THE THE BR RESS 8 COMMON VARIETIES ACT correspondence with the Arizona small mine operators and wi State director in Arizona of the State bureau there, and I cer agree with the exchange of correspondence you had with Frank K and, again, I wish to thank you for your interest in the mining try over the years. I know that you come from another great n State and one that is rapidly developing. From your experience and knowledge of the mining game, I that the various committees and subcommittees of the Congres derive much-needed help on this problem, and we are very b that you are here. Of course, our own junior Senator has foll our problems here very closely. In fact, he has had much spondence and has been called upon as often for help and advic have been in representing the association. I, again, thank you. Senator GRUENING. Thank you very much, Mr. Malone appreciate your expert statement and also you kind words. I t those of us who are in public life realize, regretfully, that mini a sort of a stepchild of the national family and that certain bran of our economy seem to get more favored treatment. In the fie agriculture, farmers are sometimes paid for not growing crops I have never heard of any miner being paid for not extracting Maybe we should introduce that kind of reform. ( In any event, we are happy to have this hearing here and we going to do everything we can to help the mining industry. isn't the only field; there are many other fields, as you know. is in a very tragic situation because for 30 years now, or 31 years have been obligated a unique example of discrimination in our enterprise economy-to keep gold at the price established way b in 1934. It is true that President Roosevelt wisely raised the p of gold from $20.70 an ounce to $35, and that gave gold mining a shot in the arm. We were very grateful for that, but since that ti of course, the cost of everything has gone up-the cost of labor, cost of materials and we are obliged to keep that price and to only to the Federal Government. That is an act of great injust and for some years we have tried to present alternatives and they h fallen afoul of the opposition of both the Republican and Democra administrations, with the result that gold mining is almost extinct the United States, whereas, in other gold-mining countries gold min is cherished, aided, promoted, and frequently subsidized. But are going to keep on trying. Now, Mr. Maloney, I wish you would present your first witne and we will be very glad to hear him. STATEMENT OF URBAN L. ROTH, BUTTE, MONT. Mr. MALONEY. Mr. Roth. Mr. ROTH. Senator Gruening, Senator Metcalf, Mr. French, M Maloney, president of the Mining Association of Montana, and oth distinguished witnesses and visitors. Let me express my sincere thanks to you Senators and to M Maloney for this opportunity to speak on behalf of the small mi operator in Montana, specifically the Mining Association of Montar and also the Southwestern organization of small mine operators. am Urban L. Roth. I am a lawyer in Butte, Mont. COMMON VARIETIES ACT 9 Senator Gruening, you have outlined for this hearing some of the purposes for which Public Law 167 was enacted. However, I believe, to put Public Law 167 in its proper perspective, we must examine into the state of the law as it existed prior to its enactment so that we can place it in its proper perspective. Why was Public Law 167 enacted? What was it intended to do insofar as changing existing mining law, and how is that law being administered and does the administration of that law square, first of all, with what we consider established law with regard to mining, and does the administration of that law square with what the Department of Interior and the Department of Agriculture told a congressional hearing in 1957 as to what was going to be the administration of the law? In the congressional hearings, preparatory to the enacting of Public Law 167, a review of existing mining law was made and it was observed that Federal mining law was designed to encourage: * * * individual prospecting, exploration, and development of the public domain. The incentive for such activity has been the assurance of ultimate private ownership of the minerals and lands so developed. Under these laws prospectors may go out on the public domain, not otherwise withdrawn, locate a mining claim, search out its mineral wealth, and if a discovery of a mineral is made, can then obtain a patent. The congressional report observed that: Mineral resource utilization comes about only after: 1. Prospecting; 2. Exploration; and, 3. Development. In 1872, to effectuate that purpose, Congress enacted what has been mining law since that time, when it opened up: "*** all valuable mineral deposits and lands belonging to the United States * to discovery. Now, because the law of 1872 had been used as a vehicle to locate spurious claims, and since "all minerals" were subject to location under the law of 1872, including minerals such as sand and gravel and building stone, which proliferate all over the United States and thus subjected most of the public domain ultimately to location, Congress felt that it was necessary to cure, first, this problem which arose out of the location of minerals of widespread and common occurrence in nature, and to give the Department of Interior a vehicle by which they could invalidate claims or quiet title to land belonging to the United States and the people of the United States-claims which were being used as summer homes or utilized for their surface resources or locations which were used mainly for commercial purposes, where they had a high recreational value-and thus Public Law 167 was enacted. Section 3 of that act solves the problem of locating minerals which had a widespread occurrence by withdrawing from location: *** a deposit of common varieties of sand, stone, gravel, pumice, pumicite, or cinders * * The act pointed out that: ***"Common varieties" do not include deposits of such materials which are valuable because the deposit has some property giving it distinct and special value and does not include so-called block pumice which occurs in nature in pieces having one dimension of 2 inches or more ***. THE THE BR 0) COMMON VARIETIES ACT In the hearing preparatory to enacting Public Law 167 the Cong of the United States pointed out those minerals might have w spread occurrence, but could nevertheless be located, and pointed that examples of these were: 10 *** limestone, gypsum, et cetera, commercially valuable because of a dis and special property ***. such as limestone, of course, suitable for cement. Moreover, the law did not affect: *** The validity of any mining location based upon discovery of other mineral occurring in or in association with such a deposit * * *. Again, to put Public Law 167 and its administration into its pro perspective, I think it is important to review the law with regard what characterized a valuable mineral discovery prior to 1955; it is universally conceded that the first test and the one which adhered to until most recent administrative decisions was Castl Womble, an Interior Department decision, which was approved the U.S. Supreme Court in Chrisman v. Miller; and this was the sta ard that Castle v. Womble and Chrisman v. Miller imposed: RESS *** where minerals have been found in the evidences of such a chara that a person of ordinary prudence would be justified in the further expendi of his labor and means, with a reasonable prospect of success, in developi valuable mine, the requirements of this statute RA that is, the law of 1872— *** have been met. To hold otherwise would tend to make of little ava not entirely nugatory, that provision of the law whereby "all valuable min deposits and lands belonging to the United States *** are *** declared be free and open to exploration and purchase ***." For, if as soon as mine are shown to exist, and become remunerative, the lands are to be subject to o disposition, few would be found willing to risk time and capital in the atter to bring to light and make available the mineral wealth which lies concealed the bowels of the earth, as Congress obviously must have intended the explo should have proper opportunity to do ***. THE THE BR 4 It is important to note that the U.S. Supreme Court, in adopti this standard on "valuable mineral discoveries," indicated that standard was, "Would an ordinarily prudent man be justified proceeding further to develop?"-and I underline and underscore word "develop"-a valuable mine. RESS Now, of importance, then, is how is the word "develop" or how w the word "develop" characterized, and how does it assist us in setti the background for later developments in the field of mining law? Well, as the decisions pointed out, "development" was really tan mount to "more exploratory work"; it did not mean the establishme of a commercially profitable mining venture; it was tantamount whether or not the discovery was such that this man would be justifi in expending and investing more money and time in explorati activities on the claim in the hopes of developing a paying mine. Now, this standard was adhered to both as to nonmetallic minera and metallic minerals until approximately 1933. In 1933 in the ca of Layman v. Ellis, which was interpreted in a solicitor's opinion, 54 Land Decisions 294, a 1933 decision, the Department of Interi split off from the prudent man theory, nonmetallic minerals such sand and gravel, which occur so frequently in nature; and, becau sand and gravel are so frequent and because they proliferate throug out the public domain and made most of the public domain thus su COMMON VARIETIES ACT 11 ject to location, they superimposed upon the prudent man theory, what is called the marketability or profitability test. The Department, in effect, held that to locate sand and gravel and to have the location stand up on application for patent, that, in addition to locating a valuable mineral and thus satisfying the prudent man theory, that the claimant should prove that he could produce the particular mineral on a profitable basis. common Industry was not particularly aroused because of the 1933 split with regard to nonmetallic and metallic minerals, and particularly the application of the profitability test to sand and gravel. At any rate this was the state of the law in 1955. Now, I submit that in 1955, when Public Law 167 was enacted that when Congress withdrew from location “* * * minerals of common occurrence * ** varieties of sand, gravel, stone, et cetera * * *" that, in effect, was tantamount to overruling Layman v. Ellis, because it rendered that problem moot-it was no longer a problem. If "common varieties" were no longer locatable, then there was no reason for this dichotomy that had arisen in the law of discovery. Therefore, in 1955, with the enactment of Public Law 167, there was only one rule of discovery and that was the prudent man theory and it was applicable to every single mineral location which was not withdrawn from location by Public Law 167; and I think that's the way Congress intended it to be. However, after Public Law 167 was enacted, Congress was deluged with complaints that the administration of Public Law 167 was not as intended, that it was being used as a vehicle by the Department of Interior and the Department of Agriculture to cancel valid mining claims; it was eroding the law regarding a valuable discovery; it was eroding the traditional test with regard to what kind of proof a claimant had to submit in support of a claim; and, to the end of investigating these allegations, Congress in 1957 held an investigation and inquired of the Department of Interior and the Department of Agriculture just exactly what they were doing and what they thought the law was. Senator Metcalf, you inquired of the Department whether they were requiring the discovery of commercial minerals eligible for patent to support a claim and this is what Mr. Shafer of the Department of Interior responded to you at that time: No, sir; not necessarily eligible for patent. Mr. METCALF. How far do you go? Mr. SHAFER. I think the requirement on the validity of the claim is explained in the letter to Mr. Engle. We do not require commercial ore—we do not require commercial ore- -we merely require a showing of minerals*** Traditional law, nothing wrong with that. *** I'm speaking of lode claims-and then the geologic and other evidence surrounding the claim, such as would justify the prudent man in the further expenditure of his time and money * * * Again, traditional law, nothing wrong with this answer. ***But we do not require commercial ore at any time. ment either for the location of the claim or for the patent. That is not a require Mr. BRADSHAW. (again, a Government witness). If he has made a discovery which is sufficient to justify a prudent man in the expenditure of his labor and means in an effort to develop a paying mine, he does not have anything to worry about, provided he comes in and registers his claim as was contemplated by section 5. 12 COMMON VARIETIES ACT Which is the quiet-title section of the act. Again: Mr. BRADSHAW. If we find that the man has any show of mineral-any sho mineral in the vein at all, or if it is a placer, if he has a deposit of mineral, it not have to be commercial * * * and if the geological conditions or the experie of other miners in the same area is sufficient to indicate a reasonable possibilit a reasonable possibility-not a probability, but a reasonable possibility-t he can develop commercial ore, then that man if free to go ahead just on his orig location without being affected by this act. Again, traditional law. This is what we've been depending on years, and, on the burden of proof, Mr. Bradshaw said: We order a hearing and we have the burden of proof * * * He told Congress: *** that the land is nonmineral or that no discovery has been made. And then, in response to a question by Mr. Engle: Now, do you bobtail the claim or strike it down completely? Now, here's his response to this one, and I am going to highpoint th later on in the Carlile decision: Answer. It is merely bobtailed. On page 39 of the hearing booklet, Mr. Hoffman, on behalf of th If there is a showing, he does not have to have a commercial discovery. I there is a showing of mineral, if he can show a showing of mineral which woul warrant a prudent man to continue his mining operations, we would leave hin alone. We would not call him for a hearing. Certainly, if this was the administrative policy and the administra tion of Public Law 167, I doubt seriously whether we would have requested this task force meeting in Montana to examine into just precisely what departmental application of the law has been. First of all, let's examine into departmental regulation. Now, we realize that when Congress enacts a law that it gives the particular department under whose jurisdiction the particular law comes the power to enact regulations, so that the department can interpret it for the people and set up administrative procedures for its enforcement. Without going through all of the history which appears in my printed statement: In 1962, this is how the Department characterized, in its regulations "common varieties," and let's see if it squares with the law which Congress actually enacted: Mineral materials which occur commonly shall not be deemed to be "common varieties" if a particular deposit has distinct and special properties making it commercially valuable for use in a manufacturing, industrial or processing operation. In the determination of commercial value *** Now, let's look at this: *** such factors may be considered as quality and quantity of the deposit, geographical location, proximity to market or point of utilization, accessibility to transportation, requirements for reasonable reserves consistent with industrial practices to serve existing or proposed manufacturing, industrial, or processing facilities, and reasonable methods for mining and removal of the material. Limestone suitable for use in the production of cement, metallurgical or chemical grade limestone, gypsum, and the like are not "common varieties." This subsection does not relieve the claimant from any requirements of the mining laws. |