and in view of the fact that the future of this nation, both in time of war and in time of peace, depends upon our oil reserves, I do not think we ought to permit this Association to give approval to this bill which has raised so much doubt. I suggest, with all due regard to Mr. Newlin, with all due respect to this committee that there has been no suggestion that any of the 409 members of the House, or the members of the Senate, that any publicly elected legislator has been consulted on this bill. Probably none of the legislators have. It is strange that no public officer of our country has been consulted except the appointed officials of our government. Therefore, I move, in view of the complex situation that confronts us, and the complex nature of this legislation as contemplated, that the whole matter be referred to the next annual session of the American Bar Association. Chairman Long: The question is on the amendment. W. M. Gardner, of Nevada: The question which has been raised by the amendment has not been definitely answered, and I want an answer to it. Let us speak plainly. Suppose the Standard Oil Company has holdings in 100 separate pools, is there any reason why the Standard Oil Company should not make under Section 2 agreements with the holders in the other portions of those 100 separate pools, make them under Section 2? Now, if there is nothing to prevent that under Section 2, then we do need an amendment. Mr. Veasey: I seem to have failed in distinguishing between Section 2 and Section 3. Section 3 is the one which involves governmental supervision, applies during periods of over production when found by the Federal agents. In the absence of such finding the general or joint agreements cannot be made, and when made are subject to approval. That is to govern on all questions of business curtailment subject to supply and demand. Section 2 deals with cooperative development and operation of oil pools. That operation is defined as embracing two things, those that will enlarge the recovery of oil from the pool, and more efficient operation of the pool. The Standard Oil Company or any other company cannot go beyond the terms of that definition. The purpose of the agreement must be to enlarge the recovery and establish more efficient means of recovery, spacing of wells, utilization of gas pressure according to some given methods. Those are the "things contemplated by Section 2, and as I said in my original statement there is a grievous doubt that this is within the purview of a Federal bureau, it is purely a matter of local production, but to relieve the men of the industry of the fear that they have experienced in the past, we have inserted that clause. Mr. MacChesney: May I ask Mr. Veasey a question. In the development of a single well, I assume that they would have the right to restrain as well as enlarge the production. Suppose there is over production. Is there anything that would prevent, under Section 2, an arrangement being reached by the Standard Oil Company and the Sinclair Oil Company entering into a single contract with reference to a property in California, and then entering into another single contract with reference to a single pool in Montana? James A. Veasey, of Oklahoma: Section 2 relates not to over production, but to means of recovery, the spacing of wells, common plans of utilization of gas energy, and cooperation of pools. Mr. MacChesney: If the agreement is within the terms of the definition for the purpose of enlarging the recovery and bringing about more efficient operation of that pool then it is withdrawn from the consideration or direction of the Federal Board. If it is not, the Board might disapprove of production in that particular pool. Mr. Veasey: It might. Mr. MacChesney: If it did, why does it not have the same effect with reference to that pool that it would with reference to 100 pools? Mr. Veasey: It must accomplish the one thing. Mr. MacChesney: Does the provision then, where such series of agreements are entered into with the evident purpose of controlling a series of separate pools, which are subject to the restrictions of Section 3, prevent the conservation? Mr. Veasey: I cannot make a very distinct plane between curtailing production and over production. J. R. Keaton, of Oklahoma: I want to ask one question. Is there anything in any of the provisions of Section 2 that would restrain production? Mr. Veasey: Not a syllable. Mr. Keaton: Then it could not relate to the matter of curtailing production for the purpose of preventing an over production because there is nothing in there relating to restraining production? Mr. Veasey: Not a syllable. It is better operative methods. Mr. Keaton: It might increase the production but could not curtail it? Mr. Veasey: Exactly so. Mr. MacChesney: I submit that he stated in reply to my question that it was possible to temporarily limit the production under Section 2. Mr. Veasey: No, I do not make such a statement. This would deal with the effects of more scientific production, the spacing of wells, and then the common use of gas pressure after producing oil, and it would enlarge production. The amendment presented by Mr. MacChesney was put to a vote and was defeated. Mr. Brennan: At this time I wish to renew my motion to refer this whole matter to the next annual meeting of the American Bar Association. The motion was duly seconded. Mr. Newlin: May I address the Association upon that subject and reply to certain inquiries that were made by Mr. Brennan. The legislation does not come before you as a spontaneous or voluntary act on the part of the Section on Mineral Law. This legislation comes before you in effect at the request of the Government of the United States. The Department of the Interior has the responsibility of the conservation of our natural resources, the conservation particularly at this time of oil and gas. The waste that has occurred has been of such great extent that it is unknown. Last year the Secretary of the Interior appeared before the Section on Mineral Law and called attention to the critical situation that existed, to the vital waste that occurred every day, and requested the American Bar Association to appoint a committee that would sit and counsel with the government as represented by the Federal Oil Conservation Board and the industry itself to the end that the waste might be stopped as quickly as possible. It was not two weeks after the adjournment at Buffalo that I received a letter from Secretary Work asking me as Chairman of the Section to immediately appoint a committee because the delay, in his opinion, was of very serious consequence. The committee was appointed and has done a tremendous amount of work. The best minds of this country have been consulted. There have been public hearings. Every branch of the industry of the country, affected one way or the other by the production of oil or gas, has been heard, and has given its counsel. In many cases legislation can be postponed from year to year. This is not a matter in which the situation will be any different in a year from now than it is today, save that there will have occurred a very substantial loss. You have the bill before you. You have had opportunity to read it. I doubt very much if there can be any more information collected in the next year than has already been received, and for that reason I definitely feel, and it is the sense of the Section, that we should not postpone a matter that means a great deal to the future of our country when we can see no reasonable probability of having greater light than we have today. George H. Wilson, of Illinois: Is there any likelihood of this bill being passed at the short session of Congress in December? Mr. Newlin: There is a likelihood, and there is on the part of the Secretary of the Interior a very definite hope and belief that it will be passed. The motion to postpone was submitted and lost. Chairman Long: The question now reverts to the motion to approve the bill as amended. This requires a two-thirds vote of those in favor of the approval. Thereupon the resolution was adopted and the bill as amended was approved. (See Proceedings, infra, p. 633; also Act as Amended, p. 637. ) Chairman Long: The next in order is the report of the National Conference of Commissioners on Uniform State Laws. It will be presented by its President, Jesse A. Miller, of Des Moines, Iowa. Mr. Miller: The National Conference of Commissioners on Uniform State Laws recommends: 1. That the American Bar Association approve the Uniform Public Utilities Act which has been finally approved by the National Conference of Commissioners on Uniform State Laws and by it recommended to the various states, territories, the Dis |