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trarily calling them an Indian tribe, but only that in respect of distinctly Indian communities the question whether, to what extent, and for what time they shall be recognized and dealt with as dependent tribes requiring the guardianship and protection of the United States are to be determined by Congress, and not by the courts. . ."

    I am of the opinion, therefore, that the allotted Siletz Indian lands are to be treated as reservation lands within the meaning of the acts of February 15, 1901, and March 4, 1911, supra.

    The Assistant Commissioner of Indian Affairs, in his letter of July 6, 1943, expresses some concern as to the effect the decision in the Oklahoma Gas & Electric case may have on the acquisition of lands by the United States for Indian purposes under the Indian Reorganization Act of June 18, 1934,²² and the Oklahoma Indian Welfare Act of June 26, 1936. ²³ The conceded failure of the allotment system to solve the Indian problem ²⁴ culminated in the passage of these two acts, by which the process of allotting and otherwise disposing of tribal lands is terminated, existing trust periods are extended, and provision is made for recognition of tribal organizations and for land purchases by the Federal Government in their behalf. The conclusion already expressed in the Solicitor's opinion of August 24, 1942,²⁵ to the effect that any lands purchased under the act for Oklahoma Indians necessarily constitute Indian reservations, is also applicable to lands acquired under the act of June 18, 1934. That act, however, removes any possible doubt by authorizing the Secretary of the Interior to proclaim new reservations or add the lands to existing reservations.

                                                                                                                                                      FOWLER HARPER,

 Approved: September 16, 1943.
OSCAR L. CHAPMAN, Assistant Secretary.

M-32093.                                                                                                                                         September 20, 1943.

Re:

Liability of the Ute Mountain and Blackfeet Tribes of Indians for certain taxes imposed by the States of New Mexico and Montana, respectively, on the tribes' royalty interests received from oil and gas mining leases on unallotted lands executed pursuant to section 3 of the act of February 28, 1891 (26 Stat. 795), as amended by the act of May 29, 1924 (43 Stat. 244, 25 U.S.C. sec. 398).

1. The act of May 29, 1924 (43 Stat. 244, 25 U.S.C. sec. 398), authorizes the taxation by the States of the production of oil and gas on unallotted lands in all respects the same as production on unrestricted lands and authorizes the Secretary of the Interior to cause the tax assessed against royalty interests to be paid.

2. The Ute Mountain and Blackfeet Tribes are liable for the taxes levied against their interests because all of the taxes sought to be collected on their royalty interests are within the permissive act of Congress.

    20 Smith v. McCullough, 270 U.S. 456, 464; United States v. Noble, 237 U.S. 74, 79; Tiger v. Western Investment Co., 221 U.S. 286; United States v. 7,405.3 Acres of Land (C.C.A. 4th), 97 F. (2d) 417.

    ²¹ Executive Orders Relating to Indian Reserves; III Kapp., pt. III, p. 667, et seq.; IV Kapp., pt. III, p. 1001, et seq.; V Kapp., pt. III, p. 642. et seq.

   ²² 48 Stat. 984, 25 U.S.C. sec. 461, et seq.

    ²³ 49 Stat. 1967, 25 U.S.C. sec. 501, et seq.

    ²⁴ Handbook of Federal Indian Law, ch. 11, sec. 1, subdivision C.

    ²⁵ M. 30582.
 

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have presented for my opinion the question of the liability of the Ute Mountain and Blackfeet Tribes of Indians for certain taxes imposed by the States of New Mexico and Montana respectively on the tribes' royalty interests in oil and gas mining leases. Both of these tribes receive royalty from leases executed pursuant to section 3 of the act of February 28, 1891 (26 Stat. 795), as amended by the act of May 29, 1924 (43 Stat. 244, 25 USC. sec. 398), authorizing the leasing of unallotted Indian lands for mining purposes. The amendatory act of May 29, 1924, supra, provides that

    ". . . the production of oil and gas and other minerals on such lands may be taxed by the State in which said lands are located in all respects the same as production on unrestricted lands, and the Secretary of the Interior is au thorized and directed to cause to be paid the tax so assessed against the royalty interests on said lands: Provided, however, That such tax shall not become a lien or charge of any kind of character against the land or the property of the Indian owner."

    The State of New Mexico levies what is known as a severance tax on certain natural resource products, including oil and gas, severed from the soil of the State. Such tax is payable by the owner or proportionately by the owners thereof at the time of severance.¹ The rate of the tax on oil is two percent of the value thereof.² The tax is required to be paid by those actually engaged in the operation of severing. The reporting taxpayer is authorized to collect and withhold out of the value of said products so severed the proportionate parts of the total tax due from the respective owners of the severed products at the time of the severance.³

The act provides:

    "Every person actually engaged in the severing of any of said products mentioned herein from the soil or actually operating the properties from which said products are severed under contracts or agreements requiring royalty interest, excess royalty, or working interest, either in money or in kind, is hereby authorized, empowered, and required to deduct from any amount due or from anything due, the amount of tax herein levied before making such payments; Provided, however, no such deduction shall be made from any amount or amounts due the United States of America or the State of Mexico as royalty or remal payments." ⁴

    "The payment of the severance tax levied by this act shall be in addition to and shall not affect the liability of the party or parties so taxed for the payment of all state, county, municipal, district and special taxes levied upon their real estate and corporeal property, including the emergency school tax, production and other special taxes. No severance tax shall be levied by any county or political subdivision of the state." ⁵

    The State of New Mexico levies a tax of one eighth of one percent on the proceeds of all oil and gas produced in the State except royalties payable to the United States ⁶ or to the State.⁷ For the purposes of this opinion I shall designate

____________
   ¹ Laws of New Mexico, 1937, ch. 103, sec. 1; sec. 76-1301 New Mexico Stat. 1941, Ann.

    ² Sec. 2; 76-1302.

    ³ Sec. 6; 76-1306.

   ⁴ Sec. 7; 76-1307.

   ⁵ Sec. 15; 76-1315.

  ⁶ The State cannot be presumed to have intended to include the Indians' royalty interests in the exemptions granted on royalty paid to the United States in this and in the severance tax act. See in this connection Laws of New Mexico, 1925, ch. 83, sec. 2, p. 126; sec. 76-1002, New Mexico Statutes, 1941, Annotated, where the State legislature, in providing for operators' net proceeds tax permits the deduction of royalties paid "to the United States, or to any Indian tribe or Indian, being wards of the United States, or the State of New Mexico."

    ⁷ Lews of New Mexico, 1935, ch. 72, sec. 25; sec. 69-231, New Mexico Statutes, 1941, Annotated.
 

this tax as "the oil conservation fund tax." The tax is collected in the same manner as the severance tax is collected.

    The State of Montana levies what it terms a "privilege and license tax" of one-fourth of one cent on every barrel of petroleum produced in the State. The producers are required to pay the tax on petroleum produced for themselves as well as for royalty holders and are to be reimbursed by the royalty holders for the tax paid on their interests in the same manner as the producers are reimbursed for the net proceeds tax paid on crude petroleum produced for others.⁸

    In my opinion, all of these taxes are within the permissive act of Congress and must be paid out of the royalty interests of the Indians.

    The act of May 29, 1924, supra, was considered by the Supreme Court of Montana in the case of British American Oil Producing Company v. Board of Equalization, et al., 54 P. (2d) 129. There the oil company, the owner of a producing oil and gas lease on lands within the Blackfeet Indian Reservation, sought to enjoin the State Board of Equalization from collecting the Montana "corporation license tax," the "operators' net proceeds tax," an oil producers' license tax termed by the court a "gross production tax," and the "royalty owners' net proceeds tax" all arising out of the production and recovery of oil from the leased lands. The Blackfeet Tribe intervened, alleging that by reason of certain treaties and acts of Congress the lands embraced within its reservation were ltax exempt and that the oil produced from the tax-exempt lands and the royalty derived from the production of oil were likewise exempt from taxation.

    The Montana Supreme Court and the United States Supreme Court on appeal ⁹ ruled that all of these taxes fell within the permission given by the act of 1924.¹⁰ The taxes under consideration must likewise be held to be within that permission. The language of the statute is that the "production of oil and gas and other minerals . . . may be taxed by the State in which said lands are located in all respects the same as production on unrestricted lands." All that is essential to the validity of the tax under this broad language is that the tax be one on mineral production and that it be exacted from production on unrestricted lands. The taxes under consideration meet both of these requirements.

    My attention has been called to the fact that the Office of Indian Affairs at one time authorized the payment of the Blackfeet Tribe's proportion ate share of the Montana "privilege and license tax" but that the Department has recently refused to authorize the payment of this tax as well as "the oil conservation fund tax" levied by the State of New Mexico. Such refusal was based on the premise that the act of May 29, 1924, supra, authorized the levy of a gross production tax only and that any other tax levied by the States was unauthorized. Oklahoma ex rel. Oklahoma Tax Commission, et al. v. Barnsdall Refineries, Inc., et al., 296 U.S. 521, was relied on to support this position. There the Supreme Court had under consideration a much more limited assent by Congress to the taxation of the Indians' royalty interests. Congress had authorized the State of Oklahoma to levy a gross production tax on all ail produced in Osage County, Oklahoma, and the Secretary of the Interior was authorized to pay such gross production tax in lieu of all other state and county taxes levied on the production of oil and gas as provided by the state law. The Secretary was also authorized to pay an additional sum of one percent of the amount received by the Osage Tribe of Indians as royalties from the production of oil and gas, such sum to be used by Osage County for the construction and maintenance of roads and bridges in the county.¹¹

    The State of Oklahoma thereafter enacted a law providing for a tax of one-eighth of a cent per barrel on oil produced in the State. The question before the court was whether that tax, when applied to oil produced by lessees on lands of the Osage Tribe of Indians, was within the congressional consent. The court held

    "Congress, in removing the tax immunity, thus had in contemplation the particular tax then on the statute books of Oklahoma, then and ever since described as a gross production tax, the benefits of which would inure to Indians in Osage County by the distribution of a part of the tax to that county. The section bears its own evidence of the intention

  ⁹ 299 U.S. 159.

  ¹⁰ Both courts assumed, under the then prevailing rule laid down in Choctaw O. & Gulf R.R. Co. v. Harrison, 235U.S. 292, Indian Territory Co. v. Oklahoma, 240 U.S. 522; and Jaybird Mining Co. v. Weir, 271 U.S., 609; that even a lessee's interest in oil produced from restricted Indian lands could not be taxed without the consent of Congress. While that rule has now been renounced (Helvering v. Mountain Producers Corporation, 303U.S. 376), so that the State is free to tax a lessee's interest without Congressional consent, the renunciation of this rule does not detract in any way from the validity of the interpretation given by the courts in this case to the 1924 act so far as it affects the taxation of the Indians' royalty interests.

  ¹¹ Section 5 of the Act of March 3, 1921 (41 Stat. 1249, 1250).
 

that the waiver of tax immunity of the production of oil from Indian lands was to be limited to a tax having these characteristics. The tax is described as a gross production tax. It is to be 'paid and distributed, and in lieu of all other state and county taxes levied upon the production of oil and gas as provided by the laws of Oklahoma, . . .' The reference must be taken to be to the laws then in effect, unless we are to indulge the improbable assumption that the state was to be left free to dispense with the requirement that the tax permitted was to be in lieu of all other taxes . . .

                *                                *                                *                                *                                *

    "The Supreme Court of Oklahoma emphasized the fact that the 1/8 of a cent per barrel tax, denominated by the statute an 'excise,' is an excise tax distinguishable from a property tax in lieu of which the gross production tax is levied, and different from the gross production tax in its temporary character and the method of its computation and distribution, and so concluded that it is not a tax contemplated by the congressional consent. Construing that consent with the strictness appropriate to the interpretation of a waiver of a defined tax immunity of the sovereign, we think the conclusion of the state court was right."

    At the time the act of May 29, 1924 was under consideration by the House of Representatives the question was raised as to the situation with respect to taxation. The statement was made that since Congress had recently passed two acts requiring the Quapaw Indians ¹² and the Osage Indians ¹³ to pay the gross production tax to the state it was thought only fair, inasmuch as that same kind of taxation was going to be extended, perhaps into various states, that the gross production tax should go to the upbuilding of the state. The statement was also made that the bill under consideration gave the state the same kind of tax as was given under the Osage act.¹⁴ It is significant to note, however, that the wording of the two sections is materially different. The wording of the Quapaw act referred to in the debate is identical with the 1924 act. It must be assumed that had Congress intended to limit the right of the states to a tax on the gross production, in lieu of all other taxes, as was done in the Osage act, Congress would have chosen the words of that act rather than the broader words of the Quapaw act.

    My conclusion is that the States of New Mexico and Montana, is seeking to impose the taxes under consideration, plainly come within the permission given by the act of May 29, 1924. This conclusion makes it unnecessary, of course, to decide whether such taxes could be validly assessed and collected by the States in the absence of Congressional consent (compare Oklahoma Tax Commission v. United States, decided by the United States Supreme Court on June 14, 1943).

                                                                                                                                                      FOWLER HARPER,

Approved: September 20, 1943.
OSCAR L. CHAPMAN, Assistant Secretary.

Memorandum for the Commissioner of Indian Affairs:

    I return herewith your Ietter of May 21 to the Secretary of the Interior with which you enclosed a letter from J. H. Hill, Esq., attorney for the administrator of the estate of Andrew Baconrind. Mr. Hill requested my opinion as to whether Marie Baconrind, a white woman, may inherit any part of the restricted estate of Andrew Baconrind, an unallotted Osage Indian who died on February 1, 1943, without issue. He was survived by his widow, Marie Baconrind, and by his mother, a Kaw Indian, both of whom would share equally in the decedent's estate under the laws of Oklahoma.

    The inheritance of Osage estates by non-Indians is, however, restricted by section 7 of the act of February 7, 1925 (43 Stat. 1008), which provides

    "Hereafter none but heirs of Indian blood shall inherit from those who are one-half or

  ¹³ Section 5 of the act of March 3, 1921 (41 Stat. 1249, 1250).

  ¹⁴ 65 Cong. Rec. 6855 (1924).
 

more Indian blood of the Osage Tribe of Indians any right, title, or interest to any restricted lands, moneys, or mineral interests of the Osage Tribe; provided, that this section shall not apply to spouses under existing marriages."

    Andrew Baconrind's father was George Baconrind, Osage Allottee No. 746. George Baconrind's name appears on the roll of enrolled Osage Indians of one-half or more Indian blood approved on September 24, 1921, as having 13/16th degrees of Indian blood. The evidence submitted to the Secretary of the Interior at the time that roll was made up shows that all of George Baconrind's Indian blood was Osage. Andrew Baconrind's mother is a member of the Kaw Tribe of one-half or more Indian blood, none of which is said to be Osage. Andrew Baconrind, therefore, possessed more than one-half Indian blood, 13/32ds of which was Osage blood.

    Section 7, upon which Marie Baconrind's right to inherit depends, is ambiguous. The words quoted above are susceptible of two possible meanings. They may be construed to bar non-Indians from inheriting from any member of the Osage Tribe who possessed one-half or more Indian blood or to bar non-Indians from inheriting only from those members of the Osage Tribe who possessed one half or more Osage Indian blood.

    In my opinion it was the intention of Congress to bar inheritance by non-Indians from any member of the Osage Tribe who possessed one-half or more Indian blood regardless of the quantum of Osage blood which he possessed. This construction of the section is supported by the legislative history of the act. The evident purpose of section 7 was to preclude the wealth of the Osage Indians from going to white persons and to preserve that wealth for the Indians. The section was suggested by the Commissioner of Indian Affairs who pointed out to the Senate Committee on Indian Affairs considering the various bills which had for their purpose a modification of the Osage Act of March 3, 1921 (41 Stat. 1249), that there was a tendency on the part of white persons to marry into the Osage Tribe be cause of the wealth of its members. The Commissioner stated that the intention of the section was ". . . to keep this estate so that it will not go to other than Indians, except that, I believe, we now recognize an Indian of half or more." ¹ The explanation of the House Conferees was that this section "Provides that hereafter anyone not of Indian blood cannot inherit from Osage Indians who are one-half or more Indian blood . . ."

    Andrew Baconrind was a member of the Osage Tribe at the time of his death. His restricted estate consists of one and a fraction Osage headrights, surplus funds, trust funds in the Treasury of the United States, and inherited Osagelands. His estate came to him by reason of his having been born to an Osage allottee from whom he inherited the headrights, funds and lands. It was a well-known fact in 1925 that Osages were intermarrying with other tribes of Indians and nothing in the legislative history of section 7 leads me to believe that Congress intended to prohibit the estates of Indians of one-half or more Osage Indian blood going to non-Indians and at the same time to allow the inheritance by non-Indians of restricted Osage lands and funds from restricted Indians of one-half or more Indian blood whose degree of Indian blood happened to be made up of less than one-half Osage blood. The more reasonable construction of the section is that Congress was endeavoring to keep the restricted property of members of the Osage Tribe of Indians of one-half or more Indian blood in the hands of Indians.

    My conclusion is in accord with the construction given by the Department to similar words contained in the act of March 3, 1921 (41 Stat. 1249), dealing with the Osage Indians. By section 3 of that act "all restrictions against alienation of their allotment selections, both surplus and homestead, of all adult Osage Indians of less than one half Indian blood" were removed and the Secretary of the Interior was required to determine, within four months after the passage of that act, "what members of said tribe are of less than one half Indian blood."

    To obviate the possibility of the omission from the required roll of any member of the Osage Tribe entitled to have restrictions against the alienation of his lands removed, the Department prepared, in addition to the roll required by the 1921 act, a roll to show the names of all members of the Osage Tribe having one-half or more Indian blood. In this way all members of the tribe appeared on either one or the other of the two rolls approved in 1921.

    In determining whether or not a particular Indian came within the meaning of the words "Osage Indians of less than one-half Indian blood' all of

___________
    ¹ Hearings before the Committee on Indian Affairs, United States Senate, 68th Cong., 1st sess., on S. 2065 and S. 2933, part 2, p. 249.
 

the Indian blood of the member was considered. As an example, Paul Cedar appears on the roll of members of the Osage Tribe of one-half or more Indian blood when as a matter of fact his Osage blood amounted only to one-eighth, his father having been one-fourth Osage and one-quarter Quapaw while his mother was a half-blood Creek Indian. George Hildebrand appears on the same roll. His father was a half-blood Cherokee while his mother was a half-blood Osage.

    The blood of those of less than one-half Indian blood was computed in the same manner. Many shown on the roll of members of the tribe of less than one-half Indian blood, approved July 1, 1921, as having one-fourth or one-eighth Indian blood had as a matter of fact much less than that amount of Osage blood.

    The Department thus construed the 1921 act as removing restrictions against the lands of mem bers of the Osage Tribe of less than one-half Indian blood rather than of members of the Osage Tribe of less than one-half Osage Indian blood. I believe that a similar construction should be placed upon section 7 of the act of February 7, 1925, supra.

    Since Andrew Baconrind was a member of the Osage Tribe of more than one-half Indian blood the disposition of his estate is limited by section 7 of the act of February 7, 1925, supra, and his white widow may not share therein.

    The attorney for the administrator, should be so advised.

                                                                                                                                                     FOWLER HARPER,

M-33319                                                                                                                                               October 30, 1943.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    Joe Redthunder, of Nespelem, Washington, has filed a claim in the amount of $64 for compensation for damage to his crops as a result of the failure of the Office of Indian Affairs to furnish him the water which he was entitled to receive from the irrigation system of the Colville Indian Irrigation project, Colville Indian Reservation, Washington. The question whether the claim should be paid under the act of February 20, 1929 (45 Stat. 1252, 25 U.S.C. sec. 388), has been submitted to me for opinion.

    It is my opinion that the claim should be paid.

    The facts regarding this claim are not in dispute. The claimant was entitled to receive water from the Colville Indian Irrigation project for irrigation of 102 acres of land on whch he was cultivating an alfalfa crop. Water was withheld from the claimant's tract of land after a determination by the Superintendent of the Colville Indian Agency that turning water into Little Nespelem Creek, used as a part of the irrigation system to carry water to the land of the claimant, would cause the flooding of other land adjacent to the creek and damage the crops of the owner of that land. After a careful investigation had been made by Extension Agent Milton R. Wood, Irrigation Manager H. C. Cushing, and F. A. Gross, Superintendent of the reservation, it was determined that the claimant had sustained substantial damage to his crops as a result of the withholding of the water. It was estimated that the yield of alfalfa from the claimant's land was thereby reduced by eight tons, and that the value of hay of this type was $8 per ton in the field. On August 14, 1943, the claimant entered into a contract with the United States, subject to the approval of the Assistant Secretary of the Interior, agreeing to accept a total sum of $64 in full settlement of the claim.

    Recovery under the act of February 20, 1929, supra, is permitted when the damage is caused by reason of the operations of the United States, its officers or employees in the survey, construction, operation or maintenance of Indian irrigation works. The Comptroller General has ruled that, to permit payment, the damage sought to be recovered under this act, and similar appropriation acts, must be the result of a direct act of omission or commission on the part of an officer or employee of the United States, in which no element of negligence appears. See Comptroller General's decisions in the case of C. J. Mast, A. 45268, June 30, 1933 (unpublished), and in the case of Sam Wade, A. 47614, August 5, 1933 (unpublished).

    That the damage in this instance was the direct result of nonnegligent action, or determination not to act, on the part of officers and employees of the Government in the operation of the irrigation project seems obvious. This case is distinguishable from the Sam Wade case, supra, in which it was held by the Comptroller General that compensation for damages caused by the negligent omission of an employee to perform his duty to turn water into the irrigation system could not be paid under an appropriation act containing provisions similar to those of the 1929 act, supra. Here the failure to
 

supply water for the claimant's use was not due to a negligent omission of an employee to perform a duty, but was pursuant to an administrative determination made by an officer of the Government. It is true that damage to the claimant's crop was foreseeable, if indeed not substantially certain, as a result of withholding the water. This, however, is not sufficient to characterize the conduct of the Government employees as negligent. The Superintendent of the Indian Agency was faced with two alternatives, either of which involved potentiality of harm to someone. If the water were withheld, claimant's crops would likely suffer; if it were not withheld, other lands would probably be flooded. In such a case, the actor must weigh the magnitude of the risks involved and in doing so, he may and should consider the gravity of the harms likely to result from the two courses of conduct open to him. (See Restatement of Torts, sec. 295, comment (a) .) In this case the action calculated to cause the lesser damage was taken. Altogether, it is clear that the decision of the Superintendent and the orders given and executed pursuant thereto were reasonable under the circumstances and, therefore, not negligent.

    Since the damage for which compensation is requested resulted from the nonnegligent action of Government officers and employees in the operation of Indian irrigation works, and the estimate of the amount of damage suffered by the claimant, agreed upon by the claimant and the Office of Indian Affairs, appears to be reasonable, the claim should be paid in full.

                                                                                                                                                      FOWLER HARPER,

Approved: October 30, 1943.
OSCAR L. CHAPMAN, Assistant Secretary.

 Memorandum for Mr. Zimmerman, Assistant Commissioner of Indian Affairs:

    Reference is made to your memorandum of July 12, answered in part by former Solicitor Gardner's memorandum of July 26, concerning a claim by the Osage Tribe of Indians against the Concho Sand and Gravel Company for limestone removed from the NW 1/4 NW 1/4 Section 23-25-8. In that memorandum you suggested that this claim be considered by this office in connection with its review of the claim of the Osage Tribe against Joseph D. Mitchell arising out of a lease to Mitchell from the tribe and a sublease or assignment by Mitchell to the Concho Company. The Mitchell lease and sublease or assignment does not cover the NW 1/4 NW 1/4 of Section 23-25-8. The claim of the tribe for limestone removed from that 40-acre tract is not therefore involved in the Mitchell controversy.

    In a letter dated June 2, Superintendent Hall, after reviewing the facts with respect to the claim of the tribe against the Concho Company, suggests that suit be filed for the sum of $1,046.25 with in terest from the dates of removal of the stone. The amount named represents royalty at the rate of ten cents per cubic yard less a payment of $627.75 made by Concho on January 11, 1943. A royalty payment, may or may not, depending upon the circumstances of removal of the stone, represent the compensation to which the tribe is entitled. Many cases may be cited for the proposition that if a trespass is willful, damages may be recovered to the full extent of the value of the property removed, but that if the trespass is an honest mistake the trespasser may deduct his costs from the value of the property. See for example Wooden-Lure Company v. United States, 106 U.S. 432; Benson Mining and Smelting Company v. Alta Mining and Smelting Company, 145 U.S. 428; Pine River Logging Company v. United States, 186 U.S. 279; United States v. St. Anthony RR Company, 192 U.S. 524; note 7 A.L.R. 908-933. Where the trespass is the result of an honest mistake, the damages are said to be the value of the property in place (the product in the ground before being disturbed) and where the circumstances make it impractical to fix this value the same result is arrived at by a determination of the reasonable royalty that would have been paid for the right of mining under similar circumstances. See for example Turner v. Seep, 167 Fed. 646 (Indian oil lease); Ashurst v. Coopers' Administrator, 232 Ky. 648, 23 S.W. (2d) 916; Johns Run Coal Company v. Littlefork Coal Company, 223 Ky. 230, 3 S.W. (2d) 623.

    The information at hand is sufficient to determine whether the trespass of the Concho Company was willful or the result of an honest mistake. It is clear that the Company removed the limestone with full knowledge that it had no lease from the Osage Tribe. It is also clear, however, that the Company paid damages to the surface owner and it may be that it proceeded in good faith upon the theory that the surface owner owned the limestone free from any claim on the part of the Osage Tribe. If upon further inquiry such are found to be the facts, it would be appropriate to compute the claim of the tribe on a
 

royalty basis. In that event I would suggest that further demand for payment of the royalty with interest be made on the Company and that upon its failure to respond the matter be submitted to the Department of Justice for collection through court proceedings. If, however, it be found upon further inquiry that the Company proceeded with knowledge of and in disregard of the tribe's claim of ownership of the limestone, the Company should be held liable for the full value of the limestone without any allowance for expenses incurred or for any value the Company may have added to the product by its labor. In that event, a determination of the value of the limestone should be made and be followed by a demand on the Company for payment of the amount so determined. Upon failure of the Company to make payment, collection should be sought through judicial proceedings.

    Superintendent Hall's letter of June 2 with its enclosures is returned herewith.

                                                                                                                                                    FOWLER HARPER,

M-33414                                                                                                                                             December 9, 1943.

Re:

Secretarial approval of deeds or partition proceedings in connection with certain land in Miami County, Kansas, originally allotted to Wah-port-ge-quah or Mrs. Ward under the treaty of May 30, 1854 (10 Stat. 1082), with the Kaskaskia, Peoria, Wea and other Indians in Kansas.

1. The Secretary's approval at this date would relate back to the date of the deeds or the date of the partition proceedings.

2. In the absence of proof that the Indian heirs received just compensation, it would be improper to recommend Secretarial approval of the deeds or the partition proceedings.

    Reference is made to the Assistant Secretary's letter of July 29, 1943, to R. C. Jones, Secretary to the late Congressman U.S. Gayer, regarding the title to certain tracts of land in Miami County, Kansas, originally reserved for Wah-pon-ge-quah or Mrs. Ward under the treaty of May 30, 1854 (10 Stat. 1082), with the Kaskaskia, Peoria, Wea and other Indians in Kansas. Mr. Jones was advised that this office would be required to render an opinion as to the legal questions involved. Formal request for an opinion was made by the Assistant Commissioner of Indian Affairs by memorandum dated August 30, 1943. The reference numbers are Ten.-Acq. 31037-10 and 33372-49. It should be observed that this opinion has been held in abeyance at the request of Mr. Jones, to permit him to complete his investigation of the facts.

    The land to which Mr. Jones desires the title cleared by Secretarial approval of certain deeds, if such approval may be properly given, is described as the SW 1/4 SW 1/4 Sec. 14, the SE 1/4 SE 1/4 Sec. 15, and the NE 1/4 NE 1/4 Sec. 22, all in T. 16 S., R. 24 E., 6th P.M., Miami County, Kansas. This land was a part of the reservation of Wah-pon-gequah or Mrs. Ward. The patent issued to her contained restrictions against alienation without the approval of the Secretary of the Interior. No deeds affecting the above described land have been approved by the Secretary.

   The records of the Indian Office disclose that the land was involved in a partition proceeding in the District Court of Miami County, Kansas, in 1865. Certain lands were set off and assigned to Mary E. Ward, Milton (also known as Ashel M.) Ward, Irene Ward and Ida Ward, heirs of the original allottee. The remainder of the land, approximately 320 acres, was decreed to be sold by the sheriff as it was found to be inexpedient to divide this land. Certain deeds were executed by W. T. Shively, as guardian of the minor heirs of Mrs. Ward, and certain other deeds were executed by the sheriff acting under order of court, None of these deeds has ever been approved by the Secretary. The matter of a proval of various deeds has been presented to the Department on innumerable occasions down through the years. (See: National Archives File No. 68, Peoria-Wa-pon-ge-quah or Mrs. Ward; Land 52752-1900; Land Sales 31037-10, 93000-13, 35560-15). No applicant has been able to furnish proof that the Indian heirs received any compensation for the sale of any part of the land under consideration. A search of the early day court records and of abstract company records has been unavailing, according to Mr. Jones. In the National Archives File No. 68, supra, is a letter dated April 15, 1904, addressed to the Secretary of the Interior by Mary E. Wallace and Ashel M. Ward, heirs of the original allottee, protesting against the approval by the Secretary of the guardian's deeds and of the sheriff's deeds. These Indian heirs state that they never received any com pensation for the sale of the land. Other attempted
 

conveyances of parts of the land were made by heirs of Mrs. Ward at various times. No deeds conveying any part of the land under consideration have ever been approved by the Secretary.

    If the Secretary at this date should approve the deeds or the partition proceedings, such approval would relate back to the date of such deeds or such proceedings. Lomax v. Pickering, 173 U.S. 26; Anchor Oil Company v. Gray et al., 256 U.S. 519. Since the claimants to the title are unable to show that the Indian heirs received a fair consideration for the land, it is not proper to recommend to the Secretary his approval of these deeds or court proceedings, simply because the present claimants have purchased and improved the property in good faith from their predecessor in title. The present claimants are charged with notice of the irregularities of record and the fact that the conveyances of the interests of the Indian heirs have not received the approval of the Secretary of the Interior as required by law.

    The title tothe lands under consideration may be cleared by Secretarial approval if the claimants to the title present quitclaim deeds from all of the heirs at law of Wah-pon-gequah or Mrs. Ward, deceased, supported by proper proof of heirship, or if they perfect a suit to quit title. Should the latter course be pursued, the court decree may be submitted and consideration will be given to the approval of the decree by the Secretary. The rights of the Indian heirs must now be protected by the Secretary to the same extent that the rights of the original Indian allottee were protected.

                                                                                                                                                       FOWLER HARPER

Approved: December 9, 1943.
OSCAR L. CHAPMAN, Assistant Secretary.

M-33339                                                                                                                                           December 24, 1943.

Re:

Are purchases made by individual Indians on purchase orders issued by Indian Agency superintendents and paid for out of the individual Indians' restricted accounts subject to State sale taxes?

Where the purchases are made on Indian reservations the Indians are exempt from payment of State sales taxes because Congress has given exclusive authority to the Commissioner of Indian Affairs to regulate trade with the Indians on Indian reservations and prices at which goods shall be sold to the Indians.

Where the purchases are made outside of Indian reservations the Indians are not exempt from the payment of State sales taxes unless the restricted funds used to make the purchases have been declared by Congress to be nontaxable.

MY DEAR MR. SECRETARY:

    The Office of Indian Affairs has informally requested my opinion on the question whether purchases made by individual Indians on purchase orders issued by Indian agency superintendents and paid for out of the individual Indians' restricted accounts at the agency are subject to State sales taxes. I am informed that it has been the practice of some of the agency superintendents in issuing such purchase orders to insert thereon the words "State sales tax exempt." The Superintendent of the Taholah Indian Agency in the State of Washington, who has been inserting such a statement on purchase orders issued by him, states that his action in this respect has recently been questioned. The Office of Indian Affairs, therefore, desires to be informed whether such purchases are exempt from State sales taxes.

    The answer to this question depends upon whether the sales covered by the purchase orders are made on or off an Indian reservation.

    A similar question relating to the application of State sales taxes to sales to Indians was before this office in 1940. In an opinion approved on May 8 of that year ¹ it was held that because Congress had already given exclusive authority to the Commissioner of Indian Affairs to regulate trade with the Indians on Indian reservations and the prices at which goods should be sold to the Indians,² the field was closed to State action. Therefore, sales to Indians on reservations were held not to be subject to State taxation and Indian purchasers on reservations were held not required to pay the additional cost which may be added to the price of the article to cover the tax.

____________
  ¹ M. 30449.

  ² 25 U.S.C. secs. 261 through 266.
 

    Since that opinion was written Congress has waived the immunity of individuals from the payment of State sales taxes formerly existing with respect to sales made in Federal areas. By the act of October 9, 1940 (54 Stat. 1059, 4 U.S.C. secs. 12-18), Congress permitted the States to extend their sales taxes to persons residing on or carrying on business, or to transactions occurring, in Federal areas. That act, however, contains no indication of any intent on the part of Congress to interfere with the regulation by the Commissioner of Indian Affairs of trade with the Indians on Indian reservations or to burden the Indians with a tax to which they could not then legally be subjected. On the contrary, section 5 of the act declares that the permission given to the States shall not "be deemed to authorize the levy or collection of any sales tax on or from any Indian not otherwise taxed," While this declaration is somewhat awkwardly phrased the meaning is plain. Basic Indian immunities under the law in force prior to the enactment were not to be disturbed nor were new immunities to be created. The legality of State taxes on sales to Indians thus is to be determined not by but independently of the provisions of the act of October 9, 1940. Under this view, the opinion on May 8, 1940, is correct in so far as it holds that purchases by Indians on Indian reservations are not subject to the sales tax law of the State.

    The Indian superintendents should, accordingly, be instructed that merchandise obtained by Indians on purchase orders issued to merchants doing business on Indian reservations and paid for out of the Indians' restricted funds is not subject to State sales taxes.

    The opinion of May 8, 1940, also held that when Indians purchase goods off the reservations they are not exempt from State sales taxes except with respect to special types of Indian purchases. One of these .types was purchases made by Indians or Government agents for the Indians off the reservation where such purchases were made with restricted funds. Such purchases were considered to be instrumentalities of the Federal Government not subject to State taxation upon the principle that the State through the use of its taxing power could not binder or interfere with an instrumentality of the Federal Government. The opinion was there expressed that a State tax on the acquisition of property by Federal authority placed an unconstitutional burden upon the Federal Government. Panhandle Oil Co. v. Knox, 277 U.S. 218, and Graves v. Texas Co., 298 U.S. 393, were cited to support this position. The opinion, however, recognized that in 1940 the law with respect to what constituted an unconstitutional burden upon a Federal instrumentality was in a state of flux and recognized the tendency of the courts to restrict the tax immunity of agencies of the Federal Government where the burden on the Government was not clear and direct. The holding appeared justified in view of the then confused state of the law.

    The Supreme Court has in the last few years had occasion to consider whether a State sales tax ultimately borne by a Federal instrumentality is an unconstitutional burden on the Federal Government as well as the immunity of restricted funds of Indians from State taxation. It has overruled its former decisions in both fields to such an extent that a reexamination of the question of the tax immunity of the Indians so far as purchases made off the reservation with their restricted funds are concerned must be made.

    At the outset, it must be conceded that the only effect of a State sales tax on purchases made either by or for the Indians out of their restricted funds, so far as the Federal Government is concerned, might be to increase the cost to the Government of providing relief for the Indians. In other words, if the Indians' purchasing power were decreased by the addition of the State sales tax, the Government might he called upon to furnish additional services and merchandise for them. In this way the economic burden of the tax might be passed on to the United States. The Supreme Court has held that this fact does not make the tax a tax upon the United States which infringes its constitutional immunity from State taxation.

    In the case of Alabama v. King & Boozer, 314 U.S. 1, the court, in sustaining a State sales tax on goods purchased by a contractor with the United States on a "cost-plus-a-fixed-fee" contract, under which the tax, though paid by the contractor, was borne ultimately by the Federal Government said at page 9:

    "The Government, rightly we think, disclaims any contention that the Constitution, unaided by Congressional legislation, prohibits a tax exacted from the contractors merely be cause it is passed on economically, by the terms of the contract or otherwise, as a part of the construction cost to the Government. So far as such a nondiscriminatory state tax upon the contractor enters into the cost of the materials to the Government, that is but a normal incident of the organization within the same territory of two independent taxing sovereignties. The asserted right of the one to be free of taxation by the other does not spell immunity from paying the added costs, attributable to

the taxation of those who furnish supplies to the Government and who have been granted no tax immunity. So far as a different view has prevailed, see Panhandle Oil Co. v. Knox, supra; Graves v. Texas Co., supra, we think it no longer tenable."

    "The trend of our decisions is not to extend governmental immunity from state taxation and regulation beyond the national government itself and governmental functions performed by its officers and agents. We have recognized that the Constitution presupposes the continued existence of the states functioning in coordination with the national government, with authority in the states to lay taxes and to regulate their internal affairs and policy, and that state regulation like state taxation inevitably imposes some burdens on the national government of the same kind as those imposed on citizens of the United States within the state's borders, see Metfalf & Eddy v. Mitchell, supra, 523-24. And we have been held that those burdens, save as Congress may act to remove them, are to be regarded as the normal incidents of the operation within the same territory of a dual system of government, and that no immunity of the national government from such burdens is to be implied from the Constitution which established the system, see Graves v. New York ex rel. O'Keefe, 306 U.S. 466, 483, 487."

    "We have this day held in Penn Dairies v. Milk Control Commission, ante, p. 261, that a different decision is required where the contract and the sales occur within a state's jurisdiction, absent specific national legislation excluding the operation of the state's regulatory laws. The conclusions may seem contradictory; but in preserving the balance between national and state power, seemingly inconsequential differences often require diverse results. This must be so, if we are to accord to various provisions of fundamental law their natural effect in the circumstances disclosed. So to do is not to make subtle or technical distinctions or to deal in legal refinements. Here we are bound to respect the relevant constitutional provision with respect to the exclusive power of Congress over federal lands."

    Until recently it has been the position of this Department that restriction against alienation of the funds of the Indians implied immunity from State taxation. In the case of Oklahoma Tax Commission v. United States, 319 U.S. 598, decided June 14, 1943, the court had before it the question of whether funds restricted by act of Congress were immune from State estate taxes. One of the arguments advanced by the Government on behalf of the immunity of such funds was that Congress by placing restrictions upon the funds manifested a purpose to exempt them from State taxes. The Court found that restriction against alienation, without more, was not the equivalent of a congressional grant of tax immunity. It pointed out that the doctrine of constitutional immunity from taxation for the income of the Indians' holdings on the Federal instrumentality theory had been renounced in Helvering v. Mountain Producers' Corp., 303 U.S. 376, and that the immunity formerly said to rest on constitutional implication could not now be resurrected in the form of statutory implication. The Court then considered the act by which the particular funds there in question were restricted and found nothing in that act suggesting that Congress meant to exempt such restricted funds from State taxation. The Court pointed out further that when Congress wants to require both nonalienability and nontaxability it can, as it so often has done, say so explicitly.
 

    While it is true that the taxes considered in that case were estate taxes levied by the State of Oklahoma on the transfer of estates of deceased members of the Five Civilized Tribes and while the court found that the Indians of the Five Civilized Tribes have no tribal autonomy, such as exists on other reservations, and that there is little to distinguish them from other citizens of the State, yet it must be recognized that the court did hold that restrictions, without more, are not enough to remove Indian funds from the sphere of State taxation.

    Therefore, it must be held that unless the particular restricted funds used to make the individual purchases have been declared by Congress to be nontaxable, such funds have no immunity from State taxation when used outside of an Indian reservation. If an Indian goes off the reservation to make his purchases, such purchases may not be considered exempt from State sales taxes.

    That part of the opinion of May 8, 1940, which held that purchases made by an Indian or by Government agents for an Indian with restricted funds outside of an Indian reservation were exempt from the payment of State sales taxes is overruled, and the superintendents should be instructed that merchandise obtained on purchase orders issued to merchants doing business outside of the reservation and paid for with restricted funds is subject to State sales taxes unless Congress has provided that the funds used are tax exempt.

                                                                                                                                                      FOWLER HARPER,

Approved: December 24, 1943.
OSCAR L. CHAPMAN, Assistant Secretary.

 The tribal council of the Confederated Salish and Kootenai Tribes of the Flathead Reservation may not insist upon distribution of a per capita payment, arising from funds accruing to the tribe subsequent to its organization under the act of June 18, 1934 (48 Stat. 984), upon the basis of the 1920 roll.

The 1920 roll was prepared pursuant to the provisions of 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). Rolls made pursuant to the 1919 act are required to be used only for the completion of the distribution of such funds as have been segregated under the 1918 act and remain undistributed. Those acts grant no personal interest to any individual Indian in the common or communal funds of any tribe.

The roll of 1920 must be regarded as controlling only for the purpose of making payment to enrollees whose names appear on that roll, or their heirs or legatees, of the shares of any tribal funds which have been segregated and individualized pursuant to the act of 1918.

The utility of the roll of 1920 for the purpose of such a segregation was destroyed by the repeal, by section 2 of the act of June 24, 1938 (52 Stat. 1037), of the authority for such a segregation.

By the act of June 18, 1934, supra, Congress affirmatively recognized the rights of Indian tribes who accepted its provisions to determine their membership for all tribal activities.

The Flathead Tribe voted to accept the provisions of the 1934 act and has organized and adopted a constitution thereunder. That constitution prescribes definite rules of membership and is thus determinative of those who are entitled to share in the distribution of tribal property.

Under the provisions of the act of June 18, 1934, and the provisions of the tribal constitution, the tribal council has the privilege of approving or vetoing the per capita payment authorized by the Secretary of the Interior.

If the council approves the per capita payment, distribution thereof must be based on a constitution roll to be adopted by the council.

Article VI, section 1 (h), requires approval by a popular referendum of appropriations by the tribal council of "available applicable tribal funds" in excess of $5,000. Since the funds in question are funds in the Treasury of the United States, they are not available for appropriation by the tribal council and, therefore, section 1 (h) of Article VI of the tribal constitution is without application.

Memorandum for the Commissioner of Indian Affairs:

    This will refer to your referendum of September 17 relating to a per capita payment to the Flathead Indians which the Secretary authorized to be made on April 9, 1943. You request further consideration and interpretation of the memorandum addressed to you on August 20 by this office and you raise two questions with respect to Resolution No. 337 adopted on September 25,
 

1942, by the tribal council of the Confederated Salish and Kootenai Tribes of the Flathead Reservation.

    The pertinent provisions of the resolution for the purposes of this memorandum are as follows:

"WHEREAS, the Confederated Tribes of the Flathead Reservation receive a substantial revenue annually from the rental of its power sites, which income accrues to the credit of the Tribe in the United States Treasury, and

"WHEREAS, the Tribal Council believes that the best interests of the tribe will be served by instituting a program of social and economic improvement and advancement of the Tribes, Now, Therefore

"BE IT RESOLVED, by the Tribal Council of the Confederated Salish and Kootenai Tribes of the Flathead Reservation in special meeting assembled on September 25, 1942, that the following items be and are hereby approved:

  "Section 1. A payment of twenty-five dollars per capita shall hereafter be made annually to the Indians on the Flathead Annuity Roll as approved January 22, 1920, and maintained current under approved regulations, said payment to be made on the first day of March, or as near such date as may be practicable, from tribal funds deposited in the United States Treasury to the credit of the Confederated Salish and Kootenai Tribes. The accrued balances of such funds, after such per capita payments have been made, shall be made available for, and shall be used under a general welfare program devoted to the social and economic improvement and advancement of the members of the tribe, and including the expenses of administering such programs.

    "Section 2. It is hereby determined and established that for the division and distribution of tribal monies or other interests or assets, the annuity roll approved January 22, 1920, and maintained current under approved regulations, shall be used for determining the eligibility to participate in any such distributions.

  "Section 3. Any member of the Confederated Salish and Kootenai Tribes, of less than one half Indian blood, who is carried on the annuity roll, or any heir of such Indian, the heir being less than one-half Indian blood, may surrender his or her tribal interests and membership, with the approval of the Tribal Council and the Federal Government, provided that any cash settlement for such surrender of tribal interests and membership shall not exceed seven hundred fifty dollars for a full share. Funds made available under Section 1 of this act may be used for the purchase of such interests.

    "Section 4. The surrender of interests as provided in Section 3 by any member, shall release forever the Confederated Salish and Kootenai Tribes and the Federal Government from any future responsibility or indebtedness of any sort to such Indian as an Indian and to any descendant of such Indian as an Indian.

  "Section 5. The Secretary of the Interior is hereby requested to obtain Congressional legislation to effectuate this act, provided that before such legislation is submitted to Congress for action, it shall be subject to review by the Flathead Tribal Council."

"a per capita payment of $25 to the recognized members of the Flathead tribe of Indians, as determined by Article II of the tribal constitution, who are alive on the date of this authority (3360 more or less)."

    "The resolution of September 25, 1942 requesting that a distribution be made annually to the Indians listed on the Flathead annuity roll approved January 22, 1920, cannot be accepted as being in conformity with the tribal constitution and the conclusions of the Solicitor of the Department, who in his opinion dated May 17, 1941, stated, 'the membership of the tribe, as determined by the tribal constitution, governs all use and distribution of tribal property.'

    "Should the Council of the tribe desire to prepare a roll at this time making payment to those whose membership is not questioned and leaving an opportunity for later determining the status of those who were born since the adoption of the constitution and whose status is uncertain because of a question of residence, such action would be approved. A supplemental roll could then be prepared for the newborn and those whose status is questioned, . . ."

proved January 22, 1920, and maintained current under approved regulations." The Department authorized distribution "To the recognized members of the Flathead Tribe of Indians, as determined by Article II of the Tribal Constitution, who are living on the date of this authority (3,360 more or less)."

    You now argue that no resolution of the tribal council, as you construe it, gives the necessary consent for the distribution. You construe the words "and maintained current" to mean "the elimination of those who have died and the addition of those who were born since 1920." The attached files show very definitely that the council did not intend such a construction to be put on its resolution and. that your office did not so construe it until your present memorandum. On September 30, 1942, shortly after its adoption, Mr. Holst of your office, who was at that time at the agency reported with respect to Section 2 of the resolution:

    "The Council was informed that this roll could be opened and a living roll prepared in lieu thereof, but they did not desire that. There are 2,543 names on this roll representing the living members of the tribe as of January 22, 1920. Seven hundred seventy-seven of these annuitants are dead but their heirs share in proportion to their inheritance, thus maintaining the 2,543 annuity shares. This roll has been kept current and was used in the per capita distribution of March, 1942. It has Department approval and has been accepted for 22 years. There are very few objections to it. To build up a new roll of economic members would be a most difficult undertaking and would result in interminable claims and counter claims. . . ."

    "There are 552 Indians whose names are on the 1920 roll who have permanently left the Reservation-have been away more than five years. Of these non-residents, 440 are of 1/4 or less Indian blood. Also, there are many such on the Reservation who desire to give up their tribal affiliations and interests. In general, they are those of little Indian blood. This desire to get away provides an opportunity for a voluntary purge of the roll. The annual $25 is about all those who voluntarily leave the Reservation can expect from membership. Even on the Reservation, their share in the welfare program is more limited than that of those of higher degree of Indian blood."

    "There are 3,208 Indians on the census roll of this Reservation but they are hard to find now. In addition to the 600 permanently away from the reservation, there are about 150 in the war, several hundred in outside Defense work other hundreds away for higher wages and still others just away observing the outside world."

    "We have received and studied your copies of the two basic resolutions passed by the Flathead Council on September 25. We shall follow one of two courses of action:

    (1) We shall recommend to the Secretary that he review the resolutions and approve of them.

    (2) We shall allow the 90-day review period to pass without Secretarial review so that the resolutions would automatically become effective.

    "Either of these courses would lead to the approval of the resolutions. If case No. 2 is decided upon, we would then proceed to work out the legislation necessary to make certain parts of these two resolutions effective and submit the draft of this legislation to the Flathead Council.

    "While the approval would include approval of the use of the annuity roll of January 22, 1920, we would certainly later approach the Council with the suggestion that the constitutional roll be used rather than the annuity roll because the latter would necessitate a tremendous amount of bookkeeping to keep track of the inherited interests and would eventually result in the passage of headrights beyond the membership of the tribes. But we realize the potency of your arguments for the approval of the resolutions in toto at the present time. . . :'

    On January 20, 1943, the Superintendent applied for an allotment of tribal funds in the amount of $63,575 for the purpose of making "annual tribal annuity payments to 2,543 Flathead Indians," Mr. Woehlke by his memorandum of February 5, 1943, recommended that a $25 payment be made and that the 1920 roll be used. Mr. Reeves
 

expressed the opinion that it was entirely a question of policy whether the payment should be made on the 1920 roll, or "a new roll advocated, pursuant to which the dead enrollees would be stricken and the new-born children added, thus bringing the roll up to date annually before making payment." On February 12, 1943, Mr. Bruce of your office called attention to the fact that the use of the 1920 roll for this payment was in disregard of the provisions of the tribal constitution and the Solicitor's memorandum of May 17, 1941. He stated that the membership of the tribe as determined by the tribal constitution is entitled to the distribution of this money. On February 26 your office requested the Superintendent to inform you of the "number which represents present tribal membership determined pursuant Article II of the Flathead constitution." On February 27 the Superintendent informed you that there was no constitutional roll. He reported further that while the council in December 1942 had appointed a committee to submit to the council a constitutional roll for approval, the council when requested to define the word "resident" appearing in paragraph b, section 1 of Article II of the tribal constitution did not take action of this request and indicated that it did not want to take exception to the enrollment of any child born to any Flathead Indian anywhere. He stated further: "Our census roll shows approximately 3,360 names." Thereafter the authorization of April 9, 1943, was approved.

    The record before discloses that the council has taken no action whatever on the per capita payment authorized by the Secretary. The matter has been before the council for many months. It has been discussed at various council meetings but all the council seems to have done was to authorize the preparation of a roll containing the names of all persons of Indian blood whose names appear on the official census roll of the tribe as of January 1, 1935, and whose names also appear on the Flathead annuity roll of January 22, 1920, who were living on April 9, 1943. The council agreed to approve such a roll as the roll upon which immediate payment of the per capita payment should be made. The record before me does not show that the council ever did actually approve such a roll.

    The council has tabled numerous requests of the Superintendent and others that it take action on the matter particularly with respect to paying Indians born since January 22, 1920. Members of the council have expressed the opinion that they did not believe anyone had authority to eliminate the shares of the deceased Indians but nothing definite has been accomplished toward reaching a solution of the problem. In fact, the council has apparently taken no affirmative action in the matter since its resolution of September 25, 1942. The council is apparently about equally divided on the question of whether it should insist on distribution according to the 1920 roll or agree to distribution on the basis of the tribe's membership as determined by its constitution. On July 2, 1943, your office wrote to the Superintendent:

"We understand that among the members of the council there is a difference of opinion as to which roll should govern. This has resulted in the delay in making the payment to many of the Indians. In view of the ruling of the Solicitor and the instructions of the Department, we feel that there is little excuse for failure to make the payment as directed . . . the tribe is without authority in this matter so far as this payment is concerned."

    No per capita payments can be made until the council acts. This is so because the council has the power, both by section 16 of the act of June 18, 1934 (48 Stat. 984, 25 U.S.C.A. sec. 476), and the Tribe's constitution, adopted pursuant thereto, to approve or veto the disposition of tribal assets.

    It is evident to me that the council's refusal to act has been motivated, in a large measure, by the fact that certain members of the council are laboring under a misconception of the council's right to insist upon distribution of the fund on the basis of the 1920 roll. If the legal effect of that roll be promptly explained to the council, I believe that the impasse that has been reached would be broken.

    The roll of 1920 was prepared pursuant to the provisions of section 28 of the act of May 25, 1918 (40 Stat. 591, U.S.C.A. sec. 162), and the act of June 30, 1919 (41 Stat. 952, U.S.C.A. sec. 163). Section 28 of the act of 1918 authorizes the Secretary of the Interior to withdraw from the United States Treasury and segregate the common or community funds of any Indian tribe that are susceptible of segregation so as to credit an equal share to each and every recognized member of the tribe and to deposit the funds so segregated in banks subject to withdrawals for payment to individual owners or expenditure for their benefit under regulations governing the use of other individual Indian moneys. Section 28 further provides that the funds of any tribe shall not be segregated until the final rolls of said tribe are complete. The act of 1919 authorizes the Secretary of the Interior in his discretion to cause a final roll to be made of the
 

members of any Indian tribe, and declares that such roll, when approved by the Secretary, shall constitute the "legal membership of the respective tribes for the purpose of segregating the tribal funds as provided in section 28 of the . . . act approved May 25, 1918."

    In a memorandum opinion by the Solicitor for this Department dated May 17, 1941, it was held that tribal rolls made and approved under the act of 1919 are required to be used only for the completion of the distribution of such funds as have been segregated under the act of 1918 and remain undistributed. As pointed out in that opinion neither act contains any provision requiring that the approved roll shall govern the tribal membership thereafter in such matters as voting in tribal affairs, organizing under a tribal constitution, sharing in the use of tribal land and credit funds, or for any other purpose, even the allotment of lands, save for the distribution of tribal funds susceptible of segregation. Even as to the distribution of tribal funds, however, it is important to notice that both statutes fall far short of creating any present vested interest in the individual members to unsegregated tribal funds. Under the rule of communal ownership, no individual member of the tribe has any vested, enforceable interest in tribal property whether land or funds. No such vested interest can be acquired by the individual member until the property has lost its tribal character and has become individualized.¹ Tested by this rule, it is clear that the acts of 1918 and 1919 grant no present interest to any individual Indian in the common or community funds of any tribe. The acts merely provide the means for the establishment of such an interest through individualization of the funds to be accomplished by segregating and crediting to each member an equal share in the funds so segregated. Under this view, which is in accord with that expressed in the opinion of May 17, 1941, the roll of 1920 must be regarded as controlling only for the purpose of making payment to enrollees whose names are shown on that roll, or to their heirs or legatees of the shares of any tribal funds which have been segregated and individualized pursuant to the act of 1918.

    You state that funds proposed to be distributed by the tribal resolution of September 25, 1942, "are those received from the Montana Power Company under its contract with the tribe." The attached files reveal that the moneys proposed to be distributed as the result of a license issued on May 23, 1930, by the Federal Power Commission for the development of power on the Flathead Reservation under the provisions of the Federal Water Power Act of June 10, 1920 (41 Stat. 1063), and the act of March 7, 1928 (45 Stat. 200, 212). Under the provisions of the latter act "rentals from such licenses for use of Indian lands shall be paid the Indians of the said reservation as a tribe, which money shall be deposited in the Treasury of the United States to the credit of said Indians, and shall bears interest at the rate of 4 per centum." The agreement entered into between the tribe and the licensee in 1936 at the time the Federal Power Commission amended the original license does not provide for the payment of any money directly to the tribe other than liquidated damages in the event the company failed to complete the first unit of the project within a specified time. The per capita a payment in controversy was not, apparently, authorized to be made out of liquidated damages but out of annual payments made under the license.

    Under the provisions of the license as amended, the licensee is required to pay annual charges into the Treasury of the United States as compensation for the use of the Flathead tribal lands. These charges, while nominal up to the year 1940, in that year and for the remaining years of the license became substantial. Some $125,000 was due the tribe under the license in January 1941. It was with these funds that the council was dealing when it passed its resolution of September 25, 1942. No part of these moneys was segregated under section 28 of the act of 1918 and the utility of the roll of 1920 for the purpose of such a segregation was destroyed by the repeal in 1938 of the authority for such a segregation. ² Additional legislation effectively preventing the use of the 1920 roll had, moreover, intervened.³

    By the act of June 18, 1934, supra, Congress affirmatively recognized the right of Indian tribes who accepted its provisions by tribal vote to determine their membership for all tribal activities. Section 16 of that act authorized such tribes to organize for their common welfare, to adopt appropriate constitutions, and to exercise all powers vested in them under existing law. One of these powers, inherent in every tribe, is the power of determining the membership of the tribe.⁴ The Flathead Tribe voted to accept the provisions of the act and has organized and adopted a constitution thereunder. The constitution prescribes rules of membership land is thus determinative of those

____________
   ¹ Handbook of Federal Indian Law, pp. 183-4.

   ² Section 2, act of June 24, 1938 (52 Stat. 1037).

  ³ See Gritts v. Fisher, 224 U.S. 640, and Sizemore v. Brady, 235 U.S. 441, holding that until the creation of vested rights in individual members it is competent for the Congress to change the method of distribution of tribal property.

  ⁴ 55 I.D. 14.
 

who are entitled to share in the distribution of the tribal property. These rules, which are embodied in article II of the constitution read:

    "Section 1. The membership of the Confederate Tribes of the Flathead Reservation shall consist as follows:

    " (a) All persons of Indian blood whose names appear on the official census rolls of the Confederated Tribes as of January 1, 1935.

    " (b) All children born to any member of the Confederated Salish and Kootenai Tribes of the Flathead Reservation who is a resident of the reservation at the time of the birth of said children.

    "Section 2. The council shall have the power to propose ordinances, subject to review by the Secretary of the Interior, governing future membership and the adoption of members by the Confederated Tribes.

    "Section 3. No property rights shall be acquired or lost through membership in this organization, except as provided herein."

    Your memorandum raises a further question: Does a per capita payment require approval of the tribe in a referendum? Article VI, section 1 (h) of the tribe's constitution authorizes the council:

"To appropriate for tribal use of the reservation any available applicable tribal funds, provided that any such appropriation may be subject to review by the Secretary of the Interior, and provided, further, that any appropriation in excess of $5,000 in any one fiscal year shall be of no effect until approved in a popular referendum."

                                                                                                                                                    FOWLER HARPER,

M-33441                                                                                                                                               February 11, 1944.

Re:

Whether the approval by the President of the will of Ne-ta-wa-si-no-kwe, deceased Chippewa Indian Allottee, on May 5, 1921, operated to remove the restrictions against alienation on the devisee's lands imposed by virtue of Article 3 of the Chippewa Treaty of September 30, 1854 (10 Stat. 11