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To understand the import of these claims, the Colorado Big Thompson project was not started until about the year 1935. Under the appropriation laws of the State of Colorado, the Colorado Big Thompson would get a priority as of the year 1935, which would mean that all rights initiated prior to that time would be ahead of the rights of the Federal Government. First in time, first in right. However, the claims based on the withdrawals of Government land according to the Government, related the Government's claim back to the date of the withdrawal.

Now I would like to tell you what that action means.
Senator WATKINS. What withdrawal are you speaking of there?

Mr. CHILSON. In this particular case, Senator, I tried to get the exact withdrawals but I was unable to do so. I tried to get that information.

Senator WATKINS. In a general way, what were they?

Mr. CHILSON. Oil shale claims, power site withdrawals, and I am not too sure but I think some forest land withdrawals. Oil shale and power site withdrawals I am sure were involved.

I also tried to get the exact date of those withdrawals but I was unable to do so.

Generally, I think the earliest one was somewhere around 1908 or 1910, and varied from there up to about 1920. If I can, I want to try to put into words what that means.

In Colorado, we recognize the generation of power as a beneficial use. We recognize that one who appropriates water to generate hydroelectric power is entitled to a water right and a priority as of the date of the initiation of this use. So if the Federal Government should utilize those power rights to the extent that they could use the entire flow of the river for power and let us assume that the power withdrawal was 1915, to take a date; I don't know that that is the date, but we will assume it is; that would mean that the Federal Government would have a claim on the entire flow of the Colorado River at the point of these power sites for the generation of power and that any other user who came in after that and wanted to apply the waters to a beneficial use would be prohibited from doing it because the water

a would have to pass on down and go through these powerplants.

The oil shale withdrawals in Colorado are very large. I mean by that that they involve large deposits of oil shale. If and when those oil shale deposits are developed, it will take tremendous amounts of water. Colorado had a survey made by an engineer, Mr. Raymond J. Hill

, whose estimate of the amount of water that would be needed to develop the oil shale deposits in Colorado, the privately owned ones as well as the Federal ones, and the uses that go with that development, would be 300,000 acre-feet a year, which is a tremendous amount of water.

What I am trying to say is that the power site withdrawals and the oil shale withdrawals could demand practically the entire flow of the Colorado River.

Those rights relate back to the date of withdrawal.

The city and county of Denver, which is on the east slope of the Colorado, has been very short of water. They have spent some $20 million in developing a transmountain diversion of water through the Moffat Tunnel by building the Williams Fork Reservoir and other

structures. However, the date of initiation of Denver's priorities was after the dates of these public-land withdrawals. So in this litigation, the Federal Government told Denver and all other appropriators who had initiated rights after these withdrawals, "You have nothing more than a squatter's right to this water. You can continue to use it as long as the Federal Government does not use it. But now we are needing this water for the Colorado Big Thompson project, and therefore we are going to ask the court to give us the right to take this water for the Colorado Big Thompson project related back to the dates of these withdrawals."

I started to say an amusing thing but it is not amusing. The ironical part about it is that the Federal Government put in quite a sum of PWA or WPA money-I have forgotten which-in helping Denver to build its transmountain diversion works during the depression. Build them for what? If the Government is going to take all their water, then they have spent money in building structures that are of no value.

The city and county of Denver have recently passed a bond issue of some $70 million to further develop the water supplies from the headwaters of the Colorado River.

If the Federal Government's theory is correct and Denver is spending that money on nothing more than a squatter's right to that water use. In other words, this is not a mere hypothetical or theoretical thing. It is actual.

In fairness, I should say that in that litigation in which those claims were made, the litigation was settled by stipulation and agreement. The Government withdrew its claims on the withdrawal theory. They accepted a claim on the appropriation basis that is related to 1935 when the Colorado Big Thompson project was started.

It was a very happy solution. It solved an internal problem in Colorado. We are quite grateful to the United States for that settlement.

Senator WATKINS. That is the one that was entered in the court and finally referred to in the Colorado bill?

Mr. CHILSON. That is right. It is commonly known as the Blue River case.

Senator MILLIKIN. You are aware, are you not, that the Senate side of the Congress has given that the force of law.

Mr. CHILSON. That is what I heard.

Senator WATKINS. It is in the conference report, too. They referred to it and approved that it become effective immediately.

Senator MILLIKIN. Yes; that is what I am talking about.

Mr. CHILSON. When the Federal Government says "we recognize vested rights," they are talking about vested rights that accrue prior to the dates of withdrawal, not prior to the time the Government puts the water to use.

Now, the Government may not use water for oil shale development for 100 years. In the meantime, so far as firm water rights are concerned, private water users can acquire no firm supply if the Government theory is correct. It is obvious what this does to future development.

Also to try to express the magnitude of this problem, I am informed that the total irrigated acreage in the 17 Western States is a little over

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24 million acres. Of that, 2,872,000 acres are reported to be in the State of Colorado. The total of withdrawn lands and reserved lands in the State of Colorado as of June 30, 1955, was 23,243,000 acres, which is practically almost equal to the total irrigated acreage in the entire 17 Western States. So it is a problem of great magnitude.

May I say one thing more about these withdrawals? This has to be from recollection because I have not had a chance to check it.

I believe that some of these withdrawals relate back to as far as 1897. There were a lot of them made in the early 1900's and considerably more made from 1910 to 1920 and in that period.

Senator WATKINS. May I ask a question at that point?

Did I understand you to say that the withdrawals would take practically the entire flow of the Colorado River?

Mr. Chilson. I had to make an assumption, Senator. If you assume that the Government on these power sites that they withdrew would build powerwplants large enough to demand the entire flow of the river, which could be done, I assume, then it would mean they would have a priority right for the entire flow of that river to pass through those powerplants, because we recognize power use as a beneficial use, so if the Federal Government should construct those powerplants and could relate back their date of priority to the date of withdrawal, then except as to rights vested prior to the date of withdrawal they could call for the entire flow of the river to pass through the powerplant.

Senator WATKINS. Were they not going to use the water for a consuniptive use in connection with the extracting of the oil shale from the rock?

Mr. CHILSON. I do not know that any definite plans have been made. But necessarily if a large oil shale development is made, either by private capital or by the Federal Government, it takes people and people need water for domestic use, which is a consumptive use. Also, the manufacture of oil shale itself would be a consumptive use.

Senator WATKINS. Was that involved at all in the case, the matter of using some water for consumptive use in connection with the extraction of oil from the shale?

Mr. Chilson. No. The sole purpose of the waters, in this particular litigation, was to furnish water for the Colorado-Big Thompson project, which was a reclamation project.

Senator WATKINS. They transferred whatever they thought the rights were under those withdrawals over to the Big Thompson?

Mr. Chilson. That is right. It is a little more complicated than that. In the Colorado-Big Thompson project, the people of northern Colorado had to build a compensating reservoir on the western slope to compensate the western slope users for the water that we were taking to the east slope. In other words, to firm up their water supplies and to give water for future development. Actually, it was in connection with that reservoir, I think, that they were making these claims.

Also, to be fair about it, if the oil-shale development did take place, the waters in this reservoir are upstream from that development and could be used in that connection. But it was in connection with the Colorado-Big Thompson project that these claims were made.

Senator WATKINS. That seems to be satisfactory.

Mr. CHILSON. Leaving that point for the moment, I wish to refer to another statement which the Attorney General made in the statement of March 19, on page 2. The Attorney General expresses a fear that this legislation would "subordinate substantially all Federal rights to the use of water in the West to the laws of the State," which is correct. He also says, "and the rights of those claiming under State laws."

I read nothing in this act which subjects the rights which the Government has obtained by appropriation and use of water to any rights of other water users under State law.

This legislation and the previous legislation, as I understand, merely places the Federal Government on a parity with other water users. If it wants to use water it comes in and gets it with the same priority and by the same method that an individual or a citizen of the State would obtain his water right.

Senator WATKINS. If it was any other way, if the Federal Government had the right to reserve the water, that is, the final disposition, until such time as they needed it, there could not be any substantial development in the West.

Mr. CHILSON. There certainly could not be.

Senator WATKINS. No one would have made an investment on water rights if they felt that sometime in the future the Government could come in with a claim of ownership of the water and take it away.

Mr. CHILSON. That is correct, Senator.

The people have relied upon these previous acts of Congress, thinking that they had a firm title to their water when they made their appropriation or use under State law.

Senator WATKINS. And the Government has contributed to that view by the numerous acts which it has passed recognizing that.

Mr. CHILSON. That is right.

Senator WATKINS. It would be ordinarily in the position, if it were a private citizen, of having created an estoppel and now claiming that it had some other rights to that water.

Mr. CHILSON. I think that is right.

In connection with estoppel, the court said in a case in Montana, where the validity of certain mining claims was attacked, in substance, that a whole economy had been built up on a belief of a certain set of facts and that the court was not going to overturn that economy because of some legal theory unless it was necessary. Those are not the exact words.

Senator WATKINS. Was that against the Government? I am just wondering how far the courts would apply estoppel against the United States Government.

Mr. CHILSON. I will give you the citation of it. It was Butte City Water Company v. Baker (196 U. S. 119). The argument was made in that case that the Federal Government did not have the right to delegate the power of the Congress to the States in the regulation of mining claims on the public domain.

Senator O'MAHONEY. In summarizing the decision of the court, you used the words that in effect the court held that the State laws would not be disregarded unless it were necessary.

I think it makes it important that you put in the record at this spot the exact language of the court. That might be misinterpreted.

Mr. CHILSON. Yes; I was quoting just from memory.

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I will read from page 127. The court here is speaking of the legislation which was enacted by Congress and then the acts of the State legislature in conformance therewith, and so on:

Finally it must be observed that this legislation was enacted by Congress more than 30 years ago. It has been acted upon as valid through all the mining regions of the country. Property rights have been built up on the faith of it. To now strike it down would unsettle countless titles and work manifold injury to the great mining interests of the Far West. While, of course, consequences may not determine a decision, yet in a doubtful case the court may well pause before it unsettles interests, so many and so vast, interests which have been built up on the faith not merely of congressional action, but also judicial decisions of many State courts sustain it, and of a frequent recognition of its validity by this court. Whaterer doubts might exist if this matter was wholly res integra, we have do hesitation in holding that the question must be considered as settled by prior adjudications and cannot now be reopened.

Senator O’MAHONEY. That is a much stronger statement.
Mr. CHILSON. Yes.

Senator WATKINS. They did not mention the doctrine of estoppel there.

Mr. Chilson. I do not recall that they mentioned estoppel specifically, Senator. I do not believe the court did specifically.

I might say in this connection, that is, referring now to the fears of the Attorney General of what is going to happen if they have to comply with State law, that I think the experience of the Bureau of Reclamation in the building of these projects in the West generally show that the Federal Government can live with State law. It is true that there is a certain amount of litigation. It is true that in some cases there can be delay. It is likewise true that there is litigation between individual water users. It is true that sometimes there is delay for a private individual in proving up on his water right.

The Federal Government encounters no more problems than the individual.

But I point out that they complain of these delays and troubles under the existing situation. My own feeling about it—and this is merely an opinion—is that a large part of the difficulty of the Federal Government in dealing with the waters of the West is because of this very contention of the Government that they own all the waters and that they are not subject to any of the State laws, rules, and regulations Therefore, any time the Federal Government steps in on water rights

, everybody begins to look at his hole card and says, “Where am I?"

For example, in the Colorado-Big Thompson project, which furnishes water to my own area—I live at Loveland in northern Colorado and I served as director of that district for a number of years—when the Federal Government started that project, they started to adjudicate their rights under that project in the State court.

Senator WATKINS. When you say they, you mean the Government, too?

Mr. CHILSON. The Bureau of Reclamation of the United States. Senator Watkins. They voluntarily went into the State court!

Mr. CHILSON. Yes, sir." As I say, later they withdrew. But the statement of claim that they made was not for the amount of water needed for the Colorado-Big Thompson project. The claim they filed was for all unapprporiated waters of the Big Thompson River

. Here were people who had rights, who had not yet had them adjudicated. Here were people who expected to make future development,

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