by the adoption of act 55 of the Louisiana Legislature for the year 1938. To develop the principle of international law on the subject would involve an interpretation of the works of a vast number of publicists and textwriters, for any law on the subject is theoretical and flows from precedence. Two observations, however, can be safely made: First, that publicists are all agreed that each littoral nation has dominion over some area of the marginal seas adjoining, their views differing only with respect to the extent thereof (DeJure Belli, bk. III, C. XVIII 629, Gentili, 1598, trans. of 1912 ed. in Classics of International Law, 1933, p. 384); and, second, that the minimum limit of a State's boundaries extends 3 miles seaward. We think it must be regarded as established that, as between nations, the minimum limit of the territorial jurisdiction of a nation over tidewaters is a marine league from its coast (Manchester v. Massachusetts (139 U. S. 240, 257)). Whatever else may be said in favor of the rights of Massachusetts and Louisiana, respectively, to establish their maritime boundaries by statute, no State or nation has raised a complaint, and there is nothing to show that such boundary determinations were in conflict with the law of nations. Mr. WALTER. What is the citation of that Massachusetts case? Next of importance-and I think, gentlemen, that this is important-that in studying the language embraced in both bills relative to boundary establishment and extension is an observation that concerns the limit placed on State seaward boundaries of 3 miles. In the case of Harcourt v. Gaillard (12 Wheat. 523, 526 (1827)) it was held: There was no territory within the United States that was claimed in any other right than that of some one of the Confederate States. And in the case of Weber v. State Harbor Commissioners (18 Wall. 57 (1873)), the court held that such territory as the United States acquires it obtains for the purpose of forming new States therefrom. The same is cited approvingly in Shively v. Bowlby (152 U. S. 1 (1894)). In view of this jurisprudence, bolstered by logic and reason, it is my thought, at least, that the territory of the several States and that of the United States in that area of land constituting the continental United States is coextensive and coterminus. I wonder, therefore, if Congress would be willing to take the chance of limiting the territorial jurisdiction of the United States by drawing the line of any State's boundaries short of the full distance that such jurisdictional claim extends seaward. I have no important quarrel to make with the leasing procedure set up in the two bills nor with the division of revenue provided for in H. R. 5991. In fact, I am not emphasizing dollars and cents but a factor of greater importance. Of primary concern to me is the question of control within the actual boundaries of the coastal States. Efficient and effective control surmounts all other considerations. Several of the coastal States have had wide experience in leasing submerged coastal lands for oil, gas, and mineral development. In Louisiana, for instance, drilling and production activities in the Gulf-even in the large bays, lakes, and sounds extending seaward from coast-brought on a multiplicity of problems. State departments, boards, commissions, and agencies with trained and experienced personnel studied those problems and cooperated with lessees and operators in every possible respect, consistent with care, in solving them. It does not seem fair, practical, or logical that such experience should be done away with and that control should be taken from the State level and placed in Washington. Even if it could be conceded, and it cannot be, that the record of leasing in Washington has been as efficient as that of the oil-producing States in dealing with inland areas for oil, gas, and mineral development, no argument can be made in favor of switching experienced management by the oil-producing coastal States to inexperienced and untried control in the Nation's Capital with respect to off-coast leasing. On Wednesday, March 3, 1948, Hon. Julius A. Krug, then and now the Secretary of the Interior, appeared before the Committee on the Judiciary to testify in connection with S. 1988-that was the former quitclaim bill-and similar bills that were pending in the Eightieth Congress, second session. Senator Moore asked Secretary Krug: Will the assumption of the management of the oil industry and the Federal Government produce one more barrel of oil than that what is being produced today under the private-enterprise system or the granting of leases by States? Has the Federal Government at any time ever had any complaint of the oil industry's complying with every request and with all the Government's needs, both in war and in peace? Replied Mr. Krug: No. I have had considerable experience with the oil industry, as you know, sir. and he added: They speaking of the States have done a miraculous job. I think they will continue to do a miraculous job * The National Petroleum Council, composed of industrial leaders and executives and appointed by the Secretary of the Interior to recommend a national oil policy for the United States, made this impressive observation, among others, in its report of January 13, 1949: The petroleum resources of the lands beneath the marginal seas extending to the outer edge of the Continental Shelf can best be explored and developed under State, rather than Federal, control. Actually, Mr. Chairman and members of the committee, it does not require the testimony of a well-informed Cabinet member or the outspoken judgment of Nation-wide leaders of industry to show that State control is more efficient and effective than Federal control in the leasing of lands for oil, gas, and mineral development anywhere, but especially in the area we are concerned with in these hearings. It is only natural to expect that trained and experienced personnel, representing the State and familiar as they are with local topography, geological conditions, economic problems, conservation practices, and the governmental set-up throughout, and who are close by and on hand at all times to see what is going on, to correct shortcomings and to assist lessees and operators with their problems, can do a better job than those who would undertake to direct and supervise a program far removed from activities and whose experience in off-coast leasing is yet to begin. To illustrate the point, I shall quote a portion of the testimony of B. A. Hardey, then chairman of the Louisiana State Mineral Board, as given to the Committees on the Judiciary of the Eightieth Congress at its hearings on S. 1988. Speaking of the Louisiana State Mineral Board, Mr. Hardey said at pages 102 and 103: Our program is important enough from the standpoint of reaping revenue for the State in proportions of magnitude, but it takes on added significance when our requirement of good faith performance on the part of State lessees is considered in relation to the ever-increasing need of conserving our natural re Sources. While the board is deeply concerned in maintaining a steady flow of revenue to the State from oil, gas, and mineral leases covering State-owned lands, the end to be achieved is not as important as the means applied in pursuing such objective. We place primary emphasis upon prudent development, conservation measures, cooperation with other State departments and commissions, prompt action, and the direction of our effort to the achievement of the all-embracive welfare and economy of the State. * * We are familiar with Louisiana topography; we know enough about geological conditions in the State to be conversant on the subject; we have had experience in oil, gas, and mineral enterprise in private capacities; we can easily differentiate between prudent and improvident development; we know what constitutes waste *; we understand the laws of this State and the policies of the department of conservation * *; and we know how, when, and under what circumstances other State departments, boards, and commissions fit into the comprehensive picture of public land and resource utilization for the common good of all citizens of the State. * Since the leasing of submerged coastal lands off the Louisiana coast began in August 1945, the State has received $38,395,743.92 in bonuses and rentals. Royalties from production represent a receipt of $116,523.58. There are now 27 producing wells in the area, 23 wells being drilled, and 19 locations made. A total of 30 abandonments indicates good faith manifested in an effort to carry out obligations of reasonable development. A total of 371,523 barrels of oil has been produced in the area, of which 305,890 barrels have been disposed of. These statistics reveal evidence of proper development. Adequate production prevents waste and constitutes a sound practice of conservation. I would like to interpolate at this point to make this statement on something that was not made clear last year in the consideration of S. 1988. The question was asked, I think, of two of the representatives of Louisiana why Louisiana had not impounded or earmarked funds received from leases since the decision in the California case. That question was not answered. The answer to that question, gentlemen, is that Louisiana cannot do it. It has no statute that authorizes the escrowing of funds. Right now 20 major oil companies are suing the State mineral board and the State land office to suspend operation under these leases and the payment of rentals, depending upon the decision in the case brought by the United States against the State of Louisiana. That is the only way ke know that we will have of impounding any funds. It will be either in case that suit is won by the oil companies or in case the legislature comes along and passes a statute permitting escrow. I thought that statement should be made in view of the unanswered. question at the hearings on S. 1988. Mr. KEMP. May I just add to that, Mr. Chairman, that in bill 5992 an accounting is asked by June 23, 1947, of the revenues received from these offshore leases in Louisiana, and apparently also the court peti tion has a judgment for an accounting of that money. One of the problems that we face if those becomes law, would be how we could possibly pay such a judgment. All of our money is dedicated to the retirement of bonds, by constitution and by the legislature. Those bondholders are assured or were assured that this money was back of those securities. Now, the only way in the world that I know of that the Federal Government could collect any such judgment would simply be to come down and have the marshal take over the State Capitol, put it up at auction and apply the proceeds on the judgment. That is just about the impossible situation that you get into with dating any legislation or judgment back, because it would be absolutely impossible under law for the State to make any payment on that claim. Mr. MADDEN. An appendix is attached to this statement to reflect a composite picture of drilling and production activities in submerged coastal lands off the Louisiana coast. A comparison of the statistics found therein with the leasing activities of the Federal Government, through the Department of the Interior, is suggested as a means of determining the preference, State versus Federal control. Mr. WALTER. Without objection, the appendix referred to will be included in the record at this point. (The appendix referred to is as follows:) APPENDIX DRILLING AND PRODUCTION ACTIVITIES UNDER LOUISIANA STATE LEASES IN COASTAL WATERS AND MARGINAL WATERS OF THE GULF OF MEXICO Included in the figures above is revenue derived from leases in areas which, in all probability, should be classified as inland waters. Excluding revenue from such areas the figures read: Bonuses Rentals. Royalties (approximately 25 percent of total). Total___ 1 Classified, perhaps, as inland water area. $21, 991, 206, 38 10, 603, 881. 73 29, 130.90 32, 624, 219. 01 Mr. MADDEN. B. L. Krebs compared Louisiana leasing activities of the State and that of the Federal Government, respectively, in a series of five articles appearing in the Times-Picayune of New Orleans, during June 1949. His disclosures are amazing. He cited individual cases in which the State received $11.22, $43.11, $85.14, and as high as $103 per acre for an oil, gas, and mineral lease, while in the same respective area the Federal Government obtained only 50 cents per acre for a lease. This same consideration of 50 cents per acre, Mr. Krebs revealed, was received by the Federal Government for a lease within a half-mile of a well producing oil and distillate at the rate of $12,000 per month. Mr. KEMP. Mr. Chairman, I wonder if it would be in order at this particular phase of the hearing to introduce for the record those articles. There are only five that Mr. Krebs wrote. We would like to have them made a part of the record and printed in the report. Mr. WALTER. Without objection, they will be included in the record at this point. (The articles referred to are as follows:) FEDERAL-STATE OIL LAND HANDLING (By B. L. Krebs for the Times-Picayune-the second of a series of five articles) The United States Government has granted oil leases for 50 cents an acre after the State of Louisiana leased its lands in the same area for $10.22 an acre. Within the same marshland area near the mouth of the Mississippi River in Louisiana, the United States Government owns the land surface, which it operates as a migratory wildlife refuge, and the State of Louisiana owns the water bottoms. In July 1948 the State mineral boards, after competitive bidding, leased its water bottoms to the California Co., large oil operator, for a bonus of $15.130 for the first year, and an annual rental of $7,565 for each of two subsequent years. The State water bottoms were estimated at that time to contain 1,480 acres, but engineers for the State board of public works now estimate the bayou beds and small ponds at half that acreage. However, on the original estimate of 1,480 acres the State received $10.22 per acre for the first year of its lease. On March 1 of this year the Federal Government's 9,742 acres of land surface were leased by the Bureau of Land Management of the Department of the Interior on a noncompetitive basis. The lessees paid the Government 50 cents per acre for the first year, with the second and third years rental free. Thereafter if they wish to continue holding the leases, and no drilling for oil has started, they will pay 25 cents per acre for the fourth year, with the fifth year again rent-free. That would make an average return to the Government of 15 cents per acre per year for the 5-year period. |