Mr. GATCHELL. No, they did not seek certiorari. The Ninth Circuit reversed the district court, and the Montana Co. left it there. Senator WATKINS. Do you construe that case to mean that the State for consumptive uses had complete control?

Mr. GATCHELL. I don't think it quite stands for as bald a proposition as that, because we are anxious to have the State proceed-when I speak of we, they called me in, not that the Federal Power Commission had a thing to do with the irrigation use, but they called me in to help out in the presentation of that case. The theory on which I felt it was strongest was that the State had a right to put those waters to a consumptive use. I think really all that the case stands for is that the Montana Power Co. just used the wrong means of trying to stop them. Their legal remedy was not the one that they had sought. Senator O'MAHONEY. This is your opinion that the State has the right for consumptive use?

Mr. GATCHELL. Yes. I think that case very definitely stood for that.

Senator O'MAHONEY. Is that also the opinion of the Federal Power Commission?

Mr. GATCHELL, The Federal Power Commission was not involved in that case as such. The Federal Power Commission has not been involved in any case that I know of where a similar conflict between consumptive and nonconsumptive uses has existed.

Senator O'MAHONEY. If such a case would arise would the Federal Power Commission entertain your views as expressed in this case or would it entertain some other views?

Mr. GATCHELL. Senator O'Mahoney, I am just the general counsel. Senator O'MAHONEY. That is a powerful position.

Mr. GATCHELL. There are five commissioners, and I would certainly not speak of them on anything that they had not expressed their views on.

Senator BARRETT. Would you say that the water stored in the dam on the Deschutes River will be used consumptively?

Mr. GATCHELL. I don't think that is a consumptive use. I don't think any one can claim that.

Senator BARRETT. You do not think so?

Mr. GATCHELL. I don't think this is a consumptive use. Under the laws of Oregon that is a nonconsumptive use.

Senator BARRETT. I have heard a good many people who are well versed in water law in the West say that when you store it like that the evaporation which necessarily flows from storage amounts to consumptive use.

Mr. GATCHELL. Senator Barrett, I was one of those who engaged in quite an extended study say 15 years ago, maybe I miss the date, on State water laws. We went into the laws of the 17 Western States to analyze what those laws meant. We got out quite a report. It was quite an education to me. I would not want to set myself up as any expert on State water law with respect to that. I do not regard the use by the Portland General Electric Co. of water of the Deschutes River, either storing it or putting it through its powerplant at the Pelton Dam as a consumptive use. That is merely my opinion.

Senator O'MAHONEY. Getting back to my question, of course, you can't express the views of the five commissioners. They are changing.

But the views which you expressed in this Montana case were your views of the law?

Mr. GATCHELL. Sir, they are still my views.

Senator O'MAHONEY. That is what I wanted to get at. Because I have found you to be a pretty good lawyer.

Mr. GATCHELL. Thank you, Senator. I didn't know after this appearance whether you would entertain any views like that.

OWNERSHIP OF UNAPPROPRIATED WATER

Senator MALONE. I might ask a question. I am impressed with your grasp of the subject and your long-time study of it. When you talk about consumptive use, the State being in charge of the relative rights to consumptive use and where the application to appropriate should be filed. Then in connection with this decision and the quite broad question of the control of unappropriated water, do you follow a step further that when there is to be consumptive use of unappropriated water the State is the place to file the application-under State law? I think I understood your explanation, and your grasp of the subject has impressed me. You have conceded that there is no question that when there has been a consumptive use, a right acquired under the State, that must be respected.

Mr. GATCHELL. It must be, Senator.

Senator MALONE. We believe, and I think most of us do, that there is unappropriated water. The position taken by the Government in the Supreme Court decision and the claim of certain Government departments is that when it is not appropriated, then it belongs to the Government and the Government does not have to file with the State to establish its right to the use of the unappropriated water. Mr. GATCHELL. I see what you are driving at, Senator Malone. Senator MALONE. That concerns me.

Mr. GATCHELL. It is a matter of very great importance. They put a military or naval installation out and they need water

Senator MALONE. But if the naval people don't have to consult the State, then why would anyone else connected with the Government have to file with the State?

Mr. GATCHELL. When they put a naval or military installation out and then need water, as to whether they should go to a State agency to secure a water right, that is a separate problem from the one which is approached by the Federal Power Commission. I was trying to point out that this decision by the Supreme Court in the Pelton case is very narrowly limited to the right to control the use of that water, and the Court there very pointedly says that if they secure the right to use the water from the Federal Power Commission under the Federal Power Act, they do not need to go to the State to get that same authority to use.

Senator O'MAHONEY. That is limited to unappropriated water? Mr. GATCHELL. It certainly is; yes, sir.

Senator MALONE. It is also limited according to your statement now of this decision of the Federal Power Commission, that it should not apply to a branch where it is a nonconsumptive use and does not apply in your opinion to the use of the water which would be a consumptive

use.

Mr. GATCHELL. Oh, no. I would not say that. We are not concerned with the construction as an agency, construction by the Federal Power Commission. We do not construct anything. We merely license non-Federal agencies, States, municipalities or power companies, to construct. We do not engage in the construction of any developments. Military installations are under the Army

Senator MALONE. My point is if it is confined to the nonconsumptive use, that is, you do not divert it around consumptive users, and it returns to the stream, if you do not interfere with the established consumptive use of the water, do you think this decision is confined to that kind of use?

Mr. GATCHELL. If I were trying to support a military or naval installation where they needed to use water for consumptive purposes, domestic use in their post, I would take the same reasoning that the court has here and apply it in support of my claim. We have not been required to do that in our work, Senator, and I am saying the analogy would seem to me to be there.

Senator MALONE. What would the analogy be?

Mr. GATCHELL. The analogy is that these lands of the United States are under its ownership by reason of the constitutional right of Congress to dispose of them in any way the Congress sees fit.

Senator MALONE. Or if it acquires them by purchase as long as the Government owns them.

Mr. GATCHELL. It can get them by purchase or cession or condemnation.

Senator MALONE. They own the lands to which the water is to be applied. Then what?

Mr. GATCHELL. All that this decision says is that the control of the use of that unappropriated water rests in the Federal Government. That is what the decision says when it says the licensee does not need to go to the State. I want to call attention to a decision which may bear on your question. The Niagara Falls Power Co., which finally changed its name over to Niagara Mohawk, which was the parent corporation when it was merged, constructed the Niagara Falls project under the Federal Power Act as the new development in 1921, the first license issued by the Federal Power Commission. Part of the project had already been started and was in operation and had been. in operation for some 20 or 30 years before then. But they permitted a very substantial improvement and enlargement of their diversion from the river.

We thought that this new diversion was one for which they secured their authority solely from the Federal Power Commission, and therefore we said they did not need to get any water rights from the State of New York. It was a navigable stream and the Commission had full control over the diversion.

The Supreme Court did not agree with us. The company had paid many thousands of dollars for riparian rights and by the time we got to it in this case it amounted to half a million dollars directly involved for certain water rights in part of the diversion up there. They were trying to charge that half million dollars as a part of their capital costs and we said that was an improper charge.

In this case, reported at 347 U. S. 239, the Federal Power Commission v. Niagara Mohawk Power Company, the Supreme Court said.

those water power rights had to be obtained by them from the State of New York notwithstanding the license. That is why I have had difficulty in dealing with the question which Senator O'Mahoney put to me to differentiate between the control of the use of the water, which is one thing, and the water rights, which is another thing.

Senator BARRETT. The water rights were acquired under State law? Mr. GATCHELL. The water rights were acquired under State law. Senator BARRETT. They said that under the Federal Power Act you had to respect the State law?

Mr. GATCHELL. Yes, sir; the company had to pay for them.

Senator BARRETT. That is the same provision that applies here. Did you mean to say to Senator O'Mahoney that beneficial use can be made of this same water which is impounded?

Mr. GATCHELL. I haven't said that. I do not know and I don't think any court has yet passed upon the right of a future consumptive user, that is, someone who wants to put the water to irrigation use.

Senator BARRETT. I think you are right now, but that is not the impression I got from your testimony before. Let me ask you this question, too: You say the storage of that water impounded there does not constitute consumptive use. Let me call your attention to the fact that in the upper Colorado River there will be an evaporation of 531,000 acre-feet, a year in Glen Canyon, and that is charged as consumptive use against the upper States.

Mr. GATCHELL. You are dealing there with a different thing. It is a beneficial use in any event. Under the division of the waters of the Colorado River I don't think there is any other way that they can charge for that water. If these reservoirs are constructed upstream and there is evaporation, it means that the lower States just do not get that much water and they should not be charged for the water that is evaporated in that manner.

Senator BARRETT. It is consumed and therefore it is consumptive

use.

Mr. GATCHELL. I am suggesting to you, Senator Barrett, that it is done on a different theory. The States set up a priority of uses, where they define the various order of precedence for uses. They put domestic water supply and irregation and municipal water supply, and then they come into the nonconsumptive uses, industrial uses. Water power is always listed with the nonconsumptive uses. In the division of the waters of the Colorado River they must deal with the stream flow as it will result if certain improvements are made. That is why they deal with it in that way.

Senator BARRETT. I don't profess to be an expert in this field. Mr. GATCHELL. I am by no means, Senator, an expert.

Senator BARRETT. Anyway, I am a little bit disturbed at some of the answers you have made here and I would like to ask this you question: I read that Pelton Dam case, not once but half a dozen times, and I grant that by that decision the Federal Power Commission, notwithstanding sections 9 and 27, which direct that you must comply with State law, apparently gave the licensee the power to construct this dam and impound that water without complying with State requirements. I can't find anything in that decision which says that future rights acquired under State law downstream for the beneficial consumptive use of the natural flow of that river cannot be granted and will not be respected. Do you find anything?

Mr. GATCHELL. There is nothing in the decision which passes on that one way or the other.

Senator BARRETT. Senator O'Mahoney asked you that question. I don't think it is justified. I said downstream, but I mean either way. Mr. GATCHELL. I don't care whether upstream or downstream. Senator BARRETT. That is right. I didn't mean to differentiate. Mr. GATCHELL. I thought you meant in the river.

Senator BARRETT. That is right.

Mr. GATCHELL. Up or down.

Senator BARRETT. I think that question is unsettled. I think that is what Senator O'Mahoney had in mind.

Mr. GATCHELL. I was trying to develop the whole thing. It is a complex picture. It is not a simple thing.

Senator BARRETT. I don't see, Mr. Gatchell, how you are going to operate consistently under sections 9 and 27-there is no use my going into them because you know them better than I do-unless you respect the rights of the State of Oregon to accept filings and to permit appropriations of the natural flow of the stream. That is what I am speaking of. I don't believe you are following the law there.

Mr. GATCHELL. Senator Barrett, section 9 merely says that an applicant for a license shall present evidence satisfactory to the Commission that he has complied with the laws of the State with respect to appropriation and use.

Senator BARRETT. That is right.

Mr. GATCHELL. The Supreme Court directly passed on that in the first Iowa decision where the Commission had refused to issue a license to the first Iowa cooperative because it had not complied with the State law.

Senator BARRETT. That is right.

Mr. GATCHELL. The Supreme Court said, "You do not need to refuse to issue a license because the applicant could not comply with a State law." The duality of control inherent in the State requiring a license for the use and the United States requiring a license for the use that duality of control is not present when the United States has authority. It is sovereign. If the Power Act requires a license and a license is issued, the State cannot similarly require a license for that use. It does not go on to the question which Senator O'Mahoney asked which, if you want my opinion, is the $64 question. It does not go on to what happens when there is a subsequent consumptive use upstream or downstream which would interfere with the power use which is granted under the license. It happened in the Pelton project that the Commission put in certain restrictions in that license

Senator BARRETT. By the way, the Commission didn't agree with the Supreme Court in the first Iowa instance, did they?

Mr. GATCHELL. The Supreme Court overruled the Commission. Senator BARRETT. That is right. I suppose you advised the Commission in the first place that they had better comply with State law, did you not?

Mr. GATCHELL. That was our advice, yes, sir.

Senator BARRETT. It ought to be your advice today. We are trying to get you back on the beam again now.