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1026

DEPARTMENT OF THE INTERIOR

JANUARY 24, 1941

paid to the life cestui, unless the settler has shown a clear intent to have such a variance from the ordinary rule. * * *"

    In the case of Brown v. Sperry, 181 So. 734, the court, after quoting sec. 233, Restatement of the Law of Trusts, said:
    "* * * when a trustee sells trust property it is immaterial what its actual value is; whatever he receives for it becomes a part of the corpus of the estate."
    In the case of In re Baxter's Estate, 297 N.Y.S. 885, the court, in construing a will said:
    "The question first presented is whether the reference to 'net rents, income and profits' operates to give to the beneficiaries of income the gains, if any, realized upon the sale or liquidation of principal assets. The court holds that the phrase means nothing more than if the only word used was the word 'income'; * * * Hence the beneficiaries of income have no right in capital profits."
    In the case of Old Colony Trust Co. v. Comstock, 195 N.E. 389, it was held (syllabus):
    "Gains in value of investments belong to capital and are to be credited to principal of trust fund rather than to income, * * *"
    I am of the opinion, therefore, that any profits which might be derived from the sale of Government bonds bought by you with restricted funds for the individual adult members of the Osage Tribe who do not have certificates of competency should be considered as principal, subject to be reinvested by you as trustee for the individual Indians, and not as "income" which you are directed to pay over to them.

    This construction of the word "income" is in accord with departmental practice during the interim between the passage of the act of February 27, 1925, supra, and the act of June 24, 1938, supra. As pointed out above, the latter act incorporated the language of the former act in this respect. In my opinion the practice followed by the Department under the 1925 act was correct and is equally correct in administering the funds of these Osage Indians under the 1938 act.

   The conclusion which I have reached seems to me to be inescapable in view of the policy pursued by Congress in connection with the individual affairs of these Indians. This policy seems to me to evidence a legislative judgment that these particular members of the Osage Tribe are not ready to receive any more of the corpus of their trust estate than is specifically directed to be paid to them by the act of June 24, 1938, supra.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.


Approved: January 24, 1941.
OSCAR L. CHAPMAN, Assistant Secretary.

ST. CROIX INDIANS--ORGANIZATION
UNDER SEC. 16 OF INDIAN REORGANIZATION
ACT

 

January 29, 1941.


Syllabus

Since the St. Croix Indians of Wisconsin are not now recognized as a band, the only form of organization under section 16 of the Indian Reorganization Act now open to them is an organization of those St. Croix Indians designated by the Indian Office as having one-half or more Indian blood who are residing on the St. Croix Reservation. However, all the St. Croix designated by the Indian Office may adopt a temporary constitution establishing a band organization, independently of section 16 of the act, to obtain the status of a recognized band, with the possibility of later organizing as a band under section 16 of the act.

The proposed provisional constitution should be revised to distinguish, and to be appropriate to, the two alternatives.

Memorandum for the Commissioner of Indian Affairs:

    I am returning the letter to the Superintendent of the Great Lakes Agency which discusses the provisional constitution drafted for the St. Croix Indians under which they propose to organize as the St. Croix Band. The letter assumes that the organization is being undertaken under section 16 of the Indian Reorganization Act. However, it appears that the group organizing, is neither a recognized tribe or band nor a group of Indians resident upon a reservation. Therefore, this group is not entitled to organize under the IRA. Moreover, from the letter of November 3, 1939; from Mr. Phinney, Field Agent, submitting this constitution, and from the letter from Coordinator Burns of July 15, 1940, reporting recent action by these Indians, it appears that the organization is not in-
 



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OPINIONS OF THE SOLICITOR

JANUARY 29, 1941

tended to be one under the IRA but is to be a temporary organization for the purpose of achieving recognition of these Indians as an organized band. The apparent intent is to seek a permanent organization under the IRA as an organized band if the temporary organization proves successful.

    This distinction between organization under the IRA and provisional organization outside the act is, of course, crucial. In view of the history of the organization problem confronting this group of Indians, my suggestion is that reconsideration be given to the purpose and type of organization. In any case, the constitution proposed needs correction as the document is not in good form for either type of organization.

    The St. Croix Indians have long been known informally as the St. Croix Band, as the Lost Band of Chippewa Indians and as Chief Little Buck's Band. The Solicitor's Office held in a memorandum of February 8, 1937, that the action by the Department and by Congress in 1914 and 1915 based on the Wooster Investigation was conclusive that this group could not then be considered a recognized band. The Wooster Investigation found that these Indians were members and descendants of members of the Lac Courte Oreille and Fond du Lac Tribes and did not have a separate tribal status. However, in recent years at least, the St. Croix Indians have been active as a band with a representative organization and have persisted in seeking legal recognition of the band. This has been important to them in order that they might employ attorneys for the prosecution of tribal claims and in order that they might manage the land and other rehabilitation assets provided by the Government. Under the designation of "Survivors and Descendants of Chief Little Buck's Band" they have now employed an attorney, adopting one of the suggestions proposed by the Indian Office in the letter of April 24, 1940.

    The land involved was purchased under the IRA for the St. Croix Indians of one-half or more Indian blood who might be designated by the Secretary of the Interior, and this land was declared a reservation on November 28, 1938. On November 10, 1938, the Commissioner of Indian Affairs had approved a roll of St. Croix Indians of one-half or more Indian blood. These Indians were grouped by him in a category designated Class A. Those in Class B were St. Croix Indians of one-half or more Indian blood who were married to white persons or Indians of other tribes and who were not approved as persons eligible for land assignments or organization. Indians in Class C were disapproved as having less than one-half Indian blood.

    On the question of organization these Indians were early informed that in order to organize under the IRA the organization must be based on the Indians residing on the St. Croix Reservation, The Indian Office letter of January 24, 1939, included suggestions for permitting other St. Croix Indians not on the reservation to join the organization by application. The letter from Mr. Phinney of November 3, 1939, reported the concern of the Indians over creating an organization based on residents of the reservation, since these residents were not representative of the St. Croix group, and the need for a temporary organization on a band basis. The Indian Office reply of April 24, 1940, approved by the Department, stated there was no objection to such a provisional constitution, agreeing that an organization of individuals on the reservation was not a satisfactory type of organization; but it suggested additional methods to secure a broader type of organization under the IRA after the organization was once established on the basis of residence. The report by Coordinator Burns of July 15, 1940, reiterated that the Indians did not seek to organize on a reservation basis under the IRA at this time but wanted a provisional band organization to secure recognition of the band.

    I see no legal objection to setting up a provisional constitution for a band organization. If this constitution is approved by the Commissioner of Indian Affairs and the group is then dealt with by the Department as a band, it may, perhaps, later merit consideration as an "organized band" under the definition of the word "tribe" in section 19 of the IRA, when organization under section 16 is sought. The advantage is, of course, that the organization need not be based at the outset on the residents of the reservation. The band organization would be based upon the St. Croix Indians designated by the Commissioner as eligible for land assignments and organization, as these Indians would be all the St. Croix Indians now recognized by the Department as having full membership rights. As suggested in the Indian Office letter of January 24, 1939, other St. Croix Indians could be included upon application when they had thus demonstrated their desire for tribal membership. While some St. Croix Indians who had been previously considered by the St. Croix group as members would not be included in the band at the outset because of the half-blood rule and the distinction made by the Commissioner between Class A and Classes B and C, this would amount in legal effect to elimination by the Interior Department, ratified by the Indians, of persons not considered sufficiently identified by blood and by interest to be members of the band until they sought such identification by application.
 



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DEPARTMENT OF THE INTERIOR

JANUARY 29, 1941

    I do not suggest that any group of half-blood Indians could set up a band organization on a temporary basis and then organize as a recognized band under the IRA, but in this instance the St. Croix Indians have common property interests, a common history, and a common past identity as Chief Little Buck's Band. Moreover, they have functioned as a band in recent years.

    I also do not suggest that a .tribe or band eligible to organize under section 16 of the IRA may organize with the approval of the Department in a manner not in conformity with that section. My point is that this group of individuals designated as Indians by the Indian Office, not being eligible to organize as a complete group under section 16 of the act, may establish a provisional organization independently of that section. This organization may be recognized as a representative and responsible organization by approval by the Indian Office of the constitution, but such action would not, of course, prevent ,the Department from later recognizing such other organization under the IRA as may legitimately be established.

    However, since the Indians may not fully appreciate the possibilities of organization of the residents of the reservation under the IRA, I suggest that two versions of the constitution be presented to them, one of which would be appropriate under the IRA and one appropriate for temporary use by the band organization until organization under the IRA is attempted. The differences in the adoption procedure should be explained. The IRA constitution must be adopted at an election called by the Secretary of the Interior at which 30 percent of the eligible voters vote, and must be approved by the Secretary of the Interior. In the case of the non-IRA constitution, the Indians may proceed to adopt it by a simple majority vote if they are satisfied with it as it is presented to them, and it may then be approved simply by the Commissioner of Indian Affairs, as in the case of other constitutions of Indian tribes not entitled to organize under the act.

    The main points in the revision of the constitution may be outlined as follows:

    1. Preamble. The IRA constitution should state that the Indians organizing are the St. Croix Indians of Wisconsin residing on the St. Croix Reservation. The non-IRA constitution can describe the Indians organizing as the recognized St. Croix Indians of Wisconsin, descendants and survivors of Chief Little Buck's Band of Chippewa Indians, who are seeking to re-establish a band organization.

  2. Membership. The IRA constitution should include such membership provisions as were suggested in the letter of January 24, 1939. In addition it could include section 2 of the membership provision of the constitution as proposed and revised by the Indian Office. A provision for descendants of members should include not only children of one-half or more Indian blood born since November 10, 1938, to members of the organization, but also children born of residents of the reservation. In the case of the non-IRA constitution, the membership provisions could be the same as those in the constitution, as proposed and revised by the Indian Office. I see no reason, however, for the elimination of the group of Indians included in the membership provisions in the constitution as submitted by the Indians, namely, the St. Croix Indians appearing on the Wooster roll and their descendants not affiliated with any other tribe and approved as one-half or more Indian blood, since this is a group of Indians which the Indian Office specifically recommended be referred to in the membership provisions in its letter of January 24, 1939.

    3. Powers. Whichever form of organization is adopted, the organized group Cannot be considered as an Indian tribe with sovereign powers of self-government. Such a conception is neither necessary nor appropriate since these Indians have been scattered groups long living under State law. However, they would have in relation to their land the full rights of a landlord. Both types of constitution can vest in the tribal council or business committee the authority to represent and negotiate on behalf of the tribe and to promulgate ordinances, subject to approval by the Secretary of the Interior, providing for the use of the reservation lands, the assignment of such lands, and the removal from the lands of nonmembers. In the case of the IRA constitution there should be included, in addition, the authority to prevent the alienation of the lands, and to employ counsel, the choice of counsel and the fixing of fees to be subject to the approval of the Secretary of the Interior. A band not organized under the IRA must have any attorney's contract approved as to all its terms, pursuant to 25 U.S.C.A. sec. 81.

  4. Amendments and ratification. The IRA constitution must provide for the procedures required by the act and by the regulations. In both cases the duration of the constitution should be specified since the organization is considered to be temporary, a period of years being indicated for the automatic ending of the organization or for the calling of an election on the revocation of the constitution.

    This office would be glad to assist in the redrafting of the constitution along the lines indicated.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
 


 

1029

OPINIONS OF THE SOLICITOR

FEBRUARY 6, 1941

AUTHORITY FOR SALE OF TIMBER-
UNALLOTTED LANDS

M-31064                                                                                                                                               February 6, 1941.

Synopsis of
Solicitor's Opinion

Re:

Authority for the sale of timber, live and dead, on the unallotted lands of the Chippewa Indians of Minnesota.
Held:
1. Authority to sell live standing timber.

    (a) Live standing timber on unallotted land, reserved from sale under acts of Congress and Executive orders, may not be sold until legislative authority is obtained therefor.

    (b) Live standing timber on the ceded lands restored to the Chippewa Indians of Minnesota may not be sold until legislative authority is obtained therefor or until the ownership of the lands is vested in the Minnesota Chippewa Tribe.

    (c) Live standing timber on tribal lands of the Minnesota Chippewa Tribe may be sold by the tribe under the authority contained in the charter of the tribe.

2. Authority for the sale of dead timber.

    (a) Dead timber on the unallotted lands reserved from sale under acts of Congress and Executive orders may be sold by the Indians residing on such reservations for their sole benefit pursuant to 25 U.S.C.A. sec. 197.

    (b) Dead timber on ceded lands restored to the Chippewa Indians in Minnesota may be sold under the authority of 25 U.S.C.A. sec. 197, if the lands are within an Indian reservation. If not within an Indian reservation, such timber may not be sold without further legislative authority, unless the ownership of the lands is vested in the Minnesota Chippewa Tribe.

    (c) The dead timber on the tribal lands of the Minnesota Chippewa Tribe may be sold by the tribe under authority of the tribal charter.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    There has been referred to me for an opinion the question raised by the Indian Office whether there is authority for the sale of live standing timber on the unallotted lands of the Chippewa Indians in Minnesota or whether additional legislation is necessary. This question is prompted by the fact that the general timber sales act of June 25, 1910 (36 Stat. 855, 857; 25 U.S.C.A. sec. 407), authorizing the sale of live standing timber on unallotted land of any Indian reservation, does not apply to the Indian reservations in Minnesota. The question was also prompted by the consideration recently given to the existing authority for the sale of dead and down timber on an Indian reserve in this area (Solicitor's memo., May 31, 1939, and departmental letter to the Superintendent of the Consolidated Chippewa Agency, September 23, 1940). Since the consideration of the authority for the sale of dead and down timber, then given, was incomplete in that it related to a small area in a peculiar status, I will, in this opinion, deal with the entire problem of the authority to sell timber on the unallotted lands of the Chippewa Reservation in Minnesota, giving first attention to the sale of live standing timber.

    The general timber sales act of 1910 was not applied to the Chippewa reservations in Minnesota, probably because it was contemplated that all the valuable timber (the pine timber) on the unallotted lands would be sold under the act of June 27, 1902 (32 Stat. 402), which amended the cession act of January 14, 1889 (25 Stat. 642), to provide for the sale of pine timber separate from the sale of the ceded lands, and because the disposition of the timber on the Red Lake Reservation required separate treatment. Appropriate disposition of the timber on the Red Lake Reservation was provided for by the act of May 18, 1916 (39 Stat. 137). There is, therefore, no question of authority for timber sales on that reservation.

    The 1889 act for the sale of the unallotted lands and the 1902 amendment for the sale of the pine timber did not, in fact, cover all the unallotted lands of the Chippewa Indians of Minnesota, exclusive of the Red Lake Reservation, because certain reserves were created. The 1902 act reserved 5 percent of the pine timber in certain areas as forest reserves, but these reserves were later incorporated in the Minnesota National Forest by the act of May 23, 1908 (35 Stat. 268). The 1902 act also reserved from all sale of land and timber certain designated islands and peninsulas. Certain small areas were set aside for agency, school, and similar purposes and reserved from disposition under the act of January 14, 1889. Since then there have been additional small reserves made by Executive order, and even by legislation, as in the case of the Ball Club village site, which was the subject of my memorandum of May 31, 1939. In so far as these reserves of the lands ceded by the
 



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DEPARTMENT OF THE INTERIOR

FEBRUARY 6, 1941

Chippewa Indians in Minnesota are concerned, I know of no authority to sell live standing timber on these lands and legislation would, therefore, be necessary if it became desirable to make such sales. The terms of such legislation, as, for example, the designation of the beneficiary of the proceeds, may be considered later, if and when a particular problem arises.

    The ceded lands which remained undisposed of, except the lands ceded by the Red Lake Band, have been restored to the ownership of the Chippewa Indians in Minnesota under section 3 of the Indian Reorganization Act of June 18, 1934 (48 Stat. 984), and in accordance with the opinion of the Solicitor of February 19, 1938 (M. 29616). The restoration of these lands to the status of Indian lands ended the authority of the Secretary of the Interior to sell any remaining pine timber on these lands under the 1902 act, as such disposition would be inconsistent with their restored status and with the intent to give the Indians the assets rather than the income from the assets through their sale by the United States. In their new status as Indian lands belonging to the Chippewa Indians in Minnesota there is no authority for the sale of live standing timber upon them. However, when a division has been made between the Minnesota Chippewa Tribe and the Red Lake Band of their joint interest in the lands restored to the Chippewa Indians in Minnesota as a whole, then the lands vested in the Minnesota Chippewa Tribe will be the tribal lands of that group and the timber thereon will be subject to disposition under the constitution and charter of that tribe.

    Section 17 of the Indian Reorganization Act authorizes the granting of charters to Indian tribes vesting in them the power to manage and dispose of real and personal property of every description, excluding only the power to sell, mortgage, or lease for longer than 10 years, any of the land included in the reservation. Under this authority the Interior Department has uniformly granted charters to Indian tribes authorizing them to make timber sale contracts, subject to the approval of the Secretary of the Interior, or his representative, and subject to the regulations of the Department for sustained yield forestry management adopted under section 6 of the act. The charter of the Minnesota Chippewa Tribe is such a charter. This interpretation of section 17 by the Department is undoubtedly correct, in my opinion. If the prohibition on the sale of the "land" were construed to include the timber on the land, incorporated tribes would have seriously less, rather than more, power over tribal property, in comparison with unincorporated tribes, which would be in contravention of the intent of the act. Such a construction is negatived by the express authorization of power to dispose of real property of every description, excepting only the land itself, thus indicating that the word "land" is used in its natural descriptive sense and not in the legal technical sense of being synonymous with real property. Therefore, there is sufficient authority at the present time for the sale of live standing timber on the tribal lands of the Minnesota Chippewa Tribe, whether such tribal lands were created by the restoration of the ceded lands and their segregation to the Minnesota Chippewa Tribe or whether such lands were acquired by purchase for the tribe, or by any other means.

    The question of the authority for the sale of dead and down timber on other than allotted lands is complicated by the special legislation covering such sale contained in the act of June 7, 1897 (30 Stat. 90), as modified by section 4 of the act of June 27, 1902 (32 Stat. 404; 25 U.S.C.A. 197). This legislation authorizes the Secretary of the Interior to permit the Indians residing on any Indian reservation in Minnesota to sell dead timber, standing or fallen on such reservation, for the sole benefit of such Indians. The Secretary is also authorized to permit the Chippewa Indians in Minnesota to dispose of dead timber on the ceded lands, otherwise than by sale. In view of this act, the dead timber on those reserves made under the legislation and Executive orders reserving ceded lands from sale may be sold by the Indians of those reserves for their own benefit. Therefore, no legislation is needed for the sale of dead timber on these areas unless it is important to change the designation of the Indians who may be authorized to make the sales and to receive the proceeds.

    There may be various situations such as that exemplified by the Ball Club Reserve which was the subject of recent consideration by the Solicitor (memo. May 31, 1939) where there no longer exists an identifiable group of Indians for whom the reserve was intended to be created or where the reserves are so small that there is no substantial group of Indians residing thereon. I do not suggest that legislation would be necessary simply in order to provide that all the Chippewa Indians in Minnesota shall be the beneficiaries of the proceeds of the sale of dead timber in order to make the beneficiary in this respect correspond to the beneficiary of the sale of the ceded lands and timber under the 1889 act or the restored lands under the Indian Reorganization Act. The legislation for the disposition of dead timber indicates a purpose on the part of Congress to distinguish the beneficiaries of the dead timber on the areas reserved from the beneficiaries of the dead timber on the ceded areas subject to sale. As pointed out in 31 L.D. 315, there is no objection to a differentiation
 



1031

OPINIONS OF THE SOLICITOR

FEBRUARY 10, 1941

by Congress of the beneficiaries in respect to the sale of dead timber.

    Accordingly, I modify my statement in the memorandum of May 31, 1939, in so far as it suggested that legislation should be secured to cover the sale of dead and down timber on the Ball Club Reserve in order to make the beneficiary the same as the beneficiary of the ceded lands, namely, the Chippewa Indians of Minnesota. However, my suggestion stands in so far as legislation is suggested because of the fact that the group of Indians for whom the reserve was set aside is apparently no longer identifiable.

    The ceded lands which have been restored to the ownership of the Chippewa Indians of Minnesota take on the character of unallotted lands, and the sale of dead timber on these lands would be governed by the provisions of the legislation for the disposition of dead timber in 25 U.S.C.A. sec. 197, above discussed. The dead timber on these lands could then be sold by the Indians residing on the reservations of which they are a part. However, if some of the restored lands are scattered outside existing reservations, there is no authority at the present time for the sale of timber upon them, until such time as the lands may be vested in the Minnesota Chippewa Tribe. Tribal lands belonging to the Minnesota Chippewa Tribe acquired by restoration and segregation, or by purchase, or otherwise, are covered by the charter of the tribe and the dead timber may be sold by the tribe under its power to manage and dispose of tribal property granted in the charter subject to the limitations specified therein.

    The various situations I have discussed may be summarized as follows:

1. Authority to sell live standing timber.

    (a) Live standing timber on unallotted land, reserved from sale under acts of Congress and Executive orders, may not be sold until legislative authority is obtained therefor.

    (b) Live standing timber on the ceded lands restored to the Chippewa Indians of Minnesota may not be sold until legislative authority is obtained therefor or until the ownership of the lands is vested in the Minnesota Chippewa Tribe.

    (c) Live standing timber on tribal lands of the Minnesota Chippewa Tribe may be sold by the tribe under the the charter of the tribe authority contained in

2. Authority for the sale of dead timber.

    (a) Dead timber on the unallotted lands reserved from sale under acts of Congress and Executive orders may be sold by the Indians residing on such reservations for their sole benefit pursuant to 25 U.S.C.A. sec. 197.

    (b) Dead timber on ceded lands restored to the Chippewa Indians in Minnesota may be sold under the authority of 25 U.S.C.A. sec. 197, if the lands are within an Indian reservation. If not within an Indian reservation, such timber may not be sold without further legislative authority, unless the ownership of the lands is vested in the Minnesota Chippewa Tribe.

    (c) The dead timber on the tribal lands of the Minnesota Chippewa Tribe may be sold by the tribe under authority of the tribal charter.

                                                                                                                                            NATHAN R. MARGOLD,
Solicitor.


 Approved: February 6, 1941.
OSCAR L. CHAPMAN, Assistant Secretary.

ADOPTION OF CONSTITUTION--JURISDICTION
OF WHEELER-HOWARD ACT

 

February 10, 1941.


HON. ROBERT H. LAFOLLETTE, JR.,
United States Senate.

MY DEAR SENATOR LAFOLLETTE:

Your letter of January 30 puts the question:

"If the Menominee Indian Tribe should adopt any form of constitution at the present time, will the Menominees automatically come with in the legal jurisdiction and operation of the Wheeler-Howard Act?"

    This question must be answered in the negative. The adoption of any form of constitution at the present time by the Menominee Indian Tribe would not bring the Menominees within the jurisdiction and operation of the Wheeler-Howard Act. The Tribe is already under the jurisdiction and operation of that act and no action adopting a constitution would have the slightest effect one way or another upon that situation.

    From the report made to you by the Menominee tribal delegation and from discussions in this Department with members of that delegation I gather that there is considerable misunderstanding on the Menominee Reservation as to the significance of the Wheeler-Howard Act and the relations of the act to possible organization by the Tribe. Some
 



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DEPARTMENT OF THE INTERIOR

FEBRUARY 10, 1941

members of the Tribe apparently do not realize that the Act has been in force on the Menominee Reservation since its enactment on June 18, 1934. These individuals, in some cases, have been led to believe that the act involves a limitation of Indian rights and that the adoption of a constitution would make the act applicable to the reservation, thereby infringing upon Indian rights. Each of these beliefs is fallacious. During the period since June 18, 1934, when the act has been in force on the Menominee Reservation, the rights of the Indians have not been diminished. The adoption of a constitution would not have the effect of diminishing any such rights. On the contrary, the adoption of a constitution by the Menominee Tribe would, under section 16 of the Wheeler-Howard Act, protect the Tribe in the exercise of four rights which have hitherto been mere matters of administrative discretion: the right to employ legal counsel, subject to the approval of the Secretary of the Interior with respect to the choice of counsel and the fixing of fees; the right to prevent the sale, disposition, lease or encumbrance of tribal lands, interests in such lands or other tribal its without the consent of the Tribe; the right to negotiate with the Federal, State and local Governments; and the right to receive from the Secretary of the Interior advice concerning appropriation estimates and Federal projects for the benefit of the Tribe prior to the submission of such estimates to the Bureau of the Budget and to the Congress.

    I am quite sure that there is no substantial objection on the part of the Tribe to the guarantee of these rights and that an attempt to clarify the legal issues involved in the proposed constitution drafted by the Tribal Council can be relied upon to eliminate the confusions which are implicit in the question which has been put to you.

    Please call on me if I can serve you further in this matter.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


CREATION OF THE HOPI UNIT WITHIN THE
BOUNDARIES OF THE NAVAJO RESERVATION

February 12, 1941.


Syllabus

Re:

Order of the Secretary of the Interior, proposed by the Indian Office, to delimit within the Hopi Reservation created by the Executive order of December 16, 1882, an area for the exclusive use and occupancy of the Hopi Indians and an area for the exclusive use and occupancy of Navajo Indians.
Held:
A. The proposed order is found to be
1. Contrary to the prohibitions against The creation of Indian reservations without statutory authority, contained in the acts of May 25, 1918 (40 Stat. 570, 25 U.S.C.A. sec. 211), and March 3, 1927 (44 Stat. 1347, 25 U.S.C.A. sec. 398d);

2. In violation of the rights of the Hopi Indians within the 1882 reservation; and

3. Not in conformity with the provisions of the Hopi constitution approved December 19, 1936.

B. Legal procedures to meet the practical problem are:
1. The amendment of the Navajo-Hopi Grazing Regulations (25 CFR Pt. 72) to separate Navajo and Hopi grazing, with the assent of the Hopi Tribal Council.

2. Use of the authority of the Secretary over the settlement of other Indians within the 1882 reservation to remove the Navajo farmers from the Hopi area, with compensation for their investment.

Memorandum for the Commissioner of Indian Affairs:

    The Indian Office has submitted for the signature of the Secretary an order which would define within the Hopi Reservation created by the Executive order of December 16, 1882, an area which is to be for the exclusive use and occupancy of the Hopi Indians. This area is referred to in this memorandum as the Hopi Unit. The remainder of the 1882 reservation outside the Hopi Unit is to be for the exclusive use and occupancy of the Navajo Indians. It is proposed to accomplish this delimitation by fiat of the Department without expression of assent on the part of the Indians and without statutory authorization. The authority which is relied upon for this action is the wording of the Executive order of 1882 which created the reservation for the Hopi Indians "and such other Indians as the Secretary of the Interior may see fit to settle thereon."

    I am returning this proposed order as I find it to be

1. Contrary to the prohibitions against the creation of Indian reservations without statutory




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OPINIONS OF THE SOLICITOR

FEBRUARY 12, 1941

authority, contained in the acts of May 25, 1918 (40 Stat. 570, 25 U.S.C.A. sec. 211), and March 3, 1927 (44 Stat. 1347.25 U.S.C.A sec. 398d);

2. In violation of the rights of the Hopi Indians within the 1882 reservation; and

3. Not in conformity with the provisions of the Hopi constitution approved December 19, 1936.

Because of the gravity of the practical problems involved, I am adding to this statement certain suggestions for legal procedures which may be useful in meeting, at least partially, the immediate problems.
1. Prohibitions of the 1918 and 1927 acts
    The act of 1918 provides:
    "Section 211. Creation of Indian reservations. No Indian reservation shall be created, nor shall any additions be made to one heretofore created, within the limits of the States of New Mexico and Arizona, except by Act of Congress."
    The relevant provision of the act of 1927 is contained in section 4 of that act and reads as follows:
    "Changes in the boundaries of reservations created by Executive order, proclamation, or otherwise for the use and occupation of Indians shall not be made except by Act of Congress: Provided, That this shall not apply to temporary withdrawals by the Secretary of the Interior."
    As the definition of an area for the use and occupation of a group of Indians is a definition of a reservation, these statutes prevent the proposed action by the Department without legislative authority.

    An "Indian reservation," as recognized in the 1927 act, itself, may be defined as an area set apart by the Government for the use and occupation of Indians. United States v. McGowan, 302 U.S. 535. The right of use and occupancy is the Indian title to land which the creation of an Indian reservation establishes or recognizes, unless, as in rare instances, a different title is specified. This is true whether the reservation is created by treaty, statutes, or Executive order. Johnson v. Mclntosh, 8 Wheat. 543; Mitchell v. United States, 9 Pet. 711, 745; United States v. Cook, 19 Wall. 591; Leavenworth etc. R. R. Co. v. United States, 92 U.S. 733, 742; Seneca Nation v. Christy, 162 U.S. 283, 288-9; Beecher v. Wetherby, 95U.S. 517, 525; Minnesota v. Hitchcock, 185 U.S. 373, 388 et seq.; Lone Wolf v. Hitchcock, 187 U.S. 553; Jones v. Meehan, 175 U.S. 1; Spalding v. Chandler, 160 U.S. 394; McFadden v. Mountain View Min. & Mill. Co., 97 Fed. 670, 673; Gibson v. Anderson, 131 Fed. 39. In the McFadden case, supra, the court explained that the effect of an Executive order "was the same as would have been a treaty with the Indians for the same purpose, and was to exclude all intrusion on the territory thus reserved by any and every person, other than the Indians for whose benefit the reservation was made, for mining as well as other purposes." Even a setting apart by the Secretary of the Interior of lands for Indians use amounted to the creation of a reservation, as the Secretary was deemed to be acting for the President. United States v. Walker River Irrigation Dist., 104 F. (2d) 334. Since the effect of an order creating a reservation is to give the Indians the use and occupancy of the land, an order giving certain Indians the use and occupancy of a designated area of land is, in effect, the creation of a reservation. This conclusion is true a fortiori where the effect is to give a tribe of Indians an exclusive right of use and occupancy in an area which was part of a larger area in which they had the right of use and occupancy in common with other Indians settled thereon.

    The 1927 act was passed in order to make certain that the rights of use and occupancy within the reservations created by the executive branch of the Government were the same as those recognized in the case of treaty or statutory reservations, and particularly the right to receive the proceeds from minerals within the reservation. The intent of the act was to confirm the opinion of the Attorney General in 1924 that the Indians of Executive order reservations had the same property rights as the Indians of other reservations (34 Op. Atty. Gen. 181). That opinion of the Attorney General left open the question whether the President might abolish part of a reservation created by him. It is clear that section 4 of the act, above quoted, was intended to settle this question by providing that the President could not alter the boundaries of reservations already created. It has been suggested that section 4 was intended to relate simply to additions to Indian reservations. No such intent appears in the legislative history of the act, and if such were the intent, the section would have been largely unnecessary in view of the act then in existence prohibiting the withdrawal of public lands as an Indian reservation except by act of Congress (act of June 30, 1919, 41 Stat. 34). However, resort need not be had to the legislative history of section 4 of the 1927 act, since there is no am-
 



1034

DEPARTMENT OF THE INTERIOR

FEBRUARY 12, 1941

biguity in the prohibition upon any type of change of the boundaries of an Indian reservation.

    The proposed order would not only change the boundaries of the 1882 reservation but would also, in effect, create a Hopi Reservation where no reservation exclusively for the Hopis had previously existed, and would thus violate the prohibition in the 1918 act against the creation of any reservation within the limits of the State of Arizona except by act of Congress.

    These statutory prohibitions were apparently recognized by the Department in the period from 1930 to 1934 when an attempt was made to obtain passage of the Navajo boundary bill with a provision included to authorize the Secretary of the Interior to define a boundary between the Navajo and Hopi Indians. This attempt was abandoned and the bill was finally passed containing a provision that nothing in the act would affect the status of the 1882 reservation. (Act of June 14, 1934, 48 Stat. 960.) The files of the Department show that this result occurred because of the protests coming from both the Navajo and Hopi Indians. (Indian Office files No. 308.2 Pts. 1 and 2, 8970, 1930.)

2. Rights of the Hopi Indians in the 1882
reservation

    The 1882 reservation was created for the use and occupancy of the Hopi Indians, together with such other Indians as the Secretary might settle thereon. Although their rights were not exclusive, the Hopi Indians were thus given the right of use and occupancy throughout the 1882 reservation. This right, as previously indicated, is the usual Indian title to land. An order forbidding the Hopi Indians from using and occupying a portion of the 1882 reservation would be an alienation of their property right in that portion of the reservation. No citation of authority is necessary for the fundamental statement that the Secretary of the Interior is not privileged to alienate Indian lands without authorization from Congress, whether the alienation is to other Indians or to non-Indians. The privilege placed in the Secretary of the Interior at the time of the creation of the 1882 reservation to settle other Indians within the reserve permitted him to allow non-Hopis within the reservation. The privilege does not extend to the exclusion from the reservation of the Hopis themselves.

    There is one case which states that where, under an Executive order and a statute, the Secretary has authority to settle other Indians upon a reservation created for designated tribes, the designated tribes have only the "right to reside" thereon and no "definite title" to the land. Crow Nation v. United States, 81 Ct. Cls. 238, 278. The question before the court was not the title of the Indians to the land but the tribal recognition given to the River Crow Indians. The case contains no authority upholding the right of the Secretary to remove a tribe from a reservation for whom the reservation was created, even though the tribe might have less than ordinary Indian title to the land. In the Crow case, moreover, the River Crows had voluntarily abandoned the reservation and claimed no title thereto.

    However, it has been the settled opinion of the Department that where a statute or Executive order creates a reservation for a designated tribe or tribes, such tribes have the usual Indian title of use and occupancy, even though the Secretary is privileged to settle further Indians upon the land. There have been at least 25 such Executive orders and 6 such statutes, many of which relate to tribes which are now organized under the Indian Reorganization Act. In no case have these tribes been considered as having less than the usual tribal property rights. Their rights have even been deemed to have become exclusive where over a long period of time there has been no action by the Secretary to introduce other Indians into the reservation. Memoranda of the Solicitor, September 15 and October 29, 1936 (Colorado River Indian Tribes). I do not maintain that in this case the rights of the Hopis have become exclusive rights since there were Navajos upon the reservation at the time the 1882 order was promulgated, and Navajos have continued within the reservation in increasing numbers.

    My conclusion on this point is that, while the Secretary may control the settlement upon the reservation of the Navajo Indians, he may not deny the use and occupancy of any part of the reservation to the Hopi Indians without their voluntary action, as such denial would be an alienation of their property beyond the authority of the Secretary.

3. Hopi constitution

    At least three provisions of the Hopi constitution bar action by the Department to limit the use and occupancy of the Hopi Indians to the proposed Hopi Unit without the assent of the Hopis. Article I, defining the jurisdiction of the Hopi Tribe, provides that the authority of the tribe shall cover the Hopi villages "and such land as shall be determined by the Hopi Tribal Council in agreement with the United States Government and the Navajo Tribe." This provision was intended to provide, and clearly does provide, for
 



1035

OPINIONS OF THE SOLICITOR

FEBRUARY 12, 1941

the defining of a boundary to the land of the Hopis by agreement of all parties concerned. Article VI, section 1 (c) embodies the provision in section 16 of the Indian Reorganization Act that organized tribes may prevent the disposition of their property without their consent. Article VII places in the Hopi Tribal Council supervision of farming and grazing upon the land beyond the traditional clan and village holdings.

Available Legal Procedure

    As I have presented the legal objections to the method proposed by the Indian Office to meet the serious threat to the welfare of the Hopi Indians from Navajo encroachment, I should like to proceed with certain constructive suggestions as to possible legal procedures available to meet the urgent problem.

    I understand that the problem is economic and psychological. The increasing infiltration of the Navajo Indians farming and grazing livestock within the 1882 reservation threatens to choke the Hopi economy, particularly as the Hopis are turning more to the grazing of livestock and the range land is deteriorating. Neither tribe is willing to agree to a reservation boundary. The Hopis believe that such an agreement would embarrass their traditional claims to large areas of land. The Navajos wish the privilege of utilizing the entire 1882 reservation as far as possible. The core of the matter is land use for farming and grazing. I believe it possible to take effective action to control farming and grazing without defining a separate Hopi reservation.

Proposal for grazing segregation

    The Secretary of the Interior has the undoubted authority to regulate the use of range land to protect the land from waste and to prevent unfair and unreasonable monopolization by individuals. This authority was established in the Navajo grazing cases (United States v. Bega, D.C. Arizona, unreported, D. J. File No. 90-2-8-24-3). In so far as the 1882 reservation is concerned, the power is also based upon statutory expression in section 6 of the Indian Reorganization Act. The present Navajo and Hopi grazing regulations (25 CFR Pt. 72) regulate the number of units which each family may place upon the range in the light of the carrying capacity of the range. To administer these regulations the Secretary of the Interior has established grazing districts based upon the social and economic requirements of the Indians, one of which, No. 6, is designated as the Hopi Reservation for the purpose of grazing administration. 25 CFR sec. 72.13 (g). Within this Hopi grazing reservation the regulations are to be executed in so far as they are compatible with the provisions of the Hopi constitution and in cooperation with the Hopi Tribal Council (sets. 72.4, 72.6 and 72.9).

    It would be possible for the Indian Office to show, I believe, that it is necessary for the proper protection of the range from destruction and for the effective enforcement of the regulations that Hopi and Navajo grazing be separated. It is apparent that the Hopi Tribal Council can control its own members better than it can the intruding Navajos who are ancient enemies. The presence of the Navajos within the Hopi grazing district is a deterrent to constructive action by the Hopis to protect the range. The friction between the two tribes makes the enforcement of the regulations difficult. If it can be shown that there is a direct relation between the protection of the land from waste and the separation of tribal use, an amendment can be made to the grazing regulations providing that no Navajo shall be issued permits within the Hopi grazing district and no Hopi shall be issued permits within the remainder of the 1882 reservation. A further amendment might be included to enlarge Grazing District No. 6 to include all of the proposed Hopi Unit, which is a slightly larger area.

    The Hopi constitution recognizes the regulatory power of the Secretary over the range land provided in section 6 of the Indian Reorganization Act. However, since the suggested regulation would not only regulate the use of the range but would exclude Hopis from the use, for grazing purposes, of the land outside the Hopi Unit, the regulations must have the assent of the tribe. The distinction between the regulation of a property right and the denial of the exercise of a property right as a basis of the affirmance or disaffirmance of the power of the Secretary is apparent in the two cases of United States v. Bega, supra, and Mason v. Sams, 5 F. (2d) 255 (D.C.W.D. Wash., 1925). In the latter case the regulations of the Secretary which denied fishing privileges to tribal members without the consent of the tribe were held invalid.

    It is possible that the assent of the Hopis will be obtained if three considerations are kept in mind:

    (1) The regulation does not create a reservation boundary, since the Hopis would remain entitled to all beneficial use, including the right to any proceeds, within the remainder of the 1882 reservation.

    (2) The regulation would be to the practical advantage of the Hopis since they would apparently
 



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DEPARTMENT OF THE INTERIOR

FEBRUARY 12, 1941

obtain greater grazing areas than they have the effective use of at present.

    (3) A formal agreement or the signing of a document by the Hopi Tribal Council is not necessary if they are reluctant to take such positive action. If the tribal council will assist in the execution of the regulations through the issuance of permits within the Hopi Unit and in such other ways as may be appropriate, their acquiescence will be sufficiently demonstrated.

    If the rights of the Hopis are thus recognized, I see no objection to the Navajo superintendent issuing permits to Navajos within the remainder of the 1882 reservation under the authority of the Secretary to settle non-Hopis within the reserve.

Farming Segregation

    As there are some Navajos farming within the Hopi Unit who may remain there in spite of the fact that they can no longer graze their livestock, and as their presence would be a continuing source of friction because of the need of the Hopis for additional agricultural land, it would be possible for the Secretary of the Interior to use his authority over the settlement of non-Hopis within the reserve to remove these Navajo farmers from the Hopi Unit. However, as these farming settlements were made with the knowledge of the administrative officers of the Department, the investment of the Navajos should be respected, either by assisting them in resettling elsewhere on land of equal value or by providing other compensation.

    The Secretary does not have the power to remove the Hopi farmers who may be located outside the Hopi Unit but within the 1882 reservation in view of the use and occupancy rights of the Hopis in that area. There are no farming regulations adopted under section 6 of the Indian Reorganization Act, and if there were, and these were assented to by the Hopis, it would probably be more difficult to relate soil erosion prevention through the control of farming practices to the separation of the tribes than in the case of grazing regulation. However, it is possible that the Hopis outside the Hopi Unit could be attracted into the Unit by assistance in resettlement.

    If adjustment in the use of farming and grazing purposes of the 1882 reservation is effected in some such way as I have outlined, and if this adjustment proves to be to the general satisfaction of both tribes, it is possible that agreements may then be obtained from the two tribes for legislative action to define a reservation boundary.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


INDIAN SERVICE EMPLOYEES--OWNERSHIP OF
STOCK IN INDIAN OWNED CORPORATIONS

 

February 26, 1941.


Syllabus

Re:

May persons employed in the Indian Service own stock in corporations, a large part of whose stock is owned by restricted Indians?
Held:
Section 68, title 25, United States Code, having the purpose of avoiding a conflict of interest in an employee of the Indian Service between the conscientious use of his official authority over restricted Indians and his private financial interest in a business venture with which restricted Indians are prominently associated, it is suggested that Indian Office employees should avoid even the appearance of a violation of this section and invest their funds in more neutral business ventures.
Memorandum for the Commissioner of Indian Affairs:

    Reference is made to Assistant Commissioner Zimmerman's inquiry of December 12 as to whether it is permissible for Mr. Whitlock, Superintendent of the Rosebud Indian Agency, and Mr. Hector, Superintendent of the Shawnee Agency, to own stock in the Osage Federal Savings and Loan Association.

    In the inquiry it is pointed out that while section 68, title 25, United States Code, provides that "No person employed in the Indian affairs shall have any interest or concern in any trade with the Indians," such stock ownership as in the instant case does not fall under this provision, especially as the two superintendents are not directors of the association and have no hand in its management. Attached to the inquiry is a memorandum by G. B. Fulton, Osage Tribal Attorney, in which he distinguishes the instant case from that dealt with in recent opinions of the Attorney General and of the Acting Solicitor concerning the case of two employees of the Osage Agency desirous of serving as directors of the First National Bank Building Corporation in Pawhuska, Oklahoma. Mr. Fulton states that the instant case is parallel to that of an employee of the Indian Office owning stock in the General Motors Corporation in which restricted Indians also may own stock.

    A corporation, a large part of whose stock holders are restricted Indians, is surely engaged in "trade with the Indians" and an Indian Office em-
 



1037

OPINIONS OF THE SOLICITOR

MARCH 3, 1941

ployee who owns stock in such a corporation has clearly an interest in this trade with the Indians. The purpose of the prohibition of section 68 is to avoid a conflict of interest to arise in an Indian Office employee between the conscientious use of his official authority and his interest in a business enterprise which may be furthered by an unconscientious use of his official authority. Thus, the Attorney General stated in his ruling dated May 9, 1940,

"It would, of course, be objectionable for employees of the Indian Office to acquire stock in this corporation and participate in its affairs for personal profit, while at the same time exercising in behalf of the United States a measure of control over other stock and, aside from the question of the application of particular statutes, would be forbidden by regulations of your Department."
Such business interest, as a matter of fact, will be equally strong whether the Indian Office employee be a stockholder of the corporation only or a director as well. It may be true that the instant case is not quite as strong as that to which the ruling of the Attorney General refers in that the Indian Office employees here concerned may not have any direct authority over the Osage Federal Savings and Loan Association which to use in furtherance of their private financial interests as stockholders of this association, but it is suggested that even the appearance of a violation of the instant statutory provision should be avoided and that whenever Indians are prominently associated with a corporation or business association, employees of the Indian Service should avoid taking any financial interest in the success of such a business enterprise and should rather invest their funds in a more neutral business venture.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


APPROVAL OF WILL WRITTEN IN THE SIOUX
LANGUAGE AND NOT FORMALLY WRITTEN

 

March 3, 1941.


Memorandum for the Commissioner of Indian Affairs:

    I believe that the attached recommendation should have your personal reconsideration.

    The recommendation is that we disapprove a document, written by the hand of the decedent in the Sioux language and not formally witnessed, which is considered by the Probate Division of your office to be a will. While such disapproval would be legally authorized, since our probate regulations (25 C.F.R. 81.51) do not make special provision (as do 19 States and Alaska) for approval of holographic wills, such regulations could be waived if, as a matter of policy, it should be decided that the document is a will meriting approval. I believe that the Assistant Secretary, in passing upon this matter, should have the benefit of your consideration and your recommendation on this question of policy. As against the advantage of preserving the usual rules regarding witnesses, there should be weighed the following considerations:

(a) No question has been raised as to the genuineness or propriety of the will.

(b) The will was presented by the widow against her own interest.

(c) The will allocates to two landless grandchildren a tract of land which they can apparently divide and use; on the other hand, if the will is disapproved, the landless grandchildren take nothing and the property is divided into three equal shares among the wife and the two daughters of the decedent.

    Whether the will is to be approved or disapproved, I suggest that a check be made on the accuracy of the translation. One of the Sioux employees of your office (Miss Warrior), upon consultation, suggested that the Sioux word "wicaqu", which appears at the head of the instrument and which is translated as "bequeathing" in the annexed translation, does not have any such technical meaning as would serve to distinguish a bequest from a gift inter vivos. If this instrument is of the latter character, then perhaps it can be approved as such. Further, I am advised that the translation, in next to the last sentence of the document, of the word "micinca" as "you" is erroneous, and that a proper translation would be "children."

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Attachment.

    My own view and recommendation to you is that a special exception be made and the will approved.

N. R. M.
 



1038

DEPARTMENT OF THE INTERIOR

MARCH 10, 1941

AGREEMENT BETWEEN INTERIOR AND JUSTICE
REGARDING EVIDENCE USED IN CASES BEFORE
COURT OF CLAIMS--MENOMINEE

 

March 10, 1941.


Memorandum for the Commissioner of Indian Affairs:

    The attached letter to the Attorney General concerning the request by the attorneys for the Menominee Tribe in the Court of Claims for certain letters which passed between the Department of Justice and this Department informs the Attorney General that it is the opinion of this Department that the request of the attorneys is justified and that we see no alternative but to comply with it. The letter goes on to state that this Department is no longer willing to follow the agreement made with the Department of Justice in 1938 for the handling of reports on cases before the Court of Claims. I am returning this letter as I have certain suggestions on its content.

    The Indian Office letter of January 27 to the Menominee attorneys in reply to their request of January 24 for copies of correspondence on the Menominee report of this Department informs them that the office has under consideration the propriety of furnishing them with the correspondence requested, excepting the final report of the Department, a copy of which was sent them with the letter. The statement now made in the proposed letter to the Attorney General that this Department sees no alternative but to comply with the request of the attorneys would be binding upon the Department and would stand in the way of a later denial of the correspondence to the attorneys. I think the propriety of furnishing the correspondence to the attorneys should not be foreclosed by this letter to the Attorney General, and that the question should be held in abeyance at least until the Department of Justice has replied to this letter.

    Moreover, I do not agree with your conclusion that the Department must comply with the attorneys' request, in the absence of a court order. I do not consider the correspondence requested "useful * * * in the preparation for trial" and therefore a matter to which the attorneys have the right of access under section 4 of the Menominee jurisdictional act (act of September 3, 1935, 49 Stat. 1085). It is possible that the 1938 correspondence may also be considered confidential communications which could properly be withheld even from the court. The advice of the Attorney General could be requested on that point. As to the copies of the revision of the tentative Menominee report, they may, without impropriety, be denied on the argument that, being unsigned papers, they are not official documents of the Department.

    I suggest that the Attorney General be advised of the response of the Indian Office to the request of the attorneys and of our opinion as to the propriety of furnishing the remaining material, and that he be informed that if the Department of Justice has objection to the furnishing of this material, this Department will not furnish it without court order.

    The last paragraph of the letter to the Attorney General gives as one consideration for abandoning the practice agreed to in 1938 the understanding of the Department that the reports of the Department are not used as evidence, that they are submitted primarily for the guidance of the Department of Justice, and that their use is a matter within the discretion of that Department. I doubt that this is a true reflection of the possible use of the reports of this Department. Section 4 of the Menominee jurisdictional act (act of September 3, 1935, 49 Stat. 1085) provides that any document in the possession of any department of the United States may be used in evidence. Section 272 of title 28 of the United States Code authorizes the Court of Claims to call for papers or documents from any of the departments. In view of these statutes the use of a report of this Department is not entirely within the discretion of the Department of Justice.

    I do not disagree with the determination to abandon the procedure for the preliminary review of the reports of this Department by the Department of Justice. However, I suggest that the abandonment of this procedure be placed simply on the basis that this Department will assume responsibility for preparing and presenting reports of a proper character.

    In view of the number of suggestions I have made on the content of the letter to the Attorney General, I am attaching a substitute second page of that letter, incorporating those suggestions for your convenience in consideration.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.


EXCHANGE OF LAND BETWEEN INDIAN
AND NON-INDIAN

 

March 21, 1941.


Memorandum to the Commissioner of Indian Affairs:

    Reference is made to your letter of February 17, requesting the approval of deeds for the exchange
 



1039

OPINIONS OF THE SOLICITOR

MARCH 21, 1941

of lands between Frank Jealous of Him and his wife, et al. (your reference Land Division Adj. 82447-40, 64354-40). The transaction has been approved but I should like to take this occasion to correct a mistaken view of the law which apparently caused unnecessary and cumbersome proceedings in this case.

    It appears that these lands were reappraised for the purpose of showing that the lands exchanged are of equal value. This reappraisal was suggested by the Assistant to the Commissioner's letter of November 4 in the file which indicates that the Indian Office is of the opinion that lands exchanged between Indians and whites under the Indian Reorganization Act must be of equal value. I have in various memoranda indicated that this is not the case and that no legal objection can be raised to a transaction whereby the Indian acquires a more valuable tract of land than the land he relinquishes, paying a cash sum to boot. Such a transaction, in effect, amounts to land acquisition on behalf of the Indian, which is one of the specific objectives of the Indian Reorganization Act. As I wrote in my memorandum of February 3, 1937,

"* * * Under section 5 the two tracts of land may be either equal or unequal in value, but if they are unequal in value it must be the Indian rather than the whites involved in the transaction who emerge from the transaction with an increased land value. Thus, an Indian may not convey $2,000 worth of land to a white man where the white man transfers to the Secretary for the Indian's use a tract of land worth only $500 and a cash payment to boot of $1,560. On the other hand, an Indian may transfer the lesser tract to a white man and make an additional payment of $1,500 in exchange for a transfer of the more valuable tract to the Secretary for the benefit of the Indian. The difference between the two cases is not technical or abstruse. In the one case the Indian is selling land; in the other case land is being bought for the Indian's benefit. The former is forbidden and the latter is authorized by the terms of the act. This distinction, based on the major purpose of the act, should eliminate some of the confusion that appear in certain memoranda on this subject in the attached file."
    It would thus appear that the reappraisal of lands in this case was unnecessary and based upon a mistaken view of the requirements of the Indian Reorganization Act.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
GOVERNMENT OWNED SCHOOL BUILDINGS ON INDIAN
ALLOTMENT--QUESTION OF LAND LEASE
PAYMENTS TO INDIAN
March 21, 1941.
Memorandum for the Commissioner of Indian Affairs:

    Reference is made to your letter of January 7 to William O. Roberts, Superintendent, Pine Ridge Agency, relating to the purchase of certain land from the heirs of Joseph Running Hawk, Pine Ridge Allottee No. 6576, for Indian school purposes. Your reference number is Acq. 22279-40.

    Your letter to the superintendent indicates that the value of the school building is in dispute. I feel that the value of the school building is not a relevant issue as the facts indicate that the title to the building is concededly and clearly in the Government. There is a labyrinth of correspondence relating to this matter which I feel it is needless for me to explore in detail. The facts briefly indicate that the school building was erected on the property before the allotment deed was issued. Through some inadvertence the allotment deed did not reserve the school property. The Indians, when they acquired the property by the allotment deed, took the property with notice of the Government's building on the land and made neither claim of ownership nor did the Indians attempt to interfere with the use of the building for school purposes. Clearly this shows acquiescence, consent and license and the doctrine of caveat emptor may be applicable. The Government, to make its right to the building more secure and free from controversy, entered a lease with the Indians after the Indians refused to correct the allotment deed wherein it was agreed that the Government was to own all the buildings and improvements placed on the land "and to have its own time to dispose of or to remove said buildings therefrom." This lease, while signed by the Indians, was not signed by the Government because it was felt that a lease exceeding a five-year term was prohibited by the act of June 25, 1910 (36 Stat. 856). It is of no avail to criticize that determination at this time, but I should like to point out that the United States as a sovereign is authorized to lease land for school purposes for a period greater than that provided for in the statute. The Attorney General in his letter of February 7, 1935, to the Secretary held that the Government may acquire lands for school purposes under section 4 of the act of June 18, 1934 (48 Stat. 984), even though the language of the act prohibits the sale of restricted Indian lands. Said the Attorney General:
 



1040

DEPARTMENT OF THE INTERIOR

MARCH 21, 1941

    "To hold that a sale of restricted Indian lands to the United States, needed by the Government for the purpose of carrying out its policy of promoting the educational advancement of the Indians is within the ban of the statute, would, to that extent, abrogate that policy. It is a familiar rule that a general statute which takes away or limits any right, title or interest does not bind the sovereign unless the sovereign is expressly named therein (United States v. Knight, 14 Pet. 301, 315; Dollar Savings Bank v. United States, 19 Wall. 227, 239).

    "Therefore, in the absence of any provision in the act specifically forbidding the sale of restricted lands to the United States for the purpose of erecting school buildings thereon for use in the Indian school service for the benefit of the Indians residing on the Reservation where such lands are located, I am of the opinion that Section 4 of the Act of June 18, 1934, does not prohibit such sale."

Since the Government is authorized to acquire restricted lands in fee simple for school purposes, it seems to me clearly permissible for the Government to lease school lands beyond the restricted period mentioned in the statute.

    The unsigned lease creates a license and recognition on the part of the Indians sufficient to permit the Government to enjoy the use and ownership of the building. A building erected upon the land of another by his consent or license does not become a part of the realty but remains the property of the person annexing it. Price v. Case (1834), 10 Conn. 375; Fischer v. Johnson, et al., 106 Iowa 181, 76 N. W. 658 (1898); Collins v. Taylor, 101 Maine 542, 64 Atl. 946 (1906); Priestly v. Johnson, 67 M O . 632 (1878); Dame v. Dame, 38 N. W. 429 (1859); Kay County Gas Company v. Bryant, et al., 135 Okla. 135, 276 Pac. 218, 221 (1928). Even though the title to this building was at times recognized by the Government and at other times was not, the rights of the Government cannot be prejudiced by inter-office correspondence between the Office of Indian Affairs and the superintendent. The Government can neither be bound nor estopped by acts of its officers or agents in entering into an arrangement or agreement to do or cause to be done what the law does not sanction or permit. United States v. San Francisco, 310 U.S. 16, 32. As late as July 10, 1940, it appears that the Indians have disclaimed title to the building. Equity has compelled the owner of land as a condition of his recovering the land to pay for improvements made by a bona fide improver. Jackson v. Ludeling, 99 U.S. 5 13, 520 (1878); Seal v. School District No. 2 in Lake County, 133 U.S. 553 (1890). There can be no doubt that the Government can qualify as a bona fide occupant of the land in view of the facts related herein.

    It is my opinion, therefore, that the Government is not authorized to disclaim title to its building now and to offer compensation for it as a means of settling a claim on the part of the Indians for the use and occupation of the land by the Government. The Indians would be led along a very hilly road if their rights arising out of the use and occupation of the Government were held to be a claim as all claims must be supported by an act of Congress in spite of the Tucker Act. See Hooe v. United States, 218 U.S. 322, 31 Sup. Ct. 89.

    Even though it may seem desirable from an administrative standpoint to pay the heirs for the reasonable use and occupation of the land, such compensation cannot be based upon the value of the school buildings now owned by the Government but can only be based upon the fair value of the lands taking all factors and conditions into consideration. This may not only be the market value but the worth to the owner. It has been held that interest in a condemnation award is an element of just compensation. Shoshone Tribe v. United States, 299 U.S. 476; Seaboard Airline Railway Company v. United States, 261 U.S. 299. The value to the Government of the use and occupation of this land over a long period of years is a factor that may properly be considered now in assessing the value of the land. This solution may lead to a far more equitable means of compensating the Indian for the real value of the land to him than an attempt to fix the value of a school building belonging to the Government as of 1924 as a criterion of value for the use and occupation thereof.

    The letter is returned without approval for the reasons stated in this memorandum. Your letter has been redrafted to conform with the recommendations herein suggested and this redraft is submitted herewith for your consideration.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


QUESTION OF DEPARTMENT APPROVAL OF OSAGE
PARTITION PROCEEDINGS AND OTHER LITIGATION
REGARDING ATTORNEYS COMPENSATION

 

April 11, 1941.


Memorandum for the Commissioner of Indian Affairs:

    I desire to call your attention to a schedule of fees in partition cases under the jurisdiction of
 



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OPINIONS OF THE SOLICITOR

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the Osage Indian Agency, which were adopted on December 10, 1926. In my opinion these fees are excessive and it is suggested that a more equitable and reasonable schedule should be formulated. It is the consensus of the opinions of Messrs. Flanery, McMahon, Fulton, and Spector that the fees that now obtain under the existing schedule are excessive and should be revised. Mr. Pearson, President of the Osage County Bar Association, after discussing this matter with Mr. Spector also agreed that the existing schedule ought to be revised as in some instances the fees are excessive. May I suggest the following substitute schedule for your consideration and approval:

1. A fee of $200 in partition cases where the estate is less than $10,000;

2. $300 where the estate is less than $15,000;

3. $400 where the estate is less than $25,000;

4. $500 as a maximum fee in all cases over $25,000.

    These fees, of course, must be supported by data showing the amount of work involved as there is no justification for paying such fees unless they constitute reasonable compensation for the services rendered. If it can be shown that unusual services have been performed, discretion should be exercised in changing the schedule. It is generally recognized that compensation for legal services is based upon the amount of work involved, the amount of money involved, and the skill and efficiency of the legal services rendered. All these factors should be taken into consideration in fixing and approving fees. In determining fees based
upon values, care should be exercised that the values are not inflated as this results in many instances in excessive and unfair fees.

    In order to discourage excessive and unnecessary partition proceedings and other litigation in which restricted Osage Indians are parties, I think provision should be made for the submission of facts sufficient for this Department to pass upon the propriety and necessity before such proceedings are authorized. This preliminary approval will avoid unnecessary and expensive proceedings as it is very often too late to entertain objections to proceedings approved by the court after expenditures of considerable sums of money.

    I shall be glad to have your views and reactions in regard to those suggestions. Should you agree with those recommendations, may I suggest that you take the necessary steps to promulgate new regulations to effect the necessary changes.

                                                                                                                                                FELIX S. COHEN,

Acting Solicitor.


GOVERNMENT CONSTRUCTION OF FENCES
AROUND PRIVATE LAND NOT YET ACQUIRED
FOR INDIANS

 

April 12, 1941.


Memorandum for the Commissioner of Indian Affairs:

    Reference is made to a letter from the Superintendent of the Rocky Boy's Agency to Kenneth W. Green, Assistant Land Field Agent, which accompanied your request of March 17 for the approval of options in connection with the acquisition of lands for the Rocky Boy's project. Your reference number is land Division, Acq. 30370-40, 59077-40.

    It appears, according to the superintendent's letter, that it is a policy of the purchasing department to construct fences along boundaries of lands not yet acquired by the Government. The letter says

"* * * So long as the program is developing it is difficult to construct fences on permanent boundaries because with each purchase program boundaries change. However, we will plan to establish it as the policy of the Purchasing Department as well as our field unit to establish the exterior boundaries as indicated on your map and will attempt to work our plan whereby we will fence on these exterior lines and give the white owner within the reservation privilege of running a certain number of head which his holdings would entitle him to run. In this way we will establish our exterior boundaries and hope to be able to acquire all lands within them."
    While the Government as a rule exercises its eminent domain power by formal condemnation proceedings, the Government may without instituting condemnation proceedings appropriate for a public use private property. In that event it impliedly promises to pay therefore. See Federal Eminent Domain, Department of Justice, section 25c, pages 162, 163. In a number of instances options affecting the land enclosed by the fences are accepted by the Government. This definitely obligates the Government to pay for the land under the Tucker Act. The court in the case of Luis N. Sancatz et al. v. United States, Case No. 1357, District Court of the District of New Mexico, decided 12/11/1940, your reference number Acq. 986-1936, United Pueblo 310, held that the Government was obliged to pay a sum in excess of the option price.

    It is therefore suggested that careful consideration be given to the practice of constructing fences around land not yet acquired by the Govern-
 



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DEPARTMENT OF THE INTERIOR

APRIL 12, 1941

ment which may obligate the Government to pay more for the land in this manner than by direct purchase.

                                                                                                                                                FELIX S. COHEN,

Acting Solicitor.


ENROLLMENT AS MEMBERS OF THE
CONFEDERATED TRIBES OF THE COLVILLE
RESERVATION OF PERKINS HAVING LESS THAN
ONE-FOURTH INDIAN BLOOD

 

April 16, 1941.


Memorandum for the Commissioner of Indian Affairs:

    The attached letter to the Superintendent of the Colviile Agency authorizing him to enroll a number of mixed-blood children presents several important legal principles which I wish to call to your attention.

    The inter states (1) that the Colville Business Council has no right to pass upon the question of enrollment with the Colville Tribe, and (2) that, therefore, enrollments must now be made in accordance with "the general policy and the laws and court decisions governing such matters prior to the enactment of the Indian Reorganization Act." The letter thereupon proceeds to instruct the Superintendent to enroll a large number of mixed-blood children, including 2 who have 3/16, 1 having 5/32, 3 having 1/8, 2 having 1/16, and 2 having only 1/32 degree of Indian blood. The letter would permit the enrollment of several other children who are less than quarter-bloods upon presentation of further evidence on residence of the parents.

    (1) The statement that the Colville Business Council has no right to pass upon matters of enrollment misinterprets the provisions of the constitution. There is no provision of the constitution dealing specifically with tribal membership. However, the preamble provides that the purpose of organization is to form a recognized representative council to handle reservation affairs. Article V, section 1 (a) gives the Business Council the power to confer with the Indian Office and to protect and preserve the tribal property and the general welfare of the tribe, and other provisions of the constitution authorize the Business Council to take action which involves determination of tribal membership, such as determining the qualifications of voters and of councilmen (Art. II, sets. 6, 7, and Art. III, secs. 2, 3, 5) excluding nonmembers, taxing members and nonmembers, and regulating the domestic relations of members (Art. V, sec. 1 (b), (d), and (e)). My conclusion is that any power which the tribe has over the determination of tribal membership may and should be exercised by the Business Council under the terms of the constitution. The power of the tribe to determine membership is my next point.

    (2) The Indian Office refers to the general policy and laws and court decisions governing enrollment matters prior to the Indian Reorganization Act as authority for causing the enrollment of these mixed blood children. The court decisions on the question of tribal enrollment and membership are unanimously to the effect that the tribe has the power to determine what persons of mixed blood shall be considered tribal members and this power is limited only by the approval power of the Department where tribal property is involved, by the statutes in particular cases requiring a tribal enrollment in a certain way, and by the statute (25 U.S.C. sec. 184) vesting in mixed-blood children born of marriages contracted prior to June 7, 1897, a right to share in tribal property (Handbook of Federal Indian Law, ch. 7, pp. 47 through 61). The Oakes case is outstanding confirmation of this kind of court decision (Oakes v. United States, 172 Fed. 305, C.C.A. 8th 1909).

    There are no statutes governing the matter of determining tribal membership among the Colville Indians. In fact, there are no general laws or regulations governing enrollment of tribal members. There are only customs and usages of the Indian Office, which are formulated scantily in the 1904 Regulations of the Indian Office governing the distribution of annuities. If these regulations did apply, several of the enrollments authorized by the letter would not conform with the regulations since the regulations prohibit the enrollment of children of Indian women married to white men after June 7, 1897 (sec. 324, par. 4). If the practice of the Indian Office prior to the enactment of the Indian Reorganization Act was to enroll mixed-blood persons without the consent of the tribe and over its opposition, I do not think this practice can be condoned or continued in the face of the known and repeated decisions of the courts on this subject, whether or not the tribe is organized under the act.

    In this instance the Confederated Tribes of the Colville Reservation have declared against the enrollment of mixed-blood persons who have less than 1/4 degree of Indian blood. The resolution of the Business Council of January 13, 1939, recited that

"Whereas the Colville Business Council is deeply interested in the welfare of the Colville Indians, we do hereby resolve to protect our enrollment as to the degree of Indian blood, and




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OPINIONS OF THE SOLICITOR

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"Whereas, there is a large number of people drawing tribal interests, that are of a small degree of Indian blood, and

"Whereas, said small degree of Indian blood is not in accord with self Government and wishes of the Colville Indians, that such persons do not desire to be known as Indians any further than to carry title of drawing per capita payments or to come under medical attainments and other interests that the tribal resources may tend to benefit the Indian thereof:

"Therefore, be it resolved by the Colville Business Council in regular meeting assembled in accordance with Art. V, Sec. 1 (A) of our constitution and by-laws, as recognized by the Indian Office, in order to settle a most vexatious problem that we request no further enrollments be accepted with less than one quarter (1/4) degree of Indian blood.

    "Resolved further, that no child born off the reservation, of parents having their homes off the reservation be enrolled here from now on.

    "This resolution adopted by the Colville Business Council, January 13, 1939, with all in favor and none opposed."

This resolution was supported by several letters from the Superintendent, particularly that of March 21, 1940, in which he reported that the large number of persons enrolled with the tribe who had very little Indian. blood had no purpose in retaining their connection with the tribe other than to obtain the Federal services provided for Indians, and that these persons were a source of constant trouble in the handling of Indian affairs.

    The tribe had the authority, through its Business Council, to prohibit the enrollment as tribal members of persons with less than one-fourth Indian blood. Because they acted in the form of a request to the Indian Office instead of in the form of a controlling regulation, their action should not be accorded any less respect. There is no authority in the Interior Department to enroll as a tribal member, over the protest of the tribe, a person who had a remote ancestor who was a Colville Indian. In my memorandum of December 18, 1937, concerning the enrollment of certain persons with the Prairie Band of Pottawatomie Indians, I stated that

"* * * However, if the Prairie Band still refuses, in the light of this information, to accept the children into membership, the Department is without power to enroll the children of its own accord, and the Business Committee should be so informed. While the Department may approve or disapprove adoptions into the tribe and expulsions therefrom made by the tribal authorities, no case holds that the Department, in the absence of express statutory authorization, may grant a person tribal membership over the protest of the tribal authorities. Such action would be contrary to the rules enunciated in the cases and to the position taken by the Department in the drafting of tribal constitutions."
No person has a vested right to enrollment with an Indian tribe merely because he was born of parents living anywhere within an allotted and open reservation and has some Indian blood. Such a vested right would have to stem from a Federal or tribal law, and no such law has been enacted.

    I recommend that the letter to the Superintendent be revised to state that the council had authority in enacting the resolution of January 13, 1939, to speak for the tribe, and that in view of the refusal by the tribe to accept enrollment, as members, of persons of less than 1/4 Indian blood, the Department has no authority to cause the enrollment of such persons. This does not in any way affect the need and desirability of an amendment to the constitution incorporating the quarter blood rule, as such an amendment will make the rule of continuous application and binding upon future councils.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


WHETHER PUEBLO WITH FEE TITLE IS
CONSIDERED INDIAN COUNTRY AND UNDER
FEDERAL CRIMINAL JURISDICTION

                                                                                                                                                                    April 18, 1941.
William A. Brophy, Esq.,
802 First National Bank Building,
Albuquerque, New Mexico.

MY DEAR MR. BROPHY:

    In your letter of April 10, 1941, you reported the prosecution of a Pueblo Indian for larceny under section 548 of title 18 of the United States Code, committed on lands purchased by the pueblo of Laguna under the Pueblo Lands Board Act of June 7, 1924 (43 Stat. 636), and the amendatory act of May 31, 1933 (48 Stat. 108). You state that you consider these lands to be Indian country. I agree entirely with your conclusion. The lands
 



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DEPARTMENT OF THE INTERIOR

APRIL 18, 1941

were purchased under authority of acts of Congress which required approval of the purchase by the Secretary of the Interior and which imposed on the lands restrictions against alienation. The fact that the fee title to the lands is in the Pueblo and not in the United States in trust for the Pueblo is immaterial in view of the decisions in United States v. Sandoval, 231 US. 28, and United States v. Ramsey, 271 U.S. 461. The lands would also come within the broad definition of an Indian reservation made in the case of United States v. McGowan, 302 U.S. 535, as being lands which have been validly set apart for the use and occupancy of Indians.

    I consider it important that the lands be definitely established as Indian country and as an Indian reservation.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


FEDERAL AND STATE LAWS--TRIBAL ENTERPRISES
ON NAVAJO RESERVATION

 

May 1, 1941.


Syllabus

Re:

Application of various Federal and State laws to tribal enterprises and their employees on the Navajo Reservation.
Held:
1. Employees' compensation.
(a) Federal employment compensation.

    While it is doubtful that the Federal Compensation Commission would recognize employees of these enterprises as Government employees, application therefor may be made in order to obtain a ruling on this point from the Commission.

(b) State workmen's compensation.

    Tribal enterprises on the Navajo Reservation are not subject to State workmen's compensation legislation.

2. Social Security Taxes.
(a) Federal old age insurance.

    Employees of these tribal enterprises and the enterprises, as employers, are subject to the payment of the old age insurance tax imposed by section 1400, title 26, U. S. C.

(b) Federal unemployment insurance.

    These tribal enterprises are also subject to the payment of the unemployment insurance tax imposed by section 1600 of title 26.

(c) State unemployment compensation laws.

    Under section 1606, title 26 U.S.C., States have the power to subject these tribal enterprises to their unemployment compensation laws.

3. Income tax.
(a) Federal income tax.

    These tribal enterprises being neither individuals nor corporations are not subject to the payment of the Federal income tax. Individual Indians, however, are liable for this tax on salaries received from employment in these enterprises.

(b) State income tax.

    States have no authority to levy income taxes on tribal enterprises or their employees.

4. State sales tax.
    States have no authority to levy a sales tax on sales made by these tribal enterprises.
5. Bills of lading.
(a) Shipments to Government agencies.

    Government bills of lading may be used for such shipments.

(b) Chipments[sic] to private dealers.

    It is doubtful whether the use of Government bills of lading, and especially of land grant rates, will be permitted by the Comptroller General for such shipments.

6. Wages and Hours Act.
    This act applies to such tribal enterprises as are engaged in interstate commerce.
Memorandum for the Commissioner of Indian Affairs.

    Reference is made to the attached letter of Assistant Commissioner Zimmerman to Mr. E. R. Fryer, Superintendent, Navajo Agency, dated November 25, 1940. This letter answers a number of questions submitted by Mr. Fryer concerning various taxes and regulations to which tribal enterprises on the reservation may be subject. I would like to suggest the following answers.

1. Employees' Compensation.

    (a) Federal employment compensation.

    United States employment compensation is available only to Federal employees. The question whether employees of enterprises carried on on Indian reservations under Government supervision can be considered as employees of the United States Government depends on the nature of such enterprises. The practice of the Federal Compensa-
 



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OPINIONS OF THE SOLICITOR

MAY 1, 1941

tion Commission has usually been to consider such Indian employees as employees of the Federal Government unless the operations of such enterprises would seem to put it outside the realm of Government operations. Thus, in the case of the Menominee Indian mills Indian employees were not recognized by the Commission as Federal employees. While Menominee funds are deposited in the Treasury of the United States, no express Congressional authorization is required for their expenditure as section 4 of the act of March 28, 1908 (35 Stat. 51), grants to the Secretary authorization to use the deposited funds for the payment of operating expenses of the mills. A fortiori it would not seem probable that the Commission would recognize as Federal employees the Indian employees of the tribal enterprises on the Navajo Reservation, the funds of which are handled directly by the Superintendent for the tribe, not deposited in the Treasury of the United States but in individual money accounts and expanded as the needs of the enterprises require, without Congressional authorization. Yet it is suggested that a test application be made in order to obtain a formal ruling on this point from the Commission.

    (b) State Workmen's Compensation. The act of June 25, 1936 (49 Stat. 1938, tit. 40, sec. 280), authorizes the various States to apply their workmen's compensation laws

    * * * to all lands and premises owned or held by the United States of America by deed or act of cession, by purchase or otherwise, which is within the exterior boundaries of any State, and to all projects, buildings, constructions, improvements, and property belonging to the United States of America, which is within the exterior boundaries of any State, in the same way and to the same extent as if said premises were under the exclusive jurisdiction of the State within whose exterior boundaries such place may be.
In my memorandum to the Assistant Secretary, dated October 20, 1936, it was held that this law did not apply to a tribal enterprise carried on on an Indian reservation. Employees of Indian projects on the Navajo Reservation are, therefore, excluded from State employment compensation acts and cannot take advantage of them even though the State authorities may be willing to accept them.

    (c) Should, then, the Federal Compensation Commission reject the application of these employees, so that they would thus not be covered by any workmen's compensation, legislative action would become necessary to subject them either to State or Federal employment compensation, or some other way must be found to protect them.

2. Social Security Taxes.

    (a) Federal old age insurance.

    The act of August 10, 1939 (53 Stat. 187), provides for a Federal old age insurance tax to be paid by employees (26 U.S.C. sec. 1400) and employers (26 U.S.C. sec. 1410). The only exemption from that tax is that provided by section 1426 (b) (6) for services

"performed in the employ of the United States Government, or of an instrumentality of the United States which is (A) wholly owned by the United States or (B) exempt from the tax imposed by section 1410 by virtue of any other provision of law."
This exemption is so narrow that it subjects even services performed in the employ of an instrumentality of the United States to this tax unless such instrumentality falls under the narrow categories described by (A) or (3), supra. The tribal enterprises on the Navajo Reservation, financed out of individual Indian moneys deposited with the Superintendent and disbursable without the need of Congressional authorization, cannot be said to be "wholly owned by the United States" nor does there appear to be any other provision of law which would specifically exempt such enterprises from this tax. A similar situation was pointed out to you in a memorandum of this office dated June 10, 1940, concerning the question whether cooperative stores organized by Eskimos in Alaska were required to pay social security taxes. In that memorandum it was, however, suggested that the Bureau of Internal Revenue be asked to rule on the interpretation of the exception of instrumentalities under subclause (B).

    (b) Federal unemployment insurance.

    Pursuant to section 1600 of title 26 of the Code, an unemployment insurance tax is imposed on employers fixed at a percentage of the wages paid by them during each year, in terms similar to the provisions of section 1410; no unemployment insurance tax, however, is imposed on employees. Section 1607 (c) (6) contains a narrow exemption provision which is worded in a manner identical with section 1426 (b) (6), so that Indian enterprises on the Navajo Reservation are not exempt from this unemployment insurance tax as Government instrumentalities, any more than they are from the old age insurance tax. There is an exception, however, contained in section 1607 (a) which exempts employers of less than eight persons. Section 1607 (a) reads as follows:
 



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DEPARTMENT OF THE INTERIOR

MAY 1, 1941

    "The term 'employer' does not include any person unless on each of some twenty days during the taxable year, each day being in a different calendar week, the total number of individuals who were in his employ for some portion of the day (whether or not at the same moment of time) was eight or more."

    (c) State unemployment compensation laws.

    Section 1606 grants authority to the States to subject to their unemployment compensation laws even enterprises located on land or premises owned, held or possessed by the United States (sec. 1606 (d)). This provision alone would not suffice to authorize the States to subject the Navajo enterprises to their unemployment compensation laws (see my memorandum to the Assistant Secretary dated October 20, 1956, as discussed under 1 (b), supra). Section 1606 (b), however, extends this authority by exempting only those Federal instrumentalities which are "(A) wholly owned by the United States or (B) exempt from the tax imposed by section 1600 by virtue of any other provision of law." Pursuant to this section Federal instrumentalities are not automatically subject to State unemployment laws but may be subjected to them by an express provision contained in such State statute. Section 1601 provides that payments made under such State unemployment compensation laws may be credited against up to 90 percent of the unemployment insurance tax imposed on employers by section 1600. There is, however, a question whether the provisions of section 1600 are broad enough to include Indian enterprises which are not expressly sanctioned therein. As it does not appear, however, that the State of Arizona has so far attempted to subject Indian enterprises to its unemployment compensation laws this question may be left open until such an attempt is made on the part of the State authorities.

3. Income tax.

    (a) Federal income tax.

    Only individuals or corporations are subject to the Federal income tax. Tribal enterprises, therefore, since they do not fall under either of these two categories, do not owe the income tax. Individual Indians, however, are subject to the Federal income tax on salaries received from such employment on tribal projects, since the Supreme Court in Superintendent, Five Civilized Tribes v. Commissioner of Internal Revenue, 295 U.S. 418 (1935), ruled that the income of Indians not directly derived from restricted lands is included in the broad language of the Federal income tax statutes. No income tax returns have to be filed, however, unless the income exceeds the basic tax exemption, which is $800 for an individual, $2,000 for a married couple, plus "$400 for each person (other than husband or wife) dependent upon and receiving his chief support from the taxpayer if such dependent person is under eighteen years of age or is incapable of self-support because mentally or physically defective." (See tit. 26, sec. 25 (b) (2) U.S.C.)

    (b) State income tax.

    Indian activities carried on on a reservation are not subject to the authority of the State. State income taxes, therefore, cannot be levied on the income of tribal enterprises carried on on the reservation nor on salaries received therefrom.

4. State sales tax.

    For the same reason as given under 3 (b), supra, State sales taxes may not be levied on sales made by tribal enterprises on the reservation. For a more detailed analysis of the question of the applicability of State sales tax statutes to the Indians, you are referred to the Solicitor's opinion of May 8, 1940 (M. 36449).

5. Bills of lading.

    (a) Shipments to Government agencies.

    The question whether certain types of Indian enterprises are entitled to the use of Government bills of lading for shipment of their products was the subject of a ruling by the Comptroller General (15 Comp. Gen. 1144) dated June 30, 1936. In that ruling the Comptroller General interpreted the act of April 30, 1908 (35 Stat. 70, 73), making appropriation for the payment of transportation of material, supplies, etc., for the Indian Service, so as to hold that Government bills of lading should be used and land grant rates paid.

"for transportation of any supplies and materials, including lumber, to or between Indian reservations or between United States ware houses or other Government buildings, posts and stations to the Indian Agency, whether for the use of the United States, on the one hand, or of such Indians on the other."
    (b) Shipments to private dealers.

    As to shipments to private dealers, the above-quoted ruling of the Comptroller General held that in the case of the Menominee mills there was no objection to the use of Government bills of lading. Whether land grant rates or commercial rates were to be used, however, was left to a consideration of the facts in each individual case. In view of the fact that as stated under 1 (a), supra, the funds of the Menominee mills are handled by the Treasury and then accounted for with the Comptroller General while the funds of the Navajo enterprises are handled by the superintendent through individual Indian money accounts and
 



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OPINIONS OF THE SOLICITOR

MAY 13, 1941

thus no account for them is rendered to the Comptroller General, it is doubtful whether the Comptroller General would extend the permission to use Government bills of lading to the Navajo enterprises.

6. Wages and Hours Act.

    In my opinion, M. 29999, dated November 28, 1938, I concluded that the Wages and Hours Act should apply to the employees engaged in the operation of the Menominee and Red Lake Indian mills in Wisconsin and Minnesota. This ruling was affirmed on July 10, 1939, by the Wages and Hours Division of the Labor Department. It was predicated upon the interstate commerce character of these two tribal enterprises. Whether, therefore, the act is applicable to the projects here under discussion depends on the nature of their business. If any of these projects, the sawmill for instance, is engaged in interstate commerce, the Wages and Hours Act will apply to it; otherwise, it is not subject to it. The superintendent should, however, be advised that for an enterprise to be engaged in interstate commerce it is not necessary that all or even a majority of its business be interstate commerce but it is sufficient if a substantial part of its output moves in interstate commerce. Thus, the Supreme Court ruled in Santa Cruz Co. v. National Labor Relations Board, 303 U.S. 453 (1938), that a canning company processing fruits and vegetables raised in the State and shipping approximately 37 percent of its finished products outside the State was engaged in interstate commerce.

    If it should appear chat further advice on specific situations is needed, a complete statement of the facts involved in each individual case should be furnished to this office.

                                                                                                                                                FELIX S. COHEN,

Acting Solicitor.


TRIBAL ORDINANCE REGULATING LIVESTOCK

 

May 13, 1941.


Syllabus

(1) A tribal ordinance providing for the impounding of livestock trespassing within the reservation and their release to the owner upon payment of a fine and expenses is not properly classed under the tribal constitution as a law and order ordinance, since it does not define conduct of members of the tribe and provide for trial and punishment of offenders. It is rather an exercise of the power of the tribe, subject to the approval of the Department, to prevent overgrazing and to protect the natural resources of the tribe.

(2) Since the ordinance does not define a crime nor provide for the trial and punishment of offenders, it does not conflict with the Federal statute penalizing the driving of livestock on Indian reservations without the consent of the tribe.

(3) Since the tribe has authority to protect the reservation from trespassing livestock, it has an equal right to prescribe the appropriate and usual procedure of impounding the livestock accompanied by their sale, after notice to the owner.

(4) The ordinance should (a) limit the charges to the expense of handling the livestock and omit any penalties, (b) provide that the proceeds of any sale of the livestock, over expenses, shall be held for the owner, and (c) provide for some procedure for notice by posting or publication.

Memorandum for the Commissioner of Indian Affairs:

    The attached letter to the Chairman of the Fort Belknap Indian Community Council holds that Ordinance No. 8, passed by the council on February 3, to provide for the impounding of livestock trespassing within the reservation, is invalid under section 1 (i) of Article V of the tribal constitution. This letter presumably constitutes a rescission of the ordinance under the review provisions of the constitution. I am returning this letter in order to point out certain legal considerations involved in the interpretation of the constitution in relation to this ordinance.

    The section of the constitution referred to by the council and by your office as authority for the adoption of the ordinance is section 1 (i) of Article V, providing for law and order powers and reading as follows:

    "To establish ordinances, subject to review by the Secretary of the Interior, governing law enforcement on the reservation, and to set up courts for the trial and punishment of offenders against such ordinances, in cares that do not fall within the jurisdiction of the Federal court."
    The ordinance providing for the impounding of trespassing livestock reads as follows:
    "THAT livestock trespassing within the boundaries of the Fort Belknap Reservation




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DEPARTMENT OF THE INTERIOR

MAY 13, 1941

may be impounded by any officers of the Community Council.

    "The owner should be notified immediately, and may obtain animals after paying both a charge of five dollars ($5.00) per head, and incidental expenses accruing thereto. If the trespass occurs on allotted land, the fine shall be paid to the allottee. After 10 days' notice the animals may be sold."

    Your office holds the ordinance to be in conflict with the section quoted, because grazing trespass is a matter of Federal law within the jurisdiction of the Federal court (25 U.S.C. sec. 179). However, the tribal ordinance for the impounding of livestock does not provide for the "trial and punishment" of offenders and, therefore, is not an ordinance which comes within the language of the second part of section 1 (i), since that part of the section refers only to cases for the trial and punishment of offenders. The ordinance does not contemplate any court action at all, and under the ordinance the only logical court action would be a possible civil suit by the owner of the livestock as plaintiff in the Indian court to recover his cattle.

    The ordinance is not strictly speaking a criminal provision at all but a method of protecting the grazing lands of the reservation from damage by removing straying cattle. The ordinance would more appropriately be designated as action under section 1 (k) of Article V which authorizes the council "to prohibit the overgrazing of lands or other depletion of the capital or natural resources of the community by ordinances which shall be subject to approval by the Secretary of the Interior." A local community with power to adopt livestock laws is generally considered as having, as a necessary corollary, the authority to impound livestock which is running at large in violation of these laws (3 C.J.S. 1232). That this ordinance is not properly a law and order ordinance is also indicated by the fact that such ordinances can relate only to the conduct of members of the tribe or of other Indians under the jurisdiction of the court, whereas this ordinance is intended to relate to the stock of any livestock owner, white or Indian.

    Even if this ordinance were considered a law and order provision, however, there would still be an important distinction between the terms of the ordinance and the trespass prohibited by the Federal law referred to in the letter. The Federal law covers only cases where the owner of the livestock is at fault (16 Op. Atty. Gen. 568) and the penalty is placed upon the owner as a punishment for his fault. The ordinance, on the other hand, extends to all livestock found trespassing within the reservation, regardless of the fault of the owner. This further indicates that the ordinance is not properly a penal provision but should be considered a regulation of property in the general interest.

    The procedure that I suggest be followed is to inform the community council that the ordinance is not properly classed as a law and order ordinance as it does not define the conduct of members of the tribe and provide for their trial and punishment, but that it is properly an exercise of the power of the council under section 1 (k). Since council action under section 1 (k) requires express approval by the Department, your office may then proceed to consider the ordinance on its merits, not restricted by the time limit of the review procedure.

    Concerning the merits of the ordinance, I have the following comments, based upon the foregoing discussion of the character of the ordinance and upon the fact that a statute for the impounding and sale of cattle should contain certain procedural safeguards because of the summary nature of the proceedings.

    (1) Any charges placed upon the owner as a condition for his recovery of the cattle should be charges for the expense involved of keeping the cattle and should not be in the nature of fines or penalties. The imposition and collection of penalties may be left to the Federal law. Accordingly, this would mean that the second sentence of the second paragraph of the ordinance, providing for payment of "the fine" to the allottee, should be omitted.

    (2) The provision for sale of the impounded cattle should state that the proceeds of the sale, over the expenses of taking and keeping the cattle, are to be held for the owner. The owner is entitled to the proceeds over expenses (3 C.J.S. 1236) because the impounding procedure is a device to protect property from injury by privately owned animals without expense to the public authorities and is not intended to impose penalties by the confiscation of property, which can only be done by criminal statute.

    Sale of impounded animals after notice to the owner is the usual and appropriate procedure provided in impounding statutes for relieving the public of the care of the animals (3 C.J.S. 1235). I see no reason why such procedure is not equally available to the tribe as a public body, even though the animals may belong to white persons. The authority of a tribe to tax white-owned cattle within the reservation and to remove such cattle found to be illegally within the reservation under the laws of the tribe has been recognized. Morris v. Hitchcock, 21 App. D.C. 565 (1903), aff'd 194 U.S. 384. See also Crabtree v. Madden, 54 Fed. 426 (C.C.A. 8th, 1893); 18 Op. A.G. 34, 36; 23 Op.
 



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OPINIONS OF THE SOLICITOR

MAY 17, 1941

A.G. 214, 220, 528. In the Crabtree case the court stated that if the tribe had the authority to impose the tax it had an equal right to prescribe the remedy (at p. 429). So here, if the tribe has authority to protect the lands of the reservation from trespassing livestock, as I believe it has, it has equal authority to provide the appropriate and usual remedy.

    (3) Because of the summary procedure for sale, it is important that the notice provisions be adequate to give the owner an opportunity to recover his cattle before sale. Since it is possible that the owner may not be known, it might be well to suggest to the council that they provide some procedure for notice by posting or publication.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.


TRIBAL ROLLS FOR THE PURPOSE OF
DISTRIBUTING TRIBAL FUNDS AND FOR
ALLOTMENT PURPOSES

 

May 17, 2941.

Syllabus


    1. The tribal rolls compiled under the act of June 30, 1919 (41 Stat. 9, 25 U.S.C.A. sec. 163), may be considered final tribal rolls only for the purpose of distributing tribal funds segregated under section 28 of the act of May 25, 1918 (40 Stat. 591, 25 U.S.C.A. sec. 162), and, as a result of the repeal of section 28 of the 1918 act, these tribal rolls have become historical documents required to be used only for the distribution of such funds as were segregated under section 28 and remain un distributed.

    2 (a). The Blackfeet tribal roll compiled for allotment purposes under the act of June 30, 1919 (41 Stat. 16), but treated by Congress and the Department as the final tribal roll for all distribution by the Federal Government of tribal property, need no longer be considered the determining tribal roll since sections 16 and 17 of the Indian Reorganization Act, under which the tribe is organized, authorize the determination by the tribe of its membership and of the management and disposition of tribal property.

    2 (b). The persons whose names appear on the Blackfeet tribal roll compiled under the act of June 30, 1919, have no vested right in undistributed and unsegregated tribal property and cannot prevent the management and disposition of tribal property by the tribe under the authority of the Indian Reorganization Act and in accordance with the tribal constitution and charter.

    3. Classification of various enrollment acts according to legal effect.

Memorandum to the Commissioner of Indian Affairs:

    You have asked my advice on the general problem of the place in present-day tribal activities of the final tribal rolls compiled under section 28 of the act of May 25, 1918 (40 Stat. 591, 25 U.S.C.A. sec. 162), and the act of June 30, 1919 (41 Stat. 9, 25 U.S.C.A. sec. 163), and various acts relating to specific tribes.

    Your memorandum states that these rolls were made "with a view to closing out the affairs of the several Indian tribes, of distributing their assets and terminating their legal existence." You report that as late as 1932 the Department held in the Solicitor's opinion of August 13, 1932 (M. 26520) that an Indian born subsequent to the closing of the Fort Hall tribal roll could not be added to the tribal membership for the purpose of sharing in a tribal payment authorized subsequent to the closing of the roll. However, as you indicate, the tribes were not in fact disbanded and their tribal activities have increased rather than diminished in recent years, particularly as a result of the Indian Reorganization Act. The question of the present effectiveness of the tribal rolls compiled under sections 162 and 163 of title 25 of the Code is complicated, you add, by the fact that section 162 was repealed by the act of June 24, 1938 (52 Stat. 1037).

    In order to point the problem for my consideration you have formulated the following two questions:

    "No. 1. The Act of May 25, 1918 authorized the segregation of tribal funds; the Act of June 30, 1919 authorized the making of final rolls for the purpose of carrying out the intention of the prior Act: Does repeal by the Act of June 24, 1938, of the applicable section of the prior Act terminate the validity of the final rolls compiled in accordance there with?

    "No. 2. In view of the fact that the Blackfeet Indians have organized under the Indian Reorganization Act: (a) Is the roll authorized by the Act of June 30, 1919 (41 Stat. 3-16) still the determining tribal roll for all purposes; (b) More specifically, have vested interests in tribal property devolved upon those persons whose names appear on the final roll to such an extent as to prevent any dis-
 



1050

DEPARTMENT OF THE INTERIOR

MAY 17, 1941

tribution either of tribal property or of earnings derived from the use of tribal property to the membership provided for in the Blackfeet Constitution and By-laws?"

    No. 1. In asking whether the repeal of section 162 of title 25 of the Code terminated the validity of the final rolls compiled in accordance with that section and section 163, the use of the word "validity" is not precise or appropriate in this connection. The repeal did not terminate the validity of the rolls for all past distributions of tribal funds but, in my opinion, as will be shown, it did terminate the utility and function of these rolls in the future since no further segregation of tribal funds is possible under section 162.

    Section 162 authorized the segregation of the funds of any tribe susceptible of segregation, so as to credit an equal share to each recognized member of the tribe, as individual Indian moneys, provided that a final roll should first be made of the membership of such tribe. Section 163 supplemented this section by authorizing the Secretary of the Interior to cause a final roll to be made of the membership of any tribe which, when approved by the Secretary, was to "constitute the legal membership of the respective tribes for the purpose of segregating the tribal funds as provided in the preceding section." The language quoted makes clear that the rolls prepared under that section are for the purpose of distributing tribal funds segregated under section 162. The rolls are not declared to be the final tribal rolls for all purposes of tribal life.

    The Comptroller General's decision of March 15, 1923 (2 Comp. Gen. 554), cited by you, does not necessitate a contrary view. In fact it substantiates the opinion that rolls prepared under section 163 need be considered final only for the purpose of distributing funds segregated under section 162. The decision holds that a fund segregated under section 162 subsequent to the making of a roll for the purpose of a prior distribution must be distributed in accordance with that roll, since the roll once made "constitutes the legal membership of the tribe for the segregation of not only the particular tribal fund considered at the time such final roll is made but for all other tribal funds susceptible of and subsequently segregated for distribution."

    While the Solicitor's Opinion of August 13, 1932, referred to by you, relies upon the Comptroller General's holding, above quoted, it does carry the holding beyond its limit by determining that a roll compiled under section 163 must be used for the pro rata distribution of a tribal fund authorized under a special act and not made under section 162. In reaching this determination the opinion holds, in effect, that a roll made under section 163 is final for all subsequent pro rata distributions of tribal funds, whether or not the fund is one susceptible of segregation under section 162.

    I cannot agree with this extension of the Comptroller General's decision. It is, in fact, inconsistent with the advice given by the Comptroller General in his letter to this Department of December 20, 1922, that a final roll made under section 163 need not be adhered to for the purpose of a per capita distribution of a treaty annuity appropriated annually by Congress since such appropriations are not tribal funds in the Treasury susceptible of segregation within the meaning of section 162.

    In any case, there is nothing in any decision of this Department or of any other agency, of which I am aware, nor in sections 162 and 163 themselves, which requires that the rolls compiled under section 163 shall govern tribal membership thereafter in the matter of voting in tribal affairs, organizing under a tribal constitution, sharing in the use of tribal land and credit funds, or for any other tribal purpose, even the allotment of land, except a pro rata distribution of funds.

    This office has previously taken the position that the tribal rolls compiled under section 163 were only for the purpose of distributing tribal funds. This statement was made in a discussion of the power of Indian tribes to define their membership, wherein it was held that "The power of the Indian tribes in this field is limited only by the various statutes of Congress defining the membership of certain tribes for purposes of allotment or for other purposes, and by the statutory authority given to the Secretary of the Interior to promulgate a final tribal roll for the purpose of dividing and distributing tribal funds (citing section 163)." (Solicitor's Opinion, October 25, 1934 (55 I.D. 14, at 33).) Under this opinion the power of the tribe to determine its membership must be considered limited only by the express terms of congressional enactments.

    The Department has already narrowed down the limitations on tribal action in this field imposed by section 163 by a definite holding that rolls prepared under section 163 were final as against tribal action only for the purpose expressly stated in that section; i.e., for the distribution of funds segregated under section 162. This holding occurred in the case of the application of Annie Sloan for enrollment on the Puyallup tribal roll prepared under section 163 and for her proportionate share of tribal funds. In a letter of November 29, 1938, approved February 24, 1939, to her attorneys the Department held that, while there was no authority to add her name to the final roll made under
 


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