Assistant Secretary FINNEY. Pending an adjudication of the

matter.

Senator KENDRICK. One of the provisions named in section 2 suggests a basis for the decision, where the land was not known to be mineral in character. That is to say, it suggests that the department would have a right to assume that the State was entitled to the full and complete title to the land. That is suggested in the language of the section. Do you not think so?

Assistant Secretary FINNEY. Which bill are you taking about?
Senator KENDRICK. In 1623, section 2.

Assistant Secretary FINNEY. Oh, yes; there is no question about that. If the lands are not known to be mineral, they belong to the State and title could not be disturbed even if you discovered a diamond mine on it since.

Representative MORROW. But here is the distinction: Even if the State is without knowledge and some one else gets that knowledge 10 years afterwards, and has knowledge that goes to the time the State got it, that makes it mineral.

Assistant Secretary FINNEY. That is true.

Representative MORROW. That is the point that puts our State in jeopardy.

Assistant Secretary FINNEY. Well, it is always a question of fact, Mr. Morrow.

Representative MORROW. But you can go back 30 years. Senator Bratton said that some of this land passed to his State in 1912, and yet you can go back of that.

Assistant Secretary FINNEY. I am not going to decide your case until it gets to me.

Representative MORROW. I am not trying to get you to decide any case, but trying to get the facts before the committee, so the committee will understand them. Now, as I understand, the Government does not take the knowledge that it had at the time it got it; it takes the knowledge of the community, and that may be used in establishing the title to the land.

Assistant Secretary FINNEY. Either or both.

Representative MORROW. And that may be used 50 years from now. Assistant Secretary FINNEY. That is right.

Senator KENDRICK. In the State of Wyoming 35 years has already gone by, and if we do not get legislation the present situation will continue.

Assistant Secretary FINNEY. That is the reason the department is willing to have some legislation; but we do not want something wild here that undertakes to give the States something Congress never intended to give them in the grants.

Representative MORROW. The States have a right to know something definite.

Assistant Secretary FINNEY. We have no objection.

Senator ODDIE. I do not think, Mr. Chairman, the principles of equity have been applied sufficiently by the department in its dealings with the States. It has been dealing with them on a strictly legal basis and overlooking the equities.

Senator KENDRICK. Do you think that is particularly true because of the reason and the high purpose for which these lands were

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granted? They were granted for education purposes for the children of the State.

Senator ODDIE. Yes; and I know in my State we are facing some conditions similar to those in some of the other States, in that the settlers in agricultural sections have very recently had their titles attacked by the Government because of supposed water rights in the Indians prior to 1859. It has attacked the titles of the settlers who have legally enjoyed their rights for 60 years. The trouble has been that the Government has not recognized the proper equities in

the matter.

Senator BRATTON. And following that, Senator, Senate bill 3078 only applies where no fraud inheres in the transaction, where everybody acted in good faith. And, as Senator Kendrick says, for this high purpose, educating the youth of the State, everybody acting in good faith, it seems to me equity would say, "You having all these lands all these years, the status quo should be maintained."

Senator KENDRICK. It is a contract, after all, between the State and the Government-contracts based on the equities involved. Now, it would be manifestly absurd and unbusinesslike and everything else to assume that a contract entered into never reached the time when it was determined.

Senator ODDIE. Just as it is with our settlers, whose titles have been attacked because of supposed water rights antedating them by 60 years and more.

Assistant Secretary FINNEY. I would just like to say right here, in answer to Senator Kendrick's and Senator Oddie's statements, I do not know of any case where the Government has charged the State with fraud in attempting to retain or acquire these school sections. It is a question of fact, not of fraud, whether it passed as a nonmineral grant or did not pass.

Now, there are cases where coal companies have gone to a State knowing that they were coal lands-they have gone to the State and bought it for $1.25 an acre, and have gone in and developed the coal lands. The State did not know about it and was not fraudulent, but the coal companies did know it. However, the question of fraud does not cut much figure usually.

Senator KENDRICK. But, Mr. Secretary, I do not think the Gov. ernment should establish the right to take a century in which to conclude a transfer of this property.

Assistant Secretary FINNEY. I do not know what the courts might hold as to the Government being guilty of laches; but there is no statute of limitations, and cases have come up where surveys have been made 20 years or 25 years ago.

Senator KENDRICK. Would you consider in that case that the Government had acted in any degree of diligence? Is there not a responsibility on the Government to prove any contract that it has with a State?

Assistant Secretary FINNEY. Of course, the answer to that would be that we did not know about it; it has just been brought to our

attention.

Senator KENDRICK. Why should you not know?

Assistant Secretary FINNEY. Well, the Department of the Interior has not the money nor the time nor the men to go out and determine the character as of to-morrow of every section in the country.

Senator KENDRICK. I understand that, but that does not involve a reasonable opportunity to find out and determine, and my thought is that there is a responsibility on the part of the Government to clear the title that it is intended to grant to the State. And the Government has not a right to assume-it is not to my viewpoint equitable and fair for the Government to continue to hold this in reservation and say that some day it may be mineral. There should be a limitation on that.

Assistant Secretary FINNEY. I think we are all agreed on that. The CHAIRMAN. The time has now come when action should be taken.

Senator KENDRICK. I think unless we proceed on that theory here we are just wasting our time. But here is the time and opportunity-Senator Walsh does not think so, as I understood him-but I think that is the merit and meat of the whole question we are considering here.

Assistant Secretary FINNEY. Well, so far as the Secretary's report is concerned, he favors legislation like S. 1623, which is something like you have in mind. (See p. 138.)

Can I complete this now, Mr. Chairman? I have only one or two things further, and it will take me only a moment.

The CHAIRMAN. Certainly.

Senator WALSH. In regard to this matter-will you excuse me, Mr. Finney?

Assistant Secretary FINNEY. Certainly.

Senator WALSH. Senator Kendrick must have misunderstood me. I said I agreed with him-

Senator KENDRICK (interposing). Yes; but you said you understood it was not the purpose of this legislation

Senator WALSH (interposing). I called attention to a feature of one of the bills that impressed me. But I am more particularly impressed with section 2 of S. 3078. I have before me five different bills dealing with the same subject. If you will give your attention to that, Senator Kendrick, for a moment.

Senator KENDRICK. I listened carefully to you.
Senator WALSH (reading):

That no suit in any court or proceeding in the Department of the Interior, heretofore or hereafter brought, to adjudge or declare an exception from any grant either of lands designated therein or certified to a State thereunder because of known mineral character of such lands on the date the grant would have otherwise attached, shall be maintained unless brought or begun within six years of such date.

That is to say, if there is a suit pending or proceeding pending that was not begun within six years from the time the grant attached, then that suit fails.

Senator KENDRICK. Yes.

Senator WALSH. That would destroy the proceedings now pending to establish the right of the Government to section 16.

Senator KENDRICK. Providing that it began after the expiration. of six years.

Senator WALSH. Which they were.

Assistant Secretary FINNEY. Yes, sir.

Senator WALSH. Which they were.

So this bill is one to establish the right of the Standard Oil Co. in section 36 in Elk Hills Naval Reserve No. 1. (Sutro brief, see pp. 173, 179.)

The CHAIRMAN. That is not what it does.

Senator WALSH. That is what it does. You might think differently from other language to which I will call your attention. [Reading:]

and all lands so designated and/or so certified which are not involved in any such suit or proceeding at the expiration of such period of six years shall be deemed to have been unaffected by the exception of known mineral lands from the grant.

That is to say that the whole country over there has never been any inquiry at all by anybody, either in court or out of court, before the Department of the Interior or elsewhere, as to whether the particular tract is mineral or is not mineral. It goes to the State without any inquiry at all as to whether it is mineral in character, or not, by anybody. [Continuing reading:]

Provided, That nothing contained in this section shall be construed to limit the period for the bringing of any action in the courts, or the institution of any proceeding in the Department of the Interior, or to affect any now pending suit to adjudge or declare such an exception for fraud upon the United States in connection with the survey or selection of such lands.

Senator KENDRICK. I wanted to ask you there: Is it not true according to the testimony before our committee at the time we were holding the investigation of the oil leases, that the Elk Hills territory was known to be mineral and so reported by the Government when the official survey was accepted?

Senator WALSH. Yes; it was so reported, Senator.

Senator KENDRICK. Well then

Senator WALSH (interposing). Just a moment. You will recall that after that a subsequent inquiry was instituted by a man who was sent out there-what was his name?

1

Assistant Secretary FINNEY. Special Agent Ryan.

Senator WALSH. By Special Agent Ryan, who went out and reported that it was not mineral.

Senator KENDRICK. That was through the action of the department itself?

Senator WALSH. Yes.

Senator KENDRICK. But in a general way the Elk Hills lands would be included under this bill?

Senator WALSH. Where? How?

Senator KENDRICK. By the fact that they were known mineral and reported so at the time of the survey.

Senator WALSH. But there is no such exception in the bill.
Senator KENDRICK. Not in this bill?

Senator WALSH. No.

Assistant Secretary FINNEY (interposing). Mr. Colton made a statement before you came in, Senator, which was, that this establishes a rule. But you can not bring your suit or proceeding unless you do it within six years.

Senator WALSH. Of course. The Government brings its suit alleging that that land was known to be mineral at the time of the Government survey.

Assistant Secretary FINNEY. Yes.

Senator WALSH. But it does not bring that proceeding until six years after that time, and under this it does not make any difference whether it was known or unknown, they can not begin the proceeding.

Senator KENDRICK. I think that is an unwise provision in the bill with reference to the proceeding. I think it should be based entirely on the known character of the land at the time of the survey.

Senator WALSH. Yes; but the Government says it was known and it is ready to establish it was known, but not having begun the proceedings within six years it is not permitted to establish that. But this section, if you will give me your attention a little further, this section continues [reading]:

But in no such action or proceeding shall any fraud be held to have been shown if the evidence adduced fails to prove that an actual discovery of a valuable deposit of mineral had been made or that an outcropping of a valuable deposit of mineral existed upon the surface thereof within the boundaries of such lands at the time when the State was admitted into the Union, or when the lands were surveyed, or when the lands were selected, as the case may be.

Introducing the principle to which I adverted a little while ago. Assistant Secretary FINNEY. And I also call attention that the following section, section 3 of S. 3078, undertakes to establish a rule of evidence that shall be followed in determining these cases, which I regard as unnecessary, because we now have our rules of evidence and apply them, and I do not think Congress should undertake to establish by law the rules of evidence.

Senator WALSH. Yes; that is further suggested. [Reading:]

That in adjudicating or declaring whether any lands designated in a grant to a State or selected by a State under any grant are excepted from the grant because of the known mineral character of such lands, the courts and the Department of the Interior shall observe, apply, and be bound by those rules of admissibility of evidence and those principles of proof with respect to what constitutes known mineral lands that were enunciated in decisions of the courts and the Department of the Interior at the time such grant was accepted by the State.

In that case it is the contention of Mr. Sutro, counsel for the Standard Oil Co., that at the time this grant attached, if it attached at all, in the year 1904, certain rules of evidence obtained in the Department of the Interior, and he contends that those rules have since been changed, and he contends that if the rules then in force were applied then the lands must be awarded to the State of California and its grantees. (Sutro brief, p. 189.) In other words, this is another provision to insure the loss of section 36 in the Elk Hills naval reserve to the Government of the United States. No, I do not think he was right about it. I do not think that there has been any change, but that is his contention, and we are going to legislate that his contention is correct.

Senator ODDIE. Mr. Secretary, what would be the effect of this upon the disseminated porphyry copper deposits, under the rulings of the department?

Assistant Secretary FINNEY. Senator, you are a mining engineer and I am not; I am not especially expert on these forms of deposits. Of course, in determining whether it passed or did not pass, the