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couraging rational development and at the same time insuring the longest possible life to the oil supply. The royalty rates fixed by the Government should neither exceed nor fall below the current rates. But much more important than revenue is the enforcement of regulations to conserve the public interest so that the inconvenience of the lessee shall specifically safeguard oil fields against the penalties from careless drilling and of production in excess of transportation facilities or of market requirement.

One of the difficulties presented, especially in the California fields, is that the Southern Pacific Railroad owns every other section of land in the oil fields, and in those fields the oil seems to be in a common reservoir, or series of reservoirs, communicating through the oil sands, so that the excessive draining of oil at one well, or on the railroad territory generally, would exhaust the oil in the Government land. Hence it is important that if the Government is to have its share of the oil, it should begin the opening and development of wells on its own property. (Laughter and applause)

In view of the joint ownership which the Government and the adjoining land-owners, like the Southern Pacific Railroad, have in the oil reservoirs below the surface, it is a most interesting and intricate question, difficult of solution, but one which ought to address itself at once to the State law-makers, how far the State legislature might impose appropriate restrictions to secure an equitable enjoyment of the common reservoir, and to prevent waste and excessive drainage by the various owners having access to this reservoir (applause). It has been suggested, and I believe the suggestion to be a sound one. that permits be issued to a prospector for oil, giving him the right to prospect for two years over a certain tract of Government land for the discovery of oil, the right to be evidenced by a license for which he pays a small sum. When the oil is discovered, then he acquires title to a certain tract, much in the same way as he would acquire title under a mining law. adopted, then he would be like that above suggested. applies also to Government gas lands.

Of course, if the system of leasing is given the benefit of a lease upon terms What has been said in respect to oil

Under the proposed oil legislation, especially where the Government oil lands embrace an entire oil field, as in many cases, prospectors, operators, consumers, and the public can be benefitted by the adoption of the leasing system. The prospector can be protected in the very expensive work that necessarily antedates discovery. The operator can be protected against impairment of productiveness of the wells which he has leased by reason of the control of drilling and pumping of other wells too closely adjacent or by the prevention of imperfect methods as employed by careless, ignorant or irresponsible operators in the same field, which result in the admission of water to the oil sand; while, of course, the consumer will profit by

whatever benefits the prospector or operator receives in reducing the first cost of the oil.

PHOSPHATE LAND

Phosphorous is one of the three essentials to plant growth, the other elements being nitrogen and potash. Of these three, phosphorous is by all odds the greatest element in nature. It is easily extracted in useful form from the phosphate rock, and the United States contains the greatest known deposits of this rock in the world. They are found in Wyoming, Utah and Florida, as well as in South Carolina, Georgia and Tennessee. The Government phosphate lands are confined to Wyoming, Utah and Florida. Prior to March 4, 1909, there were four million acres withdrawn from agricultural entry on the ground that the land covered phosphate rock. Since that time 2,322,000 acres of the land thus withdrawn was found not to contain phosphate in profitable quantities, while 1,678,000 acres was classified properly as phosphate land. During this Administration there has been withdrawn and classified 437,000 acres, so that today there is classified as phosphate rock land 2,115,000 acres.

The rock is most important in the composition of fertilizers to improve the soil, and as the future is certain to create an enormous demand throughout this country for fertilization, the value to the public of such deposits as these can hardly be exaggerated. Certainly with respect to these deposits a careful policy of Conservation should be followed. Half of the phosphate of the rock that is mined in private fields in the United States is now exported. As our farming methods grow better the demand for the phosphate will become greater, and it must be arranged so that the supply shall equal the needs of the country. It is uncertain whether the placer or lode law applies to the Government phosphate rock. There is, therefore, at necessity for some definite and well-considered legislation on this subject, and in aid of such legislation all of the Government lands known to contain valuable phosphate rock are now withdrawn from entry.

A law that would provide a leasing system for the phosphate deposits, together with a provision for the separation of the surface and mineral rights as is already provided for in the case of coal, would seem to meet the need of promoting the development of these deposits and their utilization in the agricultural lands of the West. If it is thought desirable to discourage the exportation of phosphate rock and the saving of it for our own lands, this purpose could be accomplished by conditions in the lease granted by the Government. to its lessee. Of course, under the Constitution the Government. could not tax and could not prohibit the exportation of phosphate, but as proprietor and owner of the lands in which the phosphate is deposited it could impose conditions upon the kind of sales, whether

foreign or domestic, which the lessee might make of the phosphate mined.

(Applause)

The tonnage represented by the phosphate lands in Government ownership is very great. But the lesson has been learned in the case of such lands as have passed into private ownership in South Carolina, Florida and Tennessee, that the phosphate deposits there are in no sense inexhaustible. Moreover, it is also well understood that in the process of mining phosphate, as it has been pursued, much of the lower grade of phosphate rock which will eventually all be needed has been wasted beyond recovery. Such wasteful methods can easily be prevented, so far as the Government land is concerned, by conditions inserted in the leases.

WATER-POWER SITES

Prior to March 4, 1909, there had been, on the recommendation of the Reclamation Service, withdrawn from agricultural entry, because they were regarded as useful for power sites which ought not to be disposed of as agricultural lands, tracts amounting to about 4,000,000 acres. The withdrawals were hastily made and included a great deal of land that was not useful for power sites. They were intended to include the power sites on twenty-nine rivers in nine States. Since that time 3,475,442 acres have been restored for settlement of the original 4,000,000, because they do not contain power sites; and meantime there have been newly withdrawn 1,245,892 acres on vacant public land and 211,007 acres on entered public land, or a total of 1,456,899 acres. These withdrawals made from time to time cover all the power sites included in the first withdrawals, and many more, on 135 rivers and in 11 States. The disposition of these power sites involves one of the most difficult questions presented in carrying out practical Conservation.

The Forest Service, under a power found in the Statute, has leased a number of these power sites in forest reserves by revocable leases, but no such power exists with respect to power sites that are not located within forest reserves; and the revocable system of leasing is, of course, not a satisfactory one for the purpose of inviting the capital needed to put in proper plants for the transmission of power.

The Statute of 1891, with its amendments, permits the Secretary of the Interior to grant perpetual easements or rights-of-way from water sources over public lands for the primary purpose of irrigation and such electrical current as may be incidentally developed, but no grant can be made under this Statute to concerns whose primary purpose is generating and handling electricity. The Statute of 1901 authorizes the Secretary of the Interior to issue revocable permits over the public lands to electrical power companies, but this Statute is woefully inadequate because it does not authorize the collection of a

charge or fix a term of years. Capital is slow to invest in an enterprise founded upon a permit revocable at will.

The subject is one that calls for new legislation. It has been thought that there was danger of combination to obtain possession of all the power sites and to unite them under one control. Whatever the evidence of this, or lack of it, at present we have had enough experience to know that combination would be profitable, and the control of a great number of power sites would enable the holders or owners to raise the price of power at will within certain sections; and the temptation would promptly attract investors, and the danger of monopoly would not be a remote one.

However this may be, it is the plain duty of the Government to see to it that in the utilization and development of all this immense amount of water-power, conditions shall be imposed that will prevent monopoly, and will prevent extortionate charges which are the accompaniment of monopoly. The difficulty of adjusting the matter is accentuated by the relation of the power sites to the water, the fall and flow of which create the power.

In the States where these sites are, the riparian owner does not control or own the power in the water which flows past his land. That power is under the control and within the grant of the State, and generally the rule is that the first user is entitled to the enjoyment. Now, the possession of the bank or water-power site over which the water is to be conveyed in order to make the power useful, gives to its owner an advantage and a certain kind of control over the use of the water-power, and it is proposed that the Government in dealing with its own lands should use this advantage and lease lands for power sites to those who would develop the power, and impose conditions on the leasehold with reference to the reasonableness of the rates at which the power, when transmuted, is to be furnished to the public, and forbidding the union of the particular power with a combination of others made for the purpose of monopoly by forbidding assignment of the lease save by consent of the Government (applause). Serious difficulties are anticipated by some in such an attempt on the part of the general Government, because of the sovereign control of the State over the water-power in its natural condition, and the mere proprietorship of the Government in the riparian lands.

It is contended that through its mere proprietary right in the site the central Government. has no power to attempt to exercise police jurisdiction with reference to how the water-power in a river owned and controlled by the State shall be used, and that it is a violation of the State's rights. I question the validity of this objection. The Government may impose any conditions that it chooses in its lease of its own property, even though it may have the same purpose and in effect accomplish just what the State would accomplish by the exercise of its sovereignty. That is shown frequently in leases of

houses containing a covenant against the use of the house for that which under the law of the State is an unlawful use; and nevertheless. no one has ever contended that that condition, though it be for the stricter enforcement of the State law, is without the power of the lessor as a proprietor of the land which he is leasing.

There are those (and the Director of the Geological Survey, Mr Smith, who has given a great deal of attention to this matter, is one of them) who insist that this matter of transmuting water-power into electricity which can be conveyed all over the country and across State lines, is a matter that ought to be retained by the general Government, and that it should avail itself of the ownership of these power sites for the very purpose of coordinating in one general plan the power generated from these Government-owned sites. On the other hand, it is contended that it would relieve a complicated situation if the control of the water-power site and the control of the water were vested in the same sovereignty and ownership, viz: the State, and then were disposed of for development to private lessees under the restrictions needed to preserve the interests of the public from the extortions and abuses of monopoly. Therefore, bills have been introduced in Congress providing that whenever the State authorities deem a water-power useful they may apply to the Government of the United States for a grant to the State of the adjacent land for a water-power site, and that this grant from the Federal Government to the State shall contain a condition that the State shall never part with the title to the water-power site or the water-power, but shall lease it only for a term of years not exceeding fifty, with provisions in the lease by which the rental and the rates for which the power is furnished to the public shall be readjusted at periods less than the term of the lease. say every ten years.

The argument is urged against this disposition of power sites that legislators and State authorities are more subject to corporate influence and control than would be the central Government. In reply it is claimed that a readjustment of the terms of leasehold every ten years would secure to the public and the State just and equitable terms. Then it is said that the State authorities are better able to understand the local need and what is a fair adjustment in the particular locality than would be the authorities at Washington. It has been argued that after the Federal Government parts with title to a power site it cannot control the action of the State in fulfilling the conditions of the deed, to which it is answered that in the grant from the Government there may be easily inserted a condition specifying the terms upon which the State may part with the temporary control of the water-power sites, and, indeed, the water-power, and providing for a forfeiture of the title to the water-power sites in case the condition is not performed: and giving to the President, in case of such violation of conditions, the power to declare forfeiture and to direct proceedings to restore to the

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