that he had written a letter suggesting the creation of a committee to discuss this project. That committee was instructed, on page 3 of the report, to investigate certain things.

Included in that investigation was the need, the extent of Federal participation, the cost in Federal funds, existing laws, and whether or not any more laws were needed. The committee did report, and the report of the recommendations will be found on page 8 of that Senate document. The report shows that everything that had been done was faithfully reported by this committee, including the recommendation that the project or projects were authorized under the laws set out, which included the War Powers Act, the Lanham Act, and laws relating to Army and Navy construction, Army and Navy appropriations. And it concluded by saying that no additional legislation was needed.

Now, the Senate was put on notice in 1944 that this project would be undertaken on those terms. Is that correct?

Mr. WARNE. That certainly is correct. That report was submitted. by the commission through the Secretary of the Interior to the President and transmitted by him to the Congress, and printed as a Senate document.

Senator MCCARTHY. Mr. Warne, I am of the opinion that Public Law 289 superseded the various acts that you point out on page 8 of the report. Do you follow me there?

Mr. WARNE. Yes.

Senator MCCARTHY. You point out that this may be done under the first War Powers Act, 1941, and the Lanham Act. Public Law 289 does supersede those particular acts. Am I right in that?

Mr. WARNE. I am not sufficiently familiar with that particular citation to say. I assume that it did.

Senator MCCARTHY. My offhand thought at this time is that your committee apparently overlooked the fact that Public Law No. 289 had been passed, and that you were to proceed under Public Law No. 289, rather than the acts you point out in your recommendation.

Mr. WARNE. Our investigation of the legal authorities at that time-first, we investigated the legal authority of the Reclamation Act, which is administered by the Bureau of Reclamation, and concluded that an emergency project of this sort could not be undertaken under it in the limited time available, and competent legal counsel of the War and Navy Departments made submissions with regard to the authority existing in this agencies, to the committee.

Senator FERGUSON. Are you a lawyer, Mr. Warne?

Mr. WARNE. No.

Senator FERGUSON. You have your own counsel?

Mr. WARNE. Yes.

Senator FERGUSON. The commission had its own counsel ?

Mr. WARNE. The commission had available the staff counsel of the

various agencies that were represented; yes, sir.

Senator FERGUSON. He did act also as your counsel?

Mr. WARNE. Yes.

Senator FERGUSON. And you had legal opinions?

Mr. WARNE. There were legal opinions.

Senator FERGUSON. Can you furnish those to the committee? Have you furnished those to the committee in your statement?

Mr. WARNE. I haven't got that here. I think it is in the files of the committee or the commission, and I would be glad to submit it.

Senator FERGUSON. We would like to have the full opinions rendered as of the time that you acted.

(The following letter and opinion were submitted:)

UNITED STATES DEPARTMENT OF THE INTERIOR,

Mr. J. HERVEY MACOMBER, JR.,

BUREAU OF RECLAMATION, Washington, D. C., March 3, 1947.

Clerk, Senate Committee on Expenditures in the Executive Departments,

Senate Office Building.

MY DEAR MR. MACOMBER: In the course of my testimony as chairman of President Roosevelt's San Diego Aqueduct Committee, appointed in 1944, Senator Ferguson requested that I supply for the record copies of any legal memoranda in the committee files bearing on the committee's answer to question No. 4 stated in President Roosevelt's letter of October 3, 1944. Question No. 4 reads: "The existing laws under which the development might be authorized." The committee's answer to this question was as follows: "The laws under which the development is authorized include the First War Powers Act of 1941, the Lanham Act, and the laws relating to Army and Navy construction, and Army and Navy appropriation acts.”

A search of the committee files reveals no legal memoranda except a memoranda to me dated October 13, 1944, from the then chief counsel of the Bureau of Reclamation, Mr. J. Kennard Cheadle, discussing possible construction of the San Diego aqueduct under the reclamation laws. A copy of Mr. Cheadle's memorandum is enclosed. It wil be recalled that President Roosevelt's letter of October 3, 1944, indicated the President's desire that the Bureau of Reclamation be the construction agency for the aqueduct. For your information, Mr. Cheadle has left the Government service and is now engaged in private practice in Spokane, Wash.

In view of the committee's determination that the impending water emergency in San Diego required the earliest possible action, the committee concluded that construction should be undertaken by the Navy Department acting through its Bureau of Yard and Docks as indicated in Recommendation 6 of the report of the President's committee, October 21, 1944. It is my recollection that the committee spent an entire afternoon discussing the question of authorization for this construction by the Navy Department with its legal advisers and was satisfied that the Navy had such authority although no formal opinions to that effect were at that time evidently prepared.

Sincerely yours,

Enclosure.

WILLIAM E. WARNE,
Assistant Commissioner.

Memorandum for Mr. William E. Warne, chairman of President's Interdepartmental Committee, re San Diego aqueduct.

You have requested a brief memorandum stating how the Bureau can build the San Diego aqueduct under the reclamation law. Mr. Wilhelm has placed before me the President's letter of October 3 addressed to you. I have considered the six points set forth in the President's letter, and in the following paragraphs make comments on those points on which you may find legal advice useful in the conference on October 16.

(1) The extent of Federal and local participation in the financing of the construction proposed.-Once the extent of Federal and local participation is determined, there would be no difficulty in effecting the necessary contractual arrangements. The Army or the Navy could contribute funds, under the contributed funds statute in the reclamation law, and the Bureau of Reclamation could expend the contributed funds on the construction in the same manner as though the contributed funds had been appropriated by the Congress for construction of the aqueduct. Alternatively, the Army or the Navy could make its contractual arrangements with the city of San Diego (or a metropolitan water district including San Diego and other municipalities in the area), and the Bureau could have a contract with the city or district alone, covering the entire cost of the aqueduct. Under section 9 of the Reclamation Project Act of 1939, repayment

contracts for municipal water supply are to provide a repayment period of not to exceed 40 years and are to carry interest not exceeding 31⁄2 percent per annum "if the Secretary determines an interest charge to be proper." I mention this point here because if the Secretary should determine that interest should be charged to San Diego, it might well be determined by the Department that there should be no interest on the part of the cost being borne by the Army or the Navy. Should it develop that there should be this difference between the terms provided for the Army and the Navy on the one side and for San Diego on the other side, then it might simplify matters if the Bureau had separate contracts with San Diego and with the Army and the Navy.

Point (2) does not call, at this time at least, for any comment from me. (3) The source of Federal funds for the work.-If the Army or the Navy has presently available funds to cover the extent to which they should participate in financing the construction, those funds could be made available to the Bureau either under a memorandum agreement pursuant to existing law for interdepartmental transactions or the funds could be made available to the Bureau under the contributed-funds statute and expended by the Bureau as though appropriated by the Congress for the construction work we do. Other funds required for the construction by the Bureau (assuming that San Diego is to have a repayment contract instead of a contract under which it places cash on the barrel head under the contributed-funds statute) could be requested by the Bureau in an estimate for appropriations from either the reclamation fund or from the general fund. (4) The existing laws under which the development might be authorized.—The development would have adequate Federal authority if the Secretary were to make a report to the Congress under section 9 of the Reclamation Project Act of 1939, in which report he found the project feasible as measured by the criteria prescribed by the Congress in section 9 of the 1939 act. In my judgment, the development could thus be authorized, whether as a matter of engineering it be determined to construct the aqueduct from the All-American Canal or from a point on the aqueduct system of the Metropolitan Water District of Southern California.

(5) Additional legislation which might be required.—No additional legislation would be required if the Secretary found the development feasible under section 9 of the 1939 act. Additional legislation would be required for the Bureau's part only if the estimated cost exceeded the estimated returns. Whether additional legislation would be required for the Army and the Navy to make available to the Bureau funds to the extent it is determined under point (1) that the Army and the Navy should participate in the financing, is a matter on which the Army and the Navy should be able to advise.

I have no comments to make on point (6) in the President's letter, except that the proposed development seems to me to be one that properly may be set up as a "new project," a "new division of a project," or "new supplemental works on a project," the selection of classification depending somewhat on the location of the aqueduct. The basic starting point is that the water supply is to be furnished from waters stored in Lake Mead, behind Boulder Dam, a Federal reclamation project.

J. KENNARD CHEADLE, Chief Counsel.

Senator THYE. Mr. Chairman, I would like to learn where are the other committee members that served with you on that commission of which you were chairman? Where do they now reside?

Mr. WARNE. Admiral Moreell has retired.

Senator FERGUSON. Where does he reside?

Mr. WARNE. I think it is in New York. General Reybold, I don't know where he is now. Perhaps someone from the Army can tell me. Admiral MANNING. He resides at Wilmington, Del.

Mr. WARNE. And Baird Snyder, Federal Works Agency, is dead. Mr. Swing resides in California. He was not a Federal employee but was a representative of the San Diego area.

Senator THYE. Where does he reside?

Mr. WARNE. In San Diego. I would like to point out to the committee that the local area down there is

The CHAIRMAN (interposing). Just a minute, Mr. Warne. You gave the laws under which the development was authorized, but had

not conditions changed in regard to those laws before the project was begun in 1945?

Mr. WARNE. No; the project was actually started immediately, in that engineering work was immediately commenced, was immediately sought, and I believe some four principal contracts had been awarded before VJ-day, which I assume would be the turning point if there were any question as to the authority of the War Powers Act. The CHAIRMAN. And by the time the actual construction was begun, the Federal Works Agency advised that they had no legal authority to enter into this agreement or pay part of the cost, didn't they?

Mr. WARNE. Well, those are matters that the Navy Department can answer better than I. Our committee, once it had made its report, was discharged by the President in a letter which also is a matter of exhibits here. It was reconstituted this last fall on a little different basis for another assignment.

The CHAIRMAN. But the findings of your committee were based on conditions and legislation which existed in 1944?

Mr. WARNE. That is true.

Senator DOWNEY. Mr. Chairman, in view of certain question raised by Senators here, I would like to ask permission of the chairman to read just the closing page of the memorandum on this matter which I have submitted here, and which, as I say, was prepared for me by the Senate legislative counsel bureau, as I think it might cut through a good deal of the difficulty that we have here.

Let me say in the first place the General Accounting Office decided that under section 3 of the First War Powers Act the Navy had acted incorrectly. Now, Mr. Simms, in preparing this legal memorandum for me, differs with the counsel of the General Accounting Office on that. His closing paragraph is as follows, and I think goes to questions raised by Senator McCarthy and some of the other Senators here.

The CHAIRMAN. What are you reading now?

Senator DOWNEY. I am reading now from page 9:

Even though the Comptroller General may be unwilling to admit that he has erroneously decided that section 3 of the First War Powers Act had the effect of rendering illegal the expenditures for the construction of the San Diego adequate project, it is believed that he will no longer contend that such expenditures are illegal, in the light of the additional information furnished by the Acting Secretary of the Navy in his letter of February 1, 1947, to the chairman of the Senate Committee on Expenditures in the Executive Departments. The Acting Secretary of the Navy has clearly stated that the San Diego aqueduct was authorized by the act of April 4, 1944 (Public Law 289, 78th Cong.), which was a blanket authorization for construction work, and that a full report of the project and the land to be acquired therefor, was filed with the Senate and House Naval Affairs Committees, which approved the acquisition of the land. This additional information apparently was not in the possession of the Comptroller General at the time he prepared his report, and should suffice to allay his doubts with respect to the legality of the expenditures in question.

In other words, I just wanted to point out to the committee that it is the position of the Secretary of the Navy that, independently of the powers that we have been here discussing, he did act entirely within the limits of authority given to him by Congress in Public Law 289, passed in 1944. And I might say that Mr. Simms, our assistant counsel, tells me that he thinks it would be indisputable that the Secretary did act properly and legally under that law.

Senator MCCARTHY. Did I understand, Senator, that the House and Senate committees did approve the acquisition of this land? Senator DOWNEY. Yes; I am so informed, and I think the Navy representatives will be prepared to testify to that.

The CHAIRMAN. Their approval was given some time before the end of the war?

Senator DowNEY. Yes; I think so.

The CHAIRMAN. Before the end of the war in Europe?

Senator DowNEY. Yes; I think that is true.

Senator MCCARTHY. Then the House and Senate committees approved the acquisition of the land, but as yet they have not approved the disposal to the city of San Diego?

Senator DOWNEY. I assume they have not. The Navy, I understand, transmitted to the chairman of the two Naval Affairs Committees a report of what they had done in relation to San Diego, and that there has been no action taken by either of the Naval Affairs Committees on that.

The CHAIRMAN. You may proceed, Mr. Warne.

Mr. WARNE. The approval by President Roosevelt of my commission's report, and his letters to the agency heads involved, required the Bureau of Reclamation to prepare plans and specifications, and the Federal Works Agency to advance up to $500,000 for this engineering work, and the Bureau of Yards and Docks to perform the emergency construction work. In his letter to the Vice President and Speaker of the House the President said:

In accordance with the recommendations of the committee, joined in by the Secretary of the Interior, I have instructed that the emergency be met in keeping with the report.

This letter pointed out in addition that the Bureau of Reclamation would continue its relationship with the local interests and will, upon making suitable arrangements, be in a position to build the permanent additional works after the war.

The President also requested assurances that the negotiations would be pressed with the Metropolitan Water District of Southern California, by the local interests, looking toward the continued use of these works. And I might report to the committee that the San Diego County Water Authority and the city of San Diego last November 5, during the election, held elections on a number of issues, and have actually joined the Metropolitan Water District of Southern California, so that this aqueduct will be permanently useful to the area when it is completed and placed in service.

In summary, the Presidential approval meant that action to meet the San Diego_water emergency would commence, and my agency, the Bureau of Reclamation, immediately took steps to get the engineering work under way and supply plans and specifications to the Navy Department, and the Navy Department, as I understand it, started the work down there as soon as they could thereafter.

Senator FERGUSON. I would like to get the date that they actually started construction, the breaking of ground.

Mr. WARNE. I think Admiral Manning or someone from the Navy can give that.

Senator FERGUSON. You don't have that information?