They have to dig their own laterals in every case to connect with the main ditches, and it is questionable in many cases whether they do not spend more in labor and effort than the land is worth, adding the cost of construction to the entire cost of the land for the result.

Mr. UNDERWOOD. But they do not make that expenditure, do they, Mr. Secretary, until the project is under way? They do not dig their laterals under those circumstances, do they?

Secretary BALLINGER. Yes; I have even seen on the Umatilla where the laterals were built in advance of the completion of the main ditches.

Mr. UNDERWOOD. But not in advance of the Government taking up a project?

Secretary BALLINGER. No; not in advance of the Government taking up a project.

Mr. UNDERWOOD. But in those cases here it is of course where the Government has not taken up the project.

Secretary BALLINGER. Where the Government, through the Secretary of the Interior, has declared the project feasible and the land has been withdrawn for the purposes of irrigation and for the development of the headwaters and the construction of works, the settlers have gotten in in some cases, and it is in those cases that they should get some relief.

Mr. UNDERWOOD. But they have not dug the lateral ditches?

Secretary BALLINGER. No, sir. There may have been some cases where men may have been foolish enough to go and prepare laterals in advance of the main ditches.

Mr. GAINES. Is not this true, that when these people took up the lands the department preferred that they should not take them, and was even endeavoring to discourage it?

Secretary BALLINGER. I am sure that Mr. Davis is right in his statement that an attempt was made to give notice to people, in advance, of the inadvisability of their going onto these projects in advance of the construction of the work; but those notices are more or less ignored by the settlers in the West, and they have been almost entirely ignored on these projects. Whether they had the notices actually or not, they have not respected them, and the majority of the settlers say they have not had notice, and many of them say that they had a promise from engineers. Now, the service insists that it is not bound by any promise that might be given by a subordinate in the field.

The CHAIRMAN. Do the engineers acknowledge that they made such promises?

Secretary BALLINGER. I think they have said that they did not. I have never heard any of them admit that they had. I am merely saying what conditions I found as I went through several of those projects. That was particularly true of this project in southern Idaho known as the Minidoka, and the Boise. There is a project in eastern Oregon that was merely contemplated-never approved at all-where the Government started in to make preliminary surveys. In that case many settlers went in simply following the surveyors into the field. The Government owes no obligation to them, and this bond issue, if made, would not apply to that project.

Mr. DALZELL. If this should become a law, do you think you could sell 3 per cent bonds payable in silver, redeemable at the option of the Government after ten years?

Secretary BALLINGER. If these bonds should be paid out of this reclamation fund, which is practically a certainty, I would not say that they could be sold at 3 per cent, because I am not sufficiently acquainted with the money market for the sale of such securities; but here is a fund that for many years has stood practically on the basis of $7,000,000 of receipts.

Mr. GAINES. Payable in silver, did you say, Mr. Dalzell?

Mr. DALZELL. Yes.

Mr. GAINES. Yes; the language is, "Redeemable in coin at the pleasure of the United States."

Mr. DALZELL. Yes. I wanted to know what sort of people they expected to buy those bonds.

Secretary BALLINGER. I suppose they could be disposed of to bond houses.

Mr. DALZELL. They can not be sold at par.

Secretary BALLINGER. The total receipts into the reclamation fund up to June 30, 1908, were $41,945,142.63, as follows:

Sales of public lands..
Town-site sales...

Total...

In addition to the above, there are repayments from water rentals, sales of old material, supplies, etc., of..

Grand total..........

$41, 156, 576. 23 74, 399. 06

41, 230, 975. 29

714, 167. 34

41, 945, 142. 63

The estimated receipts for 1909 were $7,771,809. The estimated receipts for 1910 are $7,293,000. This does not include what should be received from the refund under installments from completed work. Now we have an investment of something like $50,000,000 in this work, with only a beginning as to the completion of it and returns to the fund.

Mr. UNDERWOOD. Fifty million dollars ought to come back to you within ten years, under the law?

Secretary BALLINGER. It must, under the law, come back in ten years; but we can not get it back in ten years if we can not get these projects opened. The Huntley project and a portion of the Shoshone project are giving returns, and one or two others-I think there are not over three or four from which we are getting_returns-including the Minidoka and the Payette-Boise project. We have also a large force of engineers in the field and we have our equipment, and the overhead charges are large, and it seems to me from every standpoint of business consideration it will be economy to the Government to proceed rapidly to complete these projects.

Mr. UNDERWOOD. Right on that point, how long will it take you to complete the projects in hand that you have started to work on with the money you will receive from the sale of public lands and from refund charges, if you do not get any more money?

Secretary BALLINGER. It would postpone, I should say, five years the completion of these projects.

Mr. UNDERWOOD. Do you mean to complete them all within five years?

Secretary BALLINGER. We could not complete what is estimated here, with the addition of $30,000,000, in five years.

Mr. UNDERWOOD. I do not mean anything complete what you have started to work on. to complete what you have broken dirt on?

new, but if you just How long will it take

Mr. Pou. You mean without any additional appropriation?

Secretary BALLINGER. Without any additional appropriation, but just receiving money from the public lands and from the refunds, I should say five years? Is that right, Mr. Davis?

Mr. DAVIS. About ten years.

Secretary BALLINGER. About ten years, Mr. Davis says.

The CHAIRMAN. Mr. Underwood, find out how much it would take to complete the projects already commenced, and we can figure on the other.

Mr. UNDERWOOD. That is what I asked him. How much will it take to complete the projects you have already commenced?

Secretary BALLINGER. For the approved portions of projects that are now under construction it is estimated it will take $30,138,000, and for the extensions, $55,786,000.

The CHAIRMAN. To complete those on hand, $30,000,000?
Secretary BALLINGER. Just the approved portions of them.

Mr. UNDERWOOD. Then you will have money within five years to complete those, because you are getting $7,500,000 a year, and then you are getting something over $1,000,000 from the returns from the irrigated lands, which will make nearly $9,000,000, so that it ought not to take much over three years and a half to have the money to complete the approved projects, ought it, without any new funds? Secretary BALLINGER. Yes; if we get $7,000,000 a year, in five years we will have $35,000,000.

Mr. UNDERWOOD. Then, I think, Mr. Davis stated that you were getting something like $1,000,000 a year now, and it would grow. Secretary BALLINGER. It would grow as fast as we brought in the money in additional installments from new completed portions. Mr. UNDERWOOD. The amount from that source will grow as you spend this money?

Secretary BALLINGER. Yes, indeed.

Mr. UNDERWOOD. So that in the course of the next three or four years at the outside you ought to have the money in hand to complete the approved projects?

Secretary BALLINGER. Yes, now, standing alone on that question. Mr. UNDERWOOD. Yes.

Secretary BALLinger. But just as has been stated by Mr. Davis, there is this question of settlers which I think ought to be considered, this question of relieving them by a more speedy development of this work; and then there is this other question of the Government retaining for the ultimate development and perfection of these projects, water rights that we are bound to lose. Then there comes the international question of the Colorado River, and the question on the northern boundary of the United States, the making beneficial uses of those waterways.

The CHAIRMAN. I do not think Congress will consent, for the purpose of protecting interstate water rights, to enter upon a new scheme that is going to bankrupt this service again in the next five years.

Secretary BALLINGER. I quite agree with you, Mr. Payne, on that, but we have projects on the Colorado River which should be completed for the settlers.

The CHAIRMAN. That have been commenced?

Secretary BALLINGER. Yes.

The CHAIRMAN. That is the part of this that you are estimating for? Secretary BALLINGER. Yes.

The CHAIRMAN. To be completed, that will involve $30,000,000? Secretary BALLINGER. Yes.

The CHAIRMAN. Now, you have another class of cases involving about $50,000,000, I think you said?

Secretary BALLINGER. Those are extensions.

The CHAIRMAN. Extensions?

Secretary BALLINGER. Of existing projects, that have been contemplated by the service.

The CHAIRMAN. What do you mean by "extensions?" I suppose that the projects are all within one scheme.

Secretary BALLINGER. No; the lands have now been withdrawn, as I understand it, covering these extensions, and they are standing withdrawn in the land office; and the expense of covering the lands withdrawn would take over $75,000,000 in round numbers, as it stands now upon the estimate.

The CHAIRMAN. You mean on projects already commenced?
Secretary BALLINGER. Yes; on projects already commenced.

Mr. UNDERWOOD. But it is not something that you have got to complete; no work is entered upon. That $75,000,000 does not include that?

Secretary BALLINGER. Yes; work is entered upon on all the projects under which that estimate is made.

Mr. UNDERWOOD. But there is no injury to the Government by not carrying it on?

Secretary BALLINGER. No injury except the loss of the water rights by not making beneficial use of the water rights.

The CHAIRMAN. You would not lose those water rights by not making these extensions?

Secretary BALLINGER. You would if you did not take the water out of the streams.

The CHAIRMAN. Who would get it?

Secretary BALLINGER. It goes to other projects outside.

The CHAIRMAN. Other States?

Secretary BALLINGER. No, not other States, but other enterprises that may be started along the streams.

The CHAIRMAN. By state laws?

Secretary BALLINGER. By state laws.

The CHAIRMAN. Individually, I should welcome that.

Secretary BALLINGER. The only thing is that it is going to seriously embarrass the completion of these projects if the water is taken, Mr. UNDERWOOD. If the water is taken for other irrigation projects, the people of the United States get the benefit of it, do they not?

Secretary BALLINGER. That is not wholly true. As I understand from my study of these projects, the outline of these projects is for the purpose of taking the water from the stream and covering the largest possible area. Now, if you split that up and allow the waters to be taken on a smaller area and diverted for that purpose, you have destroyed the larger possibility.

Mr. UNDERWOOD. I do not know whether you get my point or not. I understand what you mean. You think if this is done by the Government it will be done to a larger extent?

Secretary BALLINGER. It will cover a larger area of land.

Mr. UNDERWOOD. And that is the only difference so far as the people of the United States are concerned?

Secretary BALLINGER. That is the only difference so far as the people of the United States are concerned. In other words, by conserving the water you can reach a greater area of land. That is the principle on which the Government has been working in all these projects. If we are restrained so that we can not make a beneficial use of these waters within a reasonable time, the Government has got to let loose of them, and the States will allow particular contracts to be made by other parties. That is particularly true in Oregon, and I think it is particularly true also in Idaho, is it not?

Mr. DAVIS. Yes, sir.

The CHAIRMAN. Suppose you make those extensions and get some water that another State in the vicinity of Idaho claims; what is the law in regard to that? Suppose they make a claim after you have made these extensions and are using the water; will that cut them off or bar them in an action to be commenced or a claim to be made? Secretary BALLINGER. If we have made a legal appropriation and put the water to a beneficial use, it can not be taken away from the Government.

The CHAIRMAN. Of course it can not. If you make it without making these extensions or contemplating them, I do not see why your position is not equally sound.

Secretary BALLINGER. We can make the appropriation, but until we put the water to a beneficial use that appropriation will fall to the extent to which we have not put the water to a beneficial use. The CHAIRMAN. Has any case been decided on that?

Secretary BALLINGER. That is the law of almost all these western States.

The CHAIRMAN. Is that the state law?

Secretary BALLINGER. Yes. Mr. Campbell, chief legal officer of the Reclamation Service, is here, and I will ask him to speak to you about those things.

The CHAIRMAN. Will that depend on the statutes of the States? Secretary BALLINGER. Yes.

The CHAIRMAN. If they are repealed, where are your rights?

Secretary BALLINGER. If the rights are vested, the repeal of those laws would not affect you. I would like to have Mr. Campbell, who is here, asked any questions the committee desire to put to him. He is the chief law officer of the Reclamation Service.

The CHAIRMAN. I wanted to hear from him. I do not know anything about that.

Secretary BALLINGER. I have not given the same study to these questions that he has.

I have suggested to the Senate committee in connection with a similar bill pending in the Senate, as a substitute for the language in that bill, and I would suggest the substitution of the same language for the language of this bill, this clause:

That the money borrowed under the authority of this act shall be expended in the completion of such feasible projects as have been heretofore approved by the Secretary of the Interior, and in the construction of such extensions thereof as may be proper and necessary to the successful and profitable operation and maintenance of the projects, or to protect water rights claimed by the United States.