Mr. FINNEY. Quite a number were filed for continuances and several for severance of charges. For instance, I have alluded to one for severance, and there was another one called the Rea L. Eaton case, and that involved failure to do assessment work, and the very serious charge that the locators were dummies. I severed the charges and ordered the hearing upon the dummy charges.

Senator WALSH of Montana. We will recess for a few minutes at this point.

AFTER RECESS

Senator WALSH of Montana. Mr. Finney, can you tell us how many cases were continued to await the determination of the Krushnic case?

Mr. FINNEY. Well, sir, I can not, off-hand. Has the land office compiled any table of cases that were continued to await the outcome of the Krushnic case?

Mr. ELY. We have a list of several of them here. I do not know whether it includes all of them or not.

Mr. FINNEY. There are eight cases listed in this memorandum here, Senator, but I personally could not tell you whether that covers them all or not, but I do recall distinctly in the two cases that I mentioned, hearings proceeded. These eight, I take it, were continued until after the Supreme Court had decided. I would not want to say there were any more without a more thorough investigation.

Senator WALSH of Montana. Did the hearings proceed?

Mr. FINNEY. I think very few did. When the charges were severed, hearings proceeded upon those charges which did not relate to assessment or, as in the Pritchard case, as to rights between the Pritchard homestead entryman, and the mineral claimants, and, by the way, the reason for that, Senator, I did not state before, was that this Pritchard had gotten his homestead patent and consequently it was the view of Mr. Duncan and myself that we would have to prove the invalidity of the Pritchard homestead before we could allow the mineral claims, or vice versa. If we proved the Pritchard homestead patent was unassailable, there was no use to proceed on the other charges, so that what was finally done, a long decision, which I have here, was prepared by Mr. Duncan ordering the hearing and investigation on that specific subject and deferring the other charges until after its conclusion.

Now, those letters of Mr. Kelley's and Mr. Heron's of May 4 and May 15 are the ones, as I understand it, that he felt had been destroyed or ordered destroyed.

Senator WALSH of Montana. I did not understand that.

Mr. FINNEY. I say those two letters that I put in the record in connection with these continuances, the letters of May 4 and May 15, were, as I understand it, part of the papers which Mr. Kelley thought had been destroyed or ordered destroyed.

Senator WALSH of Montana. I have not found it necessary to go into that, Mr. Finney.

Mr. Kelly's article No. V refers to a letter addressed to Secretary Wilbur after he took office under date of March 5, 1929, in which he says:

It is my understanding that the report of this office was not permitted to be brought to the attention of the Secretary.

That was the Kelley report that we have been talking about undoubtedly, Mr. Finney.

Mr. FINNEY. I don't know just which report he has in mind. He has made so many of them, Senator.

Senator WALSH of Montana. Well, this will refresh your recollection about it and perhaps make it more definite. In his letter to Secretary Wilbur, he says:

My office has conclusive proof, and more than one year ago submitted it to the department, that the statements upon which this decision was based were false, and those who made the statements knew their falsity and made them designedly for the purpose of deceiving the Secretary and inducing him to render a decision favorable to the contention of the oil-shale applicants, which he might not otherwise do.

Mr. FINNEY. That must refer to the Freeman-Summers case and the letter which we put in the record the other day signed by Kelley and by Cutter and the other engineer.

Senator WALSH of Montana. Yes, in which he contended against the contention made by the geologists and lawyers at the December 1, 1926, conference.

Mr. FINNEY. Yes, sir.

Senator WALSH of Montana. He continues:

It is my understanding that the report of this office was not permitted to be brought to the attention of the Secretary.

And, I believe you said that you did not lay it before the Secretary but told him the substance of it.

Mr. FINNEY. I talked to Doctor Work and told him what the substance was. I don't think I told Kelley that, however. I just told Commissioner Spry we had decided not to go into the case. I want to be fair to Kelley, too.

Senator WALSH of Montana (reading):

It is my understanding that the report of this office was not permitted to be brought to the attention of the Secretary, and I believe I have further reliable evidence that the then Solicitor for the Interior Department and his attorneys were not in accord with the holdings in this decision as promulgated.

That is correct.

Mr. FINNEY. I stated that; yes, sir.

Senator WALSH of Montana. Now, he continues:

Upon the promulgation of this decision the press of Denver reported an interview with Mr. Robert H. Hawley (oil company attorney) as boastfully saying that as a result nearly all of the oil shale placer claims in Colorado could be carried to patent.

I think you, yourself, referred to some contentions in that matter by Denver attorneys.

Mr. FINNEY. Yes; I said that was probably correct, that Hawley and Larwill, and some of these enthusiastic young attorneys thought they won a great victory and perhaps there would be a wholesale patenting of claims.

Senator WALSH of Montana. He refers to another letter that he wrote to Secretary Wilbur under date of August 2, 1929, as follows:

The employees of this office who are investigating these mining claims are trained, experienced professional men of high standing.

What do you know about that?

Mr. FINNEY. About their qualifications.
Senator WALSH of Montana. Yes.

Mr. FINNEY. I know some of them personally. Others, I do not know. This man Kintz was a graduate engineer and had had experience in Nevada where there was a shale plant in operation for a while, a private plant, and he had been an agent in the office for a good many years engaged in mineral investigations, and I think his other men, Cutter and Lewis, were very capable young men, graduates of colleges.

Senator WALSH of Montana. He continues:

They are sympathetic with all honest oil-shale applicants and are desirous, whenever possible, of reporting favorably upon mining claims. All applicants receive the same impartial consideration. All doubtful questions are resolved in favor of the mining claimants, but our investigations are thorough and searching, and we intend to continue them in this manner and to report the facts as we find them regardless of consequences.

Mr. FINNEY. I do not find any fault with that.

Senator WALSH of Montana. Reference is made in his article VIII to the matter which we have been considering, and in that regard he says:

My office awaited authorization to proceed. It never came. And I discovered that the delays which the oil companies wanted had been agreed to by Secretary Work long before my office was even asked to approve or disapprove.

He is speaking of the applications for delay to await determination in the Krushnic case.

Further

I have to recommend that all applications for indefinite continuance of such hearings be denied and that authorization be given to proceed herewith. That refers to a letter that he wrote.

Mr. FINNEY. Yes, sir. Now, in a number of these cases, I will state it as a fact, the commissioner referred the applications for continuances out to Mr. Kelley for report and recommendation, and in some that I saw he reported against a continuance. There was one case that we never did receive any reply on.

Senator WALSH of Montana. Well, he says in this letter:

My office awaited authorization to proceed. It never came.

That apparently is not correct, is it, Mr Finney?

Mr. FINNEY. Well, he evidently misinterpreted the Work letter, because the Work letter, as you said a moment ago, was not a general suspension, so there was no necessity for an order saying to go ahead, as we viewed it.

Senator WALSH of Montana. He continues:

And I discovered that the delays which the oil companies wanted had been agreed to by Secretary Work long before my office was even asked to approve or disapprove. By chance I learned that Senator Waterman, of Colorado, strong adherent of the oil companies, had been to see Doctor Work. And on January 2, 1929, Waterman sent the following telegram to Dines, Dines & Holme, the mid-west lawyers, and D. D. Potter, agent for Prairie Oil:

"In compliance with wishes of yourself and my friends in Colorado interested in shale applications, Department of Interior will immediately direct Denver field division to postpone all hearings on pending shale contests until after definite decision in Krushnic case."

This is January 2, 1929. Now, what is the date of the Work letter?

Mr. FINNEY. According to my list here, it was December 30, 1927, that Senator Waterman asked me to continue the matters pending the departmental decision.

Senator WALSH of Montana. Yes.

Mr. FINNEY. Then, the date of the Work letter to Senator Waterman was March 5, 1928, and the date of the Work letter to Thomas, Long, Chamberlain & Nyce, which was the final letter, was March 30, 1928.

Senator WALSH of Montana. Yes.

Mr. FINNEY. I guess the 1929 must be an error.

Senator WALSH of Montana. You think that was 1928?

Mr. FINNEY. It must have been 1928.

Senator WALSH of Montana. Well, this seems to be a quotation from the Waterman letter, in which he says:

In compliance with wishes of yourself and my friends in Colorado interested in shale applications, Department of Interior will immediately direct Denver field division to postpone all hearings on pending shale contests until after definite decision in Krushnic case.

Mr. FINNEY. Of course, I never saw that. That was evidently sent out by Senator Waterman direct to these men, but Work was not Secretary at that time, I think.

Senator WALSH of Montana. You are quite right, West was then Secretary,

Mr. FINNEY. Yes. Now, I think that must be an error. I went all through our files and these were the only letters I could find relating to the general subject of continuances.

Senator WALSH of Montana. So, you think that means January 2, 1928?

Mr. FINNEY. I think it must have; yes, sir.

Senator WALSH of Montana. Well, do you know how Senator Waterman came to write that way under date of January 2, 1928? Mr. FINNEY. I do not know. As I read to you, in the record, the first request was December 30, 1927, to me. He wanted it continued until after we had passed on the rehearing in the department, and I granted the continuances until further orders, as you will remember it. Then Work made his decision. Then Senator Waterman writes him again and wants it held up until they can decide whether or not they will take the Krushnic case to court. That was after this, however. That was in March. I think Waterman must have based his telegram or letter there on my action of the last day of December, 1927.

Senator WALSH of Montana. And what action was that?

Mr. FINNEY. I generally continued those hearings until further notice.

Senator WALSH of Montana. I do not remember that.

Mr. FINNEY. That was pending the Work decision. I have the copies here, I think. This was Waterman's letter to me of December 30. Now, December 31, I wrote that letter.

Senator WALSH of Montana. Well, undoubtedly, this is the basis for the Waterman letter.

Mr. FINNEY. Yes; it must be.

46780-31-14

Senator WALSH of Montana. That is to say, there was a general order to continue all hearings put out on December 31, 1927?

Mr. FINNEY. Yes, sir; by me.

Senator WALSH of Montana. Well, how long did that order remain in force?

Mr. FINNEY. Well, that remained in force until the Work decision in the Krushnic case. It remained in force until the following March, because Waterman then writes in and says,

In view of the denial of the motion for a rehearing

Senator WALSH of Montana. This order of December 31, 1927, contemplated suspension of the hearings until the determination by the department of the Krushnic case?

Mr. FINNEY. Yes.

Senator WALSH of Montana. Not until the determination of the Krushnic case by the court?

Mr. FINNEY. No, indeed.

Senator WALSH of Montana. So that in March, after the department had affirmed the decision in the Krushnic case, Waterman writes again?

Mr. FINNEY. Yes, sir; and wants to know whether they will be allowed some time.

Senator WALSH of Montana. He says:

I have advised Mr. Potter that it was your thought that perhaps 30 days' grace might be extended in order to permit shale claimants to initiate court, or whatever other action they may determine upon.

Doctor Work says in his letter of March 5, 1928:

As I stated in connection with said decision, the question involved is one of law, and I would be very glad, indeed, to have the matter reviewed by the court.

In order to allow claimants opportunity to take such action as they may deem appropriate, and to save expense incident to possible hearings during that time, I have to advise you that no hearings will be ordered or set involving the question of nonperformance of assessment work prior to April 1, 1928.

Mr. FINNEY. Yes, sir.

Senator WALSH of Montana. So that really the order was again made in substance on March 5, but to expire April 1, 1928?

Mr. FINNEY. Yes, sir; and then on March 30, Thomas, Long, Chamberlain & Nyce came in and notified us they had brought a suit. Senator WALSH of Montana. Then, what steps were taken?

Mr. FINNEY. Then Secretary Work wrote the letter to them which I read.

Senator WALSH of Montana. In that, he says:

The Department is glad to have the question of law involved determined by the courts, and will of course defer any further action in the Krushnic case. As to other cases, however, it must be borne in mind that long delay in proceeding with hearings might work to the disadvantage of both the Government and the claimants, in that important witnesses might die or remove; that through lapse of time memories of witnesses might not be so clear as at the present time, all of which might militate against ascertaining the exact facts in these cases.

And, so he said that he would take up each case as it was presented. Mr. FINNEY. Yes, sir; that is right.

Senator WALSH of Montana. So that really then there never was any general order to continue all the cases to await the determination of the Krushnic case?