proved by the Secretary of War, and at all times fully preserve the primary purpose of flood control. "The terms and conditions under which any such signatory state shall make available the rights of water conservation, power storage or power development herein reserved shall be determined by separate agreement or arrangement between such state and the United States; and the type and general plans for the construction of such of the reservoirs as are herein contemplated to provide for such further development shall be approved by some agency of such state, for that purpose duly authorized, before any construction thereon is begun or prosecuted. "ARTICLE X "In order that an adequate fund may be established and created from which payments for the acquisition of lands, easements and rights of way may be made, the signatory states become bound and each hereby obligates itself to pay to the Commission the proportion of the cost of acquisition of lands, easements and rights of way respectively set forth below, and subject to the limitations hereinafter provided as follows: "(1) The Commonwealth of Massachusetts fifty per cent thereof. "(2) The State of New Hampshire fifty per cent thereof. "Provided, however, that it is the understanding, intent and purpose of the parties hereto that the cost of acquisition of lands, easements and rights of way for two reservoirs provided for herein, shall not exceed the sum of Two Million Two Hundred and Eighty-five Thousand Dollars ($2,285,000), and that the drainage area of the Merrimack River Basin to be controlled thereby shall be approximately twenty-two and one-half (22.5) per cent thereof; and it is expressly provided that the maximum amount for the cost of acquisition of lands, easements and rights of way to which each of the signatory states shall be bound or obligated on account of said two reservoirs shall not exceed the respective proportions hereinbefore set forth of said sum of Two Million Two Hundred and Eighty-five Thousand Dollars ($2,285,000). "The fiscal year shall be deemed to begin on July 1st and end on June 30th. Payment by the signatory states of the cost of acquisition shall be made as and when requested by the Commission on or after July 1, 1937; provided that not more than one-half of said sum of Two Million Two Hundred and Eighty-five Thousand Dollars ($2,285,000) shall be required to be paid in any fiscal year after said date. "ARTICLE XI "In the execution of the initial plan of two reservoirs herein contemplated said Commission, with the approval of the Secretary of War, shall determine the order in which the construction work of the same shall be commenced and prosecuted. "The initial plan for the construction of two reservoirs herein mentioned and provided for is a part of a long range comprehensive program for flood control on the Merrimack River and its tributaries, the object and purpose of the signatory states being to enlarge and expand such flood control projects to an ultimate control. "In the further development of such comprehensive program, said Commission shall determine from time to time the site, character, location, and extent of such additional reservoirs, subject to the approval of the legislature of the state in which the same may be located. "ARTICLE XII "Each of the signatory states shall annually contribute and pay to the Commission the respective proportions of the expense of operation and maintenance of the flood control reservoirs hereafter constructed under the terms of this agreement as follows: "The Commonwealth of Massachusetts fifty per cent thereof. "The State of New Hampshire fifty percent thereof, and each state shall make adequate provision for compliance on its part with the provisions of this Article, and funds shall be made available as and when required upon the requisition of the Commission. "As a part of the expense of operation and maintenance of said reservoirs the Commission shall assume and pay to the respective towns entitled thereto the cost of reimbursement for loss of taxes, as set forth and required in the third paragraph of Article VI hereof, and shall pay all costs incident to or damages resulting from the operation and maintenance of such flood control reservoirs, and shall save the United States free and harmless on account thereof, and shall pay all other costs or expenses which may be necessary in the operation and maintenance thereof, including the expenses of the members of said Commission hereinbefore provided to be paid out of the funds of said Commission. "ARTICLE XIII "Each of the signatory states hereby releases and discharges the other and the Commission of and from all damages, which may be claimed to result from the obstruction, detention, impounding, storage, release, or diversion of the waters of said Merrimack River and its tributaries, insofar as the same may be in any way affected by the construction, operation, or maintenance of the reservoirs herein contemplated. "ARTICLE XIV "This compact shall become operative and effective when approved by the legislatures of each of the signatory states and by the Congress of the United States. Notice of approval shall be given by the Governor of each state to the Governor of the other state and to the President of the United States, and the President of the United States is requested to give notice to the Governor of each of the signatory states of its approval by the Congress of the United States." SEC. 2. The right to alter, amend, or repeal the provisions of section 1 is hereby expressly reserved. The CHAIRMAN. The Joint Resolutions 430, 435, and 436 were referred to the War Department, and the War Department submitted reports suggesting amendments to these resolutions. The report of the Secretary of War, dated July 30, 1937, will be inserted at this point in the hearing. (The report above referred to is as follows:) E. D. 7402 (Merrimack River, Mass.)-93. Chairman, Committee on Food Control, WAR DEPARTMENT, Washington, July 30, 1937. House of Representatives, Washington, D. C. DEAR JUDGE WHITTINGTON: Careful consideration has been given to House Joint Resolution 430, a joint resolution consenting to an interstate compact relating to flood control in the Merrimack River Valley, which was referred to the Department by your letter of June 30, 1937. This compact, if the joint resolution is amended as suggested, satisfactorily provides the means for the fulfillment of the conditions of local cooperation set forth in the Flood Control Act approved June 22, 1936, so far as relates to the construction of a system of flood-control reservoirs in the Merrimack River Basin for the reduction of flood heights in the Merrimack River as authorized in the act. It is understood that the Federal Power Commission will report to you upon the features of the project relating to the future development of hydroelectric power. The Bureau of the Budget has been consulted and advises that "while there is no objection to the general purpose of the proposed legislation, or to the presentation to the committee of the proposed report thereon, this advice should not be construed as involving a commitment with respect to the relationship to the President's program of each and every one of the various provisions of the resolution." Sincerely yours, HARRY H. WOODRING, The CHAIRMAN. The report on the three resolutions by the Secretary of War is substantially the same. The recommendation of the Secretary of War on House Joint Resolution 430 is that the first nine lines on page 1 of the joint resolutions be eliminated and the following inserted in lieu thereof: Whereas the States of Massachusetts and New Hampshire have negotiated and entered into the folowing compact, to wit. The second amendment suggested by the Secretary of War is that section 2 be stricken, and that there be inserted in lieu thereof the following: And whereas the said compact has been approved by the legislatures of each of the two States as provided therein: Therefore be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the consent of Congress is hereby given to the compact hereinbefore recited: Provided, That nothing therein contained shall be construed as impairing, diminishing, or in any way affecting the jurisdiction, duties, rights, and powers committed to and vested in the War Department by the Flood Control Act approved June 22, 1936, and its amendments, or by any other law of the United States, with respect to any of the matters dealt with in the compact. SEC. 2. The right to alter, amend, or repeal this resolution is hereby expressly reserved. There is a similar report on joint resolutions 435 and 436 by the War Department. The CHAIRMAN. There is also a report by the War Department on the Casey resolution, House Joint Resolution 482, and that report will be inserted in the record at this point. (The report of the War Department above referred to is as follows :) Hon. WILL M. WHITTINGTON, Chairman, Committee on Flood Control, WAR DEPARTMENT, Washington, August 16, 1937. House of Representatives, Washington, D. C. DEAR JUDGE WHITTINGTON: Reference is made to your letter of August 7, 1937, requesting the views of this Department on House Joint Resolution 482, joint resolution giving advance consent to compacts relating to flood-control projects in the Connecticut River. The resolution in effect authorizes the States of Connecticut, Massachusetts, New Hampshire, and Vermont to enter into compacts solely for the purpose of meeting the local cooperation requirements of section 3 of the Flood Control Act of June 22, 1936, with respect to the projects authorized by the act to be constructed in the Connecticut River Basin. It specifically provides that no compact shall contain any provision relating to water conservation, power storage, or power development, or any reservation to the States of any title or interest in the lands, easements, and rights-of-way needed for the said projects, it being required that complete title to such lands, easements, and rightsof-way shall be conveyed to the United States. So far as the interests committed to the War Department are concerned, no objection is seen to the passage of the resolution by Congress. The Bureau of the Budget advises that this proposed legislation will not be in conflict with the program of the President. Sincerely yours, HARRY H. WOODRING, The CHAIRMAN. The three joint resolutions-House Joint Resolution 430, House Joint Resolution 435, and House Joint Resolution 436 were referred to the Federal Power Commission and the Power Commission submits a report, which I will ask the reporter to insert at this point in the hearings. The report is dated July 20, 1937. There will also be inserted in this hearing with the report the memo randum therein referred to by Mr. Ryan, General Counsel of the Federal Power Commission. (The report and memorandum referred to are as follows:) Hon. WILL M, WHITTINGTON, Chairman, Committee on Flood Control, FEDERAL POWER COMMISSION, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: In response to the request of your committee for such suggestions as the Commission might desire to make for the protection of the Federal Government with reference to H. J. 430, H. J. 435, and H. J. 436, consenting to interstate compacts relating to flood control in the Connecticut and Merrimack River Valleys, I am enclosing a memorandum by our general counsel, Mr. Oswald Ryan, which provides an analysis of the compacts in the light of existing national-power policy. This Commission is in full accord with the analysis and conclusions contained in the memorandum, that while the Connecticut and Merrimack River Valley compacts conform to the congressional policy laid down in the Flood Control Act of 1936, insofar as they provide for the apportionment among the signatory States of the cost of certain flood-control projects, in other respects they go beyond the purpose and intent of that act and constitute a radical departure from the established policy of the Federal Government with respect to the development and conservation of the water-power resources of the United States. The Commission feels that those provisions of the compacts, which, if approved by Congress, would work a surrender by the United States of the Federal interest in the water-power resources of these streams which Congress has asserted since 1920, and those other provisions which substitute for the present clearly defined and long-established Federal control over these power resources as uncertain, indefinite, and doubtful control based upon the contingency of a possible future agreement between the United States and the signatory States raises grave considerations of national interest which the Commission believes strongly argue against the approval of the compacts in their present form. Sincerely yours, FRANK R. MONINCH, Chairman. Memorandum re: Compacts covering flood control in the Merrimack and Connecticut River Basins. The Connecticut and Merrimack Valley compacts, which are identical, except as to signatories, description of projects and apportionment of costs, have been negotiated between the States of Massachusetts and New Hampshire, and the States of Connecticut, Massachusetts, Vermont, and New Hampshire, respectively, pursuant to section 4 of the Flood Control Act of 1936. The policy of that act as stated in section 1 thereof is ** * 66* * * that flood control on navigable waters or their tributaries is a proper activity of the Federal Government in cooperation with States, their political subdivisions, and localities thereof; that the Federal Government should improve or participate in the improvement of navigable waters their tributaries, including watersheds thereof, for flood-control pur or poses * * Section 3 of the Flood Control Act of 1936 provides that no money "shall be expended on construction of any project until States, political subdivisions thereof, or their responsible local agencies, have given assurance satisfactory to the Secretary of War that they (a) provide without cost to the United States all lands, easements, and rights-of-way necessary for the construction of the project * * *; (b) hold and save the United States free from damages due to the construction work; (c) maintain and operate all the works after completion in accordance with regulations prescribed by the Secretary of War * * *99 Section 4 of the Flood Control Act relates to compacts between States and the consent of Congress thereto "for the purpose of providing in such manner and such proportion as may be agreed upon by the Secretary of War, funds for the construction and maintenance, for the payment of damages, and for the purchase of rights-of-way, lands, and easements" in connection with projects for flood control on streams which lie in two or more States. The purpose for which compacts may be entered into under this act is solely to apportion the payment required of States in connection with projects benefiting two or more States. The act contains no authority for the making of compacts between States which reserve to such States any rights or authority with respect to matters other than the apportionment of such costs for the construction of flood-control projects. The proposed Merrimack and Connecticut Valley compacts, however, in addition to providing for the apportionment of the cost of certain-named floodcontrol projects the plans for which have been approved by the Secretary of War and of future projects the plans for which have not yet been made, appear to extend beyond the intent and provisions of the Flood Control Act of 1936. Thus the compacts provide (art. VIII, Connecticut Valley compact; art. IX, Merrimack Valley compact) that 66* * * each of the respective signatory States wherein any reservoir may be situated, reserves respectively unto itself all benefit or advantage of water conservation, power storage, or power development that may be inherent in such reservoir site." After directing that any signatory State desiring to reserve to itself the value of the site for water conservation, power storage, or power development should notify the War Department before the commencement of flood-control construction work in order that the plans of the dam may be developed in harmony with water conservation, enhancement of stream flow, or power development, the articles provide 66 * That nothing herein contained shall be deemed to prevent any such State, at its option, at any time hereafter, by itself or through such agency as it may designate, from developing any such reservoir or reservoirs for use for water conservation, power storage, or power development, in order that it may avail itself of the full beneficial use and enjoyment of the rights herein reserved." The above-quoted provisions of the compacts are not only not authorized or contemplated by the Flood Control Act of 1936 (under which the compacts were executed), but are in direct conflict with the establish policy of the Congress relative to the development of water-power resources as revealed in the Federal Water Power Act of 1920 and the comprehensive amendment thereto of 1935 (Public Utility Act of 1935, title II). These provisions would divest the Federal Government of its present control over the development and coordination of the power resources of the regions affected and would involve a surrender by the United States of the Federal interest in the enactment of the Federal Water Power Act of 1920, particularly in those provisions thereof which relate to recapture by the United States. Except insofar as it might be able subsequently to effect satisfactory agreements with the signatory States, the only control over any proposed power development which the Federal Government would have under the compacts would lie in the limited authority given to the Secretary of War to approve the plans for the design and construction of the dam for multiple uses in order that the primary purpose of flood control may be preserved. To the States themselves will be left, in practical effect, the determination of what power developments should or should not be undertaken in these regions, and, of course, the State policy in this respect might be in direct conflict with the present or future Federal policy. If the Merrimack and Connecticut Valley compacts are approved by Congress, the States signatory thereto may themselves develop the power from the projects construed under the compacts, or may provide for development by power companies or other private agencies. If the latter plan should be adopted, the signatory States will have a veto power over the national policy with respect to the disposition and use of the power so developed since "the terms and conditions under which any such signatory State shall make available the rights of * * * power development herein reserved shall be determined by separate agreement or arrangement between such State and the United States * * Under this provision, for example, the Federal Government would not be free, as it is now, to give the preference to municipalities and public power districts in the disposition of these water-power resources which it has been the congressional policy since 1920 (Federal Water Power Act) to provide. In conclusion, it would seem that while the Merrimack and Connecticut Valley compacts conform to the congressional policy laid down in the Flood Control Act of 1936 insofar as they provide for the States' share of the cost of certain flood-control projects on the two rivers, in the other respects above |