its approval within which new suits concerning lands purchased before April 30, 1908, and not involved in any suit already pending, must be brought, if at all, and authorized the Attorney General to compromise any suit theretofore or thereafter instituted save the main suit against the company. The compromises were to be effected through the medium of consent decrees of forfeiture and by repurchase of the lands within six months following by the purchaser claimants from the United States at the rate of $2.50 per acre. About $900,000 have been collected by the Government in this way, all coming from cases involving more than 1,000 acres. The purchases involving less fall within the time limitation, no suits having been brought in any such case within the year allowed by the act. The right of compromise was confined by the act to cases (other than the main suit) involving patented lands. The limitation feature was expressly inapplicable to any of the lands or the parties involved in the suits which had been brought.

Those with whom the Government compromised differ from the others only in the fact that they paid $2.50 in addition for a patent from the Government. They had all violated the law by purchasing 1,000 acres or more. This gave the Government the right to assail their contracts on the ground that they were invalid. It yielded this right and gave the purchasers a good title in consideration of their paying $2.50 per acre. Therefore they have no just cause for complaint.

OUTSTANDING CONTRACTS.

There are a number of contracts outstanding for the purchase of lands upon which a part only of the purchase price has been paid. The lands covered by these contracts (amounting to 80,000 acres) were omitted from the Government suits.

PRESENT STATE OF THE ACCOUNT.

In rough figures, the account between the United States and the railroad company may be stated thus:

Total amount of the two grants, 3,200,000 acres, at $2.50 per acre. $8, 000, 000. 00 Amount received on their account__

Balance due railroad company.

COMPROMISE.

5, 506, 870. 97. 2,493, 129. 03

An early settlement of the controversy is much to be desired. If, therefore, the railroad company could be induced to agree to an adjustment of the whole matter it might be wise for the Government to yield on a few points, especially with respect to some of the charges made and credits claimed in the tables given above. But if the company is going to contest any legislation that Congress may pass upon the subject, and the indications now are that it will, then the Government should claim all that it is entitled to by strict rule of law. In this connection I would respectfully suggest the wisdom of inviting the representatives of the railroad company to indicate what, if anything, they would agree to as a settlement of the entire controversy.

METHODS OF ADJUSTMENT.

From the foregoing discussion it will be seen that, in harmony with the Supreme Court's definition of the railroad company's rights, Congress may buy back the unsold land immediately, or within a reasonable time, by appropriations from the Public Fisc, or provide new methods of disposing of the lands for money, and satisfying the just claims of the railroad company out of the proceeds of sale. I am also of the opinion that in all cases not settled by and under the act of 1912, where lands have been sold in violation of the granting acts, Congress, if it chooses, may deal with the lands as though the sales had never occurred, for, legally speaking, such sales, having been made in contravention of express statutory prohibitions, are absolutely void. Postponing the case of the purchasers for separate consideration, and confining attention now upon the problem_presented by the claims of the railroad company and its lienors, I would first of all lay emphasis upon the desirability of a law so clear and so elastic in its adaptation to the possible results of further litigation that no doubt need be entertained of its validity. As already indicated, I hold to the view that the amount of moneys which the company has collected in excess of its rights should be deducted from the payments to be made, unless the company and its lienors shall justify a more liberal adjustment by consenting to the act and thus precluding the possibility of any further controversy and litigation. That amount the act itself should not attempt to fix either by figure or rigid definition. On the contrary, the act, in fairness as well as for its own sure protection, should provide for the ascertainment of the amount through judicial proceedings, wherein all questions of fact and law involved may be conclusively determined. Payments to the company and the lienors, whether from the Treasury or the proceeds resulting from disposals of the remaining lands under the act, may be properly deferred until the amount of the deduction has thus been established.

If Congress regains the lands through a payment made or guaranteed from the Treasury, they may be, of course, retained or disposed of as Congress sees fit. It has been suggested that, in some part at least, they should be added to existing forest reservations. Whether, and to what extent, this suggestion should be adopted is a matter which, from the executive standpoint, should be of interest to the Secretary of Agriculture. On the other hand, it has been urged that in justice to the State of Oregon, and especially to the counties of that State in which the bulk of the lands is situate, the lands and the timber should be opened as speedily as possible to private acquisition in order that settlement and industry may be promoted and that the local taxing power may not be unduly restrained. In the hands of the railroad company the lands were taxable to the extent of the company's interest ($2.50 per acre). according to my belief, but to their full value according to the claims of the counties. My information is that these counties were largely dependent on such taxation for their revenue, and that since the entry of the decree in 1913 they have suffered greatly because of their inability to collect the taxes assessed and levied.

These accumulated taxes, whether technically valid or not, should, in my judgment, be paid immediately when Congress resumes the

title. I suggest this not only in fairness to the counties but because the taxes would be a cloud upon the Government's title and would embarrass any attempt to dispose of the lands to settlers.

Generally speaking, if Congress decides to gain the money for satisfying the company by disposing of the lands themselves, the law should be such as to guarantee the payment within a reasonable time. This certainty should, I think, be made to appear upon the face of the act and not left to presumptions or deductions from facts and conditions not there discernible.

The law should definitely assure an income of at least $2.50 per acre from all the lands now unsold, devotable, so far as may be necessary, to the railroad's claim, when the just and proper amount of the Government's set-off has been judicially determined.

Respecting the 80,000 acres of land sold under executory contracts, I would observe, first, that it would be fair to allow the purchasers and their assigns the same measure of relief as was afforded in the cases governed by the act of 1912 (supra). Whether any of these executory transactions is protected by the statute of limitations prescribed in that act, I will not undertake to say. Some of them, I am persuaded, were not within the limitation or the provision for compromise. Equality between these cases and the cases settled by that act will be brought about if those who claim under the executory contracts are permitted to gain good title by paying to the Government what they agreed to pay the company, where the contracts call for less than 1,000 acres, and making an additional payment of $2.50 per acre where the contracts call for 1,000 acres or more.

In the light of these general observations I will now consider briefly the proposed legislation mentioned in your letter, and two other pending measures which have come to my notice.

SENATE BILL 30, INTRODUCED BY SENATOR CHAMBERLAIN.

This bill undertakes to deal only with the unsold lands. Except in a few points of detail the changes which occur to me are merely such as will be desirable if Congress shares my opinion that the matters of the excess collections, the outstanding executory contracts, and the existing taxes, should also be included in the legislation. I will embody my ideas in the form of amendments with a few explanatory notes.

Add a recital, as follows:

Whereas the Oregon and California Railroad Company and its predecessors in interest received a large sum of money from sales of said land for prices in excess of two dollars and fifty cents per acre and from leases, interest on contracts, etc.

Page 3: Strike out all commencing with the words " and the United States," in line 15, down to the bottom of the page, and insert:

with the right to immediate possession: Provided, That lands sold under contract by said railroad company for which the purchase price has not been paid in full, shall be deemed unsold lands, under the provisions of this act, and the title to the same is hereby revested in the United States, to be disposed of as provided in section seven of this act.

NOTE. This should be read in connection with new section 7. There are about 80,000 acres covered by the contracts mentioned. (Supra, p. 17.)

Page 4: After line 14 insert:

Provided, That these classifications shall not apply to the lands referred to in the proviso to section 1, except in the contingency stated in section 7.

Page 6: Substitute a period for the comma following the word "office," in line 1, and insert the following:

The register and receiver shall promptly forward to the Commissioner of the General Land Oflice, for his consideration and action, all bids which in their judgment should be accepted.

NOTE. It is believed that the Commissioner of the General Land Office, rather than a local officer, should have the power to accept bids.

Following the word "accepted." in line 2, insert the following: "by the Commissioner."

Strike out the word "grossly" in line 10.

Page 7: Substitute a colon for the period at the end of line 2, and insert the following:

Provided, That the owner of the timber shall make no use of the land except for the purpose of protecting the timber or cutting and removing it: Provided further, That where timber is offered for sale hereunder and no bid is made therefor, or, if made, is rejected, then the timber shall become subject to private entry at prices to be fixed by the Commissioner of the General Land Office, after appraisement, but in no case to be less than two dollars and fifty cents per acre. All timber sold under this act shall be subject to the taxing power of the States apart from the land.

Page 8 Strike out the word "lost." in line 20, and insert "lots." Page 9, insert new section 7, as follows:

That any person, or his assignee, who prior to the institution of any suit by the Attorney General under the joint resolution of April 30, 1908, entered into an executory contract in writing with the railroad company in good faith and for a consideration adequate at the time of such contract for the purchase of any of said grant lands upon terms requiring the payment of the purchase price in installments, with interest, shall make payment in full to the United States of the unpaid purchase money with interest due on the contract, and upon making such payment the purchaser, or his assignee, shall receive a patent from the United States for said land: Provided, however, That where he purchased 1,000 acres or more he shall be required to pay, in addition to what his contract calls for, the sum of $2.50 per acre before obtaining patent. The United States is hereby subrogated to the rights of the railroad company against such purchaser or his assignee, according to the terms of said contract. In the event that the purchaser or his assignee neglects to carry out his contract in accordance with its provisions, or in the event that he is now in default with respect to the payments required by the contract and fails for six months after the approval of this act to make payment to the United States of the amount due, with interest, according to the contract, all his right and interest in the land covered by the contract shall cease and determine. and the land shall be classified in accordance with the provisions of section 2 and disposed of as other lands of the same class: Provided, however, That this section shall not apply to lands included in the decree of forfeiture entered by the United States District Court for Oregon July 1, 1913.

Insert new section 8, as follows:

That the Attorney General of the United States be, and he is hereby, authorized and directed to institute and prosecute any and all suits in equity and actions at law against the Oregon and California Railroad Company and any other proper party which he may deem appropriate to have determined the amount of moneys which have been received by the said railroad company or its predecessors from or on account of any of said granted lands, whether sold or unsold, patented or unpatented, and which should be charged against it as a part of the "full value" secured to the grantees under said granting acts as heretofore interpreted by the Supreme Court. In making this determination the court shall take into consideration and give due and proper legal effect to all receipts of money fror sales of land or timber, from forfeited

contracts, rent, use of timber by the railroad company, timber depredations, and interest on contracts, as well as from any other source relating to said lands.

NOTE. Instead of fixing in the bill the amount which the railroad company has already received in excess of $2.50 an acre and thus risking too large a deduction from what is coming to it from the lands yet to be sold and thereby jeopardizing the validity of the bill, I think it safer to provide for a judicial determination of the amount of the deduction. This is discussed supra.

Insert new section 9, as follows:

The title to all money arising out of said grant lands and now on deposit to await the final outcome of said action commenced by the Attorney General in pursuance of the joint resolution of 1908, is hereby vested in the United States, and the United States is subrogated to all the rights and remedies of the obligee or obligees and especially of Louis L. Sharp as commissioner, under any contract for the purchase of timber on the grant lands.

NOTE.-See page 10, supra.

Insert new section 10, as follows:

The taxes accrued on the lands revested in the United States, whether situate in the State of Oregon or of Washington, shall be paid by the Treasurer of the United States, upon the order of the Commissioner of the General Land Office, as soon as may be after the approval of this act, and a sum sufficient to make such payment is hereby appropriated out of any money in the Treasury not otherwise appropriated.

NOTE. The accrued taxes amount to over $1,300,000. The counties need the money badly. No land or timber should be sold by the Government before the taxes are discharged. New section 11 provides for reimbursing the Treasury out of the proceeds arising from sales of the land and timber for taxes paid. Page 9, strike out "7" and insert "11" after the word "section" in line 16.

Strike out "from the disposition and sale" in lines 16 and 17 and insert" from or on account of said."

Strike out all after the words "railroad company " in the twentyfourth line, page 9, down to end of section 7, and insert:

whether patented or unpatented, sold or unsold, and the value of said lands at $2.50 per acre. From the sum thus ascertained he shall deduct the amount already received by the railroad company and its predecessors in interest on account of said lands as determined under section 8; and a sum equal to the balance thus resulting shall be paid to the railroad company, its successors or assigns, and to those having liens on the land, as their respective interests may appear. The amount due lien holders shall be evidenced either by the consent, in writing, of the railroad company or by a judgment of a court of competent jurisdiction in a suit to which the railroad company and the lien holders are parties. All money shall be paid from time to time, as the fund accumulates, by the Treasurer of the United States upon the order of the Commissioner of the General Land Office: Provided, however, That if, after the expiration of ten years from the passage of this act, the proceeds derived from the sale of lands and timber are not sufficient to pay the full amount which the said railroad company, its successors or assigns are entitled to receive, the balance due shall be paid from the general funds in the Treasury of the United States. After the said railroad company, its successors or assigns, or the lien holders, as the case may be, shall have been paid the amount to which it or they are entitled, as provided herein, an amount equal to that paid to the States of Oregon and Washington and the counties thereof for accumulated taxes, as provided in section 10 hereof, shall be deposited to the credit of the United States.

NOTE. The amount to be deducted is to be judicially determined under new section 8 (supra). New section 11 also provides for taking care of the lienors' interest so far, of course, as the amount coming to the railroad company will permit. It is thought prudent to provide for the payment to the railroad company of any balance that might be due it in the event that the proceeds of the lands and timber during the next 10 years were not sufficient to discharge the whole debt, although there is no probability that such a contingency will ever arise.