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APPROPRIATION BILL FOR 1938

HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

SEVENTY-FIFTH CONGRESS

FIRST SESSION
ON THE

INTERIOR DEPARTMENT
APPROPRIATION BILL FOR 1938

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Administrator, Rural Electrification Administration; and Frank R. McNinch, Chairman, Federal Power Commission.

Although the committee avails itself as much as possible of information available from the several Government agencies, it, nevertheless, requires a competent staff of its own to perform necessary research and work out details of the problem as directed by the committee.

OIL CONSERVATION POLICY OF THE FEDERAL GOVERNMENT

Five States—Kansas, Louisiana, New Mexico, Oklahoma, and Texas—producing 73 percent of the national oil output, have adopted the policy of regulating oil production so as to prevent waste. Each State determines for itself the amount of oil which currently may be produced therein without waste.

Under the act approved February 22, 1935, generally known as the Connally hot-oil law, the Federal Government, through the Department of the Interior, supports the State policy of oil and gas conservation by providing that petroleum, or the products thereof, produced in excess of the amounts permitted by State law is contraband and may not be moved in interstate or foreign commerce.

During the fiscal year ended June 30, 1936, the Department issued 5,968 certificates of clearance involving 222,034,000 barrels of petroleum at an over-all cost of about one-tenth of a cent a barrel. The administration of the law is so essentially a field activity that, of the 78 persons employed, 60 are in the field and only 18 in Washington. The current appropriation for the administration of the act is $300,000

The act has been upheld uniformly in the Federal courts and no issue thereunder has been presented to the Supreme Court of the United States. The prosecution of cases rests with the Department of Justice which prosecutes civil and criminal proceedings under the act. Out of 248 cases in the courts, the Government has been successful in 231 and unsuccessful in 2, with 15 pending.

The Connally law expires by limitation on June 16, 1937, but a bill to make it permanent has now passed the Senate and is pending in the House. Only one Federal Tender Board, that for east Texas, has been established but, if the law is extended, it is very probable that a new Federal Tender Board will have to be established for the Corpus Christi area, and it is anticipated that an appropriation of $500,000 will be required for the fiscal year ending June 30, 1938.

INDIAN REORGANIZATION PROGRAM

Collectively, the various elements of the Indian Reorganization Act, approved June 18, 1934, aim to bring about a social and economic rehabilitation of these wards of the Nation and to end certain disastrous policies and abuses which had developed in Indian administration. In broad outline, the act aims to put a stop to the further alienation of Indian lauds to white ownership which has been proceeding since 1887 at an accelerating rate. It reverses the traditional policy of destroying Indian self-government and instead establishes a system of home rule which, we hope, will ultimately put an end to the Indians' dependency on the arbitrary regulation of the Indian Bureau. It lays down a broad program designed to arrest the steady pauperization of Indians by providing them with land and access to an adequate system of rural credit. For the first time, it makes proper provision for the advanced education and training of Indians.

Eight of the 19 sections of the Indian Reorganization Act deal with "the land question." Over the period from 1887 to 1934, Indian lands decreased from 138,000,000 acres to 52,000,000 acres. Half of that which remained in 1934 was almost valueless, semi-aird desert. The Indian Reorganization Act prohibits the further breaking up of Indian tribal lands into allotments in severalty, thus bringing to an end the policy which has been responsible for huge losses in Indian acreage as well as the Indians' non-use of their own lands through leasing system.

Coupled closely with the land sections is that which authorizes the establishment of a revolving loan fund of $10,000,000, of which, to date, Congress has authorized $3,480,000. The pending appropriation act for 1938 recommends an additional $1,730,000. Prior to the passage of the act, Indians were unable to secure credit through the pledging of their allotments on account of their trust status. The Government provided credit for Indians at a rate of less than $1 per capita per year.

ASSISTANCE OF BUREAU OF MINES TO MINERAL INDUSTRIES

The forward-looking policy of the Bureau of Mines, aimed to aid adjustment of the mineral industries to changing conditions, has received the support of the Department and of Congress. Flush production, especially of gold, silver, copper, lead, and zinc, resulting from discovery and exploitation of rich deposits, is a thing of the past, and the increasing necessity of utilizing lower-grade ores compels technologic improvement and lower costs, which is one of the main objectives of the research work of the Bureau of Mines. More direct service than formerly is now given to small operators in testing their ores to determine suitable treatment processes.

The Bureau is conducting many technical studies in anticipation of low-cost power that soon will be available to many western mining areas as a byproduct of Government irrigation and flood-control projects. For example, it has undertaken the investigation of electrometallurgical processes for reduction of ores available within the power radius of the various projects. These include ores of manganese, chromium, magnesium, antimony, potash, tungsten, and various refractory materials hitherto not utilized. Equipment already available at the Bureau's Reno station was used for preliminary work pending completion of an electrometallurgical station at Boulder City,

Erovided with large-scale equipment and cheap power from Boulder lam. Promising results already have been obtained, particularly with reference to manganese, one of the more important strategic metals hitherto unavailable domestically, at a reasonable cost, in sufficient quantity to meet national requirements. Other domestically deficient strategic materials now being investigated by the Bureau include the ores of chromium, manganese, tungsten, and antimony. These studies may well stimulate expansion of the western mineral industries with resulting creation of employment and augmentation of the national wealth.

The Bureau's efforts in promoting health and safety of workers in the mineral industries is bringing about better working and living

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