Senator ASHURST. Did they pay cowboy wages?,.
Mr. STEWART. No.

Senator ASHURST. Did they decline to pay the wages of the cowboys?

Mr. STEWART. No; never paid no wages or would not allow methen I was going to draw this $1,100 and paid bills that I owedthe amount that $1,100 would pay. They sent me word that the money was then deposited in the Bank of Winslow, and I paid bills to the amount of something like four hundred and some odd dollars, which they paid, leaving six hundred and something there, and I owed bills to cover that and taxes and other things and one bill to Mr. Putney down here. When he got them in he turned them down and would not pay, and when I went down and talked to him he said that he had received word from the War Finance to close me out. And the bank was owing taxes up to November, 1923, and that left the back taxes there of something like $700, so they said the reasons for holding this up was because the taxes were not paid, and I showed them the contract with the bank to pay all of that taxes and to take care of expenses-all accrued expenses up to that time and everything that had occurred, and he said that did not make any difference; it was a defunct bank. I told him, as I understood it, it was a guarantee behind this to take care of all of those things and when I bought the cattle that the cattle was to be-the indebtedness was to be all cleaned up to that date, and I had this contract and all to show for it, but he refused to do anything and they are holding that money yet there and they have never paid the taxes or never have made any move to pay this indebtedness.

Senator CAMERON. This transaction was through the Winslow Bank?

Mr. STEWART. It is through this here-what do they call itdefunct Winslow Bank.

Senator CAMERON. The bank that failed?

Mr. STEWART. Yes, sir.

Senator CAMERON. Have you ever heard anything further from the officers or agents of the War Finance?

Mr. STEWART. No; I have not heard through them.

Senator CAMERON. I would like to ask you this question: When were those notes due?

Mr. STEWART. Well, I think they are made for one year at a time, but I believe that

Senator CAMERON. With the privilege of running until 1927, weren't they?

Mr. STEWART. 1928. Well, my contract calls for 1928. I signed an agreement with them to renew those notes each year, but you see the deal was between them and the War Finance.

Senator CAMERON. What is the name?

Mr. STEWART. My deal was between the Navajo County Livestock Loan.

Senator CAMERON. Well, the money was to come from the War Finance?

Mr. STEWART. Yes, sir.

Senator CAMERON. And you were to have this money, as you understand, until 1928?

Mr. STEWART. Yes, sir.

Senator CAMERON. And they were to furnish you certain amounts of money to run your cattle and the overhead and for the keeping of your family, is that right?

Mr. STEWART. Yes, sir.

Senator CAMERON. And the $1,100 was supposed to be in the bank to your credit and they would not let you draw against?

Mr. STEWART. That is what they allowed.

Senator CAMERON. They allowed you $1,100 and the bank so stated that there was $1,100 but in reality you only got four hundred of the eleven hundred or thereabouts?

Mr. STEWART. Something over $400.

Senator CAMERON. Was that transaction before the bank failed! Mr. STEWART. No, sir; since the bank failed.

Senator CAMERON. Have you seen them lately in regard to this matter?

Mr. STEWART. Yes, sir.

Senator CAMERON. What do they say now about it?

Mr. STEWART. Mr. Webster told me that if he was me he would get a good lawyer and go after Dodson to get him and I told him that I thought there was a better way of getting at it; that as soon as this committee arrived I would just try and get them interested and I also wrote others in regard to it.

Senator CAMERON. You are in no position to pay the money; that is, you could not pay it now anyhow?

Mr. STEWART. No, sir.

Senator CAMERON. And you understood that this loan should run until 1928?

Mr. STEWART. Yes, sir.

Senator CAMERON. Have you an agreement or anything to that effect?

Mr. STEWART. Yes, sir.

Senator CAMERON. What was this loan company's name?

Mr. STEWART. Navajo County Livestock Loan Co.

Senator CAMERON. In other words, it was the agency that handled the loan for the War Finance Board?

Mr. STEWART. Yes, sir.

Senator CAMERON. Or the banking institution?

Mr. STEWART. Yes, sir.

Senator CAMERON. As far as you know, the comptroller or director or agent of the War Finance Board has not requested the payment of this loan?

Mr. STEWART. No, sir.

Senator CAMERON. The notice or whatever it was of this loan came through the association that you did business with?

Mr. STEWART. It came through this defunct bank.

Senator CAMERON. The bank is just the agent for the War Finance Board, as I understand it?

Mr. STEWART. I don't believe he is anything. I think he just assumed a position down there.

Senator CAMERON. We will be glad to take this up for you early in July. We have your statement now and you furnish the committee with your papers. Send them to our office at Washington.

Senator ASHURST. Send them to Senator Cameron by registered mail and we will be in Washington carly in July and we will take this matter up and see if we can't get it straightened out for you. Senator CAMERON. Thank you very much.

(Witness excused.)

STATEMENT OF MR. REGINALD E. MARGESSON, OF HOLBROOK,

ARIZ.

Senator CAMERON. Will you give your full name to the reporter? Mr. MARGESSON. Reginald E. Margesson.

Senator CAMERON. You are residing at Holbrook, Mr. Margesson?
Mr. MARGESSON. Yes, sir; that is my post office.

S nator CAMERON. You are in the stock business, are you?
Mr. MARGESSON. Cattle business.

Senator CAMERON. Have you a permit on any forest reserve?
Mr. MARGESSON. No, sir.

Senator CAMERON. Your cattle are all on the public domain?
Mr. MARGESSON. Yes, sir; public domain and leased land.
Senator CAMERON. That is State land?

Mr. MARGESSON. That is State and railroad land; I lease quite a good deal of railroad land.

Senator CAMERON. Will you state to the committee anything that you care to?

Mr. MARGESSON. Well, the idea is so that we can control the adjacent Government sections which are intermixed with the railroad and State lands which we are now paying a lease on. The way it is now we want protection and there seems to be some dispute amongst others whether we have any right to include any Government sections inside of our fences, and we will all more or less have some Government land included in the drift fences.

Senator ASHURST. You heard the chairman, Senator Cameron, state that there would be no prosecutions, either civil or criminal, on account of the drift fences until this committee has reported? Mr. MARGESSON. At the present time we want to inclose the Government land with our railroad and State land which we are already paying leases on.

Mr. BOWDEN. You would like to lease it?

Mr. MARGESSON. Yes, sir; we would like to lease it.

Mr. BOWDEN. You would like to see a leasing bill passed through Congress?

Mr. MARGESSON. Yes, sir.

Mr. BOWDEN. There has been legislation presented to Congress recently along that line, and one of the principal functions of this committee at the present time is to get recommendations for the leasing of the public domain.

Mr. MARGESSON. Yes, sir.

Mr. BOWDEN. Would you favor leasing the public domain?
Mr. MARGESSON. I would.

Mr. BOWDEN. The control of that, in your judgment, is necessary?
Mr. MARGESSON. It is necessary.

Mr. BOWDEN. What do you pay for your Santa Fe land?
Mr. MARGESSON. Two and a half cents straight.

Mr. BOWDEN. How long a lease do you think the Government ought to give?

Mr. MARGESSON. Well, I heard what Mr. Hennessey said, 10 years, and I think that would be somewhere about right. You see, in order to be of much benefit we have to do considerable work in the way of fixing watering places. To be of any benefit a man has to build tanks and put in wells at considerable expense, and if he only gets from year-to-year leases, as we do with our railroad lands, some of it five years but a good part of it only from year to year.

Mr. BOWDEN. You think that the Government should give you long leases to encourage work if the Government isn't going to help you?

Mr. MARGESSON. Yes, sir.

Mr. BOWDEN. You think it ought to be leased on an acre basis?
Mr. MARGESSON. I should think so.

Mr. BOWDEN. In what size tracts?

Mr. MARGESSON. Well, I should suggest that where a man controls railroad land he should have the first chance at the Government land.

Mr. BOWDEN. Or the present user of the land or the man who has developed equities in it?

Mr. MARGESSON. He ought to be entitled to the Government land, the privilege of leasing it first, any way, and not give a chance to any outsider to come in and lease the Government land for a very nominal rent, which we expect to get. We don't expect to pay what we are paying the railroad.

Mr. BOWDEN. What do you think you ought to pay?

Mr. MARGESSON. I should think for the Government land half a cent an acre would be about right; they have no taxes to pay and everything is clear.

Mr. BOWDEN. Would you recommend that the public lands here that are unreserved be turned over to the State of Arizona?

Mr. MARGESSON. I think they are better left in the hands of the Government.

Mr. BOWDEN. Do you wish to state a reason for your belief?

Mr. MARGESSON. I think we could lease it more reasonably from the Government. That is my principal reason. Besides we are not trying to fight the homesteader. Let the homesteader come in and take all he wants. If there is any land that a homesteader wants, he is perfectly welcome to all of it for all the cowmen and sheepmen care about it.

Mr. BOWDEN. How about increasing the homestead entry to four sections?

Mr. MARGESSON. Well, I couldn't say it would be of any benefit for this reason, it is all he can do to pay taxes on 640 acres, and if he has got to pay taxes on four sections he can not make it, and it is not enough to run cattle on, so what is he going to do? Four sections will not run any cattle. We figure 15 head to the section. Mr. BOWDEN. Well, why not make it 15 sections, get it out of Government hands into private hands?

Mr. MARGESSON. Who is going to take it? The cowmen won't take it. I have a homestead, and I am figuring on letting it go to get out of paying taxes. The less land a man has got the better off he

is. The railroad people will tell you that-when it comes down to owning it.

Senator ASHURST. Just one question and that is all. Have you ever had any experience with the War Finance Corporation? Mr. MARGESSON. Yes, sir.

Senator ASHURST. Well, has it proved of any benefit to you?

Mr. MARGESSON. No, sir; I can not say that it has. I think we would have been better off if there had been no loans extended at all, so far as the War Finance is concerned.

Senator ASHURST. They have been harsh, cruel money lenders, haven't they?

Mr. MARGESSON. Yes, sir; they have used very little tact or judgment in their loans.

Senator CAMERON. You did business with the organization in Arizona, didn't you?

Mr. MARGESSON. No, sir; I didn't. I can not say from any experience of my own that I have been dealt harshly with, because I have done my business through the Colorado War Finance Corporation and other corporations which were a go-between between me and the Government.

Senator CAMERON. You did not do business direct with the department at Washington?

Mr. MARGESSON. Oh, no.

Senator CAMERON. It was an intermediate corporation that you did business with?

Mr. MARGESSON. Well, I will tell you

Senator CAMERON. What I am trying to get at is not to shield anyone, but to get the facts so we can present them to the War Finance Board when we get back to Washington.

Mr. MARGESSON. I don't mean to leave the impression that the Colorado corporation through which I did business, ever dealt harshly with me at all, but this is the business that the Government did. When you make sales every dollar of this money goes straight into Washington and you make application for what you figure you need for your running expenses for the next year. Then they will probably give you about half of what you need and the other is applied on the note and it leaves you hard-up all the time and keeps a man struggling for that reason, when his outfit really is worth all that the loan calls for. And another thing, now they don't allow you 1 cent of interest. I sold about $13,000 worth of cattle last year and they kept that money for nearly 90 days, and I didn't get 5 cents interest.

Senator CAMERON. And they were charging you interest?

Mr. MARGESSON. Interest on my loans, just the same; and they were using my money for about 90 days I couldn't say exactly. Senator CAMERON. And they didn't give you an credit?

Mr. MARGESSON. No credit; not a dollar.

Senator CAMERON. Is your loan coming due soon?

Mr. MARGESSON. Yes; my loan is due the 1st of next year, 1926. Senator CAMERON. What month?

Mr. MARGESSON. First of January; that is what they called for

now.