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Mr. PAGE. Yes, sir.

Mr. RICH. Do you think $170,000,000 is going to complete it? Mr. PAGE. Yes, sir.

NECESSITY OF COMPLETING PROJECT IN ITS ENTIRETY

Mr. O'NEAL. Mr. Page, may I ask you again the question I asked you the other day: Is there any policy in the Reclamation Service as to building a part of the work so that it may be useful at that point, without just completing a little part and then requiring the completion of all of the balance before it is of any value? For instance, on this Central Valley project that we are now appropriating money for, say something should happen and we could not appropriate the balance of it, could what we have done already be utilized without further appropriation of the great additional sum or balance of the $170,000,000?

Mr. PAGE. Well, some small part of it, but relatively little.

Mr. O'NEAL. In other words, most of these reclamation projects are tied in as part of a whole, so that we make an annual appropri ation, and we gradually approach the point where if we have nothing to stop it, it goes on to completion and we receive returns, but we cannot stop midway or short of completion and get. the advantage of the money that we have put into it? We have to continue to appropriate it until we get to the point of final completion where it can be utilized?

Mr. PAGE. That is true because of the nature of the type of construction which is required on a reclamation project, such as this Central Valley project, for instance.

Mr. O'NEAL. In other words, you cannot do it by units?

Mr. PAGE. No, sir; we cannot do it by units. On many of the proj ects you can develop the land by units, but the larger part of your investment must be in before you can begin to reap any benefits from the project, before any land can be developed.

Mr. O'NEAL. In other words, with this $170,000,000 program in the Central Valley there is no point at which you could stop and then have some experts there to operate it; but we must look to the future appropriations of the full amount before we can begin to get any return or any realization from the capital invested?

Mr. PAGE. Well, that statement is a little broad. One of the prin cipal benefits of the Central Valley project is to the dry lands in the south end of the San Joaquin Valley, those lands which have an inadequate amount of water supply.

Mr. O'NEAL. Yes.

Mr. PAGE. In order to supply that water and to serve the land to be saved we must have the Friant Dam to control the San Joaquin River, and we must have the Sacramento River development in order to import water for the lower part of the San Joaquin Valley before we can store behind the Friant Dam a sufficient amount of water to give the benefits desired.

There is the small Contra Costa Canal which is a separate unit. apart from this, that is now under construction and can be used, but until you can import the Sacramento River water into the San Joaquin Basin you can get little or no benefit from the project itself.

COMPLETION OF PROJECT BEFORE RETURNS ARE MADE FROM SALE OF POWER, ETC.

Mr. LEAVY. As to this $15,000,000 that is asked for the Central Valley project this year in order to keep the work moving in an orderly manner, will it require a regular appropriation for the next several years, and on through before returns begin to come in?

Mr. PAGE. Yes, sir; and probably a greater sum could be used to advantage.

Mr. LEAVY. Will it begin to pay to the Federal Treasury any of these appropriations at any stage before final completion? That is · what I am trying to get at.

Mr. PAGE. It would be near final completion before we can hope to get a very large return either from the sale of power or from the use of the water. I might say in that connection that that is one reason why we have consistently brought in the total cost of these projects each year in the annual hearings, in our justifications, and why Congress has been told what the total cost of these projects would be each year. We want to avoid with these projects what might be considered as getting their head under the tent. The full cost is stated at the outset, as, for example, $170,000,000 for Central Valley.

CONGRESS INFORMED ON COST OF PROJECTS AUTHORIZED

Mr. O'NEAL. May I ask you, Mr. Page, one more question along the same line? It seems to me that we have sort of gotten the pig by the tail in a good many of these cases, and there is not very much we can do about it; but on future proposed projects can we not establish something that will give Congress, or whatever authority starts these projects, full information as to what the ultimate cost will be so that we can pass on whether we want to begin them or not?

Mr. BURLEW. It only happens because of the use of emergency money. Congress has authorized projects with full knowledge of the total cost of them, but it so happens now that a few of them were started with emergency funds, and for the first time last year Congress was informed as to the cost of them. I do not think what you fear happening ever can happen again.

Mr. O'NEAL. Have you sufficient emergency funds now, or anything that will be returned to you that will enable you to ask for some new project not to be authorized by Congress?

Mr. BURLEW. No; we have not.

Mr. O'NEAL. In other words, that phase of the Reclamation Service is passe unless we have additional emergency legislation? Mr. BURLEW. That is right.

Mr. PAGE. It never was invoked until Congress appropriated these lump-sum emergency funds. Under our previous plan we always went to Congres to secure annual appropriations for our projects from Congress, and that practice existed until 1933.

Mr. BURLEW. Yes. Congress at that time ceased making appropriations and depended on the emergency money to take the place of the appropriations.

Mr. O'NEAL. I suppose you have other projects, that there are a lot of others that are required that would come to Congress to be

authorized by act of Congress and the money then appropriated by Congress?

Mr. BURLEW. Yes; except this: the President some time ago reported to Congress, or the Public Works notified Congress, that he had a reservoir project. It is not within my knowledge to say that if Congress in appropriating for the Public Works fund in the future, in line with the President's message, that in it there might not be some reclamation projects, and whether Congress would be asked as to the particular projects for which the fund would be used, I do not know, but at the present stage of the allotment of emergency money there is no chance of this happening again, because there are not the funds available.

Mr. RICH. But, Mr. Burlew, this is something new in the annals of our history in having Public Works money spent the way we have spent it in the last 2 or 3 years.

Mr. BURLEW. Yes, sir.

AMOUNT OF EMERGENCY FUNDS ALLOTTED TO RECLAMATION PROJECTS

Mr. RICH. Can you tell us how much money has been spent through the Interior Department on the lands that are directly under the supervision of the Interior Department?

Mr. BURLEW. I believe that is in the Budget that we submit here. Mr. PAGE. That list which you have gives you the emergency money that has come to the Bureau of Reclamation.

Mr. RICH. That was $226,756,000.

Mr. KUBACH. That includes the appropriations for 1937.

Mr. RICH. Let us separate these two items. It was $96,224,000 for Public Works: $61,922,000 for Emergency Relief under the act of 1935; and $68,610,000 was direct appropriations.

Mr. PAGE. That was the direct appropriation, that last figure. Mr. RICH. So that you have spent two-thirds more by Public Works and by Emergency Relief on these proposals, than you did from direct appropriations?

Mr. PAGE. Well, for the fiscal years 1934, 1935, and 1936 Congress made no appropriations for our Bureau direct.

Mr. RICH. Well, they had no money to appropriate, did they? Mr. PAGE. Yes. They had money to appropriate in the emergency fund, and we were told that that was the way in which we were to obtain our money during that period.

Mr. RICH. What was the object of requesting that this money be spent by the Secretary of the Interior rather than through the Interior Department?

Mr. PAGE. I do not know as to that, but that was the policy that was established.

Mr. RICH. Established by whom?

Mr. PAGE. By the Congress.

Mr. RICH. Yes; but why would Congress want to grant the power for the money to be spent on the Interior appropriation projects and give it away to the Secretary of the Interior when we should have assumed that responsibility. That was their function, was it not?

Mr. SCRUGHAM. That is hardly fair to ask Mr. Page about a matter of congressional function.

Mr. O'NEAL. Does the record disclose the projects which were started from P. W. A. and the emergency funds?

Mr. RICH. We have had that put in.

Mr. LEAVY. Yes; I think that was asked for. Just pursuing, if I may, for a moment your question, the whole situation has been described in reference to the undertaking and the beginnings of certain of these projects in recent years without specific legislation authorizing them. That came about as the result of the depression and the enormous appropriations made to solve and to meet this unemployment situation. Instead of direct doles, Federal in their nature, these were undertakings that would result in something tangible, the creation of wealth national in its character; is that not the fact, Mr. Page?

Mr. PAGE. Yes, sir.

Mr. RICH. I will say to my colleague that when this was up on the floor of the House 2 years ago in reference to the money that was being spent on the Interior Department, the chairman of the subcommittee, who is now chairman of this committee, said it would. have been a whole lot better to have had the money spent through the Interior Department by acts of Congress than it would to have it spent by the Secretary of the Interior without Congress participating.

Now, Mr. Burlew, referring to the statement you made awhile ago that it is not liable to happen again, do you think that we might have another depression?

Mr. BURLEW. I said under the present status of the emergency funds. I indicated that there is a possibility that if a lump sum is appropriated for Federal public works projects that there might be some items included in it that may not be referred to Congress, but that would be another act of Congress. In other words, the way the thing stands now there would be no repetition of it.

Mr. RICH. If we appropriated another emergency-relief sum, such as $2,000,000,000 or $3,000,000,000 again, which is liable to happen even this year, a lot of this money will probably be spent by the Secretary of the Interior, will it not?

Mr. BURLEW. Probably so.

Mr. RICH. And the fact remains we will go right into the same thing we are now discussing.

Mr. BURLEW. But, Mr. Rich, my point on that is that Congress will act again before that is done. Then it is up to Congress. Mr. O'NEAL. They might do it by amendment.

Mr. BURLEW. It seems to n.e a possibility.

Mr. RICH. It is easy enough for us to consider this, but you come again with a $3,000,000,000 request for emergency relief, then we will go right ahead and we will stick our heads under the tent, and we will start a lot more projects. I want this subcommittee to get that point fixed in their minds. If you think that is a thing which we ought to be behind, go ahead, but if you do not, you ought to make some note of the fact that if we start new projects we certainly ought to designate every one of them that are going to require great, vast sums of money, and analyze the whole specific question. If new projects are started the money from that particular source ought to be enough to complete the whole job. Otherwise, we are going to have this drain on the Federal Treasury continue.

DECREASE OF REVENUE FOR INTERIOR DEPARTMENT

Now, Mr. Burlew, since you are here, and know a great deal about the operations and functions of the Interior Department, we cannot see how we are going to raise money for the continuation of the Interior Department, because we have practically lost all the revenues from the sale of lands. We have diminishing sales in oil leases, and in mineral leases. What have you in mind that will enable us to secure funds from the properties that are already developed and that will carry on the reclamation work, other than coming to the Federal Treasury and asking for funds each year in greater and greater amounts than we have appropriated in the past?

Mr. BURLEW. Well, we have studied that question but we have not yet found the answer, unless it would be found, as Mr. Page stated the other day, in a loan to the reclamation fund, which would be repaid over a long period of years as we get more returns from these projects.

These projects, Mr. Rich, are like building a house that would require 5 years' time to build. You cannot use that house until you get the roof on it and get the fixtures in it or until it is completed. If, however, in the meantime you stop building your house before it is completed, you do not get any benefit from it. wise, if you stop building these projects before they are completed you get no benefit from them.

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Mr. RICH. I appreciate that and I am interested in developing the West, and if I thought we could get the returns I would favor it; but as I see the picture, I cannot see anything ahead but greater and greater drains on the Federal Treasury in order to do that because we have lost the sources of revenue that we have had in the past and you have got to look to some new source of revenue to get a return of your investment. I have read the justifications that you have given us here. I have not finished reading those on Indian Affairs, but I see the Interior Department requiring 10 percent more and then 10 percent more next year. That is true not only in the Interior Department of the Government but in other departments and we are going to reach the cracking point some day.

ACREAGE TO BE SERVED BY CENTRAL VALLEY PROJECT

Mr. BURLEW. Mr. Rich, if you could have seen the Central Valley as Mr. Page and I did last summer, and seen those orchards that have died because of lack of water, you would appreciate the tremendous investment in labor and money in the West. You would also see how this money would restore it and bring capital into the country.

Mr. RICH. You have out there in the Central Valley about 400,000 acres of land that is developed, have you not?

Mr. BURLEW. I do not know the amount that is developed.
Mr. RICH. It is 400,000 acres, I think.

Mr. PAGE. There are 400,000 acres reverting to desert out of about 3,000,000 acres which are irrigated in the whole Central Valley. The 400,000 acres which are going dry lie in the southern San Joaquin Valley, where alone there are 1,000,000 or more irrigated and producing.

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