the Bureau of Land Management is coming around and taking that hope away from them because it is not immediately marketable. Mr. BARRY. I think there has been a change, at least since I was a hard rock miner in the 1930's. There are a lot of people around who have lived on mining claims and who really did not have anything. Everyone had great confidence in his own claim, but he could not convince any of his associates that he had anything at all. He was following a trace of rock hundreds of feet through a granite mountain, you know, in hopes of turning up a big body of gold. Actually, under the law, you can have no rights against the United States until you make a discovery. There is nothing new about that rule. That is an old rule. Until they have actually found evidence that there is a quantity of ore in paying quantities and quality, they do not have a discovery. But nobody bothered those old prospectors in the 30's because they were out of the way, I guess. Senator METCALF. Let me ask you, for instance, suppose a man goes out and discovers gold, and under the present unfortunate policy of this administration Senator GRUENING. It is a common variety? Senator METCALF. Yes; it is a common variety. [Laughter.] He might have a substantial discovery of gold, but he cannot market it, but he hopes maybe there will be some sense in the Treasury Department in some future day and the price of gold will go up so that he can possibly compete and then it would be a tremendously valuable resource. What happens in that sort of a situation? Mr. BARRY. Well, the example of the gold that you give is not that he cannot market it, but he cannot get enough of a price for it to justify his taking it out of the mine. It is salable, you can sell gold in a minute now, as I understand it. Note the prudent-man rule. This is important, basic. It is the law that controls us and it has been the law ever since the beginning of the administration of the law. He has to have enough evidence from what appears on the ground within the boundaries of his claim not that he can just sit back and relax and hope that there will be an improvement of condition, but he has to have evidence of such character as would induce a prudent man to spend his money and his time and labor to get the ore out. Well, if he is not going to make any money getting it out, then he would not be prudent if he were to expend his money and time and, therefore, he would not have a discovery. As nearly as I can see, that is simply paraphrasing the plain English language and there is not much unclear about it. Senator METCALF. Let me continue this hypothetical case. Here is a man who back in the 1920's made a gold discovery. He did not patent his claim. It was a valid discovery and he took a good deal of gold out of the ground and gradually, but the prices of labor and other prices go up and the price of gold was frozen at $35 an ounce. He continues to do his assessment work, hoping that there will be a return of sanity, and he no longer has the kind of a marketable claim that you are talking about. Are you going to take that away from him? Mr. BARRY. I would like to cite a couple of cases. They are included in my letter to Mr. Overton, and the first is a Ninth Circuit case. It is Mulkern v. Hammitt. In that case it was no longer economically valuable, that is to say, no longer economically possible to continue to operate the mine. No patent had been sought, there is either a contest coming up later or an application for a patent at the time the mine is closed down. It is closed down because of an economic condition. Mulkern v. Hammitt held that if you do not get your claim patented when you have a good going business, you take the risk that if you apply later, you cannot get a patent. It will not support a patent. This is exactly the language that was used by the Supreme Court in 1962, I think it was, in Best v. Humboldt Co., which was the most recent decision by the Supreme Court. Senator METCALF. That case is cited in your letter? Mr. BARRY. That is correct. It is cited in my letter. Also Mulkern v. Hammitt, decided; Adams v. the United States, decided. All of these cases indicate that if you no longer have enough ore or, let us say, enough value in what you have there on the claim to justify a prudent man investing his time and money with the prospect of developing the mine, a valuable mine, you cannot support a patent and you lose your claim. Senator METCALF. We do not apply as stringent a rule on discovery and enough of a claim to continue to support discovery as we do on applications for a patent; do we? Mr. BARRY. Yes. Senator METCALF. It is your position that we take the same rule as far as discovery is concerned and as far as a patent is concerned? Mr. BARRY. Yes; except for another rule that applies also. If you have indications which in good faith justify your occupancy of a piece of ground that you claim and if you are diligently and continuously engaged in attempting to make a discovery, you have what the law calls pedes possessio, and this gives you a possessory right over any other person who would want to jump the claim while you are developing it and the Government generally will not disturb you. But you have no rights against the Government, and this is well set out, with respect to pedes possessio. In order to get a claim against the Government you have to have an actual discovery of a mineral and the evidence must be of such character that the quantity and quality is enough to justify a prudent man going ahead and spending his money to develop the mine. Senator METCALF. Did you read the testimony, the galley proofs? Mr. BARRY. I did. I hope I have it enough in mind. Senator METCALF. Do you recall that some of the testimony was that a very important mine, the Berkeley Pit, of the Anaconda Co., would never have qualified for discovery, nor would it have qualified for a patent if your rule had been applied? Mr. BARRY. Perhaps the Berkeley Pit did not ring a bell. Senator METCALF. It will ring a bell with Mr. Cavanaugh. The Berkeley Pit is a huge operation of the Anaconda Co. of low-grade ore that has only been operable since they have had open pit mining operations and a concentrator that would handle low-grade ore. Mr. BARRY. Well, let me ask you this: I can say by hindsight, because we never had a chance to decide this in advance, that the men who developed the Berkeley Pit were prudent men, they invested their time and money in the prospecting and development of a valuable mine, if I understand the implication of your question, and the product they made was a valuable product, marketable Senator METCALF. It was not marketable for a long, long time, though. They just kept on digging and experimenting with various processes of handling lower grade ore, and then it became marketable. Mr. BARRY. I am not sufficiently acquainted with the facts. Now, this can be said about the Berkeley Pit. Whether it would be true or not, I would have to know the facts. I do not think I have any innovation here at all as I have indicated in my statement. Marketability, that is to say, someone has to be willing to exchange money for your ore or you are not prudent in expecting to get your money back if you get the material out on the dump and ship it to market. This seems to me to be the implication of the prudent man rule. If am not mistaken, I have never heard of anyone attempting to justify or even contending that the early miners just liked pretty rocks and liked to take them out of the ground. They were interested in selling them, selling them for money, developing a valuable mine. Senator METCALF. I think every miner is interested in that. Mr. BARRY. Well, I suppose that is the incentive. Let me just say this about Mr. Hand's case. On page 76 he says this: The Bureau of Land Management at that time, and they still do apparently, although the decision has never been rendered, contend the claims are invalid owing to insufficient mineral showing. Now I don't know if they do or not, and, of course, it has never been determined. Senator METCALF. He is talking abut a decision of your Director, which would be Mr. BARRY. No, I do not think so. Senator METCALF. Would be the same position as the Forest Service. Mr. BARRY. He started out by saying that he has a mine, and that he has a few complaints. He says: As a result of an examiner's hearing about a year ago, and they concerned two unpatented claims. The examiner apparently has not arrived at a decision. Senator GRUENING. All right. Thank you, gentlemen, for coming. I want to thank the witnesses for coming. I think their testimony has been helpful and I hope we can develop something constructive during the course of the next few weeks and be prepared, when Congress reconvenes, to see if some legislation will not be useful. We appreciate your suggestions and those of the Forest Service along those lines. Thank you very much. (Whereupon, at 12:40 p.m., the hearing adjourned, to reconvene at the call of the Chair.) APPENDIX THE COMMON VARIETIES ACT, AS AMENDED § 601. Rules and regulations governing disposal of materials; payment; removal without charge; lands excluded The Secretary, under such rules and regulations as he may prescribe, may dispose of mineral materials (including but not limited to common varieties of the following: sand, stone, gravel, pumice, pumicite, cinders, and clay) and vegetative materials (including but not limited to yucca, manzanita, mesquite, cactus, and timber or other forest products) on public lands of the United States, including, for the purposes of this subchapter, land described in sections 1181a-1181j of Title 43, if the disposal of such mineral or vegetative materials (1) is not otherwise expressly authorized by law, including, but not limited to, sections 315315m, 315n, 3150-1, and 1171 of Title 43, and the United States mining laws, and (2) is not expressly prohibited by laws of the United States, and (3) would not be detrimental to the public interest. Such materials may be disposed of only in accordance with the provisions of this subchapter and upon the payment of adequate compensation therefor, to be determined by the Secretary: Provided, however, That, to the extent not otherwise authorized by law, the Secretary is authorized in his discretion to permit any Federal, State, or Territorial agency, unit or subdivision, including municipalities, or any association or corporation not organized for profit, to take and remove, without charge, materials and resources subject to this subchapter, for use other than for commercial or industrial purposes or resale. Where the lands have been withdrawn in aid of a function of a Federal department or agency other than the department headed by the Secretary or of a State, Territory, county, municipality, water district or other local governmental subdivision or agency, the 53-117 0-65--10 141 Secretary may make disposals under this subchapter only with the consent of such other Federal department or agency or of such State, Territory, or local governmental unit. Nothing in this subchapter shall be construed to apply to lands in any national park, or national monument or to any Indian lands, or lands set aside or held for the use or benefit of Indians, including lands over which jurisdiction has been transferred to the Department of the Interior by Executive order for the use of Indians. As used in this subchapter, the word "Secretary" means the Secretary of the Interior except that it means the Secretary of Agriculture where the lands involved are administered by him for national forest purposes or for the purposes of sections 1010-1012 of Title 7 or where withdrawn for the purpose of any other function of the Department of Agriculture. July 31, 1947, c. 406, § 1, 61 Stat. 681, amended July 23, 1955, c. 375, § 1, 69 Stát. 367. 1955 Amendment. Act July 23, 1955 Amended section to require disposal under this subchapter of common varieties of sand, stone, gravel, pumice, pumicite, and cinders, and to give the Secretary of Agriculture the same authority as lands under his jurisdiction as the Secre to tary of Interior possesses as to landa under his jurisdiction in the disposal of mining and vegetative materials. Legislative History: For legislative history and purpose of Act July 23, 1955, sce 1955 U.S.Code Cong. and Adm. News, p. 2174. § 602. Bidding; advertising and other notice; conditions for negotiation of contract; report to Congress (a) The Secretary shall dispose of materials under this subchapter to the highest responsible qualified bidder after formal advertising and such other public notice as he deems appropriate: Provided, however, That the Secretary may authorize negotiation of a contract for the disposal of materials if— (1) the contract is for the sale of less than two hundred fifty thousand board-feet of timber; or, if (2) the contract is for the disposal of materials to be used in connection with a public works improvement program on behalf of a Federal, State, or local governmental agency and the public exigency will not permit the delay incident to advertising; or, if (3) the contract is for the disposal of property for which it is impracticable to obtain competition. (b) A report shall be made to Congress on January 1 and July 1 of each year of the contracts made under clauses (2) and (3) of subsection (a) of this section during the period since the date of the last report. The report shall (1) name each purchaser; (2) furnish the appraised value of the material involved; (3) state the amount of each contract; (4) describe the circumstances leading to the determination that the contract should be entered into by negotiation instead of competitive bidding after formal advertising. July 31, 1947, c. 406, § 2, 61 Stat. 681, amended Sept. 25, 1962, Pub.L. 87-689, § 1, 76 Stat. 587. 1902 Amendment. Pub. L. 87-689 designated existing provisions as subsec. (a), substituted therein, provisions requiring the Secretary to dispose of materials after formal advertising and such other public notice as he deems appropriate, and authorizing negotiation, of a contract for the sale of less than 250,000 board-feet of timber, or for materials to be used in connection with a public works improvement program for a Federal, State, or local governmental agency where the public exigency will not permit the delay of advertising, or for property for which it's impracticable to obtain competition, for provisions rcquiring publication of notice once a week for 4 consecutive weeks in a newspaper of general circulation, and competitive bidding, in савев where the value was in excess of $1,000, and per mitting disposal upon such notice and in such manner as he prescribed where the value was $1,000 or less, and added subsec. (b). Legislative History! For legislative history and purpose of Pub.L. 87-080, seo 1902 U.S.Code Cong. and Adm.News, p. 2020. § 603. Disposition of moneys from disposal of materials All moneys received from the disposal of materials under this subchapter shall be disposed of in the same manner as moneys received from the |