Show SMOOT OIL BILLS because the retiring secretary of the interior john barton payne was opposed to the enactment of the smoot bills designed to protect oil prospectors operating under a permit in a district where oil may be struck the senator made no at empt during the closing days of the last session to get action on his bills but decided to reintroduce them at t the special session and have th t them em deferred lef erred to the new secretary of th the interior albert B fall before brin bringing g them up before the public lands committee tor for action the policy of secretary payne it if adhered to would tend to retard oil 4 development for it would ta take ke away th incentive of most prospectors and only those strongly financed would proceed with the boring of 0 wells secretary paynes idea was to make male 1 I 1 the oil leasing act produce the maximum revenue for the federal government he regarding the revenue feature as the prime essential ot of the leasing law senator smoot on the other hand wants the law administered as he believed congress intended it should administered so as to encourage the development of oil the federal revenues being a secondary consideration moreover senator smoot takes the position that a 12 ah per cent bonus for the government ought ough tto to lie be an a pla and that the law should not i be interpreted as it could be under the payne ruling to enable the fed creble government to grab off 99 9 per cent as its share of the profits the letter letter of secretary payne reporting adversely on the smoot bills bill follows ft 6 the two bills have a similar ou ol jact namely to amend section aj 13 00 0 said act so as to provide that thai where an application tor for an oil an aal 1 gsg prospecting permit is filed to ro lands which are subsequent to thu tho filing and prior to issuance is suanee ot of a perm nat designated as part of a arg oil or gas structure the applicant shall notwithstanding atch such nation of 0 the land be entitled to it the application is other otherwise allowable allo a permit not nonbeing be being ing allowable J in such cases under the law as it now stands 1 I consider the proposed amendment I 1 of the law objectionable in the first place the object of issuing a permit is to prospecting 0 he be land for iti oil and gas gaa ties and where the lands have beebi proved oil or gas hearing bearing the reason and purpose of the permit no longer exists but the lands should be I 1 offer offered tor for lease at the royalties fixed fl b the regulations under the act again where a structure has been demonstrated to be a producing field the application prior to such determination amounts to nothing more than granting to him av valuable right tor for the only reason that hr he had filed the application since under the law he is not required or au do anything in the way of 0 prospecting the land until a permit has been granted to him again the amendment of the law so proposed will encourage speculation in the filing of applications for prospecting permits on lauds lands wi hin a structure on which a well is being drilled and entitle the applicants to secure valuable rights which they can dispose of at a profit in it the event the well demonstrates the pro of the structure and will result in the leasing of a largo large part of the structure at the 5 per cent royalty provided tor for the discovery lease under a permit and even after the well is bright in applications could be reported to tile the department and the n necessary ary order of designation made and right to permits secured with tile resulting 5 6 per cent royalty leases when wells were drilled on the land the amendment would therefore in this respect tend more to encourage speculation than exploration I 1 accordingly rec commend that neither of the bills be enacted |