RECLAMATION BONDS. COMMITTEE ON WAYS AND MEANS, The committee met at 10.30 o'clock a. m., with Hon. Sereno E. Payne (chairman) presiding. Present: The chairman, and Messrs. Dalzell, Boutell, Needham, Calderhead, Gaines, Longworth, Ellis, Clark, Underwood, Pou, Randell, Harrison, and Brantley. The CHAIRMAN. This meeting was called for the purpose of a hearing on two bills (H. R. 18398 and H. R. 19079) which have been introduced and referred to this committee for the issue of $30,000,000 of bonds to replenish the irrigation fund." Hon. Richard A. Ballinger, Secretary of the Interior, accompanied by Mr. Arthur P. Davis, chief engineer, Reclamation Service, and Mr. A. C. Campbell, chief law officer, Reclamation Service, appeared before the committee and Secretary Ballinger suggested that Mr. Davis be heard first. The CHAIRMAN. We will first hear Mr. Davis. STATEMENT OF MR. ARTHUR P. DAVIS, CHIEF ENGINEER RECLAMATION SERVICE. The CHAIRMAN. Mr. Davis, you have had charge, I suppose, of the irrigation projects for some time? Mr. DAVIS. I have been the chief engineer for about three years and have had charge of the engineering work during that time and was connected with it all the time before. The CHAIRMAN. You have been connected with it from the beginning? Mr. DAVIS. Yes, sir. The CHAIRMAN. The committee would like to have from you a statement showing the necessity for the issue of the bonds, how this condition came about, etc., and then the members of the committee will probably want to ask you some questions. Mr. DAVIS. The law under which the Reclamation Service was organized provides that the Secretary of the Interior shall use certain funds received from the sale of public lands in the construction of irrigation projects, and that the major portion of the funds arising in any State shall be expended for the benefit of lands in that State if feasible projects can be found. The Secretary was given the discretion, however, in the bill, of using the funds otherwise for a limited time, but at the end of each ten-year period an adjustment must be made so that the major portion of the funds received in any one State must be expended for the benefit of lands in that State. The requirement, therefore, was that a project must be taken up in every State if a feasible project could be found and the money so expended. Up to date the expenditures have accorded with that provision with but two exceptions. Of course there is continual expenditure and continual receipt in every State, so that a statement made one day may not be exactly true the next, but approximately that is the fact. The largest receipts are in the State of Oregon. The expenditures in the State of Oregon are much less than half of the receipts in that State, owing to the difficulty of finding feasible projects in that State. The State of Oklahoma is one of those returning a large amount of money from the sale of public lands. No project has been taken up in that State, because no feasible project has been found. Mr. UNDERWOOD. Oklahoma is not in the terms of the original act? Mr. DAVIS. Yes, sir. It was at that time the Territory of Oklahoma. The CHAIRMAN. If feasible projects should be found in those States more than half should be expended in them; you have complied with that law in regard to Oregon and Oklahoma? Mr. DAVIS. Yes, sir. The same is true of North Dakota. The expenditures there have been in accordance with the existence of feasible projects. It has been less than half of the receipts in that State. That was true of Oklahoma and North Dakota. It can hardly be said not to be true in Oregon, because there are projects we have taken up only two on which a great deal of money might be spent-and there are other feasible projects, only there is the difficulty of working them out in accordance with the law which has delayed us in taking them up. Mr. ELLIS. From an engineering standpoint, is not the extension of the Umatilla project feasible? Mr. DAVIS. We can not yet tell; the investigations are now in progress. The CHAIRMAN. Does not the law result then in this, that some States may have feasible projects far in excess of the funds arising from the sale of lands in those States and the money would be used for less feasible projects that would be undertaken in other States where less than half of the fund has been used? Mr. DAVIS. That is decidedly the case. The CHAIRMAN. So that is more or less a just criticism of the provision in the law? Mr. DAVIS. I think so. The CHAIRMAN. And that hampers you in a measure in taking up the most feasible projects in the United States without regard to state lines? Mr. DAVIS. Yes, sir. Mr. CLARK. What is the principal feature of the law? Mr. DAVIS. That the money received from public lands in any State shall in the major part be expended for the benefit of lands in that State within the ten-year period, subject to the existence of feasible projects. Mr. CLARK. Have they ever tried to find a feasible project in Oklahoma? Mr. DAVIS. Yes, sir; we have so spent a great deal of money. Mr. DAVIS. Not everywhere. Mr. CLARK. Take the Canadian River in the western part, is there not anything they can do in the way of irrigation for that State? Mr. DAVIS. We have tried very persistently and have not yet found a feasible project. We might have spent money, but in my judgment it would not have come back. We have had surveys made and one of the largest projects which was investigated was on the Red River in the neighborhood of Snyder, Okla., and we found there that the water was too salty for safe irrigation. The CHAIRMAN. There is more land and less water? Mr. DAVIS. Yes, sir. Mr. CLARK. Was the water more salty than the Arkansas River? Mr. DAVIS. Yes, sir; we tried to overcome the difficulty there and, in fact, spent a great deal of effort trying to find feasible means of diverting from the basin a creek which brings in most of the salty water. It is a question of cost. Mr. CLARK. They have a successful project out in western Kansas? Mr. DAVIS. We have a project which I think is the most questionable project we have attempted. Mr. CLARK. I know a fellow testified here that they had the most promising project in the United States? Mr. DAVIS. That is one of the illustrations of the difficulties of that particular region, because western Kansas is very much like Oklahoma. The pumping project which has been installed has been a disappointment in the quantity of water obtained. We have obtained less than half that we expected from such information as we could obtain before putting in the project. Mr. RANDELL. That condition of salty water does not exist in most of the tributaries of the Red River. Mr. DAVIS. No, sir. Mr. RANDELL. Were you on Salt Fork? Mr. DAVIS. Above that. That was not included. The salty creek is Cherry Creek. Mr. RANDELL. Near Mangum is what is called Salt Fork. That is a very salty stream, but my understanding is that that is about the only one? Mr. DAVIS. The other fork below the mouth of Cherry Creek carries sufficient salt to be dangerous for irrigation, but if this creek were eliminated, which we proved by a long series of observations, it would be good water, and it is possible to eliminate that creek, but in the meantime they came in and said that the farmers did not care about irrigation, and a good many of them wanted to be relieved from "signing up" their land. It is very difficult to deal with that condition, because it is nearly all private land. Mr. CLARK. They did not make any such explanation this last year? Mr. DAVIS. I did not hear of it, because the project has been dead two years. Secretary BALLINGER. That is practically all private land? Mr. DAVIS. Yes, sir. In Oklahoma there is only a small percentage of public land in any project which has been considered. The land is pretty good without irrigation. They raise crops nearly every year, not as large as with irrigation, but sufficient to sustain the settlements. In California the expenses have been less than the major portion required by law to be expended within the first ten years, and to carry out the provisions of that law it would be necessary to take up new work. With the exception of Oregon and California the law has been complied with, and in those cases it has been due, as I said, to difficulties of various kinds which have delayed the taking up of projects. One of the difficulties in California is that most of the land is private land, and it is very difficult to arrange all the details to assure the return of the fund and to obtain water rights and various other things that are required by the law. The CHAIRMAN. When does the ten-year period expire? That provision of the law greatly hampers the taking up of projects in those States expected to be benefited, because there has to be a series of adjustments of water rights, land ownerships, rights of way, etc., and where the people feel that they have a club to compel the department to take up the project by that provision of law they do not cooperate and they do not make an effort to meet the requirements of the law. They think there is a requirement of law and that some project must be taken up anyhow. They are constantly using that argument. It has been far more a detriment to California and Oregon than an assistance. There are projects in those two States which if we did not have the difficulties mentioned to overcome could have been taken up long ago. There have been some other reasons in addition to the requirements of the law why some projects have been undertaken. Various international difficulties. For instance, the retention of the waters of the St. Mary and Milk rivers led to the taking up of projects in northern Montana. This was presented to President Roosevelt by those interested and used as an argument why those projects should be taken up. They probably would not have been taken up otherwise. There is in eastern Montana a large and expensive project on the Yellowstone River, where about 66,000 acres of land are being placed under irrigation. It is nearly completed now. That was taken up mainly for the reason that it included some land in North Dakota, about one-third of the land is in North Dakota, and on account of the provision of law that was the conclusive argument in taking up that project. I think I am in a position to appreciate all the weaknesses of the service as thoroughly as anybody, and I do not say that everything which has been done was wise and no mistakes have been made, but those are the facts and the reasons. Mr. UNDERWOOD. You are seeking in this bill to change the original law as to the distribution of this fund so that if there is not a project in a certain State where half can be spent you can divert the whole fund to some other State? Mr. DAVIS. There is no such provision in this bill, as I understand. I have never seen the bill before. Mr. UNDERWOOD. That proposition is not before the committee? The CHAIRMAN. The committee is not confined to these bills, they can amend them in any way they see fit. Mr. UNDERWOOD. What is the proposition which is before the committee? Mr. DAVIS. The law provides that the major portion of the funds shall be expended in the State in which received, and that, while the major portion may be diverted temporarily, it must be returned in ten years. The readjustment only applies to the major portion, which has been considered by us to mean 51 per cent. Mr. UNDERWOOD. I would like to have you read the law on that subject and let it go into the record. Mr. DAVIS. (Reads): SEC. 9. That it is hereby declared to be the duty of the Secretary of the Interior in carrying out the provisions of this act, so far as the same may be practicable and subject to the existence of feasible irrigation projects, to expend the major portion of the funds arising from the sale of public lands within each State and Territory herein before named for the benefit of arid and semiarid lands within the limits of such State or Territory: Provided, That the Secretary may temporarily use such portion of said funds for the benefit of arid or semiarid lands in any particular State or Territory hereinbefore named as he may deem advisable, but when so used the excess shall be restored to the fund as soon as practicable, to the end that ultimately, and in any event, within each ten-year period after the passage of this act, the expenditures for the benefit of the said States and Territories shall be equalized according to the proportions and subject to the conditions as to practicability and feasibility aforesaid. The language is "the major portion," which has been interpreted by the department to mean 51 per cent. The CHAIRMAN. Is there any part of this suggested loan required for the purpose of equalizing the funds in the different States-any necessity growing out of the fact that you must equalize the fund at the end of the ten years so that the major portion will be expended in each State? Mr. DAVIS. It is fair to say that a small proportion would be required for that purpose because under the law we must expend more money in Oregon and California. Secretary BALLINGER. The Hamer bill sets out the provision for equalization under that section. Mr. UNDERWOOD. What is to be accomplished by the equalization of this fund in States where you have no projects that you can carry out? Mr. DAVIS. Nothing. It does not apply to those States; it is subject to feasible projects. Of course, that provision keeps up a constant pressure from Oklahoma and North Dakota, where there are no more feasible projects, and it creates a great deal of dissatisfaction and criticism of the service. It is embarrassing. I will say frankly, Mr. Chairman, there is no question but what if it had not been for that provision we would not have taken up any project in North Dakota, except a portion of the gravity project which extends in North Dakota. The CHAIRMAN. Is that true of Kansas? Mr. DAVIS. I think it is; yes, sir. The CHAIRMAN. I understand that the project in Kansas was to sink wells 20 feet or more and intercept the undercurrent of water, and after you had sunken the wells you discovered less than half the water that you had expected to find when you commenced the project? Mr. DAVIS. It is not up to expectations at all. The CHAIRMAN. And you can not irrigate as much as you expected? Mr. DAVIS. No, sir. Mr. UNDERWOOD. I was on the committee which reported this bill when it was originally passed by the House. The question of the ownership of this fund in the several States came up in the committee and the committee refused to take any action on it at all. It was |