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The question of discovery has always been considered by the courts by associations of mining men, by your predecessors in office and by the textbook writers on mineral locations as a paramount and controlling element in all mineral locations upon the public domain. Congress has required that a discovery of mineral shall be made within the limits of every valid location upon the public mineral domain. It has undertaken to prescribe no arbitrary rule as to discovery. Judge Riner, whose 30 years of honorable service upon the bench of the United States court for this circuit, and whose long experience in mining matters entitles his opinion to great weight, has said in one case, which will doubtless be cited to you, where he applies all the questions of discovery to the discovery of oil, that no arbitrary rule or standard had been, can be, or should be made in determining whether or not a discovery exists. The presence of oil in an oil placer claim may be by seepage, coming from a reservoir separated by miles from the location. It is evident that such a seepage would not be a discovery, because it does not indicate the presence of oil in the claim located. In other cases, the presence of oil, studied with reference to geological conditions, does indicate the presence of a reservoir of oil within the claim located. Each case must be governed by its own facts. After many years of consideration by the courts, by the Interior Department, by miners' associations, by textbook writers, it has been conceded that in determining the question of a discovery, there is no arbitrary standard that can be or should be fixed governing all cases.

The question before you, I understand, at this hearing, is the question as to whether or not the Interior Department shall place an arbitrary standard of 15 gallons to the ton, in a seam 1 foot thick, as a requirement of discovery, and further require that this quantity of oil shall exist in the discovery seam. This is the exercise of arbitrary power, which is inconsistent with the history of mining locations and is inconsistent without theory of government and fair dealing. Why 15 gallons instead of 20 or 25, or 5? What geological factor or condition exists in all cases to uphold such a requirement? The rule of discovery in lode mining locations where lodes carry ores are supposed to exist has always been that the discovery must show such a vein carrying such values as would lead a mining man of ordinary experience and judgement to conclude that in depth he would have a reasonable expectation of producing commercial ore in paying quantities.

The department in issuing its patents heretofore on oil shale lands has been governed by no arbitrary rule. It has followed the rule that your predecessors have followed in the past and which the courts, including the Supreme Court of the United States, have approved as a reasonable rule. The question of discovery in each case must be determined by the geologic facts and all the other facts and circumstances that they may be detailed in evidence. It is with some alarm, as a citizen of the west, that I find your department for the first time in its history attempting to standardize discovery. If you do this, you are not only going contrary to the decisions, the rules, and the experience of generations past, but you are for the first time in the history of your department, or of any department of the United States, exercising an arbitrary power.

You must remember that many of the oil-shale locations made under the act of Congress prior to the leasing bill were made with these decisions before them, which had become a rule of property. Men were induced by this and by the fact that no arbitrary standard was created by Congress itself to go upon the public domain, to search, to employ geologists and scientific men to aid them in the search for deposits of oil shale. They made their locations in good faith in reliance upon an administration of these matters that had proceeded uniformly for generations. To require these people to lose their investments, after the Government had induced them to make them, by the creation in your department of an arbitrary standard of discovery, when all geologists and mining men know that the facts of no two are identical, is, it seems to me, a species of confiscation by the Government. Your department in this matter represents the citizens of the West, who have had the energy to go out into the waste places with the hope of finding oil shale and with the belief that this oil shale would sometime remunerate them for the expenditures of their time and their money, to the same extent as you represent the Government of the United States.

I will not undertake in this matter to cite cases. They will be cited by Mr. Roberts, of our firm, and doubtless by other lawyers, representing clients, so

that you may have all before you. I do, however, register my protest against any action of your department which would attempt to standardize that which Congress has not standardized, and to apply that standardization to all cases of discovery.

It is well known to geologists that these shale beds exist under certain geological conditions and that successive beds, separated often by leaner material, exist, and that the lower beds, unexposed to the elements or to the effect of evaporation, contain more oil to the ton than of those that are originally discovered at or near the surface. An outcrop of oil shale is universally less rich in oil content than the beds that are not exposed to the elements. If a citizen of the United States in good faith has discovered shale, and in connection with the geological conditions reasonably believes from that discovery that he will sometime reap a profit from the lower beds of shale, it seems to me there is no reason for requiring any certain amount of oil in this or that discovery. He takes his own chances, spends his own money and time and energy, acts upon the advice of such scientists as he may employ for that purpose. If he makes a mistake, the mistake is his.

Another reason why no arbitrary standard should now be applied is the fact that it is impossible for your department, or for any other department, to determine what amount of oil to the ton in any given oil shale is to be commercially valuable. How are you going to mine it? Will it be by tunnels? By shafts? Or by the caving in process? How is it going to be extracted? On the lines of the old Scotch treatment, or by some new process which the energy and enterprise of men may yet find?

I do not believe that an arbitrary standard is ever justifiable in such cases. If it is adopted, however, it should be adopted only after processes of mining and treatment have been tested in commercial enterprise and become standardized.

There is much more than can be said against the adoption by your department of an arbitrary rule of this character. It is questionable as to whether the courts will sustain such an action. The Supreme Court of the United States has always required, when the question of classification has come before it, a reasonable classification based on facts.

Knowing that is your intention to administer this great trust which is developed upon you in fairness both to the Government and to the citizens of the West, who protest against putting them in cold storage for some future generation, and believing that you will consider all these matters before you arrive at a conclusion, I have the honor to sign myself,

Your obedient servant,

TYSON S. DINES.

(Whereupon at 12 o'clock noon, the committee recessed until Thursday, February 6, 1931, at 10 o'clock, a. m.)

OIL SHALE LANDS

FRIDAY, FEBRUARY 6, 1931

UNITED STATES SENATE,

COMMITTEE ON PUBLIC LANDS AND SURVEYS,

Washington, D. C. The committee met, pursuant to the recess, at 10 o'clock a. m., in the committee room, Capitol, Senator Gerald P. Nye presiding. Present: Senators Nye (chairman), Glenn, Walsh of Montana, and Bratton.

Present also: Hon. Ray Lyman Wilbur, Secretary, Department of the Interior; Hon. Edward C. Finney, Solicitor, Department of the Interior; Northcutt Ely, Executive Assistant to the Secretary of the Interior; U. E. Goerner, Esq., Assistant Law Examiner, General Land Office; Mr. Ralph S. Kelley.

The CHAIRMAN. The committee will be in order.

STATEMENT OF HON. EDWARD C. FINNEY, SOLICITOR, DEPARTMENT OF THE INTERIOR-Continued

Mr. FINNEY. I would like to ask the permission of the committee to make a statement which relates to my testimony on Tuesday. If I may read the statement, you can then decide whether you will allow me to put it in the record. [Reading:]

FEBRUARY 5, 1931.

To the Chairman and Members of the Senate Committee on Public Lands. GENTLEMEN: The New York World whose published charges form the basis of the investigations you are conducting, in a news article published Wednesday, contained the following headlines: "First Oil Charge of Kelley Upheld.

Valuable Shale Lands."

This statement is false.

Finney Admits Change of Policy on

There was no change of policy with respect to shale lands as a result of the general public hearing held by Secretary Work, December 1, 1926. I did not state or admit that there had been a change of policy. No ruling or decision was made at the hearing or as a result of the hearing. The subsequent decision in the Freeman-Summers case rendered September 30, 1927, was based upon the evidence submitted in that particular case at the original and supplemental hearings. It was not a change of policy, but was a decision based upon the evidence and the law as presented in that case. As I stated at the hearing of December 1, 1926, and as I stated to your committee on Tuesday, each case was to be considered and disposed of upon its own facts and evidence. The New York World also states that I admitted that the decision of 1927 virtually established an entirely new definition of oil discovery on the western shale lands. I made no such admission as the record will show. On the contrary I specifically stated the same rule had been and is applied to copper, coal, phosphates, etc. The article also refers to said hearing as an ex parte showing. I stated, as your records will show, that this was an open hearing on the general question of what constituted discovery. That it was not a contest between the parties or between the Government and parties, but was a hearing at which anyone might voluntarily appear and express his views and that the departmental officials in accordance with the usual custom in such

cases, simply listened, asked questions, and filed the record for such use as might be deemed proper.

There are other misstatements in the article. It is stated that Senator Phipps wrote a letter to Secretary Wilbur with respect to the rehearing in the Freeman case. Secretary Wilbur was not in office at that time. The letter was written to Secretary Work, and I so stated. The article also says that Finney said that Senator Kendrick, Republican, Wyoming, had argued for a more liberal administration of the oil-shale claims. I did not say Senator Kendrick was a Republican. The purpose of the World in characterizing him as a Republican, I think, is obvious. It appears that this paper is distorting my evidence for the purpose of prejudicing the case and making the public believe its purchased charges are being sustained.

I ask that this statement be made a part of the record. Senator WALSH of Montana. I see no objection to putting it in the record.

The CHAIRMAN. It will be made part of the record.

Mr. FINNEY. I have the affidavits that you requested me to bring up, filed in connection with the various motions.

(The affidavits referred to by Mr. Finney read as follows:)

DEPARTMENT OF THE INTERIOR,
Washington, February 4, 1931.

I hereby certify that the annexed copy of letter, filed under Denver 032575, formerly Glenwood Springs 018827, is a true and literal exemplification of the original on file in this office.

In witness whereof I have hereunto subscribed my name and caused the seal of this office to be affixed, at the city of Washington, on the day and year above written.

THOS. C. HAVELL,

Assistant Commissioner of the General Land Office.

WASHINGTON, D. C., February 25, 1925.

A-6957 and 6957(a)-J. D. Freeman and Standard Shales Products Co. v. George L. Summers, Glenwood Springs 018825

Honorable SECRETARY OF THE INTERIOR,

SIR: With our letter of January 26, 1925, we filed in the above-described consolidated case petitions for rehearing and for a new trial, at which a proper presentation might be made of the facts in the case.

We then requested that opportunity be afforded the mineral applicants for furnishing affidavits showing that if a new trial were ordered before the local land office, material evidence could be adduced in support of the validity of the placer claims involved.

We also called attention to the fact that these claims have been recently made the subject of field examination by a mineral examiner of the General Land Office, and requested that the results of his personal and disinterested field investigation be considered in connection with this case.

Owing to the fact that field operations are necessarily suspended in the vicinity involved, owing to climatic conditions, difficulty has been encountered in locating men whose affidavits were desired. However, we have received and present herefith the following affidavits, and are expecting to receive additional affidavits, to wit:

1. Affidavit of J. D. Freeman, explicitly showing disclosure of commercially valuable shale deposits upon land involved, and full performance of annual labor upon the placer claims.

2. Affidavit of E. H. Walker of similar import. It will be noted that this affiant participated as an employee of the Survey Division of the General Land Office, in making resurvey of this township.

3. Affidavit of Joe Worthington of similar import.

4. Affidavit of H. K. Savage as to presence of snow in the vicinity involved. If, prior to action by the department upon the pending petitions, additional affidavits are received, they will be promptly filed. However, we do not feel

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