Earl Warren: State of Arizona, Complainant, versus California et al.
Mark Wilmer: May it please the Court. Well, we have been handed by counsel for California a portion of the transcript which is headed uncontradicted testimony of JR Ryder which relates to project deficiencies. We are not here to attempt to comb the record nor are we here to make findings which the Master refused to make. We simply say so that it will not be assumed that because we have not contested the statement that we ascend to it. We simply say that we do not agree. We simply say that a proper investigation of the testimonial offered would indicate quite to the contrary but I don't think this Court is the place that we should attempt to resolve questions of fact. I'd like to briefly, if might, turn to Section 8 (b) again because the reading of that demonstrates to us at least two things. I'm not going to read it because it is long but its in substance and briefly provided that the United States, in constructing, managing, and operating the dam reservoir canals and other works, including the appropriation, delivery and use of water for generation of power, irrigation, and other uses shall be subject to and shall conform to the terms of a compact if any between the States of Arizona, California, and Nevada or any two thereof. Now, that is most unusual language in directing that the Secretary shall conform to a compact made by two of the three states and we think that it requires some searching to find out why that is. It then provides, of course, that if the compact is made and approved by the Congress prior to January 1, 1929, that shall govern the Secretary's contracts and that if made subsequent thereto the Secretary's contract shall govern. I would say in passing that originally, the period allowed for compact was a year, but apparently in the haste of the closing of this Congress or the holiday season and all, they didn't extend the period because the Act was approved on December 21st and it was, of course, seven or eight days before the period expire. What I'm leading to is this. The debates in Congress emphasized and made clear one thing, a contest between States' rights and the power of the federal judiciary, the power in the Federal Congress. All through these debates, the question was not, “Has Congress by this legislation, allocated the water?” The question was, “Can Congress constitutionally do so?” And as you have heard before, Senator King at one point said, “I, in effect challenge the right of the federal government to put his mighty hands down upon this river.” And the other point said, “The States' rights are being destroyed.” Now, nothing is said in this authorization, this suggestion of a compact which was to govern the Secretary about appropriative rights. How do you square the notion, appropriate -- appropriative rights, rights of prior appropriation should survive the compact or should survive the Project Act when nothing is said in here with respect to preserving those rights? This is a Carte Blanche authorization to the States to enter into a compact and there's nothing whatever with respect to recognizing appropriative rights.
Speaker: It is also true, however, that the Congress did not undertake itself to make an allocation of water.
Mark Wilmer: We think it did, Your Honor. We think it did and let me -- let me just pursue that on a moment if I may. How, if it please the Court, unless Congress had divided the water, could do if the States make a compact? In other words, unless the Congress felt that it set apart to each of these States their aliquot part of the water could have authorized two of them to compact. Certainly, it wouldn't be said, if it please the Court, that Arizona and Nevada could compact and cut California out. You can't make a division of something unless you own it, unless it's confined to your jurisdiction, and it's within your custody. We say, if it please the Court, that this is another indication that Congress did say they have made an allocation. We say that Congress must have thought. They made an allocation as otherwise they couldn't have authorized two of the States to make a compact since in so doing, they had no right to decide how much they have. Now, I expressed that awkwardly, Mr. Justice Harlan but --
Speaker: I understand.
Mark Wilmer: -- in substance, the Congress had to think that they have divided the water because otherwise it would have been completely irresponsible on the part of Congress to say the two of them, “You can divide between yourself this water as you like.” Now, let me pursue that just a little further.
Arthur J. Goldberg: Well, what you're saying is --
Mark Wilmer: Yes.
Arthur J. Goldberg: -- is obvious that where it could rather depend on Arizona and Nevada (Inaudible) California --
Mark Wilmer: Yes, Your Honor.
Arthur J. Goldberg: (Inaudible) -- what you say?
Mark Wilmer: Yes, yes. I --
Arthur J. Goldberg: (Inaudible)
Mark Wilmer: Or obviously, it wasn't intended that California and Nevada should get together and cut out Arizona. So, the Congress must have thought that we have set apart to each one of these three states their proportionate share of the water. And they said in the substance, if Arizona and Nevada want to get together and raise the ceiling a little bit, fine, between themselves. If Arizona wants to give Nevada 100,000 acres feet, fine! If Nevada wants to give Arizona 100,000 acre-feet of the 300, they said that they don't need, fine! Or if Arizona, Nevada, and California altogether and get together and in the interest of peace, settle these questions, fine! Now let me make one further suggestion, the other reasonable interpretation is, that since Congress have said California may not go beyond 4.4 million that Nevada and Arizona were thereby given the authority from Congress to divide between themselves, the balance of the water which would be the 3 million acre-feet water. We say, if it please the Court, that it is impossible to believe that the Congress, no one gets great treasure of water, this thing that has been fought over and, fought over, and fought over for years that this Congress intended to walk away and leave that to the sole discretion of the courts or the interstate compact. Now, if I may just turn briefly to Section 5 (b). If the Court may kindly examine Section 5 after the provision with respect to water contracts, you will find what? You will find that the Secretary was given detailed directions as to how he should handle power. He was told that in the event there was conflicting applications, he should have a hearing and he was told what policy he was to apply in that hearing. He was to apply the policy of Federal Power Act. Now, can we believe for one minute that the Congress intended to store up this great body of water, this great treasure in the west which is practically, as it has been said an amenity and not a treasure? Can we believe for one minute that they intended to store that water in a great reservoir and then do what? What was the Secretary to do, unless he was given a direction to conform to 4 (a)? What was he to do? Was he to wait for the courts to adjudicate it by a lawsuit? Was he to hold a hearing with respect to the rights of prior appropriators? How was he to do that because Congress gave him no authority to hold a hearing with respect to water rights? They did give him the authority told hold a hearing with respect to power applications. So what is he to do? Wait another 10-year, Wyoming versus Colorado, litigation period? How was he to determine where the waters to go unless 4 (a) told him. And we think that the administrative construction which the Secretary of the Interior followed by allocating first off in Arizona 2.8 million. Next allocating to California the 4.4 million in the first priorities and then allocating to Nevada 300,000, implemented and carried out the directions the Congress gave. Now, I would say that again in closing, to me, it is inconceivable that with a treasure far greater than power, far greater than power, that Congress would have advocated its responsibilities. That Congress would have shown this great treasure up for grabs. The Congress would have said despite the fact that this great treasure is needed and required, we're going to store it until what? Until the rights of prior appropriators are determined and how are you going to determine those? Either by compact which had failed, and failed, and failed or by litigation. And as Mr. Taylor said in response to a discussion by Mr. Carter that I read you yesterday, we have in the Upper Basin litigated for 25 years and with very poor results. I've always thought that a statute should be given a reasonable interpretation and in the public interest and I therefore say, if it please the Court, in our judgment at least, you cannot reconcile the notion of Congress with detailed precision, spelling out how the power was to go. With detailed precision, saying what the Secretary should do if there was a conflict, and then walking away from 32 million stored acres of water -- acre-feet of water, that to me is inconceivable.
Hugo L. Black: Mr. Solicitor General.
Archibald Cox: Mr. Justice Black, may it please the Court. I would like first to say a word about question of justiciability that occupied a considerable part of the Court's time yesterday. First, the -- it is clear that there is enough water in the river to satisfy the presently existing uses. But it is also claimed that there is not enough water in the mainstream of the Colorado River to satisfy the fully matured claims based upon past events. The exact amount which will be available below Lee Ferry is of course unknown and as the Master found unknowable with any exactitude in the future, so that one is dealing here with something of indefinite and perhaps shifting size. But there are certainly no estimates that put the exact amount available after evaporation and channel losses and after satisfying the Mexican treaty in excess of 8 million acre-feet. Now, take the matured claims that already exist or at least are alleged to exist. California claims that she is entitled to 5,378,000 acre-feet based upon what she says are existing appropriative rights. Arizona claims based on a contract with the Secretary of Interior, 2.8 million, and Nevada claims 300,000. Adding the total of those claims, one gets just under 8,500,000 acre-feet which is in excess of what anyone would say was a reliable amount downstream in the future. There's another way of indicating the extent of the clash. I made myself a little table which shows how the conflicting theories of the Master in California would work out at two estimates of the available flow. If you take the -- if the available flow is 5,850,000 as suggested by -- as suggested by the California witnesses, I have had these copy then if it would help the Court why the clerk contest if you wouldn't have write it down. I think it's accurate. It certainly gives the main outlines of maybe some differences about the details. If the available flow is 5,850,000 then under the California proposal, California would get 4.6 million, Nevada would get 125,500 and Arizona would get 1,129,500. Under the Master's Report California would get only 3.4 million against the 4.6 million, Arizona would get 234,000 and Arizona would get something over 2 million so there is a very significant difference there.
Byron R. White: Is it available (Inaudible)
Archibald Cox: This is available after deducting the Mexican treaty in channel losses and so forth.
Byron R. White: (Inaudible)
Archibald Cox: It does not include the Gila River. I'm talking about the mainstream, yes. Now, if you assumed that the available --
Potter Stewart: So the California proposal is a little inaccurate. This California proposal double barreled.
Archibald Cox: This -- this is what California would propose to decree out of the mainstream.
Potter Stewart: Out of the mainstream --
Archibald Cox: Yes.
Potter Stewart: California, of course, says that we have to consider all tributaries too.
Archibald Cox: That's right. Well, this was in -- since the fight is over the mainstream and the question of justiciability relates to claims on the mainstream, this seemed to me to show the conflict between the claims that exist today.
William O. Douglas: If there's no conflict, there were distributaries?
Archibald Cox: There's no doubt but that -- whatever is in the Gila will go to Arizona. There's a question as to how the Gila should be -- there's a question as to what is the surplus over the 4.4 million, and what the 4.4 million should be taken out of it. But I don't think that California wants to use any Gila River water.
William O. Douglas: Except in the computation.
Archibald Cox: Oh yes, in the computation. But even since the Gila, the claims would still be -- have the same conflict as I suggest here, because these are only clients to the mainstream if I were to base this table on all the water in the basin then I would have had to put in more claims to the Gila than there are Gila River water. And so again, we would have the clear conflict between claims based on events that have already occurred. Now, on the other table, I will show you the difference in the allocation of the mainstream under the Master's Report and California's proposal. And there again, there is an obvious conflict between the rights that California says she has today based on past events and the rights which Arizona and Nevada say they have today, based on past contracts with the Secretary.
Arthur J. Goldberg: General, Justice Stewart appears to mean if you have the history of problems, when you have California (Inaudible)
Archibald Cox: Yes, yes. It is based on -- this is an allocation of the mainstream but the computation is based on a universe that would include the Gila. Now, coming to the law, this court in Nebraska against Wyoming said, referring to its early --
Potter Stewart: Just before you proceed, you're basing your position that this is a justiciable controversy before us, exclusively upon these facts that there is not enough water to go around. I take it that you concede that if there's not enough water to go around, we will not have a justiciable controversy.
Archibald Cox: Well, I did not mean to concede it. I thought there was not enough water to go around. And I am basing my argument presently on that point.
Potter Stewart: Because what I understood the Arizona position was that there was enough water to go around.
Archibald Cox: Well, I think that people to some extent are trying to carry water on both shoulders. I think that the problem there is this, that there may be not enough water for purposes of having a justiciable controversy and there still maybe enough prospects of future water so that we do not have to think of all the Southern Californians as saying their farmland shrivel up or the people of the metropolitan district goes thirsty, because there are in the future various contingencies that may fall in. Including as Arizona says the possibility is unsafe. But I think there is an in between point where there is a disaster for Southern California and yet there is a real conflict as to the existing claims. And that's the position which we would think was an accurate description. In the Nebraska against Wyoming case, this Court said, “Wyoming against Colorado indicates that where the claims to the water the river exceed the supply, a controversy exists appropriate for judicial determination. And then referring in another passage to that earlier case, there -- there the only showing of injury or threat of injury was the inadequacy of the supply of water to meet all appropriative rights. But now here, they aren't all based on appropriative rights, Arizona is based on the contract. But it seems to me the same principle applies that the claims based on past amendment exceed the supply. It is important to bear in mind two other things. In the first place, a suit to quiet title will of course lie in the case of water rights as well as in the case of other real estate and this may be thought of as having some of the aspects of a suit to quiet title. The -- if the Court's concerned with that, I can give two references one is to Kinney on his book on water, second edition, Section 1535; the other is to Wylie, the third edition, Section 654 and an illustration which I think is clear occurred to me. Suppose one had real estate to which there were mortgages with the same amounts as this water. And you were trying to borrow some money, claiming that the amounts of the alleged liens weren't as large as the claimant say they are. As I understand it, under those circumstances, he could maintain a bill to quiet his title. Finally, I would remind the court of its decision in Illinois against Wisconsin, when the two little Illinois towns filed an application for -- to determine their right to withdraw water from Lake Michigan, saying that the lake estates denied that right. The bill alleged that the towns couldn't borrow the money to build the plants to draw the water until these claims were adjudicated. The point was argued in full and while the Court wrote no opinion and I suppose it's not definitely decided, nevertheless did grant permission to file the bill between the States so that again points in this same direction. I would emphasize, finally the importance of the clarification here, in two respects: First, this controversy clouds the title and blocks the development of the river; second, from the standpoint of Arizona and who would agree from our standpoint with respect to the Indian reservation, California keeps changing the situation all the time. They keep taking more water and then they come in and say, “See, we are entitled to this because we have been using it”. And this in itself seems to me a changing in the situation and affecting of the Arizona and Indian rights, which makes the case sharply justiciable. Now, on the merits from the standpoint of the United States, this case has two main parts, the apportionment of the mainstream water between Arizona, California and Nevada, and the second, the claims of the United States to water in behalf of the Indian reservations the National Forest Park and the Wildlife Refuge. The mainstream controversy which I will discuss first itself has two principal divisions: First, the so-called limitation issue; and second, the so-called priority or ratability issue. The former question, I think might better be stated a little more broadly by saying that it raises the issue, what's the subject matter to be divided? What is the supply of water with which the Project Act is primarily concerned? Is it all the water in the Lower Basin as California contends? Or is it -- does the Project Act deal primarily within Section 4 (a) only with the mainstream water controlled by the Hoover Dam and related works. Once that question has been answered then one can go on to the priority or ratability issue. Now, the controversy -- limitation controversy focuses of course on Section 4 (a) of the Project Act and on the first paragraph of Section 4 (a). If the Court wish to refer to it, it appears on page 382 of the Master's Report, which provides that California must accept a limitation that all the water she takes shall not exceed 4.4 million acre-feet of waters, apportioned to the Lower Basin States by paragraph (a) of Article III of the Colorado River Compact plus not more than one-half of any excess or surplus waters unapportioned by said compact. The dispute is over the composition of the universe that Section 4 (a) divides at least, divides in the sense that it says California can have only so much. California says that she is entitled to remember the 4.4 million out of the 7.5 million acre-feet of all the water in the entire Lower Basin plus the Gila. Thus, she is willing to read the compact literally. Because the compact on page 373, rather clearly apportions all the water in the basin but she is unwilling to read literally the words plus not more than one half of any excess or surplus waters unapportioned by said compact. Because the compact says that the waters not apportioned by Article III (a) and (b) shall be held for future apportionment. And California has to give the words not apportioned here a different meaning than the words unapportioned have in the latter part of the compact itself. The Master agrees as indeed as everyone that these words 4.4 million acre-feet of water is apportioned to Lower Basin States by paragraph 4 (a) of Article III of the Colorado Rivers compact are to be read as referring to the compact. There is no doubt about that but he said that the draftsman of the Project Act, acted on the supposition that Article III (a) of the compact, apportioned to the Lower Basin, 7.5 million acre-feet of mainstream water. The Congress was wrong, the Master said, in that supposition that the compact apportion is to 7.5 million acre-feet out of all the water in the basin. But it's perfectly clear, right or wrong that Congress made that supposition. And then he said the question is -- shall my or the Court's interpretation of the Project Act be governed by the true meaning of the compact or shall it be governed by what Congress clearly suppose was the meaning of the compact and he concluded that the latter meaning of the Project Act was the one that should be followed in order to give effect to the intent of Congress. We differed from the Master only in one minor respect. It seems to us that it is unnecessary and indeed inappropriate to construe the compact at all. The Upper Basin States are here, Arizona would put a different meaning on the compact than the Master did. It seems to us that that question doesn't need to be decided because we think that the proper way to interpret Section 4 (a) is to give Article III (a) of the compact, the meaning that Congress suppose it have and that that controls in the interpretation of the Project Act. There are three principal grounds for this conclusion. One is that Congress was dealing what it enacted to Project Act primarily with mainstream waters and one would naturally suppose also not inevitably that the limitations would be written in terms of the mainstream waters with which the project was dealing. Second, we find in the second paragraph of Section 4 (a) in support for the Master's reading and our reading that Congress intended to apportion 7.5 million acre-feet of mainstream water. There are several provisions in the second paragraph, 382 and over on 383 that seem to indicate this to us. The Master mentioned most of them. In the first place, item one, authorizes an agreement which would apportion to Nevada 300,000 acre-feet and to Arizona, 2.8 million acre-feet of the 7.5 million acre-feet annually apportioned to the Lower Basin by paragraph (a) of Article III of the Colorado River Compact. Now that, if you couple those references of two million eight point three million with the 4.4 million given to California, you would get the whole 7.5 million acre-feet. If that is the whole 7.5 million acre-feet apportioned into the Lower Basin, then one cuts out two Lower Basin States in the -- supposes the Congress wasn't concerned with them at all. Again, item two, provides that Arizona may annually use half the surplus of excess and half of the excess or surplus waters unapportioned by the Colorado River Compact. The compact itself, reserves the surplus over the 7.5 million feet of basin water, for future apportionment and Congress can hardly be suppose to have said, “Well, Arizona can have half of that.” Especially when they said in the first paragraph of Section 4 (a), California can have half of it too because they would have been taking the whole surplus.
Potter Stewart: What? Aren't you talking about the first million of the surplus?
Archibald Cox: I think -- I think not. It speaks of the surplus unapportioned. California says, that means the first million of which was allocated to the Lower Basin, but the only time the contract speak -- the compact speaks of waters unapportioned is in page 374 in item 3F. The word speaks of the beneficial equita -- further equitable apportionment of the beneficial use of the waters of the Colorado system unapportioned by paragraphs (a), (b) and (c). So there, it speaks as if (a), (b) and perhaps (c) had made some kind of an apportionment. Finally, Mr. Justice Stewart, and I think most persuasive of all, the second paragraph of Section 4 (a) in item three says and, and this is certainly an additive and, and that the State of Arizona shall have the exclusive beneficial conceptive use of the Gila River and it's territories within the boundaries of said State. This is in addition to what have gone before or what have gone before then must have been an apportionment of the mainstream water. It is suggested by California that that's an inappropriate reading that this really aren't conjunctive and that all, that there were some duplication in this that what it said here that Arizona made by this compact get 2.8 million acre-feet out of the Lower Basin's share and then it went on and said that Arizona can have all the Gila as identifying where it's coming from. Well, that is possibly, grammatically except at the time everybody supposed that the Gila have three and a half million acre-feet in it. And it would be rather silly to say that Arizona can have 2.8 million and she can have exclusively out of the Gila, when the Gila contained 3.5.
Potter Stewart: Part of Gila was in New Mexico.
Archibald Cox: Yes, but I don't think such -- I'm not sure. I don't think that the difference --
Potter Stewart: But that would count.
Archibald Cox: I don't think so, but I want to emphasize, I'm not sure. I don't want to mislead the Court. One other point with respect to the second paragraph, if you put the first -- if you look at the first paragraph and the second paragraph of Section 4 (a), they fit together on our reading, very neatly as two halves of a whole. It's like taking two pieces of paper which looked detached and you find it suddenly they fit together, the little hole which I've called it over corresponds to the dispute about the meaning of the word. If you fold it out, in other words, if you read it our way, they match perfectly which seems to me not to be wholly chance as indeed the legislative history shows.
Speaker: What significance if any is the October of 1963 going? Were they provided for further equitable --?
Archibald Cox: When it would -- as my expression showed, I don't know if there's any significance still, it is -- I've forgotten. I don't know of any particular significance. It would have come about 40 years, wouldn't it, after the meeting through whatever significance that may have. The other point on which we rely for -- to sustain our reading of Section 4 (a), is the legislative history which I think if anyone reads it through, have hardly helped concluding that it demonstrates almost beyond the doubt of the correctness of the Master's reading with respect at least to what Congress intended. And this is particularly true if you trace the events through from the initial proposals of California and Arizona when they were bargaining, to the Governor's Conference, to the proposals made in the Senate and then down through the sequence of the various amendments to the final vote. I'm not going to ask the Court to go though that long process with me again as I did last time, but there are five points concerning the legislative history that I would simply like to emphasize so that if any of the justices would go through it again, you may bear them in mind, is the conclusions which we think should be particularly noted. First, there was early and unanimous agreement that Arizona should have the waters of the Gila River in addition to her share of the mainstream. You'll find this in all the proposals except to one side and there -- they go on and argue about the mainstream.
William O. Douglas: But when you get to the legislation, you'll find that only on the contingency that a new price state compact is executed -- California is that true?
Archibald Cox: You'll find that to be true. I think the explanation is --
William O. Douglas: I suppose you can find on --
Archibald Cox: The reason you require the compact, I think, Justice Douglas, with respect to Gila was because it would deal not only with the apportionment portion of the United States share but with the burden of the Mexican treaty. And Congress apparently was not undertaking to prescribe a solution with respect to the burden of the Mexican treaty. As to that, they agreed that it should be contingent upon a compact between the states. I think that's the reason. But this was made contingent on the compact. At least, it certainly is an adequate reason and it again fits in with the legislative history.
William O. Douglas: But you don't find it -- there any -- have I missed any other thing in the laws themselves that touch specifically on the award of the waters of the Gila to Arizona?
Archibald Cox: No, I didn't observe anything else. Second, as I said, the dispute focused upon the division of the mainstream. And very quickly narrowed to the question whether giving Nevada full of 300,000 acre-feet, should the remaining 7.2 be divided 4.6 to California and 2.6 to Arizona. Or should it go 4.2 to California and 3 million out of the mainstream to Arizona, and of course the final compromise split the difference. Third, everyone who spoke assume that the universe to be divided was 7.5 million acre-feet in the mainstream of the Colorado River. And fourth and this is particularly important, I think Justice Douglas, throughout the legislative history, the first and second paragraphs of Section 4 (a), were treated as -- as conjunctive, as fitting together. Indeed through merely all the debate, they were put together and both were mandatory rather than contingent upon a compact. They were two parts of a single arrangement and this gives significance to what I was saying earlier. Finally, every senator who took a significant part in the discussion explicitly recognized that the division was being made of 7.5 million acre-feet of mainstream water plus an unascertained surplus in the mainstream. You find, for example, after the amendment was passed on the first paragraph. And while the second part was being the debated that Senator Hiram Johnson came into a colloquy with Senator Hayden of Arizona. Senator Hayden said, “The senator fails to understand that there are two elements in this water controversy.” One is how the seven and a half million acre-feet to be divided in the Lower Basin. The Senate settled that by vote, California may have 4.4 million acre-feet of the water, it follows logically that if that demand is to be conceded as everybody agrees, the remainder is 2 million acre-feet for Arizona. That settles there. Mr. Johnson: “How much from the Gila?” “Whatever is in it that is ours anyway.” Johnson: “How much water does Arizona get from the Gila?” And then Hayden said, “Well, let's take your figures.” Senator Johnson, “My figures are at a minimum, three and a half million acre-feet.” Mr. Hayden: “yes”. Mr. Johnson: “Alright. Now, in the division of water that the Senate saw fit to impose yesterday, Arizona had 2 million acre-feet and 3.5 million acre-feet from the Gila, did not?” This is Senator Johnson of California, and Mr. Hayden said “Yes, correct, making 6,300,000 acre-feet.” California was given with claims of protective right, 4.4 million. Now, there you see that we're debating the set to what became the second paragraph of 4 (a) and we're debating it in terms of Mexican treaty wise, which I think confirms the explanation that I suggested, Justice Douglas.
William O. Douglas: When you follow those things down, I suppose you can find almost anything in this legislative history.I'm so confused. But when you follow this down to the Phipps' Amendment, you will find Phipps himself saying, as I recall, that those -- that 4.4 million acre-feet is out of system waters this is what he said.
Archibald Cox: The 4.4 million came, excuse me. Senator Phipps' statements came long before this. They came before the Senate did oppose its apportionment. I wouldn't -- it's there.
William O. Douglas: Yes.
Archibald Cox: In fact, I didn't think he said it came out of system water. It seemed to me, he did call attention to the Gila. I would think that the way he called attention to the Gila was much as Senator Johnson did on the colloquy that I just read. He said, “Don't forget that Arizona also has the Gila”, but we don't have in front of it. Now, I must come to a point very closely related to the limitation of that question, but one which is a little bit separate and that's the matter of the diversions from the mainstream above Lake Mead. The Master, apparently suppose that his view of the Project Act, in Section 4 (a), compelled him to leave out of account, compel the Secretary to leave out of account, any diversions made from the mainstream above Lake Mead. And as a result, he invalidated you will recall the provision in the contract between the Secretary and Arizona. That if Arizona diverted any water upstream then what she got under the contract should be reduced. It's seems to us that the Master was wrong on that point. Before coming to the reasons, it might be worthwhile to illustrate very briefly the purpose and the effect of those clauses in the Arizona and Nevada contract. And I will take the Arizona contract for an illustration. Let's suppose being very optimistic, there were eight and a half million acre-feet available in the mainstream below Lee Lake -- below Lee Ferry and from Lake Mead. Under the Project Act and the contracts, Nevada would get 300,000, California would get 4.4 million and -- plus one half of the surplus and Arizona would get 2.8 million plus it's half of the surplus giving California a total of 4,900,000 on my assumption, and Arizona 3,300,000. Now, suppose that Arizona takes a million of the 8,500,000 out above Marble Canyon, now, there would be seven and a half million acre-feet available from Lake Mead. Under the Master's view, the Secretary would give Nevada 300,000, California 4.4 million and Arizona 2.8 million. Arizona would have stolen if I may put it that way a million feet upstream, so she would now be getting 3,800,000, instead of the 3,300,000 she would get if it all came from Lake Mead. The effect, in other words, on my supposition as to figures would be that Arizona takes California's half of the surplus. The disputed clause, if valid, of course prevents this, because the amount taken out above would be charged against what she was entitled to get from Lake Mead. We submit that the clause in the contract is valid as an exercise of a power incidental to the Secretary's power to make contracts for the waters impounded behind Hoover Dam. The predicate upon which the Project Act and the contracts both rest is that Lake Mead and Hoover Dam are to be the source for the division of the mainstream waters of the Colorado River. What the disputed clause seeks to do is to preserve that fundamental condition in a sense or at least to treat things as if the fundamental condition were preserved, in the event that one party seeks to change it.
Potter Stewart: Well, in order to really preserve that fundamental condition, wouldn't it, provisions has to be made in the contract involving withdrawal of water from -- by Nevada for example, Muddy River and Meadow Valley and by Arizona from the Little Colorado River and not --
Archibald Cox: No, because the Little Colorado River is not a part of the Lake Mead water.
Potter Stewart: It's not.
Archibald Cox: Up to that part, I would agree with you.
Potter Stewart: It's not huh?
Archibald Cox: No. the Little Colorado comes in, does it not, below --
Potter Stewart: Comes in to Lake Mead, I thought. It comes in to Colorado which comes in to Lake Mead. It may not -- maybe this river flows in the opposite direction.
Archibald Cox: Your Honor is quite right and what -- there would have to be -- to carry this out exactly, equal -- a similar provision with respect to the Little Colorado if it were enough worth worrying about.
Potter Stewart: And Nevada, as I look at the map, can't get any --
Archibald Cox: Nevada -- Nevada again -- and it does apply to the upstream tributaries.
Potter Stewart: Well, I can't get any water directly from the Colorado River without going to Arizona.
Archibald Cox: Any -- I would say this that that only should apply but as I remember it does apply to any water that flows in between Lee Ferry --
Potter Stewart: In to Lake Mead.
Archibald Cox: In to Lake Mead. And that principle, I accept, my geography --
Potter Stewart: Well, I'm not sure.
Archibald Cox: -- was wrong. Now, I suggested earlier that what the Secretary was doing was attempting to preserve for a -- as if it were preserved, a fundamental condition of the contract. This is a rather familiar type of condition. If, I promise for example to dig a 200 foot ditch for Mr. Ely at the rate of 25 feet a day, one of the implied conditions will be that he mustn't sleep out at night and fill in ten feet every night that I've dug that day. Again, if I promise Mr. Wilmer to deliver him daily, 5000 weighed milk for my dairy, I'm excused from performing surely to the extent that Mr. Wilmer steals my milk for my cows. The case here is in principle, I submit, just the same as the latter illustration. Furthermore, it seems to me this is the kind of incidental power that an agent would be given in these circumstances even if it was not spelled out in so many words. Let's suppose for example that I were authorized by a large dairy farm to contract for the delivery of its milk, surely also and only its milk so that I wouldn't be authorized to sell any cows but surely, I would be impliedly authorized to put in the contract a covenant that the obligation to make daily deliveries should be reduced by the extent to which the buyer killed the cows or slipped in and stole the milk first. And that is all we say that the Secretary was doing here. Now, the Master raised two objections. He said that these clauses in the contract attempt to take away from Nevada and Arizona the right to determine priorities intrastate. We deny that they have that right and I don't want to debate that point now. But even if they have it as we have shown in our brief, this is not true, Arizona would be free to protect the downstream appropriator and not permit the diversions upstream under her law as it is today. Or she chose to change her law, the Secretary's contract wouldn't stand in the way, it would simply determine what should be done on those -- under those circumstances.
Potter Stewart: The contracts by the Secretary where the States of Arizona and Nevada and with various metropolitan and other --
Archibald Cox: Yes.
Potter Stewart: -- districts in California and not with the State. The Secretary's contracts with the State of Arizona --
Archibald Cox: It's with the State of Arizona.
Potter Stewart: And with the State of Nevada.
Archibald Cox: State of Nevada.
Potter Stewart: And not with the State of California.
Archibald Cox: Right. The other objection that the Master raised is he said this would make the Secretary's contracts with users in Arizona less than contracts for permanent use. I think the answer to that is that any contract for permanent use is certainly contingent under being water. Water may not come down because it doesn't rain, but it may also come down because somebody -- not come down because somebody has lawfully diverted it upstream and surely permanent is subject to that qualification. So we think that the contracts themselves are not only consistent but authorized under the Master's reading of Section 4 (a) and that they could perfectly well stand on that reading and indeed in a sense confirm it. I now turn therefore to the other main issue with respect to the mainstream. The matter of the priority issue as Mr. Ely has called it, the matter of ratable deduction as it might be called in times of shortage. Of course, we've already very largely answered the question. What is to be -- about priority or division if the mainstream is seven and a half million acre-feet then California gets 4.4 million, Arizona gets 2.8 million and Nevada gets the remaining? If it's more than seven and a half million, they share equally or this is spelled out in the Act, in the contracts taken together. The only uncertainty is what happens when less than seven and a half million acre-feet is available, and on this point, neither the Project Act nor the Secretary's contracts given explicit answer California's thesis reduced to its simplest terms is this, the central theme of western water law is that one who first takes the claim and begins construction is entitled to the water claim that the Boulder Canyon Project was put down in that legal context without affecting the law or rights on the river except for the California limitation, that California having got there first and stated out the claims, is entitled to have them satisfied regardless of the effect upon others subject again only to the limitation. The opposing view which was espoused by the Master and Arizona and Nevada and the United States, centers about the proposition that the Project Act, taking a fresh start rejects the law of prior appropriation as unsuited to the development of the Colorado River Basin. And under -- and especially under national auspices, and instead provides its own rules of apportionment to be filled in by the Secretary of the Interior. And although there's no expressed provision in the Act or contracts for what will be done when there is a shortage that is less than seven and a half million acre-feet because it's perfectly clear that Congress assumed there wouldn't be any shortage. Our view is that nevertheless the Project Act and the Secretary's contracts contemplate equality of rank or priority among the states in respect to the quantities of water allocated to each regardless of when their projects were undertaken. Now, I propose to develop our reasons for thinking that that is the contemplation of the Project Act and the Secretary's contract.
Potter Stewart: This is putting to one side the language about present perfected use.
Archibald Cox: No, I'm coming to that. That's an important -- excuse me, I don't mean to be so informal but it's an important part of my argument. I'm now going to take up the indications and the situation the Project Act and the Secretary's practice that seemed to us to indicate that a rule of ratability is much more consistent with the Act and the contract then resort to the law of prior appropriation. First, in interpreting the Project Act, we submit, that the Court should keep consequently before it, two dominant facts. One is that the chief obstacle to the development of the Colorado River Basin was the law of prior appropriation and its consequences. The need was to assure the States' equality of access to a fair share of the water whether the State should be early or late in its development. But the Upper Basin States were worried before the compact was signed, about the record growth of California and refused to support any Colorado River project within -- until the law of prior appropriation should be set aside at least as between the Upper and Lower Basin so that they would have equality of right when they needed the water. That was done in the compact as between the Upper and Lower Basin. Similarly, the next great obstacle to undertake into the project was the fear that California would expand its uses before Arizona. So Arizona said, we can't ratify the compact until we're guarded against this consequence of the law of prior appropriation. And one of the main purposes of the Project Act, we think, undeniably, was to get over this obstacle to beginning the project. Now, the second dominating fact is that the project itself would show so far over overshadow any other development on the river as to make it appropriate to take a fresh start in the delivery -- in the division of the water provided that vested rights or are perfected rights, Mr. Justice Stewart, were protected. It's the vast expenditures by the United States for the Hoover Dam and the related works that made the Colorado River available for beneficial use. Before the project was undertaken, there were less than three and a half million acre-feet of uses downstream. The necessary works were largely at the mercy of the river. There was no All-American Canal to carry water to the Imperial and Coachella Valleys, twice the river it changed its course so that none of these people downstream would have any water. California speaks of its claim the water for the Metropolitan Water District as a prior appropriated rate, but the truth is that in 1929, it was as I said that the last argument just to gleam in somebody's eye or at least some surveyor's maps. And it's conceded that that Metropolitan Water District project never could have come into being if the United States had not dealt the Hoover Dam and started to plan for controlling the waters of the river.
Hugo L. Black: Does the record show how much more water has been made available by the governmental construction for use of beneficial purposes that could be depended on before the construction took place?
Archibald Cox: That would be -- that would present the same difficulty in estimating that there is in knowing what the available supply is today. If California is very low estimated of the available supply of 5.8 million, isn't it? If we're correct, one could subtract the uses in 1929 of 3.1 million and it would find that it had not been quite doubled but it must -- you must remember that the uses before 1929 were uncertain. There was this dam through Mexico in which there was some trouble with. The river was -- kept changing its course at least on big floods, it changed its course.
Hugo L. Black: Why put in the word dependable water supply for beneficial use?
Archibald Cox: I don't -- I don't know what one could have said in 1929 was the dependable supply. Certainly, if they went into the South case, of course, again and started emptying into the salted sea, the dependent -- the Imperial Valley would have no dependable supply until somebody again diverted it. I think that it certainly -- the river -- the project more than doubled the reliable uses with that. Turning now to the Project Act, we find in it ample proofs that the Congress did take a fresh start based upon a statutory method of allocation. Section 1 of the Project Act, you'll recall, on page 379, authorizes the Secretary to construct and operate the dam and incidental works in the mainstream for the delivery of the stored water thereof for the reclamation of public lands and other beneficial uses. And Section 5 tells him, in part, how he is to do that. The first sentence authorizes him under -- that's on page 384, authorizes him on under such general regulations as he may prescribe to contract for the storage of water in said reservoir and the delivery thereof. And then the last sentence of Section 5 over at the top of 385, explicitly states, no person shall have or be entitled to have the use for any purpose of water stored as it foresaid, except by contract made as herein provided. There couldn't be any clearer evidence of the intention to take a fresh start. Rights to the use of water are to depend on contracts with the Secretary. No person shall have any right to the use of the water unless he has a contract made under the statute. Now, we think that Section 6, turning over to page 387, not only confirms our idea that Congress was taking a fresh start but that it also impliedly excludes any notion that the Act recognizes or requires the Secretary to recognize mere appropriative rights. Section 6 provides the dam and reservoir provided for by Section 1 hereof shall be used first to river regulation and so forth; second, for irrigation and domestic uses and satisfaction of present perfected rights in pursuance of Article VII of the Colorado River Compact. Article 8 of the Colorado River Compact provided present perfected rights to the beneficial use of the waters of the Colorado River System are unpaired -- unimpaired by this compact. You see, they weren't concerned with the mere appropriative rights but present perfected rights. Then it goes on to say that when the storage capacity of 5 million acre-feet shall have been provided on the mainstream, those perfected rights shall attach to the stored water instead of the original flow.
Hugo L. Black: How are those protective -- those perfected rights could be determined?
Archibald Cox: But the meaning of -- I think this was to be determined of course first by the Secretary because he is instructed to use the water for this purpose. In the case of dispute, I would suppose that an appropriate legal action could be brought than when it comes to what substantive rules would govern which is perhaps what Your Honor had in mind. Let me say --
Hugo L. Black: May I ask you -- perfected rights.
Archibald Cox: Yes.
Hugo L. Black: You're talking about the future.
Archibald Cox: No. The present perfected rights.
Hugo L. Black: Present perfected rights based on assumptions and what has been done in the past.
Archibald Cox: Well, now, this requires saying the word about the nature of the water right. A water right one begins to acquire by making a claim, and under some state laws, there is a procedure for making and filing a claim. And then he begins to commence the construction of these dams and ditches and anything else that he needs to get the water and apply it to beneficial use. When those two steps have been taken, the appropriator has an inchoate right, and when he perfects it, it will then date back to the time when he made the claim and began constructing the dams and ditches. Suppose, for example, that he makes his claim and begins construction in 1925 and the he finishes the water and applies it for beneficial use in 1935. When he does it under the law of prior appropriation, his right would date from 1925 and it would take precedence over a person who says began his project and finished it in 1930.
Byron R. White: (Inaudible)
Archibald Cox: I think not at all.
Byron R. White: (Inaudible)
Archibald Cox: Well, I simply meant mechanically, the Secretary would determine.
Byron R. White: (Inaudible)
Archibald Cox: Whether it be state or federal substantive law. So far as I know, that makes no causable difference in this context.
Hugo L. Black: Why?
Archibald Cox: Because I don't think that there is any right which was --
Hugo L. Black: Is there any dispute here?
Archibald Cox: I don't think so.
Hugo L. Black: There's an accused dispute.
Archibald Cox: No. There's no dispute about this.So far as I know -- so far as I know, there is no right to Justice Black which would be perfected under the law of one state in 1929, the effective date of the Act. And which might not be a perfected right at that time if you took some federal distillation of water law and not the law of a particular state.
William O. Douglas: Your federal distillation would be what a future Secretary or the present Secretary might decide upon. How can you tell?
Archibald Cox: I think --
William O. Douglas: There's no federal law of water in this field.
Archibald Cox: No, but I suppose that since these were well-known terms, present perfected right and in a minute, I'll get back to stating the complete definition of present perfected right but since these were well-known terms in the law of all these western states, just as one could get a distillation of the law of agency so one could get a distillation of a perfected right. But our case doesn't at any sense depend on this. It does as Mr. Justice Black suggests doesn't seem to me that it's before anybody now. The Master seems to have supposed that what was a perfected right in 1929 would depend on the law of the state in which the man claims for water. And where so far as the perfected right goes, entirely contend to have it determine according to that law except in the case of the Indian reservation.
Byron R. White: What did the Master think that the applicable rules would be in making contracts inside a state with water uses? How was he to determine, which users would get what water?
Archibald Cox: The Master thought that state law was to control. We accepted to that and have argued in our brief that he was wrong or that in any event that point needs not to be decided here. I don't think it really bears on the place that I'm now here to argue.
Byron R. White: If you argue -- you argue in your brief that he was wrong?
Archibald Cox: Yes, yes.
Byron R. White: And that there should be a federal rule of --
Archibald Cox: We simply argue that the Secretary has freedom to choose following the instructions in the statute, what lands will be reclaimed and who he will give contracts to. Once he gives the contracts then they will -- then the water rights under Ickes and Fox might well become those of the attached part of the land.
Byron R. White: Entirely aside from who may have originated some appropriative rights or be in the process of perfected --
Archibald Cox: Entirely aside from any rights except present perfected rights. I think we ought to get back to what was meant by perfect --
Potter Stewart: Well, those aren't in issue here, I understand.
Archibald Cox: The point that I want to make is that the instruction to respect present perfected rights is an implied repudiation of the notion that simply mere appropriative rights are to be recognized under this Act. And --
Hugo L. Black: You mean by appropriative right, it's been staked out --
Archibald Cox: Yes, let me -- let me, I was coming to that a few moments ago. An appropriative right is one that can be used to cover one which has been staked out construction is going forward. But no water has been put -- has been diverted and put to beneficial use. To get a perfected right, under the law of all the western water states, one must do more. He must divert the water for beneficial use and in most states, he must put it to beneficial use as well divert it and get it down to his field. And it is only when he has put it to the use and it is only to the extent that he has put it to use that the right is perfected.
William J. Brennan, Jr.: And this is prior to 1929?
Archibald Cox: And then when the Congress spoke in 1929, a present perfected right, we think it meant those that were perfected by that time, in other words, for our purposes, rights perfected prior to 1929. Now, I want to emphasize that this was a widespread -- universal, I think, I could say usage of the term perfected. One finds in Kinney, one finds in the State of Washington statutes. One finds it in a member of cases and that I think really there'd be no room for dispute as to what is necessary to perfect a right --
William O. Douglas: I think that is quite right, Mr. Solicitor General in my State of Washington. What you say is true but it is also true that once a right is perfected, the water right is marketable there and very often been sold and then applied to different land.
Archibald Cox: That may be true. I suppose under the Reclamation Act, that may not be -- may not be possible because it must be pertinent to the land. But otherwise -- but I don't think we're concerned with that here.
William O. Douglas: It went so far as the -- well, we don't know. If you were an engineer and you were going to design this new Arizona project, wouldn't you have to know something about where the water rights were?
Archibald Cox: You would have to know -- you would have to have two things. You'd have to know what were the rights perfected as of 1929 and you'd have to know how much water Arizona could get through the Secretary. And now, the Secretary told Arizona that how much Arizona users could get from the Secretary. The Secretary told them that, the only question is whether his contract with Arizona is valid against California's claims.
William O. Douglas: Or whether or not his decision is to how the water will be used in Arizona would be consistent with the claims of Arizona landowners.
Archibald Cox: Well, we haven't got to -- we are not to that point.
William O. Douglas: But aren't you to that point? Mustn't you got to that point before you setup your irrigation system? How could you, as an engineer, design it unless you know what land was to be served?
Archibald Cox: Well I think that --
William O. Douglas: You would know what --
Archibald Cox: -- I don't think anybody suggest that there are any substantial number of rights in Arizona other than the present perfected right and the claims of the Indian reservation that the Secretary would be bound to respect, so my first answer is I just don't think there are enough for them to worry about although the Arizona counsel can say better than I. Second, we do argue, I hesitate to take time for it. We do argue in a brief that it is up to the Secretary to decide with whom he will contract and that state law has nothing to do with it.
William O. Douglas: Now let's assume it's the other answer. If the Secretary can decide it --
Archibald Cox: Yes.
William O. Douglas: -- then of course --
Archibald Cox: Well, we think that's consistent with the Act.
William O. Douglas: But if state law governs then you have a quite different considerate problem.
Archibald Cox: I don't --
Hugo L. Black: Mr. Solicitor General, may I say that my trouble with this argument from the beginning in the subject to what law that governs has been this. If the Secretary -- if the man to his rights, in holding the allocation has been made then there are now no disputes between any persons claims under the state law, and the fact that the Secretary is hiding something and between him and the Secretary. I do not see how that is into the case or why we should lock out into such an important piece of law in a matter of this compact until we have accurate controversy. Now, after the government has built its dam, maybe, sometime there will be a dispute that those states still have the right to decide who will get it but I haven't seen it in this case.
Archibald Cox: Well, we agree with that completely, Mr. Justice Black. We have so argued in that brief that there is no occasion for the Master to express himself upon it and that there is no occasion for us to discuss it now. The real question is only down to the level of the allocation to the several states. And what I was trying to suggest is the taking of our definition of present perfected right which I haven't heard seriously disputed the Master's definition. Then the fact that the Congress said with respect to present perfected right is a strong indication that the Congress was not concerned with the law of prior appropriation that it was, as I say, taking a fresh start. Now, that I think follows by way of interest with three reasons. In the first place, having mentioned one that almost impliedly excludes the other; second, the -- if the Congress assumed that the law of prior appropriation was to be in effect, there was no reason to direct anybody to respect present perfected rights because the law of prior appropriation would cover those rights as well as the broader class of those that haven't been perfected; the third reason is, that the direction to respect present perfected right is inconsistent with recognizing the law of prior appropriations because one may get a perfected right before 1929, which under the statute would be senior and specifically senior to the unperfected claims of the California Metropolitan Water District and the excess claim, the increased use claim of the of the Imperial Valley which of course ancillary restraints the two claims as to which this is important.
William O. Douglas: How do you explain the incorporation of the provisions of the reclamation law?
Archibald Cox: I think there is ample scope for the provisions of the reclamation law without their bearing on this. I would answer the argument based upon as Section 18 or 14, whichever it is, that incorporates the reclamation law.
William O. Douglas: I think both of them pair on it.
Archibald Cox: One does expressly and the other doesn't. If the one that does expressly says, “Except as herein provided.” On the first place, we say that it is otherwise herein provided.
Earl Warren: Section 14.
Archibald Cox: Section -- thank you sir. Second, there is nothing in the reclamation law that deals with the claim -- the apportionment of water interstate.
William O. Douglas: Oh, we rule quite contrary in the Nebraska and Wyoming.
Archibald Cox: As I understood that part of Nebraska and Wyoming, you said that under the reclamation law, the States, the United States was not entitled to a separate apportionment because the States were there to represent the beneficiaries of contracts with the Secretary. But that wouldn't indicate that the reclamation law supplied a rule for dividing this water between --
William O. Douglas: We applied it specifically to interstate priorities in that case. We didn't say it -- we didn't say that it was an absolute rule but we say that absent to other consideration that was to govern.
Archibald Cox: Well, perhaps -- I simply have to submit my reading of the case, perhaps I've got that.
William O. Douglas: You're one of the members of a long distinguished line of Solicitor Generals who has argued the same position over the years, trying to get the water rights in the hands of the federal agent rather than state law.
Archibald Cox: Mr. Justice Douglas, I really don't think that we're trying to argue that proposition today perhaps --
William O. Douglas: I'm not saying --
Archibald Cox: -- with all my life to do it (Voice Overlap)
William O. Douglas: I'm not saying we're --
Archibald Cox: -- I don't think it's involved here.
William O. Douglas: I'm not saying that you're wrong and --
Archibald Cox: And the other point that I would like to submit by way of comment on the Reclamation Act is that as we understand the way this Court has construed the Reclamation Act in Section 8 of the Reclamation Act. It has never held that the Reclamation Act requires the Secretary to observe state law in deciding what lands will be reclaimed and who will get the benefits of contracts with it. Now, it had -- does tell him as was recognized in the Gerlach case that the Secretary in getting rights for reclamation project is to respect the laws of divested rights within the States. And in Ickes and Fox, it was indicated that to some undefined extent, a state law might affect the rights of those who have contracts with the Secretary. But in the Ivanhoe case, the Court said and I know no case contrary to it, that when it came to determining -- to running the project, to determining who would get the contract that the Reclamation Act did not bind the Secretary. But I want -- I really think this is beside the main point here. The point I'm seeking to emphasize is that they didn't take a fresh start and that the start that they took seem to repudiate the law of prior appropriation. Now, I would like to --
Potter Stewart: In a word -- in a word, your position is that all of these add up to giving the Secretary absolute and unfettered discretion as to whom he will make contracts with within the state limitations except for present perfected rights which he must respect, is that it?
Archibald Cox: Yes, but the point that I'm trying to --
William O. Douglas: All democrats and all republicans doesn't include --
Archibald Cox: I presume that there are some --
Hugo L. Black: In some division --
Archibald Cox: -- implied restrictions. I was going to say and I think this answers your questions Justice Black. Really, the point we're concerned with, I think Justice Douglas, is antecedent to that. What we say is that the Secretary, being bound by the general guidance of the statute, has the authority to say that Nevada gets 300,000 acre-feet and Arizona gets 2.8 million, and they made contracts with the California users within her allocations.
Byron R. White: But furthermore, you'd say --
Archibald Cox: Now --
Byron R. White: Furthermore, you'd say that within the State, he has the same power.
Archibald Cox: But we don't think that question has to be --
Byron R. White: Well, I don't. But that's your position.
Archibald Cox: That's our -- that's our --
Byron R. White: And --
Archibald Cox: But I would like to keep the two separate because I don't --
Byron R. White: Yes but isn't there another -- you say not only that it's the Secretary who is to decide, but that the rules he follows are also his own. And he needs not to have any reference to state law or any equities that people within the State may have under their law.
Archibald Cox: He must have reference to the statute.
Byron R. White: That's all of it. That's all --
Archibald Cox: The statute gives very considerable instruction. For example, it gives instructions as the section has been mentioned before in the argument and I think not from the brief. But you will note that there are instructions over in Section 9 about who shall have the first opportunity to get contracts with the Secretary on reclaimed lands of federal instruction. Now, it seems to us that there are several indications which I would like to mention very briefly, both in the Project Act and in the compact that the right of the States which was pretty well marked out by Section 4 of the Project Act, the Secretary doesn't have any real discretion in that respect, are to be treated readily. In the Project Act, in the compact, I should say, it seems to us that there are three that treat these sovereign bodies also this instance in terms of Upper Basin and the Lower Basin groups of State as equal. The first place is the basic division. And Article III (a) is made regardless of the volume of prior appropriations in either state. Article III (c) provides that if the surplus over 15 million acre-feet in the river is not enough to satisfy the obligations of the Mexican treaty then the two basins are to share equally, rule of ratability. Article III (f) which preserves the surplus against the claims of prior appropriation, again, seems to repudiate that as a rule. Now, the Project Act, the limitation to 4.4 million acre-feet if you construe it as the Master did, clearly, didn't recognize all California's prior appropriated claims. Arizona and California are treated equally and they share up and down ratably in any surplus over the seven and half million. Section 4 (b), also dependent upon a compact, nevertheless seems to treat the States as of equal in rank, also not necessarily in the amounts of water. And finally, in the debates in Congress, there was no -- no one ever suggested that the sovereign state should have anything but equality in the rank of their class. Finally, I would point out that the Secretary of the Interior in times of shortage and reclamation project frequently makes a ratable distribution of the available water. And that not infrequently is spelled out in contract so that this practice plus --
Tom C. Clark: That doesn't bring -- was it being done way back in 1929.
Archibald Cox: I couldn't say. I had the current practice in mind that some of them are earlier project. I see that my time has expired.
Hugo L. Black: Mr. Parry.
R. P. Parry: Mr. Justice Black and members of the Court. I'm representing the State of Nevada. We are here once more in our attempt to, shall I say, hang on to this viable block of water which will determine the element, development of the southern part of the State. In the limited time that we have available, I would like to emphasize these points. First, this contract between the State of Nevada and the Secretary of the Interior, for 300,000 acre-feet of Lake Mead storage, and I emphasize the word storage, is a valid and binding contract which should be upheld under whatever theory this case may be decided. I think to that extent, Nevada is in a different position than some of the other parties to this case. Second, we think that the Master was entirely correct in his analysis, resulting in his decision, that this figure of 300,000 acre-feet should not be diminished because of some prior existing diversions on some small tributaries which I will mention in detail later. Next, that this contract with the State of Nevada is different from the contract with the State of Arizona is a specific whole contract in itself and does not require any implementation or addition of subsequent individual contracts with particular users. We also emphasize the point that because in the case of Nevada, this additional stored water will be of necessity used for the assistance of human life that there is much reason to use judicial discretion in placing a floor under the amount to which it may be diminished in times of critical water shortage. And then incidentally, we have urged in our briefs and were mentioned briefly, it has been our opinion over the long whole -- the operation of the river would be better if the Court retain jurisdiction, appointed a permanent commission with an advisory committee representing the various individual states who could make the rules and regulations, the annual allotments and so forth for this precious water. To understand Nevada's position, it is necessary to look briefly at the physical situation which existed during the time that the Project Act was being considered. The only water that was being diverted from the Colorado River system and as the State from the mainstream during all of the discussions, the Project Act was some water that was being diverted from the Virgin River and the Muddy River which are two small tributaries that's shown on the map behind me coming in to the upper end of the arm of the reservoir which runs north and south. There had been early pioneer settlements in that area starting along in the 1970s. Principally, people of the LDS faith would come down from Salt Lake City. And prior to the time that the Project Act was being considered, they had diverted all of the available water on those streams onto the flat land surrounding them and had applied it to beneficial use and it is estimated that that total consumption there is a consumptive use in the order of 50,000 acre-feet. That was not a part of the mainstream water supply at the time the Project Act was being considered. It was a maximum development. It cannot be increased in the future. There is no more water there that applied in that way. It is upon lands above the reservoir, so to that extent, this old rights in that corner of Nevada are different from the downstream rights in California and Arizona and that they cannot be supplied from storage. They were supplied by tributary use prior to Project Act. It will have to continue -- there is no possibility or event of an increase of use. The other portion of Nevada --
Potter Stewart: These were, would you say, present perfected rights within the meaning of the Project Act?
R. P. Parry: I think under any definition --
Potter Stewart: Under any definition.
R. P. Parry: I don't think how ever much we quibble there could be any question as to those rights.
Potter Stewart: The Muddy River and the Virgin River now flow into Lake Mead. Did they use to converge and then the converged stream flow into the Colorado.
R. P. Parry: Yes, Muddy River flow into the Virgin, a few miles above its mountain, but now, the reservoir has backed up --
Potter Stewart: Yes.
R. P. Parry: -- sufficiently far that has flooded the mouth of the river that flow in separately.
Potter Stewart: But you say there is maximum appropriation so there was very little flow at all into the Colorado River.
R. P. Parry: And at the times of critical -- when water is needed or when the water is used, there is no water that flowed in. There were people, very assiduously and carefully conserve every drop of water. So, when I say it flowed in, I meant the stream bed in Virgin conditions. But after the irrigation developed, there was no water went in, that was well-known at the time of the Project Act and was taken into consideration by every engineer I think who studied the project. The other portion of Nevada which is now using and will in the future use, the mainstream Colorado River water out of Lake Mead storage is the area that we call generally the Las Vegas Valley that lies to the west of the dam and the reservoir. These valleys are in a high plateau, and even to, with the dam there, it is necessary by pumps to lift the water in the order of 1200 feet in order to get it up where may be used. At the time of the Project Act and perhaps six or seven thousand people in a dusty, slippy village of Las Vegas which was in existence because it was a railroad division point. Today, that area is percentage-wise, the fastest growing locality in the United States. And in lieu of those people, it is --
William O. Douglas: Especially to water --
R. P. Parry: Pardon me?
William O. Douglas: Do the water?
R. P. Parry: The water is at least one of the necessities, yes, Justice Douglas. At the time of the Project Act, the only water that was being used there came from an underground supply, through wells, artesian and pumping. For many years, more water was removed from that underground supply than was annually recharged so that it became necessary to bring in water from Lake Mead. And today, the area has a population of approximately 170,000 people. The number of school children has increased 50% even since the 1960 census. The absolute control in point of the development of that area is the amount of water that Nevada will get out of Lake Mead storage. Nevada is unique and that there isn't any other source of water available good or bad. There is no brackage water that could be converted, there's no seawater that can be converted. And the reason that Nevada has intervened in this case and is here today is because whatever decree may be entered is going to absolutely determine the size of the population that may live in that area. Detailed studies were introduced in the evidence by the best experts that Nevada could obtain, and throughout those studies, the water was not considered as being available or used for irrigation of crops as we ordinarily know it because it is too valuable. And all estimates of the requirements and the needs were based upon use for domestic purposes using that word in the broadest sense is also including industrial uses and of course the growth of shrubs and lawns and things of that sort around the homes.
Byron R. White: Mr. Parry.
R. P. Parry: Yes sir.
Byron R. White: (Inaudible)
R. P. Parry: Precisely. We feel that unless we have a decree that sustains the validity of this contract for storage that the economic future is so unstable that it is difficult to plan.
Byron R. White: (Inaudible)
R. P. Parry: Yes.
Byron R. White: (Inaudible)
R. P. Parry: The way we put it is that if there was one thing that was fixed and determined throughout this lengthy, legislative history which has been referred to at length and briefs and at arguments and so forth was that Nevada was to have 300,000 acre-feet.
Byron R. White: (Inaudible)
R. P. Parry: That is correct. That that was irreducible minimum and no one ever seemed to quarrel about that --
Byron R. White: (Inaudible)
R. P. Parry: California Mr. Justice Black.
Hugo L. Black: (Inaudible)
R. P. Parry: That is correct and by applying their priority and limitation act and they say that Nevada should have a total of -- in the order of 120,000 acre-feet of water and no more.
Potter Stewart: Well, Mr. Parry, you would agree that in case of shortage, Nevada's 300,000 would have to be reduced by what 370 feet of the shortage?
R. P. Parry: We have agreed at the pro rata reduction with one exception as I mentioned. We believe that when you go into the field of applying this pro rata reduction then there is the use of judicial discretion and that there is much reason for putting a floor. We've suggested somewhere around 200,000 acre-feet or something below which Nevada should not be reduced because our use is going to be to sustain human life. Now, if you have an irrigation project and it's reduced, well you can reduce, cut down the crops --
Potter Stewart: (Voice Overlap) That's more like it, yes.
R. P. Parry: But with us, it is a very real problem that time. Now, the best experts --
Potter Stewart: Let me ask --
R. P. Parry: Yes.
Potter Stewart: -- one other question so I'm sure I understand you. Your position is that you're entitled to 300,000 acre-feet subject to this possibility of reduction that we've just talked about out of Lake Mead plus some 50,000 acre-feet out of the tributaries.
R. P. Parry: Of all perfected uses --
Potter Stewart: -- of all perfected right.
R. P. Parry: -- tributaries which where in existence long prior to --
Potter Stewart: And do I understand that the Master deducted those from your 300,000, didn't he?
R. P. Parry: No, he did not.
Potter Stewart: Did not.
R. P. Parry: I will come to that in a moment.
Byron R. White: (Inaudible)
R. P. Parry: I didn't hear you.
Byron R. White: The Solicitor General suggests that they should be developed.
R. P. Parry: Yes. That is the controversy between Nevada and the Unites States --
Byron R. White: But you haven't signed no contracts for that water of course.
R. P. Parry: We did sign contracts.
Byron R. White: For the water out of the tributaries?
R. P. Parry: No. Not on the tributaries. No, there are no contracts covering the water out --
Byron R. White: And you don't pay for water out of the tributaries.
R. P. Parry: That is correct.
Byron R. White: But you do out of Lake Mead?
R. P. Parry: That is correct. We have two -- I might clear that up. We have two contracts for water out of Lake Mead. There was a contract made in March of 1942 and this bears on another issue and I can cover them at the same time between the United States acting through the Secretary of the Interior and the State of Nevada, a body politic and corporate and its Colorado River Commission, said Commission acting in the name of the State by that principle in its own behalf as well as in behalf of the State. And this term ‘state' as used in this contract being deemed to be both the State of Nevada and its Colorado River Commission, and that 1942 contract was for 100,000 acre-feet of water with no reference to any reduction. In 1944, in January, a supplemental contract was entered into which changed only paragraph of the 1942 contract but it did provide that the Secretary should deliver to the State each year including all other waters diverted for use within the State of Nevada from the Colorado River system, the amount necessary to supply 300,000 acre-feet. Now, that is the time and those were the words that were inserted in that contract which changed the 300,000 acre-feet that until that time, everyone and I'm sure the Congress of the United States and Senator Pittman who was a leading exponent of this project legislation and all, all of a sudden by the insertion of those three words -- are those words, the 300,000 was reduced to 250,000. And that Nebraska or rather Nevada has contested throughout this hearing. We urge that it was ultra vires, that it was on the part of the state officials and on the part of the Secretary and we of course concur in the Master's argument as to why I think, he thinks it's improper which I will not repeat at this time. We have one other controversy with the United States which was not mentioned in this argument that was mentioned in the prior argument and in the briefs and that is as to whether there should be separate contracts in addition to the basic one with the State of Nevada was users of water. And there, I think, the confusion arose because of the difference between the Nevada contract and the Arizona contract was not pointed out. The Arizona Contract is as Mr. Ely said rather in agreement with the State of Arizona that they would in the future enter into other contracts with water users. But distinctly different from that, the Nevada contract is a specific contract with the State of Nevada using the words that I read and throughout practically every paragraph of the contract if it is recited that the State will do this, the State will receive the water, the State will construct the means of diverting it, the State will pay for it, and the whole setup is a state action through this Colorado River Commission which was created by the statute, the State of Nevada is an appendix in our opening brief. It has every power and authority that any irrigation district or anything else that could be created and as I've --
Hugo L. Black: (Inaudible)
R. P. Parry: Pardon me?
Hugo L. Black: -- the law.
R. P. Parry: Under the Nevada State law.
Hugo L. Black: (Inaudible)
R. P. Parry: Yes. And the purpose and the reason for creating the Colorado River Commission was to have an orderly disposition of the water so there wouldn't be a scramble for it and so we would get the optimum development of the area --
Hugo L. Black: (Inaudible)
R. P. Parry: Not that I know of. There has been the technical point raised that there should be this individual contracts. We don't know what that means whether every man who has a tap and uses water has to have a contract for whom it is but this Commission is proceeding rapidly for planning the development of the area and the Congress of the United States has made arrangements to set over to the State of Nevada, a body of land in the adjoining El Dorado Valley which adjoins the Las Vegas Valley for development with this water through this state commission and has authorized studies by the Bureau of the Reclamation for the development of this area.
Arthur J. Goldberg: Mr. Parry, how much of the water are you now actually using?
R. P. Parry: About 20,000 or 25,000 acre-feet of Lake Mead water at present time are being diverted in --
Arthur J. Goldberg: And how is that distributed by your river commission.
R. P. Parry: It is distributed through a body known as the Las Vegas Water District which in a sense, it's mingled into the domestic water supply system of the area, a part of which comes from underground wells, apart from this, with -- and then there is one exception to that, the United States during the war built a tremendous installation called the Henderson Magnesium Plant which is now been turned over to private hands and is a great chemical complex cost in between $200 to $300 million and water goes direct to that complex. The United States Government built the first pump and pipeline out of the reservoir. That assists and purchased from the United States by this Commission and other lines installed. And they are -- and plans are presently on their way for greatly expanding that use of water.
Arthur J. Goldberg: What is your estimate to the period of time that'll be the lapse until you take advantage of the whole body of water that is available to you under the contract with the Secretary?
R. P. Parry: The evidence in the record showed that by the year 2000, we picked that up just as a test year, that we would need more than 500,000 acre-feet of water if the orderly development went on. So our present estimate is that the 300,000 will be consumed in the next few decades and some of it additionally of what we can divert with our present facilities is going to be needed badly in the next few years. And that is one reason that from perhaps narrow point of view of the State of Nevada that this -- we think this is a justiciable controversy is that we must know as a matter of practicality the extent of Nevada's contract for water. Because just as in the evidence showed in the case of the Metropolitan Water District, the basic pumping clients, the basic tunnels and installations of that sort should be for economical reasons built to eventually supply the maximum amount at the time they are built.The individual pipelines may come in from time to time. If California is correct and 180,000 acre-feet is to be taken away from us that is the water for about a half a million people under the best analysis an acre-foot of water will supply the annual consumption of about three people in that arid region. And there is a precise and definite question there which it would seem to us that all responsible people should decide. And I also concur, of course, in other broader argument, there is a justiciable controversy here as to the extent of this rapidly growing southwest region and all of which will in a sense be under a cloud of suspicion unless there is a determination of this water allocation. The -- in the brief, it seems to us that this case might be simplified this way, the Secretary of the Interior under the Project Act, just for the moment ignoring all the language of it, under the long line decisions of this Court, starting with the Appalachian case and going down through the Twin City Power case. Certainly, when he came in and took over the river which has been facetiously called the Red River which is an actual thing under the control of the United States, he took over all of the water rights regardless of what was there before. And if it had not been for the exemption of the present perfected rights, controlled also by the California limitation, I do not believe any attorney could argue to this Court but that the Secretary of the Interior had all the water rights in the river. Also, under the Ivanhoe case and other cases, having that control and having impeded the flow of the river, counted it in the reservoir, created it into storage then he had the right to dispose of that by contract. And I believe that those broad principles will go a long way towards solving many of these rather specious points that have been argued at length in this tremendous record. In the, in the long run, that's the question, what --
Byron R. White: (Inaudible)
R. P. Parry: We think that under the overall setup in the Project Act that the Master was correct in determining that there was a statutory allocation to the States. And that in the case of the State of Nevada, the State created a statutory body and is contracted for and is paying for that water, and subject only to the overall rule which I think pervades throughout the whole west that the water may not be wasted. And that should be applied to a beneficial use then in our opinion, the State of Nevada has the right to make those decisions.
William J. Brennan, Jr.: Well, are you suggesting that the state could require the Secretary the contract with your State Commission?
R. P. Parry: Well, the con -- the Secretary did --
William J. Brennan, Jr.: I know he did.
R. P. Parry: So I think that's a moot question --
William J. Brennan, Jr.: I think what -- I think what has been accorded in --
R. P. Parry: And I'm not dodging the question. I would say -- I would answer in affirmative, yes. That in view of the whole legislative history and of the whole Act that the State was in the position and was willing to enter into a firm contract as it did.
William J. Brennan, Jr.: Would this apply also to California and Arizona?
R. P. Parry: Well, California had these present perfected rights in the name of various entities which exceeded their limitation. So there was a different question presented there.
William J. Brennan, Jr.: How about Arizona?
R. P. Parry: As to Arizona, my answer would be in the affirmative. And the --
William J. Brennan, Jr.: You spell this out of the history and --
R. P. Parry: I spell it out of two things. I think that we must not ignore the basic rights of the United States when it comes in and takes physical control of a navigable stream. It seems to me if there is anything established in the law of the land now and that -- and I say that regardless of what all the Senators said to the contrary when they are arguing about this Act. What they said four years ago has but little resemblance to the law of that type of river as it has been announced by this Court since that time. When we start from that premise then I believe that we have a sound foundation upon which we can find in the Project Act, allocation of the type that the Master found. I believe that overall, he did an extraordinary job. As I comment before, Nevada came in as an intervenor, so to speak, not wanting to be squeezed between the two giants. But this water being so precious in our favor, we find ourselves now supporting the Master's decision most wholeheartedly. Thank you.