How these cases will be decided will depend on the specific facts of each case, and those facts will be developed only as the cases are considered in the proper tribunal. I would like to add, however, with respect to those cases which are now pending, that some of the testimony deserves comment, insofar as I can make comment without governing how they are going to be decided before they come up here or what course the hearings are going to take before they reach I think that some of the principles of law that have been announced here deserve discussion by me and they are involved in those me. cases. The Department has lately been accused of having recently invented the marketability test in opposition to the prudent man rule. The so-called prudent man rule was first enunciated in a Department of the Interior decision in Castle v. Womble, in 1884. The issue being considered was discovery, and the Secretary of the Interior said: *** it is my opinion that where minerals have been found and the evidence is of such 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. The principle announced in Castle v. Womble was accepted by the Supreme Court as a correct expression of the law first in Chrisman v. Miller (197 U.S. 313 (1905)) and in many other cases thereafter. From the earliest days of the interpretation of the mining laws the prudent man was assumed to have been motivated by a desire for economic gain. Thus, in 1914 the Department said that "the evident intent and purpose of the mining laws" was to provide an "inducement or incentive for the mineral claimant to remove the minerals from the ground and place the same in the market.' The response to this proposition in recent years has been to suggest that a new element has been introduced, that the law has been changed, and that some other rule has guided the Department in the past. I pointed out in an opinion dated September 20, 1962 (69 Î.D. 145) that the so-called marketability test is only an aspect of the prudent man rule. Castle v. Womble, 19 L.D. 455 (1894); Layman v. Ellis, 52 L.D. 714 (1929); and Chrisman v. Miller, 197 U.S. 313 (1905) are all consistent with each other and with our present holdings. If a mineral is not economically valuable, if it has no market, would a reasonably prudent man spend his time and means to remove it from the ground and place it in the market? However, our discussion of the marketability aspect of the prudent man rule has no direct connection with the common varieties provision. The fact that a reasonably prudent man might expend time, labor, and money in the development of a deposit of a certain mineral does not make that mineral an uncommon variety. It has no bearing whatsoever on that point. Whether a mineral is excluded from the mining law by section 3 depends entirely on the intrinsic qualities of that mineral. The most readily marketable common variety of sand is not locatable. A more detailed statement on the subject of marketability is contained in a letter I addressed to Mr. J. Allen Overton, Jr., executive vice president of the American Mining Congress, on September 11, 1964, a copy of which I will furnish for the record. I will give the reporter a copy of that now. Senator GRUENING. That will be included in the record. (The letter referred to follows:) U.S. DEPARTMENT OF THE INTERIOR, Mr. J. ALLEN OVERTON, Jr., Executive Vice President, American Mining Congress, Washington, D.C. DEAR MR. OVERTON: This will acknowledge on behalf of Secretary Udall your letter of June 29, 1964, enclosing a resolution by the Public Lands Committee of the American Mining Congress and a number of mining associations. The resolution expresses concern over the asserted threat to the mining laws posed by the application by this Department of the marketability rule in mining cases, particularly where it is based upon a concept of fluctuating economic conditions. The resolution strongly urges that the Department "return to the policies enunciated by the Congress and to those decisions of the courts which recognize the prudent man test in the determination of the validity of a mining claim." The import of the resolution seems to be that this Department has recently been disregarding or departing from policies expressed by the Congress and rulings of the courts. If this is indeed the meaning of the resolution, it is a severe indictment of the Department, for the Department, of course, is charged with the duty of administering the mining laws in accordance with the intent of those laws and the interpretations placed upon them by the courts. We cannot accept the charge as true. There is no identification in the resolution of any policy enunciated by the Congress which has been disregarded by the Department. The Congress speaks through the enactment of statutes and resolutions. We know of no legislation enacted in recent or remote years which states policies which have been ignored in departmental rulings. The fact is that the mining laws provide only that "all valuable mineral deposits" in lands belonging to the United States shall be open to exploration and purchase (Rev. Stat., sec. 2319 (1875), 30 U.S.C. 22 (1958)). This brief, general language has not been amplified or clarified by the Congress in the 92 years since the law was enacted. Of necessity, the burden has been placed upon the Department initially and the courts finally to ascertain the specific meaning of the law. Shortly after the enactment of the above-mentioned mining laws, the Department of the Interior began giving specificity to the laws and making, clear what factors were necessary to establish a valid mining claim. In Castle v. Womble (19 L.D. 455 (1894)), it was held that a valid discovery of minerals would be made only if a reasonable, prudent man "would be justified in the further expenditure of his labor and means, with a reasonable prospect of success" to develop the mine. This rule was given express approval by the Supreme Court in Chrisman v. Miller (197 U.S. 313 (1905)) and more recently in the case of Best v. Humboldt Placer Mining Company (371 U.S. 334 (1963)). The resolution appears to interpret the application of the "marketability" test as something either contrary to or different from the "prudent man" test of Castle v. Womble, supra, On the contrary, the marketability test has been utilized many times in the past and is clearly a logical and necessary adjunct to the "prudent man" rule. As early as 1912, in holding that a deposit of pumice or volcanic ash was properly located under the mining laws as a valuable mineral deposit, the Department stressed the fact that it had commercial value as evidenced by sales of the pumice that had been made. Bennett et al. v. Moll (41 L.D. 584 (1912)). The marketability concept of determining whether a mineral was valuable and thus worthy of a prudent man's "labor and means" was also applied in Stanislaus Electric Power Company (41 L.D. 655 (1912)), Cataract Gold Mining Company et al. (43 L.D. 248 (1914)), and Layman et al. v. Ellis (52 L.D. 714 (1929)). The syllabus to the Layman case states: "Lands containing deposits of gravel which can be extracted, removed, and marketed at a profit are mineral lands subject to location and entry under the placer mining laws." [Emphasis supplied.] It is clear, therefore, that for more than half a century departmental decisions have recognized marketability as an essential requirement in judging whether a valid discovery for purposes of the mining laws has been made. In the case of nonmetalliferous minerals of widespread occurrence, the Department has held that the claimant must show immediate marketability to perfect a claim. (See United States v. Kelly Shannon, et al. (70 I.D. 136 (1963)), and cases cited therein.) As to all other locatable minerals, the mining laws require that the claimant demonstrate, as part of the "prudent man test," that there is a discovery of valuable minerals—i.e., minerals for which there is a reasonable prospect of a present or future market. The courts have without exception sustained the Department's use of the marketability test. Foster v. Seaton (271 F. 2d 836 (D.C. Cir. 1959)); Mulkern v. Hammitt (326 F. 2d 896 (9th Cir. 1964)); Adams v. United States (318 F. 2d 861 (9th Cir. 1963)); The Dredge Corporation v. E. J. Palmer, et al. (Civil No. 366, D. Nav., Sept. 25, 1962 (appeal pending)). We surmise that the immediate impetus for the resolution is the recent decision of the Department in the case of United States v. Alvis F. Denison, et al. (71 I.D. 144 (1964)). In that case the Department held that, although certain manganese claims might have been valid in prior years when manganese was sold from the claims and there was a market for the manganese, the claims lost their validity and became null and void for lack of discovery when the market for manganese ended and there was no reasonable prospect of a future market. We must challenge the implicit criticism in the resolution that the Denison ruling departs from the decisions of the courts which recognize the prudent man test. As the Denison decision clearly states, it simply follows the ruling of the U.S. Court of Appeals for the Ninth Circuit in Mulkern v. Hammitt, supra. repeat the following quotation from the court's decision: We "This court, in the recent case of Adams v. United States (9 Cir., 318 F. 2d 861), *** held that even though the mining claim there in litigation would, at one time, have satisfied the test (of Castle v. Womble), nevertheless the Government rightfully denied a patent to the claimant since, because of changed economic conditions, the claim did not presently satisfy the test. *** The problem in both cases (Adams and Mulkern) is whether the public lands of the United States should be perpetually incumbered and occupied by a private occupant just because, at one time, he had there a valuable mine which has now been completely worked out; or because he had on his location a mineral which, in the then practice of the building industry, had a market, but which, on account of a change in building practice, no longer has a market or a reasonable prospect of a future market; or because at the time of his discovery, transportation facilities were available which made exploitation feasible, which facilities are no longer available (326 F. 2d at 898). [Emphasis supplied.] Please note that in speaking of changed economic conditions the court was addressing itself to the question of the time at which the Castle v. Womble test should be applied. That is, the court recognized that the prudent man test was controlling, but that it was to be applied at the time the validity of a claim is called into question. The Mulkern and Adams decisions appear to be no more than logical applications of principles set forth by the Supreme Court in Best v. Humboldt Placer Mining Company, supra. During the time when manganese of the grade involved in the Denison case was a "valuable" mineral, no patent applications were filed. It is a mining claimant's undoubted right under the mining laws not to seek a patent. But it is also the law that a locator who chooses not to carry his claim to patent takes the risk that his claim will no longer support the issuance of a patent. Such was the holding of the Supreme Court in Best v. Humboldt Placer Mining Company, supra. In that case the Court, after stating the rule to which I have just referred, went on to say that: ***It must be shown before a patent issues that at the time of the application for patent 'the claim is valuable for minerals,' worked-out claim not qualifying. United States v. Logomarcini (60 L.D. 371, 373). "Respondents' mining claims are unpatented, the title to the lands in controversy still being in the United States. The claims are, however, valid against the United States if there has been a discovery of mineral within the limits of the claim, if the lands are still mineral, and if other statutory requirements have been met ***" (p. 336). The basic principle upon which the Court relied in Best was announced in the oft-cited leading case of Cameron v. United States, 252 U.S. 450, 460 (1920), wherein Mr. Justice Van Devanter, speaking for the Court, said: A minining location which has not gone to patent is of no higher quality and no more immune from attack and investigation than are unpatented claims under the homestead and kindred laws. If valid, it gives to the claimant certain exclusive possessory rights, and so do homestead and desert claims,. But no right arises from an invalid claim of any kind. All must conform to the law under which they are initiated; otherwise they work an unlawful private appropriation in derogation of the rights of the public. Of course, the land department has no power to strike down any claim arbitrarily, but so long as the legal title remains in the Government it does have power, after proper notice and upon adequate hearing, to determine whether the claim is valid and, if it be found invalid, to declare it null and void.***” We are unable to distinguish in principle between a mineral once valuable but later worked out and a mineral once valuable but now valueless because of a change in economic conditions. In each case the unpatented claim loses its validity. This principle was discussed and the same conclusion was treated as established law in the debates and reports in Congress on S. 3451 (87th Cong., 2d sess.) which became Public Law 87-851 (1962). The Senate report on the bill contains the the following statement: "But, for one of a variety of reasons, many of the claims may not, in fact, be patentable at the present time. In some cases, the mineral veins which justified the original location have been worked out. In others, mineral deposits which, would have sustained a patent application some years ago will no longer suffice, because rising costs and artificially fixed prices for the minerals have rendered actual mining operations uneconomic" (S. Rept. 1984, p. 4, 87th Cong., 2d sess. (1962)). This statement is identical to one made by Senator Church in introducing the bill (208 Congressional Record pp. 11079-11080 (1962)). Similar statements are contained in the House report on the same legislation (H. Rept. 2184, p. 2, 87th Cong., 2d sess. (1962)), and in the comments on the floor of the House (108 Congressional Record, p. 19648 (1962)). In sum, we do not believe that the Department can fairly be charged with having departed from policies enunciated by Congress or from prior judicial or departmental rulings. Not only is the decision in the Denison case a logical corallary to the long-settled marketability test, but it is also in accordance with recent court holdings. I hasten to assure the Public Lands Committee of the American Mining Congress that it is our sincere intention to continue to carry out the public trust in the administration of the mining laws insofar as it is within our abilities to do so. We hope that this explanation will be called to the attention of your committee and of the other organizations signing the resolution. If you would like additional copies of this letter to send to those organizations, we shall be happy to supply them. Sincerely yours, FRANK J. BARRY, Solicitor. Mr. BARRY. The 1955 act, referred to as Public Law 167, is basically a protective measure, designed to eliminate the location of mining claims and use of the public domain for certain specified purposes. Unfortunately, the evils which prompted enactment of this law did not disappear with the passage of the act. Although not as prevalent today, there still exist a number of locators whose interest lies outside the field of legitimate mining to require vigorous enforcement of the law. It has been repeatedly stated that the 1955 act was not intended to change the mining law of 1872, and, as that law is applied to those minerals which remain subject to location, the basic law has not been changed. However, to the extent that the 1955 act removed from location some substances previously subject to location. it did change the mining law just as the Mineral Leasing Act of 1920 changed it. Were this not true, the act would be meaningless. Also, other sections of the act did change the rights of the mining claimant to the use of the surface and surface resources. But the act did not change the essential provisions of the mining law itself, it did not change the requirements of a valid discovery to sustain a mining location and a patent, and it did not amend the prudent-man rule. Neither has any decision by the Department changed any one of those essential provisions of the mining law, and we earnestly strive to apply the law correctly to the varied factual situations which confront us from time to time. Unlike the Mineral Leasing Act, the 1955 act did not carve out of the operation of the mining laws clearly definable substances. It may have been felt by the act's framers that a distinction could readily be made between common varieties and uncommon varieties of the minerals subject to the act, but experience has demonstrated that this is not the case. Early in the present administration, the need for clarifying legislation was expressed in a letter from the then-acting Secretary of the Interior to the chairman of the Committee on Interior and Insular Affairs of the House of Representatives. With your permission, I would like to insert a copy of that letter in the record at this point. Senator GRUENING. It will be included. (The letter referred to follows:) DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D.C., November 2, 1961. Hon. WAYNE N. ASPINAll, House of Representatives, Washington, D.C. DEAR MR. ASPINALL: This is in reply to your letter of August 29, concerning Associate Solicitor's opinion M-36619 (May 12, 1961). That opinion has been modified by a supplemental Associate Solicitor's opinion, M-36619 (supp.) (Oct. 5, 1961). A copy of the latter opinion is enclosed. Two questions raised by the Bureau of Land Management prompted this opinion. One was whether a limestone deposit should be classified as a "common variety" within the meaning of section 3 of the act of July 23, 1955 (30 U.S.C., 1958 ed., sec. 611), unless it has some distinct and special properties not generally found in limestone deposits. As you know the act states that a deposit of sand, stone, gravel, or other named materials must be deemed a "common variety" and hence not subject thereafter to location under the mining laws in the absence of some property giving it a distinct and special value. As stated in the enclosed opinion, the House and Senate Committee reports on section 3 reveal that under this language Congress intended to leave limestone deposits locatable under the mining laws if the deposits were "commercially valuable because of distinct and special properties.' The Associate Solicitor considered this language to indicate that neither the House nor the Senate committee considered limestone as having "distinct and special properties" per se, but only those deposits which were commercially valuable because of such properties. In view of the language of the act, the legislative history as a whole, the prior decisions of the Department, and the fact that almost any limestone deposit may be used in the manufacture of portland cement if enough other substances are added to it, the Associate Solicitor ruled that limestone is a "common variety" within the meaning of section 3 of the act unless it has some distinct and special properties not generally found in limestone deposits. The second question raised by the Bureau of Land Management was whether it was necessary to regard limestone used in the making of portland cement as a "common variety" because some additional material was used in manufacturing the limestone deposit into a portland cement clinker. The former Associate Solicitor, Mr. C. R. Bradshaw, was of the opinion that the only type of limestone used in the manufacture of cement which would not be a "common variety" was a deposit which could be processed into a portland cement clinker without the addition of any supplementary material. However M-36619 (supp.) adopts a more liberal view and rules that the mere fact that additional material is used is not sufficient to label the limestone deposit a "common variety." We understand that in nearly all cases additional substances are combined with limestone in the making of portland cement. We believe that legislation to clarify the meaning of "common variety" in section 3 of the act would be helpful. Several questions about the meaning of the term have been asked, and only by legislation amending section 3 may they be 53-117 0-65- -9 |