1950 HAPPENINGS IN WASHINGTON—ADDRESS BY SENATOR MARTIN [Mr, MARTIN asked and obtained leave to have printed in the Recorp a radio ad- dress entitled “Happenings in Washington,” delivered by him on July 17, 18950, which appears in the Appendix.] PROPOSED LEGISLATION INTRODUCED BY SENATOR WILEY [Mr. WILEY asked and obtained leave to have printed in the Recorp a statement pre- pared by him as to the proposed legislation introduced by him ‘n the Eighty-firet Con- gress, which appears in the Appendix.] THE GUATEMALAN CRISIS—ARTICLE FROM READER'S DICEST (Mr. WILEY asked and obtained leave to have printed in the Recorp an article by J. P. McEvoy entitled ‘Trouble in Our Own Back Yard,” published in the Reader's Digest for August 1950, and an article from the La Crosse (Wis.) Register, which appear in the Appendix. ] THE DAIRY AND BROOM INDUSTRIES— ARTICLES FROM NEBRASKA ON THE MARCH [Mr. BUTLER asked and obtained leave to have printed in the Recorp two articles pub- lished in the July issue of Nebraska On the March, one relating to the dairy industry and the other to the Deshler broom factory, which appear in the Appendix. | VOICE OF ‘vYHE WORLD—EDITORIAL FROM THE NEW YORK TIMES {Mr. BENTON asked and obtained leave to have printed in the REcorp an editorial en- titled “Voice of the World,” published in the New York Times of July 15, 1950, which appears in the Appendix. ] ADDRESS BY MICHAEL TIERNEY IN CON- FERRING DEGREE ON DR. JOSEPH E. CARRIGAN, OF VERMONT |Mr. AIKEN asked and obtained leave to have printed tn the Recorp the address de- livered by Michael Tierney, vice chancelor of the National University of Ireland, on the occasion of conferring the degree of doctor of economic science on Dr. Joseph E, Carrigan, Administrator of ECA in Ireland, which appears in the Appendix.] ST. LAWRENCE SEAWAY [Mr. AIKEN asked and obtained leave to have printed in the Recorp an article en- titled “The St. Lawrence Seaway,” written by Senator Youna and published in the Dakota Farmer of June 3, which appears in the Appendix.] EFFECTS OF INFLATION ON BUSINESS— ADDRESS EY SENATOR WHERRY [Mr. WHERRY asked and obtained leave to have printed in the Recorp an address by himself on inflation, broadcast July 18, 1950, which appears in the Appendix.] WATER RESOURCES OF NEW MEXICO— ADDRESS BY SENATOR ANDERSON [Mr. ANDERSON asked and obtained leave to have printed in the Recorp a radio ad- dress, dealing with the water resources of New Mexico, delivered by him on July 16, 1950, which appears in the Appendix.] THE BRAZILIAN NAVY IN WORLD WAR II—ARTICLE BY HOMER C. VOTAW {Mr. ANDERSON asked and obtained leave to have printed in the Recorp an article en- titled “The Brazilian Navy in World War I,” by Homer C. Votaw, which appears in the Appendix. J GENERAL APPROPRIATIONS, 1951 The Senate resumed the consideration of the bill (H. R. 7786) making appro- CONGRESSIONAL RECORD—SENATE priations for the support of the Govern- ment for the fiscal year ending June 80, 1951, and for other purposes. Mr. HAYDEN. Mr. President, I sug- gest that the clerk continue to read the bill for amendment, The VICE PRESIDENT. The clerk will state the next amendment. The next amendment was on page 246, line 5, under the heading “General in- vestigations,” to strike out “$5,150,000” and to insert “$6,500,000.” The VICE PRESIDENT. Without ob- jection, the amendment is agreed to. The Senate will be in order. Those who are compelled to leave the galleries will do so quietly. Mr. DOUGLAS rose. The VICE PRESIDENT. Docs the Senator from Illinois desire recognition on the amendment? Mr. DOUCLAS. Yes. Mr. MAGNUSON. Mr. President, a parliamentary inquiry. May I inquire what page of the bill we are considering? The VICE PRESIDENT. Page 246, line 5. Mr. DOUGLAS. Mr. President, be- cause of the degree of noise in the Cham- ber, I do not believe many Senators heard the clerk when he read the committee amendment, and I wondered if we could not now proceed to the consideration of that amendment, instead of treating it as having been agreed to? The VICE PRESIDENT. The Chair anounced that without objection the amendment was agreed to. If the Sen- ator wishes recognition on the amend- ment, the Chair will withdraw the an- nouncement. The Senate will please be in order. Mr. DOUGLAS. Mr. President, the bill as passed by the House eppropriated $5,150,000 for general investigations and planning on the part of the Bureau of Reclamation. I may point out that ac- cording to the Senate hearings, on page 541, the Bureau of Reclamation has al- ready a substantial carry-over from pre- vious appropriations for this purpose. This cmount was stated as approximate- ly a million dollars, although it may be that later testimony indicated that there might be some downward adjustment in that figure. Furthermore, the Missouri Basin ap- propriations for the Bureai include about three and one-half millions dol- lars for planning, as is seen on page 149 of the Senate committee report. It is labeled “phase C.”’ The Bureau there- fore already has about a million dollars, so far as we can tell, and if the Missouri Basin appropriations are agreed to, there will be a further $3,500,000. The Sen- ate committee has now increased the House appropriation from $5,150,000 to $6,500,000, or an increase of $1,350,000. Mr. President, we have just heard read & meSsage from the President of the United States asking an appropriation of $10,000,000,000 for military purposes. This in itself would be extremely seri- ous, but we know it will be followed, in all probability, by additional requests for appropriations. Yet here we are ap- parently going on with business as usual, carrying out elaborate and increasing investigations for further reclamation and power projects which we know in 10579 our hearts, if we are to carry out the duty imposed upon us, will be postponed or not put into effect. Mr. President, I think that as we are considering measures to adjust the ci- vilian economy of the country to the new tasks imposed by the military situation we should gear our own actions now to accomplish the same result, and this fs a pretty good place to begin. Here is where we can save $1,350,000 to begin with, These plans are merely the beginning. First, provision is made for planning; then come authorizations; and then cole appropriations, So we are starting upstream on a series of gigantic projects to help the engineers and the Bureau of Reclamation spend not merely millions of dollars, but literally billions of dollars, on the projects they already have on the drawing boards. And they want to get the drawing boards ready for still fur- ther projects. Mr. President, I hope very much that the Senate will reconsider its action, which was taken in great haste, and that it will sustain the House figure of $5,150,000. Mr. HAYDEN. Mr. President, I take it from what the Senator has just said that he believes that in the past we have made a great mistake by developing rcc- Jamation and hydroelectric projects. The Senator may remember that it was the Reclamation Service that built the Grand Coulee Dam. If we had not had the plans for it it could not have been built. The Senator knows that most of the money, when actually expended, goes into hydro- electric projects. ‘The Senator from Illinois will further remembcr that in the days of the depres- sion we did not have any such plans, and because of the lack of plans there arose the necessity for WPA. So we spent more money on inconsequential projects, and added nothing much to the life of the Nation, simply because of the lack of information. The Budget Bu- reau’s estimate, recommended by the President of the United States, is $7,- 800,000. The committee has not allowed that much, but has cut it more than $1,- 000,000. We always have difficulty with these appropriations because of misun- derstandings respecting them. First, I should like to have the Senator to know that $500,000 of this money is not taxpayers’ money at all. It comes from the money collected from the Boul- der Canyon project and is expendable in that Colorado River area. The remain- der of the money, all except some $200,- 000, is reimbursable. That is, it is not going to be an ultimate loss to the Treas- ury of the United States. I cannot understand how at any stage of the proceedings any person can deter- mine that we should not have plans so that we may know what we are doing. Without plans we will simply be working in the dark, and all of a sudden, when the demand comes, we will have to take quick action, and, as a result, make many mistakes. My judgment is that the ap- propriation is a sound one and in a proper amount, and that the Senate should al- low it.
10580 Mr. DOUGLAS. Mr. President, I point out that the budget estimates were pre- pared in December 1949, and were sub- mitted to the Congress on the 3d of January 1950. They are, therefore, at least 7 months behind time, and in the past 7 months many things have hap- pened, particularly in the 344 weeks since the North Koreans went south of the thirty-eighth parallel. What we are hav- ing now is widespread police action in South Korea, and the President has Just asked for $10,000,000,000. I say to my colleagues that if we have to appropriate $10,000,000,000 to drive the North Koreans back and to prepare our defenses for other points—and I am perfectly ready to do it, and the country is ready to do it—it is time that we trimmed ordinary civilian expenditures, and I submit that here is a very good place to trim. We are already appropriating large sums for planning. Last year we appro- priated, as I remember, $100,000,000 for plans to be drawn in the event a depres- sion should occur. We have made large authorizations in various parts of the budget for planning. According to a chart in the hearings, we already have nearly $1,000,000 carried over from last year. Then there are the Missouri Basin planning appropriations of three and one-half million dollars. I do not pro- pose that planning be cut out entirely. I think we ought to reduce it to a mini- mum in view of the national emergency. Mr. HAYDEN. The Senator from IIli- nois should be consistent. He should move to cut the amount much below what the House allowed in this case. Mr. DOUGLAS. I am perfectly will- ing to make such a motion. Mr. HAYDEN. The Senator from Illi- nois should be consistent; he should do that all the way through the bill. I may remind him that at the beginning of the last war when I had charge of the Interior Department appropriation bill, it looked like we were going to get into war. I said I wanted the Senate to un- derstand and the country to understand that the appropriations in that bill were all subject to review in case the money was needed elsewhere. The President did impound the money, and, if neces- sary, the President will do the same thing again. Mr. DOUGLAS. Why should we de- pend on Executive action? Why do we not have power of independent judgment in this matter? Mr. HAYDEN. Because we are acting today. The President can act tomér- row and the next day as the occasion requires. Mr. DOUGLAS. We know that there is a full-scale war in South Korea, We know that we are going to spend $10,000,- 000,000 at a minimum. We know, in view of that situation, that we should curtail on civilian expenditures. Here is an item for future planning for public works which in all probability will not be carried out for years, if at all. Why is not this a chance to show the country that we want to make some sav- ings? Why should we always make ap- propriations and then depend on the President to take the rap in making the cut? CONGRESSIONAL RECORD—SENATE Mr. HAYDEN. If it is a question of making a showing, that ts one thing. If it is a question of doing a sane piece of business, to undertake proper planning, that is another thing. I insist that the appropriation should not be reduced. Mr. MAGNUSON. Mr. President, I rise only in the hope that I can clear up for the Recorp a false impression which may have been created by the colloquy relating to planning developments, par- ticularly for power. When anyone sug- gests that in any all-out war effort power is not just as important as a tank, a gun, or an airplane, he is under a mis- apprehension. The Senator from Ari- zona, the chairman of the subcommittee, pointed out that had it not been for the great power dams on the Columbia River and in the Tennessee Valley, World War II probably would have last- ed many, many months longer than it did. Had it not been for the hydroelec- tric power projects which were begun back in the 1930’s, over the opposition of many Members of Congress, who said we should not plan these things—but, nev- ertheless, Franklin D. Roosevelt and the administration went ahead with the work and started the construction—had it not been for the power resulting from that construction we would be 10 years behind in atomic development. Myr. President, I hope that when we in Congress in the future or during the present emergency discuss the question of whether we shall limit, as we should, expenditures for nonessential purposes, that is production for purely domestic needs as compared with military needs, we will, in the light of experience, place the development of hydroelectric power in the category of a purely military item. The President even today in his mes- sage, when he pointed out what we must spend for this war, and for what may happen, makes the situation clear. I quote from his message: Nevertheless, the increased appropriations for the Department of Defense, plus the defense-related appropriations which I have recently submitted for power development and atomic energy, and others which will bei necessary for such purposes as stock- piling— And so on, and so forth. In other words, he urges that the amount of money we have to spend in this emer- gency should not affect in any way our planning for power, reclamation, and the internal development of our country. Mr. MURRAY. Mr. President, will the Senator yield Mr. MAGNUSON. I yield the floor. Mr. MURRAY. Is it not also a fact that at the present moment there is a shortage of hydroelectric power in vari- ous parts of the country, and that if that shortage continues during the effort to rearm it will be very difficult to carry on the program? Mr. MAGNUSON. Yes. The Presi- dent points out in his message of today that it is not only the Korean matter that should be considered, but that it looks like a long-time operation in order to stamp out the ideologies of commu- nism in the world. That may last for a Jong time. During that time we must keep our armament up to the point where it is sufficient to do the job for ourselves JULY 19 and the United Nations. Part of what is necessary to do the job is power. For instance, one-half of all our aluminum, which is most vital in any modern war- fare, in the building of airplanes, and for other purposes, must be developed by power, Without Grand Coulee it would be impossible to have the atomic energy plant at Hanford. Without Grand Coulee we could not produce one-fifth of the aluminum we are now producing; and without Bonneville, we could not produce the power which is needed there. Two more pot lines are being instalfed at the aluminum plant, Mr. President. So if we begin to reduce expenditures, I hope we do not cut out the real heart of our production, which is cheap hydro- electric power. Mr. THOMAS of Utah. Mr. Presi- dent, I dislike very much to enter this discussion, but I cannot remain silent under the circumstances. I wish to re- late a little of American history with which all Members of the Senate are familiar. During the debate on the strategic materials bill, a bill introduced in Con- gress many years ago, a great Senator, who became a vital leader in the war effort, made a strong plea for economy. He was opposed to entering upon a great program of stockpiling, and he asked the Senate not to do the things which I had said would be essential if we got into war. I had stated that America was in & perilous condition. The Senator who opposed me prevailed, however, with the result that on the floor of the Senate a bill providing for a $125,000,000 expendi- ture for the beginning of our stockpil- ing program was reduced to $25,000,000 That step was taken by the Senate be- cause Senators were economy-minded. However, when the bill went to con- ference, the conferees on the part of the House were adamant; and the final re- sult was that the full amount was pro- vided. That bill was enacted and went on the statute books in time of peace. It was most important to have that bill enacted into law and to have that program available, for the minute Hitler moved into Poland—and this is history which has not been related very often— the Russian organizations in the United States started to purchase our rubber, Rubber jumped 300 percent in price in one day, and it looked as if all the avail- able rubber on our market would become controlled by a foreign government, At that time there was in operation in the world a consortium for the control of rubber. It had a representative in New York, representing the governments of Great Britain, Holland, and France, That representative came to Washington and told me what was happening. There was nothing which could be done under the law to meet the necessities of that situation; but immediately following a call to the White House, we promised that in the first tary bill which came before the Senate there would be includ- ed an embargo on the exportation of rubber. The result was that the price of rubber was brought down. However, what we were most concerned with was to have available an adequate supply of rubber. Therefore, before the embargo was imposed, I secured a promise that
1950 the rubber quota for the United States would be doubled for that year and would be tripled for the next year, and that all the rubber then at our disposal would be shipped at once to the United States. Mr. President, this is the part of the story which I wish to emphasize for the benefit of the Senate and the people of the United States: If on December 7, 1941, the Japanese had been able to cap- ture that rubber when it was on the high seas, in shipment to the United States, they would have crippled the United States Government far more than they were able to do by the destruction of most of our fleet at Pearl Harbor. Mr. President, in order to maintain the strength of our country, we must not rely solely on the military or on our man- ufacturers. Of course, agriculture, rec- lamation, and power, are most impor- tant; but we cannot have adequate strength unless we maintain sufficient long-range programs. All the people of the United States benefit, either direct- ly or indirectly, from such programs. If those programs are curtailed, our econ- omy suffers; attacks on such programs are attacks at the very heart and soul of the economy of the United States. Curtailments 1n such programs reduce the strength of our soldiers in the field. Only yesterday the comment was made that the war now going on ir Korea is the silliest war ever waged, because our men armed with rifles are being sent to repel heavy tanks. Of course, such a situation seems preposterous. It comes about because of 9, lack of plan- ning and a lack of understanding. Mr. President, I am not criticizing anyone in this connection, but in con- sidering what action the Congress should take, at least let us realize that if we attempt to save a dollar or two in con- nection with these long-range programs, we are likely at the same time to de- stroy our strength which has been built up as a result of the expenditure of millions and millions of dollars. If that happens our whole defense effort and all that we are trying to do in the world will fail, and at the same time the Amer- ican economy will collapse. After all, what more does any enemy of the United States want than to have our economy collapse? Mr. President, upon what does the strength of the West depend except on its ordinary economy, which has been developed as a result of reclamation and the electric energy produced in connec- tion therewith. From those develop- ments we obtain food, power, water, all the resources of the entire west. The only strategic steel plant ever built in the history of the Nation is directly de- pendent upon water and water power developed at one of the reclamation projects, a project built long before the war, Mr. President, these things are se- rious. We must be sure that the all- around strength of the United States is maintained, or else the United States will never succeed, CONGRESSIONAL RECORD—SENATE Mr. O’MAHONEY. Mr. President—— The PRESIDING OFFICER (Mr. Hritn in the chair). The Senator from Wy- oming is recognized. Mr. O’MAHONEY. Mr. President, if it were not for the aspect of public power which is involved in this committee amendment, I should be very much im- pressed by what the Senator from Ili- nois {Mr. Dcucias) has said, But we cannot afford to think of business as usual or Government as usual in the face of the present crisis. The fact remains that if it had not been for public power in the Northwest, in the Tennessee Val- ley, and wherever else the funds of the United States have been invested in the construction of power plants, it would have been utterly impossible for this country to have produced the munitions of war which were so necessary during the conflict in which the shooting ended in 1945—a conflict which, however, has not yet terminated. It is utterly futile to think that pri- vate capital will go into the building of hydroelectric power plants at this time. The facts before the committee are clear: There is a far greater demand now for hydroelectric power than can be served by both private power plants and public power plants. The President advised us today that he will ask in- creased funds for military preparedness. If we are to expend those funds for that purpose we shall require o great deal more electric power energy than we now have. Moreover, Mr. President, in the areas for which these plans are devised there are great natural resources, the devel- opment of which is absolutely essential. Let me speak of one—-and I should like to have the attention of my friend from Illinois to this matter. Alumina, the material from which aluminum is made, is presently being manufactured chiefly from bauxite which is imported into the United States. There are all over the West, alumina clays from which alumina can be made, and as the result of the development of which the United States will be independent of foreign sources of supply of bauxite. These alumina clays cannot be developed in the West without additional electric power. We had an example during World War IT of how these developments could be brought about. As a result of the Grand Coulee project, as has been indicated by the Senator from Washington, it was pos- sible to establish in the Northwest the manufacture of aluminum, which would have been utterly impossible without that public power. As I have said, Mr. President, under ordinary circumstances, if it were not for this matter of public power, I should be very much inclined to go along with the Senator from Illinois. We must have economy. We must not follow business as usual, We must concentrate upon building up our economy. It cannot be denied that public power is one of the essential ingredients of the sort of mili- tary preparedness which we are now about to engage upon in a more intensi- fied degree than heretofore, 10581 I have advised the Senator from Ari- zona that it is my purpose later in the consideration of this measure to ¢ ffer an amendment similar to that which I pre- sented at the time the flood-control bill was under consideration, so that, follow-~ ing the recommendation of the Hoover Commission, there may be set up in the executive office a board of engineers whose duty it will be to examine every one of the projects contained in this bill, so far as reclamation is concerned, and every project which is contained under the civil functions chapter of the bill, so that no new project may be initiated unless a certification is received from the engineers that the initiation of the project would help the national defense. In other words, instead of saying we shall not investigate, let us go along with investigations, so that we may know where public power projects can be de- veloped, or even reclamation, if neces- sary; but let us be certain that in this emergency the funds shall not be ex- pended to initiate projects which would be open to the criticism that they consti- tuted only business as usual. . In those circumstances, Mr. President, and in the light of the suggestion which I make with respect to such an over-all amendment to curtail expenditures which cannot be geared into the nation- al defense, I hope that this committee amendment may be accepted. Mr. DOUGLAS. Mr. President, by the comments of various Senators, one would have thought that my proposal to diminish the appropriation for plan- ning further projects in the field of rec- lamation was of direct aid to the soldiers of North Korea, and as though the fate of the American troops in South Korea depended upon lavish planning of pub- lic works in the West. I think up reflec- tion Senators will conclude that this is a very grievous overstatement of the situation. I think I have been known as quite sympathetic to public-power projects. I favor public-power projects on rivers and in river basins where there is a sharp fall of rain, where the rivers have rather precipitous fall and, therefore, have rather great potentialities of power development, and where the surround- ing hills are of such height that it 1s possible to get depth in the reservoirs without flooding much adjacent mead- owland. I have always been a supporter of the TVA, and I am a supporter of public-power projects in the Columbia Valley. I hope we develop more projects in the Snake River, and so forth. But there is a time and a place for everything. At present we are in a virtual war. We also need to remember that we have a very large backlog of existing projects for which the plans have virtually been drawn. I hold in my hand part 4 of the hearings before the Subcommittee on Appropriations for the Interior, of our sister branch, the House. On page 662 there is a list of the reclamation proj- ects in this bill which have already been authorized and approved. Incidental- ly, the initial cost of those projects was estimated at $1,682,000,000—no small figure. But their present estimated cost
10582 is $5,252,000,000. I ask unanimous con- sent that there be inserted in the Recorp CONGRESSIONAL RECORD—SENATE table showing these figures in columns (2) and (3), the foregoing totals of at this point in my remarks the full which I have myself supplied. JULY 19 There being no objection, the table was ordered to be printed in the Recorp, as follows: Statement of estimated project costs, construction period, and power-development data Original esti- | Present esti- | construc- Project and State mated cust | mated cost ! | tion appro-| capacity priation (kilowatts) qa) (2 Giln, Ariz. -...----2------02 renee - All-American Canal, Arie -Calif-.2.2-22000 2... 22- Colorado River front work and levee system, Arizona- California * Boulder Canyon, Ariz -Nev.5 Davia Dam, Aris -Nev.? Central Valley, Calif. . Santa Barbara, Calif. -- . Colorado-Big ‘hompson, Colo. . Paonia, Colo. .---- 22. ------- ee neers neeeee enone ence San Luts Valley, Colo... ....--- Boise, Idaho, Payette division... Lewiston Orchards, Idaho. . Buffalo Rapids, Mont,, first division. Fort Peck, Mont ?.....-....----------- Hunger. Horse, Mont?.. 22... -.. Milk River, Mont., Fresno Dam... Sun River, Mont , Greenfields divisi Fort Sumner, N. Mox. ..-...-------+ Tucumcari, N Mex-.-.---.-- Rio Grande, N Mex -Tex_.. WO Austin _. Teschutes, Oreg. -- Klamath, Oreg -Cal! Provo River, Uteh. .. Columbia Busin, Wash.. ..---- Yokima, Wash., Roza division... Eden, Wyo... wa eeee Kendrick, Wyo.. Riverton, Wyo.. Shoshone, Wyo... . Rehabilitation and betterment—various.........----- e Missouri River Basin—~various....-..-----.-.0--+----- Date first Total power Date power available $82, 491, 500 After 1086. 38, 500, 000 October 1951, 16, 285, 000 June 1984, 126, 500, 000 June 1958, 41, 200, 000 June 1954, 170, 000, 000 Aftor 1956, 32, 210, OO May 1054. |, 000, .| June 1953.8 1,071, 260 June 1958. 17, 365, 000 September 1981, 6, 678, 300 June 1951. 997, 000 Docomher 1080, 1,935,000 | «2,735,000 | 1086 J | eee ene ee nen ene n weer [eee June 1954 5, 732,554 | 16,280,000} 1943 fen. nnn ne eee ne] eee eee nee eee After 1056. 88, 648, 000 -| June 1954 2,000,000 | = 2,000,000 | 1904 fee fo ee [eee eee eee October 1950, 7, 872,400 | 9, 700,000 | 192 fe eee | nee eee een een nnn [eee eee een -| June 1981, 2, 464, 000 -| June 1982. 8, 155, 000 December 1952. 21, 150, 000 Tune 1952. 5, 600, 000 Jane 1955. 8, 400, 000 2, June 1953, 4,400,000 | 18,146,601 | 1006 9 fief eee June 1985. 15, 774, 000 28, 050,000 | 1984 flee] wee eee eee ee] nee eee eee June 19! 303, 000, 000 | 773, 839, 000 1,974,000 | April 1942_... -| Oct ober 1981 ....22.. After 1956, 15, 000, 000 22, 868, 10,000 | June 1063.. June 1953_.... June 1953 2, 045, 000 4,828,000] 194 Jee. ef. we ceeee ene ce Tune 1954 20, 000, 000 26, 000, 000 . August 1990. .. June 1956, 9, 500, 000 21, 813, 403 600 November 1926. Tune 1954 8, 851, 360 16, 851, 705 10, 600 | April 1922 --| December 1948. June 1956 § 56, 000, 000 32,636,100 | 1849 fen ee emer nen fa enna eee e eee eceeaneeee Various 1950 and ‘ter 529, 152, 800 |2, 834, 427, 848 1,180, 200 | May 1950........... After 1986...........] After 1966, 1 Differences between origina! and present estimated costs are due to the approved changes {n project programs and changes Jn price Icvols. § Pro 8 for which irrigation {s not directly involved. 8 Project to be complete except for additional transmission facilities at present in a deferred status, 4 Conejos division only—now under construction. § Estimated cost embraces cost of power division on} ¢ Estimate was prepared for » greater number of projects than is currently under consideration. Mr. DOUGLAS. Mr. President, $5,- 250,000,000 worth of reclamation proj- ects have already been authorized, and the general plans for them are virtually drawn, As a matter of fact, of the $6,500,000 in this item of the bill, only a little more than $1,000,000 is for advance planning upon these authorized projects. Some- thing like $5,048,000 goes under the gen- eral term “engineering and economic in- vestigations.” I cannot believe that the total of $6,500,000 is so essential to the war effort, so necessary to developing public power projects and getting alum- inum, that we must approve it to the last jot and tittle. There probably are cer- tain projects in the West which should be carried through. They are in general quite well under way now, and all that is needed is further work upon them. But, Mr. President, I do not see the advantage of appropriating the full $5,000,000 more so that we can develop an additional set of plans, over and above the $5,250,000,000 worth of projects that we have authorized. The Bureau of Reclamation moves by stages. Planning is the first stage, then authorization, and then appropriation. It has $5,250,000,000 worth of work in projects we have authorized, and it 1s coming before the Congress and asking to have appropriated $300,000,000 of it. It now wants to capture further territory with $5,000,000 of planning and investi- gation funds so it can increase its back- log of authorized projects to possibly $6,000,000,000 or $7,000,000,000. We have enough fat of potential public works to live upon for a time, and we can cut down economic investigations and the development of new projects and carry on the projects we already have under way. Therefore, Mr. President, I move to strike out the figure “$6,500,000” and in- sert in its stead “$3,000,000.” The PRESIDING OFFICER. The question is on agreeing to the amend- ment of the Senator from Illinois to the committee amendment. The amendment to the amendment was rejected. The PRESIDING OFFICER. The question now recurs on agreeing to the committee amendment. The amendment was agreed to. The PRESIDING OFFICER. The clerk will state the next committee amendment. The next amendment was, under the subhead “Construction and rehabilita- tion,” on page 247, line 2, after the word “facilities”, to insert “and emergency re- construction of the La Prele unit, Wyoming.” Mr. MAGNUSON. Mr. President, I have an amendment to the committee amendment which probably should have been submitted before action on the com- mittee amendment-—— The PRESIDING OFFICER. The eommittee amendment is now pending. Mr. MAGNUSON, My amendment is at the desk, The PRESIDING OFFICER. The clerk will state the amendment offered by the Senator from Washington. The Curer CLerK. On page 247, line 8, after the word “Wyoming”, it is pro- posed to insert the following: “and initi- ation of construction on the Kennewick division of the Yakima project, Wash- ington.” Mr. MAGNUSON. Mr. President, I do not want to burden the Senate, and I therefore ask unanimous consent to insert in the Recorp an explanation which I have prepared. There being no objection, the explana- tion was ordered to be printed in the Recorp, as follows: COMPELLING REASONS ror ProvipINa Funps To INITIATE CONSTRUCTION ON KENNEWICK Drvision, YAKIMA Proyect—STATEMENT BY Senaror MAGNUSON I have at the desk an amendment to pro- vide funds to initiate construction in fiscal 1951 on the Kennewick division of the so-called Yakima project. This is a mul- tiple-purpose project in the State of Wash- ington. The Kennewick division is located directly above the junction of the Yakima and the Columbia Rivers. It will service approxi- mately 21,000 acres of land. It includes a power plant of 12,000 kilowatts. Hydro- electric power from this plant will go into the Northwest power pool. Thé Bureau of the Budget recommended $175,000 for continuation of plans and speci- fications on the project. No construction funds were authorized by the Bureau on the mistaken theory that the Kennewlek division constitutes a so-called new start.
1950 I appeared before both House and Senate Appropriations Committees to take issue with the Budget Bureau’s contention that the Kennewick is a “new start.” After weighing the facts, both committees concluded that this is merely a division of the Yakima project—a project, parts of which have been in operation over 40 years. I will not repeat my arguments here. I do wish, however, to quote the conclusion reached by the two committees, On page 172 of its report, the House Ap- propriations Committee makes the following statement. “The President’s budget message on page M-65 contains the following ~tatement: ' “"The activities of the Bureau of Reclama- tion and the flood-control program of the Corps of Engineers, involving the construc tion of dams, power facilities, canals, chan~ nels, and levees will be limited in 1951 to ¢ontinuation of work on projects started in prior years.’ “The committee does not agree with the determination of the Bureau of the Budget in rejecting appropriations for the construc- tion of the Kennewick division, Yakima proj- ect, Washington, under this expression of policy. The committee has considered this division and has determined that it is not a new project but is part of the Yakima project under such policy ” On page 146 of the Senate committee's report there appears the following: “YAKIMA PROJECT, KENNEWICK DIVISION, WASHINGTON “The committee concurs with the deter- mination of the House Appropriations Com- mittee on page 172 of its report No. 1797 to the effect that the Kennewick division of the Yakima project ‘Is not a new project but is a part of the Yakima project ’” It is unmistakably clear from the language I have just quoted that both committees of Congress agree that the Kennewick division is not a new start, and there is strong im- plication in both statements that the Bu- reau of the Budget was in error in denying construction funds on that basis. . Early completion of this project {s of vital importance to what is called the tricity area of eastern Washington. The tricity ares includes the great atomic energy plant at Hanford Prior to the location of the Hanford plant fn this section of eastern Washington, the economy was geared to agricultural produc- tlon—packing and processing of farm prod- uce. - In acquiring land for Hanford activities, the Atomic Energy Commission tock by con- demnation over 7,000 acres of rich, irrigated Jand. In addition, about 150,000 acres of the most desirable land in the entire Co- lumbia Basin project have been placed in a safety zone. Development of the atomic energy plant has brought with it a vast increase in pop- wation. To sustain this population more jobs, more produce, more of everything is re- quired. An area geared to agricultural production of necessity incurs heavy investments in packing sheds, processing plants, coal stor- age facilities, etc. Heavy withdrawal of land which formerly grew the products to sustain these investments has a depressing effect upon their value and in the long run would demand diastic readjustments. Early com- pletion of the Kennewick division—bringing into production 21,000 acres of land—will go far toward minimizing the effect of the re- adjustment. Irepeat, both committees of Congress have considered carefully our contention that the Kennewick is not a new project, but one of the five divisions of the Yakima project—~ &@ division planned almost 40 years ago. They specifically state in their reports that this is not a new start My amendment does not increase the over-all appropriation al- CONGRESSIONAL RECORD—SENATE lotted the Bureau of Reclamation for cons struction and rehabilitation, It simply makes it clear beyond any possible misunder- standing that if the Bureau can find the funds within its over-all appropriation it is free to initiate construction on the Kenne- wick division of the Yakima project. I hope the Senate will adopt this amend- ment. Mr. MAGNUSON. Mr President, the Kennewick project, in the State of Washington, lies on the slope of the Co- lumbia River across the river from the atomic-energy plant at Hanford. When the Yakima project was planned—again getting back to planning—sufficient acreage was included to take care of what would be the normal population increase. But along came the atomic- energy plant, which took some 21,000 acres of tillable land in that area, The people there fee] that the Yakima proj- ect, which is included in what we call a section of it, the Kennewick project, could be developed on the other side of the river in lieu of the 21,000 acres taken by the atomic-energy plant. Mr. HAYDEN. Mr. President, will the Senator yleld? Mr. MAGNUSON. T yield. Mr, HAYDEN. The Kennewick proj- ect was not considered to be a new proj- ect. We wanted to make certain in the text of the bill that it was a part of the Yakima project. Mr. MAGNUSON. Yes. Mr, HAYDEN. Under those circum- stances, Mr. President, I have no objec- tion to taking the amendment to con- ference. Mr. MAGNUSON. I thank the Sena- tor from Arizona. The PRESIDING OFFICER. The question 1s on agreeing to the amend- ment of the Senator from Washington tMr. Magnuson] to the committee amendment. The amendment to the amendment was agreed to. The PRESIDING OFFICER. The question recurs on agreeing to the amendment of the committee as amended. The committee amendment = as amended was agreed to. MESSAGE FROM THE HOUSE—ENROLLED BILLS SIGNED A message from the House of Repre- sentatives, by Mr. Chaffee, one of its clerks, announced that the Speaker had affixed his signature to the following enrolled bills, and they were signed by the Vice President: S 382. An act for the relief of Wong Suey Wing: S 841. An act for the relief of Michele Bartolomeo Marchisio; 8.976. An act for the relief of Vartan Chamsarian; 8, 1262. An act for the relief of Jullana Mendiola Alastra; 8 1779. An act for the relief of Phil Meyers, also known as Gil Meyers; 8.2077. An act for the relief of Francisco Gonzalez Perez; 8.2277. An act for the relief of George A. Voregarethsos (George Spiro Chatmos) ; 8.2296. An act for the relief of Marla Cicerelll; and 8 2676 An act for the relief of Kimie Yamada Ina and her daughter, Ritsuko Ina. 10583 GENERAL APPROPRIATIONS, 1951 The Senate resumed the consideration of the bill (H. R. 7786) making appro- priations for the support of the Govern~ ment for the fiscal year ending June 30, 1951, and for other purposes. The PRESIDING OFFICER. ‘The clerk will state the next committee amendment. The next amendment was, on page 247, in line 4, after the word “expended”, to strike out “$297,467,000" and insert “$294,713,000.” Mr. DOUGLAS. Mr. President, we now come to the heart of the coconut. This is a general appropriation of ap- proximately $295,000,000 to the Bureau of Reclamation for construction and re- habilitation I believe the appropriation bill intro- duces an innovation at this time in that it does not list the projects upon which the money is to be expended, but they are given in the committee report on pages 142 and 143, and I would suggest that Members of the Senate who are interested in the question consult the report at that point. Mr. President, if this appropriation is agreed to we shall be appropriating vir- tually $295,000,000 for reclamation proj- ects in the West. NEW, OR SUBSTANTIALLY NEW, STARTS We have gone to some trouble to find out with reference to those projects which ones constitute new starts, ac- cording to the figures which we can get, and the projects which are virtually new starts, namely, where only a small frac- tion of the total appropriation has al- ready been expended. It may be as- sumed in such cases that only planning money has been spent thus far. I should like to give that list, if I may. For instance, in the Central Valley, in the case of the Sly Park Dam, as to which there is a total estimated cost of $6,220,000, we find that no money has been expended to date, so that any ap- propriation would, in effect, constitute a fresh start, In the case of the Folsom power fa- cility, the total estimated cost is $47,800,- 000, and no money has been expended to date, In the case of the Fort Peck project, Glendive-Williston transmission line, the total estimated cost is $2,000,000, and nothing has been spent to date accord- ing to the hearings. Mr. President, we are thus appropri- ating for projects which have not been started at all, and we are also appro- priating large sums of money for proj- ects upon which only small amounts have been expended, Let us consider parts of the so-called Gila project, for the Wellton Canal, the total estimated cost is $1,570,000. It was estimated by the Bureau that there would be expended through the fiscal year 1950, $15,291, or only 1 percent of the total. On the Wellton lateral unit, the total estimated cost of which is $2,358,000, only $25,537 or a little over 1 percent was gatimated to be expended by June 30, 0, On the Dome lateral unit the total esti- mated cost is $1,919,000, and the amount
10584 spent to June 30, 1950, was estimated as $7,516, or one-third of 1 percent. This ean be checked in the House hearings. Similarly, on the Colorado River front project, the total estimated cost of the levee system 1s $16,295,000, and the esti- mated amount spent is $414,428. The Bureau's justification stated that 9 pre- liminary report on levee plans had to be completed before construction could be initiated—House hearings, page 681. On the Colorado-Big Thompson proj- ect, for the Brush substation, the total estimated cost is $2,518,500, of which $431,795 has been spent. On the Flatiron, Fort Collins, Creely tap line, the total estimated cost of which is $799,100, $28,758 has been spent. The Bureau's justification states that with these requested 1951 appropri- ations construction on these ttems will be started. On the Spring Creek Dam in the Paonia project, the total estimated cost of which is $3.300,500, the sum of $272,- 200 has been spent. Again the justifica- tion reveals that this appropriation will start the construction. In the case of the Big Sandy Dam and Reservoir in the Eden project, the esti- mated cost is $2,000,000, and the amount estimated to be spent by June 30, 1950, is $42,025. This project was stopped by order of the War Production Board in 1943. This bill will let the construction go ahead. : On the Kendrick project, Seminole- Baroil line, the estimated cost of which is $242,000, the sum of $25,000 has been spent. This bill will let construction be initiated. In the Missouri River Basin, the Jamestown unit, the estimated cost of which is $10,749,000, the estimated amount spent by the end of fiscal 1950 is $214,573. Our own Senate committee report, page 150, states that this appro- priation will allow construction to start. On the Missouri-Souris project and I shall have more to say about that proj- ect, because it will probably be said that it is essential to the prosecution of the war in Korea, judging by what has hap- pened today—only $1,218,000 is esti- mated to have been spent, although the ultimate cost will be $68,855,000. Mr. President, there are projects here totaling appropriations of $6,593,000. If they are new or substantially new starts, according to my figures, it is also inter- esting to note that the total estimated cost of the foregoing projects for which we shall be asked to make increased ap- propriations in the next few years, ts $166,404,100. If we make the starts this year and carry on this year, it will be said, “Well, we have gone so far. We must continue.” Then we shall be involved in a further appropriation of approximately $160,- 000,000. I think this is a very crucial time for us to stop, look, and listen on this kind of appropriation. MIBSOURI-SOURIS PROJECT I want to say a further word, if I may, about the last project I mentioned, the Missouri-Souris division. According to the testimony before the House, as I read it, no final decision has been made on the location of the canal and lead-off from CONGRESSIONAL RECORD—SENATE the diversion dam to the related work in the so-called phase B, namely, units being prepared for construction. I ask Senators to refer to the House hearings at page 911. The Assistant Secretary frankly stated: There is a great deal of work that needs to be done before the ultimate feasibility of the irrigation plans can be worked out for the Crosby-Mohall unit or the Jamestown unit, or any of these distant units. The estimated cost of the phase A as- pects of Missouri-Souris, Missouri diver- sion unit—phase A signifying units se- lected for construction—is $68,855,000, and the Crosby-Mohall and Devils Lake units in phase B will cost $269,000,000 and $21,000,000, respectively. In addition, the Jamestown unit of Missouri-Souris, which the committee action has moved from phase B to phase A, is estimated to cost $10,749,000 By taking the first big steps on these projects of Missouri-Souris, we would be getting involved in costs which would run close to $370,000,000. It seems wiser therefore to halt this construction now, since only $1,432,000 has been spent on phase A, until all doubts have been re- moved concerning the economic feasibil- ity of the project. How can we justify starting out on a road which leads to enormous expenditures when so many questions are stiJl unanswered, and when the President of the United States is asking for a $10,000,000,000 appropria- tion to conduct a war. I suspect, al- though the record is not clear, that the provisions for the repayment of the ir- rigation costs of this project are Nkewise most incomplete. Mr. HAYDEN. Mr. President, will the Senator yield? Mr. DOUGLAS. I yield. Mr. HAYDEN. The conclusion I draw from the Senator’s remarks is that we made a mistake in the past in adopting a reclamation policy, and that we should not attempt to institute any new proj- ects, either now or in the future, because they would cost money. I believe the Senator overlooks the fact that these projects create wealth. They create much more wealth than they cost. Their construction adds to the wealth of the Nation, and that fact can be proved with respect to all reclamation projects. The taxes paid into the United States Treasury, following the creation of this new wealth, have more than repaid the cost of new projects, and will continue to do so. If the Sen- ator looks at it in terms of dollars and cents. and does nof take into considera- tion the homes which have been pro- vided for people and the wealth which has been added to the Nation, I would agree with him If the Senator takes the broader view, and considers the wealth which has been created and the taxes which have been paid into the Treasury, I think he is utterly mistaken, Mr. DOUGLAS. There is the ultimate premise, which the very able Senator from Arizona defends, that these proj- ects pay for themselves. In that con- nection I may say it has been found that most irrigation projects must seize power revenues in order to pay for themselves. JULY 19 We found that to be true with respect to many irrigation projects. Mr. HAYDEN. The Senator is mis- taken. He is correct if he looks merely at the amount of money which the Fed- eral Government has paid out and the amount of money which has been paid back. If we look at the wealth that has been created by a project, he is not cor~ rect. Let us take, for example, the Salt River project in my State. On that project the Government spent $20,000,- 000. It created wealth on the basis of which $66,000,000 in income taxes were paid into the Federal Treasury last year. That amount of money would not have been paid into the Treasury if the proj- ect had not been constructed, because the land would have remained a desert. Mr. DOUGLAS. Ihave analyzed some of the irrigation projects which have been proposed during this session. I find the cost per acre of land to be $600, $700, and, in some cases, as high as $1,100 I see before me the very able and beloved Senator from Vermont [Mr. AIKEN]. Land in Vermont is supposed to be the least fertile of any Jand in the United States. I know he denies it, but it has been alleged to be true. Myr. AIKEN. It is not true. Mr. DOUGLAS. At least the hillsides of Vermont are not particularly fertile. If we were to spend $700 or $1,000 an acre on the hillsides of Vermont we could lit- erally make them bloom like a rose, and we would have abundant crops. I should like to know why we should spend $700, $800, or $1,000 an acre on semiarid land and not upon the stony hillsides of Ver- mont. Mr. AIKEN. Mr. President, will the Senator yield? Mr. DOUGLAS. I am glad to yield te the Senator from Vermont. Mr. AIKEN. I should like to correct the Senator's estimate. I think he said the cost per acre was $700 or $800, I think he should have said $1,700. Mr. DOUGLAS. It is my nature to be conservative. Does the Senator from Vermont say the cost has been $1,700 an acre? Mr, AIKEN. The cost is estimated to be $1,700 an acre on some projects. If that amount of money were spent the yield per acre would not be any greater than if $100 an acre were spent on that land in Vermont. Mr. DOUGLAS. I thank the Senator from Vermont. I may say that I have been going over figures showing the price at which land sells north of Blooming- ton, Ii]. The Bloomington area pro- duced not only the very able majority ] r of the Senate, but also the junior Senator from Wyoming [Mr. Hon], whom we claim as a native son of Ilii- nois. That land is supposed to be the richest land in the Nation. Its selling price does not much exceed $400 an acre, Here we learn that for some proj- ects we are asked to pay $1,700 an acre for desert land. Mr, AIKEN. Perhaps there is no proj- ect proposed in this bill in which an investment would begin to yield the re- turns which would come from the devel- opment of the St. Lawrence seaway. That is a project which would be en-
1950 tirely self-supporting, self-sustaining, and self-liquidating. It has been amaz- ing to me that so many Senators who encourage this type of construction, which at best is of doubtful economic value, insist on objecting to the develop- ment of the greatest of all natural re- sources in North America as to which there is no question of economic feas- ibility. It is a project which must be developed in the interest of the security of the Nation, It seems to me that the development oz the St. Lawrence seaway should come far ahead of these proposed projects for which we are asked to appropriate hun- dreds of millions of dollars, and per- haps eventually billions of dollars Mr. DOUGLAS. I think the Senator from Vermont is entirely correct, as he generally is, that from the ultimate standpoint the St. Lawrence project is probably one of the best projects before us, and that in terms of emergency it is very much more important than the ir- rigation projects in the Southwest. Mr. AIKEN. If the Senator from Ili- nois will permit me to say so, I should like to add that it is entirely possible that if the United States should become en- gaged in an all-out war, as seems likcly, the outcome of that war would depend on whether the St. Lawrence seaway were developed, and whether the great steel industry of America could be main- t ined in the Central States without the development of the St. Lawrence sea- way. It seems to me unthinkable, in view of the position in which the United “tates finds itself, that there should be any opposition in Congress or out of Congress to the development of the St. Lawrence seaway, because it is so vital to the national economy and security. Mr. DOUGLAS. I appreciate the speech by the Senator from Vermont, who has been the most persistent and certainly one 01 the most intelligent ad- vocates of the St. Lawrence seaway. At the moment what I am trying to do is to save money in these appropriations for power and reclamation projects in the West Iama friend of the West; but we have already provided large appropria- tions for this area We have committed ourselves to projects which are extreme- ly costly. Please let us not start new projects, and let us also slow down, 1n view of the war emergency, the rate at which we build the projects which are already under way. REDUCTIONS IN RATE OF CONSTRUCTION Mr. President, in addition to cutting out these new starts and substantially new starts, I believe we should slow down existing projects in general, and reduce appropriations by 25 percent for projects already substantially under way, with the exception of the Colorado-Big Thompson project. This may make the Senator from Colorado wince, but in that case I think we should slow down by 40 percent, And I can defend those Suggestions. If I may make a reference to the Col- orado-Big Thompson project, the origi- nal estimate of cost was $44,000,000. At that time it was provided that the water users should repay half the cost, but not to exceed $25,060,000, That seemed CONGRESSIONAL RECORD—SENATE perfectly fair at the time. If I am in- correct, wull Senators check me up by reference to the House hearings, page 733? Now we find that the estimated cost is $150,503,000, but the water users cannot be charged more than $25,000,- 000, so that $125,000,000 is to be loaded upon the general taxpayer, or upon the power users, one or the other. I believe it would help if we slowed down the rate of construction. It might even help the Bureau of Reclamation in carrying on negotiations with the water users, so that they would assume a larger proportion of the cost that at present. Mr. ANDERSON. Mr. President, will the Senator from linois yield? The PRESIDING OFFICER (Mr. CHAPMAN in the chair). Does the Sen- ator from Illinois yield to the Senator from New Mexico? Mr. DOUGLAS. I yield. Mr. ANDERSON. Docs not the Sen- ator recall that the same argument for slowing down he now 1s making was made against the Grand Coulee project in 1940 and 1941, but by the time we were a little way along with the war emergency, we were very glad we did not slow down the Grand Coulee project? Mr. DOUGLAS. The amendment which I shall shortly submit, to cut $90,000,000 from this appropriation, will not call for any specific cut on any given project. It is merely a reduction in the total amount, and the Bureau of Rec- Jamation will then have the power and authority to pick out the $204,000,000, let us say, of projects which 1t regards as most essential for the war effort and the national interest, and derate its energies to them But it will not have the power to use the full $294,000,000, as would be provided in the pending appro- priation bill. Every time a Senator pro- poses a reduction, other Senators rise and act as though he was intending to cut the heart out of the West. We are not trying to do that. We love the west- erners, but we do not believe they should walk off with the National Treasury. Mr. HUNT. Mr. President, will the Senator yield? Mr. DOUGLAS. I yield for a ques- tion. Mr. HUNT. Will the Senator from Illinois yield for an observation? Mr. DOUGLAS. Yes; if I do not lose my right to the floor. Mr. HUNT. Mr. President, the very skilled economist from my native State is exceptionally clever in presenting his arguments for reductions in appropria- tions for reclamation projects purely from the standpoint of reading the nu- merals in the book. I should like to say to the very distinguished junior Senator from Illinois that had he lived on and immediately adjacent to a reclamation project, as I have, for the past 30 years, he would not today be making the argu- ment he is making, for the reasons which I shall state. In my own county there is a small reclamation project known as_ the Riverton project, upon which there has been expended some $13,000,000, to bring land under water. The crops al- ready produced on that project total in excess of $17,000,000. 10585 Aside from that, the small town, which is the center of this reclamation project, Riverton, Wyo, only a few years ago had a population of perhaps 1,000. The census just completed shows this town now has a population in excess of 4,500. The property in that area in the last sev= eral years, perhaps the past 5 years, shows appreciation in value from $12,000,000 to $41,000,000. I should say to the distinguished Sen- ator from IHinois that carloads of fur- niture, carloads of automobiles, carloads of many things manufactured in the East, come to that section, and payment for those various commodities comes from the pockets of the people living on the reclamation project there. So the end result of reclamation is pumping prosperity into the home State of my distinguished colleague from Illinois. Mr. President, some years ago a come mittee from the Congress was investi- gating reclamation projects on the ground, It so happened that a distin- guished Representative from Michigan was &@ member of the committee. He did not favor reclamation. When the com- muttee detrained and were going up the street, one member of the committee called the attention of the distinguished Representative from Michigan to the line of automobiles on either side of the street. He said to him, “Where do you think those automobiles come from?” Of course the distinguished Representa- tive said, “Michigan” “Where do you think the money came from to pay for them? It was from the reclamation project.” Mr. President, I could go on endlessly reciting the tremendous increase in value of land, valuation of property, and in- crease in business, around that reclama- tion project, due solely and only to that project, which today has a tremendous impact on our total economy, with which the distinguished professor from the University of Chicago is so familiar. Mr. DOUGLAS. Mr. President, I wish to congratulate my good friend the junior Senator from Wyoming for this eulogy of the advantages of water. Let me say, to allay his fears about his par- ticular project at Riverton, on which so ‘much seems to depend, including the future of the automobile industry, that instead of the $3,200,000 contemplated in the Senate committee report, cut- backs which I have suggested would bring the appropriation for Riverton to about $2,250,000. Riverton would not be denied the opportunity of getting water, but there would be merely a slowing down in the rate at which the water would be brought to Riverton and adjacent communities, Mr. President, many of the irrigation projects have been very fine, but we are beginning to wake up to the fact that with present construction costs, the costs per acre in many cases are ap- parently in excess of the benefits con- ferred. If the value conferred were only equal to the costs, we could recover by means of special assessments upon the water users; but in virtually every irriga- tion project that is proposed, the water users ask to be exempted from par- ticipating in all of the costs, They will
10586 take only a portion of the costs and shoulder the rest of the cost onto the power users, or upon the Federal Treasury. Mr. President, I may remind my good friend of what he perhaps is fully aware of, while on the power projects interest is included, in the irrigation projects in- terest is not included as a cost, though I think it properly should be. Mr. McFARLAND. Mr. President, will the Senator yield? Mr. DOUGLAS. The Senator from ‘Wyoming has said to me, sotto voce, that he would like to ask me a question, and I now yield to him for a question. Mr. HUNT. Mr. President, I wish to make a very brief observation, and then ask the distinguished Senator a ques- tion. For a great many years it has been very evident that businesses in the area of a reclamation project profit to an equal extent, or perhaps to a greater ex- tent, than do the settlers on the project. Yet, with the exception of the income from power, the settler himself is ex- pected to pay the total cost of the project. Mr. DOUGLAS. Without interest, however. Mr. HUNT. I now want to ask the distinguished Senator from Illinois a question. It is not a leading question, and I can assure the Senator that it is a@ question asked in perfect good faith. I should like to ask the distinguished economist—and I say that because the answer to the question bears on econ- omy—does he not think that those who profit so greatly from a reclamation proj- ect, other than the settler, should, through some method of taxation, help to pay for the project? I mean the lum- berman, the banker, the garageman, in- deed, everyone who moves into the com- munity and becomes a successful busi- nessman. Should they not help to pay through taxes some part of the cost of that reclamation project? Mr. DOUGLAS, I may say to my good friend from Wyoming that the idea of secondary benefits and tertiary benefits is a very delusive one. The same argu- ment could be advanced if we want to develop the banana industry in Dlinois or in Vermont. We could build hot- houses for the purpose and grow ba-" nanas, and as a result of growing ba- nanas in either Dlinois or Vermont there would be increased employment in the surrounding towns, which would boom, and there would be a demand for glass, there would be a demand for power, so that other industries would benefit, and therefore they should contribute to the cost of the project. The question comes down to total cost as compared to the total benefit. When irrigation costs rise to $600 and $700 or $1,000 an acre—and the Senator from Vermont has assured us that he knows of some projects where the cost is $1,700 an acre—whereas the most fertile land in America, north of Bloomington, the land which gave the junior Senator from Wyoming to the world, sells for only $425 an acre, I submit that, in the words of Benjamin Franklin, we are “paying too much for our whistle.” Mr. ANDERSON. Mr. President, will the Senator yield at that point? Mr. DOUGLAS, I am glad to yield. CONGRESSIONAL RECORD—SENATE Mr. ANDERSON. The Senator from Illinois has stated that the land above Bloomington, which certainly is as fine land as there is in any farming area, is selling for $400 an acre. Mr. DOUGLAS. Perhaps $425. Mr. ANDERSON. I wish to suggest to the Senator that citrus groves in California sell for $3,000 or $4,000 an acre. I see the Senator from Florida (Mr. Ho.ztanp] on the floor. He may say that similar land will probably sell for more than that in his State. Does not the Senator from Mlinois believe that the going price for this land is some indication of its value; that if it sells for $3,000 an acre, with water on it, or if it sells for $4,000 an acre, the man who farms it knows what he is doing. Mr. DOUGLAS. Then let the water users pay the cost to the Government, plus interest. Mr. ANDERSON. I should like to suggest that there was a time in this country when it was regarded as eco- nomically not feasible to have an irri- gation project where the cost per acre exceeded $45. It took us many years before we reached the point where we would say that the cost should exceed $90. When I received an assessment against my own lands of $90 an acre I thought it was outrageous, because other lands similarly situated had been as- sessed at $45 an acre. Now an assess- ment of $150, $200, or $250 an acre is not regarded as excessive. Does not the Senator from Illinois believe that the change in the value of the dollar has something to do with the extra costs? Mr. DOUGLAS. Yes; certainly. I would not object to $150 or $200 or pos- sibly $250 an acre in areas where the figures show it can pay out, but when we get up to $600 or $700 or $1,000, it Is pretty high. While IX hold no brief for the State of California, and have only been a tourist there occasionally—and we cannot expect that every State will be like California—I do not believe that with all the native pride which the people of the Southwest have they would claim that the fertility of New Mexico is the same as the fertility of California. Mr. ANDERSON. I would not, of course, try to compare anything in my State with the excellence of California. But I do wish to suggest that an acre of land in California or in the reaches along the Rio Grande south of El Paso that produces two and a half bales of cotton to the acre, is more valuable than an acre of land that produces one-half bale to the acre, and that farming costs, being what they are, the land producing more is worth very much more to the farmer than land producing less. The Senator should bear in mind that this process of irrigation has been going on for a long time. The first project took the best locations. Mr. DOUGLAS. That is correct. Mr. ANDERSON. The finest dam sites were picked out. The valleys that were most easily irrigable were chosen. And now we are getting a little bit to- ward the end of the stack, and the proj- ects are more costly. But I believe the Senator should have a yardstick by which to measure accurately. It is not just a question of how many dollars, but it is a JULY 19 question: Is the project economically worth while to the country itself? The point the distinguished senfor Senator from Arizona [Mr. Haypen] made, and which the junior Senator from Arizona (Mr. McFarLann] has made many times is, that in the Central Valley is a project which cost $20,000,000 but which each year returns back into the Treasury $60,000,000 in income taxes. That is true with respect to every irrigation project, not perhaps to the same degree. The collateral benefits to the Treasury of the United States I think need to be borne in mind. Mr. DOUGLAS. Mr. President, I may say it is undoubtedly true that on many of the early irrigation projects the costs were more reasonable, but with his char- acteristic frankness the Senator now states that we are now scraping the bot- tom of the barrel, and we are undertak- ing new projects on which the unit costs are extremely high. I think we have probably reached the point where we should not go much further, particularly in the present national emergency. I am glad to see my good friend, the senior Senator from Colorado [Mr, JoHN- SON] on the floor, because in his absence I was compelled to say something about the Colorado-Big Thompson project, the cost of which originally was estimated to be about $44,000,000, half to be repaid from water; but the present cost is esti- mated to be $150,000,000, and now only one-sixth of the cost of the Colorado- Big Thompson is to be paid by the water users and five-sixths will have to be paid either by the power users or by the tax- payers. The other day I jumped into a hornets’ nest in dealing with an attempt to cut the appropriations for roads. I have discovered now that the hornets which grow in the Southwest, while a very lov- able type of hornets, are nevertheless ex- tremely powerful and potent, and I feel that the hornets’ nest of the other day is as nothing as compared to the hornets’ nest of today. I see that a number of my good friends from the Southwest are on their feet seeking to obtain the floor, and I think I will have to take them in turn. I yield first to the junior Senator from Arizona [Mr. McFar.anp]. Mr. McFARLAND. Mr. President, I merely wish to say to my good friend from Illinois that I am afraid he is a hornet, because he goes around trying to sting everyone else except the people of his own State. I should like to dem- onstrate that now, I hope to his satisfac- tion. Let us consider flood-control proj- ects in Illinois. By keeping the water of the rivers in their channels the land ad- jacent to the rivers is made very val- uable. The main difference between irri- gation and flood contro! is that in irri- gation water is taken out of the channel] and put on the land, whereas in the case of flood control water is kept in the channel, thereby making the adjacent land very valuable. The distinguished Senator from Mli- nois is advocating that the farmers pay interest on trrigation developments. The people whose land adjoins the rivers which are controlled by flood-control projects have land which is made more valuable by expenditure of money for
1950 flood control. Does the Senator from Illinois feel that the people of his State who have benefited very much by flood contro] should be made to pay principal and interest on such flood-control proj- ects? If he does, I hope the next time there comes before the Senate a flood- control bill which deals with the State of Illinois he will ask that on that par- ticular project the people who are bene- fited be made to reimburse the Govern- ment for the cost, and pay interest on the project. Otherwise, I do not want to hear the Senator talk about the neces- sity for such action to be taken in con- nection with irrigation. Mr. DOUGLAS. The question the Senator from Arizona has asked is a very pertinent one. It is very true that in connection with many flood-control projects adjacent land which is bene- fited and largely redeemed from being alluvial swamp land and made into good farm land, is improved very greatly by such flood contiol. But I am afraid my good friend from Arizona was not pres- ent when the rivers and harbors bill was considered, because I submitted an amendment to it which provided that half the cost of the construction of levees be assessed against the land di- rectly benefited. I did not secure many votes for that amendment. Mr. McFARLAND. Was that in con- nection with an Illinois project? Mr. DOUGLAS. Iam in favor of such assessment with respect to all flood-con- trol projects, including those in Illinois. Mr. McFARLAND. I may say I did not hear the Senator from Illinois make any such proposal with respect to an Illinois project. Mr. DOUGLAS. Mr. President, I am in favor of such a proposal applying to all projects—including those in Illi- nois, Mississippi, Alabama, and so forth. However, I think only about six Sena- tors voted with me on my amendment. I do not remember that the Senator from Arizona voted with me, but he may not have been on the floor of the Senate when that vote was taken. However, I am delighted to have the Senator from Arizona as a convert; and the next time such matters come before the Senate I hope he will be on my side. Mr. McFARLAND. Mr. President, the Senator has not converted me, I believe that flood control is worth all the money it costs, and even more. Likewise, I also believe that irrigation and reclamation are most important to the economy of the United States. They constitute the only remaining frontier of our country. I regret very much that our distin- guished friend, the Senator from IIli- nois, a man who has been so foresighted in so many respects and has believed in progress and has believed in affording an opportunity for the youth of the coun- try and people generally who wish to make homes for themselves, cannot be sufficiently foresighted to realize the benefits of irrigation and reclamation. Mr. DOUGLAS. Mr. President, it so happens, of course, that the Bureau of Reclamation has no projects in Mlinois, and therefore the proposals for econ- omy which I am making now are pro- posals which, if adopted by the Senate, CONGRESSIONAL RECORD—SENATE will result in the making of reductions at the expense of other States. How- ever, Illinois’ turn will come when the civil-functions bill—the so-called Army engineers’ bill—comes before the Sen- ate; and I shall not spare Illinois when that time comes. I shall not launch upon any lengthy process of self-justification, Mr. Presi- dent; but I think I can say that in Illi- nois I have opposed proceeding with two big river and harbor projects. There is one project—not yet authorized, but proposed—calling for an expenditure in excess of $100,000,000, to widen and deepen the canal between Moline, on the Mississippi River, and Hennepin, on the Illinois River. I have gone to Moline and to Rock Island, and I have opposed that project; and I have gone up and down the canal and have said that I do not think it is needed any more than a Hottentot needs a white tie and tails. Furthermore, there is tn South Chi- cago another project, in regard to which I had a little exchange at arms with the esteemed senior Senator from Tennessee [Mr. McKettar] last year—the so-called Cal-Sag project, calling for an ultimate appropriation of approximately $78,000,- 000. It is a worthy project in general, but I have declined to sponsor that proj- ect this year. I went to South Chicago, and there I helped to pay the cost of renting a hall for a meeting at which I explained that because of the need for economy, I was opposed to the project at this time. Mr. President, I would not have men- tioned these matters, had not the Sena- tor said that I was in favor of economy at the expense of someone else. I fully understand that if we take the pathway of economy, we must be willing to apply it to ourselves and to our own States, I understand that, and I am willing to do so. However, I ask that all of us apply the same standard to ourselves, Mr. JOHNSON of Colorado. Mr. Pres- ident, will the Senator yield? Mr. DOUGLAS. I yield. Mr. JOHNSON of Colorado. I thank the Senator. Mr. President, the Senator from Tli- nois has made some reference to the Big Thompson project, in Colorado. Mr. DOUGLAS, That is correct. Mr. JOHNSON of Colorado. I wish to say that, generally speaking, I commend the Senator from Illinois for his efforts along the line of economy. I think it is splendid that a fight is being made for economy and for a reduction in spend- ing. I believe that is one of the very great needs of our country. Mr, President, I wish to commend the Senator—and I hope he will listen to what I am saying now. Mr. DOUGLAS. I certainly will listen to the Senator. I turned aside for a moment to obtain some figures bearing on a question which I believe the Sena- tor will ask me. Mr. JOHNSON of Colorado. Mr. President, as I was saying, I am trying to pay a compliment to the Senator—a rather tortured compliment, perhaps. Mr, DOUGLAS. Mr. President, I am most grateful for any compliment which is paid me by the Senator from Colo- rado, even if it is tortured. [Laughter.] 10587 Mr, JOHNSON of Colorado. Mr. Pres- ident, I wish to pay tribute to the Sen- ator from Illinois for his efforts to obtain economy. Of course, there are two kinds of spending in the United States. One is spending which will result in an invest- ment, the other is spending from which no return is obtained. Mr. DOUGLAS. Mr. President, I do not wish to make a wisecrack at the ex- pense of the Senator from Colorado; but I would say that an investment ts gen- erally considered a spending of money in one’s own State, whereas an expenditure is a spending of money somewhere else. Mr. JOHNSON of Colorado. Mr. President, I do not make any such dis- tinction as that. I think there is a very logical difference between an expendi- ture which brings no return and an ex- penditure for a project which not only will continue to serve the Nation, but will result in having returned to the Federal Treasury all the money it spent on the project. Mr. DOUGLAS. Then, is the Senator from Colorado in favor of the St. Law- rence project, for which not only the principal, but the interest would be re- turned to the Federal Treasury? Mr. JOHNSON of Colorado. In the Senate I have opposed the St. Lawrence project for a long time, but for entirely different reasons. I do not think that project can be compared with the recla- mation projects. Mr. DOUGLAS. The St. Lawrence project is located in the northeastern section of the United States; and that project, when constructed, will return to the Treasury not only the principal but the interest. Mr. JOHNSON of Colorado. Mr. Pres- ident, I do not care to get into a dis- cussion of the St. Lawrence project, be- cause it involves a question different from the one with which we are dealing now. At this time I wish to talk about the Big Thompson project. As the Senator from Illinois has said, the over-all cost of the Big Thompson project has risen, until finally it is nearly three times what it was originally estimated to be. That increase has been caused by several fac- tors. One is the increase in the cost of construction. Mr. DOUGLAS. Is not the increase also due to a change to more elaborate plans? Mr, JOHNSON of Colorado. I was about to mention that factor, also. The changes which have been made in the plans for that project are similar to the changes which often are made in the plans for building a house. After the plans for a house have been drawn up, sometimes it is decided to add a bay window or to make other changes, and of course such changes result in increas- ing the cost. A similar experience has been had in respect to the Big Thomp- son project. However, all the changes proposed for that project will serve well the people of that area. The Senator from Illinois spoke of $25,- 000,000 to be repaid by the locality. That is true. The people of the locality to be served by the Big Thompson project have placed a tax levy upon all their
10588 holdings in the towns and cities, and they have agreed to pay $25,000,000 to the Federal Government to take care of some of the cost of building the Big Thompson project. At that time it was believed that the Big Thompson project would cost approximately $50,000,000. However, now we know that it will cost approximately $150,000,000. Neverthe- less, that project has been begun. Let me say that recently I read in the press a very wise statement which was attributed to the Senator from Illinois, namely, that once a man puts his hand to the plow, he must go on through to the end of the furrow. I thought that was a very wise statement, and it applies especially to the Big Thompson project, for in that case we have put our hand to the plow; the Federal Government has undertaken a great irrigation project and a great power project. We have be- gun it. Every time we hold back or re- strict or delay the appropriations for that project in the annual appropriation bills, the more damage we do, not only to that locality, but to the Federa) Govern- ment itself. Someday that project will be finished, and when it is finished it will begin to pay back. The more we delay the construction of the project, the longer it will take to get our money back. I should like to say a word further, after which I shall not delay the Senator, because I note that other Senators de- sire to interrupt him. The Big Thomp- son will pay back every cent. The use of the water will pay a part of it. The sale of electricity will represent the bal- ance. Our friends in Wyoming and Ne- braska, as well as sections of Colorado who will get none of the water are send- ing in applications for the electricity to be generated there. There is already a greater demand for all the electricity to be generated by the Big Thompson proj- ect than it will be able to produce. So it is a good project. It is providing sup- plementary water to one of the finest and best agricultural regions in all the country. It does not need my defense, The Senator should come to Colorado, and go over the Big Thompson project. He ought to inspect the project, and see the tunnel through the Rocky Mountains which is 13 miles in length and, as I understand, the longest tunnel in the United States, He should see the water being brought through that tunnel, the country which is to be irrigated, the fine little towns and cities which are to be supplied with electricity, and which pledged their credit to the payment of this project. Then I think the Senator would be very reluctant to propose de- lays to the progress and completion of the Big Thompson project. Mr. DOUGLAS. Mr. President, there seems to be a process of antiphonal singing here, a verse by some distin- guished Senator which calls for a reply. I am not proposing that the work on the Big Thompson should be stopped. Iam merely proposing that we shall pro- ceed at a somewhat slower rate than js projected. The present appropriations call for about $21,000,000 worth of work to be done in the current year. I think that could be cut back. In general, I am suggesting that there should be a cut- CONGRESSIONAL RECORD—SENATE back of 25 percent, but I think that in the case of the Big Thompson, where the water-payment situation is so uncertain and inadequate, the cut could be still more. LARGE FEDERAL DEFICIT FEEDS INFLATION There is another consideration which should be borne in mind, We already have a Government deficit of $3,000,000,- 000 for the past year, and unless we cut the appropriation bill for the year 1950-51, we shall have a deficit of, say, $4,000,000,000. On top of that, we are going to have the war expenditures, The President has asked for $10,000,000,- 000, and we are going to give it to him, but we all know that probably beyond that requested appropriation of $10,000,- 000,000 will be requests for further sums of money. The prospects are that unless we put into effect a most rigorous tax-increase bill, the deficit for the year 1950-51 will be very great. How does the Govern- ment get the money for that deficit? It borrows from the banks, primarily, And what do the banks do? They create credit upon which the Government draws, and in effect we write up the credit and bank deposits of the country and increase the number of money coun- ters which may be offered for goods, with the result that the prices are bid up and inflation results. The larger the deficit, the more the borrowing, the greater the rise in prices. The smaller the deficit, the smaller the rise in prices, and the less inflation. I submit, Mr. President, that we have to make our decisions not merely in gen- eral terms, but as specific items come up, and we should decrease the deficit so that there will not be this great compe- tition on the part of the Government with those bidding for scarce materials and scarce labor. Every million dollars we put into Big Thompson and into other projects, either directly or indirectly, bids labor and materials away from the war effort. We must ask ourselves, Are dollars worth more on the Big Thompson than in producing munitions or artillery or tanks, or equipping troops? We must ask ourselves that question. If we ask ourselves that question, I think it is pretty clear that it would be better in the national interest to slow down the rate of construction of these projects so as to release purchasing power, mate- rials, and men for the more direct war effort, and then, when the war is over, as we hope it will be soon, these projects can be picked up again. Mr, AIKEN and Mr. YOUNG addressed the Chair, The PRESIDING OFFICER. Does the Senator from Illinois yield, and if so to whom? Mr. DOUGLAS. I promised to yield to the Senator from North Dakota. Mr. YOUNG. Mr. President, the dis- tinguished Senator from Dlinois referred a while ago to the Missouri-Souris proj- ect as a very colossal affair, Mr. DOUGLAS. That is correct. I oited that particular case, Mr. YOUNG. It would cost approxi- mately $270,000,000, but it is a project which is spread over three States—Mon- JULY 19 tana, North Dakota, and South Dakota. I do not know any project which would lend more stability to the economy of these States than that project. It would provide forage and feed in the dry years, and, as the Senator knows, we have some dry years there, and we have some very good ones. It is a very good trade terri- tory for the city of Chicago, and I hope the Senator will come out to North Da- kota and view our problems at first hand. Mr. DOUGLAS. There could be noth- ing better than for the Senator to spend some time in North Dakota with the able junior Senator from North Dakota. Mr. YOUNG. The larger part of this irrigation project would be in North Da- kota. The acreage would not be so great in comparison to total acreage of the States, but it would provide the feed necessary for carrying us over the dry years and many more profitable cash crops. It would make for us a more pros-~ perous State and would help to maintain the national economy. The State of North Dakota passed what is known as a conservancy district act last year, guar- anteeing to levy on all of the affected property its share of the cost of this dam. It would take a good many years to com- plete the project. I should like to point out also that it is in various units. The one on which it is proposed to start con- struction now is in Montana, in the northeastern area, probably the driest part of that State, where perhaps more than any other place in the United States a water project is needed. Mr. DOUGLAS. I may say to my good friend from North Dakota that, as he says, the ultimate cost of these projects is very great. The ultimate cost of phase A of the Missouri-Souris project is ap- proximately $79,000,000, since the Senate committee has transferred the James- town unit to phase A, and the Crosby- Mchall and Devils Lake units in phase B will cost approximately $270,000,000 and $21,077,000, respectively, or a total of $369,000,000. But there has been ex- pended upon these projects, as my figures indicated, about $1,432,000, to date. As to the ultimate need of these projects, there is question by the Bureau of Rec- lamation, itself, because, as I quoted Mr. Warne’s testimony, he frankly ad- mitted—and I quote again: There is a great deal of work that needs to be done before ultimate feasibility of the irrigation plans can be worked out for the Crosby-Mohall unit or the Jamestown unit or any of the distant units, And, in the case of the Missouri diver- siongunit, the location of the planned canal is not yet determined. Mr. YOUNG. Mr. President, will the Senator yield? Mr. DOUGLAS. In a moment. In lieu of the doubts about the ultimate feasibility, in view of the fact that the amounts spent to date have been very slight, and therefore we would not lose so much if we halted the work, and in view of the national situation, it would seem to me unwise to plunge in with substantial additional appropriations now, which then would commit us to pro- ceed more rapidly with this tremendous am, which will ultimately cost at east $370,000,000. And we can be fairly certain that before the Bureau gets
1950 through, the cost would be $500,000,000, because the Bureau, like the Army engi- neers, can always be trusted to have its projects cost infinitely more than they first estimated the cost to be Mr. YOUNG. Mr. President, will the Senator yield? Mr. DOUGLAS, Iam glad to.yield. Mr. YOUNG. So far as the project in North Dakota is concerned, of course, there is no money being spent for con- struction there now. It is all being spent for investigation to prove its feasi- bility. There have not been large sums of money spent. In fact, if we proceed at the rate we are proceeding now, it would probably take a thousand years to complete the project, which, under nor- mal circumstances, probably could be completed within 10 to 20 years. I may point out to the Senator that no con- struction is going ou within the borders of the State of North Dakota. Mr. DOUGLAS. But if this bill goes through, will not the construction of some of the dams actually start? Mr. YOUNG. No. Regarding the Missouri-Souris project that is on the Montana side, and it is a unit by itself, Mr. DOUGLAS But the construction of dams will start. Mr. YOUNG. There has been an ap- propriation for the Missouri-Souris di- version dam in Montan:, but no definite date has been set for letting a construc- tion contract Mr. DOUGLAS. But I mean that ff a start is made on it, as the construction schedule of the Bureau indicated, it will - be on page 906 of the House hearings, then we are committed to the project. And while this Montana unit costs $69,000,000, the related units cost an ad- ditional $300,000,000, and we shall be told we are committed to it all. Mr. YOUNG. No, no. Mr DOUGLAS. That is my point. Mr. YOUNG. No; the Senator is in error about that. We are not com- mitted to the entire project—just the Montana unit, which is a small part of that total project. Mr. AIKEN. Mr. President, I wonder if the Senator from Mlinois has noticed in the message of the President this morning that the President reminded Senators of the fact that we cannot use the same men and materials in construc- tion work that we have to have in fight- ing the war. I should like to quote from the message: I em directing all executive agencies to conduct a detailed review of Government programs, for the purpose of modifying them wherever practicable to lessen the demand upon services, commodities, raw materials, manpower, and facilities which are in com- Petition with those needed for national de- ense, In other words, the President recog- nizes that we shall have to cut out some of these projects while we are engaged in war. It is not only a question of money; it is a question of men and ma- terials which will be required. It seems to me it would be the best judgment sim- ply to complete the projects which are nearly completed and which can be com- pleted in time to be of some value in the war effort, and not to start a myriad of XCVI——667 CONGRESSIONAL RECORD—SENATE new projects at this time. We should wait until we see whether we win the war. I assume we shall win it, but let us be sure we shall win it. If we begin turning down absolutely essential proj- ects, such as the St. Lawrence seaway, on which the great steel industries will soon be dependent, there is a possibility that we may not win the war. So let us not take any chances. Let us pay heed to the message of the President in which he plainly indicates that the starting of new projects will have to be discontinued for the time being. Mr. DOUGLAS. Mr. President, I thank the Senator from Vermont for the reinforcing testimony he has given. I tried to point out, in more imperfect fashion, that if we were trying to divert men and materials from less necessary civilian projects to war projects, there ts @ reciprocal obligation upon us to divert men and materials from Jess necessary governmental projects to war projects, I am surprised that the seeds which the Senator from Vermont and the junior Senator from Illinois have been trying to sow in the Senate seems to have fallen on such infertile soul. I now yield to my beloved friend, the senior Senator from North Dakota, who, by the way, is one of my very best friends in the Senate. Mr. LANGER, I thank the Senator, indeed. I should like to ask my dis- tinguished friend if he has ever been in Montana or North Dakota? Mr. DOUGLAS. Yes. Mr. LANGER, In the northern part of Montana? Mr. DOUGLAS. I spent a summer in Montana. Mr. LANGER. Where? Mr. DOUGLAS. In Glacier Park. Mr. LANGER. That does not surprise me. Mr. DOUGLAS. But I went through a great deal of North Dakota and Mon- tana in the struggle to get there. I en- joyed both States very much. They pro- duce fine people and splendid Senators. Mr. LANGER, May I ask what year {it was when the Senator visited Mon- tana? Mr. DOUGLAS, It was a great many years ago. Mr. LANGER. More than 20 years ago? Mr. DOUGLAS. It was probably 20 years ago. Mr. LANGER. That was when the Senator was a very young man. Mr. DOUGLAS, No. Iamrather ad- vanced in years, now, so I was a middle- aged man at that time. Mr. LANGER. Does the Senator know that during a drought, in a distance of 500 miles from North Dakota all the way to Havre, Mont., on the Great Northern Railroad, only one carload of wheat was shipped from those millions of acres? Mr. DOUGLAS, I know the distin- guished senior Senator from North Da- kota was then the Governor of his State, and I am sure he knows everything that happens in North Dakota, and particu- larly what happened during that period. I would never question any fact that the senior Senator from North Dakota reports. 10589 Mr. LANGER. Does the Senator know that conditions were so bad that we had to ship out all our cattle except a foundation herd? Mr. DOUGLAS. I say “Yes” to any- thing the Senator says is a statement of ‘act. Mr. LANGER. Does the Senator know, for example, that a man named Charles Whitman, who put in his life establishing a fine herd of white-faced cattle, had only seven head left under the program of Mr. Wallace? Does the Senator know that? Mr. DOUGLAS. I do not know that, but I am sure the Senator would not tell an untruth, so I make my standardized reply, that I accept his statement. Mr. LANGER. Does the honorable Senator know that up to 65 years ago Montana had 1,712,205 acres of irrigated land and North Dakota had only 17,409 acres? Mr. DOUGLAS. I do not know that. I think if the Senator will examine the Montana figures, it will be found that the amount was 1,712,205 acres. Mr. LANGER I want to be accurate. Does not the Senator believe that we in North Dakota are entitled to have irri- gation, the same as any other States? Mr. DOUGLAS. I may say to my good friend from North Dakota that I wish his State well. If there are irriga- tion projects, the cost of which is not excessively high, I should be delighted to vote for them, but where the irriga- tion costs are in excess of the value of the land irrigated, I think it is pretty clear that the project should not be carried out. Mr. LANGER. Wait a minute. Mr. DOUGLAS. The Senator has been asking me questions, and I want to ask him a question. Mr. LANGER. I desire to comment on what the Senator has said. The Senator mentioned the cost of irrigation. The Senator knows that the cost is all paid back by the farmers who do the irri- gating. Mr. DOUGLAS, I may say, in the first place, the interest is not paid back, and, in the second place, we increasingly find that a large portion of the capital costs are being unloaded on power, and I think it may be very questionable in some cases whether even under those condi- tions the capital cost can be repaid from power revenue. Mr. LANGER. Does the Senator know—— Mr. DOUGLAS. May I answer the Senator’s question before he asks an- other one? Mr. LANGER. Does the Senator know of a single irrigation project the cost of which has not been paid back? Mr. DOUGLAS. I would say that time has a great many more years in which to unfold. Mr. LANGER. I agree with that state- ment. Mr. DOUGLAS. As to the cost per acre, when the cost is $700 an acre or beyond that amount, we are reaching a poi: t where the costs will not be repaid by the owners of land or the users of water, ex- cept a small percentage of cases.
10590 Mr. LANGER. Can the distinguished Senator name one single projcct in North Dakota or in Montana where the cost ever went up as high as he has indicated? Mr. DOUGLAS. I have been going over some of the costs in Idaho and Ne- vada, and they are almost astronomical. Will the distinguished Senator please tell me what the cost per acre of irri- gated land in the Missouri-Souris project will be? Mr. LANGER. At the present time it is problematical, but whatever it is it will be paid back. Mr. DOUGLAS. Instead of the Sena- tor hiding behind the word “problemati- cal,” since he is so accurate in giving the acres of irrigated land down to the last digit, will he tell me within $100 what the average cost will be in North Dakota? Mr. LANGER. Let me tell my dis- tinguished friend that he knows it is impossible to answer that question, for this reason—— Mr. DOUGLAS. Take the estimated capital cost and divide by the number of thousands of acres of land to be irri- gated. Weare doing a little bit of arith- metic in the corner here, and we shall have the figures for the Recorp in a moment. Mr. LANGER. There are approxi- mately half a million acres which the Bureau of Reclamation has stated may not be capable of being irrigated. If we get the water up 10 feet and find the land cannot be irrigated, the cost of the project is great. But does the Senator know of a single project where the money has not been paid back? Mr. DOUGLAS. There is a day of reckoning coming, may I say to my good friend. Mr. MURRAY. Mr, President, will the Senator yield? Mr, DOUGLAS. I had intended to speak for only a few minutes, but the questions asked have kept me on my feet for an hour and a half. I now yielc to my beloved friend from Montana. Mr. MURRAY. Mr. President, I think the Senator will be unable to find any case in the State of Montana or the State of North Dakota where the value of the improvements has been more than the value of the land. The Senator would not want to see those sections of the United States com- pletely destroyed as a result of failure of the reclamation programs. Popula- tions are being lost in North Dakota, South Dakota, and Montana as a result of drought conditions. Without these projects which we propose to construct these States would be economically de- stroyed, because the soil is rapidly being blown away as a result of dry years. Mr. LANGER. I ask unanimous con- sent that I may ask the Senator from Montana three questions without the Senator from Illinois losing the floor, Mr. DOUGLAS. Ishall yleld in a min- ute. For the sake of enlightenment I should like to put some figures in the Recorp. The total cost of the projects would amount, under the present figures, to $369,000,000. The maximum number of acres which could be irrigated, accord~- CONGRESSIONAL RECORD—SENATE ing to the figures of the Bureau of Rec- lamation, would be roughly 1,250,000 acres, Mr. LANGER. The Senator’s figures are wrong. Mr. DOUGLAS. I understand that of that total a little more than 500,000 acres probably would not be irrigated, or at least there is some doubt about it. Therefore we have a unit cost of $290 and possibly up to $490 an acre if we allocated the entire cost to irrigation. Mr. LANGER. Mr, President, will the Senator yield? Mr. DOUGLAS. I yield. Mr. LANGER. The figures are en- tirely wrong. Mr. DOUGLAS. If they are wrong we shall correct them. Since we do not have information as to cost allocations between irrigation, power, flood control and navigation, it is difficult to make estimates now. And that is my point. The feasibility of the project needs fuller analysis before we appropriate more money for it. Mr. MURRAY. I have no other com- ment to make except to say that the Senator’s positioa in reference to these reclamation projects is wrong. It does not seem to me that we can afford to deny these appropriations, because they are necessary to carry out reclamation projects in the Northwestern States. If we wish to keep the Northwestern States a great productive area, and as a sup- plier of food and material for our econ- omy, we must carry out these programs. Mr. DOUGLAS. At the very time that we are withdrawing some land from cul- tivation under the acreage restriction program of the Department of Agricul- ture, we are throwing additional land into cultivation by means of irrigation. It is a contradictory policy, but I shall not press it further at this time. I now yield to the Senator from West Virginia, whom I observe on his feet. Mr. NEELY. Mr. President, we have just witnessed the unusual spectacle on this floor of the scholarly Senator and beloved statesman from Illinois, with whom we do not always agree, shaking hands with his opponent in debate, the distinguished Senator from North Da- kota |[Mr. Lancer}. Let me admonish my friend from North Dakota to remem- ber the following from the Holy Bible: And Joab said to Amaga, “Art thou in health, my brother?” And Joab took Amasa by the beard with the right hand to kiss him. But Amasa took no heed to the sword that was in Joab's hand; so he smote him there- with in the fifth rib and shed out his bowels to the ground. In my opinion, the distinguished Sen- ator from Illinois will, with his long, sharp, logical sword, soon follow Joab’s example. Therefore, it is my hope that the Senator from North Dakota, while he still has his bowels and his brain, will beat an orderly retreat to the other side of the aisle. Mr. LANGER. I shall do so. Mr. DOUGLAS. I have no such in- tention as the Senator from West Vir- ginia fears. The only possible thing I could have to thrust at the Senator from JULY 19 North Dakota would be a bouquet of roses. Mr. NEELY. Mr. President, the Sena- tor’s observation proves that he is a worthy successor of the renowned Sen- ator “Ham” Lewis. On a certain occa- sion, as my good friend, the senior Sen- ator from Tennessee |Mr. McKeEtuar], will recall, Senator Lewis made a wither- ing remark to a Senator from Indiana who had interrupted him. The rebuked Senator complained of the severity of Senator Lewis’ retort. Thereupon, in his inimitable Chesterfleldian way, Senator Lewis said, “I assure my friend from In- diana that although I always wear my intellectual rapier loose in its scabbard, I shall never again thrust it at him, with- out first pointing it with a rose.” Con- gratulations to the Senator from IIli- nois [Mr. Dovczas] for his compas- sion and felicitations to the Senator from North Dakota {Mr. Lancer] for the safety which his opponent has just as- sured him. Mr. WATKINS. Mr. President, will the Senator yield? Mr. DOUGLAS. I yield for a question. Mr. WATKINS. Will the Senator yield for a comment with a question? Mr. DOUGLAS. Certainly. Mr. WATKINS. Mr. President, I am sorry I had to leave the Chamber for a moment and missed the fine colloquy between the Senator from the West and the distinguished Senator from Illinois. I'am wondering if, in making his cal- culations of the cost of land per acre for irrigation purposes in the West and of the cost of these reclamation projects, the Senator has taken into consideration the fact that of the total sum of money appropriated in this bill a large amount is provided for items other than reclama- tion and irrigation. Mr. DOUGLAS. Oh yes: power and flood control and navigation. Mr. WATKINS. Has the Senator cal- culated the exact cost of the ‘part allo- cated to irrigation to determine what the cost per acre would be? Mr. DOUGLAS. I may say that the Bureau of Reclamation itself has not fig- ured the proper allocation between power and irrigation. In view of that fact, how can the Senator from Illinois do some- thing which the Bureau of Reclamation itself confesses it is unable to do? Mr. WATKINS. Is the Senator ac- quainted with the contracts which are made between the Bureau of Reclama- tion and water users, in which that dis- tinction and the allocations are made. Mr.DOUGLAS. Iam acquainted with some contracts. I know tha. generally the effort is made to load the major part of the cost of construction upon the power users, and to free the water users. Mr. WATKINS. Does the Senator also understand that in the West the first priority on the streams of the West is for consumptive uses, not only for ir- rigation but for domestic use by human beings and by industry in a consumptive way? For example, a steel plant must have a certain amount of water to use in the making of steel. When all that is taken into consideration, does the Sena- tor realize that the actual cost of the
1950 water is not the important consideration, for the simple reason that the water itself in a consumptive way must be put to beneficial use; otherwise the power will be valueless. In other words, it would not make any difference how many power projects we had in the West; if we did not have water for people and for industry to use in a consumptive way, the power would be absolutely valueless. As & matter of fact, the stream develop- ment which the Senator has been talking about must be considered on a basin- wide basis. If the income from the en- tire project—power, industry, and the consumptive use of water—makes the entire program self liquidating, the pro- gram is justified. I think the Senator should also bear in mind that the resources and the pos- sible development of the streams on an over-all basin-wide basis must be taken into consideration to determine whether a project is feasible. It is distinctly un- fair to pick out the irrigation end and say it is being subsidized at the expense of the other features. There would not be any power development unless people are brought onto the land. People must have homes, farms, and industries. I may also point out to the Senator that in view of the present situation in the world—and I am going to bring in the argument as to the war, because I think it is certainly material at this point—if people are going to move from the cities they must have a place to which to go, and there is no better place for safety than in the mountainous and the arid sections of the West. They must have homes, and water must be available for irrigation and for domestic uses and other uses. In that way we make an in- vestment in security. Therefore the projects which are under way should not be delayed. Mr. DOUGLAS. Would the Senator from Utah suggest doubling the appro- priation in order to add to security against atomic attack? Mr. WATKINS. I think that it would be one of the best investments this country could possibly make. Mr. DOUGLAS. Would the Senator from Utah suggest tripling the appropri- ation? Mr. WATKINS. We would have to keep within our possibilities; but I would reduce the long-range reclamation proj- ects and power projects we are build- ing for Europe at the present time, and put the money in our projects at home. Certainly that would strengthen Us more than putting the money in Europe would benefit us. At least we know it would be for our use, and it would not be put in the hands of a possible enemy by virtue of the desertion of a third or fourth of the population who are Communists at heart. Mr. DOUGLAS. Has the Senator con- cluded? Mr. WATKINS. I wanted to know whether the Senator had taken all these things into consideration in making his estimate of the value of irrigation in the West under the present program. I should like also to call to the Sen- ator’s attention the fact that in World CONGRESSIONAL RECORD—SENATE War IT many reclamation projects were under way. There was one in Utah. It had not been quite finished, but along came & program for building a steel plant in Utah. One was desired there for making steel plates for the Navy. It was found the plant could not be operated without water, and it was fortunate we had a project halfway finished. Moun- tain water was necessary in making the steel. Other water would not do, be- cause it would leave defects in the steel. The Government went ahead and fin- ished the project so that the steel plant could be completed. Then they brought in thousands of people, and they found there was a shortage of water in the cities and towns. If there had been a drought many of the installations, the Army stores, the Navy camps, and the like, in that State, would have had to move out. It was fortunate we had a reclamation project under way which could be finished to such a degree that they could g.. water. So that the over- all picture is favorable to the develop- ment of reclamation projects. Mr. DOUGLAS. I hope the Senator from Utah will forgive me if I say that his argument reminds me of a passage in Benjamin Franklin’s autobiography, in which he said that— So excellent a thing it is to be a reason- able creature because one can then find a reason for what one wants to do. Mr. President, I had not intended to take up as much time as I have taken. I think the Recorp will show that a vast portion of the time has been consumed in cross-examination, I now move that the figure “$294,713,- 000” in line 5, on page 247, be stricken out and the figure ‘$204,000,000" be substituted in its stead. I ask unanimous consent that there may be inserted in the Rscorp at this point a brief justification and summary which I have prepared for this reduc- tion, and which I have tried to state orally on the floor. Mr. LANGER. Will the Senator tell me who prepared the justification? Mr. DOUGLAS. Mr. McCulloch, my assistant, andI. The two of us prepared t. The PRESIDING OFFICER. Is there objection to the request of the Senator from Tlinois? There being no objection, the justifi- cation was ordered to be printed in the Recorn, as follows: STATEMENT oF SENATOR PavL H. Douglas In Support oF SUBSTITUTE AMENDMENT To RE- DUCE CONSTRUCTION AND REHABILITATION APPROPRIATIONS OF THE DEPARTMENT OF THE Inrerion, BUREAU OF RECLAMATION, TO “ $204,000,000 Page 247, lines 4 and 5: House bill, $207,- 467,000; Senate bill, $294,713,000; budget es- timate, $325,966,500. The Bureau of Reclamation projects for which construction and rehabilitation ap- propriations are included in the present bill, include a number of new starts and items on which 80 little will apparently be completed by the end of fiscal 1950 that they may be considered essentially new starts. In line with the general policy against appropria- 10591 tions for such new construction starts this year, these should be omitted. In view of the President's message today, the general need for reduction in Federal expenditures and the higher priority which other items in this omnibus bill should be accorded, the rate of expenditure for projects now under construction should be substan- tially reduced for 1951. I am suggesting in general that this reduction be in the amount of 25 percent of the proposed expenditure in the Senate committee bill. Not only the general budget situation of the Federal Government, but also the certain expansion in the demand for funds and ma- terials for other more essential Government work and for the crucial defense work which the President has outlined in the months ahead should persuade us to make reductions at least to the extent I have suggested. With certain other decreases, which I shall note below, the suggested reduction in this appropriation is $90,713,000, and the new fig- ure which I propose that the Senate adopt by way of a substitute amendment to the com- mittee amendment (of $294,713,000) in line 5 on page 247 1s €204,000,000. While I have itemized these new starts, weak projects and percentage reductions, it is not the intention of this amendment to bind the Bureau of Reclamation to these particu- lar amounts. I recognize that it is preferable to Jeave discretion in this matter to the Bu- reau, Bo that it may cut back more sharply those projects that may best: be deferred and accelerate those projects which in the na- tional interest are most essential. A. NEW, OR SUBSTANTIALLY NEW, STARTS The new starts which my amendment pro- poses should be dropped from the bill are the following: Senate appropriations Gila project: Wellton canal.....--....---. 630, 000 Wellton lateral unit.....-... 70, 000 Dome lateral unit__.--.-.-.- 10, 000 110, 000 Colorado River front work and levee system ~...-..-....------ 950, 000 Central Valley: Sly Park Dam.-...--~--.--. = 250,000 Folsom power facilities...... 750, 000 1, 000, 000 Colorado-Big Thompson: Brush substation.....-...... 1, 000, 000 Flatiron, Fort Collins, Gree- Jey tap line....... caecennen 377, 000 1, 877, 000 Paonia project: Spring Creek Dam. _800, 000 Fort Peck: Glendive Williston transmission line..-......----- 250, 000 Eden project: Big Sandy Dam and Reservoir -[_2..2----~--------- 206, 000 Kendrick project: Seminol-Baroil Hne-.. 2. -- +2 150, 000 oe Missouri Basin: Jamestown unit........-..- - 780, 000 Missour! Souris.............. 1, 000, 000 1, 760, 000 oes ee Total... 6, 593, 000 It is also interesting to note that the total estimated costs of the foregoing projects, for which we shall be asked to make increasing appropriations in the next few years if these starts are permitted now, is 6166,404,000. A table showing the total estimated costa of these projects, the amount estimated to be spent on them to June 30, 1960, and the pages of the House hearings where these
10592 figures and construction facts are given, fol- lows: Tobe | hear- Totalost!-| spent ings Project name mated | through | refer- costs fiscal onve 1950} (pt. 4) page — Gila: Wellton Canal ....... $1,570, 000) $15, 201 Welltou lateral unit... 2,858,000] 26, 637, 657 Dome lateral unit....| 1, 9t¥, 000 7, O16 Colorado River front and levee systom....2-.. ee. 16, 205, 000) 414, 428) 681 Contral Valley: Sly Park Dam........ 6, 220, 000 0 } 608 Folsom power facility | 47, $00, 000 0 Culorado-Big Tham pson* Brush substutfon 2,413,500; 431, 705 733 Flatiron, Fort Collins, 738 Greeley tap line. __. 799,160] 28, 788 Peoma: Spring Creck 8, 300, 500; 272, 200) 743-744 Yam... 22.22 .---- +--+ Fork Peck: Glendive- Wilhtston transmission Vine 2... 22 --e----- | 1,785, 000 0} 759-760 Eden: Big Sandy Dam and Reservoir. 2... 2,000, 000} 42, 025} 817-818 Kendrick Semino}-Baroll line . Bo tee eee eee 242, 000} = 2h, O00) 821-822 Missour! Basin Missouri-Souris, . Jamestown unit. _._| 10,749, 000] 214, 573 1150 Missourt-Souris- 68, 855, 000) 1, 218, 174] 005-008 Total... eee eee 166, 404, 100)... 22... 1 Senate report. In the case of the last project, the Mis- souri-Souris Division, Mussour! Diversion Unit, according to the testimony, there has been no final decision on the location of the canal to lead off from the diversion dam, (House hearings, pp. 907, 910.) And in ref- erence to the related work of this division now in phase B, Mr. Warne, of the Bureau, frankly stated (House hearings, p. 911): “There is a great deal of work that needs to be done before ultimate feasibility of the irrigation plans can be worked out for the Crosby-Mohall unit or the Jamestown unit or any of the distant units.” Since the estimated cost of phase A aspects of Missouri-Souris is $68,855,000, and the Crosby-Mohall and Devils Lake units in phase B will cost $268,953,000 and $21,077,000, respectively, in addition to 810,749,000 for the Jamestown unit, it sems wiser to halt this construction now (with only $1,432,747 epent on this phase A section through flecal 1950), until all doubts have been removed concerning the economic feasibility of the project. How can we justify rtarting out on a road that leads to such enormous expendi- tures with so many significant questions un- answered? I suspect, although the record is not clear at this point, that provisions for repayment of the irrigation costs of the proj- ect are likewise most incomplete. B. ELIMINATE CERTAIN SENATE INCREASES In addition, I am suggesting that the fol- lowing Senate increases over the House com- mittee figures ought to be dropped. No ade- quate reason is given in the report for these increases; Provo River project...--...----. $2, 245, 000 Riverton project...---222-.----. 200, 000 Missouri Basin project_..-..---. 3, 000, 000 C. FORTY-PERCENT REDUCTION IN COLORADO-BIG THOMPSON My amendment also assumes a 40-percent, instead of a 25-percent, cut-back in the ap- propriation for the Colorado-Big Thompson project. In justification for this higher cut-back, I note that the original estimate of the cost of this project was $44,000,000. The present estimated cost is $150,503,000 (House hear- CONGRESSIONAL RECORD—SENATE ings, p. 662). A repayment contract, how- ever, wes made which provided that the water users should repay one-half of the cost of the project, but not to exceed $25,000,000 (House hearings, pp. 738, 738-741). In other words on the basis of present fig- ures the Government will be repaid for only about one-sixth of the cost of the project and the balance must be repaid, if at all, by electric-power revenues. While the Bureau's justification states that negotiations are un- der way for an amendatory or supplemental repayment contract, I believe it might help to persuade the water users that this is desirable if the rate of construction were sharply cut back. This seems to be another example of a case where rising costs and project changes result in enormous increases in total costs, far beyond the estimates made at the time of the original authorization by Congress. D. OTHER MISSOURI BASIN DEDUCTIONS In connection with the Missouri Basin project, I would also urge elimination of fur- ther appropriutions for the following projects for the reasons stated below: (a) Cheyenne division—Key Hole unit -.22 nee $3, 179, 000 The Senate committee report (p. 152) states: “The 1951 estimate for this project appears under phase A in the amount of 83,179,000, which has been allowed by the committee. However, representations have been made to the committee that the water supply on the Belle Fourche River 1s such that under the Wyoming-South Dakota compact of February 18, 1943, it may be difficult to fill this pro- posed reservoir. Under the terms of the com- pact between the two States, there is no limi- tation upon the number of small reservoirs which may be built in Wyoming. It ts the opinion of the committee that a comprehen- sive study of the future water supply should be made before construction is undertaken.” The best way to guarantee that there will be no wasteful new construction until the availability of water is assured is to omit fur- ther appropriations, (b) Phase B items_____ wemenn nnn $5, 154, 000 The total estimated cost of the Missourt Basin items sted in “Phase A” (“Units se- lected for construction") is $7€0,157,C84. Starts have been made on all elements of this phase A. Although the total amount of ap- propriations authorized by law for the Mis- sour! Basin program of the Bureau is only $350,000,000, the Government would appear to be effectively committed by the starts that have been made to the total of expenditures of $769,000,000. Until phase A is more fully authorized and completed, !t would appear to me unwise by this appropriation bill to permit expenditures on phase B (“Units being prepared for con- struction”) which involves projects, the total estimated cost of which is an added $944,933,- 000. In view of the serious questions as to the adequacy of water supply for the whole basin project and in view of the relatively small part of the total irrigation costs which it is estimated that water users will be able to repay, it seems to me that we should not only eliminate all items in phase B but possibly make even more drastic reductions in phase A. I believe the Senate should also take note of the extent to which project costs in gen- eral far outrun original cost estimates, as I pointed out above in connection with the Colorado-Big Thompson project. As listed by the Bureau the original estimated cost of the projects included in the current bill was $1,682,467,174. The present estimated cost is $5,252,404,105. (House hearings, p. 662.) JULY 19 E. SUMMARY A complete tabulation of the project re- ductions which I am suggesting in this sub- stitute ameriment is as follows: Summary of proposed reductions (with dis- cretion left to Bureau for item revisions), Bureau of Reclamation—construction and rehabilitation Total re- duction Now . 25 per- from Project name cent starts, Senate ° commit- teo figure Gila... 2 eee eee $1, 552,000} $110, 000/$1, 662, 000 All-American Canal....} 412, 000|__.-. a 412, 000 Columbin River front. .}.-.....- 950, O00 50, O00 Boulder Canyon........ 1, 525, 000}... eee 1, 525, 000 Davis Dam 2. Jo. 22} 3, 405, 000]... 3, 405, 000 Central Valley_. --{10, 515, 000) 1, 000, 000)11, 615, 000 Santa Barbara... 22222. 17, 454, OO}... eee 1, 454, 000 Colorudo-Big  Thomp- SON. 22. Lee eee ene 17,849, 000} 1, 377, 000] 9, 226, 000 Paonia... -- 80, 000 San Luis Valley --| 40,000 Boise-Payette._. -- 61, 000]. Buffalo Rapids. . 40, 000 Fort Peck... en Hungry Horse ene} 7,875, 000 Fort Sumner... 170, 000 Tucumeani so. - 43, 000}. Rio Grande... 260), 000}. W. C. Austin. 65, 000}. Deschutes 125, O10}. Alamath._ eee 222, 000 Tiovo River, Sonate Increase... ._} 2, 245, 000 25 percent of balance..} 537, 000]. Colum bia Basin -{ 12, 375, 000}. 5b, 000) 200, 000 Riverton: Sonate Increase... 25 percent of balance Shoshone _.__22.. 20, 000}. Missout Basin: Senate merease... .| 3, 000, 000}. 25 percent of balance. |20, 086, 000 Total.....---eee 93, 086, 0001. 200, 000 750), OOO). Jamestown Unit...2.... - Keyhole unit -} 8, 179, 000)... - Mossouri-Sounis.. 1, 004), OOO}... - Phase B_. oo. ee &, 154, 000) Total 222. see e epee eee ok 10, 083, 000/33, 169, 000 Rehabilitation and bet terment...2..202220.. 750, 000}. .....2..- 750, 000 Votal. eee} eee eee | enews 190, 726, 000 14) percent, Mr. DOUGLAS. I suggest the absence of a quorum. The PRESIDING OFFICER. ‘The clerk will call the roll. The legislative clerk called the roll, and the following Senators answered to their names: Alken Hayden Millikin Anderson Hendrickson Morse Benton Hickenlooper Mundt Brewster Hill Murray Bricker Hoey Myers Bridges Holland Neely Butler Humphrey O'Conor Byrd Hunt O'Mahoney Capehart Ives Pepper Chapman Jenner Robertson Chavez Johnson, Colo. Russell Connally Johnson, Tex. Saltonstall Cordon Kem Schoeppel Darby Kerr Smith, Maine Donnell Kilgore Smith, N.J, Dougles Langer Sparkman Dworshak Leahy Stennis Eastland Lehman Taft Ecton Lodge Thomas, Okla. Ellender Lucas Thomas, Utah Ferguson McCarran Thye Flanders McCarthy Tobey Frear McClellan Tydings Fulbright McFarland Watkins George McKellar Wherry Gillette Magnuson Wiley Graham Malone Williams Green Martin Young Gurney Maybank
1950 The PRESIDING OFFICER. A quo- rum is present. The question fs on agreeing to the amendment of the Senator from Illinois to the committee amendment on page 247, in line 4, Mr. DOUGLAS. Mr. President, I should like to make a brief statement about the amendment, and then I shall ask for the yeas and nays. The amendment I have submitted to the committee amendment proposes that the appropriation for construction proj- ects in the Bureau of Reclamation be re- duced from approximately $295,000,000 to approximately $204,000,000, thus ef- fecting a saving of approximately $91,~- 000,000. In the discussion which has occurred, I have indicated that that re- duction would be made, for example, by stopping all new construction starts and all essentially new starts, and by slow- ing up to the extent of 25 percent on projects already under way, with the ex~- ception of the Big Thompson-Colorado project, as to which I suggest a slowing- up rate of 40 percent. In the statement I have inserted, I have suggested several other possible reductions. However, the apportionment of the reduction to be made under my amendment to the com- mittee amendment would be left in the hands of the Bureau of Reclamation, as is the case at the present time; and the Bureau of Reclamation could apportion the reduction to the extent of $91,000,- 000 in the same way the Bureau would apportion the proposed appropriation of $295,000,000—in other words, among the various projects; and the Bureau could do so in a way which would benefit those which are needed in the war effort. Thus, Mr. President, the adoption of my amendment to the committee amendment would result in a reduction in the consumption of materials, and to that extent my amendment would aid the war effort. The PRESIDING OFFICER. The question is on agreeing to the amend- ment offered by the Senator from Ili- nois to the committee amendment on page 247, in line 4. Mr. DOUGLAS. Task for the yeas and nays. The yeas and nays were not ordered. Mr. HAYDEN. Mr. President, I should like to be heard on the amendment pro- Posed by the Senator from Illinois to the committee amendment. The committee amendment calls for an appropriation which is $2,754,000 less than the amount voted by the House, $31,253,500 less than the estimates, and $39,248,638 less than the amount appro- priated for 1950. In my judgment, the proposal made by the Senator from Illinois would mean that after the committee has cut this appropriation to the bone, to a point where just enough money is carried in the bill in order properly to carry on the work which now is going on, the con- struction projects now under way, now in process of construction, would have to be shut down. I should like to have the attention of the Senator from Illinois on this point, CONGRESSIONAL RECORD—SENATE Mr. President, because I am sure he does not realize the situation. If his amend. ment to the committee amendment pre- vails, inasmuch as the bill as reported by the committee will provide only suffi- cient funds to pay the contractors under existing contracts for the work on which they now are employed, then, when the contracts are stopped—as they will have to be stopped if the amendment of the Senator from Wlinois to the committee amendment is adopted-—-we shall have to pay the contractors the damages which result from such stoppage. We had an illustration of that situation in Califor- nia, last year, when such a stoppage cost the Government $700,000. The effect of the Senator’s proposal, if it is adopted by the Senate, simply will be that work now underway, which should be completed because it is in the interest of the war effort—for instance, the work involved in finishing hydroelec- tric projects, and similar work which is going on—will be delayed. Then, if the inflation which the Senator fears occurs, when we return to that work, it will take more dollars to finish it. Mr. LEHMAN, Mr. President, will the Senator yield? Mr. HAYDEN. I yield. Mr. LEHMAN. I would be perfectly willing to cut back on the appropriations for reclamation projects, even though, as the Senator knows, I have voted, both on the floor of the Senate and in com- mittee, for every reclamation project, because I believe in them. At this particular time I think it would be perfectly legitimate to delay some of the reclamation projects, but I do not wish to have any delay occur in the case of the power projects, because I believe they have a direct bearing on the war effort we have to make. In my opinion we should increase the production of power in every possible way, rather than restrict it. Therefore, Mr. President, let me ask the Senator from Arizona to what extent the amendment proposed by the distin- guished Senator from Illinois to the com- mittee amendment would, if adopted, in- terfere with the development of power facilities. Mr, HAYDEN. First of all, Mr. Presi- dent, in the case of the Colorado-Big Thompson project, to which the Senator from Illinois has referred, let me say that project can be finished, if there is any sort of a short war at all, in time to have the power from that project available for use during the war. However, if the amendment of the Senator from Illinois to the committee amendment is adopted, we shall not be able to obtain the power from that project during the war. The same is true of the power features of the Central Valley project. Practi- eally all these projects are multiple-pur- pose projects, and their power features are being pushed ahead of almost any other features, However, Mr. President, so far as the irrigation features of the projects are eoncerned, let me say that all of us realize that we may need additional irrigation facilities in order to be able to irrigate 10593 more land, so that it can be cultivated for the production of cropa which will be badly needed if we get into a war, at which time there would be difficulty in regard to importations. On the other hand, when we already are under contract to make payments for further construction on projects already under way, it is perfectly foolish to make appropriation cuts of the kind which would be required by the amendment pro- posed by the Senator from Illinois to the committee amendment. Mr. FERGUSON. Mr. will the Senator yield? Mr. HAYDEN. I yield. Mr. FERGUSON. Would it not be better to apply to hydroelectric lines which would supply power the funds which otherwise would be used for the construction of dams which would take years to complete? Mr, HAYDEN. This amendment does not relate to new dams which will take years to construct. Mr. FERGUSON. How long will it take to construct them? Mr. HAYDEN. That will vary; but all the ones to which this item relates are under construction, and have been under construction for years. All these projects were authorized be- fore the war began. Construction on all of them was stopped during the war. Since the war, we have resumed con- struction on them, and construction has been continuing since that time. Mr. FERGUSON, I appreciate that they are authorized years in advance. Mr. HAYDEN. No; I mean that the money for their construction was car- ried in the appropriation bills in the 1940's. During the war period, con- struction on all of them was shut down for four or five years. Following the war construction work on them was re- sumed. We have been continuing with their construction since then; and they are reaching completion. Mr, FERGUSON. But are we not now in the same position we were in when construction on them was shut down, In other words, we are in a war. Mr. HAYDEN. But we made a mis- take during the war, in my judgment, when we stopped the construction work. I know that jis true in the case of the Davis Dam. We stopped the construc- tion of that dam during the war, but there has been a crying need for power. It would have been the wisest thing to continue with the construction of that project and to have had the power from it available during the war, It was a terrific mistake to stop the construction of that project during the war. The PRESIDING OFFICER. The question is on agreeing to the amend- ment of the Senator from Illinois to the foanmnittee amendment on page 247, in ne 4, Mr. DOUGLAS. Again, Mr. President, I ask for the yeas and nays. The yeas and nays were not ordered. The PRESIDING OFFICER. The question is on agreeing to the amend- ment offered by the Senator from Illi- nois to the committee amendment on page 247, in line 4. President,
10594 The amendment to the committee amendment was rejected. The PRESIDING OFFICER. The question now {is on agreeing to the com- mittee amendment. Mr. MURRAY. Mr. President, I should like to ask a question of the Senator from Arizona, who js in charge of this portion of the bill. I wish to inquire in regard to the action of the committee in pro- posing a reduction from $297,467,000 to $294,713,000. I understand that the effect of such a reduction will be to deny the appropria- tion of $1,400,000 for continuation of the work on the Havre-Shelby line or proj- ect, which now is nearing completion, and also to eliminate the appropriation of $365,000 which is necessary to con- struct the Canyon Ferry-Great Falls transmission line, which connects with the Canyon Ferry project. Mr, HAYDEN. That is correct; it will make a reduction of $1,400,000 in the amount of money available for the Havre-Shelby line, and will also result in the other reduction which has been men- tioned. Let me explain to the Senator that, as he will remember, last year the Con- gress, in pursuit of a policy of arming the Reclamation Service with funds where- by it could negotiate on a basis of equal- ity with the private power companies, provided funds for the construction of the Havre-Shelby line. I shall discuss it first. At the time when that appropriation was made, it was understood that if the Montana Power & Light Co. would bring about a suitable wheeling contract to carry the power, the line would not nec- essarily be built, It so happens that the situation which has developed in Montana is that in December the Reclamation Service made a contract for the construction of this line, but gave no go-ahead order to the contractor. The notice to proceed was issued on March 21, 1950. On April 12, the Montana Power & Light Co, obtained from the Montana Public Service Com- mission an order permitting it to reduce its rates to rural electric cooperatives to exactly the Government rate of 514 mills. If that action had been taken prior to the time when the contract was awarded or prior to the time when the contractor was notified to proceed with the work under the contract, there would really have been no excuse for building the line, because the primary purpose of the line is to get power to the REA cooperatives at the Govern- ment rate; and if power could be ob- tained from the private power company at the same rate, construction of the line would not be justified. However, the Montana Power & Light Co. was about 3 weeks late in obtaining the order per- mitting it to reduce the rate in the way I have stated. So the contract was let. We are faced with that situation; and under the circumstances the committee felt that the Bureau of Reclamation was in a little too much of a hurry to let the contract. For that reason, the com- mittee voted to disallow the funds at this time, CONGRESSIONAL RECORD—SENATE Mr. MURRAY. Myr. President, the Senator will recall that an effort has been under way for many years to construct this project, so that low-cost Fort Peck power will be available to the farmers in that area, who have been denied this power during all this period of time. In 1947 the Senate appropri- ated funds for the construction of this line in 1948. At that time the Bureau of Reclamation did not hurry to let the contract—thinking that there might be a possibility of entering into a contract with the private power company. How- ever, nothing happened. The Bureau of Reclamation continued to hold up the contract, and did so until very late in the year, Then, just before work was begun under the contract, Congress eliminated that appropriation. Then the farmers in that area be- came despondent about the possibility of getting the project constructed. Howy- ever, they continued to make efforts to obtain it. They had spent a grect deal of money for that purpose, but they could not get any contract for service. They had to build a line at their own expense. That line connected with the Montana power system. Also it was necessary to purchase a steam plant there, to firm up the power. All that was necessary in order to make it possible to provide power to those who live in that area. So, during all these years they have been struggling to get this project, and now, last year, after a very elaborate de- bate on the floor of the Senate, we suc- ceeded in getting an appropriation with which to start the project. The project was not started, however, and contracts were not let for it until December of last year, waiting again to see whether any- thing could be accomplished with refer- ence to making an agreement with the power company. The power company did not offer them any contract, did not offer them any wheeling agreement, and the result was that they finally had to start construction on the project. The project has now been carried on to almost full completion. I have before me a statement from the Commissioner of the Bureau of Reclamation in which he shows the status of construction at this time. It shows that the Government has already expended $892,136 and has obligations on the project amounting to $535,231. So the project cannot be stopped at this point, when it is almost finished. Besides, it will be absolutely necessary to have this project. We cannot tear Gown the lines now and end the project at this point, because even if the Mon- tana Power Co. could furnish power to the rural electric cooperatives there at the present time, the time is going to come when they will need more power, and will need stronger, heavier lines to carry that power. Besides there is a pumping project involved in the area which will require considerable power. Mr. HAYDEN. But the representa- tions made to the Committee on Appro- priations were that if this appropriation were denied, the Montana Power Co. would then pay the Government for all materials and the lines, as I understood, JULY 19 and take them over. That is not clear in the record. Mr. MURRAY, No, and it is not clear anywhere. Mr. HAYDEN. Very well. Mr. MURRAY. With whom are they going to contract? They have not of- fered an agreement to the farmers or to the Government. Mr. HAYDEN. That is the point to which I am coming. This money has been allowed by the House, but has not been allowed by the Senate. If that point cannot be cleared up, it seems to me quite evident that the House is going to insist upon the appropriation. On the other hand, if it can be shown that the Government will come out whole without loss in this matter, and that in the meantime the REA cooperatives are receiving the benefit of this very low rate on the power of 5.5 mills, then we might be justified in taking it up. I think the best way to handle the mat- ter is to take it to conference and see what the Montana Power Co. has to say about it at that time, Mr. MURRAY. I should like to ask the Senator whether he does not think that this would be a very mistaken ac- tion in view of the emergency which is before the country at the present time: that is, to destroy this line, and to de- stroy this property? It is almost akin to arson. It would be a criminal de- struction of property. We have a line already completed, and the Congress, because of some language picked up from the street or in the lobbies of the Congress, to the effect that the power company is going to compensate the Government for the destruction of this line, proposes to terminate construction and cancel the appropriation. I think it is the most unusual legislative action I have ever heard of. Mr. HAYDEN. What the committee instructed me, as chairman of the sub- committee, was to inquire first of the Reclamation Service as to the progress on the work at that time. At the time we acted on this item we had that in- formation. I was also instructed to in- quire of the Montana Power Co. as to what its attitude would be about taking the property off the hands of the Gov- ernment, and, while there is no firm commitment at the moment—— Mr. MURRAY, No. Mr. HAYDEN. We were given to un- derstand that the power company would do that. Before this question is ulti- mately settled in conference, that will have to be determined. Mr. MURRAY. The Senator said the power company would do that. What is the agreement it proposes? What does it propose to do? Mr. HAYDEN. To take over all the materials and to take over the line so far as it has been built, as I under- stand, - Mr. MURRAY. What does it propose to offer to the rural cooperatives who are involved? Mr. HAYDEN. A low rate for power. Mr. MURRAY. A low rate for power? Mr. HAYDEN, Yes.
1950 Mr MURRAY. But it does not pro- pose to give them the lines which would he needed in order to enable the cooper- atives to secure adequate servi Mr. HAYDEN. If the line is to be built, as the Senator states, of course it will have to be completed either by the Government or by the private power company. Mr. ELLENDER. Mr. President, will the Senator yield? Mr. HAYDEN. I yield. Mr. ELLENDER. As I remember, the evidence shows that 9 of the 11 cooper- atives are now being furnished with power as cheaply as they could obtain it if they were to manufacture it them- selves. Is not that correct? Mr. MURRAY. That is not involved in this item. Mr. HAYDEN. It is the same identi- cal rate as that at which the Govern- ment offers to supply It. Mr. ELLENDER. But it is all involved in the question, is it not? Mr. MURRAY. It is not involved in this item, because it is entirely separate and apart from the contracts they may enter into with the power company in other sections of the State. But here is a situation in which the power company has failed to offer a contract during all these years, and does not now offer a contract. No one knows what it ‘pro- poses to give to the rural cooperatives in the way of adequate service and fu- ture low rates. Mr. HAYDEN. Oh, yes; they have the rate fixed by the Montana Power Commission. If any REA cooperative applies to them, and they serve it with power, it shall have the benefit of the rate of 5.5 mills, which is exactly the same as the Government rate. Mr, ELLENDER. That was my un- derstanding. Mr. MURRAY. Then that would mean that there would be turned over to the Montana Power Co. a complete monopoly of the power coming from the Fort Peck Dam. At the present time, the Fort Peck Dam is carrying that power down to Great Falls, where the Mon- tana Power Co. takes it. If a contract of that kind is given to the Montana Power Co., it would mean that the Bureau of Reclamation will lose the difference be- tween 2.5 mills for power and 5.5 mills, so that the Government will be losing 3 mills per kilowatt nour, which the Mon- tana Power Co. sccured as a result of that situation, and that deprives the project of the opportunity to repay. Mr. HAYDEN. That matter was not presented to the subcommittee, but it certainly will have to be considered when the bill goes to conference. My sugges- tion is that this matter be taken to con- ference, and that those who are inter- ested otherwise can ask the Montana Power Co. to come forward with a clean- cut, specific proposition. If it does not have one, then that is one thing. If it has & proposition that will save the Govern- ment whole and free of cost, then I think the situation would be different. Mr. HILL. Mr. President, will the Senator yield? Mr, HAYDEN. I yield. CONGRESSIONAL RECORD—SENATE Mr. HILL. The Senator says, which would hold the Government free of any cost whatever. How much money has the Government invested in this project at this time? Mr. HAYDEN. The Government has about $800,000 in it now, and the cost will be close to, but under, $2,000,000. Mr. HILL. But there has already been expended on this project about $800,000 of the Government’s money; is that cor- rect? Mr.HAYDEN. Yes. Mr. MURRAY. And, in addition to that, another $400,000 to $500,000 has been obligated. Mr. HILL. Does the Senator mean that that has been contracted for? My. MURRAY. I mean contract ob- ligations. Mr. WHERRY. Mr. President, will the Senator yield? Mr HILL. Will the Senator from Nebraska let me finish first? Mr. WHERRY. Yes. Mr. HILL. Is there a supplemental contract obligation of $400,000 to $500,- 000, in addition? Mr. HAYDEN. Yes. The contractor has agreed to build the entire line, and he has been paid for his work as it has proceeded. Mr. HILL. Then the Government really has an interest in the matter to the extent of $1,200,000 or $1,300,000, has it not? My. HAYDEN. Yes. Mr. HILL. Does the distinguished Senator from Arizona have any infor- mation in writing from anyone in au- thority connected with the Montana Power Co. as to what the power com- pany will do in this matter? Mr. HAYDEN. We have a telegram from them. The work was just start- ing on the line when we had our hear- ings. The work had been halted by the blizzard. The representation made at that time was that the company would take off the hands of the Government all the material it had. The missing part of the understanding is, What is to be done to compensate the contractor for the profits he otherwise would make? The committee said, “If we can save a million doUars, let us save it.” Mr. HILL. From whom is that rep- resentation? Mr. HAYDEN. From E. J. Corette, tee president of the Montana Power ane HILL. He did not go into the question of what our debt may be to the contractor, did he? Mr. HAYDEN. No; but he did agree to take off our hands all the material on the ground and to take over the line. Mr, MURRAY. Mr. President, will the Senator yield? Mr. HAYDEN. I yield. Mr. MURRAY. Mr. President, I ask unanimous consent to have inserted in the Recorp at this point a statement from the Commissioner of Reclamation with reference to the status of the line, and also an extract from the report of the chief engineer on the status of con- struction and material contracts, 10595 There being no objection, the matters were ordered to be printed in the Rec- orp, as follows: JoLy 14, 1950. Hon Micnart J. Krewan, House of Representatives, Washington, D.C. Myr Dear Mr. Kmwan. In order that you may be informed as to the present status of construction on the Havre-Shelby line and substations, we are enclosing a state- ment on the status of funds and construction progress as of June 30, 1950, and estimated progress as of July 31, 1950, Sincerely yours, Micnarr W. Srravs, Commiastoner. Status of construction, erpenditures, and obligations, Hatie-Shelby transmission line and subdstations, Fort Peck project, Montana—status of funds June 30, 1950 (actual) July 31, 1950 (estimated) Ac ered expend. tures Obliga-| crued_ | Obiga- tions jexpend- Havre-Shelby trans mussion line, 8mith Construction Co... }$311, 054|$138, 046|$308, 910/$200, 623 Havre substation, Valley Construc- 12,094] 27,976) 28,024) 89, 568 Governmont-fur- nished materials and equipment ...] 17, 281] 259, 978) 260, 000} 104, 145 Alle other (R/W, de- sign, en rineering, and = administra- tion, etc) 8, 199} 205, 202) 31,000 Rucyard sabstation. es nr Rennes . Shelby substation... |.....--- we aeeeee] ceeeeee 47, 000 Total....--.... 596, (90) 484, 190] 892, 136] 585, 231 Estimated progress as of July 81, 1960 TRANSMIBSION LINE Miles of potes hauled and dis- tributed... 2.2.20. - ene we ee 65 Miles of structures framed... 58 Miles of holes dug ...-. .....- 58 Miles of structures erected .... 55 HAVRE SUBSTATION Grading Back! eeneenener anne Conercte placeme! Rudy ard and Bhelby substa- 1 Complete. 390 pereent complete, 550 percent complete, 430 percent completo. 560 percent complete, 4 Construction contracts awarded. If construction is stopped we would have an uncompleted facility incapable of serving any useful function, and of the $1,427,367 ex- pended or obligated as of July 31, 1950, the Government would suffer a direct loss of ap- proximately $800,000, since the $200,000 ex- pended Zor right-of-way, design, engineering, and administration, and approximately $400,- 000, consisting of contractors’ profits, con- struction costs, termination costs, and super- vision and legal expenditures could never be recovered. This assumes a salvage value of approximately 800,000 for material and equipment, which is questionable, since some of it is special equipment and might have only a nominal salvage value, in which case the direct loss to the Government could run as high as a million dollars.
10596 In addition, if the Havre-Shelby Line is not completed and placed in service by the Gov- ernment, the Fort Peck project will lose a principal outlet for firm power. This may well result in requiring the project to sell firm power which has 6 value of 5.5 mills per kilowatt-hour at a rate for dump energy, or 2.5 mills, 9 loss of 3 mills. After the load has been built up over a period of 10 years it will result in an estimated annual loss of almost $250,000, Mr. HAYDEN. Mr. President, I ask unanimous consent to place in the Rec- orp a telegram sent by direction of the subcommittee to Mr. J. EZ. Corette, vice president of the Montana Power Co., and his reply thereto. There being no objection, the tele- grams were ordered to be printed in the Recorp, as follows: JUNE 29, 1950. Mr. J E Corerte, Vice President, Montana Power Co, Butte, Mont, Members of Subcommittee on Interior D3- partment Appropriations have asked me to submit to you following information relative to Havre-Shelby line obtained from Recla- mation Bureau. (1) Due to favorable bids under estimate, total estimated cost has been reduced from $83,860,000 to $1,912,000; (2) estimated contract expenditures as of June $30, 1950, for materials are $202,000 and for progress payments on 23 supply contracts and 2 construction contracts are $295,000; (8) in addition to above contract expendi- tures an additional amount of approximately $155,000 has been expended for engineering, right-of-way, and administration; (4) in ad- dition contractor has on hand approximately $115,000 of supplies for which certified in- voices have not as yet been submitted to Reclamation Bureau; (5) therefore, total actual expenditures and contractors’ earn- ings as of June 30, 1950, plus materlal on band by contractor amount to $767,000; (6) status of work is reported as follows. ¢ miles of poles hauled to site; 1,3, miles of holes dug, 2 miles of structures framed, and erection was started on June 26, 1950, and on Havre substation grading is completed; structure excavation is 75 percent completed; and concrete work is 13 percent completed. Bubcommittee would like to have your com- ments on above factual statement and what the Montana Power Co, would be willing to do under present circumstances. Subcom- mittee would also like to have a statement from you as to present status of the negotia- tions with the Interior Department for a wheeling contract and how near you are to an agreement on same. Please wire reply at once as subcommittee meets again tomore row, Friday. Car. HAYDEN, Chairman, Interior Department Ap- priations Subcommittee, —_—_— GreaT FALts, Mony., June 30, 1950. Senator Cart HAYDEN, Chairman, Subcommittee on Interior Department Appropriations, Senate Office Building, Washington, D, C.; Have no source of information to check items on (1) to (5), inclusive, of your tele- gram, Item (6) appears accurate but this is very little work toward completion of 100 miles of lines; in addition, excavation, grading, and foundations are only a small part of the cost of a substation and this work has Just been started. Important facts are that Bureau let all contract for Havre-Shelby line and substae tions after money was appropriated by Sen- ate with the very clear understanding and statemont that no money should be spent if arrangement could be made with Montana CONGRESSIONAL RECORD—SENATE Power Co. to serve REA’s involved at Bureau of Reclamation rate. At hearing before your committee on April 20, Mr. McPhail was told by you per- sonally and by other committee members that money was appropriated for this line with such understanding. Our information is that “go ahead” order was not given to contractor on Havre-Shelby line until ap- proximately April 22, In addition, on April 12, Montana Public Bervice Commission approved s Montana Power Co. rate for power company rate for power to Marias, Hill, and all other REA’s on our system, which is identical to Bureau's rate, thereby eliminating any possibility of any saving to the REA’s or anyone else by building the Havre-Shelby line. The facts clearly indicate to us that Bu- reau has not acted in good faith with you or with the Senate but has deliberately created a situation to make it difficult for your committee to rescind the appropriation made last year for this line. This has been done in spite of the fact that no benefits could result from building of this line. Our company is still willing to purchase at your cost all materials which have been acquired for this line, As to the Wheeling contracts, we have a contract with Bonneville and supply all REA’s in far western Montana under it. Bu- reau refused to make with us a contract similar to the Bonneville contract and we could not agree on a rate to be paid for Wheeling because Bureau insisted on paying only 1 mill per kilowatt-hour even though Wheeling distance was approximately 150 miles instead of 50 miles as in North Da- kota contracts in which the 1l-mill rate was established, In view of this deadlock we reduced our rate to the Bureau rate, thereby accomplish- ing every benefit that could result from a Wheeling contract plus saving the Bureau all expense that would necessarily result from its serving these customers. We understand from discussion last week between Mr. Mc- Phail and our counsel, Mr. Glover, that Bureau agrees that Wheeling agreement to REA's is now unnecessary as they already have power at Bureau rate. Only negotiations pending with the Bureau regarding Wheeling are from Canyon Ferry to Crow Creek irrigation pumping plant and for use of our two 100,000-volt lines between Qanyon Ferry and Great Falls to interconnect Canyon Ferry plant and Bureau's Fort Peck line. We believe these negotiations will re- sult in satisfactory agreements to both parties. As we see the situation, every additional dollar spent on Havre-Shelby line will be wasted, as there are no benefits to be accom- plished; and sensible thing would be for Bureau to cancel all contracts and reduce expenses toa minimum. Undoubtedly every contract has a provision that it 1s subject to appropriations by Congress, Am sending this telegram from Great Falls but will be in my office in Butte all day Friday and would be pleased to answer any further inquiries, We certainly hope that you will rescind last year’s appropriation for Havre-Shelby line, thereby carrying out the intention clearly expressed in the CoNnGressionaL Rec- orp last fall and saving as much money as possible. Respectfully, Tes MONTANA Power Co., J. E. Corerre, Jr, Vice President. Mr. GURNEY, Mr. President, will the Senator yield? Mr, HAYDEN. I yield. Mr. GURNEY. I am a member of the subcommittee. I should like to ask if it is not correct that the total cost of the Havre-Shelby line was anovroxi« JULY 19 mately $2,000,000, or was it a little more than that amount? Mr. HAYDEN. It was originally esti- mated to be $2,880,000, but it was re- duced, by a favorable bid, to $1,912,000. Mr. GURNEY. It was very close to $2,000,000. Mr. HAYDEN. That is correct. Mr. CURNEY. The information re- ceived from the Bureau, as I remember, was to the effect that along with ma- terials and expected profits there was an obligation of approximately $800,000. Mr. HAYDEN, That 1s correct. Mr. GURNEY. Materials on hand, which the Montana Power Co. agreed to buy at the cost to the Government, would amount to approximately $500,000. Therefore there is a possible net loss to the Government of between $200,000 and $300,000. That, I believe, was the un- derstanding of the committee on which it based its decision not to build the line, inasmuch as there would be no lowered cost to the cooperative below the 514- mills rate at which the Montana Power Co. agreed to furnish current. That is the same rate, of course, the cooperative would pay if it received the Bureau power. Therefore, as I see it at this time, when we need money and mate- rials, we can save the expenditure of the money and save the use of the materials, because the Montana Power Co. is al- ready connected with the Havre-Shelby cooperative, as I understand. We have before us an expense of $300,000 instead of a total of $1,900,000. That was the background for the subcommittee’s mak- ing the recommendation to the full com- mittee and to the Senate. Mr. LANGER. Mr. President, will the Senator yield? Mr, HAYDEN. I yicld. Mr. LANGER. Mr. President, some of the farmers in the western section of North Dakota are very much interested because they are expecting to get power. But a letter from the Commissioner indi- cates that the figures quoted a moment ago by the distinguishcd Senator from South Dakota [Mr. Gurney] are not accurate. Here is what is going to hap- pen in case construction is stopped, ac- cording to Mr. Straus: If construction is stopped, we would have an uncompleted facility incapable of serving any useful function, and of the $1,427,367 expended or obligated as of July 31, 1950, the Government would suffer a direct loss of approximately $600,000, since the $200,000 expended for right-of-way, design, engineer- ing, and administration and approximately $400,000 consisting of contractors’ profits, construction costs, termination costs, and supervision and legal expenditures could never be recovered. This assumes a salvage value of approximately $800,000 for materlal and equipment, which is questionable since some of it is special equipment and might have only a nominal salvage value, in which case the direct loss to the Government could run as high as a million dollars. In addition, if the Havre-Shelby line is not completed and placed in service by the Government, the Fort Peck project will lose & principal outlet for firm power. This may result in requiring the project to sell firm power which has a value of 55 mills per Kilowatt-hour st a rate for dump energy, or 26 mills, a loss of 3 mills. After the load has been built up over a period of 10 years, it will result in an estimated annual loss of almost 2250 00N
1950 That, Mr. President, is apparently the whole story. So it is much more serious than we have been led to assume, I am delighted to know that the senior Sena- tor from Montana [Mr. Murray] is lead- ing this fight because hundreds of thou- sands of farmers are interested in the question of whether they are going to get cheap power or whether the Montana Power Co. is going to have a monopoly. It seems to me that the stopping of this line is entirely wrong. Mr, HILL. Mr. President, will the Senator yield? Mr. HAYDEN. I yield. Mr. HILL. If anyone will read the telegram which the distinguished chair- man of the subcommittee sent to Mr. J. E. Corette, vice president of the Mon- tana Power Co., under date of June 29, 1950, and the telegram of Mr. Corette in reply, he will see that the Montana Power Co. certainly very skillfully evad- ed any direct answer to the chairman's telegram, and did not at any place in the telegram say that the Montana Power Co. would hold the Government free of all costs and expenses which had gone into the line. If the power company is willing to do anything, it has certainly kept it a deep, dark secret up to this time. Mr. HAYDEN. The committee acted on the information available to it at the time. I am quite sure that when the bill goes to conference we shall have to have more information from both the Recla- mation Service and the Montana Power Co., and the conferees can then decide what to do about it. For that reason I should prefer that the bill remain as it is when it is taken to conference. Mr. MURRAY. When the conference meets, the conferees will not be able to hold any hearings or get any facts de- veloped with reference to the situation with regard to the expense of complet- ing the line. They will not be able to know what the company will do. Mr. HAYDEN. The Senator is mis- taken. The custom is to act on these matters and get the very latest avail- able information. I can assure the Sen- ator that we shall have accurate infor- mation as to exactly what the situation is when the matter is taken up in con- ference, and we shall also have, if it is possible to obtain it, definite informa- tion from the Montana Power Co. as to how much it is willing to pay. Mr. MURRAY. Will the conferees have information from the farmers in- terested in this matter? Will they know what the farmers’ position is with ref- erence to the ability of the Montana Power Co, to furnish them with adequate power? I understand they claim that the pres- ent line of the Montana Power Co. is to- tally insufficient to carry the load. Be- sides, there is a pumping project in that district which will require great quanti- ties of electric power because it involves @ hundred thousand acres of land, Mr, HAYDEN. As I understand, the transmission line will be finished within 30 days, ‘The poles will be in the ground and the wire will be on the poles. Mr. MURRAY. It is a question of whet her we will turn it over to the Mon- CONGRESSIONAL RECORD—SENATE tana Power Co., and give them a mo- nopoly of the power. Mr. HAYDEN. I understand that, but we have appropriated the money with the understanding that if they would re- duce rates and render the service, it would not be necessary to build the line. The money would not have been ob- tained on any other basis. That is how we proceeded in the case of the South- west Power Administration. We took $6,000,000 out of the bill. We made the same arrangement elsewhere. The in- terval between the time when the con- tract was let and the power company reduced its rate complicates this case somewhat, and therefore is not exactly like the other cases. Nevertheless, the money would not have been appropriated by Congress if we had not believed the circumstances to be as stated; and so, the committee said, “If the company will do it, we can save the Government some money.” Mr. MURRAY. I should like to call the Senator’s attention to the contention of rural electric cooperatives in this field, who have been claiming for a long time that because they could not get ade- quate service over the company’s line, they were compelled to build a line them- selves to the Montana Power Co. line in order to hook onto it. In addition to that, as I said a little while ago, they had to buy a steam plant, because avail- able power was :nsufficient. Mr. ECTON. Mr. President, will the Benator yield? Mr. MURRAY. I yield. Mr. ECTON. The Marias Cooperative built their lines several years ago, and they have those lines. Is that not cor- rect? Mr. MURRAY. They have built their lines. The Marias Cooperative have their own system. Mr. ECTON. They have thelr own system. Mr. MURRAY. They had it origi- nally, and they want to take advantage of their right to have access to Fort Peck power. I think they are entitled to it. They are preferred customers for that power, and they ought to be permitted to use it. Mr. HAYDEN. The subcommittee was in an embarrassing position. One Sen- ator from Montana was urging us to al- low the appropriation, while the other Senator was suggesting that it be dis- allowed. A situation like that is always embarrassing. I have in my hand the latest information from the Commission- er of Reclamation with respect to the status of this line, and I should like to put it in the hands of the junior Senator from Montana with the request that he send it to the Montana Power Co., and ask them to come back with a very defi- nite offer as to what they will do in the light of the representations now made by the Bureau of Reclamation. We acted on information which was a month or 6 weeks old. If we could know definitely in conference what the power company proposes to do, and could see how much it would cost the United States, one way or another, the conferees could consider the matter with some degree of intelli- gence. If not, I do not see that the Sen- 10597 ate conferees can do anything but re- cede. On the other hand, if the Mon- tana Power Co. can come in with a clear- cut proposition to show that the Treas- ury of the United States is not going to lose anything, I think the Senate confer- ees ought to stand by what has been done. ‘ Mr, GURNEY. I think the proposal would be a very fine solution of this problem. Personally, I want to see the cooperatives get adequate power at the Government rate of 5% mills. I do not want to appropriate any Federal money at this time, especially for duplicating lines. I want to be sure that the Gov- ernment’s interests are preserved. If we have a proposal from the Bureau setting forth the status of the contract at this time, ana the Montana Power Co. will agree to buy the material, or make some other agreement, and it appears to the conferees that it is a reasonable solution of this problem, I think that is the best we could do. The matter could be very well handled in conference. Mr. HAYDEN. I think that {is the best we can do. Would the distinguished Senator from Montana be willing to do that? Mr. ECTON. Idid not hear the Sena- tor from Arizona. Mr. HAYDEN. I have here the latest information issued by the Bureau of Reclamation, dated July 11 and July 14, as to the status of this transmission line, showing how far it has gone, what it has cost, and what the estimates on it are. The conferees would like to know what the Montana Power Co. proposes to do at this time under the circumstances. Mr. ECTON. The information I have from the Montana Power Co. officials, which I think the distinguished Senator from Arizona has, is that the company is perfectly willing to take from the Gov- ernment at cost all the material which is now on the job, so the Government will not lose any of the cost in that re- spect. What the liability to the con- tractor would be I am not prepared to say. Mr. HAYDEN. I am asking if I give the Senator these letters will he transmit them to the Montana Power Co. with the understanding that by the time the bill comes to conference we will have a statement from them? Mr. ECTON. I am willing to cooper- ate, However, I would suggest, since the Senator from Arizona has been handling the matter, that he do it, and that the information be sent directly to him. Mr. HAYDEN. I shall do it that way. Mr. MURRAY. Mr. President, I should like to continue with this discus- sion. In connection with the point which arises with reference to the suffi- ciency of the present transmission lines of the Montana Power Co., I wish to call attention to the fact that farmers in this area expect to have a power failure this winter. They wrote a letter to the local power manager of the Bureau of Reclamation at Great Falls, asking for the right to lease this unfinished line so that they may be able to get more power for their cooperatives, I should like to have the letter inserted in the Recorp. In it the Marias Cooperative,
10598 writing to the Bureau of Reclamation manager at Great Falls, says: I have discussed with you our desire to temporarily lease the use of your Havre- Shelby transm.ssion line on the section from Chester to Shelby, Mont., to relieve our pow- er shortage for this coming winter's load; as it Is my understanding that when the con- tracts were let on the Havre-Shelby trans- mission line that the construction of the line would be completed by October 1, of this year. We have made extensive inquiries for the rental of transformers whieh we will transform from 69,000 volts to either 7°00/120C0/400Y or to 34,600, which we pre- fer; provided, we can find transformers of capacity sufficient to serve our additional power requirements, The letter continues to show the in- sufficiency of the present transmission line. The Montana Power Co. does not offer any agreement to increase those lines Therefore, it seems to me that the construction of the Havre-Shelby line is absolutely essential. It seems to me it would be a criminal act to destroy the line after it has been practically finished. There being no objection, the letter was ordered to be printed in the Reconp, as follows: Maras RIVER ELECTRIC COOPERATIVE, Shelby, Mont., July 12, 1950, Mr. CHESTER BRAZIL, Power Manager, Reclamation Bureau, Great Falls, Mont. Drar Mr. Braziv: I have discussed with you our desire to temporarily lease the use of your Havre-Sheilby transmission line on the sectlon from Chester to Shelby, Mont., to relieve our power shortage for this com- ing winter’s load; as it is my understanding that when the contracts were let on the Havre-Shelby transmission line that the construction of the line would be completed by October 1, of this year. We have made extensive inquiries for the rental of trans- formers which we will transform from 69,000 volts to elther 7200/12000/400Y or to 34,500, which we prefer; provided, we can find trans- formers of capacity sufficient to serve our additional power requirements. We had a peak load of approximately 4,200 kilowatis last year; and even with our plant generating at full capacity, we were unable to hold a satisfactory voltage regulation on this peak load; and therefore, we anticipate & great deal more trouble this coming win- ter than we had the last winter. Please bear in mind, that we have a trans- mission line from Conrad to Shelby and pur- chase power from the Montana Power Co. to supplement our generating capacity, and operate our plant in parallel with the power company’s plants. We anticipate a normal peak of 5,200 kilo- watts this December, which will be increased by another 200 kilowatts; provided our allo- cations sare completed to serve areas that we anticipate construction on this fall. We will be urgently in need of power for next winter’s use, in addition to what we can now generate and expect to receive from the Montana Power Co. over the present trans- mission Iine hook-up; and I would appre- clate your immediate advice as to what we can expect relative to the completion of the Havre-Shelby line and the possibility of leasing it temporarily to relieve our power situation, or that the Bureau of Reclama- tion furnish us with an additional 2,000 kilowatts of supplemental power delivered to Shelby over that portion of the Havre-Shel- by transmicsion line at our substation which would be locsted in the vicinity of the pro- posed Burcau substation. CONGRESSIONAL RECORD—SENATE Ycur immediate advice on these matters will be greatly appreciated, as the time ts drawing near when action will be necessary. Very truly yours, R. O. McPHILu Ps, Manager. Mr. ECTON. Mr. President, will the Senator yield? Mr. MURRAY. I yield. Mr. ECTON. I wonder if the Senator knows that the Montana Power Co. has offered to double their voltage on the line so that everyone will be able to have sufficient power. Is the Senator familiar with that? Mr. MURRAY, I have been familiar with the proposals which the Montana Power Co. has been making over the years. For the last 5 or 6 years we have failed to get any satisfactory agreement from them which would enable the co- operatives to get the power which they need. In addition to that, as I said a little while ago, we will need this transmission line more than ever as a result of the Marias pumping project, which under- takes to irrigate 100,000 acres of the valuable land in that area. Mr. President, this is a most unususl and arbitrary action and will, if ap- proved, result in denying the farmers of the section of Montana involved en ade- quate and efficient program of rural elec- trification at reasonable cost. In addi- tion, it will result in a tremendous loss to the Government because this line is already nearing completion and the funds which we appropriated last year have already been paid out or almost completely obligated and cannot now be recaptured. Furthermore, the meaning and net ef- fect of this procedure will be to turn over to the Montana Power Co. a monopoly of the power generated at the Fort Peck Government Project and repudiate the program of the Bureau of Reclamation in furnishing power to REA’s at low rates for rural electrification. There are three cooperatives involved in that program. It is in a very rich ag- ricultural section of the State of Mon- tana, and the successful development of this area is entirely dependent upon an adequate supply of firm power at a rea- sonably low cost. There is also in this area as I have stated a potential irrigation pumping de- velopment on the Marias project that could be served by the Havre-Shelby line. This development of over 100,000 acres of good irrigable land can be placed under water by the proper location of ir- rigation pumping plants. Tt is estimated that the annual energy required for such purpose may reach a total of over 4,000,000 kilowatt-hours annually. With- out the Havre-Shelby line it would be necessary for the Marias pumping proj- ect to secure its power from the Mon- tana Power Co. at a higher rate than this power could be obtained from the Fort Peck project. Of course, the agreement which the Montana Power Co. is now offering, of 5.5 mills for the power they propose to sell to cooperatives, does not apply to the JULY 19 pumping project. That would have to be a separate contract, and the farmers there would have to pay an excessive price for the power, which would prac- tically render the project unfeasible. Mr. President, I should like to refer to some other background history of this controversy. This struggle on the part of the REA’s in Montana to secure low- cost powcr, which they had been guar- anteed by Congress, has b:2n going on for many years. During all that time we have made cfforts to make agreements with the power company, but they have never taken any interest in these ruial cooperatives until just recently. At the outset of this effort of the farm- ers to get power on their farms, the Montana Power Co. displayed no interest whatsoever in serving these cooperatives or in providing adequate transmission facilities for such purpose. The company simply stood by with their control of the power from the Fort Peck Government project and undertook to block the devel- opment of these cooperatives. It was not until the Bureau of Reclamation pro- posed construction of the Havre-Shelby line that the company suddenly became interested. That was back in 1947. I have already described the situation then. The Congress appropriated funds in 1947 to build this line. If the Bureau or Reclamation had proceeded expedi- tiously, they could have completed the transmission line at that time. I re- member some of the farmers who came here testifying about that—and I think the Senator from Arizona will recall it. They said some of the officials of the Bureau of Reclamation should have been shot for their failure to proceed with the construction of the line. It seems that some people are going to criticize the Bureau of Reclamation this time because they have proceeded. At any rate, the farmers were getting no power. The Congress, finally taking cogni- zance of all these factors, back in 1947 appropriated funds for the fiscal year 1948 to provide for initiating construc- tion of this line and substations. A large percentage of the line was then surveyed and staked out, designs and specifica- tions prepared, and invitations for bids published during the fiscal year 1948. During all this time the Montana Power Co. offered no satisfactory program to serve these cooperatives, but continued to oppose the program in every way pos- sible and maintained a powerful lobby in Washington for that purpose. Just rrior to awarding the contract for construction the Congress, because of this pressure of the power interests, re- scinded its 1948 fiscal year appropriation. This action of the Congress was a severe shock to the REA’s. It left the people of the Havre-Shelby area totally dependent upon an inadequate, makeshift, and com- pletely unsatisfactory system consisting of low-voltage transmission lines owned by the Montana Power Co. and supple- mented by a line belonging to the REA’s and a steam-generating plant at Shelby which the REA’s were compelled to pur- chase in order to provide some semblance of service, although clearl: inadequate.
1950 After the action of Congress rescind- ing the 1948 appropriations for this line the REA cooperatives were deeply con- cerned as to their future expansion and development. They had already expend- ed large sums of money and were de- spondent over the future, but continued the struggle. It was clearly shown at the hearings before the committee that the REA development in the Havre- Shelby area depended entirely upon the construction of the Havre-Shelby line. On the basis of these well-established facts, developed in extensive hearings, the Congress last year, after a very elab- orate debate, appropriated funds for the construction of the Havre-Shelby line for the fiscal year 1950. At no time during the Senate debate last year on the appro- priations for the fiscal year 1950 did the Montana Power Co. offer adequate serv- ice under a proper agreement for these REA’s. Never a thing; they just stood by, hoping they could beat them. They were successful before the committee in knocking out all the appropriations for transmission lines in Montana, but when it came to the floor of the Senate they were defeated. They did not even then try to enter into any agreement with the rural cooperatives in Montana. Mr. HILL. Mr. President, will the Senator yield? Mr. MURRAY. I yield to the Senator from Alabama. Mr. HILL. It was the fine and able efforts of the senior Senator from Mon- tana on this floor that got the money for that line, of course. Mr. MURRAY. Assisted by the Sen- ator from Alabama [Mr. HiL1], the Sen- ator from North Dakota |Mr. LANGER], and many other Senators, who recognize the merits of the program. It seemed utterly ridiculous that the Government should build the Fort Peck Dam and have all this power available to these pre- ferred customers, and then that they should be shut out of the power by the action of the Montana Power Co., which undertakes to get a monopoly of the power from that project, I think it is utterly indefensible. During all the months intervening since the fiscal year 1950 appropriations were made, there was no effort to pro- vide a wheeling agreement or adequate transmission facilities to serve this area. The Montana Power Co. having offered no wheeling agreement, the Bureau of Reclamation in good faith and under in- structions from the Congress awarded a contract on December 28, 1949, for ma- terials and construction of the line. Mr. ECTON. Mr. President, will my Colleague yield at that point? Mr. MURRAY. I yield. Mr. ECTON. Is the Senator aware of the fact that the Montana Power Co. had a contract signed by nine REA co- operatives in that area who were will- ing to take the company’s power, but the REA here in Washington refused to approve it? Mr. MURRAY. That does not relate to this section of the State of Montana at all; that jis an entirely different sit~ uation, CONGRESSIONAL RECORD—SENATE Mr. ECTON. I should be pleased if the Senator would tell me to what sec- tion of Montana he refers. Mr. MURRAY, I am referring to the section of Montana which will receive service from the Havre-Shelby line, in the northern section of the State, where these three very large cooperatives which have spent a great deal of money trying to get power during the past 6 of 7 years are located. I am referring to that area, where they should have access to the power from Fort Peck, but they have been denied it all these years by the maneuverings of the Montana Power Co. and their failure to give them a fair and decent contract. Mr. ECTON. Is not the Senator aware of the fact that the two cooperatives in- volved have been offered the same rate as the others, namely, 5.5 mills, the same as the Government rate? Mr. MURRAY. Yes; but that means that the Bureau of Reclamation will have to turn over to the Montana Power Co. @ monopoly of power from Fort Peck, and lose 3 mills per kilowatt on all the power hereafter which comes from that project, which will amount, as the Senator from North Dakota showed a Httle while ago, to a quarter of a million dollars a year. The power company continued, all during the winter and spring, to refuse to enter into any deal with these co- operatives, and after failing to block the movement in the House, the power com- pany officials then rushed back to Mon- tana and went before the State rail- road commission, which regulates the rates for utilities, They appeared one day and submitted these revised rates, and the railroad commission acted on it the very same day, and put the rates in operation. This, however, did not occur until long after the contract was let for construc- tion of the Havre-Shelby line and long after it was in course of construction, In view of that action by the commission it would seem to me that later on, after a few years, they will be able to go to the Montana Railroad Commission and get the commission to revise the rates, to raise the rates they may charge the farmers. That is something which can readily be expected, because they natu- rally have power and influence in the State with reference to the regulatory body, and I am satisfied that the com- pany will receive such increase if it asks for it. I believe this action before the Mon- tana Commission is significant in that there is a possiblity that the company, once the Government is deprived of the right to serve these REA’s, may make representations at a later time to the commission that its rates should be raised. It seems reasonable to assume that it might be successful in accomplish- ing this even without holding public hearings. That is very significant as far as the REA cooperatives are concerned since, in view of the manner in which this rate reduction was handled, there is grave doubt as to the future. But, Mr. President, this rate reduction was not 10599 accompanied by any agreement to pro- vide transmission facilities to carry full service to the area. Now it is claimed that the power com- pany will compensate the Bureau for the losses sustained if construction on this line is discontinued. Who is going to determine this? What is the compensa- tion going to be? And who is going to reimburse the farmers who will be com- pelled by the power company’s action to spend thousands of dollars more than would be necessary if the Havre-Shelby line were completed? It seems to me that is something which has not been properly adjusted by the conference committee. There ought to be some way of weighing the company’s proposals and determining whether they are sufficient actually to compensate the Government for the total losses it will suffer. If the company had made an offer of an agreement after the action of the Coneress last year and could offer com- plete service to the REA’s, it would have been a different story. But they waited until the last minute, when the line is nearly completed. So now the Govern- ment stands to take a heavy loss if the proposed action is carried into effect. We would not have been here last year fighting for this appropriation if the Montana Power Co. had at that time offered the rate which they are now pro- posing to offer. It seems to me the point I make to the effect that it results in giving a monopoly to the Montana Power Co. is something which should be taken into consideraiton by the conference committee. I think that the power com- pany, by its neglect and delay in present- ing any proposal until after the line had been partly constructed, has waived any right to depend on any so-called under- standing, and the committee is released from obligation under the alleged under- standing arrived at in the conference last year. T regret exceeding ‘y to see this struggle between the power interests of my State and the people again resurrected. Last year we thought that the fight had been finished and that we would now begin to witness a long period of progress and cooperation in the development of rural electrification in Montana. I think the power company is making a grave mis- take in again reopening this bitter feud. There is not enough at stake to justify the power company in seeking to deprive the farmers of northern Montana of the right to have this transmission line and have access to a full supply of power from the Fort Peck project. The power company knows that it is not adequately equipped through its present transmission lines to furnish the Havre-Shelby area with sufficient power to fulfill all requirements. The power company stands to profit enormously as & result of its control of the public power generated at Fort Peck, which the tax- payers of our State have helped to bring into existence. The power company has also been greatly benefited by the devel- opment of the Hungry Horse power profj- ect in Montana, which they tried to ob-~ struct for years, and will now witness a great expansion of its business,
10600 The company is expanding its busi- ness t:emendously and is going to make huge profits. Already its stock has jumped on the stock exchanges because of the enormous expansion of business which will result to the company because of the fight we made in Congress for the Hungry Horse Dam and the other de- velopments in our State. The company fought us in connection with the trans- mission line from Kerr Dam to Ana- conda claiming that it was not necessary. They fought us for several years and tried to block the development of the Hungry Horse project. Finally Congress took action with resg ect to the project. After that the company came here last year and admitted that the Kerr-Ana- conda power line was necessary. The company is going to benefit from it be- cause it carries power from the Hungry Horse Dam to the Montana power centers where they are going to obtain a huge amount of that power, It seems to me that the power company should be satis- fied with the tremendous growth and profits it stands to make through its expanding operations under this power development program, and not waste its time trying to crush the little group of farmers who seek to get the meager bene- fits of low-cost power on their farms, to which they are entitled under the na- tional policy. Mr. LANGER, Mr. President, will the Senator yield? Mr. MURRAY. I yield. Mr. LANGER. The distinguished Scn- ator from Montana will remember that at the very time the Hungry Horse Dam project came before us for considera- tion for the first time, when former Sen- tor Wheeler and the distinguished senior Senator from Montana appeared and asked for the initial appropriation of a million or a million and a half dol- lars to make a study of the project, even then the power companies protested and opposed the request. Mr. MURRAY. Yes. Mr. LANGER. And now after the project has been completed the company takes advantage of it. Mr. MURRAY. Yes. Undoubtedly the Hungry Horse Dam should have been constructed long before it was. Jt should have been constructed before the last war. By reason of the failure to con- struct the dam, big fioods occurred in the Lower Columbia. The dam helps to hold back those waters, and contributes greatly to flood control in the Columbia Basin. £0 it seems the Congress acted unwisely in delaying tha. nroject, as it did several years ago. Mr. LANGER. Mr. President, will the Senator yield further? Mr. MURRAY. I yield. Mr, LANGER. Asa metter of fact the construction of the dam changed the en- tire situation around Kalispell, Mont., did it not? Mr. MURRAY. Yes. It has changed the entire siiuation in the whole State of Montana as well as in the Dakotas. In that section of the country we were losing population. Just befcre the project was begun we had fewer people in Montana than there were in Montana 30 or 40 years before. CONGRESSIONAL RECORD—SENATE The population had greatly dwindled because we had no balanced economy. All w2 had was an agricultural economy. After the young pecple had gone through school and graduated from college, they were obliged to leave the State and go to other sections. As a result of this de- velopment, however, people are coming into Montana secking to obtain the power created by the project, to use it for in- dustria” purposes. Yesterday I had a conversation with a man who represents a concern which wants to construct an aluminum pro- duction plant in Montana, Mr. Raver, of the Bonneville Power Authority, has been negotiating with him. That is one il- lustration of what is occurring. Hun- dreds of similar illustrations could be given. Such construction will develop Montana’s internal economy. Montana is the third largest State :n size in the Union. It could maintain a population of many hundreds of thousands more than it has now. Instead of the popu- lation increasing in Montana, it has been dwindling. Another factor that I believe is of major importance to the Senate is the possible losses that will be incurred by the Government as a result of failing to appropriate funds to complete the Havre- Shelby line. We are not assured that the company will stand all the costs as a resulting of stopping construction, al- though company officials have indicated their willingness to reimburse the Gov- ernment for materials involved. Expend- itures by the Bureau of Reclamation, as of June 30, 1950, are $526,090, Obli- gations, as of July 1, 1950, will total $828,522. The estimated expenditures by July 31 will be $892,000 and the esti- mated obligations, $535,000. As of July 10, 10.5 miles of structures have been crected and 17.5 miles of structures framed. By July 31 it is estimated that 55 miles, or over one-half of the struc- tures, will be erected and 58 miles of Structures framed. Should the Bureau of Reclamation now be required to terminate the con- struction contract and dispose of the matcrial, it would stand to lose approxi- mately $200,000 for designs, surveys, en- gincering and admunistration, and right- of-way acquisitions. Termination of the contracts would probably result in a loss to the Government of from $400,000 to $800,000 for setthng the claims which, no doubt, the contractors for matcrials and construction will seck for such ter- mination, The amount of the loss is con- tingent upon final determination of the disposal or use of materials and the re- sulting salvage value. The direct and immediate loss to the Government would as a minimum be $600,000 and may reach as much as a million dollars. What will be the status of the struc- tures already in place? Salvage would be costly. If the company cffers to take it cver, it will be an admission that the line is required in spite of testimony to the contrary. The Congress will also have to decide the question of disposal. We cannot abandon these works by merely saying, “Stop—no more work is to be done.” JULY 19 Mr. President, this is a tragic matter. I am confident that the conference com- mittee which will handle this bill will not be jcckeyed into this muddle of confu- sion which was concocted by some smart lawyers and lobbyists. No, Mr. Presi- dent, this so-called cffer of the company to assume the loss caused by the ter- mination of construction of this line is not worth a penny. Such an arrange- ment would be contrary to public policy. It seems to me that some sort of decep- tion must have been perpetrated on the committee to induce it to peremptorily terminate the construction of this vi- tally necessary line which will not cost the Government a single dollar. In view of the present cmergency con- fronting the country, Congress must act in this matter with caution. We can not afford to see this property and the Jabor which has been expended on it recklessly wasted. There can be no doubt but that the Havre-Shelby line is necessary to carry the load required to serve that area. If it was not built this year, it would have to be built in a year or two by the Montana Power Co. if it should undertake to fully serve the arca. Mr. MAGNUSON. Mr. President, will the Senator yield? Mr. MURRAY, I yield. Mr. MAGNUSON. Is it not true that the President today, in his emergency message to the Congress, took pains specifically to point out that the limi- tation of expenditures ought not to be applicd to power, and that he named it as such? Mr. MURRAY. That is correct. The Senator from Washington made a state- ment for the Recorp to that effect this afternoon. Now to destroy the line after it has been almost completed would be a piece of vandalism hard to understand. It would be a flagrant and criminal de- struction of property at a tame when the country is facing a great emergency. I cannot understand why anyone would propose completely to destroy a line which has been constructed and will be available for service within the next month. Certainly that is not the proper thing to do. Furthermore, this action forced on the farmers of Montana will be the begin- ning in our State of a perpctual fued which will never subside, and in the long run it will be a very costly per- formance on the part of the power com- pany and a great injury to the citizens of Montana. When the power company says it will compénsate the Bureau for the loss sus- tained by the destruction of the line, what does it mean? It means that the taxpayers of the country will be callcd upon to pay for it—not the Montana Power Co. Any funds paid out by the Montana Power Co. to compensate for the destruction of the line, if the courts would permit such a fraud on the Gov- ernment, would be a deductible item in the company’s income-tax reports; and, therefore, the taxpayers of the country would be paying for the loss that would be sustained. Also, Mr. Fresident, the consumers will suffor, because, of course, higher rates will ke charged.