live on the land more than 2 years before he can prove it up; at least 3 years. Mr. POAGE. The difference is he does not have to actually live on the land all those 3 years. About 2 years actual living on the land during the course of 3 years will give him patent to it, will it not? Mr. SMITH. Eligibility for our loans would be that he would have to live on an operating unit. The CHAIRMAN. There certainly cannot be any urgency about this bill. It seems to me that we know so little about the problem involved. I suggest that we let the matter go over to the next session. In the meantime maybe we can get some members of the committee to visit the desert land and get their own impressions as to what should be done about it. Mr. POAGE. I think that we are getting into what we should be dealing with in executive session. This bill does not do a thing in the world except provide for the desert entryman the same thing that we are doing for the homestead entryman, and while I do not know all the technical differences between a desert entryman and a homesteader, the homestead law was passed during the administration of Abraham Lincoln and provided for only 160 acres of land. As I understand it, the desert entryman can take 2 sections, or is it only 1 section? Mr. DIXON. I am not certain. Mr. POAGE. It is a much larger block of land that you can acquire under desert entry than you can acquire under homestead. It is 1 or 2 sections of land rather than a quarter of a section. Otherwise, it is almost identical with the homestead provisions. You do have to live on the land for a certain period of time. You have to make improvements worth a certain amount of money, I think $500, which has to include a dwelling place where the family can live. There has to be some kind of water supply on it, is that not right, Mr. Smith? Mr. SMITH. That is right. Mr. POAGE. When you have complied with those three things, built some kind of residence, gotten some kind of water supply and made improvements of a certain amount of money, I think $500—and that generally consists of fencing or breaking some of the land-and if he stays there for the requisite period of time, he then gets title by paying $1.50 an acre or $1 an acre. You do not get this land absolutely free, you pay $1 or $1.50 an acre for it. As I understand this bill, we have been saying to those people who have lived on the 160 acres of land that we will lend you money to put in an irrigation system, but the man on the larger tract of land who probably needs the irrigation system even worse because he obviously is in a dry country and he must have some source of water supply, we say we cannot lend you anything. The CHAIRMAN. They strike out the words "homestead entry" and put in "homestead or desert-land entry." They want the two to be treated alike. Mr. POAGE. That is what the bill does, treats them exactly the same. The CHAIRMAN. The one that they refer to here is the act approved October 1949. Mr. POAGE. The Desert Entryman Act. Mr. SMITH. That is the Homestead Entryman Act. Mr. POAGE. That is merely an amendment of it because it was passed in 1862. Mr. SMITH. That is right, but the 1949 statute enacted in 1949 authorizes the Secretary of Agriculture to make Bankhead-Jones loans, and obtain mortgages on homestead units. Mr. POAGE. And this says that he can make mortgages before patent has been issued to homestead units, or desert entrymen? Mr. SMITH. That is right. Mr. POAGE. I do not see that you do any violence at all to our philosophy of the Farmers' Home Administration because we go out to find a farm where the local committee will say that the farm can be purchased at a price which will enable a family who have been approved and who have a background of farming to pay it out. The Government loaned every dollar of the money to buy that farm. The Government bought the farm from some private individual. Then they would make a loan to improve that farm. What is the difference between borrowing every dollar to buy from some individual and making a loan on a farm the Government already owns? The Government already owns this desert-land. The Government has promised to convey to this entryman for a fee of about $1 an acre, and after he has lived on it a certain length of time there is much less burden there than there is where they go and buy the farm from some individual, and the security from the standpoint of the Government is just as good because the Government has every dollar of the equity in the farm that the Farmers' Home Administration buys, so if the Government has to take it over the Government's security is just as good where it has the title as where it takes a mortgage. The CHAIRMAN. Neither of the gentlemen can tell us how many people are involved, how many applications they have on file, and just how important the problem is. I do not think we can pass this bill without knowing that. Mr. McLEAISH. In 1955 we made 160-acre loans on reclamation units in the West totaling $2,453,000. The CHAIRMAN. On desert land? Mr. McLEAISH. No, sir. Some of these desert cases are involved in that number. The CHAIRMAN. You have made some desert-land loans ? Mr. McLEAISH. Yes, we have made a few, only where the occupant could provide us with good security. The CHAIRMAN. I went out to Arizona and visited one of those grand projects where they had recaptured some desert land and they had green pastures growing everywhere. It cost them an enormous sum of money. The Government put in the facilities. It was out in some section of Arizona. It appeared to me that it was a silly sort of undertaking and much too expensive. Mr. McLEAISH. We only make our Bankhead-Jones loans to homestead entry units where the applicant has a farming background and where we have determined that a sound loan can be made for the development of the unit. The CHAIRMAN. Casa Grande project is what I am thinking of. Is that still operating? Mr. McLEAISH. Yes. The CHAIRMAN. Is it doing well? Mr. SMITH. Yes. Our loans are reasonably successful on that unit. Mr. HOPE. Mr. Chairman, I think maybe these loans are a lot more safe from the standpoint of the Government getting its money back than on most of the loans that you make out in that part of the country. Certainly they are much safer loans than the loans on your big reclamation projects which are going to run into hundreds of dollars per acre before you can bring the land into cultivation. I am not opposed to this, but I think that we ought to have more information about it, more than we have now. It seems to me that Mr. Heimburger has his book open. Do you have anything on it, Mr. Heimburger? Mr. HEIMBURGER. Mr. Hope, I have found the law relating to these desert-land entries, and I could describe it briefly to you. The CHAIRMAN. Let me interrupt. (Discussion off the record.) The CHAIRMAN. We will let this go until January. Try to get us some more information on it. Mr. POAGE. You have the same limit on these loans that you have upon the tenant purchase loans? Mr. SMITH. That is right. Mr. POAGE. That is, the value of the farm cannot exceed the average value in the county? Mr. SMITH. That is right. Mr. POAGE. So about $12,000 is your upper limit? Mr. SMITH. That varies by counties over the Nation. Some of those loans go up as high as $20,000. Mr. JOHNSON. I have found that the committees are pretty conservative. The CHAIRMAN. Let us proceed with the next bill. (Whereupon the committee proceeded to the consideration of the next bill.) |