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including pueblo lands, in New Mexico which have been set aside by Executive order.

    With respect to chapter 126, I believe that the limitations contained in sections 6 and 25 would not apply to the construction by the United States of any water and irrigation works on any of the pueblos or Indian reservations in New Mexico unless Congress authorizes the State to impose such obligations. It is possible that S. 934 and H. R. 3517, bills introduced in the 77th Congress, 1st Session, to facilitate compliance with, and to promote the successful operation of, the Rio Grande Compact of March 18, 1938, were intended to confer, at least in part, this authority on, the State. Adverse reports on these measures were sent to the respective houses in Congress by the Secretary of the Interior on August 11, 1941. There would appear to be nothing further at this time that could be done in respect to chapter 126 of the New Mexico Session Laws.

    Chapter 153 would appear to be beneficial in the land program which is being carried out so far as the purchase of lands under that program for the several pueblos where such lands are situated within the Middle Rio Grande Conservancy District. This legislation would permit the Conservancy District to determine the total amount of the lien against the lands and the purchase of the land could be free of all of the present liens in so far as the Conservancy District charges are concerned. It will be noted, however, that according to the provisions of chapter 153 at least an attempt is made not to relieve such lands of any future assessments by a conservancy district. This phase of the problem, however, is a matter that does not appear to need any further comment at this time.

    I shall be glad to receive any further discussion of these laws which you may wish to present.

                                                                                                                                                FELIX S. COHEN,

Memorandum for the Secretary.

    At the staff conference on Wednesday, September 17, you asked that this office look into the question of the right of certain Indians of the fish-eating tribes of the Northwest to fish in streams and waters outside the boundaries of their reservations.

    The Indians do not claim the right to fish anywhere in the State on terms different from those applicable to the white man. The provisions of certain early treaties entered into prior to statehood between the Indians and the United States reserved to the Indians the right to fish at all usual and accustomed places in common with citizens of the territory. Under these treaties the Indians are convinced that they have the right to fish at usual and accustomed places without State interference or regulation. They have strongly resisted attempts of the State authorities to enforce the State law and regulations against them in this matter. The situation became so acute in the State of Washington that the Indians in that State brought several suits to enjoin the State authorities from interfering with their treaty fishing rights. Despite existing decisions of the Supreme Court of the State of Washington against the Indians and certain decisions of the United States Supreme Court seemingly adverse to them, two of these cases were recently decided in favor of the Indians by the United States District Court for the Western District of Washington. Recognizing the gravity of the situation, this Department, in cooperation with the Department, of Justice and representatives of the State of Washington, arranged for a test suit to be carried, if possible, to the United States Supreme Court.

    Sampson Tulee, an Indian of the Yakima Reservation, was charged and convicted of catching salmon and food fish with a dip bag net without obtaining a license, as required by State law. The place at which the fish were taken was conceded to be a treaty fishing ground. Tulee's conviction was affirmed on appeal by the Supreme Court of Washington in a 5 to 3 decision with one of the majority subsequently changing his views. An appeal to the United States Supreme Court has been perfected. Pending a disposition of the appeal by the United States Supreme Court, no action by this Department appears to be necessary.

NATHAN R. MARGOLD, 

Re:

1. Are the Freedmen of the Five Civilized Tribes entitled to vote on the acceptance of a constitution in pursuance of section 15 of the Oklahoma Welfare Act?

2. Would it be admissible under the act to adopt a constitution containing provisions whereby Freedmen who might be on the rolls would and could be eliminated?

1. The Freedmen having been admitted by treaties and formal tribal actions as full-fledged members in all of the Five Civilized Tribes excepting the Chickasaw Nation, they have the right to vote on any constitution to be adopted by these tribes under the Oklahoma Welfare Act.

2. As the Oklahoma Welfare Act constitutes the basis for complete reorganization of the Oklahoma tribes, the Five Civilized Tribes have full authority to reorganize their membership on a new basis excluding the Freedmen.

    Your inquiry of August 11, 1938, presented a question concerning the status of the Freedmen in the Five Civilized Tribes in connection with the desire of some of these tribes, and particularly the Seminole Nation, to organize under the Oklahoma Welfare Act of June 26, 1936.

    This question involves two problems which will be taken up in order.

1. Are the Freedmen of the Five Civilized Tribes entitled to vote on the acceptance of a constitution in pursuance of section 3 of the Oklahoma Welfare Act?

2. Would it be admissible under the act to adopt a constitution containing provisions whereby Freedmen who might be on the rolls would and could be eliminated?

"That the Chickasaw people hereby refuse to accept or adopt the Freedmen as citizens of the Chickasaw Nation upon any terms or conditions whatever and respectfully request the Governor of our Nation to notify the Department at Washington of the action of the legislature in the premises." (See United States v. The Choctaw Nation et al., 38 Ct. Cl. 558).

"There is no treaty nor statute which has come to my attention which conveys membership in any of the tribes under the Kiowa Agency to persons not of Indian blood. * * * If, therefore, these persons or other white persons have in fact been adopted as members of the tribes, the basis for such adoption must have been some definite tribal action taken with departmental approval. If no such tribal action occurred, those persons have no legal claim to membership, and no recognition as members need be accorded them by the tribe."

    It has, however, been suggested that the Secretary may issue regulations to the effect that only tribal members of Indian blood may vote on the adoption of such a constitution. It is true that section 3 of the Oklahoma Welfare Act provides that the Secretary of the Interior may prescribe rules and regulations to govern the adoption of a constitution by any tribe organized under this act. This provision corresponds to section 16 of
 

the Indian Reorganization Act which has been held to confer a broad authority upon the Secretary of the Interior to pass upon the qualifications of voters without therein being limited by past enrollments (Solicitor's opinion M. 27810, December 13, 1934). This opinion, however, pointed out that the Secretary in the exercise of his authority is bound by any statutes which may determine tribal membership. As the membership rights of the Freedmen in the Five Civilized Tribes have been fixed by treaties, which are the equivalent of statutes, and by formal tribal action in pursuance of these treaties, the Secretary would not appear to be authorized to issue regulations which would deprive the Freedmen of their right to vote on constitutions to be adopted by the Five Civilized Tribes under the Oklahoma Welfare Act.

    2. The question whether Freedmen now citizens of various Nations of Oklahoma may be excluded by appropriate provisions in constitutions to be adopted by these Nations pursuant to the Oklahoma Welfare Act must be answered in the affirmative. The Oklahoma Welfare Act represents a turning point in the organization of Indian tribes. A new type of organization on a new basis is provided by this act. It thus takes its place beside the various treaties of 1866 which after the end of the Civil War similarly provided for a new organization of the Five Civilized Tribes on a new membership basis. With the consent of Congress and pursuant to these treaties the tribes resolved to modify their membership basis and to include a large number of Freedmen who thus became Indians by law only. It would appear that the tribes should be able to modify their membership once more and, having obtained the consent of Congress through the Oklahoma Welfare Act, to arrange their membership and other affairs in a constitution to be adopted by their free vote. They are thus entitled to decide that in the future only Indians by blood shall be members of the new tribal organization that is to come into being by adoption of these constitutions. A number of Indian tribes have incorporated similar provisions in their constitutions in order to limit membership to persons of Indian blood. Among these are the Cheyenne River Sioux Tribe of South Dakota, the Quileute Tribe of the Quileute Reservation, Washington, and the Kialogee Tribal Town of Oklahoma The customary provision reads as follows:

    "The membership of the * * * Tribe shall consist of the following:

    "(a) All persons of Indian blood whose names appear on the official census roll of the tribe as of June 18, 1934.

    "(b) All children born to any member of the * * *  Tribe who is a resident of the reservation at the time of the birth of said children."

                                                                                                                                           NATHAN R. MARGOLD,

M-31417                                                                                                                                            October 9, 1941.

Re:

Does section 8 of the Oklahoma Welfare Act, excluding Osage County from the benefits of that act, apply to all Indians living in Osage County or only to the Osage Tribe of Indians?

In view of the clear unambiguous language of section 8, all Indians residing therein and all lands situated therein must be held to be excluded from the provisions of that act.

MY DEAR MR. SECRETARY:

    There has been referred to me the question of the interpretation of section 8 of the Oklahoma Welfare Act of June 26, 1936, reading as follows: "This Act shall not relate to or affect Osage County, Oklahoma." The question is whether the section was intended to exclude from the benefits of the act only the Osage Tribe of Indians or all Indians residing in Osage County, regardless of the tribe to which they belong.

    The obvious interpretation of this section would be that clearly called for by the unambiguous term "Osage County" used therein. The section thus should exclude from the act all Indians and their holdings in that county regardless of tribal membership. The legislative history of the act would appear to confirm this interpretation. The House
 

Committee on Indian Affairs in bits Report No. 2408, 74th Congress, 2d session, discussed the inclusion of section 8 in S. 2407, which became the Oklahoma Welfare Act, in the following words:

    "Because of the peculiar circumstances prevailing in Osage County the committee has recommended in section 8 of the proposed substitute that it be excluded from the provisions of the bill. The Osage Reservation is rich in mineral deposits, and the members of the tribe have derived millions of dollars in royalties and bonuses from this natural resource. There are numerous unallotted members of the tribe who  participate to a negligible amount in the tribal revenues. Some of these should be eventually allowed to take advantage of the provisions embodied in this legislation. Further studies are necessary, however, before a definite conclusion in this respect can be reached, and the committee therefore feels that the exclusion of Osage County is proper at this time."

    Consideration should furthermore be given to the parallel provisions in the Indian Reorganization Act. It is significant that that act contains both tribal and geographical exclusion and the difference between the types has not been confused. Section 13 excludes the Osage and other Oklahoma tribes by name. It also excludes the geographical areas of the Territories, colonies and insular possessions; and section 18 excludes any reservation which has voted against the application of the act.

    This office has consistently held that the exclusion of a reservation is geographical in that the act does not apply to any persons therein, even a member of a tribe covered by the act. The latest expression of this opinion is a memorandum to the Commissioner of Indian Affairs of June 30, 1941, denying the possibility of purchasing white-owned land in the name of the United States for a Quinaielt Indian on the Chehalis Reservation.

    Finally, the language of the Oklahoma Welfare Act is clear enough to include all Indians living in the county. Thus, where section I of the act authorizes the Secretary of the Interior to acquire lands for the Indians, the language of section 8 unmistakably prohibits such acquisition in Osage County regardless of whether the Indian for whom the lands is to be acquired is a member of the Osage or another Indian tribe. Also, where section 4 of the act permits any ten or more Indians to receive from the Secretary of the Interior a charter as a local cooperative association, Indians living in Osage County do not have this privilege regardless of their tribal affiliation. Similarly Indians living in Osage County cannot apply for loans from the revolving loan fund set up by section 10 of that act.

                                                                                                                                            NATHAN R. MARGOLD,

Approved: October 9, 1941.
OSCAR L. CHAPMAN,
Assistant Secretary.

    Proposed Executive order extending trust periods on Indian lands.

1. An Executive order attempting to extend restrictions upon Indian lands now restricted regardless of when the restrictions upon those lands expire is too general. The order should be an exercise of discretion based upon consideration of present conditions and land policies and their reasonably foreseeable continuation.

2. Other statutes are involved besides those cited as authority for the extension of the trust periods.

3. Land entered by Indians under the Indian Homestead Act, July 4, 1884 (23 Stat. 76, 96), is not covered by the order; it is not described by the words "public domain allotments."

    The attached Executive order to extend trust periods on Indian lands is subject to certain legal objections which cause me to return it to your office for further consideration.

    The principal objection is that the order is too general. It would extend for another 25 years the restrictions which have been extended in 1941, thus creating restrictions on land until the year 1991.

    The act of February 8, 1887 (24 Stat. 388, 389), on the authority of which this order is partially
 

based, was interpreted by the Attorney General to preclude unlimited extensions. The Attorney General (25 Op. Atty. Gen. 483, 1905) held that the words "in any case" in the act of 1887 indicated that wholesale extensions were not intended and that special examination or knowledge of particular cases was contemplated. This opinion quoted the conference report to the effect that the words "in any case" were inserted to allow the President to extend this period only in special cases. The later act of June 21, 1906 (34 Stat. 325, 326), did not contain the words "in any case" but used the words "of any Indian allottee."

    Most of the legislation giving authority for this Executive order also seems to be so limited. The language of the legislation, except for the above limitation, is otherwise very broad.

    It would seem that to allow extension only in individual cases would be too narrow an interpretation, but the extension of trust periods should probably be limited to cases in a certain class such as those expiring within a certain period. With regard to the present Executive order there seems to be no exercise of discretion since the extension applies to all cases. Since the extensions will become effective in some cases decades in the future, there is no implication that the surrounding circumstances bearing on the desirability of extension were considered. The discretion of the President should be based on a reasonably foreseeable continuation of present conditions and land policies.

    The authority listed in this Executive order includes only three statutes. There are additional statutes which would be the basis for the extension of the trust period in some cases. One of these, the act of February 14, 1923 (42 Stat. 1246), extends the act of 1887 to all lands purchased by authority of Congress for the Indians. Another statute extends the act of 1887 to additional tribes. This is the act of March 2, 1889 (25 Stat. 1013). There are also three instances where the restrictions had expired and an act of Congress was necessary to reimpose the restrictions and give the President the power to extend the trust period. These acts are the act of February 8, 1927 (44 Stat. 1061), the act of May 27, 1937 (50 Stat. 210), and the act of April 11, 1940 (54 ,Stat. 106).

    The use of the words "including public domain allotments" would not include land entered by Indians under the Indian Homestead Act of July 4, 1884 (23 Stat. 76, 96). This act has been held to be in pari materia with the act of February 8, 1887, to the extent that the President by Executive order can extend the restrictions on land held under both, but this power does not apply to homestead rights acquired by Indians seeking rights as citizens under the general homestead laws. United States v. Jackson, 280 US. 183 (1930).

                                                                                                                                            NATHAN R. MARGOLD,

Memorandum for the Commissioner of Indian Affairs.

    You have informally communicated to me a draft for a Memorandum of Understanding between the State of South Carolina, the Catawba Tribe, the Office of Indian Affairs of the United States Department of the Interior, and the Farm Security Administration of the United States Department of Agriculture. The matter would appear to be of sufficient importance to require a formal expression of opinion on my part.

    It is my understanding that this Memorandum of Understandings merely constitutes a general declaration of intention on the part of the Indians and the three agencies which are to cooperate in this program. This Memorandum is then to be implemented by such formal contracts as may be necessary to carry into full effect the understanding of the parties.

    In spite of the informal nature of this Memorandum it is important to consider the authority of the Office of Indian Affairs to enter into such an agreement as the one here proposed. The agreement provides in effect for a cooperative venture of the four parties concerned in order to bring relief to the remainder of the Catawba Tribe in South Carolina.

    By the treaty of 1840 between the Catawbas and the State of South Carolina, the State took charge of this tribe and has since made considerable expenditure on behalf of the tribe. The Federal Government did not take jurisdiction over these Indians until the fiscal year 1941, when the Interior Department Appropriation Act appropriated $7,500 for the relief of the Catawba Indians. This amount was included in the $2,854,520 appropriated in that bill for the general support of Indians and administration of Indian property. (See Conference Report to accompany H.R. 8745;
 

page 6). While thus no special act of Congress was passed expressly granting to the Department of the Interior jurisdiction over the Catawbas, the special appropriation made for them in the 1941 Appropriation Act implies the grant of such jurisdiction for the purposes for which these funds were appropriated. This intention came out clearly in the hearings before .the Senate subcommittee when first an appropriation for the Catawbas was discussed, which at that time was figured at $15,000. During the course of those hearings on H.R. 8745 (76th cong., 3d session, page 467), Senator Hayden stated as follows:

    "* * * Then all we would have to do, as a practical matter, would be to increase the sum of $2,846,000 by $15,000 and indicate in the report that it was intended for the Catawba Tribe of Indians, and you would do all the rest?

    Mr; Zimmerman: 'I think that would be correct, Senator.' "

    It is true that this agreement is not merely one between this Department and the State, but that there are two other parties, the Indians themselves, to be incorporated under State law, and the Farm Security Administration, a Federal agency. Nothing in the Johnson-O'Malley Act would appear to prevent the addition of such other parties to the agreement. As a matter of fact, private corporations are one of the agencies enumerated in section 452 with which contracts under the Johnson-O'Malley Act may be made by the Department. As to the inclusion of another Federal agency in this venture, the additional help provided by it serves only to strengthen the desirability of the agreement and to increase the effectiveness of the arrangements contemplated by the Johnson-O'Malley Act.

    In order to permit this agreement to be entered into on the part of the State of South Carolina, the State Legislature inserted a provision in section 5 of its Deficiency Appropriation Act of 1941, which set up a committee consisting of two appointees of the Governor, two members of the Senate, and: two members of the House of Representatives. This committee was authorized "to negotiate and enter into a contract with the Federal Government for the purpose of bettering the condition of the Catawba Indian Tribe in South Carolina." For that purpose the committee was authorized to obligate the State to an extent of $75,000. The agreement is to be signed by the Governor and the members of this committee. This would appear to constitute sufficient authority for the State to enter into this agreement.

    In view of the informal character of the Memorandum the signature of the members of the existing business council of the Catawba Indians would be sufficient. Formal contracts as required may, of course, be entered into after the Indians have incorporated under the laws of the State of South Carolina.

    While there is in principle no legal objection to the form and substance of the Memorandum, I have made certain changes in its language especially in order to emphasize its informal character by pointing out that the various obligations enumerated in .the Memorandum express merely the intention of the parties rather than a final and binding agreement.

    It is further noted that on page 2 under No. 2 (a) of the intended obligations of the State of South Carolina, the State promises to recommend to its convening general assembly an appropriation for the fiscal year 1942-1943 for the Catawbas of not less than $9,500 with the proviso to the effect that "the Catawba Indian association agrees that no requests will be made for such an appropriation in the future." Such a proviso would seem to be unnecessary and unjustified in that the Catawba Indians neither can, nor should, be deprived of their right to petition the legislature of their State for appropriations needed for their
subsistence. This proviso has therefore been eliminated.

    It is further noted that the requirement included in the original draft submitted on October 9 to
 

the effect that the Catawba Indians promised "to execute, in favor of the State of South Carolina, a release and quitclaim of all claims and actions, of whatsoever nature, against the State of South Carolina" (p, 5, No. 3) has been eliminated from the present draft. This elimination is most desirable in that it avoids a procedure of doubtful legality which could have consisted in using a contract under the Johnson-O'Malley Act in order to deprive the Indian tribe of claims which it might be able to enforce in the courts.

    Finally your attention is drawn to the obligations of the Farm Security Administration which on page 6 of the draft is "to assume the entire responsibility for management, operations, and supervision of the (Catawba Indian) Association." While it is clear that the Farm Security Administration can and should take complete charge of the rehabilitation program to be initiated by this agreement, it cannot take charge of the association itself, if that association is to be a bona fide corporation under the laws of the State of South Carolina. I have therefore substituted for the last word of the language just quoted, "Association," the words "program initiated by this Memorandum of Understanding."

                                                                                                                                            NATHAN R. MARGOLD,

  THIS MEMORANDUM OF -UNDERSTANDING, entered into as of the ____ day of _________, 1941, between the State of South Carolina, acting by and through the Governor of the State of South Carolina, and the Special Committee on the Catawba Indians, the Indians of the Catawba Reservation, acting by and through their elected Business Committee, the United States Department of the Interior, acting by and through the Commissioner of Indian Affairs with the approval of the Secretary of the Interior, and the Farm Security Administration of the United States Department of Agriculture.

    WITNESSETH:

    WHEREAS, it is to the mutual benefit of the State of South Carolina and of the Catawba Indians in York County, South Carolina, that the Catawba Indians be rehabilitated upon a self-sustaining basis, and accorded equal treatment with other Citizens, without discrimination; and

  WHEREAS, the State of South Carolina has requested the cooperation of the Farm Security Administration and the Office of Indian Affairs in the rehabilitation of the Catawba Indians; and

    WHEREAS, the Farm Security Administration, with the financial and technical aid of the State of South Carolina and the Office of Indian Affairs, is desirous of rehabilitating said Catawba Indians, and in furtherance of such purpose, to aid them in conducting nonprofit activities and other social, educational and welfare activities;

    Now, THEREFORE, the parties to this Memorandum of Understanding do hereby declare it to be their intention to supply, subject to the execution of appropriate contracts whenever necessary hereunder, the following aid and assistance for the purpose of promoting the rehabilitation of the said Indians:

    The State of South Carolina will:

(1) Contribute to the Catawba Indian Association hereinafter described the sum of $75,000 immediately upon request of the Farm Security Administration of the United States Department of Agriculture;

(2) Recommend to its next convening General Assembly the passage of appropriate legislation for the following purposes:

(a) For the fiscal year 1942-1943 an appropriation to the Catawba Indian Association of not less than $9,500, to be used as directed by the Farm Security Administration to aid in rehabilitating the said Indians.

(b) To insure to the members of the Catawba Indian Tribe all the rights and privileges of any other citizens of the State of South Carolina without discrimination; provided, however, that they shall continue to be subject to the laws of the State of South Carolina;

(c) To convey all lands, and improvements thereupon and appurtenances thereunto belonging, now within the boundary lines of the present Catawba Indian Reservation, to the Catawba Indian Association;

(3) Admit members of the Catawba Indian Tribe into its public schools, including secondary schools, high schools, vocational schools, and State institutions of higher learning, on the same terms as other citizens of the State of South Carolina.

The Catawba Indian Tribe will organize itself as an incorporated cooperative association, to be known as the Catawba Indian Association, with assistance and advice of the Farm Security Administration. The Association will carry on the program of rehabilitation advised and recommended by the said Farm Security Administration. Said Association will be authorized to accept and receive all financial aid from the State of South Carolina, or from any other source, and will expend such moneys in the manner agreed upon from time to time by the Association and the Farm Security Administration. Said Association will organize and conduct rehabilitation programs for the Catawba Indians, will hold title to all its lands in trust for members of the Association, provided that the Association shall not alienate or encumber such lands except as security for loans to the Association by a Federal agency, or in accordance with the terms of the Charter of. the Association, and will be the sole agency through which the Catawba Indians will deal with the other parties to this Memorandum of Understanding.

The United States Department of the Interior, through the Office of Indian Affairs, will, to the extent that its personnel and funds are available therefor and so long as the Catawba Indians require assistance:

(1) Contribute annually to the Catawba Indian Association as the agent of the State of South Carolina, pursuant to the terms of the Johnson-O'Malley Act, $7;000, if appropriated by the Congress of the United States, or such sums, if any, as are made available for contribution by the Congress. Such sums shall be used by the Catawba Indian Association for the rehabilitation and support of the members of the Association, but shall not be used for administrative expenses of the Association:

(2) Delegate members of its staff from time to time, if requested by the Farm Security Administration and the Association, to assist the Catawba Indians in the development of Indian arts and crafts and in the development of markets therefor;

(3) Assist the other parties to this Understanding in developing the educational program for the Catawba Indians;

(4) Assist the Farm Security Administration in making medical examinations of all members of the Catawba Indian Tribe, and whenever possible, to hospitalize tubercular cases in an Indian Service sanitarium;

(5) Organize a Catawba Indian CCC project for conservation work on lands of the Association, and to employ and pay members of the Association for such work, provided that the Farm Security Administration will assist in providing the necessary equipment;

(6) Advise the Farm Security Administration with respect to the general and social welfare of Catawba Indians.

The Farm Security Administration of the United States Department of Agriculture will assist the Catawba Indians with the organization of a cooperative association to be known as the Catawba Indian Association, and make loans to said Association not to exceed $_______, in accordance with the policies and procedures of the Farm Security Administration, for the development and construction of real property of the Association, and assume the entire responsibility for management, operations, and supervision of the program initiated by this Memorandum of Understanding.

    IN WITNESS WHEREOF the parties have hereunto set their hands and seals this ___ day of ________, 1941.

APPROVED:
_______________________________

APPROVED:
_______________________________
Secretary of the Interior.

APPROVED:
_______________________________
Secretary of Agriculture.

STATE OF SOUTH CAROLINA

BY _____________________________

BY _____________________________
THE CATAWBA INDIANS

BY _____________________________
Chairman, Business Committee.

OFFICE OF INDIAN AFFAIRS

BY _____________________________
FARM SECURITY ADMINISTRATION

BY _____________________________
Administrator.
 

M-31579                                                                                                                                               January 15, 1942.

Synopsis of
Solicitor's Opinion

Re:

Whether a patentee under the homestead laws of ceded Colville Indian Reservation lands whose entry was properly cancelled and years afterwards reinstated and patented, is entitled to be paid the value of timber caused to be cut and removed from the land by the Indian Agency between the time of cancellation and the time of reinstatement.

1. That the patentee's entry having been properly cancelled and not reinstated at the time of the severance of the timber, he had no right of possession or equitable or legal rights in the land at that time.

2. That the rule that patent to a homestead entry relates back to the date of timber cut and removed in the interim between entry and patent only in cases where the entryman was maintaining his inchoate possessory right at the time of the cutting and removal and continued to maintain it until he perfected the entry.

3. That the doctrine of relation is a fiction of law intended only for the protection of persons who without fault of their own might otherwise sustain an injury, and does not relate further back than the inception of the equitable right and the courts have refused to apply it where the entryman or claimant, though having an entry or claim pending, had no legal or equitable right to the land at the time of the timber trespass, but acquired his patent by virtue of a subsequent purchase of the land.

4. Where the original entry of the patentee making demand for payment for the cutting of the timber was rightfully cancelled for failure to pay the purchase price of the land with interest and he failed to embrace the opportunity extended to him to have his entry reinstated or make a second entry but remained silent for about 8 1/2 years and did not apply for restoration of his rights until after the timber was partially cut, that he had no right of possession or equitable or legal right in the land at the time of the cutting, that the United States was the exclusive owner of the timber at the time of cutting, that whatever rights he formerly had were lost by his laches in failing to exercise his rights, that the reinstatement of his entry was not based on any then present equitable or legal right, that the patent he obtained did not relate back of the date of reinstatement of the entry and the patentee is not entitled to payment for the timber by application of the doctrine of relation.

5. That assuming patentee maintained settlement after cancellation of his entry, such settlement did not authorize the reinstatement of his entry, and further assuming that such settlement was resumed for the purpose of initiating a new right of entry, the title to the timber, nevertheless, would remain in the Government until the conditions of the law had been fulfilled, and as patentee never acquired a patent based upon an entry that had its inception in such a settlement but upon rights acquired, if at all, after the timber was cut, he is not entitled to be paid for timber appropriated theretofore.

MY DEAR MR. SECRETARY:

    At the request of the Assistant to the Commissioner of Indian Affairs there has been submitted for my consideration and opinion the question whether William G. Harper is entitled to be paid the stumpage value of timber cut and removed pursuant to a contract with the Indian Agency from the ceded Colville Indian Reservation lands by Landreth Brothers Lumber Company after the homestead entry of Harper on the land on which the timber was cut had been cancelled and before his entry was reinstated and patent issued.

    The records of the General Land Office disclose the following facts: On November 5, 1925, Harper made homestead entry, Spokane 015304, under section 2289, Revised Statutes, and the act of March 22, 1906 (34 Stat. 80). The entry was subsequently amended and allowed to describe
 

lot 4 N 1/2 SE 1/4 NW 1/4, SW 1/4, NW 1/4, Sec. 1, T. 34 N., R. 31 E., W. M. Final proof was submitted November 11, 1929, and on October 15, 1930, final certificate was authorized upon completion of the payments of the purchase price. The act of March 22, 1906, supra, requires that one-fifth of the purchase price shall be paid at the date of entry and the balance thereof in five equal annual installments. The joint resolution of March 19, 1920 (41 Stat. 535), permits an extension of time from year to year for payment of the installments of the purchase money upon the payment of interest in advance at the rate of 5 percent per annum, subject to the condition "That the last payment and all other payments must be made within a period not exceeding one year after the last payment becomes due by the terms of the act under which the entry was made * * *." The joint resolution further provides:

    "* * * That failure to make any payment unless the same be extended, or to make any extended payment at or before the time to which such payment has been extended herein provided shall forfeit the entry and the same shall be cancelled and any and all payments theretofore made shall be forfeited."

    The undisposed of ceded lands on the former Colville Indian Reservation were temporarily withdrawn by the Secretary of the Interior on September 19, 1934, "from disposal of any kind, subject to any and all existing valid rights, until the matter of their permanent restoration to tribal ownership as authorized by section 3 of the act of June 18, 1934, supra, can be given appropriate consideration." Section 18 of that statute (act of June 18, 1934, 48 Stat. 988, 25 U.S.C. sec. 478); provides that the act shall not apply to any reservation if a majority of the Indians on the reservation shall vote against its application. The request of the Assistant to the Commissioner of Indian Affairs for an opinion states that the Colville Indians voted against the acceptance of the act.

    By letter to Harper of March 15, 1940, the Commissioner of the General Land Office alluded to the fact that the land had not been restored to tribal ownership and to the previous correspondence with Harper and said:

    "If you are now residing upon the land embraced in the entry and making it a home to the exclusion of a home elsewhere, this office will consider an application to reinstate the entry, provided you file it * * * with a remittance of $124.80 due on the purchase money and the $36.97 due on the interest December 31, 1936. The application should be filed immediately in the District Land Office at Spokane, and accompanied with corroborated affidavits of two witnesses."

    "* * * I have lived on the land for over

three years. But of late have had to work elsewhere to help make a living for my family. But will reside upon land again when I send in the final payments to your office."

    The Assistant Commissioner of Indian Affairs reports that the land in question is a part of the West Fork Timber Unit and that the holders of the logging contract on this unit, the Landreth Brothers Lumber Company, marked the trees on the SE 1/4 SW 1/4 NW 1/4 Sec. 1, for cutting early in January 1940, and in that month and in May 1940 cut and removed from Harper's former homestead 76,220 feet, B.M., of timber of the value of $228.60 and that Harper is demanding payment for the value of that timber. The Assistant Commissioner invites consideration of certain facts from which he concludes that the entry was not made in good faith for a home but for the purpose of speculating in the timber and that Harper made fraudulent representations in his final proof and that the entry was reinstated upon representations not in fact true, and his position is that Harper should not be paid because of these circumstances indicating fraud and bad faith. Among other things, it is alleged, in substance that at the time Harper made his original entry it was well known in the region that the timber was to be sold and that the advertisement of the West Fork Unit had been prepared: that in 1929 Harper sold and caused to be cut $1,062.92 worth of timber as timber on his homestead, which subsequently was ascertained to have been cut from an adjoining Indian allotment and from tribal land, damages for which were collected from the logging company that cut the timber; that Harper's house, improvements and cultivation were outside his homestead and on Indian land, and at the time of entry the land was all surveyed with appropriate markers in the field; that he had not lived on the land for the past nine years, although his living on the land was made a condition for reinstatement. Attention is invited to the fact that Harper did not apply for reinstatement until after the first timber was cut in 1940.

    It has been held in any number of cases that a patent from the Government relates back and takes effect from the date of the entry (see cases, sec. 15, 43 U.S.C.A., note 18), and this doctrine of relation has been applied to defeat suits instituted by the United States to recover the value of timber unlawfully cut and removed from a homestead entry by or with the consent of the entryman, upon which after the trespass the entryman acquired final certification by the perfection of and payment for his entry. United States v. Ball, 31 Fed. 667; United States v. Freyberg, 32 Fed. 195. The rule that the patent relates back to the date of entry has also been applied to sustain an action by a homestead or other entryman of public land who sued for the recovery of the value of timber cut and removed from his entry during the time his rights were inchoate and before he acquired the equitable or legal title to the land. See Knapp v. Alexander Co., 237 U.S. 162; Peyton v. Desmond, 129 Fed 1. For other cases see Public Lands, sec. 502, 50 C.J. 1103. The doctrine of relation, however, is only a fiction of law designed to promote justice (Gibson v. Chouteau, 13 Wall. 92, 101: United States v. Detroit Lumber Co., 200 U.S. 321, 334), and does not apply to make that wrong which was innocent when done (Flint et al. v. Gordon, 41 Mich: 420, 2 N. W. 648; Richardson v. Midwest Refining Co., 39 Wyo. 58, 270 Pac. 154); and cannot be invoked by one whose default and lathes would make it work an injury to another (Evans v. Durango Land & Coal Co., 80 Fed. 433). A title by relation extends no further backwards than the inception of the equitable right (Hussman v. Durham, 165 U.S. 144, 148).

    An examination of the cases where the right of the entryman was sustained to recover damages for timber cut and removed from his entry in the interim between the initiation of his rights and their perfection by final certificate or patent, plainly discloses that the entryman was maintaining his equitable right acquired by his entry and right of possession thereunder at the time of the alleged severance of the timber from the entry, and that the doctrine of relation was applied for the reason that he was maintaining his inchoate possessory right which was capable of perfection and which he continued to maintain until it was
perfected. There are instances where the courts have declined to apply the doctrine that upon issuance of patent the title relates back to the time of entry so as to cut off the right of the United States to recover for timber severed and removed between entry and patent. In the case of United States v. Norris, 41 Fed. 424, Gill made homestead entry in 1877. The timber thereon was sold by him and logged in 1883 and 1884. He never complied with the homestead law in any respect. In 1889 he made payment for the land and acquired patent under the act of June 15, 1880 (21 Stat. 237). Section 2 of said act authorized "persons who have heretofore under any of the homestead laws entered lands properly subject to such entry" to "entitle themselves to said lands by paying the government price therefore," provided the pur-
 

chase shall not interfere with the rights or claims of others who may have subsequently entered such lands under the homestead laws (William C. Pascoe, 1 L.D. 50). The Government sued the purchaser for the value of the logs, who set up the defense that the title of the entryman related back to the date of entry. The court, in upholding the right of the Government to recover the value of the timber, said:

"Whatever may be his [the entryman's] title now against the government, it would be carrying the doctrine contended, for by defendant's counsel to unwarrantable lengths to say that the government is estopped from holding the defendant liable in this suit for the value of the timber cut from the public lands, and appropriated by him, at a time when the ownership therein, in law and equity, was in the sovereign."

    In Evans v. Durango Land & Coal Co., 80 Fed. 433, 25 C.C.A. 531, the case came up on a demurrer to the bill of complaint. The facts in so far is they have bearing on the application of the doctrine, of relation, are briefly as follows: October 2, 1880, Evans filed coal declaratory statement which was suspended. During the suspension on November 26, 1881, one McMaster conveyed the land embraced in the declaration to one Bell in trust for the defendants and on December 1, 1881, filed what was alleged to be a pretended entry under the coal land laws while the land was withdrawn from sale. Thereafter the Commissioner of the General Land Office issued instructions relating to the character and sale of the land, and Evans was notified to make entry and payment. He tendered application to purchase and payment on June 27, 1892, which was refused by the register of the local office because of the pending application of McMaster. Evans thereupon instituted contest against the application of McMaster on the ground it was made in the interest and for the benefit of defendants. The contest was sustained on the ground alleged and McMaster's application was rejected. Evans was thereafter allowed to, and did enter the land under the coal land laws and made, payment December 31, 1894, and received finals certificate upon which patent issued February 28, 1895. Evans sued the defendants for the value of the coal removed by them from January 8, 1885, down to and beyond the time of issuance of patent.

    The court cited Hussman v. Durham, supra, and other cases for the propositions that there is no hard and fast rule giving a patent retroactive effect by relation to the time when the entry is fully consummated by payment and that the doctrine of relation is a legal fiction intended only to apply to the protection of persons who, without fault of their own, might otherwise sustain an injury and never where it has a contrary effect. It was held that Evans acquired only a preferential right of entry by his declaratory statement and not an equitable title; that his equitable right had its origin in the payment made December 31, 1894, his preferential right having expired October 2, 1881; that the contest proceedings showed that McMaster's filing was cancelled because it was made for the benefit of others and not because of any preferential right of Evans, and it would be presumed that had McMaster's claim been valid it would have been allowed. The court said:

    "* * * Inasmuch as the plaintiffs invoke the equitable doctrine of relation for the purpose of recovering the value of coal which the defendant company has taken out of the land in controversy, doubtless at great labor and expense, and during a series of years, they ought to show, by proper averments, why Evans remained silent and inactive for such a long period after his declaratory statement was filed, and they should also show that his apparent failure to comply with the law and to exercise due diligence was excusable. Without some

further allegations showing how it happened that no action was taken by Evans towards perfecting his claim between October 2, 1880, and June 27, 1892, although for a greater part of that time the defendant company was in possession of the land, and mining coal thereon, the inference is clear that he must have been guilty of gross laches in prosecuting his claim, and in asserting his rights; and such laches on his part would seem to be a sufficient reason why his patent should not be given effect by relation as of the date when he filed his declaratory statement. It may be that facts can be shown which will excuse Evans' apparent want of diligence in perfecting his title, but we are constrained to hold that the present complaint: does not contain such a showing nor any averments which would justify us in holding that his patent should be given effect by relation as of a date anterior to December 31, 1894.* * *"

    Irrespective of the question of the right of reinstatement, the fact is, as shown by the record, that Harper did not take advantage of the opportunity to reinstate his entry or attempt to make a second entry, but remained silent for over 8 1/2 years and until the timber was marked for cutting and part of it was cut before attempting to have his rights revived. At the time of the cutting of the timber, Harper had no right to the possession of the land whatsoever and no equitable right to acquire the title thereto, and aside from the question whether the Indian Agency had the right to sell the timber and authorize its cutting, in view of the then status of the land, there is no question that at the time of severance of the timber from the land the United States was the exclusive owner of both the land and timber and entitled to dispose of it.

    The reinstatement of the entry subsequently was placed on the grounds that the land had not been restored to tribal ownership (in other words that the land remained subject to disposal under the public land laws), and the final payment under the former entry had been made. Whether the Commissioner had authority to do this, and whether the patent is valid, are questions not material to the present inquiry. This is so because, in any event, the Department may, as we have seen the courts have done, inquire into the facts and circumstances to determine the time when the rights secured by a patent have their inception. From a review of the record it appears that at the time the timber was cut, Harper had no right of possession and no rights either legal or equitable in the land. The inceptive right he had to acquire title to the timber, and as homesteader to cut and convert to his own use such timber on the land as might be necessary to remove with a bona fide purpose to clear the land for cultivation, was lost by the previous cancellation of the entry. Whatever rights he may have had to reinstatement or to initiate new rights by second entry were lost by his laches in failing to exercise them. Assuming that the act of reinstatement was motivated by a desire to prevent Harper from losing the fruits of his labor and expense in compliance with the homestead law, it is clear that the reinstatement was not based upon any existing right or equity in the land and that he acquired no new inceptive right to obtain title until the entry was reinstated.

    I am, therefore, of the opinion that Harper is not entitled to be paid for the timber under any fiction of law that he was constructively in possession of the lands at the time of severance and appropriation thereof under the doctrine that the patent relates back to the date of original entry.

    The Acting Commissioner of Indian Affairs invites attention to the following excerpt from the letter of the Commissioner of the General Land
 

Office to the Commissioner of Indian Affairs dated April 11, 1941:

    "If at the time of the withdrawal of the undisposed of ceded Colville lands by order of the Secretary of the Interior dated September 19, 1934 (54 I.D. 559), issued under authority of the act of June 18, 1934 (48 Stat. 984), the entryman was maintaining a valid homestead settlement claim, and if he continued to maintain such settlement claim to the date of the cutting of the timber, we are of the opinion that he had such a possessory right to the land as made the sale of the timber thereon by the Indian Agency improper. The land, until it was withdrawn, was subject to both settlement and entry. Perhaps a field investigation should be made to determine the facts as to settlement."

    If the view is based upon the argument that Harper, equally with others qualified to settle upon the lands, could, notwithstanding the cancellation of his prior entry initiate a new right of entry by settlement and may have been such a settler at the time of the trespass and acquired thereby rights in the timber on the land, there are two answers. The first is that notwithstanding any such settlement, the ownership of the land and timber thereon remains in the Government until the conditions of the law are fulfilled. Stone v. United States, 167 U.S. 178, 191, 193. The second answer is that Harper never acquired a patent based upon an entry that had its inception in such a settlement, but upon rights acquired, if at all, after the timber was cut and removed. It follows that he acquired no interest whatsoever in the timber sold by the Indian Agency.

    For the reasons stated, the demand by Harper to be paid for such timber should be refused.

                                                                                                                                             NATHAN R. MARGOLD,

Approved: January 15, 1942.
OSCAR L. CHAPMAN, Assistant Secretary.

M-31476                                                                                                                                              February 3, 1942.

Memorandum for the Assistant Secretary:

    On September 11, 1941, you referred to me for an opinion the question by what methods certain tracts situated within the original allotment of Jap Nelson, deceased Yakima Allottee No. 985, could be acquired for the use of the Irrigation Service on the Wapato Indian Irrigation project, Washington.

    A similar question was dealt with in my memorandum for the Commissioner of: Indian Affairs dated August 14, 1937. The conclusion reached therein, in so far as it relates to the instant case, was to the effect that Indian lands in heirship status with one or more of the heirs being incompetent or under age could be caused to be sold by the Secretary under the authority given in section 1 of the act of June 25, 1910 (36 Stat. 855; 25 U.S.C. sec. 372). The main difficulty in such a case lies in the fact that section 372 provides that "upon payment of the purchase price in full, the Secretary of the Interior shall cause to be issued to the purchaser patent in fee for such land." As in the instant case the United States is the purchaser of the land, this provision would lead to a legal absurdity by requiring the issuance of a fee patent to the United States.

    In the above mentioned memorandum I dealt with the situation arising as a consequence of a land purchase under section 5 of the act of June 18, 1934 (84 Stat. 984). This section provides that title to land purchased thereunder shall be taken by the United States in trust for the tribe or individual Indian for whom it is acquired. In this connection I wrote:

    "* * * In the face of this dilemma it appears to be a reasonable view that the requirement of section 372, that a patent in fee be issued to the purchaser, is inapplicable where the United States is itself the purchaser, and that in this case section 5 of the act of June 18, 1934, supersedes and amends the relevant provisions of section 372. This view is in accord with the familiar rule that a limiting statute does not run against the sovereign."

forth specifically how title is to be taken to the lands acquired, the rule that a limiting statute does not run against the sovereign still governs the instant case.

    In view of these conclusions it is my opinion that the Secretary may sell the tracts in question under the authority given by 25 U.S.C. sec. 372 without having to issue a patent in fee. This power to sell carries with it by necessary implication the power to convey title to the land. The same situation arose in connection with the purchase of Indian lands in heirship status under section 372 for the Shoshone Tribe and individual Shoshone Indians under the Shoshone Judgment Fund Act of July 27, 1939 (53 Stat. 1128, 1130). The method of conveying title used in that case was by an order signed by the Secretary conveying the title of all the heirs to the United States in trust for the tribe or the individual Indian. It is suggested that the same method be used the instant case.

    I may add that this type of order was recently submitted to the Attorney General in connection with the acquisition of certain school lands on the Pine Ridge Reservation for examination of the title. Should, upon receipt of his reply, any further question remain as to the validity of this method of conveyance, I shall be glad to consider it.

                                                                                                                                          NATHAN. R. MARGOLD,

Approved and referred to the Commissioner of Indian Affairs
for appropriate action.    February 4, 1942.
OSCAR L. CHAPMAN, Assistant Secretary.

 Memorandum for the Commissioner of Indian Affairs:

    I am unable to agree with the legal views embodied in the attached letter, which, in effect, recommends criminal prosecution against Indians who, in the exercise of treaty rights, and upon their own reservation, decline to conform to general regulations issued under the authority of the Migratory Bird Treaty Act. (Act of July 3, 1918 (40 Stat. 755); 16 U.S.C. secs. 703-704.)

    The right to hunt on their own reservation was an essential part of the arrangement with the Yakima Tribe consummated by the Treaty of June 9, 1855 (12 Stat. 951). The proceedings in the council with the Yakima Tribe leading to this treaty show a constant concern on the part of the Indians and repeated assurance on behalf of the Federal Government that in the lands that were to be reserved to the tribe the Indians would have the right to take game, as well as the other common incidents of ownership, and that no white man would be allowed to enter upon the reservation for the purpose of interfering in any way with the Indians in the administration of their own laws or in their efforts to gain subsistence from the resources of the reservation. See pages A22, A87, A88, A91, A92 of official proceedings transmitted by Governor Isaac I. Stevens and General Joel  Palmer to the Commissioner of Indian Affairs on June 12, 1855. Although the treaty did not refer in express terms to hunting rights upon the reservation, the protection of such rights was necessarily implied by the provision that the reservation should be "set apart * * * for the exclusive use and benefit of said Confederated Tribe and bands of Indians, as an Indian reservation; * * *." (Article II.) This certainly, was the Indians' understanding of the treaty.

    While it is established that Congress has the right to violate treaty obligations, the converse of this rule is that an intent to do so will be found only where the language of the legislation leaves no room for any other possible construction.

    "A treaty will not be deemed to have been abrogated or modified by a later statute unless such purpose on the part of Congress has been clearly expressed." Cook v. United States, 288 U.S. 102, 120 (1933); and see United States v. Hayne, 264 U.S. 446, 448 (1924); Chow Heong v. United States,112 U.S. 536, 549-550 (1884); United States v. Forty-three Gallons of Whiskey, 108 U.S. 491, 496 (1883).

    In the present case neither the Migratory Bird Treaty with Great Britain (39 Stat. 1702) nor the statute providing for its enforcement deals expressly with the question of Indian treaty rights, although in both the Migratory Bird Treaty and the statute certain privileges are granted to Indians regardless of former Indian treaty rights and these privileges, of course, apply to treaty Indians as well as nontreaty Indians. Neither do the regulations issued under the Migratory Bird Treaty Act deal expressly with the question of special In-
 

dian treaty rights. On the contrary, the regulations repeatedly refer to State laws (50 CFR 1.8, 1.9, 1.11, 1.51, 1.53, 1.61) and may therefore properly be viewed as applying only to persons subject to State laws, and thus not to Indians on Indian reservations. Under the circumstances, without questioning the power of Congress otherwise to provide, I must hold that Congress has not actually abrogated the treaty right of members of the Yakima Tribe to utilize for their needs the wildlife resources of the Yakima Reservation.

    If it should appear that the execution of the Migratory Bird Treaty necessarily requires a limitation of Indian hunting rights on Indian reservations, then the United States would be under an international obligation to Great Britain which would conflict with its treaty obligation to the Yakima Tribe. If such a conflict of obligations can be settled by the voluntary agreement of the Yakima Tribe to accept appropriate limitations upon its hunting rights in exchange for other concessions which the Federal Government may lawfully grant, then further legislation, would not be necessary. In the absence of such agreement, it would appear that only Congress can determine which of two inconsistent treaty obligations shall be violated and which shall be enforced.

    At the present time there is no agreement, no regulation, and no statute which expressly abrogates any Yakima treaty rights with respect to hunting on the Yakima Reservation. Under the circumstances I think it would not be proper for this Department to support criminal proceedings against members of the Yakima Tribe based upon the exercise of such treaty rights.

    It may be that certain statements in the opinion rendered on June 15, 1934, by the Acting Solicitor of this Department on hunting rights of the Swinomish Indians (54 I.D. 517), not essential to the actual holding in that case, are inconsistent with the foregoing conclusions. If that opinion suggests either that hunting rights on the reservation were not protected for the future by the treaty there under consideration, or that, despite any such protection, such rights were plainly abrogated by the Migratory Bird Treaty Act of July 3, 1918 (40 Stat. 755), these are propositions which can no longer be maintained in the light of court decisions rendered since that opinion was issued. Shoshone Tribe v. United States, 299 U.S. 476 (1937); Chippewa Indians v. United States, 301 US. 358 (1937); United States v. Cutler, 37 F. Supp. 724 (D.C.E.D. Ida. 1941). Certainly the Yakima Indians understood that on the reservation which they were retaining they would have the right to avail themselves of the sources of food supply which they had hitherto used. According to well-established principles of construction the Indians' understanding of the treaty should prevail if the treaty itself is ambiguous. Worcester v. Georgia, 6 Pet. 515, 582 (1832); Jones v. Meehan, 175 U.S. 1 (1899); United States v. Shoshone Tribe, 304 U.S. 111 (1938). There may be some doubt as to whether Congress, in enacting the Migratory Bird Treaty Law, intended to abrogate prior Indian treaty rights, but again any such doubt should, under persuasive authorities, be resolved in favor of the Indians. Winters v. United States, 207 U.S. 564 (1908), and see cases cited, supra. At any rate, in view of the foregoing considerations, it would hardly be proper for the Department, charged with the protection of Indian rights, to support criminal proceedings against members of the Yakima Tribe based upon their exercise of treaty rights which they regard as sacred.

                                                                                                                                            NATHAN R. MARGOLD,

Re:

Interpretation of the agendum and payment provisions in an oil and gas lease on Indian lands.

1. Where a lease is for a term of 10 years and as much longer thereafter as oil or gas is found in paying quantities, and where the development of only one gas well in paying quantities is sufficient to continue the life of the lease, the lease is not subject to cancellation after the expiration of the primary term if there is a gas well thereon capable of producing gas in such quantities upon which the required royalty of $300 per annum is paid, even though such well is shut in because of market conditions and gas is not sold therefrom.

2. Where payment is made by the lessee of $300 annual royalty on one shut-in gas well, he may pay $100 annual rental on a second shut-in gas well under the provision in the lease providing for forfeiture of an unprofitable gas well unless a $100 annual rental is paid for retaining gas producing privileges.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion on certain basic questions presented to you by the Geological Survey, through the Office of Indian Affairs, concerning the interpretation of lease No. 37992, contract 127ind-858, Susan Riddle, Choctaw Indian allotment 15694, upon which decisions are desired in order that the proper royalty accounting may be made.

    The lease in question is dated May 31, 1918, and was approved by the Department on July 18, 1918. The assignment by the original lessee, The Quinton Spelter Company, to the Utilities Oil Production Corporation, pertaining to the W 1/2 NE 1/4
Sec. 12, T. 7 N., R. 18 E., Ind. M., was approved by the Department on October 11, 1929. The lease is for a term of "ten years from the date of the approval hereof by the Secretary of the Interior, and as much longer thereafter as oil or gas is found in paying quantities, * * *."

    Development of the oil and gas deposits underlying the lease consisted of two dry gas wells completed in 1918 and 1921, which were producing until March 1930, when they were shut in. The open flow of each well is approximately 200,000 cubic feet per day and the shut-in pressure is approximately 150 pounds per square inch. Gas from well No. 1 was sold prior to its being shut in during March 1930. Gas from well No. 2 was never sold but was used only for lease operations. Since the wells were shut in the lessee has continued to pay royalty for well No. 1 at the rate of $300 per an num and rental for well No. 2 at the rate of $100 per annum. The reasons given for not utilizing the gas subsequent to 1930 are insufficient pressure to enter the main shipping line and marketing conditions which do not justify the installation of equipment to boost the pressure to line requirements.

    The provisions in the lease relating to the payment of royalty and rental on gas wells are as follows:

    "* * * And the lessee shall pay as royalty on each gas producing well three hundred dollars per annum in advance, to be calculated from the date of commencement of utilization: Provided, however, in the case of gas wells of small volume, when the rock pressure is one hundred pounds or less, the parties hereto may, subject to the approval of the Secretary of the Interior, agree upon a royalty, which will become effective as a part of this lease; Provided, further, That in case of gas wells of small volume, or where the wells produce both oil and gas or oil and gas and salt water to such extent that the gas in [is] unfit for ordinary domestic purposes, or where the gas from any well is desired for temporary use in connection with drilling and pumping operations on adjacent or nearby tracts, the lessee shall have the option of paying royalties upon such gas wells of the same percentage of the gross proceeds from the sale of gas from such wells as is paid under this lease for royalty on oil. The lessor shall have the free use of gas for domestic purposes in his residence on the leased premises, provided there shall be surplus gas produced on said premises over and above enough to fully operate the same. Failure on the part of the lessee to use a gas producing well, which cannot profitably be utilized at the rate herein prescribed, shall not work a forfeiture of this lease so far as the same relates to mining oil, but if the lessee desires to retain gas producing privileges, the lessee shall pay a rental of one hundred dollars; per annum, in advance, calculated from date of discovery of gas, on each gas producing well, gas from which is not marketed or not utilized otherwise than for operations under this lease. Payments of annual gas royalties shall be made within twenty-five days from the date such royalties become due, other royalty payments to be made monthly on or before the 25th day of the month succeeding that for which such payment is to be made, supported by sworn statements."

    (1) Did the lease expire when production ceased in March 1930, or may it properly be considered as continued in force by existence of wells capable of producing gas which are now shut in?

    (2) What is the annual royalty or rental due from well No. 1, from which gas formerly was sold, while it is not producing?

    (3) What is the annual amount due for well No. 2, from which gas was used only for lease operations, while it is not producing?

    As the habendum clause of the lease provides that after the expiration of the 10-year term (1928) the lease shall remain in effect so long as "oil or
 

gas is found in paying quantities," it is necessary to determine whether or not after March 1930 gas has been found in such quantities within the contemplation of the law.

    There is a well-established rule that where an oil and gas lease is for a definite term and as long thereafter as oil or gas is found (or produced) in paying quantities, the lease terminates after the definite term as soon as the wells cease to yield an operating profit, whether or not such cessation is due to market conditions. Summers, Oil and Gas, Perm. Ed., Vol. 2, sec. 306. However, there is an equally well-established exception to the rule in the case where only dry gas wells have been produced under the lease, where these have had to be shut down because of market conditions but are capable of production, where only a flat sum, is due the lessor for production from a gas well, and where such sum has been paid by the lessee. If these conditions exist, the courts do not permit the lessor to cancel the lease for expiration, abandonment or forfeiture, on the theory that gas cannot be stored above the ground and the lessor is not injured since he receives the same amount as he would if the gas were being produced and sold. Summers, Vol. 2,. sec. 299; Summerville v. Apollo Gas Co., 207 Pa. 334, 56 Atl. 876 (1904); McCutcheon v. Enon Oil Co., 102 W. Va. 345, 135 S.E; 238 (1926); McGraw Oil Co. v. Kennedy; 65 W. Va. 595, 64 S.E. 1027 (1909). Note that the exception fails if the wells have become incapable of production. United States v. Brown, 15 F. (2d) 565 (N.D. Okla. 1926).

    In Smith v. McGill, 12 F. (2d) 32 (C.C.A. 8th, 1926), the court had under consideration an Indian lease the terms of which were identical with this lease. There gas from a gas well brought in during the primary term was sold for about two months thereafter. It was then discovered that the gas was not feeding into the pipe line because of lack of pressure and the lessee began to drill the well to a greater depth. The lessee tendered the lessor $300 as payment for the gas-producing well but the money was refused because the lessor did not consider the well as producing gas in paying quantities. The lessor failed in his effort to have the lease cancelled. I shall quote at length from the opinion in this case because it summarizes the position taken by the courts in construing leases involving gas alone:

    "* * * In the construction of leases of this nature, a distinction has generally been recognized between a covenant by the lessee to pay the lessor an amount proportioned to the oil which is produced, and a covenant to pay the lessor a fixed sum as a periodic rental for a gas well. As to the first-mentioned covenant, due diligence on the part of the lessee to produce and market the oil is usually implied, if not expressed, because the lessor's remuneration for the grant depends upon it. Brewster v. Lanyon Zinc Co., 140 F. 801, 72 C.C.A. 213; Union Gas & Oil Co. v. Adkins (C.C.A.) 278 F. 854. But where the lessor is to receive a fixed sum, in the nature of rental, for a gas well, the lessee is not held to the same degree of diligence in producing and marketing the gas which