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Mr. VAILE. You are an assistant to the Attorney General?
The CHAIRMAN. I assume you prepared the letter which I read, signed by Mr. Riter.
Mr. DYAR. I did. If it please the committee, I do not know wbether it is clearly understood that I was going to make a request that both the opinions already delivered be printed.
The CHAIRMAN. It is understood they will be printed.
Mr. DYAR. The leading by the chairman of the report of the Department of Justice has practically placed before the committee the matter which I intended to place before it at the outset, and I doubt whether there is anything much that I would want to add at this time, if I may reserve some little time after the committee hears the other parties.
I think the main positions, and I will recapitulate them in a moment, are before the committee, and I do not want to go into details or to enlarge very much upon what we have already said. But for the information of the conmittee I wish to say this: The fund of some $3,500,000 now in the hands of the receiver is composed of two parts; one part is derived from the proceeds of wells put down in the river bed proper—that is, perhaps, $2,400,000, or something like that-the other part is something like $600,000, which represents the proceeds from wells that have been put down on the south side of Red River—that is, on what we have come to style the flood-plain area ; that is, the low-lying, flat, sandy projection running out from the foot of the Texas bluffs.
Mr. VAILE. Will you be good enough to point out on that map, so that the committee will understand, the areas in conflict between the States and the Government.
Mr. DYAR. I will say, in the first place, that the Red River through all of this region (indicating on map], and for miles above and below, runs in a trough. It is from 75 to 100 feet; perhaps 40 at the lowest place and 100 at the highest ; it cuts right down through the body of the country, and on each side is a bluff, and these are the bluffs (indicating). They are very uniform in their distances apart through this particular region and average from a mile and a half to 2 miles.
Mr. RAKER. That is, a cross from bluff to bluff?
Mr. DYAR. Yes, sir. Now, the river runs within those bluffs and these bluish sireaks show the water as it was running at a particular time, but the river bed, which we have come to call the sand bed, is this yellowish area here [indicating), with streaks of water flowing through and over these various areas and islands here (indicatingl, so that the actual river beel, which is spoken about and referred to in the court's opinion and in the briefs, is represented by this yellowish area here [indicating), which is not occupied by water except in little streaks for, perhaps, three-fourths or five-sixths of the time. Only at times of floods is the whole of this sand bed covered with water, and in exreme floods the whole area between the bluffs is covered. Those floods are comparatively rare, coming, perhaps, on an average, of 12 or 14 years apart. Now, these are what we call the flood plains sindicating), this whitish area extending out from the bluffs. We call them flood plains, and that means the low level which is covered by the waters occasionally.
Mr. VAILE. Only in these extreme tloods?
Mr. DYAR. Yés. Now, the Government and Oklahoma contended, and still contend, that the real banks of the Red River are the bluffs. We showed, or have attempted to show—and the Court has not decided this yet—that these flood plains are merely temporary and shifting; they come and they go. The river comes back to the bluffs during the years as they go along-that is, in the course of a century or half century-and the river is constantly changing It is a very peculiar river, and our contention is that the real banks of the river, and that the south banks of the river and the treaty line, are along the bluffs and not at all around this temporary, shifting, sandy flood plain, having more or less vegetation upon it. Whether we will win that contention we do not know.
When the receiver was appointed-he was appointed on the application of the United States, subsequently supported by Oklahoma-we gave a description of the territory which we asked to have included in the receivership, and generally we took as the south line the south bluffs of the Red River all through this region indicatings, but the wells were very thick along here sindicating), and in order that no question might be raised as to where we put the line, we took a description by courses and distances through the whole distance of range 14, and those courses and distances, being the south line of the receivership, run right close on to the bluffs all the way along, so that the receiver has taken from wells in here [indicating] nearly $5,000,000 and the other $5,000,000 has come from sand bed wells.
Now. this flood-plain area here sindicating] was covered by Texas patents and was held in possession, owned, and claimed by patentees of the State of Texas. In a measure, it is land; it looks like land; it has some vegetation on it, and at the outset, before any decision was rendered, the United States, in opposition to the action taken by the receiver when he was appointed, said that we thought that those Texas claimants who were on territory that was distinguishable obviously from the real river bed, and who claimed under Texas patents must be considered as being there in good faith and with color of title from the State of Texas, because it was not obvious to the eye that that was a part of the river bed; it was uncertain and dependent upon a great many conditions. So the United States conceded at the outset that the land which was claimed under Texas patents by Texas people should be treated as in their possession and in good faith ; but the provisions of the leasing act did not apply, even if the United States owned it, and we felt and suggested to the court that it would only be equitable for the receiver to take three-sixteenths of the total products of those wells, leaving the operators in possession and allowing them to operate their wells under the general supervision of the receiver.
They were within the receivership; they were under the control and protection of the receiver, but they only paid to him three-sixteenths of the total production, they taking the rest, and that was carried out by order of the Supreme Court. So that, as I say, this fund is made up of two parts. The receiver accounted for about ten million and some dollars, but he only has $3,500,000 left now. That means that in making up his $10,000,000 he takes the total production of the whole receivership area. He then deducts the amount that was paid over or left in the hands of the operators; and that sum, less his expenses, leaves the $3,500,000, approximately, now in his possession.
Mr. RAKER. Were these Texas patents issued before or after the case of the United States v. Texas, which was decided on March 16, 1896 ?
Mr. DYAR. They were all issued before. There were two sets of them.
Mr. DYAR. Yes. I do not know that it is of much interest, but the original Texas patents were all taken under the warrant system ; a man bought so much land, went and located it, and had it surveyed. The surveys were made between 1836 and 1861 and the patents were issued shortly afterwards. Those all stopped right under the bluff and described that as the bank of the Red River.
Mr. SMITH of Idaho. Those patents are not in controversy and the proceeds received for oil from those wells are not in controversy.
Mr. DYAR. Only that I want to tell you that you must not assume that the two things are to be treated just alike. I think the provisions of the bill will be the same, but here we only have one-eighth, with an additional sixteenth for expenses. That was the idea ; the idea was that the receiver would take the royalty and add one-sixteenth to cover the expenses of administration.
Mr. RAKER. Do you intend to say to the committee that the patents issued by the State of Texas for the north line of the land ended at the south boundary of the river as delineated here?
Mr. DYAR. No; the old patents stopped right under the bluff, and the north lines were surveyed and described as being along the bank of the river but by courses and distances and stakes and monuments.
Mr. RAKER. Which corresponds with your designation of the line?
Mr. DYAR. Yes. But some 20 years later the State of Texas issued other patents covering the lands lying out here [indicating), and there is to-day a conflict between the old patentees and the new patentees.
Mr. SUMMERS. Has the line of the bluffs changed since the first patents were issued ?
Mr. DYAR. No; the line of the bluffs never changes; they are solid bluffs that do not change in a hundred years.
Mr. SUMMERS. Are they of stone?
Mr. DYAR. Not exactly stone; they are made of comparatively soft, reddish material, but the amount of water in the river impinging upon the bluffs is so small—the bluffs being from 50 to 60 and 70 feet high-that it does not amount to anything. But these flood-plane banks are constantly shifting. In 1875 the middle of the river was right there [indicating); this north flood plane was there [indicating], but now it has cut away back.
Mr. VAILE. The State of Texas, as a matter of fact, has issued patents for lands other than those in what you call the flood plane, has it not?
Mr. DYAR. No; and I will explain that. The State of Texas came into the Union after being an independent nation; she owned all the vacant land within her borders and she came into the Union as the owner of those lands and the United States Government had no title to any lands in the State of Texas as public lands. Now, Texas, shortly after her independence, passed a law by which, in substance, she reserved to the State as a proprietor the beds of all rivers over two chains wide, so that the riparian proprietors on the Texas side never took any title to the river bed ; that was reserved to the State and, as I say in the report, the State of Texas, claiming to the middle of the river, in 1918, long before any of these placer mining claims were located, issued mineral licenses to one H. C. Poe from a point here [indicating], covering the south half of the river, to a point down there somewhere [indicating], and issued a mineral license for the rest of the lands to Sam Sparks, running away up here [indicating] and covering about all of the lands here in controversy.
Mr. VAILE. Did that include more than the so-called flood plane?
Mr. DYAR. There are three ranges represented and that would be about 18 miles.
The CHAIRMAN. What do you mean by that Eighteen miles of the part of the river in controversy?
lir. DYAR. Xo; the whole of the river from the one hundredth meridian down to the Arkansas border is in controversy.
The CHAIRMAN. How many acres of oil lands are in controversy before the Supreme Court?
Mr. DYAR. I do not know how many acres, but I should imagine 2.000 acres or 3.000 acres; it is a comparatively small area. This is all developed oil territory down here [indicating). The development proceeded northwestward, and somewhere in here (indicating] in 1911, I believe it was, came in the Texas Chief, and that gave a great impulse to development, and the development has continued to the northwest ; it first came to the flood plane here [indicating] and then extended on into the river bed proper.
Mr. RAKER. When you say * here" you mean into the State of Texas?
Mr. DYAR. No. The develcpment commenced on the bluffs in Texas, and extend down onto the disputed flood plain area, and then into the river bed proper.
Mr. DRIVER. Does this represent the lands on which there are oil developnfents?
Mr. DYAR. Practically, I think, from some point about here [indicating). The wells are very thick in here [indicating); there are a few wells in the river bed there and a lot up here [indicating]; then just in here [indicating] is a group of wells. How many are there, Mr. Testerman?
Mr. TESTERMAN. About 237 wells.
Mr. DRIVER. What I mean is this: Does this map represent all the territory on which they have developments?
Mr. DYAR. Yes, sir; and much more.
Mr. VAILE. To clear up one point which some of the members may not understand, it has been decided by the Supreme Court of the United States, has it not, that the State of Texas has neither territoral jurisdiction nor ownership of the title of any lands north of the south bank of the river?
Mr. DYAR. North of the south bank of the river, but we do not know yet where the south bank of the river is.
Mr. RAKER. You mean by that that you do not know where it is on the ground?
Mr. DYAR. We do not know where it is on the ground and we do not know what physical thing the court will say is the boundary. It may say that this flood plain bank is the true bank (indicating) ; we do not know; it may say the Government's claim is right and this bluff line is the bank [indicating) ; we do not know.
Mr. RAKER. It has long (now) been settled that the line dividing Texas and Oklahoma was the south bank of the Red River.
Mr. DYAR. Yes, sir.
Mr. Dyar. That is right. Having stated where that part of the fund came from and how it is composed, I will now proceed. At the same time the court made an order that the receiver take entire possession of the river bed itself, with the three or four wells that were then operating in the river bed, with the derricks and everything going on, and impound and take possession of all the
proceeds, and that no doubt, was because, as to the river bed, nobody had and color of title from any source, unless it might be under the Texas leases: at any rate, it was not then developed to any extent and it was a matter so obviously subject to controversy between four different claimants that the theory of the court must have been when it made that order that they were all there taking the risks of the situation; so that the order was that the receiver should impound all money and that when the titles were determined or the rights were determined the moneys would go to whomsoever the court decided that belonged.
The CHAIRMAN. You said there are four different claimants while I have figured about five. First, those claiming under the State of Oklahoma ; second, those claiming under the State of Texas; third, those claiming riparian rights from the Oklahoma side; fourth, those claiming under the placer law; and fifth, those claiming under the oil leasing act. Is that correct?
Mr. DYAR. Well, there are some parties who are claiming both under the placer mining law and the leasing act; they are trying to take advantage of both the placer mining act and the leasing act, and there is one party who just the other day presented a petition of intervention—I do not know whether it has been filed yet or not-and he claims under the leasing act.
The CHAIRMAN. Then there are five different classes of claimants?
Mr. RAKER. Senator Gore spoke about a decision which is expected in a day or two. Is that the decision which is to determine just where the boundary line is?
Mr. DYAR. Yes; it is to determine where the south bank is.
Mr. RAKER. The evidence has been presented to the court and the court will settle that question.
Mr. DYAR. Yes. But there is another question of a latent ambiguity in the last opinion. The last opinion said that the north shore riparian claimants took to the middle of the river, the middle of the main channel of the river. We thought that was pretty plain, and we presented to the court, at its request, a decree on the part of the Government defining the medial line of the present sand bed half way between the banks as the limit of the north shore riparian claimants.
Mr. VAILE. Let us clear that up before you go further. The theory on which it was held that the claimants' line extended to the middle of the river and not farther south was not that the State of Oklahoma did not have territorial jurisdiction over the land south of that?
Mr. DYAR. Not at all.
Mr. VAILE. But that only the land south of the middle of the river was Government land within the State of Oklahoma ?
Mr. DYAR. That is right, exactly.
Mr. RAKER. So that if the court should hold that the middle of the river is your blue line then a considerable of this other territory will be eliminated as far as this bill is concerned ?
Mr. DYAR, You mean this flood-plain territory here [indicating]?
Mr. DYAR. No; that is just where the water is. It is there to-day and here to-morrow; those things shift around, so that to-morrow it may be here [indicating). As a matter of fact, since this suit was started this river has cut right through here (indicating), and at present the whole volume of water in the river runs through there [indicating] and it is filling up and building a great