HISTOKY AND LEGAL BASIS. 49 



Under the law as it now stands a claim may be held indefinitely 

 without an attempt to obtain patent, and so long as the annual as- 

 sessment work is performed the claim is secure against adverse 

 claimants. Until patent is issued no taxes are assessable by the 

 State, and many producing mines refrain from patenting in order 

 to avoid taxation. A limit to the number of years that a claim may 

 be held pending the institution of patent proceedings would correct 

 this abuse. 



It is not only with relation to mineral deposits nor by comparison 

 with a sale system that a leasing system is advocated. Leasing 

 should replace the present permit system, under which rights of way 

 across the public domain are granted for reservoir sites, power devel- 

 opment and transmission, and irrigation works. Under the existing 

 laws the right of way granted is either in perpetuity or is revocable 

 in the discretion of the Secretary of the Interior. Both of these 

 conditions are undesirable — ^the first because the resource passes for- 

 ever beyond the direct control of the public, which thus becomes 

 powerless to guard against misuse, disuse, or monopoly; the second 

 because the capital which is required in the construction of such en- 

 terprises is not sufficiently protected. Between the grant in per- 

 petuity, which inadequately protects the public, and the revocable 

 permit, which inadequately protects the capital invested, lies the 

 lease, which adequately protects both. By leasing rights of way for 

 a fixed period of years absolute control would periodically return to 

 the public, while the investor would be secure for a period long 

 enough for his investment to return a profit. 



If a lease law is to be adopted certain provisions should be incor- 

 porated in it, whether it is for a single resource or for all. In the 

 first place the end to be attained is not revenue for the Government 

 but is rather the retention of control in the public. It would be a 

 long step backward to return to the early policy of using the public 

 lands as a means of Federal revenue, and any lease law enacted 

 should be so framed as to encourage development, prohibit specula- 

 tion, and add nothing to the cost of the resource to the consumer. 

 The States in which the lands are situated should be compensated 

 for the loss of taxes which they would suffer from the permanent re- 

 tention of the fee to natural resources in the National Government. 

 Doubtless the simplest way to accomplish this is to provide that a 

 certain percentage of net receipts from leasing shall go to the State 

 in which the lands are situated. The term of a lease should be long 

 enough to permit profitable investment and development. It should 

 not be longer than is necessary to furnish an adequate return on the 

 amount invested. 



Whatever action Congress may decide to take regarding the natural 

 I'esources now in public ownership should not be much longer de- 

 78894°— Bull. 537—13 4 



