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by them on Triumphs Nos. 22 and 23, J. D. No. 1 and F. D. No. 7 claims, and another computation of like character extending from said base 620 feet vertically to the estimated position of the exposures sampled on the remaining claims, and conclusions were drawn that the former would yield an average of 14.7 and the latter 13.6 gallons. Estimates of the yield in barrels per acre were for the first group mentioned 404,250, and for the second group mentioned 421,600.

It was brought out on cross-examination that neither witness had made a detailed examination of the stratigraphic section upon the claims in question; that the estimates were based on partial tests of a corresponding stratigraphic column along a new trail in Sec. 16, T. 6 S., R 95 W., shown as table "HH" in Bulletin No. 729, supra, and admitted to be mostly and partly covered and not examined in detail to a vertical interval of 360 feet of such column. In this computation were also included general estimates made by pocket tests throughout the adjacent field of various sections of the upper member of the formation. As to the untested part an arbitrary yield of 5 gallons per acre was included in the computations. Conclusions thus drawn, assuming some facts, and ignoring the fact which appears by preponderance of evidence, that there are barren sandstones and practically barren shales upon the land, are of little or no weight.

Furthermore, while facts showing costs and systems of mining of like deposits under similar conditions are relevant in the appraisement of values, the department is not called upon to venture conjectures whether the shales exposed upon these claims, described to be hard and tough, impregnated in varying degree with an inflammable oil, and lying horizontally 31⁄2 miles distant at the nearest boundary and 5 miles at the farthest boundary from the richer shales in sight, will be mined by the methods heretofore or now envisaged by contestants' witnesses. It suffices to say that the scheme so far as it appears is untried as to oil shale, is but a theory that has not reached the stage of experiment, is entirely speculative and affords no foundation for attributing value to any shale exposed upon the lands in question that may yield oil.

The ultimate conclusions of the department are that the shale beds whose oil content was tested and shown by contestant subsequent to the date of the approval of the leasing act have not been connected with discoveries made prior thereto by evidence of sufficient weight and credibility to command respect; that the evidence does not show what actual exposures of oil shale the discoverer or locators found and relied upon as a discovery upon any of the claims; that the finding merely of oil shale upon the lands in question is insufficient to induce or warrant the belief, under the existing state of knowledge on the subject, that the same are valuable deposits, and a fortiori was insufficient at the time these locations were made. It follows that the former decisions must be and are hereby adhered to.

Senator WALSH of Montana. Mr. Finney, I wish you would, before our next session, take this opinion and indicate those portions to which you dissented and to which you now dissent.

Mr. FINNEY. Well, I certainly dissent from the conclusion. I will be very glad to try to comply with your request.

The CHAIRMAN. When do you suggest we continue with this

matter.

Senator WALSH of Montana. I would suggest that we stop here and let it go over until Tuesday.

The CHAIRMAN. Very well, the hearing will be continued on Tuesday morning, February 10, at 10 o'clock.

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

OIL SHALE LANDS

TUESDAY, FEBRUARY 10, 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 of the Committee on Interstate Commerce, Capitol, Senator Thomas J. Walsh, of Montana, presiding.

Present: Senators Walsh of Montana and Glenn.

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.

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

Senator WALSH of Montana. Mr. Finney, we stopped when you were asked to point out the particulars in the opinion prepared by Mr. Duncan with which you disagreed.

Mr. FINNEY. I have made an effort to do so, Senator, but of course you will understand in the time I have had I have not been able to analyze all of the evidence in this case, covering 1,600 pages, Senator, so I took the Duncan decision and tried to point out I have written a memo-I have tried to point out with reference to the page numbers, certain things that I don't agree with, and then I have also explained why I wrote the substitute decision.

Senator WALSH of Montana. Will you read it, please?

Mr. FINNEY. Yes, sir. There is the proposed decision, if you would like to have it before you.

Senator WALSH of Montana. Thank you.

Mr. FINNEY. (reading):

UNITED STATES DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SOLICITOR, Washington, February 9, 1931.

Memorandum in re: Proposed decision prepared by Mr. Duncan in FreemanSummers case, February 27, 1927.

On page 5, reciting the measure and character of the proof to be submitted at the supplemental hearing, Mr. Duncan quotes from the decision of July 29, 1925, ordering the new hearing, but omits to quote or mention telegram of instructions to the register and receiver, January 28, 1926, authorizing them to receive and consider testimony with respect to the geological formation, exposures of shale on nearby lands, etc. This is material, because for years the department and the courts have held that in determining the character of land, investigations and evidence are not to be restricted to the specific tracts involved, but may go to discoveries on adjacent land and to their geological formations (30 L. D. 583); (34 L. D. 104); Diamond Coal and Coke Co. vs. United States (233 U. S. 236); Charlton vs. Kelly (156 Fed. 433).

Pages 18 and 19. I do not agree with the statement that the testimony of Dow was without probative force because he was unable to recall years after location the exact points on the claims where he saw shale. It is clear from the testimony of the Land Office Special Agent Kintz, corroborated by Crandall, that natural exposures were visible on the Triumph Nos. 22 and 23, and on the J. D. Nos. 1 and 2. On the F. D. No. 7, Kintz found oil shale in an open cut which had been made by mineral claimants at a time not stated. On the J. D. Nos. 3 and 5, Kintz found oil shale in an artificial exposure described to him by Freeman and designated by Dow and Hubbard as a discovery. Where natural exposures of shale were visible and were found by the Government agent, it is but fair to reach the conclusion that Hubbard et al., when upon the claims locating and performing acts in connection therewith, found and observed these exposures. Hubbard states in his testimony that he made discoveries on all the claims separately; that he knew oil shale and that we took samples of it and brought a lot back with us and burned several samples in the camp to test them out." It is a fact that prospectors not equipped with scientific apparatus for testing shales do make tests by burning samples and I have personally subjected oil shale fragments to this sort of a test.

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Dow's testimony is not definite because as he stated "Five years afterwards I can't carry a picture in my mind of the certain location of those things in so many claims I was over." It is not unnatural that years after the date of location he was not able to testify as to the exact position of exposures that he saw on the original visits to the ground. As to the location of discovery holes or workings, the statement of witness Hubbard that it was hard to definitely state the exact position thereof because none of the discovery holes were tied in i. e., connected by a surveyed line to a corner or natural object, is not to my mind an unreasonable explanation, and is not sufficient ground for disbelieving his testimony.

On page 26, Mr. Duncan refers to the introduction of documents including minutes of the meetings of the county commissioners, April 1 to 4 and April 5, 6, 8, and 9, 1918, showing Hubbard to have acted as clerk on those occasions and Hubbard admitted on cross-examination that if his name were signed to the documents, he must have been in Glenwood Springs on those dates. He explained that the trip from Glenwood to the claims took 6 or 7 hours and that the 11 days he worked were not continuous and he was going back and forth. At one point in his testimony he states that his work upon the claim was between April 2 and May 16. It is entirely possible, therefore, that Hubbard was working on the land for 11 days even if, as shown by the records of the county commissioners, he was present in Glenwood Springs during the 8 days covered by their records.

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Mr. Duncan states on page 28 that at the time these parties were on the claim snow was deep on the ground." In their testimony "there was snow on the north side of the ridges where the sun did not shine", but they did not remember placing any corners in the snow. It is not shown that other parts of the claims were covered with snow at that time and I found nothing in the testimony to justify Mr. Duncan's statement that the claims were covered with deep snow. Be that as it may, Mr. Duncan, on page 30, proposed to hold that assuming that oil shale outcropped on certain of the claims and that Hubbard and Dow at the time of discovery saw the shale, that Hubbard sampled it and found some of the samples would burn and recognized them to be oil shale, the question is presented as to whether this in and of itself, constitutes a discovery. He then proceeds, pages 30 to 32, to discuss the mineral claimant's contention that the area in question is one homogeneous deposit of like mineral easily identifiable by fossil minerals and that a discovery of any oil shale on the land a part of the mass that lies below it is a sufficient discovery to satisfy the law.

Mr. Duncan, on page 32, states that the questions raised go beyond the scope of the inquiry that the department defined and constitute an attempt not to meet, but to avoid the measure of proof.

The telegram to the register permitted such evidence to be introduced and the cases cited heretofore in this statement and many other decisions specifically authorize taking into consideration discoveries on and the geological formation of the lands and surrounding areas. This is not only departmental practice, but is common practice of people engaged in mineral development and mining, and even uneducated prospectors soon learn to study the formations and exposures and to draw conclusions therefrom. Therefore, I do not agree with Mr. Duncan's statement that the questions raised went beyond

the scope of the inquiry that the department authorized, or constituted an attempt to avoid the measure of proof.

Page 34. Mr. Duncan states that it was open to the contestants at previous hearings, meaning the original and supplemental hearing, to satisfy the department by competent evidence that oil shale of lesser richness and thickness than that specified in the Geological Survey rule of classification, is in fact a valuable deposit and that such proof was not made. I do not agree with this statement as made. The Geological Survey classification rule has no applicability to the determination of the question as to whether a valid discovery of mineral has been made on a mining location. That is a question of fact in each case to be determined by the department on the facts and evidence presented in that case. Here, if we accept the testimony of the mineral contestants and their witnesses and of Government Agent Kintz, shale had been discovered on the surface in what are known as the upper beds. Whether the mass below is a solid mass bearing oil in greater or less quantities throughout or whether the oil-bearing shales are in beds separated by intervening sandstone or sand beds not carrying oil, it is a fact conclusively established by the Geological Survey's investigations and reports and corroborated by every geologist who ever visited the territory and submitted his views to the department and in fact admitted by Mr. Kelley himself, that the Green River formation in western Colorado between certain streams described in the proceeding does contain rich deposits of oil-bearing shale. Discovery is a prerequisite to a mineral location, section 2320 R. S. What constitutes a sufficient discovery? Where minerals have been found and the evidence is of such a character that a person of ordinary prudence would be justified in the further expenditure of his labor and means with a reasonable prospect of success in developing a valuable mine, the requirements of the statute have been met. Castle v. Womble (19 L. D. 455), decided in 1894, and since consistently approved and followed by this department and by the courts.

In United States v. Bunker Hill and Sullivan (48 L. D. 598), the department said:

"In connection with the matter of discovery it must not be understood that an actual disclosure of commercial ore is essential to a sufficient and adequate discovery. The principle laid down in the case of Castle v. Womble, 19 L. D. 455, which has been many times cited, is authoritative."

In Book v. Justice (58 Fed. 106), involving a lode case, the court said with respect to placer claims:

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So, in respect to placer claims, if a competent locator actually finds upon unappropriated public land petroleum or other mineral in or upon the ground, and so situated as to constitute a part of it, it is a sufficient discovery, within the meaning of the statute, to justify a location under the law, * Lindley on Mines, third edition, page 347, quotes the above statement and says:

*

This is in consonance with the rule announced by the courts in the case of lodes, that neither the size nor richness of the vein is material, so long as there is a genuine discovery. A discovery of such indications as would in a given district lead a miner to the more valuable deposit, according to the experience in that district, would sanction a mining location."

In Lange v. Robinson (148 Fed. 801), involving a placer claim in Alaska, the court said:

"There was an actual discovery of gold upon each of the claims located. They are situated near other lands presenting the same surface indications which at the date of the locations of these claims were known to be valuable for the placer gold which they contained; and the facts, according to the uncontradicted testimony of the plaintiff and of the witness Field, above quoted, were sufficient to justify the expenditure of money for the purpose of their exploration, with the reasonable expectation that, when developed, they would be found valuable as placer mining claims. This was in our opinion all that was necessary."

In Charlton v. Kelly (156 Fed. 433), the court referring to the decision in the Robinson case, said:

"And we held that, to constitute a discovery sufficient to support the location of a gold placer claim as against another mineral claimant, it is not necessary that gold must be found in paying quantities, but that there must have been such a discovery of gold as to give reasonable evidence that the ground is valu

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able for placer mining, taking into consideration its character, location and surroundings

Applying this rule to the situation here involved in the light of conditions existing at date of location and up to February 25, 1920, we find from the evidence and from the undisputed statements in the official report of the Geological Survey No. 729, that beds of shale containing large quantities of oil were exposed and known to exist in the sides of cliffs or banks of ravines and streams to the north, south, east and west of this land.

In every direction and at every point where the force of nature had cut through the strata, these beds were exposed. It is inevitable and to my mind beyond any reasonable doubt that the same beds underlie the Freeman placer claims. Would any practical miner exercising ordinary common sense, seeing the shale on the surface, knowing the geological conditions and exposures (and to get into the land he must have passed some of them), reach any other conclusion than that a person of ordinary prudence with a further expenditure of his labor and means, could and would by sinking a shaft or other working on the surface of these locations, develop a valuable oil shale mine. To my mind there is no doubt whatever that this is the fact.

On page 36, Mr. Duncan refers to the requirement that the claimants must meet the geological rules of classification as quoted in the order for rehearing signed by me. As stated to your committee, I think this was error, and that rule was not applied in the subsequent decision because it was not warranted by the law or by any departmental rule or decision applicable to contest cases. Considerable discussion is included in Mr. Duncan's paper, pages 36 to 46 in discussion as to whether this particular area of the Green River formation is a solid mass of mineralized shale or whether it is separated by intervening barren beds of other rock.

It was urged by contestants at the hearing and it was urged by various lawyers and geologists at the general open hearing held by Secretary Work on the question of discovery December 1, 1926, that such was the fact. To my mind this is not material and it did not control me or occasion the conclusion reached in the decision which I prepared as a substitute for the Duncan paper and which was signed by Secretary Work, September 30, 1927 (52 L. D. 201–207). In that decision on page 203, I state:

"The contestants advance the proposition that the Green River formation at least an area thereof * and within which boundaries these claims are included, is one massive homogeneous deposit of like mineral.

**

I find nothing in the decision which indicates to my mind that I accepted this proposition as a fact. I did not do so. It was not necessary in my view to support the conclusion reached in the decision. On pages 203-205 certain departmental decisions are discussed or distinguished and it is then stated:

"In this case it appears from the evidence submitted at the original hearing and rehearing that actual discoveries of mineral were made either on the surface or in shallow workings."

The decision then quotes from Geological Survey Bulletin No. 729, continues with a discussion of oil shale deposits, cites 34 L. D. 123, to the effect that a valid discovery does not require that the mineral in its present situation can be immediately disposed of at a profit and then states:

"The evidence in this case shows that in this particular area of Colorado the lands contain the Green River formation and that this formation carries oil shales in large and valuable quantities; that while the beds vary in richness of their content, the formation is one upon which the miner may rely as carrying oil shale, which while yielding at places comparatively small quantities of oil, in other places yielding larger and richer quantities of this valuable mineral. In other words, having made his initial discovery at or near the surface, he may with assurance follow the formation through the lean to the richer beds."

It will be noticed that the decision speaks of the shale as being found in beds and speaks of the Green River formation and in the last sentence states that the miner may follow the formation through the leanant to the richer beds. The use of the word beds in the decision recognizes that they are separated by bands of other material.

The "Green River formation" is a term used to describe the entire mass of the earth's surface in this particular area, whether interspersed with barben or lean areas. It unquestionably carries valuable shale beds. They undoubtedly pass into and under the land in question. When the decision states that the miner could, with confidence, follow the formation, it means he could

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