PAYMENT OF ROYALTIES TO ROBERT TOQUOTHTY

FRIDAY, JANUARY 27, 1928

UNITED STATES SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, D. C.

The committee met at 2.10 o'clock p. m., pursuant to call, in the Territories and Insular Possessions Committee room, Capitol, Senator Lynn J. Frazier, presiding.

Present, Senators Frazier (chairman), La Follette, Pine, Kendrick, Wheeler, Bratton, and Thomas.

Present also: Hon. J. W. Harreld, former Senator from Oklahoma, Hon. Charles H. Burke, commissioner of Indian Affairs, and Howard B. Hopps, attorney, of Oklahoma City.

The CHAIRMAN. The committee will come to order. We have before us Senate bill 2362, which was a departmental bill, which I introduced.

Senator Harreld is here, and he asks for an amendment to raise the amount of this fund to be paid to this Indian for oil that was taken out of his well, on his land, at the time the oil was produced, from $16,339.69 to $130,717.45, which, as I understand, was the total amount of the oil produced from that well. That matter, after a brief hearing last week, was referred to the department for their opinion, and a letter in regard to it came in just to-day, and I have not had time to read it. Commissioner Burke is here and perhaps he can state it just as well.

STATEMENT OF HON. JOHN W. HARRELD-Resumed

Mr. HARRELD. If the chairman please, I am going to discuss this, and if the committee does not object, I suggest that the letter be made a part of the record here, and I would like to be heard on this in favor of my amendment.

Senator WHEELER. I would like to hear the report.

Mr. HARRELD. Very well, if you want to read it. I was going to read it in the course of my remarks.

Senator WHEELER. Very well, if you are going to read it.

Mr. HARRELD. Yes; it is to be considered in connection with some letters from the department on the same subject.

Senator WHEELER. I suggest that Senator Harreld be permitted to proceed in his own way, and then the letter can be incorporated as a part of the record.

Mr. HARRELD. That is what I intended to do.

The CHAIRMAN. Very well, go ahead, Senator Harreld.

Mr. HARRELD. Mr. Chairman and gentlemen of the committee, I am quite familiar with the history of this matter and with the general

situation as it has developed from time to time in regard to the Red River bed; so that when Mr. Hopps of the firm of McLaury & Hopps, was employed by Robert Toquothty to represent him here and elsewhere in trying to get his rights in regard to this matter, they offered to employ me and I accepted the employment to help. I did it partly because they offered to pay for my services, and partly because I think that this Indian has not been treated right and has not received justice.

I think, to shorten the matter, it will be best for me to make a short statement of the facts. In doing so, I find that there is no material difference between the Secretary and myself as to the facts. We do differ quite materially in the conclusions that are drawn from those facts. I am going to make a statement of the case and if there is any difference in the minds of the committee and the Secretary and myself about it, I shall ask then that proof be offered on those controverted points. I have not accepted employment in Indian matters, although that opportunity has been offered, except in this particular case. As you know, I was formerly a member of this committee, and chairman of it, and I am very familiar with the details of this case.

Prior to 1910 the north boundary of Texas was the south bank of Red River, and the south boundary of the State of Oklahoma was also the south bank of Red River. Prior to 1910 there was ceded to the Kiowa, Apache, and Comanche Indians a reservation on the Oklahoma side of this river. For some reason the title of the tribe reads, to the medial line of Red River, not to the south bank of Red River, leaving a sort of hiatus there, perhaps a half mile to a mile wide, between the south line of the Indian reservation and the Texas line. That was the condition in 1910, and I fix that time. because in 1910 this Indian reservation was allotted in severalty. Each Indian member of the tribe was given so many acres. Those who were allotted land in the south part of the reservation were allotted so that their boundary called for the medial line of the river, which was the south line of the reservation.

The Red River, like a great many other western streams, is more of a sand bank than it is a river, and at places it is very wide and at other places it is narrow, and the water percolates through the sand, so that there is not much stream there.

Along in 1917 or 1918, after this land was allotted in severalty and Robert Toquothty had been allotted a tract of land in the southern part of this reservation calling for the medial line of Red River, somebody brought in an oil well in the bed of the river. Upon discovering that that hiatus existed there, and that there was a tract of land lying between the middle line of the river and the south bank of the river, there was in influx of people who filed on the land as public land-Government land. They filed under the general leasing act; people tried to homestead it; they filed placer claims on it, and they began to drill wells promiscuously, and to get oil.

Texas concluded that she had some rights, and they rushed their Rangers in and took possession of some of the wells that had been drilled, and finally brought a suit in the Supreme Court of the United States.

The CHAIRMAN. Who did that?

Mr. HARRELD. The State of Texas. They claimed to the middle line of the river and it finally resolved itself into a suit of the State of Texas against the State of Oklahoma, and the United States was made a party, and the Indian tribes were made a party. The result of this suit was that the court held as had been claimed by Oklahoma that the south bank of the Red River was the boundary line between Texas and Oklahoma.

Senator WHEELER. They held what?

Mr. HARRELD. That the south bank of the Red River was the boundary line between Oklahoma and Texas.

Senator WHEELER. That was the Supreme Court of the United States?

Mr. HARRELD. The Supreme Court of the United States; and that this intervening space between the middle line of the Red River and the south bank of the Red River was public land. They also held, however, that it was not subject to homesteading; that it was not subject to placer claims; that it was simply public land belonging to the United States in the State of Oklahoma.

In the meantime all of it had been taken up and a lot of development work had been going on, and it was a disputed question as to where the medial line of the Red River was, so that a commission was appointed by this same court in this same case to establish the medial line of the river. Congress passed S. 4197 in the Sixty-seventh Congress in 1923. I believe it was known as the Watson Act (Public 500), which provided that the claims of those who had gone on this Red River bed that belonged to the Government, or part of it had belonged to the Government, and had made improvements in good faith, and had drilled wells, should be recognized, and directed the Secretary of the Interior to hold hearings and determine the relative rights of each of these claimants; and that was done and they were given certain rights. It was allocated among these claimants, and they proceeded then to develop the property.

One of those companies which had located on what they thought to be Red River bed territory or Government land south of the middle line of the river was the Delta Oil Co., and in their operations, not knowing where the line was, they drilled several wells and one of them was afterward found to be on the land of Robert Toquothty. This Federal commission that had been ordered by the court to locate the medial line made its report, and its report showed that one of those wells drilled by that oil company belonged to Robert Toquothty.

Before that line was run-it was run in June, 1923-for two years prior to that and for a year or for several months after that the receiver who had been appointed by the court to go there and take charge of the whole thing, and had done so, took charge of this well of Robert Toquothty's along with the others, and he continued to drill other wells.

In the interval during which he had possession of this well that was finally found to be Robert Toquothty's he collected $130,000, the amount that we are asking for here, which is shown by his own report, and it was collected up until October, 1923. He was in charge of that well two years and four months, and in that two years and four months he collected $130,000 of the proceeds.

When the court's commission established this line and showed that this well was on Toquothty's side of the line, our contention is that right then and there the receiver had no further jurisdiction over it, and that he simply had $130,000 that he ought to have paid over to Toquothty, who was a restricted Indian, and therefore it would have gone to the Secretary of the Interior, and he ought not to have exercised any dominion over it whatever, and ought to have paid it to the Secretary of the Interior for the benefit of Robert Toquothty. He did not do it. The receiver dissipated it in the drilling of other wells and in the general expenses of the receivership, and afterwards went into court and stated that a flood occurring on the 23d of October, 1923, had changed this medial line of the river, shifting it north so as to throw this well back into the part which the Goverment claimed, and made no further accountng after thatseparately.

. This $130,000 had accrued up to that time.

He succeeded in getting approved, in a general way, his report, and used this $130,000 in drilling other wells and in the general expenses of his receivership. His own report shows that he received something like $12,000,000, and he expended it all but about $3,000,000.

Senator WHEELER. Did he have a bond filed as receiver?

Mr. HARRELD. Yes, he had a bond; but the court made an order discharging the receiver so that we have no recourse there. We could come back and get the order modified, I think, in the Supreme Court; but the receiver is discharged, and we would have no recourse from that source.

The rights of this Indian were called to the attention of this committee some two or three years ago-about a year and a half ago— when I introduced a bill, at the request of the department, to give him the royalty, amounting to 122 per cent of $130,000, which was some $16,000. I remember that it was called up before the committee, and somebody raised the question at that time that if he was entitled to the royalty he ought to be entitled to all of it, and the bill went over. Afterwards, as you all know, I became ill and had to leave, and last winter it received no attention, so that it died on March 4 last year, and it has been reintroduced in practically the same form, by the chairman of this committee at the request of the department, and that is the bill we are now considering, Senate bill 2362.

I want to call your attention to the fact that this first well was drilled by the Delta Oil Co. That is recognized in the report of the receiver, who recognized and paid a claim to the Delta Oil Co. for $25,000 and got credit for it in the settlement. The exact amount was $25,571.28.

We are asking for the entire amount, and we are not averse, if the committee thinks he ought to pay this $25,000, that it be credited against the $130,000. The reason why we insist on the full amount is this: That receiver paid this $25,000 and over for the cost of drilling, to the Delta Oil Co., without requiring the Delta Oil Co. to account for what it had taken out of the well before that time. Delta Oil Co. had been getting the receipts from that well for several months, or more than a year, and under the proof in the case, the evidence here is that they had from $50,000 to $150,000, the entire

The

receipts from that well belonging to this Indian estate; and this receiver did not require any accounting from the Delta Oil Co. for the proceeds of what they took out.

Senator KENDRICK. With whom did the Delta Oil Co. make their contract?

Mr. HARRELD. They did not make it with anybody. They were simply squatters on the land, and the court held that they obtained no right by doing so. Congress afterwards recognized their right in joint resolution 500, and the receiver turned the well back to them, and they have been getting proceeds of it ever since 1923. Senator WHEELER. The Delta Oil Co.?

Mr. HARRELD. Yes. The point is

Senator KENDRICK. Is ther no a possibility here that the Delta Oil Co. may be made responsible for the entire thing?

Mr. HARRELD. We take the position that the claimant ough not to have to chase anybody around.

Mr. HOPPS. May I just answer the Senator's question?

The CHAIRMAN. Yes.

Mr. HOPPS. The Delta Oil Co. has now gone out of business.
Mr. HARRELD. I did not know that.

Senator KENDRICK. We understood they were now in possession.
Mr. HARRELD. They were for two years after 1923.

Senator KENDRICK. Is that well producing now?

Mr. HOPPS. It is at the present time producing practically nothing; but the Delta Oil Co. got this production for about two years. after this time mentioned.

Senator WHEELER. In what way do you feel that the Government was derelict in its duty?

Mr. HARRELD. I feel that the agent of the Government was derelict this receiver. He was just as much the agent of this Government as the Congress or the Secretary of the Interior, because the Supreme Court was the agent of the Government and the receiver was the agent of the Supreme Court. In other words, the United States is the guardian of the Indians, and it is responsible to the Indians, and we have recognized that for a long time, here, that the Federal Government is responsible for the derelictions of its agents; whether it is the Secretary of the Interior, or the Commissioner of Indian Affairs, or Congress, or the Supreme Court of the United States, or a receiver of the Supreme Court of the United States, they are all agents of the Government and the Government is responsible. The fact remains that an agent of the Government, in this case, dissipated $130,000 which this Indian was entitled to, and it is up to Congress to give him some sort of relief.

Senator WHEELER. The Supreme Court of the United States appointed a receiver?

Mr. HARRELD. Yes.

Senator WHEELER. Would there not be some question of dereliction of the part of the Indian himself for not going after this?

Mr. HARRELD. The Indian is a restricted Indian, and of course it is the duty of the Department of the Interior to look after his affairs. They allege in their answer here, and Secretary Work's letter mentions it, that after this boundary was established by the commission appointed by the court, they did not go in and ask the receiver to turn back this land to Toquothty and others who were situated like