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there should be a liberal interpretation of the law, instead of restrictions that may shut out someone who is ready and willing and able to attempt to develop and it is development that we all finally want in this thing. There can be no question of bad faith, it seems to me here, because these locations will benefit no one, unless there is an immense amount of capital invested and the development is proceeded with, and, thus eventually, we have the result that everybody desires.

I am not saying this that the department should in any case issue a patent where the proof does not show the required facts; but I am speaking of the spirit in which the law should be administered and applied; and above all there should be no arbitrary restrictions or restrictive or prohibitory constructions and interpretations based upon the law. For instance, I think it is very clear that rules and regulations regarding oil and gas should not apply in this case. The physical features have been made absolutely clear, it seems to me, by this evidence, and nothing in conflict

Secretary WORK. What is the administration of the oil shale under? The oil and gas leasing law?

Mr. WINTER. That may be very true, but it is also the oil shale, phosphate, and sodium law.

Secretary WORK. How can we avoid it?

Mr. WINTER. But we are not speaking of that section of that leasing law37-which instructs the department about granting patents under locations made prior thereto. I am only mentioning the leasing law to present the other side of this matter in the event that patents are denied, and to show what additional burdens are placed upon these operators by the leasing law, to carry out and support the proposition that it is under these patented claims, individual ownership, that the hope of this industry for immediate development lies. I trust that the spirit and purpose of Congress, the purpose expressed in the title of these laws, will actuate the department so that they will promote and encourage the mining industry. [Applause.]

Secretary WORK. Is there anyone else who would like to be heard? We have plenty of time.

Mr. THOMAS of Denver, Colo. As I understand this question it is limited to the question of discovery.

Secretary WORK. Well, we have not limited it to that.

Mr. THOMAS. What I want to say is very brief. Mining laws have been drawn up and developed by a group of men most of whom are now dead. I need not mention such men as Senator Hughes. I would like to ask permission of the Secretary, at a later date to file a brief by Senator Charles S. Thomas. He is abroad at the present time and is not available at this hearing, but will be here in a week or ten days.

Secretary WORK. Such a brief will be very welcome upon this subject.

Mr. C. W. Church of the Index Shale Co., DeBeque, Colo., here addressed the meeting.

Mr. Secretary and Gentlemen: My name is C. W. Church and I represent, as an officer, the Index Shale Oil Co., of DeBeque, Colo., and Denver, Colo. The Index Co. is not a large holder of shale land but it is a manufacturing company and very soon will be a producing one, and it is as a representative of a concern which is interested chiefly in the manufacturing and producing end of the oil-shale business that I appear before you.

To the arguments produced before this meeting so ably, on the question of what constitutes discovery on a shale location, presented by Mr. Hawley, Mr. Roberts, Mr. Larwill, Mr. Russell, and others, I want to lend my most ardent support.

This hearing has been rather long extended and the hour is now very late and it is not my intention to engage in any lengthy speech which would of necessity be a repetition of what has already been presented to this conference and which has been indeed fully covered.

I just want to say to you that the Index Shale Oil Co. is actively engaged in developing its property with a commercial plant to treat the oil shale. This company has been engaged in this work for six years. Several hundreds of thousands of dollars have been expended on this property.

To-day we have a large oil education plant fully completed: within the past 60 days we have completed the erection of a gasoline absorption plant with a capacity of several million cubic feet of gas per day. We have installed mining and power equipment to provide the raw shale for our mill. We are now installing an aerial tramway from our mine to our plant and this will be com

pleted before the holidays, and then the Index Co. plant will go into continuous and permanent commercial operation.

The oil-shale deposits of this company are exposed on the escarpment above the plant. The general location is a square faced promontory between two creek valleys or canyons. Our shale is exposed on three sides. The deposit can easily and accurately be measured with several hundred feet of exposed shale on each three faces of the cliffs, aud this has been done by competent eng neers. If there is any mine in this country which has its ore blocked out more accurately than this shale of the Index Co. I would like to hear about it. And yet some of our claims lie on top of the mountain and back from the escarpment. The discovery location on each of these claims disclosed oil shale yet it might be possible that on the discovery work on some of these claims shale of a content of 15 gallons per ton or less may have been found. Yet we know that immediately below these discovery workings lie the great mahogany vein and other shale strata of high oil content to a total depth of many hundred feet.

The injustice of any proposed rule establishing a minimum oil content for a shale discovery is readily apparent, and, as a representative of a company who has spent much money in this field and who is directly and principally interested in the manufacturing and producing end of the oil shale enterprise, I protest against any such ruling.

C. W. CHURCH,

President Inder Shale Oil Co., DeBeque, Colo. Secretary WORK. Would anyone else like to speak?

(No response.)

If not, I want to just say a word-just enough to thank you men for coming, and for having prepared your matter so well and presented it so clearly that there has been no appreciable overlapping and no loss of time to this department. Conference and hearing like this are of a very frequent occurence here. In my judgment, there never has been a matter better presented than this in my time as secretary.

Reference has been made occasionally to yourselves as being western men. I with a great many others in the department would like to be included in that classification. It is of interest for you to know that the Secretary, his assistants, and the commissioners of the principal bureaus, and the solicitor are nearly all from west of the Missouri River. This Department of the Interior is really the department of the West.

Now, gentlemen, I appreciate your coming. I know it will be profitable. I know I am better advised, and thank you very much for the time and expense and trouble you have gone to in presenting this matter.

Whereupon, the hearing closed at 5.20 p. m.

Following the hearing a communication was received from Messrs. Dines, Dines & Holme, First National Bank Building, Denver, Colo., in which they present their views on the question discussed at the hearing.

DINES, DINES & HOLME, Denver, Colo., November 26, 1926.

Hon. HUBERT WORK,

Secretary of the Interior of the United States,

Washington, D. C.

MY DEAR SIR: Not knowing to what extent the clients whom our firm has the honor to represent may be interested in the outcome of the hearing called by you at Washington for December 1, 1926, and being unwilling to put them to the expense of a journey to Washington by me to make an oral argument before you, in addition to the presentation that will be made to you by Mr. Roberts, of our firm, and for that reason alone, I have taken the liberty of placing before you my own personal thoughts and conclusions in writing for such use as you may think those conclusions deserve. As this hearing is public and designed to aid your department in the administration of an important public trust, I feel that you are entitled to have before you the results of the study and experience of all citizens in arriving at your conclusions. I can truthfully state to you that I am more influenced by a desire to have you and your department decide the questions before you rightly than by any duty to clients, or personal interest.

The question of discovery has always been considered by the courts by associations of mining men, by your predecessors in office and by the textbook writers on mineral locations as a paramount and controlling element in all mineral locations upon the public domain. Congress has required that a discovery of mineral shall be made within the limits of every valid location upon the public mineral domain. It has undertaken to prescribe no arbitrary rule as to discovery. Judge Riner, whose 30 years of honorable service upon the bench of the United States court for this circuit, and whose long experience in mining matters entitles his opinion to great weight, has said in one case, which will doubtless be cited to you, where he applies all the questions of discovery to the discovery of oil, that no arbitrary rule or standard had been, can be, or should be made in determining whether or not a discovery exists. The presence of oil in an oil placer claim may be by seepage, coming from a reservoir separated by miles from the location. It is evident that such a seepage would not be a discovery, because it does not indicate the presence of oil in the claim located. In other cases, the presence of oil, studied with reference to geological conditions, does indicate the presence of a reservoir of oil within the claim located. Each case must be governed by its own facts. After many years of consideration by the courts, by the Interior Department, by miners' associations, by textbook writers, it has been conceded that in determining the question of a discovery, there is no arbitrary standard that can be or should be fixed governing all cases.

The question before you, I understand, at this hearing, is the question as to whether or not the Interior Department shall place an arbitrary standard of 15 gallons to the ton, in a seam 1 foot thick, as a requirement of discovery, and further require that this quantity of oil shall exist in the discovery seam. This is the exercise of arbitrary power, which is inconsistent with the history of mining locations and is inconsistent without theory of government and fair dealing. Why 15 gallons instead of 20 or 25, or 5? What geological factor or condition exists in all cases to uphold such a requirement? The rule of discovery in lode mining locations where lodes carry ores are supposed to exist has always been that the discovery must show such a vein carrying such values as would lead a mining man of ordinary experience and judgement to conclude that in depth he would have a reasonable expectation of producing commercial ore in paying quantities.

The department in issuing its patents heretofore on oil shale lands has been governed by no arbitrary rule. It has followed the rule that your predecessors have followed in the past and which the courts, including the Supreme Court of the United States, have approved as a reasonable rule. The question of discovery in each case must be determined by the geologic facts and all the other facts and circumstances that they may be detailed in evidence. It is with some alarm, as a citizen of the west, that I find your department for the first time in its history attempting to standardize discovery. If you do this, you are not only going contrary to the decisions, the rules, and the experience of generations past, but you are for the first time in the history of your department, or of any department of the United States, exercising an arbitrary power.

You must remember that many of the oil-shale locations made under the act of Congress prior to the leasing bill were made with these decisions before them, which had become a rule of property. Men were induced by this and by the fact that no arbitrary standard was created by Congress itself to go upon the public domain, to search, to employ geologists and scientific men to aid them in the search for deposits of oil shale. They made their locations in good faith in reliance upon an administration of these matters that had proceeded uniformly for generations. To require these people to lose their investments, after the Government had induced them to make them, by the creation in your department of an arbitrary standard of discovery, when all geologists and mining men know that the facts of no two are identical, is, it seems to me, a species of confiscation by the Government. Your department in this matter represents the citizens of the West, who have had the energy to go out into the waste places with the hope of finding oil shale and with the belief that this oil shale would sometime remunerate them for the expenditures of their time and their money, to the same extent as you represent the Government of the United States.

I will not undertake in this matter to cite cases. They will be cited by Mr. Roberts, of our firm, and doubtless by other lawyers, representing clients, so

that you may have all before you. I do, however, register my protest against any action of your department which would attempt to standardize that which Congress has not standardized, and to apply that standardization to all cases of discovery.

It is well known to geologists that these shale beds exist under certain geological conditions and that successive beds, separated often by leaner material, exist, and that the lower beds, unexposed to the elements or to the effect of evaporation, contain more oil to the ton than of those that are originally discovered at or near the surface. An outcrop of oil shale is universally less rich in oil content than the beds that are not exposed to the elements. If a citizen of the United States in good faith has discovered shale, and in connection with the geological conditions reasonably believes from that discovery that he will sometime reap a profit from the lower beds of shale, it seems to me there is no reason for requiring any certain amount of oil in this or that discovery. He takes his own chances, spends his own money and time and energy, acts upon the advice of such scientists as he may employ for that purpose. If he makes a mistake, the mistake is his.

Another reason why no arbitrary standard should now be applied is the fact that it is impossible for your department, or for any other department, to determine what amount of oil to the ton in any given oil shale is to be commercially valuable. How are you going to mine it? Will it be by tunnels? By shafts? Or by the caving in process? How is it going to be extracted? On the lines of the old Scotch treatment, or by some new process which the energy and enterprise of men may yet find?

I do not believe that an arbitrary standard is ever justifiable in such cases. If it is adopted, however, it should be adopted only after processes of mining and treatment have been tested in commercial enterprise and become standardized.

There is much more than can be said against the adoption by your department of an arbitrary rule of this character. It is questionable as to whether the courts will sustain such an action. The Supreme Court of the United States has always required, when the question of classification has come before it, a reasonable classification based on facts.

Knowing that is your intention to administer this great trust which is developed upon you in fairness both to the Government and to the citizens of the West, who protest against putting them in cold storage for some future generation, and believing that you will consider all these matters before you arrive at a conclusion, I have the honor to sign myself,

Your obedient servant,

TYSON S. DINES.

(Whereupon at 12 o'clock noon, the committee recessed until Thursday, February 6, 1931, at 10 o'clock, a. m.)

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