Mr. MEAD. Mr. Chairman, might I just make a statement in regard to this?

The need of these projects and the need of reclamation is that Congress shall face the actual situation that exists on these projects, and that there shall be something more than writing off or postponing payments. That effects no real solution. That is all there is to the bill that was passed on May 9; it was to give an opportunity for a reconstruction act. And if it is postponed until another year, it simply means that you prolong the uncertainty and prolong the delay, in any attempt to reorganize existing districts, which will make it a very difficult matter, because every month's delay in this uncertainty makes the restoration of the right kind of conditions more difficult.

Mr. HUDSPETH. Is there any possibility-if you will permit an interruption, Doctor Mead

Mr. MEAD (interposing). I want to say this; right now, in reply to the inquiries of Judge Raker: That the only way that we can disclose the exact situation is to bring here the testimony that this committee gathered and read it to you; and you will see exactly what is the difference between the assumed position of the particular project that we were speaking of and the actual situation.

Now, the committee itself did not assume to pass final judgment in regard to any of these projects; but where there was a matter that required further investigation and the presentation of the exact facts considered that there should be a further investigation by the Government pending any determination of what would be the financial adjustment there. Now, the opinion of the committee has always been that that investigation is necessary, and the sooner it is made. the better it is going to be for the returns from these projects, for agriculture and for the condition of the people living on them.

I want to say this, that any idea that you are going to collect all of this money that the Government has spent without some further action to enable people to earn that money, is just simply a delusion. It can not be done. And some of that money has been lost; irrevocably lost. And no action that Congress can take, or no failure to act, will affect that situation.

Mr. RAKER. Now, Doctor Mead, I have been trying to find in this report," Federal reclamation by irrigation" (S. Doc. 92), the conclusions which you have just drawn, namely, the amount under each project that has thus been handled and the total amount but can not find it; so that as a member of the committee, I am seeking information.

Now, returning to these charges-(and then I am going to make a suggestion to the chairman if Mr. Leatherwood is through). Mr. LEATHERWOOD (interposing). I have a motion to make. Mr. RAKER. Let me read section 11 of the proposed legislation: That the secretary is hereby authorized to undertake a comprehensive and detailed survey of the physical and economic features of each existing project, and to classify the irrigable lands thereunder in accordance with the provisions of section 5 of this act.

Section 5 is the one that we had under consideration the last time we met, and we went into detail on it; and as I gathered from your statements, the parties under the projects who now have contracts

advantageous to them could not be compelled to change their contracts by subsequent legislation; those who have burdensome contracts, so that the contracts they would have under the proposed legislation would be more advantageous than those they now have would accept; and the charging off of those amounts due from those last-named parties would be, in substance and effect, a depletion of the fund to be returned to the United States to that extent; and therefore the Federal Government would lose that amount of money. Is that a fair statement, Doctor Mead?

Mr. MEAD. Yes, sir; that is exactly the situation.

Mr. RAKER. Yes. Now, that being the case so that it may be in the record now, and then I will get at it in a different angle, to get all the information I can from those who have it-in your judgment how much of the total reclamation fund that has been expended up to date will have to be thus charged off?

Mr. MEAD. Well, the table is in the report.

Mr. RAKER. On what page?

Mr. CAMPBELL. On pages 142 and 143. In perusing the report you will find that we made definite recommendations on each one of these projects and the divisions thereof as to what we thought would be necessary to carry out any probable losses, if they did occur; and on pages 142 and 143 we have two tables, one known as probable losses and the other as definite losses. So that on all of these projects we have made a definite statement as to whether there would be losses, in our opinion, or not. Also we have in the table referred to the various resolutions or recommendations in the first part of our report, which, in our opinion, when applied to these various projects would be helpful to them and necessary.

Mr. HUDSPETH. This table shows definite losses amounting to $18,561,146.

Mr. CAMPBELL. Yes, sir.

Mr. HUDSPETH. And the table also shows probable losses amounting to $8,830,000.

Mr. CAMPBELL. Yes, sir.

Mr. RAKER. And that the total probable loss and the total definite loss, as estimated by this table, will be $27,391,146.

Mr. CAMPBELL. That is correct.

Mr. RAKER. I request that the reporter insert the table in the record at this point.

(The table referred to is as follows:)

SUMMARY OF LOSSES

It has been found not just to 'require and in some instances not possible to obtain the total repayment of costs of investigation, construction, operation, and maintenance charged against the projects.

Hence the reclamation fund must suffer depletion to the extent that such costs should not or can not be repaid either by the water users or by the United States. There are two classes of projects-secondary and primary.

Costs charged against secondary projects cover all expenditures for preliminary reconnaissance, surveys, and examinations. If a secondary project is selected and construction authorized, such preliminary expenditures become part of total construction; if a secondary project is not selected and authorized, such preliminary costs are carried in suspense account. If a secondary project is definitely abandoned, the reclamation fund must suffer a permanent depletion in the amount of such preliminary expenditure.

Total costs charged against primary projects cover preliminary expenditures, all expenditures for construction, operation, and maintenance during construction, before public notice, and accumulated unpaid expenditures for construction, operation, and maintenance, interest, and penalties which have been added to the total costs by authority of law.

The committee has found that such total costs on some projects are in excess of what water users can or should be required to repay. The reclamation fund must suffer depletion to the extent that water users can not repay and should suffer depletion to the extent water users should not repay such costs. The reports upon the special projects contain the facts regarding costs and the reasons for recommending reductions of charges to water users. The following table shows the actual and probable reductions which the committee recommends.

Under the head "definite loss items are listed which must result in actual depletion of the fund.

Under the head "Probable loss" items are listed which are estimated, the amounts depending upon the acreages now not capable of profitable cultivation but which may hereafter be restored to or found capable of profitable cultiva tion. Under this head are also listed items which may be restored to the fund by congressional action.

Mr. RAKER (continuing). Now, there, you see, we have a $27,000,000 proposition before us; and if that is not worth a little of my time and care and attention, why, I will not long be a member of this committee.

Mr. LEATHERWOOD. You do not mean, Judge Raker, that any legislation, or the legislation that we have under consideration, is going to cause us to forego getting every penny of this that it is humanly possible to get? 10

Mr. RAKER. That I do not know.

Mr. LEATHERWOOD. Well, I know; there is no question about it.

Mr. RAKER. Well, what you know, Mr. Leatherwood, I am sorry to say that I do not know.

Mr. LEATHERWOOD. Just for illustration, may I say one other thing?

Take, on page 143, the Strawberry project, about which I knowand I use that simply because I think I know more about it than about any other. There is no probable loss estimated here in this table, and there is no definite loss; but there is a prospective loss of $400,000. It is not shown here in these tables. But you block the situation in that country, as it is now, and I undertake to say to you that the Government will lose $400,000 in all probability. On the other hand, you go ahead along the constructive lines of the two bills now before Congress, and you have solved in my State the question and saved to the United States Government $400,000.

Mr. RAKER. Well, that is a puzzle that I can not understand.

Mr. LEATHERWOOD. Judge Raker, do you mean to tell me, with your legal training, that you can collect from me $400,000 that I never gave a scratch of a pen to obligate myself to pay to you? Mr. RAKER. Well, it depends on circumstances.

Mr. LEATHERWOOD. I have named all the circumstances.
Mr. RAKER. No.

Mr. LEATHERWOOD. I have absolutely never contracted with you, orally or in writing, to pay it; could you collect it?

Mr. RAKER. That does not make any difference?

Mr. LEATHERWOOD. I say, can you collect it?

Mr. RAKER. Yes.

Mr. LEATHERWOOD. Then I am through. I have no further discussion upon the business end of it.

Mr. Chairman, I move that

Mr. RAKER (interposing). For further answer to your question: Because the books are full of cases in equity where a man never made a scratch of a pen and never made any contract, verbal, written, or otherwise; but he received the benefit and had, therefore, to pay for the benefit that he received.

Mr. HUDSPETH. I think that is correct.

Mr. RAKER. I do not know just what Mr. Leatherwood refers to. Mr. HUDSPETH. I can not understand; I know the gentleman from Utah states the facts at all times; but it is beyond my comprehension that men would stand out in the way of the Government collecting a debt that they could not collect legally.

Mr. LEATHERWOOD. Mr. Hudspeth, it is not a question of standing out. Suppose I have 40 acres of land. My Government has contracted with me at $60 an acre for the water for the land. I pay the United States Government $60 per acre in full of all such charges. Have I not performed my contract?

Mr. RAKER. It depends.

Mr. LEATHERWOOD. It depends; all right. In addition to the contract, the Government expended a greater sum of money than the return from my land and the other lands in the project will repay

Mr. RAKER (interposing). But if I sat idly by and acquiesced, and by my acquiescence consented and tacitly encouraged the development of additional units or additional works, and got the bene

fit of those works, you would come pretty near getting the money that is due you.

Mr. HUDSPETH. I might say that the construction cost of the Rio Grande reclamation project was estimated and the settlers and farmers there were given to understand that it would be $40 per acre. It has now increased to where they are obligated to pay $94 per acre.

Mr. LEATHERWOOD. Certainly; within the terms of your contract. But I am talking about a contract that I absolutely know about, and have a copy of right here.

Mr. HUDSPETH. Let us determine the policy of the committee. The CHAIRMAN. I think we should do so.

Mr. LEATHERWOOD. I move, Mr. Chairman, that the entire membership of the committee be urged to be present at the earliest possible date, and that we immediately take up for consideration the question as to what we are going to do.

Mr. RAKER. We might meet to-morrow morning at 10 o'clock. The CHAIRMAN. Yes.

Mr. RAKER. I think we will expedite the matter by all of us being here at that time.

Mr. HUDSPETH. I think so, too; we should have a full committee meeting.

Mr. LEATHERWOOD. And if the plan of Judge Raker is to be followed, there is nothing to be accomplished.

Mr. RAKER. Mr. Chairman, I ask that the reporter be requested to have all the testimony up to date in this matter in the committee room by to-morrow morning.

The CHAIRMAN. In manuscript form?

Mr. RAKER. Yes; in manuscript form.

Mr. CAMPBELL. I think, Mr. Chairman, we had probably better be here when you meet to-morrow, for this reason: That if you do decide to make the investigation, as has been suggested by Judge Raker, then I can say without fear of any contradiction, that this committee will be working on that testimony with the assistance of from 5 to 35 people for four or five months. Not that I desire to scare you away from any investigation. But I know that it took us six months; and when I tell you that the records which flow with this report will weigh probably a ton, you may appreciate what you are going up against.

Mr. MEAD. I want to say this, too, Mr. Chairman: That if there is any question about the actual loss of the money that we have put down as a loss, we can take that up with the committee at any time. As to a considerable part of it, we can show that it is actually legally lost to-day, and can not be recovered in any way.

The CHAIRMAN. I think it will be a good idea, if you can, before we have another meeting, for you to prepare a statement showing to what these losses are attributed to; whether they are due to land that is not productive or engineering mistakes, or what, so as to have them classified when we meet again.

Mr. MEAD. I have had that statement ever since we began these hearings, expecting it to be called for every day.

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