I do not say what he said was correct; I only say that what he said merged pretty well with the things that I had tried to understand and believed these cases to represent.

I am glad to find out you think that was somewhat the purpose of these cases as well.

Mr. MASON. Of course, we have reported on any number of bills-by we, I mean the Federal Power Commission-including the Barrett bill that you referred to. I don't have any prepared statement because I assumed there would be questions and the position of the Federal Power Commission is pretty clear in the Pelton and First Iowa cases.

The law is pretty clear. I did not come here to discuss what the law is, but what might be the solution.

As we see the thing the problem is divided into two phases: One is, that if there is a vested State water right, somebody has a water right under State law, is he going to be paid for it as a result of either development authorized directly by Congress or a development authorized indirectly by Congress through a license under the Federal Power Act?

With respect to those licensed under the Federal Power Act, the law is very clear that the licensee must pay for any vested water rights he interferes with or takes over or uses.

Now, the other problem seems to me to be the one that Mr. Stanley spoke about. The real complaint he had is, who is going to control ultimately the federally authorized development? Are the States going to have authority to control it?

That is Mr. Stanley's position. Or is the Federal Government going to control federally authorized developments as the law presently is, as expressed in the First Iowa and Pelton cases.

Those are the two issues involved. As the Commission in reporting on past bills has pointed out, we have no problem of compensation.

In the Pelton case there were no State water rights being interfered with. As a matter of fact, the Commission required the licensee to build a reregulating dam downstream from the main power dam for the purpose of reregulating flows so that the natural unregulated flow of the river could be maintained notwithstanding power development.

That cost $4 or $5 million.

There were other measures taken. All the things that the State requested were granted. The only thing unresolved was who was going to have the final say as to who was going to ultimately issue the final license, the State of Oregon or the Federal Power Commission.

The Commission went to the Supreme Court in the Pelton case which interpreted the law to say that the final authority was delegated to the Federal Power Commission by Congress.

With respect to the question of who is going to control the comprehensive development of the national resources referred to in First Iowa and also the Pelton case, so far Congress has followed consistently for 40 years a comprehensive national plan for water development as expressed in the Federal Power Act. If that policy is to be continued in effect, then the Federal Government, through the Federal Power Commission, must have the final say-so or ultimate control as to comprehensive development.

Our experience over the years certainly has been that if ultimate control is vested in the States we then have 48 or 50 authorities which have the final say-so on national planning for water power development rather than a single one.

There are many projects where one side of the dam is in State A, the other side of the dam is in State B.

If one State has a law which would act to limit a dam to 25 feet and the other State said the dam had to be 100 feet high, under those circumstances there could not be comprehensive development of water resources.

To the Commission the problem is just as simple as that. The Commission has made an effort to stay out of the legal argument as to who owns what. It points out that this comprehensive plan of regulation, as expressed in the Federal Power Act, has been successfully operated for 40 years and urges that, whatever you do, don't disturb basically that system by putting control into the individual States.

I don't know how to state the problem any more simply than that, Mr. Chairman.

The CHAIRMAN. Quite obviously, though, there are States where a great many

people worry.

Is there any way that the Federal Power Commission could suggest an amendment that might relieve their worries to some degree?

Mr. Stanley gave some suggestions as to what might be done. He would add a few words here and there to the bill.

Do you see any danger in adding those words?

Mr. MASON. Going back to the so-called administration bill, which we reported on and there has been much discussion about, I am giving my personal view now, but I think some lawyers will agree with me that have considered the problem, as far as the Pelton situation is concerned, it is my personal view that the administration bill would not really remedy the situation. It would not give the State what it wants because there is not applicable State law even if you pass the administration bill that would give the State of Oregon the right to appropriate water on reserved lands.

You have to get to the basic problem, the Desert Land Act.

There has not been a delegation by the Congress to the States to control water on reserved lands. That is the key to the whole problem.

Congress did, through the 1860 act, the 1866 act, the 1877 act, as I see it, enact laws to turn over to the States the right to administer water on public lands, but not reserved land, under the Pelton decision.

Now, in the absence of some change in that basic delegation, the administration act, the State law would not be applicable after you passed the administration bill. That is my own view.

The CHAIRMAN. Now, Mr. Stanley suggests that where the act refers to public lands, to add "including reserved lands."

You do not think that would really solve much of anything?

Mr. MASON. If you did that and nothing more, you would then have the effect of requiring the licensee to comply with State law when he wants to build a project on reserved lands. By amending that act the way Mr. Stanley suggests, a licensee constructing a project under Federal Power Commission authority on reserved lands of the United States, absent the interstate commerce authority, and solely the land authority, would be subject to the State laws.

That in effect would be a veto of Federal authority by the State if the State refused to issue a water permit.

The CHAIRMAN. Are there any questions?
Senator METCALF. No questions.

The CHAIRMAN. Mr. Hickey.

Senator HICKEY. Mr. Chairman, if I may :

Did I understand you to say you were the counsel in the Pelton Dam case? Mr. MASON. Yes, sir; in the hearing before the examiner in Portland, Oreg., and before the Commission and I also was on brief in the Circuit Court of Appeals in the Ninth Circuit, also in the Supreme Court.

Senator HICKEY. Did I take it from your statement to the committee that in your view you interpreted the Oregon case in the very narrow area of applying only to reserved lands?

Mr. MASON. That is all that is involved. The Commission specifically made no finding on the navigability so that the commerce power was not involved. It was strictly a land deal.

I might add that was done purposely. There was no evidence at all in the record with respect to navigability.

Whether the Deschutes River, the one involved, could be shown to be navigable or not, I do not know. Maybe it could, but there was no evidence introduced in the record relating to navigability so that the Commission, in deciding upon the application, was very careful to say it was assuming the river was not navigable. The Commission made no finding one way or the other.

Senator HICKEY. You know it gave rise to great speculation as to what the effect would be.

Mr. MASON. We are aware of that.

Senator HICKEY. I think it is important for us to get in the record here that your concept, the concept of the agency you represent, is that this was a rather limited decision with regard to its effect and in no sense does it apply other than to reserved lands.

Mr. MASON. That is correct.

I think that the inability or failure or unwillingness of people to understand the Pelton case has caused a lot of controversy which we do not feel is justified.

In the Supreme Court decision the Court was careful to point out that there was no interference with any State water right here, with any vested right. The natural flow of the stream is maintained throughout the 365 days of the year, 24 hours a day and there was not any claim of damage involved there. The Court also pointed out the efforts that the Commission made with respect to the fish run, and its requiring the licensee to comply de facto with all reasonable requirements of the State.

The only thing that we could not agree on with the State of Oregon was who was going to have the veto power. The Supreme Court in the Oregon case points that out. I am reading from the Supreme Court decision, Federal Power Commission v. State of Oregon, 349 U.S. 435. I am going to read from page 445, and I quote:

"To allow Oregon to veto such use, by requiring the State's additional permission, would result in the very duplication of regulatory control precluded by the First Iowa decision, 328 U.S. 152, 177-179. No such duplication of authority is called for by the Act. The Court of Appeals in the instant case agrees. (211 F.2d at 351.)"

I think the Pelton case is a decision in which the Court, itself, made every effort to limit its applicability.

Certainly in preparing the briefs and making arguments in the Court the Federal Power Commission was careful to limit its argument the extent that it could. We were concerned only with the authority granted under the Federal Power Act, not who owned the water and these other problems that have come up today.

Senator HICKEY. I think what you have said here is in line with the information given me earlier this year as to what the Farm Bureau people believe the Pelton Dam to be limited to, to a very limited field, and that anything that this committee might do in the way of being beneficial to water users in the arid West it would have to do in the view that the Pelton case was a very limited case. I was very pleased to listen to your analysis of the problem.

I have about three questions. I take it that your view of the establishment of ownership of water in the Federal Government arises from the instruments by which the lands were ceded to the United States, whether it be treaties, annexations, purchase or what, that those property rights that are claimed by the Federal Government stem from the acquisition or ceding of the land. Is that correct?

Mr. MASON. That is correct. I would like to add this comment. You used the term "ownership of water." That is a term that is used very loosely. Actually it is awfully hard to conceive of anybody owning flowing water. What we are talking about is right of use.

Senator HICKEY. Let us be really articulate then and instead of saying "ownership," say the recognition of property rights in the water or to the water. That, then, would be your basic understanding of the basis of the Government claim?

Mr. MASON. That is my understanding.

Senator HICKEY. Starting off there, do you understand that the Government has in some instances and may in other instances divest itself of this particular property value?

Mr. MASON. That is correct. In that connection, to take an example of that, the Desert Land Act

Senator HICKEY. That was my next question. Do you believe then that the Desert Land Act you have referred to was a legal means by which the Congress of the United States divested the Federal Government of this particular property right acquired by virtue of annexation, one of the ceding processes?

Mr. MASON. I would not quite state it that way. I would say that the Desert Land Act is the means through which Congress set up the procedure which permits the States to administer use of water on public lands, but I believe that the law is clear that up until the time that someone acquires unappropriated water through State procedures that the water on the public land, not having vested in any private person, may still be withdrawn from that procedure by the Federal Government. That is the reserved land theory.

I believe Mr. Stanley takes the position that the Desert Land Act had the effect of conveying to the States all waters on public lands of the United States.

I do not take that view. I do not think the Portland Cement case stands for that. The Congress said we are going to recognize water rights acquired by private individuals through local customs and laws and once they are acquired

we will recognize them but until the party acquires them the Federal Government retains that right.

That is what we are talking about.

Senator HICKEY. In the process of admitting States to the Union, where a State constitution provides at the time it is accepted by the Congress of the United States that the State in and of itself is the owner of all the water within its boundaries, would you say that acceptance of such a constitution by the Congress of the United States prior to the admission of the State would be a divesting of Federal rights by the Congress?

Mr. MASON. In answer to that, I would like to say I am glad I was here this morning and heard the question before. I really have not given thought to that in any of the cases we have had.

I would not be helpful here to guess at an opinion. I do not have an opinion on that.

Senator HICKEY. My State has that peculiar provision.

I think probably as a lawyer you recognize the possibility that such an argument is valid.

Mr. MASON. I certainly recognize the argument is there. Whether it is valid, I have no opinion. I do not know any case in point. I am afraid I would not be much help to you on that because I just do not know anything about it.

Senator HICKEY. Now the concluding question: if we are to effect some legislation, having gone on the premise that the Federal Government can divest itself of its water rights, is it in your opinion that this committee should determine a way or a means by which we could write into the Federal law an additional manner in which the Government could divest itself of these rights, such as was done under the Homestead Acts and other legislation you mentioned? Could that remedy the problem or quiet the fears of people?

Mr. MASON. I would think that one possible solution or one way to quiet the fears, the real legitimate fears, would be to enact a statute which would be similar to section 8 of the Reclamation Act, and section 27 of the Federal Power Act, which would say that the agents of the United States are to pay for any vested water right acquired under State law where any of those rights are interfered with in the construction of navigation or flood control projects unless Congress provides an exception in a specific law authorizing that project.

Those are the only projects left that I know anything about that people are not 100 percent compensated when their water rights are taken.

I am referring to the Twin City case (350 U.S. 222) which followed ChandlerDunbar (229 U.S. 53) and distinguished Niagara Mohawk (347 U.S. 239). In Niagara Mohawk we took the position, consistent with Chandler-Dunbar, that the Federal Power Act exercised that navigation servitude and gave the licensee the right to use water rights without paying for them—that is, water rights acquired under State law.

We took the position that those water rights were not good unless we had concurrent Federal rights.

The law is clear today that a licensee cannot take advantage of the navigation servitude in building a project under the Federal Power Act.

If he interferes with a vested right under State law, even though it is on a navigable stream, a licensee has to pay for it.

The Federal Government could apply the same theory across the board to all Federal projects. You could then give assurance that any rights acquired under State law are subject to compensation if the Federal Government interferes with them in any way.

To me that would remove all of this fear of no compensation for vested State water rights.

That may not get to the next part of your problem: What do you do with controlling the use of water on reserved lands? Of course, with respect to power when you use water for power you do not consume the water. There is not anything necessarily or inherently inconsistent between the construction and operation and maintenance of a water power project and the use of the same water upstream and down for irrigation, municipal water use, or any other consumptive use. As a matter of fact, the natural result of most development is that you store floodwater that ordinarily would go to waste and augment low flow's during summer months and you automatically have more water downstream for irrigation and other purposes. That is true of the Government's Kern River flood control project in southern California, and many others.

One of the purposes besides flood control is to augment low flows and increase irrigation use downstream.

Senator HICKEY. By virtue of those retaining dams?

Mr. MASON. Yes, sir; by virtue of storing floodwater and then releasing them over the low-flow periods to raise your low flows.

So, with respect to the Federal Power Act, not making any consumptive use of water, we do not have these direct conflicts that occur in the reclamation projects and as occurred in the Friant Dam situation that was talked about this morning.

We really do not see any problem here so far as the Federal Power Act is concerned. We do see it with respect to other types of projects for consumption use-namely, irrigation projects-where the Government is going to use the water or the private parties are going to use it. There you have a direct conflict. Senator HICKEY. But you recognize that in many of the statutes now on the books, the Government recognizes the State control and right to administer the waters?

Mr. MASON. Yes, sir. As part and parcel of that they recognize the fact that the Congress provided that you are going to get paid for these as in the Gerlach case discussed this morning. That was the case where the Bureau of Reclamation under its law thought it should pay for interference with downstream irrigation use, downstream of Friant Dam. Really what they are doing was depriving a man of the right of natural floodflows. The Bureau put the dam there and no more floodwaters flowed over the lands.

The Justice Department came into the case and asserted the navigation servitude, contending that since Congress had authorized the dam for navigation and reclamation, the Federal Government should not pay for such loss of floodwaters. However, the Supreme Court said that the Federal Government should pay for the water rights which were taken or interfered with that belonged to private

owners.

Congress could say the same thing with respect to navigation servitude if it wanted to.

Senator HICKEY. Thank you very much.

The CHAIRMAN. Before you leave now, because this question of the State constitution came up, I asked to have put in a copy of the administration bill that the Department sent to us. When Senator O'Mahoney got that he added to it. He made it Senate 851 and introduced it as Senate 851 but he added a clause. That clause read:

"Nor shall it affect the right of any State to exercise jurisdiction over the water rights conferred by the act admitting such State into the Union or such State's constitution as accepted and ratified by such act of admission.”

The Department of Justice commented on the bill and said:

"With this clause contained in the bill this Department would have to oppose it in its present form. There are substantial reasons why we cannot agree as a matter of law that 'any State' has had 'conferred' upon it 'the right *** to exercise jurisdiction over water rights,' in the manner suggested by the language of the clause quoted. However, we do not press our views in this respect this time further than to suggest very practical reasons why we believe your committee will wish to recommend amendment of the bill by deleting the clause in question.

"If the effect of a State's admission to the Union based on language in the act of admission or its own constitution, has been such as that implied by the clause in question it is fait accompli, and any legislation on the subject is superfluous. But if, on the other hand, the effect of a State's admission was not such that that is so implied, then the clause in question cannot make it so. Furthermore, the mentioned clause deals with an issue which is not germane to the rest of the bill and its inclusion could very possibly cause confusion and misunderstanding in the interpretation and application of any such legislation as a whole. Finally, the clause referred to could not, in my view, have any effect of application in more than 3, more likely only 2, of the 17 so-called reclamation States. We, therefore, join in the recommendation made by the Department of the Interior that this clause be eliminated."

I read that into the record just to show that Senator O'Mahoney, working as diligently as he could in trying to bring about a peaceful solution to this whole matter, ran straight into a stone wall again.

That is one of the problems we have steadily when we try to get some legislation passed.