think there is as much desire for the qualitative factors in life amongst the poor as amongst the more affluent, and I think a lot of our young people today, with great perception, sense the high orientation of materialistic society, and the great emptiness that comes to man when he does not have something a little more than that, namely, the spiritual and the human values. I think we have here a vehicle in this whole matter of water development that could do far more than just create a better utilization of a natural resource-it could help cool down some of these social problems that we face in the large cities and in the rural areas as well.

And that might be the vehicle by which we nationalize more in terms of the interest and involvement of people in these programs, rather than now, the more typical regional character that they have. Could you agree?

Mr. BRONN. Yes, sir, you have explained this framework better than I did. Thank you.

Senator BIBLE. I thoroughly agree. I think you made a very fine analysis of our overall problem, Senator Hatfield. I think the record should properly reflect exactly what you said.

The Senator from Wyoming?

Senator HANSEN. Thank you, Mr. Chairman.

I do not have any questions at this time. I have been very much interested in your presentation, and I think it is excellent, and I want to compliment you for it.

Senator BIBLE. The Senator from Alaska?

Senator STEVENS. Thank you, Mr. Chairman.

I am no stranger to this group, either, and I am happy to have them. here, and have their presentation. I take it your comments really mean that you would like to have some sort of an environmental improvement benefit on something that is an overall concept of improvement, the permanent improvement that we all get from maintaining this land base in a productive state.

Mr. BRONN. Yes, sir.

Senator STEVENS. I would hope that we would work something out along that line. I would be glad to have any suggestions that you might have.

Mr. BRONN. Thank you. I will be coming around to see you, sir. Thank you.

Senator STEVENS. Thank you, Mr. Chairman.

Senator HANSEN (presiding). Mr. Sorensen, would you like to present your next witness?

Mr. SORENSEN. Well, Senator Hansen, we are glad to have Ed Southwick from Utah here, and we have asked him to briefly describe some of the problems that we see in the small project program, and I will ask that he be allowed to take up that now. Senator HANSEN. You may proceed, Mr. Southwick.

STATEMENT OF EDWARD H. SOUTHWICK, OGDEN, UTAH

Mr. SOUTHWICK. Thank you, Mr. Chairman, members of the Senate Interior and Insular Affairs Committee.

It is a pleasure to discuss with you briefly some of the problems mainly concerning the Small Projects Act, administered by the Department of Interior, under Public Law 984.

As you know, this program has been inoperative for the past 2 years, due mainly to a conflict between the legislative and executive branches of government.

Before talking about some of these problems, I would like to talk a little bit about the purpose of the act, and review some of the history.

The Small Projects Act provides for loans to non-Federal public entities to construct water development projects, and also to rehabilitate these projects. Many of the loans are for rehabilitation.

The design and construction is done by the local entity, although it has to be approved by the Bureau of Reclamation.

The Bureau also has to approve the construction, after completion. The maximum loan is $62 million, under this program.

Public Law 984 was enacted in 1956, and at that time, when President Eisenhower signed the bill, he indicated that it would not become operative until what he termed a usurpation of executive powers was. removed from the bill.

Another bill was submitted, and in 1957, the program became operative. It functioned quite well under the Eisenhower and Kennedy administrations, although there were several amendments passed concerning this law.

The authorization, because of need, has increased from $100 million to $200 million. The loans were increased from $5 million to $6%% million. The interest rates under the Small Projects program were conformed to interest rate for other Federal water projects, and fish and wildlife benefits and recreational benefits, at least 50 percent of the costs of them were considered nonreimbursable, under the program. Senator Moss, one of your colleagues on the committee, introduced a bill, S. 1609, which would have broadened features of this Small Projects program to include uses such as municipal and industrial, as a primary use, a little different from at present; agriculture irrigation has to be the primary use, and the latest interpretation by the Department of Interior is that it has to be this during the repayment period.

But S. 1609 would have broadened this, so that municipal, industrial and other uses could also be considered primary.

But in August of 1966, the Secretary of Interior informed the Congress that 4-D, or section 4-D in this Act was objectionable to the administration, unless-and this concerned this what is termed a legislative impasse between the legislative and executive, concerning the 60-day waiting period, or the veto power of the Congress, when these bills are laid before the committee for this period unless this was changed by law, no more projects would be submitted to Congress for approval, and since that time, no more have.

There has been no funding of the small projects, even though there have been some nine projects completed in this 60-day period, totaling $28 million for construction, and a great need concerning them.

Well, Senator Jackson, chairman of this committee, submitted S. 862 to resolve this conflict. Hearings were held in June of 1967, and the testimony was very favorable. I know you gentlemen are familiar with this, but at any rate, this amendment was passed by the Senate in August of 1967.

The provisions of S. 1609, Senator Moss' bill, were also combined with this.

The House considered it, reported it out favorably, but that is where the problem was. It was not passed in the House.

So this is where we stand at the present time. We have an act that has been very valuable to many people, and many groups in the West, and it is not operating.

We would recommend, as a National Reclamation Association, that contacts be made with the Nixon administration to determine if they will allow this program to operate, similar to the way it was in the Eisenhower and Kennedy administrations.

If not, we would propose that a bill similar to S. 862, which includes S. 1609, be reintroduced in the Senate and House, which would solve these problems and get this program back on the track.

We really think this isn't simple, the solution here, because the committees in the House, of Agriculture and Public Works, have taken a different view than the House Interior Committee, as you know.

But we do appreciate the work of this committee in not only passing the bill originally, and the amendments that have been made to the bill, but in helping this thing be implemented.

I would just like to comment before closing on Senator Hatfield's remark about broadening the scope of reclamation.

Some have indicated the desire to broaden the Small Projects Act to the 50 States. We have discussed this, and there is some discussion on both sides of the coin, but I don't believe there would be much objection to doing it, doing this, with this program, if it were funded adequate to the 50 States.

What we think would be a problem, if we increased it from 18 to 50 States, and kept the appropriations the same, and that, of course, could hinder the program.

But we want to thank you for the work you have done, and we solicit your help in getting this program back on the track, because it has been a great benefit to our citizens, and a very valuable program. Thank you.

Senator HANSEN. Thank you, Mr. Southwick.

Senator Hatfield, have you any questions?

Senator HATFIELD. No; I appreciate very much the gentleman's testimony.

Senator HANSEN. Senator Stevens?

Senator STEVENS. I have one question, Mr. Southwick. I have been away from the scene here a while, but I participated in that 1956-57 period.

Are you saying that the action that was taken by the former Secretary of Interior was based upon the 1966 amendments, or on the

1957 amendments?

Mr. SOUTHWICK. There was the 1957 amendment which cleared it up as far as the Eisenhower administration was concerned.

Senator STEVENS. Yes; I recall that. I participated in that. Now, did Secretary Udall say that that compromise, which was worked out with the Justice Department and everyone else, was still not acceptable?

Mr. SOUTHWICK. That is right, under section 4-D of the remaining Small Projects Act.

I think the objection-well, you probably know what the objection was. It was the veto power of this 60 days over actions of the executive

branch, but this, to the Johnson administration, still was not satisfactory.

Now possibly the Nixon administration might take a different look at this, and it is our hope that they will. We believe we should inquire and find if this might not be the case.

Senator STEVENS. Thank you.

Senator HANSEN. Thank you, Mr. Southwick.

Mr. Sorensen?

Mr. SORENSEN. Senator Hansen, with some further emphasis on the matter of benefits which flow from our reclamation projects, we have asked Mr. Kenneth Cook, the Director of the Agricultural Development Department of the Northern Pacific Railroad Co., to indicate to you and the members of the committee some of the specifics that the railroads have found to be involved in this reclamation development, and I, with your consent, would like to ask Mr. Cook to come up. Senator HANSEN. Fine. Mr. Cook, we will be happy to hear from

you.

STATEMENT OF KENNETH L. COOK, DIRECTOR OF AGRICULTURAL DEVELOPMENT DEPARTMENT, NORTHERN PACIFIC

RAILWAY CO.

Mr. Cook. Thank you.

You have a copy of my statement, but for this presentation, I will condense this material for my oral comments.

Senator HANSEN. You may do so, and without objection, it will be included in its entirety in the record at the end of your remarks. Mr. Cook. Thank you.

Mr. Chairman and members of the committee: My name is Kenneth L. Cook. I am the director of the agricultural development department for the Northern Pacific Railway Co., with headquarters in St. Paul, Minn., and I am pleased to be here representing both the National Reclamation Association and my company, which has long supported the Federal funding of feasible irrigation development.

As a pioneer in development in the West, the Northern Pacific Railway Co. has since its start been very enthusiastic about agricultural and industrial development throughout the territories traversed by our main and branch lines.

We have consistently encouraged sound economic growth, and have helped make this feasible by providing economical and dependable transportation.

As a granger railroad, the Northern Pacific depends upon the agricultural industry for a very substantial portion of its revenues. The railroad serves excellent agricultural areas in Washington, Idaho, Montana, North Dakota, and Minnesota.

In recent years, growth of our revenues from areas with irrigated agriculture has been the most spectacular.

We serve the Yakima Valley, Walla Walla Valley, and Columbia Basin in Washington, the Yellowstone, Bitterroot, and Flathead Valleys in Montana, and the Garrison unit now under construction in North Dakota. Without exception, these areas have experienced substantial economic growth as a result of irrigation, and in each case, improved rail service has provided substantial investment by our

company.

Each of the irrigated areas we serve might be used as an example of how investment in irrigation has brought investment in plant and facilities and general economic growth. However, for brevity, I will consider here only the Columbia Basin to illustrate a few points which I think are very important.

We have 130 miles of line within the boundaries of the Columbia Basin project. Before 1952, we served only a handful of small country elevators in the entire area. These were adequate for handling the lesser production from dry land farming. Where there were only nine industries in the entire basin, handling agricultural products before irrigation, there now are at least 140, an increase of more than 1,300 percent. Obviously, such industrial growth represents substantial investment by many firms.

Along our line alone, more than $25 millon has been invested in facilities to handle products from the Columbia Basin project. Our business at five stations in the area has more than doubled in the past 10 years, and since the start of irrigation in 1952, the growth in revenues from these stations have been of even greater proportions.

Now we must remember that irrigation waters have been available only a relatively short period of time in a large part of the total Columbia Basin project, and as growth continues, so will investment in plant and facilities. The same is true of the need for more extensive transportation services and the need for additional sources of supplies for fertilizers, farm equipment, and many other needs for argicultural production.

With encouragement from the irrigation districts, shippers agricultural producers, and industries planning development in the area, the Northern Pacific Railway Co. filed, on October 4, 1964, an application with the Interstate Commerce Commission requesting authority to construct a 54-mile line at an estimated cost of $5 million from the main line at Mesa, Wash. to the town of Mattawa, Wash. The new line will serve the Wahluke Slope Region of the Columbia Basin project, which is the major development area within the project scheduled for water delivery during the next several years.

The Interstate Commerce Commission has set specific timetables for the completion of this branch. Therefore, adherence to the Bureau of Reclamation's present schedule for water delivery is in our case an economic necessity.

The production potential of the Wahluke Slope region is recognized as one of the highest in the entire Columbia Basin project. There is a total of over 100,000 acres of irrigable land in the Slope area. About 75 percent of the land in the area to be served by the new branch line consists of class I and class II soils-the two top classes in soil classifications. In addition, the growing season ranges from 170 to 210 days, among the longest east of the Cascade Mountains.

The productive potential of the Slope area prompted Northern Pacific's application for the right to construct the branch line into an area now isolated from all existing rail facilities. Without it, the full production potential of the area would not be realized, as the distance would be too great for farmers to haul their products to existing markets at rail heads.

In summary, what I want to stress here today is the progressive and stable economic growth in this highly productive area is just