considered the same, report it favorably to the House with the recommendation that it be passed.

This bill authorizes the Secretary of the Interior to issue under certain conditions oil and gas prospecting permit or lease under the provisions of section 19 of the general leasing act of February 25, 1920 (41 Stat. 437), section 228, title 30, Code, covering certain lands in Wyoming, aggregating 1,600 acres. The conditions imposed and the report of the Interior Department show that the Oregon Basin Oil & Gas Co., a Wyoming corporation, is the intended beneficiary under the bill.

Summed up in a sentence, the bill merely extends the period during which this company may apply for a prospecting permit under the terms of said section of the original oil leasing act, so that the company may now make such application, notwithstanding the fact that the period for so doing has expired. As appears from the Interior Department records and report, various individuals located a group of oil placer mining claims in 1912, and caused wells to be drilled thereon. After the locations were made, the land was included in a petroleum withdrawal which precluded subsequent mining locations, but had no effect on prior locations. In 1922, this company, organized by the locators, and after an expenditure of about $200,000, applied for placer patents, upon the supposition that patents had been earned. The department did not question the entire good faith of the company, or its compliance with the terms of the general mining law, except in one particular, i. e., the matter of sufficiency of discovery of oil or gas upon the claim involved.

The decisions of the Secretary of the Interior, on appeal from the General Land Office, are found in the Land Decisions, volume 50, 244, 253, in which a more detailed statement of facts will be found than is contained in the report of the department upon this bill. It appears that oil was actually physically found in wells which ranged in depth from about 40 feet to over 400 feet; that this oil was of good quality; that samples of the oil were taken and preserved; but it was held by the department that, as oil had not been found in commercial quantities, nor in any sand or stratum from which commercial production had been elsewhere secured, the amount of oil found did not constitute a sufficient discovery to warrant issuance of patents to the placer mining claims.

As mentioned by the Secretary's report, the company sought relief in the courts on the theory that the department had committed error of law; but the courts of the District of Columbia and the Supreme Court declined to review the Secretary's action, and took the view that the decision as to sufficiency of discovery was a determination of a fact with which the courts should not interfere. (See 6 Fed. (2d) 676; 55 App. D. C. 373; 273 U. S. 660, all under title of Oregon Basin Oil & Gas Co. v. Work.)

Section 19 of the leasing act (sec. 228, title 30, Code), under the provisions whereof it is proposed to authorize issuance of prospecting permit, with right to lease following discovery, is one of the relief sections of the leasing act and reads as follows:

"That any person who on October 1, 1919, was a bona fide occupant or claimant of oil or gas lands under a claim initiated while such lands were not withdrawn from oil or gas location and entry, and who had previously performed all acts under then existing laws necessary to valid locations thereof except to make discovery and upon which discovery had not been made prior to the passage of this act, and who has performed work or expended on or for the benefit of such locations an amount equal in the aggregate of $250 for each location, if application therefor shall be made within six months from the passage of this act shall be entitled to prospecting permits thereon upon the same terms and conditions, and limitations as to acreage, as other permits provided for in this act, or, where any such person has heretofore made such discovery, shall be entitled to a lease thereon under such terms as the Secretary of the Interior may prescribe unless otherwise provided for in section 18 hereof: Provided, That where such prospecting permit is granted upon lands within any known geologic structure of a producing oil or gas field, the royalty to be fixed in any lease thereafter granted thereon or any portion thereof shall be not less than 121⁄2 per cent of all the oil or gas produced except oil or gas used for production purposes on the claim, or unavoidably lost: Provided, however, That the provisions of this section shall not apply to lands reserved for the use of the Navy: Provided, however, That no claimant for a permit or lease who has been guilty of any fraud or who had knowledge or reasonable grounds to know of any fraud, or who has not acted honestly and in good faith, shall be entitled to any of the benefits of this section.

"All permits or leases hereunder shall inure to the benefit of the claimant and all persons claiming through or under him by lease, contract, or otherwise as their interests may appear."

Had this company foreseen in 1920 that the department would deny its application for placer patent, it might, within six months after enactment of the leasing act (February 25, 1920), have applied for permit under said section upon surrendering its placer title.

Had it done so, it would have secured much greater rights than will be possible under the terms of the pending bill, in that:

First. Whereas it might have secured two permits, one on each dome mentioned in the report of the department, aggregating 5,120 acres, it is restricted by the bill to but 1,600 acres.

Second. Had it then secured permits, in event of making commercial discovery, it would have had a lease upon one-fourth the area of each permit at a flat royalty of but 5 per cent, while by the terms of this bill and of section 19 of the leasing act, it must pay a minimum royalty of 121⁄2 per cent on all the permit area this because the land is now within the "known geologic structure" of a producing field as per its designation as such. See department's report.

While the Secretary did not refer in his report, to the legislative precedents for this bill, such precedents exist.

Reference is made to the acts approved September 15, 1922 (42 Stats. 844), and June 26, 1926 (44 Stat. pt. 3, 1621). By the first of said amendatory acts, the provisions of section 18a of the leasing act were extended to include certain lands in Utah which had been included in a withdrawal order other than that mentioned in the original leasing act. The bill which became said act (S. 2460, 67th Cong.) was made the subject of Senate Report 608 and House Report 1104. From House Report 1104, is quoted the following from the statement of First Assistant Secretary of the Interior Finney, made before the House Committee on the Public Lands:

Now, in that situation, the only thing the department could do with those lands which have been demonstrated to contain oil by these claimants would be to put the lands up at auction, under section 17 of the leasing act, and dispose of them at competitive bidding, which would seem hardly fair to those who have spent money and drilled the wells. For that reason the department reported that it had no objection to the enactment of this law, which would permit all these people to present their claims and permit the President to make some adjustment under the provision of section 18a."

The bill (H. R. 10980, 69th Cong.) which became said act of June 26, 1926, was made the subject of House Report 1221 and of Senate Report 1108. The following is quoted from the report of the department on that bill and incorporated in the committee reports:

"Section 17 of the oil and gas leasing act is the only section under which disposition might be made of the said land at the present time. To dispose of the Îand at public auction under this section would place the parties in interest in a position to lose the improvements placed upon the land.

"It appears from the record that the locators and their lessee have such equities in the claim as to entitle them to the relief provided by the bill."

The question may be asked just what disposal would be made of the lands involved in event this bill should fail of enactment. As stated of land involved in the other bills which were enacted, as above mentioned, the Interior Department would have the right to offer the lands for lease on bonus bidding. Concededly it is possible that the Government might receive something by way of bonus in such event; but with knowledge of this phase of the matter the Secretary evidently believed that it would be only fair that this company, which, with its predecessors, was responsible for the expensive development of this wildcat field, should be accorded opportunity to secure in some part the rights (though of diminished value and extent) under the leasing act which it might have secured had any reason existed in 1920 for fearing that its placer title would be brought into question by the Government.

As to the possible rights of third persons, it is to be noted that the very language of the bill forbids the issuance of permit or lease to this company save as to lands free of valid adverse claims of others.

Inquiry at the General Land Office shows that the lands involved are surrounded by areas included in prospecting permits issued under section 13 of the leasing act, not based upon any preliminary exploration and without claim of preference right. Under those permits, in event of discovery, each permittee

BE

will secure a lease for one-fourth of his permit area at a flat royalty of but 5 per cent, and with a minimum royalty of 121⁄2 per cent on the remaining area, while the minimum royalty which this company must pay will be 121⁄2 per cent, although it was through its work that the prospective oil value of this field became known.

Further, it should be noted that the language of the bill is one of authorization only, and not of direction, thus leaving the actual issuance of permits or granting of leases to the discretionary power of the Secretary of the Interior. The report of the Secretary of the Interior follows:

Hon. N. J. SINNOTT,

DEPARTMENT OF THE INTERIOR,
Washington, January 25, 1928.

Chairman Committee on the Public Lands,

House of Representatives.

MY DEAR MR. SINNOTT: Reference is made to your letter of December 27, 1927, requesting report on H. R. 479, which proposes to authorize the Secretary of the Interior to grant certain oil and gas prospecting permits or leases. The bill was introduced by Mr. Winter, of Wyoming, and is similar to S. 767, introduced in the Senate by Mr. Warren, of Wyoming, on which report was submitted to Hon. Gerald P. Nye, chairman Committee on Public Lands and Surveys, on January 14, 1928.

The bill contemplates extending the provisions of section 19 of the leasing act of February 25, 1920 (41 Stat. 437), to any claimant of title under the mining laws to the following described lands: T. 51 N., R. 100 W., 6th p. m.; sec. 5, NE. and N. 1⁄2 SW. ; sec. 6, E. 1⁄2 NE. 4 and NE. 4 SE. 4; sec. 29, SW. NE. 4, S. 1⁄2 NW. 4, SE. 4; sec. 30, SE. 4; sec. 31, E. 2; sec. 32, N. 1⁄2 and SE. 4.

The above-described lands are embraced in the following applications of the Oregon Basin Oil & Gas Co., for patent on oil placer mining claims located in T. 51 N., R. 100 W., 6th p. m., Wyoming.

Lander 013746, filed February 16, 1922, covering the Polly oil placer mining claim, located June 7, 1912, on the SW. 4 sec. 5.

Lander 013752, filed February 16, 1922, covering the Mars oil placer mining claim, located June 9, 1912, on the SE. 4 sec. 29.

Lander 013753, filed February 16, 1922, covering the Lavender oil placer mining claim, located June 9, 1912, on the SE. 4 sec. 30.

Lander 013757, filed February 16, 1922, covering the Nicholas oil placer mining claim, located June 7, 1912, on the SE. 4 sec. 6.

Lander 013771, filed February 16, 1922, covering the Calhoun oil placer mining claim, located June 7, 1912, on lots 1 and 2 and the S. 1⁄2 NE. 4 sec. 6.

Lander 013772, filed February 16, 1922, covering the Solon oil placer mining claim, located June 9, 1912, on the NE. 4 sec. 32.

Lander 013773, filed February 16, 1922, covering the Purple oil placer mining claim, located June 9, 1912, on the SE. 4 sec. 31.

Lander 013775, filed February 16, 1922, covering the Ida May oil placer mining claim, located June 7, 1912, on lots 1 and 2 and the S. 1⁄2 NE. 4 sec. 5.

Lander 013780, filed February 16, 1922, covering the Sarah oil placer mining claim, located June 7, 1912, on the SE. 4 sec. 32.

Lander 013782, filed February 16, 1922, covering the Venice oil placer mining claim, located June 9, 1912, on the NE. 4 sec. 29.

Lander 013783, filed February 16, 1922, covering the Lady oil placer mining claim, located June 9, 1912, on the NE. 4 sec. 31.

Lander 013784, filed February 16, 1922, covering the Samuel oil placer mining claim, located June 9, 1912, on the NW. 4 sec. 32.

Lander 013785, filed February 16, 1922, covering the Hahn oil placer mining claim, located June 7, 1912, on the NW. 4 sec. 29.

The tracts described in sections 5 and 6 lie within the known geologic structure of the Wiley oil field designated by the Geological Survey on July 20, 1920, and the remaining tracts are within the Elk Butte oil field, dseignated on the same date. The lands were also included in petroleum reserve No. 32 by Executive order of May 6, 1914, and are within the first form withdrawal by the Secretary, of May 2, 1919, in aid of the Shoshone reclamation project.

The records show that the claims covered by the proposed legislation have been selected from a group of 51 claims operated by the Oregon Basin Oil & Gas Co., involving an expenditure for roads, water lines, camps, and drilling in the sum of

$200,000. Oil was discovered in 1912 in shallow wells, although there has been no actual production of oil or gas in appreciable amounts.

The mineral applications of the Oregon Basin Oil & Gas Co. were rejected by the Commissioner of the General Land Office for lack of discovery, which rejection was affirmed by the decision of the department rendered February 1, 1924 (50 L. D. 253), and on February 21, 1924, a petition for exercise of supervisory authority was denied (50 L. D. 258). In the case of Oregon Basin Oil & Gas Co. v. Secretary of the Interior et al., decided May 4, 1925 (55 App. D. C. 373), on appeal to the Court of Appeals of the District of Columbia, it was held that (syllabus):

"1. Whether discovery of oil on a particular location is legally sufficient to entitle discoverer to patent is question of fact, addressed to the Secretary of the Interior, whose decision is conclusive on courts, unless arbitrary, capricious or induced by fraud or imposition.

"2. Finding by Secretary of the Interior that oil discovered in wells at depths of 45 and 434 feet did not warrant issuance of patent to discoverer, notwithstanding discoveries on adjacent claims at much greater depths and from formations unconnected with formations penetrated by wells of discoverer, held conclusive on courts.

The action of the Secretary of the Interior was affirmed, and on May 16, 1925, the court allowed an appeal to the Supreme Court of the United States, which court, on January 24, 1927, affirmed the decision of the lower court.

During the aforesaid litigation action on the case appealed (Lander 013740), together with 50 other applications of the Oregon Basin Oil & Gas Co., involving the same question, was suspended. All the applications have been finally rejected and closed, except those covered by the bill here under consideration, which were ordered suspended by departmental letters of April 5, and July 20, 1927, at the request of the mineral claimant.

While the department is of the opinion that the discovery alleged in the applications is insufficient to warrant the issuance of mineral patents to the applicant which would transfer title to the land covered by the claims in fee, the bona fides of the applicant company have never been questioned, and no objection will be interposed to legislation which will give the company an opportunity to file applications for permits or leases for consideration under section 19 of the act of February 25, 1920.

Very truly yours,

71ST CONGRESS 2d Session

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SENATE

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REPORT No. 617

CONSTRUCTION OF UNDERPASS UNDER RAILROAD TRACKS IN VICINITY OF FERN PLACE IN THE DISTRICT OF COLUMBIA

APRIL 30 (calendar day, MAY 6), 1930.-Ordered to be printed

Mr. CAPPER, from the Committee on the District of Columbia, submitted the following

REPORT

[To accompany S. 4223]

The Committee on the District of Columbia, to whom was referred the bill (S. 4223) to amend the act entitled "An act to provide for the elimination of grade crossings of steam railroads in the District of Columbia, and for other purposes," approved March 3, 1927, having considered the same, reports favorably thereon, and recommends its passage with the following amendments:

On page 1, line 9, strike out all after the word "thereto" down to and including the word "Columbia" in line 5 on page 2, and insert in lieu thereof the following:

under the tracks and right of way of the Baltimore and Ohio Railroad Company in the vicinity of the intersection of Fern Place and Piney Branch Road, extended, in the District of Columbia on a line to be determined by the Commissioners of the District of Columbia and in accordance with plans and profiles of said subway and approaches to be approved by the said commissioners.

On page 2, line 6, strike out the words "and approaches thereto" and insert, in lieu thereof the following:

and thereafter the cost of maintaining the structure within the limits of its right of way.

On page 2, line 10, strike out the words "said half cost" and insert, in lieu thereof, the word, "same".

On page 2, line 20, strike out the figures "$211,000" and insert in lieu thereof, "$250,000."

On page 3, beginning with the word "to" in line 10, strike out the language down to and including the word "Company" in line 12. On page 3, line 14, after the word "said", insert "Baltimore and Ohio".