expressed by members of the committee caused several amendments to be made in the regulations which were reissued and approved May 28, 1908, copy herewith. At the same time there was issued a pamphlet entitled "Cooperative Certificates-Issue and Use by Associations of Settlers or Water Users and Regulations of May 28, 1908," copy herewith, which discussed fully a number of the questions that had been presented to the Senate committee. The cooperative certificates, of which a sample is inclosed, were issued in pursuance of a contract following the specific form outlined in the regulations. Copy of the contract with the North Platte Water Users' Association is also inclosed. The certificates so issued represent the value of work done or materials furnished in connection with the construction of the distribution system, and in surrendering the certificates each person, in accordance with the regulations and article 6 of the contract, transfers any right or interest he may have in the work performed, and in return therefor received a reduction of the water right charges which are due from him to the United States on account of a certain definite tract of land. This reduction becomes a set-off against the amount which he owes the United States on account of this charge on the land. In laying out and constructing irrigation works under the provisions of the reclamation act the Secretary of the Interior may build a reservoir for storing water and make appropriate arrangements with the water users to utilize this water supply through their own ditches. In such a case the reclamation project would consist solely of the reservoir, and the settlers would at their own expense provide the main canal and distributing system, paying only the cost of the reservoir. The Secretary may in other cases go a step farther, and in addition to the reservoir build a main canal connecting with distributing systems already on the ground, which were each originally connected with the river. A connection with one main canal would involve great economy in operation and great saving of water losses which would otherwise occur in the small ditches. In such a project the settlers would pay the cost of the reservoir and main canal. The project may consist of a reservoir, a main canal, and small main laterals, leaving t the water users the construction of the minor laterals and small distributaries; or the project may consist of a complete system, consisting of the reservoir, main canal, main laterals, and distributing ditches carrying the water to the individual farms. In the latter case the settler pays the Government for a complete irrigation system and furnishes no part of the work. In the other cases the settler pays the Government for varying parts of the system, supplying the remainder at his own expense. The several projects of the Reclamation Service present many variations of this plan. In fact, the same project, by reason of irrigation systems constructed over part of the area before the Government began work, presents varying conditions and different parts of the system will be chargeable against different sections, equitable reductions being made for the portion of the system supplied by the settlers. A complete system for carrying water to each individual farm was planned and built for the first lateral district of the North Platte project, and on July 29, 1907, the Secretary of the Interior issued his public notice under provision of section 4 of the reclamation act, fixing the charge of $35 per acre of irrigable land for the building of the irrigation system, and 40 cents per acre per annum for operation and maintenance. (Copy herewith.) It was intended in the year 1909 to build the system for the second lateral district by a cash expenditure from the reclamation fund, the charge for building the works being held at $35 per acre. Instead of waiting until the service should take up this second lateral district in regular order, the people undertook the building of their distributing system for themselves in order to save an average of several dollars per acre on the total charge of $35 per acre. The North Platte Vallev Water Users' Association thereupon entered into a contract with the United States, following the form found in the circular in the regulations of February 21, 1908. This contract, except for the description of the work and the specifications, is the same as all other contracts for cooperative work which have heretofore been executed, except the contract for the Grand Valley project. By this contract the North Platte Valley Water Users' Association agreed that the work designated by the Reclamation Service should be performed under a maximum fixed in the contract. The work supervised by the engineers of the Reclamation Service and all work constructed was to become the property of the United States, subject to the provisions of the regulations. As the work was performed, the engineers of the Reclamation Service checked the amounts and the records of the association to insure the proper issue of certificates, and the association issued certificates indicating the value of the labor performed or materials furnished. The water users performing the work on this lateral system received certificates representing the value of the work and in a la ge majority of cases have already turned in these certificates as a reduction of the charges due on their water-right applications. When the water user desires to turn in these certificates he presents them to the fiscal agent of the Reclamation Service, who gives him an appropriate receipt for the certificates. The engineer in charge then makes a statement of the charges due on the specific tract designated in the water user's application for water right and indicates the reduction on account of the surrendered certificates, recommending that an equitable apportionment of the charges assessed against the lands be declared in accordance with the balance stated. The Director of the Reclamation Service thereupon recommends that the charges against the land described in the specific water-right application be reduced to the amount recommended by the engineer and that said amount be declared an equitable apportionment of the charges. Pursuant to this, the Secretary of the Interior issues a public notice, declaring the specific amount reported to him to be an equitable apportionment of the water-right charges due for the installment or portions of the installment for the lands described in the application, with a view of returning to the reclamation fund the estimated cost of construction. The Commissioner of the General Land Office then notifies the receiver of the local land office of this public notice and directs him to receipt for the cash paid in pursuance of the statement as the full amount of the water-right charges for the stated installment or portions of installment. This equitable apportionment of the charges is made in pursuance of the provisions of section 4 of the reclamation act, which provides that the Secretary of the Interior shall fix the charges to be paid under each project: "The said charges shall be determined with a view of returning to the reclamation fund the estimated cost of construction of the project, and shall be apportioned equitably. * The effect of this operation is that a man who desires to pay the operation and maintenance charge which is required at the beginning of the irrigation season having 80 acres owes $32. He presents himself at the office of the Reclamation Service with $30 in certificates and $2 in cash and asks that the amount of his obligation to the United States for operation and maintenance for the current year be reduced to $2 in view of the fact that by reason of his work it has cost the United States $30 less for completing the second lateral district, and that accordingly the United States could not justly charge against the water users the full building charge of $35 per acre and annual operation and maintenance charge for the entire district, but should make a reduction from the total charges collected from the district of $30 on account of the work that he has done. A similar reduction would be made on account of the work done by his neighbor, and so on indefinitely, each man who has contributed to reducing the cost of this district receiving corresponding reduction in the charges due from him to the United States. Various phases of this matter are discussed in the pamphlet entitled “Cooperative Certificates," notably beginning on page 5. Attention is invited to the statement of conditions on the following pages, 6 and 7. There is also submitted herewith for consideration a manuscript entitled, "Discussion of the legality of the policy and methods involved in the plan for cooperative construction of reclamation projects by the settlers thereon." This dwells particularly on the fiscal side of the matter and shows that there was in the reclamation fund at the time of the execution of the agreement of March 3, 1908, and at all times subsequent, an amount largely in excess of all possible liabilities (p. 63 of the manuscript). Much of this balance has been allowed to accumulate to meet all possible contingencies and to enable the systematic development of the various projects in accordance with the requirements of law and of the physical conditions to be met. There is also transmitted a sample of a certificate of the North Platte Valley Water Users' Association, together with a form (7-458) reporting the cancellation of the certificates, this being: First. A statement by the engineer as to the surrender of certificates and recommendation that the water-right charges be reduced on a certain tract of land. Second. A recommendation of the Director of the Reclamation Service to the Secretary that a certain amount be declared an equitable apportionment of the charges. Third. Public notice by the Secretary, declaring the amount recommended to be an equitable apportionment. Fourth. Instructions by the Commissioner of the General Land Office to the receiver of public moneys to accept the amount stated. This simple method of handling the matter avoids a large expenditure on the part of the Government, following in this respect the established usage of the country. Very respectfully, F. H. NEWELL, Director. The SECRETARY OF THE INTERIOR. DEPARTMENT OF THE INTERIOR, Washington, D. C., July 31, 1909. SIR: Departmental letter of July 20, directed this office to submit for consideration of the Attorney-General a concrete case arising in connection with the plan of cooperation in western Nebraska. The Attorney-General has intimated his willingness to consider such a case, which in departmental letter of the same date to the President is stated to be understood as a motion for review of the opinion of the Attorney-General. The contract considered by the Attorney-General, namely, that made with the Grand Valley Water Users' Association, is entirely different from the cooperative contracts made with other water users' associations. The Grand Valley contract was, in fact, preliminary to a further contract which would have been made on the ordinary cooperative contract form. The Grand Valley contract provided that the Grand Valley Water Users' Association would furnish $125,000 in money and labor to be expended on the basis of the usual cooperation contract. One of the principal objections found by the Attorney-General to this contract was the fact, that the money furnished by the Grand Valley Water Users' Association provided another fund for the reclamation work, that the money subscribed is not in, nor does it go into the reclamation fund, and that there is no security that it will be in that fund or that the work agreed upon will be done. This feature is entirely absent from the ordinary cooperative contract, because the associations advance no money whatever to the Government in such cases. The cooperative contract for the North Platte project involved the work of constructing a distributing system connected with the main canal in order that water might be furnished to settlers on the area covered in what is known as the "second lateral district" in 1909 instead of 1910 as had been planned. The project is a very extensive one, involving the ultimate irrigation of nearly 300,000 acres of irrigable land. The project has been divided into sections, known as "lateral districts," which can be completed as parts of the whole project under the authority of section 4 of the reclamation act. The first lateral district was completed in 1907 and the main supply system for the second lateral district was planned to be constructed in 1908; the distributing system to be constructed in 1909, and the water to be furnished in 1910. The moneys available in the reclamation fund had been divided among the 30 projects in the several States and Territories according to a definite plan of operations from year to year and with a view of meeting the requirements of section 9 of the reclamation act, regarding the distribution of expenditures among the States and Territories. Plans had been made to reach this equalization in 1912, so that the construction of the second lateral district in 1908 would have interfered with the entire adjustment. The Secretary could have made funds available by the postponement of work on other projects and could have allotted funds for the work on the second lateral district in 1908; the result would have been the disbandment of trained forces and the idleness of expensive plant and equipment on other projects. The cooperative plan consists in the United States making a contract with the Water Users Association by which the association agrees to perform certain work within certain maximum prices, the work to become the property of the United States upon acceptance. Payment is made by the association in certificates of work performed, which are to be accepted by the United States in reduction of charges against particular tracts, as an equitable apportionment thereof. (Sec. 4.) Transmitted herewith is a letter signed by the director under date of July 24, in which the facts and conditions are set out in detail and full explanations made of the administrative features. Said letter is accompanied by exhibits showing the regulations and the procedure and also an exhibit discussing some of the fiscal and legal features. Very respectfully, MORRIS BIEN, Acting Director. DEPARTMENT OF THE INTERIOR, MY DEAR MR. ATTORNEY-GENERAL: As you know, Senator Burkett, of Nebraska, has complained somewhat of your construction of the "cooperative certificate plan of the Reclamation Service," embodied in your opinion of May 26, 1909. On the 20th of July the President sent Senator Burkett's letter to this department. I inclose a copy of my letter to the President, dated July 20, 1909. The Senator's letter was then transmitted directly to the Secretary at Seattle, Wash. I herewith inclose you a copy of the Secretary's letter to the President, dated July 26. We have submitted to-day to your office a statement of facts covering the North Platte project in Nebraska, in pursuance of Senator Burkett's desire. The department would esteem it a very great favor if you could take this matter up at an early date and submit to us such further or additional opinion as you think the facts warrant. You will note that I stated in my letter to the President that you would probably treat this new statement of facts as a motion to review your opinion and give the matter further study and investigation. Permit me, my dear sir, to convey to you the confidence and respect which this department has in you. Very sincerely, yours, Hon. GEORGE W. WICKERSHAM, FRANK PIERCE, Attorney-General, 44 West Forty-fourth street, New York City. DEPARTMENT OF THE INTERIOR, The honorable the ATTORNEY-GENERAL. SIR: There has been prepared and is submitted herewith a new statement of facts covering the cooperative plan of the Reclamation Service with special reference to the situation on the North Platte project in Nebraska in pursuance of Senator Burkett's desire to have the Attorney-General give further consideration to the matter. The papers in question consist of "Statement of facts relative to North Platte reclamation project and proposed contract with the North Platte Water Users' Association," dated August 5, 1909, and the several exhibits therein specifically listed. Very respectfully, FRANK PIERCE, Acting Secretary. STATEMENT OF FACTS RELATIVE TO NORTH PLATTE RECLAMATION PROJECT AND PROPOSED CONTRACT WITH THE NORTH PLATTE WATER USERS' ASSOCIATION. AUGUST 5, 1909. Pursuant to the provisions of the reclamation act, approved June 17, 1902 (32 Stat., 388), the Secretary of the Interior has located and established the North Platte project, which as planned involves the ultimate irrigation and reclamation of nearly 300,000 acres of land, map thereof being hereto attached and marked "Exhibit A.” In accordance with the provisions of section 4 of said act, the territory within the project has been divided into "such portions or sections as it may be practicable to construct or complete as parts of the whole project," each section being designated "lateral district," the first of which (lateral district No. 1) was completed by the Government. With reference to lateral district No. 2, numerous requests were received for its construction, with which the Government found it impracticable to comply, for reasons which follow: There were (and still are) 30 projects in process of construction and development; in the administration of the reclamation act, the Secretary of the Interior is required to lay out plans for construction and to determine, in advance, the amount of money available for each project-in other words, to apportion to each project the amount to be expended thereon during a given period-such apportionment being made with a view to complying with the provisions of section 9 of the act, requiring the Secretary, so far as practicable, to expend the major portion of the funds arising from the sale of public lands within each State and Territory named within the lanits of such State, and to restore as soon as practicable any funds expended in any State or Territory in excess of such requirement. Under the distribution and apportionment at the time in effect no funds were available for the construction of said second lateral district and could not be made available without changing the entire programme for the then present and future work, upon which the apportionment of funds had been made. Such change would have interfered with work on other projects and was deemed inadvisable and inexpedient. To accomplish the construction of the works required for the second lateral district in the North Platte project, other than concrete structures and the supplying of certain materials, without using moneys in the reclamation fund, the Government entered into a contract with a local corporation known as North Platte Valley Water Users' Association, in the form hereto attached, marked "Exhibit B," by the terms of which (art. 4) the association agreed to pay for the work done in "certificates of approved form," which "shall be receivable in payments on water-right charges levied by the Secretary of the Interior, as provided by the departmental regulations.' The services called for by said contract were performed by the association and certificates to the amount of $35,199.86 issued, of which over $21,000 is outstanding. The Government supplied, through the reclamation fund, concrete structures and certain materials used, such as reenforcing steel, lumber, etc. (Form of certificate is hereto attached, marked "Exhibit C," and said regulations, dated, respectively, February 21 and May 28, 1908, are also attached, marked, respectively, "D" and "E." A general circular of the latter date is also attached, marked "F.") Section 5 of the act provides that annual installments due from persons within the area of the project shall be paid to the receiver of the local land office; to meet this requirement the installment due from any person presenting a certificate in the form of Exhibit C has been remitted or reduced by deducting from the amount thereof the sum recited in such certificate, such deduction being accomplished by means of a process called "equitable apportionment of charges," consisting of a document signed by the Reclamation Service officers, a public order signed by the Secretary fixing the amount of the installment at the balance remaining after such deduction, and a direction by the Commissioner of the General Land Office to the receiver of the local land office to accept said sum as the full installment due. (Form of the document containing all of the last-mentioned matters is marked "Exhibit G.") It will be observed that this plan did not involve the advancement of any money by any person, as was the case in the Grand Valley matter recently considered by the Attorney-General. The Reclamation Service deems this circumstance of importance, and differentiates the proposed North Platte plan from the one heretofore considered. The matter is submitted for the purpose of ascertaining whether there is such a difference, and whether, in the opinion of the Attorney-General, the views announced in his communication to the Secretary of the Interior of May 26, 1909, control the proposed arrangement and prevent its consumation as being in contravention of the law. For the information of the Attorney-General the following papers are submitted herewith: 1. Argument from the Director of the Reclamation Service in the form of letters to the Secretary of the Interior dated July 24 and 31, 1909. 2. Discussion prepared by the Reclamation Service of your opinion of May 26. 3. Senate Document, Sixtieth Congress, first session, No. 507, setting forth hearings before the Committee on Irrigation on May 18, 1908, upon the issue of certificates by water users' associations; and 4. Public notices and regulations concerning the North Platte project. In the first lateral district the lands entered or subject to entry under the reclamation act amount to 25,605 acres, and in the second lateral district 17,023 acres. DEPARTMENT OF JUSTICE, The honorable the SECRETARY OF THE INTERIOR. SIR: I am in receipt of your letter of the 21st ultimo, transmitting to me a statement of facts covering the cooperative plan of the Reclamation Service with special reference to the so-called North Platte project in Nebraska, which, it is suggested, so differs from the Grand Valley Water Users' Association plan, which was referred to in my opinion rendered to you under date of May 26, 1909, as to call for a different conclusion. The Acting Director of the Reclamation Service, Mr. Morris Bien, in his communication to you dated July 31, 1909, referring to the Grand Valley contract, says: "One of the principal objections found by the Attorney-General to this contract was the fact that the money furnished by the Grand Valley Water Users' Association provided another fund for the reclamation work; that the money subscribed is not in, nor does it go into, the reclamation fund, and that there is no security that it will be in that fund or that the work agreed upon will be done. This feature is entirely absent from the ordinary cooperative contract, because the associations advance no money whatever to the Government in such cases." This paragraph evidences a misapprehension of the objection to the proposed contract which was before me. That objection was not that the moneys subscribed by the water users' association was not in the reclamation fund, but that the reclamation |