APPENDIX

Statement of Edward Peile, president, Jackson County Stockmen's As- Page sociation

Statement of Mike Hanley, Jordan Valley, Oreg___

201

201

Statement of Gene Officer, president, Grant County Stockgrowers Association, Canyon City, Oreg---.

204

The committee met, pursuant to notice, at 2 p.m., in the Klamath County Courthouse, Klamath Falls, Oreg., Hon. Bob Packwood, acting chairman, presiding.

Present: Senator Packwood.

Also present: Allen W. Neece, Jr., legislative counsel, Senate Small Business Committee; and Gregory C. Dow, legislative assistant, office of Senator Packwood.

Senator PACKWOOD. This meeting will please come to order. I see Sam Johnson in the audience, and George Flitcraft, the mayor is here. In terms of protocol in spite of the high calling of the State legislature, Sam, I will let the mayor in his own town speak first before I call you, Sam, as a witness.

George, where are you? Come forward, Mayor Flitcraft. George is a former contemporary of mine in the Oregon Legislature and a longtime close friend.

STATEMENT OF HON. GEORGE C. FLITCRAFT, MAYOR, CITY OF KLAMATH FALLS, KLAMATH FALLS, OREG.

Mayor FLITCRAFT. Thank you, Senator Packwood. I am indeed flattered. I was somewhat confused as to why such a great deal of preferential treatment was being shown a mayor of the community when all the power of the community is right out there, but I would like to take this opportunity to extend a welcome to you, and I know I speak for the entire community. We are indeed happy to have you with us, and I would like to thank you for taking time in your busy schedule to make this trip into our area. I think that it is worthy of note, I have known you for a great number of years, in fact, I can recall when you were a building aspirant in the political field, and you have always concerned yourself and shown a great deal of interest in water related matters, and understood the importance of water in our existence today.

I had a letter, Bob, that I was going to send to you, but in the interest of economy I thought I would take this opportunity and bring it over and read it into the record.

Senator PACKWOOD. It is a good thing as postal rates will be going to 16 cents soon.

(1)

Mayor FLITCRAFT. It would be worth it if I could be assured that you would get it.

Dear Bob: I would like to take this opportunity to briefly comment upon the effects of the drought on Upper Klamath Lake, and the consequent need for expedient action by the Corps of Engineers.

As we have learned already this year, the lake is extremely vulnerable to drought impacts and the attendant problems that come with lower water levels. Our region's agricultural and recreational resources are directly tied to sufficient water levels, and in turn, our city's economy is linked to these resources.

The drought has already affected our lake-related recreation economy adversely, and other sectors of the region's economy remain threatened. In light of these conditions, we feel it is imperative that the Corps of Engineers move forward vigorously with their study. Any delay in action will unduly expose our region to continued lake deterioration, and the consequent economic problems which the drought has created.

Your support thus far on this matter has been extremely important, and our progress is due in large part to your efforts. In the face of worsening conditions, resulting from the drought, we look forward to your continued support. Sincerely.

Senator PACK WOOD. Thank you, Mr. Mayor.

Mr. Commissioner, do you want to say a few words?

STATEMENT OF RAYMOND P. THORNE, BOARD OF COUNTY COMMISSIONERS, COUNTY COMMISSIONERS CHAMBERS, KLAMATH COUNTY COURTHOUSE ANNEX, KLAMATH FALLS, OREG.

Commissioner THORNE. I haven't prepared testimony, but I do have some points on the water drought matters that I think could be pertinent, although I don't have a written copy to present to you.

Senator PACKWOOD. If you would like to take a moment now, I have a fair list of witnesses, and I don't want to hold you here. Do you want to do it now?

Commissioner THORNE. I would appreciate that if the written report is not necessary.

Senator PACKWOOD. Come right on down.

Commissioner THORNE. Hon. Senator Packwood and members, we have worked with this drought situation here in Klamath County and find that there are a couple of problems that I can address myself to in this matter. One is the total lack of coordination that we find in the State and Federal Governments. Locally we have what I feel is a good coordinated system working hand in hand with local farm communities and the board of county commissioners, but I feel that at this time it is necessary to take the drought related programs and place them under one auspices, whatever that auspices should be, which would be left up to the Federal legislature.

Also in the area of water hauling, water hauling should be from the water source to the cattle, not from the cattle to the water as is currently in the program. This works a hardship on the cattle people and sheep people and is almost a distinct impossibility to present this water hauling program in the manner in which the cattle have been transferred to the water, and also it would be a cost saving to the Gov

ernment in the process if the water was hauled to the cattle instead of the other way around.

Also in the area of agricultural water development, it is set up now only for districts, and this does in no way speak to the individual farmer, and it is often hard for districts to take on the projects under them, and so this particular area could be helped by including in the agricultural water development that manner in which the individuals who are having drought problems can get involved in the agricultural water development process.

These are the only areas that I could comment on at this time and I am sure you will be finding others, and I certainly appreciate your taking your time to come to Klamath Falls and Klamath County to hear our problems.

Thank you.

Senator PACKWOOD. Thank you. I also want to congratulate you on your appointment.

Commissioner THORNE. Thank you, Senator.

Senator PACKWOOD. That is why we are having these hearings to get the community response, and I agree with the commissioner's statement, we ought to have one body and one coordination.

I always have to chuckle a bit when I recall that 25 years ago we created the Department of Health, Education, and Welfare solely for the purpose of having one man, the Secretary, in charge of all of these educational programs so they would be rationally administered, and if that is what we get if we reorganize in a rational administration, I am not sure I want the job coordinated.

We have started 2 days of hearings, here today, of course, and tomorrow in Burns, and I think I will make a few comments and then call on Sam. As you fly around eastern Oregon, I have been struck with the fact that the cattle industry has been devastated here. I have talked with other Senators from around the Western cattle producing States and the situation may vary a bit from State to State, depending on how bad the situation has been, but unfortunately it is negative. Then you look at our dry land grain producers, and they tell you that we are going to wind up with a harvest this year of someplace between half to 60 percent of the yield that they otherwise expect, and there are some Federal programs that will help wheat producers by and large. We will see gaping weaknesses in current law that prevents them from getting much assistance this year. The wheat producers will be testifying tomorrow in Burns.

I am going to call on a number of people from the Federal agencies, but before I call on the first witnesses, I want to mention one program which has had special significance and success.

I have asked the Small Business Administration to discuss their loan program. Some of you may not realize it, but just last fall we were successful in getting the law changed so that the Small Business Administration could make loan programs available to farmers. Farmers were not, for some reason, classified as a small business. They are now. This year, in the Senate Small Business Committee, we developed some low interest loan programs for drought-related disaster areas which I think may be beneficial to many drought impacted farmers and ranchers.

Because, however, the program is so new, I have asked the Small Business Administration to make a loan officer available at the two

hearings, and they are here today. They are in the courthouse and they will be disseminating information, and to the extent possible, processing applications for loans. If there is anybody here that wants to make an application, they are here for your use, so don't hesitate to keep them fully occupied.

Let me mention one more thing that I feel illustrates the impact these hearings can have. In mid-April of this year a lone rancher, Gary Williams from Bonanza, who will testify later today, called my office and told me about a problem he was having. Several natural springs on his ranch were dried up because of a lack of runoff water and precipitation. He was going to purchase a truck and begin hauling water to his cattle. He located a source of water but he had no place to store the water, no water troughs.

He asked if I could look for excess Air Force fuel containers in Federal surplus property that could be used for this purpose. I didn't find any excess fuel containers, but I did find 70 containers in which they ship aircraft engines. When they are split in two you have 140 halves, and they held 500 gallons of water each, and they were very adequate. The troughs were transported to Oregon from Arizona through the cooperation of the Bureau of Land Management, and they were distributed by the Governor's office and the State department of agriculture.

There was one slightly humorous incident, one rancher got two of these bolted together and he unbolted them and found out there was a jet engine inside, which may say something about the looseness of the inventory control of the Federal Government. Also you would think when they loaded it that they would have noticed that it seemed substantially heavier than the others, but anyway after we obtained these first tanks, and they worked very well, the Air Force put a freeze on the remaining containers, which means they wanted the tanks for their own use. We were able to locate another 80 in Arizona and the Bureau of Land Management was able to load them on trucks and send them down here before the Air Force found out about it.

I recently spoke with a three-star general in Washington and he said they had a need for them for other purposes, but we managed to get some here and there are still others there.

I mention this incident just to illustrate what a response to a single call can do, and Mr. Williams' call suggested the idea. I am not sure I would have thought of that, of being able to help in that way, had he not mentioned some kind of Government surplus property that would hold water, and I hope that the ideas provided today and tomorrow may be equally effective. I am not changing any laws at the moment, and Congress takes up again right after Labor Day, but in my experience in dealing with many of these programs, with few exceptions it is not the law that is the problem. Usually the laws are adequate. It is coordination. It is whether or not we can get agencies to use the laws they are allowed to use, and you may be able to give them some ideas today which would be of immense help.

The second reason I mention the water troughs is to illustrate that we don't necessarily have to rely solely on Federal Government programs to solve our drought problems, although they were all military water troughs. We got them through the suggestion of an Oregon rancher and the local BLM who sent the trucks and the Governor's office and the State department of agriculture helped distribute them,