LEASES UPON NAVAL OIL RESERVES. 26 THURSDAY, DECEMBER 6, 1923. UNITED STATES SENATE, COMMITTEE ON PUBLIC LANDS AND SURVEYS, The committee met, pursuant to adjournment, at 10 o'clock a. m., in room 210, Senate Office Building, Senator Reed Smoot presiding. Present: Senators Smoot (chairman), Lenroot, Norris, Ladd, and Walsh of Montana. The CHAIRMAN. The committee will come to order and we will resume our hearing. Senator WALSH. Mr. Chairman, I would like to call Doctor Smith. The CHAIRMAN. Doctor Smith will please come forward. STATEMENT OF DR. GEORGE OTIS SMITH, DIRECTOR GEOLOGICAL SURVEY, WASHINGTON, D. C. Senator WALSH. Give your name, please. Doctor SMITH. George Otis Smith, Director of the Geological Survey. Senator WALSH. Doctor Smith, how long have you filled the position of Director of the Geological Survey? Doctor SMITH. Sixteen years with the exception of an absence of about 11 months on the Coal Commission. Senator WALSH. During what period was that? Doctor SMITH. That was from 1907 to date. Senator WALSH. I mean what was the period of your absence. Doctor SMITH. Oh, the period of 11 months' absence. That was from October, 1922, to September, 1923. Senator WALSH. You were director, then, for a number of years. prior to October, 1922? Doctor SMITH. I was. Senator WALSH. Just what does that branch of the Government have to do with the matter of oil lands of the Government? Doctor SMITH. Its earliest work on the oil lands consisted in mapping oil territory and investigating oil structures, determining the oil production. But later, as there was added interest in the public lands, there was assigned to the Geological Survey what had been in fact one of its primary objects under the organic act creating it, namely, classification of public lands. And this function has been performed under the Interior Department in conjunction with the work of the General Land Office, and, in a way, with the work of the Bureau of Mines, the three bureaus coordinating the work relating to the public lands, especially, I might say, as you have asked, with reference to the oil lands of the public domain. Senator WALSH. How, if at all, was the bureau associated with the creation of the naval oil reserves? Doctor SMITH. The connection of the Geological Survey with that dates back to the beginning of the adoption of a policy of reservation. The first recommendations to the Secretary of the Interior, back in 1908 and again in 1909, were made by myself as Director of the Geological Survey. And at that time, as the record shows, the policy of withdrawing, both for public use and as a temporary measure pending legislation, was adopted. The first withdrawals of petroleum lands were made by President Taft, as the record shows, in 1909, as the direct result of a letter addressed to the President by the then Secretary of the Interior, Judge Ballinger, in September, 1909, and more directly as the result of a conference between the Secretary and the President at Salt Lake City, at which conference I was present. Senator WALSH. What lands were withdrawn at that time with a view to their use for naval purposes? Doctor SMITH. There had been some lands withdrawn, as the record already shows, prior to that time, but this recommendation was based primarily on naval use, the needs of the Navy for fuel oil; and also there was mention made of the need for a supply of lubricating oil, and that was specifically set forth in the recommendation to the President. In fact, it was the gist of the recommendation. Senator WALSH. It appears that the withdrawals were made in 1909 of naval reserves Nos. 1, 2 and 3, and subsequently, after the act of 1910, confirmed by further withdrawals. Doctor SMITH. There were larger areas withdrawn than 1, 2 and 3, but the areas included those areas that were withdrawn in 1909 and later confirmed and ratified under the legislation passed in 1910. Senator WALSH. The records show that while withdrawals were thus made in 1909-10, reserves Nos. 1 and 2 were not actually set apart as naval oil reserves until 1912, and No. 3 until 1915. Is that in accordance with your recollection? Doctor SMITH. Yes, sir. Senator WALSH. What I want to know is whether their use, or the use of the parts withdrawn was as a naval reserve, was that contemplated at the time of the original withdrawals in 1909? Doctor SMITH. I do not believe that that can be emphasized too strongly, that that was the purpose of the earlier withdrawals. I refer now to 1909. There had been some withdrawals in 1908 in California the purpose of which was to prevent what I would call the fraudulent acquisition of lands, taking them up as gypsum lands when the purpose was to secure the lands for oil purposes. Those were rather small in amount, and they showed their purpose by the wording that it was withdrawal from agricultural entry. There were some being taken up apparently for agricultural purposes. The CHAIRMAN. I may state that there were some large areas taken up as oil lands which were not oil lands, in Utah and other States. Doctor SMITH. Yes, sir; in 1909 and specifically in 1910. Those withdrawals were generous withdrawals, but as fast as the lands could be examined and classified they were pared down to what we thought was strictly oil lands. The CHAIRMAN. And as to some of the withdrawals the lands were released entirely? Doctor SMITH. And the other lands released. The CHAIRMAN. No; as to some of them the whole was released. Doctor SMITH. Well, that would be the purpose of it according to the result of the investigation and classification. Senator LENROOT. Were not all Government lands withdrawn where it was believed there was oil? Doctor SMITH. Yes, sir; that was the purpose. And I might add that the withdrawal recommended to President Taft when he stopped at Salt Lake City was as to California lands, and it was on his initiative that Utah lands and Wyoming lands were added to the California tracts. Senator WALSH. As I understand, you yourself were in conference with President Taft at the time the matter was under consideration? Doctor SMITH. Yes, sir. The letter that was prepared and sent by Secretary Ballinger to the President reached the President while on a western trip, and this conference I speak of was arranged by telegraph. I think I was in California at the time and came East to attend it. Senator WALSH. That letter, as I understand you, was written on your initiative? Doctor SMITH. Yes, sir; on my initiative at the request of Secretary Ballinger when I discussed the matter with him. I had previously, 18 months before, prepared a similar letter, addressed to Secretary Garfield, but that did not ripen into presidential consideration. Senator WALSH. In view of your association with it, I wish you would tell the committee what the theory was and what the plan was touching the eventual utilization of the deposits in those reserves. Doctor SMITH. Well, I think the committee will understand that sometimes we start with general principles and develop the plan as we go along. The fact that was put up to President Taft was the dependence, the increasing dependence of the Navy upon fuel oil. I would like to add there that this was not on the initiative of the Navy. The Navy gave information when called upon about its change from coal to oil as a fuel, but it was not on the initiative of the Navy but on the initiative of the Interior Department that that was done. And it was set forth that the British Admiralty was depending more and more on oil, and that it seemed to be a matter of national importance that our country should insure itself of a future supply of oil for the Navy. It was intended at that time, and I think was so stated, that as the land was explored and classified certain definite tracts would be set apart for the use of the Navy as needed, emphasis being put upon the future needs when oil might not be available. But I do not think it was anywhere set forth that this should be a reserve that should be in accordance with some people's ideas of conservation, to be set aside not to be used, but to use it as needed to supplement the current supply of oil that could be obtained through commercial channels. Senator WALSH. Was there any difficulty about getting oil at that time through the usual commercial channels? Doctor SMITH. At that time we were in, as I now remember, somewhat of a period of overproduction. The more farseeing of the oil |