Home

Amendment was self-executing and reached without legislative action the conditions of discrimination against which it was aimed, the result might arise that as a consequence of the striking down of a discriminating clause a right of suffrage would be enjoyed by reason of the generic character of the provision which would remain after the discrimination was stricken out. Ex parte Yarbrough, 110 U.S. 651; Neal v. Delaware, 103 U.S. 370. A familiar illustration of this doctrine resulted from the effect of the adoption of the Amendment on state constitutions in which at the time of the adoption of the Amendment the right of suffrage was conferred on all white male citizens, since by the inherent power of the Amendment the word white disappeared and there fore all male citizens without discrimination on account of race, color or previous condition of servitude came under the generic grant of suffrage made by the State."

    The foregoing cases leave no room for doubt on the proposition that under the Fifteenth Amendment the Indians are protected against all legislation which discriminates against Indians in prescribing the qualifications of voters.

    The case of Elk v. Wilkins, 112 U.S. 94, held simply that a non-citizen Indian might be disfranchised by State legislation, along with non-citizens of other races. Here there was no discrimination against Indians as such. The Supreme Court declared:

    "The plaintiff, not being a citizen of the United States under the Fourteenth Amendment of the Constitution, has been deprived of no right secured by the Fifteenth Amendment, and cannot maintain this action." (At page 109.)

    "All Indians born within the territorial limits of the United States are declared to be citizens of the United States. The granting of citizenship to Indians shall not in any manner affect the right of any Indians to tribal or other property."

    The constitutionality of these provisions in State constitutions and statutes does not appear to have been the subject of opinion in any court of competent jurisdiction, State or Federal. In the case of the Indian disfranchisement clause in the constitution of Washington, however, the State Attorney General has ruled upon the issue, in the following terms:

    "If an Indian has become a citizen of the United States, the State has no power to make his right to vote dependent upon the payment of taxes when no such requirement is made with respect to the members of any other race. Consequently, the proviso to section 1, article 6, supra, is in conflict with the Fifteenth Amendment and therefore invalid unless it be given the construction above." (Per Attorney General W. V. Tanner, opinion rendered June 15, 1916.)

    "We are of the opinion, taking into consideration the 15th Amendment and the Act of June 2, 1924, that it is doubtful whether the provisions of Article VI of the state constitution with respect to Indians are now in effect. But whether or not these provisions are in effect, we are further of the opinion that the payment of sales taxes and gasoline tax is a sufficient qualification on the part of an In-

dian offering to vote to comply with the provisions of Article VI as amended. If an Indian can show that he has paid such taxes to the state, and possess the other qualifications required in Article VI as amended, including registration if that is required, such Indian voter should be by no means disqualified as an elector."

                                                                                                                                                        F. L. KIRGIS,

 Memorandum for the Commissioner of Indian Affairs:

    The attached letter to the Attorney General contains commitments concerning the right of the State to assess and collect sales taxes on Indian reservations with which I am unable to agree.

    As pointed out in Surplus Trading Company v. Cook, 281 U.S. 647, the jurisdiction of the State over Indian reservations is full and complete save as to the Indians and their property, so that the State may lawfully tax property located thereon if not belonging to the Indians. Under this rule it is clear that white traders and non-Indians who deal with them must comply with the State laws including those imposing sales taxes even on the reservation lands.

With respect to the Indians, however, it is now well settled that they are not amenable to State laws while on their reservations unless expressly subjected to those laws by Congress. The Kansas Indians, 5 Wall. 737, 755, 756; United States v. Kagama, 118 U.S. 375; United States v. Rickert, 188 U.S. 432; United States v. Quiver, 241 U.S. 602; United States v. Hamilton, 233 Fed. 685; In re Blackbird, 109 Fed. 139; In re Lincoln, 129 Fed. 247; State v. Rufus, 237 N.W. 67.

    The imposition of a sales tax on sales made by or to tribal members within a reservation is a peculiarly direct interference with the power of Congress under the Constitution "to regulate commerce with the Indian tribes." Furthermore. Congress has expressly placed in the Commissioner of Indian Affairs the authority to regulate prices of goods sold to Indians.

    "The Commissioner of Indian Affairs shall have sole power and authority to appoint traders to the Indian tribes and to make such rules and regulations as he may deem just and proper specifying the kind and quantity of goods and the prices at which such goods shall be sold to the Indians." (25 U.S.C.A. Sec. 261.)

    When the particular sales tax law of Utah is considered, its inapplicability to sale of goods by or to Indians can be appreciated. Chapter 63 of the Laws of Utah of 1933, providing for a sales tax, places upon every retail sale a tax amounting to a certain percentage of the purchase price. In order to regulate and enforce the collection of this tax all wholesalers and retailers must be licensed by the State Tax Commission. The license can be revoked upon failure to conform to requirements of the act and the doing of business without a license is made a misdemeanor. The law places considerable powers of inspection, regulation and supervision in the State Tax Commission. Taxes not paid over by the vendor are a lien upon his property in favor of the State. The inappropriateness of subjecting the Indians conducting a fair or otherwise trading on the reservation to State licensing, taxation and execution is apparent. The State has recognized that certain sales may not come within its constitutional power to tax. Section 6 of the sales tax law exempts from taxation "all sales which the State of Utah is prohibited from taxing under the Constitution and laws of the United States or of the State of Utah."

    I suggest that the Department of Justice be advised that the State sales tax law does not in the opinion of this Department apply to the Indians
 

buying and selling goods within the reservation in Utah.

                                                                                                                                            NATHAN R. MARGOLD,

M-29619                                                                                                                                                February 7, 1938.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion concerning the present title of that portion of lot 2 of Barron's Reserve conveyed by Mary Ann Smith and her husband, Anthony F. Smith, to Daniel D. Pratt, by deed dated February 2, 1870. In the submission of the case, the Commissioner of Indian Affairs makes the following statement of fact:

    "As shown by the record which is transmit ted herewith, on April 12, 1870 Daniel D. Pratt, to whom the land had been conveyed in trust, reconveyed the property to Mary Ann Smith, reciting in his deed that the said Mary Ann Smith had directed him to execute a deed of conveyance for the land back to her. The attorneys who are engaged in examining the title to a small portion of the land conveyed to Daniel D. Pratt, contend that the deed of February 2, 1870, did not constitute a sale of the land but merely had the effect of creating a trust; that the first actual sale of the land occurred on July 8, 1889 on which date Mary Ann Smith sold a portion of the land described in the deed of February 2, 1870 to one John S. Johnson for a consideration of $10,500 and that the deed to Johnson should have been approved by the President rather than the "trust deed" to Daniel D. Pratt in order to comply with the provisions of the Treaty under which the land was granted to Mary Ann Smith.

    Whose contentions raise the question whether the President's approval of the conveyance of February 2, 1870 to Daniel D. Pratt, as required by Article VI of the Treaty of October 16, 1826 (7 Stat. 295), operated to remove the restrictions against alienation of the land, thereby enabling the Indians reservee or her trustee, Daniel D. Pratt, to make such subsequent disposition of the land as they saw fit without further approval by the President. Moreover, since the deed conveyed no beneficial interest in the land, did its subsequent reconveyance by Daniel D. Pratt to Mary Ann Smith render the situation essentially the same as if the deed of February 2, 1870 had never been made thereby necessitating approval by the President of all conveyances of the land made by Mary Ann Smith subsequent to its reconveyance to her?"

    The treaty with the Potowatomi Indians made on October 16, 1826, provides by Article VI as follows:

    "The United States agree to grant to each of the persons named in the schedule hereunto annexed, the quantity of land therein stipulated to be granted; but the land, so granted, shall never be conveyed by either of the said persons, or their heirs, without the consent of the President of the United States; and it is also understood, that any of these grants may be expunged from the schedule, by the President or Senate of the United States, without affecting any other part of the treaty."

    "To the children of Joseph Barron, a relation of Richardville, principal Chief of the Miamies. three sections of land, beginning at the mouth of Eel River, running three miles down the Wabash in a direct line, thence back for quantity."

    "That the said party of the first part, in consideration of the premises hereinafter named and of the sum of One Dollar to her in hand, do hereby convey and confirm unto the said party of the second part, all the following described Real Estate situate in said County of Cass and State of Indiana, in strict trust and confidence, that he shall hold the same for the sole use and benefit of the said Mary Ann Smith and shall sell and convey the same to such persons, and for such considerations, as she may appoint and designate and not otherwise, to-wit;"

"EXECUTIVE MANSION

U. S. Grant."

U. F. HOWARD, Recorder Cass County.

    Acting on the authority granted by the deed made on February 2, 1870, Daniel D. Pratt conveyed the land to Mary Ann Smith by a conveyance dated April 12, 1870. The conveyance by Pratt to Smith was not a relinquishment of the trust but was an execution of it. If during the time between March 14, 1870 when the President approved the deed from Smith to Pratt, and April 12, 1870, Pratt had conveyed the land to A, B or C in fulfilment of the authority given to him, there would be no reason to question the title. I am of the opinion that the conveyance could be to the original grantor, as well as to anyone who was formerly a stranger to the title. The President must have been cognizant of the fact that by the approval of the deed to Pratt he was removing the restrictions on alienation provided in section 6 of the Treaty. There was no other purpose to be served by the approval. He was validating a conveyance that placed in the hands of Daniel D. Pratt, the full power to sell and convey the property to such persons and for such consideration as the grantor might designate.

    It has been urged that the decision of the court in the case of Brown v. United States (27 Fed. (2d) 274) involved similar questions to the one presented by the deed of Mary Ann Smith and husband to Pratt. In the Brown case, it appears that Wosey Deere was a full-blood Creek Indian, and as such received an allotment of 160 acres under the act of March 1, 1901 (31 Stat. 861). She also purchased 7 1/2 acres with restricted funds on consent of the Secretary of the Interior. The deed therefore contained a clause against alienation without the approval of the Secretary. Wosey Deere made a trust deed to Ward and Grayson for the term of 21 years. The property was to be conveyed back at the end of the period. The court holds that this transaction did not remove the restriction from alienation, that the conveyance was not an absolute alienation, and when the condition on which it was made came to an end, a reconveyance to Wosey Deere rendered the situation essentially the same as if the conveyance had never been made. The instrument executed by Wosey Deere is of greatly different import than the one executed by Mary Ann Smith and husband. Wosey Deere conveyed to Ward and Grayson for their sole use and benefit. They were not given power to sell the land.

    In the case of Smith v. McCullough (270 U.S. 456, 463), the Supreme Court of the United States held that a trust deed did not remove the restrictions on alienation. In this case, the grantor was a Quapaw Indian to whom a patent had been issued by the United States with provisions against alienation without the approval of the Secretary of the Interior. The Indian made a trust deed with the approval of the Secretary which conveyed the land as security for a promissory note given by him. The only purpose of the trust deed was to secure the payment of the debt. The trust deed contained a provision for reconveyance of the debt. The court holds that the instrument did not remove the restrictions on alienation of the property.

    The instruments which were the subject of the litigation were in each instance different than the one made by Mary Ann Smith to Daniel D. Pratt. In these cases the grantees are not given the right to convey the land. In this case the right to sell and convey was the only power vested in the grantee. The sole purpose of the grant was to authorize Pratt to sell and convey the land. The petition by the Indians to the President is as follows: "And the grantors respectfully petition His Excellency the President of the United States to grant his consent to this their deed of Conveyance." The President approved the "deed of Conveyance" and must have assumed to act in accordance with Article 6 of the treaty and for the express purpose of giving his consent to the conveyance. It may be conceded that the trust deed to Pratt did not amount to an alienation of the interest of the grantee, thus accepting the doctrine of the cases cited. But the trust arrangement did authorize Pratt to transfer the land upon having the consent of the grantee, and the President approved that arrangement, thus
 

giving his consent that alienation might be effected. That action satisfied the requirement of the statute.

    It is my opinion that the approval by the President of the conveyance made February 2, 1870, by Mary A. Smith and husband to Daniel D. Pratt was "the consent" authorized by the treaty and served to remove the restriction against alienation.

                                                                                                                                        FREDERIC L. KIRGIS,

Approved: February 7, 1938.
OSCAR L. CHAPMAN, Assistant Secretary.

    In connection with the study of allotment and heirship problems undertaken at your suggestion by this office, the question has been raised whether the Department or the tribe concerned would be justified in cancelling liens on land transferred by individual Indians to Indian tribes, where the lien was originally imposed as security for repayment of loans made from (a) gratuity funds, and (b) tribal funds.

    In answer to the first question, attention is called to the act of July 1, 1932 (47 Stat. 564) which provides:

    "That the Secretary of the Interior is here by authorized and directed to adjust or eliminate reimbursable charges of the Government of the United States existing as debts against individual Indians or tribes of Indians in such a way as shall be equitable and just in consideration of all the circumstances under which such charges were made * * * Provided further, That a report shall be made to Congress annually, on the first Monday in December, showing adjustments so made during the preceding fiscal year: Provided further, That any proceedings hereunder shall not be effective until approved by Congress unless Congress shall have failed to act favorably or unfavorably thereon by concurrent resolution within 60 legislative days after the filing of said report, in which case they shall become effective at the termination of the said 60 legislative days."

    It is unnecessary to consider whether the act of July 1, 1932, covers cases where the reimbursable loan has been made from tribal funds appropriated by Congress for that purpose rather than from gratuity funds. Where an individual Indian turns over land to the tribe in settlement of a debt owing to the tribe, the lien of the tribe against the land is merged and extinguished even without formal action by the Department and Congress. In order to clarify the nature of such a transaction the tribe should in each case execute a waiver of existing indebtedness, and the deed from the transferor should recite that relinquishment is made to the tribe or to the United States in trust for the tribe in consideration of this waiver of existing indebtedness.

    For the purposes of this inquiry it has not been thought necessary to pass upon the validity of different types of liens to which individual borrowers have assented.

    I am returning for some revision a proposed letter to Mr. Whitebird of the Bad River Indian Reservation concerning the rights of Indians to hunt and fish on ceded lands and within the reservation.

    In the middle of the first paragraph on the second page the following statements appear:

    "Only those Indians who were so enrolled are eligible to hunt and fish on the Bad River Reservation without the consent of the governing body of the tribal organization which has been established in accordance with the act of June 18, 1934 (48 Stat. L. 984). Indians who are not enrolled on the Bad River Reservation and who have not obtained permission of the tribal authorities to hunt and fish thereon, may be ejected from the reservation by the tribal officers who have been authorized to enforce tribal rules and regulations among the Indians."

    The further statement that unenrolled Indians hunting or fishing without the permission of tribal authorities may be ejected from the reservation should be modified in view of section 1(s) and 1(q) of Article VI of the constitution which provide for ejectment from the restricted lands of the reservation of persons not legally entitled to reside thereon and for subjection of nonmember Indians residing on the reservation to the law and order ordinances of the tribe.

    To avoid the possibility of misinterpretation I would suggest that these sentences be changed to read as follows: "Those Indians who were so enrolled and those Indians who are members of the Band under its Constitution adopted under the act of June 18, 1934 (48 Stat. 984), are privileged to hunt and fish on the Bad River Reservation, subject to any regulations to protect the wildlife of the reservation promulgated by the tribal council under section 1 (t) of Article VI of the Constitution. Other Indians may be required to obtain the permission of the tribal authorities to hunt and fish thereon, which requirement may be enforced under sections 1(q) or 1(s) of Article VI of the Constitution."

    In the second paragraph, line 5, of page 1 of the letter to Mr. Whitebird, the words "ceded to them" should be changed to "ceded by them."

    There appears to be some uncertainty as to whether this letter should be prepared for the signature of the President or of the Secretary of the Interior and the place for the designation of the title of the person signing the letter has been left blank. I am informed by the Division of Mails and Files of the Secretary's Office that the proper interpretation of the letter received from Mr. McIntyre is that an appropriate reply should be prepared for the signature of the President.

    Since the letter is to be signed by the President it is particularly important that it be as accurate as possible.

                                                                                                                                            FREDERIC L. KIRGIS,

M-29616                                                                                                                                               February 19, 1938.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    At the request of the Indian Office there has been presented to me for opinion the question whether the undisposed of lands ceded by the Red Lake Band of Chippewa Indians under the act of January 14, 1889 (25 Stat. 642), should be restored under section 3 of the Indian Reorganization Act of June 18, 1934 (48 Stat. 984), to the Red Lake Band or to the Minnesota Chippewa Tribe. It was requested that particular consideration be given to
 

the recent decision of the Supreme Court in the case of Chippewa Indians of Minnesota v. United States. 301 U.S. 358.

    At the outset it should be made clear that the real legal question involved has not been exactly presented by the Indian Office. The conflicting equitable claims are between the Red Lake Band and the Chippewa Indians of Minnesota and not between the Red Lake Band and the Minnesota Chippewa Tribe. "The Chippewa Indians of Minnesota" is the term which designates all the Chippewa Indians in the State of Minnesota, in which group are included both the Red Lake Band and the Minnesota Chippewa Tribe. The "Minnesota Chippewa Tribe" is, on the other hand, the name of the recent organization of the Chippewa Indians under the Consolidated Chippewa Agency, which does not include the Red Lake Indians. It is believed that the Indian Office intended to refer to all the Chippewa Indians in the State of Minnesota and to present the question on that basis. Accordingly, this opinion will deal principally with the question whether the lands ceded by the Red Lake Band under the 1889 act should be restored to the Red Lake Band or to the Chippewa Indians of Minnesota. The place in this problem of the of the Minnesota Chippewa Tribe will be discussed after the principal question has been disposed of.

    The authority in section 3 of the Reorganization Act for the proposed restoration reads as follows:

    "The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or any other form of disposal by Presidential proclamation, or by any of the public land laws of the United States: Provided, however, That valid rights or claims of any person to any lands so withdrawn existing on the date of the withdrawal shall not be affected by this Act: Provided further, That this section shall not apply to lands within any reclamation project heretofore authorized in any Indian reservation."

    The act of January 14, 1889, under which these lands were ceded by the Red Lake Band, provided in section 1 for negotiation by a commission,

    "with all the different bands or tribes of Chippewa Indians in the State of Minnesota for the complete cession and relinquishment in writing of all their title and interest in and to all the reservations of said Indians in the State of Minnesota, except the White Earth and Red Lake Reservations, and to all and so much of these two reservations as in the judgment of said commission is not required to make and fill the allotments required by this and existing acts, and shall not have been reserved by the commissioners for said purposes, for the purposes and upon the terms hereinafter stated."

    This act of 1889 has been before the courts in a number of cases and as a result of these judicial interpretations certain propositions as to the legal effect of this act are fairly clear. These propositions may be stated briefly as follows:

    First; at the time of and long prior to the act of 1889, the Chippewas in Minnesota resided on 12 reservations. One of these, the Red Lake Reservation, was occupied by the Red Lake and Pembina Bands. It has been well recognized that these 11 were occupied by 13 or so different Chippewa Bands. It has been well recognized that these 11 reservations were set apart for the use and benefit
 

of the bands occupying them. (See Chippewa Indians of Minnesota v. United States, 80 Ct. Cl. 410, 414, 301 U.S. 358, 373.) The exclusive ownership of the original Red Lake Reservation by the Red Lake and Pembina Bands was clearly established in the case of Chippewa Indians of Minnesota v. United States, 80 Ct. Cl. 410; aff'd. 301 U.S. 358.

    In the second place, it has been definitely determined that the lands ceded by each of the Chippewa Bands were ceded in trust for the common benefit of all the Chippewa Indians of Minnesota, so that their ceded land holdings were in effect pooled (Minnesota v. Hitchcock, 185 U.S. 373; Morrison v. Work, 266 U.S. 481; Chippewa Indians of Minnesota v. United States, 80 Ct. Cl. 410 and 301 U.S. 358). Under the arrangement resulting from the 1889 act each Chippewa Indian received equal benefit from the disposal of any of the lands ceded, regardless of the amount of land ceded by his particular band. This has continuously been the basis of executive and legislative action in the distribution of the proceeds of the lands and in their use for various general purposes for the benefit of all the Chippewa Indians of Minnesota. Where the courts have found that the land ceded on any one reservation has been improperly disposed of, damages are awarded on the basis of the 1889 act for the benefit of all the Chippewa Indians in Minnesota. (United States v. Mille Lac Band, 229 U.S. 498; United States v. Minnesota, 270 U.S. 181.) Where ceded lands have been set apart by the Government for other purposes, such as a forest reserve, the Government has paid the value of the lands into the general fund for the benefit of all the Chippewa Indians of Minnesota.

    In the Supreme Court decision in the case of Chippewa Indians of Minnesota v. United States, supra, a further proposition was definitely enunciated, namely, that the lands not ceded by the Red Lake Band under the 1889 act remained the property of that band. In this case, the plaintiff, representing all the Chippewa Indians of Minnesota, sued the Government for damages on the theory that the entire Red Lake Reservation had been ceded in trust to be sold for the benefit of all the Chippewa Indians of Minnesota, except for such lands as were actually needed for allotment to the Red Lake Indians. As the part of the original reservation reserved by the commissioners for allotment to the Red Lake Indians had never in fact been allotted, so that there never had resulted any definite surplus lands to be sold, it was claimed that this constituted a breach of trust on the part of the United States, and that computation should be made of the loss resulting therefrom to the Chippewa Indians of Minnesota. However, both the Court of Claims and the Supreme Court determined that the part reserved for eventual allotment by the commissioners had not been ceded by the Red Lake Band, so that the Red Lake Band remained the exclusive owners of the portion reserved, and the Chippewa Indians of Minnesota in general had no intent in those lands.

    In the consideration of this decision, the distinction between the lands ceded by the Red Lake Band and the lands reserved by the commissioners for allotment should be carefully borne in mind. The lands reserved by the Commissioners have been known as the "diminished Red Lake Reservation" and they are in no way involved in the present question which is the subject of this opinion. This opinion is concerned only with the lands ceded by the Red Lake Band and not reserved by the commissioners. The lands ceded are in the same status as the lands ceded by any of the other Chippewa bands. They are lands which were ceded for the pecuniary benefit of all the Chippewa Indians of Minnesota.

    As a result, it would appear that all the Chippewa Indians of Minnesota have an equal interest in the lands ceded by the Red Lake Band. Consequently, these lands could not be restored to one band without the consent of the other Indians or without compensation to them for their interest. It is fundamental that tribal assets cannot be disposed of by the United States without the consent of the tribe or without compensation. (See Chippewa Indians of Minnesota v. United States, supra, at 375). That the funds derived from the 1889 act may be considered tribal funds, as distinguished from funds belonging to individual Chippewa Indians was upheld in the case of Wilbur v. United States, 281 U.S. 206.

    Application of section 3 of the Indian Reorganization Act should be made in the light of these facts. The effect of section 3 is to permit the substitution of the land itself for the proceeds of the land as the corpus of the trust held by the United States for the Indians. The section was enacted on the theory that the land was more valuable to the Indians than the monetary returns. On this principle, the beneficiaries of the proceeds of the land should be the beneficiaries of the land itself when the land is substituted for the proceeds. For this reason, it is my opinion that the lands ceded by the Red Lake Band under the 1889 act should be restored for the benefit of the Chippewa Indians of Minnesota.

    This holding, it must be emphasized, applies only to the land ceded by the Red Lake Band under the act of 1889. It has no application to any restoration of lands ceded by the Red Lake Band by the agreement of March 10, 1902, ratified by the act of
 

February 20, 1904 (33 Stat. 46), from the lands not ceded under the 1889 act but reserved by the commissioners for allotment. This subsequent cession of part of their diminished reservation by the Red Lake Band was made for their own exclusive benefit and any undisposed of lands remaining from that cession should be restored under section 3 of the Reorganization Act to the Red Lake Band.

    While I reach the conclusion as a matter of law that the lands ceded by the Red Lake Band under the act of 1889 should be restored to the Chippewa Indians of Minnesota, it should be observed that such a conclusion would seem to be not only equitable but the practical course to follow. It is believed to be equitable in that the quantity and location of all the lands not yet disposed of is a matter of chance, and it is now impossible to restore an equal amount or a proportionately equal amount to each one of the bands that ceded lands for the common benefit of all. In other words, all of the Chippewa Indians have so far shared equally in the proceeds of the lands ceded by each band. If remaining lands are returned only to the bands which originally ceded them, those bands receive peculiar and special benefit.

    The designation of all the Chippewa Indians of Minnesota as the beneficial owner of the remaining undisposed lands would seem to be the only practical course in view of the fact that it is now impossible to restore the lands to their 1889 status, except possibly in the case of the Red Lake, Nett Lake and Grand Portage Bands. These are the only ones of the original 15 or so Chippewa bands which, from the records available, remain more or less intact on their diminished reservations. Under the intentionally disrupting effect of the 1889 act the other Chippewa bands have been divided between their original area and the White Earth Reservation or entirely consolidated on that reservation. These broken and removed bands have apparently lost their band organization and identity, and their original reservations have in some cases practically disappeared or been consolidated administratively with other reservations.

    This present day situation should properly, and must necessarily, be considered in connection with the restoration of lands ceded by the Red Lake Band as, in my opinion, the lands ceded by that band should be restored according to the same principle as that to be followed in the restoration of lands ceded by other Chippewa bands. It is now proposed that the ceded lands remaining on eight other original Chippewa reservations be restored under section 3 of the 1934 act. According to my information in only one of these eight cases would it now be possible to restore the land to the original band occupying the reservation.

    In reaching this conclusion I have not overlooked the fact that certain lands within the Grand Portage Reservation have already been restored under section 3 of the Reorganization Act to the Grand Portage Indians. This action, taken without complete consideration of the general problem of land restoration in the Chippewa area and without due regard for the interest in those lands possessed by the other Chippewa Indians of Minnesota, should be modified to conform with this opinion.

    Finally, it should be pointed out that the restoration of all the remaining undisposed of lands ceded under the 1889 act to all the Chippewa Indians of Minnesota need be only a temporary legal expedient toward obtaining a permanent satisfactory adjustment of land ownership and use among the groups concerned, in the light of present day conditions. After the land has become the tribal land of the Chippewa Indians of Minnesota, it would be possible for the Red Lake Band and the other Chippewa Indians, now organized as the Minnesota Chippewa Tribe, each to relinquish to the other its interest in the tribal land which had been ceded by the other group or members of the other group. Whether or not congressional action is needed to confirm such an arrangement can be considered independently. The Red Lake Band would then have exclusive jurisdiction of the lands originally possessed by it and the Minnesota Chippewa Tribe would be in a position to assign, under its constitution, the restored land under the Consolidated Chippewa jurisdiction either to the original band, if still existing, or to a present day organization of the Indians now residing on the reservation in which the land lies. From a review of the record in connection with this restoration question, it appears not unlikely that both groups of Indians would accede to such a mutual adjustment of their interests.

    In summary of the foregoing conclusions, it is my opinion that the remaining undisposed of lands ceded by the Red Lake Band under the act of 1889 should be restored under section 3 of the Reorganization Act to the "Chippewa Indians of Minnesota," and that, if this opinion is approved, the remaining lands ceded by the other bands of Chippewa Indians under the 1889 act should be restored to the same beneficiary, and the previous restoration of lands to the Grand Portage Band should be corrected.

                                                                                                                                            NATHAN R. MARGOLD,

    I am returning for revision the proposed letter to Superintendent Roberts concerning the transfer of allotted land on the Pine Ridge Reservation from a member of the Pine Ridge Tribe to a member of the Ponca Tribe. It appears that the Pine Ridge allottee wishes to will her allotment to her niece, an allottee of the Ponca Tribe, in gratitude for care and services. The proposed letter to the Superintendent informs him that this is not legally possible under section 4 of the Reorganization Act since the Ponca allottee is neither an heir of the Pine Ridge Indian nor a member of the Pine Ridge Tribe. With that statement I am in full accord.

    However, the letter proceeds to state that the transfer may be made under section 5 of the Reorganization Act through a deed by the Pine Ridge Indian to the United States in trust for the Ponca Indian. I believe this statement should be considerably modified in view of the fact that section 5 is limited to transactions made "for the purpose of providing land for Indians" and in view of Circular No. L. A. 3162 of June 26, 1936, and of other interpretations of section 5 of the Reorganization Act which definitely restrict the scope of section 5 to transfers necessary to provide lands for Indians and which will not permit existing land holders to become landless. No attention is paid in the letter to this limited scope of section 5. The proposed recipient of the land evidently possesses land since she is referred to as an allottee. It does not appear in the record whether the donor of the land possesses any other land besides the allotment which she wishes to give to the Ponca Indian. Moreover, it is extremely doubtful whether section 5 should be used to effect a transfer of land to a nonmember of the tribe having jurisdiction of the land and thus to defeat the effect of section 4 of the act, intended to prevent just such absentee land-holding, unless there are strong reasons why such transfer is in the interests of the individual Indians and the tribes concerned. Compensation for care and services furnished a relative would not, in my opinion, be sufficient justification for invocation of section 5.

    It is believed that the discussion of the transfer of the land under section 5 should make clear that the transfer cannot be made under that section on the facts shown, and in any case should not be made unless the recipient is in actual need of the land, the donor will not become landless, and the transfer of the ownership to an Indian not a member of the Pine Ridge Tribe is absolutely essential in the interests of the Indians and will not have an injurious effect upon land holding and consolidation within the reservation.

                                                                                                                                        FREDERIC L. KIRGIS,

 Memorandum to the Commissioner of Indian Affairs:

    The letter to the Blackfeet Tribal Business Council concerning the Articles of Incorporation and By-laws of an oil cooperative being formed on the Blackfeet Reservation is returned herewith for further consideration of the question whether these Articles and By-laws should be approved by the Secretary of the Interior.

    The letter from the chief organizer of this cooperative, Mr. James Brown, submitting the Articles and By-laws, assumes that they are subject to such approval. The Articles and By-laws themselves make no reference to such approval, but the preamble of the Articles states that the organization is being formed under the constitution and charter of the Blackfeet Tribe and the cooperative association law of Montana. The Indian Office seems to have taken for granted that these documents are subject to the approval of the Secretary. Among the various matters offered for the consideration of the Tribal Business Council in the proposed letter discussing this organization, there is a statement, suggestion No. 6. that the Articles and By-laws should be changed to provide that amendments may be made only with the approval of the Secretary of the Interior, the authority approving the original Articles and By-laws.

    The only provision of the Blackfeet constitution considered applicable to this problem is section 1(h) of Article VI, which, in so far as relevant provides that the Council shall have power "to regulate and license all business or professional activities conducted upon the reservation, subject to the approval of the Secretary of the Interior." In my opinion, the approval power of the Secretary under this provision relates only to the action
 

of the Tribal Council in regulating or licensing business activities on the reservation. The provision does not authorize or require approval by the Secretary of the organization documents of a cooperative association formed by the Indians on the reservation. In other words, the Secretary can approve or veto the action of the Council permitting an Indian cooperative to carry on business, but any group of Indians may form an unincorporated or incorporated cooperative association without submitting the organization documents to this Department for approval. Under this interpretation of section 1 (h) of Article VI, the Secretary of the Interior would still retain an opportunity for supervision of these business activities.

    In view of the foregoing, I recommend that suggestion No. 6 in the proposed letter to the Blackfeet Tribal Business Council be omitted and in its place an explanation be made of the approval power of the Secretary which might read as follows:

    In submitting the Articles of Association and By-laws of the oil cooperative to this office, Mr. Brown assumed that these documents were subject to the approval of the Indian Office and the Secretary of the Interior. Such approval is not required under any provision of the constitution of the Blackfeet Tribe. Section 1 (h) of Article VI of that constitution gives the Tribal Business Council authority to regulate and license all business or professional activities conducted upon the reservation, subject to the approval of the Secretary of the Interior. Under this provision, any action by the Council licensing a cooperative or any other business must be approved by the Secretary of the Interior, but the particular Articles of Association and By-laws of the business organization do not need such approval. However, the Articles of Association and By-laws should be submitted to this office in connection with any action by the Council licensing the organization, in order that they may be considered in connection with the question whether the action of the Council should be approved. In addition, the Council or any group of Indians interested in forming a cooperative should feel free to seek the advice of this office as to the drafting of appropriate documents or as to the adequacy of documents submitted to this office for consideration.

 Memorandum to the Commissioner of Indian Affairs:

    The Indian Office letter of February 28 to Superintendent Dickens of the Cheyenne River Agency discusses the effect of the severance of tribal relations under section 2 (b) of Article II of the Constitution of the Cheyenne River Sioux Tribe. The letter makes the following four points:

    1. A member of the tribe severing his tribal relations need not dispose of his restricted land. and his individual restricted property is not affected.

    2. Such a member would be deprived of his interest in the undistributed tribal property.

    3. His heirs could not claim an interest in tribal property on his account but their own interest in tribal property would not be affected.

    4. A member severing his tribal relations should in his application for severance from the tribe made to the council specifically relinquish his interest in undistributed tribal property in consideration of the council's approval of his application.

    I concur in the first proposition. However, the second proposition should be modified in view of the acts of Congress preserving in Indians who abandon their tribal relations their interest in tribal property. These acts were set forth and discussed in an Indian office letter approved by the Secretary of the Interior on March 15, 1937, addressed to Superintendent Parker of the Winnebago Agency and dealing with the rights of absentee and former members of the Santee Sioux Tribe. Of the four acts there discussed the two dealing with the rights of Indian women marrying white men and the rights of children of such marriages need not be considered at this time as they do not apply to the facts involved here. The letter to Superintendent Parker took the position that the act of February 8, 1887 (24 Stat. 388), did not apply to Indians abandoning their tribal relations after the date of that act. This leaves, however, the act of March 3, 1875 (18 Stat. 420), which on its face applies to Indians abandoning their tribal relations at any time. This act reads as follows:

    "That any Indian born in the United States, who is the head of a family, or who has arrived at the age of twenty-one years, and who has abandoned, or may hereafter abandon, his tribal relations, shall, on making satisfactory proof of such abandonment, under rules to be prescribed by the Secretary of the Interior, be

entitled to the benefits of the act entitled 'An Act to secure homesteads to actual settlers on the public domain,' * * * Provided, That any such Indian shall be entitled to his distributive share of all annuities, tribal funds, lands, and other property, the same as though he had maintained his tribal relations; and any transfer, alienation or incumbrance of any interest he may hold or claim by reason of his former tribal relations shall be void."

    In view of this purpose of Congress to induce Indians to leave the reservations and the interpretation of the statutory language "abandonment of tribal relations" it may be said that the act of 1875 would not apply to Indians who wish to relieve themselves of membership in a tribe but who, nevertheless, remain upon the reservation of the tribe and continue living as other members of the tribe and continue enjoying the Federal protection of reservation life. It is believed that the problem presented by the Superintendent of the Cheyenne River Agency concerns this situation, which is likely also to occur in other places where a tribe organizes under the Reorganization Act. Certain Indians who are opposed to such organization or otherwise disaffected wish to end their legal connection with the tribe and yet continue their habits and mode of life on the reservation. In my opinion such an Indian may sever his legal membership but the act of 1875 would not apply to him and he could not claim the benefit of a continuing interest in the tribal property. In addition to the argument of the intent of the 1875 act and its interpretation, it may be said that such an Indian continues to enjoy the benefits of tribal life on a reservation protected by the Government whereas other Indians who leave the reservation and take up life in white communities do not enjoy these benefits and are compensated therefore by a continuing interest in the tribal property.

    In view of this possible distinction I would suggest that your second point be modified to provide that so long as an Indian who has severed his legal membership with the tribe continues to remain on the reservation of the tribe and continues his life as a tribal Indian that he is not entitled to share in undistributed tribal property.

    The relinquishment in the application suggested in your point 4 should also be limited to such a situation, as the act of 1875 expressly invalidates the relinquishment of any interest in tribal property guaranteed by the act. As an Indian is always privileged to sever his membership with the tribe (United States ex rel. Standing Bear v. Cook 25 Fed. Cases No. 14891), recognition of such a right by the tribal council might not constitute a valid consideration for his relinquishment. However, since the severance of tribal membership while remaining on the reservation of the tribe and continuing life among the other members of the tribe is an anomalous and confusing situation, it is believed that recognition by the tribal council of the privilege of an Indian to remain on the reservation and yet to sever his tribal membership would be sufficient consideration for his relinquishment in his application of his interest in the property of the tribe for so long as he continues to remain on the reservation.

    In all events, a member who severs his membership with the tribe would not be entitled to the privileges available to tribal members under the constitution and charter of the tribe, particularly the obtaining of an assignment of tribal land and the obtaining of a loan from the credit funds. If such a person has an assignment of tribal land at the time he severs his tribal relations, he would no longer be entitled to hold such an assignment.

    In connection with your third point, on the interest of the heirs of such a person, the letter should point out that any children born after the severance of membership with the tribe would not be
 

members of the tribe and would therefore not be entitled to share in tribal property.
 

 Memorandum for the Assistant Secretary:

    The attached letter to the Rosebud Sioux Tribal Council, prepared for your signature by the Indian Office, contains several erroneous allegations. The letter states:

    "The purpose of Section 2, Article II in the Rosebud Constitution is to enable the Council by ordinance to prescribe the qualifications of those who shall be considered eligible for adoption and to outline the procedure or method necessary, and when this has been done it would be the responsibility of the Council to pass and act on all applications. There would be no appeal or review of the action by the Council."

    "Sec. 2. The Tribal Council shall have power to promulgate ordinances, subject to review by the Secretary of the Interior, covering future membership and the adoption of new members."

    The letter further criticizes the ordinance adopted by the Rosebud Council for the reason that under this ordinance an adoption fee must be deposited with the president of the Council. Objection is made that "By reference to the Constitution it will be noted that it is the Treasurer's duty to receive such funds and he is bonded to account for them." Actually, the Constitution says nothing about custody of funds and the bylaws say only that "The Council Treasurer shall be the custodian of all moneys which come under the jurisdiction or the control of the Rosebud Sioux Tribal Council." I do not think that a deposited fee is necessarily under the jurisdiction or in control of the Council. In this Department and elsewhere a clear distinction is made between moneys deposited with an executive officer pending consideration of a matter and moneys in the United States Treasury, under the control of Congress.

    Since the assigned reasons for rescinding the ordinance are, I believe, legally untenable, the ordinance should not be rescinded. Inasmuch as this ordinance was approved in the field, positive approval by you, at this time, is unnecessary, and non-action will have the effect of approval.

    I suggest, finally, that the criticism of typographical and grammatical errors. in proposed letters to the Tribal Council, is of doubtful propriety. If there is any criticism of these matters, it should be directed, in a case like the present, to the superintendent of the reservation who approved the ordinance and who presumably supplied the stenographic help which the Council required. Certainly, we would not think of criticizing an ordinance adopted by a territorial legislature, for instance, on grounds of typographical and grammatical inaccuracy, where such inaccuracies do not raise any substantial question of interpretation.

                                                                                                                                              NATHAN R. MARGOLD,

    In connection with the matter of calling elections on the constitutions for the Lower Sioux Indian Community and the Prairie Island Indian Community under the Pipestone jurisdiction, the two constitutions and the letters addressed to the two
 

constitutional committees have been revised in this office to accord with certain legal principles.

    Neither of these two Indian groups constitutes a tribe but each is being organized on the basis of their residence upon reserved land. After careful consideration in the Solicitor's Office it has been determined that under section 16 of the Indian Reorganization Act a group of Indians which is organized on the basis of a reservation and which is not an historical tribe may not have all of the powers enumerated in the Solicitor's opinion on the Powers of Indian Tribes dated October 25, 1934. The group may not have such of those powers as rest upon the sovereign capacity of the tribe but may have those powers which are incidental to its ownership of property and to its carrying on of business, and those which may be delegated by the Secretary of the Interior.

    In the case of these two communities three of the powers listed in the constitutions have been found not to be within the permissible limits of the powers for such group. These powers were the power to condemn land of members of the community, to regulate the inheritance of the property of members of the community, and to levy taxes upon members of the community. The first two powers were eliminated but the last was modified to restrict it to a permissible scope by allowing the levying of assessments upon members of the tribe for the use of community property and privileges. As these assessments would be incidental to the ownership of community property, it is considered that the community would be privileged to impose them. The reasons for these changes were reported to the Indians in the letters to the constitutional committees. It is believed that the Indians will have no objections to these changes but if they should have they may seek the postponement of the elections as already suggested in the letters addressed to the committees. The remaining powers were found justified on the basis of one of the above-mentioned principles. The power over law and order is made subject to review by the Secretary of the Interior and may be sustained as a delegation of power.

    As these changes were legally necessary and did not involve considerations of policy and as there has been prolonged delay in calling the elections for these two communities, the above changes were made in this office without returning the files to the Indian Office. It is requested that you call this memorandum to the attention of the Organization Division in order that the above stated legal principles may be followed in future cases of organization of Indians upon the basis of residence on a reservation.

    With the memorandum addressed to you from Mr. Herrick, Acting Commissioner of Indian Affairs, dated October 28, 1937, transmitted herewith, there was attached a compilation of provisions of Oklahoma Laws, which were deemed relevant for the purpose of considering what Oklahoma laws would be applicable to cooperative associations organized under section 49 of the Oklahoma Indian Welfare Act (49 Stat. 1967 June 26, 1936). Mr. Herrick in his memorandum asked to be advised which provisions of the Oklahoma law, if any, would govern these cooperative associations and recommended that such provisions be compiled and furnished to the associations. He also asked that if it is determined that the cooperatives must comply with some provisions of Oklahoma law, representatives of the credit section of the Indian Office be permitted to discuss the provisions informally with one of your representatives. Consideration of this question in this office was delayed by pressure of other work and the need for extended study of the problem.

    The problem is as follows: Section 4 of the Oklahoma Indian Welfare Act, hereinafter referred to as the Welfare Act, provides:

    "Any ten or more Indians, as determined by the official tribal rolls, or Indian descendants of such enrolled members, or Indians as defined in the Act of June 18, 1934 (48 Stat. 984), who reside within the State of Oklahoma in convenient proximity to each other may receive from the Secretary of the Interior a charter as a local cooperative association for any one or more of the following purposes: Credit administration production marketing consumers' protection, or land management. The provisions of this Act, the regulations of the Secretary of the Interior, and the charters of the cooperative associations issued pursuant thereto shall govern such cooperative associations: Provided, That in those matters not covered by said Act, regulations, or charters, the laws of the State of Oklahoma, if applicable shall govern.

    "The Secretary of the Interior is hereby authorized to prescribe such rules and regula-

tions of this Act. All Acts or parts of Acts in consistent herewith are hereby repealed."

    The lengthy memorandum attached to Mr. Herrick's communication quotes, digests, or refers to a large number of Oklahoma laws; together with provisions deemed relevant from the Welfare Act, the regulations of the Department, and the charters and bylaws of Indian cooperative associations. However, in addition to this compilation certain questions are raised by the introductory statements in this memorandum. These questions should be disposed of before discussion of the applicability of the laws included in the memorandum.

Preliminary Questions.

    1. It is assumed in the memorandum that the regulations of the Secretary of the Interior referred to in section 4 of the Welfare Act include any of the regulations prescribed by the Secretary to carry out the provisions of the act, as provided in section 9. For example, the regulations governing loans to the associations would take precedence over the Oklahoma law as well as regulations governing the organization of the associations. I believe this assumption is correct, but I doubt whether it will lead to confusion as suggested in the memorandum since the associations will undoubtedly be governed by the loan regulations for an extended period of their existence and since it is to be expected that the obligations of indebtedness will be covered by regulations peculiar to that situation.

    2. It is assumed in the memorandum that the provisions of the bylaws of the associations do not prevail over Oklahoma law unless those provisions are specifically required in regulations of the Secretary; but doubt is expressed whether provisions of the bylaws would prevail over Oklahoma law if the subject of the provisions was required by the regulations to be included in the bylaws but the particular provisions incorporated in the by laws were not, specifically required by the regulations. This situation is illustrated by sections 2 (a) and 2 (b) of the regulations for loans to Indian cooperatives. Section 2 (a) provides that the by laws shall include adequate provisions on a large number of different subjects, such as the time, place and manner of holding, calling and adjourning meetings; the number, titles, tenure of office, powers and duties and manner of election of officers, directors and committees; the manner of making disbursements and keeping accounts; and the manner of issue, transfer and retirement of stock. On the other hand, section 2 (b) specifies certain particular provisions which must be included in the bylaws. The provisions included in the bylaws pursuant to section 2 (b) clearly prevail over Oklahoma law. In addition I am of the opinion that the provisions included in the bylaws pursuant to section 2 (a) of the regulations also prevail over Oklahoma law. The regulations intend by section 2 (a) to authorize the cooperative to exercise discretion in the formulation of the provisions required to be covered; and in providing sample bylaws which contain such provisions and which are required to be followed at least as to general order and form, the regulations clearly indicate that the cooperative is not bound by the requirements on the subjects included in the Oklahoma statutes. Otherwise, this portion of the regulations would be nugatory.

    3. The memorandum discusses the chapters in the compilations of Oklahoma statutes, which may relate to the various types of Indian cooperatives. It points out that the sections 9909 (a) -9909 (x) of the 1936 Supplement to Oklahoma Statutes, 1931, provide for cooperative credit organizations; that sections 9870-9893 of Oklahoma Statutes, 1931, provide for cooperative associations for the processing, marketing, etc. of agricultural and horticultural products; and that section 9893 provides that the cooperative associations shall be subject to the general corporation laws of Oklahoma except when such laws are inconsistent with the laws for the cooperative associations. Question is raised whether Indian cooperative associations for production only, or for consumers' protection only, or for consumers' protection only, or land management would come within the provisions of sections 9870-9893. In this discussion the memorandum omits reference to the provisions of the Oklahoma law for "cooperative corporations" contained in sections 9894-9909 in the same chapter and article as the provisions for cooperative associations. In the compilation of the provisions on cooperative corporations in the part of the memorandum setting forth the Oklahoma laws there is a statement that Indian groups will probably not be organized as corporations for conducting operations on a cooperative plan as contemplated in these provisions. It is believed that this dismissal of the Oklahoma statutes on cooperative corporations is misleading. The provisions for cooperative corporations do contemplate associations somewhat
 

different from cooperative associations organized under sections 9870-9898. The latter are associations primarily to render services to producer members and are to be organized without stock, whereas the former cover cooperatives carrying on any production, mercantile or industrial business, and utilizing capital stock. It would seem that the Indian production, consumer retail service, or land management cooperatives might come within the type of cooperatives covered by the provisions of Oklahoma law dealing with "cooperative corporations." On the other hand, the Indian cooperatives for processing and marketing may be more analogous to the type of cooperatives covered by the Oklahoma provisions for "cooperative associations," particularly if they are organized without stock.

    In determining the applicability of Oklahoma laws, first consideration should be given to those laws which specifically cover the type of organizations which the Indians are forming. After such consideration, attention can be given, if necessary, to the general corporation laws of Oklahoma.

    4. The memorandum suggests that: it may be possible to avoid the applicability of a number of the sections of the Oklahoma statutes, by modifying the Indian regulations and, charters so as to issue charters to "cooperative associations as such" rather than to the associations as corporations. The suggestion is founded upon an assumption that the Indian cooperative associations need not be and possibly should not be incorporated and recognized as corporations. This rests, in my opinion, upon a doubtful interpretation of section 4 of the Welfare Act which authorizes the Secretary of the Interior to issue "charters" to cooperative associations. In view of the history and present day usage of the word "charter" its primary meaning is a grant of corporate existence to an association of individuals from a sovereign state. Thompson on Corporations, 3d, Ed., Vol. 1, Sec. 160. The fundamental distinction between an unincorporated association and an incorporated association. is that the former is a group of individuals acting together under the common law, whereas the latter is an association which has acquired a separate legal personality by virtue of a grant, under general or special statute, from a sovereign state. If Congress intended only unincorporated associations among Indians no provision need have been made for the chartering of the associations by the Secretary of the Interior as the agent of the Federal Government.

    5. The memorandum assumes that provisions of Oklahoma Law which may be found to be applicable may nevertheless be avoided through covering the matter which is the subject of the Oklahoma law into the regulations of the Secretary or into the charters of the associations. This may be done, in my opinion, in most instances. However; there may be some provisions which could not be so avoided or which the Department might hesitate to attempt to avoid, such as the provisions defining criminal activities on the part of a corporation. or the directors of a corporation.

    6. The memorandum states that provisions of Oklahoma law dealing with foreign corporations have been set forth in view of the possibility that Indian cooperatives incorporated by the Federal Government might be considered foreign corporations within the terms of Oklahoma Law. The provisions dealing with foreign corporations may be safely disregarded, as it has been repeatedly that corporations formed by national laws be considered not as foreign corporations, domestic corporations with the States in they do business. Fisher & Van Gilder v. First Trust Joint Stock Land Bank, 210 Iowa 531, 231 N.W. 671; In re Cushing's Estate, 82 N.Y. Sup. 795; Texas and Pacific Ry. Co. v. Weatherby, 41 Tex. Civ App. 409, 92 S.W. 58; Fletcher on Corporations, Vol. 9 Sec. 4314, Vol. 10, Sec. 4739, Vol. 17, Sec. 8291; Thompson on Corporations, 3d Ed., Vol. 1, Secs. 146, 158.

Applicability of Oklahoma Laws.

    The applicability of Oklahoma laws to cooperative associations organized under section 4, of the Oklahoma Act is discussed in terms of certain basic principles. It has not been deemed necessary at this time to undertake the burden of specifying whether each particular statute cited in the memorandum applies to any one or all types of Indian cooperatives in Oklahoma. However, the compilation of Oklahoma statutes has been reviewed in detail and it is believed that they would all be embraced within the principles to be discussed. If the application of any specific statute is considered by the Indian Office, informal discussion with representatives of this office may be had at any time.

    The memorandum assumes, in commenting upon the Oklahoma statutes, that the Oklahoma statutes govern in all cases unless the express substance of the provision is included in the Welfare Act, the regulations of the Secretary or the charters of the associations. This assumption is, in my opinion, too broad. There are certain other considerations which militate against the application of Oklahoma lows [sic], Oklahoma laws not applying to Indian Cooperative Associations.

    1. Oklahoma laws which establish prerequisites to obtaining corporate status or the right to do business in Oklahoma as a corporation are believed to have no application to Indian cooperatives. Ex-
 

amples of such laws are section 9873 of the Oklahoma Statutes, 1931, which provide that articles of associations must be transmitted to the Secretary of State for filing and recording and to the county commissioner in the county in which the association is located, if the Secretary of State has issued a certificate to such association. The memorandum assumes that this would apply to the Indian cooperative associations since the Secretary of State and county commissioner in Oklahoma perform simply routine functions. However, it is this function which serves to incorporate the association. The Indian associations being incorporated by the Federal Government cannot be subjected to the process of incorporation by the State Government. Similar statutes are statutes requiring the payment of filing fees or the filing of the names of officers before the association is privileged to operate as a corporation. Sections 9889, Okla. Stat. 1931. 9909b, Okla. Supp. 1936; 13628, Okla. Constit. My reason for stating that such statutes are not applicable is primarily that the subject of incorporation would seem to be covered by the Oklahoma Indian Welfare Act. However, the fundamental principle of Federal Government that a State cannot place conditions upon the existence of a Federal agency (McCulloch v. Maryland), 4 Wheat. 315, Fletcher on Corporations, Vol. 14, Sec. 6685) should also be considered. In view of this principle section 4 of the Welfare Act should be construed only as permitting application of certain State laws to the affairs of Federal corporations, whose existence itself is beyond the State's reach. Any other construction could hardly have been the intent of Congress.

    2. For similar reasons, in my opinion, State laws permitting State agencies to dissolve corporations would not be held to apply to the Indian cooperatives. Examples of such laws are section 9909h, Okla. Supp. 1936, authorizing the Bank Commissioner to liquidate credit unions, and section 9780, Okla. Stat. 1931, authorizing action by the county attorney for involuntary dissolution of a corporation. Section 5 of the Welfare Act and section 9 of the cooperative charter, in providing for dissolution of the cooperatives by Secretarial action with the concurrence of a majority vote of the membership or by Act of Congress, would seem to cover the subject of dissolution. In any event a construction of the Welfare Act to permit dissolution of the cooperatives by State action would seem abhorrent to the principle above discussed.

  As long as the cooperatives are borrowers from the Indian credit funds, supervision of their finances and action in the event of insolvency would seem to be covered by the regulations for loans to Indian cooperatives and credit associations, and supervision by the Bank Commissioner under sections 9909, c, g and k, Okla. Supp. 1936, or similar activities by State agencies would seem to be excluded. However, when no longer indebted to the United States and subject to the loan regulations, the cooperatives might be subject to supervision and regulation by State agencies, unless barred by future regulations of the Department, as such State activities would not affect the existence of the cooperatives. Upholding the authority of State agencies to regulate activities of Federal corporations where Congress, has authorized the corporations to carry on such activities, subject to State laws, is the case of First National Bank v. Fellows, 244 U.S. 416.

    3. Oklahoma laws setting forth in detail the organizations and structure of corporations would not in my opinion apply to Indian cooperatives where the substance, though not all the details, of the Oklahoma laws are included in the regulations of the Department or in the charters of the association or in the provisions of the bylaws authorized by the regulations. For example, section 9874, Okla. Stat. 1931, contains an elaborate procedure for the statement of articles of association including notice, number of votes necessary and the recording of the amendment. The charters of the Indian associations provide simply for an amendment to be passed by majority vote of the members present and to be approved by the Secretary of the Interior. It is believed that such a provision in the charter makes the process of amendment a matter covered by the charter as contemplated by section 4 of the Welfare Act, and that the Indian associations are not bound to supplement the charter provisions with details drawn from the Oklahoma laws. This principle is of great importance in view of the possible extent of its application. Sections 2 (a) and 2 (b) of the regulations for loans to Indian cooperatives, previously referred to, cover a large number of subjects involved in the organization and structure of a cooperative association. These same subjects are treated in great detail in the Oklahoma statutes, for each type of corporation which the Oklahoma statutes deal with. It would seem that the details of internal structure set forth in the Oklahoma laws need not be drawn upon to fill in or to overrule the provisions governing the structure of the Indian cooperatives which are included in either the regulations or the charters of the bylaw provisions drafted pursuant to authority in the regulations.

OKLAHOMA LAWS APPLYING TO INDIAN COOPERATIVES.

    1. Oklahoma laws which may be said clearly to apply to the activities of Indian cooperative asso-
 

ciations are, first of all, laws governing the business transactions of the associations. Familiar examples of this are laws setting forth the legal incidents of .mortgages, notes and contracts, and the requisites to valid execution of such documents by corporations. Related to this type of transactions are the intra-corporation activities surrounding sale and transfer of stock, marketing contracts with the members of the associations, the legal effect of action by the association in handling products for members, the liability of the directors, and similar activities carried on in the course of the internal operations of the corporation.

    2. Oklahoma laws which grant privileges to corporations or impose limitations on corporate activities in addition to those privileges and limitations included in the Welfare Act or the regulations or charters of the Indian associations would seem to apply to the associations. For example, the provision permitting proxy voting in the case of cooperative associations (sec. 9878, Okla. Stat. 1931) and the provisions, forbidding, proxy voting in the case of credit associations (sec. 9909, Okla. Supp.. 1936); similarly, the provision permitting the setting aside of a working funding the case of cooperative associations (sec. 9886, Okla. Stat. 1931), and the provisions permitting them to make marketing agreements, implemented by penalties (sec. 9882, Okla. Stat: 1931); also the provision permitting credit associations to borrow funds up to a certain amount (which would not apply to Indian credit associations so long as they are bound by a loan application not to borrow from other sources than the United States), and provisions limiting the privilege of directors and officers to borrow from a credit association (sets. 9909 p. q. Okla. Supp. 1936).

    3. Oklahoma laws which define crimes committed by corporations or officers of corporations would almost certainly apply to Indian cooperatives. Such statutes are those defining and punishing fraud (sets. 2160-2174 Okla. Stat. 1931) and those prohibiting actions against public policy such as the influencing of voting or the contributing to campaign funds (sets. 5858, 5859, Okla. Stat. 1931).

    It is believed that the foregoing principles are sufficient to guide the Indian Office in its preliminary consideration of the need and desirability of amending departmental regulations to include subjects covered by Oklahoma laws.

                                                                                                                                        FREDERIC L. KIRGIS,

 William A. Brophy, Esq.,
806 First National Bank Building,
Albuquerque, New Mexico.

MY DEAR MR. BROPHY:

    Reference is made to your two letters of April 1 regarding the taxability of lands heretofore purchased from the Pueblo Indians, and suggesting that in the case of a proposed purchase for the Taos Pueblo the title be taken in the United. States in trust for the Pueblo.

    The question of the right of the State to tax lands purchased and conveyed to the Pueblos is covered by my letter to you under date of April 6;. and its enclosures.

    The question of whether title to the lands should be conveyed to the Pueblos or to the United States in trust was considered in 1929 by the then Solicitor, and in an opinion dated August 7, 1929 (52 L.D. 694), he stated:

    "With regard to the character of title to be conveyed, that is, whether the conveyance should run to the United States in trust for the Indians or direct to the respective Pueblos, I find that no clear direction on this point is contained in the act of 1924 or in either of the appropriation acts above referred to. It appears from the papers accompanying the submission, however, that the moneys to be used in effecting these purchases belong to the Indians as a result of appropriations made by Congress to compensate them for the loss of lands and water rights, title to which was found to have vested in non-Indian claimants, which moneys are carried in the United States Treasury to the credit of the Pueblos entitled thereto. (See section 7 of the act of 1924.) Moreover, as we have seen, the tracts to be purchased were originally held by the Indians in communal fee simple ownership and are surrounded by other lands held by the Indians under the same sort of title. These considerations, in the absence of any express direction by Congress in the matter, but lead to the conclusion that the intention was to remove these non-Indian claimants by purchase of their rights and restore the lands to their original status, and I am therefore of the opinion that the conveyance in question should run not to the United States in trust for the Indians, but direct to the respective Pueblos, to be held by

them in the same manner and subject to the same tenure as other lands included in the original Pueblo grants."