had increased to approximately 16,000 head, and profits of nearly $825,000 had been realized.

In all phases of stock raising the Indian Service is placing the Indians' activities in line with the most advanced practice of the live-stock industry. Pure-bred and high-grade sires are purchased for their herds and flocks, and close attention is given to breeds best adapted to the country in which they are located. Special effort is made to give competent oversight to the Indian's individual beginnings, so that his stock shall suffer no neglect through its owner's lack of knowledge or industry. Persistent campaigns are enforced against animal diseases.

The younger Indians in large numbers have for some years received excellent vocational training in our Government schools, where the course in agriculture is made prominent, and through intelligent application, energy, and ambition are adding modern methods and leadership to the live-stock business on all the reservations.

The older Indians responded splendidly to the patriotic demands for increased production during the war period, and discovered for themselves larger opportunities in all live-stock operations, in which their interest now seems permanently awakened, and there can be no doubt that the Indians are destined to become lasting and progressive factors in the stock-growing industry of our country.

REIMBURSABLE FUNDS.

The use of reimbursable funds has proved a very important factor in the industrial progress of the Indians. The amount available last year under specific congressional appropriation for this purpose was only $100,000. A much larger sum could have been used to advantage.

During the year there were large repayments to the credit of funds appropriated in previous years. At Mescalero the total indebtedness of individual Indians has been liquidated. At Crow on April 30 there remained an unpaid balance of $595.56 out of approximately $80,000, expended from tribal funds under this plan. In three months, from February 1 to April 30, the indebtedness at Flathead was reduced from $12,764.23 to $4,314. Ninety-one per cent of the amount expended for the Indians at Pala has been repaid up to April 30. Of course, there have been a few bad debts, but the loss, if any, will be very small, while the good results are very apparent.

FIVE CIVILIZED TRIBES.

The year's fiscal operations for the Five Civilized Tribes were the largest in their history, involving the handling of $47,668,996.02, including receipts and disbursements of all classes of funds.

Indian money belonging to individual Indians was expended for their maintenance, farms, buildings, live stock, and equipment in the sum of $1,966,758.

The restriction against alienation of the allotted lands of individual Indians was removed from 209,945.64 acres, involving 2,578 applications for removal of restrictions, the largest number of removals for any year since the act of May 27, 1908.

A reduction in the number of field clerks and probate attorneys was made during the fiscal year 1920, because of inadequate funds and in consequence of the increased number of removals of restrictions. It is impossible to say exactly how much longer supervision should be retained, but the time is fast approaching when these Indians should be reasonably capable of handling their own affairs.

There is an increasing number of full-blood Indians who believe the restricted period should be extended beyond 1931, when the trust period expires.

The field clerks and probate attorneys are rendering valuable service to the 19,982 restricted Indians of the Five Civilized Tribes.

During the year, 51,384.88 acres of tribal land and 71 town lots were sold for $681,467.77, leaving unsold 36,928 acres (not including 379,284.46 acres of coal and asphalt mineral deposits. Choctaw Nation), 2,326 town lots, and 11 tribal school reservations containing 1,264 acres, and improvements to be hereafter sold under existing law.

The largest and most valuable tribal property yet to be disposed of is the segregated coal and asphalt mineral deposits in the Choctaw and Chickasaw Nations, of which 423 tracts remain unsold, which embrace an area of 379,284.46 acres.

Three sales have been held under the act of February 8, 1918 (40 Stat. L., 433), but new legislation by Congress to govern any future sales will have to be enacted. These sales included 94 tracts, embracing 61,822.54 acres, at an average price of $32.03 per acre, and for a total of $1,980,074.13.

Two hundred and forty-two restricted Indians paid a Federal income tax of $351,148.18. Although accounts numbering 6,000 were closed during the year, there yet remain unclosed 17,000 individual Indian accounts.

OIL AND GAS IN THE FIVE CIVILIZED TRIBES.-During the year about 3,500 oil and gas mining leases of restricted lands and 1,700 assignments were disposed of.

On August 16, 1919, the following amendment to the regulations was adopted:

Leases executed by guardians of minors under order of court for a period extending beyond the minority of the minor will be approved unless it appears that such action would be prejudicial to the interests of the minor: Provided, That in the event the minor becomes of age within one year from date of execution of lease the consent of the minor to the execution of the lease should be obtained and be submitted with the lease for consideration.

Prior thereto leases were approved for a term during minority, and as long thereafter as there was paying production. Under date of November 19, 1919, the following order was issued:

In cases where there is an existing oil and gas mining lease covering restricted land expiring on a certain date, no new oil and gas mining lease will be given favorable consideration unless it is executed and filed after the expiration of the former lease.

Prior to the decision in the Eastmand Richard case, reference to which was made in my last annual report, a number of oil and gas mining leases had been negotiated with full-blood heirs of deceased Indians of the Five Civilized Tribes covering their inherited land, such leases being approved by the local courts, but not by the Interior Department. Since the Supreme Court held that the department had supervision over such lands until the interests of the full-blood heirs had been properly conveyed, it became necessary to take some action relative to the commercial leases. Many of the leases had been developed, and it was decided that it would be only fair and just to recognize all leases taken in good faith, provided the lessees would apply for approval thereof and agree that the terms and conditions of the departmental form of lease should govern thereafter. The lessees have taken prompt advantage of these conditions, and a number of the leases have been approved.

The regulations have heretofore limited to 4,800 acres the amount of restricted Indian land which any one person, firm, or corporation may lease for oil and gas mining purposes, the intention of this provision being to prevent a monopoly of the oil and gas deposits. This regulation was in force for a number of years, with the result that a large number of persons and firms are interested as lessees in oil lands. In the meantime many of the Indians have had the restrictions removed from their land, and there is at present only about 15 per cent of the land which remains under the jurisdiction of the Interior Department. Since there were so many competing oil operators in the field, it was believed the danger of monopoly was eliminated, and on June 26, 1920, the 4,800-acre regulation was accordingly revoked.

The income of restricted Indians from their oil and gas leases amounted to $4,774,556.31. Although there was considerable activity in development work during the year, the production fell off. Owing to the fact that the price of oil was the highest ever received in Oklahoma, the Indians received a larger revenue from their leases than in the preceding year.

OSAGE OIL AND GAS LEASES.

The Osage Reservation, under which the oil and gas is reserved to the tribe until 1931, unless otherwise provided by Congress, com

prises approximately 1,500,000 acres, of which 680,000 acres on the east side were leased for oil under a blanket lease authorized by Congress, which expired March 16, 1916. On June 30, 1919, new leases had been made covering approximately 1,433,848 acres for gas and 470,804 acres for oil.

During the fiscal year 1920 oil-lease sales were held on October 6, 1919, February 3, 1920, and May 18, 1920. At each of these sales approximately 200 quarter-section tracts were offered for lease for oil-mining purposes.

At the sale on October 6, 1919, oil leases were sold covering approximately 35,310 acres, for a bonus consideration aggregating $6,146,500.

At the sale on February 3, 1920, oil leases were sold covering approximately 31,773 acres, for a bonus consideration aggregating $3,102,700.

At the sale on May 18, 1920, oil leases were sold covering approximately 31,783 acres, for a bonus consideration aggregating $2,860,900.

The larger amount of bonus received at the October 6, 1919, sale was occasioned by a number of tracts being offered adjoining valuable producing property, four quarter sections alone bringing in a total bonus of $2,286,000.

There were leased at these three sales approximately 98,866 acres, for a bonus consideration aggregating $12,110,100. The lessees are allowed three years within which to pay the entire amount of bonus. The oil leases aggregating 540,866 acres are included in the lands leased for gas. The oil leases provide for a royalty in addition to the bonus paid of 163 per cent, except when wells on a quartersection tract or fractional part of a quarter section are sufficient to average 100 or more barrels per well per day; then royalty on oil is 20 per cent. The royalty on gas is 163 per cent based on a value of 18 cents per 1,000 cubic feet for gas at the well, which is equivalent to 3 cents per 1,000 cubic feet.

There are in the Osage Reservation approximately 5,849 oil wells, producing from 2 to 1,800 barrels per day each, with a total daily production of about 50,000 barrels. Although there has been a scarcity of casing and other material necessary to carry on drilling operations, development has been reasonably rapid and many new pools have been discovered and are now being developed.

It is evident that all the oil and gas can not be produced prior to 1931, when the mineral-trust period expires. Congress should extend such period. The Osage Indians claim that all the minerals belong to the tribe in common and have petitioned for an extension of 25 years from 1931. Legislation is pending which, if enacted into

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law, will extend the trust period and will make subject to the Oklahoma laws the gross production of oil and gas belonging to the lessees. It is also proposed to set aside 3 per cent of the royalty accruing to the Indians for the purpose of constructing and maintaining permanent roads and bridges in Osage County. It is believed that the passage of such an act will serve the best interests not only of the Osage Indians, but also the oil and gas lessees, who will have their leases extended for so long as there is paying production, and the State of Oklahoma and county of Osage which will greatly benefit by the taxes collected and by the construction of permanent improve

ments.

Acreage leased.

Leased for gas.

Leased for oil__.

1,433, 848. 00

470, 804. 22

(Not including 24,960 acres oil leases sold May 18, 1920, for which leases are executed after July 1, 1920.)

Gross production of oil July 1, 1919, to June 30, 1920____barrels__ 17, 077, 348. 71 Royalty to credit of Osage Nation July 1, 1919, to

Bonuses received from July 1, 1919, to June 30, 1920

8, 611, 874. 72

Total receipts..

17,873, 165. 59

OIL AND GAS-OUTSIDE THE FIVE CIVILIZED TRIBES AND

OSAGE NATION.

The high prices of crude oil and the tremendous demand for the products of petroleum have resulted in the search for oil being extended to all sections of the country, in consequence of which