advised that that is an improper method of procedure, it has had no opportunity to formulate any policy.

Mr. LENROOT. Under your theory, why would not an injunction against the further violation of the covenants or a mandatory order compelling their observance give all the relief that the Government is entitled to?

Mr. BLAIR. It would, unless Congress desired to change the policy fixed by the original land grants.

Mr. LENROOT. The court said:

However, an injunction simply against future violations of the covenants, or, to put it another way, simply mandatory of their requirements, will not afford the measure of relief to which the facts of the case entitle the Government.

What have you to say about that expression?

Mr. BLAIR. Well, there are a good many expressions in that opinion which are not consistent with each other. I think the Supreme Court meant this: Under the grant, as made, Congress had failed to provide what you might call an accelerator process. It had not required the railroad company to sell to any particular person or at any particular time. Therefore, there was no means of accelerating the process of getting the lands into the hands of bona fide settlers. An injunction of the character which the Supreme Court had reference to there would have left that unsatisfactory state of affairs, and I suppose that is what the Supreme Court referred to.

Mr. LENROOT. Was it not argued in that case that a large part of those lands was not susceptible of actual settlement under any conditions, and that, therefore, that interpretation of the grant never applied, as contended by the Government; and did not the court hold in this case that that was immaterial, that the grant covered all of the lands and that the restrictions covered all of the lands?

Mr. BLAIR. I understand that the Supreme Court held that the restrictions covered all of the lands.

Mr. LENROOT. Now, is not the theory which you now assert, that the company would be entitled to remove the timber and then offer the land for sale to actual settlers, contradictory of the doctrine laid down by the Surpeme Court?

Mr. BLAIR. If I thought so I would not have announced it.

Mr. LENROOT. If the court takes the position that the character of the land had nothing to do with the obligation of the railroad company as to actual settlement, I do not quite see how you can assert the doctrine that the timber upon the land has anything to do with the obligations of the railroad company.

Mr. BLAIR. I can not read into that part of the decision to which you refer any intended prohibition by the Supreme Court of clearing the land from timber before offering it for sale. The Supreme Court said, the fact that, in your opinion, the land is not good land for actual settlers to live on does not justify you in selling it in large tracts to people who will not be actual settlers. You must, when you come to sell the land, sell as required by the actual-settlers clause; you must follow that, and sell it to no one else. That does not mean, however, it seems to me, that the railroad company can not first clear the land of timber, for that would tend to secure bona fide settlers as purchasers, and that would not prevent the railroad company from complying with the requirement of selling the land to such settlers at not exceeding the maximum price.

Mr. LENROOT. With whom do you think that determination should rest-with the court, with the company, or with Congress-that is, the question of whether the clearing of the land would tend to settlement or the reverse?

Mr. BLAIR. That is a question which, in the first instance, I think has to be decided by the grantee, subject to injunction or any other remedy through the courts, if it violates the grant, just as in every case of a grant that has covenants in it. There is no method that I know of to decide beforehand just exactly what would constitute a breach of covenant.

Mr. KENT. Your theory, as I understand it, is based on the assumption that the land would be worth $2.50 per acre, after clearing it of timber, for settlement purposes. You must have a theory there of some sort.

Mr. BLAIR. Well, Mr. Kent, I do not exactly see why the land must be worth $2.50 per acre or that $2.50 is the sum we are required to sell at.

Mr. KENT. The court allows you $2.50 per acre.

Mr. BLAIR. The court simply says that we can not sell it for more than $2.50 per acre.

Mr. LA FOLLETTE. The attitude of the company is that it would be better and that the land would be more liable to be settled if the timber was removed than if the timber was allowed to remain on it. That is your theory, is it not, that you could get actual settlement faster with the timber off and leaving the stumps than if you attempted to invite settlement with the timber on it?

Mr. BLAIR. The theory of the company was doubtless my theory

Mr. LA FOLLETTE (interposing). Well, you represented the com

pany.

Mr. BLAIR. I represent the company on legal questions. Now, assuming the fact that there may be land so heavily wooded that the sale of it in that wooded condition in small tracts would invite speculation rather than tend to invite persons who would come with the intention to settle on the land, then, unless the timber was removed, that conclusion would follow. Now, you see that involves two propositions, one of law and one of fact. I have tried to reason out a theory as to how Congress gets the right to the timber or the value of the timber, because it seems to be assumed by counsel for the Government that Congress has the right to everything above $2.50 per acre, which probably means about four-fifths of the value of the land, but I have not been able to do so.

Mr. LA FOLLETTE. It belonged to the Government before it made the grant, did it not?

Mr. BLAIR. Yes, sir.

Mr. LA FOLLETTE. If the covenants of the grant were not carried out, who on earth would have any right to it except the Government that had been outraged in the violation of the covenants?

Mr. BLAIR. Well, if the covenant was what we call a subsequent condition which involved a forfeiture

Mr. LA FOLLETTE (interposing). The Supreme Court said it did practically involve a forfeiture.

Mr. BLAIR. I think the Supreme Court's decision was rather the other way.

Mr. LA FOLLETTE. It says that Congress has the right to recover the title, and if it does, I do not see but what it amounts to the same thing. Under the decision Congress practically has the right, on account of the failure to carry out the contract

Mr. BLAIR (interposing). As I read the opinion of the Supreme Court, it was that the failure of the railroad company to observe the restrictions in the covenant did not operate as a forfeiture of the grant, and that means that the title still remains in the railroad company. I do not find anywhere in the decision anything to the effect that Congress has the right to take back the grant. That may be an inference to be drawn from something in the decision, but I have not been able to find in the decision anything which would justify that inference. It would be inconsistent with the holding that there had been no forfeiture of the grant, because, as you say, the forfeiture of the grant and giving Congress the right to take it amount to about the same thing.

Mr. LENROOT. You recognize the distinction between the right of Congress to declare a forfeiture and the right of Congress to revest title upon making full compensation?

Mr. BLAIR. The Congress, I understand, can exercise the right of eminent domain in proper cases. That, as some one stated just now, involves the payment of compensation. I believe the Supreme Court has held that Congress has no right to prescribe in the act in which it proposes to take something by exercise of the power of eminent domain the compensation it is going to pay or the rule by which such compensation shall be ascertained.

Mr. LENROOT. But assume that the granting act prescribes the compensation that the grantee is to receive out of the grant; say that it is determined by the granting act, then, the Government may revest title, provided it had the right in other respects, upon making that compensation fixed in the original act, without confiscating the property of the grantee?

Mr. BLAIR. Very probably. In other words, if there is no doubt about amount of compensation. I would say, however, that I do not see how Congress can, as it were, rescind this contract for the purpose of taking the land without rescinding the contract as a whole. I do not see that Congress can leave upon the railroad company the burden of continuing from now on and forever to carry troops and property of the Government free after it has rescinded or modified the terms of the contract.

Mr. LENROOT. Not if it gives the grantee the full value of the granting act. Then it has all the benefits it should have out of the obligation.

Mr. BLAIR. That would give rise to the question of whether you can change the consideration of a contract, even if you consider it an equivalent consideration, while the contract remains otherwise unchanged.

Mr. KENT. AS I understand you, the proposition in the original grant is that the railroad company can not receive more than $2.50 per acre. The limitation is not more than $2.50 per acre, although some of the land might not bring $2.50 per acre. Now, under the decision of the court, I understand the proposition is that Congress should give you $2.50 per acre all around. Some of the land you might not be able to sell at $2.50 per acre, so that, taking the thing

as a whole, you would be getting more than the actual value of the original contract.

Mr. BLAIR. That is assuming, of course, that under no circumstances could the railroad company derive any advantage from the timber on the land, and, considering the strict legal rights of the grantee, I am unable to concur in that view. If you will permit me to say so, what you say is strictly logical if your premise is granted. Mr. SINNOTT. What other emoluments do you claim you are entitled to other than the $2.50 an acre and the value of the timber coming from these granted lands?

Mr. BLAIR. I would not like to have the Southern Pacific Co. bound by what I should say offhand in answer to that question, but it seems to me that that covers everything except this: Suppose we go to the expense of making a sale, surveying the land, and making the sale to somebody at the proper price of $2.50 an acre, and that person does not take the title and forfeits a part of that price which he has paid. I think we would have the right to receive the benefit of that. I think in the Attorney General's letter, which is before the committee in printed form, there were several other sources of revenue, as interest or items of that sort, and I take it all of them are proper sources of revenue under the circumstances.

Mr. KENT. Do you understand there were any mineral reservations in these tracts?

Mr. BLAIR. Yes; I understand that the mineral lands were especially reserved.

I may add a few words about the effect of the past sales by the railroad company in disregard of the provisions of this act. The Government brought its suit on the theory that such disregard of the provisions of the act forfeited the land granted, on the theory that the restrictive provisos were what we lawyers know as conditions subsequent, the violation of which gave rise to a forfeiture of the grant.

As I understand the decision of the Supreme Court, it decided three things in respect to the restrictive covenants and the violation of them. First, it decided that these restrictive covenants were not conditions subsequent and therefore that there had been no forfeiture of the grant. Now, if that means anything, it means that the title to the unsold lands was not forfeited by the action of the railroad company in respect to the lands which it had previously sold. That means the railroad company now has such title to the unsold lands as it would have had if it had never sold any lands except in compliance with the provisions of the granting act. That means that the railroad company's title to the unsold lands is not now subject to forfeiture, and that, as I have said before, we have such title to the unsold lands as we had the day after the patents therefor were issued.

The next thing, as I understand it, which the Supreme Court decided in regard to these past transactions or in regard to the restrictive covenants was that these restrictive covenants were enforceable, existed in full force and vigor, and could be enforced by injunction. I am informed that was in answer to a contention on the part of the Government that it had no remedy if the restrictive covenants were not construed to be conditions subsequent, on the theory that the Government had no right to sue for damages or to recover the excess

price received by the railroad company. I may be wrong in that because, as I have said, I was not a party to the proceedings in court, but I am informed that was the position of the Government at that time, that these restrictive covenants should be construed as conditions subsequent because the Government interested in the enforcement of those covenants had no remedy against the railroad if it sold the lands in violation of those covenants, and the answer of the Supreme Court was, "You have a remedy by injunction."

Mr. LENROOT. So far as the sold lands were concerned, the Supreme Court expressly

Mr. BLAIR (interposing). I am coming to that in a moment. The third thing the Supreme Court decided was this: The Supreme Court says in its opinion that the question of the sold lands is not presently before us. The Supreme Court did not decide that the railroad company was immune in respect to those past transactions; but at the request, I believe, of the United States, it reserved to the United States all its right to sue for whatever liability the railroad company had incurred to the United States in a suit to be hereafter brought. Therefore we have these three things decided in regard to the past transactions. First, they did not operate a forfeiture; second, that as to the future sales we could be made to obey the law by injunction; third, as to the past transactions, the door was left open to the United States to sue for any penalty, pecuniary or otherwise, which we had incurred.

Mr. KENT. Do you not believe there is a limitation on the amount the Government could sue the railroad company for in consideration of those past transactions?

Mr. BLAIR. Mr. Kent, to be very frank with you, I have not been able to satisfy myself exactly what the United States has a right to sue for.

Mr. KENT. Would it not be limited to $2.50 an acre?

Mr. BLAIR. I am not prepared to answer that question. I rather agree with the counsel for the Government that they have not the right to recover any damages, but that is a question which has been. left to the courts and I have no doubt it will be settled by the courts. The CHAIRMAN. What counsel of the Government do you refer to, Mr. Blair?

Mr. BLAIR. I have that recollection, Mr. Ferris, simply by reading the brief. The briefs are very voluminous, consisting of 1,000 pages, I believe, of a brief statement of the facts, and 1,000 pages devoted to a brief statement of the law; but somewhere in those briefs, it sticks in my mind, there was the statement which I have made. I do not want it to be taken as something I absolutely vouch for.

Mr. SINNOTT. Mr. Blair, as to your second proposition, that the railroad company could be made to obey the grant by an injunction, the Supreme Court used this language:

It might seem that restriction upon the future conduct of the railroad company and its various agencies is imperfect relief, but the Government has not asked for more. Then reading down a few paragraphs, the same sentence Mr. Lenroot called your attention to, I will quote from the decision:

*

An injunction * * simply mandatory will not afford the measure of relief to which the facts of the case entitle the Government.