This bill was introduced as a substitute for H. R. 11328 at the request of the Secretary of the Interior, and his letter of transmittal, together with the favorable memorandum from the Commissioner of Indian Affairs, read as follows: Hon. SCOTT LEAVITT, DEPARTMENT OF THE INTERIOR, Chairman Committee on Indian Affairs, Washington, D. C. MY DEAR MR. CHAIRMAN: In compliance with your request of June 6, for a report on H. R. 11328, which would extend the restrictive period against alienation, lease, mortgage, or other encumberance of any interest of restricted heirs of members of the Five Civilized Tribes, which request was received too late to enable us to submit the report before adjournment of the last session of Congress, there is transmitted herewith a memorandum on the subject that has been prepared by Commissioner Rhoads, of the Indian Service, to which memorandum careful attention is invited. The draft submitted by Commissioner Rhoads as a substitute for H. R. 11328 also is inclosed herewith. I can not overemphasize the importance of the legislation suggested by Commissioner Rhoads. The situation in the Five Civilized Tribes under the act of May 27, 1908, is thoroughly deplorable and it is time that remedial legislation was enacted. Little can be done to improve the situation of the Indians there until the changes proposed in Commissioner Rhoads's draft are adopted. Very truly yours, Memorandum for the Secretary. RAY LYMAN WILBUR. DEPARTMENT OF THE INTERIOR, In the attached letter from the chairman of the Committee on Indian Affairs of the House of Representatives, a report is requested on H. R. 11328, being a bill to extend the restrictions against alienation, lease, mortgage, or other encumbrance of any interest of restricted heirs of members of the Five Civilized Tribes, and for other purposes. By the provisions of section 1 of the act of May 10, 1928 (45 Stat. L. 495), the existing restrictions on the lands of Indians of the Five Civilized Tribes of one-half or more Indian blood are extended for an additional period of 25 years, commencing April 26, 1931, except the special restriction against the alienation of homestead allotments imposed by section 9 of the act of May 27, 1908 (35 Stat. 312), for the benefit of children born since March 4, 1906. Since the passage of the act of May 10, 1928, some more or less perplexing questions have been raised regarding the status of the lands and funds of Indians after April 26, 1931, when the act extending the period of restrictions takes effect. Uncertainty exists under present law as to whether the said act extending the restrictions on lands will include the accumulated funds, restricted until April 26, 1931, of living allottees as well as whether it will include such funds inherited by children born since March 4, 1906; and sincere interest has been manifested by the Indians, particularly with reference to the property of their children. Those children born since March 4, 1906, received no allotments in their own right and in most cases their only lands consist of such as they inherit from their parents. Large sums of restricted moneys accrued from oil and gas leases have also passed to such children by inheritance, and additional royalties are accruing and becoming payable to them. Many of the Indian allottees have expressed themselves as definitely desiring that their children's interests remain under the jurisdiction of this department; and that the sale of inherited lands and the partitioning of lands among their heirs shall be made subject only to the approval of the Secretary of the Interior. They also desire authority of law to enable them to dispose of their lands to their children subject to the same restrictions as are upon the lands in their own hands. In view of the wishes of the Indians and with special reference to the many heirs born since March 4, 1906, a large number of whom are full bloods and with but limited education and business experience, and to remove beyond the range of legal controversy the question of whether the act of May 10, 1928, extends the restrictions on moneys as well as lands, there is submitted herewith a draft of a bill which we would recommend as a substitute of H. R. 11328. Under present law no inherited lands of Indians of the Five Civilized Tribes will be restricted after April 26, 1931, except as to full-blood heirs and devisees who are restricted against alienating their lands except by approval of the proper local court. Section 9 of the act of May 27, 1908, as amended (44 Stat. 239), provides: "The death of any allottee of the Five Civilized Tribes shall operate to remove all restrictions upon the alienation of said allottee's land: Provided, That hereafter no conveyance by any full-blood Indian of the Five Civilized Tribes of any interest in lands restricted by section 1 of this act acquired by inheritance or devise from an allottee of such lands shall be valid unless approved by the county court. * Immediately following the death of an allottee the heirs are in many cases persuaded to sell their lands, including all mineral rights; and in many cases not knowing the value thereof they are sold at a price far below their actual worth. If the heirs are full-blood Indians their deeds to be valid must be approved by the proper county court. No definite procedure for such approval has been prescribed by Congress; and the Supreme Court of Oklahoma has held that such approval is a ministerial act and not one of a judicial character. In this connection see Buck et al. v. Simpson et al. (166 Pac. 146). An application had been made under section 9 of the act of May 27, 1908, supra, to the county court to approve a deed which purported to grant all of the estate of the Indian heir in and to the land described therein and the county court made findings of fact and an order approving the deed. Although in the findings it was erroneously stated that the Indian had only a life estate in the land, it was held that the approval by the county court of said deed gave it validity and effect and that it conveyed to the grantee named therein all the estate of such Indian heir in the lands and the action of the county court in approving said deed not being judicial and the findings forming no part of the order of approval may be treated as mere surplusage. Reference is also made in this connection to the case of Carey v. Bewley et al. (224 Pac. 990), where the same court held (syllabus): "The approval of a full-blood's conveyance is not rendered invalid because the same was approved without the appearance of the full-blood Indian grantors before the county court at the time of the approval." In this case the court quoted with approval its holdings in the former cases of Henley v. Davis (156 Pac. 337) and other cases, as follows: "From this fact we take it that proof of the payment of a present consideration is not essential to the validity of such conveyance but the approval of the approving agency provided in the act renders the conveyance valid, although no consideration was paid or recited in the conveyance. The title to inherited land was in the heir, and the heir had the right to convey upon approval of the approving agency. We take it that if he gave the land away and the proper agency approved the conveyance, the title would pass to the grantee and the heir could not thereafter repudiate the conveyance.' Although their acts do not come before any official of the Federal Government for consideration or review the Supreme Court in the case of Parker v. Richards (250 U. S. 235) held that the county judges in approving deeds by fullblood heirs are the agents of the Federal Government acting under authority of Congress, which is undoubtedly true. The Federal courts have also held that an oil and gas mining lease made by an heir of an allottee of the Five Civilized Tribes is a conveyance of an interest in the land within the meaning of section 9 in the act of May 27, 1908, and a valid instrument without the approval of the Secretary of the Interior. (United States v. Gypsy Oil Co., 10 Fed. (2d) 487.) Hence full-blood Indian heirs, frequently with but little education and business experience and in some cases unable to speak or read the English language, are left to compete with their superior white neighbors who are qualified by years of experience and even special training in the matter of contracting for rights in the exploration and development of oil and gas lands. It is also contended by some, including wellqualified members of the bar, that under section 9 of the act of May 27, 1908, an heir born prior to March 4, 1906, may convey with approval of the county court his interest, including oil, gas, and other minerals, in and to homestead allotments, notwithstanding there are heirs born since March 4, 1906, who receive no allotments in their own rights and for whose use and benefit special restrictions were placed on the homestead until April 26, 1931, such conveyances HR-71-3-VOL 1-25 to take effect after the expiration of the restrictions on April 26, 1931. Deeds of this character are now being approved by the county courts and opportunities for deception, overreaching, and fraud by unscrupulous persons upon Indian heirs are multiplied. Many suits have been filed to set aside these deeds which are considered invalid and a cloud upon titles. In this connection the following is quoted from a report recently received from the field: "It is an open secret among the land-buying fraternity that the defendants in our Federal court cases expect to appeal these cases if decided in favor of the Government, and keep them in court until after April 26, 1931, and at that time procure new deeds, approved by a county judge of the State of Oklahoma, and thus defeat the Government in its effort to protect the Indian in his inherited lands." It would appear that there is but one remedy to properly protect these Indians in their inherited lands and that is the enactment by Congress prior to April 26, 1931, of a protective statute. Under the statutes of Oklahoma a mortgage on real estate conveys no interest in the land but is treated merely as a lien; yet the courts, both State and Federal, have held that mortgages made by Indian heirs conveying restricted inherited lands are conveyances of interests in the lands within the meaning of section 9 of the act of May 27, 1908, supra; and are therefore valid instruments without approval of the Secretary of the Interior, and frequently valuable lands are lost through foreclosure of such mortgages. In this connection attention is invited to the decisions of Terrell v. Scott (262 Pac. 1071), Potter v. Vernon (264 Pac. 611). In a recent case of this character involving the jurisdiction of the county courts to approve mortgages, known as Wilson v. Tyler (418 Equity, in the United States District Court for the Northern District of Oklahoma), where it was removed and docketed from the District Court of Washington County, Okla., the Federal district court sustained the validity of the mortgage. This department urged an appeal in the case but the Attorney General after carefully considering the case was of the opinion that the law was settled in the matter and that we could hardly hope for reversal of the decision by the circuit court of appeals. In a memorandum prepared in the Solicitor General's office upon which the Department of Justice based its refusal to appeal the case, it was stated: "I may add that the Interior Department has recommended appeal, and that the United States attorney has recommended against the same 'unless expressly recommended by the Department of the Interior.' It would appear, however, that the main reason for recommending appeal is the pernicious practice apparently growing in, Oklahoma of taking mortgages from these full-blood Indians, which usually result in a foreclosure sale netting to the Indians only a small portion of the value of their property, and the desire of the Interior Department to put an end to that practice. As to this my suggestion would be that since in the present status of the law such practice can not be prevented, the way to accomplish the purpose desired for the protection of the Indians against their own improvidence in the matter is not by giving to section 9 of the act of 1908 a forced interpretation which is not warranted by the terms of said act, but by procuring the necessary legislation from Congress." The foregoing cases show the scope and effect of section 9 of the act of May 27, 1908, in removing restrictions from inherited lands as construed by the courts. Many heirs, particularly full bloods are wholly unprepared to transact business of any consequence. Many complaints have been received from Indian heirs against their grantees on account of alleged inadequate considerations and practices of fraud. The practical working of the law as now applied does not always protect the Indian but frequently permits results inimical to his best interest in that he does not receive fair and adequate consideration for land interests which he parts with. Many additional concrete cases could be given, not necessarily cases that have been before the courts, such as that of Lottie Carney, a full-blood Chickasaw, who it appears, on May 18, 1915, sold by deed approved by the county court of Pontotoc County, Okla., 154 acres of land for a consideration of $1,600 and that within three days thereafter a purchaser was able to borrow on the same land $2,100 or $500 more than the sum he paid the Indian heir as the purchase price. Another case, that of Louvina Bills, deceased, two of whom were full-blood Indians, and one a half-blood Indian, the record shows that on February 12, 1916, the half-blood heir sold his undivided one-third interest in 120 acres of land in Carter County, Okla., for $1,600 and that seven days later the two full-blood heirs sold, with the approval of the county court of Atoka County, Okla., their undivided inherited two-third interests in the same 120 acres to the same purchaser for $1,000 or $600 less than was paid for the one-third interest purchased from the half-blood heirs. The proposed legislation strikes at the root of much of the evil that has grown up in recent years in connection with transactions with Indian heirs among the Five Civilized Tribes and which has resulted in an avalanche of criticism which must rest primarily with the Federal Government which has plenary jurisdiction over Indian affairs; and in view of the effect of section 9 of the act of May 27, 1908, as now defined by the courts, it seems imperative that remedial legislation be enacted if these Indian heirs are to be properly protected in their property rights. Moreover, as pointed out by the Supreme Court of the United States in its decision in the case of Parker v. Richards (250 U. S. 235), if full-blood Indians are in need of the protecting care of the Federal Government as to lands allotted to them in their own right, they are equally in need of such protection as to lands which they inherit. The facts herein set forth present conditions among the Indians of the Five Civilized Tribes which clearly call for serious consideration by the legislative branch of the Government and the early enactment of salutary provisions of law if this department is to afford the Indians the measure of protection and assistance necessary for their well-being. I would therefore favor the enactment of the draft of bill submitted herewith as a substitute for H. R. 11328. Q C. J. RHOADS, Commissioner. |