Confusion and uncertainty have resulted from these court decisions. State laws and Federal court decisions are in conflict and economic progress and development must wait on their reconciliation. Since vested water rights are based exclusively on State water law and since there is no body of related Federal water law, there is a consequent doubt as to the basis of these private rights. Uncertainties as to water rights are bound to delay additional development with its requirement for large investments. Moreover, as long as the doubts persist as to what authority the States still have in the water field, it will hinder and delay them in developing much needed water programs. Any State will be slow to enact a system of water law or set up a procedure for the administration of water rights when it is doubtful where the authority of the State ends and that of the Federal Government begins. Individual and industrial planning and investment will be similarly delayed. The States have a definite interest in protecting the rights of their citizens established in good faith in reliance on their water laws, and in defining their own areas of responsibility and authority in the development of their water resources. The States' concern in the matter is illustrated by the acts of 19 States' legislative bodies in memorializing the Congress and the President to resolve this conflict in favor of the States. These States include Alabama, Arkansas, Florida, South Carolina, Tennessee, Texas and Mississippi. The 86th Congress held comprehensive hearings on several proposed States rights measures. At that time, the Congress was told that a defeat of the States' position will leave many water users only a limited right of use at the sufferance of the Federal Government. In the West alone, States have granted thousands of water rights, whose orderly administration relies on local authorities and not Federal controls. If a Federal or federally licensed project can be built on a stream without regard to prior water rights, then those non-Federal properties depending on State water rights are in serious jeopardy. The investment of money in the development of water resources, whether public or private, needs as a foundation a system of laws on which to base firm rights to use the water that has been developed. Two-thirds of the States have already recognized this need by adopting laws concerning water rights and by setting up administrative machinery for the administration of these rights. The continued failure to clarify the relationship between Federal and State water law will increase the uncertainty and retard the development plans of private interests, local governmental bodies, State governments and perhaps even the Federal Government. A Rand Corp. research study made by Jack Hirschleifer, James C. De Haven, and Jerome W. Milliman on "Water Supply" states that "Certainty is perhaps the most important quality of real property law. If property rights are uncertain, the incentive to develop and invest in water resources will be seriously reduced. Uncertain propty rights greatly hamper the transfer or sale of property to competing uses and users." Doubtless the current uncertainty in Federal-State relations could, in time, be clarified on a case-by-case basis by the courts. This process, however, might extend into the indefinite future. In the meantime, without positive, unmistakable clarification by the Congress, the continuing doubts as to vested water rights and State responsibility are bound to hamper both private and State activities in water planning and development. The uncertainty and resultant economic loss are unpardonable. The national chamber, therefore, strongly urges the committee to undertake immediate steps to clarify the situation. Such steps should properly include the scheduling of more extensive hearings on this important question by this committee, at which all aspects of the problem can be placed before you for study. The national chamber would welcome the opportunity to present detailed testimony to you at that time. It is our hope that such hearings would result in legislation to clarify this situation, and thereby meet our Nation's present and future needs. Under State administration, with proper Federal cooperation, we can preserve the great gains already achieved and to be achieved in the future. The CHAIRMAN. Thank you, Mr. Henderson. May I say that I am glad you mentioned these cases, such as the Pelton case and the Hawthorne case, because they have been matters of our study. You suggest that we schedule more extensive hearings. Senator Kuchel and I discussed this hearing we are now having at some length. We could have prolonged this for many days and many weeks, as a matter of fact, but we thought we would have a preliminary hearing and try to find out what the areas of disagreement or areas with question marks for study might be and then see how far we can go with the committee to work it out. I do not want you to become discouraged by the fact that there are only 2 days now. There will probably be a great many more coming in the future. I think if the national chamber does have detailed testimony that it desires to give, it would be well for it to indicate now about what the fields will be and how long the testimony will take, and then we will try to schedule them. We will resume the hearings at a later time unquestionably. Mr. HENDERSON. I am sure the chamber would be glad to cooperate, Mr. Chairman. The CHAIRMAN. Are there questions? Senator KUCHEL. I have no questions. This is a very useful state ment. The CHAIRMAN. Thank you very much for your appearance. (Subsequently the following communication was received from the chamber of commerce of the United States :) CHAMBER OF COMMERCE OF THE UNITED STATES, Senator CLINTON P. ANDERSON, Chairman, Senate Interior and Insular Affairs Committee, DEAR SENATOR ANDERSON: At the end of Mr. George Henderson's testimony for the Chamber of Commerce of the United States on June 16, you indicated you would like to have further information from the chamber as to the points we think should be covered in any legislation dealing with State water rights. It is our belief that the sovereignty of the States in the management of their intrastate or apportioned interstate water resources must be protected and reaffirmed by the Congress if we want to stimulate further State water resources planning and development. It is essential that Federal-State relationship in water resources be spelled out so it cannot be misinterpreted. We recommend that legislation clarifying Federal-State relationships with respect to water rights be enacted this year to carry out specifically these objectives: 1. Consider reserved or withdrawn lands in the same status as all other public lands. 2. Direct Federal agencies not to acquire or interfere with the exercise of any water rights held under State law without compensation, and where such rights are acquired otherwise than by agreement with the owner, they shall be taken by proceedings in eminent domain. There are additional points that need clarification during the 87th Congress if we hope to provide the maximum degree of confidence in vested water rights granted in the past and those which will be granted in the future. These points include 1. Reaffirm all water rights acquired under State law, before or after such legislation. 2. Direct that the Federal agencies, as a condition precedent to the use of water for any project, acquire rights to the use of water in accordance with individual State procedures. 3. Outline what specific rights are or are not held by the Federal Government to the use and control of water. 4. Provide that any legislation clarifying the situation should apply to the entire Nation. The national chamber believes that it may be desirable to draft several bills to carry out the aforementioned recommendations. If the clarification of the situation is to be taken in stages, however, there does not appear to be a need to wait any considerable period between the enactment of the necessary laws. Such procedure would give notice that it is the intent of the committee to clarify the several points involved. We believe that it would be useful to the committee to have additional testimony on the aforementioned points, once bills are introduced. We would appreciate it if you would make this a part of your record on this subject. Cordially yours, CLARENCE R. MILES, Manager, Legislative Department. The CHAIRMAN. Mr. Mead will be our next witness. STATEMENT OF WILLIAM J. MEAD, FEATHER RIVER PROJECT ASSOCIATION OF CALIFORNIA Mr. MEAD. My statement is very brief, Senator. I am sure that members of the organization I represent, the Feather River Project Association of California, have appeared before this committee on prior occasions. The purpose of this association is to support water development throughout California, and it actively supports in particular the California water development system which will be built and financed largely through the issuance of $134 billion in general obligation bonds which were approved by the people of the State last November. The support the Feather River Project Association gives water development takes the form principally of research and public information functions, research being of a study and review nature principally. The association tends, as a result, to take a rather broad, practical view of problems such as that before this committee and, therefore, does not attempt to offer any suggestions on precisely what terms of legislation may be desirable. However, I would like inserted in the record of this hearing the following resolution setting forth the views of the Feather River Project Association on this subject. The CHAIRMAN. Without objection that will be inserted into the record. (The resolution referred to follows:) RESOLUTION OF THE FEATHER RIVER PROJECT ASSOCIATION FEDERAL-STATE RELATIONS IN WATER RIGHTS Whereas, in a report of the Feather River Project Association's legislative committee, it is stated that there exists a conflict between the Federal and State Governments as to rights to water and its use, and that such conflict has resulted in costly litigation and is adverse to, and is interfering with, needed water development essential to the best interests of the people and the economy of the Nation and the State; and Whereas the report recommends that Congress be urged to study this problem with the objective of adopting appropriate legislation to solve this problem: Now, therefore, it is Resolved, That the report of the legislative committee of the Feather River Project Association be approved and that Congress be urged to assign this problem to the appropriate interim committee for study and report. Mr. MEAD. This resolution refers to a report of a legislative committee, Senator, which was verbal and was presented on June 8.. Therefore, there has been no opportunity to reduce this report to writing. Would it be proper to ask the committee if we could submit this report in writing to the committee? The CHAIRMAN. Yes. It will be received for the information of the committee. Are there any questions? Senator KUCHEL. Mr. Chairman, may I request that the record be kept open for 10 days for the filing of any additional statements by either witnesses who are present or who are not? The CHAIRMAN. We will do exactly that. We will keep the record open until a week from Monday, about the 25th. Thank you very much, Mr. Mead. The next witness is Mr. Thompson. We are very glad to have you here, Mr. Thompson. Mr. Thompson is no stranger to most of us. This is a different capacity, however, than that in which you ordinarily appear. STATEMENT OF SAM THOMPSON, FIRST VICE CHAIRMAN, Mr. THOMPSON. Yes, sir. I am first vice chairman of the Interstate Conference on Water Problems. It is a conference of the Council of State Governments, with representatives from all of the States participating in annual meetings. Because it is one of the fundamental aspects of the water resource problem, the conference has been very much aware of the difficulties which have developed around the question of water rights and has taken a position on the subject. The opportunity to present these views to your committee is much appreciated. The proposition on which Congress and the country as a whole have sought to build water policy and administration for at least 100 years is clear. We have proceeded on the assumption that rights to the use of water are to be determined, acquired, and divested in accord ance with State law. The States have developed bodies of law, and increasingly are developing machinery for the administration of water rights based on the existence of this long-settled proposition. On the other hand, there is no similar body of Federal law. The only Federal water rights doctrine we have is that of equitable apportionment. Where interstate compacts do not exist for the allocation of the waters of interstate streams, this doctrine is useful. But its only scope and purpose is the apportionment of water among States, and not among individual users within those States. The seemingly clear principle of determination of water rights by State law has become increasingly befogged because individual Federal agencies, usually administering single or limited-purpose water programs, have sought to assert the general supremacy of the Federal Government under the Constitution as a ground for pressing their own programs in the face of other considerations. So licenses for the development of hydroelectric energy have been given to users who were not entitled to the water under State law, and the action has been justified as an expression of the Federal power policy. Water has been taken by the Hawthorne Depot in Nevada, and the explanation offered has been that this was necessary for the national defense, even though there was nothing to prevent acquisition of the same water under State law. Apparently attempts have even been made to replace the system of State-conferred water rights to irrigation water by contracts for service from Federal projects. In contrast to the situation which has been developing in instances such as the Pelton Dam case, the court of appeals in San Francisco has recently ruled against the assertion of Federal right in the Friant Dam case. In a series of statutes that is now both long and clear in intent, Congress has sought to lay down a policy that would prevent the confusion which has developed. The Federal statutes say that water rights shall be acquired in accordance with State law. However, the piecemeal character of these statutes and strong pressure from some administrative agencies to test the limits to which they could push Federal power by pleading the commerce and defense provisions of the Constitution have substantially unsettled the congressional policy, to the damage of us all. While the courts will always be used to settle disputes among individual water users who seek to interpret their rights within the limits of statutory law, judicial determinations are not a satisfactory means for the construction or revision of major water policy, either Federal or State. This is a job for legislatures and, at the Federal level, for Congress. Congress is allowing its repeatedly declared policy that Federal agencies and licensees should observe State law to be eroded away because the subject of water resource development has become large and confused. However, the present anarchy in which everyone is encouraged to take potluck in the courts whenever he wants to change water policy can produce only turmoil and Congress will be shirking its responsibility if it does not effectively implement and restate its long-settled and sound approach to the problem of water rights. That the present judicial confusion can cut many ways is amply illustrated by the Friant Dam litigation. There it was held that certain riparian landowners along the San Joaquin River had rights to |