the respective States covering submerged lands of the Continental Shelf, to encourage the continued development of such leases, to provide for the protection of the interests of the United States in the oil and gas deposits of said lands, and for other purposes,

The proposed legislation would authorize a continuation, under certain conditions, of oil and gas operations and development in the offshore submerged lands involved in the cases of United States v. California (332 U. S. 19). United States v. Louisiana (339 U. S. 699), and United States v. Texas (339 U. S. 707). The conditions prescribed for such continuation would include, among other things, a requirement that the operations be conducted under a State lease covering such lands issued prior to December 21, 1948, and in force and effect on June 5, 1950 (the date of the decisions of the Supreme Court in the Louisiana and Texas cases) or under a lease issued with the approval of the Secretary of the Interior and in force and effect on the effective date of the proposed legislation. It would also be required that all rents, royalties and other sums payable under the lease subsequent to June 5, 1950, which have not been paid in accordance with the provisions thereof, shall be paid to the Secretary of the Interior, who shall deposit such moneys in a special fund in the Treasury. June 5, 1950, is the date prior to which an accounting was denied to the United States in decrees entered by the Supreme Court in the Louisiana and Texas cases (340 U. S. 899; 340 U. S. 900). All leases brought within the terms of the measure would be subject to a minimum royalty of 121⁄2 percent of the value of the production conducted thereunder.

The Secretary of the Interior would be authorized to exercise such powers of supervision and control as may be vested in the lessor by the terms of the State leases and to impose such other requirements as he may deem to be reasonable and necessary to protect the interests of the United States. Where a State lease covers lands underlying inland navigable waters, the Secretary would be authorized, with the approval of the Attorney General, to certify that the United States claims no proprietary interest in such lands, provided the submerged lands in question are not subject to certain specific proprietary claims of the United States. In the event of a controversy between the United States and a State as to whether or not certain submerged lands are situated beneath navigable inland waters, the Secretary would be authorized, with concurrence of the Attorney General, to negotiate and enter into an agreement respecting the continuation of operations in such lands, and the impounding of revenues therefrom, pending the settlement or adjudication of the controversy.

In order to meet the existing urgent need for further exploration and development of mineral deposits in submerged lands of the Continental Shelf, the Secretary of the Interior would be authorized, pending the enactment of further legislation on the subject, to issue, on a basis of competitive bidding, oil and gas leases of such lands not covered by State leases, and the President would be empowered to withdraw from disposition any unleased lands and reserve them for the use of the United States in the interest of national security. All revenues derived from operations conducted under the proposed legislation, whether from continued State leases or from new leases, would be subject to the following disposition: 371⁄2 percent of the moneys received from operations within the seaward boundary of a State would be paid to such State; all other moneys so received would be held in a special account in the Treasury pending the enactment of legislation concerning the disposition thereof.

As the above summary of its provisions reveals, the proposed legislation is in the nature of an interim measure to provide authority for continued oil and gas operations and development in offshore submerged lands pending the enactment of permanent legislation dealing with the subject. The Department of Justice has, of course, along with the Department of the Interior and the Department of Defense, heretofore repeatedly urged the enactment of permanent legislation providing for such development under the authority and control of the Federal Government. This Department adheres to that position. However, in view of the needs presented by the current national emergency, we have concluded that Senate Joint Resolution 20, as introduced, appears to be adequate for the protection of the interests of the United States until such time as the Congress is able to consider legislation of a permanent character. We, therefore, urge the early consideration and passage of the resolution.

The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report.

Yours sincerely,

PEYTON FORD, Deputy Attorney General.

STATEMENT OF PHILIP B. PERLMAN, SOLICITOR GENERAL OF THE UNITED STATES

Mr. PERLMAN. Mr. Chairman and gentlemen of the committee, I am Philip B. Perlman, Solicitor General of the United States. I appear, with the approval of J. Howard McGrath, the Attorney General, on behalf of the Department of Justice in response to the invitation by the chairman of this committee.

The general views of the Department of Justice relative to Senate Joint Resolution 20, the measure under consideration, have been set forth in a letter to the chairman of the committee, dated January 29, 1951, and signed by Peyton Ford, the Deputy Attorney General. However, I appreciate this opportunity to explain personally to you the attitude of the Justice Department with respect to the proposed legislation.

I believe I am entitled to take advantage of the occasion to note in the record that more intelligent and intensive efforts to arrive at a fair solution of the legislative problems involved in the future administration of the mineral resources of the open seas adjacent to the shores of this country have been made by this committee, under the chairmanship of Senator Joseph C. O'Mahoney, than by any other committee of the Senate and House which has considered the matter during the past 5 years and more. I first appeared before this committee on October 4, 1949, in connection with S. 923, S. 2153, S. 155, and S. 1545, Eighty-first Congress, first session. At that time I informed this committee that all of the hearings previously held by both Senate and House Committees, were, and I quote:

primarily concerned with the bills proposed by or at the instance of those who are seeking to deprive the Federal Government of its rights in vast mineral resources lying in the bed of the ocean-rights which, it should be said

Senator MILLIKIN. Mr. Chairman, I would like to point out that the gentleman is assuming his case in that statement.

Mr. PERLMAN (continuing):

are vital to defense of our country and our people, and which may prove to be absolutely necessary to our continued existence as a free, independent, and sovereign Nation.

In October 1949, I also stated to this committee:

The importance to all the people of the problems involved in the legislation pending before this committee cannot be overstated, despite the efforts during the past few years to make it appear that the issues are almost purely of local concern. The false propaganda through which many persons have been induced to believe that the controversy is merely one relating to the question as to whether certain administrative powers should be exercised by Federal or State authorities has been effective. Pressures from local governments, actually operating in most instances against even their immediate best interests, have been so great as to cause the Congress to pass a bill surrendering Federal rights in the sea, and relinquishing forever vast resources in oil and also in other minerals, the character and full extent of which are unknown.

Senator MILLIKIN. Mr. Chairman, the gentleman takes upon himself quite a little bit when he assumes to determine the proper judgment of the States as to their self-interest.

Mr. PERLMAN (continuing):

That bill was passed when the case of the United States v. California, brought to determine where these rights were vested, was pending in the Supreme Court

of the United States. It was vetoed by President Truman. In the Eightieth Congress, a similar piece of legislation passed the House but died in the Senate because its proponents, although confident of sufficient votes for passage, could not muster the number required to override the anticipated Presidential veto. The Eighty-first, and now the Eighty-second, Congress has witnessed the introduction of more and more bills designed to strip the Federal Government of its rights and its properties, some in the House and some in the Senate.

Senator MILLIKIN. Mr. Chairman, the purpose of the bill is not to strip the Federal Government of its rights, but to strip the Federal Government of its claim of rights which some people think it does not have.

The CHAIRMAN. Does the Senator from Colorado, in that statement, mean to exclude the Continental Shelf beyond the 3-mile limit?

Senator MILLIKIN. I told the distinguished chairman that I reserved decision on beyond the 3-mile limit until I can get more facts on it.

Senator SMATHERS. Mr. Chairman, may I add right there that I personally would like to take exception to this statement: "The false propaganda through which many persons have been induced to believe that the controversy," and so forth. I do not believe that the Solicitor General has any right to infer that the officials of the States certainly their patriotism cannot be questioned-have been putting out false propaganda. That is matter of his own conclusion, and I am confident that they would be glad to put their record up against his anytime as to a matter of false propaganda.

Mr. PERLMAN. May I continue, Senator? I was quoting from a statement made in 1949, and it never has been questioned, and it is true. Senator SMATHERS. I would have questioned it had I been here, and I question it very much now.

Mr. PERLMAN. You were here in the House, I believe, and I made a similar statement in the House and it was not questioned.

Senator SMATHERS. I was not permitted the opportunity of hearing it, but I think that that is an improper statement for anybody to make concerning the officials of a State.

Senator LEHMAN. Mr. Chairman, it is merely a quotation from the testimony given in 1949. It seems to me perfectly proper to repeat it.

Senator MILLIKIN. The distinguished Solicitor General is just repeating the mistake that he made in 1949.

Senator LEHMAN. That may be, but it is a quotation from testimony.

Mr. PERLMAN. I am repeating the truth, Senator.

Senator MILLIKIN. That does not lend it sanctity because it is repetition. It compounds the error.

The CHAIRMAN. The committee will judge the sanctity and the value of the statements when the time comes, I hope.

Senator Cordon.

Senator CORDON. I am always willing to take my turn, Mr. Chairman. I just suggest to the chairman, while I am in entire agreement with him, that in the end the committee must make this decision; the witness has just suggested that inasmuch as he made this, in my opinion, utterly irrational and unfounded statement in 1949, and some of us felt that it was so silly that it did not need any controversy, that now it stands as sacred, and I do not like that kind of approach at all. As far as I am concerned, I will be happy when the witness is finished.

The CHAIRMAN. Well, as a matter of fact, I think it is only proper to say that the witness has claimed no sanctity for his statements. Senator CORDON. There is a difference of opinion there, too.

The CHAIRMAN. The Senator from Florida, did you care to make a statement?

Senator SMATHERS. I was merely going to say, Mr. Chairman, that just because we might disagree with the able Solicitor General we would not infer that it was false propaganda or begin to use the cliches that we see used today about communism and Americanism and all that sort of thing.

This is a legal matter and a technical matter, and there is no sense, in my opinion, in inflaming and aggravating the situation, which has to do only with facts, by talking about propaganda, false propaganda, and casting aspersions on the patriotism or the intention of duly elected citizens of the various States.

The CHAIRMAN. Of course, there is no doubt, the Chair will say, that this committee will proceed in this case as it has in all cases, and endeavor to resolve the issues on the facts. Argument of course can be made at any time, and I think there are enough lawyers around this table to know what is a legal argument or a jury argument.

Senator MILLIKIN. The Solicitor General should also know.

The CHAIRMAN. I think he does, and I think he is doing pretty well. Senator CORDON. I cannot find yet where the witness has reached any legal question involved. I hope he hurries on to that. The CHAIRMAN. Proceed, Mr. Perlman.

Mr. PERLMAN. The observations made in 1949 have become even more relevant and pointed as of today. The aggression by the North Koreans and by the Chinese Communists, which is being resisted by the United Nations, has resulted in great drains on our oil reserves and resources. The vast rearmament program, even if the area of hostilities does not spread, requires increased use of oil, and the immediate, vital need for continued and expanded exploration and development of sources and potential sources of supply.

Legislation is needed because it has been determined (1) that the mineral resources of the ocean beds off the shores and outside of the inland waters of the United States are subject to the paramount power and full dominion of the Federal Government, and (2) that the adjacent States have no title to or claim upon those resources. This determination has been made by the Supreme Court of the United States, and is the law binding upon the States and those who have obtained grants of any of such resources from the States. That, I may interject, Mr. Chairman, is the situation today, whether these Senators who have spoken like it or not.

Senator MILLIKIN. Mr. Chairman, whether the Solicitor General likes it or not, the final court of appeals is the Congress.

Senator SMATHERS. Exactly.

Mr. PERLMAN. When it was found that oil and gas could be recovered economically from submerged lands under the ocean, the States adjacent to areas in which such pools were located assumed that they had proprietorship, and began the issuance of leases off their shores. As time went on, doubts as to the authority of the States appeared. At first, the administrative officials concerned with the situation were inclined to believe that the Federal Government lacked rights over

the mineral resources in the beds of the sea, but their mistaken views either were rejected or changed as the full implications of the questions involved were studied and more considered judgments reached. The first suit to resolve the question was filed at the express direction of President Truman. A district court action was followed by an original action against the State of California in the Supreme Court of the United States. The suit against California was argued during the early part of 1947, and was decided by the Supreme Court on June 23, 1947. The suits against Louisiana and Texas were brought in December 1948, and were decided on June 5, 1950. So that the Supreme Court has now decided the precise question no less than three times. Up to this time, however, the Congress, except for the effort to give the Federal oil and gas resources of the States of California, Lousiana, and Texas to those States, has neglected to pass any legislation on the subject.

Senator MILLIKIN. I might add they passed it but it was vetoed by the President, as the Solicitor correctly states earlier in his argument. There were not enough votes to override the Presidential veto, but that is not an immutable fact. That might change.

Mr. PERLMAN. The administration bill, introduced in the Eightyfirst Congress as S. 923, and previously at the joint request of the Secretaries of Defense and Interior and the Attorney General, contains the provisions we thought and still think are advisable. We have never been able to obtain a report on it, in either the House or the Senate. It has not yet been introduced, so I am informed, at this session. The administration's companion bill, submitted to answer completely the unfounded assertions that the beds of inland waters are involved and I desire to state emphatically again that such areas are not and never were involved-was introduced by the Chairman in the Eighty-first Congress as S. 2153.

In an effort to meet the need of the national emergency caused by the Korean and Chinese aggression, you, Mr. Chairman, introduced at the last session interim legislation known as Senate Joint Resolution 195. Lengthy hearings were held on that proposed legislation from August 14 to 19, 1950, inclusive, but no report was made and Congress adjourned once more without action. You have, Mr. Chairman, introduced that measure, with some changes, at this session, and we are here again to discuss it.

The proposed joint resolution (S. J. Res. 20) would provide, on an interim basis, greatly needed authorization for the development of the petroleum resources in offshore submerged lands, seaward of low-water mark and outside of inland waters, under the control and supervision of the Secretary of the Interior. This authorization would embrace both a continuation of oil and gas operations heretofore conducted in such lands under State leases and also new operations in lands not covered by existing leases. Since the decisions of the Supreme Court last June, the executive branch has taken steps to provide for the continuation of all existing oil and gas operations in the offshore areas, this action being taken under the inherent authority of the executive branch to preserve and protect the resources of the United States and to prevent the waste of or injury to such resources. However, existing production facilities only are involved, and no provision has been made for new exploration and develop