rado for 37 years. I made my first shale locations 13 years ago. I have traveled across this country time and time again without any financial reward to this hour to secure the capital for the purpose of developing this industry. We people in western Colorado realize it because we are living in its atmosphere, but we are not any more interested than you here. It is a great potential resource of this country and it should be aided in every legitimate manner. (At this point Mr. McMullin presented to the secretary a large photograph showing a typical oil-shale formation. The photograph was filed with the other papers of the record.) I desire to file that photograph with my briefs, Mr. Secretary, and thank you for your attention. Mr. HAWLEY. Mr. William C. Russell, a mining engineer of Denver, will be the next speaker. Mr. RUSSELL. Mr. Secretary and friends: I will dispense with any preliminaries and at once proceed to read the statement which I have prepared on the subject of "discovery." I was uncertain at the time I wrote this statement or article whether I should be present to read it or not, and I have therefore addressed it in the form of a letter to the Secretary. WASHINGTON, D. C., December 1, 1926. Washington, D. C. To the Hon. SECRETARY OF THE INTERIOR, In re: Discovery on Oil Shale Placers. MY DEAR DR. WORK: In recognition of your call for a public hearing at Washington beginning this 1st day of December, 1926, on the question of what constitutes a discovery" within the meaning of the law, on an oil shale placer mining claim, I have the honor to submit for your consideration a few facts covering my observations gained over a period of 28 years as a mining engineer, including 9 years practical experience as such, in the oil shale fields of the West. It is indeed much to your credit, our Honorable Secretary, that you have opened wide the doors for a full and candid discussion of the whole question of discovery as affecting oil shale placers, for it has appeared that certain members of your department have been acting under a misunderstanding as to the nature of the oil shale deposits and as a result of such misunderstanding have undertaken to set up a schedule of limitations as to the quantity of oil that a given thickness of shale must produce as one of the prerequisites to a patent. It appears that they have been inclined to take the rules which were prepared by the Geological Survey for the guidance of its field force in the classification of the western oil shales and write them into the general mining law of the land. It seems hardly possible that the Survey had any notion, when it framed the schedule, of upsetting the very foundation of our mining law by injecting into it a new interpretation of the term "discovery." Lawmaking is quite outside the sphere of the Survey's authority, and it is unbelievable, therefore, that it should presume upon the prerogatives of Congress. The Survey's oil shale schedule may have served its purpose well as a guide for the field force in their work of land classification, but it should have no bearing or influence whatever upon the discovery question, and it certainly has no standing as a practical operating guide in determining what is commercial and what is noncommercial oil shale. However, the advocates of this schedule have succeeded in carrying it along far enough to cause more or less disturbance and to entail considerable unnecessary expense among certain shale land claimants, and it is, therefore, to be hoped that the results obtained through an open and candid discussion of the whole shale problem will set at rest for all time the fallacy of establishing limitations on shale land discovery. Only upon rare occasions hitherto in the entire history of the mining industry of the United States have limitations on discovery been seriously considered either by the Department of the Interior or by the courts. It seems safe, therefore, to predict that when all the facts with respect to the physical and economic conditions which surround the oil shales shall have been laid before you, that you will find no place for any schedule of values whatever, but that you will be entirely satisfied to permit the laws and precedents which have hitherto governed "discovery" on both lodes and placers, to prevail. Although oil shale lands have been properly classified as placers and are placers in the sense that they are of sedimentary origin, yet at the same time, as a practical proposition they come nearer being lodes than placers, if for no other reason than that they contain mineral substances, are completely indurated or solidified and must be mined in the same general manner that lodes are mined. Limestone deposits have likewise been classified as placers, and the general placer mining law has been subjected to so many interpretations during the last half century that to-day it bears but little semblance to the original law which was made to fit the alluvial gold deposits of California. However, the law governing "discovery" on both lodes and placers has remained practically unchallenged and unsullied from its very inception in 1866. We therefore maintain that the rule which has held good ever since the beginning of the mining industry in America to the effect that when a locator had found mineral in either rock in place or in gravel, he had made a "discovery," should still hold good. A prospector has always been considered as having made a discovery when he found mineral and when the evidence was of such a character that a person of ordinary prudence would be justified in the further expenditure of time and money, in the hope of ultimate reward. Some may argue that the oil shale business is really the oil business and should therefore come under oil regulations, while, as a matter of fact, the only relationship that the shale oil business bears to the well oil business is that in both cases oil is ultimately produced. The oil shale business is strictly a mining and manufacturing proposition and nothing else. It is well known, of course, that the oil shales of Colorado, Utah, and Wyoming, at least, are found in what is classified as the Green River series of the Tertiary Period. There is no free oil in these shales and it is conceded by some of our best engineers that they must be mined and treated in a large way, just, for instance, as we would mine and treat huge deposits of low grade copper ore, limestone, and gypsum or any other material that must be handled in a wholesale manner in order to be made profitable. Therefore, taking these opinions as being worthy and well founded, the several streaks or zones of rich shale which enter into the schedule of land classification of the Geological Survey, have no standing as a commercial proposition. It is entirely untenable to try to set up the claim that a 6-inch horizontal stratum capable of yielding 30 gallons of oil per ton, or of a 12-inch stratum capable of yielding 15 gallons per ton, or of any other one of the various streaks which enter into the Survey's classification, can be mined and treated singly at a profit. Enough of these streaks must be mined together and in one operation so that mining costs may be reduced to a minimum because the cost of mining will vary in accordance with the methods used and the volume produced, whereas the retorting costs per gallon of oil produced from either high or low grade shale will remain fairly constant. According to the accepted logs, the hydrocarbon elements in the shales are, by no means, evenly distributed inch by inch or foot by foot throughout the Green River deposit, but there is enough high grade material present at intervals through the deposit to bring the general average of the whole mass, at least from the surface down to the so-called "Mahogany Ledge," to a point where its treatment may be profitable. During the last 10 years, and since the Survey drew up its classification schedule, various individuals and corporations have employed skilled mining engineers and chemists to sample and analyze in vertical section, thick zones of the Green River formation, and these scientists have found that the shales will yield in one certain representative area, in northwestern Colorado, an average of 15 gallons per ton for a total vertical thickness of 525 feet from the surface, and in another place 14.7 gallons for 550 feet from the surface. A rich zone, 50 feet in thickness and included within the above two deep sections, will produce an average of 32 gallons per ton in one place and 36 gallons in another. Assuming that the 525-foot section, running an average of 15 gallons per ton, has been correctly sampled and analyzed, what place in the scheme of things has the Geological Survey's 1 foot that runs 15 gallons? It must be that the Survey had some idea as to the possible commercial value of the shales at the time they framed their schedule, and it would be enlightening indeed if the record were supplied with the reasons, commercial or otherwise, that lay back of the schedule. If Congress finally threatens to amend the mining law by establishing limitations on discovery, taking as a basis therefor the 15 or the 30 gallon rule of the survey, the mining engineers of the country would ask for nothing easier, in the light of the up-to-date information as to the potential gallonage contained in the shales from top to bottom, than to show up the utter im practicability of such a schedule as a basis for commercial operation. After all, then, what virtue is there in any schedule of limitations on anything, anywhere, unless it is practical? As to the geology of the Green River series, it is admittedly made up of stratified sedimentary rock, in place. The entire deposit is homogeneous in character to the extent that it was all laid down under substantially the same physical and climatic conditions and contains more or less hydrocarbon elements or kerogen practially throughout its entire depth. True enough and fair enough, the geologists and engineers who pioneered the shale deposits described the formation as being "composed of beds of oil-yielding shale interstratified with more or less sandstone and oolite." This was not bad for a starter, but it seems that the rather limited Government crews employed during the early stages of their investigation, sampled and analyzed principally the richer and more promising sections of the deposit. This was a perfectly natural thing for them to have done at the time and under the circumstances. Later on, came large companies with their adequately financed crews of technicians who sampled, analyzed, and charted cross-sections of the formation ranging in thickness from a few feet here and there to 2,200 continuous feet in vertical thickness. These results have indeed been highly educational and have added much to the store of information gained by the early prospectors, and it is some of this broader and more extended knowledge as to the extent and oil content of the shales, and of even the sandstone partings, that is being continually brought to light. It, therefore, seems safe to venture the opinion that, had the department known in 1913 what is now known concerning the shales, it would have either set up an entirely different book of rules for the guidance of the field men in their classification work or that the entire shale area would have been withdrawn from entry because of its prospective value as a reserve source of oil. As noted hitherto, it is doubtful if the survey, when it set up its classification schedule, had in mind the question of "discovery" at all. The presumption is that wherever the field force could make the schedule work, they did so, and wherever it would not work, they evidently classified the Green River deposit as being valuable for its oil content by geological inference. Wherefore, even if the 15-gallon rule should perchance ultimately be made to apply, should valid shale-land claimants not be allowed to follow the same course of geological inference in making their proof as the Government geologists did in making their classification? When we come down to the bare facts in the case, a discovery" has always been a discovery in just what the word implies, and it should always be thus when considered as the basis of a mineral location, regardless of any schedule of values, pedantic theories, or geological inferences. Just as in the beginning of any other mining boom, there were those who took the law of discovery as affecting o1l-shale placers just as they would have regarded the same in the case of any other placer and observed it faithfully. while there were others who undoubtedly regarded it lightly. Each class of locations should, therefore, be treated in accordance with its dues, and "let the chips fall where they may." No attempt is here being made to justify the acts of the bogus or fraudulent locator, but there is an earnest desire on the part of those interested in the general development of the oil shales to assist the legitimate locator who has made his discovery of oil in perfecting his title. realizing as we probably all realize that the patented lands will ultimately form the real basis of the oil-shale industry in America. That oil shale lands will, sooner or later, become valuable as a source of petroleum is a safe enough prediction, and while it is wholly commendable that the Government has set aside some of those lands for the use of the Navy, it is inconceivable, even in the face of the growing desire to conserve our natural resources, that any undue hardship should be worked upon the legitimate shale land claimant, or that any laws or regulations, "discovery" or otherwise, should be interpreted in a manner that will deprive the pioneer of his just and lawful mining rights-his vested property rights. if you please the rights which he believed he had at the time he initiated title. Summarizing, we have the following to offer: 1. The shales under discussion contain no free oil-only the hydrocarbon elements from which oil may be synthesized by distillation. 2. The shales are hard or tough, or both, in accordance with their richness or leanness, and they must be mined in the same general manner as coal, metallic ores, or cement rock are mined. 3. The shales lie horizontally, or nearly so, in most cases, and the potential oil values therein are more or less unevenly distributed in zones or streaks practically throughout the entire Green River deposit, which, its maximum depth in Colorado, is about 2,600 feet. at 4. There is no single streak or bed falling within the classification schedule of the Geological Survey which will probably ever be worked alone and by itself. 5. In order to attain the best results, the shales must be mined in a large way-by mass production methods. 6. Regardless of any question of homogeneity of the Green River deposit, of any argument as to richness here or leanness there, or any differentiation in color, texture, or specific gravity, the whole mass, inasmuch as practically all of it contains more or less kerogen, should be considered as one workable bed, just as the "porphyry coppers" are treated as one bed whether the mineral values therein run in one place only a trace, in another one-half per cent and in still another two per cent. On the whole, the general copper values which they carry make up a commercial average. Just so will oil shales, if mined as a whole, make up a product of commercial grade when the day of their utilization arrives. 7. Inasmuch as there is so close a relationship between the oil shales and the prophyry 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. 8. Finally, the question of discovery is one of a practical nature and while it involves the application of a rule of law, such application should not be made in a technical sense but in the manner in which the practical miner out in the hills would apply it. Therefore, every physical and economic fact connected with the entire problem should be carefully considered before any change in law and in precedent governing "discovery" is seriously undertaken, and it is to the end of arriving at the facts in the premises that I respectfully submit this contribution. Faithfully yours, Secretary FINNEY. May I ask a question or two? WM. C. RUSSELL, Denver, Colo. Secretary FINNEY. Do I understand that in your view these oil shale deposits are disseminated throughout the entire formation just as the porphyry copper is disseminated through the Utah copper mine deposits. Mr. RUSSELL. Not exactly in the same manner. Secretary FINNEY. In other words, is the oil shale or the oil-bearing content, distributed all the way through this 2,000 feet or does it lie in different beds? Mr. RUSSELL. It lies in different beds. Just as the porphyry copper lies in different beds excepting where there is brecciation. Secretary FINNEY. Is not there more or less mineralization all through a formation like that? Mr. RUSSELL. Yes indeed. You are correct. Secretary FINNEY. In other words do you follow your mineralization all the way down through? Mr. RUSSELL. You find your mineralization all the way. Secretary FINNEY. You find a barren streak 15, 20, or 30 Mr. RUSSELL. Your mineralization is with you all the time and you find it lean here and rich there. Secretary FINNEY. But all of the bed contains more or less of the oil? Mr. RUSSELL. Yes. Down as far as the "mahogany" ledge, for 500 or 600 feet, at least. Secretary FINNEY. What you call the mineralized area. Now, you spoke of the 15 gallons a ton. You do not understand the department has made any decision of that kind in an actual case for patent do you? Mr. RUSSELL. I understand that before we can get our patents we will be obliged to show 15 gallons. Secretary FINNEY. Is not that apprehension, rather than based on any actual decision? Mr. RUSSELL. I will refer that question to Mr. Hawley. Secretary FINNEY. Mr. Hawley, has the department rendered any decision to that effect? Mr. HAWLEY. Yes; it has. They have affirmed that discovery in the Freeman case, and in the case of the Empire Mining Co. in Wyoming they rejected the application for patent because they had not met the rule in the FreemanSummers case. Secretary FINNEY. The Freeman case was not closed yet. Mr. HAWLEY. But the rule was applied in the Empire case as a precedent. So we have reason to think that has been established as a basis of discovery. Secretary FINNEY. I do not think there has been any practical rule established. We may have discussed that rule of classification in some decision. This calls also for a further showing. There has been no final decision yet. Mr. HAWLEY. We are very glad to hear that. Mr. RUSSELL. It is a fact that we have obtained but two patents in Colorado in over two years? Secretary FINNEY. That is not due to the rejection. There has been no claim finally rejected by the Secretary of the Interior that I know of. We have had two cases come here, the Empire case and the Freeman case, and after final decisions were made further rehearings have been ordered, so that the department has not laid down a general rule by a decision such as you are discussing. Mr. RUSSELL. That is the mark that we are shooting at. inference. That is the Secretary FINNEY. You also suggested a change in the law. Do you know of any recommendation that we have made as to changing the law as to what constitutes discovery? I do not know of any. Mr. RUSSELL. Well, if the 15 or 30-gallon rule is made to apply I think that law itself will first have to be changed, because I know of no Secretary FINNEY. You mean if the department would put a restriction or that sort of limitation on what constitutes discovery we would construe the law that way. I understood you to say that there was some proposition to amend the placer-mining law. Mr. RUSSELL. I suggested— Secretary FINNEY. In other words. I think it is the department's duty and probable intention to administer these claims and decide them under the existing placer law as continued in effect by the general leasing act. That general leasing act continued the old mining law in effect as to any claims valid at the time of the passage of the general leasing law and that are properly maintained. Mr. RUSSELL. Yes. Secretary FINNEY. So we will go back, then, to look whether compliance was had with the old mining law, whether it be a placer claim or a lode claim, whether it be coal or potash or phosophate and all that? Mr. RUSSELL. Yes. Secretary FINNFY. So I do not know of any proposition to get a new law on the subject. Mr. RUSSELL. I merely made that reference there. I could not see how the 15-gallon rule could be put through or applied unless there was a new law, unless the old law was amended. I am not a lawyer, however. Secretary WORK. Neither am I, so I can talk to you. [Laughter.] Isn't it that you are concerned about the regulations that the department promulgated under existing law? Isn't that what you fear? Mr. RUSSELL. That is it. I perhaps may have gone a little bit beyond my scope and sphere. Secretary WORK. No: you did not. That is what I got from your talk. Secretary WORK. Neither of us being lawyers we can understand each other and that is exactly what I got; that you are anxious about the regulation that |