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claim, in large amount, in small amount, rich or lean—that you can consider the surrounding evidence. And what is the surrounding evidence? Up every gorge and canyon along the cliffs can be seen the entire Green River series, and with the discovery of the kerogen on the particular claim in this great blanket deposit there has been a sufficient discovery.

What are some of the other evidences that may be considered? The case of Cascaden v. Bortolis (162 Fed. 267), also arising out of the condition of the muck cases in Alaska

Secretary FINNEY. Don't you think that those Alaska courts were overly liberal in some of those mining cases?

Mr. LARWILL. I do not think that was liberal, Judge Finney. It was the Ninth Circuit Court of Appeals. Judge Ross was speaking in most of these cases as I remember. But the courts have spoken, and those are the decisions that we have to guide us; they are the decisions that have existed; they are the decisions which induced these people in good faith to make their investment in these oil-shale claims.

Secretary FINNEY. Now the department has the responsibility of determining the sufficiency of a discovery in a patent proceeding.

Mr. LARWILL. The department has, but these decisions of the courts ought to be highly persuasive.

Secretary FINNEY. Does not the Castle-Womble case along this line establish a principle without going to such lengths as some of these cases? It is almost ridiculous the extent to which they have gone.

Mr. LARWILL. I wouid not characterize these

Secretary FINNEY. You do not think, do you, that the finding of a few colors of gold in some mud that is washed down the stream is evidence of mineral?

Mr. LARWILL. I think just this, that when that is discovered and I know that the country is mineralized then I have made a discovery, and even the department refers to mineral belts.

Secretary FINNEY. What you find must be some index of what is below. An isolated color of gold does not mean anything by itself.

Mr. LARWILL. But it is not isolated—it is not isolated in these mineral districts. That is just the point.

In Michie v. Gothberg (30 L. D. 407), they found a little mineral and the evidence that was considered was that as stated in the statement:

It is further shown that said claim is situated in what is designated as a * mineralized belt;' that considerable prospecting for minerals was done upon this belt, in the vicinity of the claim, during the three years next preceding the date of the hearing; and that such prospecting had resulted in the discovery of indications of copper deposits to an extent justifying further expenditure of time and money in their development."

Now that is spoken by the Secretary of the Interior himself. When you have discovered the mineral in whatever quantity then you may look at surrounding conditions and draw the proper deductions from surrounding conditions.

Secretary FINNEY. That is true.

Mr. LARWILL. And that is precisely what these gentlemen did. They were not skilled miners, and it is not required that they should be skilled miners, but they made their locations under the law as it then existed. Appended to our brief is a list of their names, in many cases original locators, in other cases the transferees of the original locators ordinary, prudent citizens. The Columbia Co. is a group of gentlemen from the South-college professors, cotton planters—who went out there and bought up some of these claims. Mr. Wheeler is a cattleman in Colorado; Judge Weaver, who sits over there, a distinguished member of the New Jersey bar. Those are ordinary, prudent men and they did rely upon just this discovery and they were justified under the cases in relying upon this discovery, and in the light of the evidence which has been adduced by the geologists here to-day it was with something of a shock that they read this language in the Freeman-Summers case:

" However certain or justifiable the inference geologically that the lean beds of oil shale outcropping on the land indicate richer and valuable beds at depth, it is apparent that they have no physical connection with such deeper beds of rich deposits nor are they continuations of them, but are separate and distinct therefrom." I say it was with a shock that the oil-shale world read that language, because from the beginning (and it is borne out in every one of these papers

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here to-day), the Green River series has been considered as a single deposit, and out of that erroneous statement of fact grew, of course, the erroneous conclusions of law; and that, it seems to me, is just the very crux of this hearing here to-day. If that language is a statement of the truth of the facts then disastrous results will follow. But is it a statement of the truth of the facts? And that is the reason that we must consider so carefully the statement prepared by these independent geologists as to the nature of these deposits, and I refer, of course, to Mr. Goodale's statement referring generally to deposits of this same character where the discovery of a trace or a few grains of the mineral is entirely sufficient-wide deposits—to justify making a location, and constitutes in fact a shale-oil discovery. The Freeman-Summers opinion was written in a changing period; that is to say, it was written in 1924.

To illustrate my point I want to quote from the testimony of Mr. 0. J. Berry, one of the first Government inspectors to get into the shale field in Colorado, given in 1922.

Secretary FINNEY. Testimony given in the Freeman case?
Mr. LARWILL. No, your honor, testimony first in the Wright case which
was the first case coming up to the department in which we are concerned.
I have the deposition here, but to save time I will quote from the brief.

Secretary FINNEY. All right.
Mr. LARWILL (reading):

** Question. But you admit that the opinion is that formed upon the speculative basis, and that there have not been any commercial operations so far, and it is probable that the first commercial operations might be on a thimer vein or thinner strata?"

This is a cross examination. Mr. Berry answers:

“ It is possible that they may find minerals in these oil shales, which in my opinion are not there. I have never made any tests to know that these minerals are not there, and I have been told by several parties that they are there. If that is true, perhaps the entire Green River formation may some day be worked, but in my opinion that is an erroneous statement to make."

Mr. LARWELL (continuing). In other words, in 1922, as to some of these zones or strata this Government inspector, who is considered one of the best in the field, stated that in his opinion there were barren zones in his opinion there were zones where the mineral was not there; and while this was still extant in the department, the Freeman-Summers case came down saying that there was no physical connection as a matter of fact between these richer beds and these leaner beds. Then last summer in 1925, Mr. Berry testified in the case of the United States v Krushnic, in which our office happens to be concerned, and this is what he said [quoting from brief] :

“Mr. Berry testified that the thickness of this formation is approximately 2,400 feet; that it is composed of sandstone and shales, the larger part being shale; that all portions of the formation contain traces of oil, even the sandstones; that the oil occurs as kerogen, a carbonaceous substance which can be converted into oil." In other words, in that period of five years, Mr. Berry had changed his opinion and had come to the conclusion, which is expressed in all these statements which have been quoted, that the whole series contains some kerogen and that there is no barren spot in the entire series.

Now how is a discovery made? As I stated a faw moments ago, it is not a laboratory experiment; it is a theoretical problem. The old prospector, the miner, goes out on the land and he discovers some of the mineral and having discovered some of the mineral in an area which had been proven to contain that mineral he makes his locaton. Now I want to read just very briefly from the deposition taken of Mr. P. C. Coryell, taken in January, 1921, to preserve his testimony as to the locations which he had made, part of which locations belong to one of the parties whose names are affixed to our brief:

* Mr. Coryell testified that for over 30 years he had been engaged in locating and opening up mining properties in western ('olorado except during a year or two when he had been a coal-land inspector for the United States. He then told how he had become interested in oil shale. He described his retort for testing shale as follows (p. 4 of his deposition): "I constructed a small distilling apparatus out of a pipe.

I did not have any accurate method of measuring the quantity of oil, but I was satisfied that the material was an oil-producing material.'”

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He goes on :

" Ordinarily, where a ledge of shale outcrops, it continues substantially continuously, so in walking over these claims, we were walking over oil shale from point to point.

It was a continuous discovery from start to finish, but we took our samples as near the center of these claims as we could. We took samples and boiled oil out of them.

We spent all our evenings in testing this stuff when in camp."

Now, that was a practical and an absolute and a full discovery of oil shale, whether the samples that he got were from these top claims which I have pointed out or from these other claims with the frontage which disclosed the entire Green River series. “I took the shale and boiled oil out of it." He had discovered the mineral under such circumstances and conditions that an ordinary prudent person would be justified in going ahead and developing the claim. That is discovery under all of the decisions. He goes on to say:

“We found oil shale in place all around the north escarpment of the Little Maud, both below the main ledge, as well as when we came around to the other side. The oil shale crops out of the ground there in ledges 500 or 600 feet high, and the question of making a discovery is very simple. You walk by a ledge and crack off a piece and put it in your war bag, and when you get in at night put them in your improvised retort and get oil out of them."

And there, gentlemen, is a discovery by a practical miner of these claims which have only in the last 10 years been determ ned to contain mineral of value. Out there, as you have heard in reference of other speakers, the shale deposits are called the “book cliffs," and if you have seen them you will realize that it is an exceedingly appropriate name. You walk up the canyons and there they lie, page on page, in this great book that nature laid down in the early ages. Now, if we had a book and opened that book at any page we would be reading that book; and so here, as the discoverer opens this great book of nature at any page he has opened that book, gentlemen, just as much as if it were a book on this table, and he had made a discovery which complies with the law.

All these discoveries, as I stated before, were made in good faith under the existing law; oil, the mineral has been found on each of the claims, and. all that these claimants ask is that the Government keep the ancient mining faith which existed in the custom of miners long before there was any written law, which was expressly included in the written law and has continuerl down to the present day, except for this mineral and certain others after 1920, but which, as your honor, Judge Finney, just said a few moments ago, as to then existing claims, if they have been continuously maintained in accordance with the laws under which they were located, applies with full force and effect, and to which the leasing act added not one iota of weight or effect.

Secretary FINNEY. You represent a number of these claimants, some of whom have applied for patent and some others who are going to apply. Will you people be able to present your cases when and if you apply under these instructions which were made since the first Freeman-Summer's decision? (Reading):

JANUARY 29, 1926. REGISTER, UNITED STATES LAND OFFICE,

Glenwood Springs, Colo.: Referring my telegram yesterday Freeman against Summers, it is intended that mineral claimants after submitting ev'dence as to discovery or exposure on claims of oil shale before February 25, 1920, may further show not only mineral contents of shale at discovery point but may adduce geologic' evidence identifying body shown at discovery with oil-bearing body exposed or known elsewhere and showing relation of stratum exposed at discovery to general oil-bearing formation of vicinity. Full development of facts is desired bearing on discovery and values and within general limits indicated rulings should be liberal on admission of evidence.

FINNEY, First Assistant Secretary. Secretary FINNEY. Does that open the door to making up your cases ;

Mr. LARWILL. That opens the door to the extent of 15 gallons minimum, Take the case of Coryell. He boiled oil out of the rocks. He did not know whether it was 15 gallons a ton or one gallon a ton, but he got the mineral. That is what I mean-he discovered the mineral on the claim.

Secretary Work. In what connection, if any, was a 15-gallon minimum prescribed as necessary to a permit?

Mr. LARWILL. Only in the letter just mentioned there.
Secretary FINNEY. He quoted the original decision in the Freeman case.

Secretary WORK. Simply it becomes a question with respect to what is the approximate minimum amount of oil necessary in the shale-necessary to prove discovery—is that it?

Mr. LARWILL. Mr. Secretary I do not believe
Secretary WORK. Isn't that the question? I am not a lawyer.

Mr. LARWILL. No; our belief, if you please, sir, is that under the laws as they exist no minimum requirement should be made as to the amount of oil discovered; if oil shale bearing material is discovered, on each of the claims and then the surrounding evidence shows

Secretary WORK. The oil shale would carry a little oil?
Mr. LARWILL. Yes; it must carry some oil.

Secretary WORK. You want it to show oil-definite proof of the existence of oil on the surface you want that to show discovery?

Mr. LARWILL. On the surface, or dig down under the detritus far enough to get into the shale?

Secretary WORK. Either one; but particularly on the surface because that is where you can see without any lens.

Mr. LARWILL. And when you are in the shale you are in the Green River series and it does not make any difference at what page you have opened that series in the book, you have opened it up, you have made a discovery. Yes, sir, that is our case.

Secretary Work. You just want to prove the existence of the field of oil regardless of its quantity ?

Mr. LARWILL. Yes; prove the existence of oil regardless of quantity, but it goes to prove the character of the country.

Secretary Work. You are getting into geological inference. Would not it be a little better to show oil and there would not be so much inferential?

Mr. LARWILL. You must show oil Mr. Secretary on every claim. Oh, yes ; you must show the oil on every elaim.

Secretary WORK. Well, that gets back to the first proposition; you simply want the department to be satisfied that you have discovered oil-bearing sbale, and that is discovery?

Mr. LARWILL, In this area?
Secretary WORK. Well, anywhere. Why in that area?

Mr. LARWILL. In this area because it is a known mineralized area of oil shale, and that is all that we are concerned with.

Secretary WORK. If it is discovered anywhere I think it would be oil-bearing shale just the same.

Mr. LARWILL. If you have discovered the mineral that you are after-
Secretary WORK. You object to the specified minimum ?

Mr. LARWILL. Any minimum-any limitation. The law does not; the cases do not.

Mr. HAWLEY. It might be well Mr. Secretary to give to you a suggestion which has occurred to us in our consideration of some of these things as to what in general a rule might be.

Secretary Work. We will be glad to hear it. Mr. HAWLEY. A legally sufficient discovery to form the basis of a location of an oil-shale placer claim appears when it is shown that oil-yielding shale is physically exposed upon the claim, and the evidence is of such a character that a person of ordinary prudence would be justified in further expenditure of his labor and means with a reasonable prospect of success in developing a valuable mine. Evidence may be to the effect or of such a character as to show that the shale so exposed is a part or portion of a formation or deposit which is known through geological evidence, exploration, or development at other points to carry oil shale of value.

Secretary Work. I say that is a good statement. You require a little more discovery than I indicated a moment ago. (Laughter ]

Mr. HAWLEY. The next speaker will be Mr. Roberts, of Denver, Colo., who will discuss the law.

Mr. HAROLD D. ROBERTS. I am appearing here on behalf of a group of clients that my office represents. Mr. Eaton, of Glenwood Springs, Colo.; Mr. A. C. Dierick, of San Francisco; Robel J. Graf, of Tulsa, Okla.; the Alturus Shale Oil Co.; and J. L. Warren, L. L. Aitken, and other associate owners in the Denver group. I am not connected with any of the parties in the so-called Freeman-Summers case nor in this Empire case that has been referred to. Several of the clients that I represent have not yet filed their applications for patent in the local land office and so to what extent we may come in conflict or collision with these rules of this department we can not know at this time.

I am here to express the hope that no rule or precedent will crystallize which is out of line with the mining law as we see it. It may be that we are taken care of entirely by the circular letter to which First Assistant Secretary Finney has just referred, dealing with the scope of evidence, although that defines apparently just the scope of evidence to be received and not the standards by which the evidence will necessarily be tested. I refer to that in no light spirit-I mean the significance to be attached to this evidence is a thing that the department has not passed upon. We look at this as in the formative stage at the present time and if we are able throw any light upon the lines along which the law of discovery should crystalize we are here to do that.

I shall not weary this group by going in detail over the decisions of the courts and of the department as to the question of discovery, but I shall begin with the first principles to which Mr. Finney has referred and point out a few of the land marks along the way.

The only reference to discovery in the statutes is the very brief allusion in the Revised Statutes, section 2320. A clause in that section deals with lode claims as follows:

“ No location of a mining claim shall be made until the discovery of the rein or lode within the limits of the claim locatedi."

Then to the extent that this has any relation to placers, it is carried over by reference in a later section, 2329, which says that:

" Claims usually called 'placers, including all forms of deposit, excepting veins of quartz or other work in place, shall be subject to entry and patent, under like circumstances and conditions, upon similar proceedings, as are provided for vein or lode claims."

Whatever that means! But as the very test of a placer is that it is not a vein or lode it is obvious that the express call of the first section that there should be the discovery of a vein or lode is not to be read into the requirement as to placers because there are no veins or lodes. A placer deposit does exist in that form so that what is to be discovered in a placer has been left for the courts and this department to work out. As lode cases came up for decision earlier than placer cases, the test of discovery applied in them can be referred to. The first of these, Book 1. Justice Co., decided by Judge Hawley in Montana in 1893 had in it a significant phrase. There the question was raised of how much mineral has to be discovered in a big, widely mineralized zone. The court merely says that it must be "sufficient to justify the locators in expending their money in prospecting and developing the ground located.” There a great many of the assays ran from $1 to $4 a ton in a country where $20 would have been a minimum cost of mining, so that in applying this rule to the very small values of $1 to $4 assays it is obvious that the amount, under proper circumstances, which Judge Hawley looked upon as sufficient was a rather small amount; and it is also to be noted that he does not require that the miner be justified in following the particular streak that he has found. He says only enough to justify his “prospecting and developing the ground located."

Now that case also contains the statement: “When the locator finds rock in place containing mineral.” And it had to be rock because he was considering lode claims. “It is the finding of the mineral in the rock in place as distinguished from float rock that constitutes a discovery." We know that float rock is sufficient in placers because the very idea of a placer is a crumbled mass of rock not necessarily in place. Of course the oil shales here happen to be in place, in a certain sense, but looked at in another way they are comprised of an earlier formation quite analogous to well-packed gravel or silt.

Now in another of Judge Hawley's decisions he used this striking statement :

" It was never intended that the court should weigh scales to determine the value of the mineral found as between a prior and a subsequent locator of a mining claim on the same lode."

These are old stand-by quotations thoroughly familiar to all of your law board, and the department has gone into these many times, but they are still some of the early landmarks.

Now the question so far as the courts are concerned—the direct question of what is a discovery in placer-really came up in those Alaska cases that

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