that area taken out of the States project and served by the Bureau, the State needs an amount of 1,100,000 acre-feet at the site to serve Kern County, Kings County, and southern California and the central

coast area.

The intent of the joint venture as envisioned in this bill would be that, if the reservoir itself, for a total capacity of 2,100,000 acre-feet, the total cost of that, including the forebay which is necessary, is $119 million, the Federal Government would pay 10/21 of that, or $56 million.

Senator ANDERSON. I follow you. Tell me one thing.

Mr. BANKS. The State would pay for the total dam and reservoir facilities 11/21, or $63 million.

Senator ANDERSON. Where do we get the $290 million figure?

Mr. BANKS. In addition, of course, to what we have termed the jointly used facilities here, which will include the dam and reservoir, the forebay, the afterbay, and the canal leading southward, in addition to those two which we estimate will cost $247 million, there are certain works which will be used solely by the Federal Government for service in the San Luis unit, and in which the State will have no interest whatsoever.

Senator ANDERSON. We have a bill under which we contemplate that the Federal Government, if we go ahead in the exact terms of the bill, is to put up $290,043,000; is that right?

Mr. BANKS. That, as I understand it, Senator, is the Bureau's estimate of the costs of the works necessary to serve the San Luis unit service area as a strictly Federal project.

Senator ANDERSON. If you come later and the State of California takes a part of that, I am not going to worry about that. I just want to take the Bureau's estimate for a strictly Federal project.

Now, that covers a million acre-feet of storage?

Mr. BANKS. Yes, sir.

Senator ANDERSON. What is the estimate of the 1,100,000 acre-feet that the State of California is interested in in connection with this reservoir?

Mr. BANKS. The additional cost for the additional constructing of it to the full capacity of 2,100,000 acre-feet would amount to $55 million. Senator ANDERSON. Do we not have, Mr. Lineweaver, the breakdown of where to get this $290 million. They do not come in with a lump-sum bid. Is there somebody from the Bureau of Reclamation here?

Mr. LINEWEAVER. Mr. McCarthy.

Senator ANDERSON. You say you do not have it here. This is a hearing on this bill.

Mr. DANIEL V. MCCARTHY (Bureau of Reclamation). I was not aware that I was going to be asked to testify this afternoon.

Senator ANDERSON. Somebody is going to justify asking for $290 million. That involves a reservoir and various other things; does it not? Have we never had a statement of what this $290 million covers ?

We had a long hearing on it. Do you happen to know what the Bureau of Reclamations estimate is on the dam itself where you are planning to spend $55 million?

Mr. BANKS. At present costs, it would amount to, for the dam itself, about $57 million.

Senator ANDERSON. So that your share of the cost would be $55 million?

Mr. BANKS. For the total reservoir; yes.

Senator ANDERSON. And the Bureau of Reclamation's share is only $57 million?

Mr. BANKS. Yes.

Mr. LINEWEAVER. That is the reservoir itself.

Senator ANDERSON. Is that eleven twenty-firsts as against ten twenty-firsts?

Mr. BANKS. Roughly.

Senator ANDERSON. Do you have different arithmetic than I have? Fifty-five million dollars divided by 10 is 5, times 5, and 11 times 55 is what? I am trying to discover how you get $57 million.

Mr. BANKS. The $57 million is taken from the January 1954 report of the Bureau of Reclamation for the cost of construction of the San Luis Dam, with a reservoir of 1 million acre-feet adjusted by indexes to present price levels. At January 1954 the Bureau used a figure of $52,116,000. At present price levels, that is about $57 million.

Senator ANDERSON. I thought you gave me a figure a minute ago where the State of California was going to put up $55 million, it had 1,100,000 acre-feet of storage, and the Federal Government had 1 million acre-feet, and they were going to do this on a joint venture in which California would assume the extra cost of the enlargement of the reservoir.

Mr. BANKS. This proposal does not propose that the State would take the additional cost. It proposes that it would be split proportionately.

Senator ANDERSON. I am sorry. I should have said the proportion

ate cost.

Mr. BANKS. I think, Senator, possibly, if you will permit me to put this in the form of a tabulation for you and submit it to you, that I can make it a little more clear.

Senator ANDERSON. What I am trying to get to, Mr. Banks, is certainly you would be permitted to supply these figures, but I would like to have them supplied by tomorrow morning if you can work them out. The Government here in its report shows $52,116,000 for the San Luis Dam and Reservoir, which will adjust to maybe $57 million.

Mr. BANKS. That is correct.

Senator ANDERSON. Now, on that basis, your part will be $70 million, or will you pay eleven twenty-firsts of this figure?

Mr. BANKS. This will have to be adjusted to the total construction costs of the full capacity reservoir. Then we will pay eleven twentyfirsts of the total cost. This is only for 1 million.

Senator ANDERSON. Can you tell me how much will be added to the cost by going to 2,100,000 acre-feet capacity?

Mr. BANKS. May we change this figure? Mine are all on the basis of 1958. Change that one to $57 million.

Senator ANDERSON. That is right.

Mr. BANKS. To build the larger reservoir increases the cost to $112 million. Now, the State would pay eleven twenty-firsts of the $112

million.

Senator ANDERSON. And the Federal Government would pay ten twenty-firsts of it?

Mr. BANKS. That is right.

Senator ANDERSON. So that they will end up with about the same thing. Now, we are going to get what we want to know. Suppose they start to build, and the Federal Government lets a contract, or the State of California, or they let it jointly, and the bid cost, for easy figuring, is $105 million. Now, the Government would then put up $50 million and the State of California $55 million. The Appropriations Committee meets and, in its wisdom, decides to put up $71⁄2 million for that year.

You are trying to say that if the State of California wanted to put $30 million into it in the first year, it could do so, even though the Government said it only wants to go forward at this lower speed. That is a rather unusual proposal. The Federal Government has never done that, so far as I know.

Mr. BANKS. May I say, Senator, that, so far as the State is concerned on this thing, the Bureau of Reclamation, in effect, so far as the State's interest in this is concerned, becomes a construction agency, and we saw no reason why the Bureau should not be able to proceed as rapidly as money could be available from either source with, then, final accounting made at such time as the Congress in its wisdom might make the full appropriations for their share.

Senator KUCHEL. May I ask one question?

Senator ANDERSON. Yes, but we are getting to the question. You do recognize that we have at least three people concerned in this. One is the Congress of the United States, which takes a look and decides how much of an appropriation it should have. Before that, you get the Bureau of the Budget, which has come in and said how much it will approve. Still ahead of that, you have the Bureau of Reclamation, which is going to ask for it.

You are going to propose that some official in the State of California, which is a partner in the deal, can commit his partners at a rate faster than the Bureau of Reclamation shall recommend, that the Bureau of the Budget shall approve, and the Congress shall finally appropriate, and you think that can be passed on a little simple amendment here and not get caught on the floor of the Senate.

Mr. BANKS. We are not committing a rate of expenditure of Federal funds on this, but we are committing rate of construction. Senator KUCHEL. Do you intend, by this language, to permit the State to pony up part of the Federal contribution in advance, or merely the State contribution?

Mr. BANKS. I would anticipate that, quite possibly, the State might wish to pony up, as you put it, part of the Federal contribution.

Senator ANDERSON. Because, otherwise, you would have a distorted construction schedule. You would be going at $40 million one year and $10 million the next. You would not want to do it that way.

Mr. BANKS. If I may forecast a little, Senator, I think you will have some testimony before you later this afternoon, by Kern County people, particularly, who are extremely anxious to see this thing constructed and in operation at the earliest possible date.

Senator ANDERSON. I do not doubt this at all, but, if you are going to have $290 million of interest-free money, you are going to have to do it at the rate of speed that the Bureau of Reclamation proposes, the Bureau of the Budget will approve; that the President will recommend; and that the Congress will finally pass.

I do not believe that they are going to turn it over to the State of California and say, "You are my partner. I have committed myself to put this money up at a certain rate of speed. You spend at any rate you want." I do not believe they will say it to you. I would hate to be there when the Senator from California proposes that on the floor of the Senate. You are going to put him in a tough spot.

Mr. BANKS. In support of this, Senator, again I would like to state that it is because of the critical need of water, not only in Westlands, but elsewhere, that it is imperative that we do whatever we can to get this facility constructed and in operation at the earliest possible date. Senator ANDERSON. I do not question that at all, Mr. Banks. Mr. BANKS. This was discussed with all of the water users concerned, water-using agencies concerned, and I believe this concept is one which meets approval. We make no prediction, of course, whether it will meet the approval of Congress, but we offer it as a means of expediting the construction of this project.

Senator ANDERSON. I do not question that. Probably we are spending too much time on this. I am only trying to say to you that, in the Congress, in the passage of the upper Colorado storage bill authorizing the Navaho Dam, $1,800,000 was made available; $300,000 of that was allotted to roads, and then the Bureau of the Budget and the Bureau of Reclamation came in and suggested that at least $12 million of the Navaho Dam appropriation be put on Flaming Gorge and not start Navaho Dam. That was the procedure in this case, although the administration later reversed itself as to the Navaho program.

It was recognized that the dam is just as necessary as it was the day the appropriation was passed, but there still is the control over the purse in the United States. You are proposing that the State of California take over that function and set aside the Appropriations Committees of the Senate and House, set aside the Bureau of Reclamation, set aside the Bureau of the Budget, and ignore the President of the United States, who may come out and say, "There shall be no new starts," as two Presidents have done in my short time in the Congress. I doubt if that sort of thing would be acted upon favorably in the Congress, and I think I ought to say so frankly, because I think you will encounter difficulty. I do not question Kern County saying it is necessary, but I say to you that, having a representative type of government, you have to believe that the Senate and House will recognize that just as well as the State of California.

Mr. BANKS. Senator, may I clarify, however, for the record, that there was no intent on the part of this language to commit the Congress to any rate of expenditure of funds. This has to do with rate of construction and expediting the rate of construction by advancing of State funds.

Senator ANDERSON. Let me ask you this: For a long time we had an organization known as PWA. PWA came along and said that certain public buildings might be constructed as PWA projects. There was an overall limitation of several billion dollars on how much they could spend. They required State, municipal, and various other organizations to spend only at that rate of speed. I can use exact examples. Suppose that the city of New York, which was building LaGuardia Airport as a PWA project, would say, "We know we only get $100,000 a month, but we are going to spend $1 million a month, and get it later." Don't you suppose that would have been held up?

Mr. BANKS. Of course, we have not conceived of this as a means solely of, shall we say, an antidote to recession.

Senator ANDERSON. I am not talking about that.

Mr. BANKS. Our sole concern is getting this facility built as rapidly as possible to serve both Westlands Water District and the areas to the south.

Senator ANDERSON. There is no point in discussing it interminably. I want to say to you that this is not in accordance with the practice of the Government, and the Government reserves the right to change its mind. It started the Florida ship canal and then did not build it. It started Passamaquoddy Dam and then did not build it.

Our reclamation projects are almost always financed to completion. You can almost gamble on that, but the control of the purse of the United States Government is in Congress, and I do not believe they would have that control if that amendment went through.

Let us have the next feature.

Mr. BANKS. Do you wish to go through these item by item, Senator? Senator ANDERSON. If they are important, I wish to cover them. Mr. BANKS. I think the next most important one is section 3 (g), on page 6 of your amending bill, which is intended to more clearly set forth the relative rights of the United States and the State in the use of the total capacities of the works envisioned hereunder that are to be jointly used. Similarly with section 3 (h), on page 7, go together, and, as I say, are intended to set forth more clearly than we had in the original language.

Senator ANDERSON. Maybe we ought to have a statement of why you strike out certain language. Under (g) you strike out the fact that

The United States shall have unrestricted use of such capacities in the works of the San Luis unit which are used jointly by the United States and the State as shall be required to carry out the purposes of section 1 of this Act.

Your version is that the rights of the United States shall be on some proportionate rate. Are you worried about the United States having equal rights?

Mr. BANKS. May I state the history of these changes? There was great concern among the water-using agencies of the southern part of the San Joaquin Valley and southern California as to the original language of section 3 (g) and (h) which seemed to them to give the United States complete control over the total capacities to any extent that the Secretary might determine to be necessary.

Senator ANDERSON. Total capacities.

Mr. BANKS. That was the concern that was expressed with the original language.

Senator ANDERSON. Does it read that way?

The United States shall have unrestricted use of such capacities in the works of the San Luis unit which are used jointly by the United States and the State as shall be required to carry out the purposes of section 1 of this Act.

What is wrong with that?

Mr. BANKS. Senator, as far as the original language is concerned, may I remind you that Mr. Towner and I both participated in the drafting of the original language. It was our belief at the time we drafted it that it was good, and set forth reasonably well the intent of all those parties to the draft.