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COMMON VARIETIES ACT

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Evidence was before the committee that the mining laws had been used as a pretext to obtain land for running commercial enterprises, beer halls and honky-tonks, and other activities that had nothing whatever to do with mining. It was to correct these abuses that Public Law 167 was enacted.

But I cannot forbear pointing out that the so-called Common Varieties Act has given rise to an uncommon variety of problems. It is this subcommittee's hope that these hearings may lay the groundwork for the solution to some of those problems.

Now, as to the mechanics of today's proceedings. I am going to ask Senator Lee Metcalf, as the prime mover of these hearings, to make any remarks he cares to make and then to present Mr. William Maloney, the secretary-manager of the Mining Association of Montana, who has arranged the proposed agenda and order of witnesses. At this point I want to express our thanks and appreciation to Mr. William Maloney and to the Mining Association.

First. however, I would like to announce that at the specific request of the chairman of the full Interior Committee, Senator Jackson of Washington, the Forest Service and the Department of the Interior have sent observers to these hearings, both from Washington and from the regional headquarters. These observers will report back to their respective executive branches, and at a later date the committee will discuss the problems you present here and their possible solution with the Secretary of Agriculture and the Secretary of the Interior. I am going to call the names of these observers and ask each of them to stand and perhaps to remain standing until their names have all been called.

First is Mr. Reynolds G. Florance, Director, Division of Legislative Reporting and Liaison of the Forest Service.

Then, there is Mr. Robert Manchester, Chief of the Branch of Mining of the Bureau of Land Management.

Mr. Morris Hankins, who is the regional attorney of the Forest Service.

Mr. William L. Shafer, Bureau of Land Management.

Mr. Thomas J. Cavanaugh, Associate Solicitor for Public Lands, Department of the Interior.

I would like to suggest that if these gentlemen desire, at the end of the hearing, after we have called on the other witnesses, to make any comments or have any questions to ask, we would be very happy to hear them.

The whole purpose of this hearing is to elicit the maximum amount of information. We do not want to foreclose anybody, we want to make these hearings just as informal and useful as possible. So if these observers, in addition to observing, would also like to make any comments or ask any questions, we will be very happy to hear them.

Now, we will have the pleasure of hearing from the very able junior Senator from Montana, Senator Lee Metcalf, who is truly the friend of domestic mining in Montana and everywhere throughout our country.

Senator Metcalf.

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STATEMENT OF HON. LEE METCALF, A U.S. SENATOR FRO
STATE OF MONTANA

Senator METCALF. Thank you, Mr. Chairman. Whether i a personal visit or on Senate business, it is always good, of cou be back home in Montana and to be in Butte. Today it is my ure to be here with one of the most distinguished Senators U.S. Senate Senator Gruening from Alaska. Senator Mansfie I are proud that he is here in our home State. Senator Grueni he has told you, is the chairman of the Interior and Insular Subcommittee on Minerals, Materials, and Fuels.

Senator Gruening graduated from Harvard University and m school but gave up the practice of medicine to enter journ Between 1912 and 1933, except for his service with the Field Art Corps in 1918, he applied himself to the newspaper profe working his way up from reporter to editor. He worked on the York Tribune, the Nation, and the New York Post. In 1933 h appointed adviser to the U.S. delegation to the 70th Inter-Ame Conference at Montevideo. He later served as the Director o Division of Territories and Island Possessions of the Departme. the Interior and administrator of the Puerto Rico reconstruction. was appointed Governor of Alaska in 1939. Twice reappointed served until 1953.

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He first came to the Senate in 1957 as a Senator-elect on a visional basis under the Alaska-Tennessee plan. He was elected the Senate in November 1958. Upon admission of Alaska a State in January of 1959 he drew the 4-year term from that St He was reelected in 1962, and he tells me that when he tossed w Senator Bartlett as to whom would be the senior Senator-beca they came in at exactly the same time he lost the toss, so he junior Senator from Alaska.

Senator Gruening is here to hear testimony on Public Law 1 It has been brought to the attention of the Committee of Interior a Insular Affairs that the law has been discriminatory in some of operations and enforcement.

Public Law 167 was originally written to prevent abuse and mist of national resources as in the famous, or maybe we should infamous, Al Sarena mining case, where, under the guise of t mining laws, a company removed $100,000 worth of timber from t public land. They never removed an ounce of minerals.

Colliers magazine the late, defunct Colliers-had a series of articl on mining law abuses. There was talk all over America about cas that Senator Gruening has spoken of, where honky-tonks and ba and so forth were built on "mining claims." I was a member of th House Interior Committee at the time and we tried to write a la that would correct these abuses. It was meant to protect the publi but if, through interpretation or administration, it is hurting th small mining operator, it ought to be changed.

I, too, am a member of the Government Operations Committe that Senator Gruening talked about. It is the special responsibilit of that committee to maintain legislative oversight over legislation its application and its enforcement. But it is also the responsibility of the legislative committees themselves, every time that they enac legislation, to keep track of the way that their laws are carried out

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COMMON VARIETIES ACT

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In almost the decade which has elapsed since the enactment of Public Law 167, a good deal of experience has been had with the law. It is our purpose today to hear your experience with the law, its administration and its enforcement; to hear whether or not we have safeguarded the interests of bona fide miners and prospectors as we hoped to do and said we were going to do in Senator Anderson's report.

Later, in Washington, the responsible agencies will testify before this subcommittee and such changes, modifications, or improvements, either amendments or changes in regulations that need to be attempted, will be discussed and negotiated.

Bill Maloney, my old friend from the Mining Council, as secretary of the Montana Mining Association, has done a superb job in organizing this hearing and getting a list of witnesses before us, so, from now on, Bill, it is your hearing, your opportunity and the opportunity of members of your association, and we want you to proceed in the way you think best and I now turn this back to the chairman.

Senator GRUENING. Mr. Maloney, I echo the sentiments expressed by our able junior Senator from Montana. You have done a magnificent job in organizing this hearing, and we would like to call on you now to present the witnesses, and, incidentally, to make any remarks that you think are appropriate; you may make them at this time or later.

Mr. Maloney.

STATEMENT OF W. G. MALONEY, SECRETARY-MANAGER, MINING
ASSOCIATION OF MONTANA

Mr. MALONEY. My name is Mr. W. G. Maloney and I am secretarymanager of the Mining Association of Montana. I have been, for the past 9 years in this position.

Senator GRUENING. I would like to suggest, as I have said to you before, that we want to make this as relaxed and as informal as you wish.

Mr. MALONEY. Chairman Gruening, of the Senate Subcommittee on Minerals, Materials, and Fuels, and Senator Metcalf: I wish to take this opportunity to thank you and the committee on behalf of the Mining Association of Montana for holding this hearing here in Montana to consider problems of the industry under Public Law 167, referred to as the "common variety" and "Multiple-Use Act" of 1955.

Under the interpretations of this law by the Bureau of Land Management confusion has been brought about by their various interpretations.

The industry is operating under a tremendous burden because of the uncertainty of the status of the claims which are located with a view toward future patents.

Expert witnesses to follow will go more into detail concerning the legal and the geological aspects of these areas of confusion. I might also add that these two witnesses-one, an attorney, the other, one of the outstanding geologists of the West-will also be available to answer questions and will follow me, respectively, in their talks.

Widespread dissatisfaction with the definitions of the law has even extended to officials within the Department of Interior. For example in a letter written by an Assistant Secretary in the Department of

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Interior, dated May 8, 1964, to Uuno Sahinen, associate director the Montana Bureau of Mines and Geology, it was stated:

*** although the amendment (Circular 2089) served to clarify the mo ambiguous definition employed previously, it is not broad enough to eliminate questions ***.

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*** Accordingly, we can well understand that mining claimants sometim find it difficult to ascertain in advance the status of their claims under this la with any degree of certainty. Our inability to arrive at a working definition "common varieties" which is acceptable both to industry and administratio suggests that clarifying legislation would be useful **

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On March 23, 1965, at a meeting of the Arizona Small Mine Oper ators Association in Tucson, Ariz., with officials of the Forest Servic and the Bureau of Land Management, Calvin Brice, of the Fiel Solicitors Office, Bureau of Land Management, made the following

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Special and distinct value, as defined in section 3, "common varieties," is now a litigable part of the mining law, and a changing part, since we do not knov ourselves, until the matter is litigated, what they are ***.

statement:

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Brice pointed out that:

*** Departmental rulings * * *.

on which his opinion is based—

*** are subject to judicial review *** admittedly at great inconvenience and expense to the claimant, but nevertheless, this is the Department's ruling. H. R. Hochmuth, Associate Director of the Bureau of Land Management, in a speech delivered in 1964, as quoted in the April 23, 1965, issue of Pay Dirt, stated the following:

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*** many persons, including the writer, have come to the conclusion that the 1872 mining law is an anachronism and no longer serves the best interests of the Nation or the mining industry * * *.

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There can be no gainsaying that this mining law of 1872 is not administered as it was originally intended. There has been a definite trend in decisions toward more stringent requirements to establish the validity of a claim. Examples of these may be found in the narrowing application of the rule of discovery, the employment of the rule of marketability, the definition of "common varieties," and the concern for economic values.

Hochmuth, in a discussion of "discovery" as determining validity of the mining claim, continued:

***The fact that such a claimant is large, experienced and well motivated does not satisfy the law. It must physically expose ore of such quality as will assure that the development might reasonably be expected to result in a valuable mine. It may have reams of data produced by recognized scientific exploratory methods which infer the existence of good ore. It may have conducted exhaustive feasibility studies and done extensive research on metallurgy and new uses of the mineral. The decision to proceed may have been made by a highly competent board of directors. Nevertheless, it will be obliged to submit its claims to the tests imposed by law as it is known and applied today.

I might interpolate, as it is known and applied by the Bureau regulations.

In United States of America v. Irving Rand, Contest No. 05303-A (Apr. 26, 1962) the Department of Interior held:

The deposits are not now valuable and do not constitute a discovery under the mining laws.

In that case the mine still contained a substantial amount of ore worth $16.10 per ton, but since World War II the relative value of gold to labor had depreciated to the point that the vein was not profitably operated at the time of the contest.

Then, in the Denison case, No. A-29884, April 24, 1964, Secretary of Interior Udall ruled:

Although a mining claim may have been valid in the past because of the discovery on the claim of a valuable deposit of mineral, the mining claim will lose its validity if the mineral deposit ceases to be valuable because of a change in economic conditions.

Under this ruling, if it had been applied in the past, it is possible that there wouldn't be any large-scale mining operations as now exist in the Butte area, since it is generally acknowledged that the present and future operations of the Butte Hill are based on the Berkeley pit. Let us assume that the Berkeley claims here in Butte were unpatented in the 1920's. That was the time that the Berkeley closed down, the mine was shut down then because it was unprofitable. Under the present Department interpretations of the mining laws, the economic conditions of the 1920's would cause the Berkeley claims to be declared invalid.

Later, the Berkeley mine resumed operations as an open pit, which is now referred to as the Berkeley pit. It developed, and we have a mining operation directly responsible for the continued prosperity of a regional economy, from which numerous sidelines of business activity prosper. Thousands of men are employed, all as a result of the open pit operations. It is an integral part of the western operations of a nationwide corporation.

Proceeding logically, from local to regional to countrywide economic activity, the implications of continuing this policy would result in depressed economic conditions throughout the Nation, or throughout all that part of the Nation which depends upon the mining industry to a certain extent.

Now, just to elaborate a little on the amount of work done at the Berkeley pit: Since the 1955 date, the overall excavation-that is not just ore but stripping and everything from the Berkeley pit was approximately 300 million tons. I think the official figure to around the first of the year is around 272 million tons.

Speakers who follow me will point up this confusion by their own special problems and describe controversies that are now pending with the Bureau of Land Management. These speakers I am referring to here are mostly small mine operators, with one or two exceptions. Some are from the Southwestern Montana Mining Association, where some of these small problems are coming from. They have representatives here who will speak later and go into them in detail.

It has been arranged for Mr. Roth, if it is satisfactory, to follow me and go into the various details of the general allusions I have made to the confusion to go into it in specific detail.

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Mr. Sahinen, who will follow him, has had many years' experience as associate director for the Montana State Bureau of Mines. has been one of the greatest helps that we have had in Montana for the small miners. He and his staff make field trips all summer long. They go out and look these small claims over; they assist them if asked for this kind of advice and they get the help they need. He is a recognized authority on geological conditions and I am sure you will consider him a recognized authority on "common varieties." He will be the third speaker, and each one of those gentlemen will answer any and all questions propounded to them.

Senator Gruening, I would like to say to you that I have followed your writeups for the past several years, especially your exchange of

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