Mr. FASCELL. Apparently there may not be any. Then we are assuming that there is a public responsibility only, and that is based on the damage to life and property. This is the only public nature as far as the U.S. Government is concerned.

Mr. KILGORE. And the treaty obligation.

Mr. SELDEN. In connection with Mr. Kilgore's statement, let me ask you this: Did the Bureau of the Budget take into consideration these pending suits when it made the recommendation that there be repayment of water supply and irrigation cost?

Mr. HUGHES. As far as I know, we did not specifically, Mr. Chair

man.

Mr. KUGEL. I think we were aware of the existence of these suits and of the general difficulty on water rights in the basin. I think what we were expressing was a general policy which has been followed for water resource projects.

Mr. SELDEN. Did you apply it to this specific case, with the implications that he pointed out?

Mr. KUGEL. No, sir.

Mr. SELDEN. Do you think that would have any effect on your recommendations?

Mr. HUGHES. I feel, Mr. Chairman, we would be inclined to have our recommendation stand anyway. We would recognize that there are complexities here, perhaps pretty serious ones. It seems to me, however, that an equitable allocation of cost could be worked out, given the assumptions and presumptions

Mr. SELDEN. I would like to request that the Bureau of the Budget look into this matter further and give us additional information in view of the water rights in the basin and the pending lawsuits. Mr. HUGHES. We will be glad to do that.

Mr. FASCELL. I would like to approach it from this standpoint: I can see how you can't charge a man for water he already owns. I can see how you could charge him for a service that he is not now getting. I would like to determine if there is any feasible method under current procedures where such a determination can logically and reasonably be made. In the present situation above the Falcon Dam, anybody who is a water user-when the structure is built you will have a regulation that does not exist. If this is worthless, then we ought to know it.

Mr. HUGHES. Well, we will attempt to work with the Department and reconsider this.

Mr. SELDEN. Are there any further questions?

If not, sir, we want to thank you for your statement and for the information you have given us. It may be that we will have to call on you again.

Mr. HUGHES. Thank you. I would like to make two additional comments: First of all, I want to make it clear that, as I believe the Department of State representative has stated this morning, the President has urged that legislation to accomplish the purpose of H.R. 8080 be enacted and we accordingly strongly urge enactment of suitable legislation.

The second thing I wanted to mention was this: There has been no discussion of our first recommendation and I am not sure what this means. We consider this point of very fundamental importance

in connection with this legislation. I think the most cogent way of indicating our concern here and the President's concern, is to make reference to the President's budget message language dealing with a similar requirement in the defense area where he has specifically requested its removal.

I can cite you the message if you would like and read it for your

record.

The language is on M-18 of the budget message as printed:

In the budget message for 1959, again for 1960, I recommended immediate repeal of the section 601 of the Act of September 28, 1951 (65 Stat. 365). This section prevents the military departments and the Office of Civil and Defense Mobilization from carrying out certain transactions involving real property unless they come into agreement with the Committees on Armed Services of the Senate and the House of Representatives. As I have stated previously, the Attorney General has advised me this section violates fundamental constitutional principles. Accordingly, if it is not repealed by the Congress at its present session, I shall have no alternative thereafter but to direct the Secretary of Defense to disregard the section unless a court of competent jurisdiction determines otherwise.

Mr. FISHER. Perhaps I should make some comment on that. I put that in the bill on my own initiative.

There is some precedent for it. I would not want to persist in it. It is being done with some other committees now, as you know. The Public Works Committee is doing it, and others. As far as I am concerned, as author of the bill, I would not persist in it at all. I realize the validity of the President's point.

Mr. FASCELL. What you are saying, in effect, is if the Executive is going to execute the contract, let him do it; and if we want to put conditions and terms in the law, let's do that and quit beating around the bush.

Mr. HUGHES. That is right.

Mr. FASCELL. If we want to insist that one of the provisions in the contract shall be that if a lease is made to a private utility that there shall also be a wheeling provision to REA's, we had better spell it out in the law and not beat around the bush.

Mr. HUGHES. Yes.

Mr. FASCELL. This other way is a sort of a backdoor approach which is not good for anybody.

Mr. HUGHES. That is right.

Mr. SELDEN. If there are no further questions, thank you very much, Mr. Hughes.

Colonel Hewitt is still with us and ready to answer any questions that the committee members might propound. Since he has been answering questions all along, it may be that most of the questions that have come to mind have been answered.

If there are any further questions, I know he will be glad to give us the answers to them.

Mr. FISHER. By way of clarification a little bit further, since the subject has not been presented in question form to Colonel Hewitt: In regard to the incremental issue, I would like to have the benefit of the colonel's ideas about that. He has been in this business a long time. I do know there are a number of precedents for it. I do know that this project is quite different from many of those the Budget Bureau evidently had in mind, in that it is primarily flood control as spelled out in the treaty.

I would like to ask Colonel Hewitt if he has any comment based upon his experience in the past and his knowledge of the peculiar situation applicable to this particular project as to whether the incremental method may properly be applied?

STATEMENT OF COL. LELAND H. HEWITT, COMMISSIONER, U.S. SECTION, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO

Colonel HEWITT. I believe the incremental method has been used on many different occasions of which we can cite a few. Whether or not the incremental method should be used here is up to the Congress to decide. I think that we can, or we should realize that there is the possibility that had it not been for the treaty we would have recommended the construction of a dam for flood control alone. But with the treaty provisions being what they are, I believe that it would be impossible to comply with the treaty without making this a multi

purpose structure.

Mr. Friedkin can give you examples of where this incremental method has been used and has been approved by the Congress for construction.

STATEMENT OF JOSEPH F. FRIEDKIN, PRINCIPAL ENGINEER, SUPERVISING, U.S. SECTION, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO

Mr. FRIEDKIN. We have one specific case recently. In the case of the Burns Creek Dam on the Palisades project in Idaho, the reference is House Document 14, 85th Congress, 1st session. The primary purpose of the dam was for power. There was added an additional 100,000 acre-feet of storage for conservation purposes. The benefits were nearly equally divided. The conservation storage was allocated on the incremental basis with power being the primary thing in that

case.

Mr. FISHER. That would be one of the more recent cases.
Mr. FRIEDKIN. Yes.

Colonel HEWITT. I believe also there is a precedent, although I am unable to cite the law, whereby in the construction of flood control features that a community may contribute to the cost of the conservation storage and not pay for it until they use it. But at any rate, the additional cost, defending the incremental method, is the additional cost of providing that incremental storage rather than the A-47

method.

Mr. FASCELL. I am trying to get through my head, since the bill as written does not provide for repayment, what the actual effect of providing by legislation is the incremental system.

Mr. FRIEDKIN. Mr. Fascell, your question is well taken. With no requirement for repayment, there is no reason for an allocation of

cost.

Mr. FASCELL. It doesn't have anything to do with the monetary value of power as it would relate to a benefit-cost ratio.

Mr. FRIEDKIN. No, sir. The total benefits to costs is one matter. Separately, it is the question of repayment because your total benefits can far exceed the cost of the dam as in this case.

Mr. FASCELL. There is no relationship there because it doesn't make any difference who pays it.

Mr. FRIEDKIN. That is right.

Mr. FASCELL. I had a couple of other questions.

One of the things that it would seem to me we ought to know about in this matter is the question of the salability of power, as such, from a competitive standpoint or from the standpoint of trying to determine actual competition, if it exists, would be the existence of or the feasibility of transmission lines to the source of that power.

Colonel HEWITT. They are practically available at the site now.
Mr. FASCELL. Whose transmission lines are those?
Colonel HEWITT. The C. P. & L. serves that entire area.
Mr. FASCELL. The are right there?

Colonel HEWITT. Yes.

Mr. FASCELL. How about any REA?

Colonel HEWITT. I have forgotten just what the representatives of the REA said yesterday, but it seems to me they said that their transmission lines were at some distance from the proposed site of the dam.

Mr. BURLESON. At Uvalde, some 100 miles away.
Mr. FRIEDKIN. 120 miles the gentleman says.

Mr. FASCELL. I think we ought to have somewhere some kind of a financial estimate of what it costs to construct lines for 120 miles.

Mr. BURLESON. If the gentleman will yield, you will remember, Mr. Shepperd yesterday in his testimony said that if they had a line at the site they wouldn't be permitted to bid on the power. Their setup doesn't permit them to do it.

Mr. FASCELL. Could he use it at all?

Mr. BURLESON. If they could, they could only use 5,000 kilowatthours, as he testified.

Mr. FASCELL. For all 74 REA's?

Mr. BURLESON. This REA organization is at Hondo, Tex. I asked him about the possibility of organizing a transmission cooperative of the number of local distributing cooperatives in the valley area. He said that was a possibility. It seems to me that is the only possibility that you would create as to any competitive purchasing of the power generated at this installation.

Mr. FASCELL. I thought, however, he said even if they got together they would be limited, under the law in the purposes for which they borrowed the money, to rural customers.

Mr. BURLESON. They would have to show feasibility to the REA for borrowing money for that purpose.

Mr. FISHER. It will be recalled that a witness on yesterday pointed out that the REA cooperatives are now engaged in the construction of a steamplant in that area of 66,000 kilowatt-hours. So they do build plants of substantial capacity. I assume if they had need for it, and could get the money, the cooperatives could buy the falling water and build a generating plant. They would, of course, have to show a need, just as I suppose they had to show a need in order to borrow the money to build the 66,000-kilowatt steamplant.

I just mention that, referring back to the testimony that was given. Mr. FASCELL. This steamplant is how far away?

Mr. FISHER. It isn't very far.

Mr. FASCELL. From the damsite?

Mr. FISHER. About 150 miles.

Mr. KILGORE. Somewhere in that range.

Mr. FASCELL. I know that isn't a long way in Texas, but where I come from you would be halfway to Africa.

Mr. FISHER. Just off the record.

(Discussion off the record.)

Mr. BURLESON. May I ask Colonel Hewitt this question: To sort of wrap this thing up, do you see a necessity for this committee in its initial action to be overly preoccupied with the matter of, No. 1, authorizing hydroelectric power at this installation, since such a great ratio of benefit is charged to flood control; and, two, would you suggest to the committee that we authorize the project and that we cross this other bridge when we get to it? Could we not lay down policy and prospective negotiations for the disposition of power when and if the generating plant is installed?

What would be your attitude about that?

Colonel HEWITT. I should say that the authorization for the construction of the project was extremely desirable at this time. I don't think we have had any testimony from any interested party that objects to the construction of the dam. Certainly as far as the Mexican section and our section, I am sure both countries are anxious to proceed with the construction at the earliest possible moment.

Whether the authorization for the sale of falling water or for the construction of a hydroplant at Federal expense is to be given at this time, I believe that that is to be determined by the Congress.

There is one thing about it, however, and that is that the original premise of the treaty was to the effect that the countries would build a single powerhouse; that has not been found to be too practicable and at Falcon we have built two powerhouses that are identical, one on each side of the river.

Mexico is going to build a powerhouse, and by the same token they are going to expect the United States to build one, so as to conform more or less with the treaty.

That is a facet which should be considered by the committee in making their recommendations.

Mr. BURLESON. I assume, of course, that when this construction was commercial you would want to know whether you were going to install hydroelectric power or not?

Colonel HEWITT. It would be cheaper to build it at that time but it could be built at a later date.

Mr. BURLESON. If this committee went ahead and authorized a project and included the hydroelectric facility, it is not going to be built tomorrow. There is a lot of time to negotiating this thing without exercising ourselves over crossing every "t" and dotting every "i" it would seem to me.

Mr. SELDEN. You could include certain features for the additions of a hydroelectric plant without actually building the hydroelectric plant? Am I correct?

Colonel HEWITT. We propose to install penstocks at this time. If they were not installed during the construction of the dam, it would be almost physically impossible to do it later on.

Mr. SELDEN. By installing the penstocks, however, you have then made provisions for the addition of a hydroelectric plant either then or at a later date?