65th CONGRESS, HOUSE OF REPRESENTATIVES. 2d Session.

COOS BAY WAGON-ROAD GRANT.

JUNE 24, 1918.-Referred to the House Calendar and ordered to be printed.

Mr. TILLMAN, from the Committee on the Public Lands, submitted the following

REPORT.

[To accompany H. R. 8625.]

The Committee on the Public Lands has had under consideration the bill H. R. 8625, a bill to adjust what is commonly known as the Coos Bay wagon-road grant by accepting a reconveyance of the granted lands from the Southern Oregon Co., the record owner of said grant, and recommends that the bill do pass with the following amendments, namely:

Page 2, at the end of line 24, add the following proviso: "Provided, That nothing herein shall be construed to prevent the United States from instituting and maintaining such suits or actions as may be necessary to recover the value of timber or other material heretofore cut or removed from any of said lands without the consent of the Southern Oregon Co."

Page 3, line 1, strike out the word "and," insert a comma after the word "accrued," and insert after the word "unpaid " the words " and now delinquent."

Page 3, line 18, after the word "years" insert the following: "or who under lease from said company have cultivated and placed valuable improvements upon."

Page 3, line 22, strike out the colon after the word "acre" and insert the following: "and reimbursing the United States for the taxes paid on such land."

Page 5, lines 7, 8, and 9, strike out the following language: "to the State treasurer of the State of Oregon, to be and become a part of the irreducible school fund of the State; twenty-five per centum shall be paid."

Page 5, lines 13, 14, 15, and 16, strike out the following language: "forty per centum shall be paid into, reserved, and appropriated as a part of the fund created by the act of June seventeenth, nineteen hundred and two, known as the reclamation act.”

Page 5, lines 22 and 23, strike out the words "State and" and also the words" and to the reclamation fund."

Page 6, line 12, strike out "$50,000" and insert in lieu thereof "$12,000."

The history of the Coos Bay wagon-road grant and the reasons for this legislation are in brief as follows:

The grant in question was made to the State of Oregon to aid in the construction of a military wagon road from Coos Bay to Roseburg, in Oregon. The grant was made March 3, 1869 [15 Štat., 340], hereinafter set forth. The State selected the Coos Bay Wagon Road Co. to construct the road, and by act of its legislature October 22, 1870, hereinafter set forth, transferred all its rights and interests in and to the grant to said company, subject to all the conditions and limitations prescribed in the act of Congress by which the grant was made to the State.

The wagon road was constructed by said company in accordance with the terms of the act of Congress of March 3, 1869. By act of Congress approved June 18, 1874 (hereinafter set forth), issuance of patent to said granted lands was authorized to said Coos Bay Wagon Road Co., and in pursuance thereof patents were issued by the United States to said company for 105,120.11 acres.

By mesne conveyances the Southern Oregon Co., mentioned in the bill H. R. 8625, became the owner of the granted lands December 14, 1887, in so far as the Coos Bay Wagon Road Co. was competent to transfer them, with the exception of approximately 7,500 acres previously sold by the road company and one of its successors to individuals.

In addition to said sale of 7,500 acres, some 4,500 acres of land have been disposed of to different parties, so that the entire area undisposed of is approximately 93,000 acres.

On account of the violation of the terms of the granting act, which prohibited sales in quantities greater than 160 acres to any one person and at a price exceeding $2.50 per acre, the Attorney General of the United States filed suit for a forfeiture of the land grant in the United States court for the district of Oregon. This court and the Circuit Court of Appeals refused to grant a forfeiture, but decreed that the Southern Oregon Co. be enjoined from making further sales in violation of law and from making any sale or disposition whatever of the land and timber until Congress shall have reasonable time within which to provide for their disposition in such manner as it may deem proper, at the same time securing to the company all the value conferred by the granting act. The case is now pending on appeal by defendant before the Supreme Court of the United States. The following letter from the Attorney General of the United States gives more in detail the history of the grant and the reasons. in favor of H. R. 8625 as introduced.

Hon. ScorT FERRIS,

DEPARTMENT OF JUSTICE Washington, D. C., January 21, 1918.

Chairman Committee on the Public Lands,

House of Representatives.

MY DEAR SIR: I have just received your letter of the 19th requesting a report on House bill No. 8625, present Congress, authorizing an acceptance from the Southern Oregon Company of a reconveyance of the lands constituting the Coos Bay wagon grant in the State of Oregon.

The grant in question was made to the State of Oregon by the act of March 3, 1869 (15 Stat., 340), to aid in the construction of a military wagon road from the navigable waters of Coos Bay to Roseburg, and was upon condition that the granted lands should be sold in quantities not greater than a quarter section to any one person and for a price not exceeding $2.50 per acre. By an act of October 22, 1870, the Legislature of the State of Oregon donated the lands to the Coos Bay Wagon Road Company, subject to all the conditions and limitations prescribed in the act of Congress by which the grant was made to the State.

Upon certificate from the governor of the State that the road had been constructed, four patents were issued by the United States, as follows: No. 1, dated February 12, 1875, for 42,496.93 acres; No. 2, March 18, 1876, for 1,080 acres; No. 3, November 8, 1876, for 61,111.53 acres; and No. 4, February 17, 1877, 431.65 acres, making an aggregate of 105,120.11 acres.

Prior to 1876 the Wagon Road Company disposed of in small quantities about 7,500 acres of the lands to individuals. some sales embracing as much as an entire section of land, and on May 31, 1875, the company entered into an agreement to sell all of the lands and the road to one John Miller for the price of $1.00 per acre for the lands, and on that day the company executed to Miller a deed for all of the lands that had then been patented and which had not been sold to individuals-that is to say, about 3,500 acres. The contract with Miller provided that the balance of the lands would be conveyed to him as soon as the patents were procured from the Government. In furtherance of this agreement the Wagon Road Company on January 7, 1884, executed a deed to one William H. Besse for the lands that had been patented to the company since the date of the deed to Miller in 1875, for an alleged consideration of $91,715.05; and by mesne conveyances these lands were conveyed to the Oregon Southern Improvement Company on January 4, 1884. In the meantime Besse had acquired by intermediate conveyances the lands that had been deeded to Miller in 1875. He conveyed them to one Russell Gray on December 29, 1883, and Gray on January 5, 1884, transferred them to the Oregon Southern Improvement Company. So that in 1884 the Oregon Southern Improvement Company became the owner of the entire grant in so far as the Oregon Road Company was competent to transfer it, with the exception, of course, of the area of approximately 7,500 acres that had been previously conveyed to individuals. In order to secure certain bonds that had been issued by it, the Oregon Southern Improvement Company executed a deed of trust conveying all of its property to the Boston Safe Deposit and Trust Company of Massachusetts, which company was in 1886 succeeded as trustee by William H. Rotch and Edward D. Mañdell; and during that year proceedings were begun in the United States Court for the District of Oregon to foreclose the deed of trust, as a result of which a sale of the property was ordered and was made by a master to Rotch, one of the trustees, and one W. W. Crapo, who on December 14, 1887, transferred the property to the Southern Oregon Company.

By a joint resolution approved April 30, 1908 (35 Stat., 571), Congress authorized and directed the Attorney General of the United States to Institute such proceedings as might be necessary to enforce all the rights and remedies of the United States growing out of this grant. In pursuance of that law the Attorney General filed a suit in the United States court for the district of Oregon praying, among other things, for a forfeiture of the land grant. However, before this suit proceeded to a determination, the Supreme Court of the United States had decided the somewhat similar case growing out of the Oregon and California Railroad land grant (238 U. S., 393), in which it held that while the railroad company had violated the law in selling lands contrary to the terms of the grant, such violation nevertheless did not operate as a forfeiture of the entire grant. In view of the action of the Supreme Court in the railroad case, the district court for Oregon on July 12, 1915 (225 Fed., 560), rendered a decision and entered a decree in the present case along the lines of the Supreme Court's decision in the railroad case; and on the appeal of the Southern Oregon Company the decree of the district court was affirmed by the circuit court of appeals February 13, 1917 (241 Fed., 16). By this decree the company is enjoined from making further sales in violation of the law and from making any sale or disposition whatever of the land and timber until Congress shall have a reasonable time within which to provide for their disposition in such manner as it may deem proper, at the same time securing to the company all the value conferred by the granting act. The Southern Oregon Company took a further appeal to the Supreme Court of the United States, where the case is now pending.

H R-65-2-vol 2—37

The bill upon which you request my views authorizes a settlement of this litigation in the following manner: Upon the execution and delivery by the Southern Oregon Company of a deed satisfactory to the Attorney General, reconveying to the United States all of the company's right, title, and interests under the grant, the lands are to become again a part of the public domain, and the United States is to pay the Southern Oregon Company the sum of $232,463.07, whereupon the suit now pending in the Supreme Court is to be dismissed and all matters of difference, controversy, and litigation between the United States and the Southern Oregon Company arising out of this land grant are to be fully settled, adjusted, and terminated.

The bill also provides that the taxes accrued and unpaid on the lands at the time of the delivery of the deed of reconveyance provided for shall be paid by the United States, and a sum sufficient to make that payment and also to provide for the payment of the sum of $232,463.07 to the company is appropriated by the bill.

The bill further provides that the lands are to be classified and disposed of in the manner provided for the classification and disposition of the Oregon and California Railroad grant lands by the Chamberlain-Ferris Act of June 9, 1916 (39 Stat., 218); and after the Treasury is reimbursed for the taxes paid on the lands and in the amount paid the Southern Oregon Company the balance of the proceeds is to be distributed as follows: Twenty-five per centum to the county in which the lands sold are situated for common schools, roads, highways, and bridges, and port districts; twenty-five per centum to the State treasurer to become a part of the irreducible school fund of the State; forty per centum to be paid into the reclamation fund, and the remainder to become a part of general fund in the Treasury.

The evident purpose of the bill is to dispose of this somewhat complicated and vexatious matter without further litigation or further delay of any sort. The act is to become effective, upon acceptance by the Southern Oregon Company, within thirty days from and after its approval, and there has been filed in this department a proposition by the president of the company for the settlement of the case, which gives absolute assurance of the company's acceptance of the bill if enacted into law.

Since the acquisition of the grant by the Oregon Southern Improvement Company and the Southern Oregon Company some 4,500 acres of land have been disposed of to different parties, so that the entire area undisposed of is now approximately 93,000 acres, and the amount to be paid the company is at the rate of $2.50 per acre for this area. At the trial of the case in the district court the Southern Oregon Company offered evidence showing receipts and disbursements on account of the land grant as follows:

Excess disbursements over receipts, other than interest‒‒‒‒‒ 472, 867. 03