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So that, on the basis of the Geological Survey estimate, the United States still owns, unaffected by patents or applications for patents, approximately 87 per cent of its original oil-shale lands in Colorado, Utah, and Wyoming.

Of course, as conceded heretofore, the estimate of the Geological Survey is only approximate, and it is undoubtedly true that there are thousands of acres included within those estimates which are not properly oil-shale lands, which are lands, embraced in valleys, meadows, and other similar areas, which may not properly be termed oil-shale lands. However, the figures of the Geological Survey thus referred to are the only authoritative approximations which is available.

In any event, these figures give no support to any contention that a large part, or even a proportionately material part, of the oil-shale lands of the United States in the three States mentioned had been in any way lost or disposed of by the United States.

I think that Mr. Kelley in his letters goes into some detail to indicate the high character of the Green River shales as compared with the others.

Senator PITTMAN. It might be interesting to know under what laws those patents were granted.

Mr. Finney. Under the placer mining law.
Senator PITTMAN. Under the placer mining law?
Mr. FINNEY. Yes, sir.

Senator PITTMAN. Well, were the shales on those patented lands of commercial value?

Mr. FINNEY. If you mean by that whether they could have been mined and disposed of at a profit at the time of the patent, or now, the answer is no.

Senator PIITMAN. They were no different then from the land on which you denied a patent for mineral purposes?

Mr. FINNEY. No.
Senator KENDRICK. May I ask a question there, Senator Pittman?

Senator PITTMAN. So, the Government has disposed of 175,000 acres in patents on lands which in your opinion there was no valid claim to in the locator ?

Mr. FINNEY. No; that was not my opinion. I have never held in the world, that I know of, that you had to have an actual commercial discovery of any commodity that you could take out and market at a profit. On the contrary, the department has held that that is not the case, and I cited that in the last decision on the FreemanSummers case, signed by Secretary Work.

In other words, Senator, you might discover a very valuable deposit of gold, if you please, in a remote part of Alaska, so remote that you could not mine it because of the lack of transportation facilities or something of that kind. Nevertheless, it is mineral land and in our view it would be a valuable deposit. In other words, at some future time, if and when they get transportation, it could be taken out and disposed of.

Senator Walsh of Montana. My understanding is that your opinion in this case is predicated upon the proposition that in this particular case there was no discovery on that particular piece of land.

Mr. Fixney. Yes, sir; they had failed to show a satisfactory discovery on these particular locations,

Senator Pittman. Let me see if I get that right. If they discovered those lower deposits on the surface, would that have been a valid location of land, giving 28 gallons to å ton?

Mr. Finney. I have no doubt that if they had exposed some evidence in those locations at that time of this shale bed containing the 28 gallons, that this man would have written up a decision holding the locations valid.

Senator PITTMAN. I am not asking what he would have done. Mr. FIXXEY. And, I would have signed it.

Senator PITTMAN. Well, the upper strata we will say only carried 7 gallons. Mr. FINNEY. Yes.

Senator PITTMAN. That would not constitute a valid discovery, in vour opinion.

Mr. FINNEY. No, sir; I don't say that. I didn't then.

Senator PITTMAN. Well, you say though that it has to lead to something. If you are simply going on discovery, that is one thing, but if you are going to differentiate as to values at the time of discovery, that is another thing.

Mr. FINNEY. We will get into that later, but I will discuss it now if you wish. I am very firmly of the opinion that the old departmental decision rendered by Hoke Smith, in the case of Castle v. Womble (19 L. D. 455), which has been followed down since is absolutely sound law, and moreover I think it is in harmony with not only the letter but the spirit of the mining law, that where minerals have been found and the evidence is of such character as would warrant a man of reasonable prudence in proceeding with the claim with a reasonable prospect of success in developing a paying mine, that that is a sufficient discovery under the mining law.

Senator PITTMAN. Well, under all the geological evidence that you read in this particular case, wasn't it enough to cause a reasonable man to think he could dig down there and get some profit?

Mr. FINXEY. We might have held it even then, but I wasn't satisfied with the showing, and to anticipate a little, Senator, I ordered later on a new hearing, a new trial, at Glenwood Springs.

Senator Walsh of Montana. We are anticipating the course of our inquiry.

Senator PITTMAN. I am just trying to find out how you issued patents for 175,000 acres under the opinion that you just read. I have never read of a shale claim in the United States that could be patented under your decision.

Mr. FINNEY. Don't misunderstand that decision. That decision does not say they must have a deposit which they can immediately market at a profit.

Here is the departmental rule in Narver v. Eastman (34 L. D. 123):

It does not follow that because there no clear profit arising from the sale of an article that has been manufactured or produced that it therefore has no commercial value. Take for example the farmer. In the course of husbandry it frequently happens that different crops raised by the farmer when put in market do not sell for enough to pay the costs of their production and transportation, but can it be truly said that said crops have no commercial value simply because after the same have been sold and all expenses incident to their production and shipment deducted, there is no clear gain to the farmer, and therefore, as a corollary, that the lands are not valuable for agricultural purposes? And the same may be said as to the entry under this act of land valuable “chiefly for stone.” Could not the land be valuable chiefly for stone even though, because of its remoteness from market or other causes, the stone could not then be sold for a remunerative price?

Senator PITTMAX. Taking the rule of law that you laid down a while ago, that you said you approved, would or would not, in your opinion, the geological reports with regard to this particular case lead a reasonable man to go on prospecting?

Mr. Finney. I can not quite answer that yes or no. With the additional evidence that was secured in this case that there had been a discovery on each of these locations, and with the additional evidence supplementing the geology which we had in this case, I did write an opinion personally, holding the discovery was sufficient to warrant a prudent man in continuing. Yes, it is my opinion that if a man discovers shale on the surface of a mining location, one of these beds in this Green River area, and is able to trace under that land these other beds below, at different depths, workable depths, those beds being exposed along the canyons and cliffs and so forth, that a reasonable man of course would take those things into consideration. You and I would. Any man would.

Senator PITTMAN. That is what I am getting at.
Mr. FINNEY. That was the ultimate decision in the case.

Senator PITTMAN. Now, take a quartz claim for instance. A quartz claim on the surface, we will say, goes $1 a ton in gold. Any miner knows it will not pay. He hasn't any geological way of ascertaining whether 100 feet down, or 1,000 feet down, it will be over $1 a ton. In fact, in 999 out of 1,000 cases it will not be. Yet, the Supreme Court has held that is a valid discovery.

Mr. FINNEY. Correctly, too, and we have held in the East Tintic case, which was mentioned, Secretary Jones held that very slight indications on the surface were sufficient in the East Tintic district to warrant the patenting of a mining claim, because we also took into consideration discoveries and geological formation on adjoining lands.

Senator PITTMAN. What I was interested in, was how 175,000 acres got patented under the same law.

Mr. FINNEY. In the opinion of those passing on it, there had been shown a discovery on each claim.

Senator PITTMAN. This field in this particular case is probably the richest of all.

Mr. FINNEY. No, there are many thousand acres that contain these same beds.

Senator PITTMAN. This is the highest grade field and yet you could not find evidence sufficient to warrant patenting that, and yet 175,000 acres have been patented in fields that are not as rich or not as attractive.

Mr. FIXNEY. We subsequently found evidence sufficient to do it.

Senator KENDRICK. What were the decisions in the contested cases ?

Mr. Finney. In some cases, we found discoveries sufficient, and there have been other cases where applications have been rejected.

Senator Walsh of Montana. Let me remind you in this connection, before we go further, that it is a matter of very little consequence, as I take it, to this committee, as to whether a correct conclusion in any particular case was arrived at or was not arrived at. We are more particularly concerned about how it came about that the department changed its view about the matter.

Senator KENDRICK. In this particular case. Mr. FINNEY. WellSenator Walsh of Montana (interposing). Before we go into that, Mr. Finney, let me ask you what part, if any, did you have in the preparation of that opinion.

Mr. FINNEY. I do not think I wrote any of this. I simply read it, reviewed it, agreed with it, and signed it. During the eight years I was first assistant secretary, I never signed a single decision in a land or mining case without reading it carefully, so I read this carefully, and it represented my views at that time on the record before me.

Senator Walsh of Montana. In one of the Kelley articles, No. 4, occurs the following—I think perhaps we better get the context before we come to that.

Mr. FINNEY. I can run right along here. I need not read all this stuff. I can tell you in substance what subsequently occurred, following that decision.

Senator WALSH of Montana. Well, before we get to that, Mr. Finney, Mr. Kelley is referring to a report made to you, after the opinion of Secretary Work has filed, reversing the opinion to which we have just been listening. He says concerning this matter he laid several copies of the report on your desk, Mr. Finney, and, he says

I said that I wished to have the opportunity of taking the facts in the report up with all the attorneys in the office of the solicitor of the department. At that Finney told me that he did not wish me to discuss the report with any of the attorneys. He spoke with some show of feeling.

“May I not leave copies of the report for distribution in the Solicitor's office?" I asked.

His reply was that he did not want them distributed and did not want them left in his office.

'Why, I wrote the Freeman-Summers decision,” he told me, impatiently, “ and approved it."

Apparently that was not correct, Mr. Finney.

Mr. FINNEY. It is in part correct. It is like a great many of Kelley's statements. They have some basis and are absolutely false or erroneous in other respects.

Senator WALSH of Montana. He continues :
He also said, “I did not write the first decision in this case."
Do
you

know to what that refers? Mr. FINNEY. I do not recall having stated it, but I presume he means the decision which we have just been discussing, which I signed. That was the first decision that was rendered by the department in the case.

Senator Walsh of Montana. As distinguished from the later one by Secretary Work?

Mr. FINNEY. Yes; as distinguished from the later one by Secretary Work, which I did write.

Senator Walsh of Montana. He also says:

I did not write the first decision in this case. I do not understand how I ever permitted that decision to get by me and bear my signature.

Mr. FINNEY. Well, I do not recall that I said that, but if I did I had reference probably to a statement in one of the decisions. I made two. I denied a motion for a rehearing after this where there had slipped in a statement that 15 gallons of oil to the ton was a prequisite in order to classify land as oil shale. That, I think, caused more of the sensation in Colorado than the mere action upon the Freeman locations, or the Summers entry, because all these fellows that had locations and their attorneys thought the department was going to let a rule of the Geological Survey, which they used in classifying, determine the right of every locator of shale land.

Senator WALSH of Montana. Let us get at the matter now if we

can.

Mr. FINNEY. I did, I think, say something about that.

Senator WALSH of Montana. The statement here is attributed to you:

I did not write the first decision in this case.
Mr. FINNEY. That is right.
Senator Walsh of Montana. And then, he continues as saying:

I do not understand how I ever permitted that decision to get by me and bear my signature.

Mr. FINNEY. I do not recall having said that at all, but I did have a conversation with him and I talked quite freely with him.

Senator WALSH of Montana. We will come to that later, but I am now trying to get at the facts in relation to the preparation of these opinions or decisions, Mr. Finney.

Mr. FINNEY. Yes.

Senator Walsh of Montana. You referred just a moment ago to some opinion or decision which you disapproved.

Mr. FINNEY. Well, I referred to a second decision in this same case, which I signed, and which was written by this same Mr. Phillips, in which there was incorporated this statement about the 15 gallons to the ton.

Senator Walsh of Montana. Have you got that?
Mr. FINNEY. Yes.
Senator Walsh of Montana. Let me look at it, please.

Mr. FINNEY. That is probably what I was discussing with Kelley. My recollection is not very clear. I have no apologies for that decision. I think that was right at the time and on the record. In the interim, Senator, a motion for reconsideration had been filed by the attorneys for Freeman and ultimately resulted in that decision which denied the motion.

Senator KENDRICK. Senator Walsh, how long will you continue ? Senator Walsh of Montana. Well, only 10 minutes more. Senator KENDRICK. I will have to go now.

Mr. FINNEY. You find that reference there, do you not, to the Geological Survey classification rule! That is the only part of the decision that I would not have allowed to pass me, had I the opportunity to reconsider it, and that is evidently what I told this man Kelley.

Senator Walsh of Montana. Well, what you were referring to then in the conversation with Kelley was to an opinion that had been prepared by Phillips and signed by you.

Mr. FINNEY. Yes, sir.
Senator WALSH of Montana. Denying the motion for a rehearing.

46780—31-3

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