absorbed by the investing public. The Canadian bonds draw 1 cent rate of interest more than ours do, or ours draw within a cent of the interest that the Canadian bonds do, and many of our people are purchasing Canadian bonds to-day.

Another way would be by reducing the amount of our exemptions, from $2,000 for a married man to $1,000, and from $1,000 for a single man to $500 to $600. That would get the money.

Mr. RAINEY. How much do you think that would get?

Mr. SMITH. I think it would get quite a good deal of the money. Mr. RAINEY. You would be surprised to find how little it would get. Mr. SMITH. Well, I thought of that way because some other countries have cut down exemptions. Other ways I have also stated: By doubling the luxury tax.

By restoring our income tax to its former rate.

By collecting the interest and principal on our loans to our allies. By taking bonds from foreign nations for our loans to them, and funding them. They agreed to give bonds, as I understand. That is a part of the law, I think. I do not know that it is, and I would not say that they agreed to it; but we could ask them for bonds in collecting it. I am in harmony with the following, in an editorial published in the Washington Post of March 23, 1920:

The proposal that American taxpayers shall carry the burden of the war debts, while Great Britain and the other allies shall be allowed to postpone the payment of interest on the money they have borrowed, is worthy of the condemnation of all Americans, so long as it can be proved that the European beneficiaries of American loans are devoting part of the money, or its equivalent, to the increase of armaments on land and sea. We have cited the immense expenditures of Great Britain for increased naval activities. We could cite heavy expenditure by France for increased military activities connected with the absorption of Syria and neighboring portions of the Turkish Empire.

Congress should put its foot down upon the increase of armies or navies by any nation that is a debtor to the United States until such nation has paid in full all installments of interest and a reasonable contribution to a sinking fund for amortizing its debt. No enemy threatens Great Britain on the sea. There is no necessity for taking interest money due the United States and using it for increasing the British Navy. The only navies in the world which could seriously threaten the British Empire are the American and Japanese. One is a close friend, and the other is a close ally. There is no danger from either. France is in no danger from any foreign army. It is not necessary for France to divert interest money due the United States and employ it to increase her military forces.

It is high time that the United States should take account of facts in its relations with European nations.

By amending the income tax law so that men can be made to pay who work for $5 to $10 a day, a few days, weeks, or months at a place, and who earn more than the exemption, but are lost trace of and who escape payment. I think every good citizen in the land would be willing to pay something. A slight amount at least.

Another method suggested is a tax on excess profits made on war contracts. That is one way to do it, I think.

Then there is the tax on sales.

And, relief can also be had by paying this bonus in installments. I want to suggest that these boys never turned their backs to the enemy. They never met defeat, and I hope that they will not meet defeat for the first time here at home in their own Government after they have gotten back. I thank you.

Mr. RAINEY. Have you any objection to a tax on war profiteers? Mr. SMITH. I stated that as one way, here.

Mr. RAINEY. You just said "war contracts."

Mr. SMITH. I meant those that made large profits; to lay a tax on excess profits made on munitions or anything else, during the war.

Mr. RAINEY. You would not get it that way, but you would get it by taxing all those who made money during the war, on account of the war; all those who made large amounts. Would you have any objection to doing that?

Mr. SMITH. No. I had that in mind.

Mr. RAINEY. If we presented a proposition for that on the floor of the House, would you vote for it?

Mr. SMITH. I will be voting for these boys.

Mr. RAINEY. Would you vote for that tax on war profits?
Mr. SMITH. Yes. If that is deemed best.

Mr. RAINEY. Will you vote for any proposition that the Ways and Means Committee reports?

Mr. SMITH. For any proposition that does justice to these boys, or does what has been done by other countries, and meets what is the sentiment in this country; because the States are taking up bonus legislation in one, two, three order, and passing it. There is a big sentiment for paying these boys.

The CHAIRMAN. Now, we are going to close these hearings to-day, and as soon as we can have the hearings printed, the committee will meet, to consider the evidence presented with the view of agreeing upon some form of legislation.

STATEMENT OF HON. MOSES P. KINKAID, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA.

Mr. Chairman and gentlemen of the committee, I am pleased to be given the opportunity to express my views concerning the bill to be known as the national soldiers' land settlement, home aid, vocational training, and adjusted compensation act. I am glad to believe its provisions will afford a wise and satisfactory solution of the legislative problem, which for a time it seemed to be. As I view it, one of its chief virtues is that its four different alternatives will permit of treating all the ex-service men alike. For a time it appeared to me that the principal difficulty was that neither a home-building scheme or an outright adjusted compensation act would permit of doing justice to more than one-third of the men. It will be recalled that the straw votes obtained by ex-Secretary Lane disclosed that not more than one-third would probably avail themselves of a homegetting plan, and I deem this to have been the principal feature which operated, first, against the Lane bill in the last Congress, which was favorably reported to the House by our Committee on Irrigation of Arid Lands, and, again, against the Lane-Mondell bill in the present Congress. We have learned by experience that no law gives general satisfaction which is not administered alike to all citizens affected by its provisions, and it is perfectly clear that any enactment which will not permit of treating all of the same class, and possessing equal claims, in the same way must prove objectionable and very unpopular. The fact that money may be readily converted into any kind of property has constituted an argument in favor of a compensation scheme, if but one alternative were to be provided, and that was the way the proposition to do something for

ex-service men was treated at the start, namely, that only one kind of recognition or reward would be legislated for.

I am therefore very much pleased with the solution worked out by the legion committee, and I wish to here congratulate them and the Congress upon the conclusions at which they have arrived, as shown by the draft of the bill they have presented to your honorable committee. It seems to me the wisdom and sound judgment reflected by the provisions contained in the bill should commend them most highly for the favorable consideration of the Congress in a determination of the legislation to be granted. For a time the legion seemed to deem it not appropriate that its organization specify the kind of legislation which, in their view, should be enacted, and that has been the chief cause of delay in taking up and passing a bill. It will be patent to all that it would be useless to enact a law which would be unsatisfactory to those for whose benefit it was intended, and it could not be intelligently determined what would be satisfactory until the organization had explicitly expressed itself. This feature has been well exemplified by the fact that the recommendations made by the various legion posts scattered through the different States were in conflict; even the recommendations made by local posts in the same State were conflicting and contradictory. On the whole, in my judgment, the legion has rendered the Congress and the country generally an invaluable service in drafting and presenting a bill, and this course is calculated to secure the greatest possible amount of satisfaction and approval both by members of the legion and the public generally.

In view of the deliberations of the representatives of the American Legion, together with the advices given by ex-service men in general without regard to organizations, and of the interest evinced by the public in general, that justice be done to the men who upheld the principles of free government and the honor of our flag in the late war, I very heartily recommend the making of a favorable report of the legion's bill, substantially as it provides.

But I have appeared before you to-day for the additional purpose of being heard in behalf of my bill H. R. 11961, "To authorize advances to the reclamation fund and for the issue and disposal of bonds in reimbursement therefor, and for other purposes, which I introduced at the request of the governors representing the Western States Reclamation Association, here in session in the month of December, then earnestly appealing for a considerable appropriation for a several years scheme for the expansion of the reclamation of lands in the semiarid west.

I need not reiterate to you of what this association is composed, because you have already given them hearings, and there special representative, the able and distinguished ex-governor, William Spry of Utah, has several times been heard by your committee in advocacy of the relief provided in the bill I introduced, which he himself helped to prepare. The bill provides

That to enable the Secretary of the Interior to carry on and complete irrigation projects approved but not begun for lack of funds, and for the investigation, commencement, and completion of such new projects as may be deemed feasible to be undertaken, the Secretary of the Treasury is authorized ard directed, upon request of the Secretary of the Interior, to transfer from time to time to the credit of the recla mation fund, created by the act entitled "An act appropriating the receipts from the

sale and disposal of public lands in certain States and Territories to the construction of irrigation works for the reclamation of arid lands," approved June 17, 1902, and acts supplementary thereto and amendatory thereof, such sum or sums not exceeding in the aggregate $250,000,000, as the Secretary of the Interior may deem necessary to complete, construct, operate, and maintain such projects or to acquire, perfect, and protect water rights pertaining thereto by the United States, and such sum or sums as may be required to comply with the foregoing authority are hereby authorized to be appropriated out of any money in the Treasury not otherwise appropriated: Provided, That all sums so transferred shall be reimbursed to the Treasury from the reclamation fund as hereinafter provided.

It is the first section of the bill I have read to you as it is written. The second section in substance provides that for the purpose of reimbursing the Treasury for such advances to the reclamation fund, the Secretary of the Interior is authorized to issue bonds, bearing interest at a rate not exceeding 44 per cent per annum, which bonds are to be exempt. The bonds are to be issued and the sales made in such amounts, annually, as the Secretary of the Interior may determine to be required for the completion of units and projects now under course of development, and the taking up of new projects. The bill in no manner seeks to change the existing reclamation law, but merely provides funds for the continued operation of this act, the beneficence of which has been proven by the 17 years of its successful operation. The association of western governors evidently were of the opinion that it was in the public interests to adhere to the present reclamation law, approved June 17, 1902, and the acts supplementary and amendatory thereof; in other words, that we should hold fast to that which has proven good.

Mr. Chairman and gentlemen of the committee, in view of the very able presentations already made in these hearings of the success of farming by irrigation, whether by individual enterprise, under State laws, or under the auspices of the Government, in the operation of the national reclamation act-in view of the magnificent results in crop raising and the statistics relative to the same, given by Gov. Spry, Mr. George H. Maxwell, executive director of the National Reclamation Association, and Engineer Ross, each having enjoyed an abundance of experience, and yet broader observations of the beneficial results of the reclamation of semiarid lands to successful agriculture by irrigation-in view of all the information these able gentlemen have presented, it would constitute a waste of time for me to undertake to cover the same ground again. And it is my judgment you would not have me thus uselessly take up the very valuable time of your committee. Accordingly, I shall deem it sufficient for my part to urge upon the consideration of your committee, the very strong demand being made throughout the semiarid States for a considerable appropriation of money to be used in the completion of projects already commenced, and for the development of prospective projects. As indicative of the demand for the development of new or prospective projects, I shall here give a list of bills introduced to our House Committee on Irrigation of Arid Lands in the first session of the present Congress. They come from most all of the semiarid States. They are as follows:

H. R. 1130. Mr. Raker, $500,000 for impounding flood waters of Little Truckee River and Long Valley Creek in Nevada and California.

H. R. 1710. Mr. Webster, $50,000 for investigation of central Washington lands, with a view to their reclamation.

H. R. 4304. Mr. Summers, $25,000 for investigation of central Washington lands, with a view to their reclamation.

H. R. 5714. Mr. Kinkaid, $10,000 for North Platte surveys, etc.

H. R. 6139. Mr. Hernandez, $5,000 for investigation of feasibility for reservoir and irrigation project, Santa Fe River, N. Mex.

H. R. 6236. Mr. Hernandez, $2,500 to investigate feasibility for reservoir and ditches in Canjilon and Cebolla Rivers, N. Mex.

H. R. 6640. Mr. Welling, $3,000,000, Strawberry River, Utah, project.

H. R. 6641. Mr. Welling, $2,000,000, Price River, Utah project.

H. R. 6643. Mr. Welling, $5,000,000, Green and Grande Rivers, Utah project.

H. R. 6875. Mr. Smith, $100,000, to investigate feasibility DeBouis project in Idaho. H. R. 7019. Mr. Summers, $7,000,000, for an extension of the Yakima project, known as Kittitas high line unit.

H. R. 7545. Mr. Hudspeth, $1,500,000, advance to reclamation fund for completion of drainage work on the Rio Grande project (Texas-Arizona).

H. R. 328. Mr. Kinkaid, $2,000,000, for Lower North Platte project.

The aggregate of the amounts asked for in these several bills is $21,192,500. I said I would mention these bills as indicative of the demand being made; however, the number of these bills and the amounts asked for the development of the different projects specified, do not constitute an adequate criterion for the demand for the expansion of irrigation in the West.

The fact is if it had not been that our committee repeatedly advised the Members who introduced these very bills that favorable action thereon would not be taken by our committee, the number of such bills would have been greatly increased, how much can only be guessed at, but it is a fact that knowledge came to our committee that numerous similar bills would be added to this list if a favorable report would be granted on any of them. The chief reasons why the committee did not accord consideration to these bills, was on account of the existing condition of the Treasury, which forbids the authorization of appropriations in cases where the money can possibly be dispensed with for the time being.

I deem it proper to mention that the Reclamation Service has estimated that it would cost to complete projects now under course of development $112,134,000 these projects contain an area of 2,948,196 acres. The Reclamation Service has further estimated that it would cost to develop prospective projects containing an acreage of 2,289,000 acres, the sum of $160,600,000. Their report also shows that there is due the reclamation fund from water users $123,000,000. The annual payments made by water users to be applied upon this $123,000,000, as I understand it, will continue to increase for the next several years. And the income from the act providing for the leasing of oil and coal lands, etc., approved February 25, 1920, which has already added several millions to the reclamation fund, will annually add materially, how many millions I can not intelligently estimate, to the reclamation fund.

With the bill H. R. 11961 enacted into law it would be the province of the Secretary of the Interior to ascertain the amount of funds to be raised under the act each successive year, to be added to the amount of funds derivable from payments made by water users and the oil and coal leasing act. The larger the amount realized from the ordinary sources, the smaller would be the amount required to be raised under the next act. This flexible feature I believe to be a virtue of the provisions of the bill recommended by the governors.