mittee, if the committee were to adopt language to provide that Federal power licenses would be subject to the laws of the State with respect to the use of water, would that recommendation, if we adopted it, have the effect of wiping out at least a portion of the so-called Pelton Dam decision?

Mr. ELY. If you phrased it as I have suggested here, that the use for navigation, following the precedent of the O'Mahoney-Millikin amendment, and the use for generation of power are subject to these beneficial uses, you are dealing with a conflict between nonconsumptive uses on the one hand and consumptive uses on the other, and asserting the superiority of the latter, whether those rights are asserted under Federal law or under State law.

This amendment is not aimed at the Pelton decision but at the relative superiority of the classes of use.

With respect to the Pelton decision, I would personally suggest that you go no further than to subject Federal power licenses to the superiority of State statutes dealing with consumptive use. I have a feeling that when you get into the non-consumptive-use field, the use of a stream for power generation as compared with the preservation of its flow for fish, you are getting into a highly controversial field that is aside from the major purpose of the bill, which is to protect State rights to consumptive use. On that question of power versus fish, a good deal depends on whose ox is gored, and what the relative values are. I am not sure you have to attempt to control that by Federal legislation.

Senator KUCHEL. Aside from that, however, on the question of power versus consumptive beneficial use, your recommendation would be that power should be subordinated?

Mr. ELY. Yes. You have already subordinated navigation to consumptive use by the O'Mahoney-Millikin amendment of 1944, and I think by implication that includes power. But I would spell it out. Senator KUCHEL. Did the State in the Pelton Dam decision urge that specifically its statutes with respect to beneficial consumptive use should prevail?

Mr. ELY. No. The conflict there was between the Federal power licensee and the State which asserted that no dam should be built there because it would conflict with the fish runs.

Senator KUCHEL. So we have here the possibility of providing for the continuance of Federal power licenses, subjecting them, however, to State statutes in that specific field?

Mr. ELY. Only with respect to a superiority of beneficial consumptive use. The Federal Power Act itself provides for machinery to evaluate these conflicting claims of power versus fish, or other conflicting uses of the waters.

Senator WATKINS. They are supposed to work out some practical solution or else not grant the license.

Mr. ELY. That is correct. I personally see no occasion to break away from that machinery. I don't think it is necessary to protect the State's consumptive-use rights that you are primarily concerned with, if I read the bill correctly. The Pelton case in that sense is a warning that it is not a direct invasion of State consumptive use. Senator KUCHEL. I think that is a highly important recommendation. Do you have language suggested on that point?

Senator WATKINS. We have the language set forth in his proposed amendments. The first one is page 4, line 7, insert a new section, and it reads the same as the O'Mahoney-Millikin amendment to the 1944 Flood Control Act, except the generation of power is added.

Mr. ELY. That is correct. I think generation of power by implication is included in navigation because the commerce clause with respect to navigation is the source of the Federal Power Act.

The next suggestion I make, Mr. Chairman, is on page 4, line 22. You strike the words "under State law." The effect of the language as written in the bill is to protect existing rights under State law in making the reservation the bill would not make of waters for the appropriation and use of the public. My specific point is that there are rights that ought to be protected which may not have accrued under State law, but under Federal law.

For example, Indian rights. Also, there are contract rights held on a number of projects with the Reclamation Bureau which may or may not confer some right derived from the United States and not from the State. That is a doubtful point in many cases, and there is no objection in appearing to collide with them.

In Nebraska versus Wyoming, for example, the contracts for storage and delivery of stored waters were held to be outside the scope of the decree which apportioned natural flow. In the lower Colorado River under the Boulder Canyon Project Act, Arizona, California, and Nevada all hold contracts with the United States under section 5 of the Boulder Canyon Project Act, which directs that no person shall have the right to the use of stored waters except by contract with the United States, and there is a serious question as to what degree those contracts are confirmatory of the appropriations made under State law, and what degree they are brand new federally created rights. I see no occasion by the use of the words "under State law" here to limit the protection you intend to give.

Senator BARRETT. We had a discussion of that matter on Monday, I believe, and at that time we thought that those words should be stricken from the bill. I tentatively agreed to it myself.

Yesterday afternoon, Mr. Rankin indicated that if we would strike those words from the bill, we would then destroy the provision of subjecting the rights under the Pelton case to the provisions of the bill. What do you say as to that?

Mr. ELY. I thought in suggesting this that I was suggesting something the Department of Justice would rather welcome. Apparently we have the situation here covered by the story of the native who told the stranger you can't get to the post office from here. There surely is a solution.

Senator BARRETT. I would think so.

Mr. ELY. Also, I would suggest in that same line after the word "all" insert "unappropriated." That is surely what is meant. Senator BARRETT. There is no question about that.

Mr. ELY. On page 5, line 3, I encounter a problem that is somewhat more difficult to suggest a solution to. That is a problem of interstate streams referred to by Mr. Rankin yesterday. If the language of section 6 were kept intact on that, to my mind the principle is entirely sound, but I think Mr. Rankin has a very good point as to how you would apply it. Take the case with which some of us at this table are

most familiar, the Boulder Canyon project. Under the laws of what State would the United States proceed to establish the right to store water at Hoover Dam? When the Boulder Canyon Project Act was passed in 1928, or soon thereafter there was placed on the statute books of Arizona, for example, a statute that directed that no Federal damin so many words should be constructed unless the plans for it had been approved by the Arizona State engineer, a statute designed to prevent the building of Boulder Dam as it was then called. You surely don't want to walk into that kind of a beartrap. In protecting the States rights to consumptive use, you surely don't want to throw the baby out with the bath water.

There must be some provision for the construction of Federal projects, particularly on interstate streams, under constitutional purposes, navigation, flood control, or whatever, without encountering the veto power of one of the States concerned.

Second, there has to be some workable machinery under this bill to provide that to the degree you are required to conform to State law, there ought to be a State law on how to go about it.

I would suggest that you cut that knot by this sort of amendment, which you have before you, coupled with one which I undertook to put on paper in very rough form last evening after hearing Mr. Rankin's testimony.

I would suggest at page 5, line 3, you change the period to a comma, and insert

except on interstate streams; provided, that upon any interstate stream which is the subject of a compact among two or more States to which the Congress shall have given its consent, the rights of the United States, and of those claiming under it, shall be subject to and controlled by said compact.

Senator WATKINS. That has the effect of making the compact the law of the river.

Mr. ELY. That is right, sir. Then I would go further and add this language, either at this point or as a separate section, or in whatever manner you please. The United States, in disposing of waters stored or diverted by means of federally owned structures, and all users of such waters, shall conform to the laws of the State in which such use is made relating to the beneficial consumptive use thereof. So you are requiring conformity with State law in the release from storage and use in a particular State under Government contracts, let us say, and imposing that restriction on the use rather than upon the acquisition by the United States of the right to store the water in the first place. For example, when the California water contracts were made under the Boulder Canyon Project Act, I recall very vividly that the Interior Department was confronted with that very question, with whom in California should it make water delivery contracts, and in what order of priority and in what quantity. That is a separate question from the one of how much water California and Arizona and Ñevada might be entitled to.

Assuming California's share to be X, how should X be divided up internally in California? The Interior Department at that time followed the technique of addressing a letter to the State engineer, Mr. Bank's predecessor, asking that the division of water resources make a recommendation to the Interior Department as to the allocation of such waters in California, that if possible the proposed applicants

agree among themselves and that that schedule of priorities thereupon be included in all Government water contracts. That was done. So that with respect to the use of Colorado River water in California, this problem was finessed, and bypassed in what I think was a statesmanlike way.

There was an agreement among proposed users, it was approved by the State, it was recommended to the United States and incorporated as a uniform allocation or priority clause in all Government contracts. That does not mean that the Secretary of the Interior was there determining what California's rights were as against Arizona or Nevada, but simply what the internal division of water and under what priorities should be made in California.

I would suggest that is a sound method of solving your similar dilemma here, to require conformity with State law in the disposition of waters within a State, stored by the United States, without necessarily going so far as to require the United States to acquire the right to build the works and store the waters under State law, because on an interstate stream you cannot say what law is to be followed, and if the dam straddles the State boundary, as some of them do, Hoover, Parker, and the proposed Glen Canyon Dam, you have the problem of which law is to govern.

Senator WATKINS. We have a similar situation in Utah in a small way in connection with the reclamation of the participating projects if the Colorado bill should be adopted. Gooseberry was recommended by the State water and power board, and conflicting interests in the adjoining county objected to that. The congressional representation from Utah in Congress followed this recommendation of the State water board. We didn't feel that the Congress of the United States should attempt to determine the question of how the Utah water was to be distributed, and to whom.

That is in a small way. Of course, we have not had much difficulty in the past because we have not had any considerable development under reclamation law.

Mr. ELY. On page 6, line 12, in section 7, which deals with waiver of immunity to suit, I would suggest after the word "otherwise" you insert "or is the owner of works used in the diversion, storage, or distribution of waters involved in such suit" comma. The reason for that is this. The waiver as now written applies only to cases where the United States is or claims to be the owner of any right to the use of such water or is in the process of acquiring any right to the use thereof.

In the third Arizona v. California case (298 U. S.), the United States was held to be an indispensable party and the States were denied permission to litigate in the absence of the United States, on the ground that the United States owned all the works that would impound the water and consequently its rights were affected. You may have similar instances in which the United States is not in itself claiming any right to the use of water, but does assert that because it owns the works, has built them for constitutional purposes, navigation or whatever, it is an indispensable party and you cannot proceed in its absence.

I would make the waiver more general and not limit it to cases where the United States claims the right to the use of water.

Senator BARRETT. That would be enlarging upon the McCarran Act as it stands at the present time.

Mr. ELY. Yes; it would.

Senator BARRETT. The Justice Department, I think, indicated that it would much prefer to leave the more restricted law on the books instead of trying to enlarge it. This is a point, however, that we ought to give some consideration to when we get around to it.

Senator WATKINS. It seems to have some merit. I think it ought to be studied very carefully.

Mr. ELY. I will comment after stating 1 or 2 other amendments on this whole problem of Federal immunity, if I may.

On page 6, line 13, after the word "suit", I would change the period to a comma, and insert "in consequence of such claims or otherwise", for the same reason I have just explained.

On page 7, line 16, I would strike all of section 8.

Section 8, as now written, provides that nothing in this act shall be construed as authorizing the joinder of the United States in any suit or controversy in the Supreme Court of the United States relating to the rights of States to the use of the water of any interstate stream. That is precisely the type of case where to make good the purposes of your bill you may find yourself in litigation. If the United States by interposing the veto power of Federal immunity can prevent your enforcing the bill you have gained nothing. I see no reason why, inasmuch as most of the great developments from here on are going to be on interstate streams, if the waiver of immunity in section 7 is sound, and I think it is, why you should hamstring the right of relief of States with respect to interstate streams.

The problem on the Colorado River, of which we are all sensitive, is not this problem.

Senator WATKINS. We waived immunity.

Mr. ELY. You waived immunity in the pending Colorado storage project bill. In the previous problem of whether or not the four upper States should be joined in the case now pending in the United States Supreme Court, the United States was already a party. It had intervened. The question of whether those States had joined did not turn on the question of sovereign immunity of the United States, but upon the question of whether there were necessary parties to the adjudication of claims against the United States and the present parties.

Let us not confuse those two questions of joinder against sovereign immunity.

If the Federal Government can be called to account in the United States Supreme Court by the States for the protection of their water rights, in my mind it is a good thing. It is not going to be abused. The States are helpless to litigate the interpretation of an interstate compact in most cases now because by hypotheses they involve interstate streams, and there is a Federal structure on them. If there is not, you have no water.

Senator BARRETT. That is true.

Senator WATKINS. As a matter of fact, the upper Colorado bill is the first Reclamation-Act that has had a waiver of immunity. Is that not a fact? Do you know of any other?

Mr. ELY. I think that is correct. If I might suggest, I think it would be appropriate that every time Congress gives its consent to an interstate compact, in the act of consent it waive the immunity of the United States to joinder in a suit arising under that compact. Senator BARRETT. I think that is a mighty good suggestion.