We did propose, and we have right along wanted, the original date. If we had the original date, it might enable us to recover, if not against the States, against the oil companies, the lessees, after that date; but since they have paid the States, we would then be put in a position of asking them to pay twice.

We cannot recover from the States, and if we made an effort to compel the lessees to pay us from June 23, 1947, if we succeeded in that, they would have to go back to the States and ask the States to reimburse them, and that would cause a complication.

We felt that we would not be justified in attempting to bring that kind of a situation about. We did not advocate that date, but the Senators put it in, and under all the circumstances, we are willing to accept it.

I ought to say this, Senator. After all, when we failed to get an accounting from June 23, 1947, to June 5, 1950, the Government lost an opportunity to recover large sums, the exact amount of which I do not know. I have been told that they exceed $30,000,000. After all, that seems like a lot of money.

Senator LONG. Could you not get a fairly reasonable estimate of what the exact amount of those sums would be?

Mr. PERLMAN. That is the estimate that has been indicated. I do not know whether it was made by the Interior Department, but it is one that appeared in the public prints, and I have taken it as being somewhere near accurate.

But, after all, this is a tremendously important subject. The resources are tremendously important. If they are what the Federal Government believes they are and what I think you believe they are, if it transpires that in making a final adjustment of the situation that has arisen by reason of the decision-the paramount power over these areas is not, as has been said, newly acquired, but always did belong to the United States from the date of its formation and from the date when these other States came into the Union-if the Federal Government starts out to exercise the rights that it always has had, we cannot help but feel that although these sums, 30 million or 50 million or whatever they may be, sound large, in the long run they are not so important if these resources are as great as all of us anticipate they may be.

We also cannot overlook the fact that we are dealing with two governments, State governments and the Federal Government, and if the money that has been collected in the past should go to these three States instead of going into the Federal Treasury, we do not think that, if the situation can be adjusted finally and for all time in the future, the Federal Government has any great cause for complaint merely because three States were enriched or advantaged in the past through this situation.

Senator LONG. If that happened, there would undoubtedly be some disappointment on the part of these Federal lease applicants who contend that the Federal leasing law applies, would there not?

Mr. PERLMAN. Yes; I imagine so.

Senator LONG. What is your opinion as to their rights under the present circumstances as they exist today?

Mr. PERLMAN. Senator, the Attorney General of the United States some years ago gave an opinion. I think the first opinion was given by Mr. Mastin White, who is here today and who is the Solicitor of

the Department of the Interior, and was then. He gave an opinion to the effect that the Mineral Leasing Act does not apply to the marginal sea or to the Continental Shelf.

That opinion was approved by the then Attorney General, Tom C. Clark, who is now an Associate Justice of the Supreme Court, so that all of us come to this problem with those opinions given by the Interior Department and by the Attorney General of the United States." It is our considered opinion that the Mineral Leasing Act does not apply and never has applied.

Senator LONG. Would you mind explaining the logic behind your opinion on that subject; in other words, the way you arrive at that conclusion?

Mr. PERLMAN. There are a number of provisions in the Mineral Leasing Act which, on their face, are not applicable to these types of operations in the sea. The act itself-I do not have it in front of mecontains a number of provisions that are plainly designed for operations on fast land, on Government-owned property on fast land. That, I think, is fully set out in Mr. Mastin White's opinion, which is the detailed explanation of why the Mineral Leasing Act does not apply. When it was passed in 1920, I believe it was, there was no thought of this situation, and Congress certainly could not have had it in mind. Congress in those days was not faced with any effort by the Federal Government to manage these areas in the open sea. It was not contemplated that it would, and the act was not designed to apply to the submerged lands lying underneath the ocean.

It never was intended, it never was contemplated, it never was discussed; and some of the provisions of the act are inapplicable to operations conducted in the submerged beds of the sea.

Senator LONG. I do not fully understand the operation of the Leasing Act, but as I understand it it makes a distinction between actual producing properties and those that have not been developed, does it not? In other words, there is a difference in the way the leasing would proceed for properties that are known discoveries and properties that

are not.

Mr. PERLMAN. That is true, Senator, particularly under the original act before there were amendments added to it, because in the lands that they were dealing with in 1920, and thereabouts, there was a lot of what I think the oil people called wildcatting. There was prospecting in areas as to which they had no indication whether or not any oil would be found.

The CHAIRMAN. May I interrupt, Mr. Perlman? Since Mr. Mastin G. White, the Solicitor of the Department of Interior, is here, perhaps it would be appropriate for him to answer the question of the Senator from Louisiana. Would you mind doing that, Mr. White?

Mr. WHITE. Not at all, Senator. Senator Long, the Mineral Leasing Act of 1920 does make a distinction between the leasing of lands which are within the known geological structure of a producing oil or gas field, on the one hand, and lands which are not within the known geological structure of a producing oil or gas field.

Senator LONG. Could I get those terms straight at this point? When it says "lands within a known geological structure of a producing field," does that refer to an oil field that is actually producing or does that refer merely to a seismograph indication that there is a dome in the subsurface?

Mr. WHITE. It relates to a field that is producing, but it relates not only to the immediate tract on which a producing well may have been drilled, but also to the surrounding portions of the structure, which has been defined as of a given time by the United States Geological Survey. Senator LONG. What is the basis for leasing on the known geological areas?

Mr. WHITE. Those leases must be issued competitively. The Secretary of the Interior is required to offer them for open competitive bidding, and he is required in each case to lease the particular tract to the qualified person who offers the highest bid at the offering.

The CHAIRMAN. May I interrupt, Mr. White. I think perhaps the responses which you are giving, while they are accurate enough in themselves, completely accurate, as a matter of fact, do not cover the point which Senator Long probably had in mind. I call attention to the opening sentence of the Mineral Leasing Act of 1920. It reads as follows:

Be it enacted

and so forth

that deposits of coal, phosphate, sodium, oil, oil shale, or gas, and lands containing such deposits owned by the United States, including those in national forests, but excluding lands acquired under the Act known as the Appalachian Forest Act, approved March 1st, 1911 (thirty-sixth statute, p. 961), and those in national parks, and in lands withdrawn or reserved for military or naval uses or purposes, except as hereinafter provided, shall be subject to disposition in the form and manner provided by this Act to citizens of the United States, or to any association of such persons, or to any corporation organized under the laws of the United States, or of any State or Territory thereof, and in the case of coal. oil, oil shale, or gas, to municipalities:

* *

Then follows a proviso which is not important in this case.

Now it is under that section that those who have claimed that the Mineral Leasing Act applies to the submerged lands assert their principal claim. They say that these are lands which belong to the United States, even though they are submerged lands, and that they are not among the lands which were excluded from the applicability of this law.

Therefore they hold the Secretary of the Interior has the right to issue leases on the submerged lands, particularly since the Supreme Court has now asserted that the United States has the paramount right in the area outside of navigable inland waters from the low water mark seaward. That is the controversy, is it not?

Mr. WHITE. Mr. Chairman, I believe that you were quoting from section 17 of the Mineral Leasing Act.

The CHAIRMAN. No; I was not. I was quoting from section 1.

Mr. WHITE. That is correct. Section 17 relates specifically to oil and gas leases.

The CHAIRMAN. That applies only to known areas. Now my point is this, Mr. White: That section 1 established or attempted to establish the area under which the Leasing Act would apply. The rest of the law, some of it dealing with coal, some of it dealing with oil, some of it dealing with phosphate, and so forth, is a matter of detail with respect to those subjects.

There are two classifications as to oil: Oil lands which are known to be within a producing structure, and oil lands which are not known to be within a producing structure, and a different rule is applied to these two categories.

Mr. WHITE. Yes, Mr. Chairman. That is what I was endeavoring to explain.

The CHAIRMAN. So in order to explain the answer given by Mr. Perlman to the question of Senator Long, you ought to explain why the Department of the Interior, or you as Solicitor of the Department of the Interior, wrote the opinion that this act, from section 1 of which I have now read, does not apply to the submerged lands. That, I think, is the issue, is it not?

Senator LONG. That is right.

Mr. WHITE. I shall be glad to do that, Mr. Chairman. Perhaps I misunderstood the immediate question.

Senator LONG. As a matter of fact, there are some points I want to develop in connection with that anyway. If you would, you might go ahead and explain the reasons why you do not think it applies.

Mr. WHITE. Yes, sir. May I give a brief historical statement with respect to this problem?

The CHAIRMAN. Since you are going into a historical statement, will you not please be seated?

Mr. WHITE. Thank you. The chairman has read, accurately, of course, from the provisions of section 1 of the Mineral Leasing Act, which defines the lands and the mineral deposits which are subject to leasing by the Secretary of the Interior under the Mineral Leasing Act. Now, that act was originally passed on February 25, 1920. The question as to the scope of the statute arose at a fairly early time, specifically in 1924. The problem was considered in 1924 by the then Attorney General, Mr. Harlan F. Stone, and he reached the conclusion that the Mineral Leasing Act was only applicable to the public domain, or public lands, an opinion which was later confirmed by Attorney General Jackson, who reconsidered the problem in 1941.

Senator CORDON. Will you indicate what the issues were that gave rise to the opinion?

Mr. WHITE. Yes, sir. The opinion of 1924 was written because of a question which was submitted to the Attorney General by the President, and by the then Secretary of the Interior, as to whether certain oil and gas leases which had been issued by a previous Secretary of the Interior on Indian reservation lands had been validly issued, or were improperly issued, and the Attorney General, Mr. Stone, concluded that those leases had been improperly issued for the reason that the act applied only to the public domain or public lands-in other words, those lands which were available for disposition under the public land laws, a category which did not include Indian reservation lands.

Now, the second occasion for the construction of the statute arose because the Secretary of the Interior in 1941 wished to issue some leases under the Mineral Leasing Act upon lands that had been acquired by the War Department in connection with its improvement program on the Cerritos Channel in California.

The then Attorney General, Mr. Jackson, confirmed the view which Mr. Stone had taken in 1924, that this statute is only applicable to the public domain or to public lands which are available for disposition under the public land laws, and Mr. Jackson concluded in 1941 that this category did not include acquired lands, such as those bought by the then War Department for its rivers and harbors improvement work.

Now, that was in 1941. As I think you will have noted from my brief description of the questions involved in the 1924 and 1941 opinions, they did not, of course, relate specifically to the question whether the Mineral Leasing Act of 1920 is applicable to submerged lands of the Continental Shelf, as defined in Senate Joint Resolution 20; but they did lay down the general proposition that the statute was applicable only to the public domain or public lands, these being terms which, in Federal statutes relating to the disposition of land, have never been construed as applying to lands below the line of ordinary high tide at the coast.

The first time of which I am aware when an official position was taken by the executive branch of the Government on the specific question whether the Mineral Leasing Act of 1920 is applicable to what are defined here as submerged lands of the Continental Shelf was in 1946. I exclude previous instances when it was assumed that these lands were owned by the coastal States. Secretary of the Interior Ickes on February 5, 1946, was appearing before a congressional committee which was considering the problem of the submerged coastal lands.

The question arose as to whether, if the Federal Government should succeed in the then pending case of the United States against California, the existing Federal law on the subject of the issuance of oil and gas leases would apply to the lands within the scope of the favorable Supreme Court decision. Mr. Ickes took the position on that occasion that the Mineral Leasing Act would not apply to these lands.

He pointed out that the Mineral Leasing Act contains various provisions which are unsuitable to the problem that would be involved in the administration of oil and gas deposits within the submerged lands of the Continental Shelf.

He also pointed out, as the Solicitor General did a moment ago, that the question of the submerged coastal lands was not even considered by the Congress at the time when it was passing upon the provisions of the Mineral Leasing Act of 1920, and he expressed the opinion on that occasion that the Mineral Leasing Act was not applicable to submerged lands of the Continental Shelf. Now, that was

in 1946.

The next significant step in this historical program occurred in 1947. when the Congress enacted a statute having the title of "The Mineral Leasing Act for Acquired Lands," and which had for its specific purpose the expansion of the scope of the Mineral Leasing Act of 1920 so that it would apply generally to Government-owned lands in addition to the public domain lands or public lands.

However, Congress at that time wrote into the Mineral Leasing Act for Acquired Lands that although, generally speaking, it extended the provisions of the Mineral Leasing Act of 1920 to all Government-owned lands not theretofore within the scope of the Mineral Leasing Act of 1920

The CHAIRMAN. Do you remember the exact citation of that act? Mr. WHITE. The act of August 7, 1947, and it is in title 30 of the United States Code. I believe that it is in the Statutes at Large, volume 61, page 913, and it is in title 30 of the United States Code. I have forgotten the number of the first section in the code.