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supra. An Indian ward votes or is entitled to vote. United States v. Dewey County, supra; Anderson v. Mathews, 174 Cal. 537, 163 Pac. 902; Swift v. Leach, 45 N.D. 437, 178 N.W. 437. His children are entitled to attend public schools even though a Federal Indian school is available. LaDuke v. Melin, supra; United States v. Dewey County, supra; Piper v. Big Pine School Dist., 193 Cal. 664, 226 Pac. 926. He may sue and be sued in State courts. In re Celestine, 114 Fed. 551 (D. Wash. 1902); Swift v. Leach, supra; Brown v. Anderson, 61 Okla. 136, 160 Pac. 724. His ordinary contracts and engagements are subject to State law, Luigi Marre and Cattle Co. v. Roses, 34 P. (2) 195 (Cal. 1934), and his personal conduct is subject to State law except upon reserved land. State v. Morrin, 136 Wis. 552, 117 N.W. 1006. He must pay State taxes on all non-trust property which he may own and all fees and taxes for the enjoyment of State privileges, such as driving on State highways, and all taxes, such as sales taxes, which reach the entire population. Where the taxes paid by the Indians are insufficient to provide necessary support for State schools, hospitals, and other institutions caring for Indians, the Federal Government often pays for such services with trust or tribal funds or with gratuity appropriations (See e.g., act of April 16, 1934, 48 Stat. 596). 17 Decisions of the Comptroller of the Treasury 678. And Indian wards are constantly receiving care in State institutions either without charge or with payment from their unrestricted resources. Furthermore, the United States has not provided any old-age pension system for the Indians nor has it made any general provision for Indians for the types of services which it is assisting the States to render under the Security Act.

    It is my conclusion from the foregoing that ward Indians who come within the categories of needy persons enumerated in the Social Security Act are entitled to the benefits of that Act.

    It remains to be seen what limitations the States have in fact imposed upon the Indians either in their laws pursuant to the act or in the administration of those laws. The Digest of State and Territorial Laws on Old Age Pensions compiled by the Works Progress Administration indicates that on March 1, 1936, a large number of States had statutes which conformed to the requirements laid down in the Social Security Act for State plans for which Federal funds for old-age assistance would be
available. None of these statutes specifically excluded or included Indians. In applying these statutes, however, certain provisions have been pointed to by State authorities as barring Indian participation.

    The old-age pension law of Montana Section 3 (6) Chp. 170, Laws of Montana 1935, states that an inmate of a public or private institution is not eligible for old-age pension. The Attorney General of Montana, in arguing that this provision excludes ward Indians, has given the word "institution" a very broad meaning so that it would include any I am [sic] without authority to interpret State law, it established feature of social or national life. While may be stated that the parallel clause in Section 3 (a) (1) of the Social Security Act, "who * * * is not an inmate of a public institution" can not be interpreted in any such fashion. The phrase must be construed in its entirety and the word "institution" should be related to the word "inmate" which, as defined in Webster's New International Dictionary means a person in a particular building. The word "institution", therefore, must be restricted to its obvious meaning in this connection, that of a specialized establishment housing and caring for persons with particular social or physical maladies. While some Indians may be inmates of institutions, certainly this does not apply to Indians as such. Moreover, the plain purpose of the clause is to exclude those old people who are already receiving institutionalized care from the public. Fortunately the laws of many States place this exception beyond cavil by stating its intent more clearly in specifying "charitable, benevolent, fraternal, correctional institutions, home for the aged, jail, workhouse, in sane asylum" etc.

    Other questions arise in respect to the limitations on property and income placed upon applicants for old-age assistance under various State laws. These limitations should be applied to Indians exactly the same as to others, and whether or not trust property should be included in the valuation of the applicant's property will depend upon whether a State makes an exception of property which is exempt from legal process. A few States provide that certain State officials may require the transfer to the State of property of the pensioner. Under section 4 of the Indian Reorganization Act, June 18, 1934 (48 Stat. 984) no transfer of restricted Indian lands could be made to the State. However, since the transfer of property is made a discretionary and not a mandatory condition precedent to relief the statutory prohibition of transfer of Indian lands should not bar holders of restricted lands otherwise eligible from receiving relief.

    The digests of State and territorial laws granting aid to dependent children and blind persons compiled by the Works Progress Administration as of March 1, 1936, indicate no provisions which would exclude Indians or which raise peculiar problems in their application to Indians.
 

    The Social Security Act has provided certain measures for preventing the denial of direct assistance to qualified applicants contrary to its terms. Sections 2 (a) (4), 402 (a) (4), and 1002 (a) (4) require a State plan for old age assistance, aid to dependent children, and blind assistance, respectively, in order to be approved, to provide for granting to any individual whose claim for assistance, is denied an opportunity for a fair hearing before a designated State agency. An Indian applicant who is denied assistance for reasons other than failure to meet the standard qualifications imposed upon all persons should seek relief from such State agency. If it is found that the State in its law or administration is imposing citizen or resident requirements contrary to the terms of the Social Security Act or violating other express terms, the Social Security Board has power to stop further payments to the State by the Federal Government. Sections 4, 404, 1004. If the Indians fails to obtain relief through administrative channels, he may re sort to judicial action.

    In summary, I have concluded that under the terms of the Social Security Act providing Federal assistance to States for direct aid to the needy aged, the needy blind and needy dependent children and for improving certain welfare services, Indians, although wards of the Federal Government, are entitled to share in such aids and services when otherwise qualified, and I have found in the State laws which are considered as conforming to the requirements for State plans no provisions which constitute a barrier to Indian participation.

                                                                                                                                            NATHAN R. MARGOLD,

M-27814 (Supp.)                                                                                                                 April 23, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have asked that I consider certain protests against the conclusion reached in my former opinion No. M-27814, which was approved by you on January 30, 1935. In that opinion it was held that the Choctaw and Chickasaw Nations were invested with the title to land selected for railroad rights of way under the Act of February 28, 1902 (32 Stat. 43) where the railroad has never paid compensation for the selected right of way and has never made use of it.

    The protests have been made by the oil and gas lessees of part of the homestead allotment of one Laura Burris, an enrolled member of the Chickasaw Nation. At the time the allotment to Laura Burris was made the Choctaw and Chickasaw Railroad Company had filed a map of definite location of its proposed line of railroad for the purpose of securing a right of way in conformity with the provisions of the Act of February 28, 1902, supra. Consequently the deed issued to Laura Burris by the Choctaw and Chickasaw Nations granted the homestead allotment "less 6.26 acres occupied as a right of way by the Choctaw and Chickasaw Railway." The railway company, however, did not pay damages for the right of way as required by the statute and has never made use of the land. In those circumstances it would follow from the opinion of January 30, 1935 that the fee estate in the land embraced within the selected right of way is vested, not in the owners of the abutting lands contained in Laura Burris' allotment, but in the Choctaw and Chickasaw Nations.

    The oil and gas lessees of the abutting allotted lands maintain that the fee estate in the land of the right of way is vested in their lessors. Their claim is based on three contentions: (1) That under the provisions of section 14 of the Act of April 26, 1906 (34 Stat. 137) the fee estate passes on abandonment of the right of way to the "owner of the legal subdivision of which the land so abandoned is a part"; (2) that the Department has long interpreted that statute in the manner contended for and that there is consequently an established administrative construction on which the claimants and others have relied and which cannot now be lightly overthrown; and (3) that in any event the original allotment deed to Laura Burris conveyed to her the interest in the land covered by the proposed right of way which the Indian tribes had and, thus, that any abandonment or relinquishment of the right of way by the railroad company must as a matter of law inure to the benefit of the allottee or her assigns. It is my opinion that none of those contentions are well founded, but I shall discuss them at some length in the order in which I have stated them.

    The opinion of January 30, 1935, contained a detailed analysis of the 1906 act as well as the granting act of 1902. The conclusion was reached that the 1902 act granted only a right to acquire a right of way after, among other things, the payment of compensation to the Indians, and that the 1906 act operated to invest the abutting property owners with title to abandoned rights of way only if, among other things, the rights of way had actually existed
 

as interests in the land in the nature of easements. In those circumstances, of course, title to the right of way would not pass to the abutting landowners in a situation of the type now presented where no payment of damages was ever made by the railroad company to make possible the creation in it of an interest in the land.

    I have thoroughly re-examined the bases of that conclusion concerning the interpretation of the statutes and, in doing so, I have carefully considered the arguments which have been presented both orally and in written briefs on behalf of the oil and gas lessees of the abutting lands. I have, however, found nothing to create doubt concerning the correctness of the conclusion or the soundness of the analysis by means of which the conclusion was reached. The interpretation placed on the granting act of 1902 is not seriously questioned by the claimant, nor can it well be questioned. In a recent opinion of the Supreme Court of the United States in the case of Noble et al. v. City of Oklahoma City, -- U.S. --, 56 S.Ct. 562, the court squarely decided that, under a grant substantially similar to that contained in the 1902 act, a railroad obtained only a right to acquire a right of way on payment of damages. Consequently there can be no doubt that the Choctaw and Chickasaw Railroad Company, failing as it did to pay the required damages, acquired no actual interest of any kind in the land of its proposed right of way.

    The claimants' primary contention, however, is that the act of 1906 operates to vest title to the land of the proposed right of way in the abutting owners irrespective of whether the railroad had acquired an interest in the land. In section 14 of that act it is provided that a railroad may, on making payment to be prescribed by the Secretary of the Interior, acquire title to lands over which it has a "right * * * in the nature of an easement for right of way." By that same section it is prescribed that if the railroad should fail to make the payment, title to the right of way will vest in the owner of the abutting lands. The claimants argue that since the railroad in this instance made no payments, the title to the right of way has vested in the abutting owners under that statutory provision. That argument, in my opinion, is fallacious for two reasons. In the first place the provision in section 14 of the 1906 act is operative according to its own terms only where the railroad had already acquired an interest in the land "in the nature of an easement," and it has already been pointed out that, under the 1902 act, no interest in the land could be acquired by the railroad in the absence of a payment of damages for the taking of that interest, which payment was never made in this case. In the second place the payment for which provision is made in the 1906 act is a payment in addition to and independent of that required by the act of 1902. The payment prescribed by the 1906 act is one whereby the railroad might acquire the fee estate in the land over which it already had acquired a right in the nature of an easement by the payment of the damages prescribed by the 1902 act. Clearly a railroad which had paid the damages and acquired a right to build and operate its road under the 1902 act could not be required to make a further payment on penalty of losing its vested easement for failure so to make payment. Consequently it is manifest that the payment required by the 1906 act is a payment for the servient estate so that the entire fee estate in the land may be acquired by the railroad, in default of which the servient estate is to vest in the owner of the abutting land. In those circumstances it is clear that the payment contemplated by the 1906 act is for a purpose entirely distinct from the purpose of the payment required by the 1902 act, and that the former payment is in addition to and independent of the latter.

    That conclusion is inescapable when the legislative history of the act is considered. The legislative bill which subsequently became the act of 1906, without alteration of the provisions contained in section 14, was drafted in the Department of the Interior and was submitted to the Congress for its consideration by the Secretary of the Interior with his letter of December 7, 1905 to the Speaker of the House of Representatives. With that letter was also included an explanatory statement prepared by the special committee which the Secretary had appointed to prepare the bill. Those documents are all reproduced in House Document No. 74, 59th Congress, 1st Session. In explanation of section 14 the Departmental committee stated:

    "Section 14 provides for conveyance of all land in said nations reserved from allotment or sale for the use or benefit of any person, corporation or organization, and that this section shall not apply to land reserved from allotment because of the right of any railroad company in the nature of an easement, which the company is permitted to purchase at a valuation to be determined by the Secretary of the Interior."

    "Section 14 authorizes persons, corporations, or organizations for whom lands have been reserved to buy the same and secure an absolute title therefor."

    I find no substantiation for the contention that the Department has consistently placed a contrary interpretation on the acts of 1902 and 1906 by holding that the title to abandoned rights of way reserved under the act of 1902 vested in the owners of the abutting property where the railroad had never paid the damages necessary to the creation of an interest in the land covered by the selected right of way. On the contrary I find that prior to the present controversy the Department has consistently held that the title to such abandoned rights of way is vested in the Indian tribes and not in the abutting owners.

    In support of their contention on this point the claimants rely expressly on an undated longhand memorandum by Mr. Merritt of the Indian Office to Mr. Layne of that office, the letter of the Acting Commissioner of Indian Affairs to the Secretary of the Interior under date of March 28, 1913, Assistant Secretary Laylin's letter of April 19, 1913 to James S. Davenport, Second Assistant Commissioner Hauke's letter of May 6, 1913 to L. H. Burton, and Commissioner Sells' letter of July 9, 1919 to Hon. Robert L. Owen. Mr. Merritt's undated memorandum and the Acting Commissioner's letter of March 28, 1913, which was prepared as a result of the memorandum, unquestionably express the conclusion that whether or not the railroad ever paid the damages required by the act of 1902, the title to the right of way vests on abandonment in the abutting owners under the provisions of section 14 of the act of 1906. But the Acting Commissioner`s letter failed to meet with the approval of the Department. Under date of April 19, 1913, Assistant Secretary Laylin wrote to the Commissioner of Indian Affairs concerning the Acting Commissioner's letter. Although the Assistant Secretary approved the conclusion that, if the railroad had paid the damages required by the 1902 act, the title passed on abandonment to the abutting owners, he expressly repudiated the conclusion that a similar result followed where the railroad had not paid the damages. In that latter situation he clearly held that the title to the right of way was vested in the Indian tribes. The Laylin letter of April 19, 1913 to James S. Davenport was written in conformity with the letter of even date to the Commissioner, a copy of which was enclosed. The Hauke letter of May 6, 1913 to L. H. Burton also was written pursuant to the Assistant Secretary's letter of April 19, 1913 and had reference only to a right of way for which the railroad had paid the damages required by the act of 1902. Likewise Commissioner Sells' letter of July 9, 1919 to Hon. Robert L. Owen, which also recognized title to be in the abutting owners, is shown by the files of the Indian Office to have had reference only to a right of way for which the railroad had paid the necessary damages.

    It is true, however, that three Indian Office letters of recent date, one of which was approved by the Department, have squarely taken the position that, even though the damages had not been paid, the title to the land of the right of way vested in the abutting landowners by reason of the provisions of section 14 of the act of 1906. All of those letters had reference to the precise controversy now under consideration and all of them were overruled and nullified by the former opinion in this controversy. In such circumstances those letters clearly cannot be relied on to establish a contrary departmental construction.

    Actually I find that there has been a continuous and long-standing departmental construction of the statutes in accordance with the conclusion reached in the opinion of January 30, 1935. The records of the Indian Office show that over a period of years some 69 deeds have been executed by the tribes conveying tracts included in abandoned railroad rights of way for which damages had never been paid by the railroads. Those conveyances were, of course, predicated on the proposition that, under the statutes, title to those lands was vested in the tribes. For convenience I cite a few of the Indian Office letters authorizing those conveyances, each of which letters expressly enunciates the conclusion flowing from that construction of the statutes which is now attacked: letter of May 13, 1916 (90912-15), approved by the Assistant Secretary of the Interior on May 15, 1916; letter of May 21, 1918 (43901-18), approved by the Assistant Secretary on July 17, 1918; letter of May 21, 1918 (43902-18), approved by the Assistant Secretary on July 17, 1918; letter
 

of December 12, 1918 (98915-18), approved by the Assistant Secretary on February 13, 1919; letter of December 17, 1918 (100753-18), approved by the Assistant Secretary on February 14, 1919; letter of March 26, 1919 (27665-19), approved by the Assistant Secretary on April 19, 1919; and letter of May 5, 1919 (39593-19), approved by the Assistant Secretary on May 19, 1919.

    In those circumstances it appears that the long established interpretation of the Department has been exactly to the contrary of that suggested by the claimants.

    Perhaps the most serious question raised by the claimants is whether the original allotment and conveyance of land to Laura Burris by the Choctaw and Chickasaw Nations conveyed to her the entire estate which the nations had in the land covered by the right of way. If the conveyance were that inclusive, of course, the allottee and her assigns would have vested in them the fee to the land covered by the abandoned right of way irrespective of the provisions of the act of 1906, and no interest would or could remain in the Indian tribes.

    The conveyance to Laura Burris was, in form, similar to all of the conveyances made to members of the Five Civilized Tribes in fulfilment of allotments. The described parcel of land was conveyed "less 6.26 acres" included in the selected right of way of the Choctaw and Chickasaw Railroad. There would seem to be little doubt that such a deed conveyed no interest of any kind in the 6.26 acres which were expressly excluded. Yet in a recent case decided by the United States Circuit Court of Appeals for the 10th Circuit (Shell Petroleum Corp. v. Hollow, 70 F. (2d) 811), it was held that a deed conveying a tract "excepting one acre," which had been conveyed to a school district for so long as the property was used for school purposes, operated to convey the grantor's reversionary interest in the one acre and to invest the grantee with the fee title to that acre upon its abandonment for school purposes. In arriving at that conclusion the court relied heavily on the common law presumption, created as a matter of public policy, that a conveyance of land carries with it the grantor's interest in strips or gores and small parcels which have been carved out of it by prior conveyances of interests less than a fee simple absolute. Yet even that presumption must fall if the intent of the parties is shown to be otherwise, for the effect of an exception in a conveyance is dependent on that intent. Chicago, Rock Island and Pacific Railway Co. v. Denver and Rio Grande Railroad Co., 143 U.S. 596, 614. It may be both reasonable and desirable to imply an intent to convey the grantor's interest in an abutting street (Paine et al. v. Consumer's Forwarding & Storage Co. et al., 71 Fed. 629) or an abutting river bed (United States v. Hayes et al., 20 F. (2d) 873) where the description of the conveyed property does not include the street or river bed but where it is not expressly excluded. But a very different situation exists where, as here, the deed expressly states that it conveys a certain tract "less" a designated parcel or strip. Where such language is used many courts have decided that there is an express intention to retain all interest in the excepted parcel or strip and that, in fact, no interest therein is conveyed. Hartwig et ux. v. Central-Gaither Union School District et al., 253 Pac. 733 (Sup. Ct. of California); Moakley et al. v. Blog et al., 265 Pac. 548 (Dist Ct. of App. of California); Dickman v. Madison County Light and Power Co., 304 Ill. 470, 136 N.E. 790; Appleby et al. v. City of New York et al. 199 App. Div. 539, 192 N.Y. Supp, 211, affirmed, 235 N.Y. 351, 139 N.E. 474; Voss v. Thompson et al., 105 Okla. 238, 232 Pac. 392.

    If we accept as good law the holding in the case of Shell Petroleum Corp. v. Hollow, supra, that the words "less" or "excepting" when used in a conveyance are not a conclusive manifestation of the grantor's intent to retain whatever interest he may have in the excepted tract, it nevertheless does not follow that, in the instant case, the allottee acquired the interest of the Choctaw and Chickasaw Nations in the land covered by the proposed right of way. In the Shell Case the court recognized that the words "less" and "excepting" might indicate an intent not to convey any interest in the excepted parcel, but held that not necessarily to be true in the case before it since the conveyance was by warranty deed and the exception may have been intended only to protect the grantor from any liability on his warranties because of the existence of the dominant estate in the excepted parcel. Actually, then, the existence of the warranties was the controlling factor in the determination that the servient estate in the excepted parcel passed to the grantee. But the conveyances from the Choctaw and Chickasaw Nations to the various allottees, including Laura Burris, contain no warranties. Consequently the decision in the Shell Case is not applicable here.

    It appears, then, that the Indian tribes did not convey to Laura Burris their interest in the selected right of way unless there is some other manifestation of intent so to convey or some other circumstance to explain the express exception contained in the conveyance. No other circumstance explanatory of the exception has been suggested and I know
 

of none. Certainly it cannot be said that the purpose of the exception was merely to exclude the interest which the railroad had in the right of way. If that were the purpose it might easily have been accomplished by omitting any exception at all or by expressing the exception in appropriate language. It certainly is not accomplished by an exception of the land itself. See Moakley et al. v. Blog et al., supra, and the cases therein cited by the court.

    It has been suggested that a manifestation of an intent to convey the servient estate in the land is to be found in the circumstances surrounding the execution of the deed. The case of United States v. Hayes et al., supra, has been relied on in support of that suggestion. In that case the court held that deeds in satisfaction of allotments made to members of the Creek Nation conveyed the tribal interests in the beds of the Arkansas and Cimarron rivers on which the deeded lands abutted. The court found an intention so to convey the river beds from an analysis of the treaties and Congressional enactments which lead to and which authorized the making of allotments to members of the Five Civilized Tribes. The purpose of those treaties and enactments was said to be to divest the tribal organizations of all property preparatory to disbanding those organizations. In those circumstances the court thought it manifest that the tribe intended to divest itself of its river bed land as a part of the abutting land in accordance with the usual common law concept. But, as has been already pointed out, that situation is vastly different from that in the instant case where the deed, instead of being silent concerning the land in controversy, actually excepted it from conveyance.

    Furthermore, the reasoning on which the intent was established in the Hayes Case is not applicable in the present controversy. The very fact that section 14 of the act of 1906 provided that, if damages for the creation of the easement had already been paid. the fee title might be acquired by the railroad or allowed to pass to the abutting owners on abandonment clearly shows that it was not contemplated that the servient estate in the rights of way had passed to the abutting owners under the allotment deeds. If that servient estate had passed there would be no occasion for the provisions vesting title in the abutting owners on termination of the dominant estate by abandonment. In those circumstances the Statutes and treaties cannot be said to manifest an intent on the part of the tribes that the servient estate in rights of way pass to the allottees under the allotment deeds despite the expression of a contrary intent in the exception contained in the deeds. Since, for the purpose of determining the intent on which the exceptions were founded, it is obviously immaterial whether the railroad had or had not paid the damages necessary for the creation of an interest in the land under the 1920 act, it is my opinion that there is no indication of any intent sufficient to defeat the operation of the exception contained in the deed to Laura Burris.

    It has also been suggested that even though the exception may have been otherwise valid and sufficient to prevent the passage to Laura Burris of title to the right of way, it nevertheless was in operative because of indefiniteness of description of the land excepted. It is true, of course, that the parcel excepted must be capable of identification else the exception swill fail. But in this instance it appears that the excepted land covered by the proposed right of way can be readily identified. The deed itself refers to the specific right of way which is involved. In accordance with the requirements of the act of 1902 granting the right to take the right of way the railroad must file a map of its selected right of way with the Department of the Interior, with the "United States Indian agent for Indian Territory" and with the principal chief or governor of the Indian tribe. In this instance those maps were filed prior to the allotment to Laura Burris and they are still filed. From those maps it is possible, according to the report made by the Superintendent for the Five Civilized Tribes agency on January 11, 1936, to locate the right of way on the ground with precision. In those circumstances there is no basis for the suggestion that the exception has failed because of indefiniteness. The exception stands valid and operative.

    I may point out that a similar interpretation of the exceptions contained in allotment deeds, as well as an interpretation of the statutes similar to that set forth in part I of this opinion, form the basis for the numerous conveyances of abandoned right of way tracts which have been made over a long period of years by the tribes. Those interpretations have consequently become the foundations of real property titles and cannot lightly be overthrown.

    In accordance with the detailed analysis which I have made it is my conclusion that the title to the land covered by the selected right of way for which the railroad company never paid damages does not vest in the abutting landowners under the provisions of section 14 of the act of 1906, that the Department has long and continuously interpreted those statutory provisions in that manner and that the allotment deed to Laura Burris did not convey to her any interest in the land covered by the selected right of way. It is therefore my opinion that
 

the title to the abandoned right of way is now vested in the Choctaw and Chickasaw Nations.

                                                                                                                                            NATHAN R. MARGOLD,

M-28029                                                                                                                              April 23, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion on certain questions arising out of the act of June 28, 1906 (34 Stat. 539), as amended by subsequent legislation hereinafter referred to. The questions deal with trust funds on deposit in the United States Treasury to the credit of individual Osage Indians and relate particularly to the disposition to be made of such funds upon the death of the Indian owner. As formulated by the Commissioner of Indian Affairs, the questions are:

1. Whether such funds are part of the Osage headright and as such must be held awaiting the determination of heirs.

2. Whether such funds may be paid to the administrator in the discretion of the Secretary of the Interior.

3. Whether such funds must be paid to the administrator on application where the decedent is less than one-half Indian blood or had had a certificate of competency.

    The act of June 28, 1906, provides for an equal division of the lands and funds of the Osage Tribe of Indians among the individual members according to a roll authorized to be made by the act. Most of the lands were to be allotted in severalty, partly as homesteads and partly as surplus lands. The remaining lands, including some town lots, were to be sold for the benefit of the tribe. Section 2, subdivision 7, authorized the Secretary of the Interior, in his discretion, to issue a certificate of competency to any adult member authorizing him to sell and convey all of his allotted lands except his homestead. The oil, gas, coal and other minerals were reserved to the Osage Tribe for 25 years with provision for the leasing of same on royalties during that period. At that time, the United States held for the tribe trust funds of more than $8,000,000 received under various treaties as compensation for the relinquishment of other lands. Under subdivision 1 of section 4, these funds were segregated and the sum of $3,819.76 placed to the credit of each of the 2,229 enrolled members. The act contained no provision for the payment of this sum or any part thereof to the individual member. Instead, the act declared that the segregated funds should be held in trust at interest by the United States for a period of 25 years, at the end of which period the funds (together with the lands and mineral interests) were to become the absolute property of the individual members. (Sections 4 and 5.) In the meantime, the interest accruing on these segregated funds was to be paid, with exceptions not here material, "quarterly to the members entitled there to" (subdivision 1, section 4). The funds so segregated and retained in trust are those to which the questions under consideration relate and they will hereinafter be referred to as "trustfunds."

    With respect to the proceeds derived from mineral leases and other tribal sources, subdivision 2 of section 4 of the act of 1906 directs that all such moneys be placed in the Treasury of the United States to the credit of the individual members and that, subject to certain deductions, all such moneys "shall be distributed to the individual members of said Osage Tribe according to the roll provided for herein, in the same manner and at the same time that payments are made of interest on other moneys held in trust for the Osages by the United States."

    Section 6 of the act of 1906 provides:

    "That the lands, moneys, and mineral interests, herein provided for, of any deceased member of the Osage tribe shall descend to his or her legal heirs, according to the laws of the Territory of Oklahoma, or of the State in which said reservation may be hereinafter incorporated, except where the decedent leaves no issue, nor husband nor wife, in which case said lands, moneys, and mineral interests must go to the mother and father equally."

courts the estates of Osages who are deceased or are orphan minors, insane or otherwise incompetent. That section reads:

    "That the property of deceased and of orphan minor, insane, or other incompetent allottees of the Osage Tribe, such incompetency being determined by the laws of the State of Oklahoma, which are hereby extended for such purpose to the allottees of said tribe, shall, in probate matters, be subject to the jurisdiction of the county courts of the State of Oklahoma, but a copy of all papers filed in the county court shall be served on the superintendent of the Osage Agency at the time of filing, and said superintendent is authorized, whenever the interests of the allottee require, to appear in the county court for the protection of the interests of the allottee. The superintendent of the Osage Agency or the Secretary of the Interior, whenever he deems the same necessary, may investigate the conduct of executors, administrators, and guardians or other persons having in charge the estate of any deceased allottee or of minors or persons incompetent under the laws of Oklahoma, and when ever he shall be of opinion that the estate is in any manner being dissipated or wasted or is being permitted to deteriorate in value by reason of the negligence, carelessness, or in competency of the guardian or other person in charge of the estate, the superintendent of the Osage Agency or the Secretary of the Interior or his representative shall have power, and it shall be his duty, to report said matter to the county court and take the necessary steps to have such case fully investigated, and also to prosecute any remedy, either civil or criminal, as the exigencies of the case and the preservation and protection of the interests of the allottee or his estate may require, the costs and expenses of the civil proceedings to be a charge upon the estate of the allottee or upon the executor, administrator, guardian, or other person in charge of the estate of the allottee and his surety, as the county court shall determine. Every bond of the executor, administrator, guardian, or other person in charge of the estate of any Osage allottee shall be subject to the provisions of this section and shall contain therein a reference hereto: Provided: That no guardian shall be appointed for a minor whose parents are living, unless the estate of said minor is being wasted or misused by such parents: Provided further, That no land shall be sold or alienated under the provisions of this section without the approval of the Secretary of the Interior."

    Section 5 deals expressly with trust funds and provides for the payment of same as follows:

    "That the Secretary of the Interior, in his discretion, hereby is authorized, under rules and regulations to be prescribed by him and upon application therefor, to pay to Osage allottees, including the blind, insane, crippled, aged, or helpless, all or part of the funds in the Treasury of the United States to their individual credit: Provided, That he shall be first satisfied of the competency of the allottee or that the release of said individual trust funds would be to the manifest best interests and welfare of the allottee: Provided further, That no trust funds of a minor or a person above mentioned who is incompetent shall be released and paid over except to a guardian of such person duly appointed by the proper court and after the filing by such guardian and approval by the court of a sufficient bond conditioned to faithfully administer the funds released and the avails thereof."

    " * * * That no partition or sale of the restricted lands of a deceased Osage allottee shall be valid until approved by the Secretary of the Interior. Where some heirs are minors, the said court shall appoint a guardian ad litem for said minors in the matter of said partition, and partition of said land shall be valid when approved by the court and the Secretary of the Interior. When the heirs of such deceased allottees have certificates of competency or are not members of the tribe, the restrictions on alienation are hereby removed. If some of the heirs are competent and others have not certificates of competency, the proceeds of such part of the sale as the competent heirs shall be entitled to shall be paid to them without the intervention of an administrator. The shares due minor heirs, including such minor Indian

heirs as may not be tribal members and those Indian heirs not having certificates of competency, shall be paid into the Treasury of the United States and placed to the credit of the Indians upon the same conditions as attach to segregated shares of the Osage national fund, or with the approval of the Secretary of the Interior paid to the duly appointed guardian. The same disposition as herein provided for with reference to the proceeds of inherited lands sold shall be made of the money in the Treasury of the United States to the credit of deceased Osage allottees." (Italics added.)

    Section 7 of the act of 1912 reads:

    "That the lands allotted to members of the Osage tribe shall not in any manner whatsoever be encumbered, taken, or sold to secure or satisfy any debt or obligation contracted or incurred prior to the issuance of a certificate of competency, or removal of restrictions on alienation; nor shall the lands or funds of Osage tribal members be subject to any claim against the same arising prior to grant of a certificate of competency. That no lands or moneys inherited from Osage allottees shall be subject to or be taken or sold to secure the payment of any indebtedness incurred by such heir prior to the time such lands and moneys are turned over to such heirs: Provided, however, That inherited moneys shall be liable for funeral expenses and expenses of last illness of deceased Osage allottees, to be paid under order of the county court of Osage County, State of Oklahoma: * * *"

    "That any adult member of the Osage Tribe of Indians not mentally incompetent may dispose of any or all of his estate, real, personal, or mixed, including trust funds, from which restrictions as to alienation have not been removed, by will in accordance with the laws of the State of Oklahoma: Provided, That no such will shall be admitted to probate or have any validity unless approved before or after the death of the testator by the Secretary of the Interior."

    Section 2 of the act of 1925, as amended by section 4 of the act of March 2,1929, supra, reads:

    "Upon the death of an Osage Indian of one half or more Indian blood who does not have a certificate of competency, his or her moneys and funds and other property accrued and accruing to his or her credit and which have heretofore been subject to supervision as provided by law may be paid to the administrator or executor of the estate of such deceased Indian or direct to his heirs or devisees, or may be retained by the Secretary of the Interior in the discretion of the Secretary of the Interior, under regulations to be promulgated by him: Provided, That the Secretary of the Interior shall pay to administrators and executors of the estates of such deceased Osage Indians a sufficient amount of money out of such estates to pay all lawful indebtedness and costs and expenses of administration when approved by him; and, out of the shares belonging to heirs or devisees, above referred to, he shall pay the costs and expenses of such heirs or devisees. including attorney fees, when approved by him, in the determination of heirs or contest of wills. Upon the death of any Osage Indian of less than one-half of

Osage Indian blood or upon the death of an Osage Indian who has a certificate of competency, his moneys and funds and other property accrued and accruing to his credit shall be paid and delivered to the administrator or executor of his estate to be administered upon according to the laws of the State of Oklahoma: * * *"

    The first question as to whether the trust funds are part of the Osage headright and as such must be held awaiting the determination of heirs, appears to have been induced by certain court decisions dealing with the alienability, etc., of an Osage headright and the jurisdiction of the courts thereover. In Taylor v. Tayrien (51 Fed. (2d) 884), the Tenth Circuit Court of Appeals ruled that no Indian of the Osage Tribe has the right to alienate his headright and that it is not subject to judicial process. In that case the Indian involved was an Osage of less than one half blood and had a certificate of competency, and the court held that his headright was not transferable and did not pass to his trustee in bankruptcy. To the same effect is Taylor v. Jones (51 Fed. (2d) 892), involving an Indian who was a member of the Kaw Tribe of Indians of less than the half blood with a certificate of competency. In both cases the Supreme Court of the United States denied certiorari. Taylor v. Tayrien (284 U.S. 672); Taylor v. Jones (284 U.S. 663). See also In re Dennison (38 Fed. (2d) 662); appeal dismissed 45 Fed. (2d) 585. In Denoya v. Arrington (20 Pac. (2d) 563) the Supreme Court of Oklahoma held that the income accruing to the Osage headright of a deceased Osage allottee subsequent to the death of said allottee is not an asset of the estate of such decedent which can be appropriated for the payment of the claims of creditors. Compare, however, Globe Indemnity Company v. Bruce (81 Fed. (2d) 143).

    In the Globe Indemnity Company case, an Osage headright is accurately defined in the following language:

    "The right to receive the trust funds and the mineral interests at the end of the trust period, and during that period to participate in the distribution of the bonuses and royalties arising from the mineral estates and the interest On the trust funds, is an Osage headright."

    Section 2 of the act of February 27, 1925, as amended by section 4 of the act of March 2, 1929, supra, deals expressly with payments to executors and administrators, and will first be considered for the purpose of determining whether trust funds are included within the authority conferred by that section. Said section, which is reproduced above, divides the estates of deceased Osage Indians into two classes: (1) estates of Osage Indians of one half or more Indian blood who do not at the time of death have certificates of competency, and (2) estates of Osage Indians of less than one half Indian blood, or who have certificates of competency at the time of death. As to the first class, the Secretary of the Interior is given authority in his discretion to retain in his custody and control or pay to the administrator or executor of the estate the decedent's "moneys and funds and other property accrued and accruing to his or her credit and which have heretofore been subject to supervision as provided by law." With respect to the second class, the Secretary is directed in mandatory language to deliver the funds and property described to the executor or administrator. In both cases, only those moneys "accrued and accruing" may be paid. Interpreting the words "accrued and accruing," the Tenth Circuit Court of Appeals in Globe Indemnity Company v. Bruce, supra, said (at page 153):

    "It will be observed the act speaks of moneys, funds and property accrued and accruing to the credit of the owner of the headright, not of quarterly payments accrued or accruing to such owner. We see no reason for construing the words accrued and accruing as referable to quarterly payments.

    Interest on trust funds and the mineral royalties are constantly accruing to the credit of owners of headrights. On the death of the owner of a headright, certain interest on trust funds and mineral royalties will have accrued to his credit. It must refer to those that arise after the death of the owner of the headright. We hold the word 'accrued' refers to interest and royalties that have arisen to the credit of the owner of the headright at the time of his death and the word 'accruing' refers to the interest and royalties that will arise to the credit of his headright after his death and prior to the distribution of his estate." (Italics added.)

    The tribal funds segregated under the act of 1906 were placed in trust by Congress for a definite and specific period which has since been extended to 1959, and the authority to determine when and under what conditions the trust so created shall be terminated rests exclusively with Congress. An intent to shorten or curtail the period of trust is not to be implied but must be clearly expressed. Payment of the trust funds to the administrator or executor obviously releases and terminates the trust. No provision authorizing release or termination of the trust in that or any other manner is found in the acts of 1906, 1921, 1925 and 1929. Section 3 of the act of 1912 does, as we have seen, subject to the jurisdiction of the local county courts the estates of deceased allottees of the Osage Tribe. That section, however, when read, as it must be, in conjunction with sections 5 and 6 of the same act cannot be regarded as authorizing termination of the trust by payment of the trust funds to the administrator or executor of such estates. Section 5 deals expressly with the trust funds and takes cognizance of the lack of authority in the Secretary of the Interior to release such funds from the trust by authorizing such release, in whole or in part, upon application, to Osage allottees, including minors as well as the blind, insane, crippled, aged or helpless, with a proviso dealing specifically with payments to guardians appointed by the local county courts. Speaking of this section, the Supreme Court of the United States in McCurdy v. United States (246 U. S. 263, 269) said:

    "Under the Act of June 28, 1906, the Secretary of the Interior had no authority to release or to invest any part of the principal of the trust fund held for Panther. His authority to release rests wholly upon section 5 of the Act of April 18, 1912 * * *."

ited in cases where competent heirs are jointly interested with incompetent heirs in such funds by the mandatory direction that the competent heirs be paid their shares without the intervention of an administrator. As to the shares of the incompetent heirs, regardless of degree of Indian blood, the plainly expressed intent of Congress is that the trust funds shall be retained under trust for their benefit unless the Secretary of the Interior approves their release, not to an administrator, but to the duly appointed guardian of the heir.

    The case of Globe Indemnity Company v. Bruce, supra, held that the probate court had jurisdiction under the act of 1912 over the headright of a deceased Osage Indian who had a certificate of competency at the time of death and that the administrator was authorized to receive the quarterly payments accruing to the headright after the decedent's death. The funds which the administrator in that case had received, however, did not include the principal of the trust funds but represented accumulations from mineral royalties and interest on trust funds. The authority of the Secretary of the Interior to release the trust funds to the administrator was not before the court for decision but the lack of such authority may be implied from the recognition given by the court throughout its decision that the interest of the individual Indian in the trust funds consisted of the right to receive the same at the end of the trust and that, in the meantime, he was entitled only to participate in the quarterly distribution of the interest.

    The court stated that its conclusion with respect to the jurisdiction of the probate court was in harmony with certain opinions of the Solicitor for this Department and the Comptroller of the Treasury. See Solicitor's opinion of May 25, 1915, D. 29630; Opinion Comptroller of Treasury, March 11, 1916, 22 Comp. Dec. 457; and Solicitor's opinion of May 25, 1922, M-7169. The latter opinion appears to have been concerned with funds accumulating to the Osage headright and is without controlling bearing here. The Solicitor's opinion of May 25, 1915, and that of the Comptroller of March 11, 1916, definitely hold that the trust funds to the credit of the estate of Thomas Mosier, Sr., a deceased Osage allottee, properly could be paid to the executor of his estate. Careful examination of these opinions discloses, not only that the trust imposed upon these funds by Congress was disregarded, but that no effect was given to the specific directions made by Congress with respect to the disposition of such funds upon the death of members of the tribe. The Solicitor placed chief reliance upon section 8 of the act of April 18, 1912, authorizing adult members of the tribe to dispose of any or all of his estate, real, personal, or mixed, including trust funds, with the approval of the Secretary of the Interior. The Solicitor said:

    "When a will, approved by the Secretary of the Interior, is admitted to probate, the jurisdiction of the court attaches to all the property involved therein, trust funds being specifically named. The only possible concern the Secretary of the Interior can have thereafter, is that conferred by section 2 of said act to investigate the conduct of the executor and present any delinquencies or negligence on his part to the proper court, taking such further steps as may be necessary to have the matter prosecuted, or to prosecute any remedy, civil or criminal, in behalf of the heirs of the decedent."

    The Globe Indemnity Company case, supra, refers to the well settled rule that decision of the department charged with the execution of a law are entitled to great respect and should not be overthrown except for cogent reasons. It is equally well settled, however, that the administrative view is not controlling where clearly wrong. Harris v. Bell (254 U.S. 103, 109). It is also well settled that the Secretary of the Interior may reconsider and vacate decisions of his predecessors in office in matters of this kind wherever such reconsideration demonstrates the fallacy of the prior decisions. Wilbur v. United States (281 U.S. 206).
 

    It is my considered opinion that the Secretary of the Interior not only has not been authorized by Congress to release the funds under consideration to the administrator of the estate of a deceased Osage Indian, but that such action would be in direct contravention of the express directions for the disposition of said funds as contained in section 6 of the act of April 18, 1912. Questions Nos. 2 and 3 are, therefore, answered in the negative.

    Further answering question 1, I have to advise that the trust funds credited to the estate of a deceased Osage Indian should be held pending administration of the estate in the local courts at the conclusion of which the funds should be retained in trust for the benefit of the heirs or devisees subject to release as now authorized by sections 5 and 6 of the act of April 18, 1912, or as may hereafter be authorized by Congress.

                                                                                                                                            NATHAN R. MARGOLD,

M-28256                                                                                                                              April 28, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion as to the authority of the Secretary of the Interior to expend the restricted funds of individual Indians, adults and minors, under the jurisdiction of the Taholah Indian Agency in Washington, in the purchase of single premium annuity policies.

    The Secretary of the Interior has only such power over restricted Indian property as Congress has expressly or by necessary implication confided in him. According to the correspondence accompanying the present inquiry, the moneys here involved were derived from sales of timber on the restricted allotments of the Indian owners. The timber sales were made under authority of section 8 of the act of June 25, 1910 (36 Stat. 855), which provides:

    "That the timber on any Indian allotment held under a trust or other patent containing restrictions on alienations, may be sold by the allottee with the consent of the Secretary of the Interior, and the proceeds thereof shall be paid to the allottee or disposed of for his benefit under regulations to be prescribed by the Secretary of the Interior."

    In the case of minors and Indians non compos mentis, as well as adult nonassenting Indians, the expenditure or investment, if made, must be made by the Secretary of his own volition. These Indians are all wards of the United States and the authority conferred by section 8 of the act of 1910, supra, extends to all. But that authority, while broad, is not unlimited. The Secretary is not authorized, for example, to make donations or gifts of the Indians' property. Mott v. United States (283 U.S. 747). He is not authorized to create trusts transferring Indian property from Federal supervision and control to a private agency without specific authority from Congress. (36 Ops. Atty. Gen. 98). Nor can his authority safely be construed as extending to the purchase, independent of the Indian owner's wishes or consent, of single premium annuity policies. Such a transaction involves the transfer to the insurance company of substantial sums of money in consideration of the company's unsecured obligation to pay a stipulated sum monthly commencing usually at some future date. Congress has not clearly indicated its intent to confer authority upon the Secretary to make disposals of the property of its Indian wards in this way, and until it has done so, it is my opinion that such expenditures or investments, if made at all, should be confined to the funds of adult Indians having sufficient mental capacity to understand the nature of the expenditure or investment and who desire that their moneys be used for such purpose.

                                                                                                                                            NATHAN R. MARGOLD,

    You have requested my recommendation in the matter of the employment of Huston Thompson, Esq., to represent individual restricted Indians of the Five Civilized Tribes in cases involving the liability of such Indians for Federal income and estate taxes. The application of Mr. Thompson for this employment contemplates direct employment by the Secretary of the Interior and the payment of compensation from the funds of these Indians without the assent of the Indians. A brief statement with respect to your authority and the necessity for and terms of the proposed employment is necessary.

    1. Authority of the Secretary. In 1922 Congress declined to grant general authority to the Secretary of the Interior to make contracts for Indians of the Five Civilized Tribes in Federal income tax matters, but did enact legislation authorizing the Secretary to make such contracts for services in connection with taxes for the years 1919, 1920 and 1921 (act of September 21, 1922, 42 Stat. 994). That legislation, however, did not forbid the making of such contracts. Consequently any authority the Secretary had in such matters prior to that enactment remained in him after the enactment.

    August 16, 1921, the Solicitor for this Department in a lengthy and well-considered opinion reached the conclusion that the Secretary of the Interior had authority under the then existing law to em ploy competent persons or firms to represent restricted Indians of the Five Civilized Tribes in Federal income tax cases and to pay their fees and expenses from the restricted funds of the several individual Indians benefited. That conclusion, with which I agree, is in accord with the well-settled principle that a trust fund must bear the expenses of its administration, including the payment of reasonable compensation to attorneys employed for the recovery or preservation of the fund. Trustees v. Greenough, 105 U.S. 527, 532; United States v. Equitable Trust Co., 283 U.S. 738, 744.

    Under the proposed employment Mr. Thompson's services will be directed to the protection of the Indians against the payment of excessive or illegal taxes. In my opinion you have authority to employ him for that purpose and make payment of his compensation from the funds under your control belonging to the Indians benefited by such services. Reasonable payments for such a purpose obviously should not be confused with the disbursements involving a waste or dissipation of the estate, such as gifts or donations made in violation of the duty to protect and conserve such estates. These latter transactions are, of course, invalid. Mott v. United States, 283 U.S. 747.

  2. Necessity for and terms of employment. Prior to the recent decision of the Supreme Court in the Sandy Fox case, 295 U.S. 418, this Department, the Attorney General and the lower courts had ruled that the income derived by Indians from their restricted lands was not taxable under the Federal revenue laws. The Supreme Court in the Sandy Fox case not only held that the reinvestment income of a Five Tribes Indian was taxable, but used language strongly indicating that the original or primary income was taxable save where there is an express exemption. Since that decision the Internal Revenue Department has made certain rulings with respect to the liability of these Indians for both income and estate taxes. This necessitates, of course, considerable readjustment requiring the attention of trained help if the rights of the Indians are to be fully protected. In this process of readjustment questions are likely to arise which can only be settled in the courts and it is generally recognized that the attorneys in this Department and in the Department of Justice cannot represent the Indians in litigation of this nature against the United States.

    As to the terms of employment, Mr. Thompson requests a down payment in each case to cover necessary expenses, his final fee in the event of success to be determined on a quantum meruit basis not to exceed 25 percent. Conferences with him developed that specific cases in which services needed to be rendered had not been determined and would not be determined until after investigation and examination of the records of the Internal Revenue Department and the Office of the Superintendent for the Five Civilized Tribes had been made. In these circumstances I do not think it is possible to fix in advance an equitable charge against the Indians for expenses and I suggested to Mr. Thompson that in the event of his employment reasonable sums to meet necessary expenses such as filing fees, court costs, transcript of records and the like, not including travelling expenses or expenses of office upkeep, might be paid upon approval of applications submitted during the course of his investigation, in which applications the necessity for such expenses is to be fully set forth. In view of the fact that Congress has specifically subjected the production of minerals, including oil and gas from restricted lands belonging to Indians of the Five Civilized Tribes to all forms of Federal and State taxation, I further suggested to Mr. Thompson
 

that his employment should be on a purely contingent basis, his fees in the event of success to be determined by the Secretary of the Interior on a quantum meruit basis. Mr. Thompson stated informally that he was willing to accept the employment on these terms.

    Interest and penalties should be excluded from the employment, the Internal Revenue Department having ruled that these should be waived and in cases involving estate taxes, the employment should be confined to services on behalf of restricted Indian beneficiaries in such estates.

    If you conclude to approve Mr. Thompson's employment I will be pleased to draw the contract. Such a contract, I believe, will be legal and beneficial to the Indians.

                                                                                                                                            NATHAN R. MARGOLD,

    In the second paragraph of the attached letter to the Superintendent of the 5 Civilized Tribes the statement is made that "the act of 8-24-12 (37 Stat. 497), provides for the sale of timber on the lands of the 5 Civilized Tribes under such regulations as may be prescribed by the Secretary of the Interior." In the last paragraph of the letter is stated that the Superintendent has authority "to sell Indian tribal timber of the 5 Civilized Tribes where it seems desirable," and the concluding sentence of this paragraph says that "the foregoing applies only to tribal timber lands of the Choctaw and Chickasaw Nations of Oklahoma."

    The act of 8-24-12, supra, has application only to those lands reserved from allotment by section 7 of the act of 4-6-06 (34 Stat. 137), which lands are described in section 7 by legal subdivisions. I suggest that the general references, indicating that the act of 8-24-12, authorizes timber sales through out the 5 Civilized Tribes, be eliminated and that it be made clear that the timber sale authority is confined to the lands specifically described in section 7 of the act of 1906.

                                                                                                                                            NATHAN R. MARGOLD,

  You have requested my advice as to whether the act of May 23, 1928 (45 Stat. 717) extended the boundaries of the Acoma Reservation so as to include all of the townships specified in that act and particularly lands in private ownership, the purchase of which is contemplated under the Indian Reorganization Act.

    The act of 1928 reserved for the Acoma Indians only the vacant unappropriated and undisposed of public lands within the designated townships. The land within these townships which was then in private ownership did not become a part of the Acoma Reservation and cannot not be considered within the boundaries of that reservation. This situation should not be confused with a situation where land is now in private ownership which was originally a part of an Indian reservation and which is within the boundaries of an existing reservation. It is land of this latter character which may be considered as land within the boundaries of a reservation within the meaning of that term in the Indian Reorganization Act and with reference to the acts making appropriations for the purchase of land under the Reorganization Act.

    Accordingly, if the land which it is desired to purchase for the Acoma Indians is now in private ownership and was not a part of the vacant and undisposed of land at the date of the act of 1928 free from effective claims by settlers at the date of the withdrawal of the land from entry (Oct. 3, 1927) it could not be acquired under the contemplated appropriation act for the fiscal year 1937.

                                                                                                                                            NATHAN R. MARGOLD,

    The attached file concerning a proposed order to restore to tribal ownership certain nonirrigable lands within the Yuma Indian Reservation is returned.

    As authority for issuance of the proposed order
 

section 3 of the act of 6-18-34 (48 Stat. 984) in invoked. That section, so far as material, reads:

"The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or any other form of disposal by Presidential proclamation, or by any of the public land laws of the United States."

"This brings us up to the period of about 1890 at which time there was adopted the plan of opening to entry, sale, etc., the lands of reservations that were not needed for allotment, the Government taking over the lands only as trustee for the Indians. Under this plan the Indians were to be credited with the proceeds only as the lands were sold, the United States not to be bound to purchase any portion of the lands so opened. Undisposed of lands of this class remain the property of the Indians until disposed of as provided by law (Ash Sheep Co. v. United States, 252 U.S. 159). Such lands are usually referred to as surplus lands of Indian reservations opened to public entry and undoubtedly comprise the class of lands from which restorations to tribal ownership are to be made under the said Section 3, if in the public interest. It can safely be said that it would not be to the interest of the public to restore to the Indians all undisposed of public lands that at one time were in Indian ownership but afterwards became the property of the United States by outright cessions from the Indian owners, because, as stated above, such action would mean the withdrawal in many states of all lands now available for entry as public domain. Such action undoubtedly would raise strong opposition in the various localities affected and have an undesirable bearing on the new Indian legislation."

    Should you conclude to present the matter to Congress I suggest that consideration be given to incorporating in the legislation adequate provisions for the protection of the U.S. in its development on the Colorado River, and that consideration also be given to the inclusion of a provision validating existing mining leases made on the theory that the nonirrigable lands belonged to the Indians, provided, of course, such leases are other wise in good standing.

    As pointed out in my opinion of 1-8, supra, these nonirrigable lands have not and will not become a part of the public domain until formally opened to settlement by the President. Pending restoration of the lands to Indian ownership they are, therefore, effectively protected from sale or disposal under the general land laws.

                                                                                                                                            NATHAN R. MARGOLD,

 Memorandum to the Assistant Commissioner of Indian Affairs:

    Your memorandum of 5-14 inquires whether the Executive order of 2-11-1887 may be construed as including within the boundaries of the reservation made therein for the Jicarilla Apache Indians all of the townships designated in the order, regardless of the fact that privately owned lands were and are contained within the townships. The Executive order of 2-11-1887 reads as follows:

    "It is hereby ordered that all that portion of the public domain in the Territory of New Mexico, which, when surveyed, will be embraced in the following townships * * * be * * * set apart as a reservation for the use and occupation of the Jicarilla Apache Indians: Provided, That this order shall not be so construed as to deprive any bona fide settler of any valid rights he may have acquired

under the laws of the U.S. providing for the disposition of the public domain."

M-27878                                                                                                                              May 20, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion as to whether certain lands formerly a part of the San Carlos or White Mountain Indian Reservation in Arizona but restored to the public domain by Executive order, may be returned to tribal ownership by the Secretary of the Interior under authority of section 3 of the Act of June 18, 1934 (48 Stat. 984). Section 3, so far as material, reads:

    "The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or any other form of disposal by Presidential proclamation, or by any of the Public-land laws of the United States."

    By letter dated August 10, 1934, approved by the Secretary of the Interior September 19, 1934 (54 I.D. 559), the Commissioner of Indian Affairs gave consideration to and defined the class of lands which is subject to restoration under section 3 of the Act of June 18, 1934, supra. In that letter, after referring to the practice prevailing in early times of obtaining absolute cessions of the Indian title in consideration of money payments or other benefits, it is stated:

    "This brings us up to the period of about 1890, at which time there was adopted the plan of opening to entry, sale, etc., the lands of reservations that were not needed for allotment, the Government taking over the lands only as trustee for the Indians. Under this plan the Indians were to be credited with the proceeds only as the lands were sold, the United States not to be bound to purchase any portion of the lands so opened. Undisposed of lands of this class remain the property of the Indians until disposed of as provided by law (Ash Sheep Company v. United States, 252 U.S. 159). Such lands are usually referred to as surplus lands of Indian reservations opened to public entry, and undoubtedly comprise the class of lands from which restorations to tribal ownership are to be made under the said Section 3, if in the public interest."

fore opened" etc., but the legislative debates which it is competent to consider in matters of this kind (Work v. Brafet, 276 U.S. 560, 566), plainly show that the purpose of Congress was to confine the authority of the Secretary of the Interior to lands of Indian reservations opened to sale or disposal for the benefit of the Indians. (See Congressional Record June 12, 1934, pages 11472 and 11473.)

    An examination of the Executive orders referred to above discloses that the restorations made there by were absolute and unconditional. No interest in the Indians was reserved and there was no provision for disposal of the restored lands for their benefit. Section 3 of the Act of June 18, 1934, supra, has no application to such lands. This being so, the Secretary of the Interior is deprived of authority to restore the lands to tribal ownership by the Acts of May 25, 1918 (40 Stat. 561, 570), June 30, 1919 (41 Stat. 3, 34), and March 3, 1927 (44 Stat. 1347), the provisions of which acts prohibit the creation of Indian reservations from public lands or the making of changes in the boundaries of existing reservations, except by act of Congress.

    The Commissioner of Indian Affairs appears, however, to question the validity of the Executive orders restoring the lands of this reservation to the public domain. In that connection he refers by citation to the case of C. N. Cotton, 12 L.D. 205, and the opinion of the Attorney General of May 27, 1934 (34 Op. 181). The latter opinion held that Executive order Indian reservation lands were not subject to lease under the public land leasing Act of February 25, 1920 (41 Stat. 437). While the question of the authority of the President to abolish or vacate Executive order reservations was not before the Attorney General he stated (at page 186):

    "Whether the President might legally abolish, in whole or in part, Indian reservations once created by him, has been seriously questioned (12 L.D. 205; 13 L.D. 628) and not without strong reason; for the Indian rights attach when the lands are thus set aside; and moreover, the lands then at once become subject to allotment under the General Allotment Act. Nevertheless, the President has in fact, and in a number of instances, changed the boundaries of executive order Indian reservations by excluding lands therefrom, and the question of his authority to do so has not apparently come before the courts."

    With respect to the validity of the Executive order of 1902 and that of the prior orders as well, it may be said that the power to restore land within Executive order Indian reservations, like the power to create such reservations, did not in these earlier days rest upon any statutory base. The Executive assumed and exercised both powers in innumerable instances. As pointed out in the opinion of the Attorney General of May 27, 1924, the power to restore has not been presented to the courts for decision. But the power to create such reservations has been called into question and has been upheld by the United States Supreme Court in United States v. Midwest Oil Co. (236 U.S. 459), on the broad principle that while the Executive cannot by his course of action create the power, Congress may grant such power by implication and must be presumed to have done so where the practice has been long continued and is known to and acquiesced in by Congress. The courts when called upon to consider the question may or may not decide that this same principle applies to the power of the Executive to restore Indian reservation lands to the public domain. However this may be, Congress has not seen fit as yet to authorize the Secretary of the Interior to vacate and set aside Executive orders restoring Indian reservation lands to the public domain. In the absence of statutory authority, and in view of the inhibitions contained in the acts of May 25, 1918, June 30, 1919, and March 3, 1927 supra, it must be held that
 

lands of this character cannot be returned to tribal ownership by order of the Secretary of the Interior.

                                                                                                                                            NATHAN R. MARGOLD,

 Approved: May 20, 1936.
OSCAR L. CHAPMAN, Assistant Secretary.

    In your memorandum of May 19, you requested me to reconsider my memorandum of May 12 in which I took the position that the boundaries of the lands added to the Acoma Reservation by the act of May 23, 1928 (45 Stat. 717), were the boundaries of the lands actually reserved by the act, namely, the lands which were "vacant, unappropriated and undisposed of" at the date of the act. The necessity of defining the boundaries of the Acoma Reservation arises from the possibility that reorganization funds for land purchase may not be able to be used in the next fiscal year for purchases outside the boundaries of existing reservations in New Mexico.

    I have studied the correspondence of the Indian Office dealing with the addition to the Acoma Reservation made by the Act of 1928 and the legislative history of that act. It is clear that the intention was to set aside for these Indians only the remaining vacant land within the townships designated and that the other land, which consisted mainly of railroad and school land, would be leased by the Indians if necessary for grazing purposes. However, these facts are not conclusive of the question raised. Ordinarily a reservation is made by describing its exterior boundaries. However, where the public domain has already been appropriated to some extent, the act of Congress or Executive order creating the reservation may reserve simply the public land within a certain defined area. For the purpose of determining the lands reserved, the boundaries of the defined area have been treated administratively as the boundaries of the reservation. It is common for the officials of the Indian Office to refer to the townships designated in the 1928 act as "the area set aside" for the Acoma Indians. It is also usual for the boundaries of a reservation to be considered as the area originally set aside for the Indians although these boundaries do not coincide with the land within the area which remains in fact in a reserved status.

    Reference to the map of this area will show that about one out of every four of the sections within the townships set aside was vacant land and became reserved for the Indians and that these sections are scattered over the checkerboard with out connection with each other in most cases. In view of the scattered arrangement it is true that it would be impossible for practical purposes to define the boundaries of the reservation as coinciding with the boundaries of the vacant and reserved land. It appears reasonable to conclude that the boundaries of the addition to the Acoma Reservation may be considered the boundaries of the area within which the lands to be set aside were to be determined. In other words, the reservation of public lands within the designated area may be considered equivalent to a reservation of the designated area except for the land therein then in private ownership.

    In reviewing the correspondence it appears that continuous effort has been made by the Indians and the Indian Service and other interested persons to acquire the railroad and school land and the public domain allotments within the area set aside under the act of 1928 for the Acoma Indians to make possible the full utilization of the lands they now have. The reasons given for failure to obtain this land show some confusion as to whether these lands are within the reservation. It was indicated that the act of March 3, 1921 (41 Stat. 1239), allowing the relinquishment and lieu selection of lands within the counties of which the designated townships were a part did not permit the exchange of the railroad and school lands because they were in a reservation. On the other hand, it was also implied that these lands could not be acquired in anyway without act of Congress except by purchase by the Acoma Indians with their own funds, because such acquisition would constitute an addition to an existing reservation in contravention of the act of May 25, 1918 (40 Stat. 570), which prohibited the addition to existing reservations in New Mexico without act of Congress. However, it is my opinion that while the purchase of these lands under the Reorganization Act will add to the quantity of reserved land for these Indians the transaction would be analogous to the purchase of privately owned land within the original boundaries of a reservation and should not be considered a purchase of land outside the boundaries of an existing reservation.

    In view of the doubts attending the answer to the question herein considered, and in view of the large sums contemplated to be expended, I suggest that you consider the advisability of submitting the matter to the Comptroller General before
 

purchasing any of the lands under the appropriation for the next fiscal year.

                                                                                                                                            NATHAN R. MARGOLD,

 Memorandum for the Commissioner of Indian Affairs:

    In the proposed circular letter on the Law and Order Regulations, it is stated at the top of page three that the penalty set forth in section 23 of chapter 5 (penalty for illicit cohabitation) could be invoked for failure to record any tribal custom marriage. The requirement in section 1 of chapter 3 that Indian marriages and divorces be recorded within three months at the agency applies alike to tribal custom marriages and State Law marriages and no penalty is attached for the failure to record such marriages. Section 2 of Chapter 3 gives the tribal council authority to determine whether Indian custom marriage shall be recognized and, if so, of what it shall consist. The last paragraph of that section states, "Pending any determination by the tribal council on these matters, the validity of Indian custom marriage and divorce shall continue to be recognized as heretofore."

    It appears from the foregoing that the validity of Indian custom marriage is not made dependent by the regulations upon recording such marriage at the agency, unless the tribal council should determine that recording was a necessary part of such marriage. Since tribal custom marriage is valid "as heretobefore", although not recorded there is no authority to invoke the penalty for illicit cohabitation for an unrecorded Indian custom marriage.

    It is suggested that the second sentence of the first paragraph on page 3 be revised to state that if the tribal council shall determine under section 2 of chapter 3 that the recording at the agency of a tribal custom marriage is necessary to the validity of such marriage, the penalty set forth in section 23 of chapter 5 could be invoked for failure to record such tribal custom marriage. In the first sentence of the paragraph in question it can be brought out that the provision in section 1 of chapter 3 for the recording of all marriages at the agency within three months is not intended to refer to previous marriages.
 

M-28519                                                                                                                                   May 27, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    The Assistant Commissioner of Indian Affairs has requested my advice as to whether under my opinion approved March 12, 1936, demand deposits of Indian funds may be made without interest in banks not members of the Federal Reserve System but insured by the Federal Deposit Insurance Corporation.

    In that opinion I held that section 324 (c) of the Banking Act of 1935 (49 Stat. 684), supersedes and nullifies section 28 of the act of May 25, 1918 (40 Stat. 591), which forbids deposit in banks of Indian moneys without interest, to the extent of permitting demand deposits of Indian moneys without interest in banks which are prohibited under the Banking Act of 1935 from paying interest on such deposits. Section 324 (c) of the Banking Act of 1935 prohibits any member bank of the Federal Reserve System from paying interest on demand deposits. Section 101 (v) (8) of that act directs the Board of Directors of the Federal Deposit Insurance Corporation to prohibit payment of interest on demand deposits in insured banks which are not members of the Federal Reserve System. However, the repeal clause which was the basis of my opinion appears in section 324 (c) but not in section 101 (v) (8). This repeal clause reads as follows:

"So much of existing law as requires the payment of interest with respect to any funds deposited by the United States, by any Territory, District, or possession thereof (including the Philippine Islands), or by any public instrumentality, agency, or officer of the foregoing, as is inconsistent with the provisions of this section as amended, is hereby repealed."

by a public instrumentality in an insured non member bank. While section 101 (v) (8) expressly incorporates the exceptions in section 324 (c) to the prohibition of the payment of interest, the exceptions cannot be construed as embracing the repeal clause.

    The legislative history of the repeal clause was reviewed in connection with my opinion of March 12, 1936, and nothing illuminating the intended scope of the clause was found. But it should be noted that Congress has previously treated differently member banks and insured nonmember banks in regard to the prohibition on the payment of interest, since the Banking Act of 1933 (48 Stat. 162), prohibited member banks from paying interest on demand deposits but did not place this prohibition upon nonmember insured banks. Furthermore, Congress allowed this prohibition to rest against member banks without authorizing deposit in them by public instrumentalities of the United States whose funds must under existing law be deposited with interest. It would therefore be unreasonable to assume that because the repeal clause in section 324 (c) removes the restriction upon deposit of public moneys in the case of member banks that the clause was intended, and ought to be read to remove the restrictions upon such deposit in the case of insured nonmember banks. Moreover, to carry over the repeal clause in section 324(c) to section 101 (v) (8) would constitute a repeal of section 28 of the 1918 act by implication. It is a familiar principle that repeal of a statute by implication is not favored and is never admitted unless a later statute is irreconcilable with an earlier one. United States v. Greathouse, 166 U.S. 601, 605; Russell v. Williams, 106 U.S. 623, 628. And especially is this true where Congress has expressly provided for effecting a change in the application of the earlier law. Rosencrans v. United States, 165 U.S. 257, 262. As it was pointed out in my opinion of March 12, there is nothing inconsistent between section 28 of the 1918 act, prohibiting the deposit of Indian moneys without interest, and a statute forbidding certain types of banks from paying any interest on certain classes of deposits.

    Accordingly, the holding in my opinion of March 12, 1936, must be read in a narrow sense to apply to member banks directly prohibited by the Banking Act of 1935 from paying interest on demand deposits and not to insured nonmember banks prohibited by administrative act from the payment of such interest. In other words, Indian funds may be deposited in demand accounts with out the payment of interest only in banks which are members of the Federal Reserve System, and cannot be so deposited in banks which are not members of that system even though the banks are insured with the Federal Deposit Insurance Corporation.

                                                                                                                                            NATHAN K. MARGOLD,

M-28525.                                                                                                                             May 29, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    At a conference before you on April 3 attended by Senators Ashurst and Hayden, Representative Greenway, Messrs. Guy Anderson, Lee N. Stratton and George Jones, of Arizona, a question was raised, on which you requested my opinion, as to the location of the eastern portion of the present south boundary of the San Carlos Indian Reservation in Arizona. It was contended that this portion of the boundary line had been erroneously located with the result that certain lands, in fact a part of the public domain, were included within the reservation boundaries. I have since been advised that the Indians of the reservation also claim that this boundary line is improperly located, but their claim is that lands outside of the boundary as now located should have been included in the reservation. Both claims are based upon the language of an Executive order issued by President Grant on August 5, 1873, but before discussing the provisions of that order, it may be helpful to refer to the prior orders under which the reservation was established, the conditions leading to the issuance of the order of August 5, 1873, and the action taken in locating the boundary pursuant to that order.

    The San Carlos or White Mountain Indian Reservation was originally established by Executive order of November 9, 1871. The eastern portion of the south boundary of the reservation, according to that order, followed the crest of the "Cordilleras de la Gila," i.e., the Gila Mountains. It is to be noticed that the valley of the Gila River at this point was not included within the reservation boundaries. The reservation was enlarged on the south to include the Gila River and a portion of its valley by Executive order of December 14, 1872,
 

which order extended the south boundary of the reservation 15 miles south of and parallel to the Gila River. The area so added was designated in the Executive order as the "San Carlos Division of the White Mountain Indian Reservation." This order gave rise to immediate and vigorous protests and by memorial approved February 7, 1873, the Legislative Assembly of the Territory of Arizona petitioned Congress for cancellation of the order in so far as it extended to that portion of the valley of the Gila above old Camp Goodwin, the memorial reciting, among other things, that this portion of the valley had already been settled by white persons who had made valuable improvements thereon. By letter addressed to the Secretary of the Interior under date of July 29, 1873, the Acting Commissioner of Indian Affairs referred to this memorial and, after stating that the lands were not required for agricultural purposes by the Indians, recommended restoration to the public domain of-

"* * * all that portion of the valley of the Gila River in the Territory of Arizona hitherto included in the San Carlos division of the White Mountain Indian Reservation as established by Executive Order dated December 14, 1872, lying east of and above the site of old Camp Goodwin * * *."

    The original survey of that part of the south boundary of the reservation east of and above old Camp Goodwin under the Executive order of August 5, 1873, was made under the direction of the General Land Office in 1883 (see plat approved October 15, 1883). This survey was executed by Paul Riecker, United States Deputy Surveyor, under contract No. 38, Arizona, dated May 19, 1883. In the letter of instructions to Mr. Riecker dated May 19, 1883, it is stated:

"You will run thence due north to the summit of the range of hills, or mountains bordering the Gila River on the North, known as the Gila Mountains. Thence you will run along said summit southeasterly with the trend of same to the line of 109° 30' west longitude, which is the southeast corner of said reservation."

    Riecker's record shows that in accordance with the instructions of May 19, 1883, he followed the summit of the Gila Mountains, and the records in the General Land Office show that the summit of the Gila Mountains has uniformly been recognized since that time as the south boundary of the reservation at the point in controversy. See for example, a map of Arizona showing the progress of the public land surveys, accompanying the Surveyor General's report of 1874, which map indicates the location of the boundary in practically the same position as surveyed in 1883; a map of Arizona dated 1879, prepared by the War Department, showing the boundary along the summit of the Gila Mountains; and a map of Arizona dated 1883, prepared by the General Land Office, showing the boundary along the Gila Mountains in the position as surveyed in that year. In addition, a resurvey of the boundary in question was made by the General Land Office in 1915. This resurvey, as shown by plat approved June 12, 1916, confirms the location of the boundary along the crest of the Gila Mountains as determined by the survey of 1883.

    In support of the claim that the boundary so located is erroneous, it was asserted at the conference of April 3 that the Executive order of August 5, 1873, intended, by use of the words "valley of the Gila River," to restore to the public domain the entire drainage area of the river east of and above old Camp Goodwin. As nearly as can be determined from the maps available, this interpretation would place the boundary on the divide between the drainage areas of the Gila River and the Black River and this would exclude from the reservation a considerable area of land now located in the southeastern part of the reservation above the lowlands of the valley of the Gila River. A claim similar to this was considered and rejected in Whaley v. Northern Pac. Ry. Co., 167 Fed. 664. In that case, it was contended that the words "the Bitter Root Valley above the Lo Lo fork," as used in an Indian treaty, embraced all of the country and lands lying above the Lo Lo fork and from which the waters Rowed and were tributary to the Bitter Root River. Answering this contention, the court said:

    "It is certain that the definition of what is the valley above the Lo Lo fork given to the
 

words as used in the treaty by the Department of the Interior restricts the valley to the area of lowlands or depressions of considerable size, with bottoms of gentle slope as compared to the sides; that is to say, the valley is defined to be the space enclosed between the ranges of mountains, Under either of these commonly accepted definitions, the lands involved in this suit have been excluded from the valley lands; and decision of where the valley ends and where the range of mountains began became one of fact to be ascertained by the Interior Department, as does decision of what are swamp lands. Heath v. Wallace, 138 U.S. 573, 11 Sup. Ct. 380, 34 L. Ed. 1063. True, in construing a treaty had by the United States with Indians, we must always consider the words used by their plain import; yet, doing this, the common understanding of the word 'valley' is to look upon it as meaning lowlands, in contradistinction to mountain slopes and mountain ridges."

    The claim of the Indians that the boundary is in error is referred to in a letter dated April 8, 1936, from the Superintendent of the San Carlos Indian Agency to the Commissioner of Indian Affairs. The Superintendent states in part:

"* * * The Indians have always claimed that the land taken from them by the Executive order of August 5, 1873 did not include the land as fenced away from the reservation at present, but only included the actual Gila Valley, which was then mostly occupied by Mexicans and Morman settlers.

    "It is noted from contour maps showing this area that the Gila Valley is shown under the one-thousand meter contour, and from this altitude the country breaks up into sharp hills and canyons and up to and including our present fence line, which is on an approximately 1600-meter elevation and the Gila watershed. It has been claimed, and I believe with perfect properness, that all land above the one-thousand-meter elevation of the Gila area is not valley nor alluvial land. This would place our boundary fence down on public domain at least eight or ten miles and would include into the reservation several hundred thousand acres of land improperly withdrawn."

    In conclusion, I have to advise that upon the records and data before me, no basis is found for disturbing the present location of the eastern portion of the south boundary of the San Carlos Indian Reservation.

                                                                                                                                                NATHAN R. MARGOLD,

    Referring to your memorandum of June 1, regarding objections raised by the Comptroller General in his letter of May 4 to payments provided for in the Keshena Hospital contract with the Bureau of Catholic Indian Missions, your attention is called to the following amendment to the First Deficiency Appropriation Bill adopted by the Senate June 1 (Cong. Rec. p. 8779).

    "Support of Indians and administration of Indian property (tribal funds) Appropriations from tribal funds of the Menominee Indians of Wisconsin, fiscal years 1935, 1936, and 1937 for general support of Indians and administration of Indian property (Keshena Agency), are hereby made available for hospitalization of Indian under contracts for such service for such fiscal years, and the Comptroller General of the United States is hereby authorized and directed to allow credit in the accounts of disbursing agents of the United States for payments heretofore made on this account."

    "The Keshena Hospital plant belongs to the Menominee Tribe of Indians. No specific statutory authority for leasing the property to the Bureau of Catholic Indian Missions is at hand. But this does not mean that the authority does not exist. The power of the Secretary of the Interior is not always dependent upon express statutory provisions. In Territory of Alaska v. Annette Island Packing Co. 289 Fed. 671, the power of the Secretary of the Interior to lease a site for cannery buildings and fish trap rights on the Annette Island Reservation in Alaska with the exclusive right to fish in the adjacent waters was upheld notwithstanding the fact that there was no express statutory authority therefor. The power to make the lease in the instant case may reasonably be regarded as included within the broad general powers conferred upon the Secretary of the Interior by section 441, Revised Statutes (section 2, Title 25, U.S.C.). As to the broad scope of the powers conferred by this statute see West v. Hitchcock, 205 U.S. 80; Rainbow v. Young, 161 Fed. 835; Knight v. U.S. Land Association, 142 U.S. 161.

'Wisconsin: Keshena, $61,500, including $10,000 for monthly allowances, under such rules and regulations as the Secretary of the Interior may prescribe to old and indigent members of the Menominee Tribe who reside with relatives or friends;

'This property is leased to the Bureau of Catholic Indian Missions, and is operated by the Catholic Sisters, the Indian Service paying for Indian care on a per diem basis. This system of operation was inaugurated at the request of the tribe, and will result in a saving, since the overhead costs will be reduced and hospitalization can also be afforded while living on and adjacent to the reservation."

    The enclosed form of loan agreement, with attached papers, is returned herewith for further consideration.

    It is my opinion that the first paragraph of section 4 of the proposed loan agreement, requiring the United States to take title to all property purchased with funds borrowed from the revolving credit fund by any Indian corporation or by any borrower from such a corporation, will impose upon the Indians and the Department serious legal burdens. Such a provision would mean, for instance, that title to every plow, truck, or package of cigarettes purchased out of the authorized $10,000,000 fund will be held by the United States. Any contract relating to such property would presumably be a public contract, subject to general legislation on public contracts. Any disposition of such property would presumably be subject to the rulings of the Comptroller General. In any suit involving such property the United States would presumably be a necessary party. Under such a rule the sale of a pound of prunes by a tribal cooperative store presents tremendous legal difficulties. Title to the prunes must remain in the United States unless the advance to the cooperative store has been completely repaid. Presumably, then, the United States would have to consent to the sale, and would have to relinquish its legal title to the prunes; otherwise the consumer would be destroying public property. Whether the United States would be liable for breach of warranty if the goods should prove defective may present a serious legal question. More serious is the probability that the United States would be a proper party defendant in an ordinary damage suit against the owner of a truck, for instance, financed by a revolving fund loan. In my opinion, it would be unwise to adopt a rule which imposes upon the United States these extensive legal liabilities and imposes upon the Indian borrowers the corollary burden of red tape and delay which will follow inevitably from the vesting in the United States of title to all articles purchased out of loans from the revolving credit fund.

    Aside from these considerations, I think that the legal authority of the Secretary to exempt from taxation personal property of individual Indians by taking title to these articles is very doubtful. See United States v. Ransom, 284 Fed. 107; United States v. Gray, 284 Fed. 104; McCardy v. United States, 246 U.S. 263; United States v. Low, 250 Fed. 218, 226. And cf. Francis v. Francis, 203 U.S. 233, holding that the President is without power, in the absence of express statutory authorization, to include restraints upon alienation in a patent granted to an Indian.

    Thus, in the case of United States v. Gray, supra, the court declared: "But the fact that funds arising from the sale of allotments are trust funds over which the Secretary is given some power of disposition does not, in our judgement, give him a right, without more, to invest them in real estate * * * much less can it be said that every such investment, per se, would withdraw the property purchased from taxation to which it had theretofore been subjected" (p. 105). In other words, if personal property is otherwise subject to taxation, it can not be exempted from taxation by action of the Secretary of the Interior unless such action is authorized by law. And while tax-exemption of lands acquired under section 5 of the Indian Reorganization Act is expressly provided for, no such provision is made for personal property purchased by individual Indians with the aid of credit funds. Although tax-exemption of personal property may be supported on grounds which will be hereafter considered, such tax-exemption can hardly be supported on the ground that title to the property is in the United States unless such title has been acquired pursuant to specific statutory authority.

    I think it is clear that when Congress provided for money loans to Indian chartered corporations, it intended that money was to be loaned to them, to be spent by them for prescribed purposes, and that Congress did not intend that the money would be spent to purchase trucks, groceries, and other articles in the name of the United States in order that equitable interests in such Federal property might be loaned or assigned to Indians.

    Furthermore, I think the proposal to take title to all such property in the name of the United States violates the intent of the act of June 18, 1934, that the Indian corporation is to receive a direct loan from the Government and is to be responsible for the repayment of this loan. If, as the act provides, the corporation is to incur legal liability for repayment, and if, as the regulations provide, the corporation is to furnish security for such repayment, the corporation can protect itself only by taking security from those members to whom money is loaned. Such security might consist in