flow, regardless of source. By section 2 (b) the Secretary of the Treasury is authorized to advance to the fund, from time to time and within the appropriations therefor, such amounts, not exceeding $165,000,000, as the Secretary of the Interior deems necessary. Section 2 (b) further provides:

Interest at the rate of 4 per centum per annum accruing during the year upon the amounts so advanced and remaining unpaid shall be paid annually out of the fund, except as herein otherwise provided.

The question is, therefore, whether the act should be construed as providing that interest is not to be paid on moneys advanced to the fund for the cost of construction of the All-American Canal.

The act nowhere so provides in express terms, and there are provisions in section 2 relating to the fund which, taken literally, would require that all moneys advanced by the Treasury for any part of the authorized project should bear interest. By section 2 (d) the Secretary of the Treasury is directed to charge the fund as of June 30 in each year "with such amount as may be necessary for the payment of interest on advances made under subdivision (b) at the rate of 4 per centum per annum accrued during the year upon the amounts so advanced and remaining unpaid, except that if the fund is insufficient to meet the payment of interest the Secretary of the Treasury may, in his discretion, defer any part of such payment, and the amount so deferred shall bear interest at the rate of 4 per centum per annum until paid." It may be suggested that the phrase "except as herein otherwise provided" in section 2 (b) should be deemed to refer only to the exception with respect to the deferment of interest provided in section 2 (d), just quoted. The references in section 2 (c) to "the payment of interest, during construction, upon the amounts so advanced," and in section 2 (e) to "payment of interest," are not expressly qualified. An inference that all sums advanced from the Treasury for any part of the project are to be interest-bearing may also be drawn from the reference in section 5 to "the repayments to the United States of all money advanced with interest" and the provision of section 7 that the Secretary of the Interior may, in his discretion, "when repayments to the United States of all money advanced, with interest, reimbursable hereunder, shall have been made, transfer the title" to the said canal and appurtenant structures, with certain exceptions, to the districts or other agencies of the United States having a beneficial interest therein.

On the other hand, there are other provisions of the act which provide an entirely different plan of reimbursement of expenditures for the canal and appurtenant structures than those which govern the reimbursement of the cost of the dam and power project. Section 1 provides that "the expenditures for said mail canal and appurtenant structures are to be reimbursable, as provided in the reclamation law, and shall not be paid out of revenues derived from the sale or disposal of water power or electric energy at the dam authorized to be constructed at said Black Canyon or Boulder Canyon, or for water for potable purposes outside of the Imperial and Coachella Valleys." No such provision is made with respect to the dam or power plant, and it is manifest from the act as a whole that the expenditures for their construction are to be paid mainly, if not wholly, from those revenues which were excluded as a source of reimbursement of ex

penditures for the canal. In section 4 (b), which requires the Secretary of the Interior to make certain provisions for revenues before any money is appropriated for the construction of the works comprised in the project or any construction work is done thereon, the dam and power plant and the main canal and appurtenant structures are treated in separate paragraphs, which differ materially in their provisions. The first paragraph, dealing with the dam and power plant, requires that the Secretary make provision for revenues, adequate in his judgment to insure, among other things, "the repayment, within fifty years from the date of the completion of said works, of all amounts advanced to the fund under subdivision (b) of section 2 for such works, together with interest thereon made reimbursable under this act;" whereas in the second paragraph, dealing with the main canal and appurtenant structures, the requirement is that he shall make provision for revenues adequate in his judgment "to insure payment of all expenses of construction, operation, and maintenance of said main canal and appurtenant structures in the manner provided in the reclamation law;" and interest is not mentioned.

Thus, while the dam and reservoir were to provide for the storage of waters for the purpose of reclamation of public lands as well as for flood control, improvement of navigation, generation of electrical energy, and the other purposes recited in section 1, the main canal was singled out and treated as a purely reclamation project, the expenditures for which were to be reimbursable in the same manner as those for other projects administered under the reclamation law.

The reclamation law is defined by section 12 as meaning the act of June 17, 1902 (ch. 1903, 32 Stat. 388), and the acts amendatory thereof and supplemental thereto. The plan set forth in those acts, so far as here material, is as follows: By section 1 of the act of June 17, 1902, a special fund was created in the Treasury known as the "reclamation fund," consisting of moneys received from the disposal of public lands in certain States and certain fees and commissions; other sources of revenue were added by supplemental acts. The moneys in this fund are used for the construction of irrigation projects which the Secretary of the Interior determines to be practicable, and the fund is then reimbursed by charges made upon the lands designated by the Secretary by public notice as irrigable under the project, whether held by entrymen or in private ownership. Those charges are to be determined "with a view of returning to the reclamation fund the estimated cost of construction of the project," and are to be apportioned equitably. (Id., secs. 2, 3, 4, and 5; see also act of August 13, 1914, 38 Stat. 690; act of December 5, 1924, section 4, 43 Stat. 702.) By the act of May 25, 1926, section 46 (44 Stat. 647), no water is to be delivered upon the completion of the project until contracts approved by the Secretary shall have been made with irrigation districts providing for the payment, among other things, "of the cost of constructing" the works in not more than forty years from the date of the public notice. The reclamation fund is thus a permanent revolving fund, created in the first instance by an appropriation of public moneys and used for the financing of reclamation. projects.

This fund is not to be used for the works authorized by the Boulder Canyon project act, which are financed instead through the Colorado River Dam fund created by section 2, and that act contemplates (see

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secs. 5 and 9) that revenues received under the reclamation law in connection with this project are to be covered into that fund. The provisions of section 9, however, closely parallel those of the reclamation law, and the references in sections 1 and 4 (b) to the reimbursement of the cost of construction of the main canal and appurtenant structures in the manner provided by the reclamation law manifestly refer to the charging of the cost of construction upon the lands benefited as therein described.

The reclamation law contains no provision for the payment by the land owners of any interest upon the sums advanced from the reclamation fund, and I am advised that the term "construction charge" as used in the reclamation law has never been construed by the Interior Department as including an interest charge upon the cost of construc

Congress must be deemed to have been familiar with the reclamation law, to which frequent references are made in the act, and with the practical interpretation thereof by the Interior Department as not authorizing the charging of interest upon the cost of construction of a reclamation project against the lands benefited thereby. In this view, the omission of any mention of interest in the second paragraph of section 4 (b), in contradistinction to the express mention thereof in the first paragraph, is significant, and strongly indicative of an intention of Congress that interest upon the construction cost of the All-American Canal should not be charged against lands benefited.

If interest is not to be charged against the land, the act designates no source of revenue from which interest might be paid to the General Treasury upon sums advanced for the construction costs of the canal. Section 1 explicitly provides that the expenditures for the canal shall not be paid out of revenues from the sale or disposal of water power or electric energy at the dam or for water for potable purposes outside of the Imperial and Coachella Valleys. It is reasonable to presume that, since Congress forbade the use of such revenues for payment of the principal of such expenditures, it did not intend that they should be reached to pay interest thereon. It appears that the cost of the canal and appurtenant structures is expected to be nearly $40,000,000. Under the reclamation law repayment may not be accomplished for forty years. Interest at four per cent upon that sum for that period would constitute an amount of such magnitude that the failure of Congress to specify any revenues out of which it could probably be paid creates a strong inference that it was not intended to be paid.

The apparent conflict between the provisions of the act above discussed is, in large part, explained by its legislative history, which in my judgment, makes it clear that it was the intention of Congress that advances for the cost of construction of the All-American Canal should not bear interest.

The bills originally introduced by Senator Johnson in the Senate (S. 728, 70th Cong., 1st sess.) and by Congressman Swing in the House (H. R. 5773, 70th Cong., 1st sess.) did not differentiate the manner in which the expenditures for the canal were to be reimbursed from that which was to govern the repayment of the expenditures for the dam and power plant, and it was plain that interest was to be paid upon all sums advanced from the Treasury for the construction of any of the works thereby authorized. Section 1 did not contain the words

The expenditures for said main canal and appurtenant structures to be reimbursable, as provided in the reclamation law, and shall not be paid out of revenues derived from the sale or disposal of water power or electric energy at the dam authorized to be constructed at said Black Canyon or Boulder Canyon, or for water for potable purposes outside of the Imperial and Coachella Valleys.

The last sentence of section 2 (b), requiring the payment of interest upon advances, was not qualified by the words "except as herein otherwise provided." Section 4 (b) contained but one paragraph, reading as follows:

(b) Before any money is appropriated or any construction work done or contracted for, the Secretary of the Interior shall make provision for revenues, by contract or otherwise, in accordance with the provisions of this act, adequate, in his judgment, to insure payment of all expenses of operation and maintenance of said works incurred by the United States and the repayment, within fifty years from the date of the completion of the project, of all amounts advanced to the fund under subdivision (b) of section 2, together with interest thereon.

Section 7 did not contain the words "reimbursable hereunder" following the word "interest." Sections 5, 9, and 14 (originally numbered 13) were, so far as here material, substantially in their present form. It was thus anticipated that revenues would be received by the fund under the reclamation law. But those revenues and the revenues from power and other sources were to be used indiscriminately for the repayment of advances to the fund and interest thereon.

The report of the Senate Committee on Irrigation and Reclamation (Rept. No. 592, 70th Cong., 1st sess., March 20, 1928), however, recommended several amendments, of which the following are here significant: To insert in section 1 part of the language above quoted, namely, "the expenditures for said main canal and appurtenant structures to be reimbursable, as provided in the reclamation law," the committee explaining the purpose of this amendment as "avoiding conflict with well-established precedent" (Rept., p. 4); to add to the last sentence of section 2 (b) the words "except as herein otherwise provided"; to add to section 4 (b) the words "made reimbursable under this act"; and in section 7 to insert, after the words "with interest," the words "reimbursable hereunder."

The Senate bill, with these proposed amendments, was thereafter extensively debated in that body, but no action was taken thereon before adjournment sine die on May 29, 1928. (Cong. Rec., vol. 69, p. 10678.) Meanwhile, the House had passed its bill, unamended in any respect here material, on May 25, 1928. (Id., p. 9990.) After the commencement of the second session of the Seventieth Congress in December, 1928, the Senate substituted the House bill for the Senate bill, Senator Johnson offering an amendment striking out all after the enacting clause and substituting therefor the Senate bill with the proposed amendments. (Cong. Rec., vol. 70, p. 68.) The subsequent debates hereinafter referred to were in the Senate on the House bill as thus amended.

The committee amendments above discussed, which segregated the canal project and made the land benefited bear the cost of its construction were apparently proposed for the purpose of meeting opposition to the use of revenues from power for any payment on account of the canal, which was regarded as a reclamation project for the benefit of the Imperial and Coachella Valleys in California. (See Minority Views, Sen. Rept. 592, pt. 2, pp. 25-26; see also Cong. Rec., vol. 69, pp. 9457-9, 10295, 10495; vol. 70, pp. 230-1, 236, 244.)

The committee report contains language indicating that it regarded the effect of the amendment as also making expenditures for the reclamation features noninterest bearing. The statement is made (Rept., p. 7) that "this tremendous enterprise * * * will cost

the Federal Government nothing except loss of interest on reclamation features, the same as in all other works of this kind." The report further states (pp. 7-8):

While the Government will in the first instance advance funds for the construction of the works, all advancements will be repaid to the Government within 50 years and those for purposes other than reclamation, with interest at 4 per cent per annum.

The report is not wholly clear on this subject because it goes on (p. 8) to refer to the authorized appropriation as including an item for interest during construction of the then estimated cost of the works including the canal. It is to be observed that the items embraced in the appropriation were made up before the committee amendments segregating the canal were proposed (id., p. 27), and it is probable that the committee overlooked the fact that its discussion of the interest item was not consistent with its earlier language regarding loss of interest on reclamation features. The report, moreover, refers to the interest item as "largely a bookkeeping arrangement to fix the amount for which beneficiaries of the project will be charged." In the subsequent debates, Senator Johnson, who was in charge of the bill, in a colloquy with Senator King on May 1 (Cong. Rec., vol. 69, p. 7623), made the direct statement that the payments by the landowners, the beneficiaries of the canal, were to be without interest. The colloquy is as follows:

Mr. KING. I think the Senator ought to state that with respect to the AllAmerican Canal it is not contemplated that interest shall be charged upon any advancement, even if the people in the valley are ever able to pay it; in other words, that the interest is to be remitted, and that they are to have an indefinite period-40 years at least-within which to make payment.

Mr. JOHNSON. No; they are to repay under the reclamation law.
Mr. KING. That means without interest.

Mr. JOHNSON. Exactly.

(See also id., pp. 7389-7390, 7627, 9457.)

While there are other statements in the debates during April and May from which it might be implied that it was not clearly understood that interest was not to be payable upon advances for the construction cost of the canal (id., pp. 7389, 7536, 7538), this was definitely recognized in the debates in December which immediately preceded the passage of the bill. During the discussion on December 11 Senator Johnson referred to the report of the Board of Engineers appointed by the Secretary of the Interior, with the approval of the President, under authority of joint resolution approved May 29, 1928 (Doc. No. 446, H. R., 70th Cong., 2d sess.), and the following colloquy then occurred between him and Senator King (Cong. Rec., vol. 70, p. 402):

Mr. KING. It is important in the discussion of the question of amortization. The Senator stated that under the plan suggested by the commission the AllAmerican Canal would be constructed under the reclamation project and therefore nothing would be a charge under the terms of the bill. The Senator forgot for the moment, I think, that the interest would have to be borne by the Government for the advances which were made for the construction of the All-American Canal.