"Provided, That such amounts expended on land development shall be reimbursed in not to exceed forty annual installments:"

Also, the proviso commencing on line 9, page 1, and ending on line 6, page 2, of H. R. 9734, should be amended to read as follows:

"Provided further, That such amounts expended on the construction of pumping and distribution facilities shall be reimbursed to the United States by the water users on the Saco Divide unit in not to exceed forty annual installments, the first installment to accrue not later than the year following the last installment due and payable to the United States by the water users on the Saco Divide unit for that portion of the cost of the facilities common to the Saco Divide unit and other units of the Milk River project to be allocated by the Secretary of the Interior to the Saco Divide unit.'

The benefit which the United States would receive from the construction of the Saco Divide unit under the proposed legislation would be the recoupment of $225,000 which has been written off as a loss under the Omnibus Adjustment Act of 1926 and the return of $245,000 of the construction costs of Fresno Dam. The construction of the Saco Divide unit would also carry out the purposes of the appropriation item for water conservation and utilization projects in the Great Plains and semiarid areas of the United States. Farmers in the proposed unit now dependent on precarious dry farming would be given the security and stabilization afforded by a dependable water supply, and at the same time immediate relief to them and others in the area who are in dire need would be afforded by the Work Projects Administration's participation in the construction.

Although the Saco Divide unit has been proposed for construction under the appropriation item for water conservation and utilization projects contained in the Interior Department Appropriation Act, 1940, it involves the utilization of irrigation and storage features constructed for a regular reclamation project, and as noted at the outset of this report, the proposed Saco Divide unit does not measure up to the standards prescribed by the Congress for Federal reclamation projects and for combined relief-reclamation projects. The construction and development of this unit can be undertaken in accordance with the proposed plan only if the Congress makes special provision for it. I believe that careful consideration should be given to the fact that the situation of the proposed Saco Divide unit is unique and affords an opportunity, if the proposed legislation be enacted, for effectuating general reclamation and relief policies and at the same time partially recouping for the United States project costs heretofore written off by the Congress.

On the Milk River project the repayment problems have been complicated due to physical peculiarities of the water-supply system and due to the unusual plan of contracting for the repayment of the construction costs of Fresno Dam. In the circumstances, if the Congress gives favorable consideration to H. R. 9734, I recommend that the following additional section be incorporated in the bill for the purpose of safeguarding the interest of the United States:

"SEC. 2. No water shall be delivered for the Saco Divide unit until the Secretary of the Interior has entered into the contract or contracts required, in his judgment, to carry into full effect the provisions of section 1 and to provide for repayment of the reimbursable construction costs chargeable to the Saco Divide unit."

For the convenience of your committee there is attached a draft of bill in which the amendments to H. R. 9734 suggested above are set forth.

I have been advised by the Director of the Bureau of the Budget that this proposed legislation, either in its present form or amended in accordance with the suggestions herein contained, would not be in accord with the program of the President.

Sincerely yours,

HAROLD L. ICKES, Secretary of the Interior.

О

AUTHORIZING THE PRESIDENT TO REQUISITION CERTAIN MATERIALS FOR THE NATIONAL DEFENSE

AUGUST 15, 1940.-Committed to the Committee of the Whole House on tie state of the Union and ordered to be printed

Mr. FADDIS, from the Committee on Military Affairs, submitted the following

REPORT

[To accompany H. R. 10339]

The Committee on Military Affairs to whom was referred the bill (H. R. 10339) to authorize the President to requisition certain articles and materials for the use of the United States, and for other purposes, having considered the same, submit the following report thereon, with the recommendation that it do pass with the following amendments: On page 1, line 9, delete the words "request for".

On page 2, line 11, strike out the word "he" and insert in lieu thereof the words "such owner".

On page 2, line 14, strike out the word "him" and insert in lieu thereof the words "such owner".

On page 2, line 15, strike out the word "he" and insert in lieu thereof the words "such owner".

On page 2, line 18, strike out the period and add a comma and the following proviso:

Provided, That recovery shall be confined to the fair market value of such article or material, without any allowance for prospective profits, punitive or other damages.

The purpose of this bill is to authorize the President to requisition certain materials and articles for the use of the United States or its interests, any military equipment or munitions or component part thereof, or machinery, tools or materials, or supplies necessary for the manufacture, service, or operation thereof.

These machine tools or materials or supplies are articles for which export license has not been obtained. These articles are destined for foreign governments and are needed in our program for national defense.

This bill, however, does not apply to munitions or machinery tools or materials or supplies for which there is no intention to export. A large part of these machine tools, materials, or supplies that would come under the provisions of this bill are now on the various wharves. The bill also provides that the recovery shall be confined to a fair market value of such articles or materials requisitioned and taken over without any allowance for profits, punitive or other damages.

INCREASING THE LENDING AUTHORITY OF EXPORTIMPORT BANK OF WASHINGTON

AUGUST 15, 1940.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. STEAGALL, from the Committee on Banking and Currency, submitted the following.

REPORT

[To accompany H. R. 10361]

The Committee on Banking and Currency, to whom was referred the bill (H. R. 10361) to provide for increasing the lending authority of the Export-Import Bank of Washington, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

STATEMENT

Section 1 of the bill is in the form of an amendment to the provisions of section 5d of the Reconstruction Finance Corporation Act, as amended, which authorized the Corporation to give financial aid in connection with the national defense program of the United States Government. Section 1 authorizes the Export-Import Bank of Washington to make loans to any governments, their central banks, or other acceptable banking institutions, or when guaranteed by any such government, central bank, or other banking institution, to the political subdivisions, agencies, or nationals of any such government, to assist in the development of the resources, the stabilizing of economies, and the orderly marketing of the products of the countries of the Western Hemisphere. The provision of such authority in the Export-Import Bank effectuates the request of the President's message of July 22 to the Congress.

Such loans may be made only upon the written request of the Federal Loan Administrator with the approval of the President and subject to such limitations and conditions as either of them may prescribe. The bill provides for a revolving fund of $500,000,000 for such purposes to be made available to the Bank from funds supplied