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DEPARTMENT OF THE INTERIOR,

CiENERAL LAND OFFICE,

Washington, April 26, 1924. J. D. Freeman v. George L. Summers. Land held to be of known mineral character, and its development as such justified; conflicting homestead entries held for cancellation. REGISTER AND RECEIVER,

Glenicood Springs, Colo. GENTLEMEN: On May 10, 1920, George L. Summers filed homestead application 018825 to enter, under the act of February 19, 1909 (35 Stat. 639), the S. 12 NW. 14, N. 12 SW. 44, sec. 1; S. 12 NE. 14, N. 14 SE. 14 sec. 2; T. 5 S., R. 97 W., sixth principal meridian, and on the same date be filed additional homestead application 018827 to enter, under the act of December 29, 1916 (39 Stat. 862), lots 3, 4, S. 12 NW. 14 sec. 2; lots 1, 2, 3, and SE. 14 NE. 14 sec. 3, said T. 5 S., R. 97 W. The lands were accordingly designated and the applications were allowed, respectively, May 17, 1920, and January 18, 1921, application 018825 in accordance with and subject to the provisions and reservations of the act of June 17, 1914 (38 Stat. 509).

That was a reservation of the mineral. [Reading :)

Final proof in support of both entries were filed May 22, 1923. On May 21, 1923, however, J. D. Freeman filed a duly corroborated affidavit and application to contest the entries stating, in effect, that he claimed å prior right under the mining laws of the United States to certain lands embraced in said entries, namely, the S. 142 NE. 14, N. 12 SE. 14, NW. 14 (lots 3, 4, S. 12 NW. 14), sec. 2, N. 4 NE. 14 (lots 1 and 2), SE. 14 NE. 14, NE. 14 NW. 14 (lot 3), sec. 3, T. 5 S., R. 97 W., sixth principal meridian; that these tracts are embraced in oil shale placer mining claims F. D. No. 7 and J. D. Nos. 1, 2, 3, and 5, upon each of which valuable mineral oil shale had been discovered and located April 1, 1918, by Risin P. Bouldin, M. L. West, L. Morgan West, F. M. West, W. J. Wigton, M. Boyle, L. W. Leringer and J. W. Woodcock.

Senator WALSH of Montana. The usual eight.
Mr. FINNEY. Eight locators, yes, sir. [Reading :)

That, thereafter on April 18, 1918, the said locators filed for record their location certificates; tbat they, the said locators transferred, mediately or immediately, to him (applicant) all their right. title and interest in and to said five placer mining claims for valuable consideration; that at all times since said locations the locators and himself (applicant have held, used, Occupied and possessed all of said claims and performed the annual assessment work thereon each year as required by law; that the only known use or value of said lands is for their deposits of oil shale and that they are chiefly valuable therefor. Wherefore, he, applicant, asked that a hearing as to the mineral or agricultural character of said lands be had.

Notice was accordingly issued and answer filed. Hearing was set for September 5, and continued to September 11, 1923, before you at Glenwood Springs, at which time and place the parties, pursuant to notice, appeared, each in person with counsel and submitted testimony.

A transcript of the testimony was later filed, and on January 9, 1924, you rendered a joint decision, in which you find, notwithstanding your statement that “there is no question but the land in controversy is oil shale in character,” and that " valuable shale beds lie at some considerable depth below the Summers homestead; that no actual discovery of oil shale had been made on the land ; tbat these claims had been allowed to lapse and were so lapsed at the date of the passage of the leasing act of February 25, 1920; and that sufficient assessment work has at no time been done to hold these clainis valid, holding that the contest against the entryman has failed.”

From this action the contestant has appealed to this office, the record together with the appeal having been transmitted under date of January 17, 1914.

The evidence in this case is voluminous consisting of the testimony of 38 witnesses, 18 for the contestant and 20 for the contestee, besides some 50 or more exhibits in the form of certitied copies of location certificates, abstract of title, plats, photographs, etc.

The contestant in his own behalf testified that he knew the land in question was located as and for placer mining claims, and in substantiation of that fact offered in evidence five copies of certificates of location certified to by the county recorder of the county in which the lands are situated. These certified copies, marked “ Contestant's Exhibits 1, 2, 3, 4, and 5," show that mineral placer claims Nos. J. D. 1, 2, 3, 5, and F. D. 7, were located by Risin P. Bouldin and seven others, named in the contest affidavit, April 1, 1918, and that the certificates of location were duly recorded April 18, 1918; that of the J. D. Claims No. 1 embraces the NE. 14 sec. 2; No. 2 the NW. 14 sec. 2; No. 3 the NE. 14 sec. 3; No. 5 the NW. 14 sec. 3; and F. D. 7 the SE. 14 sec. 2; all in T. 5 S., R. 97 W., sixth principal meridian. The contestant further testified that he is the owner of these claims, and in support of this claim of ownership offered in evidence an abstract of title by the Garfield County Abstract Co. brought down year by year from the inception of said claims to September 8, 1923. This abstract, marked Contestant's Exhibit 6,” shows, not only ownership in contestant, but that affidavits have been filed of the performance of at least $100 worth of labor and improvements on or for the benefit of each of said claims since their location. It also appears that on September 20, 1920, the contestee, Summers, was served with foripal notice by the owners of said mineral claims, that his homestead entries were in conflict therewith and that he should desist from improving the land since the mining claimants intended to hold their claims and to go patent thereon. (See contestant's Exhibits 33a and 33b.)

That was three years before final proof of the homestead man was offered. [Reading:]

The land in question was, the records here show, classified as mineral and valuable as a source of petroleum and nitrogen June 29, 1916, and the waiving of all mineral rights under the act of July 17, 1914, by the contestee would seem to be an admission by him also that the land is mineral in character. However, he denied that the locators or any one of them, either made a mineral discovery on any one or more of the claims, or placed any location notices on any of them, or staked the claims, or made or filed for record any lawful location certificates thereon or did the proper or requisite annual assessment work after claim of location.

In his original homestead entry No. 018825, contestee swore that there was not to his knowledge any “valuable mineral deposits" and that no portion of the land was Claimed for mining purposes," and in his stock-raising additional entry, No. 018827, he swore that the land embraced therein “was chietly valuable for grazing and raising forage crops." But while he says in his testimony (p. 273) that he saw no stakes in position on the land, vet he admits (p. 330) that he never examined the records in the recorder's office of Garfield County, where he would have found location certificates specifically claiming the land as and for placer grounds. Ile seeks to show in his testimony (pp. 326, 488 of the record) that 80 to 100 acres of the land will raise crops of grain and potatoes and that the land is more valuable for grazing and forage crops than for the sources of petroleum and notrogen contained therein.

Of the lands entered one of the final proof witnesses shows that one-fourth acre was cultivated by contestee in 19920, 1 acre in 1921, and 20 acres in 1922, while contestee himself said (p. 275 of the record) that in 1921 he had in as an experiment about 3 or 4 acres of alfalfa, in 1922, about 15 acres in oats, barley, and timothy, besides an acre of two in garden and no acreage in 1923 except a small garden because, as he said, the existence of this contest. He received notice of the contest May 2.5, 1923, yet after he had received due notice (Exhibits 33a and 33b) he was willing to spend in improvements on the place in the neighborhood of $1,500 (pp. 276 to 303). Contestee further testified (pp. 328, 330), that he had his son file on 320 acres of land adjoining the land in question to the east, and his son-in-law to file on 560 acres of other land in that vicinity, all of them well knowing at the time they filed that the land had been located by others as oil-shale land and was being held as such.

At page 329 of the record contestee gives his version of why these lands are located for their oil-shale content, in substance as follows: That it is all “bunk" about the lands being oil shale and that the locators are trying to grab off something in a bunco manner for the "sheepmen." This as page 525 of the record contestant denies.

As to the crops raised, contestee stated (p. 276), that he raised “a good 30-ton of hay on the land in 1922," while from his wife's testimony (p. 465), it appears that all the hay so raised was put upon the top er fat roof of the horn 19 by 45 feet with the hay 12 feet high, and that hay had been hauled from elsewhere (p. 466), and stacked there.

C. E. Pratt, a witness for contestee, stated (p. 479) that he has located possibly 25 homesteaders between Grand Valley and licence Creek anıl that in doing so he disregarded “ oil shale placer claims" entirely.

It is urged against contestant that there was no discovery of oil shale made upon the lands in question, no location notices posted and no staking of claims, but it appears to have been known and by the classification made it was recognized, that oil-shale strata was contained in and through all these lands. To this effect is the testimony of witness ('oryell, for contestee (p. 263). Witness Hubbard, for contestant, who assisted in locating the claims testifiei (p. 14) that a discovery was made of oil shale on each of the claims, which he recognized as such and which would burn; that printed notices giving the name of the claims, names of locators, description of the land claimed and date of location were posted on each claim (pp. 14, 15); and that the claims were staked.. As to the staking this witness was corroborated by witness Dow (pp. 29, 30) and by witness Chris Dere (p. 186), and was done in May, 1918. On the other hand, witness Magor and a number of his employees for contestee, testified that while hunting horses and cattle on the land they never saw any stakes; that they may have overlooked them or that the stakes may have been knocked down shortly after having been set (pp. 429, 487, 489).

As to the annual assessment work, affidavits were made and filed for the period beginning January 1, 1920, and ending June 30, 1921, entries 57 and 58 in the abstract of title exhibit 6. Contestant shows (p. 59) that he made an examination of the ground and found that the assessment work had been done for that period. This fact is disputed by a number of witnesses for contestee, who testified that while hunting for livestock thereabouts that they sair no assessment holes on the claims in question for that year. I't appears, however, that the work was not done directly on the claims but on adjoining claims likewise held and owned for their benefit, as a group. This method of doing work was also made desirable it seems because of the hostile attitude of the contestee (pp. 41, 42, and 71). The annual work for the two years ending June 30, 1922, and June 30, 1923, is covered by affidavits of record appearing at entries 77, SO, and 81 of the abstract of title, and also by the testimony of contestee (p. 59), showing dimensions and value to be $100 on each claim for each of the 2-year periods.

As to the relative values of the land for its mineral content and its stock-raising use witness Coryell, for contestee, himself shows that the land is underlaid with the rich oil shales that are to be found in that field (p. 263). Witness H. Comer Wolf, for contestant, in his testimony (p. 134 and following) shows that rich beds of oil shale underlying the claims and in some cases outcroppings thereon have been tested by him as a chemist and valuable oil contents obtained.

Witness Hilton, for contestant, testified to the same facts from a geological standpoint (p. 82 of the record) and in this connection introduced a vertical geologic section made by him, as “ Exhibit 10." from which the total thickness of these shale deposits below contestee's house aggregate about 500 feet, while smaller shale beds are shown above the house. He further shows that the 61.8 feet of commercial oil shale as shown on Exhibit 10 produces 28 gallons of oil per ton (p. 88 and following). He shows that beds of shale may be profitably worked at a depth of 600 to 1,200 feet (p. 92). The testimony of witness Jensen (p. 167 and following) shows the cost of production of oil from shale (p. 170) and profit to be derived.

The land lies at an altitude of between 7.000 and 8,000 feet, and with the exception of 2 cows, 3 horses, and 5 burros (p. 466) contestee has had no stock of his own upon it, and from the testimony of Forest Supervisor Blair (p. 205), it appears that it would take 10 acres of land of that character to pasture 1 cow, or on 610 acres, 64 head, for the grazing period of about 5 months; that the charge for that number of cattle on the public range in that vicinity is 55 cents a head, or $35.20, the value of that acreage for grazing purposes, or $70.40 for twice that number. On the other hand, according to the testimony of County Assessor MeQuirk (p. 231) the taxes on 640 acres in that vicinity would be $90.20 per annum, a loss that would have to be taken care of along with numerous other expenses from an average increase of the stock of something less than 75 per cent it was testified.

It clearly appears that the lands in question, along with a large area of other lands in that vicinity are mineral in character and valuable as a source of petroleum and nitrogen; that oil shale was discovered thereon and that they were located, surveyed, staked, and filed upon by contestant and his grantors long before the entries in conflict were made. It also appears that a certain amount of assessment work, said to be the required amount for each year, has been done on and for the benefit of each of said claims and that their further development for the mineral contained therein is justified.

Your decision is therefore reversed and said homestead entries 018825 and 018827 in so far as they conflict with said mining claims are hereby held for cancellation, subject to the usual right of appeal.

Notify the parties in interest hereof, and in due time report with evidence of service. Very respectfully,

WILLIAM SPRY, Commissioner. Senator Walsh of Montana. It would appear then that the commissioner did not consider the question of discovery at all.

Mr. FINNEY. Oh, yes.
Senator Walsh of Montana. But he does not discuss the subject.
Mr. Finney. There is no extended discussion of what they were.

Senator Walsh of Montana. There is no statement about it, is there; just merely that discovery was made?

Mr. Finney. That is substantially correct, except one man testified that he had tested some of the shale on the claim and it would burn.

Senator Walsh of Montana. There is abundant evidence apparently that there is on the claim valuable shale. That is quite aside from the question, however, as to whether discovery was made, because the contention, the real bone of contention, is that most of this is valuable at depths.

Mr. FINNEY. Yes, I understand.

Senator Walsh of Montana. But, that is not the question. The question is, Did he actually discover

Mr. FINNEY (interposing). The commissioner says oil shale was discovered thereon. Î'hat is his finding.

Senator Walsh of Montana. Yes, but he does not tell us what constituted that discovery or what they did discover.

Mr. FINNEY. No.

Senator WALSH of Montana. At the time of the hearing there were people who testified, and testified undoubtedly truly, that it was valuable oil shale, and

Senator KENDRICK (interposing). May I ask a question here?
Senator Walsh of Montana. Certainly.

Senator KENDRICK. Have you ever, in your long practice—and no doubt you have had more of it, perhaps, than any man in the West, before the courts, in connection with what constitutes discovery under the old placer mining law, discovery of oil under that law have you ever known the definition of a discovery to be satisfactory to anybody?

Senator Walsh of Montana. Well, the question as to what constitutes a discovery, Senator, as it will appear later, was the subject of very earnest discussion and much reference will be made to it. I am calling attention to the fact that Commissioner Spry did not discuss that subject at all.

Senator KENDRICK. Well, you are calling attention to the fact, as I understand it, that there is no reference on his part to what development was done, what work was done in the way of shafts or drifts.

Senator Walsh of Montana. No; the prospector goes out in the hills

Senator KENDRICK. Yes, I know about that.

Senator Walsh of Montana. I speak now about quartz. He goes out in the hills and he finds what he believes to be a ledge and he proceeds to take out the rock and to show that it is a vein. Then he takes some of that rock down to an assayer and gets the matter assaved to determine that it is rock containing mineral. There is nothing here, no evidence here as to what was done by the mineral claimant with respect to that.

Senator KENDRICK. The reference is made to the amount expended. Now, I do not recall any particular reference to the actual physical showing made in the way of such development as you have discussed.

Senator Walsh of Montana. That is what I am speaking about.

Mr. FINNEY. The commissioner did not state in here that at a certain point a hole was dug 8 feet deep and shale of 20 gallons to the ton discovered.

Senator WALSH of Montana. And the shale was taken out and taken to a chemist or other assayer, and that kind of thing, and that shale contained so much oil per ton.

Mr. FINNEY. Well, witness Hubbard said this: This is just a summary, not a restatement of his testimony: That a discovery was made of oil shale on each of the claims, which he recognized as such and which would burn. Those fellows had a habit of taking a match or fire and burning this stuff. It will burn, you know, if it has the oil in it.

Senator Walsh of Montana. I am speaking now about Commissioner Spry's review of the thing. A witness testified apparently that they found shale that would burn.

Mr. FINNEY. Yes.

Senator WALSH of Montana. So that that amount of testimony concerning a discovery was in the record, but I am calling attention to the fact that Commissioner Spry does not discuss the subject as to whether that was sufficient to constitute a discovery or not.

Let us inquire now, if you will go back to the decision of the register and receiver, and omitting the formal portions, as to what they say, if anything, in their opinion, concerning the discovery.

Mr. Finney. In the summary it appears that no actual discovery of oil shale has been made on the land in controversy.

Under the paragraph entitled “ Discovery," appears the following [reading] :

Discovery.The land in this controversy was classified as valuable for petroleum and nitrogen on May 23, 1916, and the contestee, when applying for his homestead, accepted such classification. The classification of land, however, does not excuse a mineral claimant from an actual discovery in order to properly initiate his claim. In the case of Remis v. Murray (22 L. D. 411) it is stated : “ The fact that land is returned (classified) as mineral does not in any event avoid the necessity of a discovery of mineral and any location made without a discovery as required by statute is void."

The evidence in this case discloses a grave question, whether any shale of sufficient value to ever be marketable is or ever has been exposed on that part of the Summers place in controversy.

It is the contention of the contestant in this case that oil shale values do not materially change throughout a certain stratum. It is evident from the

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