Mr. DIETZ. We are not collecting maintenance charges from the ased lands. The CHAIRMAN. Why is that? Why do you not collect mainteance and operation, at least, from leased lands? Mr. DIETZ. I presume that was the policy adopted by the Indian Office, leasing the land in order to get it subdued. The CHAIRMAN. Do you think, as an engineer, that is a proper conomic system that you and I, taxpayers of the United States, hould pay for the maintenance and operation of the plant, distriution of water on leased land for the benefit of white men who make profit out of it? Mr. DIETZ. I should say not, if that were true. The CHAIRMAN. That is what it amounts to, does it not? Mr. DIETZ. Is not the money that is expended for water coming rom the Indian's own tribal funds? The CHAIRMAN. Even though it does, should not the Indian have. he benefit of the difference between what it costs to produce the water? Should it be turned over to the white lessee for less than t cost, even though it is Indian money? Mr. DIETZ. The Indian is gaining an infinite benefit from the subuing of his land. The CHAIRMAN. You have got the project only 10 per cent cultiated by the Indians, upon which there has been expended so far 1,200,000. Now, indirectly only does the Indian benefit from that f the thing is a success. I think the lessee certainly gets the maority part of the benefit. Mr. DIETZ. Yes. The CHAIRMAN. He, at least, ought to pay for the maintenance nd operation, if not a sufficient amount to reimburse the capital nvestment of $800,000. Mr. DIETZ. That is the policy adopted by the Indian Office. Our lepartment has nothing to do with that The assessment is made on he water in that way unless the policy changes from what they are loing now. The CHAIRMAN. I think they will. Mr. DIETZ. Conditions will be different from what they are now. The CHAIRMAN. What is the condition of the plant, and have you ny recommendations to make? Before you answer that question I vill ask you this: You have got now $1,200,000 invested up there. n your cost of maintenance and operation do you add an interest harge-6 per cent of the $1,200,000? Mr. DIETZ. No. The CHAIRMAN. So that is an absolute gift to the users of the vater? Mr. DIETZ. No interest charge whatever to my knowledge? The CHAIRMAN. You say it cost 30 cents to $2 an acre. If you dded 6 per cent on the $1,200,000 and divided that up against the creage, you would have a charge there of nearly $2 an acre to comare with your 30 cents to $2 an acre. Just go ahead and make our statement. Mr. DIETZ. The Uintah project is not in as fair a condition as it hould be were it not so remote from the railroad. We can not build r put in a modern class of structures out there such as the Reclanation Service is putting in nearly everywhere and such as we put in elsewhere, because we are 180 to 200 miles from the railroad, an bringing freight out there the cost would be prohibitive, and this material timber is used. The timber is poor and lasts three t five years. There is a limit to the life of the timber which we us in these structures, and the cost of the upkeep is rather high on thes structures, but, on the whole, the project is in a fair condition t distribute the water. The CHAIRMAN. The same conditions which apply to the building of the project on account of it being so far from the railroad wil apply to the distribution of the crops which are raised on that land would they not? Mr. DIETZ. To-day practically everything that is raised out ther is disposed of locally. The CHAIRMAN. What is the general situation with regard to the population surrounding the irrigation scheme? Mr. DIETZ. The land that is marked green on this map here (in dicating), is great areas developed by white men who have cleared the land and have a secondary water right reserved. They have de veloped, I presume, as large an acreage as we have, and, of course. they have their little towns, numerous little towns, out there. The CHAIRMAN. Do you figure that when you get this 75,000 or 100,000 acres under full and complete productivity that the products will have consumption in and around the reservation? Mr. DIETZ. No; probably not. The CHAIRMAN. How, then, do you expect to get them to the market? Mr. DIETZ. We have a project of a railroad out to Uintah Basin which the settlers have been expecting out there from year to year and which now appears to be within reach. The CHAIRMAN. In your judgment as an engineer, do you think that was a proper place to put an investment of that kind? Mr. DIETZ. Do you mean for an irrigation system? The CHAIRMAN. That is what I mean. Mr. DIETZ. Yes: I think so. Mr. CARTER. This white man's project is a different project from the Indian project? Mr. DIETZ. Yes. Mr. CARTER. How was it to be put in, by the Reclamation Service or by private enterprise? Mr. DIETZ. Incorporated to build their own system. Mr. CARTER. Did I understand you to say that the maintenance charges of the Indian project were paid from Indian funds? Mr. DIETZ. That was my understanding of it: yes. It is paid from these appropriations made from year to year. Mr. CARTER. But we make appropriations, as you understand, from the Treasury and from Indian tribal funds, too. Do you know of your own knowledge which this is paid from? Mr. DIETZ. No, sir; I could not say. I have the bill here. The CHAIRMAN. You are the supervising engineer of that project. It seems to me you ought to be advised about the funds and things so you could tell this committee offhand nearly what is going on. That is a very ordinery piece of information, is it not? Mr. CARTER. Yes; and we ought to have it. Mr. DIETZ. I can get it for you. Mr. ELSTON. You say that the original leases you are making on he land are made without any money rental and for the consideraion which consists practically of bringing the land into cultivation. hat is the consideration that the lessees give to the Indian for the se of the land and for the use of the water? Mr. DIETZ. Mr. Kneale said that. Mr. ELSTON. Is that your idea? Mr. DIETZ. Yes, sir. Mr. ELSTON. I understand that for those original leases the lessees ay no money consideration at all in addition to the consideration hey give of subduing the land and bringing it into cultivation. Is hat right? Mr. DIETZ. That is my understanding. Mr. ELSTON. Do they pay from 30 cents to $2 an acre for mainenance? Mr. DIETZ. The lessees do not. Mr. ELSTON. Who does pay it? Mr. DIETZ. Every purchaser of the land. Mr. ELSTON. There are very few purchasers, so that money is not oming in. Mr. HASTINGS. Twenty-five thousand acres; that is the testimony. Mr. ELSTON. Those purchasers pay only the pro rata rate that is harged to the acreage that they buy? Mr. DIETZ. That is the charge per acre. Mr. ELSTON. Ninety thousand acres is to be served by this system; s that true? Mr. DIETZ. That is the ultimate acreage; yes. Mr. ELSTON. What is the amount of acreage in total which would have to bear the total cost of maintenance and operation and overead? Mr. DIETZ. About 8,000 acres. Mr. ELSTON. Then there is only to this date about one-third of the creage that can respond in the way of payment of that overhead. Is hat true? Mr. DIETZ. Yes. Mr. ELSTON. What pays the two-thirds balance of the overhead? Mr. DIETZ. I could not answer that question. Mr. ELSTON. Is that charged as a deferred debt against the and, to be paid by eventual purchasers? Mr. DIETZ. I do not think so. We have, of course, a charge gainst each acre from year to year, but have not had any instrucions to make collections on it as yet. It is understood that the cost will be reimbursable, but we have no instructions on it at all. Mr. ELSTON. I understand that the general policy obtains that hen these original lessees leave and new leases are made on all that and brought under cultivation that the rental is made from $5 to 10 an acre to the new lessee. Is that true? Mr. DIETZ. Mr. Kneale might answer that. You are getting out f my sphere in the leasing. Mr. ELSTON. It is not your province to find out how any of the verhead or capital expense is being repaid, or what the scheme f repayment is, or how it is apportioned? Mr. DIETZ. Decide on the collections and assessments against the and which has been purchased. That is all. Mr. ELSTON. You confine your activities in the financing of thi to land that has been purchased and assessing the proportionate par of the overhead cost? Mr. DIETZ. Yes, sir. Of course, we carry on our books from year to year the charge on that acreage. Mr. ELSTON. Then, when land is brought into cultivation, hav you any idea about what the yield in value per annum per acre is? Mr. DILTZ. That varies, of course, a great deal. Mr. ELSTON. Strike an average. About what is the money valu of his crops? Mr. DIETZ. $25 to $40 an acre. Mr. ELSTON. Would that be net, without taking off overhead expense, or gross? Mr. DIETZ. I would call it gross. Mr. ELSTON. What would be the net after he pays the ordinary farm expenses? Mr. DIETZ. $15 to $25 an acre. Of course, I can not answer that It varies with the Indians and with the local conditions. Mr. ELSTON. Taking a proper perspective of this matter, which you are general superintendent, that human element would come into it in some way. Would that $15 to $25 an acre not be a result after deducting this rental of $5 to $10 an acre on the releasing of the land? Mr. DIETZ. I am not sure about that. Mr. ELSTON. I am trying to get at what is the possibility of these lessors or purchasers or original allottees who have the land there, the charge for the water having been put on it, making a payment in the way of rental for the use of the water and in the way of amortization of the total capital cost. Will this ever be paid ont of the tribal fund, or by the Government, in such a way that it is a charity proposition forever? Our idea is that this is to be a business proposition, on a business plan of amortization, where the final capital is worked out, and so forth, and the land pay for it. What does the land sell for? Mr. DIETZ. $30 to $100 an acre. Mr. ELSTON. The average holding? Mr. ELSTON. Is any of the water out of the Indian system diverted to the use of these white homesteaders? Mr. DIETZ. Not Indian water, unless it is taken surreptitiously. Mr. ELSTON. I understand that water from your system is given entirely over to Indian lands; to the acreage of allottees' land. Mr. DIETZ. We have an arrangement whereby we cover some of the secondary users of water into our ditches. Mr. ELSTON. That is a mutual arrangement? Mr. DIETZ. If they do not, they pay us a reasonable compensation. Mr. ELSTON. I was wondering whether you gave any of this water to white users or purchasers on a rental basis. Mr. DIETZ. We have no water for that; no, sir. The CHAIRMAN. You say the gross return of that acreage is $15 to $25? Mr. DIETZ. The gross return would be $25 to $40. May I ask you to ask Mr. Kneale a question? He has the figures that I have not. The CHAIRMAN. I am asking you. Do you think, as an engineerng proposition, that you can afford to spend $1,200,000 to water and that will only produce $15 to $40 an acre gross? Do you think hat is a proper proposition as an engineering question? Mr. DIETZ. It has always been my position that any irrigation. ystem should pay for the cost of both putting the water on the and, the construction cost, and the maintenance cost. The CHAIRMAN. That does not answer the question. I am asking you for your opinion as an engineer whether or not $1,200.000 is not in excess amount of money to spend on 100,000 acres of land that proluce gross $25 to $40 per acre per annum? Mr. DIETZ. I should not think so. Mr. HASTING:. That is only about $120 an acre as a construction charge. The CHAIRMAN. When you get it done it only provides $25 to $40 an acre. Mr. HASTINGS. On a construction investment of $120 it pays your maintenance charges, and that is a splendid interest, in my judgment. The CHAIRMAN. That is gross and not net. Mr. HASTINGS. Even net it is. The CHAIRMAN. It costs something to plant the acreage and something to get the water there and something to take the crops off and something for seed. Mr. HASTINGS. If you make $15 to $20 net you have a fair proposition. The CHAIRMAN. This is so infinitesimal compared to the projects we have seen that it looks like nothing to me. Mr. HASTINGS. I wanted the chairman to understand you are getting a reasonable interest return on that investment. The CHAIRMAN. I do not see it. Mr. HASTINGS. The figures speak for themselves. Mr. DIETZ. The construction cost of the project is something over $800,000 and $90,000 are the total receipts. It is 85,000 acres. Mr. RHODES What is the size of the allotments on this reservation? Mr. DIETZ. Most of the allotments are 40 acres, I believe. Mr. RHODES. What is the total reimbursable charge against the average allotment of 40 acres? Mr. DIETZ. I can not answer that. I do not know the policy of the department in reimbursable matters. I never had to emphasize reimbursables until this year. Mr. RHODES. You know that there has been expended about $1,200,000 on the project? Mr. DIETZ. Yes. Mr. RHODES. You also know the acreage to which that applies? Mr. RHODES. Would it be a correct mathematical proposition to take the 1,200,000 acres and divide into that the number of acres to which it applies? Mr. DIETZ. That would be true if all the money that has been expended is to be reimbursed. Mr. RHODES. You are unable to say whether or not the $1,200,000 is the result of reimbursable legislation? Mr. DIETZ. No; I do not know. I do not know whether that is reimbursable or not. I know Mr. Kneale and I had a talk relative to |