14.322/1:M66 Mineral Rights Underlying Farm Lands HEARINGS BEFORE THE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES SEVENTY-SECOND CONGRESS SECOND SESSION ON H.J.Res. 587 TO PROVIDE PROTECTION AND RELIEF TO FARMERS NIZED AND ESTABLISHED COOPERATIVE OF MINERAL RIGHTS UNDER- MINERAL RIGHTS UNDERLYING FARMS LANDS TUESDAY, FEBRUARY 28, 1933 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D.C. The committee this day met at 10:30 o'clock a.m., Hon. William F. Stevenson presiding. Mr. STEVENSON. The committee will come to order. We are here this morning to hear some gentlemen from Oklahoma, I believe, on H.J.Res. 587, which provides for protection and relief for farmers by aiding them to conserve and liquefy their mineral rights, and so forth. (The resolution is printed herewith as follows:) [H.J.Res. 587, Seventy-second Congress, second session] Joint Resolution To provide protection and relief to farmers by aiding them to conserve and liquify their mineral rights through recognized and established cooperative agencies engaged in the pooling of mineral rights underlying farm lands Whereas the mineral resources underlying farm lands in America have been made the subject of an official investigation and report published as Senate Document No. 93, Seventy-second Congress, first session; and Whereas the investigation revealed that the profits in oil royalties from farm lands, "particularly in the new fields, have been made by others than the landowners, and that, as a class, farmer landowners have benefited far too little from their mineral rights," and that unless the farmer "has the advantage of organized bargaining power" he is forced to dispose of them (mineral rights) at sacrifice prices; and Whereas the investigation revealed further that farmers can effectively secure such organized bargaining power by cooperatively pooling their mineral rights, and that such "pooling increases the market value of mineral rights in a way analogous to that in which fire insurance increases the value of individual buildings"; and Whereas the investigation revealed further that with "his (the farmer's) mineral rights secured in a cooperative pool, the farmer would have a business stake in the natural resources of the country upon which he could realize an income in much the same manner as does a large royalty corporation" that has substantial resources back of it; and Whereas present depressed conditions have made it increasingly difficult and costly to secure finances to defray costs of organizing cooperative pools at a time when it is most opportune and economical to render this protection to the farmers: Therefore be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Reconstruction Finance Corporation is hereby authorized to make adequately secured loans to recognized and established managing agencies of farmers' cooperative mineral-rights pools; and be it further Resolved, That for the purposes of better carrying out the objects of this resolution the Reconstruction Finance Corporation is authorized and empow ered to avail itself of facilities and services of other governmental agencies in the formulation of rules and regulations for carrying forward the purposes of this resolution and in establishing the conditions under which loans may be made available to qualified applicants and in making public such information as will encourage farmers to pool their mineral rights in sound cooperative mineral-rights pools. We will hear first Mr. Simpson. 166842-33 1 STATEMENT OF JOHN A. SIMPSON, NATIONAL PRESIDENT OF THE FARMER'S UNION, OKLAHOMA CITY, OKLA. Mr. STRONG. Do you use the Farmer's Union or the long title to your organization?" Mr. SIMPSON. Just Farmer's Union. In Oklahoma the farmers a few years ago, out of their experien, discovered that a farmer has two crops, one his surface crop an one the crop that is beneath the surface; and we discovered that the one beneath the surface can be of as much value, in many instance, as the one on top. In my own experience, I had a 400-acre farm. and for years and years I received a rental from my crop, under the ground, of $400 a year-$1 an acre. We also discovered, out of some experience as an organized gro of farmers, the Farmer's Union, that we could do better as a gr in marketing that rental value of our crop underground when we did it in a cooperative way than de did when each one made a da himself. I remember one instance at the town of Morrison, Okla. the oil men came into that territory seeking leases of mineral rights. and they were paying $3 an acre bonus for a lease. Our Farmer Union is pretty well organized there and we called a meeting and pooled something over 2,000 acres, and we dealt in a collective way with those who were seeking leases, and we got $15 an acre for oc bonus. Mr. STRONG. For the leases of your oil rights? Mr. SIMPSON. Yes, sir; for the lease of our oil rights-five time as much as the farmers who tried to single-shot and look after the own business could get. A little later, Mr. Aldrich Blake, who is here and who will mak a statement after I finish, studied a cooperative royalty pool that had operated in favor of the Osage Indians, and he became the oughly convinced that it would be a practical thing for white farters to do what those Osage Indians did-or what this Government did for those Osage Indians. This Government passed a bill that formed that cooperative pool for the Osage Indians. M: Blake, in conjunction with others, organized the first white farmers royalty pool ever organized in the United States. Mr. DISNEY. For the benefit of the committee, let it be stated that the Government, in fixing the treaty rights for the Osage India (since reference has been made to that) reserved to the entire tribe (the Osage Nation of Oklahoma) the mineral rights, so that members of that tribe have had their oil rights in common, althoug if they had not been divided into pools or held in common, ma of the Indians would have had no return from oil rights while others would have been immensely rich. The oil rights have been reserve to the tribe. Mr. SIMPSON. The Farmer's Union of Oklahoma carries on o siderable business. We are a business organization and have ma a success. While we are supposed to be radical, when it comes to business we are conservative. We have never started anything " have had to back up from, and we have made a business success everything we have undertaken. We waited to see Mr. Blake's ro alty pool get some experience, and after it had operated some t or three years the Farmer's Union of Oklahoma then established t first farmer's union cooperative royalty pool ever organized in the |