EXHIBIT 2--Continued

STATE OF NEW SOUTH WALES, AUSTRALIA-(A) ESTIMATED EXPENDITURE INVOLVED IN PROVIDING 6,000 FARMS FOR 6,000 SETTLERS-Continued

Development of farms: Advances, 6,000 at $7,200,

possible maximum__

a $43, 740, 000

95, 474, 700

90. The administrative expenses, including the provision of an instructional and training staff are difficult to estimate, but it is possible they will reach $243,000 per annum.

· Cost of improvements on various types of farms in New South Wales, Australia, as determined by the Government in 1923

a This figure, $43,740,000, will be reduced according to the capital possessed by the Overseas settlers.

5 Eight.

7 Thirty-five.
8 4 SOWS.

EXHIBIT 2-Continued

Capital of the first 1,200 settlers on the Murrinsbidge irrigation project, New South Wales, Australia

1 These figures include 2-acre farms, the holders of which had little capital. If these were excluded. the average would be more than $3,402 per settler.

Significant features of the colonization program of New South Wales, Australia, for placing 6,000 families on farms carved out of unimproved land: 1. The State requires satisfactory evidence of knowledge, experience, character, and $1,500 capital.

2. Provision made for instruction and advice for these settlers.

3. In addition to the settler's capital, State will loan up to £500 (about $2,500) to enable settler to complete improvements.

4. Total average debt of settlers to State not to exceed £1,500 (about $7,500). May exceed this in some cases.

5. Payments on land and loans will be amortized and run for 36 years. 6. Total estimated cost of this settlement program, $95,474,750.

Mr. MEAD. My contact with this kind of development began in 1907. I had been connected with the development of this country

Mr. RAKER. Before you give your experience on that, are you familiar with New South Wales?

Mr. MEAD. Yes; but before dealing with New South Wales I wish to refer to another State, which is very brief.

I went to Australia as an engineer. One of the Government projects was a work estimated to cost $15,000,000. That is where I first came to understand the relation of agriculture to irrigation development.

Before beginning the new work I felt that we ought to face the situation that existed on the old ditches, the old projects.

Nothing had been done up to that time to solve the problems of the settler or help him to surmount his obstacles.

A study of settler's problems was my first understanding of the foundation of irrigation development. We found that to take a 40-acre tract of land and put on the improvements and equipment needed by the settler would cost somewhere between $3,750 and $4,000, and that was scaling these down to the narrowest possible limits. I had no idea that it cost so much. And this, remember, was before the war.

It was equally apparent that we could not expect to get settlers to undertake to develop 40 acres of land where he must have a capital of almost $100 an acre. So the question arose, What capital must the settler have to make him a safe risk, and how far would it be safe for the Government to go in lending him what he lacked?

They sent the Minister of Lands and myself to Europe to study that question. We went to Denmark, Italy, Holland, and Ireland. My associate was a Highland Scot who was conservative and not a believer in aid that was being denounced in Australia as spoonfeeding the settler, but before we had finished observing the results

of planned settlement in Europe he was as complete a convert as I to the policy.

The program adopted was that the settler must have a capital of $1,500 if he was to take 40 acres of land. If he took a farm laborer's allotment he could be accepted without capital. The government would loan farmers $2,500 if they had $1,000 of their own. That is the plan adopted in New South Wales 15 years later. That has been in operation in the State of Victoria during this period. Settlers have paid their debts. Thirty-two new settlements have been established under it. There has been no question of its solvency. The money is coming in, and they are preparing new settlements under it and making preparation for taking on 3,000 new settlers in the State of Victoria on those terms.

That means that it has been tested out pretty_well.

I was in Egypt last year and talking with the Egyptian irrigation authorities and telling them about the experience of California, which has practically the same plan. The manager of their irrigation works said, "All you have to do is to change the names. have gone through exactly the same experience here.

We

The question comes up, Do we need that kind of oversight and aid in this country or are our conditions so favorable that we do not have to do the things that other countries are doing? Bearing on this I have to submit a statement from the University of California which gives the results of investigations made in some of the newer irrigation districts of California through a combination of funds provided by the State, by the university, and by the Federal land bank of that district.

I will not take the time, unless you desire it, to read those statistics; but if you do desire, I will read the statement.

The CHAIRMAN. Go ahead.

Mr. MEAD. Because this comes right at the foundation of our future development.

Mr. RAKER. I think we ought to know what you have there.

Mr. MEAD. The first statement relates to the Honey Lake district. It is a district created under the State district act. It is made up of Tule Lake and Baxter Creek irrigation districts.

Mr. RAKER. Eagle Lake. Does it say Tule Lake there?

Mr. MEAD. Yes; Tule Lake.

Mr. RAKER. It is Eagle Lake.

Mr. MEAD. These are new districts organized under the Wright Act and are bonded for $52.50 per acre.

Now that represents practically the same as the Government indebtedness, excepting they have to pay interest on it.

Bonds mature serially and carry 6 per cent interest. Thus, $3.15 per acre must be paid to meet interest on bonds. There are 25,000 acres in the two districts. The elevation of the land is about 4,000 and the climate and character of the country is similar to much of Nevada. The money voted is only sufficient to pay for headworks and main canals which are already built. It is not contemplated to serve individual units. Farmers will have to build their own farm laterals.

The soil and country is suited to grain, alfalfa, potatoes, and other hardy crops. Livestock is and must become the basis of their agriculture.

The following is the cost of developing an 80-acre farm in that region, making buildings as cheap as possible;

Eighty acres clearing of sagebrush, at $10, $800; building ditches and part farm lateral, $500; preparing and sowing 40 acres of alfalfa, at $15, $600; 2 miles of fences, hog tight, $800; preparing 40 acres for grain and other crops, $400; structures, $250 that is, irrigation structures.

Now, that amounts to $3,350, and every dollar of that must be spent in order to bring out the full producing value of the land.

The next is the buildings. The house $400, a wing of a barn $350, corrals $100, well and pump $150, chicken house $100, hog houses $50, tool chest $100.

That is $1,250.

Now, equipment: Wagon and rack, $100; plow, $25; harrow and disc, $50; cultivator, $12; mower and rake, $165; small tools, $100. That makes $452.

Then livestock: Two horses and harness, $250; 1 family cow, $125; 2 brood sows, $50; 50 chickens, $50.

Now, that totals up to $5,527. Then you have feed and seed $250, taxes $80, irrigation charges $320, insurance $25, living $600, and miscellaneous $250, or a total of $7,052.

Mr. RICHARDS. Doctor Mead, is that for the individual unit?
Mr. MEAD. Yes.

Mr. RICHARDS. How big?

Mr. MEAD. That is for an 80-acre farm.

Now, in the second year 10 cows will be needed, which will cost $1,250. The barn should be completed at a cost of $500 and a milk house erected costing $75.

This will bring the capital required up to approximately $9,000, and it is not safe to attempt such a venture with less than $7,500.

Local banks will loan 50 per cent on 90-day paper on cattle that are tuberculin tested. Further advances can only be made on real estate. Settlers are better off when they do not pay cash for the land, as they can buy on a very small deposit down. In fact the landowners are feeling the economic pressure to such an extent as to be glad to sell the land with no deposit down in order to shift the interest and tax burden. Prices of land range from $25 per acre to $125 for the same quality depending on how badly the owners wish to sell. Only two or three new settlers came into this district last year. It is off of the main lines of travel, a considerable distance from markets, and is not attracting settlers with capital. Settlers with capital are scarce. The chamber of commerce is doing considerable advertising, but so far with very poor results.

The land should be sown to alfalfa before settlement. It would assure settlers an immediate income and settlers with less capital could be taken.

The Happy Valley irrigation district.

Mr. RAKER. Doctor, you are getting past the Eagle Lake-Baxter district, and I will ask a few questions later, but I will call it to your attention now that whoever made that report was illy advised. Of course, all that land is under private ownership, it has a through railroad. The Southern Pacific runs right through the territory, right through the heart of it; the N. C. O. is near part of it, and

a short distance away is the Great Western Pacific, and it has the best market in the State of California. Every pound of beef, butter, potatoes, and eggs can be sold within 12 miles, at Susanville and 25 miles away at Westwood, where they are shipping in carloads of potatoes, cabbage, flour, and everything that people eat, and those people are not raising it now by one-third of what is used at Susanville in the two mills, the box factory, and the fruit growers, and Westwood where they are shipping it in by carloads. Now, that I know, and I have been there and seen it with my own eyes and talked with the managers. I have been over that country for 50 years. They leave out the best product that is raised there. They average as high as $90 an acre for alfalfa seed. When I first went over that country there was nothing but sagebrush interspersed with this land. They are using water from the Lake Leavitt reservoir. I am just calling your attention to that to show how somebody has forgotten the facts.

Mr. MEAD. There is not a word here that says that that is not a profitable enterprise. In order that there should be no misunderstanding about this, there is nothing here that would indicate that it can not be made a prosperous district. It can. But the point is that if settlers have to come in without any kind of financial aid to get started and without a better kind of credit system than is afforded they can not come, and they have not come.

I am going to show later on that the products that have made the Durham district prosperous are the products that can be grown in this district. It is possible to repeat here the prosperity that the Durham settlement has enjoyed, and the whole trouble to-day is that we have not recognized how much money it takes to get started and how vital it is to get that start quickly.

Mr. RAKER. Just as a reminiscence. Of course, I just happen to be familiar with that territory.

Mr. MEAD. Yes.

man.

Mr. RAKER. It would not be interesting to the committee and they may ask me to perform for them later my work in there as a young I became an expert cook during a whole year when this work was first started from Eagle Lake and, of course. I participated with the surveyors and I know something about it. There has been about $3,000,000 lost there by virtue of trying to carry schemes that never went into the land. That is the trouble with it. There is no better opportunity for prosperity and development in California than this valley where this land is located.

Mr. HAYDEN. The fact I want to ascertain, though, from the report which you have, Doctor Mead, is that they are not settling on the land.

Mr. MEAD. That is correct.

Mr. RICHARDS. Whence comes this report, Doctor?

Mr. MEAD. This comes from the authorities that have been making this investigation in districts all over the State. The investigation is still going on. It is a combination of the State, the University of California, and the Federal land bank. The Federal land bank feels that it needs to be in a position to know what kind of credit scheme for developing they can get behind and they want to know the conditions of farmers within their district.