Mr. JONES. I recall a project in Alabama which was authorized and completed at the expense of $15,000 in 1835. Do you think you would go back to 1835 and develop the arithmetic on the project for a user's toll on that project where Federal funds were expended on it in 1835? Mr. NICHOLSON. Here is one thing-no, sir. I don't think so. That is too involved. It seems to me it would cost more than it is worth to product any kind of formula that would be fair.

But the thing that strikes me on it is, you have some areas that I am sure—and I don't know whether you are familiar with these on the west coast, like Stockton, and up in the Northwest on the Columbia River there are some areas where the inland waterways have contributed materially to their present industrial expansion there. You are going back to put a toll on there and make them pay for something and then let somebody else suffer who needs some expansion, and the industries located in their neighborhood. Are you going to discriminate as between points where the canal and inland waterways have already contributed and between places where there are undeveloped areas and the use is certainly needed?

One other thing that bothered me a little bit. As a matter of fact, I have not had but a very short time to look at the whole picture. As far as the toll part of it is concerned, it is just too much for me. It would not be a simple thing. I will say that. I am sure of that. The establishment of it and the level of it would not be a simple thing.

Mr. JONES. How would you establish the rate on these new projects which have not been put under construction and which have been authorized on an economic formula of justification on the ratio of Federal expenditures as against the benefits of the project?

Mr. NICHOLSON. Well, frankly, I just can't answer that question. I don't believe it has any simple workable answer to it.

Mr. JONES. Mr. Nicholson, if you find a way that it can be done with any real degree of satisfaction, I would like to know about it, because I have not in my mind been able to perceive any way where you have such a variety of tolls, since it would be impossible to have any yardstick or uniformity.

Mr. NICHOLSON. It has no precedent. I know that. You have nothing to guide you-no past performance. You would certainly be plowing in a new field.

Mr. JONES. Thank you very much, Mr. Nicholson.

Are there any further questions?

Mr. LIPSCOMB. No questions.

Mr. NICHOLSON. Thank you, sir.

Mr. JONES. Mr. Jack Farrell, South Eastern North Carolina Beach Association?

(No response.)

Mr. JONES. We will have a short recess, since I understand these witnesses will arrive a little later.

(Whereupon a short recess was had.)

Mr. JONES. I will put these telegrams in the record at this point. Congressman ROBERT E. JONES,

Subcommittee of House Committee on Government Operations,

351 Agriculture Building Annex, Raleigh, N. C.

It will not be possible for me to appear before your subcommittee at Raleigh tomorrow. Please grant me leave to insert a statement in the record at some subsequent convenient time.

SAM J. ERVIN, Jr., United States Senator.

I am sorry Senator Ervin could not be with us. I tried to reach him yesterday.

Now I have a telegram addressed to Honorable Robert E. Jones, chairman, Honorable Martha Griffiths, Honorable Henry Reuss, and Honorable Glenard Lipscomb.

The subcommittee of the House Committee on Government Operations, by the very nature of its assignment, is in a position to perform a public service of immeasurable usefulness. The Hoover Commission emphasizes in its report on water resources and power, submitted to Congress, on June 27 last, that there is an imperative need for a clear and consistent national policy which will "progressively promote conservation and development of this vital national resource for the Nation as a whole, as well as for the States and local communities." Although Congress has assumed increasingly greater responsibilities in this field there is no overall policy for water utilization, demarcating the Government's role. The absence of a national policy results in the waste of "a primary human ^ necessity."

The development of a sound and comprehensive public policy has been urged for many years by Members of Congress, other public bodies, and executive agencies. There is general agreement as to the urgent need for the formulation of such a policy, and this is one aspect of the problem which should certainly be removed from controversy.

Congress will, of course, have to determine what the policy should be, and it will only do so after thorough consideration and full debate.

The effectiveness of the subcommittee will be enhanced by the objectivity with which it evaluates the recommendations of the Hoover Commission contained in its own report on water resources and power that it has submitted to Congress.

You are doubtless aware that the original hearing of the subcommittee, conducted at Mount Pocono, Pa., produced an unfavorable public reaction. At least one of the witnesses admitted that, at the time he prepared his statement to the committee, he had not read the Commission's report.

Judging from reports in the North Carolina papers, there has been a general failure to distinguish between the Commission's report and the task force's report. For example, the impression was conveyed in Raleigh and elsewhere in this region that the Commission recommended Federal aid for flood-control projects be restricted to interstate streams. No such recommendation was made. It will be helpful to the committee and to the Congress if the witnesses be fully informed concerned the recommendations made by the Commission as well as with the detailed analysis of the water-resources problem. The Commission report represents the most exhaustive study of the water-resource problem that has ever been made. CHARLES B. COATES, Executive Vice Chairman, Citizens Committee for the Hoover Report

Mr. JONES. Of course, there has been no attempt on the part of the chairman or any member of this committee that I know anything about, to discredit the Hoover Commission or any of the members of the task force, or members of the Hoover Commission. It did have and it has the responsibility and the objective of presenting the issues that have been raised by the Hoover Commission report and the task force report.

As I stated yesterday, of course, you cannot consider one without considering the other, that is, the Commission recommendations and task force report, because the latter is the basis upon which the Commission reached its decision. In other words, that is its justification for the utterances of the Hoover Commission.

The committee has already determined that the task force report is properly before it. Of course, the position of the citizens committee contained in that telegram is beating a dead horse, when Mr. Coates says that the task force is not a part of the matter under consideration by this subcommittee. There are several facts that I think should be ascertained about the citizens committee for the Hoover report, because as I understand it, they have issued copies of the Commission's report and have failed to issue the volume No. II, which is a dissent from the recommendations contained in volume No. I.

Now, if the citizens committee group is urging the adoption of the Commission's recommendations and they want to be fair and impartial in the minds of the public, they should make all of the facts available to the public-not only the majority report contained in volume I, but they should also present to the public, in order hat they can determine wisely and prudently the facts of the matter, the dissenting report contained in volume II.

I hope that the issue is one which is fully resolved, and that we will not have to go through it at every hearing, with them saying that no part of the task force report is before the subcommittee.

Mr. LIPSCOMB. Mr. Cairman, naturally I take a different viewpoint on this. I would like to give an example illustrating my position. on the matter.

We have just discussed recommendation No. 8 concerning the user charges on the inland waterways. The only connection that the task force report has with this particular subcommittee, I believe, is when we come to a recommendation such as No. 8. We can look to the task force report for the background material that supports recommendation No. 8. That is the only value that the task force report has to us. Other recommendations in the task force report were not embraced by the Hoover Commission. That is the only use that the task force report has, and that is why it was submitted to Congress, in my opinion to back up and to give the details concerning the recommendations contained in the Hoover Commission report.

Any other recommendations the task force made do not have any valid meaning to this committee.

Mr. JONES. It is in the book.

Mr. LIPSCOMB. Information supporting, as I pointed out, recommendation No. 8, is in the book-the task-force report. That is the background material that the Hoover Commission used in part to substantiate their recommendation No. 8 in this particular case.

Mr. JONES. We will have a recess until the witnesses we have scheduled appear. I understand it will be about 10 or 10:15 a. m.

(Whereupon a recess was had.)

Mr. JONES. Our next witness is Harry B. Caldwell, Master of the North Carolina State Grange.

STATEMENT OF HARRY B. CALDWELL, MASTER, NORTH CAROLINA STATE GRANGE

Mr. CALDWELL. Thank you, Mr. Chairman and members of the committee.

First of all, I want to express our thanks to you and the members of your committee for your decision to come to North Carolina for one of these hearings.

I am Harry B. Caldwell, master of the North Carolina State Grange, from Greensboro.

The grange is a general farm organization with members in all areas of the State. Our members have a keen interest in water, its conservation, control, and use, and in the development and use of electric power. We want to see the resources of the State developed for the benefit of all.

We believe that the economic growth of the State will depend to a large extent upon the supply of water and power and the use made of these resources. North Carolina is in the high rainfall area. Even so, we are frequently plagued by droughts during certain seasons of the year which destroy our crops and endanger the water supplies for municipalities and industry. We have the potential water resources which, if properly developed and wisely used, will meet the current and foreseeable needs for agriculture and industry in this area.

While there is much that can and should be done by the State and local units of government and by the people themselves, there is a real need for Federal action in flood control, valley development; soil, timber, and water conservation; navigation, drainage, and electricpower programs.

We agree that an "imperative need exists for a clear definition of the role and policies of the Federal Government in the framework of a consistent national water policy which will progressively promote conservation and development of this vital natural resource for the Nation as a whole, as well as for the States and local communities."

We have not had sufficient time, Mr. Chairman, to properly analyze the task force and Commission reports on water resources and power since receiving notice of this hearing. Consequently, our comments will be of a general nature and limited.

The North Carolina State Grange believes that the need for action calls for positive leadership by the Federal Government. The reports now before you seem to place major emphasis on the role of private interests and local government in the development of these great resources. While we recognize the need for cooperation between the Federal Government, the States, localities, and private citizens in arriving at solutions to our water problems, we hope that the implications of the committee reports will be carefully analyzed before any action is taken to restrict Federal participation in these programs. We do not feel that the agricultural aspects of the problem were given adequate recognition in the Commission reports. Moreover, the Commission, in our opinion, made a basic mistake in considering the water resources as an independent entity, since we know that water

is part of an inseparable complex which also includes land, timber, crops, grass, and other values.

The largest water reservoir in the world, outside of the oceans, is land. In the consideration of any policy affecting water and land resources, this fact cannot be overlooked or ignored. It also appears to us that the Commission failed to give adequate attention to underground water supplies, underground water recharge, or drainage, in their report.

We would like to see the Small Watershed Act strengthened. Farmers find it difficult to understand why they are required to pay such a large percentage of the cost of a small watershed project which benefits an entire area, while flood-control projects on a major stream are financed by the Federal Government.

Mr. Chairman, there is a problem there we hope will be carefully reviewed by the members of the committee. The Small Watershed Act was a step in the right direction. Recognition of the problems on the tributaries of the main streams is encompassed there. However, under the provisions of that act farmers are required to make financial contributions toward the expense. We know under the floodcontrol acts, as presently carried on by the Government, that the Federal Government pays the entire cost of the investigations and the construction of the dams on the major streams, which benefit only a portion of the total population of the United States. It is rather difficult for us as farmers to see why there should be that discrimination in the operation of these two vital programs.

Mr. JONES. May I interrupt to tell you that Congressman Harold Cooley just walked in, and you are talking about a bill which he piloted through the House and which has the solution to water resource development on our farms throughout the country. I know Mr. Cooley will be interested in your observation of the operation of that act, because I know that there has been no one who has been as diligent and who has occupied his time more with the problem and is as close to it as Mr. Cooley. Therefore I am sure he would welcome your repeating that comment, Mr. Caldwell.

Mr. CALDWELL. Well, Mr. Cooley and I are very warm personal friends and I have discussed this matter with him some and will discuss it with him some more. Therefore, in order to save your time and the time of the members of the committee, if it is satisfactory I will not repeat it now, but he and I will get up to date on it.

To the extent that water problems are solved back on the land. where the rain falls, the need for large expensive structures can be minimized and the entire area benefited.

Congress should be sure that the agricultural aspects, including the maximum use of the Small Watershed Act, have been considered for each project area before any steps are taken to build large dams solely for flood-control purposes.

Speaking as a farmer and a representative of farmers, it has been our feeling that the needs of agriculture and the problems on the tributaries in many instances have been largely ignored by agencies of Government promoting flood-control programs on the main streams. Many of those expenditures have been made for the construction of large dams on main streams where different programs would have brought greater benefits to the area at perhaps even less cost to the Government. So we are hopeful that the agricultural aspects of