These oil structures, three of which are now producing, two from piers built out into the ocean, and the other from 74 wells admittedly "whipstocked" or drilled on a slant of as much as 45 degrees from shore. These fields are estimated by competent geologists to contain upwards of 2 billion barrels of oil. No royalties have accrued to the United States from any of this tideland production which has been about 40 billion barrels to date. Enclosed are aerial photographs and a map for reference. Aerial photographs supplemented by geological surveys are the usual means of locating these structures, although in some cases discoveries have been made on shore, and the structure followed out into the water. The map shows the Huntington Beach field which is estimated to contain offshore, from 3 to 500 million barrels, about 30 million of which has already been produced. This is now probably the largest oilfield in the State, although another of approximately the same size, as yet untouched, but for a few wells on shore, is just offshore near the mesa at Santa Barbara. The seven known tideland fields lay very close to shore, the southernmost off Huntington Beach, and the northernmost off the southern end of San Simeon Ranch, owned by W. R. Hearst, who is now having it surveyed, I am informed by one of his employees. The writer has spent several months investigating the ownership of these tidelands and submits herewith the various legal proofs which have convinced me of United States ownership of these tidelands, as well as their very valuable mineral rights. 1. Right of the crown to minerals in all public lands. 2. Treaty of Guadalupe Hidalgo ceding California to United States. 3. Article 4, section 3, second paragraph, United States Constitution: "The Congress shall have the power to dispose of land and make all needful rules and regulations respecting the territory or other property belonging to the United States and nothing in this Constitution shall be construed as to prejudice any claims of the United States or of any particular State." Chief Justice Hughes quoted a part of this section in upholding the right of the Government to dispose of electric energy generated at the Wilson Dam. 4. Act of Congress admitting California to the Union September 9, 1850, section 3: "That said State of California is admitted into the Union upon the express condition that the people of said State through their legislature or otherwise shall never interfere with the primary disposal of the public lands within its limits, and shall pass no law, or do no act whereby the title of the United States to and right to dispose of the same shall be impaired or questioned." 5. People v. California Fish Co. ((1913) 166, Calif. 576, 138, Pac. 79): "The tideland laws in the political code do not authorize a sale of land below low tide in any case. So far as patents from the State embrace such lands, they become no title whatever, the officers who executed them being without power under such statutes to sell or convey lands of this character." 6. Act of California Legislature approved March 9, 1897. 7. All congressional acts conveying title to the United States lands to the State of California were enacted on the following dates and contain no description of the tidelands in question. (This is confirmed by information received from the surveyor general's office of California.) March 3, 1853, to July 2, 1862, to July 23, 1866, to June 30, 1880, to January 25, 1927. The following act clearly shows United States title to minerals in tidelands: [Ch. 106-April 5, 1926-S. 2519, Public, No. 92] AN ACT To enable the Board of Supervisors of Santa Barbara County to maintain a free public Bathing Beach on Certain Public Lands Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Interior is authorized in his discretion upon application by the Board of Supervisors of Santa Barbara County, State of California, to issue to such Board a free permit authorizing the use, improvement, and maintenance of all that portion of Northeast quarter, Northeast quarter, Northwest quarter, Northeast quarter, Southeast quarter, Northwest quarter, Southwest quarter, Northeast quarter, Southeast quarter, Northeast quarter, Section 20; and Southwest quarter, Northwest quarter, Section 21, TW 4 N. R. 28, San Bernardino Mer. lying south of the Main Slough as its North Boundary and the Beach Line of the Santa Barbara Channel as its South Boundary, such area being approximately twenty-four acres, for a Public Bathing Beach, under conditions which will allow the fullest use of the land for recreational purposes, such permit shall remain in full force and effect as long as the County complies with the conditions therein and maintains such land as a free public Bathing Beach. Such land shall not be subject to the Mining Laws of the U. S. in the absence of an express order of the Secretary of the Interior restoring the land to such laws with such restrictions and limitations as the said Secretary of the Interior may prescribe. Approved April 5, 1926. Trusting that this information shall be of interest, I have the honor to remain, Yours respectfully, U. T. MCCURRY, Los Angeles, Calif. EXHIBIT 2 THE SECRETARY OF THE INTERIOR, Mr. U. T. MCCURRY, Los Angeles, Calif. MY DEAR MR. MCCURRY: Your letter of July 27, with attachments, to the President of the United States concerning deposits of oil in the tidelands of California has been referred to me for reply. You take the position that these tidelands belong to the United States so that the mineral deposits therein also belong to the United States. This Department has in many cases held that title to tidelands in California is in the State and that title to such lands and the mineral deposits therein is not in the United States. The uniform holding of the Supreme Court of the United States is that tidelands in the State of California are the property of the State. In the case of Weber v. Harbor Commissioners (18 Wall. 57) the Supreme Court held: "By that law (common law) the title to the shore of the sea, and of the arms of the sea, and in the soils under tidewater is, in England, in the King, and, in this country, in the State. "Although the title to the soil under the tidewaters of the bay was acquired by the United States by cession from Mexico, equally with the title to the upland, they held it only in trust for the future State. Upon the admission of California into the Union upon equal footing with the original States, absolute property in, and dominion and sovereignty over, all soils under the tidewaters within her limits passed to the State, with the consequent right to dispose of the title to any part of said soils in such manner as she might deem proper, subject only to the paramount right of navigation over the waters, so far as such navigation might be required by the necessities of commerce with foreign nations or among the several States, the regulation of which was vested in the General Government." For your information I attach a copy of a decision dated October 4, 1934, by this Department in the case of Joseph Cunningham, where the same issue was considered. See also 296 U. S. 10. MY DEAR MR. PRESIDENT: The writer recently returned from Washington where several weeks was spent in looking into the manner that the Federal Government intended to lease the submerged lands offshore California containing oil in the eyent the Supreme Court decided these lands to be Federal property. There has certainly been a well-organized sales movement by the oil companies now operating these properties that either the Oil and Gas Act should be amended or that other legislation should be passed to enable the leasing of these lands legally by the Federal Government. My attorney and I talked with Mr. Chapman, Acting Secretary in Mr. Krug's absence, who agreed with us that in the event his legal staff recommended amending the Oil and Gas Act and it got on the Hill that the act would be torn to pieces and that the Government would end up with nothing. I would like to call your attention to the antimonopoly clause in the present act which the companies would like to eliminate. Due to the Standard of California taking over so many former independent companies such as Signal and Petrol, who by themselves were violating the antimonopoly clause, to saying nothing of what the Standard previously was doing with too many Federal leases, this clause is a great thorn in their side. This clause was put in the act by Senator O'Mahoney to protect the little fellow and the small independent operator. Now the tideland leases are at present being operated by the Standard and their subsidiaries and under the present set-up they feel they must amend this act or pass a new one in order to shut out bona fide claimants who have largely been responsible by constant work during the last 11 years in getting this matter into the courts for settlement of ownership. I am enclosing photostats of a letter to me from Mr. Ickes in 1936. Also enclosed is a letter to Judge Nathan Margold, who was formerly Solicitor of the Interior Department, showing that I had something to do with the change of opinion in the Interior Department regarding Federal ownership of these lands. I am also enclosing legal opinion of Margold's written November 22, 1940, showing the Oil and Gas Act as now in force covers all lands owned by the United States however acquired. In other words the present act needs no amending, the lobbying to do this is an excuse to tear it to pieces so the large companies can control everything. This legal opinion of Margold's has been favorably passed on by some of the best legal minds in this country. Among these are Warwick Downing, of Denver; Avery M. Blount, of this city; and Norman Littell, former Assistant Attorney General in charge of public lands. From a political standpoint you are doubtless aware, Mr. President, that the Standard and their satellites have done everything to cut your throat since you vetoed the measure giving the States these lands. My Arkansas State Society of Southern California, representing more than 50,000 Democrats in southern California, sent you a wire urging this veto which you so courageously made. From a standpoint of California public opinion the Standard have been repeatedly rebuffed at the polls here to pass such legislation as the Sharkey bill and others which would give them a monopoly on State lands. This last effort is to do the same thing with Federal lands. For your information the almost 400 wells producing offshore here have paid out many times as trespassers on Federal property, some with records of more than 2,000,000 barrels. The oil companies would all be way out in front in the black if these oil claims offshore were given to the proper claimants with prior filing rights and again give the little man a chance. However, if this precedent of doing this tinges of violating squatters' rights, or of whatever type of robbery they now are complaining, may I suggest that the discretionary powers granted the Secretary of Interior under the present existing act should at least give these bona fide applicants a minimum overriding royalty of 12 percent on all future production and let the present operators continue to operate these leases. The present Federal royalty of 121⁄2 percent plus this overriding royalty would only mean a total of 25 percent royalty to the producers. I can supply you with a copy of a lease between the Long Beach Development Co. and the city of Long Beach here, concerning leases principally drilled under water at Long Beach where the producers pay the city of Long Beach 50 percent royalty. The Long Beach Development Co. consists of Standard, Petrol, Signal, all Standard companies, and Hancock & McCrade, supposedly independent but doubtful. In other words, Mr. President, the little fellow should be protected in this matter at a total cost of only 50 percent of what they are now paying the city of Long Beach for similar oil. This can be done, I am informed by competent attorneys, without even changing the present act. Mr. Chapman, Acting Secretary, assured my attorney and I that if the present act was not changed the proper claimants would receive their just reward for prior filings. I was somewhat disturbed by the enclosed clipping of statement made by Secretary Krug while recently here to the contrary. Knowing the Standard crowd are past masters at entertaining and putting words in reporters' notes, I am still reluctant to believe the papers here. I am enclosing a copy of this to Mr. Hannegan's office and also to the Justice Department, whom I feel certain will confirm my statement regarding the violation of the antimonopoly clause in the Oil and Gas Act. Sincerely, 80859-51-14 UEL T. McCURRY. EXHIBIT 4 Mr. UEL T. MCCURRY, Los Angeles, Calif. THE SECRETARY OF THE INTERIOR, MY DEAR MR. MCCURRY: The White House has referred to us for reply your letter of March 19 addressed to the President. Your letter is addressed to the manner in which the Federal Government intends to lease the submerged lands off the coast of California in the event the United States Supreme Court decided the pending case against California in favor of the United States. The policy of the administration on the general subject of the kind of legislation it will support in the event the Federal Government is successful has been discussed by Attorney General Clark in his argument in the Supreme Court on March 13, and by former Secretary Ickes when he appeared before the Senate Judiciary Committee on February 5, 1946, in its hearings on Senate Joint Resolution 48 and House Joint Resolution 225. The relevant portion of the Attorney General's argument in the Supreme Court is as follows: "The President has authorized me to say that the administration approaches this controversy with every desire to do substantial equity to California and to the private interests involved. In the event that the decision of this Court is favorable to the Government of the United States, it will be necessary to have congressional action to determine the use to which these oil reserves shall be devoted-whether to a reserve for our Navy, coupled with a present development looking to a determination of the limits of the pools of oil available, or to immediate exploitation. The President advised me he will recommend to the Congress that legislation be enacted designed to relieve California and those who have operated under State authority, from the necessity of accounting to the United States for revenues derived in the past from exploitation of any of the lands here involved. Such legislation, in the view of the President, should also establish equitable standards for the recognition of investments made by private interests and should offer a basis for the continued operation of private establishments wherever consistent with the national interest, and on terms which would be fair and just under all circumstances. There is no desire on the part of the President or of any official of the executive branch to destroy or confiscate any honest and bona fide investment, or to deprive the State or its subdivisions of any reasonable expectation of future return from the areas that have been developed. I am confident that a program of this kind presented by the President would not lack support in the Congress." The statement of Secretary Ickes before the Senate Judiciary Committee on the subject was as follows: "I should like to sketch for the benefit of the committee the sort of program which I believe should be enacted by the Congress in the event that the Supreme Court should decide that the United States, and not California, owns the submerged coastal lands in question. "There will, in the first place, be appropriate occasion for relief legislation. In contrast with my friends from California, I do not pretend that the issue of ownership has ever been clear. Nor do I believe that anyone should be penalized for good-faith reliance upon the State's claim of ownership. This involves at least two general principles. "1. The States concerned and those who have operated under State law should be relieved from any liability for damage in trespass for any past development of the submerged land. Specifically, neither should be required to account for oil or gas extracted before the date of the decision by the Supreme Court. Leases and contracts for operations on submerged lands outstanding when the present suit was filed in the Supreme Court should be continued in force and effect by the Federal Government, at least as to royalty rate and time limit. "2. Structures, such as docks or piers, which may have been erected on the submerged lands and the surface ownership of filled-in areas should not be disturbed if they were erected or filled in accordance with the Federal or State law. "The Congress should enact a Federal policy for the conservation of the submerged oil if the Supreme Court should determine that it is federally owned. My views on this policy embrace five points: "1. These lands should be held as a Federal oil reserve. Their administration should be coordinated with that of other Federal oil reserves. "2. The lands should be explored geologically and geophysically by the Department of the Interior to determine the location and extent of possible oil and gas-producing structures. Methods and plans should be provided for the development of such structures against the event of emergency needs. "3. Authority should be given the Secretary of the Interior to permit him to exchange or acquire lands, and to lease and permit development when drainage of oil and gas from the submerged lands occurs or is threatened by onshore operations on adjoining lands. "4. When such lands are leased, because of the drainage which would otherwise occur, operations on the submerged lands should be coordinated with the onshore operations, so as to avoid competitive development and consequent wasteful practices. Such coordination should be accomplished readily where the adjoining States have adopted or would adopt and enforce adequate legislation for the regulation of production; otherwise unit agreements with the adjacent operators should be negotiated. "5. The interests of navigation should be protected in connection with any leasing of submerged lands. This would involve coordinated action by the War and Interior Departments. In view of the importance of recreation in some of the areas, interference with seashore recreational facilities should be avoided. "Implicit in these recommendations is the thought that the Mineral Leasing Act of 1920 is not applicable to submerged lands. A reading of the act will reveal that in many particulars its provisions would not fit the problems presented in the administration of submerged lands. For example, there is the matter of acreage limitation. Another problem relates to royalties and the distribution, if any, of receipts from these lands. More importantly, the problem of the submerged coastal lands was not considered when the act was passed, and Congress is entitled to and should fix its policy with specific reference to these lands. These, however, are matters more properly to be presented at another time and to a different committee." Among other things, you enclosed a copy of an opinion of former Solicitor Margold, of this Department, dated November 22, 1940, holding that the Mineral Leasing Act authorized oil and gas leasing of lands acquired by the United States for specific purposes. Solicitor Margold's opinion was, however, in effect, overruled by the then Attorney General Jackson in his opinion of January 3, 1941 (40 Op. Atty. Gen. No. 41). The points you make will be carefully considered in connection with any legislation on leasing which the Government may sponsor in the event it is successful in the Supreme Court litigation. Sincerely yours, OSCAR L. CHAPMAN, Under Secretary of the Interior. The CHAIRMAN. The Chair will now file for the record a statement by Mr. James G. Patton, president of the National Farmers Union, dealing with this legislation. STATEMENT OF JAMES G. PATTON, PRESIDENT, NATIONAL FARMERS UNION, WASHINGTON, D. C. Mr. PATTON. As president of the National Farmers Union, I wish to present the position of my organization in regard to Senate Joint Resolution 20, which pertains to disposal of tidelands oil. The Farmers Union has testified in regard to ownership of tidelands oil and mineral resources before the committee on several different occasions. The position of our organization since the inception of the controversy has been that ownership of tidelands resources properly resides in the Federal Government. Since the United States Supreme Court in two different decisions has affirmed that the Federal Government has a paramount interest in tidelands resources, it seems unnecessary to me at this time to present the arguments in favor of Federal |