25 years an amount bearing the same proportion to cost of the dam and incidental structures as the water allocated to such subdivisions bears to the total water available for power generation at the dam, together with a like proportion of the annual expense of operation and maintenance of such dam and structures, plus five per cent interest on deferred payments. In other words, if that needs any further explanation, after the full payment of these amounts (all or part of which may be made in advance) the political subdivision on continued payment of its proportional share of the operating and maintenance charges shall continue in the right to use the water for power.

The right to use power rights so allocated is to continue after full payment of such proportion of cost of the dam and of the incidental works so long as such proportionate share of the operating and maintenance costs is paid.

The Secretary is authorized on terms and under regulations prescribed by him to make all necessary contracts for carrying the provisions of such section into effect.

The title to the dam and to the incidental works is to remain forever in the United States.

Senator ASHURST. By "incidental works," just what do you mean? Mr. MATHEWS. This refers only to the dam and to the works incident to it.

Senator ASHURST. At the dam?

Mr. MATHEWS. Yes.

Until the completion of such dam and the works, the Secretary is authorized to use all moneys received under leases and contracts made pursuant to sections 3 and 4 of the act for construction of the dam and incidental works. That is on the principle of the reappropriation of moneys received.

Now, coming to section 5, " Power rights on canals," the right to develop power from water in any canal constructed under the act shall belong to the district, communities, and lands contributing to the cost of the canals and the appurtenant structures in proportion to their contributions; but that is subject to the proviso that, until the United States is fully paid all its construction costs on canals and incidental structures, the Secretary shall control the disposition of such power rights and the net proceeds from any power development on such canals shall be applied upon such construction charges and paid into the United States Treasury. Now, at the other hearing, after it was too late to put it into the record, it became apparent that the title to the canals should also be reserved in the United States until full payment of such charges, and we are prepared to suggest such an amendment.

In section 6 we have the assessment of the costs of the dam and of the canals. No part of the cost of construction of the dam or incidental works shall be charged against lands to be irrigated from the dam. The cost of the canals and appurtenant structures shall be charged equitably against lands to be benefited and in accordance with the benefits.

Senator ASHURST. In other words, the lands could not support the cost of constructing the dam but could pay the charges of maintaining the ditches and the canals?

Mr. MATHEWS. Yes, that is true; and there is such an element in connection with the dam as would justify allocating the cost to that element. I may not be correct, but I believe that with respect to certain reclamation projects the final cost has been assessed on the territory benefited, but if there should be water-power development and any profit, settlers were given the benefit of that profit.

The CHAIRMAN. Does the use of the water for power interfere with the use of the water for irrigation?

Mr. MATHEWS. This bill gives flood control first consideration. The CHAIRMAN. Can the impounding of the water as it escapes from the reservoir be used for power without in any way affecting the use for irrigation?

Mr. MATHEWS. It should be subordinated to irrigation.

The CHAIRMAN. But with this arrangement can you get your full water development for irrigation?

Mr. MATHEWS. Yes, sir; there is perfect practicability along that line.

Senator KENDRICK. How far below the dam, if you recall, is the water diverted from the river?

Mr. MATHEWS. I think about 200 miles.

Mr. ROSE. The farthest point is about 210 miles.

Mr. MATHEWS. And there is practically all-year-around irrigation in that region, so that power generation and irrigation could be made to fit in very nicely together.

Coming now to section 7 of the bill, the bill provides:

That the dam and reservoir provided for by section 1 of this act shall be used, first, for river regulation and flood control; second, for irrigation and domestic use; and third, for power.

Power is the last consideration.

The CHAIRMAN. Is it your view that you could develop this enterprise under the act of 1902, creating the reclamation fund, when its general purpose is for irrigation development?

Mr. MATHEWS. The reclamation principle will not be applied to the dam. The Government puts out its money and makes provisions for leases and contracts for getting it back on terms and conditions which the Secretary may prescribe.

The CHAIRMAN. Isn't the fund transferred from the Treasury Department and placed in the reclamation fund as created by the act of 1902? I think that is the specific language of your bill. It gets into that fund and then becomes subject to the law of 1902 and the amendatory acts.

Mr. MATHEWS. I think the act contemplates the use of that fund as a matter of convenience, to put the money in that fund as a matter of convenience, not for the purpose of affecting the money so transferred by the act under which that fund was primarily created. The CHAIRMAN. It states, if I may read it:

SEC. 10. That for the purpose of constructing said dam and incidental works, canals, and appurtenant structures, and acquiring lands and rights of way therefor, there is hereby authorized to be appropriated, from any moneys in the Treasury not otherwise appropriated, such amounts as may be necessary to carry out the purposes of this act, not exceeding in the aggregate the sum of $70,000,000, to be appropriated from time to time upon estimates made by the Secretary of the Interior and transferred to the reclamation fund established under said reclamation law.

That becomes a revolving fund, and the water-power development is only incidental.

Senator JONES of Washington. As I understand it, you do not contemplate subjecting this to the burdens of the reclamation fund? Mr. MATHEWS. No.

Senator JONES of Washington. Would it not be much better to put them in a separate fund?

Mr. MATHEWS. It might be, although I think the idea was to put it in a fund to which the department was accustomed.

Senator JONES of Washington. It is pretty hard to put it in the reclamation fund without subjecting it to the burdens imposed upon the reclamation fund.

Mr. MATHEWS. It might be better to have a separate fund. That objection had not heretofore been considered. I do not see any reason why it could not be placed elsewhere.

Senator JONES of Washington. You know, the reclamation law provides certain methods by which that fund shall be distributed, and if you put that money in here it becomes subject to the burdens imposed by the reclamation act. In order to be sure--I did not understand you wanted it subjected to those burdens-it seems to me you had better put it in a separate fund.

Mr. MATHEWS. I should think that is a good suggestion, Senator. Section 8 is the section which has been placed in with the idea and expectation that if somebody would devise a provision such as Senator Carr has explained to you for taking care of the upper States, that provision should be substituted for the present section 8.

Section 9 is the section dealing with land settlements for ex-service men and women, giving them preferential rights for a period of three months to enter the land."

Section 10 is the section dealing with the appropriation of $70,000,000 to be transferred to the reclamation fund for use of the project, all moneys received under sections 3 and 4-section 3 being the lease section and section 4 the contract section in relation to the rights at the dam-for expense of operating and maintaining said dam and incidental works to be covered into the Federal Treasury. All moneys transferred from the General Treasury to the reclamation fund, and used for the construction of any canal or appurtenant structures authorized under this act, is to be repaid by the districts, communities, and lands benefited thereby, and allocations of expense are to be made after full hearing before the Secretary.

The CHAIRMAN. On the question of repayments, it does not follow any of the reclamation acts. If you recall, during this month the President signed a bill which greatly modifies the manner of repayment of sums of money to the reclamation fund used in the construction of dams and canals and other essentials. Do you think there ought to be a general policy regarding these reclamation projects, as to how the Government should have received the money the settler pays for the benefits received?

Mr. MATHEWS. If I may presume, I should think so. This follows the act as passed in 1902, plus its amendments.

The CHAIRMAN. With respect to repayments?

Mr. MATHEWs. With respect to repayments. In fact, I think the idea is that it would be a part of wisdom to make this particular act a supplement to the reclamation act.

The CHAIRMAN. I would not so interpret that from reading section 10, beginning with line 17 and ending with the second line on the next page.

Mr. MATHEWS. I am referring now to section 1, at the bottom of the second page.

Senator JONES of Washington. At any rate, you expect to have this money repaid under the terms of the reclamation act and amendments thereto ?

Mr. MATHEWS. Yes. I might explain on that point, to be a little more exact, that this canal will serve lands now in private ownership, lands within the irrigation district, and then lands in Government ownership. I think that under the construction and the administration of the act the Secretary would make contracts or arrangements with the district wherein these private lands will have their share of the expense then imposed upon the Government lands to be served assessments in accordance with the reclamation act.

Senator JONES of Washington. Well, the reclamation act and the amendments thereto make provision for repayment for water rights for land in private ownership, too. You expect this to conform to those provisions?

Mr. MATHEWS. Yes.

In section 11 reference is made to a certain contract of date October 23, 1918, between the United States and the Imperial irrigation district, providing for a connection with the Laguna Dam. That contract provides for the construction of a canal by the District. This subjects that contract to modification with the consent of the district.

Senator ASHURST. Would that be with the consent of the Yuma District and the Imperial Valley District?

Mr. MATHEWs. Yes; in so far as the Yuma District is involved, I think the idea so far as that contract is concerned is that in this general scheme they may agree upon modifications so as to make it subject to the general scheme.

Then, in the last section, as I stated before, there is a definition of the terms "political subdivision " and " political subdivisions."

Senator ASHURST. The last line, line 19, uses the words "Governmental organization." I wonder if that term would include an irrigation district organized under the reclamation act?

Mr. MATHEWS. I should think so.

The CHAIRMAN. How many acres do you propose to irrigate with the impounding of the waters?

Mr. MATHEWS. Now, you are carrying me beyond anything that I am familiar with. I have not information enough to attempt to answer that question. That will be taken care of by other witnesses. However, I should say roughly that with that high dam and the canal, there would be more than a million acres provided for, in addition to lands already irrigated.

Senator KENDRICK. Is there a considerable distance to carry this water between the time that it is diverted from the Colorado River and the time it reaches the land to be served?

Mr. MATHEWS. Well, the Imperial Valley is immediately on the west of the river, just north of the boundary line, so the distance is not great at all.

Senator KENDRICK. What is the full length, if you recall, of the all-American canal?

Mr. Rose. Fifty-five miles is the length of the main canal. Most of that traverses land that would be irrigable, however.

Senator KENDRICK. That is not a very long canal.

Mr. MATHEWS. That is all I have, and I thank you very much. The CHAIRMAN. Does any member of the committee desire to ask the judge a question.

Mr. MATHEWS. Permit me to trespass upon your time a moment longer. There is a thought in addition that I had intended to convey. We have met the idea somewhere that reclamation projects are not always quite dependable for the return of the money. There is a special situation here as regards both the dam and the canal. With the dam, the matter of power will be of first and primary importance to communities that must have power and water and stand ready to take enough power rights to fully finance the project. The Government lands which will be served by the all-American canal are in close proximity to the largest irrigation district in the world, where irrigation is a demonstrated success. That fact will also help the lands which are now in private ownership outside the district and which will be called upon to pay a part of the cost. They are in a neighborhood where irrigation is a positive success.

Senator KENDRICK. By relieving the settler of the cost of construction of the dam, you will find it possible to deliver this water to the settler at a low cost?

Mr. MATHEWS. Yes; that is true, Senator.

Senator JONES of Washington. Are there any estimates as to what the cost will be to the settler?

Mr. MATHEWs. I do not know that that item is covered, but, anyhow, I have no information on that.

STATEMENT OF MR. ARTHUR P. DAVIS, CHIEF ENGINEER AND GENERAL MANAGER EAST BAY MUNICIPAL UTILITY DISTRICT, OAKLAND, CALIF.

Mr. DAVIS. My name is A. P. Davis, and I am the chief engineer and general manager of the East Bay Utility District, Oakland, Calif. I was in the Government service about 41 years, and most of the investigations that have been made of the Colorado River Basin were made under my charge. I established gauges upon the Colorado River and upon various tributaries of that river in 1894 and 1895, and the work was carried on with a great deal more thoroughness and completeness after the passage of the reclamation act in 1902 when a large number of measurements were started and carried on. Continuously throughout that time, topographical work on the reservoir sites and examination of possible projects were carried on.

For nearly 20 years active work was pursued by the Reclamation Service, almost continuously up to the present time, and the various reports published give the results of that work, the last one not having yet been published. The one containing the most complete data that has yet been published is Senate Document No. 142, published by the Sixty-seventh Congress, second session, entitled "Problems of the Imperial Valley and vicinity" and deals with the problems of the basin of the Colorado River.