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Oil, Coal And Phosphate Land Act

( Originally Published 1918 )



Under the Act of February 25, 1920, millions of acres of public lands in the west were opened for mineral development. All of the development in the public lands under the act is in the control of the Secretary of the Interior.

Coal Land Leases.—The Secretary is authorized to lease to any qualified applicant coal lands in units of 40 acres each, or multiples thereof, not to exceed 2,560 acres in any one leasing tract, and in such form as shall permit the most economical operation, and offer the same on competitive bidding.

Prospecting Permits.—Where prospecting is necessary to determine the existence or workability of coal deposits, prospecting permits for a term of two years may be issued.

Public Notice.—No lease shall be approved until public notice has been given for thirty days in a newspaper of general circulation in the county in which the lands are situated.

Leases to Railroads.—No railroad shall be given a lease except for its own use, and then not in excess of one lease for each 200 miles of road, exclusive of switches, etc., and portions of its line operated other than by steam power.

Royalties.-Lessees shall pay to the United States royalties of not less than 5 cents per ton of 2000 pounds payable at the end of each third month succeeding that of the mining of the same, and an annual rental payable at the date of the lease and annually thereafter, not less than 25 cents per acre for the first year, 50 cents per acre for the second, third, fourth and fifth years and $1 per acre for each and every year there-after.

Duration of Lease.—Leases are for indeterminate periods upon condition of diligent development and continued operation, with exceptions as to strikes, etc., with the proviso that at the end of each twenty year period, readjustments of the terms and conditions may be made as the Secretary of the Interior may determine.

Waiving Royalties.—To provide for strictly local domestic needs, limited licenses may be is-sued to individuals or associations of individuals, but not to corporations, to mine coal for their own use, but not for sale, without the payment of royalties for the coal mined or the land occupied.

Leases to Municipalities: Authority is given to the Secretary to issue limited licenses or permits to municipalities for not to exceed 320 acres for a municipality of less than 100,000 population, and not to exceed 1,280 acres for a municipality of not less than 100,000 and not more than 150,-000 population, and not to exceed 2,560 acres for a municipality of 150,000 population or more, the land to be within the state wherein the municipality is located, provided that the coal thus mined be disposed of by the municipality to its residents without profit and for domestic use.

PHOSPHATES

Leases.—Leases are authorized of phosphate lands through advertisement, competitive bidding or such other methods as the Secretary of the Interior may adopt, and for not to exceed 2,560 acres, in compact form, the length of which shall not exceed two and one-half times its width.

Royalties. Royalties to be paid to the United States upon such leases shall not be less than 2 per cent of the gross value of the output of phosphates or phosphate rock at the mine, payable at the end of each third month succeeding their sale, and an annual rental of not less than 25 cents per acre for the first year, 50 cents per acre for the second, third, fourth and fifth years and $1 per acre for the continuance of the lease.

Terms and Renewals.-Lease shall be for an indeterminate period and subject to readjustment as to terms and conditions at the end of each twenty year period.

OIL AND GAS

Prospecting Permits. -The Secretary of the Interior is authorized to issue exclusive prospecting permits for a period not to exceed two years to prospect for oil or gas upon not to exceed 2,560 acres not within any geological structure or producing field, upon certain conditions as to test drilling, surveys, monuments and boundary marks, etc.

In Alaska not more than five such permits shall be given any one person and for periods not exceeding four years.

Leases on Prospected Lands.—Where the permittee has discovered valuable deposits of oil or gas upon his lands, he shall be entitled to a lease on one-fourth of the land for a term of 20 years upon a royalty of 5 per centum of the value of the production and an advance annual rental of $1 per acre. He shall also have a preference right to lease the balance of the land at a royalty of not less than 12 1/2 per centum, the royalty to be fixed by competitive bidding or as the Secretary may direct.

Leases in Known Fields.-May not exceed 640 acres and be issued on competitive bids for a 20 year term and at royalties not less than 12/ per cent and an advance annual rental of $1 per acre, with preferential right to renewal.

Converting Placer Mining Rights into Leases. —It is provided that upon relinquishment of all rights to discovery under the pre-existing placer mining law to oil or gas bearing land held prior to and continuously since July 3, 1910, embraced in the executive order of withdrawal of Sept. 27, 1909, upon which one or more gas or oil wells have been drilled, and not within any naval petroleum reserve, the claimant or his successor shall be entitled to a lease for a period of 20 years upon such royalties and terms as are set forth in the act.

Adjustment of Conflicting Claims.—Provision is made for the settlement of conflicting claims arising under prior acts and regulations and for leasing of the property embraced therein.

Oil Shale Lands.—Provision is made for the leasing of oil shale lands for indeterminate periods, on rentals of 50 cents per acre and such royalties as may be set forth in the lease, with readjustments at the end of each 20 year period. To encourage production it is provided that royalties and rentals may be suspended or waived for five years.

SODIUM LANDS

Leases.-Sodium lands, outside of San Bernardino County, Calif., may be leased up to 2,560 acres, on royalties of not less than 12% per cent and an annual rent of 50 cents per acre for the first year and $1 per acre thereafter, such leases to be indeterminate with readjustments at the end of each 20 year period.

GENERAL PROVISIONS

Limitations on Number of Leases.—The act limits the number of leases that any person, association or corporation may hold to one coal, phosphate or sodium lease during the life thereof in any one state; to not more than three oil or gas leases in any one state, and not more than one within the geologic structure of any field. Interests in violation of the limitations provided in the act are forfeited to the United States.

Refineries and Pipe Lines.—Lessees may combine to build and operate refineries and pipe lines or railroads for their joint use and that of other lessees, subject to the approval of the Secretary of the Interior.

Pipe Line Rights of Way.-Rights of way through public lands and forest preserves for pipe lines may be granted.

Pipe Lines Open to All.—All pipe lines must be open to carry oil of the government as well as any other lessee at non-discriminating rates.

This is a wise provision, and recognizes the Government of the United States as the bulwark of America.

COMBINATIONS IN RESTRAINT OF TRADE

The Sherman Anti-Trust Law, approved July 2, 1890, provides as follows:

Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract, or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments in the discretion of the Court.

Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and on conviction thereof, shall be punished by fine not exceeding $5,000 or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the Court.

Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States, or the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is hereby declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments in the discretion of the Court.

Sec. 4. The several Circuit Courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several District-Attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and re-strain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or other-wise prohibited. When the parties complained of shall have been duly notified of such petition the Court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the Court may at any time make such temporary re-straining order or prohibition as shall be deemed just in the premises.

Sec. 5. Whenever it shall appear to the Court before which any proceedings under Sec. 4 of this act may be pending, that the ends of justice re-quire that other parties should be brought before the Court, the Court may cause them to be summoned, whether they reside in the district in which the Court is held or not and subpoenas to that end may be served in any district by the marshal thereof.

Sec. 6. Any property owned under any contract or by any combination or pursuant to any conspiracy (and being subject thereof) mentioned in Sec. 1 of this act, and being in the course of transportation from one State to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure and condemnation of property imported into the United States contrary to law.

Sec. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefore in any Circuit Court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

Sec. 8. That the word "person" or "persons" wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any state or the laws of 'any foreign country.

Labor Unions and Farmer Organizations Excepted.—The Clayton Anti-Trust Law, approved October 15, 1914, provides : Section 6. That the labor of a human being is not a commodity. Nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof ; nor shall such organizations, or the members thereof, be held or construed to be illegal in restraint of trade, under the anti-trust laws.



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