The present market survey appraisal for this type of material is $0.50 per ton in sales less than $100. We do not think at present that a special appraisal would change this sufficiently so as to justify reappraisal for a sale in the $100 to $1,000 range. So far as is consistent with your range management projects, we would recommend the following in the event that the Cowans elect to make a sales application: 1. that a sale for this material include at least the 40 acres described above; 2. that a sale in the $100 to $1,000 range be made at $0.50 per ton with the understanding the Bureau of Land Management may reappraise the material in the event of future or larger sales; 3. that the term of the sale be for as long a time up to the two year maximum for sales in the $100 to $1,000 range as the applicant may desire. We recommend that you encourage material sales to the extent that you can as a preventative against mineral trespass for "common varieties." We think that this procedure will prove more effective in the long run in achieving proper. disposal of mineral materials than adverse proceedings against mining claims. LOWEL M. PUCKETT. DEPARTMENT OF THE INTERIOR, Mr. DAVID COWAN, Care of Cowan Bros., Canon City, Colo. DEAR MR. COWAN : Thank you for your time and effort in showing your marble prospect to Dan Meschter of this office last week. We are interested in having such deposits developed. We agree that the polished specimen you left with us is unusually attractive. We see no reason why it should not be suitable for interior facings if a market for it can be developed. It is our opinion, however, based on the provisions of Public Law 167 of July 23, 1955 and legal decisions made by the Secretary of the Interior and the courts pursuant to that Act, that marble suitable for building purposes is a common variety, regardless of its color, cleavability, price, demand, or quality. Section 1 of Public Law 167 provides: "Such materials (i.e. common varieties) may be disposed of only in accordance with the provisions of this Act and upon payment of adequate compensation therefor, to be determined by the Secretary." Thus, we conclude that we are authorized by law to dispose of this marble only under provisions of the Materials Sales Act of July 31, 1947 as amended. We believe you already have copies of Circulars No. 2147 and 2149. Circular No. 2147 sets forth the regulations for the sale of mineral materials. Circular No. 2149 sets forth the regulations under the general mining laws. Provisions dealing with common variety minerals start on page 25. We are enclosing for your information a copy of Form 4-1551 which is used for sales contracts of more than $100 and less than $2,000. Sales of less than $100 are made by permit for a maximum of 90 days. These do not require competitive bidding or advertising. Sales of less than $1,000 are also non-competitive provided that there is no apparent competitive interest in purchase of the material. These sales are made by contract on Form 4-1551 for a maximum of two years, and additional sales of the same material may be made to the same party provided that the total of non-competitive sales does not exceed $1,000 in any year. Sales of more than $1,000 are competitive. They must be advertised and competitive bids solicited from interested parties. The regulations provide no maximum term for such sales. The conditions of each sale are determined on its own merits. Sales of less than $100 are made on the basis of a market survey appraisal. The current Bureau of Land Management market survey appraisal of marble suitable for use in buildings is $0.50 per ton. This figure is based upon royalties actually being paid in the market. Sales of more than $100 may justify an independent appraisal. Material sales are administered by the District Manager. The District Manager in Canon City is Rowland G. Thompson who may be contacted at the district office at 1005 Main Street. He will be able to give you any further information you may desire concerning material sales. We understand that your present problem is two-fold. One problem is the determination of whether there is a suffiicient quantity of a uniform grade marble of this type present in your prospect to justify market development. The other problem is obtaining sufficient time to develop a market with the assurance that the marble will be available to you at that time. The only feasible solution to your problem we can find under law is the following suggested procedure: First, we suggest you might consider a small purchase of from $100 to $1000 for a maximum of two years. This would permit you to quarry out and remove from 200 to 2000 tons of stone at the present appraised price which should be sufficient to prove the quantity and quality of marble present. It would protect you from adverse entry during the term of the contract and give you up to two years for market development. You could then make application for a larger sale for a longer term. The risks are that under the smaller sale you would become owner of stone for which you may not have a market, and in the event of a larger competitive sale, you might possibly be outbid in a future sale. The value of contracts is payable in full whether or not the material is actually removed from the land. We appreciate your interest in developing this mineral resource and wish to cooperate with you to the fullest to see that it is properly developed and exploited. We would welcome a materials sales application from you and will do everything we can to make such a contract as agreeable to you as possible. Sincerely yours, LOWELL M. PUCKETT, State Director. Senator ALLOTT. Let me ask you also, sir, to try in your report to investigate the aspect of rhyolite and report on your decision whether or not it should be included as a common variety or excluded. Mr. CAVANAUGH. We will certainly attempt to, Senator. I might say, of course, that if this is in the process of adjudication we may not be able to, but we will certainly be glad to look into this. Senator ALLOTT. As far as I know, it is not a specific question, but I have seen various types of rhyolite of various colors--pale tan, pink, gray-and it is a building stone. There is no question about this, but it is not truly a common one and I would like to have you comment on this material, either in a separate letter or in your opinion, if you would. I say it is not a personal question with me and, of course, I assume it is taken for granted that no one here has any monetary or pecuniary or financial interest in any of these materials, either directly or indirectly, and I do not. Mr. CAVANAUGH. I am sure of it. Senator GRUENING. Senator Fannin? Senator FANNIN. Yes, Mr. Chairman. Mr. Cavanaugh, as I understand it, these bills or a bill to come out of the two of them, would provide for more types of mineral deposits that would be under the prospecting area; is that right? Mr. CAVANAUGH. I do not know whether there would be actually more types, Senator, but we would have probably a better definition to work from to determine which types actually are. Senator FANNIN. In other words, you need a clarification? Mr. CAVANAUGH. This is what we need, Senator. We need a clarification. Obviously, from the difficulties that we and the public have had, the act, at least in our minds, does not give us satisfactory guidelines. This is what we are asking and believe is necessary. Senator FANNIN. I understand we will have some industry witnesses and I imagine their testimony would be of value to you Mr. Cavanaugh, in making your recommendations to the committee. I would hope that you would take those items into consideration when you do make your recommendations. Mr. CAVANAUGH. Yes. I think it will be helpful, Senator. I have found, and I think a number of the rest of us did, that the hearings Senator Gruening's committee had in Butte last summer at which industry witnesses appeared to be very helpful in this area. Senator GRUENING. I would like to suggest that those two letters that Senator Allott introduced be responded to in the report that you make, so that you can address yourselves specifically to the point that Mr. Puckett and Mr. Cowan made. Senator Moss, do you have any remarks? Senator Moss. No, Mr. Chairman. Senator METCALF. Could I make a statement? Senator GRUENING. Go ahead. Senator METCALF. Right here in Washington I am informed that the Supreme Court Building and the Library of Congress are faced with Montana travertine, which certainly indicates that it is of some special value. Senator ALLOTT. Would the Senator yield there? I would also like to say that the interior of the State Capitol in Colorado is faced with marble from Colorado quarries, too, which is one of the most beautiful interiors I have ever seen in this country, so we have a real problem here and I hope we can work it out. I thank the Senator for yielding. Senator METCALF. I was referring to the case you are familiar with, the testimony of Jack Ahern, manager of the Montana Travertine Quarries, when we had the hearing in Butte. He said there was a ruling that this was a common variety of mineral. That ruling, as you indicated, may have been at some administrative level. Mr. CAVANAUGH. I think this is right, Senator. Of course, somebody has to make the decision should this be contested, and I think perhaps that was the reference. Senator METCALF. Anyway, thank you very much. Senator GRUENING. Thank you very much, Mr. Cavanaugh. It might be useful if you stayed here and heard the rest of this testimony. Arthur W. Greeley, Associate Chief of the Forest Service, Department of Agriculture. Mr. Greeley, we are happy to have you here this morning. Mr. GREELEY. I have with me Mr. Reynolds Florance, who is Director of our Division of Legislative Liaison and Reporting. STATEMENT OF ARTHUR W. GREELEY, ASSOCIATE CHIEF, FOREST SERVICE, DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY REYNOLDS G. FLORANCE, DIRECTOR, DIVISION OF LEGISLATIVE REPORTING AND LIAISON Mr. GREELEY. Mr. Chairman and members of the committee, I am Arthur W. Greeley, Associate Chief of the Forest Service. I appreciate this opportunity to be here this morning to make a statement on S. 2281 and S. 3485. Mr. Chairman, I have to start with an explanation. The Department of Agriculture report is still being processed in the Department. The statement that I am about to make was prepared in anticipation that our report would be here by this time. I am informed that it will be here today. In view of the fact that the report is not here before you, I am also instructed to tell you the position of the Budget Bureau with reference to the Department of Agriculture report.. This is a reasonably complex matter. The Budget Bureau people have advised us that time considerations have not made it possible for a determination yet to be made by the Budget Bureau as to the relationship of the Department of Agriculture report to the program of the President. Now, sir, may I proceed? Senator GRUENING. Please proceed, yes. Mr. GREELEY. The Department of Agriculture recommends that these bills not be enacted in their present form. S. 2281 and S. 3485 would amend section 3 of the act of July 23, 1955. This act is commonly known as the Multiple-Use Mining Act. In part it defined the rights which locators and the United States now have on mining claims located after July 23, 1955-the effective date of the act. It also provided that "common varieties" of sand, stone, gravel, and certain other minerals are no longer deemed valuable minerals for purposes of locations under the mining laws. Under the act, common varieties are disposed of by lease or permit arrangements. The Multiple-Use Mining Act has produced many beneficial results and, in general, we have looked upon it as extremely good legislation. We recognize that the problems in following and administering it have arisen, mainly in connection with the provisions on common varieties. We believe the congressional committees, the executive departments, and the private industry representatives that considered and supported the Multiple-Use Mining Act felt that the common-variety provisions could be applied with little difficulty. Experience has been otherwise. S. 2281 and S. 3485 would approach the "common varieties" problem by redefining and attempting to clarify the term through statutory amendment. S. 3485 would spell out new guidelines of classification. Both bills would specifically exclude from the common-variety category certain substances which have been found difficult to classify under the present statutory definition. S. 2281 and S. 3485 might narrow some of the areas of uncertainty in dealing with common varieties. But their approach would not permanently solve the basic probem-that a "common variety" will always be difficult, if not impossible, to define exactly. The expanded definitions which the bills would establish still necessarily fail to eliminate shady areas for both operators and resource agencies which are prevalent under the present law. There will be mineral substances which will fall on the borderline of any category rigidly defined by statute. Claimants under the mining laws would still have to risk contests when they mine such substances. Administrative decisions interpreting and further defining the statutory definition would still be necessary, and would still result in a degree of uncertainty. S. 2281 and S. 3485 would also have the effect of narrowing the scope of the "common variety" category. The bills would thereby increase the number and types of relatively low value materials which would be locatable under the mining laws. Many of these materials, such as sand and gravel and stone for aggregate, are found in widespread areas and we feel should be treated as common varieties. We feel that such a narrowing of the "common variety" category would be a step backward from the gains realized through enactment of the Multiple-Use Mining Act. One of the principal purposes of the act was to protect and insure multiple use of both the surface and subsurface resources on Federal lands. The removal of common varieties of sand, gravel, stone, rock, and other materials from location under the mining laws was considered essential to minimize conflicts between mining and the use of valuable surface resources. The act recognized that many common varieties, such as sand and gravel for aggregate, have a marketable value. It provided for realization of the value through a sales or permit procedure. In this way, the disposing agency is able to protect the values of the surface resources which would be affected. One of the principal areas of difficulty was revealed at the recent hearings held by this subcommittee on the interpretation and administration of the Multiple-Use Mining Act. This involves the uncertain application of the statutory term "common varieties" to mining claims on areas containing substances which are primarily valuable for use as building material. Such claims are often made in good faith with the belief that the substances involved are not common varieties and are, therefore, locatable under the mining laws. The locators undertake mining operations in reliance on this belief. Problems arise when the claims are contested as being for common varieties, and therefore invalid under the mining laws. The locator is faced with costly and lengthy contest proceedings. He is uncertain as to where he stands in any operation of the claim while the proceeding is pending. Then, if his claim is determined to be invalid, he may be required to pay for all the material removed and for the cost of surface restoration. Our people have discussed this matter with many locators. We feel that many of them would be willing to apply for and obtain a lease for the removal of the material if satisfactory procedures could be set up for the issuance of such leases. In most cases the locator has, through his own efforts, discovered the deposit. But under the present law, if he undertakes to apply for a lease to remove the material, he can, with few exceptions, obtain such a lease only through the competitive bidding process. He has no advantage because of the work he did in making the discovery and developing a market for the material. Experience to date has shown that most of the contested claims for building materials have been determined to be invalid. Our experience also has been that there is a long lag before a final determination is made. These uncertainties could be removed and locators could be assured of leasing the deposits they have discovered through provisions which would: (1) remove from location under the mining laws all forms of sand, stone, rock, gravel, cinders, pumice, materials that have their primary value through use for building materials, and certain other nonmetallic materials the primary use value of which does not depend on its chemical properties but on the use to which it is put; (2) abolish the distinction between common and uncommon varieties of these materials; and (3) provide for their disposal through a leasing arrangement. Provision could be made for prospecting permits, and the prospector could have a priority for issuance of a lease upon making a discovery. |