September 26, 1941

to 1938, inclusive, and represents the excess of the amount of advance royalties which are due under the schedule stipulated in the lease, if such royalties were payable during that period, over the production royalties actually paid.

Whether the so-called "advance" royalties were payable during this period is therefore the question for decision. The answer depends upon whether the advance royalties were intended, and were understood to be in fact under the applicable lease provisions, departmental regulations, and administrative practice, a guaranteed minimum royalty.

Section 5 of the lease in question provides that:

Commencing from the date of the approval of this lease, and continuing until lessee shall have drilled a producing well on said land, lessee shall pay to the officer in charge, for lessor, as advance royalty, 15 cents per acre per annum in advance for the first and second years, 30 cents per acre per annum in advance for the third and fourth years, 75 cents per acre per annum in advance for the fifth year, and $1 per acre per annum in advance for each succeeding year during the term of this lease: Provided, That should the producing well or wells on said land cease to produce during the fixed term hereof, then at the next succeeding advance royalty paying day, lessee shall resume the payment of advance royalty. It is understood and agreed that such sum of money so paid shall be a credit on stipulated royalties for the year for which the payment of advance royalty is made, and lessee hereby agrees that said advance royalty when paid shall not be refunded to lessee because of any subsequent surrender thereof, nor shall lessee be relieved from the obligation to pay said advance royalty annually when it becomes due by reason of any subsequent surrender or cancelation of this lease.

The section does not specifically cover the question of the status of advanced royalties after production is obtained, and the Texas Company contends that the obligation to pay the stipulated advance royalties ceased entirely when a producing well was drilled by the lessee. The Geological Survey, has, however, held that section 5 is a provision for a guaranteed minimum royalty and that, although advance royalties are not payable in addition to production royalties, they do not cease when production is obtained but are reduced proportionately as production royalties rise.

The Department holds that the interpretation placed upon section 5 by the Geological Survey is correct. Whatever doubt might exist as to the meaning of section 5, considered in vacuo, is dispelled when it is read in the light of applicable regulations and prior administrative practice. In the "Regulations Governing The Leasing Of Restricted Allotted Indian Lands For Mining Purposes," approved July 7, 1925, and under which the lease in question and hundreds of similar leases were issued, it is specifically provided that:

14. Lessee shall pay on each oil and gas lease annually in advance, commencing from the date of approval by the Secretary of the Interior, and continuing until lessee shall have drilled a producing well, royalties as follows: Fifteen cents per

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acre per annum for the first and second years; 30 cents per acre per annum for the third and fourth years; 75 cents per acre per annum for the fifth year; and $1 per acre per annum for each succeeding year during the term of the lease. Such payments shall be made until the royalties on production exceed the advance royalty: Provided, That should the producing well or wells on the leased land cease to produce during the fixed term of the lease, then at the next succeeding advance royalty paying day the lessee shall resume the payment of advance royalty. [Italics supplied.]

These regulations were clearly authorized by the act of March 3, 1909 (37 Stat. 781, 783), and, therefore, had the force and effect of law and it must be conclusively presumed that the lessee took the lease issued pursuant thereto with full knowledge of their provisions.

Moreover, more than seven months before the instant lease was issued, the Department had considered and decided adversely the point now raised by the Texas Company. On June 6, 1932, the Department approved a letter of instructions from the Commissioner of Indian Affairs to the Director of the Geological Survey which in part read as follows:

Under the terms of the lease the advance royalty payments are regarded as minimum and should be paid in advance as required by leasing regulations until the royalties from production exceed the advance royalties. When the royalty on production is not sufficient to equal the advance royalty no refund is allowable, but credit may be taken against the latter in the amount of production royalties.

Where lessees have been allowed to cease the payment of advance royalty because the royalties from production were in excess of the advance royalties they should be required to resume the payment on the latter immediately when production royalties fall below the required advance royalties.

It is clear, therefore, that at the time of the issuance of this lease there were subsisting explanatory regulations and administrative practice which resolved any doubt as to the meaning of section 5 and which fully support the decision of the Geological Survey. The decision appealed from is, accordingly,

Affirmed.

EXCLUSION OF OSAGE COUNTY FROM OKLAHOMA

WELFARE ACT

Opinion, October 9, 1941

STATUTORY CONSTRUCTION-SEC. 8, OKLAHOMA WELFARE ACT-OSAGE TRIBE OSAGE COUNTY, OKLAHOMA.

In view of the clear unambiguous language of section 8 of the act of June 26, 1936 (49 Stat. 1968, 25 U. S. C. sec. 508), all Indians residing in Osage County, Oklahoma, and all lands situated therein must be held to be excluded from the provisions of that act.

October 9, 1941

MARGOLD, Solicitor:

There has been referred to me the question of the interpretation of section 8 of the Oklahoma Welfare Act of June 26, 1936, reading as follows: "This Act shall not relate to or affect Osage County, Oklahoma." The question is whether the section was intended to exclude from the benefits of the act only the Osage Tribe of Indians or all Indians residing in Osage County, regardless of the tribe to which they belong.

The obvious interpretation of this section would be that clearly called for by the unambiguous term "Osage County" used therein. The section thus should exclude from the act all Indians and their holdings in that county regardless of tribal membership. The legislative history of the act would appear to confirm this interpretation. The House Committee on Indian Affairs in its Report No. 2408, 74th Congress, 2d session, discussed the inclusion of section 8 in S. 2407, which became the Oklahoma Welfare Act, in the following words:

Because of the peculiar circumstances prevailing in Osage County the committee has recommended in section 8 of the proposed substitute that it be excluded from the provisions of the bill. The Osage Reservation is rich in mineral deposits, and the members of the tribe have derived millions of dollars in royalties and bonuses from this natural resource. There are numerous unallotted members of the tribe who participate to a negligible amount in the tribal revenues. Some of these should be eventually allowed to take advantage of the provisions embodied in this legislation. Further studies are necessary, however, before a definite conclusion in this respect can be reached, and the committee therefore feels that the exclusion of Osage County is proper at this time.

It is true that the reasoning would apply more directly to members of the Osage Tribe but the language used by the Committee clearly refers to the Osage Reservation and Osage County, and thus shows no intent to exclude other Indians who reside therein from the provisions of section 8.

Consideration should furthermore be given to the parallel provisions in the Indian Reorganization Act. It is significant that that act contains both tribal and geographical exclusion and the difference between the two types has not been confused. Section 13 excludes the Osage and other Oklahoma tribes by name. It also excludes the geographical areas of the Territories, colonies and insular possessions; and section 18 excludes any reservation which has voted against the application of the act.

This office has consistently held that the exclusion of a reservation is geographical in that the act does not apply to any persons therein, even a member of a tribe covered by the act. The latest expression of this opinion is a memorandum to the Commissioner of Indian

Affairs of June 30, 1941, denying the possibility of purchasing whiteowned land in the name of the United States for a Quinaielt Indian. on the Chehalis Reservation.

Finally, the language of the Oklahoma Welfare Act is clear enough to include all Indians living in the county. Thus, where section 1 of the act authorizes the Secretary of the Interior to acquire lands for Indians, the language of section 8 unmistakably prohibits such acquisition in Osage County regardless of whether the Indian for whom the land is to be acquired is a member of the Osage or another Indian tribe. Also, where section 4 of the act permits any ten or more Indians to receive from the Secretary of the Interior a charter as a local cooperative association, Indians living in Osage County do not have this privilege regardless of their tribal affiliation. Similarly Indians living in Osage County cannot apply for loans from the revolving loan fund set up by section 10 of that act.

Approved:

OSCAR L. CHAPMAN,

Assistant Secretary.

AUTHORITY TO CARRY ON SOIL AND MOISTURE CONSERVATION ACTIVITIES UNDER REORGANIZATION PLAN NO. IV

Opinion, October 25, 1941

SOIL AND MOISTURE CONSERVATION-AUTHORITY OF SECRETARY OF AGRICULTURE UNDER SOIL CONSERVATION AND DOMESTIC ALLOTMENT ACT.

The authority of the Secretary of Agriculture, under the Soil Conservation and Domestic Allotment Act of April 27, 1935 (49 Stat. 163, as amended, 16 U. S. C. ch. 3B), to carry on soil and moisture conservation activities was almost plenary, in that he could carry on such activities on any land regardless of ownership, subject only to the condition that proper safeguards to protect the work and to preserve the beneficial effect of the operations were insured and, in the case of lands owned by the United States, subject to the condition that the activities to be performed thereon should be conducted in cooperation with the agency having jurisdiction thereover. Also, there is nothing in the act which indicates that each project thereunder must be confined entirely either to private lands or public lands, or that any single project must benefit solely either private lands or public lands.

SOIL AND MOISTURE CONSERVATION-TRANSFER OF AUTHORITY BY REORGANIZATION PLAN NO. IV-AUTHORITY OF SECRETARY OF THE INTERIOR UNDER TAYLOR GRAZING ACT.

In addition to the authority given the Secretary of Agriculture by the Soil Conservation and Domestic Allotment Act, which authority, so far as lands under the jurisdiction of the Secretary of the Interior are concerned, has now been transferred to the latter by Reorganization Plan No. IV, the Secretary of the Interior has similar authority under section 2 of the Taylor Grazing Act of June 28, 1934 (48 Stat. 1269, as amended, 43 U. S. C. ch. 8A), to carry on

October 25, 1941

soil and moisture conservation activities for the benefit of lands that are subject to the provisions of that act, and broad authority to carry on such activities on other lands under his jurisdiction. Under these several sources of authority the Secretary of the Interior may determine the lands under his jurisdiction that are in need of soil and moisture conservation work, and may initiate and carry on such work, regardless of whether the work is to be done on private or public lands, so long as the work benefits lands under his jurisdiction.

SOIL AND MOISTURE CONSERVATION-AUTHORITY OF SECRETARY OF THE INTERIOR TO PLACE ORDERS WITH SOIL CONSERVATION SERVICE OF DEPARTMENT OF AGRICULTURE FOR SOIL AND MOISTURE CONSERVATION WORK UNDER SECTION 601 OF THE ECONOMY ACT-EFFECT OF REORGANIZATION PLAN No. IV ON SUCH AUTHORITY. Reorganization Plan No. IV does not nullify the authority vested in the Secretary of the Interior by section 601 of the Economy Act of June 30, 1932 (47 Stat. 417, 31 U. S. C. sec. 686), to place orders with the Soil Conservation Service of the Department of Agriculture for the performance of soil and moisture conservation work on a reimbursable basis on lands under the jurisdiction of the Department of the Interior.

FLANERY, Acting Solicitor:

Certain questions submitted by the Director of Grazing dealing with the functions of the Department of Agriculture and of this Department relating to soil and moisture conservation on lands under the jurisdiction of this Department and on privately owned lands have been referred to me for consideration and opinion. The questions are substantially as follows:

1. Does Reorganization Plan No. IV which, among other things, transferred to the Secretary of the Interior certain functions of the Soil Conservation Service with respect to soil and moisture conservation operations on lands under the jurisdiction of the Department of the Interior, authorize the Secretary of the Interior to conduct any such operations on private lands and, if so, to what extent? 2. Does Reorganization Plan No. IV nullify the authority vested in the Secretary of the Interior by section 601 of the Economy Act of June 30, 1932 (47 Stat. 417, 31 U. S. C. sec. 686), to place orders with the Soil Conservation Service of the Department of Agriculture for the performance of soil and moisture conservation work on a reimbursable basis on lands under the jurisdiction of the Department of the Interior?

I

Prior to the time when Reorganization Plan No. IV became effective, the Soil Conservation Service, acting on behalf of the Secretary of Agriculture, had broad powers under which its functions were performed. These powers deraigned from the various provisions of the "Soil Conservation and Domestic Allotment Act" (Act of April 27, 1935, 49 Stat. 163, as amended, 16 U. S. C., ch. 3B). The powers enjoyed by the Secretary of Agriculture, so far as they related directly to soil and moisture conservation activities, were conferred by sections 1 to 4, inclusive, of that act.