A copy of the report of the Administrator of Veterans' Affairs respecting this measure reads as follows:

Hon. JOHN E. RANKIN,

VETERANS, ADMINISTRATION,

Chairman Committee on World War Veterans' Legislation,

Washington.

House of Representatives, Washington, D. C. MY DEAR MR. RANKIN: In accordance with your request there is furnished herewith a report concerning the cost of the revised H. R. 7109, Seventy-second Congress, a bill to amend the World War veterans' act, 1924, as amended, by providing allowances for widows and children and dependent parents of veterans of the World War, and a statement as to whether the proposed legislation is in accord with the financial program of the President.

It is estimated that the cost for the first year under the revised H. R. 7109 will approximate $15,260,000, and for a 5-year period, $161,134,000. The savings over the original H. R. 7109 for the first year approximate $4,694,000, and for a 5-year period $38,963,000. Over this 5-year period these savings are

as follows:

(a) Due to exclusion of parents under 65 years of age.

(b) Due to the income provision

(c) Due to the reduction in rate for parents..

In estimating the savings due to the income provision the factor of term insurance was considered as this was the only income of which the administration has any knowledge.

I am in receipt of a report from the Director of the Bureau of the Budget dated January 28, 1932, which states that the original H. R. 7109 would not, at this time, be in accord with the financial program of the President. A copy of this letter is inclosed for your use:

Very truly yours,

FRANK T. HINES,

Administrator.

RELIEF OF WATER USERS ON IRRIGATION PROJECTS

FEBRUARY 1, 1932.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. SMITH of Idaho, from the Committee on Irrigation and Reclamation, submitted the following

REPORT

[To accompany H. R. 8638]

The Committee on Irrigation and Reclamation, to whom was referred the bill (H. R. 8638) for the temporary relief of water users on irrigation projects constructed and operated under the reclamation law, having considered the same, report thereon with a recommendation that it do pass, with the following amendments:

Page 6, line 5, after the words "Collections of" insert the word "construction".

Page 6, line 10, after the word "contracts", strike out all down to and including line 13, and insert in lieu thereof the following: "shall be credited upon the succeeding payments as they become due, including operation and maintenance charges".

The committee conducted extensive hearings, and was addressed by the Commissioner of Reclamation, Dr. Elwood Mead, and by representatives from the various reclamation projects in the West, and has unanimously reached the conclusion that this legislation is imperative in order to relieve the settlers on many of the projects who are unable to meet their annual construction charges because of water shortage, due to unusual drought conditions extending throughout the arid States, and the low price of farm products, such as: $7 per ton for hay; 50 cents per hundred pounds for potatoes; 20 cents per pound for butterfat; 15 cents per dozen for eggs; 15 cents per pound for wool; 5 cents per pound for lambs; 5 cents per pound for hogs; and 4 cents per pound for beef.

Certain fixed charges, such as operation and maintenance, must be paid by the settlers each year, in addition to annual charges on construction costs, as well as county and State taxes, amounting to more than the gross value of the crop production last year in many instances. Under the law the Secretary of the Interior is prohibited from furnishing water for irrigation purposes to the occupants of the

land who are more than one year in arrears. Consequently if this legislation is not enacted, many of the settlers on a number of projects will not be able to raise any crops during the current year.

The pending bill does not involve any appropriation.

The carrying on of farming activities on a reclamation project is much more expensive than in the humid regions and while they may produce larger crops, the low price prevailing during the last two or three years for farm products, has made farming on these projects most unprofitable and involved the settlers in an actual loss, and in many instances made it necessary for them to obtain loans on their machinery and livestock to meet the construction payments which must be promptly made in order to secure water for irrigation. By reason of the fact that the Government already has a first lien on the land for the unpaid construction charges, it is impossible for the farmers to secure loans from the Federal farm loan bank, and frequently from any other source under existing conditions. In addition, many of the banks in the irrigated sections have been closed, and the small deposits of the farmers have been tied up. No money is available for financing the farmers to meet their urgent obligations. This relief legislation is in line with laws heretofore enacted to aid the farmers on other than reclamation and drainage projects, and will permit the water users in the arid regions to carry on their activities with the hope that prices next year will be sufficiently high to enable them to retrieve their losses. By reason of the fact that there is an excessive snow fall in the mountains of the West, there is every reason to believe that all of the projects will have an ample water supply for producing next year's crops.

In this connection, it is well to refer briefly to what has been accomplished under the reclamation law. According to the Commissioner of Reclamation, Doctor Mead, in his testimony before the subcommittee of the House Committee on Appropriations, December 15, 1931, there are 40,354 irrigated farms on the 26 Federal reclamation projects, with a population of 165,956. There are located on these projects 213 cities and towns with a population of 472,723. There are 688 schools, 724 churches, and 120 banks with deposits of $134,261,170, and 226,014 depositors.

Except for the cooperation of the Federal Government toward the construction of Federal reclamation projects, the eastern States would have been deprived of the purchasing power of this vast number of people. Many people are of the opinion that the reclamation of the arid lands is purely a local matter, when as a matter of fact the building up of markets on these projects is beneficial to every State in the Union.

The bill under consideration provides for the temporary relief of water users on reclamation projects which are constructed or are being constructed under the reclamation law.

Section 1 provides that the construction charges for 1931 which were due the 1st of last December shall be deferred until the end of the contract period and that 50 per cent of the construction charges for the current year shall be similarly deferred.

Section 2 provides that this deferment shall apply to individual water users who are not on projects where districts or water users' associations have assumed the joint obligation for payment.

Section 3 provides that the water users' organization and the individual water users shall resume payment of charges in accordance with existing contracts at the end of the period for which deferment has been granted.

Section 4 authorizes the Secretary of the Interior, in his discretion, to permit the adjustment of construction and operation and maintenance charges heretofore deferred on the basis authorized in sections 1 and 2 of this bill.

Section 5 authorizes the Secretary of the Interior to supply water for irrigation purposes to districts or individuals who are delinquent in their payment for the calendar year 1930 or years prior thereto.

Section 6 provides that any irrigation district or water-users' association which has contracted to pay construction charges and is not in arrears for more than one calendar year may authorize the delivery of water to any individual water user who may be delinquent in his payments to the district or association.

Section 7 provides that any profits accruing to the water users or district from the sale of power shall be deducted from the amount of any payment extended under the provisions of this bill, and that any such credits in excess of the construction charge shall be applied as now provided by law and contract.

Section 8 provides that any payments of construction charges for the year 1931 which have been made heretofore shall be credited upon succeeding payments as they become due, including maintenance and operation charges.

Section 9 provides for the deferment of the repayment of the moneys advanced to the reclamation fund under the act of June 25, 1910, and the act of March 3, 1931, until July 1, 1935.

Under the provisions of rule 13, 2-A, the following is submitted:

Act of June 25, 1910 (36 Stat. 835)

SEC. 3. That beginning five years after the date of the first advance to the reclamation fund under this act, fifty per centum of the annual receipts of the reclamation fund shall be paid into the general fund of the Treasury of the United States until payment so made shall equal the aggregate amount of advances made by the Treasury to said reclamation fund, together with interest paid on the certificates of indebtedness, issued under this act, and any expense incident to preparing, advertising and issuing the same.

Act of June 12, 1917 (40 Stat. 149)

The act of June twenty-fifth, nineteen hundred and ten (36 Stat. 835), is amended to provide that reimbursement of the moneys advanced under the provisions of that act shall be made by transferring annually the sum of $1,000,000 from the reclamation fund to the general funds in the Treasury, beginning July 1, nineteen hundred and twenty, and continuing until full reimbursement has been made.