10 BULLETIN 1257, U. S. DEPARTMENT OF AGRICULTURE 
began. With the exception of the Garden City and Hondo projects, 
which have been abandoned and, perhaps, should be written off, 
and the North Dakota pumping project, which has been in and out 
so far as operation is concerned, the project ranking highest in 
amount of interest and in percentage of increase is the Salt Eiver 
project. This is due to the fact that the heavy expenditures on this 
project were made many years ago and repayment began only re- 
cently. The act originally provided for the repayment of the cost 
of a project in a period of 10 years. Under the extension act this 
period was extended to 20 years and the Secretary of the Interior 
was given authority to fix for each project the time when the period 
of repayment should begin. This extension of the time to 20 years, 
and each year's delay in fixing the date of repayment is, in effect, 
a large increase in the cost when interest is included, as it must be 
in determining actual cost. 
The preceding statements are based on the cost of reclamation 
works to the Government. The amount of the subsidy to farmers 
represented by relief from interest is more correctly represented by 
what farmers would have had to pay as interest on deferred pay- 
ments had water been supplied by private enterprises. 
The reclamation act provides two schedules of payments, extend- 
ing over 20 years. Section 1 of the act of August 13, 1914, known as 
the extension act, provides for lands that thereafter become subject 
to the law the following schedule: At the time of making water- 
right application or entry " 5 per centum of the construction charge 
fixed for his land as an initial installment, and shall pay the bal- 
ance of said charge in 15 annual installments, the first five of 
which shall each be at 5 per centum of the construction charge, and 
the remainder shall each be 7 per centum until the whole amount shall 
have been paid. The first of the annual installments shall become 
due and payable on December 1 of the fifth calendar year after the 
initial installment." 
Section 2 provides for lands already subject to the law the follow- 
ing schedule : 
Twenty annual installments, the first of which shall become clue and pay- 
able on December 1 of the year in which the public notice affecting his land 
is issued under this act, and. subsequent installments on December 1 of each 
year thereafter. The first four of such installments shall each be 2 per centum, 
the next two installments shall each be 4 per centum, and the next fourteen 
each 6 per centum of the total construction charge, or the portion of the con- 
struction charge unpaid at the beginning of such installments. 
A computation of the amounts that would be due if interest at 
6 per cent were charged on deferred payments, shows that a farmer 
operating under section 1 of the act would pay 72 per cent more than 
one who pays the announced charge in accordance with the law; 
and that one operating under section 2 would pay 66 per cent more 
than one paying the announced charge. These figures do not, how- 
ever, measure the subsidy, since this should include interest on the 
amount by which the payments required by law fall below the pay- 
ments required if interest were charged. Including such interest 
in the computed subsidy, at the end of the 20-year period, when 
charges under the existing law have been met, the person operating 
under section 1 would still owe 146 per cent of the original charge, 
and one operating under section 2 would still owe 136 per cent of 
