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Mr. GoE. I think under the circumstances it is, yes, with that length of payment.

Senator WATKINS. Now may I inquire what the $75 takes in? Is that both the agricultural charge and the reclamation charges?

Mr. GoE. No, that is the reclamation charge.

Senator WATKINS. What is the agricultural charge going to be? How much an acre are you going to charge if you spend $1,340,000 to take care of this 8,500 acres of land that you say you are going to take care of and level up?

Mr. GOE. We have estimated we probably will recover from the operations of the Department $373,000.

Senator WATKINS. $373,000 out of an expenditure of $1,340,000?

And so forth. I am leading up to getting at the cost of this. On page 43 of this document, there is this conversation:

Senator WATKINS. Mr. Chairman, while these gentlemen are here, if they are going to put that statement in referring to the Bureau of Reclamation and the Department of Agriculture, I would like to remind them that out in Utah we have probably a million and a half acres of ground which, if it gets the same treatment you are according to this Eden project in Wyoming, would all be feasible for improvement. I refer to the Uintah Basin. Some of that land is pretty good land, but it cannot justify the cost per acre that would come under a regular project, even after you make allowance for flood control, power, and all the rest of it. So I want you to keep that in mind as to anything we propose for the Uintah Basin in Utah. We would like the same kind of treatment on a subsidy basis, on the ability of the farmers to pay, that has been given in this instance.

Now, this Eden Valley project, to which reference has been made here, is a project that has been established, oh, for 40 years or more. It has had very many ups and downs, and is brought out in this document, and elsewhere. And so when this proposal here to spend something in excess of $7 million on that project came to my attention, I made some inquiry.

There was testimony in here that the new land proposed to be irrigated would, when the water had been taken to it by the Bureau and the land had been leveled by the Department of Agriculture, would then, in that State, without further improvements, be worth about $100 an acre. It was very cautious testimony, I am sure, as you would observe if you read it.

I was interested, when I read that, because I thought I knew a little bit about that project. So I called a friend of mine in the banking business out at Rock Springs, Wyo., and, without revealing why I was asking the question, I asked him:

What is the going value of improved farms in the Eden Valley project?
He said:

I remember a couple of farms up there which changed hands this last summer at $65 an acre.

I asked him further:

You mean a farm, improved with a house, barn, fences?
Yes.

Since that time, and more recently, I have made inquiry about the values of those lands, and I get estimates all the way from $50 an acre to $85 an acre. And I am speaking about going farms, improved farms, in that area.

In this Colorado River storage project, there is another one in my State called the Lyman project, wherein it is proposed to furnish supplemental water to forty or forty-one thousand acres of land now

in cultivation. So I asked this banker to give me in writing, if he would, something with respect to values in Eden Valley and in Lyman. And I am going to read to you from his reply. I am quoting. Appraisals in Eden Valley are from $80 to $100 an acre for the best places, the value depending somewhat of course, on the types of improvements. Recently one of the better places in the valley was appraised by a life-insurance company for a loan of $80 per acre. ***

In the Lyman area I understand that the cropland is valued at about $50, and irrigated pasture at about $50 and brushland adjoining the irrigated or cropland at about $3 per acre.

Following receipt of this letter, I got in touch with a couple of friends of mine out in that area and asked them to tell me what was the going value of land in the Lyman district. And I received estimates over the telephone varying from $50 to $85 and $90 an acre. And those, I remind you again, are going, improved farms.

Now, in this description of the individual projects of the Bureau of Reclamation, referring to Lyman, and I quote:

Only grasses for hay and pasture, alfalfa, and some small grains, can be produced to any extent, as the growth of most other crops is precluded by a short growing season and untimely summer frosts, that characterize the high 6,500- to 7,000-foot elevation of the project lands.

So you have there, Mr. Chairman, a limitation, climatic elevation,. short growing seasons, upon the values you can establish in that kind. of an area.

In the case of the La Platte project in Colorado-New Mexico, the Bureau of Reclamation says:

Agriculture would continue to center around the livestock industry, with most of the irrigated area producing livestock feeds.

In the matter of the La Barge project in Wyoming, the Bureau. states, and I quote:

Project lands would generally be utilized for the support of livestock enterprises; climatically adapted crops, such as hay, small grain, pasture, and somegarden crops, would be produced.

The descriptions of the lands embraced in these participating projects which I have read go all through these detailed descriptions of the participating projects, and I would ask, if you please, when you have the time and opportunity, that you investigate those quite thoroughly; because they have a very great bearing upon the overall costs of this project to the taxpayers and the purchasers of power; the taxpayers of the country generally and the purchasers of power in the Colorado Basin if and when they are established.

It is proposed, Mr. Chairman, that there will be, according to the formula which was presented to the House committee in the hearings on the House bill, that the allocations to power, the cost of construction of the power features of the project, will be paid for out of power revenues in 44 years, and thereafter, in 6 years, the allocations to irrigation to be paid from power revenues will be paid. In other words, in accordance with this formula, there will be no payment upon that part of the irrigation costs which are allocated to power, 44 years.

I think you will understand that in our scheme of things here, particularly as they are today, we are operating this Government on a deficit basis. We are building up the national debt. I read in the paper this morning that the President was about to ask Congress for

an increase in the national debt limit from $275 billion to $290 billion. I assume that is necessary.

It is understood, by those of us who have studied the problem, that it costs the Federal Government about 212 percent to hire money; and when we operate as we are today the Government has to hire a lot of money. So I think it is consistent that we examine this project in the light of the fiscal situation in the country and the situation which confronts the taxpayers of the United States.

I have written a memorandum here, which I propose to read into the record.

Under the provisions of H. R. 4449 it is provided that $263,041,900 shall be assigned to irrigation for repayment from power revenues. According to the formula presented to the House committee by Interior, the power investments shall be repaid in 44 years and thereafter (and in 6 years) the above sum allocated to irrigation shall be repaid. On the accepted premise that moneys are costing the Government 21⁄2 percent in interest-this would mean that said sum assigned to irrigation would grow to $780 million. Interest on the unamortized balances over the said 6-year period would amount to $23 million.

In other words, there would be a charge against irrigation of $803 million. This minus the $263 million to be repaid from power revenues would leave $540 million, or $2,700 per acre. This would account for a charge of $432,000 per 160-acre farm and all of this would be general taxpayer-paid subsidy as it has no bearing upon the small amounts which would be repaid by the water

users.

There is no method of determining from Bureau presentations a differentiation between new and supplemental water. It is provided that there shall be approximately 132,000 new acres and 234,000 supplemental. According to competent water engineering authority this would be the equivalent of 200,000 new acres for which water would be supplied. This $540 million subsidy at 21⁄2 percent would break down to $13,500,000 per year, or $67.50 per acre, a perfectly fantasticfigure.

Now we have a little different picture when we consider the Senate bill, which you must, of course.

Senator WATKINS. You were going to tell us about some of the flood-control projects, where they do not get any of it back by direct repayments.

Mr. MILLER. I will tell you about that, and tell you what I think about them.

In the Senate bill there are a number of projects which were deleted from the House legislation. I have reference to the San Juan and Navaho in New Mexico, and so forth. And so I have taken the same kind of a consideration and broken that down, and I find this, Mr. Senator, that in the Senate bill the participating projects would be reimbursed from power to the extent of $553,906,600 direct and $107,500,000 as their share of the three dams, making a total of $661.406,600, which, for 44 years, would have to draw interest in the Federal Treasury, because that money is going to have to be put up at the construction stage in cash. That is not in deferred payments. That construction has to be paid for in cash, and cash costs us interest these days.

Now, at compound interest for 44 years, that is $661,406,600 at 21% percent, which would amount to $1,960,277,000, of which $91,941,500 only is to be repaid by the water users, leaving $1,868,335,500 as the cost to the United States. Of this amount $599,304,100 would be repaid by power, leaving $1,269,031,400 to be paid on this interest by the taxpayers. This $599,304,100 to be repaid by power revenues: would be collected over a 6-year period. Thus, there should be added

the interest on the unpaid balance for 6 years. This would amount to at least $208 million, thus making the total subsidy about $1,477 million, or very close to $12 billion. In all the projects there would be 294,000 acres of new land and 469,000 acres of land with supplemental supply, or the equivalent of about 500,000 acres with a full supply. Thus the total subsidy is about $3,000 per acre in

terms of new land.

Now, I submit, Mr. Chairman, that that is a burden which we cannot consistently ask the taxpayers to assume. I am talking here about the cost of these participating projects.

I told you about a survey which I made of established values, and I find this as to going farms today for which these supplemental waters are to be furnished, the average value. Now, they are scattered. They are most of them at high altitudes. They are limited by climatic conditions to a short growing season. But the average

growing values of established farms today are around $100 an acre, in many cases less. And, inquiring around, I seemed to be able to establish that if we place this water where it is proposed, we still cannot build a value in excess of $150 an acre.

Now, if we are going to establish farms which cannot be sold for more than $150 an acre, and even considering the indirect benefitsand at this point let me say that inquiry develops that as a general figure the Bureau considers that the indirect benefits are about 60 percent of the direct benefits. So if we take into consideration all of the direct and the indirect benefits, we are going to have a subsidy for these lands when we consider the money that has to be paid for interest over this 44 years, of a figure that in my estimation cannot be justified by any stretch of the imagination.

So that gets me around to discuss: What are you going to do? And I know the question will be asked of me: Well, if you are not going to use this water for irrigation, what would you suggest is going to be done with it?

But

At this point I want to submit for the record an article which appeared in the Rocky Mountain News, dated the 20th of June, by a special writer, the title of which is "Colorado Basin Holds Treasure Chest of Ores." And I will not take the time to read this in full. this gentleman paints a very fine picture of the mineral resources which are available in the upper Colorado River Basin, which he says up to last year produced more than $3,300 million worth of minerals in what he terms the free world's greatest single treasure chest of natural resources.

Here is one of the statements he makes:

Bituminous coal reserves, estimated at 400 billion tons, are equal to one-sixth of the world's known coal deposits.

That leads me to make reference to something that I understand was placed before this committee by two witnesses from Wyoming heretofore. Both of these witnesses are good friends of mine. I like them. I admire them. But I want to call their attention, and your attention, if I may, to something which apparently has been overlooked.

Both these gentlemen referred to the situation which confronts the coal miners at Rock Springs, Wyo., by the closing down of the coal' mines out there. They are sorry for them. Something ought to be done for them.

Well, I think it ought to be noted that if there is a demand out in that region for a considerable output of power, and that demand is supplied by the building of Echo Park Dam, the possibility of employment for those coal miners at Rock Springs is forever closed against them.

(The article referred to is as follows:)

[From the Rocky Mountain News, June 20, 1954] COLORADO BASIN HOLDS TREASURE CHEST OF ORES

(By David Stolberg, Rocky Mountain News Writer)

Buried in the vast upper Colorado River Basin, which up to last year produced more than $3.3 billion worth of minerals, is the free world's greatest single treasure chest of natural resources.

That fact emerged Saturday when John H. East, Jr., regional boss of the United States Bureau of Mines, reviewed the basin's mineral outlook.

The fabulously rich and relatively undeveloped area sprawls across western Colorado, southwest Wyoming, northwest New Mexico, eastern Utah, and northeastern Arizona.

STARTLING FACTS

Here are some of the startling facts disclosed by East Saturday.

1. Bituminous coal reserves, estimated at 400 billion tons, are equal to onesixth of the world's known coal deposits.

2. The maximum potential of “several hundred billion" barrels of liquid fuels produced solely from shale in a comparatively small area of 1,000 square miles near Rifle is "many times" the proved crude petroleum reserve in the United States.

3. Concentrated in the bulging earth at Climax is about 85 percent of the world's known supply of molybdenum, critical toughening agent for steel products including a host of military weapons.

4. In addition to molybdenum, the upper basin is the greatest domestic source of uranium, radium, and vanadium.

5. The "tremendous upsurge of oil interest" is justified by petroleum reserves. in the area. Thanks to increasing consumption and price leaps, natural gas also "appears certain" for a greater destiny.

TOP PROSPECTS

Based on those facts, East reported the "upper basin's mineral industry as a whole now is in a better position than ever before and its prospects are improving with each passing day."

East said production of all minerals except uranium and vanadium in Colorado was worth $1,774,423,000.

Wyoming produced more than $800 million worth, Utah more than $620 million and New Mexico just short of $100 million.

He said the basin's vast coal deposits largely are untapped because "the industry is becalmed in a sea of economic doldrums." He blamed the condition on competition from the oil and natural gas industries which have usurped coal's former grasp of large segments of domestic, industrial, and railroad markets. East said the Bureau of Mines is operating a research pilot plant at the Denver Federal Center to develop new and inexpensive methods of mining, transporting and using coal and coal products.

He said a process developed in Denver, using coal in the combined production. of electricity and chemical tars, is in use in the heart of the Texas natural gas fields.

OIL RESEARCH

He said the Bureau is also continuing basic research on the basin's oil and gas reserves for conservation needs and longer increased production.

East reported oil-from-shale commercial production will assume a major role in the United States fuel economy imminently. Factors are the continuing national demand for petroleum products at a rate "far above the peak demand of World War II," reduced oil-shale production costs, and a leap in expenses for exploring new petroleum wells.

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