Report in the Matter of the Investigation of the Salt and Gila Rivers--Reservations and Reclamation Service


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Source: 62nd Congress, 3rd session, House of representatives, Report No.

REPORT
IN THE MATTER OF THE
INVESTIGATION OF THE SALT AND GILA RIVERS--RESERVATIONS AND RECLAMATION SERVICE


PRESENTED BY MR. HENSLEY
From the Committee on Expenditures in the Interior Department


February--, 1913.--Ordered to be printed, with illustrations


SALT AND GILA RIVERS--RESERVATIONS AND RECLAMATION SERVICE

To the Committee on Expenditures in the Interior Department:

According to your instructions this subcommittee, consisting of Representatives Walter L. Hensley (chairman), Oscar Callaway, and Louis B. Hanna, under House resolution 103, Sixty-second Congress, first session, proceeded to Phoenix, Ariz., to investigate certain affairs of various Indian tribes, which necessarily included the Salt River reclamation project. A House resolution having provided expenses, your subcommittee proceeded to Arizona and we held nine sessions in Phoenix, examined many witnesses, procured and inserted in the record many public documents, personally inspected the Gila River Reservation and its irrigating system, important portions of the Salt River project, including the Roosevelt Dam and Reservoir, and the surrounding territory for many miles. The sessions at Phoenix began April 23, and concluded May 2, 1912. Since then your subcommittee has devoted much time to the testimony taken and various published reports bearing upon the questions in hand. In this investigation the committee was assisted by M. C. Burch, attorney of the Department of Justice, and Edw. C. O'Brien, special assistant to the Attorney General.

Owing to apparent discrepancies in published reports of the Interior Department this report has been delayed until the recent publication of the Eleventh Annual Report of the Reclamation Service. As the investigation progressed the subjects grew broader and more complex, and recognizing the magnitude of the undertaking we finally decided at this time to make a partial report as a foundation for an inquiry more searching and extended than that originally contemplated.

The Indian interests had been most outrageously intermingled with the affairs of the Reclamation Service; consequently the appropriations and uses of waters of the Salt and Gila Rivers formed the bases of the investigation. These rivers rise in western New Mexico, flow generally westward through central Arizona, uniting a short distance west of Phoenix and later join the Colorado, which flows into the Gulf of California. Three cities, Phoenix, Tempe, and Mesa, are located about the center of the lands watered by the Salt River project. They are reached by branch lines of two railway systems, the Southern Pacific and Santa Fe. On the north side of Salt River are the Salt River and Fort McDowell Indian Reservations, while farther south the Gila River Reservation lies on both sides of the latter stream. All lands involved were arid originally. The Pima and Maricopa Indians irrigated with the Gila waters for hundreds of years. Remains of ancient ditches still existing furnish mute evidences of the pristine industry and intelligence of these aborigines. When the whites settled along the upper Gila the water rights of the Pimas and Maricopas began to be invaded, and this has increased to such an extent that these peaceful and friendly people, industrious by nature, and agricultural from long custom, have under the management of the Interior Department, been despoiled of their farms and driven to eke out a scant living by cultivating a small area with the excess flood water available and by gathering and selling the mesquite wood. This last resource is being rapidly exhausted. The whites also settled upon and cultivated lands watered by the Salt River. Several years before the Reclamation Service came, 123,635 acres were cultivated continuously. This included 3,449 acres on the Salt and Gila River Indian Reservations. The total acreage claiming water rights was 277,721 acres. When the service began its operations about 135,000 acres were under cultivation. Most of this 135,000 acres was owned by small farmers. The excess was largely in ownership of large speculators. One tract of over 18,000 acres was held by A. J. Chandler, of Mesa, who, according to his testimony before us, defrauded the Government of it by the ‘‘dummy entry’’ plan, the ‘‘dummies’’ filing under the desert-land act, making and filing false affidavits as to their respective interests, and executing formal conveyances to Chandler after receiving patents. Chandler's copartners in this scheme were the late D. M. Ferry and C. C. Bowen, president and secretary, respectively, of the famous D. M. Ferry Seed Co., of Detroit, Mich. Chandler's irrigation engineer during these transactions was W. H. Code, of whom further mention will be made.

The Arizona Canal Co. and other concerns gathered in lands, maintained irrigation ditches, and sold water rights to the farmers. The Valley Bank, represented by Lloyd B. Christey, was also a large holder of the speculated lands. The settler had to pay a large sum for his water right, and in addition thereto a regular maintenance charge for the delivery of water. Therefore, before the Reclamation Service commenced operations in Arizona the farmers in the Salt River Valley had paid at least once for every canal which delivered them water and in many instances had paid several times for such canals by reason of the stock-juggling operations of the canal promoters.

The only large tract of land in the valley not in speculative ownership was 5,000 or 6,000 acres belonging to the Bartlett-Heard Land & Cattle Co., mainly a Chicago interest, which maintained a cattle ranch. This concern had some of the oldest water rights in the valley. All of the farmers, either by priority of appropriation or by purchase from one of the canal companies, had sufficient water for their lands with the exception of a short period of drought preceding 1902.

The Indians, on the Salt River Reservation received sufficient water from that river. They were excellent farmers and had little trouble, because their ditch connected with the river above other appropriators. The Indians on the Gila Reservation were not so fortunate, because settlers located many miles above them and used the water before it could get to them. The Interior Department's investigations on this subject reads like a juvenile effort at administrative government. Scarcely a year passed without an investigation and report that the Indians' water was being stolen, yet nothing was done to save these people from starvation. They were the prior appropriators of the Gila waters and their title thereto unquestionable, but to this day no action has been taken to save them.

Thus it will be seen that prior to the coming of the Reclamation Service to Arizona the actual farmer had water for his land. The land grafter did not have, and only by the storage of a large body of water would it be made possible for these speculative lands to be parceled out in small tracts at enormous profits. From 1892 to 1902 a sentiment originated and progressed for national assistance in the reclamation of arid lands. This obtained practically in every State and Territory west of the Missouri. Congress was repeatedly urged to build irrigation works to reclaim portions of the public domain and make homes for actual settlers. D. M. Ferry and C. C. Bowen, before mentioned, were interested in the Santa Fe, which, with other transcontinental lines, had hired a lobbyist named George H. Maxwell to work for a national irrigation law. When this was about to pass, Maxwell and B. A. Fowler, for these Arizona land speculators, at the eleventh hour secured the insertion of a provision enabling the Government officials to use Government funds to reclaim private lands.

The most powerful argument used for the reclamation act was the opportunity of the Government to use the San Carlos Dam site, on the Gila River, to reclaim 100,000 acres of Government land, while providing irrigation for the starving Pimas and Maricopas. The Geological Survey had made repeated examinations of the Gila and prepared glowing accounts of its possibilities. This report, at the request of the then chief hydrographer, F. H. Newell, was printed as a House document. It is Water Paper No. 33. It recites that feasible dam sites existed at three points on the Gila River, namely, Buttes, Riverside, and San Carlos; that any one is feasible, but San Carlos the most favorable; that a dam can be built there for $1,038,926 which would irrigate 100,000 acres of public lands and the ,Indian lands; that it should be constructed as a first step, but all other available sites should be withdrawn from entry for ultimate utilization.

With this and other equally glowing pictures before it, Congress passed the reclamation act of June 17, 1902. This act undertakes to make the West reclaim itself by providing that most of the proceeds from the sale of lands in the arid States shall constitute a reclamation fund and be expended for the construction and maintenance of irrigation works to reclaim arid and semiarid lands in the Western States and Territories.

The act directs the Secretary of the Interior to make examination for, locate, and construct irrigation works and report to Congress annually results of such examination, giving estimates of costs of all contemplated works, the quantity and location of the lands that can be irrigated therefrom, and all facts relative to the practicability of each irrigation project; also the cost of irrigation works in process of construction as well as those completed. The Secretary is authorized to withdraw from entry lands required for any contemplated project, either for irrigation works or because of their susceptibility of irrigation. He shall determine whether proposed projects are practicable and advisable, and the lands he proposes to irrigate shall be subject to entry only under the homestead laws in tracts of not less than 40 acres nor more than 160 acres. When the Secretary determines a project is practicable, he may cause contracts to be let for the construction thereof, providing the necessary funds are available, and he is thereupon required to give public notice of the lands irrigable under such project, the limit of area per entry, the charges which shall be made per acre upon said entries and upon the lands in private ownership which may be irrigated, and the number of annual installments, not exceeding 10, in which said charges shall be paid, and the time when said payments shall commence. The act limits the amount of money which the Government may collect from the landowners and entrymen to the estimated cost of construction, and requires that this estimated cost shall be apportioned equitably. The entrymen upon such lands are required to reclaim at least one-half of the total irrigable area of their entries and must pay to the Government the charges apportioned against their lands before they can receive patents therefor. No owner of private lands can receive water for more than 160 acres, and such landowner is required to be an actual bona fide resident on such lands or occupant thereof residing in the neighborhood, and no such water rights attach permanently until all payments therefor are made. The moneys received from these sources must be paid into the reclamation fund, to be used for the construction of other projects.

The Secretary is authorized and directed to use the reclamation funds for the operation and maintenance of all reservoir and irrigation works constructed until the major portion of the lands irrigated are paid for, when the management and operation of the irrigation works shall pass to the owners of the lands to be maintained at their expense under an organization acceptable to the Secretary. The title to and management and operation of the irrigation works remains in the Government until otherwise provided by Congress. The Secretary can acquire rights or property by purchase or condemnation proceedings on 30 days notice from the Secretary. The act specifically provided that nothing therein shall affect or interfere in any manner with the laws of any State or Territory relative to the control, appropriation, use, or distribution of water used in irrigation or any vested right acquired thereunder. The Secretary is required to proceed in conformity with such laws. However, the right to the use of water acquired under the provisions of the act is made appurtenant to the land irrigated and beneficial use the basis, the measure, and the limit of the right. The Secretary is also required to spend the major portion of the funds arising from the sale of public lands within each State and Territory within the limits of such State or Territory, and he is authorized to establish rules and regulations necessary and proper to carry the provisions of the act into effect.

The constitutionality of this act has been called into serious question. Aside from this, it is a masterpiece of legislation, in that it safeguards the Government and the settler. The innumerable troubles that have arisen under its operation in 10 years have been and are due to incompetence and mis and mal administration.

After this enactment, the Reclamation Service was created out of a division of the Geological Survey, the new organization taking over the usages and largely the personnel of the old.

In carrying out its provisions, surveys were made in various localities of the arid West in order to designate the projects to be adopted. Those who had watched events leading up to its passage expected that the first work, would, be done upon the Gila River. The San Carlos Dam site was located on Government land, the Salt River Dam site, called the Tonto, was in private ownership, having been filed upon by the Hudson Reservoir Co., a concern made up of Phoenix speculators. The watershed area of the Gila was 17,834 square miles and that of the Tonto only 6,260 square miles, and including the Verde only 12,260. Practically all the lands to be watered by the Gila were public lands where settlers could make homes, and the water stolen from the Indians could be restored to them, whereas under the Salt River project the large land speculators would be practically the sole beneficiaries. The estimated cost of San Carlos, including diversion works and canal, was $1,380,000, while that of the Salt River was estimated to be $3,850,000, and has since run far in excess of $10,500,000. The San Carlos Dam site could be reached by rail, the Salt River Dam site was over 60 miles away from branch railroads and an expensive mountain road had to be built to reach it. In short, if the Geological Survey reports and Reclamation Service are to be believed, the San Carlos site was infinitely superior to the Salt River site in every respect.

Answering an inquiry of a Phoenix speculator as to how to sidetrack the San Carlos and substitute the Salt River scheme, F. H. Newell, director, replied that his ‘‘friend,’’ George H. Maxwell, could doubtless point out the way. Maxwell seems to have done so, for one of the first projects designated to be built was Salt River. New homes for actual settlers were overlooked and apparently the Reclamation Service went into the hands of the big land speculators, to whom since that time it has been largely subservient. Meanwhile the Indians, whose water the Interior Department had permitted to be stolen and the actual settler along the Gila deceived as Congress had been by the specious argument used in securing the passage of the act, have waited patiently for the Government to keep faith with them. Each year their land has become more impoverished through lack of moisture and their condition has become more pitiable. Several years later a subsidiary corporation of the Southern Pacific Co. desired to secure the San Carlos dam site for a railway right of way. A board of engineers of the Reclamation Service thereupon met at Phoenix, and notwithstanding their glowing tributes contained in Water Paper No. 33, unanimously decided that the San Carlos site was not feasible for a dam. It has been charged that Epes Randolph, president of the Southern Pacific lines in Arizona, was present at this meeting and dictated the decision signed by the reclamation engineers. This Mr. Randolph denied. At present three applicants are striving in the Interior Department for this San Carlos site, viz, the Casa Grande Water Users' Association, who aim also to furnish to the Indians their share of the water, J. M. Jamison, who seeks to obtain the site for a company, intending to irrigate the lands about Florence; and the Southern Pacific's subsidiary, which desires the canyon for a railway right of way. Although these applications have been pending before the department for years and the condition of the settlers and Indians becomes more acute every day, no final decision has been reached by the Secretary of the Interior.

The Gila River Indian Reservation originally as created by the act of February 28, 1859, had 100 square miles. This was increased by several Executive orders made by Presidents Grant, Hayes, and Arthur. The present area is 357,120 acres. Before the Gila water had been stolen by settlers above, from 20,000 to 30,000 acres had been cultivated by the Indians. The Indian Bureau had spent $42,913.13 trying to irrigate up to June 30, 1910, but had made no real effort to restore the water that rightfully belonged to the Indians, these expenditures being merely makeshifts for water for them, while their own river water was being stolen.

When the Reclamation Service came, one W. H. Code, who had been Chandler's expert during the period when the Chandler outfit was defrauding the Government of the land embraced in the Chandler ranch, became reclamation engineer for the Indian Bureau. The Chandler ranch bordered on the Gila River Indian Reservation. Shortly after the appointment of Code he made several so-called investigations of irrigation conditions on the Gila Reservation, with the result that after conferences with Supervising Engineer L. C. Hill, and Director F. H. Newell, of the Reclamation Service, the following scheme was proposed: Congress should appropriate $540,000 to provide a system for the Pimas. This sum should be reimbursed to the United States by the sale of 180,000 acres of the Indians' land, contiguous, of course, to the Chandler ranch, at $3 per acre, land that with water would be worth from $100 to $300 an acre. The legislation was secured, and Newell, Hill, and Code proceeded to install the irrigating system. Their conduct is not surprising. The first step was a canal some 20 miles in length on the reservation. Its intake was at a higher level than necessary for the Indian lands to be irrigated. But this level was necessary to carry the water onto the lands adjacent to the Chandler ranch, which it was proposed to sell. The canal runs along a ridge until the point for diversion for use on Indian lands, where a series of drops were necessary to bring the water down to the required level. Here the canal forked, the smaller branch with the drops headed for the Indians' lands to be irrigated. The large fork continued on the high level in the direction of the land to be sold to a point about 4 miles distant from the Chandler ranch.

The settlers above had taken the Indians' water of natural flow; only a dam and reservoir at San Carlos could restore to the Indians water for their farms, and the powerful Southern Pacific wanted that site for their road. Some show must be made of restoring the Indians' water. Thereupon a scheme was devised to draw water from the earth--get half of the Indians' lands for the big speculators, and furnish a market for the electric power from the Roosevelt Dam. Ten pumps were installed at various points along this canal. Newell explained that it was the intention to supplement the river water with pumped well water. These pumps installed cost about $10,000 each and would wear out in 10 years. The Indians objected to the Newell-Hill-Code scheme chiefly on two grounds. First, it would get away with 180,000 acres of their best land, and second, because the water pumped was so alkaline that it would destroy their crops. They owned the river water without price. Why, by means of these pumps, should they be made to pay for their own funeral? Notwithstanding their protests, Code and his force persisted until more than a half a million dollars was thus spent in work disastrous to the Indians and valuable only to land grabbers. The Indians were to be allotted 5 acres each on which to make their homes and living, although the farm area in that region varies from 80 to 160 acres. The total area of the reservation is in excess of 357,000 acres if the land is not sold for the pumps.

Having forced the pumps on the Indians, their next step was to load them down with the expenses of operation.

Early in 1907 a contract was prepared and executed by the Interior Department with the Salt River Valley Water Users' Association. In preparing this, Code represented the Indians Hill, the Reclamation Service; and Joseph H. Kibbey, a Phoenix attorney who had been a governor of Arizona Territory, appeared for the water users. How the Indians were represented appears best from the contract itself, dated June 3, 1907, and signed by James Rudolph Garfield, Secretary of the Interior, and the Salt River Valley Water Users' Association, by B. A. Fowler, president, and Frank H. Parker, secretary. The contract recites, in effect, that the Reclamation Service is engaged in constructing the Salt River project; that there will be developed and utilized a large amount of electric power; that the Government is desirous of supplying to the Gila Reservation water for 10,000 acres of land; and that, to accomplish this, 1,000 horsepower of the electric power generated in the Salt River project should be transmitted to the north boundary of said reservation; that the Government is desirous that the Indians shall ultimately become members of the association; that it realizes that they can not do so until they have become owners in fee in severalty of the lands occupied by them; that the sum of $300,000 (of the total of $540,000) has been appropriated by Congress to construct works or otherwise supply irrigation for the Indian lands, and that $100,000 of said sum is immediately available.

After the above recitals the contract provides that the Government (meaning the Reclamation Service) shall construct a transmission line to the north boundary of the Indian reservation and transmit by means of the same 1,000 horsepower out of the excess power not needed by the members of the water users' association, as its membership is or may afterwards be constituted, the said power to be used to pump water for irrigation; that the Indians shall pay for the transmission line necessary to receive and transmit this power to the pumps; that the Government (meaning the Indian Bureau) shall forthwith pay to the Reclamation Service the $100,000 available, which shall be credited to the Indian Bureau as a payment on the cost of irrigation works for the Indians and to the water users' association on account of the cost of construction of the Salt River project; that the 10,000 acres of land to be so irrigated shall in consideration therefor be further assessed until the total charge equals that of any other lands in the Salt River project, the further assessment to be paid in 10 annual installments the same as the white farmers are expected to make payment for the project. The proportionate cost of repairs, renewals, betterments, maintenance, and operation of the Roosevelt Reservoir, power canals, house, machinery, appliances, transmission lines, and all other parts of said Salt River project shall likewise be charged pro rata against said 10,000 acres. The contract further provides that when the Indians shall become owners severally in fee they may become members of the water users' association, provided, however, that the owners of not more than 10,000 acres of said lands may be members without further consent by said association; that the association shall be under no obligation to supply more than 1,000 horsepower; that the association shall not be liable for the failure of the Government (meaning the Reclamation Service) to supply said power; that under no circumstances shall any water be furnished to the Indians.

Thus it will be seen that by this contract any excess power not wanted by the members of the water users' association shall be furnished the Indians not to exceed 1,000 horsepower; that the cost of building the transmission line to conduct this power to the reservation shall be paid to the Reclamation Service by the Indian Bureau out of the fund intended to provide irrigation for the Indians; that no more than 10,000 acres can be watered within the reservation, and these 10,000 acres must bear the same enormous charge assessed against the lands of the white settlers. The effect of the contract is to render all of the reservation, with the exception of 10,000 acres, entirely valueless to the Indians so that they will in self-defense have to sell this excess. The water in the Gila has been taken from the Indians. This contract prohibits their getting any water from the Salt River and prevents them getting water by the Salt River power for more than 10,000 acres, and then only in case there is sufficient excess power. It practically cuts the reservation down to 10,000 acres and mortgages these 10,000 acres for a proportionate share of the cost of the Salt River project, and in addition an exorbitant illegal maintenance charge of nearly $3 per acre annually, while the Indian is protesting in every way he can against the use of pumped water. It is a burden the Indians can not bear, and it would only be a question of time until the 10,000 acres would be taken from them under this plan. Kibbey, who took a prominent part in drawing the contract, acknowledged before us that no white man would sign such a contract. No Indian did. Garfield signed for them. For the privilege of being thus swindled the Indians had taken from them, of the money appropriated by Congress for irrigation, $100,000, and thus are to date the only persons who have paid one cent on the construction of the Salt River project.

During the last session of Congress an act was passed relieving them from a portion of these huge charges by providing that the assessment against the lands should not be enforced so long as title remained in them. At the same session of Congress an appropriation was made providing for the examination by a board of Army engineers of the feasibility of the San Carlos project. Both of these measures are steps in the right direction.

In the inspection of this Indian project the committee was unable to understand how more than half a million dollars could have been expended with so little to show for it. On investigation we ascertained among other reasons that although less efficient, the pumps installed on the reservation cost more than those used on the Chandler ranch. We also observed that a small cottage, built as a residence for one of the engineers, was charged up against the project at $7,396.73. This house could doubtless be duplicated for less than $2,000. The building of a well shed and the purchase and installation of machinery costing $850.78 are charged up at $4,231.14. Of this sum $405.59 is for ‘‘engineering and superintendence’’ and $298.15 for ‘‘general office expense.’’ Photographs of the cottage and well shed are herewith submitted and speak for themselves of the manner in which expenses have been incurred to deprive the Indians of their lands.

As soon as it became known that this committee was about to investigate the conditions surrounding this project, Code resigned his position as irrigation engineer for the Indian Bureau and left Arizona, although he still retains his position as vice president of Chandler's bank at Mesa, in which said bank Lewis C. Hill is also a stockholder. Code was given an opportunity by this committee to appear before it and explain his conduct, and notwithstanding his presence in Phoenix for a day or two during the sessions of the committee there, he declined to take advantage of the opportunity given him, and left the city when he must have known that his presence was desired. Lewis C. Hill is still supervising engineer of the Reclamation Service in the Arizona district. F. H. Newell is still its director.

When the Reclamation Service commenced its operation in the Salt River Valley, the farmers were assured that the total expenditures would be about $12.50 per acre, and that 250,000 acres would be included. In order to make their estimates safe the cost per acre was placed at $15, and with the encouragement of the Reclamation Service the water users' association was incorporated under the laws of the Territory (now State) of Arizona, capitalized at $3,750,000. The stock was divided into 250,000 shares, representing the number of acres, and the par value was fixed at $15 per share, representing the estimated cost of construction. Upon this representation the farmers and other owners of land in the Salt River Valley were prevailed upon to give to the association a lien upon their lands for the cost of the project.

Fowler and Maxwell seem to have been the active agents of the Reclamation Service in securing this organization, which, of course, had no sanction in law, as the reclamation act provides for dealing with an organization of the land owners only when the project is completed, more than half paid for, and turned over to the community for maintenance and operation. The Secretary reported to Congress that the estimated cost of the construction of this project was $3,850,000. This estimate is given in the Secretary's report for 1905, page 83. The total expenditures on this project to June 30, 1912, have been $10,547,396.31, in addition to which the farmers were assessed to complete the project the sum of $900,000. As the reclamation act provides that only the estimated cost of construction may be recovered by the Government, the Government's loss on this project to the end of the last fiscal year appears to be $6,747,396.31. This enormous loss on one project is due clearly to the incompetence of the officials of the Reclamation Service.

In connection with the Reclamation Service and projects, we must consider that there is no ownership of running water in the arid States. The only right recognized is beneficial use. Appropriations of water are made under State laws, but the Federal Government has no authority over running streams unless navigable, and then for navigation only. When this service commenced in Arizona the natural flow and much of the flood waters of the Salt River had been appropriated. Therefore the Reclamation Service had no right or authority over the normal flow of the Salt River. It might store excess or flood waters in the reservoir constructed, but it could not keep from the settlers below the water which they had appropriated.

To adjudicate the water rights along Salt River, the celebrated case of Hurley v. Abbott, which was decided by the Territorial Federal court, was instituted. Its decree established the rights of each individual water user on the entire stream. The dam site and reservoir was in private ownership, likewise the canals in the valley below. Had a private corporation gone into this field as the Reclamation Service did it would have ascertained and then acquired these rights before attempting the construction of a dam. With its characteristic business incapacity this service paid $40,000 for the dam site; $147,775 for the lands to be submerged in the reservoir; expended over $300,000 for roads; then let the contract for building the dam, built a $600,000 diversion dam, constructed cement and power plants, and purchased many distributing canals at great expense before it occurred to them that the Government could not control the waters of the stream. When they awoke, minus all this expense, they, by gross abuse of the discretionary power given them by Congress and by the Secretary of the Interior, proceeded to coerce the water owners who had theretofore been too far-sighted to surrender their rights. Farmers under the Tempe Canal refused to dispose of their canal and water rights and are to be congratulated on their foresight and prudence, as the result of which no limitless building cost has been fastened upon their farms, and they get along with only a reasonable charge for the maintenance of their canal and the operation of their works. Where the Reclamation Service could not buy an entire canal system, they bought what they could and by a system of petty tyranny and abuse forced unwilling owners of water rights to pay excessive charges for delivering them the water which was theirs to use.

In all of these transactions the Reclamation Service seems scrupulously to have avoided dealing with the farmers, who received nothing for their rights, although they had been compelled to pay large sums for them, and in some instances pay several times. The corporations operating the canals alone received money from Newell and his associates. Even the appropriators' canal, which the real farmers had built at great expense to protect themselves from the greed of these corporations, was brushed aside by these misrepresentatives of the Government and later delivered to the Reclamation Service in consideration of the sum of $1, while more than $700,000 was paid the corporations for their canals. The water rights of the farmers were thrown into the reservoir and an ever-increasing charge fastened upon their lands.

Three thousand nine hundred acres of Indian land on the Salt River Reservation were ‘‘signed up’’--in other words, mortgaged--for the payment of their proportionate cost of the project, although they have neither voice nor vote in the affairs of the water users' association and derive no benefit from the reservoir. The Indians on this reservation had the best water rights in the valley and received their water without cost in consideration for giving the Arizona Canal Co. a right of way across their reservation. Like the small farmers, they profited only by the Granite Reef diversion dam, which in cost constituted less than 7 per cent of the entire project, and, like the small farmer, are assessed, in addition, for the remaining 93 per cent, which benefited the large land speculators alone. The water rights decreed to these Indians by court were likewise juggled into the reservoir without their being consulted or recompensed.

Among the canals taken over by the Reclamation Service was the Consolidated or Chandler Canal, also called the Meas Canal. This canal was about 30 miles long and was constructed to convince the Interior Department that Chandler's ‘‘dummies’’ were actually reclaiming; that is, watering the lands they had fraudulently entered. When this had been accomplished and title to the land secured, the canal was allowed to run down. When the Reclamation Service came there were from 4 to 5 feet of sand and numerous trees and other obstructions in the ditch. One bank had been washed away for a distance of nearly a mile and a half near the intake, and it was hardly possible to travel along the banks. Hill the engineer in charge of the reclamation project, negotiated with Chandler to purchase this so-called canal. He testified before us that he and Chandler estimated the cost of digging a similar ditch at $187, and Chandler was paid this sum. Reclamation reports show it cost $100,000 to put the canal in repair. When repaired, it served to reclaim the very lands of which the Government had been defrauded. Also Hill permitted Chandler to reserve a power site at which power is developed to operate pumps which supply additional water for Chandler's use. Hill also gave Chandler a contract similar to that given to other large land speculators, by which the Government of the United States, in effect, guarantees to deliver water to such persons as Chandler may induce to settle upon 160 acre tracts or less. This action was taken by Hill in spite of the fact that many small farmers on the south side of the river, who for years have been compelled to pay assessments to the water users' association, are refused water by the Reclamation Service. In short, the ‘‘dummy’’ system by which Chandler fraudulently acquired title to lands now irrigated by the Government, is again in process to get the water. The reclamation act limits the amount of water which any one user may purchase to 160 acres, but by giving a deed to a ‘‘dummy’’ and having that dummy in turn execute a mortgage to Chandler for the full selling price or more, the law is evaded, and one individual thus receives sufficient water to irrigate many thousands of acres.

Additional canals were purchased at a cost of more than $500,000 and charged up against the cost of construction of the project. Attention is again called to the fact that nearly all these canals had been paid for at least once by the settlers in the valley. In some instances, as the Arizona Canal, the farmers paid several times for these canals by reason of the stock-juggling operations of the promotors. Once more these canals were sold to the farmers through instrumentality of the Reclamation Service, and a lien of more than $700,000 additional thus created upon the farmers' lands.

One of the best-informed witnesses who appeared before us, W. J. Murphy, expressed the belief that two of the many canals purchased by the Reclamation Service would have been sufficient to water all of the lands under the project. ‘‘It is apparent to anyone who was familiar with the operation of the canals,’’ said this witness, ‘‘that two canals would do the business better than the five, more economically, both as to water and the cost of maintenance, so that we wanted the Government to take the canals and in some way to remodel the system of distribution. It was at our request.’’

Instead of complying with this request of the canal owners the Reclamation Service could have purchased or condemned two of these canals and thus saved several hundred thousand dollars in the cost of the project.

The Bartless-Heard Land & Cattle Co. had old water rights and its own canal, by which it irrigated several thousand acres. When the water users' association was formed, Dwight B. Heard, representing this company, refused to sign up these lands, denouncing the plan as a ‘‘speculative unloading proposition.’’ His company was raising cattle, not seeking victims for questionable real estate transactions. However, as years passed and Heard saw Chandler selling land which had cost him about $3 per acre for prices ranging from $90 to $150, and requiring the purchasers to pay for the project and water besides, and thereby making a million and a half dollars, and witnessed similar operations by W. J. Murphy, the Valley Bank, and other speculators, he concluded that the legitimate profits of the cattle industry were not to be compared with the questionable profits of these high-finance operations, made possible by the Reclamation Service. He succumbed to the temptation and soon had a contract like Chandler's, by which these misrepresentatives of the Government, in effect, permitted themselves to be used to deceive the unwary purchasers. Heard stated on the stand that he was individually getting water for more than 100 acres of land in addition to the large tracts watered by means of the contract the reclamation officials had given his company.

Your committee was unable to find, in going over the Salt River Valley, any improvements made by the Reclamation Service on the early cultivated lands; but cement ditches and fancy concrete works were the rule upon the speculative lands.

This service reports that 134,364 acres of land had been irrigated by works built by others and taken over by the Government. They reported nearly 160,000 acres now as irrigated. In other words, to irrigate the additional 25,000 acres of raw land costs $422 per acre. According to its eleventh annual report this service is to-day supplying 115,514 acres with water under rental contracts, or approximately 20,000 acres less than were under cultivation when its operations began 11 years ago.

For some mysterious reason a large force of employees is still maintained at the Phoenix office, and the cost of their salaries charged up against the farmers under the project. According to Hill's statement before us the cost for salaries alone of this force is nearly $3,000 per month, although the service claims the project is practically completed. Overhead charges (which means those not incurred in field work) amounting to $707,565 are made against this project, including the expenses of the Phoenix office, amounting to $442,379.42. While these figures are astonishing to the reader and appalling to the discouraged farmer who is expected to pay the price, even more so are other items against the project. For example, Hill testified that this service maintained an official photographer who took pictures for newspapers and magazines to show the progress of the reclamation work, and for this pretended service the farmers on this one project had been charged up to December 31, 1911, the sum of $9,089.30. In other words, the press bureau for glorifying these officials and advertising the lands for the speculators is to be saddled upon the farmers.

We herewith submit hitherto unpublished photographs of reclamation work along the Gila River.

After the service had spent all the reclamation fund, secured the $20,000,000 loan which Congress perhaps unwisely authorized, and nearly $10,000,000 of this had been used on the Salt River project alone, this project was still incomplete. The farmers were prevailed upon to assess themselves $900,000 to finish it. This is now being spent under the direction of this service, wherefore the causes for the enormous cost are coming to light. In the work of this service no care seems to have been taken toward economy and dispatch like that general in private enterprises. The time of large crews of men was wasted by camping them miles from work and making four trips a day to and from camp to the scene of operations. Expensive concrete works were installed by one engineer; condemned by a second, and blown out with dynamite; the like repeated the second time. Some of these works cost $2,000 for each installation. Owing to ignorance or carelessness in mixing concrete, large sections washed out when the water was turned into the canals. The farmers of the valley witnessed such things with growing alarm. Their feelings were not at all relieved by the treatment received from those in charge. One Reed, perhaps least qualified of all to deal with farmers, was placed in charge of the operation and maintenance of the service in Phoenix. His treatment of the water users has been shameful and a reproach to the Government. So insolent has he become that on one occasion he drove in a Government automobile several miles to assault a farmer who complained, called the latter from his home at night, and proceeded to assault him. He was arrested and put under bond to keep the peace, but notwithstanding this and other equally reprehensible conduct on his part he is kept in sole charge of the maintenance and operation division under this project.

It is difficult to conceive of a plan more unjust than that proposed by the Interior Department in assessing construction charges against the land. The real farmers in the valley, the farmers who had already reclaimed nearly all the lands reclaimable and have received no benefit from the operation of this service except the diversion dam and the questionable insurance against successive years of drought, are to be required to pay as much per acre as the ultimate owners of raw speculative lands which never, before the advent of this service, had a drop of water. The speculative lands have been supplied with fancy concrete structures and cement ditches and not a Reclamation Service improvement of any kind could be found upon the old lands. Moreover, Assistant Secretary Adams, Director Newell, and Engineer Hill have limited the protesting farmers to less than half of the amount of water the court decreed necessary in the case of Hurley v. Abbott. This latest move is doubtless considered necessary for several purposes--among others, to provide the big speculators with water to enable them to continue their unconscionable real estate transactions. Hill's advice to Chandler, ‘‘Get busy and reduce your lands to small holdings,’’ is being carried out with a vengeance.

If all of the lands were equally benefited by the operations of this service the speculators would have had spent for their benefit approximately $2,000,000, as they owned approximately 20 per cent of the total area. However we must remember that the remaining 80 per cent of the lands were previously under cultivation, had vested water rights, and have benefited only to the extent of the diversion dam and insurance in the form of stored water in the reservoir. The Granite Reef diversion dam cost about 7 per cent of the total cost of the project, and the insurance mentioned may be worth another 3 per cent. The speculator enjoys 90 per cent of the benefits and the pioneer assumes 80 per cent of the burdens. The new farmer upon whom the speculators unload pay the remaining 20 per cent of the cost. The speculators are required to pay nothing.

In view of these conditions it is not surprising that the bitter complaints of the farmers can no longer be stifled. An organization called the Land Owners' Protective Association, made up of 500 or more of the small land owners and farmers, was organized and petitioned Congress and the Department of Justice for assistance. Large numbers of farmers attended the sessions at Phoenix and gave voice to their long-standing, bitter complaints. We are not surprised to read in the various reports of the Reclamation Service that the most serious obstacles that beset its march are the ‘‘human obstacles’’--the farmers. The ‘‘service’’ has become the ‘‘master’’--harsh, cruel, unjust, and accountable to no one for its conduct or its expenditures of the farmers' and the Government's money.

The business transactions of the Reclamation Service generally in Arizona have been conducted in the twilight zone. If actual fraud does not exist, it can at least be said that many of the badges of fraud are evident in these transactions. A good illustration is seen in the dealings between this service and the Pacific Gas & Electric Co., a private corporation. In 1906 Congress passed an act authorizing the development of electric power wherever it was feasible to do so in connection with reclamation projects, and providing that the power should be sold and the proceeds of such sales credited to the cost of the project, and that in the disposition of this power municipalities should be given the preference.

The Reclamation Service taught central Arizona that electricity from the Roosevelt Dam would make Phoenix ‘‘the power city of the world.’’ The commercial bodies at Phoenix, the Maricopa County Commercial Club, and the Phoenix Board of Trade, watched eagerly for information wherewith to boom their community for a manufacturing center. In April, 1908, the secretary of the Maricopa Club ‘‘had a tip’’ that negotiations were in progress for a contract between the service and the Pacific Gas & Electric Co. for the electrical output of the Roosevelt Dam. He made direct inquiry, but received an evasive reply. An engineer named Stannard, then in charge of the office in Hill's absence, stated that negotiations were pending. A club meeting was called and a committee appointed to call on the reclamation office and they were there informed that an agreement had been reached for a future contract which would exclude the city from getting power. Acting on this information, a committee, seven members each of the club and board of trade, called at the reclamation office about midway of April, 1908, and demanded to see the contract or further information regarding it. Stannard told them it would be two or three months before the contract would be closed and the city be in no danger of losing the electricity. The committee then wired the Secretary of the Interior, the telegram being signed also by the mayor and city council. The message was a protest against any contract depriving Phoenix of power and against any exclusive contract. The Secretary replied by wire, stating that a contract had actually been made a year prior to that time.

The contract in question was dated June 22, 1907. By its terms Lewis C. Hill, for the Reclamation Service, agrees to furnish and serve electrical power to this corporation in the city of Phoenix, Ariz., by means of the power plant at the Roosevelt Dam and the transmission line to the city. The term of the contract is 10 years from its date, and Hill agrees on behalf of the United States that during said period the Government will refrain from retailing power to anyone in Phoenix and from furnishing power to anyone therein who would again sell or retail it. So this private corporation of Los Angeles, Cal., was given monopoly of the power in Phoenix, excepting that a factory might be permitted to purchase for its own use blocks of 100 to 500 kilowatts or more.

Phoenix was aroused by this direct violation of the law of Congress which gave municipalities the preference in the purchase of such power. The committee called upon Stannard again, inquiring why he misled them, and learned that Hill had instructed him not to divulge the fact of the contract or its contents. So he had lied to order. When this contract was executed one Chalmers, of Chalmers & Kent, was attorney for the Pacific Gas & Electric Co., and one McClung, its treasurer. McClung was also vice president of the water users' association. Kibbey, who distinguished himself preparing the contract for selling electricity from the dam to the poor Indians, was attorney for the water users' association. One Ensign was local manager of the Pacific Gas & Electric Co. Ensign's brother was engineer of the Reclamation Service in charge of the electrical development at the Roosevelt Dam. Protests were made to President Roosevelt and Secretary Garfield by the bodies mentioned and by many individuals and other organizations. The Arizona Legislature passed a memorial to Congress to move the Interior Department to set aside the contract.

The Secretary did not reply for a year. Meantime Kibbey secretly called together the few members of the board of governors of the water users' association who happened to be in Phoenix during the hot portion of the summer, and with McClung presiding at the meeting, the action of Hill in making this contract was ratified and confirmed. The first intimation the citizens of Phoenix received of this was from the Acting Secretary of the Interior. The Pacific Gas & Electric Co. capitalized its exclusive contract, which cost them nothing so far as is known, at $515,000, and in the opinion of one of the corporation commissioners of Arizona expressed before us that sum was a modest estimate of the value of that contract. The Pacific Gas & Electric Co., by the terms of the contract, paid 1 Y cents per kilowatt hour for the power and retailed it to domestic consumers at 20 cents per kilowatt hour. After many protests on the part of the consumers and the citizens generally, the price was cut to 15 cents and finally 12 cents. The Boston Tea Party and the once well-known Declaration of Independence had evidently been forgotten at the Department of the Interior and the White House. Likewise the law of Congress giving municipalities the preference. A municipal league was formed to get these exclusive rates reduced. Among other expedients a campaign was started for a municipal lighting plant and an election held, resulting in authority being given by the necessary two-thirds of the voters to bond the city to raise the required funds to install such a plant. Under the Territorial form of government then existing, it was necessary to apply to Congress for an enabling act to issue the bonds. Chalmers came to Washington and by misrepresentation to the House Committee on Territorial Affairs succeeded in defeating the measure. The Reclamation Service now refers to the Pacific Gas & Electric Co. the same water users who supposed the power was being developed for their benefit, and even the Government Indian school at Phoenix has to pay several hundred dollars monthly tribute to the Power Trust created by the Reclamation Service in violation of this act of Congress.

When taken to task, Hill stated before your committee that the predecessor of the Pacific Gas & Electric Co. was the Phoenix Light & Fuel Co.; that this company had a contract with the Arizona Canal Co., by the terms of which it might be entitled to a monopoly of the water power sites below the Arizona Dam. Hill stated that he gave the contract objected to in exchange for this alleged right of the Phoenix Lighting & Fuel Co. He also stated that 1 Y cents per kilowatt hour was a high price to receive for the power developed at the Roosevelt Dam. The facts are, however, that the Arizona Dam had been washed out and that the Arizona Canal Co. was in bankruptcy; that a foreclosure proceeding had been instituted against it, and by a strange coincidence every party interested, excepting the Pacific Light & Fuel Co., had been made a party to this proceeding; that a Westinghouse expert had examined the alleged power projects the exclusive right to which were given to the Phoenix Light & Fuel Co., and had pronounced them worthless; that the Pacific Gas & Electric Co. could well afford to pay many times 1 Y cents per kilowatt hour for an exclusive contract whereby it was enabled to charge the consumer 20 cents per kilowatt hour. The real important fact, however, which Hill and his associates persist in overlooking is that the act of Congress authorizing the generation of power provides that the municipalities shall be given the preference in the sale of such power, and that Hill had no more right to sell the power to a private corporation without first giving the city of Phoenix a chance to purchase it than he would have had to sell the Roosevelt Dam to that same company. As the public had been deceived in the first instance into the belief that the Reclamation Service would reclaim public lands and later found them reclaiming lands nearly all in private ownership, the public was again deceived, and this community was required to pay for the development of the electric power upon the theory that it would be theirs, and then forced to purchase electricity from a private corporation in violation of law. Your committee believes that some action should be taken by the proper officials of the Government, either through the courts or otherwise, looking to the setting aside of this illegal and vicious contract, and that the Department of Justice should institute such criminal proceedings as the facts warrant.

Before leaving the investigation of the conditions of the Pima Indians your committee examined into the conduct of the late superintendent, J. B. Alexander, Clerk John L. Snyder, Farmer J. D. Landers, Assistant Farmer Jacob Roberts, and Forest Guard Solon Jones. It appears from the testimony taken by your committee that for a long period of time a system was carried on by the employees of the Indian Bureau by which vouchers were falsified and raised, checks forged, checks drawn in the names of many persons who were not entitled to receive them and whose names were used without their knowledge, wagons traded for wood, checks and vouchers drawn for the wood actually delivered and these funds misappropriated, fictitious names placed on pay rolls, wood, cattle, and beef purchased from persons in the names of other persons at the request of the late superintendent, who retains some of the checks and moneys of these transactions. An investigation was made by Inspector E. B. Linnen, of the Interior Department, and after many months of delay Alexander was suspended by the Secretary and the report of Inspector Linnen turned over to the Department of Justice with a view to prosecuting the guilty parties. Your committee is informed that since leaving Phoenix the Department of Justice has secured against the persons accused seven indictments embracing 91 counts. J. B. Alexander was tried on one indictment and acquitted, but is still to be tried on the remaining six indictments. The committee takes this opportunity to express its appreciation of the thorough and efficient work done by Inspector Linnen in investigating the affairs of this agency.

The following statements not in the record have been furnished to us by water users as a reason for further investigation and we insert the same for such purpose.

Since this subcommittee was at Phoenix the Acting Secretary of the Interior, Samuel Adams, has, in conjunction with Newell and Hill, forced upon the protesting farmers a new and vicious water contract. The effect of this contract is to increase by at least 50 per cent the cost of water to the settlers, deprive them of the water rights decreed them by the court, and give the officials of this service authority to run ditches across their lands arbitrarily and without compensation for damages done.

The new contract was sprung suddenly on the settlers by Adams, Newell, and Hill just as the old contracts were about to expire, so that the settler had to sign or go without water. Protests were made to Adams, who refused to alter the contract not withstanding the fact that the United States circuit court of appeals had decided, in the case of Baker v. Swigart, that the Reclamation Service has no right to make a maintenance charge of any description.

It would thus seem that the Interior Department, especially since the induction of Adams as Acting Secretary, has demonstrated its determination to cover up the past incompetence and iniquities of this service by a new series of abuses. As expressed by one witness before us, ‘‘Life under this project is like Gen. Sherman's definition of war.’’

The revelations made to us of the conduct of the Reclamation Service in the Salt River Valley and vicinity have prompted us to inquire further. From published Government records and reports we find that exclusive of irrigation attempted on Indian reservations, 28 projects have been commenced and about $75,000,000 expended to June 30, 1912. Although the disposition of this vast sum has extended over a period of 11 years, no effort has been made by anyone in authority to secure an accounting from the officials in charge. We know of no department of any government in history that has permitted officials who continually have demonstrated their scientific unfitness and business incapacity to be given apparent carte blanche at the treasury and permitted to disburse so many millions of dollars without let, hindrance, or accountability to anyone.

The reclamation act provides that the settlers under the various projects shall repay to the Government the estimated cost of construction, and that the Secretary of the Interior shall at the opening of each regular session report to Congress the estimates of cost of all contemplated works. The first definite report in compliance with this provision of the law was made in 1905. (See Report of the Secretary of the Interior for 1903, p. 81 in some issues of this report and p. 83 in others.)

The estimated cost of projects authorized and approved by the department contemplated but not yet completed is as follows:

State. Name of project. Allotment.
Arizona Salt River $3,850,000
California Yuma 3,000,000
Colorado Uncompahgre 2,500,000
Idaho Minidoka 1,300,000
Do Payette-Boise 1,300,000
Kansas Garden City 260,000
Montana Huntleya 900,000
Montana (two-thirds) North Dakota (one-third). Lower Yellowstone 1,900,000
Nebraska and Wyoming North Platte 3,330,000
Nevada Truckee-Carson 3,000,000
New Mexico Hondo 240,000
Oregon Klamath 2,000,000
South Dakota Belle Fourche 2,100,000
Wyoming Shoshone 2,250,000
Total 27,930,000

In his report of 1907, at page 40 in some issues and page 43 in others, the Secretary gives the estimated cost of the following additional projects:

State. Project. Estimated cost.
California Orland $1,200,000
Colorado Grand Valley 2,250,000
Montana Milk River 1,200,000
Do Sun River 500,000
New Mexico Carlsbad 640,000
New Mexico-Texas Rio Grande 200,000
North Dakota Pumping 1,240,000
Oregon Umatilla 1,100,000
Utah Strawberry Valley 1,500,000
Washington Okanogan 500,000
Do Yakima 3,700,000
Total 14,030,000

From these figures it appears that the total estimated cost of the 25 ‘‘primary projects’’ is $41,960,000. In other words, the full amount the Government can recover from the settlers is $41,960,000, and that if all the projects are successful enough to enable the settlers to pay.

In 1910 the Reclamation Service reports (see II. Doc. 1262, 61st Cong., 3d sess., p. 22) that there had been allotted to these projects the sum of $61,885,000, and that to complete them the further sum of $88,664,755 would be required. In other words, that $150,549,755 would be required to accomplish what the ‘‘engineers’’ of the Reclamation Service estimated would cost $41,960,000. It is evident from these figures that the loss to the Government by reason of incompetence in making estimates will be $108,589,755. But this is not all. Since 1910 the service has expended on the Salt River project above described several hundred thousand dollars in excess of the amount guessed at that time. At this rate of reckless progress the probable loss to the Government over and above estimates will be from $110,000,000 to $115,000,000. The ‘‘estimates of the engineers’’ are thus proven less than fair guesses. Such a dalliance with millions of dollars and other serious matters by persons who are styled ‘‘engineers,’’ but whose mathematical work would discredit a village high school, is calculated to breed contempt for the Government in the public mind.

The present guess at the cost is more than 350 per cent of the original estimate. Seventy-five millions of the now proposed $150,000,000 have been spent, and the end is not yet. These facts alone in our opinion make it imperative that the House appropriate a reasonable large sum of money for a complete overhauling of the affairs and accounts of this service.

As near as we can ascertain there are four completed projects of the many undertaken, viz, Garden City in Kansas; Hondo and Carlsbad in New Mexico, and Okanogan in Washington. The first consists of a pumping plant intended to irrigate 10,000 acres. All lands under this project are in private ownership. The financial condition of this project (according to the last available data) is:

Building cost $337,800.31
Operation and maintenance 49,910.39
Total expenditure 387,710.70
‘‘Accrued revenues’’ 8,053.63
Net investment 379,657.07

The Reclamation Service says:

The water plane was drawn down very low, and the discharge from the pumps was, in consequence, materially decreased. The removal of sand from the wells was found to be necessary at frequent intervals. * * * Since 1909 no water has been pumped and maintenance work has been confined to the necessary care of the plant.

The Army board says:

At the meeting which the board held with the directors of the water users' association there was submitted a copy of a resolution unanimously adopted by the stockholders at their annual meeting on October 5, 1910. The substance of this resolution is that the ‘‘Government be asked to abandon the said project so far as this association is concerned, and we ask that all contract liens so far as the Government is concerned be released.’’

In other words, the Garden City project is a total failure and loss.

The Hondo project was, according to the Reclamation Service reports, completed in May, 1907. More than 97 per cent of the lands are in private ownership. Its financial condition (according to the latest data available) was, on June 30, 1911:

Building cost $352,788.30
‘‘Accrued revenues’’ 4,022.23
Net investment 348,706.07

The Reclamation Service says:

Since the completion of the project in 1907 there has been little flood water available for storage, due to the continuance of drought conditions, and inasmuch as the normal flow of the stream above the project is fully appropriated, the supply of water to the settlers on the project has been very limited. Because of these conditions the project has not been formally opened.

The Army board says:

At the time the project was started the data as to water supply appears to have been insufficient to warrant the undertaking, and such data are not now sufficient to justify the board in drawing conclusions as to whether or not under normal rainfall conditions there will be sufficient water for the irrigation of the 10,000 acres in the project.

In other words, not only is this project a total loss, but the ‘‘engineers’’ of the Reclamation Service ought to have known better than to have undertaken it.

The Okanogan project in Washington was completed in October, 1910, according to Reclamation Service reports. More than 87 per cent of the lands are in private ownership. Its financial status is:

Building cost $565,419.56
Operation and maintenance 27,443.17
Total 592,862.73
Less ‘‘Accrued revenues’’ 4,882.00
Net investment 587,980.73

The Reclamation Service says:

See page and evaporation losses in the canals amounted to about 40 per cent, due to the fact that this was the first season for much of the system, that in many places the canals are built alongside hills through gravelly soil, and that many of the smaller distributaries extend through sandy stretches.

The Army board says:

The anticipated returns are $558,301, so there will be a loss to the reclamation fund of about $32,000, nearly $4 per acre. The charges for operation and maintenance in 1909 was $1.50 per acre. There is also a deficit under this heading, due to the small acreage under cultivation, but it is expected this will be made up in subsequent years.

As the United States circuit court of appeals has decided that no maintenance or operation charge can be made, it is evident that the deficit will not be made up. The Army board also intimates that the water supply is inadequate.

The Carlsbad project was completed in July, 1909, according to Reclamation Service reports, and, having returned a larger percentage of its estimated cost than any other project, can truly be said to be in the best shape financially. all of the lands are in private ownership. Its financial condition is:

Building cost $605,687.19
Less adjustment and accrued revenues 10,127.99
595,559.20
Operation and maintenance cost 125,955.99
Less ‘‘Accrued revenues’’ 4,548.69
121,407.30
595,559.20
Net investment 716,966.50

The Tenth Annual Report of the Reclamation Service has no criticism to offer of anything connected with this project, except perhaps of the moss in the bottom of the canals. Even this is cured by crude oil, it says. The eleventh annual report pronounces crude oil a failure and recommends the sun cure for moss.

The Army board, however, reports excessive leakage in the reservoirs and ditches both before and after purchase by the Government. The measured losses in the distributing system in 1909 (the year the project was declared completed) averaged 64 per cent of the diverted water. Owing to the great quantities of silt, the board estimates that the life of the Lake MacMillan reservoir will be about 25 years with a material reduction in its usefulness long before that time. ‘‘The area which can be irrigated from the system with storage capacity and unlined canals does not differ materially from that which can be irrigated through lined canals from the perennial flow without storage.’’ However, the board recommends that none of the reclamation funds be used for lining the canals, but that the water users assess themselves to do this work. In other words, if the water users had merely lined their canals in the first instance, as they are now asked to assess themselves to do, their lands would be getting as much water from the normal flow of the river as they are getting now from a Government project for which they are charged over $700,000.

The figures with reference to these four projects were taken from the Tenth Annual Report of the Reclamation Service. The data given in the eleventh annual report merely increases the money losses to the Government and the landowners.

Attention is also called to the fact that on four of the five projects above mentioned--to wit, Salt River, Garden City, Carlsbad, Hondo, and Okanogan--successful private irrigation systems had been in operation before the coming of the Reclamation Service. The Hondo alone had no private irrigation because it had no water, practically all of the stream being appropriated and used many miles above the present dam site.

These results from these four completed projects, and our investigations of the Salt River project, said to be nearly completed, serve to indicate what may be reasonably expected from those projects still in embryo. The facts herein disclosed, many of which stagger belief, do not retard the triumphal march of the Reclamation Service. The Secretary of the Interior confides in Congress the hopeful news that both the Porto Rico and Philippine Governments have made appropriations enabling the ‘‘engineers’’ of this service to make their island habitation blossom as the rose. The daily press informs us that the reclamation officials are also anxious to reclaim the overflowed lands along the lower Mississippi.

We are convinced that, if given a comparatively simple engineering problem to solve, no two of these ‘‘engineers’’ could arrive at the same result, and it is a matter of grave doubt whether any one of them would have the correct solution. Their so-called ‘‘engineering judgment’’ proves to be a makeshift or a matter of expediency. When they (as engineers of the Geological Survey) were urging the passage of the reclamation act, they said of the San Carlos:

The site for the dam is one which is eminently suited to the erection of a masonry structure of the highest type. No other kind of dam has been considered for this site as it fulfills all requisites of stability in a more satisfactory manner than any other type that could be built and can be made as enduring as time.

When the Southern Pacific made known its desire to secure the canyon for a railway right of way these ‘‘engineers’’ said:

The dip of the bedrock at the site of the San Carlos Dam is in the direction of flow and may be a dangerous foundation on which to found the structure.

And--

The character of the dam site is bad, as a fault occurs at this point.

In the vicinity of many of these projects are Indian reservations containing irrigable lands. The Reclamation Service has devised a system by which it takes upon itself the task of preparing plans for irrigating such lands. These plans are submitted to the Indian Office, and when approved by the reclamation department of that bureau, the Reclamation Service proceeds to do the work. On the Gila River Indian Reservation we have seen how this system works out. We believe that the conditions disclosed on the Gila make necessary a thorough investigation of the operations of the Reclamation Service in connection with all Indian reservations.

The matter of purchases, sales, and rentals by this service should be overhauled. Many millions of dollars have been spent for materials, supplies, lands, canals, water rights, etc. Millions have been realized from the sales of power, water, real estate, and materials, and from rentals and carrying charges for irrigation water. The bare fact that there has never been an investigation of these matters is sufficient, irrespective of the demonstrated incompetency--and perhaps worse--of the service, to justify Congress at this time in making a searching inquiry.

Another subject of the utmost importance is that of water rights. The lack of business judgment and discretion shown in the Salt River operations in this regard renders it necessary that Congress should ascertain what water rights have been acquired under each project in order to determine whether further expenditures are justifiable.

We therefore recommend and urge:

1.That the House appropriate the sum of $25,000 to enable the committee to make a thorough investigation of the Reclamation Service and all of its transactions, to visit such projects as desirable and to secure such legal, engineering, auditing, and other assistance as we may find necessary or useful to make the inquiry complete.
2.That the Secretary of the Interior be requested to remove from office during such investigation Assistant Secretary Samuel Adams, Director F. H. Newell, and Supervising Engineer L. C. Hill, to prevent possible obstruction of our progress by these officials.
3.That the House authorize and direct the Department of Justice to institute a suit in equity to cancel the contract between the Government and the Pacific Gas & Electric Co. by which this corporation is given a monopoly of the power developed at the Roosevelt Dam; and to institute such criminal proceedings as in its judgment may be maintained.
4.That in apportioning the charges against lands under the Salt River project the letter and spirit of the reclamation act be carried out, and that raw, speculative lands of the Chandler ranch and similar tracts be assessed with reference to the full benefits they received, and that a comparatively small charge be assessed against the lands under cultivation prior to the advent of the Reclamation Service.
5.That pending the construction of the San Carlos Dam site the Consolidated Canal be extended to the Gila River Reservation and that the Indians there be furnished with water from the Roosevelt Reservoir.
6.That no large tract of private lands be furnished with water by the Reclamation Service unless an agreement first be made requiring the owner of such lands to dispose of them at a price approximating that at which Government lands are sold to settlers.

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