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Show 742 HISTORY OF PUBLIC LAND LAW DEVELOPMENT cent royalty. There was a privilege of renewal on terms to be prescribed by the Secretary of the Interior. Where the land was "wildcat" or unproved land, the Secretary was authorized to issue prospecting permits for 2 years, covering not more than 2,560 acres. On discovery, the permittee could obtain a lease to one-fourth of the land for 20 years at a royalty of 5 percent, with a nominal rental and a right of renewal. The permittee also had a preference right to a lease of the remainder of his 2,560-acre tract at a royalty of 12i/2 to 25 percent. The royalties from all leases (except in Alaska) were to be divided as follows: 45 percent to the Reclamation Fund; 45 percent to the state for schools; 10 percent to the Federal Treasury. There were numerous provisions relating to monopoly control, alien ownership, waste of oil and gas, flooding of the oil sands, drilling of offset wells, and relief to operators on withdrawn land. The Senate debated the bill over a period of 14 days. In an atmosphere of tired resignation, the attendance often consisted of no more than 12 or 14 Senators. It is true that occasionally one would hear extravagant statements from Senator King of Utah (". . . I am absolutely opposed to the leasing system, the paternalism, the bureaucracy, the autocracy, the un-American system that the leasing system entails . . .")312 or from Senator Fall of New Mexico (". . . collectively as a government in business matters we are and always have been and always will be a failure."313 There has "never been a mine opened in the United States by any geological or 3U58Conc. Rec. 4111 (1919). 313 58 Cong. Rec. 4290 (1919). Albert B. Fall later became Secretary of the Interior in the Harding administration. His conviction for accepting a bribe in connection with the Teapot Dome scandal might be taken as an indication that he was not so astute in business matters himself. Teapot, Fall et al. will be considered in Part 3 of this chapter. other experts." 314). But, on the whole, the debate in both the Senate and the House concentrated more rationally on the specific aspects of the proposed legislation. The main issues discussed at length were: (1) whether government development and operation of the oil lands would be a feasible alternative; (2) the generosity of the relief sections; (3) restrictions in the Smoot bill on alien ownership of leases, either directly or indirectly through stock ownership; (4) the division between the states and the Federal government of royalties; and (5) the loss of taxes which the states would suffer under a system in which title to the oil lands was reserved in the Federal government. A few observations on these various points from both the Senate and the House are given below. The House eventually amended the Senate bill rather drastically,315 and its recommendations were finally adopted by the conference committee.316 The threat that the government might take over and operate the oil lands was not voiced for the first time in the 1919 debates.317 Senator Walsh of Montana felt that this was one good reason for adopting a leasing system immediately.318 On the other hand, a newcomer from Massachusetts by the same name advocated government operation because of the "failure of private enterprise."319 An unusual amendment, offered by Senator Kirby of Arkansas, would substitute for the bill under consideration a brief statement authorizing the President at his discretion to mine coal, oil, and gas on the public domain under the direction of the Secretary of the Interior when the "public exigency" may require.320 Obviously made to needle the western in- 314 58 Cong. Rec. 4284 (1919). 315 58 Cong. Rec. 7299 (1919) . 319 58 Conc. Rec. 7796 (1919). 317 See note 296 and text which follows. 318 58 Cong. Rec. 4112 (1919). 319 58 Cong. Rec. 4171 (1919). 320 58 Cong. Rec. 4283 (1919). |