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AUGUST 9, 1939

pueblo; and therefore that it was not bound by the decrees.

    "On the case thus presented the court held that the decrees operated to bar the prosecution of the present suit by the United States, and on that ground the bill was dismissed. An appeal was taken to the Circuit Court of Appeals, which after outlining the case as just stated, has certified to this Court the following questions:

*                                *                                *                                *                                *

    "2. Did the state court of New Mexico have jurisdiction to enter a judgment which would be res judicata as to the United States, in an action between Pueblo Indians and opposed claimants concerning title to land, where the result of that judgment would be to disregard a survey made by the United States of a Spanish or Mexican grant pursuant to an act of Congress confirming such grant to said Pueblo Indians? (At pp. 438 to 439.)

*                                *                                *                                *                                *

    "Coming to the second question, we eliminate so much of it as refers to a possible disregard of a survey made by the United States, for that would have no bearing on the court's jurisdiction or the binding effect of the judgment or decree, but would present only a question of whether error was committed in the course of exercising jurisdiction. With that eliminated, our answer to the question is that the state court had jurisdiction to entertain the suit and proceed to judgment or decree. Whether the outcome would be conclusive on the United States is sufficiently shown by our answer to the first question." (At pp. 444 to 445.)

    The proposition that judgments and decrees of the pueblo in matters within its competent jurisdiction are entitled to full faith and credit in the courts of any State is supported by the reported cases which consider the legal status of decisions by tribal courts.

    In the case of Standley v. Roberts (59 Fed. 836, app. dism. 17 Sup. Ct. 999), the court declared:

    "* * * the judgments of the courts of these nations, in cases within their jurisdiction, stand on the same footing with those of the courts of the territories of the Union and are entitled to the same faith and credit." (At page 845.)
    And in the case of Raymond v. Raymond (83 Fed. 721), the court declared:
    "The Cherokee Nation * * * is a distinct political society, capable of managing its own affairs and governing itself. It may enact its own laws, though they may not be in conflict with the Constitution of the United States. It may maintain its own judicial tribunals, and their judgments and decrees upon the rights of the persons and property of members of the Cherokee Nation as against each other are entitled to all the faith and credit accorded to the judgments and decrees of territorial courts." (At page 722).
See also, Nofire v. United States (164 U.S. 657); Mehlin v. Ice (56 Fed. 12).

    An analysis of the legal status of decisions of Indian tribal courts is found in the opinion on "Powers of Indian Tribes" cited above at 55 I. D. 56, and in an illuminating article by Professor W. G. Rice, Jr., on "The Position of the American Indian in the Law of the United States" ((1934) 16 Jour. Comp. Leg. (3d series) part 1, p. 78).


    In dealing with the legal relation of the pueblo to its own members, to the United States, and to the State, we have necessarily covered the basic points which define the legal relation of the pueblo to other persons. The three basic points that define this relation are: (1) the corporate capacity of the pueblo; (2) the ownership of land by the pueblo; and (3) the status of the pueblo as a ward of the United States. A brief summary is offered of the effect of statutes and court decisions on each of these points.

    (1) With respect to the corporate status of the pueblo, the following statement is quoted from a memorandum of Acting Solicitor Kirgis, dated June 30, 1936, addressed to the Commissioner of Indian Affairs:

    "That the Indian pueblos are corporations has long been recognized, not only by the State courts but by the Federal courts as well. As was said by Mr. Justice Van Devanter, in Lane v. Pueblo of Santa Rosa, 249 U.S. 110, 112:
    '* * * During the Spanish, as also the Mexican, dominion it enjoyed a large measure of local self-government and was recognized as having capacity to acquire and hold lands and other property. With much reason this might be regarded as enabling and entitl-



AUGUST 9, 1939

ing it to become a suitor for the purpose of enforcing or defending its property interests. See School District v. Wood, 13 Massachusetts, 193, 198; Cooley's Const. Lim., 7th Ed., p. 276; 1 Dillon Munic. Corp., 5th ed., secs. 50, 64, 65. But our decision need not be put on that ground, for there is another which arises out of our own laws and is in itself sufficient. After the Gadsden Treaty Congress made that region part of the Territory of New Mexico and subjected it to "all the laws" of that Territory. Act August 4, 1854, c. 245, 10 Stat. 575. One of those laws provided that the inhabitants of any Indian pueblo having a grant or concession of lands from Spain or Mexico, such as is here claimed, should be a body corporate and as such capable of suing or defending in respect of such lands. Laws New Mex. 1851-2, pp. 176 and 418. If the plaintiff was not a legal entity and juristic person before, it became such under that law; and it retained that status after Congress included it in the Territory of Arizona, for the Act by which this was done extended to that Territory all legislative enactments of the Territory of New Mexico. Act February 24, 1863, c. 56, 12 Stat. 664. The fact that Arizona has since become a State does not affect the plaintiffs corporate status or its power to sue. See Kansas Pacific R. R. Co. v. Atchison, Topeka & Santa Fe R. R. Co., 112 U.S. 414'. (Page 112.)

    "As a corporation, a pueblo has capacity to sue and defend in respect of its lands, as well as in other matters. United States v. Candelaria, 271 U.S. 432, 442-3; Pueblo of Zia v. United States, 168 U.S. 198; Garcia v. United States, 43 F. (2d) 873, 878; Pueblo de San Juan v. United States, 47 F. (2d) 446."

    In United States v. Candelaria, supra, the Supreme Court commented on the same case as follows:

    "It was settled in Lane v. Pueblo of Santa Rosa, 249 U.S. 110, that under territorial laws enacted with congressional sanction each pueblo in New Mexico-meaning the Indians comprising the community-became a juristic person and enabled to sue and defend in respect of its lands. * * * That was a suit brought by the Pueblo of Santa Rosa to enjoin the Secretary of the Interior and the Commissioner of the General Land Office from carrying out what was alleged to be an unauthorized purpose and attempt to dispose of the Pueblo's lands as public lands of the United States. Arizona was formed from part of New Mexico and when in that way the pueblo came to be in the new territory it retained its juristic status. * * *" (At pp. 442-443.)
    It is clear that the decided cases leave no room for doubt on the proposition that the pueblos of New Mexico are corporations, with power to bring suit against third parties, and liability to suits brought by third parties.

    It is not so clear what manner of corporation the pueblos are. The most explicit characterization found in any of the Federal cases heretofore decided is found in the case of Garcia v. United States, supra, where the Pueblo of Taos is classified under the category of "municipal or public corporations":

    "* * * By the Act of December, 1847, Rev. St. N. M. 1855, p. 420, section 69-101, N. M. Stat. Ann., Comp. 1929, the Indian Pueblos were given the status of bodies politic and corporate and, as such, empowered to sue in respect of their lands. Lane v. Pueblo of Santa Rosa, 249 U.S. 110, 39 S. Ct. 185, 63 L. Ed. 504. A statute of limitation, in the absence of provision therein to the contrary, runs not only for, but against municipal or public corporations. Metropolitan R. Co. v. Dist. of Columbia, 132 U.S. 1, 11-12, 10 S. Ct. 19, 33 L. Ed. 231; Little v. Emmett Irr. Dist., 45 Idaho 485, 263 P. 40, 56 A. L. R. 822; Rosedale S.D. No. 5 v. Towner County, 56 N. D. 41, 216 N. W. 212, 215. We conclude that such Indian Pueblos were entitled to the benefits of the New Mexico statutes of limitation and that the United States, as their guardian, may plead such statutes in their behalf." (P. 878.)
    The classification of the pueblos of New Mexico as "municipal or public corporations" falls within the usual definitions of such corporations. One of the most informative and most frequently cited definitions of a municipal corporation is that given by Dillon in the following terms:
    "A municipal corporation, in its strict and proper sense, is the body politic and corporate constituted by the incorporation of the inhabitants of a city or town for the purposes of local government thereof. * * * We may, therefore, define a municipal corporation in its historical and strict sense to be the incorporation, by the authority of the government, of the inhabitants of a particular place or district, and authorizing them in their corporate capacity to exercise subordinate specified pow-



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ers of legislation and regulation with respect to their local and internal concerns. This power of local government is the distinctive purpose and the distinguishing feature of a municipal corporation proper." (1 Dillon on Municipal Corporations (5th ed. 1911) sec. 31-32.)

    The essential feature of local self-government has been discussed under an earlier heading. The fact that the pueblo is a membership corporation rather than a stock corporation is too obvious to call for discussion. The relation of the corporation to a particular area of land and the inhabitants thereof is made clear in the territorial statute establishing the corporate status of the pueblos which has been quoted above.

    It is not necessary at this point to attempt a summary of the legal rights, powers, privileges and immunities of municipal corporations. These are matters on which many learned volumes have been written. It is enough for our present purposes to note that the legal relations of the pueblo with private parties not members of the pueblo will be governed by the general body of law governing municipal corporations.

    (2) A second basis of the legal relations between a pueblo and third parties, lies in the ownership of land by the pueblo. Technically, the land ownership of the pueblo falls under two categories. There is in the first place, land to which the pueblo holds fee title, either under grants by the Spanish, Mexican, or the United States governments or by reason of purchases made by the pueblo. In the second place, there is land to which legal title is held by the United States, the equitable ownership of which is vested in the pueblo. Such lands include Executive order reservations of lands formerly part of the public domain. Likewise, lands purchased by the United States for the benefit of the pueblo, whether through the use of pueblo funds or through the use of gratuity appropriations may fall under this category. In its relations to third parties, however, the rights of the pueblo are not substantially affected by this dichotomy. As a legal owner or as an equitable owner the pueblo has all the ordinary rights of a landowner with respect to third parties except the right of alienation. The pueblo has the right to exclude third parties from its land, and it has the right to qualify this exclusion by specific conditions under which third parties will be permitted to enter upon pueblo lands. As a landowner the pueblo may insist that its licensees pay a sum of money for the privilege of entering the pueblo lands, and that while they are within the pueblo boundaries they refrain from certain types of conduct which the pueblo authorities classify as offensive. As a landowner the pueblo may grant revocable rights of occupancy, grazing permits, or other licenses to nonmembers, provided that no property interest is thereby alienated, and subject to the approval of the Interior Department where such approval is required by existing law. Likewise, the pueblo may lease pueblo lands to outsiders subject to departmental approval. The necessity of obtaining the consent of the United States to any transaction involving alienation of a property interest, whether by sale, mortgage, exchange, gift or lease, is a matter to which we have already given consideration at pages 13-19 above.

    The legal authority of the pueblo to exercise the rights of a landowner with respect to third parties does not depend upon the peculiar facts with respect to the legal title of pueblo grant lands. Its rights with respect to third parties are cognate with the rights of other tribes. In 1821 the Attorney General declared with respect to the lands of the Seneca Indians:

    "So long as a tribe exists and remains in possession of its lands, its title and possession are sovereign and exclusive; and there exists no authority to enter upon their lands, for any purpose whatever, without their consent (1 Op. Atty. Gen., pp. 465. 466)."
While there are undoubted exceptions to this general rule, in so far as Federal laws have authorized employees of the Federal Government and of State governments to enter upon tribal lands for governmental purposes regardless of the consent of the Indians, the general principle thus formulated by the Attorney General has never been qualified so far as private persons are concerned. As was said in the Solicitor's Opinion on "Powers of Indian Tribes" (55 I.D. 14), which has been referred to in preceding portions of this opinion, "the tribe has all the rights and powers of a property owner with respect to tribal property." The following passages from that opinion make clear the legal basis of such property rights:
    "The powers of an Indian tribe over tribal property are no less absolute than the powers of any landowner, save as restricted by general acts of Congress restricting the alienation or leasing of tribal property, and particular acts of Congress designed to control the disposition of particular funds or lands.

            *                                *                                *                                *                                *

    "The authority of a tribal council to lease tribal lands is specifically confirmed by U.S.



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Code, title 25, sections 397, 398, and 402. Although the exercise of such authority is made subject to the approval of the Secretary of the Interior, it has been said that:

'From the language of this statute it appears reasonably certain that it was the legislative purpose to confer primary authority upon the Indians, and that the determination of the council should be conclusive upon the government, at least in the absence of any evidence of fraud or undue influence. (White Bear v. Barth, 61 Mont. 322, 203 Pac. 517.)'
    "U.S. Code, title 25, section 179, which imposes a penalty upon persons driving stock to range upon the lands of an Indian tribe, has been construed as recognizing the right of the tribe to permit the use of its lands for grazing purposes, for a consideration.

    "See United States v. Hunter, 4 Machey (D.C.) 531; Kirby v. United States, 273 Fed. 391, aff'd., 260 U.S. 423.

    "Similarly, U.S. Code, title 25, section 180, imposing a penalty upon persons settling on Indian lands, has been judicially interpreted as implying that an Indian tribe has power to permit such settlement upon such terms as it may prescribe. The cases on this subject have been analyzed under the heading 'The Power of an Indian Tribe to Exclude Non members From Its Jurisdiction'."

    That the powers of a municipal corporation "In Rainbow v. Young (161 Fed. 835) the with respect to the land of the corporation are no less than the powers of a private owner is shown by a number of cases cited in the Solicitor's opinion above referred to:
    "In Rainbow v. Young (161 Fed. 835) the court found that the power to remove nonresidents was incidental to the general powers of a landowner, which the United States was qualified to exercise with respect to Indian lands:
    'Besides, the reservation from which Mr. Sloan was removed is the property of the United States, is set apart and used as a tribal reservation and in respect of it the United States has the rights of an individual proprietor (citing cases) and can maintain its possession and deal with intruders in like manner as can an individual in respect of his property. (At p. 837.)'
See, to the same effect, United States v. Mullin (71 Fed. 682); 20 Op. Atty. Gen. 245, holding that an injunction by a State court might properly be disobeyed; 14 Op. Atty. Gen. 451. And with respect to the general power of a government as a landowner to remove intruders see Canfield v. United States (167 U.S. 518, 524).

    "As was said in the case of Stephenson v. Little (18 Mich. 433), in which it was held that the United States Government as a land owner might, through officials of the Land Office, seize and direct the sale of timber cut on public lands even though other timber had been mixed with that so cut:

    'It seems to me there can be no doubt that the Government has all the common-law rights of an individual in respect to depredations committed on its property, and that where there is no statute making it the duty of any particular official to enforce those rights, it is ex necessitate rei made the duty of the Executive Department of the Government to enforce them. (At page 440.)'
    "What is said here of the rights of the United States Government may be said with equal force of the rights of an Indian tribe. In an unallotted reservation, an Indian tribe occupies the position of a landowner in equity, if not in strict law. (United States v. Sturgeon, 6 Sawy. 29, 27 Fed. Cas. No. 16,413.) "
    Under the foregoing authorities, it is clear that when the pueblo deals with private parties, not members of the pueblo, with respect to pueblo lands, it may invoke all the rights, powers, privileges and immunities that attend land ownership, save as such powers are qualified by specific acts of Congress for the conservation of Indian land and resources.

    (3) The relationship of the pueblo, as a municipal corporation and a landowner, towards third parties is limited, finally, by the status of the pueblo as a ward of the United States.

    The fact of wardship is no longer in question.

    "It was settled by the decision in United States v. Candelaria, 271 U.S. 432, 46 S. Ct. 561, 70 L. Ed. 1023, that the Pueblo Indians are under the guardianship of the United States * * *." Garcia v. United States, 43 F. (2d) 873.
    The incidents of wardship are more uncertain than the fact of wardship. The concept of ward-



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ship, applied to an Indian tribe, is at best a helpful analogy from a well-defined relationship in private law to a constitutional relationship between a dominant and a dependent political body. Obviously there are many features of the relationship in private law that cannot be applied to the relationship which Chief Justice Marshall found to exist between the United States and "domestic, dependent nations." A mechanical application of the analogy of wardship may result in the violation of Indian rights, on the one hand, and, on the other hand, in the imposition of extra-constitutional limitations on the powers of Congress. These dangers we may avoid if we recognize certain basic principles of our constitutional law. In the first place, the relations between the Indian tribes and the United States are governed by treaties and laws of Congress. In the second place, it is important to note that, with respect to the pueblos, there are no treaties and no laws of Congress which, impose a "wardship status" upon the pueblos, and no such status can be created by judicial decision. There are, however, certain statutes which control the affairs of the pueblos, in such matters, for instance, as land alienation and liquor traffic, in ways parallel to the control which a guardian exercises over the property and person of. his ward. It is entirely proper to use the term "wardship" to describe such statutory limitations upon the powers of the pueblo. It would be entirely improper, however, from a constitutional viewpoint, to use the term "wardship" as a source of extra-statutory limitations upon the pokers of the pueblo. These considerations serve to emphasize the conclusion expressed at page 3 of this memorandum "that the ordinary powers of a State or municipality may be exercised by the recognized political authorities of the tribe, save in so far as tribal action may be restrained or annulled by the Congress of the United States."

    Bearing these considerations in mind, we may refer, without further comment, to the authorities cited under Part II of this opinion to indicate the limitations which existing statutes impose upon the dealings of a pueblo with third parties. Apart from such limitations, third parties may deal with an Indian pueblo as they deal with an ordinary corporation.

                                                                                                                                            NATHAN R. MARGOLD,


Approved: August 9, 1939.
OSCAR L. CHAPMAN, Assistant Secretary.


M-29867                                                                                                                                           September 12, 1939.

The Honorable,
The Secretary of the Interior.


    A number of questions have been formulated by the Indian Office and submitted for my opinion concerning interpretation of section 2 of the act of June 20, 1936 (49 Stat. 1542), as amended by the act of May 19, 1937 (50 Stat. 188), providing for tax exemption of certain Indian lands purchased with trust or restricted funds.

    In order that the purpose and meaning of the legislation to be interpreted may be more fully understood, both section 1 and section 2 of the act of June 20, 1936, are quoted in full:

    "That there is hereby authorized to be appropriated, out of any money in the Treasury of the United States not otherwise appropriated, the sum of $25,000, to be expended under such rules and regulations as the Secretary of the Interior may prescribe, for payment of taxes, including penalties and interest, assessed against individually owned Indian land the title to which is held subject to restrictions against alienation or encumbrance except with the consent or approval of the Secretary of the Interior, heretofore purchased out of trust or restricted funds of an Indian, where the Secretary finds that such land was purchased with the understanding and belief on the part of said Indian that after purchase it would be nontaxable, and for redemption or reacquisition of any such land heretofore or hereafter sold for nonpayment of taxes.

    "SEC. 2. All lands the title to which is now held by an Indian subject to restrictions against alienation or encumbrance except with the consent or approval of the Secretary of the Interior, heretofore purchased out of trust or restricted funds of said Indian, are hereby declared to be instrumentalities of the Federal Government and shall be nontaxable until otherwise directed by Congress."

The 1937 amendment to section 2 of the above act reads as follows:
    "All homesteads, heretofore purchased out of the trust or restricted funds of individual



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Indians, are hereby declared to be instrumentalities of the Federal Government and shall be nontaxable until otherwise directed by Congress: Provided, That the title to such homesteads shall be held subject to restrictions against alienation or encumbrance except with the approval of the Secretary of the Interior: And Provided Further, That the Indian owner or owners shall select, with the approval of the Secretary of the Interior either the agricultural and grazing lands, not exceeding a total of one hundred and sixty acres, or the village, town, or city property, not exceeding in cost $5,000, to be designated as a homestead."

    Since the questions presented by the Indian Office require interpretation of these statutes in order that they may be properly applied to situations not specifically dealt with by the acts, the purpose of the 1936 act and the 1937 amendment should be reviewed at the outset to serve as a basis for this opinion.

    The evil sought to be remedied by the act of June 20, 1936, is well known. For a long period the Interior Department had advised the Indians that lands purchased with restricted funds would be nontaxable. This advice was based upon a number of early court decisions, and on the basis of this advice restricted funds were widely invested in lands, often after the trust or restricted tax exempt allotments of the Indians had been sold to obtain the necessary funds. However, the lands purchased with restricted funds were later held to be taxable in the Federal court case of Work v. Mummert, 29 F. (2d) 393 (C.C.A. 8th, 1928), and as a result of that decision many Indians lost their lands or stood in danger of losing their lands through tax sales.

    The 1936 act was then passed to establish the tax exemption of the lands purchased with restricted funds under the guidance and direction of the Interior Department as tax exempt lands. After the passage of the act it was found that section 2 had application to such a large quantity of lands that a bill was introduced in Congress for its repeal. This bill was, however, amended on the recommendation of the Senate Committee on Indian Affairs to provide for restricting the tax exemption to homesteads purchased with trust or restricted funds rather than for repealing the tax exemption entirely, and the bill was passed in this amended form. The report of the Senate Committee in which this recommendation was made contains the following pertinent statement of the purpose of the 1936 act and the 1937 amendment:

    "The said act of June 20, 1936 (49 Stat. L. 1542) was designed to bring relief and reimbursement to Indians who by failure to pay taxes have lost or now are in danger of losing lands purchased for them under supervision, advice, and guidance of the Federal Government, which losses were not the fault of the Indians, but were purchased with the understanding and belief on their part and induced by representations of the Government that the lands be nontaxable after purchase. It was intended that such lands would be redeemed out of the fund of $25,000 authorized to be appropriated under the provisions of said act of June 20, 1936 (49 Stat. L. 1542).

    "Since the passage of said act of June 20, 1936 (49 Stat. L. 1542), it was found the provisions of section 2 thereof would apply to lands and other property purchased by restricted Indian funds, which would exempt from taxation vast quantities of property, such as business buildings, farm lands which are not homesteads, etc.

    "The Commissioner of Indian Affairs appeared before the committee and suggested the amendment herein proposed, which proposed amendment was adopted and herein recommended by your committee." (Senate report No. 332, 75th Cong. 1st Sess.)

    With this statement of the purpose of the legislation in mind, I turn to a discussion of the question presented by the Indian Office, in the order of their presentation.

    (1) May tracts of taxable Osage allotted land, title to which has passed to an Osage Indian as result of partition proceedings, be selected as tax exempt, (a) in the event no actual money consideration has passed-the only consideration being the interest of the Indian in other lands involved in the partition proceedings, (b) in the event some money consideration, less than the value of the land has passed?

    The Osage allotted lands covered by this question were made taxable by the legislation under which the lands were allotted to the Indians (act of June 28, 1906, 34 Stat. 539, amended by the act of April 18, 1912, 37 Stat. 86). Such lands, therefore, have always been in Indian ownership and have always been taxable and been understood to be taxable. In my opinion Congress did not intend to render nontaxable these lands specifically made taxable by the allotment act. While it may be said that when these lands are partitioned among a number of owners having fractional interests in the land, these owners acquire their title by "purchase" (United States v. Hale, 51 F. (2d) 629, C.C.A. 10th, 1931), it cannot be said that the lands are purchased with trust or



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restricted funds nor do they otherwise come within the purpose of the legislation here discussed. The Indians were not misled as to the tax exemption of the lands and they did not invest in the lands tax exempt funds or other tax exempt property. If those Osage Indians with fractional interests were permitted to obtain the benefit of the 1936 and 1937 acts merely through the partition of the lands they would enjoy an unfair advantage over the other Osage Indians w o have sole ownership of these allotted taxable lands. Accordingly, question (1) (a) should be answered in the negative.

    However, part (b) of this question may be answered in the affirmative where trust or restricted funds have been used for the purchase from the other owners of land in excess of the land to which the Indian was entitled by virtue of his fractional interest. In such case the additional land would represent an investment of trust or restricted funds and its protection from taxation would come within the purpose of the 1937 act. The Indian could in these instances designate as tax exempt a portion of the land acquired by him through partition proceedings which represented the investment of trust or restricted funds.

    (2) May fractional interests in tracts of purchased taxable lands be selected as tax exempt? If so, must the fractional interests in agricultural and grazing land be limited to tracts that contain 160 acres or less?

    A similar question arose in connection with the interpretation and application of the act of May 10, 1924 (45 Stat. 495), as amended by the act of May 24, 1928 (45 Stat. 733), which provided that an Indian of the Five Civilized Tribes who owned restricted land shall select and designate tracts not exceeding 160 acres to remain exempt from taxation. In the opinion of the Department of April 30, 1929 (M. 25048), it was held that tax exemption certificates might be issued in favor of each of several Indian heirs or devisees where the land was owned by more than one qualified heir or devisee so long as the tax exempt land of any one such Indian owner did not at any time exceed 160 acres.

    I see no reason why this ruling should not be equally appropriate in the interpretation and application of the acts now involved. If it were not held that fractional interests in tracts of purchased taxable lands could be selected as tax exempt, the intent of the act would be frustrated wherever two or more Indians purchased lands in common with their trust or restricted funds or whenever lands purchased with such funds descended to two or more heirs, and the lands were not partitioned.

    The second part of this question inquiring as to the quantity of land which may be designated is also answered by the opinion of the Department of April 30, 1929. It was there held, in effect, that each owner of a fractional interest was entitled to designate as tax exempt his interest in the land in so far as it did not amount in acreage to more than 160 acres.

    Where the interest of the Indian in lands purchased with restricted funds amounts in terms of acreage to 160 acres or less, he can designate his full interest in the land. Where, however, his interest amounts to more than 160 acres, he may designate only so much of his interest as amounts to 160 acres. He may do this either by designating a smaller fractional interest in the entire acreage, or he may designate his full fractional interest in a reduced acreage. Thus, if an Indian owns a one-third interest in 640 acres, he may designate either a one-fourth interest in the 640 acres or a one-third interest in 480 of the 640 acres. The latter course may be preferable in order to avoid confusion as to the fractional interest actually owned by the Indian. Where one Indian owns a fractional interests in a tract amounting to less than a 160 acre interest and another Indian owns more than a 160-acre interest in the same tract, the unused portion of the tax exemption to which the one Indian owner is entitled cannot be transferred to the other Indian owner of the larger fractional interest.

    Another situation-if four Indians purchased 160 acres, taking title one-fourth each as tenants in common, all four might execute one certificate exempting the entire tract, in which event, however, each Indian would be charged with only 40 acres and could select for exemption other purchased hands up to the 160-acre limitation fixed by the statute. Or each of the four Indians might execute separate certificates, each certificate covering the undivided one-fourth interest owned by each Indian.

    Where an Indian has purchased the entire interest in a tract which he would have been entitled to select under the statute as tax exempt but is prevented from doing so by death, his heirs, if they are Indians, may, for reasons stated in answer to question (6), make the selection. In such a case the selection is made in the right of the ancestor and the question of fractional interest does not arise.

    (3) In cases where only a part of the purchase price for the property has been paid from restricted funds, may the fractional part of the property representing the restricted funds used in payment of the consideration be designated as tax exempt?

    The answer to this question has been suggested in the answers to questions (1) and (2). In order to effectuate the purpose of Congress to protect



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as tax exempt restricted lands in so far as they are purchased with trust or restricted funds it must be held that where part of the purchase price of the property has been paid from such funds a fractional part of the property, representing the proportion of the purchase price paid with such funds, may be designated as tax exempt.

    (4) Where city property costs in excess of $5,000, may a fractional portion of the property be selected as tax exempt, such fractional portion being the proportion that $5,000 bears to the entire cost of the property?

    Under the same principles as those involved in the preceding questions, this question may likewise be answered in the affirmative. The question is one of interpretation of. that part of the act which provides that the Indian owner shall select the "village, town, or city property, not exceeding in cost $5,000, to be designated as a homestead." If this language should be interpreted to mean that where a homestead has cost more than $5,000 none of the property is tax exempt, the interpretation would create an arbitrary discrimination against those Indians who had invested $5,500 rather than $4,500 of their restricted funds in an urban homestead.

    It is my opinion that Congress intended to protect an investment of restricted funds up to $5,000. If more than $5,000 of such funds were invested, so much of the property as represented the excess would not be protected by the statute. Thus if an urban homestead cost $8,000 and $5,000 or more of the price had been paid from restricted funds, the owner would be entitled to a five-eighths non-taxable interest in the property. The remaining three-eighths interest would be taxable and subject to sale for nonpayment of taxes.

    This use of fractional interests is similar to, and no more complicated, than the use, discussed above, where Indians own fractional interests in agricultural and grazing land. The method of computation has the advantage of finality in that from the time the property is purchased the extent of taxability is known.

    The only alternative interpretation which suggests itself is that the statute in effect provides a tax exemption up to $5,000 of the assessed valuation of the property. However, the statute speaks of cost, not value, which is a totally different concept. Moreover, such an interpretation would have practical disadvantages in application which it cannot be assumed were intended to occur as part of the functioning of the statute. The valuation of property fluctuates so that property with a $5,000 tax exemption might sometimes be subject to taxation and sometimes not. Taxing authorities have different bases of taxation and different degrees of liberality in reducing the assessed value below the market value, thus creating variations in the extent of the tax exemption among the Indian owners and opening the door to changes in the assessment methods in order to reach substantial quantities of In ian property. More serious, Indian owners would not know from year to year whether their property was taxable until after assessment was completed. The conclusion must be that the $5,000 statutory limitation should be applied to the initial cost of the property rather than to its subsequent value.

    (5) Where an Indian purchases town property at a cost of less than $5,000, and improvements are placed thereon bringing the original cost of the property and cost of the improvements to more than $5,000, may such property be selected as tax exempt?

    The answer to question (4) embraces the answer to question (5) since there is no significant distinction between the investment of not more than $5,000 in an improved urban homestead and the investment of less than $5,000 in unimproved city property with the investment later increased to $5,000 by the addition of improvements. So much of the urban property of an Indian as represents an investment of not more than $5,000 of restricted funds, whether or not such property includes permanent improvements added after the purchase of the land itself, may be designated as tax exempt. There is one qualification of the foregoing. If the improvements were added subsequent to the date of the 1937 act, they would be taxable, even if they did not brings the total cost above $5,000, since the act protects only the investment of restricted funds prior to its date.

    (6) Do the benefits accruing to an Indian owning property designated as tax exempt pass to the Indian heir or devisee, or Indian grantee of the Indian making the selection?

    In view of the language in the 1937 act, this question may be answered in the affirmative. The 1937 act provides that homesteads purchased out of trust or restricted funds are "instrumentalities of the Federal Government" and shall be "nontaxable until otherwise directed by Congress." Therefore, the homesteads remain nontaxable so long as they are in Indian ownership until legislation is passed terminating the exemption. This construction of the act is in accord with the construction of other acts providing for tax exemption of Indian lands until otherwise directed by Congress.

                                                                                                                                            NATHAN R. MARGOLD,


Assistant Secretary.



SEPTEMBER 21, 1939



September 21, 1939.

Memorandum for the Commissioner of Indian Affairs:

    The attached letter to Superintendent Whitlock of the Rosebud Agency, South Dakota, with reference to the desire of Mr. William S. Hatten to withdraw from membership in the Rosebud Sioux Tribe, is returned herewith for further consideration.

    The third paragraph is, I believe, likely to be confusing. It is stated correctly that neither the Tribal Council nor the Department can interfere with Mr. Hatten's voluntary withdrawal from membership. The letter, however, suggests that in the event he wishes the withdrawal to be made a matter of record he should execute a formal request that his name be stricken from the membership roll of the tribe, to be submitted to the Superintendent and the Tribal Council. The letter goes on to say that if the Superintendent is "satisfied that it is in proper form and that Mr. Hatten is competent to elect to withdraw from the tribe," he should refer the matter to the Council which, should it "see fit to do so," "may" adopt an appropriate resolution approving the request and authorizing the Superintendent to strike Mr. Hatten's name from the roll.

    The effect of these sentences is to destroy the force of the correct assertion in the letter that Mr. Hatten's desire to withdraw from the tribe is in accordance with a right which he possesses and with which neither the Department nor the Tribal Council can interfere. The inference from them is that the Superintendent could hold up the request if he felt Mr. Hatten was not competent to make it, despite the facts that he is well past the age of maturity, possesses only three-eighths degree of Indian blood, is married to a white woman, and has lived off the reservation in a white community for several years. Similarly, the impression is given that the Tribal Council could also refuse to accede to the request. Mr. Hatten's right is not legally subject to such uncertainties. See Solicitor's Opinion, Powers of Indian Tribes (M. 27781), October 25, 1934 (55 I.D. 37); United States ex rel. Standing Bear v. Crook (5 Dill. 453, 25 Fed. Cases No. 14,891). The tribe is entitled to be informed, and the Department should also be apprised, when any member wishes to give up his membership, in order that proper record may be made of his action, but this does not confer any discretion to accept or reject his request. Any action of the Council or the Superintendent is to be regarded as purely formal to keep the tribal records in order.

    Mr. Hatten's application for a patent in fee to cover his land on the reservation is, however, in a different category. The letter indicates that the Department would be disposed to approve such an application, thus enabling Mr. Hatten to sell the land. It is not clear from the attached file whether such a sale would further complicate the land tenure situation on the reservation, but in any event I believe the tribe has such an interest in retaining the reservation lands in Indian ownership as to suggest that the application should be submitted to the Tribal Council for consideration of the desirability of the tribe's acquiring the land prior to any action by the Department.

    Attention is also called to the last sentence of the second paragraph, page one, of the letter in which the belief is expressed that the act of March 2, 1907 (34 Stat. 1221), as amended by the act of May 18, 1916 (39 Stat. 128), would permit segregation of Rosebud Sioux tribal funds from which Mr. Hatten has not previously been paid a share to pay him his pro rata interest therein. While the sentence goes on to say that the Indian Office would not be disposed to recommend such segregation, the conclusion of law that it would be permissible is, I believe, erroneous in view of the provisions in section 16 of the act of June 18, 1934 (48 Stat. 986), and in section 1 (c), article IV, of the Rosebud Sioux Constitution, which prohibit any disposition of the tribe's assets without the consent of the tribe. In the present instance consent by the Rosebud Sioux Tribal Council would be necessary. In the case of tribes organized under the act of June 18, 1934 (48 Stat. 984), the Department is not authorized to make any segregation of tribal funds to pay pro rata shares to individual members without the approval of the appropriate tribal officials, as provided in the tribe's constitution.

                                                                                                                                            NATHAN R. MARGOLD,




September 29, 1939.

Memorandum for the Commissioner of Indian Affairs:

    I am returning for further consideration the attached oil and gas lease executed in favor of the Gulf Oil Corporation by the Superintendent of the Kiowa Indian Agency, acting for and in behalf of



NOVEMBER 29, 1939

the undetermined heirs of Guy Wet-sel-line, deceased.

    The lease covers 40 acres of land and the bonus offered therefor is $1,510. The Superintendent reports that the lease is situated not far from producing wells and that there is much oil activity in the vicinity. For this reason and as an early determination of heirs is unlikely, due to complications brought about by the appearance of numerous conflicting claimants, the Superintendent recommends approval of the lease as executed by him for the undetermined heirs. The record fails to show that execution of the lease in this manner is satisfactory to the oil company.

    It appears that Guy Wet-sel-line, deceased, owned an undivided interest in the land by purchase, that interest having been conveyed by deed prohibiting alienation without the approval of the Secretary of the Interior. Under such a deed the power of the Secretary is that of approval or disapproval. He cannot initiate or make a lease. The same situation obtains with respect to the remaining one-half interest in the land which the decedent acquired by inheritance and which is still held in trust. The applicable leasing statute (act of March 3, 1909, 35 Stat. 781, 783) requires execution of the lease by the Indian owner subject to approval by the Secretary of the Interior.

    It seems clear that even if all of the heirs are restricted Indians, the execution of the lease in their behalf by the Superintendent would be ineffective unless it can be said that an emergency situation is presented in which the leasing of the land is necessary in order to prevent loss or waste. Assuming that the duty to protect and conserve Indian property in such an emergency situation would draw to it the power to make the lease, such power could in no event extend to non-Indians or unrestricted Indians, and there is always the possibility that some such may be found entitled to participate in the estate when the heirs are finally determined. Moreover, I am not satisfied that an emergency is presented. It is not shown that loss is now occurring or is likely to occur in the near future from drainage, and as the likelihood is that oil activity in view of present conditions will increase rather than decrease, it may be wise to withhold the leasing of this land until the heirs have been determined. Bidders would then be assured of a good leasehold title and the Indians might conceivably receive a more favorable offer.

    If upon further consideration of the matter it is found that danger of drainage now exists or that developments in the vicinity make it necessary, in the interests of the Indians, to lease the land at this time, I suggest that the lease when resubmitted be accompanied by a statement from the oil company indicating its willingness to accept the lease as now executed by the Superintendent.

                                                                                                                                            NATHAN R. MARGOLD,




November 29, 1939.

Memorandum for the Assistant Secretary:

    Reference is made to the recommendation of the Indian Office that the last will of Henry Chouteau, deceased Osage Allottee No. 1071, be disapproved for the reason that "equity and good conscience require that the minor children of this decedent should not be deprived of the maintenance and support so sorely needed at this time."

    The arguments for and against approval have been presented in the letters by the Osage tribal attorney and the Assistant Commissioner of Indian Affairs, but certain pertinent facts which were not discussed make it advisable to restate the case.

    Henry Chouteau, a one-fourth blood Osage Indian who had received a certificate of competency on March 5, 1910, died on April 28, 1939, survived by his wife, a white woman; three children, aged 15, 13 and 10, by his second wife; and one adult son by his first wife. By the terms of his will, executed on April 15, 1938, the testator left all of his estate to his wife, except that to each of his four children he left $5 and, subject to a life estate in his wife, an equal share in his 1 1/2 Osage headrights. If the decedent had died intestate, his property would have gone one-fifth to his wife and one-fifth to each of the four children.

    The wife, Zola Mae Chouteau, is seeking approval of the will; the three minor children are seeking its disapproval. All parties are represented by counsel and each has filed a brief for your consideration. The adult son, Theodore R. Chouteau, at first protested approval of the will. Later he withdrew his protest, and no brief has been filed in his behalf.

    The disapproval of the will by the Secretary of the Interior would affect only the restricted property, namely, the Osage headrights. If the Secretary approves the will, the County Court of Osage County still must pass upon its admission to probate. In any event, the court must decide whether the will is to be admitted to probate for the disposition of the unrestricted part of the estate. It is



NOVEMBER 29, 1939

probable that the minor children will oppose the admission of the will, even if the Secretary makes it inapplicable to restricted property. A stipulation might be secured at that time whereby the children would receive a share of the income until each reaches his majority. Such a settlement, however, is only a possibility, for we have no reason to believe that the wife would consent.

    Henry Chouteau was married three times. By his first wife he had his oldest son, Theodore, an adult. In 1923 the decedent married Marjorie Chouteau, and by her he had the three children who are protesting the will. Henry and Marjorie Chouteau were divorced in 1930 on a complaint filed by this decedent. A property settlement was entered into and the decree of the court followed the settlement theretofore made. By its terms the mother and the three children were deeded equal shares in a ranch in Wyoming, subject to certain conditions which it is not necessary to consider here. Henry Chouteau stated in his will that the property cost him $32,000, but one witness at the hearing estimated the value as low as $17,000. There is some indication that the decedent dictated the terms of the property settlement, but there is also testimony that Marjorie Chouteau asked for the Wyoming ranch. The Indian Office states informally that the value of the estate of Henry Chouteau is now about $25,000, so it appears that the property settlement involved half of the property he possessed in 1930. The net result of the settlement was that the wife and three children secured support therefrom for approximately two years, when the major and valuable part of the land was lost through foreclosure of a mortgage for some $7,000, which the wife had assumed in the property settlement. The residue of the land was sold for $1,250, a part of which still remains to be paid. Since the divorce in 1930, this decedent has made no further contribution to the support, care or maintenance of the children. It is also to be noted that during the period since 1930 Marjorie Chouteau was married twice, once for three months, once for three years. There is no evidence that she asked the decedent to take or support the children.

    In September of 1931 Henry Chouteau married Zola Mae Chouteau, who lived with him until his death and remains his widow. There were no children of this marriage. Since the decedent's death, the county court of Osage County has appointed the widow to act as special administrator. Also, on September 2 the court ordered $75 a month to be paid from the estate to Marjorie Chouteau as a family allowance beginning September 1 and continuing until further order of the court.

    Under the provisions of the act of April 18, 1912 (37 Stat. 86, 88), the Secretary of the Interior is authorized to disapprove a will. The parties seeking disapproval have sought to show that there was undue influence brought to bear upon the decedent and that he did not understand the meaning of the will. The only evidence of the first charge is that on several different occasions, when Henry Chouteau was ill, an attorney appeared in order to draft a will for him. The wife denies all responsibility for having called any of these attorneys, and she even states that she did not know what the final will provided although one witness testified that it was read in her presence. Some question is raised by her apparent lack of frankness, but such action standing alone does not justify a conclusion that she used undue influence upon Henry Chouteau in order to cause him to leave her all the property. With regard to the testator's understanding of his will, the entire discussion centers around the meaning of the words "per stirpes" and "per capita." It is true that the witness who had explained the meaning of these words to the decedent did not understand them, or at least he could not explain them later at the hearing. However, the attorney discussed the meaning with the witness in the presence of Henry Chouteau. The discussion was in English, but since the decedent spoke and understood English it is possible that he understood even if the witness did not. It also is shown that the will was drafted in accordance with instructions given the lawyer, and there is no indication that those instructions were disobeyed. The will conforms with the requirements of the Oklahoma law and the testimony at the hearing justifies the conclusion that the deceased was of sound and disposing mind and executed the will of his own volition in conformance with his own desires and free of undue influence.

    The parties opposing approval of the will call on the Secretary to exercise his discretionary power under the act of April 18, 1912, supra, and to disapprove the will for the further reason that it fails to provide adequately for the minor children. The discretionary power of the Secretary was upheld in an opinion by the Solicitor on August 25, 1933 (Estate of Earl Mashunkashey, Probate 28992-33), but it is noted that the last paragraph of the opinion reads as follows:

    "The discretionary authority of the Secretary is not, however, unlimited. His action must be neither arbitrary nor capricious, but should be carefully and reasonably exercised to avoid, in particular, abuses of discretion operating as a substitution of his will for that of a testator whose mental capacity has been clearly established."
    The testimony shows clearly that the will expresses the intentions of the decedent. He seems to



NOVEMBER 30, 1939

have weighed the disposition to be made of his property and to have expressed his decision. He comments on the property settlement which he made on his minor children and on the past contributions to his adult son. The Indian Office reports informally that at the present time the income from the estate will not provide much, if any, in excess of the amount required to meet the mortgage on part of the property and to support one person. It is probable that the testator was aware of this fact and that he chose to designate his wife as the one to take the property. No expression of Congress prevents that choice, even though the wife is a white woman. In fact, Congress has seen fit to refrain from restricting the right of non-Indians to take as heirs of Osage Indians of less than half blood. Section 7 of the act of February 27, 1925 (43 Stat. 1008), provides:

"Hereafter none but heirs of Indian blood shall inherit from those who are of one-half or more Indian blood of the Osage Tribe of Indians * * *."
Henry Chouteau can hardly be said to have ignored his parental obligation, for the property settlement of 1930 transferred approximately half of the property he then possessed to the three children and their mother in equal shares. In addition, by his will the decedent gave each of his children $5 and a one-fourth share in the 1 1/2 headrights, subject to the life estate of the wife. The wife is in her early thirties, but the possibility of her death is always present.

    I do not think that the Secretary should disapprove a will unless such action is necessary to prevent a clear injustice. Unless the will is clearly unconscionable the intention of the testator should be observed. In my opinion this will is not unconscionable, and if the Secretary sees fit to disapprove it he would be in effect substituting his own preference for that of Henry Chouteau. Disapproving the will in order to aid the children during the remainder of their minority would give to them property which the decedent has clearly indicated he wanted his wife to have.

    It is my recommendation that the will be approved.

                                                                                                                                            NATHAN R. MARGOLD,


Approved as recommended. The will
of Henry Chouteau, deceased Osage
Allottee No. 1071, of date December
15, 1938, is hereby approved:
OSCAR L. CHAPMAN, Assistant Secretary.


November 30, 1939.

Memorandum for the Assistant Secretary

    The question raised by Mr. Zimmerman in his in his memorandum of November 22 is not one of policy alone. The deed referred to is one by which an Indian, who owns 320 acres of land in excess of the 160 acres which he is entitled to hold as tax exempt under the act of May 10, 1928 (45 Stat. 495), attempts to remove a portion of the excess acreage from the tax rolls by conveying it to the United States in trust for himself. The act of 1928 expressly declares that all restricted lands, whether allotted, inherited or acquired by devise in excess of 160 acres, shall be subject to taxation by the State of Oklahoma.

    Mr. Zimmerman seems to think that the provisions of the Oklahoma Welfare Act of June 26, 1936 (49 Stat. 1967), authorize the proposed conveyance. Section 1 of that act authorizes the Secretary to acquire by purchase, relinquishment, etc. any interest in lands, water rights or surface rights to lands within or without existing Indian reservations, including trust or other restricted lands now in Indian ownership, with the provision that title to the land so acquired shall be taken in the name of the United States in trust for the tribe, band, group, or individual Indian for whose benefit such land is acquired. The act directs that the land shall be nontaxable while the title is held by the United States. The act further declares that such land shall be agricultural and grazing lands of good character and quality in proportion to the respective needs of the "particular Indian or Indians for whom such purchases are made."

    It seems obvious that the foregoing provisions of the Oklahoma Welfare Act can apply only to instances where title is being acquired for the use of an Indian who does not already own the land in question and therefore enjoy its use as fully before the transfer of land as afterwards. This clearly negatives any intention on the part of the Congress that the act should be used as a means for the removal from the tax rolls of lands already owned by an individual Indian which Congress has expressly declared shall be subject to State taxation. To hold otherwise would be to provide an easy means for nullifying, by executive action, the explicit legislative provisions contained in the act of 1928, supra, which deals with lands of Indians of the Five Civilized Tribes. Similar provisions contained in the acts of Congress dealing with the Osage Indians (acts of March 2, 1929, 45 Stat. 1478,



NOVEMBER 30, 1939

and June 24, 1938, 52 Stat. 1034) and acts of Congress of general application dealing with the taxability of lands heretofore purchased for individual Indians with their restricted or trust funds (acts of June 20, 1936, 49 Stat. 1542, and May 19, 1937, 50 Stat. 188) might also be disregarded. A large area of land in the aggregate could thus be removed from the State tax rolls by the mere expedient of having the present owners convey their lands to the United States in trust for themselves. The statement in the Indian Office letter that this would, be contrary to the spirit and intent of the Oklahoma Welfare Act is, in my opinion, correct. It is also true, as stated by the Indian Office, that the policy of the Department, as well as the Indian Office, has been not to approve such deeds.

                                                                                                                                            NATHAN R. MARGOLD,


OSCAR L. CHAPMAN, Assistant Secretary.



December 26, 1939.
Memorandum for the Commissioner of Indian Affairs:

    Reference is made to the attached letter to Mr. Roy Nash, Superintendent of the Sacramento Agency, concerning a resolution adopted by the Tule River Tribal Council on August 31 granting to the State Division of Forestry of California permission to reconstruct and maintain a fire protection road across the reservation.

    I should agree that the present tribal resolution is ultra vires if it be interpreted to convey an "easement" as the second paragraph of the resolution declares.

    Such an interpretation, however, is unnecessary and since a document of this sort should be interpreted in such a way as to preserve its validity, where such an interpretation is reasonable, I would suggest that the present resolution ought to be construed as a naked permit or license. The transaction appears to fall within the scope of the authorities cited in my opinion on Pueblo permits (Solicitor's Opinion M. 29566, August 9, 1939).

  Soconstrued, the attached permit or license is clearly valid under rulings of the Attorney General (18 Op. Atty. Gen. 34; 17 Op. Atty. Gen. 134; and see Solicitor's Memorandum, December 11, 1936; Solicitor's Memorandum, December 2, 1938). In 18 Op. Atty. Gen. 34, the Attorney General held "that in the absence of express contradictory provisions by treaty, or by statutes of the United States, the nation (and not a citizen) is to declare who shall come within the boundaries of its occupancy, and under what regulations and conditions." While a permit so granted does not create vested rights beyond the power of Congress to impair (Muskogee National Telegraph Co. v. Hall, 118 Fed. 382), the validity of such a permit, approved by the Department, is beyond question.

    Although this tribal power to grant such a license exists independently of the powers set forth in section 1 (c) of Article VI of the tribal constitution, it might be pointed out here that this section is to be interpreted literally so that the 5 year limitation would apply only to leases but not to sales or encumbrances, as there would seem to be no legal ground which would justify or require the Secretary to disregard the clear wording of the section.

    I would suggest that the present resolution be approved with a proviso to this effect: "Approved with the understanding that no 'easement' or other interest in real property is conveyed by the foregoing instrument, but that it is to be construed at all times as a mere license or permission to the State Division of Forestry of California to perform the acts specified therein upon the lands described."

                                                                                                                                            NATHAN R. MARGOLD,




January 2, 1940.
Memorandum for the Assistant Secretary:

    The attached roll is submitted by the Office of Indian Affairs as a basis for per capita payments of $1,500 to be made to enrolled members of the Klamath Tribe under section 2 of the act of June 1, 1938 (52 Stat. 605), as amended by section 2 (b) of the act of August 7, 1939, Public No. 325, 76th Congress, 1st Session. I am not prepared to recommend your approval of this roll on the basis of the justification set forth by the Office of Indian Affairs. In particular, it appears to me that a basic inconsistency is involved in the decision that certain Modocs enrolled on the Klamath Reservation



JANUARY 2, 1940

are not entitled to receive payments while their descendants are so entitled. The reason given for the former ruling, namely, that the Indians in question "do not possess valid claims to allotments on the Klamath Reservation," would appear to be equally applicable to their descendants. Possibly it would apply also to all the other Indians upon whom the statute confers a right to payment, in which case it would be clear that a right to an allotment is not a prerequisite to a right to payment.

    While I am inclined to believe that either the children should be excluded from the payment roll or the parents included thereon, I am in some doubt as to which of these solutions would most closely accord with the direction of the statute. In such a case I think that it would be helpful to have the assistance of the parties in interest; namely, the Klamath Tribe and the various special classes of claimants. The matter is of a magnitude to make litigation a probability, and it would seem the part of discretion to examine the arguments of the parties in interest before we make our decision instead of afterwards. I recognize that this is a departure from the established practice of the Department but I think that the departure is in the interests of sound administration. Opportunity to the interested parties to present their views prior to final action on the roll may be given by setting a hearing on the approval of the roll before yourself or before me, advising the parties in interest of the date of such hearing, and offering an opportunity to present argument in person or in writing. In view of the fact that the chief question raised by this case is one of statutory interpretation, you may prefer to assign the conduct of the hearing to this office.

                                                                                                                                            NATHAN R. MARGOLD,




January 2, 1940.

Memorandum to the Commissioner of Indian Affairs:

    The attached transaction involves an exchange of allotted lands between Jennette Gambler Creemedicine and Frank Merchant, Blackfeet Indians. Each is conveying 40 acres of land to the United States in trust for the Blackfeet Indian Tribe on condition that each receives an assignment on the tract being relinquished by the other. The covering letter relates that the transaction is authorized by section 4 of the act of June 18, 1934 (48 Stat. 984), and Article 7 of the Blackfeet Constitution.

    Both tracts contain 40 acres and each is valued at $400. Superintendent Graves' letter of April 7, 1939, however, points out that Mrs. Creemedicine's tract contains improvements, whereas that of Mr. Merchant is unimproved. Mrs: Creemedicine, on the other hand, is in debt with her husband to the Blackfeet Tribe in the amount of $1,700 under a loan from the tribal revolving loan fund. Mr. Merchant appears to owe $463.11 to the United States in reimbursable charges for livestock, seed and building materials, which constitute a lien against his lands. The transaction involves not only acquisition of Mrs. Creemedicine's land by Mr. Merchant, but also assumption by him of her debt to the tribe.

    In these circumstances I do not believe that there is any authority in section 4 of the act of June 18, 1934, to support the transaction. That section authorizes exchanges of restricted Indian lands when they are of equal value. While the appraisals purport to show that each tract is valued at $400, the facts that one is improved while the other is not, and that. a part of the transaction requires Mr. Merchant to assume payment of a debt of $1,700 owed to the tribe, show that the equality of value of the lands is open to serious question. As a matter of fact, much more than a mere exchange of lands is clearly intended.

    The deeds which are submitted for approval refer to section 5 of the act of June 18, 1934, as the provision of law under which they were executed. This section authorizes the Secretary of the Interior to acquire land, including restricted Indian land, in trust for Indian tribes or individual Indians. In so far as the exchange is to be effected through surrender of title by the allottees to the United States in trust for the Blackfeet Tribe, this section would appear to be the applicable statutory provision rather than section 4 of the act of June 18, 1934. The condition of the agreement whereby Mr. Merchant is to assume Mrs. Creemedicine's debt to the tribe would appear to be a condition of the granting of exchange assignments by the tribe to the Indians rather than of the transfer of title to the allotments.

    The effectiveness of Mr. Merchant's relinquishment of the trust title to his land to the tribe is, however, open to serious question by virtue of the existence of his $463.11 reimbursable debt constituting a lien on the land. Unless the debt is satisfied or the land is otherwise released from the lien against it the tribe will not receive a clear or valid title. In the circumstances, Mr. Merchant's deed to



JANUARY 2, 1940

the tribe can hardly be approved by the Department.

    The case seems to me to be one for application of the provisions of the act of July 1, 1932 (47 Stat. 564). This statute gives the Department, subject to review by Congress, power to cancel liens imposed as security for repayment of Federal reimbursable funds "in such a way as shall be equitable and just in consideration of all the circumstances under which such charges were made." In previous memoranda I have suggested the criteria which may be used in determining whether or not this act is applicable to given circumstances. Where subsequent events have shown a loan to have been made on the basis of mistaken expectations on the part of Indian Service officials, or where its nature was not made clear to the borrower, or where for any other reason it should not have been made, a case is made for application of the statute. I have also expressed the view that it would be quite proper to give special consideration to borrowers who are unable to pay off their debt but are surrendering title to their lands to the tribe.

    If this transaction is approved, Mr. Merchant's total obligations will amount to $2,163.11. His reimbursable debts go back as far as 1928. In these circumstances, a case might very well be made for the cancellation of his reimbursable charges in view of his surrender of title to the 40 acres of land he is relinquishing to the United States in trust for the tribe. The record does not at present contain information to support immediate action by the Department looking to the cancellation of these charges, but I suggest that the superintendent be asked to submit relevant data in accordance with the criteria set forth above and his recommendations as to cancellation of the charges based thereon.

    The transaction is returned herewith for further consideration in accordance with the views expressed herein.

                                                                                                                                            NATHAN R. MARGOLD,




January 6, 1940.

Memorandum to the Commissioner of Indian Affairs:

    The attached letter to the Attorney General discusses several questions which have arisen in the enforcement of the Indian liquor laws in Oklahoma. In two respects, I believe, the views expressed in it are in error.

    The letter states that the Department has proceeded on the assumption that the act of June 16, 1933 (48 Stat. 311), authorizing the manufacture, sale and possession of 3.2 beer in Oklahoma if and when sanctioned by vote of the electorate or an act of the Oklahoma Legislature, permits sale of 3.2 beer to Indians as well as other persons. On June 2, 1933, however, the Secretary of the Interior is sued an order, with which the Attorney General on September 30, 1933, expressed his agreement, holding that the laws prohibiting sales to Indians, or introduction into Indian reservations, of beer, ale, wine, etc., did not specify any alcoholic content and that 3.2 beer was, therefore, within the prohibitions of these laws. Under this order the sale of beer and other liquors on Indian reservations, or on any Indian allotment held in trust or under restrictions against alienation, or within any area in which the introduction of intoxicants into "Indian country" is forbidden, was prohibited.

    The act of March 5, 1934 (48 Stat. 396), however, repealed the Indian liquor laws "insofar as they apply to and affect that part of the State of Oklahoma formerly known as 'Indian Territory.' " This act operated to put the Indians in eastern Oklahoma on the same basis as other citizens of the State as far as the sale and possession of intoxicating liquors was concerned. Prior to March 5, 1934, the order of June 2, 1933, prohibited the sale of 3.2 beer to Oklahoma Indians, as well as other Indians, notwithstanding the act of June 18, 1933, and the act of the Oklahoma Legislature of April 20, 1933 (Okla. Session Laws, 1933, Ch. 153), and its subsequent ratification in a referendum election held on July 11, 1933. After March 5, 1934, the sale of 3.2 beer to Indians in eastern Oklahoma was entirely legal, being permitted by both State and Federal law. The sale and possession of intoxicating liquors other than 3.2 beer is not, of course, a problem at the present time, since Oklahoma law does not permit them (Okla. Session Laws, 1933, Ch. 153).

    The letter refers also to the act of June 15, 1938 (52 Stat. 696), amending section 241, title 25, United States Code, and suggests the possibility that it restored the application of the Indian liquor laws in eastern Oklahoma so as to prohibit the sale of beer (including 3.2 beer) to Indians thereafter. I am unable to see any basis for such a proposition. The act of March 5, 1934 (48 Stat. 396), repealed the Indian liquor laws in so far as they related to Indians in eastern Oklahoma. It did not amend them. The act of June 15, 1938, could neither amend these laws nor restore them in the territory. A nonexistent statutory provision



FEBRUARY 8, 1940

can hardly be amended, nor can statutes which have been repealed be restored by implication. A specific act of Congress would be necessary to effect such a restoration in whole or in part. Furthermore, it seems quite clear that the act of June 15, 1938, was not intended to receive any such construction. It amended section 241, title 25, United States Code, only in certain particulars looking to a more expeditious handling of cases of violations of the statute by permitting first offenders to be prosecuted by information as well as indictment and modified and classified the description of the types of liquors and the classes of Indians subject to the statute.

    I believe the Attorney General should be more definitely informed of the views of the Department on the questions raised. I suggest, therefore, that he be advised that it is our opinion that the sale of 3.2 beer to Indians in eastern Oklahoma is permissible under the act of March 5, 1934, and that the Department is aware of no statutory provision amending this act or restoring the application of the Indian liquor laws in eastern Oklahoma.

                                                                                                                                            NATHAN R. MARGOLD,



February 8, 1940.

    The attached lease between the Pyramid Lake Paiute Tribe and the United States to permit the establishment by the Civil Aeronautics Authority of a radio fan-type marker on tribal land is returned herewith for modification.

    The lease provides that the term shall be from November 1, 1939 to June 30, 1940, with an option in the Government to renew the lease from year to year, upon the giving of notice, through the 30th of June 1950. The lease may, therefore, be held by the Government for a maximum term of 10 years and 8 months. Where a lease specifies an original term but gives the lessee an option of renewal for a definite number of years, the lease is, in effect, a lease for the maximum period provided the option is properly exercised. Skinner v. Davis, 104 Rans. 467, 179 Pac. 359. See also, Van Sant v. Bender, 164 N.W. 711, 101 Nebr. 680; Clancey v. G. F. Buche Co., 221 N.W. 601, 53 S. Dak. 565.

    The constitution of the tribe provides in section 1 (c) of Article VI that no tribal land shall be leased for a period exceeding five years. In section 5 (b) (2) of the charter of the tribe it is provided that no lease shall be made for a longer term than five years except that leases requiring substantial improvements of the land may be made for longer periods when authorized by law. As a result of these provisions the tribe cannot make a lease for a longer term than five years unless a lease contemplates substantial improvements, in which case the maximum term is 10 years under section 17 of the Indian Reorganization Act. I know of no justification for an interpretation of the act or of the provisions of the tribal constitution and charter to exclude from their application the United States itself. Accordingly, the lease should be modified to provide for a maximum term of not exceeding 10 years, if the erection of the radio marker is considered a substantial improvement. If not, the maximum term must be limited to five years.

    When the lease is revised, the number of days' notice which the Government must give for the exercise of its option should be specified in section 5 of the lease in order that it may be possible to determine whether or not the option is properly exercised.

                                                                                                                                            NATHAN R. MARGOLD,




February 8, 1940.


Consent of tribe must be obtained where purchase of heirship lands is made in trust for tribe.

Memorandum to the Commissioner of Indian Affairs:

    Reference is made to the attached memorandum concerning the procedure to be followed for the reacquisition of heirship lands for the benefit of the tribe where authority exists therefor, particularly in those cases where the heirs are numerous and scattered.

    The proposed procedure probably contemplates a situation where the tribe desires to have the United States purchase, on its behalf, the heirship land in question. In that situation, the legality of the transaction can be defended, as I indicated in my memorandum of August 14, 1937, against all attack. This would not be the case, however, if the tribe did not choose to purchase the land. Even if



FEBRUARY 8, 1940

Federal land acquisition funds were used, the tribe might have reason to oppose the transaction, since sums expended for land acquisition are chargeable against future judgments on tribal claims. It is quite conceivable that the appraised value of land might be in excess of an amount representing the value of the land to the tribe. I must therefore advise that the proposed procedure may properly be utilized only where the tribe requests or approves the proposed purchase. Since such request or approval is an essential factor in the legality of the transaction, it should be recited in the proposed order.

    A minor difficulty arises in connection with the suggested procedure for appraisal. If the Department takes the position of being both a purchaser and an impartial appraiser it may subject itself to a good deal of criticism. This embarrassment might be avoided by having one arbitrator appointed by the heirs, one arbitrator appointed by the tribe and a third appointed by these two or by .the local Superintendent. The choice of an arbitrator by heirs may present practical difficulties where the heirs are scattered. Possibly it would be enough to offer the heirs an opportunity to name such an arbitrator at the time when the heirs are notified of the proposed sale and have the Superintendent name an arbitrator on their behalf in case the heirs fail to take advantage of the opportunity to act for themselves. This, however, is merely a suggestion and it may be that another more satisfactory procedure can be worked out by your office or by the field.

                                                                                                                                            NATHAN R. MARGOLD,



M-30589                                                                                                                                               February 12, 1940.

Memorandum for the First Assistant Secretary:

    By your memorandum dated January 13 you requested my opinion on the propriety of entering into a contract with the State of Nevada whereby the State would prepare certain maps and plans for use in connection with Indian road work. It has been proposed that this contract be entered into under the authority of the act of Congress approved June 4, 1936 (49 Stat. 1458). The first section of this act is the only section pertinent to this discussion. It reads as follows:

    "That the Secretary of the Interior be, and hereby is, authorized, in his discretion, to enter into a contract or contracts with any State or Territory, or political subdivision thereof, or with any State university, college, or school, or with any appropriate State or private corporation, agency, or institution, for the education, medical attention, agricultural assistance, and social welfare, including relief of distress, of Indians in such State or Territory, through the agencies of the State or Territory or of the corporations and organizations hereinbefore named, and to expend under such contract or contracts, moneys appropriated by Congress for the education, medical attention, agricultural assistance, and social welfare, including relief of distress, of Indians in such State or Territory."
    I have examined the legislative history of this enactment and find that in the first session of the 70th Congress several bills were introduced which, if enacted, would have authorized the Secretary of the Interior to enter into contracts with States for the education, medical attention and relief of distress of Indians in such States and to expend under such contracts moneys appropriated by Congress for such purpose. In recommending enactment of this proposal the Secretary stated:
    "The principle underlying the proposed legislation is in agreement with my belief that the time has arrived when States directly interested in the civilization and advancement of Indians should begin to assume a greater degree of responsibility for Indian affairs, especially in the matter of directing the activities specifically mentioned in the bills under consideration."
    In reporting out one of these measures in the second session of the 70th Congress, the Committee on Indian Affairs stated:
    "For a number of years those constructively interested in the welfare of the Indians have been growing in the belief that it should be made possible for such States having considerable Indian population as have developed efficient agencies to deal with health and educational problems and to relieve distress among the indigent to give the benefit of such agencies to their Indian population as well as to the white. * * * This measure does not remove any of the protection of the Federal Government from the Indians. * * * It authorizes cooperative contracts between the Federal Gov-



FEBRUARY 12, 1940

ernment and the States within carefully restricted fields of service in cases where the Indians will be benefited."

    Similar bills were introduced in each succeeding congress and were reported on by the Department. These reports all contain the statement:
    "It should be borne in mind that this legislation provides an initial step in cooperative endeavor between the Federal Government and the several States and before a definite future policy may be outlined it will be necessary to have some experience in this sort of endeavor. The legislation confines this cooperation to the three subjects of education, medical care and relief of distress, and does not in any way affect the status of the Indian either as to his citizenship or his property rights, nor does it affect in any way the tribal assets, landholdings or any other property of individual Indians or of any tribe of Indians."
None of these measures was passed. However, in 1934 a similar bill was again introduced, this bill permitting the Secretary to enter into contracts with States for the education, medical attention, agricultural assistance, and social welfare, including relief of distress, of Indians in such States. In reporting on this measure the Secretary stated:
   "* * * There are many sections of the United States where people of Indian blood are so definitely a part of the general population that it is neither necessary nor wise for the Federal Government to deal with them on any segregated plan. Moreover, in much of the rural area where Indians are living, educational, health, and other facilities are so limited that it is highly desirable for the Federal Government and the State to combine resources wherever possible. In the field of education, this method has resulted in arrangements whereby large numbers of Indian children are attending school successfully with whites. In agricultural and home extension work, particularly in Montana and South Dakota, the State and Federal forces have been able to combine on some reservations under conditions that would represent financial savings and more effective work if extended to other reservations in these and other States.

    "The proposed legislation would establish and carry forward this principle of Federal-State cooperation. It would simplify the present procedure considerably, since it would enable the Secretary of the Interior to make contracts directly with the States rather than, as at present, almost exclusively with numerous local units. It is not intended, of course, to turn Indians over to the States in large numbers and it is not contemplated that this cooperation will develop to any extent where solid groups of Indians reside, such as in the Southwest, unless Indians themselves seek this type of cooperation. The Indian Bureau finds it extremely difficult to render service to some Indians living in widely scattered communities, and cooperative endeavor with State authorities would help both Indians and whites living in these more isolated areas.

            *                                *                                *                                *                                *

    "Under the relief and welfare provisions of the bill, Indian residents would be able to secure services offered by State departments of social welfare. At the present time these departments are furnishing such types of service as foster home placement for neglected and orphan children, probation work with pre-delinquents, institutional care of defectives, mothers' pensions, and special supervision of relief programs; and these are of special importance for Indian welfare. It is not justifiable for the Indian Service to enter upon expensive duplication of, this needed work whenever a combination of State and Federal resources is feasible.

    "We are assuming that the term 'medical attention' as used in the bill covers physical examination. medical and surgical work and treatments, hospitalization, dispensary and convalescent care, nursing, sanitation, and the application of such other public-health measures as might be necessary, including the prevention, investigation, suppression, and control of contagious and communicable diseases."

In its report on this measure, which became Public No. 167, 73rd Congress, and which is known as the Johnson-O'Malley Act, the Senate and House Committees on Indian Affairs stated:
    "This bill is intended particularly to make it possible that the Department of the Interior should arrange for the handling of certain Indian problems with those States in which the Indian tribal life is largely broken up and in which the Indians are to a considerable extent mixed with the general population. In such States Indian health, for example, becomes a problem so intermixed with that of the general health of the community that it is difficult to



FEBRUARY 12, 1940

separate the two. The maintenance of a State health agency and a separate health agency for Indians under these circumstances is found to be uneconomical and contrary to efficient administration. This bill would make it possible for State health agencies to take charge of Indian health, and for the Federal Government to bear the added expense.

    "In many sections the education of the Indians is found to develop into a similar situation. The Indians in these sections are largely mixed with the white population, and it becomes advisable to fit them into the general public-school scheme rather than to provide separate schools for them. The Indian Service has already established the precedent of arranging with many local communities to take Indian children into the public schools, but it has lacked authority to transfer such functions on the broader basis to the States. It has held to the theory, however, that the Indian child in public schools, side by side with the white children, makes more progress toward adjusting itself to a modern world than when it attends schools maintained for Indians only.

    "The proposed bill does not make the transfer of any of these responsibilities for the welfare of the Indians mandatory upon the Department of the Interior. It merely makes it possible that the transfers may be made when, in the judgment of the Secretary of the Interior, they seem advisable. Contracts for these services may be made with the States at the will of the Secretary when he finds all conditions favorable to making them. The contracts will be regarded as experimental and may be cancelled at the expiration of certain short terms. "Where the State takes over these details of Indian administration, the Federal Government in each case will contribute to the expenses incurred out of money appropriated for Indian administration."

    In 1935 this Department suggested certain perfecting amendments to this act which in no way affected the purposes for which such contracts could be made. These perfecting amendments are contained in the act approved June 4, 1936.

    From the above recital of the legislative history of this act I am of the opinion that it was not within the contemplation of the Congress that the Secretary of the Interior might enter into contracts with States for all purposes but only for those purposes specifically enumerated in the act. Further, the act in question authorizes the Secretary of the Interior to expend under contracts made pursuant thereto "monies appropriated by Congress for the education, medical attention, agricultural assistance, and social welfare, including relief of distress, of Indians." The Office of Indian Affairs has not informed you under what appropriation the work in question is being done, but in the absence of a showing that such work is being done under authority of appropriations for one of the above, I am convinced that a payment made under a contract as here proposed would be rejected by the Comptroller General.

    I do not know of the existence of any other statute which would permit the Secretary to contract with the State of Nevada for the preparation of the maps and plans desired. In this connection, I call your attention to a decision rendered by the Comptroller General (14 Comp. Gen. 909), involving the question of whether the Administrator of Public Works could contract with the New York City Municipal Housing Authority for architectural services of certain well-known architects joined together as a partnership for the purpose of doing the work required. The Comptroller General held:

"Section 3709, Revised Statutes, provides:
    'Except as otherwise provided by law all purchases and contracts for supplies or services, in any of the departments of the Government, and purchases of Indian supplies, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same, when the public exigencies do not require the immediate delivery of the articles, or performance of the service. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract, at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals.'

    "The exception of personal services from the requirements of section 3709, Revised Statutes, is identified with and attaches to the individual and means that the personal element predominates and necessitates that there be selection of the person and that the contract be directly with and binding upon that person. It is personal to the one contracting and not an authority to contract for that one's services through another. 9 Comp. Gen. 169. It would not be permissible, therefore, to contract with the New York City Municipal Housing Authority to select and furnish to your administration such architects as it may deem proper * * *.

    "If the services of particular architects are



MARCH 13, 1944

administratively determined to be necessary to the success of the contemplated project, the selection of the particular architects should be made by responsible officials of your administration and the services of such architects to the extent necessary should be secured by contracting directly with the individuals and not through an intermediate agency. It should be understood that in Government projects, such as involved in the present matter, there is for consideration first whether the services incident to such projects, including architectural services, may not be performed by officers and employees of the Government. The employment of outside professional services under contract should be resorted to only when due to the highly technical features of the project or for other reasons the use of regular employees of the Government would not be adequate to accomplish the purpose authorized by law."

    Again, in considering the question whether the Securities and Exchange Commission might contract with a State to secure certain evidence of violation of the Securities Exchange Act, the Comptroller General, in 14 Comp. Gen. 681, said:
    "Section 21 (a) of the act authorizes the Securities and Exchange Commission to 'make such investigations as it deems necessary to determine whether any person has violated or is about to violate any provision of this title or any rule or regulation thereunder * * *.'

    "Thus the investigation as to the accuracy of statements made in connection with the registration of a security is a duty imposed by law on the Securities and Exchange Commission. Such an investigation, and in fact all investigations authorized by the statute, are required to be performed by the personnel of the Commission authorized to be employed * * *. Payment for such services is authorized only in accordance with the applicable Federal statutes controlling payment of salary and travel expenses. * * * In the absence of specific statutory authority therefore, the services of engineers or investigators may not be obtained by the Commission through agreement, contract, or other arrangement with a State or other agency for the loan or use of its personnel on a reimbursable basis."

    I am therefore of the opinion that if personal services are required for the performance of the work in question, such services must be obtained by employment of a person to do the job and not by contract with the State of Nevada for the furnishing of such services.

                                                                                                                                            NATHAN R. MARGOLD,




March 13, 1940.

Memorandum for the Commissioner of Indian Affairs:

    By your memorandum of November 27, 1939, you requested me to consider the rights of the Indians of the Hoopa Valley Indian Reservation, California, to fish in the waters of the Klamath River within the boundaries of said reservation, including the extension thereof, without interference by the State authorities. By your memorandum dated December 12, 1939, you requested that my opinion clearly cover the following point: "What fishing rights have the Indians in that area of the original reservation extending a distance of 20 miles from the mouth of the Klamath River?"

    You invite particular attention to my decision of June 30, 1936 (M. 28107), involving the Lower Red Lake and part of Upper Red Lake within the Red Lake Indian Reservation in Minnesota wherein it was concluded that even if the State had title to the bed of the Lakes, such title was subject to the occupancy rights of the Indians, which rights arose prior to the admission of Minnesota to statehood, in virtue of which those Indians possessed an exclusive right to fish in the waters of the Lakes, free from State regulation. Such does not appear to be the situation with regard to the Indians of the Hoopa Valley Reservation.

    On November 10, 1855, the Commissioner of Indian Affairs recommended that under authority of the act of Congress approved on March 3, 1855 (10 Stat. 698), for removing the Indians in California to two additional military reservations, "a strip of territory one mile in width on each side of the (Klamath) river, for a distance of 20 miles" be set apart as a reservation for the Indians. By Executive order dated November 16, 1855, the reservation was established.

    The Hoopa Valley Indian Reservation was created by Executive order dated June 23, 1876, and the extension thereto was created by Executive order dated October 16, 1891, under authority of the act approved April 8, 1864 (13 Stat. 39), en-



MARCH 13, 1940

titled "An Act to provide for the better organization of Indian Affairs in California."

    I find nothing in the history of the setting apart of the territory here in question to indicate that the Indians possessed any rights to the lands or waters prior to the establishment of the reservations.

    Since the Indians in question derive any rights they may have in the river from the United States, the question to be considered is what title, if any, did the United States retain to itself in the bed of the particular portions of the river involved when the State of California was admitted into the Union.

    The State of California was admitted by the act of September 9, 1850 (9 Stat. 452) "on an equal footing with the original States in all respects what ever." Section 5 of the 1850 act provided:

    "That the said State of California is admitted into the Union upon the express condition that the people of said State, through their legislature, or otherwise, shall never interfere with the primary disposal of the public lands within its limits, and shall pass no law and do no act hereby the title of the United States to, and right to dispose of, the same shall be impaired or questioned; * * * that all the navigable waters within the said State shall be common highways, and, forever free, as well to the inhabitants, of said State as to the citizens of the United States, without any tax, impost, or duty therefor."
    Title to that portion of the bed of the Klamath River here in question passed to the State if the river at the points in question was navigable in 1850 and if those portions of the river were not navigable at that time, title to the river bed remained in the United States (see United States v. Utah, 283 U.S. 64, 75).

    Whether or not the portions of the Klamath River here in question were navigable in 1850 is a question of fact which I am unable to determine on the present record.

    The Supreme Court of California has on several occasions considered the question of navigability of particular rivers and tidelands and has apparently uniformly held that the character of said lands and rivers is a question of fact which must be determined as of September 9, 1850, when California was admitted into the Union.

    The latest decision of the California Supreme Court on this question is in 1937, in the case of Newcomb v. City of Newport Beach, 60 P. (2d) 827. I quote from that decision:

    "Plaintiff deraigns her title through a patent issued by the State of California in 1907 to George N. Harbou. Said patent was issued under the provisions of section 3440-5443, Pol. Code, providing for the sale by the state of its swamp and overflowed, salt marsh, and tidelands, the lots were described in said patent as tidelands belonging to the state by virtue of her sovereignty, and were conveyed to Harbou by reference to a plat known as Location 267, State Tidelands. As to the patentee and plaintiff, as successor in interest to said patentee, said patent, is a conclusive determination of the nature of said lots, and establishes their character as tidelands on navigable waters, title to which vested in the State of California by virtue of her sovereignty on her admission to the Union in 1850. Ord Land Co. v. Alamitos Land Co., 199 Cal. 380; 249 P. 178; Saunders v. La Purisima, etc., Co., 125, Cal. 159, 57 P. 656; 41 Cal. Jur. 752.

    "Defendant city also offered oral testimony as to the tideland character of the lots in question. For the purpose of determining whether lands vested in the state by virtue of her sovereignty, it is their condition, as tidelands at the time of the admission of California into the Union in 1850 which is material. Ord. Land Co. v. Alamitos Land Co., supra. None of the witnesses herein, was familiar with the lands as early as 1850, but their testimony as to the condition of the lots at a later date was material in arriving at a conclusion as to their status at the earlier time. Ord Land Co. v. Alamitos Land Co., supra. The federal government has established pierhead and bulkhead lines in said bay as a navigable harbor. In the light of the evidence the trial court lawfully could reach no other conclusion than that the lots were tidelands on navigable waters. It is true that Newport bay was not included in the list of navigable waters in section 2349, Pol. Code (as amended by St. 1891, p. 96), but this does not mean that prior to that date it was not navigable in fact.

    "The effect of the patent issued by the state to Harbou, plaintiff's predecessor, was to vest in him title to the tidelands in question subject to the public easement for navigation, commerce, and fishing. People v. California Fish Co., 166 Cal. 576, 581, 158 P. 79; Forestier v. Johnson, 164 Cal. 24, 30, 127 P. 156. * * *"

    The United States Supreme Court in the Utah case, supra, in considering a similar question of fact regarding the navigability of certain rivers in Utah in 1896 when Utah was admitted to statehood laid clown certain rules for determining the navigability



MARCH 13, 1940

of a river. The court, quoting from United States v. Holt State Bank, 270 US. 49, 56, said:

    " 'The rule long since approved by this Court in applying the Constitution and laws of the United States is that streams or lakes which are navigable in fact must be regarded as navigable in law; that they are navigable in fact when they are used, or are susceptible of being used, in their natural and ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water; and further that navigability does not depend on the particular mode in which such use is or may be had-whether by steamboats, sailing vessels or flatboats-nor on an absence of occasional difficulties in navigation, but on the fact, if it be a fact, that the stream in its natural and ordinary condition affords a channel for useful commerce.'

    "In the present instance, the controversy relates only to the sections of the rivers which are described in the complaint, and the Master has limited his findings and conclusions as to navigability accordingly. The propriety of this course, in view of the physical characteristics of the streams, is apparent. Even where the navigability of a river, speaking generally, is a matter of common knowledge, and hence one of which judicial notice may be taken, it may yet be a question, to be determined upon evidence, how far navigability extends. The question here is not with respect to a short interruption of navigability in a stream otherwise navigable, or of a negligible part, which boats may use, of a stream otherwise non-navigable. We are concerned with long reaches with particular characteristics of navigability or non-navigability, which the Master's report fully describes."

    "The United States, in support of its exceptions, stresses the absence of historical data showing the early navigation of these waters by Indians, fur traders, and early explorers, that is, uses of the sort to which this Court has had occasion to refer in considering the navigability of certain other streams. The Master has made an elaborate review of the history of the rivers from the year 1546 to 1869, and reaches the conclusion that neither the limited historical facts put in evidence by the Government [nor] the more comprehensive investigation into the history of these regions' tend to support the contention that the non-use of these rivers in this historical period 'is weighty evidence that they were non-navigable in 1896 in fact and in law.' The Master points out that the non-settlement of eastern Utah in these years, the fact that none of the trails to western Utah or to California were usable to advantage in connection with these rivers, and many other facts, are to be considered in connection with that of non-use.

    "* * * Much of this evidence as to actual navigation relates to the period after 1896, but the evidence was properly received and is reviewed by the Master as being relevant upon the issue of the susceptibility of the rivers to use as highways of commerce at the time Utah was admitted to the Union.

    "The question of that susceptibility in the ordinary condition of the rivers, rather than of the mere manner or extent of actual use, is the crucial question. The Government insists that the uses of the rivers have been more of a private nature than of a public, commercial sort. But, assuming this to be the fact, it cannot be regarded as controlling when the rivers are shown to be capable of commercial use. The extent of. existing commerce is not the test. The evidence of the actual use of streams, and especially of extensive and continued use for commercial purposes, may be most persuasive, but where conditions of exploration and settlement explain the infrequency or limited nature of such use, the susceptibility to use as a highway of commerce may still be satisfactorily proved. As the Court said, in Packer v. Bird, 137 U.S. 661, 667: 'It is, indeed, the susceptibility to use as highways of commerce which gives sanction to the public right of control over navigation upon them, and consequently to the exclusion of private ownership either of the waters or soils under them.' In Economy Light & Power Co. v. United States, 256 U.S. 113, 122, 123, the Court quoted with approval the statement in The Montello, supra, that 'the capability of use by the public for purposes of transportation and commerce affords the true criterion of the navigability of a river, rather than the extent and manner of that use.' "

    In view of the criteria set up by the Supreme Court for the determination of such a question of fact and in view of the Court's statement (p. 75) that the determination of such a controversy is a Federal question, I suggest that an investigation into the facts of the navigability of those portions of the Klamath River here in question as of 1850



MARCH 13, 1940

be undertaken and that the tests suggested by the Supreme Court in the Utah case be used.

    I shall be glad to consider this question again when the investigation suggested above has been completed.

                                                                                                                                            NATHAN R. MARGOLD,




March 21, 1940.



Application of Union Oil Company of California for a permit to prospect for oil and gas on tribal and allotted lands of the Uintah and Ouray Indian Reservation, Utah.


1. The power of the Uintah and Ouray Tribal Business Committee, under section 3; Article VIII, and section 5 (b) of the constitution and charter, respectively, of the Ute Indian Tribe; to execute permits and leases on tribal lands and to promulgate and enforce regulations to govern such leases, authorizes the Committee, with departmental approval, to impose such requirements on prospective permittees and lessees as it sees fit, without regard to the act of May 11, 1938 (52 Stat. 347), and the regulation of May 31, 1938, authorized thereby.

2. The preference right in obtaining leases or permits accorded to members of the tribe and cooperative associations composed of members by section 3, Article VIII, of the constitution is available for any use for which the member or association is able to pay a reasonable fee, considering all the uses to which the land is susceptible.

Memorandum to the Commissioner of Indian Affairs:

    The attached proposed letter to Superintendent C. C. Wright of the Uintah and Ouray Indian Agency, Utah, concerning an application by the Union Oil Company for an oil and gas prospecting permit on the Uintah and Ouray Reservation, is returned herewith for further consideration.

    The letter fails to take adequate account of the power of the Uintah and Ouray Tribal Business Committee to establish its own regulations to govern oil and gas, as well as other leases of tribal lands, contained in section 3, Article VIII and section 5 (b) of the constitution and charter, respectively, of the Ute Indian Tribe. The Tribal Business Committee could with departmental approval, I believe, grant the proposed prospecting permit without regard to the regulations governing the leasing of tribal lands under the act of May 11, 1938 (52 Stat. 347), approved May 31, 1938. The regulations are not applicable to tribal lands of organized tribes when the constitution or charter of the tribe or ordinances, resolutions or other actions authorized thereby, contain provisions inconsistent with them (section 2 of the act of May 11, 1938, and section 29 of the regulations). While the Tribal Business Committee is not compelled by the tribal constitution and charter to take any action to regulate the leasing of tribal land, it should be given the opportunity to do so. This is only proper in view of the fact that any permit or lease to the Union Oil Company will have to be executed by the tribal officers for the tribe, rather than by the Superintendent, as I have had occasion to point out. in a number of memoranda on the powers of specific organized tribes in leasing tribal lands, dated May 28, 1936 (Shoshone-Bannock Tribes, Fort Hall), July 12, 1937 (Fort Belknap Indian Community), and September 11, 1937 (Ute Indian, Tribe). A paragraph should be added to the letter indicating the opportunity open to the Tribal Business Committee of establishing its own regulations for leasing tribal lands. The second sentence of paragraph four on page one of the letter should also be corrected to conform with the views expressed herein.

    The next to the last paragraph of the letter on pages two and three refers the Superintendent's attention to the preference rights in leasing tribal lands available to members of the tribe and to cooperative associations composed of members. He is directed therein to determine whether any such Indian or cooperative associations are desirous of obtaining oil and gas leases and can pay a reasonable fee therefore. The preference right extends, not only to leases for the same purpose as that motivating a prospective outside lessee, but to leases for any and all purposes. It would not necessarily conflict with a lease to an outsider since a mining lease could be operated without interfering with the use by an Indian or a cooperative association of the surface for farming or commercial purposes. If, however, there were any conflict, and the Indian or cooperative association is able to pay a reasonable fee, considering all the uses to which the land



APRIL 3, 1940

is susceptible, their preference right would prevail. I suggest the letter be revised to make this clear.

                                                                                                                                            NATHAN R. MARGOLD,




April 3, 1940.

Memorandum for the Assistant Secretary:

    Reference is made to the proposed rules and regulations which the Indian Office has submitted for approval and which provide a method whereby the individual Indians benefited will repay to the Klamath Tribe the tribal funds expended on the construction of a small irrigation project within the Klamath Reservation.

    The files attached to the letter of recommendation contain memoranda which raise two objections, one substantive and the other formal, to, approval of the rules and regulations. These are: (1) can construction costs be assessed and collections made from the Indian owners of the lands to be benefited, or does the Leavitt Act require that such collections be deferred until the land passes into the ownership of non-Indians; and (2) must these regulations be published in the Federal Register.

    The Leavitt Act, approved July 1, 1932 (47 Stat. 564), provides:

    "That the Secretary of the Interior is hereby authorized and directed to adjust or eliminate reimbursable charges of the Government of the United States existing as debts against individual Indians or tribes of Indians in such a way as shall be equitable and just in consideration of all the circumstances under which such charges were made: Provided, That the collection of all construction costs against any Indian owned lands within any Government irrigation project is hereby deferred, and no assessments shall be made on behalf of such charges against such lands until the Indian title thereto shall have been extinguished * * *."
    There has been no decision by the Department or by the Indian Office as to whether the Leavitt Act applies to expenditures from tribal funds, and it is not necessary to consider that question now. The Third Deficiency Appropriation Act of 1939 (Public No. 361) whereby Congress, at the request of the tribal council, made available $15,000 of tribal funds for the construction of the Five Mile Project, states that the cost of the project is "to be reimbursed to the tribe by the Indians benefited under such rules and regulations as the Secretary of the Interior may prescribe." Even if Congress intended by the Leavitt Act in 1932 to defer all reimbursements to a tribe, that intention was superseded with regard to this particular project. Under the Leavitt Act collections are not to be made until the land passes into non-Indian ownership, but the 1939 act specifically provides for repayments by certain Indians. The language of the latter act is not ambiguous; therefore no investigation of its legislative history is required to determine the Congressional intent. It is also noted that this meaning has been accepted by the Indians who petitioned for the project and by the Klamath General Council in approving it. In view of the language of the 1939 act, as well as the action of the tribal council, it is my conclusion that the Leavitt Act does not prevent the proposed assessments and collections from the Indians benefited.

    For the purpose of determining whether the proposed rules and regulations are required to be published in the Federal Register, reference is made to the act of July 26, 1935 (49 Stat. 500), Section 5 (a) of that statute requires that:

    "There shall be published in the Federal Register (1) all Presidential proclamations and Executive orders, except such as have no general applicability and legal effect * * * (2) such documents or classes of documents as the President shall determine from time to time to have general applicability and legal effect; and (3) such documents or classes of documents as may be required so to be published by Act of the Congress: Provided, That for the purposes of this Act every document or order which shall prescribe a penalty shall be deemed to have general applicability and legal effect."
Section 4 states that "the term 'document' means any Presidential proclamation or Executive order and any order, regulation, rule * * * or similar instruments issued, prescribed, or promulgated by a Federal agency * * *." Section 7 provides that "No document required under section 5 (a) to be published in the Federal, Register shall be valid as against any person who has not had actual knowledge thereof until the duplicate originals or certified copies of the document shall have been filed with the Division and a copy made available for public inspection * * *."

    Congress provided in the Third Deficiency appro-



FEBRUARY 17, 1940

priation Act of 1939 that the Secretary of the Interior should issue rules and regulations dealing with the proposed reimbursements; but publication was not required, and no penalty was prescribed. The rules and regulations set forth the conditions under which a few Indians on the Klamath Reservation are to make repayments. The transaction involved is one between the tribe and its members, although handled through the agency, and concerns tribal funds. The persons benefiting from the project, and so required to pay assessments, will be fully informed as to their obligations by the Superintendent, by the tribal council, and by the actual construction of the project and the availability of water. Section 5 of the proposed rules and regulations provides that any non-Indian purchasing the land would take it free of the assessments, the Indian owner being held liable for the payments.

    In view of the circumstances involved in the construction of this project and the repayment of the costs by the Indians benefited, it is my conclusion that these rules and regulations are not of "general applicability and legal effect" within the meaning of the Federal Register Act or the determinations of the President provided for in section 5 (a) (2). There is not therefore, any mandatory provision which requires their publication in the Federal Register. However, if for any reason, the assessments are not collected, the protection of the tribe makes it desirable that possible purchasers should be on notice that, as stated in section 7 of the regulations, the land is subject to a lien under the provisions of the act of March 7, 1928 (45 Stat. 209 210).

    I recommend that the proposed rules and regulations be approved in their present form. However, since it is probable that the same question as to the necessity of publishing regulations in the Federal Register will arise in connection with other activities of the Indian Irrigation Service, and since publication would give complete protection to the tribe, I recommend that the Indian Office be asked to give further consideration to the desirability of publishing these and other such regulations. I also recommend that the Administrative Committee of the Federal Register be asked for its comments on the publication of rules and regulations of this nature.

                                                                                                                                        FREDERIC L. KIRGIS,

Acting Solicitor.

OSCAR L. CHAPMAN, Assistant Secretary.



April 11, 1940.


    Procedure for review of tribal ordinances and resolutions which are subject to departmental review.


Failure by the Superintendent to approve an enacted or adopted tribal ordinance or resolution which is subject to departmental review within 10 days of the date of its enactment or adoption constitutes a veto thereof and the Tribal Council in order to secure approval of such an ordinance or resolution must act by majority vote to refer the ordinance or resolution to the Secretary of the Interior. Such an ordinance or resolution submitted by the Superintendent, but not so referred, will not be acted upon by the Department.
Memoranrlum to the Commissioner of Indian Affairs:

    The attached letter to Mr. Murphy Williams, Chairman of the Walker River Paiute Tribal Council, attempts to waive a provision in the second paragraph of section 2, Article VI, of the Walker River Paiute Constitution and to approve an ordinance governing adoption into the tribe which was enacted by the Tribal Council on November 7, 1939, but which was not submitted to nor acted upon by the Superintendent within 10 days of its enactment, as required by said provision. While I agree with you that the ordinance itself is unobjectionable, I do not believe that the Department can ignore the plain requirements of section 2, Article VI.

    A tribal ordinance or resolution may, upon its enactment or adoption, be handled in one of three ways. Section 2, Article VI, calls for its immediate submission to the Superintendent in order that he may have time within the 10-day review period to give it adequate consideration and to take positive action on it by way of approval or disapproval. An ordinance or resolution which is handled in this way will obviously involve the tribe and the Department in the least possible amount of delay. An approved ordinance can be at once submitted by the Superintendent for review by the Secretary of the Interior. This will normally give the Department quite sufficient time within which to consider it. A vetoed ordinance or resolution, on