Mr. GATCHELL. The Court didn't agree with us, Senator. Senator BARRETT. We don't agree with the Court and we are trying to get this thing worked around.

Mr. GATCHELL. Let me point out this: All of these hydroelectric projects cost substantial sums. You are not playing around here with something where you can give a man something one day and then take it away the next. If they invest these sums of money that they have to invest and you permit the State to come in and take all of their water away, how are they ever going to build?

Senator BARRETT. Conversely, the principle you are enunciating here is to disregard the States.

Mr. GATCHELL. No. I don't know any agency which cooperates more with the States, but somebody has to decide it in case of an impasse. If the State is the one, then why don't you just repeal the Federal Power Act and say the State does it.

Senator BARRETT. I know, but the end result of what you are saying here is, it is too bad, but if we give a licensee the power to build a dam, thereafter the State can't accept any filings for beneficial use of the flow of the stream.

Mr. GATCHELL. I don't think you can get that from the license.

Senator BARRETT. I say beneficial use of the water of the stream either up or down.

Mr. GATCHELL. I don't think you can get that from either the license or the decision in the Pelton case.

Senator O'MAHONEY. That is not your position, then.

Mr. GATCHELL. No, sir. I just don't know what the State can ultimately do. I don't think that question has been decided.

Senator O'MAHONEY. Let's see if we can straighten it out just between the committee and you. I am not trying to commit the Federal Power Commission at the moment.

You are talking solely about the use of water for hydroelectric purposes, are you not?

Mr. GATCHELL. And nothing else.

Senator O'MAHONEY. You are not talking about any of these other uses, agricultural, domestic, industrial, or other purposes? Mr. GATCHEI L. No, sir.

Senator O'MAHONEY. So under the license that you issued in the Pelton case you granted, under the Federal Power Act, a license to use the unappropriated waters of that stream for the purpose of producing power, and that is all you did.

Mr. GATCHELL. That is all we did, yes, sir.

Senator O'MAHONEY. You did not by the issuance of that license impair any existing right to the waters of that stream?

Mr. GATCHELL. No, sir; not a single vested right of any description. Senator O'MAHONEY. You did not interfere with the right of the State to grant future appropriations for domestic, agricultural, mining purposes?

Mr. GATCHELL. Upstream or downstream, no, sir.

That is a direct answer. We did not.

Senator O'MAHONEY. The electric power is the product of the falling water?

Mr. GATCHELL. Yes, sir.

Senator O'MAHONEY. That is all that it is being used for under the Federal Power Act?

Mr. GATCHELL. Yes, sir.

Senator O'MAHONEY. In your opinion, the State has the authority to tell its water users to whom rights have previously been granted; that they are not interfered with by that license. You are also saying to the State that any future applicants may secure appropriations for the domestic and agricultural, and so forth, rights, without regard to the power use.

Mr. GATCHELL. Senator, that is absolutely correct. For example, just to give you a specific illustration, upstream from the Pelton site there have been a great many irrigation diversions

Senator WATKINS. Since the building of the dam?

Mr. GATCHELL. The dam hasn't been built. I don't know whether it has been started yet. It hasn't been built. There have been a great many irrigation developments. Suppose in the future after the dam is built and the project is in operation and they want to come along and make an irrigation diversion

Senator WATKINS. Upstream?

Mr. GATCHELL. That is what I am talking about. I don't know anything in the Pelton decision by the Supreme Court which has passed upon the right of the power company or of these upstream irrigation users. It hasn't passed on that question.

Senator BARRETT. But you are passing on it right here now.

Mr. GATCHELL. I am passing on it by saying that the Federal Power Commission does not purport, in issuing this license, to say what shall be done for irrigation and municipal water supply. It says so far as the Federal Government is able to give you, you have an absolute right that the State cannot require you to secure a similar license to construct and operate and use, through the Pelton Dam, the waters Senator O'MAHONEY. It is an extremely narrow opinion which involves only the use of water for hydroelectric purposes, and it says, if I understand your statement correctly, merely that the issuance of a power right by the Federal Power Commission renders unnecessary a power right from the State, but it does not at all interfere with the right of the State to grant uses for these other purposes which the State

Mr. GATCHELL. At other sites. It does not interfere with the right of the State to grant water rights at other sites.

Senator O'MAHONEY. Including power rights.

Mr. GATCHELL. At any other sites. At this site I don't think the State can prevent the construction of the Pelton Dam by this licensee. At other sites I don't think the Federal Power Commission

Senator O'MAHONEY. But domestic rights up or down the stream are not at all interfered with, in your opinion, by the hydroelectric use of this water for power?

Mr. GATCHELL. That is my opinion, Senator, I want to warn you that that has not been tested in court. That is merely my opinion. Senator O'MAHONEY. I understand. We are trying to make the law here which will make it clear.

Mr. GATCHELL. I am trying to help you in that.

Senator O'MAHONEY. I think you are doing a good job.

Mr. GATCHELL. I am certainly interested in consumptive water uses in the West. Never put it down that I am not.

Senator WATKINS. Will the Senator yield for a moment?

Suppose they go ahead and build a dam under this license which has been granted and upheld, and then the State of Oregon grants an application to divert water upstream which would interfere with the supply of water for the dam. That would test the question squarely as to whether the Federal Government or the State, owned that water, would it not?

Mr. GATCHELL. I would think so, Senator, but I don't think that question has been presented.

Senator WATKINS. I know it has not.

Mr. GATCHELL. That would test the question directly.

Senator WATKINS. As a matter of fact, when the Federal Power Commission is ordered to grant the license, the circumstances in this case, isn't that in effect saying that the Federal Government has a paramount right over the State in that water and can grant that license? It would not grant something which would be an idle thing.

Mr. GATCHELL. That is exactly what the court said we did. We have the paramount right to permit the use of the water for power purposes at the Pelton Dam.

Senator WATKINS. By implication, wouldn't that exclude the State from giving any rights under State law to anyone else to divert water upstream which would injure that right?

Mr. GATCHELL. I have been trying to say this afternoon that I didn't think the Court passed upon the upstream use

Senator WATKINS. Î know it didn't pass upon it. Would it not be an idle thing to give them a license to build a dam at that point otherwise?

Mr. GATCHELL. Senator, the law is not developed all at once. Senator WATKINS. I realize that.

Mr. GATCHELL. They take these things step by step. One of the reasons which impelled me to recommend to the Commission the issuance of a license here, on this sole basis of Federal jurisdiction, was that I wanted to see just what the Commission's authority was with respect to lands of the United States aside from the navigability of a stream, because it seemed to me that the United States must have paramount authority to control the use of water flowing across its own land. That is what the court said it had.

Senator WATKINS. Over and above the ordinary riparian right? Mr. GATCHELL. The United States has the paramount sovereign right in there to control the use of the water of a navigable stream and streams across the United States.

Senator WATKINS. This was not a navigable stream.

Mr. GATCHELL. I say or across lands of the United States. The further step which wil have to be taken some time, which has not yet been taken, may be taken in this very case. The State attorney general was reported in the paper just this last week or so, as having directed his State's attorneys in the area where both the Pelton Dam and the Hells Canyon Dam are located, to institute criminal proceedings if either company started construction of the Pelton Dam or Hells Canyon Dam without a license from the State hydroelectric commission.

Senator WATKINS. You mean the Hells Canyon on the Snake River? Mr. GATCHELL. Yes, sir. I think Pelton Ďam has been started so they may institute criminal proceedings to see just how far this licensee

can go. Maybe they will get in that case a decision on this question. I don't know. I do not think that it has been decided so far by the

courts.

Senator WATKINS. I just wondered what your opinion was. It seems to me that it should be rather clear that the United States would not do an idle thing, grant a license, then hold that the State of Oregon, for instance, could grant an application to divert water for consumptive use upstream and take away half their supply and render the plant useless.

Mr. GATCHELL. Senator, under the State law they run the risk sometimes of having their water taken away from them, and some of their rights which have been determined in California, for example, under riparian laws, have required constitutional amendments because the rights were asserted one way or the other.

When you are taking away the use of water at a particular site by reason of diversion upstream, you are interfering with the economic factors that may have a great deal to do with the development of the country. Had the State of Oregon had the authority which would be given to it by this bill, to stop the construction of the Pelton project, they would not build it. The State does not want that project built. Yet the power is needed out there, and it is a very desirable project economically. As a matter of fact, you pretty nearly have goldplated fish from the amount of money that the Commission has required as a direct investment, some $7 million, plus an annual operating expense of over $100,000 every year, for the protection of fish going up and down the Deschutes River. I think somebody has to decide whether you are going to have these power projects. If you are, do you want the Federal Government to decide? Then, okay. Senator WATKINS. I understood that was only for navigable streams. Mr. GATCHELL. No. This case says it applies to lands of the United States. Congress gets its authority over lands under the property clause of the Constitution and not under the commerce clause. I think it is clear under the commerce clause, and this case says it is also clear under the property clause.

Senator BARRETT. The property clause also says that the Congress shall have the sole and exclusive right to dispose of the territory of the United States.

Mr. GATCHELL. Congress has the right to dispose of the property of the United States as it deems fit.

Senator BARRETT. Let me ask you this question: You have given the licensee the power to store a specific amount of water at this damsite on the Deschutes River. Do I understand you to say that the State of Oregon through its proper officials can accept filings and grant appropriations for the right to use water for beneficial purposes down below

Mr. GATCHELL. Or upstream.

Senator BARRETT. Either place. And then require the licensee to release the water during the irrigating season when it would be impractical for him to do so because he wants an even flow of water going through summer and winter for power generation?

Mr. GATCHELL. They store the water. The answer to your question, Senator, is that I don't know what will happen, what the legal result will be when there is a consumptive use acquired under State law which interferes with this power use. I don't know what it will

be. All I know is that the Supreme Court has said that a State license is not required for this power use.

Senator BARRETT. There is no question about that. There isn't any question about the effect of the Pelton decision. To give the State any rights at all, it would seem to me that you would necessarily be obliged to say that the licensee is under some compulsion or some constraint to release that water so that it could be used when they need it during the irrigation season. As I take it from your testimony, there is nothing here to protect the farmer who might acquire rights in the future from requiring the release of that water when he needs it in the summertime.

Mr. GATCHELL. I think your statement is right. I don't think there is anything in here which deals with the right of that farmer to make a future diversion for irrigation.

Senator BARRETT. So the sum and substance of the result of the Pelton case, if that is correct, is that the State would be powerless to give an adequate right to a farmer to take the water which is impounded in that dam for irrigating purposes and require the release of the water by the licensee during the irrigating season to such an extent that it would interfere with the use by the licensee of the water for power purposes.

Mr. GATCHELL. I don't think that question is passed on in any decision nor in the Federal Power Act as it is. I would hope, Senator, that you would not be suggesting the futility of licenses, though. It really disturbs me if you are suggesting that Congress should authorize licenses and then immediately say "We don't care anything about whether the water is there. We are just going to let it be taken away."

Senator BARRETT. What I am saying to you is that the effect of what you have done here is to endanger the right of the State to grant its citizens any privilege to make an appropriation of the normal flow of that stream for agricultural purposes. I think that has been demonstrated here right now. You are going to interfere with one or the other. You grant that.

Mr. GATCHELL. If there is a conflict of interest, yes, sir.

Senator BARRETT. There is no question about that. Did the licensee get a right there to that water; would you say?

Mr. GATCHELL. The Court doesn't quite say that.

Senator BARRETT. It amounts to that.

Mr. GATCHELL. The Court doesn't say that it does not. That is the whole difficulty, Senator. The Court doesn't say that it does not. I don't know what the ultimate decision on that point will be.

Senator O'MAHONEY. We can make the ultimate decision.
Mr. GATCHELL. I don't know whether you can or not-
Senator O'MAHONEY. Oh, we can write the law.

Mr. GATCHELL. Let me finish my statement, please. I don't know whether you can or not as to any outstanding license. It seems to me that the Federal Power Act is drawn

Senator O'MAHONEY. We can't interfere with vested interests. We can't violate the Constitution.

Mr. GATCHELL. I do not think there is any question as to what Congress may do as to the future. If you want to say to the Federal Power Commission, "You cannot issue a single license," I think Congress can certainly say that.