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 located."

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 v. 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

went to the ninth circuit court of appeals. There is quite a series of them, and throughout the series the court stuck by its guns. Those cases have never been overruled or commented on adversely by any decision of this department. Those cases stand for what they are worth and I believe that they lay down rules of law that are right, whether or not as to findings of fact you men would have treated the questions of fact in the same way that the Alaska juries treated them. The rules of law laid down for their guidance were laid down correctly. In the case of Lange v. Robinson, the court laid down this rule of law to guide the determination of the quotation:

"The question of discovery is in every case one of fact for the court or the jury. There must be some gold found within the limit of the land located as a placer gold claim; but it may not be said in advance as a matter of law how much must be found in order to warrant the court or jury in finding that there was in fact discovery such as the law requires. The question must be decided not only with reference to gold actually found within the land of the claim located, but also in view of the existing situation with reference to other lands known to contain valuable deposits of placer gold and whether its rock or soil formation are such as is usually found, where these deposits exist in paying quantities."

And that same court, the ninth circuit court of appeals, went on consistendly with that line. In the case of Cascaden v. Bartolis, it was held reversible error for the trial court to exclude certain testimony as to what the conditions were outside of the limits of the claim in question, and to instruct the jury to disregard certain evidence along the same line that did slip into the trial. There was a showing of actual mineral on the claims such as the panning of a few colors of gold in the surface gravel on the claims but it was held error not to let the parties interested prove that there was some association between the surface gold and gold at bed rock, and to prove that by comparing this with other known grounds near-by, the probability of reaching a deposit at bed rock could be inferred. Now I use that word “inferred" advisedly, in spite of the fact that it has been discarded as in itself sufficient for a discovery where there was nothing more. It is perfectly true that in the case of Christman v. Miller, and in numerous other cases, the courts have said that you can not make a discovery by mere geologic inference. If you will analyze these cases, however, you will find in every instance that what the court really had before it as a matter of fact was a case where no mineral had been found within the limits of the claim or where, though a trace of mineral was found within the claim, the geologic knowledge of the surrounding country was such as to discredit the claim and not such as to build up and add significance to the thing found.

I have collected a large number of these cases and I shall ask later to file a brief upon that point, analyzing those cases. They run in rather a long series, but generally it can be said of them that this ruling that geologic inference is not discovery has arisen only in those cases where inference was the only thing that was present; while on the other hand, the courts have settled that where you find some mineral on the claim in appreciable quantity, even though much less than commercial, you can build up its significance. You can show that it has such a significance, that a reasonable miner would go on and develop, by referring to known conditions around.

Now to comply with this rule takes on, I should say, Mr. Secretary, one rather more onerous burden than compliance with the rule that you discussed with Mr. Larwill a moment ago. The rule I think is that the mere finding of a trace of mineral on a claim is not entitled to be called discovery; the finding of some mineral on a claim is a prerequisite; but having found some mineral on the claim then we come to the question upon which the surrounding circumstances have to be gone into. To answer the question: What is the significance of the mineral you find? You must regard it in the light of all the geologic facts surrounding it. And then geologic inference plays its part in the determination of the question. That is, it is a double-barreled question that we often encounter. We may have the commercial deposit that we are after right exposed on the claim, and if so, the two quetsions are bound up and answered with the same sample of rock. But you may not find that; you may run into a small lean deposit of some mineral on the claim and then in order to show discovery, you may build up its significance with geologic knowledge of what it is associated with.

Now in some of the oil shale cases, I think really in connection with this, the suggestion is made, which I take to be only a suggestion, that this department might consider the adoption of a rule of thumb as to the significance of

oil shale, by saying purely as a rule of thumb, that oil shale has no significance unless it is up to the 15 gallon minimum and up to a foot in thickness. As I view the question, a rule of thumb of that sort, attractive as it might be from an administrative point of view, could not possibly express the wide diversity of situation of fact that are bound to be developed in the infinite variety of circumstances under which mineral may be found, and any such rule expressed in terms of barrels, or of gallons per ton, or inches in thickness, however framed, can not be the answer to it. The significance of a find of that thickness of shale (indicating a sample on the table) under some circumstances of shale that might run only a gallon a ton and half an inch in thickness, might be much more promising than the finding of an isolated onefoot thickness of 15 gallon shale. The latter might be absolutely discarded and discredited by the circumstances under which it was found, and the significance of the former might be, as I think in some places in this very region it is, that there is probably 500,000 barrels to the acre of oil in the shale under it. Now the significance of such matters as this can not be expressed in terms of any rule that just deals with the dimensions of the thing that outcrops on the surface, because significance has got to be gathered from more and broader things.

Now, there is in connection with one of the decisions of the FreemanSumers case, and in the Empire case, too, I think the fundamental difference is one of fact which our western exploratory operations here developed empirically in wildcatting for oil. It is unfortunately true that nine out of ten exploratory wells drilled on structure, which find a showing of oil some place on the way down, turn out to be dusters and are absolutely of no value. Unfortunately odds are greatly against the wildcatter for oil, though in most cases he gets a small quantity of oil somewhere before he gets down to test his deeper horizons. It is out of that circumstance-out of this circumstance that even when you find a little oil in a shallow horizon you can still say the odds are against your finding a comercial amount of it deeper. That there has been some temptation for this department to say that the mere finding of a small amount of oil in a shallow well is not enough to call a discovery even where the possible existence of commercial oil at depth is a geologic inference. This is because that inference is too remote, because that inference is really a nine to one shot against the man that says it is there nothing like the certainty that we have here respecting shale. When there is this mahogany series under these top claims it would be considered ore in place, blocked out, exposed on three sides of a peninsula. It goes into a hill on one side and comes out on the other, and it appears all around the end. This goes beyond any mere inference. Certainly we know it is there because, we know it has been laid down by sedimentation. It is not any guess. I want to repeat that these showings prove that it is there. Compared to wildcatting for liquid oil the situation is as different as night from day.

Now I think that all this is expressed in one of the opinions of this department, Butte Oil Co. (40 L. D., 602), a case where there was an application to patent a little piece out of the Glacier National Park after it had been organized, upon the theory that it was an existing valid placier claim before that park was created. A well had been drilled, and nothing had been found in it except a little bit of gas that had no significance whatever, and there was an oil seepage on the surface that dripped off a rock and you could skim off a few teaspoonfuls of oil. The decision in the case shows some of the evidence that was before this department; it shows that there was presented in the case a geological report by Mr. Willis in which he said, as to the significance of the seepages here, that the line of migration of the oil up to the point of seepage was probably one step upward and two steps sideways. He said that the line that was followed was probably a succession of jointing and bedding planes, that probably carried it miles to the side of where it started. In conclusion Mr. Willis stated:

"If the inference as to the irregular line of assent of the oil from its unknown source be correct, the particular point at which the oil escaped to the surface is not significant as an indication of the position of a subterranean reservoir."

Now, with those facts before this department of course you held that a mere finding of a small seepage of oil at the surface did not have the significance that was necessary to render it a discovery because if it proved anything it

proved that the oil in commercial quantity was not under the land rather than that it was.

Now that same thing, as I read the case, has come up in a much discussed case before this department, the Oregon Basin case (50 L. D.. 253). The decision of that case is just a little bit fragmentary. With a commendable tendency not to write a volume on every case that comes before this department, the decisions are frequently short. I was not really sure that I understood that case until I got out the department's geologic bulletin that tells all about the area. In a bulletin of this department. No. 656, at pages 183185, is a map of that Oregon Basin district which shows all the wells that were discussed in the decision and shows the situation that was under consideration. It is a case where you held that the finding of enough oil to fill a quart bottle, at a depth of some 400 feet, was not enough to be considered a discovery. As I read the facts of that case there was a closed gas structure, but the land applying for patent was outside of the probable line of gas production. If the gas wells on other adjoining lands indicated anything, coupled with a water well, on another part of the structure they indicated that the claimant of the land did not have anything to indicate that oil in commercial quantities underlay his land. They had found water in the Frontier sand, bored then into the Torchlight sands, at one point they had gone through the Torchlight to the Cloverly and found water there. If there was any oil on these lands it was lower than the Cloverly and it was a long way down. So it was with that kind of facts before your department that you held that the quart bottle filled with mixed liquid one-third oil and two-thirds water, at 400 feet depth, coupled with the geologic inference that you drew from this showing of extensive facts, was not enough to induce a reasonable man to put up money to go deeper.

Now applied to the facts before this department, that Oregon Basin case does not announce any rule that is in the way of saying that the finding of a thin streak of oil shale near the top of the Green River series in western Colorado can not have the significance of showing that it is associated with perfectly good deposits to develop commercially. For the moment I am not touching the question of what the character of that association is. I am coming to that in just a moment; but I say there is nothing in the Oregon Basin case that applies to facts such as we have here.

There are some dicta in that Oregon Basin case that sound as if whether you dealt with oil shale or any other kind of oil it was necessary to make your discovery in the particular seam that was going to become the subject of development. That dictum as I trace it back, comes from the case of Bay v. Oklahoma Southern Gas Oil and Mining Co. et al. (73 Pac. Rep. 936). The case is rather a novel one. The mining laws do not apply to Oklahoma. Oklahoma courts had never had occasion to apply them until they were by a congressional act put into force with reference to a certain limited area. It was the very first case under the mining laws that got into the Supreme Court of Oklahoma, and the judge said he never had a mining case before. He also said that the defendant in error in the case did not file any brief and that under those circumstances his dignity was so affronted that if he could find any possible ground to sustain the plaintiff in error he was going to do it. He said the case had virtually gone by default unless there was some public interest to compel the court to go the other way, and then he gave three or four perfectly good reasons for arriving at the result that he reaches. One was that when the placer location was located the land had just been released from an Indian Reservation and the placer location was made during a 60-day period in which it was not open to entry, so that the court could ignore the placer location entirely. The homesteader that he did award the land to, made his homestead entry regularly after the period of deadlock had expired, and that is all that the case decided. Now there are some novel statements made by this court that had never heard a mining case before. He refers to the finding of a "vein " of oil in a well 34 feet deep. Obviously he thinks he is applying the laws of lode location to that case.

Now more than that, the dictum from the case does not bear the construction that has been placed upon it; for even the Oklahoma judge thought that a finding of a gallon and a half of oil, or a bucket and a half, in that shallow well was a sufficient discovery if it could be considered at all. The judge says:

"The discovery of oil in the well drilled by Beltzerger in July, 1902, as shown by his affidavit, can not be considered in determining whether a discovery of oil was made prior to the filing of the alleged location."

Thus he does not even consider whether there was a discovery then or not, because he says it was made in trespass when the land was withdrawn so that the force of what he says later on, about the finding of a vein, does not relate to the sufficiency of the discovery that there was an attempt to prove, but it relates only to the fact that there were not any seepages or any other discoveries at all to depend on.

Secretary FINNEY. I think you are getting highly technical. I did not intend to lay that down in the Oregon Basin case. What was intended to be said in the Oregon Basin case and what was said was that the discovery of an unrelated, separated, lonesome oil sand, whether at a depth of 300 or 600 feet was not necessarily evidence that oil in paying quantities existed at 3,000 or 4,000 feet.

Mr. ROBERTS. I have no quarrel with the statement of the law as you make it. I, too, agree that a mere incidental finding of a small showing of shallow oil, is not enough in itself for a discovery. I hope that the application of this ruleSecretary FINNEY. I am saying that so you can apply your argument to the situation here.

Mr. ROBERTS. Some of the attorneys in contest cases have tried to use the Oregon Basin case so as to go far beyond anything it was intended for. I think an analysis of the Bay case throws further light on what the court that uttered the dictum originally meant by it. Under all the geologic circumstances the little lonesome bottle of oil means nothing (and that is what it was). I think discovery has got to mean something, but what any particular finding means is a thing that can be gotten at by geologic evidence.

Now, the only thing that I have left in my system that I would like to say is just a word about in what direction—what direction do you have to work? Is there any limitation that it must be laterally, or should there be any arbitrary limitation whatever. Is it necessary that in order to be encouraged by what a miner has found he has got to think that by going sideways upon the particular seam he will find commercial value? Is he at liberty to say that the thing that that means to him is to go down to where the commercial value exists? On that point I think that the technical statements that have been presented here this morning were aimed at that very question. To summarize them, it may be said in the first place that it is highly improbable that anyone will take out this oil shale the way coal is taken out, by following any seam along its course; that the line of development that a miner would consider will probably not be to go sideways in a particular horizon, but will be to lay the foundations under which several thousands of tons will be undercut and coved and tumbled down together. When it comes out of the ore chute at the bottom he will never know whether a particular lot he gets came out of this streak or that streak, or this one or that. The ores will be jumbled in such a way that all that he knows is that he is getting value and when he stops getting value he will turn off his chutes. In other words, the physical method of mining this is going to be a mass operation. The cheaper method of mining this is going to be a mass operation. The cheaper method of mining a large section will be to open it up as a whole.

The next thing is that the mere fact that you find this back away from an escarpment does not mean that it is not commercial. Mr. Mitke touched especially on that point this morning when he was comparing these caving operations with our situation. He said it was perfectly feasible to go down with a shaft to a point below where the deposit was to be taken out, then to drift under the deposit, work up and then, by caving, tumbled it down. The low costs-40 and 60 cents a ton-that he analyzed this morning were based upon operations through a shaft. The presence of a nearby escarpment is not a necessary element in working these claims, and the presence of an overburden is not an impediment to it. The overburden that is up there simply helps the crumbling operation; is a benefit rather than a detriment in crushing down the ore. That is what I take to be the point to a large part of this engineering testimony this morning. It is to assure us that when the particular sample of oil shale found by the locator is near the top of the Green River series and when by looking at the character of it or by going over to the wall of the cliff and tracing its elevation the man who finds it can say with certainty that below that sample of oil shale which he has found lie these beds which can be commercially exploited; then under all the circumstances surrounding this land he can put down a shaft and mine it. The significance of it all is that there is a quantity sufficient to induce a perfectly reasonable man to spend his money on it and go and develop his land, and we need not