PAYMENT OF ROYALTIES TO ROBERT TOQUOTHTY

WEDNESDAY, FEBRUARY 1, 1928

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

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

Present: Senators Frazier (chairman), McMaster, LaFollette, Pine, Steiwer, Wheeler, Bratton, and Thomas.

Present also: Hon. J. W. Harreld, former Senator of Oklahoma, and Hon. Charles H. Burke, Commissioner of Indian Affairs.

The CHAIRMAN. The committee will come to order. Senator Harreld, you wish to make some further statement?

STATEMENT OF HON. JOHN W. HARRELD (Resumed)

Mr. HARRELD. Mr. Chairman, I have read the stenographic report of the hearing last Friday, and on some points my statement is not very clarifying, and perhaps needs just a little modifying, especially in regard to tracing these funds from this Robert Toquothty well, and in order to save the time of the committee I have reduced may statement to writing. This is my final statement on the proposition, and I ask permission to read it, but before doing so, I want to introduce another exhibit, which is Public Document No. 500, the Sixtyseventh Congress, S. 4187, known as the Watson bill. Last Friday I introduced in this record Public 36 and Public 675. These three documents are necessary to have before you when I read my statement, so I have arranged to have present enough copies of each of these three acts for each of you to have one, and I want you to follow me in my statement wherein I refer to these specific acts.

The CHAIRMAN. What numbers?

Mr. HARRELD. Three documents, the Watson Act, Public Document 675, which directed the Secretary to hold the funds in his hands, and Public Resolution 36, which is the bill creating this tribal fund.

In my written statement I have analyzed to some extent each of these acts of Congress, beginning with Public Document 500, the Watson Act, and if each of you will take a copy of that document which the clerk will furnish you and follow me in the reading of this statement, I think the matter can be clarified very much.

I should like to get this statement in the record without interruption, if possible, and then when I get through I will be glad to answer any questions. I should like to have it in the record in just the form in which I have prepared it.

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Since the hearing held last Friday, I have carefully read the stenographic report thereof. There seemed then to be in the mind of Senator Wheeler a doubt as to the power of Congress to correct the injustice done to Robert Toquothty by appropriating money from the Kiowa, Apache, and Comanche tribal fund created by the gratuity appropriation of the Red River funds to them. I was so sure in my mind that it could be done that I was unprepared to meet and answer the question intelligently.

The Commissioner of Indian Affairs was requested to give a legal opinion upon that question, and I am sure he will report that it is within the power of Congress to make the appropriation. In fact, more mature reflection leads me to believe it is the only thing Congress can do unless it is appropriated as a gratuity, pure and simple, to Robert Toquothty. The several watch dogs of the Treasury, including the Budget Bureau, would never let it pass. Toquothty is paid out of this so-called tribal fund then he has no remedy and Blackstone is wrong when he said: "There is no wrong without a remedy."

Unless

If there are those who believe, as some intimated here Friday, that this claim should be paid out of the Public Treasury, then he should vote to pay it out of the tribal fund and let the tribe make an effort to get the same refunded from the Treasury. A bill to create a gratuity is sometimes allowed to a tribe, but to an individual never by Congress. Besides, I am convinced that the tribe will suffer no loss by making the appropriation, for the simple reason that they have funds now to which they were never entitled and we are only asking herein to recover that part of this fund which has been covered into the tribal fund by mistake.

Consideration of this matter has led me to change my position. somewhat from that announced last week, and to that extent I desire to correct my former statement.

A remark made or a question asked by Senator Thomas near the close of the session last week caused me to change my views, though I am not sure yet that my views coincide with his In order for me

to make myself clear, it is necessary for me to trace these Red River bed funds from beginning to end, as shown by the admitted facts in the case. It is admitted, for instance, that the receiver collected some $12,000,000, and when the receivership was ended he paid over, under orders of the court, to the Secretary of the Interior less than $3,000,000.

The Secretary, who has the figures, says that it is $1,235,705.78. Is that right?

Commissioner BURKE. Approximately, I think.

Mr. HARRELD. This was just a simple balance left in his hands after paying the cost of administration. I want to call attention to the fact that this must have included the Robert Toquothty fund.

Before this was paid over by the receiver, S. 4197 was passed by Congress and became the law on March 4, 1923. This was known as the Watson bill and was before this committee and reported favorably by it prior to its passage. This act you have before you now and I have just had a copy thereof made a part of the record. That bill authorized the United States Supreme Court "upon the termination of the receivership" which the Attorney General was to apply for at an early date, to direct its receiver to pay to the Secretary of the

Interior "all funds derived from oil and gas produced from the lands of the United States that may at that time remain in the hands of the receiver."

Section 1 of this act--I want to call attention to that. I wish you would get that, Senator Wheeler. I am trying to trace this fund from the time that it went into the hands of the receiver down to the present point, and I think I can say that these funds are in the hands of the tribe, in the fund that the tribe has to its credit.

Section 1 of this act authorizes the Secretary of the Interior—

to adjust and determine the equitable claims of citizens of the United States and domestic corporations to lands and oil and gas deposits belonging to the United States and situated south of the medial line of the main channel of Red River, Oklahoma, which lands were claimed in good faith by such citizens or corporations or their predecessors in interest prior to February 25, 1920, and upon which lands expenditures were made in good faith and with reasonable diligence in an effort to discover or develop oil and gas by issuance of permits or leases to those found equitably entitled thereto.

Section 4 provided

* * *

that each lessee shall be required to pay as royalty to the United States an amount
equal to the value at the time of production of 121⁄2 per cent of all oil and gas
produced by him prior to the issuance of the lease
* * *. and shall be re-
quired to pay to the United States a royalty of not less than 121⁄2 per cent of all
oil and gas produced by him after the issuance of the lease
Of the
proceeds of the oil and gas that have been produced or that may hereafter be
produced by the receiver of said property, appointed by the Supreme Court of
the United States, 121⁄2 per cent as royalty shall be paid to the United States,
and the residue after deducting and paying the expenses of receivership shall be
paid to the person or corporation to whom may be granted a lease of the land on
which oil and gas was produced.

I want to call your attention to the last sentence there.
This act also provides (section 5):

That except as otherwise provided herein the applicable provisions of the act of Congress approved February 25, 1920, entitled An act to permit the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain" shall apply to the leases and permits granted hereunder, including the provisions of sections 35 and 36 of said act relating to the disposition of royalties.

That is the general act which provides for 371⁄2 per cent to the State, 50 per cent to the Public Treasury, and 121⁄2 per cent to the reclamation fund.

Provided, That after the adjudication and disposition of all application under this act any lands and deposits remaining unappropriated and undisposed of shall, after date fixed by order of the Secretary of the Interior, be disposed of in accordance with the provisions of said act of February 25, 1920.

This act also, in section 5, authorized the Secretary of the Interior to take over and operate the wells on the public lands during the pendency of the settlement of the claims made by the various parties and directed that the balance of such funds should be disposed of under the act of February, 1920, which, as you know, was the general leasing act, under the terms of which 371⁄2 per cent of all royalties should be paid to the State in which the public lands were located; 50 per cent into the United States Treasury for general purposes, 1212 per cent to the United States reclamation fund.

and

It will be noticed, however, that there was to come and did come into the Secretary's hands not only the 122 per cent royalty, but other funds in the form of balances left after settlements made pursuant to the act.

The State of Oklahoma was, by this act, given 371⁄2 per cent of the royalties, also by the general laws, act of 1926, but no part of the other funds. Here was another chance for Robert Toquothty to get what was coming to him, but being a minor, and a restricted Indian, it seems no one saw the opportunity. The Secretary of the Interior could, when these funds came into his hands, have righted the wrongs done Toquothty, but seems to have thought that he was bound by the decision of the court and did not do so. A provision could have been put in this act to pay to him his money, but that was not done and therein Congress was derelict, because no one seems to have been looking after it.

Hearings were had and the lands allocated to the claimants by the Secretary as directed. The moneys in his hands other than royalties, those received from the receiver and from other sources, were used by him in settling the claims of those lucky enough to receive an allotment on the land. Of course, that did not involve the Toquothty fund at all. It still remained. When these settlements had been made there was left in the hands of the Secretary not only the 121⁄2 per cent of royalties but balances from other funds, which I have asked the Secretary or Indian Commissioner to furnish to you if you desire it. I understand he has it here.

Afterwards, as a member of the Senate, I introduced Senate Joint Resolution No. 71. I want to call attention to it. I am trying to trace these funds and show that they have all of them gone anywhere except into this fund. I introduced Senate Joint Resolution No. 71, which was enacted into law and approved June 12, 1926, and became Public No. 36, a copy of which I have just made a part of the record. This joint resolution purported to establish a trust fund for the Indian tribes, but while it was pending near the close of the Sixty-eighth Congress, seeing that I was not going to get the bill passed before the end of that session, with the aid of Senator Owen, my then collegaue from Oklahoma, I secured the passage of an amendment to H. R. 12156, a Crow Indian bill, providing in section 2 "That the Secretary of the Interior is directed to retain in his custody, until otherwise directed by law, the 122 per cent and other royalties heretofore or hereafter received by him in pursuance of Public Act No. 500 (the Watson Act). This bill with this amendment was approved March 4, 1925, and had the effect of holding these funds in the hands of the Secretary until the passage of S. J. Res. 17, creating the trust for the Indian tribes, which passed in the Sixtyninth Congress and was approved June 12, 1926.

It will be seen that at the time of the passage of S. J. Res. 71— creating the Indian trust fund-Congress had already, by the passage of the Watson Act, recognized the right of the State of Oklahoma to 371⁄2 per cent of the royalties, so that when S. J. Res. 71 was under consideration the only question was, how should the 50 per cent belonging to the United States Treasury and the 122 per cent which would, without further legislation, go into the reclamation fund, be disposed of. That is shown by the title to the bill I quote:

A joint resolution authorizing the Secretary of the Interior to establish a trust fund for the Kiowa, Apache, and Comanche Indians in Oklahoma and making provision for same.

No trust fund was created for the State of Oklahoma. Its rights were recognized to 371⁄2 per cent of the royalties, but no part of

other funds in the hands of the Secretary. By the language of the resolution Congress was only dealing with that part of the funds "derived from the south half of the river bed in Oklahoma which inures to the Federal Government by virtue of the decision of the Supreme Court of the United States in the suit of State of Oklahoma v. the State of Texas, which decision was rendered May 1, 1922, being the entire amount received from this source except such part as may have been awarded to successful claimants under said act approved March 4, 1923 (Watson Act), * * * and except 371⁄2 per cent of the royalties derived from such source which shall be paid to Oklahoma," etc.

It follows, therefore, that the State of Oklahoma has received only 371⁄2 per cent of the royalty and upon that basis there has been paid to the State only 371⁄2 per cent of $16,339.69 in the case of Robert Toquothty. That is, only $6,127.38 of Robert Toquothty's money can be traced to the State. On the other hanc, the remainder of it went to augment the tribal fund which not only received an amount equal to 622 per cent of the royalty but all the remnants and balances left after settling with the claimants under the Watson Act, and thus the remainder of Toquothty's money is directly traceable to this tribal fund. There was nowhere else for it to go. The claimants under the Watson Act got only what they were shown to be entitled to upon the basis of what each tract allotted to him had produced less his respective part of the expenses of administration. These claimants got none of Toquothty's money. The State of Oklahoma got $6,127.38 and we are willing for this amount to be deducted and we will try to collect it from the State of Oklahoma. No part of the $84,001.08 due Toquothty can be traced to any other fund than the tribal fund, unless you are willing to say that the Secretary of the Interior was untrue to his trust and paid it to some one who was not entitled to it, and I am not prepared to say that.

one.

Congress, in all its measures relating to this fund, at no place authorized the payment of this money due Robert Toquothty to anyIt is admitted it was mingled with the funds of the receiver and went on down the line into the hands of the Secretary and on into the tribal fund created by Senate Joint Resolution 71, which it augmented just $81,001.08, less the $6,127.38 which was inadvertently paid to the State of Oklahoma, thus leaving $77,873.81, which ought to be paid to Toquothty out of this tribal fund which is still subject to act of Congress.

I repeat there is no way to pay this just obligation otherwise. The United States Treasury has not benefited in any way by these transactions, and it is not fair, therefore, to make the loss fall on the Government Treasury when it should justly come from this tribal fund which it went to augment, and to attempt to do so would meet with the just efforts of the Budget Bureau and others to defeat the passage of the bill.

The CHAIRMAN. Is that all?

Mr. HARRELD. With that I am willing to rest the case, except that I should like a report from Mr. Burke. I sent a copy of my brief to Senator Wheeler. You received it, did you not, Senator?

Senator WHEELER. I have received it.

Mr. HARRELD. In addition I have asked Mr. Burke to make a statement as to just how much has come into the hands of the Secretary