water-development projects should be only upon the request of and in cooperation with State and local interests. We are opposed to Federal domination of water-resource development.

We favor legislation to require Federal agencies (1) to comply with State laws relating to the use of water; and (2) to respect private rights to use water established by State authority. The right to use water is a property right which should not be taken from any person without due process of law and adequate compensation.

Since this committee is not considering specific bills at this time, we would like to emphasize the principles and specific objectives which we believe are appropriate to the development of water-rights legislation.

In our opinion, any legislation dealing with this problem should(1) Be applicable to the entire United States;

(2) Recognize the validity of private water rights established under State laws;

(3) Provide that a right to use water shall not be taken from anyone without just compensation;

(4) Require licensees of the Federal Power Commission, as a condition of their licenses, to comply with applicable State laws;

(5) Provide that water flowing from reserved lands shall be considered subject to State authority in the same manner as water flowing from other public lands.

At the top of the list of objectives of such legislation, we would put the need to restore the legal relationship between State and Federal authority that existed prior to the Pelton Dam decision. In the Desert Land Act, the Congress established the principle that water, flowing from public lands, was subject to allocation among users by State authority. But the Pelton Dam decision held that reserved lands are not to be considered public lands.

Since the major water-producing areas of the West are reserved lands, this decision takes most of the meaning out of the Desert Land Act and raises a question as to the future validity of private water rights in water flowing from reserved lands. Such rights have long been established under State law; and for all intents and purposes, reserved land are public lands. We urge the enactment of legislation to accomplish this objective.

Next on our list of objectives is the need to clarify State authority with respect to the regulation of water use by private interests where the exercise of State authority does not have a significant adverse effect on the navigability of the water body involved.

In the First Iowa case, the Supreme Court held that the Federal Power Commission need not obtain approval from State authorities to divert water from the Cedar River to another river even though this river is not, in fact, navigable and even though its contribution to the navigability of the Mississippi is relatively unimportant.

In the Tacoma case, the Supreme Court held that the licensee might build a dam across a stream even though such construction was prohibited by laws of the State of Washington designed to preserve the salmon fishing industry.

Sections 9(b) and 27 of the Federal Power Act (41 Stat. 1077) indicate that the Congress has sought to establish the principle that licensees of the Federal Power Commission must comply with State law. But these sections have not effectively safeguarded this principle. We, therefore, recommend the enactment of legislation direct

ing the Federal Power Commission to require that licensees comply with all applicable State laws.

The third objective we wish to recommend is that the Congress establish the principle that, if the Federal Government in the exercise of its navigational and other powers finds it necessary to take a private right to use water which has been validly established under State law, it should compensate the owner thereof.

The right to use water is a property right which should be just as secure as a right to use land. No one would question the concept that, if the Federal Government must have a parcel of land for a governmental purpose, it should pay the owner for such land. We believe the same principle should be applicable when the Government takes a man's right to use water.

We do not contend that any number of individuals have lost their right to use water; however, there is an uneasy feeling among farmers and ranchers that, as a result of some of the judicial action which has been given to this issue, the legal foundation of such rights has been questioned.

We have just seen, in February, the trial judge in the Fallbrook case decide in the users' favor in California. He (1) dismissed the complaints filed by the U.S. Department of Justice against nearly 6,000 water users; (2) ruled that the Federal Government may not compel present users to give up their rights to water to the Federal Government for nonriparian and uses outside the watershed; and (3) decided that the underground waters in question are not of a riparian nature.

Although this decision favored the users, we would like to point out that these people were hauled into court, forced to spend time and money to again establish something they thought they already had; and they still do not know what the final outcome will be. Under present conditions, this sort of uncertainty, this sort of difficulty, could be repeated many, many times. We urge legislation to obtain this objective.

The final report of the Select Committee on National Water Resources includes the following paragraph:

The problem of Federal-State water rights is one that calls for broad objective inquiry, and for statesmanship of the highest caliber on the part of both the Congress and the States in its solution. A solution must be worked out, and worked out promptly, for the preservation of the historic pattern under which our people have grown great.

Gentlemen, we believe these lines. We believe that you, together with your counterparts on the House side, can and should work out problem to the benefit of all parties concerned.

We feel the fine line of demarcation in the field of Federal-State relationships in water resources needs to be spelled out clearly, certainly, so that it cannot be misinterpreted. We question no one's motives in this field, but we are sure errors have been made, especially in three areas. We feel the Supreme Court has overstepped its bounds, that the Federal agencies have been overzealous of their authority at times, and that the States are not without fault in this field.

We certainly agree the Congress has, and should have, certain powers: The commerce power, the property power, and others. These powers are right and proper and should be used only as the Congress

chooses to use them, and then only to promote a clear, defined national interest.

We do not believe these powers should be exercised by anyone else without the expressed authorization of the Congress. In article I, section 8, of the Constitution, the Congress was granted these powers, not the Supreme Court nor any executive department.

The constitutional authority to improve waters for navigability and the character of the "navigational servitude" are well established. But this does not mean that Congress may not voluntarily place appropriate limitations upon the navigation power as it may choose.

The commerce power of the Constitution is permissive, not mandatory, and is implemented by act of Congress. It is within the power of Congress to define the extent to which the power will be exercised and the rules and principles to be followed by Federal agencies and the courts in the administration and interpretation of the power.

Since the Justice Department has agreed in previous testimony that legislation in this field is desirable and has assisted in drafting bills to this end, and since other departments have concurred, the way should be clear of earlier resistance. We commend these departments for so doing.

However, we believe the power and duty to act rests with the Congress alone, whether a particular executive department or agency concurs or not. Incidentally, it is interesting to note how little difficulty has been experienced under the watershed and reclamation programs which are close to and directed by the local people, and that the most trouble stems from agencies which have little or no direct contact with local people.

The States, likewise, have an obligation toward water law development. Some States have laws adequate to apportion scarce water supplies among their own users. Other States have revised their laws in the past few years. Many States depend upon court action and court decisions. These will not be adequate as the user of water becomes more extensive and the supply more limited.

We do not hold with the theory that legislation to more clearly define Federal-State relationships with respect to water use will adversely affect future reclamation programs. In nearly all cases to date, the Bureau of Reclamation has complied with State laws; and we know of no good reason why it should not continue to do so.

We sincerely hope and recommend that the committee will set in motion the machinery to define and stabilize Federal-State relationships in water rights by:

(1) An affirmative decision that the job can and must be done; (2) Developing a proper bill, or bills, to correct the present confusions; and

(3) Pursuing the matter, with the help of like minds in the House of Representatives, through the Congress, to final passage.

We realize this will be a difficult task and that it will require, as stated in the select committee report, real "statesmanship of the highest caliber." We are convinced this subject is more important now than ever before and that it will increase in significance. You can resolve the issue.

Again, we appreciate the opportunity to present our views, and assure you we are ready to assist in any way possible to accomplish the objectives we have outlined.

(Mr. Taylor's citations follow :)

CITATIONS

The Pelton Dam case (FPC v. Oregon, 349KS435): The Supreme Court held that a FPC licensee on a nonnavigable stream need not obtain State authorization for the construction of a reservoir. Here the decision turned on the fact that the dam was to be constructed on federally owned reserve land.

The Desert Land Act of March 3, 1877 (19 Stat. 377).

First Iowa v. FPC (328 U.S. 152) (1946): The Supreme Court held that a Federal Power Commission licensee authorized by FPC to divert water from a tributary of a navigable river need not obtain approval from the State of Iowa for such diversion, although such approval was required by State law.

The Tacoma case (Supreme Court case 509) (June 23, 1958): The Supreme Court held that the city of Tacoma could build a dam on a navigable river despite (1) State law requiring State approval of such dams, (2) State law prohibiting dams on the particular river to protect the salmon industry, and (3) a decision of the State supreme court that the State legislature had not authorized its municipalities to have such power.

Federal Power Act of 1920 (41 Stat. 1077):

9(b). "Satisfactory evidence that the applicant has complied with the requirements of the laws of the State or States within which the proposed project is to be located with respect to * * *" shall be submitted to the Commission.

27. "Nothing contained in this chapter shall be construed as affecting or intending to affect or in any way to interfere with the laws of the respective States relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired therein.” Fallbrook case decision: A recent announcement states that the trial judge in the Fallbrook case has (1) dismissed the complaints filed by the U.S. Justice Department against some 5,000 to 6,000 water users in the Santa Margarita River Watershed, (2) ruled that the Federal Government may not compel present users to give up their rights to water to the Federal Government for nonriparian and uses outside of the watershed, and (3) that the underground waters in question are not of a riparian nature.

Senator METCALF (presiding). Thank you very much, Mr. Taylor, for a helpful statement.

The committee will be in recess until 2 o'clock this afternoon, at which time we will hear from Mr. Ely.

(Whereupon, at 12:30 p.m. the committee recessed, to reconvene at 2 p.m. the same day.)

AFTERNOON SESSION

The committee reconvened at 2 p.m., Senator Clinton P. Anderson (chairman of the committee) presiding.

The CHAIRMAN. The next witness is Mr. Northcutt Ely, former executive assistant to a former Secretary of Interior, now practicing law here in Washington.

We are glad to have you here, Mr. Ely.

STATEMENT OF NORTHCUTT ELY, WASHINGTON, D.C.

Mr. ELY. Thank you, Mr. Chairman. I am honored to be here. My name is Northcutt Ely. I am a member of the law firm of Ely, Duncan & Bennett, with offices in the Tower Building, Washington, D.C.

I am appearing as an individual at the invitation of the committee, not in a representative capacity, and what I say here represents only my own views.

1. WATER BUDGET

We are accustomed to saying that the water budget is one budget that has to be balanced. You cannot print water and you cannot borrow it. But the Nation's water budget, like its other accounts, is under inflationary pressures. In many areas we are consuming capital.

East of the 98th meridian the Nation's water resources are so great that they appear adequate to meet any foreseeable consumptive use requirements. Over 80 percent of the water diverted or withdrawn there is used by industry, and most of that use is not consumptive. The problems are ones of geographic redistribution and of quality. Money can solve most of them. There is, as yet, no absolute ceiling on quantity in sight.

West of the 98th meridian an absolute ceiling on the water supply is foreseeable. The day will come in many areas and in a few decades when more money will not produce more water from the streams. It has been estimated that by the year 2000 the population of the Southwestern States will be such that the required withdrawals of water, by diversion or pumping, will require twice the estimated runoff, and, that consumptive use requirements might equal the entire runoff, even if it could all be made available for use. Irrigated agriculture will necessarily be competitive with other uses.

We are witnessing one of the great migrations of human history. It is pouring into the driest quadrant of the American Nation. The southwestern deserts are filling up, and as people move there, they increase their per capita consumption. People have migrated over the earth's surface in great numbers before, but seldom have they deliberately lift humid areas and moved into the desert.

As our people have moved into these deserts, it is hard to say whether the development of the water supply has kept up with the population, or the population has kept up with the water supply.

We should take note of three significant factors. The first is that most of this western development has been agricultural, giving rise to the assumption, until recently, that agricultural use is the most economic use of water; second, some five-sixths of this agricultural development took place under the control of the law of supply and demand, without Government subsidy; third, most of it took place more than a quarter century ago, when our stream hydrographs were necessarily short, and in many areas, as we now know, they encompassed only the wet phase of a long-range cycle.

The demand was agricultural, and the population pressure was rural and hence not intense. Even now, more than 80 percent of the West's use of water is agricultural, less than 15 percent industrial and municipal.

But this is changing. The easy projects have all been built. The new ones are extremely expensive and their water supply is frequently controversial. The human migration into the deserts coincides with the march of the deserts against man. This appears to be a dry phase of a long cycle, and the deserts are on the march. As the hydrograph lengthens, man's optimism shortens.