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But you did not, nor did your predecessor, have any such power on January 1, 1929. The Boulder Canyon project did not take effect until June 25, 1929, the date of the President's proclamation declaring that the necessary conditions had been complied with. Until then, you and your predecessor were expressly forbidden to exercise any authority under the act. Hence, your statement that you “delayed action for 13 months after taking office is inaccurate and misleading. You took office in March, 1929. Between that date and June 25, you did not "delay" taking action. You were simply powerless to act. The failure to exercise a power not possessed can not properly be termed “delay."

Accurately stated, the facts are that the earliest date on which you could have taken any action whatever under the Boulder Canyon project act was June 25, 1929; that less than 10 months thereafter (April 24, 1930) you executed a contract with the Metropolitan Water District of California; and that two days later you executed the two power contracts referred to in your letter, the last-mentioned contracts being dated April 26, 1930, not April 28, as stated in your letter.

But the making of contracts was not the first duty delegated to you by the Boulder Canyon project act. Section 5 of the act authorizes, or purports to authorize, you to make contracts, but it says you shall do so under such general regulations as you may prescribe, and that general and uniform regulations shall be rescribed for the awarding of such contracts. This clearly contemplates that the regulations shall be prescribed first and the contracts made afterwards. Otherwise, there would be no point in prescribing regulations.

Now, the fact seems to be that you, in your haste to award these contracts have awarded them before prescribing any general and uniform regulations or any other regulations on the subject. Indeed, so far as I am aware, you have never yet prescribed any general or other regulations concerning water contracts. Your so-called “general regulations for lease of power" bear date of April 25, 1930, the date preceding the date of the power contracts made by you, but it is common knowledge that all these contracts were actually negotiated, completed, agreed upon and signed by the contractees prior to the issuance of your so-called general regulations. In thus getting the cart before the horse you have acted not only in haste, but in apparent violation of the act itself. Under the terms of the act, assuming its validity, you could not lawfully award any contract until after you prescribed general regulations on the subject. Even assuming that your socalled general regulations were actually issued and the contracts actually executed on the dates which they respectively bear, the fact would still remain that you awarded these contracts on the very first day that you could legally award them. How, then, can you deny the statement that you acted hastily?

Your letter states, or at least implies, that Arizona was three times invited to attend and participate in hearings or conference with you on the subject of power contracts. Such a statement is inaccurate and misleading. You did not write me on October 23 as now stated by you, but did write me on October 24. You inclosed a release of your statement or outline dated October 21. Your letter of October 24 did not, nor did your release statement of October 21, indicate that the power allocations therein referred to were tentative only. Both the letter and the statement announced that a power allocation had been made by you, but neither the letter nor the statement spoke of the allocation being tentative. Your letter of October 24 did not, nor did your statement of October 21, indicate what price, if any, you had fixed for power, but did indicate that you had fixed the ridiculous price of 25 cents per acre foot for the storage of domestic water for the Metropolitan Water District of California.

Your letter of October 24 did not, as you seem to imply, invite Arizona to attend a hearing before you on November 12. In that letter you merely advised me “that any formal protest that may be lodged by the applicants regarding allocation of this power and related matters" would be heard by you on November 12. Arizona was not then, or at any time, an applicant for power and, therefore, according to the terms of your letter, had no standing to lodge a protest or to attend the propossed hearing. The reason why Arizona was not an applicant for power was indicated in my letter of October 30. As then explained to you, Arizona has never conceded, but has always denied, the validity of the Boulder Canyon project act, and believes that it can not be made effective without her consent. She has, nevertheless, endeavored in all earnestness and good faith to arrive at a three-State agreement with California and Nevada which would make it safe and proper for her to accept the seven-State Colorado River compact, thus making the act effective, but her endeavors in this direction have been thwarted by California's refusal to cooperate and by your own hasty action in awarding contracts to California interests.

Then the issue between the two States was narrowed down to whether the division on the basis of definite figures as proposed by Arizona and California suggested another method. Now, do you consider that the States are really very far apart on a settlement of the main stream diversion, the tributaries being eliminated?

Senator Glass. That is a serious part of the water proposition; and then comes in this other question, as to referring all the other matters to the decision of the Secretary of the Interior, and it breaks wide open again.

Senator JOHNSON. That is the situation.

Senator HAYDEN. Arizona's contention has always been that there are contemplated a tri-State compact apportioning all benefits, including power, as stated in the Boulder Canyon project act. At no time

Senator Glass. The mandatory provision of the act is conclusive. The provisions of the act would not contemplate that, but it is simply an authorization.

Senator HAYDEN. A mere authorization; we understand that thoroughly. But the Arizona Colorado River Commission has made its position perfectly clear on the question of revenue

The CHAIRMAN. Are there any other questions of Colonel Donovan?

Senator HAYDEN. I have no further questions to ask of Colonel Donovan and thank him for coming here.

Senator KENDRICK. I have here a letter from the senior Senator from Nevada, Senator Pittman, which I am requested to submit to the committee. This is an outline of his attitude in detail, and the reasons why he is in favor of and is supporting this appropriation.

The CHAIRMAN. That will be put in the record.

Senator KENDRICK. I will deliver this letter to the clerk of the committee. (The letter referred to is here printed as follows:)

UNITED STATES SENATE,

Washington, June 11, 1930. Hon. John B. KENDRICK,

United States Senate. MY DEAR SENATOR: I am, writing to you not only as a member of the Appropriations Committee but also as a member of the Committee on Irrigation and Reclamation, which framed and reported the Boulder Dam. bill.

The second deficiency appropriation bill, which is about to be considered by the Appropriations Committee, contains an item of $10,660,000 to commence construction of Boulder Dam. This item was strenuously contested by representatives and attorneys on behalf of the State of Arizona. The main legal objection made by Arizona was remedied by a supplemental contract after the main contract for the sale of the power and water was executed by the Secretary.

The second legal question raised by Arizona was whether or not the signing of the contract by the city of Los Angeles was authorized. The last question was sumbitted by the President to the Attorney General. The Attorney General on the 9th rendered an opinion on the legal questions involved. He carefully reviews every legal objection and disposes of it. In the concluding paragraphs

“Objection has been made to the metropolitan water district power contract on the ground that the district has not yet voted bonds to provide funds to build the aqueduct on which this power would be used. It is unnecessary to consider which step must precede the other—provision for the aqueduct or provision for power and water-in view of the sufficiency of the city and company contracts to meet all requirements of the act. Even if the aqueduct financing were construed as being a prerequisite, the Secretary's reservation of energy for the district is within his authority under the second paragraph of section 5 (c) of the act.

he says:

“Giving consideration only to the city and company contract, I am of the opinion that all the requirements of section 4 (b) of the Boulder Dam project act which are made conditions precedents to the appropriation of money, the making of contracts, and the commencement of work for the construction of a dam and power plant in Boulder Canyon have been fully met and performed by the Secretary of the Interior in securing the contracts referred to in his letter."

I concur in the opinion of the Attorney General. If the State of Arizona does not concur it has its legal remedy in court. In a matter of this character I would in any event waive my personal opinion unless I was conclusively convinced that the Attorney General is in error.

The only other question involved is as to whether or not the contracts were fair to the States of Arizona, California, and Nevada. Arizona and Nevada did not receive through the contracts all that they asked for, but they have received very nearly what they asked for and far more than they were granted when the bill was first introduced in Congress. Each of such States is allotted 18 per cent of the power generated at Boulder Dam to be delivered by the primary contractees to such States in various amounts as and when demanded to the maximum of 18 per cent. This is a great advantage to Arizona and Nevada because it imposes no financial obligations upon such States except and when they receive power, and then only to the extent of the power received.

The Secretary of the Interior offered to contract with each of the States for one-third of the power for use in such States, but required that we should contract to take and pay for all such power.

That would have imposed an obligation upon the State of Nevada which it would have been difficult for it to carry out.

When the bill was first introduced there was no compensation provided to the States of Arizona and Nevada in lieu of the loss of potential taxable property. The Committee on Irrigation and Reclamation, however, proposed an amendment which it is estimated will return to each of the States of Arizona and Nevada between $350,000 and $400,000 annually during the amortization period of 50 years. After that time the revenues of Arizona and Nevada should be greatly increased.

Undoubtedly the Secretary has acted within the discretion granted to him by Congress in the Boulder Canyon act. The contracts have been held to be legal and to assure the return of the Government's money, together with interest, in 50 years.

Refusal to make the appropriation in such circumstances could, in my opinion, accomplish no change in the contracts, but would result in delay that might cause the destruction of Imperial Valley and lands in Arizona. The destruction of Imperial Valley is imminent and will continue imminent until the flood waters of the Colorado River are impounded by a dam. Congress has decided this question and the policies involved.

I am unwilling, and I think I speak for the State of Nevada, to longer delay the building of Boulder Dam. In no event could the money now to be appropriated by Congress be lost because the appropriations are for preliminary work that will have to be done no matter whether the dam is built under the present act or under the present contracts or under some other act or some other contracts. Therefore no fear of a legal determination should deter Congress from starting this necessary work. Sincerely,

KEY PITTM ΑΝ. Senator HAYDEN. In order to accomplish what Arizona desires in respect to this approrpiation, I believe that the bill should be amended by striking out the appropriation of $10,500,000 as provided in the act, and in lieu thereof, substituting an appropriation for secondary projects to the extent of a million dollars, or whatever sum is necessary in order to allow preliminary work to proceed.

You will observe that in the estimate submitted to Congress there is included in the total of $10,500,000, the sum of $385,000 to reimburse the reclamation fund for money heretofore appropriated under the heading of secondary projects, which amounts have been expended in connection with the Boulder Canyon project.

If it has been proper to make appropriations of money under the heading of secondary projects, and to use $385,000 for preliminary

Then the issue between the two States was narrowed down to whether the division on the basis of definite figures as proposed by Arizona and California suggested another method. Now, do you consider that the States are really very far apart on a settlement of the main stream diversion, the tributaries being eliminated?

Senator Glass. That is a serious part of the water proposition; and then comes in this other question, as to referring all the other matters to the decision of the Secretary of the Interior, and it breaks wide open again.

Senator JOHNSON. That is the situation.

Senator HAYDEN. Arizona's contention has always been that there are contemplated a tri-State compact apportioning all benefits, including power, as stated in the Boulder Canyon project act. At no time

Senator Glass. The mandatory provision of the act is conclusive. The provisions of the act would not contemplate that, but it is simply an authorization.

Senator HAYDEN. A mere authorization; we understand that thoroughly. But the Arizona Colorado River Commission has made its position perfectly clear on the question of revenue

The CHAIRMAN. Are there any other questions of Colonel Donovan?

Senator HAYDEN. I have no further questions to ask of Colonel Donovan and thank him for coming here.

Senator KENDRICK. I have here a letter from the senior Senator from Nevada, Senator Pittman, which I am requested to submit to the committee. This is an outline of his attitude in detail, and the reasons why he is in favor of and is supporting this appropriation.

The CHAIRMAN. That will be put in the record.

Senator KENDRICK. I will deliver this letter to the clerk of the committee. (The letter referred to is here printed as follows:)

UNITED STATES SENATE,

Washington, June 11, 1930. Hon. John B. KENDRICK,

United States Senate. MY DEAR SENATOR: I am, writing to you not only as a member of the Appropriations Committee but also as a member of the Committee on Irrigation and Reclamation, which framed and reported the Boulder Dam. bill.

The second deficiency appropriation bill, which is about to be considered by the Appropriations Committee, contains an item of $10,660,000 to commence construction of Boulder Dam. This item was strenuously contested by representatives and attorneys on behalf of the State of Arizona. The main legal objection made by Arizona was remedied by a supplemental contract after the main contract for the sale of the power and water was executed by the Secretary,

The second legal question raised by Arizona was whether or not the signing of the contract by the city of Los Angeles was authorized. The last question was sumbitted by the President to the Attorney General. The Attorney General on the 9th rendered an opinion on the legal questions involved. He carefully reviews every legal objection and disposes of it. In the concluding paragraphs he says:

"Objection has been made to the metropolitan water district power contract on the ground that the district has not yet voted bonds to provide funds to build the aqueduct on which this power would be used. It is unnecessary to consider which step must precede the other-provision for the aqueduct or provision for power and water-in view of the sufficiency of the city and company contracts to meet all requirements of the act. Even if the aqueduct financing were construed as being a prerequisite, the Secretary's reservation of energy for the district is within his authority under the second paragraph of section 5 (c) of the act.

‘Giving consideration only to the city and company contract, I am of the opinion that all the requirements of section 4 (b) of the Boulder Dam project act which are made conditions precedents to the appropriation of money, the making of contracts, and the commencement of work for the construction of a dam and power plant in Boulder Canyon have been fully met and performed by the Secretary of the Interior in securing the contracts referred to in his letter."

I concur in the opinion of the Attorney General. If the State of Arizona does not concur it has its legal remedy in court. In a matter of this character I would in any event waive my personal opinion unless I was conclusively convinced that the Attorney General is in error.

The only other question involved is as to whether or not the contracts were fair to the States of Arizona, California, and Nevada. Arizona and Nevada did not receive through the contracts all that they asked for, but they have received very nearly what they asked for and far more than they were granted when the bill was first introduced in Congress. Each of such States is allotted 18 per cent of the power generated at Boulder Dam to be delivered by the primary contractees to such States in various amounts as and when demanded to the maximum of 18 per cent. This is a great advantage to Arizona and Nevada because it imposes no financial obligations upon such States except and when they receive power, and then only to the extent of the power received.

The Secretary of the Interior offered to contract with each of the States for one-third of the power for use in such States, but required that we should contract to take and pay for all such power. That would have imposed an obligation upon the State of Nevada which it would have been difficult for it to carry out.

When the bill was first introduced there was no compensation provided to the States of Arizona and Nevada in lieu of the loss of potential taxable property. The Committee on Irrigation and Reclamation, however, proposed an amendment which it is estimated will return to each of the States of Arizona and Nevada between $350,000 and $400,000 annually during the amortization period of 50 years. After that time the revenues of Arizona and Nevada should be greatly increased.

Undoubtedly the Secretary has acted within the discretion granted to him by Congress in the Boulder Canyon act. The contracts have been held to be legal and to assure the return of the Government's money, together with interest, in

Refusal to make the appropriation in such circumstances could, in my opinion, accomplish no change in the contracts, but would result in delay that might cause the destruction of Imperial Valley and lands in Arizona. The destruction of Imperial Valley is imminent and will continue imminent until the flood waters of the Colorado River are impounded by a dam. Congress has decided this question and the policies involved.

I am unwilling, and I think I speak for the State of Nevada, to longer delay the building of Boulder Dam. In no event could the money now to be appropriated by Congress be lost because the appropriations are for preliminary work that will have to be done no matter whether the dam is built under the present act or under the present contracts or under some other act or some other contracts. Therefore no fear of a legal determination should deter Congress from starting this necessary work. Sincerely,

KEY PITTMAN. . Senator HAYDEN. In order to accomplish what Arizona desires in respect to this approrpiation, I believe that the bill should be amended by striking out the appropriation of $10,500,000 as provided in the act, and in lieu thereof, substituting an appropriation for secondary projects to the extent of a million dollars, or whatever sum is necessary in order to allow preliminary work to proceed.

You will observe that in the estimate submitted to Congress there is included in the total of $10,500,000, the sum of $385,000 to reimburse the reclamation fund for money heretofore appropriated under the heading of secondary projects, which amounts have been expended in connection with the Boulder Canyon project.

If it has been proper to make appropriations of money under the heading of secondary projects, and to use $385,000 for preliminary

50 years.

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