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Mr. DRIVER (continuing). Now, one other question: What is the technical or legal distinction between this oil pool and the oil structure?
Mr. BARKLEY. Well, now, Mr. Committeman, I do not claim to be anything except an oil-field lawyer; I am not a geologist at all; and I only know what they tell me. They tell me that they can map out, from surface indications, a distinct oil structure; and I believe that it is one oil structure in 17 that will produce oil when it is driven.
Mr. DRIVER. In other words, if I understand you correctly, the oil structure is the field?
Mr. BARKLEY. Yes, sir.
Mr. DRIVER. And the oil pool is the very location within that structure where the oil is found?
Mr. BARKLEY. Yes, sir.
Mr. BARKLEY. No; I think the word "structure” covers one pool, and sometimes little offshoots to it.
Mr. DRIVER. To that particular pool?
Mr. Driver. Then, as I understand, your own idea of that definition is the oil pool, with its outlets or offshoots?
Mr. BARKLEY. Yes, sir; and I get my information from Mr. Reiter, who located the Mexia pool; he had located nine pool structures when he located that; and that was the ninth location; and all had been drilled.
The CHAIRMAN. As to the second part of the Sparks lease, the letter from the Department of Justice states that on October 28, 1918, a lease was granted to all the rest of the land in controversy to Sam Sparks. That is the case, is it?
Mr. Dyar. That is what I want to explain. I said a lease, and there is not any practical difference. But the State first granted an exclusive permit to explore for oil, and to get in if they found it.
The Chairman. Was that prior to October 28, 1918?
Mr. Dyar. Yes; and the real lease following that was afterwards executed by the State, I believe. But, of course, that is the real thing. It gave the exclusive right, emanating from the State, to explore and develop, and take a lease if they wanted to.
The CHAIRMAN, And on October 28, 1918, the State of Texas granted a license to Sparks covering a large part of the lands in that controversy ?
Mr. DYAR. Yes, sir ; that is down a little way—covering the whole field?
Mr. RAKER. Now, is there a conflict between the mineral claims and your claim?
Mr. BARKLEY. Yes, sir—the Burk Divide. But I want to say this: If the Burk Divide were given by the Secretary of the Interior the land that they drilled, and if we are given the 80 acres that we drilled on
The CHAIRMAN (interposing.) What do you mean by “ the land that they drilled on "?
Mr. BARKLEY. They drilled out to the northwest, some distance, and not on the General Oil Co.'s 80 acres.
The CHAIRMAN. Do you mean their claim?
Mr. BARKLEY. They had three claims; in fact, their claims cover the entire pool.
The CHAIRMAN. Well, I assume that they have a claim of 160 acres, then ? Mr. BARKLEY. They have three claims, and that covers the structure.
Mr. RAKER. So that if their claim was allowed, it would take all of the structure site?
Mr. BARKLEY. Yes, sir; in its entirety.
Mr. RAKER. I suppose there were eight men who originally proceeded in the locating, and then they transferred to a company; is that right?
Mr. BARKLEY. I am not familiar with that.
Mr. BARKLEY. There are now, I think, but there were not at the time the Federal receiver took possession-the Federal receiver in the Supreme Court case.
The CHAIRMAN. The Federal receiver has since put them down?
Mr. BARKLEY. Yes, sir; but he did it with the proceeds of the oil from the Burk Divide and the other wells taken over.
The CHAIRMAN. How many oil wells did the Burk Divide have when the receiver took possession?
Mr. BARKLEY. I do not remember. I think they had one good well, and one on the sand; that is about all that I can recall.
Mr. RAKER. Are there conflicting claims against all the three Burk Divide claims of 160 acres each?
Mr. BARKLEY. I do not think so. I think the General Oil Co. claim is 80 acres; the Buckeye 10 acres; and the Southwest is 20 acres; that takes out 110 acres of the 480 acres.
Mr. RAKER. And those are the only three claims against the Burk Divide? Mr. BARKLEY. Yes, sir.
Mr. DYAR. There is another claim covering every bit of the claims that the Burk Divide cover, and they presented evidence here that they were prior to the Burk Divide; I think they claim to have located their claims all on the 18th of January, 1919, and that the Burk Divide located theirs on the 18th, 19th, 20th, and 21st.
The CHAIRMAN. What is the name of that concern?
Mr. BARKLEY. That is the reason that I said the Secretary of the Interior may consider overlapping claims; he may give us part of our land and not give us all of it; he may give the lands to good-faith claimants.
Mr. RAKER. Who is here representing the Burk Divide?
Mr. BARKLEY. I do not know. But I want to say this, that the pioneer has always been favored by Congress—you did that in your leasing act—that is because they add to the national wealth, and they have already added in this case $1,350,000 royalty to the Government,
I thank you for your attention.
STATEMENT OF MR. JOHN V. CLINNIN, CHICAGO, ILL.
The CHAIRMAN. Have you anything to add to what Mr. Barkley has said?
Mr. CLINNIN. I represent the creditors of the General Oil Co., and was here in case Mr. Barkley did not arrive in time. In fact, I was here before he came the other day.
The CHAIRMAN. You do not care to make any statement in addition to that of Mr. Barkley?
Mr. CLINNIN. The only statement I would make, if any, is to call attention of the committee to the California case. I have not the report of the committee now, but will be very glad to furnish the record with it where a similar situation arose with reference to claims where certain lands were withdrawn by the United States Government where the oil prospectors had started work and had not made a real discovery prior to the withdrawals. That case went up to the circuit court of appeals in California, which held that the prospectors had equitable title but not a legal position, and they reimbursed the equitable title holders for the moneys that they had put in there in prospecting and developing that field which was afterwards withdrawn by the Government.
The CHAIRMAN. Was that the 1909 withdrawal?
The CHAIRMAN. Of course, that withdrawal specifically gave those in the diligent prosecution of the work the right to go ahead.
Mr. CLINNIN. They went to the circuit court of appeals to get it.
STATEMENT OF MR. 0. E. HARRISON, 504 SOUTHERN BUILDING,
WASHINGTON, D. C.
The CHAIRMAN. Is there anyone else representing the Texas claimants?
Mr. HARRISON. My name is 0. E. Harrison. I represent the Seright claims, and I also represent the Courts Drilling Co., a compaany in which I was personally interested, I am sorry to say, because that company lost about $100,000.
The CHAIRMAN. What is your address?
Mr. HARRISON. My address at present is 504 Southern Building, Washington, D. C.
Mr. Chairman, I realize the responsibility that one takes in appearing before the committee. I take it that I am, in effect, testifying, and, therefore, I want to be careful with what I say. I did not come prepared to discuss a great many of the features concerning which inquiry has been made here to-day, for the reason that I thought that the subject matter that was before your committee was not the question of the equities that may be claimed either by the placer people, by the riparian owners, or by the Texas claimants, but rather, you were having under consideration the question as to whether or not you were going to confer upon the Secretary of the Interior the power to make leases and make adjustments to those equitably entitled thereto. I therefore did not assume that this committee would undertake the burden of inquiring closely into individual cases, and I may say that if you do, I think you will be here some while, but I hardly think tbat you can decide in a somewhat ex parte way the merits of these different people. There is, indeed, too much involved, and so, therefore, I shall not discuss in the little time that I shall occupy the merits of these different claims. None of us had any right to be there.
We have found that out since the Supreme Court said so, but there are two principles in the law of Nations and the law of States that you ought to consider in passing this legislation. One of them is that when one country even conquers another or takes it, the rights of its citizens, as conveyed by the sovereign, are respected, and even when one State is granted rights in a territory which it does not own, that the courts have been very careful to observe the vested rights of those who receive property under a color of authority. Bear that in mind and bear in mind also that even after the Greer case was decided, the Congress passed an act preserving and protecting and giving to the people who had secured territory from the State of Texas•a preference to the extent, I think, of 420 acres. Yow, all that was done according to just a principle that has existed in the law of nations.
Do not ask me whether I am ready, whether the placer mining people are ready, whether the riparian people are ready, but ask me, if you will, whether I think you ought to pass some law that will give us an opportunity, all of us, to go before the Secretary of the Interior and set forth in sworn testimony our equities in this matter and the basis of our good faith in making those investments. I went down to Texas some years ago, a short while ago, in this Texas matter. We invested in oil there. We did not know about the Greer case, and I am not a lawyer. I have been admitted to the bar. I do not rise to the dignity, perhaps, of some others. I have had some little experience in public law. But we began to develop territory, and it goes without saying that as we went north, toward the river there, that everybody foresaw that there might be oil out in that territory and in the river bed, and thus it was that people began to cast about from whom they could secure leases, and the word came that Texas owned that territory and the word came that the Interior Department had decided that Texas could give permits in that territory.
The word came, and we saw and knew that Texas had exercised sovereignty over that river for years; had policed it; had patrolled it; that in public celebrations it had been recognized and recognized by Congress. Now, then, the people, as practical men, thinking that Texas was a sovereign State and had the right to give a permit, and that that permit could be assigned and others could take it, and that the decision had been secured about the time that we entered into the war, when the whole country was urged, as people in the oil business were urged, to produce, and people were plunging ahead
The CHAIRMAN (interposing). What decision do you refer to?
Mr. HARRISON. The law of Texas under which it gave permission to lease water-covered areas—I mean that Texas passed—which covered this river.
Mr. RAKER. That is a new one. I did not hear that. Does that lease provide for water-covered areas?
Mr. HARRISON. Yes, it was passed in 1917.
Mr. RAKER. And after the law was passed by Texas leasing water-covered areas is when this leasing operation commenced?
Mr. HARRISON. Surely; after that. We had no right to be there, as the law is subsequently found out. The Supreme Court has decided that question. It is true it is by a dissenting opinion. It is true that it was argued by able lawyers that the Greer case did not apply. It would be a great thing if we lawyers could look back and decide the good faith of people upon the situation as we understand it now. But the placer people went in, as I understand, without any color of title, and the riparian people went in without any more color of title than we did.
I am not going to make any argument, and I want to shorten this as much as I can, but with the permission of the committee I want to introduce in the record at this time an argument that was made in a memorandum submitted on behalf of the Texas permittees in the Senate hearing, which is only three pages. It deals with the history and nature of our rights and the claim of the placer people and the riparian and it gives numerous decisions.
Mr. SMITH of Idaho. What page is it?
Mr. HARRISON. I do not want to make the argument here. I do not think it is material to this inquiry. I did not think so at the time they made it to the committee there. The committee could throw it all out on the ground that they were not going to determine the equities, that they had before them the question as to whether or not some tribunal ought to consider whether or not the people that had gone in should be given preference in the granting of these leases.
Mr. LARSEN. Do you not think it is material for us to determine the equities in order that we may determine the scope of the bill we will pass and the nature of the bill?
Mr. HARRISON. I do not see how you can determine the equities in individual cases.
Mr. LARSEN. I mean to have them before us and to have them in mind in framing the bill.
Mr. HARRISON. A general view of them?
Mr. HARRISON. Then I ask the committee if they will please to read that statement. It was prepared by Smoot & Smoot, attorneys, of Texas, in connection with myself, and if you will pardon my saying so, I think it is a wonderful memorandum because I had little participation in making it. It is a very short, concise statement of the thing that I think the committee wants.
Mr. LARSEN. In view of the fact that we are trying to get this printed in larger type, and that it is only three pages, I suggest that we include that in this record and then we will not be bothered bị both records.
The CHAIRMAN. Without objection, it may go in.
MEMORANDUM ON BEHALF OF TEXAS PERMITTEES.
RIGHTS AND EQUITIES OF CITIZENS AND CORPORATIONS OF THE UNITED STATES TO
LAND AND OIL AND GAS DEPOSITS SITUATED SOUTH OF MEDIAL LINE OF RED RIVER.
I. History and nature of rights of Texas permittees.-A brief summary of the oil and gas developments will be necessary to a clear understanding of the conditions which lead to the acquiring of these claims.
As the result of an active drilling campaign following the bringing in of the famous “ Burk” oil pool in Wichita County, Tex., the development of the field was continued north until it reached the “Big Bend” area in Red River. Up to this time no particular attention had been paid the bed of that stream. The