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as against other uses from the Colorado River in California. The priorities contained in the contracts are with those agreed to by all California contractors for use of Colorado River water under the so-called "Seven Party Priority Agreement," dated August 18, 1931. Before the Federal Government should participate in a canal lining program, however, the problem of the disposition of the conserved water must be resolved. If water conserved by canal lining were to be devoted to irrigation of new lands in the Imperial and Coachella Valleys, it would not be consistent with a primary objective of the Pacific Southwest Water Plan; i.e., to meet present water deficiencies and growing demands, but only to sustain, through the plan facilities, the existing level of irrigation development. If the conserved water were to be used not for irrigation of new lands but for meeting other water demands in California this would require, as a prelude, extensive negotiation and modification of existing agreements and contracts. Proposals on such matters must originate in California. Because of the magnitude and importance of this untapped, inexpensive source of new water supply, it is urged that California take the initiative in seeking decisions including proposals for contract modification that will permit canal lining to be undertaken as part of the Pacific Southwest Water Plan or through some other program. The Federal Government should, of course, participate to the extent that its contractual responsibilities for Colorado River water are concerned. As soon as these matters are resolved and a feasibility report can be prepared, lining of these canals should be proposed for authorization. Regional Power Intertie The advantages of interconnecting with the proposed Pacific Northwest intertie will be carefully considered as plans for the intertie become more concrete. Mutual advantages to the Bonneville Power Administration and the Central Valley Project must also be taken into account. Staging of Construction to Meet Needs It is axiomatic in water resource planning that water be made available as the demand therefor is created. However, in the interests of economy, development should be staged so as to defer capital investments so as to coincide as closely as possible with the buildup in demand. Accordingly, the implementation of the plan embodies a carefully staged development of the units included therein which will effect substantial economies without detriment to water users. As the population and water demands of the Pacific Southwest increase in the VIII-6Epson Perfection 4870 Photo, 400 dpi, 8 bit, 13,862,912 byte