Mr. TAYLOR. Yes; and in 62 years there is no oil-shale development under it and mighty little development under that leasing law of coal lands, or anything else, excepting some flowing oil wells.

Secretary WORK. You recommend that Congress change the law. I will help you if I can.

Mr. TAYLOR. It is a serious condition and not a theory that confronts these oil-shale claimants. They have earnestly attempted to locate and file upon and do the annual assessments upon and develop all these lands under the placer mining law, and they are many of them now trying to get patents-some of them have been trying for years and years-and they are not getting any patents; somebody is preventing that development, and we feel that this department might wonderfully well exercise a little more sympathy toward it and be strictly within the mining law and practice and decisions as of February 25, 1920.

I might say that I went down the other day and visited the Government oil plant on the Colorado River below Rifle at Rulison in my home county. Secretary WORK. I helped you get that.

Mr. TAYLOR. Yes; and we all appreciate it and I hope you will help us to continue it, because it is held up in the air now. It will be stopped on the 30th of next June unless we can get another appropriation from this Congress. I certainly hope the executive department of the Government will help us to get it. The refining engineer, Martin T. Gavin, and his associates are doing a splendid work down there. They are actually getting results of tremendous importance to the country. When I was there they had some 30 or 40 barrels of fine shale oil in their tanks. They have demonstrated the practical production of oil and they are turning it out every day. It is a splendid process, and it does give confident hope of one of the greatest developments in the world. As a matter of fact, Doctor Work, it is going to make Colorado, our home State, one of the richest States in this Union if we can develop

Secretary WORK. It is now.

Mr. TAYLOR. But it will be much more rich; and I hope that you will exercise your great influence in a broader way for the welfare of the Nation and the Western States-in a way that will help the people who have pioneered out there to realize on this enormous resource-and I feel if you will it will be as great an act of statesmanship as any Secretary of the Interior has ever performed. (Applause.)

Secretary WORK. Mr. Congressman Winter, we would like to hear from you. Hon. CHARLES E. WINTER (Member of Congress from Wyoming). Mr. Secretary, Judge Finney, Commissioner Spry, and members of the department; I want to express my appreciation first of the invitation of the Secretary here for this general open hearing. I particularly appreciate, Mr. Secretary, your invitation at this moment to speak.

Secretary WORK. You have all the time that is left.

Mr. WINTER. Not much left. I am going to take but a few moments.

I was very glad to hear the remarks of Judge Finney which brought out very clearly this situation that up to this time it is an open question as to what a discovery of shale claim is, notwithstanding the decision in the Freeman case, which stands upon a rehearing. We are here for the purpose of contributing, if possible, to the fund of your information, particularly as to geology and the physical facts, so that it may become apparent to the department, the Secretary, that these claims and these discoveries that are now before the department in patent applications do come within the law. It is stated that the department is not seeking to change the law but we must all recognize the fact that a violent unjustified construction of a law does change that law; and that is what we are here to try to avoid if possible.

Now, this proposition is not confined to the district of my good friend Congressman Taylor of Colorado or to his county. I am going to introduce here, if I may, for the record, a statement of fact which I do not believe has been put in the record up to this time, and that is the extent of this Green River formation or deposit. Reference has been made to the fact that it runs for perhaps a hundred miles up and down that great river and along the canyons adjacent to it. I have not the exact figures, but looked at the map as given in Bulletin No. 729, and having the report of the State geologist of Wyoming to the effect that there are about 4,000 square miles in that State of this oilbearing shale; comparing the areas as outlined in the map of Colorado and Utah there would appear to be approximately 4,000 square miles area in Wyo

46780-31-8

ming, about 2,800 in Colorado, and perhaps 3,000 in Utah. That is a total of 9,800 square miles-we can safely say approximately 10,000 square miles-in this great formation.

We members of the congressional delegation from these States have very courteously been invited to this hearing and I am sure that we have all gained a great deal of information. The discussion and the papers have been enlightening and illuminating to an unusual degree, and I may say further that they all tend in proof in one direction. There is no conflict in evidence in the facts that have been presented here to-day. We represent these States. We are, of course, anxious to see a great development go on in these States in this very important industry.

But I want to call your attention to the fact, Mr. Secretary, that while this industry may be located in these States, those who are interested come from every section of this country. This is not primarily a matter of concern merely to the citizens of Wyoming, Colorado, and Utah, as is evidenced by this group of men here to-day. They and those who have spoken for them represent States from the Atlantic to the Pacific coasts. It is of universal and nationwide interest.

Now another thing that I deduce from the presence of these gentlemen here to-day. I state without further proof that these are responsible, prudent, reasonable men. Perhaps some of the original locators and miners are here to-day. I will also classify them as reasonable, prudent men. What are they here for? They are here to ask that they be placed in possession by patents which will make secure immense investments of capital which they stand ready to provide; and in their minds there is just one thing or they would not be doing this, and that is, that they have a reasonable prospect of success if they are permitted to continue this development; and I submit that here is proof that the facts before you comply with the rule of law in your

Mr. CONSAUL. Castle-Womble?

Mr. WINTER. Castle-Womble case. Analyze it and you will see that it is here. If they were not within that rule of law they would not be here. They are a class of men who are designated in the rule; that are willing and ready and able to proceed to develop these claims. It seems to me that here is conclusive proof that they have that confidence in the indications and the mineral and the geological structure of these claims that your rule or principle is met right here by this fact. Of course, I understand that the department must rule upon every case upon its own basis and that each case must have its proof. I am speaking collectively; and I submit that, with continuous mineral value in the deposit shown, together with the favorable geological formation, these very hearings and these very arguments and the presence of these gentlemen here complete the fulfillment of the primary rule of principle laid down in that case; because as prudent men they are willing to spend time, labor, and money in further development with every reasonable prospect of

success.

May I draw for just a moment a picture of the other side of this proposition? If the department should hold that these facts do not constitute valid discoveries, then what is the situation? It has been stated here, and probably accepted by nearly all, if not all, that the hope of an immediate development of this industry lies in the patented claims. One reason for that is, of course, that there is not imposed upon the patented claims any burden of Government royalty. I have made my position well known and do not hesitate to state here that I believe the general leasing law was a mistake; I believe that the general leasing law should be repealed. That is neither here nor there upon the merits of this matter.

This enterprise is not a flowing oil well proposition or a pumping proposition; it is a mining and manufacturing enterprise and for many years will be in competition with oil well and oil pumping production. I point out the fact that this manufacturing enterprise must operate upon the smallest margin of profit possible or they will have no business, and I am here to say that the development of this industry, notwithstanding the encouragement of this industry by the plant of the Government in Colorado, will for many years depend upon the development of these private claims.

The other side of the picture is that if the patents are not issued, if these are not found to constitute valid discoveries, we then will have all of this area under the Federal Government under the general leasing act, which, of course, imposes its royalties, and which proposes to lease these lands as oil producing lands of great value.

And here is a fact I would like, Judge Finney, to bring particularly to your attention. I recall that two years ago before the Public Land Committee in the House, when the subject of bringing potash under the general leasing law was under discussion, it was stated then that the department construed the leasing law in such a way that with known deposits such as potash and phosphates it would not issue permits but would issue leases, and if I am not mistaken during the last session last winter the law was amended so as to provide for such a situation where a discovery was not necessary. Is not that the present status?

Secretary FINNEY, The House passed the bill but it did not get through the Senate.

Mr. WINTER. I have forgotten the ultimate fate of it.

Secretary FINNEY. The point is that we do apply this rule as to potash, stated in a little different way. We issue a permit to the prospector only where it is not actually known. In areas, for instance, like Salt Lake there we issue a lease direct. That is what you have in mind.

Mr. WINTER. That is what I have reference to and I think the law now authorizes the department in that respect. My further inquiry now is whether the same rule applies to a shale deposit as to potash and the phosphates?

Secretary FINNEY. There is a separate law as to shale and my recollection is that the limit was 5.120 acres to one corporation.

Mr. WINTER. That brings me to this proposition. These deposits under the leasing law are leased to citizens or companies, as the case may be, upon the assumption and upon the classification by the geological department, that they are oil land on which the Government encourages and invites private capital to come in and take leases and develop? Now, can it be possible that there are such areas which the Government so holds and classifies and invites capital to lease and spend money upon where, at the same time, under the same conditions, it can deny the fact of valid discovery to the locator? The Government in one case says: "This is oil land, this is oil shale of great value; it is capable of successful development; we invite you to take a lease upon it. It is rich enough so you can pay the Government a royalty." Now, the Government is not responsible for anybody's losses, still they invite people to invest their capital in these very lands. In the other case, the case of these applicants, it virtually says: “You have discovered nothing of value.” These lands, if patents are not granted upon them, will revert back and be disposable only under the leasing law. Permits are omitted and leases granted because the deposit is of known mineral value.

Now, it seems to me that these very facts should go a long way in the mind of the department officials to support the fact of discovery and the issuance of patent, because generally the Government is saying to those who apply for leases that this is oil land. It would seem to me to be more or less inconsistent, all of us having the same facts within our knowledge. these locators bringing these facts to the attention of the department, to deny in the one case the patent because of lack of valid discovery and then immediately invite the world to come in and develop the same ground under the leasing law. I have taken much time, now, and I have not

Secretary WORK. Charge that up against the department.

Mr. WINTER. Thank you, Mr. Secretary.

My complaint goes back in the first instance to the entire matter of the passage of the leasing act because of the double burden and the royalties imposed upon capital seeking to develop these claims. I must perforce cease, but there are a great many things in my mind that I would like to say. I realize that it would be an imposition.

It is a fault of lawyers generally that when they start in on a proposition they want to cover every point for fear that the opposition may find on the record that they omitted to cover some material point. I believe that every aspect of the question has been covered here this afternoon, and it seems to me that there is not only no dissenting voice or opinion but there is no conflict here as to facts, or the law, and it seems to me the conclusion must be, therefore, from the facts presented here that these are valid discoveries and that patents should issue upon these claims where these facts are made to appear in the record.

Both the general mining law of 1866 and the leasing law of 1920 declare that they are for the promotion and encouragement of the mining industry, and, therefore, I take it that no one will quarrel with the proposition that

there should be a liberal interpretation of the law, instead of restrictions that may shut out someone who is ready and willing and able to attempt to develop and it is development that we all finally want in this thing.

There

can be no question of bad faith, it seems to me here, because these locations will benefit no one, unless there is an immense amount of capital invested and the development is proceeded with, and, thus eventually, we have the result that everybody desires.

I am not saying this that the department should in any case issue a patent where the proof does not show the required facts; but I am speaking of the spirit in which the law should be administered and applied; and above all there should be no arbitrary restrictions or restrictive or prohibitory constructions and interpretations based upon the law. For instance, I think it is very clear that rules and regulations regarding oil and gas should not apply in this case. The physical features have been made absolutely clear, it seems to me, by this evidence, and nothing in conflict

Secretary WORK. What is the administration of the oil shale under? The oil and gas leasing law?

Mr. WINTER. That may be very true, but it is also the oil shale, phosphate, and sodium law.

Secretary WORK. How can we avoid it?

Mr. WINTER. But we are not speaking of that section of that leasing law— 37-which instructs the department about granting patents under locations made prior thereto. I am only mentioning the leasing law to present the other side of this matter in the event that patents are denied, and to show what additional burdens are placed upon these operators by the leasing law, to carry out and support the proposition that it is under these patented claims, individual ownership, that the hope of this industry for immediate development lies. I trust that the spirit and purpose of Congress, the purpose expressed in the title of these laws, will actuate the department so that they will promote and encourage the mining industry. [Applause.]

Secretary WORK. Is there anyone else who would like to be heard? We have plenty of time.

Mr. THOMAS of Denver, Colo. As I understand this question it is limited to the question of discovery.

Secretary WORK. Well, we have not limited it to that.

Mr. THOMAS. What I want to say is very brief. Mining laws have been drawn up and developed by a group of men most of whom are now dead. I need not mention such men as Senator Hughes. I would like to ask permission of the Secretary, at a later date to file a brief by Senator Charles S. Thomas. He is abroad at the present time and is not available at this hearing, but will be here in a week or ten days.

Secretary WORK. Such a brief will be very welcome upon this subject.

Mr. C. W. Church of the Index Shale Co., DeBeque, Colo., here addressed the meeting.

Mr. Secretary and Gentlemen: My name is C. W. Church and I represent, as an officer, the Index Shale Oil Co., of DeBeque, Colo., and Denver, Colo. The Index Co. is not a large holder of shale land but it is a manufacturing company and very soon will be a producing one, and it is as a representative of a concern which is interested chiefly in the manufacturing and producing end of the oil-shale business that I appear before you.

To the arguments produced before this meeting so ably, on the question of what constitutes discovery on a shale location, presented by Mr. Hawley, Mr. Roberts, Mr. Larwill, Mr. Russell, and others, I want to lend my most ardent support.

This hearing has been rather long extended and the hour is now very late and it is not my intention to engage in any lengthy speech which would of necessity be a repetition of what has already been presented to this conference and which has been indeed fully covered.

I just want to say to you that the Index Shale Oil Co. is actively engaged in developing its property with a commercial plant to treat the oil shale. This company has been engaged in this work for six years. Several hundreds of thousands of dollars have been expended on this property.

To-day we have a large oil education plant fully completed; within the past 60 days we have completed the erection of a gasoline absorption plant with a capacity of several million cubic feet of gas per day. We have installed mining and power equipment to provide the raw shale for our mill. We are now installing an aerial tramway from our mine to our plant and this will be com

pleted before the holidays, and then the Index Co. plant will go into continuous and permanent commercial operation.

The oil-shale deposits of this company are exposed on the escarpment above the plant. The general location is a square faced promontory between two creek valleys or canyons. Our shale is exposed on three sides. The deposit can easily and accurately be measured with several hundred feet of exposed shale on each three faces of the cliffs, aud this has been done by competent engineers. If there is any mine in this country which has its ore blocked out more accurately than this shale of the Index Co. I would like to hear about it. And yet some of our claims lie on top of the mountain and back from the escarpment. The discovery location on each of these claims disclosed oil shale yet it might be possible that on the discovery work on some of these claims shale of a content of 15 gallons per ton or less may have been found. Yet we know that immediately below these discovery workings lie the great mahogany vein and other shale strata of high oil content to a total depth of many hundred feet.

The injustice of any proposed rule establishing a minimum oil content for a shale discovery is readily apparent, and, as a representative of a company who has spent much money in this field and who is directly and principally interested in the manufacturing and producing end of the oil shale enterprise, I protest against any such ruling.

C. W. CHURCH,

President Index Shale Oil Co., DeBeque, Colo. Secretary WORK. Would anyone else like to speak?

(No response.)

If not, I want to just say a word-just enough to thank you men for coming. and for having prepared your matter so well and presented it so clearly that there has been no appreciable overlapping and no loss of time to this department. Conference and hearing like this are of a very frequent occurence here. In my judgment, there never has been a matter better presented than this in my time as secretary.

Reference has been made occasionally to yourselves as being western men. I with a great many others in the department would like to be included in that classification. It is of interest for you to know that the Secretary, his assistants, and the commissioners of the principal bureaus, and the solicitor are nearly all from west of the Missouri River. This Department of the Interior is really the department of the West.

Now, gentlemen, I appreciate your coming. I know it will be profitable. I know I am better advised, and thank you very much for the time and expense and trouble you have gone to in presenting this matter.

Whereupon, the hearing closed at 5.20 p. m.

Following the hearing a communication was received from Messrs. Dines, Dines & Holme, First National Bank Building, Denver, Colo., in which they present their views on the question discussed at the hearing.

DINES, DINES & HOLME, Denver, Colo., November 26, 1926.

Hon. HUBERT WORK,

Secretary of the Interior of the United States,

Washington, D. C.

MY DEAR SIR: Not knowing to what extent the clients whom our firm has the honor to represent may be interested in the outcome of the hearing called by you at Washington for December 1, 1926, and being unwilling to put them to the expense of a journey to Washington by me to make an oral argument before you, in addition to the presentation that will be made to you by Mr. Roberts, of our firm, and for that reason alone, I have taken the liberty of placing before you my own personal thoughts and conclusions in writing for such use as you may think those conclusions deserve. As this hearing is public and designed to aid your department in the administration of an important public trust, I feel that you are entitled to have before you the results of the study and experience of all citizens in arriving at your conclusions. I can truthfully state to you that I am more influenced by a desire to have you and your department decide the questions before you rightly than by any duty to clients, or personal interest.