DIAMOND CREEK PERMIT The Water Commissioner of the State of Arizona in December, 1922 granted a permit to James B. Girand and his associates for a power dam at Diamond Creek in the Colorado River. No attempt was made to construct a dam, as the company to whom the permit had been assigned was waiting to secure a permit from the Federal Power Commission, which permit was not granted. Shortly before the permit was about to expire, the Water Commissioner's office received a communication asking for a renewal of the permit granted by the State of Arizona. I suggested to the Water Commissioner that the permit be not renewed because I was convinced that, as the law now stands, the State of Arizona could derive no revenue from any hydro-electric development on the Colorado River. I believe, if there is to be private development on the river, that it should be taxed. The holders of the Diamond Creek permit agreed to this and suggested that this reservation be written into their permit. However, there was no authority in the law to make any such reservations and I submit to you the necessity of amending our water code so that it will be possible to tax hydro-electric development. The present situation with reference to the Diamond Creek permit is very uncertain. I do not believe that the gesture toward development made by those holding the permit, which resulted in the granting of an injunction by the U. S. District Court, has fulfilled the requirements of the Arizona law, which requires the starting of work within one year from the granting of the permit. However, those who hold the Diamond Creek permit have gone ahead over a period of years in good faith and have spent considerable sums of money in engineering and other experimental work. I believe the Diamond Creek site should be secured for the State of Arizona and that the ownership of all power projects on the river, within the State of Arizona, should be in the name of the State of Arizona. I believe that such rights as the Diamond Creek permittees now have should be determined and either a fixed value placed on them by the Legislature and the owners be recompensed for expenditures made, or else that an act be passed designating a court where they may have their equities adjudicated, and that the ownership in the Diamond Creek site pass to the State of Arizona. A SUMMARY OF THE LAW I think it might be well for me to briefly outline the situation as I now see it. The time is here when the State of Arizona must face the facts squarely. If we, of the lower basin, are going to restrict our future development to the amount of water now wasting, allocated to us by the proposed compact, and if we are going to proceed on the theory of definite allocations in perpetuity to the respective upper and lower basins, then we certainly should, at the same time, have an understanding with California and Nevada as to the division of the water allocated to the lower basin. The question arises whether or not we wish to limit development in the lower basin to the allocations made by the proposed compact in perpetuity. The importance of the compact, if there is to be an allocation of waters of the Colorado River prior to its development, suggests the necessity of having an understanding as to development in Mexico. The whole policy of making definite allocations now for future situations about which we know little, it appears to me, can lead only to eventual confusion and embarrassment and establish the foundation for unlimited litigation. In the absence of complete, accurate, and definite surveys with reference to the possibilities of irrigation and the maximum power development, and the practicability, feasibility, and desirability of irrigation of certain areas in preference to others, there is-in my mind— definite objection, at this time, to any compact which would upset the law as established by the Supreme Court of the United States. The decision of the United States Supreme Court in the WyomingColorado River case, made after years of deliberation, is in my judgment, so equitable, fair, and just in its provisions, that it should be upset only after the most careful analysis and consideration. The proposed Colorado River Compact was drafted prior to the time this decision was handed down by the United States Supreme Court. The law in principle, as it now stands, enunciated by the United States Supreme Court, is suggested by the following excerpt: "The doctrine of prior appropriation furnished the only basis which is consistent with the principles of right and equity applicable to such a controversy. The cardinal rule of this doctrine is that priority of appropriation gives superiority of right. Each of these states applies and enforces this rule in her own territory. The principle on which it proceeds is not less applicable to interstate streams and controversies than to others. Its application can not be other than eminently just and equitable to all concerned." Assertions have been made from time to time as to the rights of Arizona in the Colorado River. This river is recognized as a navigable stream. In the case of Kansas vs. Colorado, Justice Brewer the United States Supreme Court said: "It is enough for the purpose of this case that each state has full jurisdiction over the lands within its borders including the beds of streams and their waters." In a more recent decision, Port of Seattle VS. the Oregon and Washington Railroad Company, 255 U. S. 56, Justice Brandeis wrote: "The right of the United States in navigable waters within the several states is limited to the control thereof for purposes of navigation. Subject to the right, Washington became, upon its organization as a state, the owner of the navigable waters within its borders and of the land under the same." The federal power commission recognizes ownership of the states in stream beds in the following language, Section 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 bed and banks and to the appropriation, diversion, and use of water for power purposes and with respect to the right to engage in the business of developing, transmitting, distributing power, and in any other business necessary to effect the purposes of a license under this act." The question has been raised whether Arizona forfeited any of these rights in the Enabling Act, Section 28, the Sixth Paragraph of which reads as follows: "There is hereby reservd to th United States and excepted from the operation of any and all grants made or confirmed by this Act to said proposed state, all lands ac- An attempt has been made to distort this language to mean that the State, in the Enabling Act, forfeited ownership in the stream bed of the Colorado River. A stream bed in a navigable river is not land in the sense intended in the Enabling Act. The land reserved and excepted is land capable of being conveyed by the State. The bed of a navigable river is not capable of such transference. Had it been intended to reserve the stream bed of the Colorado River for the federal government, the Enabling Act would have said so plainly, but that it was not done and could not have been done is manifest, since it is essential that the equality of the states be preserved in accordance with the requirements of the Constitution. In all of the other fortyseven states, the ownership of the water and the beds of the navigable streams is in the states, and I do not believe Arizona would accept less in this respect than the rights enjoyed by our sister states. This view of the matter was very forcefully stated by Mr. Norviel, former State Water Commissioner, when he asserted the following doctrine: "I hold that the State of Arizona owns the bed of I believe Mr. Norviel's opinion in this respect is sound, and that the editorials and news articles published in certain newspapers and periodicals throughout the state, and the statements made by certain speakers, that the United States government or any of the other states will step in and develop the Colorado River within the confines of the State of Arizona, irrespective of our wishes in the matter and in defiance of our laws, are mere puerile piffle and utilized in an attempt to mislead public opinion. As far as the legislature of the State of Arizona is concerned, it is entitled to all the time that is necessary to gather information before making any contract which will bind the state. The legislature of Arizona, in considering the Colorado River Compact, should act unhampered by any fear that failure to approve the compact will jeopardize Arizona's interests. Arizona can safely rest its future upon the law as enunciated by the United States Supreme Court in the ColoradoWyoming and the Colorado-Kansas decisions if the full flow of the Colorado River remains available for use unaffected by any extra legal agreements. There is another question involved in the discussions in favor of the compact and that is the alleged urgent necessity for the immediate harnessing of the Colorado River for flood control purposes. This argument does not impress me, as I believe it is the smoke screen being utilized by advocates of the Swing-Johnson bill to secure the passage of that law. I believe that this measure, when accurately analyzed, is an attempt on the part of California to secure control of the flood waters of the Colorado River for power and irrigation purposes, under the guise of flood control. Floods from the upper Colorado River have never, so far as the records show, initiated serious damage below the Gila. The trouble has always come from the Gila. In 1891, 1905 and 1916 when the big floods occurred which caused the damage in Yuma and the Imperial Valley, and interrupted transcontinental railroad traffic, the trouble was caused by the Gila. The dam at Boulder Canyon above the entrance of the Gila will not exert the influence upon the Colorado River that is being claimed for it. The fact that the Gila is being gradually brought under control by the Roosevelt Dam and the dams at Mormon Flat, Horse Mesa, San Carlos and the diversion dams at Florence, Sacaton and Gillespie, tends to eliminate the danger of floods from the Gila in the future. Control dams on the Verde as proposed for the Paradise-Verde irrigation project,and the proposed dams in the Black River and the further control on the upper Gila, should eliminate almost entirely any menace from the Gila River. A flood control dam near Sentinel, I think, would assure the elimination of the menace of the Gila. All of these projects within Arizona should be encouraged in every practical way. I believe those sponsoring the Boulder Canyon Dam are concerned with power and irrigation possibilities primarily and flood control as a secondary issue. It is not to the economic advantage of the State of Arizona, either from a power or irrigation standpoint, to have the main control dam in the Colorado River located at Boulder Canyon. Neither is it the most economical place to start development of the river from the viewpoint of developing its maximum potentialities. A dam at Boulder Canyon of the height proposed, would destroy at least two other damsites which could be used for the development of hydro-electric power, and at least one of which, a proposal is made to use as a diversion dam for irrigation purposes. Building a dam at Boulder Canyon would unnecessarily destroy something of material advantage to the State of Arizona in the future. I believe that the State of Arizona should resist in every way possible the construction of a large storage dam at Boulder Canyon. The next step in a constructive program, in my judgment, if apportionment of the waters of the Colorado River is decided upon, should be recognition of the equities of the upper basin states; an agreement with California and Nevada, and probably Utah, which would definitely determine such questions as taxation, power royalty and the diversion of water; and that in conjunction with the federal government, a flood control and storage reservoir be built in the vicinity of Lee Ferry which would control the flow of the Colorado River. In order to meet the immediate demand for power claimed to exist in southern California and Nevada, early development of a power dam could be undertaken at a practical damsite in the lower river, either at Diamond Creek or some adjacent site. Arizona's immediate need is facts, definite, reliable and accurate data as to the legal rights of this state; engineering facts which will supply additional data necessary for the determination of what it is practical to look forward to in the way of reclamation of arid lands in the state, and economic data, and also a further study and determination of underground sources of water supply which would make agricultural lands available through pumping if cheap hydro-electric power were provided. Every state in the basin has spent many times more money than has Arizona in determining their rights and possibilities. Arizona is really the only state without adequate information. Common sense and good business dictate that this information should be acquired. A bill was submitted at the last election under the initiative, to the people, who were asked to vote $100,000 for this purpose. While it obtained a good vote yet it failed, due in a large measure to the general attitude of the people to vote against all initiative and referendum measures. I respectfully urge that the sum of $100,000, or as much thereof as may be necessary, be appropriated to be made immediately available for the purpose of securing the services of legal counsel, engineers and economists to undertake to determine definitely, Arizona's legal status with reference to the Colorado River, and such additional engineering and other data as may aid in answering the questions at issue and lead to the early development of the Colorado River. If this fund is appropriated, I can assure you that the work will be carried on by men whose integrity and standing will carry respect and confidence in their findings. I further recommend that provision be made in the bill for the cooperation and assistance of the United States departments of irrigation and reclamation, the Geological Survey and such other bureaus as may be of assistance, and, if satisfactory arrangements can be made, that cooperation with adjacent states be arranged for. SUMMARY To summarize, as a policy for the state, I would urge that the state of Arizona can feel safe in depending upon the law as it now stands for the conservation and protection of our rights, and that, unless a supplementary compact can be made with California and Nevada which will be satisfactory to this state, that the proposed Colorado River Compact be rejected; and that, in any event, the Boulder Canyon project should be opposed by this state as uneconomic in that it will submerge other practical damsites and will menace irrigation and power possibilties of great value to this state; that every effort be made to have a flood control and storage dam constructed in the vicinity of Lee Ferry; that the status of the Diamond Creek permit be determined and, if a right be found to exist, that the permit be revoked, the site acquired for Arizona, its present holders recompensed for expenditures made; that a special charter be granted the state to engage in the development and sale of hydro-electric power either on its own initiative or in cooperation with other states, municipalities, the United States, or other agencies; that development be undertaken under state auspices at Diamond Creek or an adjacent site which en |