voluntarily sold their property on the date the receiver took charge and the Government just to pay them for that property, the value thereof at the time it was received and perhaps with reasonable interest from that date?

Mr. DYAR. They surely ought to get back what they lost in that way; I am not making any contention to the contrary.

Mr. BURTNESS. Now do you feel if they were paid for the value of the property on the date it was taken over by the receiver, with perhaps interest at the legal rate, that then they would be getting the consideration they deserve?

Mr. DYAR. And also what has already been done-pay them for the cost of putting down producing wells that they dug. And that has already been done; the receiver has paid back $300,000 and odd on that account.

Mr. BURTNESS. Where the same man, for instance, may have dug three or four holes and one well developed to be a producer and the others did not, do you think that he should be paid only for the well which proved to be a producer and not be paid for the wells that were dry?

Mr. DYAR. Yes. If he owned the fee of the land that is all he would get. If he owned the fee of the land, his dry holes would be his loss, and I do not know why there should be any other principle applied here, unless it is because this is Uncle Sam and because this is the public treasury, and everybody who lost money is going to be compensated. I am sure that is not the rule I would follow.

The CHAIRMAN. How many acres do you figure there are, approximately, there are cfthe oil lands in this territory?

Mr. DYAR. That is a very hard question to answer. The developed oil land, what has now been decided to be Texas land and we have no interest in, is a very restricted acreage. I believe 2 miles long would include all the area and less than half a mile wide on the average.

The CHAIRMAN. Two miles long and half a mile wide?

Mr. DYAR. Yes.

The CHAIRMAN. About how many acres would that be, approximately?

Mr. DYAR. I give up.

Mr. MCCORMICK. There are 640 acres to a square mile. Mr. DYAR. This is a square mile; it is about that. would be that.

If it were in a square form, it

The CHAIRMAN. Would you figure it was about 640 acres?

Mr. DYAR. I think so. Now, Mr. Testerman's lower well, the Burk Senator, is the furthest down the river that is a producer, and the one up here. That embraces two sections and a fraction. The entire area may be 2 miles; something like that; it is a very restricted area.

The CHAIRMAN. It would be about 640 acres, then?

Mr. DYAR. Something like that, I judge.

The CHAIRMAN. How many acres do you figure these people would have gotten patent for had the old law been in force-640?

Mr. DYAR. Oh, if they had gone on-if the old law had been in force and nothing had interrupted them-they may have made discoveries on all of their claims, and they could have patented them all, of course.

The CHAIRMAN. How many acres would that have been; a couple thousand? Mr. DYAR. Four hundred eighty acres for the three claims of the Burk Divide people and 640 for the Mellish people, would be 1,120 acres.

The CHAIRMAN. About 1,100 acres.

Mr. DYAR. I mean the lands which were in those two groups only, and they cover practically all the developed territory.

Mr. LARSEN. Your division of the funds now on hand: It is not very clear to me just what kind of a division you would make.

The CHAIRMAN. Will you let me pursue this just a little further?

Mr. LARSEN. Yes. I thought you were through.

The CHAIRMAN. Call it 2,000 acres. Then if the Government had lost the suit, it would have gotten about $5,000 under the placer mining law. Having won the suit, they get one-eighth of the $3,500,000, which you will get under the bill, and the Government may get $425,000.

Mr. DYAR. It will get more than that under the bill, as I understand, because it provides the royalty is on the gross production.

You will get $425,000,

The CHAIRMAN. Yes, and you will get the royalty in the future. Mr. DYAR. We will get the royalty on $5,000,000, perhaps. The CHAIRMAN. I am talking about what is on hand now. so you have at least won $420,000 in the suit for the Government. Mr. DYAR. There are other considerations bearing on this, I think, which will come forward later.

Mr. LARSEN. With reference to the funds in the hands of the receiver, you were rather indefinite as to just how that division should be made. You spoke the other day, if I understood you, and said you would get a royalty of one-eighth and then you said you got a certain bonus on that?

Mr. DYAR. No.

Mr. LARSEN. I never did understand you to say how much that bonus amounted to. Mr. DYAR. I do not think I said definitely, but the view of the Department of Justice is just this. There is always a question of who killed Cock Robin, but we feel that we won this suit against Texas, against Oklahoma, and against the north shore riparian claimants. Until those parties were defeated the placer miners had not a shadow of right, because if the Texas and Oklahoma claims were good, the land did not belong to the United States and they could not get it. Then we won against the placer miners on the ground it was not open to them. Now the United States, we think, won that law suit and, while the lands must be leased and in any view lots of people must lose a great deal of money and some, probably, who were in just as good faith here, would lose everything because they never produced anything, we feel that it is not asking too much that the Government should have its legal rights as far as the money is concerned and that the money should go to the United States. Mr. LARSEN. All of it?

Mr. DYAR. This is a time when Uncle Sam still owes a great deal of money. All of the people are interested in this-relief from taxation or an addition to the income of the United States. Now this sum is not a mere bagatelle. And I confess, on any moral question, here are men who rushed into this situation, knowing they were up against a fight against three or four parties; they risked their money on finding oil there; they risked their money on the Texas title being good; they risked their money on the Oklahoma claim being good; they risked their money on the north shore claims being good, and then they risked some more money. Why should they be reimbursed; why should they get the money back; why don't they stand their losses, just as other people do who go into speculations and buy into law suits and go up against other claims-why don't they stand their losses just as the rest of the people do?

Mr. BURTNESS. If I understand your point of view correctly, the argument you are now making does not apply against Mr. Testerman and his associates?

Mr. DYAR. Only, probably, because there is no money in the hands of the receiver that has come out of their property.

Mr. GORE. There is some of it.

Mr. DYAR. I am not sure of that.

Mr. BURTNESS. Still, you feel they hold a different situation, possibly, in so far as their good faith is concerned; that is, they did not buy into a law suit?

Mr. DYAR. I understand that is not the case.

Mr. BURTNESS. And, if I understood you correctly-at least I so inferred from what you said—you feel they were entitled to some consideration, possibly, in the way of relief legislation. Now, then, this question occurs to my mind: How would it be possible to draft relief legislation, as a practical proposition here, that would give relief to men like Tom Testerman and would not give relief to the assignees of the persons who made the placer mining applications of the Burk Divide property, the Pacific-Wyoming property, and so forth?

Mr. DYAR. I expect to deal with that later, but I think it could be done, of course. They have embodied in these bills (I think they are practically taken from the leasing act) provisions protecting all assignees and assignments, and so forth, and it was done with a purpose, of course. They had a good precedent for it in the leasing bill; but, as a matter of fact, the result would be-now just think of this; I am sorry, but it results from the situation-these three claims and probably two claims of the Burk Divide people embrace practically, I suppose, five-sixths of the productive territory and probably have produced five-sixths or even more of the money in the hands of the receiver coming from the river bed. Now Mr. Roote claims that this matter, that these equities shall be decided, so far as they are concerned, just exactly as if the law, the placer mining law, had prevailed, and that the Government, which has the legal right and has utterly defeated them on the law, shall surrender its legal rights, just as if it had lost and they had won. It does not look to me like a fair proposition.

Mr. BURTNESS. You are appearing for the Department of Justice and I think you ought to point all of those things out to the committee and tell us just what your idea is of the equities. I feel that we should and I feel that the other parties to the contention here are entitled to know what your contentions on the subject are. And speaking as one member of the committee, I would like to know and I feel they would like to know.

Mr. DYAR. I would be perfectly willing to give my judgment if the committee asks for it; but my main purpose here is to try to save some money for the Government; not to prevent land from being leased. And if I were going to carry out that purpose, I would simply do this; I would simply provide in this bill that leases may be made upon some of these terms, that leases shall be granted upon the terms that one-eighth royalty shall be paid to the United States of the oil hereafter produced by such lands, just as if they were new lands. Of course, that would be very poor consolation to them; but Uncle Sam is entitled to some consideration.

The CHAIRMAN. You would retain all of the moneys in the hands of the receiver? Mr. DYAR. Yes. I presume it would be distributed, as I understandThe CHAIRMAN. I suppose they would say, paraphrasing a well known quotation that Uncle Sam took that which does not enrich him, but makes me poor indeed? Mr. DYAR. Why does it not enrich Uncle Sam?

The CHAIRMAN. Well, it is not a very big sum for Uncle Sam.

Mr. DYAR. Well I know; but we often bring a suit to recover a thousand or $1,500 from a timber trespasser who goes on the Government's land just the same way these people went on the Government's land, and what we recover goes into the Public Treasury. That is a bagatelle; but he can not come up here for relief, because he can not get here, maybe, because he is too poor a man. Is there any difference in the two situations?

The CHAIRMAN. Major, as between man and man, you really have no doubt (not considering the strictly legal equities, but the moral equities, between man and man-just considering abstract equity), but what the Testerman locators and these other people were acting in good faith and supposed they had a right to go on this land under the Government's mineral laws, have you?

Mr. DYAR. It is simply a question of what is meant by good faith. I say yes, in your definition of good faith, namely, the sort of good faith which entitles a man to 32141-23-26

get back the improvements which he puts on another man's land; but he has not at all that measure of good faith by which he is to get the very substance of the property of another. It is a question of the definition which you apply. Both definitions are right, but they are applicable to entirely different things.

The CHAIRMAN. Don't talk about the consequences of the good faith; but you have no doubt, have you, in your own mind, but what these people went on this land in good faith, let the consequences be what they may; that they were honest in thinking that they had a right to go on and explore for oil?

Mr. DYAR. I have. I think this: I think, in the first place, that it did not cost them a cent to go on and stake out their claims.

The CHAIRMAN. Disregarding the reasons, but considering just the actual fact of their going on in good faith? You can answer that question by yes or no.

Mr. MCCORMICK. The state of mind is what you are referring to?

The CHAIRMAN. Yes.

Mr. DYAR. Purely on the state of mind, I can not answer the question, because I think they went on and took a chance and knew they were taking a chance, and that might be good faith under one definition and would not be good faith under another definition. For instance, Archie Goddin, one of the parties who went on the land said "I saw other people going in there and I thought I would just take a chance on it." Mr. GORE. You asked a question a moment ago and I think the answer ought to go in the record. You referred to a timber trespasser and asked if there was any difference between the timber trespasser and these men, for instance, Mr. Testerman here. I think there is a fundamental difference. Anybody can look at land and see whether there is timber on it, or not, and the man who goes on Government land and cuts down timber and appropriates it is absolutely violating the law.

Mr. DYAR. Not necessarily; there is a law which authorizes it.

Mr. GORE. I know, if it is for his own use, and there are limitations, but there is a difference between the man who violates the law and cuts down timber and appropriates it for his own use, that is a very different proposition from a man like Tom Testerman, who went into the Red River to drill for oil. If what the geologists say is true, that oil has been slumbering in the earth for seven million years and some say for as long as seventy-five million years (but that is immaterial), and it might have gone on and slumbered there for another century if some man like Tom Testerman had not taken the bit in his teeth and gone in there and put down a well and showed the Government there was oil there and enabled the Government to get a great deal more out of it than it would not have gotten out of the sweltering sand dunes there, if nobody had ever gone in there and put down a well.

Mr. DYAR. No; I think you are entirely mistaken; under the actual situation that prevailed there, you are just as mistaken as you can be. Now it is anticipating, but I see we are never able to go on straight here: These people say they were pioneers; that they showed the Government the value of its property. Mr. Testerman says they did it, and surely, if anybody represented here did it, he did, because he was first. They all say it. Now just let us look at the facts appearing for a moment.

Mr. LARSEN. Just one minute, before you go into that, on that timber matter. You made a statement the other day regarding the law on the timber trespassers, and I understood you to say it was within the right of the Government, as against parties who trespassed on timber lands, to follow it down to the manufactured products.

Mr. DYAR. No; I said only where the man was going in willfully, knowing he was going there wrongfully-going there to steal, in other words-that then you follow it down.

Mr. LARSEN. What is the policy of the Federal Government with reference to trespassers on timberland. Do they simply take the stumpage value and let the party have the timber, or do they follow it down and take the manufactured product?

Mr. DYAR. We investigate the facts, and, if it goes to the courts, the court finds the facts, as to whether he was a willful trespasser, that he knew he had no right there, but he went in just simply to steal it. If he does, we follow the timber, and the courts give us the value of the timber wherever we find it, if they have reason to know it was taken in that way, and then we get a whole lot more than the timber was ever worth to the Government and make money for the Government, as a punishment for willfully disobeying the laws of the United States.

Mr. LARSEN. Measured by that rule-unless the party upon whom the burden finally rests of looking into this matter should find those parties were willful trespassers and went in there with the intention of taking that to which they had no right or claim, you would not measure it by that rule; you would simply let them have the regular market price and they would take the oil and you would take one-eighth? Mr. DYAR. No, not at all.

Mr. LARSEN. It would look to me like that was a parallel case.

Mr. DYAR. Not at all.

Mr. LARSEN. And the Government would get such bonus as it might be entitled to. Mr. DYAR. Not at all.

Mr. LARSEN. I wish you would differentiate between them.

Mr. DYAR. If the court finds the man went onto the land in good faith, doing what he thought he had a right to do under the laws, but being mistaken, nevertheless the United States, if it is the owner, does not give him the substance of the property; nor does any other landowner under similar circumstances. What we get is the value of the timber cut, at the place where it was cut, at the time it was cut-we get the value of the timber.

Mr. BURTNESs. You mean the value of the timber after it was severed from the land? Mr. DYAR. Yes, the value of the timber after it is severed.

Mr. BURTNESS. Including the work of the trespasser?

Mr. DYAR. In cutting.

Mr. BURTNESS. Or do you mean merely the value of the standing timber that was cut?

Mr. DYAR. No, the value of the timber at the place it was cut and in the place it was cut; after it was cut and in the place it was cut.

Mr. BURTNESS. That is what I was trying to get at. It is the value after it is cut, including the work of severing?

Mr. DYAR. Yes; that is the rule, whether it is the property of the Government or of any private landowner that is invaded in that way; that by doing that it diminished the value of the property, of the land, whether the owner is the Government or an individual, and they get back what it is supposed to be worth.

Mr. BURTNESS. The Government gets back more than it is worth, because it is worth more after it is cut, and it gets back the value of the labor that went into the cutting of it?

Mr. DYAR. Yes.

Mr. LARSEN. What do you mean by being cut-severing it from the realty?

Mr. DYAR. Severing it from the realty.

Mr. LARSEN. That is what we ordinarily call stumpage in my country.

Mr. DYAR. No, that is not what is called stumpage; what is called stumpage is the timber before it is cut.

Mr. LARSEN. Down in my country, the price you would get would not be over the value of the tree.

The CHAIRMAN. Referring to the timber matter: Suppose the Government had invited all of its citizens to go out on the public domain and had told them, "If you can find any timber, now, you can have it, at $2.50 an acre," and a man went out and found some timber and he endeavored to take it and Uncle Sam should come along and say, "No, you can not have this particular timber; we passed a law, like Caligula's,