Mr. RICH. Was your land privately developed?

Mr. BLAINE. The predecessor of the Northern Pacific Railroad Co. put the Sunnyside Canal [indicating] along with private individuals. During the panic of 1893 they failed, and in 1900, I organized the company that bought the canal and lateral system and the land, and I was active in the development. In 1905 we sold the canal and the lateral system to the Federal Government. The Federal Government wanted to come into that district.

Mr. RICH. Did you make a good profit on it?

Mr. BLAINE. Yes. The canal and the lateral system cost, I was told, about $800,000, and we sold it to the Government for $250,000. We bought it for a less sum than that. We had thrown a great deal of activity into the project, and we made it a going concern. It was backed by some very substantial men; the pioneer Denny's of Seattle. Mr. RICH. Has the Federal Government received their money out of the project?

Mr. BLAINE. There is a very small percent of it unpaid. It is one of the nearest paid-out projects in the whole United States. This land under the Sunnyside Canal, known as the Sunnyside unit has produced a gross wealth of $125,000,000, and the cost of the project to the Government has been $3,500,000.

Mr. RICH. Is it your opinion that before the Federal Government goes in there and develops this land, that as to the land that is owned by the railroad company there should be some understanding had with them that before this development is proceeded with, that they are going to allocate this land so that the public will get the benefit of it, and not the railroad company?

Mr. BLAINE. Of course, I cannot speak as to that.

Mr. LEAVY. I think Mr. Page, who is head of the Reclamation Bureau, answered that question the other day, but he can answer it directly as to the Government policy.

Mr. PAGE. There is a law on the statute books now that requires the Secretary of the Interior to take such precautions as he thinks wise to prevent speculation in connection with new irrigation projects. Every landowner must agree to sell his land at the appraised value set by a board of appraisers which is appointed by the Secretary of the Interior, or the landowner will not be able to obtain water. A contract has been signed with the irrigation district for this area stipulating that neither the railroad company nor any other private owner can profit by selling the land for more than the appraised value. The land is appraised in its natural state without prospect or irrigation, and it is usually appraised at from $2.50 to $10 an acre for some of the individual tracts, and the landowner must sign a contract that he will not sell his land at a price any greater than the appraised value. If he does so, half of the profit comes to the United States as a credit on the water right for that project.

Mr. RICH. Then it is the policy of the Interior Department where you are starting new developments that it is applicable to all lands before the beginning of irrigation on any project in which the Government is interested?

Mr. PAGE. Yes, sir; that requirement is met on all projects.

Mr. LEAVY. Are there any further questions of Mr. Blaine? Thank you, Mr. Blaine.

Mr. Hill and Governor Pierce, colleagues of ours, both have statements they desire to make.

MONDAY, APRIL 12, 1937.

STATEMENT OF HON. KNUTE HILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. HILL. Mr. Chairman and members of the committee, I think one of the troubles with Members of the House and others is that they do not look at this from a national standpoint. They do not look to the future as we all ought to, and sometimes it becomes a partisan question.

Now, to my mind, this is not a partisan question at all. Such men as General Goethals, who was out there years ago, urged this development. Herbert Hoover, before he became President of the United States, urged it. So, it is not a partisan question in any way. My predecessor in office was here urging it. It is a national question because there is no doubt that if it is continued it will help the whole Nation. It is not just for the Northwest, it is not just for the State of Washington, but it is for the whole country. Statistics and figures will be given here by those who testify to show that money is going out from the Northwest, from the State of Washington to the State of Pennsylvania, to Kansas, and to New York, and all over the East.

We are spending millions of dollars every year in your States now for the building of these projects, and after they have been built and we have developed our country, and we have these irrigated sections established and producing, we will spend money for automobiles and for everything else throughout the United States. These figures will be given to you to show that it is a national proposition and not a State proposition at all.

Then, we should look to the future, and that is why I think that Secretary Ickes and President Roosevelt are so strongly in favor of these projects. They are planning for the future.

Now, two or three special things, and I will be done, because there are others who are going to testify, and you will want to close.

The question was raised whether everybody in the State of Washington was for this project. I think everybody in the State of Washington is for it except, possibly, the power companies. With them it is the same old story. They have the cent so close to their eyes that they cannot see the dollars beyond.

Mr. Rich asked the question to some extent as to whether if we continued that competition would kill them off. Well, they have had competition in Seattle and Tacoma for 20 years. They have met that competition and it has not killed them off. They are in business right now. We will find many, many places for this power. There is no question of that. That can be shown by statistics and figures that will be given to you here. It will be taken up everywhere. There will be a market for the sale of this power.

Then, the other question you raised, will it kill the owners of stock in power companies off, and as to those people who have money invested, will they lose out? Of course, they will not lose their invest

ment.

In the city of Seattle, the power companies have come down to 2 cents per kilowatt-hour, while they are still charging us 7 or 8 cents per kilowatt-hour over in the Yakima Valley. They are opposed to it, because they cannot see the dollars beyond, and that it will help everybody.

Mr. LEAVY. Is it not the history of power developments that where the power rate drops down, the consumption advances?

Mr. HILL. Of course it is, and the people will use 10 times as much power after they have developed this project. People will use it for every conceivable purpose.

Mr. LEAVY. Are our farms electrified generally?

Mr. HILL. No; they are not. In the Scandinavian countries, all of the farming communities are electrified. They use their power over there, but we do not.

Mr. RICH. Do you have a public service commission in the State of Washington to regulate your power companies?

Mr. HILL. I wish we had somebody to regulate them. Their regulation is ineffective.

The people who are asking for flood control are coming down here to our Government and asking for Government aid on that, and the Government is not going to get back one cent of that money, but here we are asking for money to develop something which is a selfliquidating proposition, which is really shown by the evidence in the figures which we submit, and they hold up their hands in horror and say we must not ask the Federal Government for it.

As to the State handling the entire cost of it, it affects the whole United States, and it requires the Federal Government to do it.

Another thing has been mentioned, and that is that our State constitution does not permit us to bind the State to issue bonds. You know, as well as I do, how difficult it is to amend a constitution and to get that changed. We look at this from a national standpoint, and we want to help those families who have come out here from the Middle West. We want to make homes for them. We want to make money to buy your goods. We look at this from the national standpoint, and that is why we urge the Grand Coulee Dam as something that is going to help the whole United States, and that is why I am for it.

Mr. LAMBERTSON. I was surprised at your statement when you admitted that the Washington public utility control is ineffective. That hooks up with the other question that amazed me a moment ago, which was that somebody indicated that these power companies were going to be satisfied to be distributing companies. That kind of sticks in my mind with your other statement, that your public utility enforcement is not effective in Washington.

Mr. HILL. Well, I do not think it has been in past years.

Mr. LEAVY. That is purely a matter of opinion, is it not, Mr. Hill? Mr. HILL. Yes. I am just expressing my own opinion. Thank you, gentlemen.

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MONDAY, APRIL 12, 1957

KLAMATH AND OWYHEE RECLAMATION PROJECTS

STATEMENT OF HON. WALTER M. PIERCE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Mr. LEAVY. Governor Pierce.

Mr. PIERCE. Oregon is not at this time asking for very much money from the appropriation committee for irrigation. We have three outstanding irrigation districts in my district, all very successful.

There must be $5,000,000 or $6.000.000 invested in the Klamath project. Quite a large percentage of it is already paid back. It is one of the most highly developed regions of the West, very valuable land. There is no question about all of the invested money being paid back into the Treasury. This district wants only a smal amount this year to continue work to bring additional land under irrigation. The district will pay more this year into the Treasury than they are asking for.

Some money is necessary to complete the $18,000,000 Owyhee project. The land is practically all under cultivation, and is being farmed in small units. The Reclamation Service has carried out its plan of refusing water to be used by anyone who has the land for speculative purposes. The price of the land is thereby kept down. This project has taken care of hundreds who have come to us from the Dust Belt region lying east of the Rockies. We are asking for a small appropriation there to continue to construct additional canals. We are asking for nothing but that which has been approved by the Budget.

The chief thing that Oregon is interested in is that you carry over the appropriations that the Reclamation Service has had ap propriated before but did not use, both the appropriated money and the emergency money. The Reclamation Service should be complimented on the fact that it does not use appropriated money when it cannot be used most advantageously. They carry it over. We are asking you to carry over into the coming year these unused balances as recommended by the Budget. It shows good management on the part of the Reclamation Service.

Mr. RICH. It keeps them from squandering money where they are carrying it through, because they are showing they want to make every dollar count. I think that is a good thing.

Mr. PIERCE. Yes; we are asking for that instead of other appropriations. Those are the chief things Oregon is interested in.

I want to compliment the Reclamation Service for their general outlook and the work they have done in Oregon. The money is not taken and put into those projects now until they have reason to believe the projects will be a success. The projects that are now being constructed by the Reclamation Service are certainly grand successes in Oregon.

Mr. LAMBERTSON. You say the Dust Belt is that section of the United States east of the Rocky Mountains?

Mr. PIERCE. Of course, I do not mean all the land east of the Rockies, just. the "dust bowl"-the thousand that came from the "dust bowl" went largely into these irrigated districts.

Mr. LAMBERTSON. It concerns me quite a little bit, that you are getting so many people from the central States. Maybe we ought to be the prime movers for this irrigation out there.

Mr. PIERCE. Many of our people came into our State because they wanted to settle on these lands where they could get water.

I think that is all I have to say on this. Do not forget to carry over into the appropriation for next year the amounts that were appropriated and not used last year.

MONDAY, APRIL 12, 1937.

SACO DIVIDE IRRIGATION PROJECT, MONTANA-WATER CONSERVATION ON THE LITTLE BIG HORN RIVER AND LODGE GRASS CREEK, MONT. STATEMENT OF HON. JAMES F. O'CONNOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MONTANA

Mr. SCRUGHAM. Mr. O'Connor, we will be glad to hear you at this time.

Mr. O'CONNOR. I wish to present an amendment to the bill, to come between the Boise Project, Idaho, and the Sun River project, Montana, as follows:

Saco Division, for commencement of construction and incidental operations, $400,000.

That would come on page 279 of the bill.

Now, Mr. Chairman and gentlemen of the committee, I will be very brief in what I have to say, because I know there are many who will appear before you this afternoon.

This is what is known as the Saco Divide irrigation project, at Saco, Mont., and it is a part of what is known as the Milk River project, which is an old established and running project in Montana. This is in the nature of an extension of the present Milk River project. Much of the land there had to be abandoned in the original Milk River project, and a proportionate share of construction charges charged off. More land has proven to be unproductive, due to flooding and other causes and its share of the construction charges has been suspended. The Saco Divide will serve to replace a portion of the project land on which payments have been abandoned or suspended, and will eventually repay a portion of the cost which now appears as a write-off, thus recovering money for the Government which now appears to be lost. It will also contribute materially toward the payment of construction costs on Chain-of-Lakes. I imagine that you gentlemen are familiar with that entire irrigation or reclamation project in the northern part of Montana.

Now, this is the type of soil we are dealing with: The United States Department of Agriculture, Bulletin No. 22, series of 1928, entitled "Soil Survey of the Milk River Area, Montana," shows that just north of Saco on the Divide between Beaver Creek and Milk River is the largest uniform body of good land in the Milk River area. This land is all under cultivation, and in years of sufficient moisture it has been widely known for the large crops produced.

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