It has been the Secretary's policy to establish a firm and equitable basis for future use of water not only in California but also in Arizona, despite the absence of an agreement or adjudication.

The Department has undertaken in four particulars to preserve for Arizona an opportunity to use the waters which Hoover Dam will make available. The task has been complicated by the confusion left over from the days in which Arizona was bitterly opposed to the entire project.

First, 18 per cent of Hoover Dam's firm energy was reserved for use in Arizona. This amounts to the equivalent of about 117,000 continuous horsepower.

Second, the Parker Dam contract with the Metropolitan Water District reserves one-half of the power privilege, amounting to about 40,000 horsepower, for use in Arizona, without contribution by that State or the United States to the capital cost of the dam. Freed of capital investment in the dam, this power will rank among the cheapest power projects in the United States. In addition, the Metropolitan Water District has been required to undertake to transmit Arizona's Hoover Dam power at cost from Hoover Dam to Parker Dam to the extent that excess capacity of the district is available.

Third, in the All-American Canal contract the privilege has been reserved to the United States of using that dam as a pumping basin or diversion heading for irrigation of Arizona lands. The Hoover and Parker power will make feasible the irrigation of the first units of Arizona's proposed Gila project by pumping from Imperial Dam, as well as permit the reclamation of the Colorado River Indian Reservation near Parker.

Fourth, the Department has promulgated regulations designed to assure a water supply to Arizona. These regulations are included as an appendix in this volume. They outline the form of a Hoover Dam water-delivery contract which the United States will enter into with Arizona upon certain conditions. Briefly, the contract calls for the delivery of 2,800,000 acre-feet annually, in return for which Arizona undertakes to make no interference with the diversions by other Government contractors. This quantity of water is adequate for all of the Arizona projects below Hoover Dam, and is without prejudice to the power of the parties to contract in the future for delivery of additional water required. As in the case of the California water contracts, the undertaking relates simply to acre-feet of water stored

by Hoover Dam, without earmarking the discharges under Articles III-A or III-B of the Colorado River compact, or as surplus water. The proposed contract recites the controversy between the two States over the quantity of water available to each under the various provisions of the project act, and makes no attempt to adjust priorities as between the two States. But inasmuch as an entirely new factor, i. e., the building of Hoover Dam and providing of 30,000,000 acrefeet of storage, has intervened after the execution of the Colorado River compact, there is every reasonable assurance that water adequate to supply all of Arizona's and California's needs can be supplied under these contracts, leaving to the future the settlement of a question which in practice will probably never arise: The technical classification of the water discharges under various provisions of the compact. The proposed water contract with Arizona is specifically stated to be without prejudice to the States of the upper basin, and relates solely to water present in the lower basin. Arizona is thus offered an assurance of 2,800,000 acre-feet of main-stream water, and given an opportunity to look to the United States rather than to an agreement with the other States for a delivery of that quantity of water, in return for an agreement not to interfere with diversions by her sister States.

10. SUMMARY

This concludes a brief outline of the events which have made possible the construction of Hoover Dam: The Colorado River compact of 1922, the Swing-Johnson bill of 1928, the power contracts of 1930, the water contracts, the establishment of exclusive jurisdiction and the commencement of construction, the litigation before the Supreme Court which failed to halt the building of the dam. Included in this volume are not only the instruments which have marked the accomplishment of this program to date, but certain others which have been approved as to form and which during the coming years should make possible the peaceful development of the Colorado. These include the remaining water contracts in California, and regulations assuring to Arizona a fair share of water.

The Department has executed eight power contracts, two water contracts, has approved as to form three additional water contracts, two contracts for repayment of the cost of diversion dams, and has approved an Arizona water contract in the form of regulations.

These contracts are summarized in Part II, and their texts appear in the appendixes. The construction contracts are printed separately.

PART II

AN ANALYSIS OF THE CONTRACTS

1. THE POWER CONTRACTS.

(a) General.

(b) The lease.

(c) Contracts with others than the lessees.

2. THE CALIFORNIA WATER CONTRACTS.

(a) The Metropolitan Water District: Water contract.

(b) The Imperial Irrigation District: All-American canal contract.

(c) San Diego.

(d) Palo Verde Irrigation District.

(e) The Metropolitan Water District: Parker Dam.

3. THE PROPOSED ARIZONA WATER CONTRACT.

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AN ANALYSIS OF THE CONTRACTS

1. THE POWER CONTRACTS

(A) GENERAL

On April 26, 1930, two contracts, carrying an obligation to take and pay for all of the firm energy to be generated at Boulder Canyon, were signed at Los Angeles. The first was a lease of power privileges to which the United States, the City of Los Angeles (through its Department of Water and Power), and the Southern California Edison Co. Ltd. are parties. The second was a contract for the purchase of electric energy, to which the United States and the Metropolitan Water District are parties.

The general framework of these instruments establishes the city and company as several, not joint, lessees of the power plant, obligated to generate at cost for certain other allottees, of which the Metropolitan Water District is the major one. Allottees other than the Metropolitan Water District were accorded by these contracts various time periods within which to execute their separate contracts with the United States for purchase of energy. Ultimately the Los Angeles Gas & Electric Corporation, the Southern Sierras Power Co., and the cities of Pasadena, Burbank, and Glendale entered into such contracts. Contracts have not yet been executed on behalf of the two States of Arizona and Nevada, and the way is kept clear for the States to exercise their option at any time within 50 years. As of the present writing, therefore, eight contractors are obligated to take Hoover Dam's firm energy. The last five of them have acquired their contracts by virtue of "drawback" provisions in the original city, company, and district contracts with the United States.

(B) THE LEASE TO THE CITY OF LOS ANGELES AND THE
SOUTHERN CALIFORNIA EDISON CO.

1. The parties.

The City of Los Angeles and its Department of Water and Power are, for some purposes, separate entities. Both are parties to this lease. The Department of Water and Power is engaged in the business of generating, distributing, and selling electric energy on behalf