Assuming that these are self-liquidating projects, why cannot t States raise the money to complete them? You say you want to assure the people of this country that it self-liquidating and that it is self-paying. Why could you not she that to the people of the States and have the States finance projec of this kind? Mr. PHILLIPS. Well, personally, I do not think that the Bureau Reclamation would care to relinquish their equities in power develo ment to the States or to anyone else. I think it would be much mor desirable for the Bureau, who already have a construction investme in the project, to be in control, if you please, of the power developmen Mr. FITZPATRICK. Before they had any interest in it, when y first made your application, did your State feel the same way that time? If they did, it was not necessary to appeal to the Feder Government. You could have gone ahead and done it yourself. Mr. PHILLIPS. That was done a long time ago, sir; 20 years ago. cannot say what the attitude of my State was at that time. Mr. FITZPATRICK. You know, we hear so much about those proje going to be self-liquidating and return the money to the Feder Government, and they are purely State matters. Of course, I reaire that where the Government has started in on a case like this, its little different, but there are new projects that are now being advocated by the States, and that are entirely within the States. If they ar self-liuqidating so soon, why could not the States do it instead going to the Federal Government for funds? PROJECT IS BOTH INTERSTATE AND INTERNATIONAL Mr. PHILLIPS. To further answer your question in this particula case, sir, this is not only an interstate project, but it is also an inter national project, and it would be mighty hard, I believe, to get the Federal Government, who are interested in the delivery of water to Mexico, and the States of Texas and New Mexico together on s practical basis for development. I believe it would be impossible secure development of power on our project by the States. At the same time, I believe that if this development is undertake that it will not only serve to repay the cost of development but also to relieve the settlers on the project of a part of the construction costs It will also put the Government itself in a much more secure position. to realize on its investment in the project because it is really, after all a more dependable source of revenue than if the Government were entirely dependent upon the production of crops and the commodity prices which may prevail for those crops, and I think also that it would conform to the administration's power policy, as it is generally understood. I believe, too, that the Bureau recognizes, in the event of this development, that an equitable proportion of the costs of the Elephant Butte Dam, which is the principal feature in connection with the power development, could be and should be absorbed in the power project and paid for from power revenues, a proportionate credit to be allowed the water users on the construction costs of the Irrigation project. Mr. O'NEAL. Have you any figures, Mr. Phillips, on the cost of the transmission lines and that sort of thing? Mr. PHILLIPS. That, sir, is all set forth in detail in the Cone report. Mr. FITZPATRICK. Will this reclamation project bring any new land into production? Mr. PHILLIPS. No. No new land can possibly be brought in on the Rio Grande project. The reason for this is that the storage in the Elephant Butte Dam limits the safe annual water supply for the acreage in the project. Mr. FITZPATRICK. When you say the acreage in the project, do you mean the acreage there now producing? Mr. PHILLIPS. The acreage now producing is 90 percent of the acreage in the project. Mr. FITZPATRICK. Then it will put about 10 percent more in, wilk it not? Mr. PHILLIPS. No, sir; the power development will not. It is just a matter of the other 10 percent coming into cultivation, by reclaiming the land and getting it ready for production. Mr. FITZPATRICK. Since this reclamation project started, how many acres have been placed under production? Mr. PHILLIPS. The contemplated gross acreage in the project at the time it was started and the contract liability which the water users have agreed to repay to the Government were based on 155,000 acres, and we have had under cultivation approximately 142,000 acres as the maximum. Mr. FITZPATRICK. Does that include both States? I am sure that the committee already has given me as much time as I require, and I appreciate the opportunity of appearing before you. As I said in the beginning, I wish to concur in the general statements made by Mr. Harwell, and also feel that the Cone report is a very important piece of evidence in connection with the deliberations of the committee. Mr. SCRUGHAM. Are there any others who desire to make statements, Mr. Thomason? Mr. THOMASON. Yes; we have one more statement, and then two very brief witnesses. There has been so much interest on the part of the people of that section in this hydroelectric development that I should say some 15 or 20 towns in and near that project, including Las Cruces, N. Mex., and El Paso, Tex., together with respresentatives of the farmers and mining interests, met and organized what they were pleased to term a "power league" to aid in the development of this power which is now going to waste, and to that end, they elected Mr. A. W. Norcop, of El Paso, Tex., as president, who is present as their representative, and we should like to have him. heard at this time. Mr. SCRUGHAM. We will be glad to hear Mr. Norcop's statement. STATEMENT OF A. W. NORCOP, EL PASO, TEX., REPRESENTING THE ELEPHANT BUTTE POWER LEAGUE Mr. NORCOP. Mr. Chairman and gentlemen of the committee, I shall try to be as brief as possible. I appear here as the direct representative of the municipalities of El Paso, Tex., and Hot Springs, N. Mex., and Las Cruces, N. Mex., as well as the organization that Mr. Thomason has mentioned, the Elephant Butte Power League, which latter is a nonprofit, cooperative, voluntary association, made up all of the communities within economic distribution distance of E phant Butte Dam. It represents a population of, I think I am safe saying, at least 175,000 people. The irrigation project comprises sz area, from Elephant Butte southerly, of about 200 miles. In the center of the valley is located El Paso, the largest city in the southwest, with a population of over 100,000. Above El Paso on the project are various agricultural communities, the largest being Las Cruces. Below El Paso are various agricultural towns. Near Elephant Butte Dam is an extensive mining district, the princip towns serving which are Silver City, Santa Rita, Central, and Hurley, 80 miles from the dam. Southerly from these towns, about 50 mies there is another agricultural area the center of which is the town of Deming. That area in there [indicating] is the Deming area. The Mimbres River, which is the watershed for the Black Range Mountais comes down out of the mountains and then sinks into the ground and disappears, with the result that quite an area around the city Deming has been put into cultivation, the water being utilized bị means of pumps. Now, all of this population, gentlemen, and all of this area, whichis sort of an isolated little empire of its own-surrounded and separated from the rest of the producing areas of the country by a belt of and lands 400 to 600 miles wide, and all of this area feels that the most important thing that can be done for it now is the installation of machinery in Elephant Butte Dam for the purpose of utilizing the energy, which, as Mr. Harwell has already explained to you, is going to waste at the rate of $400,000 worth per year. That is a very con crete and definite thing. It is not a mere hypothetical waste. E means simply this, that to the east of us our gas and oil reserves are being used up in place of this energy which is flowing away, and it means that coal deposits are being used up in place of this energy is flowing away. CONSERVATION OF NATURAL RESOURCES We are all familiar with the realization that one of the ma problems, perhaps, of our country, is the conservation of our resources, and not to continue their waste. Now, gentlemen, with reference to the situation there, as to the present amount of power produced, I should like to say this: I have before me here the last annual report of the El Paso Electric Co. which is a subsidiary of the Stong and Webster interests, and is the major power company that is serving this area in here. We find this to be true in our area, as you no doubt find it to be true everywhere else, that the placing on the market of additional power at a lower price is a vital thing in the development of any community. Instead of injuring the power companies or reducing their revenue, or profit, as the cost of power to the consumer is reduced, there is markedly greater consumption. It does not reduce their revenue or profit. INCREASE IN CONSUMPTION OF POWER The El Paso Electric Power Co. shows in its last annual report that the consumption by domestic users of power, that is, residence con sumers, has increased from 350 kilowatt-hours each per year in 1928 to 960 kilowatt-hours each per year in 1936, brought about by lower rates, and that there has been a definite increase in the earnings of the company during that same period. Now, we antitipate, and with good reason, that the utilization of this power will enable us, as consumers-and I am looking at this largely from the standpoint of the consumer-will enable us to obtain power at somewhat lower costs. We do not ask for it on anything like the basis of cost of development without profit or without taking into consideration amortization of the investment. We do not ask for that, but we do feel certain, in view of the developments and the progress. of the electric company in reducing year by year the rates on power, that when this block of power is put on the market we will enjoy, as consumers of that power, a somewhat lower rate, and that, at the same time, the reclamation service and these two irrigation districts will not only get back their investment in the plant and equipment, but will realize a profit that can go, as has already been stated, toward the repayment of the original cost of the dam itself. Mr. FITZPATRICK. Pardon me right there. You said there would be a reduction in the electric rates by increasing the amount of power used? Mr. NORCOP. Yes. Mr. FITZPATRICK. Did you ever make any application to the Rural Electrification Commission for any relief down there? Mr. NORCOP. Mr. Congressman, my understanding of that act is that it is designed, of course, to enable agencies or groups to combine and to obtain loans with which to build some additional lineage, or something of that sort, in order to obtain power where existing agencies are unwilling to extend lines. I do not understand that we could go to the Rural Electrification Authority and expect to get funds from them for any such project as this. Mr. FITZPATRICK. Well, they are erecting projects through nonprofit organizations, and they are making deals with the electricpower companies now. Mr. NORCOP. That is true. Mr. FITZPATRICK. That is where they can show that there will be a greater number of people applying for electric power. So, I am asking you if you have ever made any application at all to the Rural Electrifiction Commission, as to whether they could help you out? Mr. NORCOP. I made an investigation, Mr. Congressman, and found that it was utterly out of the question for a project of this kind. Now, there are other features, Mr. Congressman, in this respect, that have been little touched upon. We must remember that the development of the water storage in that territory did not originate in irrigation at all. It originated away back in the early days, when a treaty was entered into with Mexico, as a result of which, the United States of America, in order to satisfy certain claims, and in order to obviate certain difficulties with Mexico, agreed to construct a dam to control floods and to insure the delivery of a certain amount of water to Mexico. Mexico had certain rights, of course, in the waters of that stream. That is an international as well as an interstate stream. As a result of that, a number of the people in our area, recognizing at the same time that the lands on our side of the international boundary might be better served with water and made more valuable by the construction of a larger dam, applied for it, and the result was the Elephant Butte Dam. But we must always bear this in mind, that latter is a nonprofit, cooperative, voluntary association, Ea all of the communities within economic distribution distan phant Butte Dam. It represents a population of, I think I saying, at least 175,000 people. The irrigation project o area, from Elephant Butte southerly, of about 200 n... center of the valley is located El Paso, the largest city west, with a population of over 100,000. Above El Fa project are various agricultural communities, the largest Cruces. Below El Paso are various agricultural town Elephant Butte Dam is an extensive mining district, tre towns serving which are Silver City, Santa Rita, Central, a 80 miles from the dam. Southerly from these towns, af there is another agricultural area the center of which is Deming. That area in there [indicating) is the Denair gan a Mimbres River, which is the watershed for the Black Rage M comes down out of the mountains and then sinks into the disappears, with the result that quite an area around t Deming has been put into cultivation, the water being means of pumps. Now, all of this population, gentlemen, and all of this are sort of an isolated little empire of its own- surrounded and from the rest of the producing areas of the country by a h lands 400 to 600 miles wide, and all of this area feels that important thing that can be done for it now is the mista. machinery in Elephant Butte Dam for the purpose of t... ... energy, which, as Mr. Harwell has already explained to yo, si to waste at the rate of $400,000 worth per year. That is a crete and definite thing. It is not a mere hypothetical waste means simply this, that to the east of us our gas and oi, rese being used up in place of this energy which is flowing awal 2 means that coal deposits are being used up in place of this energy w is flowing away. CONSERVATION OF NATURAL RESOURCES L We are all familiar with the realization that one of the r problems, perhaps, of our country, is the conservation of our res and not to continue their waste. Now, gentlemen, with reference to the situation there, a•• present amount of power produced, I should like to say this before me here the last annual report of the El Paso Estra which is a subsidiary of the Stong and Webster interests a major power company that is serving this area in here to be true in our area, as you no doubt find it to be true eve else, that the placing on the market of additional power at price is a vital thing in the development of any comin ata'y of injuring the power companies or reducing their revere as the cost of power to the consumer is reduced, there is greater consumption. It does not reduce their revenue o INCREASE IN CONSUMPTION OF POWER The El Paso Electric Power Co. shows in its last a: norm the consumption by domestic users of power, that is, rese sumers, has increased from 350 kilowatt-hours each per ve to 960 kilowatt-hours each per year in 1936, brought al |