REDRAFT. [S. 2911, Sixty-third Congress, first session. A BILL Further to assure title to lands granted the several States, in place, in aid of public schools. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That where a grant of lands in place has heretofore been made, or may hereafter be made, to any State in aid of public schools, the governor of any such State may cause to be listed with the Secretary of the Interior any sections or parts of sections as designated in the grant, and it shall be the duty of the Secretary of the Interior to issue a patent to the State in further assurance of title, of all tracts thus listed, and found to be of the character granted, and free from valid, adverse claims at the time when the rights of the State attach: Provided, That nothing herein contained shall be so construed as to postpone the time of the attachment of the grant of such lands under existing law. SEC. 2. That hereafter, on approval by the Secretary of the Interior of selections made by any State under grants made by Congress, he shall direct the issuance of patent for the lands so selected and approved. SEC. 3. That the Secretary of the Interior is hereby authorized and empowered to make such rules and regulations as may be necessary to carry into effect the provisions of this act and to afford to any adverse claimant of lands listed by the State an opportunity to be heard in defense of his claim. Hon. REED SMOOT, DEPARTMENT OF THE INTERIOR, Chairman, Committee on Public Lands, United States Senate. MY DEAR SENATOR: Pursuant to the request of your committee dated November 20, 1919, for a report on Senate bill 3305, entitled "A bill further to assure title to lands granted the several States, in place, in aid of public schools," I have the honor to advise that, on August 12, 1914, this department submitted a report on Senate bill 2911 (63d Cong.), which is identical in text and title with the one now under consideration. The enactment of said bill into law was therein recommended, with the modification indicated in a redraft submitted therewith. In addition to the authorities cited in said report, relative to the exception of mineral lands from statutory grants to the States in aid of common schools, the attention of your committee is respectfully invited to the more recent decision of the Supreme Court of the United States, on January 28, 1918, in the case of the United States v. Sweet (245 U. S. 562), fully upholding the construction uniformly placed by this department upon the granting act of July 16, 1894 (28 Stat. 107), to the effect that, under the settled policy of Congress, mineral lands were not included in such grant to the State of Utah, although mineral lands were not in terms expressly excepted from the grant. A copy of said report on Senate bill 2911 is inclosed herewith. All phases of the matter being carefully considered, I believe that that portion of the bill, as introduced, which requires publication of notice in all cases, is preferable to the substitute suggested therefor in said report made in 1914, but the other changes then suggested are at this time urged. I, therefore, recommend the enactment of the bill into law, if same be modified as indicated in another redraft herewith submitted. Cordially yours, FRANKLIN K. LANE, Secretary. REDRAFT. [S. 3305, Sixty-sixth Congress, first session.] A BILL Further to assure title to lands granted the several States, in place, in aid of public schools. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That where a grant of lands in place has been or may hereafter be made to any State in aid of public schools, the governor of any such State may cause to be listed with the Secretary of the Interior any sections or parts of sections as designated in the grant, and it shall be the duty of the Secretary of the Interior to issue a patent to the State in further assurance of title of all tracts thus listed and found to be of the character granted and free from valid, adverse claim at the time when the rights of the State attach: Provided, That no such list shall be certified until the State shall have published, for a period of thirty days in a newspaper of general circulation in the vicinity of the land, a notice of the filing thereof, and that as to lands hereafter surveyed such publication shall not be made until after the expiration of three months from the filing of the township plat of survey in the district land office: Provided further, That nothing herein contained shall be so construed as to postpone the time of the attachment of the grant of such lands under existing law. SEC. 2. Hereafter, on approval by the Secretary of the Interior of selections made by any State under grants made by Congress, he shall direct the issuance of patent for the lands so selected and approved. DEPARTMENT OF THE INTERIOR, Hon. REED SMOOT, Chairman Committee on Public Lands and Surveys, United States Senate. MY DEAR SENATOR: Complying with your request of April 23, 1921, for consideration and suggestions, I have the honor to report as follows on Senate bill 889, entitled "A bill further to assure title to lands granted the several States, in place, in aid of public schools." The bill provides: 1. For the issuance of United States patents, in further assurance of title, to the States, for lands granted to them in place, in aid of schools. 2. For the issuance of confirmatory United States patents, to transferees (mediate or immediate) of States, whose titles to school section lands have failed because of the known mineral character, at time of grant, of the lands purchased by them. 3. That transfers of title from the United States to the States of lands selected under grants made by Congress shall be by patent. Congress has made grants of designated sections of land to the public land States in aid of common or public schools. These grants of land in place call for no further or formal evidence of title, the statute (usually the enabling act of the State) in each case, operating both as a grant and a conveyance, so far as the lands in the named sections are of the character and status subject to the grant. Mineral lands are excepted, in terms. from many of the grants. With respect to minerals, in case mineral lands are excepted from the grant, the known condition of the designated section at the date when the grant takes effect, determines whether title to the land does or does not pass thereunder, and if at that time the land is not known to contain mineral a subsequent discovery thereof will not affect the State's title. (Deffeback v. Hawk, 115 U. S. 392; Colorado Coal Co. v. United States, 123 U. S. 307-328; Shaw v. Kellog, 170 U. S. 312.) The grant is effective, if at all, from the date thereof or the date of the admission of the State into the Union as to lands then surveyed. As to lands subsequently surveyed, the grant is effective, if at all, upon acceptance of the survey by the Land Department. (United States v. Morrison, 240 U. S. 192.) It is clear that, in the absence of some provision by which the known condition of the specified sections, at the time when the grant takes effect, can be ascertained and adjudicated, the title of the State must remain in doubt and be subject to attack. The present bill provides a remedy for such uncertainty of title. The States, relying on their grants and the absence of asserted claim adverse to them, may sell and convey school section lands to which they have no title because of the known mineral character of such lands at time of grant. A case directly in point is that of United States v. Sweet (245 U. S., 563). There the State sold school section land under a grant (act of July 16, 1894; 28 Stat. 107) which does not expressly exclude or include mineral lands. The land sold, however, was of known mineral character at the time the grant would have otherwise attached. The court denied the claim of title based on the transfer by the State. This decision emphasizes a condition calling for legislation to quiet titles such as is found in section 2 of the bill. Conveyance of title to land by the United States is usually by patent. Many of the statutes making grants of land to States (other than those of school lands in place), however, do not themselves convey title or require patents to be issued. In such case the evidence of title given the State is a certified copy of the list of lands selected, as approved by this department (sec. 2449 U. S. R. S.), a less desirable form of evidence of title than a United States patent. A considerable quantity of these granted school-section lands have been exchanged for other lands of the United States under the provisions of the act of February 28, 1891 (26 Stats. 796). Because of this fact, the words "not exchanged for other lands of the United States" should follow the word "listed" in line 9, page 1, of the bill. The bill provides for publication of notice of all lands listed by the States. In States to which the mineral land laws of the United States do not apply as well as those sections of other States where the lands are known to be purely agricultural in character, the requirement of publication would seem to result in needless expense to the States. Publication should be had, for the protection of settler and mineral claimants, as to lands in recently surveyed areas; in areas wherein mineral deposits are known or believed to occur, and of lands within the boundaries of mineral withdrawals. It is suggested, therefore, that the requirement of publication of notice in all cases found in the first proviso to section 1, be omitted from the bill, thus permitting this department to prescribe such rules as may be necessary to insure protection of bona fide claims with the minimum of expense. The contemplated legislation is in no respect mandatory on the States or their transferees. No title, if vested, is disturbed. To make this proposition more clear the second proviso to section 1 of the bill may be made to read as follows: "That nothing herein contained shall be so construed as to postpone the time of the attachment of the grant of any such lands under existing law." Should this suggestion be not adopted, the word "of," between the words "time'' and "the," in line 9, page 2, being the third line of the proviso, should be omitted. Provision should be made for the utilization of the mineral deposits in lands sold, with reservation of such deposits to the United States, under the provisions of section 2 of the bill. It is recommended, therefore, that the words "in proceedings initiated under the provisions of this act' be inserted after the word "Office'' in line 15, page 2, and the words "and of rights to prospect for, mine, and remove the same in accordance with the provisions of existing laws," be inserted after the word "States'' in line 20, page 2 of the bill. With respect to that part of section 2 which provides that transferees of the State shall have the right to a confirmatory patent from the United States without reservation, upon the payment of the appraised price of the land, I think the bill should be amended, line 21, page 2, by inserting after the word "reservation" the following: "except as to metalliferous mineralls." This suggestion is made for the reason that it would be practically impossible to appraise the lands containing metalliferous deposits, the extent or value of which can not be known until they are mined and removed. As to this class of deposits, not claimed by others, the purchaser from the State if qualified, could make location of same under the mining laws of the United States. I also suggest that the word 'granted' be substituted for the word "designated" in line 11, page 2, of the bill. With these suggested amendments, I recommend that the legislation be enacted. ALBERT B. FALL, Secretary. Respectfully, O APRIL 20 (calendar day, APRIL 21), 1922.-Ordered to be printed. Mr. CAPPER, from the Committee on Claims, submitted the following REPORT. [To accompany H. R. 5775.] The Committee on Claims, to whom was referred the bill (H. R. 5775) for the relief of Liberty-loan subscribers of the North Penn Bank, of Philadelphia, Pa.; Santa Rosa National Bank, Santa Rosa, Calif; and Mineral City Bank, Mineral City, Ohio; Robbinsdale State Bank, Robbinsdale, Minn.; and Farmers & Merchants State Bank, Kenmore, N. Dak., having considered the same, report favorably thereon, with the recommendation that the bill do pass with the following amendments: On page 1, line 3, strike out the words "accounting officers of the Treasury Department" and insert in lieu thereof the words "Comptroller General of the United States." On page 1, line 4, strike out the word "are" and insert "he is." On page 2, lines 9 and 10, strike out the words "said accounting officers" and insert in lieu thereof the words "the Comptroller General of the United States." On page 2, lines 12 and 13, strike out the words "accounting officers" and insert in lieu thereof the words "Comptroller General of the United States." On page 2, line 14, strike out the word "they" and insert "he." The facts in the case are fully set forth in House Report No. 132, Sixty-seventh Congress, first session, which is appended hereto and made a part of this report. [House Report No. 132, Sixty-seventh Congress, first session.] The Committee on Claims, to whom was referred the bill (H. R. 5775) for the relief of the Liberty loan subscribers of the North Penn Bank, of Philadelphia, Pa.; Santa Rosa National Bank, Santa Rosa, Calif.; and Mineral City Bank, Mineral City, Ohio, having considered the same, report thereon with a recommendation that it do pass with the following amendment, by adding to the title of the bill the following: "Robbinsdale State Bank, Robbinsdale, Minnesota; and Farmers and Merchants State Bank, Kenmare, North Dakota." In cases covered by this bill large numbers of Liberty bond subscribers, principally in small sums, made their applications through these banks, respectively, paid the whole or part of their subscriptions, and on account of the subsequent failure of the banks received neither bonds nor a refund of their money on account of such payments. The bill as reported provides for the indemnification of these subscribers to the extent of their actual losses, not exceeding the amounts paid in by them, respectively. This bill seeks to provide the same remedy that was proposed in H. R. 13542, reported favorably to the House in the Sixty-sixth Congress, but upon which no action was secured on account of the crowded condition of the calendar in the closing days of that Congress. This bill includes the last two banks above mentioned, which were not included in the bill filed at the last Congress on account of the committee having no information as to the failure of these banks at the time of the hearings on this matter in the Sixtysixth Congress. According to reports recently made to the Treasury Department by the various reserve banks of the country, the five instances included in this bill are the only ones where Liberty bond purchasers have sustained actual losses of material amounts by bank failures. The total amount of sums paid to said banks are approximately as follows: North Penn Bank, $165,000; Mineral City Bank, $25,000; Santa Rosa National Bank, $92,000; Robbinsdale State Bank, $31,000; Farmers & Merchants State Bank, $7,000. Dividends already paid have reduced the losses to the subscribers of the Santa Rosa National Bank to $38,000, and of the Robbinsdale State Bank to $19,000. Further dividends to be paid will somewhat reduce the total liability to such bond purchasers, which now does not exceed $254,000, and which sum may now be accepted as the maximum liability under this bill. This sum will be reduced by whatever additional dividends are paid to the subscribers. The total subscriptions aggregating this sum are over 7,500 and represent less than $35 as the average amount paid in by a subscriber. The method of securing the applications of these subscribers by the Government was according to the plan followed generally throughout the country. Applications were required to reach the Treasury Department, Federal reserve bank, "or some incorporated bank" before a specified date. Application blanks on Government forms were widely distributed for this purpose, addressed directly to the Secretary of the Treasury. A notice, relating to the third Liberty loan, provided, "it is strongly recommended that subscribers avail themselves of the assistance of their own banks and trust companies, in which case they will, of course, make payment through such insititutions." After applications were received by the banks, notice to subscribers to pay was given on mail carried under Government frank and in the name of the "United States Treasury Department," instructing the subscribers to call upon the bank to complete their subscriptions. The substance of the situation is that these subscribers followed in detail the method of subscription adopted by the Government and made payments to their banks as "strongly recommended" by the Government. The primary purpose of the subscribers was patriotic. It is probably safe to say that few indeed of the several thousand small subscribers involved ever before owned a Government bond. A subscription was for the purpose of helping our Government win the war. After these subscribers had paid their funds in the manner and to the banks designated by the Government, it is, in the judgment of this committee, neither wise nor equitable for the Government to repudiate such payments. A technical argument to evade such responsibility would be unworthy and inconsistent with the principles of honor and fair dealing that should prevail in transactions of our Government with its citizens. The patriotic and commendable effort, and, in many instances, sacrifices made by laboring people and small subscribers, such as are involved here, created an obligation which is specific and certain and any technical evasion of which can not be justified. The proposed bill justly excludes officers of the bank from participation in the benefits of the bill. The suggestion that depositors and shareholders who had no actual power or substantial relationship to the management of the bank should be excluded from participation, on the theory that they determined the solvency of the bank to |