adopted by the department-any claimant in this entire vast field would not need to make a discovery on each particular claim. Is that correct? Is that the importance of the thing?

Senator WALSH of Montana. Except as Secretary Finney said, if it was covered by soil or overburdened, he would have to clean it off.

Mr. FINNEY. That is all, because if decision was reached it is one body and rich enough to be valuable, it is not necessary to do anything further in the entire field except to discover it on the surface, and then his case is made.

Senator WALSH of Montana. In the Kelley letters he contends that is the effect of the decision.

Mr. FINNEY. To incorporate what I said in my statement, I called attention to the departmental decision of July 9, 1930, Alturus Shale case, in which the department said there is nothing in the decision, in Freeman v. Summers (52 L. D. 201), which justifies the deduction that on locations made for oil shale in the Green River formation the locators are relieved from the well-settled requirement of the mining law, that actual discovery of mineral must be made within the boundaries of the claim.

Senator GLENN. What is the date of that?
Mr. FINNEY. July, 1930.

Senator WALSH of Montana. If these gentlemen are correct geologically, if a fellow does make a discovery within the boundaries of his claim, because it is all one solid mass of ore, they will say, "We have done that. We have exposed on our claim the portion of this

mass.

Mr. FINNEY. That contention was denied in that decision I just cited. However, I do not want to be misunderstood. I do not think the extent of a mineral deposit is any reason why a man can not make a valid discovery, or why 20 or 40 men can not; in other words, if it is a placer deposit and extends over several miles of country, and 100 miners can make location on it, that is not forbidden by the mining laws.

Senator WALSH of Montana. I understand that. Let me inquire

Mr. FINNEY. Could I make one more statement: You asked if George Otis Smith said anything at the hearings. He did not, but on September 24, 1926, he submitted a memorandum, in which he refers to this hearing. It is quite a long one.

Senator WALSH of Montana. I was about to ask you whether the Secretary had before him any statement by any geologist controverting the position thus taken by the lawyers and geologists who appeared at this hearing.

Mr. FINNEY. This memorandum principally discusses the rule. He says they were designed solely as a guide for classification, and no possible thought of their part to use as a criterion for determining the sufficiency of discovery under the placer mining laws.

Senator WALSH of Montana. His rules he insisted were only for the government of his own office.

Mr. FINNEY. For classifying the lands, if they were called upon. to classify an area as shale bearing or nonshale bearing, they would intend to apply that rule. Then he speaks in here about the proper

method of mining, and so forth. I do not know that you care for that.

It was suggested at the hearing by one engineer this would be mined by caving, blow off part of the mountain and cave it down below, which would result in the handling of the entire mass of the mountain. There was some discussion of that.

Senator WALSH of Montana. Then, the question I asked you a moment ago was there anything before the secretary either at the hearing or otherwise in contravention of the position taken here, that this was on one solid body of ore. What have you to say about that?

Mr. FINNEY. I did not take the view when I wrote the decision in the Freeman-Summers case that it was a solid body.

Senator WALSH of Montana. I understand that, but this argument was all addressed to Secretary Work.

Mr. FINNEY. Yes.

Senator WALSH of Montana. Was anything brought to the attention of Secretary Work in any way in contravention of the geological situation as represented by these lawyers and attorneys?

Mr. FINNEY. Not that I recall.

Senator WALSH of Montana. At page 36 I read as follows:

Inasmuch as there is so close a relationship between the oil shales and the porphyry coppers in so far as the unequal distribution of values and the consequent necessity for wholesale production in both cases is concerned, there seems to be no need for differentiation between their bases of discovery. Copper ore is basically metallic, of igneous origin, and is subject to location under the lode law, while oil shales are of aqueous origin, possess nonmetallic mineral, and are subject to location under the placer act. Certain porphyry coppers have been known to run only a trace at the surface, but they did run that trace and they were taken to patent on that basis. Some of the oil shales at the highest elevation in the Green River series produce only a small quantity of oil, but they do produce oil, and we therefore maintain that the production of oil, be the quantity thereof great or small, is a discovery" within the meaning of the law.

That is a statement by Mr. Russell.

Senator GLENN. Who is he?

Senator WALSH of Montana. Denver, Colo.

Senator GLENN. Did he identify himself?

Senator WALSH of Montana. On page 31 Mr. Hawley identifies him as a mining engineer of Denver.

Mr. Russell, I think, continuing at page 44. Am I correct that is Mr. Russell?

Mr. FINNEY. No; that is Mr. Goodale. If you turn back to page 40 you will see where Mr. Larwill introduced the statement prepared by Mr. Goodale.

Senator WALSH of Montana (reading):

Mr. Larwill here quoted at length from Mr. Goodale's statement. Mr. Goodale is a mining engineer in the employ of the Columbia Oil Shale & Refining Co., one of the parties interested, for whom I speak.

Mr. Goodale, among other things, says:

A zone situated near the middle part of this formation, and known as the Mahogany Zone," contains the richest of the oil shales, and a composite sample across 10 feet of this zone will yield in excess of 50 gallons of oil per ton of shale. By varying the width of the composite sample, various yields can be had; as for example, a sample across 50 feet of the "Mahogany Zone" will

yield about 35 gallons of oil per ton of shale. By extending the composite upwardly, and downwardly to the limits of the oil shale series in the Green River formation, we can get a composite zone about 2.600 feet thick, which would constitute one immense mineral deposit, made up of many zones of varying oil yield, and a sample taken from any portion of this deposit and yielding oil in any amount, would constitute a discovery.

Do you remember how deep that Mahogany Zone is? My recollection is it is about 600 feet.

Mr. FINNEY. It is 600 or 700. Of course that varies, as you realize. It is greater or less.

Senator GLENN. Where is that located as respects the particular claims in controversy?

Mr. FINNEY. It runs right under them, according to geologists. Senator WALSH of Montana. It is exposed, not necessarily on these claims. There is no evidence it is on these claims, but at a distance where the streams cut the formation, it is exposed in the bluff, and then it is exposed further on in another cut, and they assume it goes clear through, the geologists do.

Mr. Larwill, having finished Mr. Goodale's statement, himself says, among other things:

Before I have finished. I want to read from one of the depositions which have been taken, to show just what a practical discovery is. There is nothing mysterious about a discovery. It is not a laboratory experiment; it is an exposing to view, the simple showing, opening up of the deposit. That is all a discovery is. But the difficulty arises from these so-called top claims; that is to say, the claims that lie between the gorges and canyons; and many of these applications for patent which are pending, to which I have referred, concern these so-called top or ridge pole claims. Now on these claims, on each and every claim, the mineral has been discovered in some quantity, but the richer shales which are exposed, the richer zones or horizons which are exposed in the canyons and gorges, are not exposed, as you can see, on these top claims, and it must be therefore a discovery under the old law of some of the mineral on the claim sufficient absolutely for a discovery because of the fact, as it is shown by such remarkable unity among these technologists who have prepared these papers, that it constitutes but one single blanket deposit and a discovery anywhere within that deposit is a discovery of the entire deposit.

Now briefly, I wish to quote from the cases which have been referred to more particularly in our brief, the simple statement of what is required in a discovery, and I am amazed that we have sat here all day and have had not mention of the case of Castle v. Womble decided by this department.

Secretary FINNEY. You are getting back to first principles.

Mr. LARWILL. And that is just what this is, Judge Finney, simply a matter of first principles-a blanket deposit, a discovery of mineral and the locating and going to patent under the laws as they have always existed. Back to first principles, yes, sir.

Now the case of Castle v. Womble has been authority as you know and has been quoted by the courts right down through the years. "Where minerals have been found." As I have stated, this precise mineral has been found on all of these claims to which I refer, top claims. In claims with cliff face the same thing, the mineral, the kerogen, the mineral that produces the oil when retorted. has been found on all of these claims. "Where mineral has 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 time and money with a reasonable prospect of success there has been a discovery."

Secretary FINNEY. And now right there the case of Womble involved a lode mining claim. There is a discovery of a vein. Now the theory is that a man discovers some mineral, it may be a small amount, and has reason to believe that that vein is impregnated with mineral and may probably grow richer as he goes down. That is sufficient discovery. There is continuity. He follows the vein on down into the rock.

46780-31-5

Mr. LARWILL. That is true, the language used in Castle v. Womble was used in connection with a lode mining claim.

Secretary FINNEY. That is right.

Mr. LARWILL. But it has been repeatedly quoted by the courts and followed by the courts whether the matter to be considered by the court was a placer claim or a lode claim.

Secretary FINNEY. But the principle could only apply where you had continuity in your mineral bearing formation or deposit or whatever it is.

Mr. LARWILL. And that is precisely, if you please, what has been shown by all of these papers and all of this discussion here to-day. There is not a barren zone, there is not a barren inch of that great Green River deposit in these shale areas of Wyoming and Colorado and Utah, not one barren inch. It all contains some of the kerogen-much in some of the zones, less in others, but never a barren streak in the whole deposit. I might stop and say here that when the department classified these deposits it could have classified them either as lodes or it could have classified them as placers. This character of deposit is right on the dividing line and some of this character of deposits have been classified as lodes and some as placers, but the discovery of mineral is the same.

You see Mr. Larwill here is serving in the capacity of a geological expert, and so I thought it was important to show that the contrary view is not presented.

Then at page 51:

However certain or justifiable the inference geologically that the lean beds of oil shale outcropping on the land indicate richer and valuable beds at depth, it is apparent that they have no physical connection with such deeper beds of rich deposits nor are they continuations of them, but are separate and distinct therefrom.

That is the statement of one of the department decisions, I think. The CHAIRMAN. We will recess until 10 o'clock Thursday morning.

(The hearings of December 1, 1926, before the Secretary of the Interior, are as follows:)

HEARINGS, DECEMBER 1, 1926, BEFORE THE SECRETARY OF THE INTERIOR ON THE QUESTION OF WHAT CONSTITUTES A SUFFICIENT DISCOVERY TO SUPPORT THE CLAIM OF AN OIL SHALE LOCATOR UNDER THE GENERAL MINING LAWS

DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,

Present: Hon. Herbert Work, Secretary of the Interior; Hon. E. C. Finney, First Assistant Secretary of the Interior; Hon. William Spry, Commissioner of the General Land Office; Dr. George Otis Smith, Director, U. S. Geological Survey; Dr. Edward Mead, Commissioner of Reclamation; Mr. Robert D. Hawley, Denver, Colo.; Hon. William L. Boatright, attorney general of Colorado; Mr. E. D. Winchester, consulting geologist, Denver, Colo.; Mr. Fred Carroll, Denver, Colo.; Mr. Charles A. Mitke, consulting mining engineer, Phoenix, Ariz.; Mr. Samuel J. McMullin, Grand Junction, Colo.; Mr. William G. Russell, Denver, Colo.; Mr. L. H. Larwill, Denver, Colo.; Mr. Harold D. Roberts, Denver, Colo.; Hon. John B. Kendrick, United States Senate; Hon. Edward T. Taylor, House of Representatives; Hon. Charles E. Winter, House of Representatives; Mr. George K. Thomas, First National Bank Building, Denver, Colo.; Mr. C. W. Church, Index Shale Oil Company, De Beque, Colo.; Mr. George E. Brimmer, The Prairie Oil & Gas Co., Cheyenne, Wyo.; Mr. Charles F. Consaul, Mills Building, Washington, D. C.; Mr. Daniel J. Danker, Brookline, Mass.; Mr. Lewis Z. Harrison, 160 Broadway, New York City; Mr. A. C. Harvey, The Pure Oil Co.; Mr. Samuel Leon Levy; Mr. J. D. Northrop, Geological Survey; Mr. L. G. Owen, Mr. Edward F. Johnson, and Mr. Peter Q. Nyce, representing L. P. Lyons; Mr. David A. Shepherd, secretary, The Columbia Oil Shale and Refining Co.; Mr. C. D. Sinclair, Ameri

can Shale Reducing Co., 115 Broadway, New York City; Mr. H. I. Smith, Geological Survey; Dr. Joseph P. Umpleby, geologist; Mr. F. D. Weaver, Camden, N. J.

DECEMBER 1, 1926-10 a. m.

Secretary WORK. It is unnecessary, of course, for me to state the purpose of this hearing. It has definite and exclusive reference to oil shale-particularly to the laws and the regulations that have been established under them by the General Land Office-and with reference to the General Land Office's responsibility in administering oil-shale lands. This is a "hearing" as far as the Department of the Interior is concerned. We have to make the regulations under the laws, and we have to administer this rather new mining industry. Some features of it are different from the mining processes that apply to oil, gas, or the precious minerals. So that you representative men from the field who are interested in the practical mining side of it we hope will tell us what you think about the existing laws and about our regulations, and make any suggestions that you think are pertinent that may be helpful in the administration of the law with relation to oil shale.

We have no advice to give. Our people working in the department are controlled by the law and the regulations we make to operate the law. They are referred to as "bureaucrats." That does not appeal to me as a term of opprobrium, because bureaus are necessary in the administration of the Government. But that is aside of the question. However, these "bureaucrats "-if you wish to call them that ought to have the benefit of the experience of practical men from the field. They can not get it themselves; so that is the purpose of this hearing.

If you have any complaints to make about the operation of the department, or about its agents in the field, I want them made to-day, and I want the names of the people given, if any, who appear to be lax in the discharge of duty, or perhaps killing time, as has been hinted to me, and of men who are not, as some claimed, active enough. Now if any of you know of such men do not hesitate to name them to us. We will take care of that here. We do not believe such complaints well founded, but let us know who is failing in his duty in the field.

Gentlemen, the meeting is open, and we want to make it just as informal as we can consistent with expediting the hearing, but we do not want to have the time of these men taken up with the unnecessary and irrelevant, but we will be patient and hope you will feel free to say what is on your mind. This department belongs to the people. The door is open every day from eight in the morning until five o'clock-so the public can look in and see its business done, and we court criticism so long as it is constructive.

Now we will hear anyone who wants to speak.

Mr. ROBERT D. HAWLEY (representing J. D. Freeman, the Pure Oil Co., the Federal Shale Oil Co., and some other oil-shale interests). I want to express, if I may, at the beginning, the gratitude of the oil-shale men generally over the opportunity which you have afforded to us to come here and discuss with you frankly and informally some of the problems with which we find ourselves confronted in our consideration of this new mineral deposit. We have not come here, Mr. Secretary, in a spirit of criticism at all; we have come here merely to discuss in the best way that we know how this potential source of oil which lies in the three States of Utah, Wyoming, and Colorado.

The question of the discovery, or a discovery, sufficient to uphold or validate an oil-shale placer location has been of particular interest to the oil-shale men during the past few months because of a rule of standard of discovery which was laid down by this department in the case of Freeman v. Summers and which we think has been applied to some other cases since. The rule has thus gained some of the dignity of a precedent.

This rule in effect adopts as a basis of discovery, the table of classification promulgated by the Geological Survey some years ago for the guidance of its men in the field in classifying the oil shale lands of the West. It provides in effect that in order to constitute a discovery there must have been physically exposed upon each claim, prior to the passage of the leasing act of February 25, 1920, or work must have been continued and exposure made after that, or a bed or a stratum of shale, as it has been said, at least 1 foot thick which would produce at least 15 gallons of oil to a ton of shale, or 1,500 barrels to the acre; or if the shale exposed happened to lie near enough to the surface to permit of its being worked by the open-cut method that it be at least 6 inches thick