further conference be obtained, if possible, between Representatives of the Public Lands Committee of the House and Public Lands Committee of the Senate, the Navy Department, the Department of the Interior, and the Department of Justice for the purpose, if possible, of agreeing upon provisions in the bill that would eliminate, as far as possible, opposition to its passage. The Senators referred to then brought the matter to the attention of the Public Lands Committee of the Senate, and the proposal was approved by that committee.

The Public Lands Committee of the United States Senate then appointed a subcommittee to represent said committee, consisting of the gentlemen hereinbefore named; and this subcommittee then invited the Public Lands Committee of the House to cooperate in the conference. The Public Lands Committee of the House thereupon appointed the Representatives hereinbefore named, and the other departments interested in the bill appointed representatives as previously named herein.

Representative LENROOT. The statement was made as to the purpose of the conference that it was to agree upon a bill. I think it might be well for Mr. Ferris to state just in what capacity we are here. Representative FERRIS. Will you not make the statement?

Representative LENROOT. Inasmuch as this matter is not before the House in any way, the House Committee on Public Lands took up this matter informally and appointed this subcommittee, but did not give it any power to act or bind the committee, but with a view, if they did sit in your conference, to facilitate the matter when it was properly before the House.

The CHAIRMAN. The Senators who called upon the Navy Department for a conference were actuated in the matter by a desire, if possible, to pass at this session of Congress the general leasing bill, known as H. R. 406. Two of the Senators present at this conference, namely, Senator Walsh of Montana and Senator Pittman of Nevada, as far as their particular constituents in their States are concerned, were more especially interested in the other provisions of the general leasing bill than in the provisions concerning oil, there being no known oil fields either in the State of Montana, represented by Senator Walsh, or in the State of Nevada, represented by Senator Pittman. It was the opinion, however, of Senator Walsh and Senator Pittman that the general leasing bill could not be passed at this session of Congress if all the provisions dealing with the disposition of oil and oil lands were eliminated.

Mr. TALLMAN. Let me suggest, Senator Pittman, that the statement that there are no oil fields in Montana is not quite accurate. The CHAIRMAN. Developed oil fields?

Mr. TALLMAN. There are developed oil fields on the southern boundary of Montana.

The CHAIRMAN. The oil fields in Montana are just across the line from Wyoming?

Mr. TALLMAN. Yes.

The CHAIRMAN. And these wells are not in any way involved in the questions in dispute in this bill?

Mr. FINNEY. Not yet.

STATEMENT OF FRANKLIN D. ROOSEVELT, ASSISTANT SECRETARY OF THE NAVY.

Assistant Secretary ROOSEVELT. Mr. Chairman, on December 2, 1916, ex-Gov. Gillett and Mr. Titus, representing the oil men of California, called at the Navy Department and stated that they would like to talk over a plan for a compromise in regard to the relief provisions of H. R. 406, the idea of compromise having been suggested to them by Mr. Williams, of the Bureau of Mines.

These gentlemen proposed that the Navy Department withdraw its objection to the passage of the bill, and that they secure for the Navy Department from the Standard Oil Co. a deed to its patented land in No. 1 reserve, and from the Associated Oil Co. quitclaim deeds to the three quarter sections within this reserve upon which are the only three producing wells. They further proposed that the relief provisions be so amended that no claimant would receive a patent unless he was in actual possession of the land claimed and had done actual physical labor toward development of the land prior to the withdrawal; that all the remaining developed land be leased to the claimants; and that the one-eighth royalty from all leased lands in California should be paid either in oil or money for the exclusive use of the Navy.

Mr. Titus estimated that the one-eighth royalty from lands so leased in California would amount to about 3,000,000 barrels of oil annually. Both Messrs. Gillett and Titus stated that the present sections 9 and 10 of H. R. 406 were so complicated and confused that even the oil men could not understand them, and further that they thought these provisions granted greater relief than should be asked.

Mr. Titus obtained names of operators on reserve No. 1, including Standard Oil section 36 and Associated Oil Co.'s claims, in order to wire conditions of relinquishment.

Mr. Richardson made no promises or statements as to the action of the Navy Department, but stated that he believed that if possible the question should be settled this year. He informed Mr. Titus that, when he laid before him the draft of proposed bill and of the action which would be taken by the operators as to petroleum reserve No. 1, he would take up the matter with the Secretary of the Navy; that there must be definite statements to act on before he would take it up. Lieut. Wright was present at interview.

On Recember 5, 1916, Messrs. Gillett, Titus, and Loomis called at the Navy Department and stated that telegrams received from California indicated that the Standard Oil Co. and the Associated Oil Co. would surrender the lands held by them in No. 1 reserve; that certain quarter sections of Associated properties would require releases from locators; that they would endeavor to secure these releases; that the Department of the Interior and the interested Senators would not agree that the royalty from all leased lands in California would accrue to the benefit of the Navy. These gentlemen further stated that they thought they could assure the Navy Department that the royalty from all leased lands in the reserves could be set aside for the Navy, either in oil or money.

Mr. Richardson explained the congressional opposition to creation of a fund of this kind.

Mr. Gillett said that the draft of the proposed substitute bill had not been completed, as the Secretary of the Interior could not be consulted at that time.

Mr. Richardson stated that he did not believe any compromise would be accepted by the Navy Department, because they could not deliver anything that depended on the action of Congress, but that he would bring the matter to the attention of the Navy Department. The Secretary of the Navy wishes in every way possible to help in the passage of the general leasing bill, and does not desire the situation with respect to coal, phosphate, potassium, or sodium, in which we have no interest, to conflict with the Navy oil situation.

In regard to the oil question-leaving out for the moment the Wyoming field, which is not at the present time under discussion, and taking up only the California situation—a suggestion was made to the department that in reserve No. 1 the private owners having claims there would release those claims to the Government in consideration of the Navy Department releasing its claims in reserve No. 2. The Secretary of the Navy has felt that in view of the fact that reserves No. 1 and No. 2, portion of them, were withdrawn by the President in 1909, thereby giving the Navy Department definite rights, that the department must, in view of the growing necessity for oil, maintain all of the rights which it obtained by the withdrawal order in 1909, and the department feels that it must take the position that these Navy lands should be confirmed solely to the Navy Department, providing, of course, in the best way possible for compensation to those people who have valid claims.

Senator CLARK. May I ask a question there, to get at the view of the department ?

Assistant Secretary ROOSEVELT. Yes.

Senator CLARK. Does the Secretary of the Navy or the Navy Department take the view that a general withdrawal under the law gives a preference right to the Navy Department, or any other department of the Government, to the lands so withdrawn?

Assistant Secretary ROOSEVELT. As of the date of the order, yes. Senator PHELAN. As of the date of order of the reservation. Senator CLARK. Oh, no; that is not what I am getting at. For instance, I gathered from your statement that the Secretary of the Navy considered that the withdrawal in 1909 gave the Navy Department a preference in the lands so withdrawn to the same extent as if they had been withdrawn as naval reserves. Is that the view of the department?

Assistant Secretary ROOSEVELT. Yes.

Senator CLARK. And then you have a specified withdrawal for a specific purpose, for instance, as a naval reserve or the creation of a naval reserve. I understood from your statement that it was the view of the Secretary of the Navy, or the Navy Department, that the general withdrawal in 1909 will give the Navy Department a preference right in the lands so withdrawn, even though they had not been withdrawn for the purposes of the Navy. I wanted to get at what was the opinion of the Navy Department. I do not know whether I make myself clear or not.

Assistant Secretary ROOSEVELT. The theory, as I understand it, is that in 1909 it was a general withdrawal for the use of the people of the United States, and that later the Navy Department became the agent of the Government for the use of those lands.

Senator PHELAN. I would like to ask Mr. Finney a question apropos to that.

The CHAIRMAN. Let me suggest that it would be far better if we keep these statements together. I think it would be better to let Mr. Roosevelt finish his statement uninterruptedly, and then we might ask him questions. Otherwise the record will be confusing.

Assistant Secretary ROOSEVELT. In regard to the proposition that was made to the confirmation to the Navy Department of all the lands in reserve No. 1, in exchange for Navy lands in reserve No. 2: The department can not accept that, for the general reason that in reserve No. 1 we believe that there is a very small acreage of proven producing area. There are only three producing wells on this reserve No. 1, although many dry wells have been sunk, and the estimated contents of this tentatively proven area is placed at only 24,000,000 barrels all told; on the other hand, in regard to reserve No. 2, a large portion of this reserve is proven oil land. Of the total acreage of 30,117 in No. 2, 3,526 acres only is held in private ownership by unassailable title.

Representative FERRIS. What is the acreage of No. 1?

Assistant Secretary ROOSEVELT. Thirty-eight thousand one hundred and twenty-four, of which 2,470 has been proven; and, as far as we know, there is no further oil in No. 1.

In reserve No. 2, out of the total 30,117, 3,526 acres are held in private ownership by apparently unassailable title. The Southern Pacific Railroad Co. has patented, which patents are at the present time under attack in the courts, 15,361 acres, or a little over half of the whole reserve. That leaves unpatented, of which the title is in dispute, 11,230 acres. Of this 11,230 acres the Navy Department, of course, is the benficiary under the 1912 withdrawal order, setting it aside to the Navy, and the Navy believes that under that withdrawal order, following the withdrawal order of 1909, it should carry out the existing law; in other words, that any claims which are valid must be determined as to their validity by the present law. We would be very glad to expedite in any way possible the determination of those claims. The way they are being determined now is by action of the Department of Justice bringing a suit, and necessarily it is a very long procedure. While we should be very glad to assist in expediting the determination of those claims, we do not want to have the present law in regard to them changed.

Senator CLARK. In other words, the view of the Navy Department is that no matter under what circumstances the developers went on, that no equitable rights are to be considered and only the strictly legal rights under the law; is that it?

Assistant Secretary ROOSEVELT. As I understand it, Senator, those claims at the present time on coming up to court are being tried in a court of equity; in other words, the equitable rights are being considered by the court now under the present procedure. The objection to the procedure is its length.

The CHAIRMAN. Mr. Roosevelt, how much oil do you think the Navy will require annually?

Assistant Secretary ROOSEVELT. At the present time the Navy requires a little under one million barrels a year. It is estimated that with the present building program, and a future building program somewhat smaller than the present one, which is an emergency program, we shall need by 1927-10 years hence-12,000,000 barrels for annual consumption. But there is the further side of it, and that is the report by the General Board of the Navy, and by the Joint Board of the Army and Navy, showing the requirements in case of war for a reserve. That reserve ought to amount to at least two years' supply. It is practically impossible for us to store a two years' supply in tanks. Therefore, we should have a definite reserve of 25,000,000 barrels that we could count on in the ground all the time, besides being assured of our annual supply.

The CHAIRMAN. What reserves has the Navy set aside at the present time?

Assistant Secretary ROOSEVELT. We have reserved No. 1 reserve, No. 2 reserve in California, and the reserve in Wyoming, which is No. 3. That reserve in Wyoming is estimated to have a total production of 30,000,000 barrels, but prior to its creation the Secretary of the Navy

Representative FERRIS. Estimated contents?

Assistant Secretary ROOSEVELT. That is estimated contents. The Secretary of the Interior said the possible productive area of this dome is somewhat less than 4,000 acres, and after stating the reasons that make it even more hazardous than usual to attempt an estimate of the total production. He said, on the basis of a hazardous estimate, recognized as such-better than no estimate he asked the consideration of the matter by geologists who have been in the field. In other words, the Wyoming reserve is not one that we feel we can depend on.

Senator CLARK. I might say, in clearing up that situation a little, that the same sand--exactly the same sand that underlies that Teapot reserve, Wyoming, No. 3, and which underlies the oil field north of there has been developed within the last three months to quite a considerable extent to the far south of this. So that so far as conjecture can make anything certain, the larger estimate is as conclusive as any geological estimate that could be made.

Assistant Secretary ROOSEVELT. But even that is only an estimate of 4,000 acres.

Senator CLARK. Whatever that may be.

Assistant Secretary ROOSEVELT. Four thousand acres total.

The CHAIRMAN. Who made the estimate of 4,000 acres?

Assistant Secretary ROOSEVELT. The Geological Survey.

The CHAIRMAN. Under what date; do you know, approximately? Assistant Secretary ROOSEVELT. April 19, 1915.

Senator CLARK. What was the area of the reserve in Wyoming? Commander RICHARDSON. A little over 9,000.

Senator PHELAN. Nine thousand four hundred and twenty. Senator CLARK. I think you will find all of it good territory. I know some gentlemen would like to go outside the boundary of the proven field.