sion in business conditions and the financial stringency. For these reasons also the prices obtained have in most cases been lower than those received in 1920; and in many instances it has been found necessary, with the consent of the Indians interested, to extend the time of payment on the notes of the purchasers.

A number of tracts of land have been purchased for Indians with their trust funds, and in these cases the abstracts of title have been examined in this office, and in case the Indian interested was regarded as not competent to handle his affairs, a restriction as to future alienation except with the consent of the Secretary of the Interior has been included in the deed.

FARMING AND GRAZING LEASES.

Under the act of Congress dated June 25, 1910 (36 Stats. L., 855), allotted Indians who are holding their lands under trust patents are authorized to lease the same for a period not to exceed five years under regulations prescribed by the Secretary of the Interior. Under these regulations allottees at various agencies have been classified as competent and noncompetent, the competent being permitted to transact the business incident to making their own leases and collecting their own rentals. In the case of incompetent Indians leases of lands are negotiated in the agency office and the rentals paid through the superintendent.

In order to eliminate as far as possible the extra handling of leasing work and the routine transmission of papers to the office, superintendents and others in charge of allotted Indian lands were early in the year authorized to grant certificates of competency to Indians who were properly qualified to negotiate leases. This has resulted in a considerable saving in clerical work and such applications for this privilege are not now sent to the bureau for action.

Under the act of February 14, 1920 (41 Stat. L., 408-415), the department was authorized and directed to charge a reasonable fee for the work incident to the sale, leasing or assigning of tribal or allotted Indian lands, the same to be collected from vendees, lessees, or grantees and covered into the United States Treasury as miscellaneous receipts. Regulations were accordingly promulgated which fixed a fee of $5 for each lease or sublease. This fee in some cases was found to work a hardship, and by order of May 27, 1921, the department directed that in all farming and grazing leases a fee of but $1 be charged where the total rental is not more than $100; a fee of $2.50 where such rental is not over $250; and $5 where the total rental is more than $250.

A further saving and reduction in the amount of official work was effected by an item in the Indian appropriation act of March 3, 1921 (41 Stat. L., 1225-1232), which requires that all farming and grazing leases thereafter entered into shall be subject only to the approval of the superintendent or other officer in charge of the reservation where the land is located-this provision not to apply to the Five Civilized Tribes. Regulations were promulgated March 3, 1921, under the foregoing act, which required superintendents to approve and retain at the agency all leases of the character indicated, except that in cases where disputes or contests arise that he is unable to adjust satisfactorily, he shall submit all the facts and evidence with a copy of the lease to the office for settlement.

AS TO INDIAN COMPETENCY.

The general course of treaties, agreements, and legislation has been in line with the purpose of reserving definite areas of land as tribal estates and of allotting there from as rapidly as possible freeholds in severalty, with the aim of inducing by this transfer of tribal to individual holdings a departure from old communal traits and customs to self-dependent conditions and to a democratic conception of the civilization with which the Indian must be assimilated if he is to survive.

In the process of allotting lands to the Indians, and the sale of such surplus as they do not need, many reservations have acquired a mixed population of both Indians and whites which has hastened local self-government, public schools, and other social, civic, and industrial benefits to the backward race.

Various reservations indicate this evolution, and some are now practically merged with white settlements and show but little racial divergence in the prevailing customs and activities. There are, it is true, a few exceptions to this transforming process, as in some semiarid portions of the Southwest where tribal relations must largely continue until existing physical conditions have been changed. The Navajo country is the most conspicuous of these exceptions and for some time to come will call for exceptional consideration, particularly as regards education, health, and such industrial advancement as the physical character of the country will permit. But the general out-work of the reservation system, with certain curable defects, is in the right direction.

As is well known, the law provides for issuing to the Indian a trust patent upon the land allotted to him, which exempts it from taxation and restricts him from its sale or encumbrance until he is declared competent to manage his business affairs, when he may, upon application, receive a patent in fee and be free to handle or dispose of his land the same as any white citizen.

It is doubtful if a satisfactory method has been found for determining the competency upon which to base a termination of the trust title. Applications for patents in fee have too often been adroitly supported by influences which sought to hasten the taxable status of the property or to accomplish a purchase at much less than its fair value, or from some other motive foreign to the Indian's ability to protect his property rights.

Notwithstanding the sincere efforts of officials and competency commissions to reach a safe conclusion as to the ability of an Indian to manage prudently his business and landed interests, experience shows that more than two-thirds of the Indians who have received patents in fee have been unable or unwilling to cope with the business acumen coupled with the selfishness and greed of the more competent whites, and in many instances have lost every acre they had. It is also true that many of the applications received for patents in fee are from those least competent to manage their affairs, while the really competent Indians are in large numbers still holding their lands in trust. It is evident to the careful observer that degree of blood should not be a deciding factor to establish competency, as there are numerous instances of full-bloods who are clearly demonstrating their industrial ability by the actual use made of their land and who are shrewdly content with a restrictive title thereto that exempts them

from taxation. At the same time the instances are far too frequent where those of one-half or less Indian blood-often young men who have had excellent educational privileges-secure patents in fee, dispose of their land at a sacrifice, put most of the proceeds in an automobile or some other extravagant investment, and in a few months are "down and out," as far as any visible possessions are concerned.

The situation, therefore, suggests the need of some revision of practice as a check upon the machinations of white schemers who covertly aid the issuance of fee patents in order to cheat the holders out of their realty, and as a restraint upon those who are not so lacking in competency as in the disposition to make the right use of it, and also as a stimulant to the thrifty holder of a trust title to accept the entire management of his estate with the full privileges and obligations that follow.

The well-known purposes of the Government are to fit the Indian for self-support and to protect his interests while doing so, and then to expect him to do his best toward independent living. The Government should not be expected to shirk its trust. It should not be made easy for young men to squander their substance and drift into vagrancy, nor for successful landholders to remain under restrictions not justified by their qualifications for citizenship.

It is hoped to find a way through which the competency of an applicant for a patent in fee can be tested by actual accomplishments on his land or in the particular industry in which he may be engaged, such as the maintenance of himself and family, if married, in a fair degree of comfort for a definite period prior to his application, so that not only the ability but the inclination and ambition to exert it will be evidenced and constitute a determining element. The same principle also argues that this standard of competency should bar an extension of the trust period to every energetic Indian who is getting ahead year after year, proving himself a capable farmer, stock grower, or a thrifty provider for his family in some vocation, and because of this ability to manage well his affairs should gladly assume the full rights and obligations which the issuance of a patent in fee confers. In all such instances of unquestionable competency consideration might well be given to the matter of determining the individual interests in tribal property and turning over to these progressive Indians their full share of the tribal estate.

SEGREGATION OF TRIBAL FUNDS ON FINAL ROLL.

The act of May 25, 1918 (40 Stat. L., 591), and June 30, 1919 (41 Stat. L., 9), provide that the funds of any Indian tribe, if susceptible of segregation, may be distributed among the members thereof upon the preparation and approval of a final roll. Under authority of the acts mentioned, final rolls have been approved or are in process of preparation on the following reservations: Crow and Flathead, Mont.: Fort Hall, Idaho; Cheyenne and Arapahoe, Osage, Kiowa, Otoe, Ponca, and Pawnee, Okla.; Rosebud, Sisseton, and Yankton, S. Dak.; and Spokane, Wash.

The practice is to pay the shares of competent Indians to them for expenditure as they see fit, and to place the shares of noncompetents and minors to the credit of their respective accounts, subject to the individual Indian money regulations.

INDIVIDUAL INDIAN MONEY.

The year ended showed a decided increase in the disbursement of individual Indian money. This is partly accounted for by the policy of disbursing their funds to returned soldiers who ask for the same, and the fact that there were more competent Indians and therefore larger sums were turned over to them than heretofore. The continued high prices in some sections of the country, the numerous crop failures, and the tight money market in general made it necessary to expend larger amounts than usual for the benefit of the older Indians.

In many cases it necessitated the selling of Liberty bonds, which were held in trust for various Indians, in order to provide them with the funds needed to purchase food, clothing, and the proper farming equipment to enable them to work their allotments.

On the whole the Indians have made good use of their money. A great many of them have purchased comfortable houses or have made improvements to their old ones. They have also invested largely in cattle and modern farming implements.

In regard to minors, while the general policy of conserving their funds has not been changed, it has been found necessary and advisable in some cases to allow the disbursement of their money for the purchase of land and cattle and the payment of tuition at colleges or automobile schools. In the first-named purchases the deed to the realty is made in their names and the cattle are branded with their individual brands. In other cases their funds have been used to pay traveling and hospital expenses when medical treatment was deemed necessary by a reputable physician.

DEPOSITARIES FOR INDIAN FUNDS.

The demand for depositaries for Indian moneys continued through most of the year despite the fact that receipts from land sales at some agencies were much below what they would have been had the money market been easier. Deposits amounting to $6,345,800 were authorized for 258 banks. At some agencies, owing to decreased receipts, it was necessary to reduce the deposits to meet current disbursements and in a number of instances to discontinue some banks as depositaries.

Due to the great demand for money by banks, better interest rates have been procured on Indian funds than during any previous period, the average rate in some localities being 5 per cent, and at one agency practically all the time deposits are earning 6 per cent.

The number of bonds or renewals of bonds approved during the year was 1,846, representing a total amount of $38,560,396. As a margin of 5 per cent and in some cases 10 per cent must be allowed to cover interest as it accrues the deposit under these bonds is, of course, considerably less.

Considering the large number and wide distribution of banks which carry Indian deposits it was perhaps inevitable, in a period of such general financial strain as the country has been experiencing, that there should be a few of these depositaries among the banks which closed their doors during the year. It is gratifying to report, however, that in some instances the closing was only temporary, and that

the sureties on the bonds of the banks permanently closed paid in full both principal and interest.

PURCHASE AND TRANSPORTATION OF INDIAN SUPPLIES.

A pronounced change in market conditions occurred within the year. The early months showed a continued scarcity of supplies and material with consequent high prices, which condition, under the pressure of the so-called "buyer's strike," reversed itself very decidedly during the closing months, bringing about lower prices in many lines, much to the relief of this service. The change likewise was apparent in the increased competition secured through advertisements. Competition on Government purchases is a fairly accurate barometer of commercial conditions, for, if business is good on the outside, there is apparently little desire to supply the Government, unless the volume is large, but when, as for the past several months, business is at a standstill, then interest in Government orders is awakened. This service has benefited accordingly.

The opening of bids and awarding of annual supply contracts took place as usual in the spring of 1920, at Chicago, St. Louis, and San Francisco, also at Washington, D. C., on coal, beef, pork, mutton, and oleomargarine, and in the fall at Chicago on dried fruit, canned goods, cereals, flour, and other products.

The regular list of supplies was purchased in the spring of 1920, except where the reaction in prices had not definitely taken place, as with sugar, shoes, linseed oil, and numerous other items. By a careful analysis of market conditions later purchases were made at a considerable saving. To illustrate, sugar at the usual time of buying was quoted in New York at approximately 23 cents per pound; by holding off it was purchased for December delivery at 7.74 cents and for February delivery at 7.5 cents per pound, a saving of approximately $90,000. Linseed oil, offered in June, 1920, at $1.85 per gallon, was purchased in March, 1921, at an average price of 85 cents, a saving of approximately $9,750. Sole and harness leather were bought later in the season at a saving of approximately $4,000. The larger part of the leather shoes were not bought until they were actually needed. In the fall, after a third advertisement, when prices had dropped approximately 25 per cent, they were contracted for at a net saving of about $13,000.

Field officers ordered for the year only those items and in such quantities as they felt were absolutely vital to the successful operation of their plants. Reserve supplies since the outbreak of the war have gradually been depleted, until a surplus now exists at the end of the year at few, if any, places. Such surplus as exists and is not required at the point where located is transferred to other places where the supplies can be used. It seems, therefore, that the quantities called for by the field officers, generally speaking, have about reached the minimum status.

The surplus of other departments, particularly the War and Navy Departments and the United States Shipping Board, has been drawn on whenever reported on any items or class of items for which this service was in the market. Many thousands of dollars' worth of material and supplies have thus been obtained during the fiscal year 1921 and several prior years, and this cooperation will continue with