Spokesman Review, August 1, 1935, p. 1

At least 90 per cent of the testimony in the suit of the government to place a value upon 1104 acres at Grand Coulee dam site was ruled out of consideration by Judge J. Stanley Webster in federal court yesterday.
The judge gave it as his opinion that the only value of the land is its fair market value apart from any possible use as a dam site.
Lawyers on both sides interpreted the opinion as meaning that all the testimony about the possibility of private capital developing the Grand Coulee project and proof regarding market for the power is taken out of the case.
Most of the 13 days of the trial has been occupied with attempts by the government to prove that private capital could not build the dam and efforts by the defense to prove private capital could and would have built it if the government had not stepped in.

Held Dam Increased Value

The defense sought to show that if the government had kept out, the dam site would have been sold to private parties for a large amount.
The land owners place upon their land a value of $5,000,000, which has almost entirely a value as a prospective dam site. The government appraisers placed a value of about $15,000 on the land, taking into consideration only its value for agricultural and other uses not connected with development of electric power.

Decisions are cited

Judge Webster read from numerous decisions of the United States supreme court, including United States versus Chandler Dunbar Water Power company, a decision handed down May 26, 1913.
In that opinion the supreme court said "that the property (referring to property such as is being valued at Grand Coulee dam site) may have to the public a greater value than its fair market value affords no just criterion for estimating what the owner should receive.
"It is not proper to attribute. . . any part of the value which might result from a consideration of its value. As a necessary part of a comprehensive system of river improvement, which should include the river and the upland upon the shore adjacent."

United States Rules Stream

The United States Supreme Court also said in the Chandler Dunbar case and other cases that the power of congress to control navigable streams (of which the Columbia River is one) is virtually unlimited. In other words, no private party could step in and build a dam at Grand Coulee without government authority.
The issue that the lands have no value as a dam site to private landowners was raised by the government early in the trial. It came up again yesterday . . .
. . . permit for construction of a dam at Grand Coulee issued by the government to the Columbia basin commission as agent of the state of Washington. The defense objected to its admission.
Arguments then were made, the government contending that private capital, if willing and able, could not construct Grand Coulee dam because the permit for such a dam had been issued to the state.

Sustains Government View

Judge Webster sustained the view taken by the government as to the irrelevancy of evidence that private capital might be able to build the dam, but rejected the copy of the permit as an exhibit.
Immediately after making his statement, the court recessed and Attorney I.K. Lewis for the defense asked Mr. Stoutenmeyer to accompany him to the judge's chambers, which he did.
Upon reconvening of court, Judge Webster recalled the jury, which had been absent during the arguments, and told them he would give his instructions this morning.

Copyright 1935. Reproduced with permission of The Spokesman Review

Spokesman Review, August 3, 1935, p.1

Instead of millions which owners of land at Grand Coulee dam site hoped to collect, they were awarded $17,339, or only $1,896 more than the government's appraisal of the 1102 acres condemned for dam site purposes. The jury in federal court came in yesterday afternoon after three hours deliberation.

Were Playing for High Stakes

However, the landowners were playing for high stakes. They had before them the precedent set at Bonneville where Mrs. Sam Hill collected $100,000 for 35 acres of dam site. In that case the government obtained a new trial, on the ground the verdict was excessive, but a second jury brought in an award slightly higher than that given by the first jury. The government paid rather than continue the litigation.
The trial of the Grand Coulee dam site case occupied 15 days, exclusive of Saturdays and Sundays, when the trial was adjourned. Most of that time was taken up in putting in testimony of the value of the land for dam site purposes.

All Testimony Ruled Out

All of this testimony was ruled out of consideration by Judge J. Stanley Webster, after the government, through its attorney, B. E. Stoutemeyer of Portland, and District Attorney J.M. Simpson of Spokane, called attention Wednesday to United States supreme court decisions bearing directly on the question of dam site value.
The supreme court took the view that since landowners along a navigable river do not own the bed of the river or the flowage, they have no dam site rights to sell. Control of navigable rivers lies in congress and not in the landowners.
Following is the jury's award to each landowner, the government's appraisal, and the landowner's own valuation:

Financial Figures Reviewed

Sam J. Seaton property, 315.3 acres
--Jury award, $8492; government appraisal, $7302;
Seaton's figure, $2,000,000

William Rath property, 191.28 acres
--Jury award, $2507; appraisal, $2132;
owner's figure, $500,000

Eva D. Burdin property, 261.3 acres
--Jury award, $4456; appraisal, $4175
owner's figure, $500,000

Continental Land Company, 169.25 acres
--Jury award, $1261; appraisal, $1211

Julius Johnson-property, 164.5 acres
--Jury award, $624; appraisal, $624

Continental Land company and Julius Johnson properties together were valued by the owners at $2,000,000.

Lost by Not Taking U.S. Offer

The government's offer for the land was $15,443, and was based on the estimated cash market value of the land for agricultural and other private uses. There was no testimony that any of the land had an industrial value except the Seaton place, which is well adapted for ferry operation. Seaton also operated a gasoline filling station.
The defendants would have made money by accepting the government's offer, because this trial will cost them more than $10,000, it is estimated. The defense had four engineers here more than two weeks as expert witnesses, paying them $50 a day. This, with attorney fees, cost of purchasing a transcript of the testimony, expense of gathering evidence and other incidental costs of a prolonged lawsuit, will run the cost of the defense up to a figure that may far exceed $10,000.
The government attorneys took the position from the outset that all testimony regarding value of the land for development of a dam is incompetent in determining the price to be paid the landowners. Judge Webster allowed the defendants to put in their testimony on dam site values, however, and if the case is appealed the circuit court will have the full facts before it.

Result Shocks Defendants

The award was a shock to Mr. and Mrs. Seaton and Mrs. Burdin, the only defendants present when the jury came in.
"Can you beat it?" remarked Seaton, who has lived at the dam site since 1920. He operated the Grand county ferry until the government took over the dam site lands.
Jurors were W.H. Little, Wenatchee foreman. . . Their verdict indicated they were not moved by oratory of defense.

One Lawyer Was Prepared

E.K. Brown, attorney for Mrs Burdin, was the only defense counsel who was fully prepared for the turn events took when the court threw out the testimony about dam site value. Mr. Brown put in detailed evidence as to the value of the Burdin tract for orchard purposes. The others relied almost entirely on proving value for dam site purposes. . . As it developed, the jury was not much impressed by testimony of Wenatchee orchardists and real estate men that raw orchard land is worth $200 or more an acre, when it is necessary to develop it by installing a high lift pumping plant.

Copyright 1935. Reproduced with permission of The Spokesman Review

Wenatchee Daily World, August 5, 1935, p. 2