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601

OPINIONS OF THE SOLICITOR

JANUARY 8, 1936

porting to represent the Indians of the Columbia Reservation. Under the provisions of the agreement, the Indians, in consideration of a sum of money, agreed to remove to another reservation and that the Columbia Reservation should be opened to settlement, except that any Indian who desired to remain might do so in which event lands not exceeding 640 acres to each family should be selected for them. The lands were thrown open to settlement before allotment selections had been made. The Indians who remained on the lands did not acknowledge the authority of Chief Moses to represent them. White men attempted to settle on the lands and were resisted by the Indians, where upon the Indians were forcibly removed by the United States troops and imprisoned. During their imprisonment, the white settlers seized their improvements, settled on the land and filed homestead declarations which were first accepted and later canceled. Suits were then brought by the United States to oust the settlers from possession. The court ruled that the President was without authority to open the lands to settlement under the homestead laws until after allotment selections had been made for the Indians; that the opening of the lands was premature; that the lands had not become a part of the public domain; and that the Indians who remained on the lands were not bound by the agreement entered into with Chief Moses "for the reason that they never gave their assent, and Moses had no authority to represent them". This ruling is without application here for the reason, first, that there has been no premature opening of the lands in the Yuma Reservation to settlement under the general land laws; second, no question is raised as to the validity of the agreement with the Yuma Indians; and third the stipulations of the agreement have been carried out by the United States and the Indians have received and accepted the allotments and other benefits promised them. In this situation, the question and it is one upon which the decision in the La Chappelle case has no bearing-is whether the Indian title to the remaining lands classed as non irrigable has been extinguished. The plain terms of the Yuma agreement requires that that question be answered in the affirmative.

    It follows from what has been said that the claims asserted on behalf of the Indians and listed above under Nos. 1, 4, 5, 6 and 7, all of which depend for recognition upon the establishment of the Indian title to the non-irrigable lands, cannot be sustained.

    Regarding the liability of the United States or that of the Imperial Irrigation District for damages caused by seepage, percolation, or breaks in the canal (see claim listed above as Nos. 2, and 3) , the law does not make the concern engaged in the carriage of irrigation water an insurer of others against damage from breaking, overflow, seepage or other escape of the water. The famous English case of Rylands v. Fletcher (1. R. 3 H. L. 330), declared that a man builds a reservoir or other works to hold water at his peril. This is not the law in the West. The ditch owner is not liable merely because the break or escape occurred, but only if it occurred through his negligence. Weidekind v. Tuolumnem etc., Company (12 Pac. 387); Walley v. Platt County (26 Pac. 129). In the operation of a canal the ordinary rule of negligence applies, namely, that there must be a failure to use the care which an ordinary prudent man would have taken under the circumstances. Parker v. Gregg, (136 Cal. 413, 69 Pac. 22). Until the All-American Canal is completed and used, it will be impossible to tell whether seepage will result. A break in the canal might occur if unprecedented conditions arise. If actionable damages occur for any reason while the canal is being operated and maintained by the Imperial Irrigation District, a judgment against the District could be satisfied under the California laws. In the meantime, I do not think the Secretary of the Interior has any authority to require the District to give bond in the amount of $200,000 or in any other amount guaranteeing the contingent liability of the District. No statutory provision of which I am aware empowers the Secretary to exact such a bond. In the absence of such a statutory provision. the District cannot be compelled to give bond unless the obligation so to do is imposed by its existing contract with the United States under which the United States is constructing the All-American Canal for the District at the expense of the District. That contract, which fixed in detail the rights and obligations of the parties both before and after the District takes over the operation and maintenance of the canal, contains no provision requiring the District to give bond, nor does it contain any reservation of power in the Secretary which may be invoked as authorizing him to exact a bond. The obligation to give bond, therefore, is one which the District has not agreed to assume and which cannot now, in view of the existing contract, be enforced without its consent.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: January 8, 1936.
T. A. WALTERS, First Assistant Secretary.
 


 

602

DEPARTMENT OF THE INTERIOR

JANUARY 24, 1936

COLVILLE RESETTLEMENT LOAN--SECURITY

January 24, 1936.
Memorandum for Commissioner Collier:

    The attached memorandum signed by Messrs. Marshall, Muck and Lamont, referring further to the proposed Resettlement Administration loan of $120,000 to the Colville Indians for the purpose of purchasing and operating a sawmill plant, reached me after my memorandum of January 17, in which was incorporated the conclusion reached at the conference before me on that date, had gone forward to you. While I understood the matter to have been concluded for the time being by that memorandum, I now understand that the application for loan is being held pending further advice from this office in the light of the additional in formation contained in the memorandum of Marshall et al.

    The memorandum of the Board of Appeals of January 15 pointed out first, that there is no authority of law under which the timber resources of the Colville Indian Reservation could be pledged as security for the proposed loan and second that the statutory requirement that the proceeds from sales of timber and other products of Indian reservations must be deposited in the Treasury of the United States for the benefit of Indian tribes (section 155, USC.), coupled with the inhibition against expenditure of tribal funds without specific appropriation by Congress (section 123 id.), precluded the use of the proceeds from sales of the timber or lumber products in repayment of the loan without specific authorization of appropriation by Congress.

    The memorandum of Marshall et al. concedes the validity of the first objection and points out in effect that no mortgage or pledge of the timber resources is to be made. As to the second objection the memorandum, as I read it, takes the position that the proceeds derived from the operation of the project to be financed by the loan falls within that class of miscellaneous revenues derived from Indian reservations which may be expended without specific appropriation under authority of the act of May 17, 1926 (44 Stat. 560), section 1 of which reads:

    "That hereafter all miscellaneous revenues derived from Indian reservations, agencies and schools which are not required by existing law to be otherwise disposed of, shall be covered into, the treasury of the United States under the caption 'Indian moneys, proceeds of labor.' and are hereby made available for expenditure, in the discretion of the Secretary of the Interior, for the benefit of the Indian tribes, agencies, and schools on whose behalf they are collected, subject, however, to the limitations as to tribal funds, imposed by section 27 of the Act of May 18, 1916 (Thirty ninth Statutes at Large, page 159)."
    You will observe that the discretionary authority given the Secretary of the Interior is made expressly subject to the limitations as to tribal funds imposed by section 27 of the act of May 18, 1916 (39 Stat. 159). This is the statute referred to in the memorandum of the Board of Appeals as section 123 U.S.C. and prohibits the expenditure of such funds without specific appropriation. If, therefore, the funds here in controversy are, as I conceive them to be, tribal funds, their expenditure is subject to actual appropriation or authorization by Congress. However, the question is one primarily for determination by the Comptroller General and if precedents have been established through actual practice, with the approval of the Comptroller General, of using funds of this character for the benefit of the Indians in the discretion of the Secretary of the Interior without specific appropriation or authorization by Congress, the continuance of such practice will not be objected to by this Office. If this be the situation, the funds derived from operation of the sawmill project could be used for such purposes as the Secretary of the Interior may in his discretion determine to be for the benefit of the Indians. However, I have no personal knowledge of such precedents and suggest that you consider the advisability of obtaining the approval of the Comptroller General with respect to these particular projects.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
UNALLOTTED LANDS--PROSPECTING & LEASES


March 12, 1936.
Memorandum for the Secretary:

    The Commissioner of Indian Affairs having submitted to you for signature an order proposing to revoke all prior orders opening unallotted Indian lands to prospecting, location and lease under Section 26 of the act of June 30, 1919 (41 Stat. 31), as amended March 3, 1921 (41 Stat. 1231), and December 16, 1926 (44 Stat. 922-923), Sec. 399. Title 25, U.S.C., you have requested my opinion as to your authority in the premises.
 


 

603

OPINIONS OF THE SOLICITOR

MARCH 12, 1936

    By the enactments cited, the Secretary of the Interior is "authorized and empowered" to lease to citizens of the United States unallotted lands on Indian reservations in Arizona, California, Idaho, Montana, Nevada, New Mexico, Oregon, Washington, and Wyoming, for the purpose of mining metalliferous and non-metalliferous minerals, including oil and gas, after mining claims have been located by such citizens in conformity with the mining laws of the United States. From the view point of the authority of the Secretary of the Interior it is significant to note that the lands of these Indian reservations were not thrown open to prospecting, location and lease by the statute. It is provided instead:

    "Unallotted lands, or such portion thereof as the Secretary of the Interior shall determine, within Indian reservations * * * may be declared by the Secretary of the Interior to be subject to exploration for the discovery of deposits of gold, silver, copper, and other valuable metalliferous minerals and nonmetalliferous minerals, not including oil and gas, by citizens of the United States, and after such declaration mining claims may be located by such citizens in the same manner as mining claims are located under the mining laws of the United States."
    By the foregoing provision the power is given the Secretary of the Interior to open these Indian reservation lands, or such part thereof as he may determine, to prospecting, subject to location and lease. The purpose of Congress in conferring this power upon the Secretary is plain. The lands dealt with are not public domain lands but lands set aside for the use and occupancy of Indians. An influx of prospectors on these reservation lands might, in many instances, interfere seriously with the purposes for which the reservation was created, or be otherwise detrimental to the interests of the Indians. To prevent this Congress made it the duty of the Secretary to determine what lands might properly be opened and empowered him to open or withhold the lands in his discretion. Nothing contained in the statutes declares that an order issued by the Secretary opening the lands shall be final, and in the absence of such a provision the power of the Secretary would not appear to be exhausted by its exertion on any one or more occasions. The power to open lands or withhold them from location and lease necessarily includes the power to withdraw them whenever protection of the rights and interests of the Indians requires that such action be taken. That the statute does not in terms say that the Secretary may revoke an order once issued is not important. The omission may well be regarded as supplied by Section 2, Title 25, U.S.C., conferring upon the Secretary of the Interior broad general powers over the Indians, their property and affairs. See West v. Hitchcock (205 U.S. 80); United States v. Wilbur (283 U.S. 414); Knight v. United States Land Association (142 U.S. 161). In the Wilbur case the Secretary, in pursuance of the Oil Conservation Policy of the President suspended the issuance of prospecting permits and leases on public lands authorized to be made by the act of February 25, 1920 (41 Stat. 437). The power of the Secretary so to do was upheld notwithstanding the failure of the act expressly to confer it.

    In the attached papers Section 3 of the act of June 18, 1934 (48 Stat. 984), is referred to as having some bearing upon the authority to close these Indian reservations to prospecting by revoking the prior orders. The general language of that section authorizes the Secretary to restore to tribal ownership surplus lands of any Indian reservation opened to sale or other disposal under the public land laws. This provision is without application because the lands here involved have never passed from tribal ownership and still remain a part of the Indian reservation. A proviso to Section 3 revokes and rescinds an order issued by the Secretary of the Interior withdrawing lands within the Papago Reservation in Arizona from mineral entry, and prohibits the issuance of further orders of a like nature. That action, while effectively divesting the Secretary of any authority to withdraw the Papago lands from mineral entry, is confined to that particular reservation. The question here relates to the authority of the Secretary under the act of June 30, 1919, supra, as amended. That act does not now and never has applied to the Papago Reservation. The Indians of that reservation never owned the mineral rights. The reservation was created exclusive of any tribal right to the minerals, and the mineral lands were declared subject to entry and patent under the United States mining laws. See Executive Order of February 1, 1917, and the act of February 21, 1931 (46 Stat. 1202).

    In view of the foregoing it is my opinion that you have authority to revoke the prior orders opening to prospectors the lands of those Indian reservations subject to lease under the act of June 30, 1919, as amended, if in your judgment such action is necessary or advisable in the interests of the Indians. Rights acquired by locators during the period the lands were subject to prospecting, location and lease cannot, of course, be disturbed and such rights are preserved by the following declarations in the order presented for your signature:
 


 

604

DEPARTMENT OF THE INTERIOR

MARCH 12, 1936

"Where valid locations have already been made, however, they may be followed by application for lease under the regulations hereto fore prescribed by the Department for the granting of such leases; and existing leases in good standing now shall not be disturbed hereby."

                                                                                                                                            NATHAN R. MARGOLD,
Solicitor.
DEPOSIT OF INDIAN MONEYS

M-28231                                                                                                                             March 12, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    My opinion has been requested on the question whether tribal and individual Indian moneys held by the Indian Bureau may be deposited in checking accounts with banks paying no interest thereon.

    Section 28 of the act of May 25, 1918 (40 Stat. 591) reads in part as follows:

    "That no tribal or individual money shall be deposited in any bank until the bank shall have agreed to pay interest thereon at a reason able rate, etc."
    It has been customary for the Indian Bureau, pursuant to the provisions of the above section, to deposit Indian funds in banks when the banks have agreed to pay a reasonable rate of interest thereon, and have qualified in other respects. For the convenience and benefit of the Indians, checking accounts were established with various banks conveniently located. This latter practice obtained until the passage of the Banking Act of 1933 (48 Stat. 181), section 11b of which provides:
    "No member bank shall, directly or indirectly by any device whatsoever, pay any interest on any deposit which is payable on demand: Provided, That nothing herein contained shall be construed as prohibiting the payment of interest in accordance with the terms of any certificate of deposit or other contract heretofore entered into in good faith which is in force on the date of the enactment of this paragraph; but no such certificate of deposit or other contract shall be renewed or extended unless it shall be modified to conform to this paragraph, and every member bank shall take such action as may be necessary to conform to this paragraph as soon as possible consistently with its contractual obligations:"
    Subsequent to the passage of the above act, both the Federal Reserve Board and the Federal Deposit Insurance Corporation issued regulations prohibiting payment of interest on demand accounts by member banks. In view of these inhibitions it became necessary for all Indian money checking banks that were members of the Federal Reserve System or the Federal Deposit Insurance Corporation to discontinue carrying the checking accounts in question. This resulted in inconvenience and expense to the Indians under the jurisdiction of the agencies affected as well as in a loss of interest because the funds relinquished by the banks had to be deposited into the Treasury with out interest and disbursed by Treasury checks.

    It is clear that the Banking Act of 1933 did not repeal the statutory provision restricting deposits of Indian money to banks paying interest, but operated merely to exclude certain banks from the category of eligible depositories.

    The Banking Act of 1935 (49 Stat. 684, 714-715), however, contains a provision which seems to go further than this. Section 324 (c), amending section 19 of the Federal Reserve Act, reads in part as follows:

    "No member bank shall, directly or indirectly, by any device whatsoever, pay any interest on any deposit which is payable on demand:

            *                                *                                *                                *                                *

"* * * Provided further, That until the expiration of two years after the date of enactment of the Banking Act of 1935 this paragraph shall not apply (1) to any deposit made by a savings bank as defined in section 12B of this Act, as amended, or by a mutual savings bank, or (2) to any deposit of public funds made by or on behalf of any State, county, school district, or other subdivision or municipality, or to any deposit of trust funds if the payment of interest with respect to such deposit of public funds or of trust funds is required by State law. So much of existing law as requires the payment of interest with respect to any funds deposited by the United States, by any Territory, District, or possession there of (including the Philippine Islands), or by any public instrumentality, agency, or officer of the foregoing, as is inconsistent with the provisions of this section as amended, is hereby repealed." (Italics supplied.)
 
 


 

605

OPINIONS OF THE SOLICITOR

MARCH 12, 1936

    The question turns upon the proper construction of the repealing clause in the act above cited. Does this clause operate to repeal a statutory repeal a statutory provision such as section 28 of the act of May 25, 1918, above quoted, which limits the class of eligible depositories to those paying reasonable interest? Can it be said that such a statutory provision "requires" the payment of interest and is "inconsistent" with a statute prohibiting certain banks from paying interest? Quite clearly the statutory provision limiting deposits of Indian moneys to banks which pay a reasonable interest rate "requires" the payment of interest as
a condition of the deposit. Is that enough to bring the provision under the knife of the Banking Act of 1935?

    From a strictly logical point of view there is no inconsistency between a statute providing that certain funds may be deposited in those banks which pay a reasonable rate of interest and a later statute providing that certain banks shall pay no interest at all. It is perfectly consistent with both statutes to make deposits in those banks which are still permitted to pay interest and not to make deposits in those banks which are not permitted to pay interest. But, if this narrow construction be put upon the repeal clause in the Banking Act of 1935, then it is doubtful whether that clause would have any meaning whatsoever. I know of no statutes requiring any bank to pay interest on any particular funds. Statutes such as the act of May 25, 1918, above quoted, or the Postal Savings Act of June 25, 1910, as amended, provide, in effect, that certain sums shall or may be deposited in those banks which agree to pay certain interest rates. These statutes limit the discretion of administrative officials but they do not impose an absolute duty on any bank since every bank is free to refuse a deposit of Government funds.

    The meaning of the repeal clause in question is not illuminated by any word of explanation in the hearings on the Banking Act of 1935, or in the discussion on the floor of either House of Congress concerning this act. The provision in question did not appear in the bill originally introduced or in the amended version of that bill as it first passed the House. It was inserted in the course of hearings by a Senate subcommittee, and the reasons for inserting the provision are nowhere disclosed. No comment on the intended scope of the provision is found in the conference report which accepted the clause found in the Senate bill.

    It appears that a substantially similar question has been considered by the Attorney General in determining the effect of the Banking Act of 1935 upon the provisions of the Postal Savings Act. The Banking Act of 1935 contained, in addition to the general language above discussed, specific language authorizing postal savings depositories to deposit funds in member banks of the Federal Reserve System subject to regulations of the Board of Governors of that system concerning interest and other matters. Did this provision supersede and nullify the earlier statutory condition that banks receiving postal savings deposits must pay 2 1/4 percent interest? Or did the Banking Act of 1935 leave the statutory interest requirement intact and merely authorize supplementary regulations not inconsistent therewith?

    In his opinion dated December 26, 1935, the Attorney General declares:

    "* * * The 1935 statute in effect provides that postal savings funds may be deposited in member banks of the Federal Reserve System at whatever rate of interest such banks have been directed to pay by regulation of the Board of Governors. This necessarily repeals the earlier provisions to the effect that postal savings funds shall not be deposited with member banks of the Federal Reserve System unless they agree to pay interest at the rate of at least two and one-fourth per centum.

    "This conclusion is fortified by the consideration that section 341 (3) would add nothing to the pre-existing laws if not interpreted in this manner. Every statute should be so interpreted as to give it some effect. Under section 2 of the amendment of May 18, 1916, the duty was placed upon the Board of Trustees of the Postal Savings System to deposit postal savings funds with qualified member banks of the Federal Reserve System. Hence, if section 341 (3) were construed merely to authorize the deposit of such funds in member banks in case they were willing to receive the deposits under the terms of the Postal Savings Act, it would add nothing to the pre-existing legislation. It would seem to follow, therefore, that Congress must have intended section 341 (3) to authorize the deposit of postal savings funds in member banks at whatever rate of interest those banks were willing to pay."

    The issues involved in the deposit of Indian moneys and of postal savings deposits, with respect to the Banking Act of 1935, are substantially similar, and the reasoning of the Attorney General in the latter case is equally applicable to the former. I am constrained therefore to hold that the Banking Act of 1935 supersedes and nullifies section 28 of the act of May 25, 1918 (40 Stat. 591) to the extent of permitting deposit of Indian moneys
 


 

606

DEPARTMENT OF THE INTERIOR

MARCH 12, 1936

without interest in banks which are prohibited, under the Banking Act of 1935, from paying interest on such deposits. Of course, there is no mandatory provision of law requiring deposit of Indian moneys in banks, and such deposits, it may be assumed, will be made only when special circumstances call for such action.

                                                                                                                                               NATHAN R. MARGOLD,

Solicitor.
Approved: March 12, 1936.
T. A. WALTERS, First Assistant Secretary.

DELAWARE--APPROPRIATION FOR


March 18, 1936.
Memorandum for the Commissioner of Indian Affairs:

    At your request a careful examination of the attached file relating to S. 2908, a bill to authorize an appropriation for payment to the Delaware Tribe of Indians in the State of Oklahoma, has been made with a view to determining whether the adverse report heretofore made by the Department on the bill was justified.

    As the claim upon which the bill is based arises out of an agreement entered into under date of April 8, 1867, between the Delaware and Cherokee Nations, it becomes necessary before discussing the merits of the bill to refer at some length to the provisions of the agreement and the respective rights of the parties thereunder as they have been determined in the courts.

    After stating that its purpose is "a location of the Delaware on the Cherokee lands and their consolidation with the said Cherokee Nation", the agreement provides in substance that the Cherokee Nation, in consideration of certain payments and the fulfilment of certain conditions, will sell to the Delaware Indians "for their occupancy" a quantity of land in the aggregate equal to 160 acres for each individual of the Delaware Tribe who was then enrolled upon a certain register made in 1867, being a list of the Delawares who had elected to remove to the "Indian country", to which list there might be added with the consent of the Delaware Council the names of such other Delawares as might desire to be added thereto; that the selection of lands might be made by said Delaware's in any part of the Cherokee Reservation east of a certain line, not already selected and in the possession of other parties, and in case the Cherokee lands should thereafter be allotted among the members of the Nation it was agreed that the aggregate amount of land provided for the Delawares should include their improvements according to legal subdivisions, that is to say, 160 acres for each individual Delaware; that the continued ownership and occupancy of the land by any Delawares so registered shall not be interfered with in any manner without his consent but the same shall be subject to the conditions and restriction as are imposed by the laws of the Cherokee Nation; that nothing in the agreement shall confer the right to alienate, convey or dispose of such lands except in accordance with the constitution and laws of the Cherokee Nation; that upon fulfillment of the agreement by the Delawares the individual members registered as aforesaid shall become members of the Cherokee Nation with the same rights and immunities and the same participation (and no other) in the national funds as native Cherokees, and that the children thereafter born to the Delawares incorporated into the Cherokee Nation shall in all respects be regarded as native Cherokees. In consideration of the benefits and privileges accruing to them under the agreement, the Delawares agreed to pay the Cherokees $1 an acre for the whole amount of 160 acres for each individual registered Delaware and also to pay an additional sum of money which shall sustain the same proportion to the existing Cherokee national fund that the number of registered Delawares removing to the Indian country sustains to the whole number of Cherokees residing in the Cherokee Nation.

    The agreement of 1867 came before the Supreme Court of the United States in Cherokee Nation v. Journeycake (1894), 155 U.S. 196. That case presented a controversy between the native Cherokees and the Delawares over the right of the latter to share in the proceeds derived from certain lands including the interest in general acquired by the Delawares in the Cherokee tribal property. The court held that in virtue of the agreement of 1867 the Delawares were incorporated into the Cherokee Nation as members and citizens thereof and that as such they were entitled to equal rights with the native Cherokees in the lands of the Nation and their proceeds. With respect to the title acquired by the Delawares under the agreement to the 160 acres of land to be provided for each registered Delaware-157,600 acres in the aggregate-the court said (pp. 212-213):

    "* * * So far as the provision in the agreement for the purchase of homes is concerned, it will be perceived that no absolute title to these homes was granted.

    We may take notice of the fact that the Cherokees in their long occupation of this
 
 


 

607

OPINIONS OF THE SOLICITOR

MARCH 18, 1936

reservation had generally secured homes for themselves; that the laws by the Cherokee Nation provided for the appropriation by the several Cherokees of lands for personal occupation, and that this purchase by the Delawares was with the view of securing to the individual Delawares the like homes; that the lands thus purchased and paid for still remained a part of the Cherokee reservation. And as a further consideration for the payment of this sum for the purchase of homes the Delawares were guaranteed not merely the continued occupancy thereof, but also that in case of a subsequent allotment in severalty of the entire body of lands among the members of the Cherokee Nation, they should receive an aggregate amount equal to that which they had purchased, and such a distribution as would secure to them the homes upon which they had settled, together with their improvements. So that if, when the allotment was made, there was for any reason not land enough to secure to each member of the Cherokee Nation 160 acres, the Delawares were to have at least that amount, and the deficiency would have to be borne by the native Cherokees pro rata. In other words, there was no purchase of a distinct body of lands, as in the case of the settlement of other tribes as tribes within the limits of the Cherokee reservation. The individual Delawares took their homes in and remaining in the Cherokee reservation, and as lands to be considered in any subsequent allotment in severalty among the members of the Cherokee Nation. All this was in the line of the expressed thought of a consolidation of these Delawares with and absorption of them into the Cherokee Nation as individual members thereof."

    Some years later when allotments in severalty of the Cherokee lands were about to be made another controversy arose between the Delawares and the Cherokee Nation. The Delawares claimed that as a band under the 1867 agreement 160 acres of land for each of the 985 registered Delawares, a total of 157,600 acres; that the estate acquired in any event was one which was to endure so long as the Delawares and their descendants continued to exist as a tribe and that the interest of each registered Delaware in 160 acres passed upon his death to his heirs. In addition to this, the Delawares claimed the right to share equally with the native Cherokees in the division of the remaining lands and funds of the Cherokee Nation. The Cherokee Nation contended, on the other hand, that the registered Delawares acquired but a life estate in 160 acres per capita; that only those registered Delawares living at the time allotments were made were entitled to 160 acres of land; that the descendants of the registered Delawares were entitled to share equally with the Cherokees and that the lands which would have been allotted to a registered Delaware, if living, did not pass upon his death to his heirs, but reverted to the Cherokee Nation. For the purpose of settling this controversy a provision was inserted in the act of June 28, 1898 (30 Stat. 495), authorizing the Delawares to bring suit in the Court of Claims against the Cherokee Nation "for the purpose of determining the rights of said Delawares in and to the lands and funds" of the Cherokee Nation under the agreement of 1867. Pursuant to this provision a suit was filed in the Court of Claims by the Delawares. The Court of Claims sustained the contention of the Cherokees (see Delaware Indians v. Cherokee Nation, 38 Ct. Cls. 234), and the Supreme Court of the United States affirmed the decision of the Court of Claims and decided against the contention of the Delawares (193 U.S. 127). The Court approved its prior holding in the Journeycake case to the effect that the registered Delawares were incorporated into the Cherokee Nation with full participation in the political and property rights of that nation. With respect to the quantity of land given the registered Delawares by the agreement of 1867, the Court held that such lands remained a part of the Cherokee tribal domain and that the Delaware Tribe as such acquired no interest therein. The right is conferred, the Court said, "not upon the Delaware Nation but upon certain registered Delawares who are to be incorporated into the Cherokee Nation". The Court further held that each individual registered Delaware held the land selected by him upon the same terms and conditions as the native Cherokees held their lands. The only privileges, not possessed by the native Cherokees, which the registered Delawares got under the agreement was a guaranty of the use of at least 160 acres of land each and an allotment of at least that quantity of land to each Delaware who survived the making of allotments. Prior to allotment, however, the registered Delawares acquired no vested interest in the land which would descend to their heirs. Under the constitution and laws of the Cherokee Nation by which the Cherokees and Delawares alike were bound, the interests of the registered Delawares like those of the native Cherokees terminated with death. As stated by the Supreme Court "the registered Delawares acquired in these lands only the right of occupancy during life, with a right upon allotment of the lands, to not less than 160 acres, together with their improvements, and the children
 


 

608

DEPARTMENT OF THE INTERIOR

MARCH 18, 1936

and descendants of such Delawares took only the rights of other citizens of the Cherokee Nation as the same were regulated by its laws."

    While the foregoing case was pending before the courts, the Cherokee allotment agreement of July 1, 1902, became law. 32 Stat. 716. Section 23 of the agreement provided for the segregation of the lands claimed by the Delawares pending judicial determination of the amount of land to which the Delawares were entitled in allotment. (See also section 25 of the act of June 28, 1898, supra.) Section 31 of the allotment agreement prohibits the making of any allotment of land or other tribal property to any person or to the heirs of any person who died prior to the first day of September 1902 and declares that the right of any such person to any interest in the land or other tribal property shall be deemed to have been extinguished and to have passed to the tribe in general, that is the Cherokee Nation, upon his death before said date. At the commencement of the suit brought by the Delawares under the act of 1898, but 212 of the original 985 registered Delawares survived. Of these 197 survived September 1, 1902, and received the allotments provided for in the treaty of 1867. The remaining 15 died after commencement of the suit but, it is understood, prior to September 1, 1902.

    Turning now to the provisions of S. 2908, we find that its stated purpose is to authorize an appropriation of $20,400, with interest at 4 percent, "to compensate the Delaware Tribe of Indians in the State of Oklahoma for 2,560 acres of land for which a judgement was awarded them in the case of the Delaware Indians against the Cherokee Nation (193 U. S. 127) ." Other provisions of the bill deal with the distribution of the moneys, the preparation of a roll, etc., and need not be discussed. As gathered from the attached papers, this bill is predicated upon the theory that the Supreme Court in the case of Delaware Indians v. Cherokee Nation, supra, found that the 212 Indians living at the time of the commencement of the suit were vested with an absolute right to allotment of 160 acres of land each, and that the interest of any such Indian who thereafter died reverted not to the Cherokee Nation but to the Delaware Tribe of Indians. The record before me indicates that 15 of the Indians living at the commencement of the suit failed to receive allotments but the acreage set forth in the bill is computed on the basis of 160 acres for each of 16 Indians.

    The theory of this bill is not supported by anything contained in the Cherokee-Delaware decision. That decision and the decision in the Journeycake case established definitely and clearly that the Delaware Tribe acquired no interest whatsoever in these lands and hence there could in no event be a reversion to that tribe of any interest upon the death of a registered Delaware. The two decisions further established definitely and clearly that the rights conferred by the agreement of 1867 on the registered Delawares in the lands in the Cherokee Nation were individual rights which, under the laws of the Cherokee Nation, terminated with the death of the individual. Where such death occurred, the lands remained as before, Cherokee tribal lands and were subject to disposition as such. If, as I am informed is the case, the 15 registered Delawares referred to above died prior to September 1, 1902, then under the allotment agreement of 1902 any interest they might have had in the land was extinguished and passed to the Cherokee Nation. This agreement not only was a Federal law but also a law of the Cherokee Nation by which the Delaware were bound equally with the native Cherokees. The making of allotments to or in the rights of these 15 Delawares would have been to extend to them greater rights than native Cherokees themselves enjoyed or possessed. Such action would have been in plain contravention of the agreement of 1867, the laws of the Cherokee Nation, the decisions of the Supreme Court, and the Cherokee allotment agreement of 1902.

    It is clear from the foregoing that the claim upon which this bill rests is without legal foundation. Not only so but no moral obligation owing to these Indians by the United States which would warrant a making of this appropriation is found. As pointed out by the Supreme Court in the Delaware-Cherokee case this was not an agreement negotiated between the representatives of the United States and those of the Indians, where the disparity of the contracting parties in education and knowledge of law and use of language is obvious, but was an agreement negotiated between representatives of Indian nations meeting on equal terms. The rights of the parties to such an agreement having been defined by the Supreme Court of the United States and having been enforced accordingly, no just cause for complaint exists as against each other, much less against the United States. Moreover, there is no indication that the Delawares were overreached in the agreement. The value of the rights purchased on behalf of the registered Delawares and their descendants will be appreciated when it is considered at the time of the execution of the agreement of 1867 the land holdings of the Cherokee Nation aggregated more than 13 million acres, including 400,000 acres in Kansas. The Delawares acquired equal interest with the Cherokees in this vast domain including the right to share in the distribution from all proceeds in the
 


 

609

OPINIONS OF THE SOLICITOR

MARCH 18, 1936

sales of lands. It is significant to note in passing that the Cherokees in the Journeycake case disputed the right of the Delawares to share in these lands and distributions and strongly urged that the Consideration paid by the Delawares was grossly inadequate.

    I recommend that the prior departmental action adversely reporting on this measure be not disturbed.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
EMERGENCY FUNDS-STRICKEN RURAL AREAS

M-28316                                                                                                                             March 18, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    My opinion has been requested on various questions of construction of the Presidential Letter No. 1323, dated January 11, 1936, allocating emergency funds to the Office of Indian Affairs for the purpose of financing "the rehabilitation of Indians in stricken rural agricultural areas by means of loans or grants", etc. The President's letter reads as follows:

"To finance the rehabilitation of Indians in stricken rural agricultural areas by means of loans or grants or both, to enable them to construct or repair houses, barns, outbuildings, and root cellars; to develop wells and springs for domestic water, to clear and improve lands for gardens and small farms, and to purchase land for such purposes when necessary; to make furniture and other hand-craft products; and to establish, maintain, and operate other self-help projects. Subject to the application of Title III of the Treasury and Post Office Appropriation Act, fiscal year 1934, to the acquisition of articles, materials and sunppies for use in carrying out such projects. (6. P. 5-236 to 5-303)"
    The questions presented to me for my opinion have been outlined by the Indian Office as follows:
    "1. Does the Presidential letter above set forth require that all loans or grants shall be made directly to individual Indians or may such loans or grants be made to Indian tribes?

    "2. May an Indian Tribe which has received a loan for authorized purposes sell, rent or otherwise dispose of products and improvements made or developed through the use of such loan funds, repay the amount of the loan, and use or distribute among its members any balance?

    "3. May an Indian tribe which has received a grant of funds for purposes authorized in the letter above cited, and has expended such funds for the purposes set forth on lands owned by the tribe, proceed to lease or assign such land, or interests therein, to individual Indians, members of the tribe?

    "4. May an Indian tribe use the proceeds of rentals of land improved through rehabilitation grants to finance additional construction projects or to meet general tribal expenses or to make per capita payments?"

    The Presidential letter should be interpreted in the light of the Emergency Appropriation Act of April 8, 1935 (49 Stat. 115), from which the authority for this letter is derived. This act makes funds available for various classes of projects including projects for "rural rehabilitation and relief in stricken agricultural acres", under the direction of the President. The act also authorizes the use of funds in the discretion of the President "for the purpose of making loans to finance, in whole or in part, the purchase of farm lands and necessary equipment by farmers, farm tenants, croppers, or farm laborers" and provides that "such loans shall be made on such terms as the President shall prescribe and shall be repaid in equal annual installments, or in such other manner as the President may determine." The only relevant limitation placed upon the use of the funds by the act is that dealing with the acquisition of articles and materials for projects as set forth in the Presidential letter itself. In the absence of any other restrictions in the act upon the use of these funds, any such restrictions as are the subject of the present inquiry must be found in the Presidential letter itself.

    The questions presented by the Indian Office are answered seriatim as follows:

    1. The letter of the President does not specify that loans or grants shall be made to individuals. No legal objection is seen to the making of loans or grants to Indian tribes, whether or not such tribes are organized under the act of June 18, 1934 (48 Stat. 984). The only requirement is that the money shall finally be used for the purposes expressly authorized.

    2. It is the essence of a loan as distinguished from a stock purchase or other agreement for participation in management and profits, that the
 


 

610

DEPARTMENT OF THE INTERIOR

MARCH 18, 1936

borrower is obligated to return only the amount of the loan, plus any agreed rate of interest. There is nothing in the letter of the President above set forth which in any way restricts what the tribe may do with the products, improvements or profits resulting from an enterprise financed thereunder, so long as the enterprise itself is one authorized by the Presidential letter above set forth. Any restrictions upon such disposition of profits, products or improvements can be derived only from the tribal constitution, bylaws, charter, or other agreement.

    3. I see no possible legal objection to this procedure, particularly in view of the fact that many Indian tribes sadly in need of the aid proposed reside on unallotted reservations, all of the land thereof being held in tribal ownership. It would appear to be perfectly proper to construct houses, to develop wells and springs for domestic water, to make hand-craft products, and do any other of the things authorized by Presidential Letter No. 1323-1 on tribal land. It is one of the inherent powers of tribal sovereignty that the tribe may levy assessments or charges upon its members for the use of tribal land. (Solicitor's Opinion approved October 25, 1934, "Powers of Indian Tribes", pages 51 to 54, 59 to 68.) Nothing in the letter above referred to restricts this tribal power. Of course, the tribe may not use funds granted under the authority here considered to engage in any enterprise which does not promote "the rehabilitation of Indians in stricken rural agricultural areas". Thus it is reasonable to infer that housing projects developed on tribal land, if rented, must be rented to Indians in such areas who are in need of rehabilitation. Beyond this restriction of purpose, the power of the tribe to lease land to its own members is subject only to such restrictions as may be imposed by the tribal constitution, bylaws, charter, or ordinances, or by Federal legislation prohibiting im proper uses of land.

    4. When money has been granted to an Indian tribe to be used for a particular purpose, e. g., the development of springs on tribal land or the construction of houses, the Presidential letter above set forth imposes no duty on the tribe when once the money has been properly expended. The fact that such expenditures may increase tribal income from the issuance of leases or permits on tribal land, or tribal income from other enterprises, does not subject a part of that income, or all of it, to any lien on the part of the Federal Government. Such income may, therefore, be received and disbursed by the Indian tribe in any manner not prohibited by Federal law or by the constitution, by laws, or charter of the tribe, unless the tribe has specifically agreed to use such rentals or income for a specific purpose. It is, of course, within the power of a tribe to agree, through its representative council or other officers, that certain income available to the tribe shall be used only for designated purposes not inconsistent with law.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.
Approved: March 18, 1936.
T. A. WALTERS, First Assistant Secretary.

PAYMENT OF WATER RIGHT CHARGES-
PUEBLOS

M-28108                                                                                                                               March 18, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    The United States pursuant to the act of June 7, 1924 (43 Stat. 636) is purchasing certain land within the Middle Rio Grande Conservancy District. The land in question is non-Indian land as determined in accordance with the procedure set out in the act of June 7, 1924, supra. This land while in non-Indian ownership has been assessed for irrigation construction charges by the Conservancy District.

    Indian lands in the Conservancy District are being reclaimed by the District, the cost thereof being paid by the United States pursuant to a contract between the United States and the District entered into under the authority of the act of March 13, 1928 (45 Stat. 312). The parties to this contract anticipated certain changes in ownership between whites and Indians during construction and provided in Article 22 of the contract for an adjustment of construction charges on such lands. By such adjustment, payment is to be made to the District by the United States for construction charges on certain land passing into Indian ownership.

    You have asked for my opinion as to whether the non-Indian lands now in question purchased or to be purchased as above set out become Pueblo Indian lands within the meaning of the act of March 13, 1928 so as to permit the payment of construction charges out of the funds there made available, and if so, whether lands so purchased fall within the purview of Article 22 of the contract of December 14, 1928.

    The act of March 13, 1928 provides in part as follows:
 


 

611

OPINIONS OF THE SOLICITOR

MARCH 18, 1936

"That the Secretary of the Interior is hereby authorized to enter into an agreement with the Middle Rio Grande Conservancy District, a political subdivision of the State of New Mexico, providing for conservation, irrigation, drainage and flood-control for the Pueblo Indian lands situated within the exterior boundaries of the said Middle Rio Grande Conservancy District, as provided for by plans prepared for this purpose in pursuance of an Act of February 14, 1927 (Forty-fourth Statutes at Large, page 1098). The construction cost of such work, conservation, irrigation, drainage, and flood-control work apportioned to the Indian lands shall not exceed $1,593,311, * * * Provided further, that in determining the share of the cost of the works to be apportioned to the Indian lands there shall be taken into consideration only the Indian acreage benefited which shall be definitely determined by said Secretary and such acreage shall include only lands feasibly susceptible of economic irrigation and cultivation, and materially benefited by this work."

From the foregoing it appears that land to be entitled to a Government paid water right under this Act must meet three requirements. It must first be Pueblo Indian land within the Conservancy District. Secondly, it must be land included in the plans made pursuant to the act of February 14, 1927 (44 Stat. 1098). And finally, it must be land found by the Secretary to be benefited by the irrigation projects.

    Whether a particular parcel meets the last two requirements is a factual matter which can readily be determined. The term "Pueblo Indian lands" as used in the first requirement is, however, subject to interpretation.

    In my opinion the proper interpretation is that Congress intended it to include all Indian lands owned as of the date of the act, and such other land as might thereafter be acquired for the Indians under the authority of the act of June 7, 1924. There is no restriction in the act based on the manner or time of acquiring title and this want of restriction is significant to the conclusion above stated because Congress had theretofore authorized the purchase of land adjudged to be non-Indian. That Congress intended the general plan of reclamation undertaken under the act of March 13, 1928, to include land then authorized to be purchased is entirely reasonable and to construe the term "Pueblo Indian lands" to exclude land acquired by purchase is to defeat this intention.

    There is, however, a limitation on the purchase of water rights for such lands. This limitation is the amount of money made available by the act of March 13, 1928. The total construction charge applicable to all Indian lands must not exceed $1,593,311. When the purchase of new water rights or the adjustment of construction charges on non Indian lands purchased brings the total above this amount there will have to be further authority from Congress.

    There remains for consideration the question as to whether the lands under consideration are with in the purview of Article 22 of the contract of December 14, 1928. This Article provides as follows:

    "It is mutually understood and agreed that as to any lands within any of the Pueblo Grants now claimed to be in Pueblo Indian ownership but which may hereafter be held under the Pueblo Lands Act or other laws relating to such titles not to belong to said Pueblos, thereby rendering such lands subject to District operation and control, the said District shall then assess the benefits thereto as provided by the said Conservancy Act, and refund to the United States any payments previously paid for said disputed lands, and as to lands now claimed to be in non-Indian ownership but which may hereafter be ad judged to belong to said Pueblo Indians, any assessments collected by the District for improvements thereon shall inure to the benefit of the United States upon adjustment being made therefor as for other lands improved under the terms of this contract, it being the intent of the parties hereto that equitable adjustments shall be made in all cases where land titles are subsequent to the date hereof adjudged to be in ownership otherwise than now recognized between the Indians and non Indians where such lands are subject to adjustment under the provisions of the said Pueblo Lands Act."
    A strict construction of this article leads to the conclusion that the parties to the contract did not have in mind changes of ownership by reason of purchase. The expressed intention is that the adjustments are limited to adjudged changes of ownership; that is, changes by reason of judicial proceedings taken under the act of June 7, 1924.

    That the contract is so narrowly phrased does not, however, preclude its alteration within the limits of the broader authority existing under the act of March 13, 1928 as above pointed out. Thus, if non-Indian lands are purchased and meet all of the requirements above set out, an actual ad-
 


 

612

DEPARTMENT OF THE INTERIOR

MARCH 18, 1936

justment by payment under the act of March 13, 1928 may be made, such a settlement being to that extent a valid alteration of the contract of December 14, 1928. Such in effect is the solution suggested in the Solicitor's opinion of August 4, 1932,
No. M. 27145.

    There is, however, a more satisfactory plan now available. There is now before me for approval a contract to be entered into between the United States and the Conservancy District covering operation and maintenance charges on newly reclaimed Indian land. This contract is authorized to be made by the act of August 27, 1935, (49 Stat. 887), but it is in the nature of a supplement to the contract of December 14, 1928. The act of August 27, 1935, in no wise curtails the authority existing under the act of March 13, 1928. I suggest, therefore that the operation and maintenance contract now before me be altered by including a provision covering the adjustment, in accordance with this opinion, of construction charges on land of the
kind now in question.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


 Approved: March 18, 1936.
T. A. WALTERS, First Assistant Secretary.

NAVAJO--DETERMINATION OF HEIRS

March 18, 1936.
Memorandum to the First Assistant Secretary:

    The revised order determining heirs of the estate of Yellow Hair, unallotted member of the Navajo Tribe, is still objectionable as it requires the Examiner of Inheritance to apply State law in determining the inheritance of the remaining personal property of the decedent. The original order in this case prepared by the Probate Division of the Indian Office required that the entire estate be distributed according to State law and that the major portion of the estate which had already been distributed according to tribal custom by a tribal judge be recovered for redistribution. This order was the subject of a memorandum addressed to the Assistant Secretary and signed by the Solicitor, which pointed out that the inheritance of personal property of an unallotted member of the Navajo Tribe is not governed by the laws of Arizona. The memorandum proposed that "instead of returning this case for the purpose of redistributing in accordance with Arizona law the personal property which has been distributed in accordance with tribal custom, it should be returned so that the entire estate may be distributed in accordance with tribal custom" and that "The Examiner of Inheritance should take testimony as to such customs of inheritance, in their application to the facts of this case, and submit a revised order determining heirs for departmental approval." The remaining estate consists of cash held in the agency office, which is apparently the proceeds of the sale of sheep belonging to the decedent and which does not appear from the facts submitted to be trust property.

    The Probate Division makes its present recommendation on the ground that the Examiner of Inheritance has not the time nor facilities to determine tribal custom and that disposition by the Examiner of Inheritance under State law will assure rapid and efficient disposition of the property to the needy heirs. It is not necessary however, that the Examiner of Inheritance take part in the disposition of the property. In fact, the matter is more properly handled by tribal authorities since the Secretary of the Interior has no statutory authority for the determination of heirs of unallotted Indians. In recognition of this fact, the Department has approved in the revised Law and Order Regulations, November 27, 1935, Chapter 3, section 5, the making of a determination of heirs in accordance with tribal custom or State law if no custom is proved, by the Courts of Indian Offenses in cases where other than trust property is involved. These regulations apply to the Navajo Reservation as there are such courts already maintained there. (See "Application of Regulations", page 1, Law and Order Regulations.) Moreover it appears that the Navajo Courts of Indian Offenses are in a position to perform this function. If additional facilities are needed, this should be undertaken as part of the obligation to equip the court as provided in the Regulations. The proper functioning of these courts should then relieve the Examiners of Inheritance and the Probate Division of some of their overburden of work. It is therefore suggested that the Superintendent in possession of the property in question be instructed to turn over the property to those persons determined by the Court of Indian Offenses in his jurisdiction to be the heirs of Yellow Hair. Moreover it is suggested that the claimants be informed of their privilege of bringing the case before the court.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

 

613

OPINIONS OF THE SOLICITOR

MARCH 20, 1936

FT. BELKNAP LAND PURCHASE--
REORGANIZATION ACT

March 20, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached letter and memorandum relative to the purchase of lands under section 5 of the Indian Reorganization Act of June 18, 1934, for the benefit of the Fort Belknap Indians raise the question of the proper description of the beneficiaries under the deed.

    The letter as drafted proposes that the deed shall run in favor of the United States of America in trust for the Assiniboin, Gros Ventre, and other Indian tribes of the Fort Belknap Reservation. In my opinion this is an improper designation.

    The Indians of the Fort Belknap Reservation are, ethnologically, of two tribes. Neither of these tribes is restricted to the Fort Belknap Reservation. The Assiniboins are located as well on the Fort Peck and perhaps other reservations. The Gros Ventre are located not only on the Fort Belknap Reservation but also on the Fort Berthold Reservation. Neither the Assiniboin nor the Gros Ventre tribes have any separate tribal organization.

    The Assiniboin and Gros Ventre of the Fort Belknap Reservation have been recognized politically as a single tribe for many years. These Indians have had a single tribal council since at least 1922. The tribal land of the reservation is owned by the "Fort Belknap Indians" as a tribe and not by the Assiniboin and Gros Ventre tribes as such. Tribal funds are likewise owned by the Fort Belknap Indians as a tribe. In short, those portions of the Assiniboin and Gros Ventre tribes located on the Fort Belknap Reservation have actually amalgamated to form a united or confederated tribe as has been the case historically with the Cherokees and Delawares, with the Confederated Salish and Kootenai Tribes of the Flathead Reservation, with the three affiliated tribes of the Fort Berthold Reservation, and with many other Indian groups. It is, therefore, entirely proper to treat the Indians of this reservation as a single tribe for which land may be acquired and which may, through its elected council, participate in the administration of such land.

    Even if these tribes had not amalgamated prior to the adoption of their present constitution, it must be held that under that constitution they constitute a single tribe.

    Section 16 of the Indian Reorganization Act specifies that tribes residing on the same reservation may organize together, adopt a single constitution, and as a tribe exercise certain powers. The Fort Belknap Indians have in fact organized as a single tribe and adopted the name "Fort Belknap Indian Community". Title to any land acquired for this tribe should be vested in "The United States of America in trust for the Fort Belknap Indian Community."

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
CHIPPEWA ENROLMENT
March 24, 1936.
Memorandum for Mr. Zimmerman:

    Further consideration, based on your memorandum of January 24, has been given to the matter of enrollment of Patricia Gameil Peron and Donna Peron, children of Mrs. Leona Leslin Peron, with the Red Lake Band of Chippewa Indians in Minnesota.

    By memorandum of May 14, 1935, the Acting Solicitor returned these applications for the reason, first, that the Red Lake Band of Indians in general council assembled had rejected the applications and, second, that the mother of these children had abandoned her tribal relations prior to birth of the children. This latter conclusion was based upon the record then submitted showing that the mother had long been absent from the reservation and while so absent had married a white man to which union the children were born. The information now at hand, obtained upon further investigation, shows that the absence of the mother from the reservation was comparatively short after her marriage. For this reason and as abandonment of tribal relations is not to be imputed to trifling circumstances, I should be inclined to agree with you that the enrollment of these children should be approved were it not for the adverse action of the Red Lake Tribal Council. This tribal action, while subject to the supervisory authority of the Secretary, in enrollment matters, where the distribution of tribal funds and other property under the supervision and control of the Federal government are involved, nevertheless should I think, be regarded as controlling in doubtful cases. If, as your memorandum indicates, the action of the tribal council was induced by a misunderstanding of the attitude of the Department in these particular cases, I suggest that consideration be given to resubmission of the application to the tribal council with the statement of your views in the matter.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
 


 

614

DEPARTMENT OF THE INTERIOR

MARCH 25, 1936

NAVAJO--AUTHORITY OF SPECIAL
DISBURSING AGENT

March 25, 1936.
Memorandum for the Assistant Commissioner of Indian Affairs:

    The attached letter relative to the authority of the Special Disbursing Agent for the Navajo Agency to collect the savings account of a deceased Navajo Indian, prepared in your office for the signature of the Acting Chief, Division of Appointments, is returned to you for further consideration.

    The only authority under which a Special Disbursing Agent may collect such accounts is that conveyed by the act of February 25, 1933 (47 Stat. 907) which provides:

"That any money accruing from the Veterans' Administration or other governmental agency to incompetent adult Indians or minor Indians, who are recognized wards of the Federal Government, for whom no legal guardians or other fiduciaries have been appointed may be paid, in the discretion of the Administrator of Veterans' Affairs, or other head of a governmental bureau or agency, having such funds for payment, to such superintendent or other bonded officer of the Indian Service as the Secretary of the Interior shall designate, for the use of such beneficiaries, or to be paid to or used for, the heirs of such deceased beneficiaries, to be handled and accounted for by him with other moneys under his control, in accordance with existing law and the regulations of the Department of the Interior."
    I am of the opinion that the language of this act is broad enough to cover the situation presented in the attached letter of the Third Assistant Postmaster General.

    The proposed answer to that letter, however, fails to conform to the requirements of the above statute. It should be limited, as the statute requires, to the contingency that "no legal guardians or other fiduciaries have been appointed." Under the revised law and Order Regulations approved by the Secretary of the Interior on November 27, 1935, courts of Indian offenses may provide for the disposition of decedents' estates which do not involve allotted lands and may presumably, in the exercise of this power, appoint "legal guardians or other fiduciaries." (Macky v. Coxe, 18, Howe, 100, and other cases cited in Solicitor's Opinion on powers of Indian tribes, approved October 25, 1934, pages 45-50).

    Accordingly, any authority conferred upon the Special Disbursing Agent of the Navajo Agency to receive funds accruing from any Government agency covered by the statute above quoted, should be expressly limited to cases where the court of Indian Offenses having jurisdiction over the estate has failed to appoint an administrator or other fiduciary.

    I recommend that a statement expressly authorizing the said employees to receive such funds be prepared for the signature of the Secretary and that a copy of such statement be forwarded to the Third Assistant Postmaster General.

Solicitor.
KIOWA CROP MORTGAGES


March 25, 1936.


 Memorandum for the Commissioner of Indian Affairs:

    Your letter of February 24 to the Superintendent of the Kiowa Indian Agency regarding the validity of mortgages of growing crops given by Indians who farm their trust allotments, is returned.

    In deciding this question your letter fails to distinguish between growing crops prior to severance and crops which have been severed or harvested. I am aware of no restriction which prevents an Indian who farms his own land from harvesting and disposing of the crop as he deems best. Growing crops, however, are a part of the land and are held in trust by the Government the same as the land and neither a sale nor mortgage thereof prior to severance is valid without the consent of the Government. United States v. First National Bank 282 Fed. 330. I suggest that this distinction with respect to the capacity of the allottee to deal with his crops prior to and after severance be brought out clearly in your letter. There should be added, of course, the further statement that the authority conferred upon the allottee to sell the land with the approval of the Secretary of the Interior (act of March 1, 1907, 34 Stat. 1018), includes the lesser authority to sell or mortgage growing crops with like approval.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
 


 

615

OPINIONS OF THE SOLICITOR

MARCH 31, 1936

EDUCATIONAL LOANS TO INDIANS

M-28317                                                                                                                               March 31, 1936.

The Honorable,
ThE Secretary of the Interior.

MY DEAR MR. SECRETARY:

    My opinion has been requested on the questions (1) whether loans under section 11 of the act of June 18, 1934 (48 Stat. 984), and the provisions of the appropriation act pursuant thereto may be made to students in a special course of technical study maintained under the auspices of a Government Indian school and on a Government school campus although separate from the regular school, and (2) whether the loans may be extended to pupils at such a school in excess of their actual expenses at the school to enable them to support their families while in training.

    The Commissioner of Indian Affairs has reported that a need has arisen for technical instruction of Indian personnel engaged in road work on Indian reservations in the operation and repair of road machinery. Lack of such training is an obstacle to the effectuation of the express policy of Congress and the Interior Department to stimulate Indian employment and advancement in the Indian services. It is proposed that a short course in mechanics be established under the Phoenix Indian School and on its campus for road men recommended from each of the road districts by the various superintendents. A number of these young men will be married and will be unable to take the course unless financial support is provided for their families during the period of the course. The superintendents will be prepared to contract for the reemployment of the students with the assurance that a proportion of their educational loans will be repaid monthly until the entire amount is amortized from their wages.

    Section 11 of the act of June 18, 1934 (48 Stat. 984), reads as follows:

    "There is hereby authorized to be appropriated, out of any funds in the United States Treasury not otherwise appropriated, a sum not to exceed $250,000 annually, together with any unexpended balances of previous appropriations made pursuant to this section, for loans to Indians for the payment of tuition and other expenses in recognized vocational and trade schools: Provided, That not more than $50,000 of such sum shall be available for loans to Indian students in high schools and colleges. Such loans shall be reimbursable under rules established by the Commissioner of Indian Affairs."
    The Appropriation Act for the current fiscal year (49 Stat. 190) provides for educational loans to Indians as follows:
"For loans to Indians for the payment of tuition and other expenses in recognized vocational and trade schools, in accordance with the provisions of the Act of June 18, 1934 (48 Stat., p. 986), $175,000, reimbursable: Provided, That not more than $35,000 of such sum shall be available for loans to Indian students in high schools and colleges."
    (1) The answer to this question depends upon whether the school involved falls within the class of "recognized vocational and trade schools." That educational loans made under the Reorganization Act cited above and the Appropriation Act for specialized vocational courses must be confined to study in "recognized vocational and trade schools" was stated by the Comptroller General in his letter to this Department dated July 23, 1935. The Phoenix Indian School is a vocational school, recognized by Congress as such, receiving an additional appropriation of $50 per capita over and above the usual Federal appropriations for Indian schools because of the higher cost of operating vocational schools of this type. It has not been assumed in the correspondence with the Comptroller on the subject of educational loans that a loan can be made only to students preparing to take all the courses offered by the school for graduation purposes. On the contrary it has been recognized that loans are both necessary and available for students who require only separate or special courses in particular subjects. It is my opinion that special courses in vocational subjects given by or under the auspices of a recognized vocational school are within the plain intent of the statutes cited.

    (2) The question of whether loans may be extended to pupils at such a school in excess of their actual expenses at the school cannot be answered with any degree of confidence upon the basis of the language of the statute or the legislative history of the relevant provisions. On this point no relevant opinions of the Comptroller General have been brought to my attention. An opinion of the Interior Department on such a question could give no reasonable assurance to disbursing agents of the Department that their accounts would not be subject to exceptions with respect to such loans. I must
 


 

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DEPARTMENT OF THE INTERIOR

MARCH 31, 1936

therefore decline to rule on the second question presented.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: March 31, 1936.
T. A. WALTERS, First Assistant Secretary.

OWNERSHIP OF ISLAND WITHIN
FT. BERTHOLD RESERVATION

M-28120                                                                                                                             March 31, 1936.

Synopsis

Re: Title to island in the Missouri River within the Fort Berthold Indian Reservation.

Held: An island formed in a navigable stream within an Indian reservation is a part of the reservation if the river bed was part of an area reserved for Indian use prior to the admission of the State in which the reservation is located.
That a certain island in the Missouri River within the boundaries of the Fort Berthold Indian Reservation is part of the Indian reservation.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    My opinion has been requested on the question of the ownership of part of an island in the Missouri River lying within the boundaries of the Fort Berthold Indian Reservation.

    The land in question has been formed out of the bed of the Missouri River since 1889, according to the findings of the Commissioner of the General Land Office. Prior to the formation of this island, North Dakota had been admitted to statehood. Act of February 22, 1889 (25 Stat. 676). The question arises: "Did the island, upon its formation, become the property of the State of North Dakota, or did it become a part of the reservation held by the United States in trust for the Fort Berthold Indians."

    As a general rule, islands formed in navigable streams belong to the sovereign state which owns the river bed. Section 5475 of the Compiled Laws of North Dakota, 1913, provides:

    "Islands and accumulation of lands formed in beds of streams which are navigable belong to the State, if there is no title or prescription to the contrary."
    It is well established, however, that tide lands and beds of navigable streams which have been made part of an Indian reservation, by treaty or otherwise, do not pass to a State subsequently created. United States v. Stotts (49 Fed. (2d) 619); Taylor v. United States (44 Fed. (2d) 531).

    The question in each case is whether prior to the admission of the territory to statehood the land has been made part of an Indian reservation, or otherwise reserved for some public purpose of the Federal Government. In United States v. Holt Bank (270 U.S. 49, 55), the court declared:

    "It is settled law in this country that lands underlying navigable waters within a State belong to the State in its sovereign capacity and may be used and disposed of as it may elect, subject to the paramount power of Congress to control such waters for the purposes of navigation in commerce among the States and with foreign nations, and subject to the qualification that where the United States, after acquiring the territory and before the creation of the State, has granted rights in such lands by way of performing international obligations, or effecting the use or improvement of the lands for the purposes of commerce among the States and with foreign nations, or carrying out other public purposes appropriate to the objects for which the territory was held, such rights are not cut off by the subsequent creation of the State, but remain unimpaired, and the rights which otherwise would pass to the State in virtue of its admission into the Union are restricted or qualified accordingly. Barney v. Keokuk, 94 U.S. 324, 338; Shively v. Bowlby, 152 U.S. 1, 47-48, 57-58; Scott v. Lattig, 227 U.S. 229, 242; Port of Seattle v. Oregon & Washington R. R. Co., 255 U.S. 56, 63; Brewer-Elliott Oil & Gas Co. v. United States, 260 U.S. 77, 83-95. But, as was pointed out in Shively v. Bowlby, pp. 49, 57-58, the United States early adopted and constantly has adhered to the policy of regarding lands under navigable waters in acquired territory, while under its sole dominion, as held for the ultimate benefit of future States, and so has refrained from making any disposal thereof, save in exceptional instances when impelled to particular disposals by some international duty or public exigency. It follows from this that disposals by the United States during the territorial period are not lightly to be inferred, and should not be regarded as intended unless the intention was definitely declared or otherwise made very plain."



 

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OPINIONS OF THE SOLICITOR

MARCH 31, 1936

    The ownership of the island in question, therefore, turns upon the narrow issue: "Was the bed of the Missouri River a part of that territory which was reserved to the Fort Berthold Indians prior to the admission of North Dakota to the Union?"

    The steps in the creation of the present Fort Berthold Reservation are traced in detail in the case of Fort Berthold Indians v. United States (71 Ct. Cl. 308). The court's special findings of fact show that by the treaty of Fort Laramie, dated September 17, 1851 (11 Stat. 749), a large tract of land, of which the Missouri River at the point in question was a northeastern boundary, was recognized as "territory of the Gros Ventre, Mandan, and Arickaree Nations" and that "in making this recognition and acknowledgement, the aforesaid Indian Nations do not hereby abandon or prejudice any rights or claims they may have to other lands; and further, that they do not surrender the privilege of hunting, fishing, or passing over any of the tracts of country heretofore described". Subsequently, by Executive order dated April 12, 1870, new boundaries were fixed for the Reservation of the Arickaree, Gros Ventre and Mandan Indians, since known as the Fort Berthold Reservation. These boundaries included territory on both sides of the Missouri River, at the point now in controversy. The Executive order made no express reference to the bed of the river. In this respect the facts here presented are different from those presented in United States v. Stotts, supra, where tide lands were expressly reserved to the Lummi Tribe, or in Taylor v. United States, supra, where the river bed had been transferred to the State of Washington prior to the creation of a reservation.

    Again, the facts presented in the instant case are distinguishable from those involved in Haight v. City of Keokuk (4 Iowa 199), and Barney v. Keokuk (94 U.S. 324), where the grant of land was made to individual Indians rather than to a political body, and was therefore construed to run to the river edge rather than to the medium filum aquae. In the instant case the grant of territory runs in favor of a political body, with which the United States dealt by treaty and which could, with entire propriety, receive a grant of title to the bed of a navigable stream. See Taylor v. United States, supra, at 534; Fort Berthold v. United States, supra; Solicitor's Opinion (M. 27781) on Powers of Indian Tribes, approved October 25, 1934, at pp. 5-23.

    Finally the case is distinguishable from United States v. Holt Bank, supra, in which the court found the bed of Mud Lake had not been included as a part of the Red Lake Reservation. The court summarized the facts leading to this conclusion as
follows:

"* * * There was no formal setting apart of what was not ceded, nor any affirmative declaration of the rights of the Indians therein, nor any attempted exclusion of others from the use of navigable waters. The effect of what was done was to reserve in a general way for the continued occupation of the Indians what remained of their aboriginal territory; and thus it came to be known and recognized as a reservation. Minnesota v. Hitchcock,185 U.S. 373, 389. There was nothing in this which even approaches a grant of rights in lands under lying navigable waters; nor anything evincing a purpose to depart from the established policy, before stated, of treating such lands as held for the benefit of the future State." (At page 58.)
    In the instant case there was, very clearly, a formal setting apart to the Indians of territory on both sides of the river bed here in question. This was done under circumstances requiring an international agreement between the United States and the Indian Nations concerned. The instant case thus falls fairly within the exception which the Supreme Court has recognized to the general policy above stated.

    On the question of the intent of Congress, the words of the United States Supreme Court in Donnelly v. United States (228 U.S. 243) are applicable to the instant case. In the Donnelly case, a question of Federal jurisdiction turned on the issue of whether the river bed of the Klamath River was part of the Hoopa Valley Reservation. The language of the Executive order describing such reservation was essentially similar to the language used in the Executive order of 1870 defining the territory of the Fort Berthold Reservation. The Court declared:

    "Does the reservation include the bed of the Klamath River? The descriptive words of the order are 'a tract of country one mile in width on each side of the Klamath River and extending,' etc. It seems to us clear that if the United States was the owner of the river bed, a reasonable construction of this language requires that the river be considered as included within the reservation. Indeed, in view of all the circumstances, it would be absurd to treat the order as intended to include the uplands to the width of one mile on each side of the river, and at the same time to exclude the river. As a matter of history it plainly appears that the Klamath Indians established themselves along the river in order to gain a subsistence by fishing. The reports of the local Indian agents and

 

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DEPARTMENT OF THE INTERIOR

MARCH 31, 1936

superintendents to the Commissioners of Indian Affairs abound in references to fishing as their principal subsistence, and the river is described as running in a narrow canyon through a broken country, the Indians as dwelling in small villages close to its banks. * * *" (At page 259.)

    The question of navigability of the Missouri River at the point in question is irrelevant to the question of ownership of the river bottom. Clearly neither the State of North Dakota nor any Indian 'tribe could interfere with commerce on a navigable stream, regardless of the ownership of the land under water. The question of such ownership should be considered in terms of its actual
implications. It is well known that the Missouri River in the region of the Fort Berthold Reservation is a river of changing outlines, with banks generally moving in one direction or another and sometimes in both directions at once. Can it be plausibly declared that at the time of setting aside Fort Berthold Reservation the Government intended to recapture islands or strips of land that might be formed from what was at the moment river bottom? Or did the Government simply reserve what it could not in any event alienate, namely, a public highway for navigation under Federal protection and control?

    Viewed in this light, the intent of the Government appears clear. I am of the opinion that the river bed, at the point in question, was part of the Fort Berthold Indian Reservation prior to the admission of North Dakota to statehood. The State of North Dakota, on its admission to the Union, expressly disclaimed all right and title to Indian lands. Constitution of North Dakota, Article XVI, section 203. It follows that islands subsequently formed from the river bed, which belonged to the Indians of the Fort Berthold Reservation, retained the original status of the river bed and must now be recognized as part of the Fort Berthold Reservation.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: March 31, 1936.

T. A. WALTERS, First Assistant Secretary.

SIOUX--ELECTIONS ON CONSTITUTIONS

April 15, 1936.
Memorandum to Mr. Zimmerman
Assistant Commissioner of Indian Affairs.

    In connection with the matter of calling elections on the constitutions for the Lower Sioux Indian Community and the Prairie Island Indian Community under the Pipestone jurisdiction, the two constitutions and the letters addressed to the two constitutional committees have been revised in this office to accord with certain legal principles.

    Neither of these two Indian groups constitutes a tribe but each is being organized on the basis of their residence upon reserved land. After careful consideration in the Solicitor's Office it has been determined that under section 16 of the Indian Reorganization Act a group of Indians which is organized on the basis of a reservation and which is not an historical tribe may not have all of the powers enumerated in the Solicitor's opinion on the Powers of Indian Tribes dated October 25, 1934. The group may not have such of those powers as rest upon the sovereign capacity of the tribe but may have those powers which are incidental to its ownership of property and to its carrying on of business, and those which may be delegated by the Secretary of the Interior.

    In the case of these two communities three of the powers listed in the constitutions have been found not to be within the permissible limits of the powers for such group. These powers were the power to condemn land of members of the community, to regulate the inheritance of the property of members of the community, and to levy taxes upon members of the community. The first two powers were eliminated but the last was modified to restrict it to a permissible scope by allowing the levying of assessments upon members of the tribe for the use of community property and privileges. As these assessments would be incidental to the ownership of community property it is considered that the community would be privileged to impose them. The reasons for these changes were reported to the Indians in the letters to the constitutional committees. It is believed that the Indians will have no objections to these changes but if they should have they may seek the postponement of the elections as already suggested in the letters addressed to the committees. The remaining powers were found justified on the bases of one of the above mentioned principles. The power over law and order is made subject to review by the Secretary of the Interior, and may be sustained as a delegation of power.

    As these changes were legally necessary and did not involve considerations of policy and as there has been prolonged delay in calling the elections for these two communities, the above changes were made in this office without returning the files to the Indian Office. It is requested that you call this memorandum to the attention of the Organization Division in order that the above stated legal principles may be followed in future cases of organiza-
 


 

619

OPINIONS OF THE SOLICITOR

APRIL 15, 1936

tions of Indians upon the basis of residence on a reservation.

Solicitor.
FIVE CIVILIZED TRIBES-ATTORNEY'S FEES

M-28309                                                                                                                                April 16, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    At the request of the Assistant Commissioner of Indian Affairs, a question relating to the application of F. M. Goodwin and associates, attorneys, of Washington, D.C., for the allowance of a fee for services rendered in representing the petitioner in the Sandy Fox case (Superintendent of the Five Civilized Tribes v. Commissioner of Internal Revenue, 295 U.S. 418), has been submitted to me for opinion. Before proceeding to a discussion of the immediate problem, however, it is essential that the events leading to and including a certain arrangement between the Department and the applicants, the scope of which is in dispute, be reviewed briefly.

    Prior to 1924, the Department had employed Wolf and Company, of Chicago, Illinois, and the F. W. Freeborn Engineering Corporation, of Tulsa, Oklahoma, in behalf of the restricted members of the Five Civilized Tribes, to assist in seeking the abatement or refund of certain Federal income taxes for the years 1917 to 1920, inclusive, under various headings, including depletion, depreciation and discovery allowances. Certain recoveries were thereby effected. The question then arose whether income derived from tax exempt land held by a restricted Indian should be subject to any Federal income tax. With the approval of the Department, a number of Indians thereupon employed Messrs. Robert B. Keenan, of Tulsa, and W. R. Banker, of Muskogee, Oklahoma, to prosecute claims for refunds of income taxes paid during past years, and other Indians employed other attorneys for the same purpose.

    On March 15, 1924, the Attorney General rendered an opinion (34 Ops. Atty. Gen. 275) favorable to the Indians' contention and Treasury Decision No. 3570, in pursuance thereof, was issued shortly thereafter. Thereupon, the Superintendent of the Five Civilized Tribes filed refund claims with the Collector of Internal Revenue for the Oklahoma District in behalf of a number of restricted members of the Tribes.

    On January 12, 1932, Mr. Goodwin, who with his associates had been active in similar Osage income tax refund cases, addressed a letter to the First Assistant Secretary of the Interior, from which the following is quoted:

"The Superintendent of the Five Civilized Tribes, on behalf of the incompetent members of the said Tribes, has already submitted applications for certain tax refunds. However, the records at the Agency at Muskogee have not been kept so as to reveal the amount which has been sent for the incompetent Indians for taxes. The Superintendent, acting on the best information available to him, submitted his applications on behalf of the Indians, but it is now believed that approximately 1,000 Indians are entitled to refunds of varying amounts which have not been covered by the applications made by the Superintendent. The exact amount of such probable refunds cannot be stated, but from all the information available, they will amount to a substantial sum. * * *

    "Mr. Whitney has discussed these cases with me and asked me and my associates to join with him in seeking your approval of our employment to make a thorough check of all the incompetent cases to obtain additional tax refunds. The data for this can only be obtained by an exhaustive examination of the returns and records of the Internal Revenue Bureau in Oklahoma and in Washington, D.C. For this reason, it is impossible for the Superintendent, or his assistants, to function in this matter. The logical and reasonable course would be to employ attorneys and cause a thorough check to be made of the Internal Revenue records so that any refunds to which these Indians are entitled may be obtained.

    "I am willing to undertake this work on a quantum meruit basis, subject to your approval of such employment and of the fee to be paid on refunds actually obtained. As there will be a mass of details to consider, it will be necessary for me to have associates. * * * In view of the fact that the Osage tax claims have been so recently handled by the Internal Revenue Bureau and that its attorneys and agents are now more familiar with the Indian laws and problems than usual, it is believed that this is a very appropriate time to undertake this work, and it would be to the advantage of the Indians as well as of the Government to expedite the same as much as possible."

    On April 18, 1932, the Commissioner of Indian Affairs, after discussing the events hereinbefore
 


 

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DEPARTMENT OF THE INTERIOR

APRIL 16, 1936

reviewed, recommended that Mr. Goodwin's application for employment be favorably considered and on May 10 the First Assistant Secretary approved a departmental letter of authorization to Mr. Goodwin. The significant portions are quoted:

" * * * you are hereby authorized to take up with the Commissioner of Internal Revenue the matter of checking the records of income taxes paid by or for restricted Indians of the Five Civilized Tribes consisting of the Choctaws, Chickasaws, Creeks, Cherokees and Seminoles. You are further authorized to take the matter up with the Superintendent of the Five Civilized Tribes Agency, Muskogee, Oklahoma, who is being furnished a copy hereof and make such examination of the records there as is proper and necessary, and thereafter to proceed to file refund claims on behalf of the individual Indians wherever it appears that Federal income taxes have been erroneously paid; * * *

    "Your fee for services rendered, as stated in our prior letter, will be determined by the Department on a quantum meruit basis and shall not in any case exceed eight per cent of the amount of refund recovered for the Indian.

    "Should it appear that any individual Indian has previously entered into contract with any other attorney to obtain refund of income taxes, such contract if approved will be duly recognized and if unapproved further opportunity will be given the Indian to elect which attorney he desires to further prosecute the claim; it being understood that in no event will a fee of more than eight per cent of the amount recovered be allowed to any attorney for services rendered in this class of cases."

    On March 29, 1932, the Commissioner of Internal Revenue had issued notices of deficiency assessments of income tax liability for the year 1929 to the Superintendent of the Five Civilized Tribes for Sandy Fox, Creek Roll No. 1263, and Susanna Dacon Butler, Creek Minor, Roll No. 153. The deficiency assessments were based on failures to include interest upon refunds of income taxes which had been made pursuant to Treasury Decision No. 3570. The record discloses that the Commissioner of Indian Affairs was advised of these assessments by the Superintendent in a letter dated April 4, 1932. The exact point of time at which Mr. Goodwin's attention was first directed to them does not appear. Presumably, however, it was subsequent to the completion of negotiations for the employment authorized in the letter approved May 10, 1932, quoted above. In any event, the first item of correspondence in the record pertinent to the instant application for the allowance of a fee is a letter, dated May 17, 1932, from Mr. Goodwin to the Commissioner, from which the following is quoted:
    "Your office has informally called my attention to the sixty-day letters issued by the Internal Revenue Bureau to Sandy Fox, a full blood Creek Indian and to another Indian member of the Five Civilized Tribes whose name I have forgotten. These sixty-day letters demand the payment of additional taxes. It is my understanding that cases of this nature will come within the purview of the employment of myself and associates in the tax cases relating to the Five Civilized Tribes. The proper course of action in the Sandy Fox and similar cases is to make an appeal to the Board of Tax Appeals in Washington before the expiration of the sixty-day period. This would be the course recommended in all such cases which may be referred to us for consideration and action.

    "The Board of Tax Appeals in all appeal matters required the payment of a fee of $10.00 in each case at the time of the filing of the appeal. * * *

    "I would therefore respectfully suggest that your office issue the proper authority to the Superintendent of the Five Civilized Tribes, directing that a draft be drawn against the account of any Indian wherein an appeal to the Board of Tax Appeals becomes necessary."

    On May 24, the Commissioner thus formally advised Mr. Goodwin:
    "Reference is made herein to our letter of May 6, 1932 to you, approved on May 10, 1932, by the First Assistant Secretary of the Interior and to the authorization therein given you and your associates in the matter of representing restricted Indians of the Five Civilized Tribes in their Federal income tax matters.

    "In view thereof and in order that you may proceed in accordance therewith in the cases of Susanna Dacon, now Butler, Creek Minor, Roll No. 153 and Sandy Fox, Creek Roll No. 1263, there are transmitted herewith copies of letters of April 4, and May 18, 1932, of the Superintendent of the Five Civilized Tribes Agency, to the Commissioner of Indian Affairs, and copies of the enclosures thereof relative to a deficiency assessment of $257.50 for the year
 


 

621

OPINIONS OF THE SOLICITOR

APRIL 16, 1936

1929 against said Susanna Dacon Butler, and a deficiency assessment of $167 for said year 1929 against Sandy Fox.

    "It appears * * * that the time for filing petitions to the United States Board of Tax Appeals for a redetermination of the tax liability for the year 1929 in said two cases will shortly expire."

    The following is quoted from a letter from Mr. Goodwin, dated July 11, 1932, to the Commissioner, concerning reimbursement for the payment of a filing fee in the Sandy Fox case:
    In accordance with your letter of May 24, 1932 * * * proceedings were instituted before the United States Board of Tax Appeals to test the validity of the deficiency assessment against Sandy Fox. This action was also taken under authority of your letter of May 6, 1932, approved by First Assistant Secretary Dixon on May 10, 1932."
The record includes a similar letter of the same date with reference to the Susanna Dacon Butler case.

    Following adverse decisions in the two cases by the Board of Tax Appeals (29 B.T. A. 635), Mr. Goodwin wrote to the Assistant Commissioner on January 23, 1934:

    "By virtue of authority of your office, approved by the Secretary of the Interior, proceedings were instituted by myself and associates to test the validity of deficiency Federal income tax assessments against Sandy Fox, Creek Roll No. 1263 and Susanna Dacon, now Butler, Creek minor, Roll No. 136.

    "The Board of Tax Appeals, before whom these proceedings were instituted, recently handed down opinions adverse to these claimants and sustaining the validity of the tax in these cases. In our judgement the opinion of the Board is erroneous and directly contrary to the opinion of the Tenth U.S. Circuit Court in the Mary Blackbird case, on which the Osage refunds were based. We believe these cases should be appealed, as a final decision will not only affect the particular deficiency assessments involved but the taxable status of a large number of the members of the Five Civilized Tribes.

    "Susanna Butler, some time since approved our employment and paid the cost of our proceedings in her behalf. Mr. Jay W. Whitney, our associate in Tulsa, Oklahoma, has just wired me that Sandy Fox has likewise approved our employment in this matter, after being informed of the result before the Board of Tax Appeals."

    The record does not disclose that formal instructions to the attorneys to prosecute an appeal issued from the Department. However, considerable correspondence passed between the Department and the attorneys concerning the propriety of prorating the costs of an appeal among affected Indians and on March 5, 1934, the Commissioner of Indian Affairs wrote to the Commissioner of Internal Revenue concerning a case similar to the Sandy Fox case:
    "You refer to the decisions rendered recently by the Board of Tax Appeals in the case of Sandy Fox and in the Mills case. It is probable that these cases, or one of them, may be appealed by the attorneys representing the Indians, and until we are definitely informed as to whether an appeal will be taken, we would not feel disposed to give a final expression of views with regard to the claim of Mollie Jones. * * *"
    The attorneys took an appeal in the Sandy Fox case to the United States Circuit Court of Appeals for the Tenth Circuit, which on January 9, 1935, rendered an opinion (75 F. (2d) 183), affirming the decision of the Board of Tax Appeals. The feasibility of petitioning the United States Supreme Court for a writ of certiorari was urged by Mr. Goodwin in a letter to the Commissioner, dated January 18, 1935:
    "Your attention is invited to an opinion handed down a few days ago by the Tenth U.S. Circuit Court in the case involving the right of the United States to levy an income tax on the restricted income of Sandy Fox, a Creek Indian, where such income arises from the investment of his restricted funds. The opinion was adverse and sustained the opinion of the Board of Tax Appeals that such income is subject to the Federal income tax.

    "Your especial attention is invited to the fact that the opinion of the court stated that 'the question is not free of doubt' and that it is 'close and difficult.' A dissenting opinion by Judge Lewis holds, in effect, that the majority opinion over-rules the Mary Blackbird case, under which the Osage refunds were made, and that it disregards the wholesome doctrine of stare decisis. * * *
 


 

622

DEPARTMENT OF THE INTERIOR

APRIL 16, 1936

    "The question of seeking certiorari in the Supreme Court of the United States is now under consideration both in the Internal Revenue Bureau and the Department of Justice and we wish to satisfy the officials that this is a case of sufficient public and administrative interest to warrant their concurrence in our application for certiorari. * * *

    "We understand also that to permit this opinion to stand unchallenged will not only affect the rights of a number of Indians but that it would add materially to the cost of administration of your office in looking after their taxation matters.

"In view of the doubt expressed by the major opinion and the strong dissenting opinion, coupled to the number of Indians involved and the administrative problems raised, we are strongly of the opinion that certiorari proceedings should be instituted and should be supported by your office as far as possible. * * * "

    A petition for a writ of certiorari in the Sandy Fox case was filed in the United States Supreme Court by the attorneys and was granted on April 15, 1935. On May 20, 1935, however, the Supreme Court rendered a decision (295 U.S. 418) affirming the judgement of the Circuit Court of Appeals.

    The foregoing is but a brief resume of the voluminous correspondence which passed between the various interested parties prior to and during the progress of the Sandy Fox matter and its restatement is essential to a determination of the question now presented: To what fee, if any, are the attorneys entitled as compensation for their services in representing the petitioner in the Sandy Fox case?

    The attorneys contend that the handling of the Sandy Fox case was not within the scope of the original departmental authorization of employment, approved May 10, 1932, and that hence they are entitled to the allowance of a reasonable fee notwithstanding the unsuccessful termination of the suit. On the other hand, the Indian Office has inclined to the view that the amount of the fee for services in the Sandy Fox case was to be governed by the provisions of the original authorization and therefore that the allowance of any fee whatever was subject to the contingency of a successful outcome of the suit.

    In so far as actual refunds were concerned, the meaning of the original agreement is clear. In each case in which a refund should be effected, the attorneys were to receive a fee computed on a quantum meruit basis, provided that it should not exceed 8 percent of the amount of the refund. If no refunds should be obtained, there of course were to be no fees whatever. To this extent there can be no dispute.

    In considering the question whether the Sandy Fox case was within the scope of the express agreement, three conceivable analyses may be suggested:

    1. The case was within the scope of the express agreement but the allowance of a fee was in any event contingent on a successful termination of the suit and no fee therefore should now be allowed.

    2. The cause was within the scope of the express agreement but the attorneys nevertheless are entitled to the allowance of a fee on the quantum meruit basis for which provision was therein made on the ground that the 8 percent limitation was applicable only to "refunds" of taxes already paid, whereas the Sandy Fox case involved a deficiency assessment, an entirely different matter.

    3. The case was entirely without the scope of the express agreement and the attorneys, having rendered the services at the request of the Department, are entitled to the allowance of reasonable compensation for the performance of a contract implied in fact.

    For the reasons set forth in the discussion to follow, I am of the opinion that both the second and third of the foregoing propositions are definitely inconsistent with the terms of the agreement and the interpretation placed on it by the parties, and that the unsuccessful termination of the Sandy Fox suit therefore precludes the allowances of any fee whatever.

    The exchange of correspondence indicates that the Sandy Fox case includes the following:

"* * * It is my understanding that cases of this nature will come within the purview of the employment of myself and associates in the tax cases relating to the Five Civilized Tribes. The proper course of action in the Sandy Fox and similar cases is to make an appeal to the Board of Tax Appeals in Washington before the expiration of the sixty-day period. This would be the course recommended in all such cases which may be referred to us for consideration and action." (Emphasis added.)
    The attorneys now contend that the first sentence quoted above had reference only to the payment of the expenses of the litigation, an assertion in my opinion inconsistent with the words "purview of the employment." I emphasize also the significant language in the Commissioner's letter of May 24, 1932, and Mr. Goodwin's letter of July 11, 1932, portions of which again are quoted respectively:
 


 

623

OPINIONS OF THE SOLICITOR

APRIL 16, 1936

    "Reference is made herein to our letter of May 6, 1932 to you, approved on May 10, 1932, by the First Assistant Secretary of the Interior and to the authorization therein given you and your associates in the matter of representing restricted Indians of the Five Civilized Tribes in their Federal income tax matters.

   "In view thereof and in order that you may proceed in accordance therewith in the case of Susanna Dacon, now Butler, Creek Minor, Roll No. 153 and Sandy Fox, Creek Roll No. 1263 * * *."

   "In accordance with your letter of May 24, 1932 * * * proceedings were instituted before the United States Board of Tax Appeals to test the validity of the deficiency assessment against Sandy Fox. This action was also taken under authority of your letter of May 6, 1932, approved by First Assistant Secretary Dixon on May 10, 1932." (Emphasis supplied.)

    The foregoing and other correspondence, portions of which already have been quoted herein, admit of no doubt that the original arrangement was recognized by all parties as the foundation of the authority to proceed in the Sandy Fox assessment case.

    This being true, the only remaining question is that of the practical application of the provisions for compensation in the original arrangement to the Sandy Fox case. For convenience, those provisions are again quoted. Mr. Goodwin's offer of January 12, 1932, contained the following:

    "I am willing to undertake this work on a quantum meruit basis, subject to your approval of such employment and of the fee to be paid on refunds actually obtained."
    The departmental authorization of May 10, 1932, stated:
    "Your fee for services rendered, as stated in our prior letter, will be determined by the Department on a quantum meruit basis and shall not in any case exceed eight per cent of the amount of refund recovered for the Indian."
    The application for fees now before the Department must be governed wholly by the foregoing language, which obviously contemplated that success in the prosecution of any particular claim should be a condition precedent to the allowance of any fee whatever. Thus, in practice, the provisions were to operate in this fashion:

    1. If the particular claim were decided adversely to the Indian, no obligation to allow any fee whatever arose.

    2. If the particular claim were decided favorably to the Indian, the attorneys became entitled to a fee computed thus:

    (a) on a quantum meruit basis and

    (b) not exceeding 8 percent of the amount of the refund.

    That is, the quantum meruit provision is not the underlying one, whereas the contingent provision is. The quantum meruit provision and the 8 percent provision are merely successive modifiers of the amount of the fee if the obligation to pay any fee arose. The attorneys do not dispute this analysis as applied to refund claims but contend that it is inapplicable to the Sandy Fox case be cause the latter involved not a claim for a refund of money already paid but, to the contrary, contested the collection of money not yet paid. Granting that the Sandy Fox case apparently was not in the minds of the parties at the time the arrangement was made and that the distinction for which the attorneys contend is theoretically sound, the fact remains that the central thought in the fee arrangement was that the payment of any fee should be contingent on success.

    Finally. it is immaterial in result whether the services in the Sandy Fox case are regarded as having been rendered pursuant to the original arrangement or in performance of a separate contract incorporating the fee provisions of the old one. In either event there is no room for the operation of the quantum meruit provision prior to the successful termination of the suit, a contingency now impossible.

    In answer to the attorney's objection that a denial of a fee will "result in a distinct injustice to lawyers who spend time and money in the performance of duties under departmental instructions" it must again be pointed out that they contracted for the rendition of the service with express reference to the contingent arrangement and the record includes no remark in any manner indicating that the contingent provision should not continue to be basic. They therefore must be presumed to have anticipated the pecuniary consequence of an adverse final judgment in the suit.

The application accordingly should be denied.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: April 16, 1936.
T. A. WALTERS, First Assistant Secretary.
 


 

624

DEPARTMENT OF THE INTERIOR

APRIL 22, 1936

APPLICABILITY OF THE SOCIAL SECURITY ACT
TO THE INDIANS

Memorandum                                                                                                                         April 22, 1936.

    The Social Security Act (49 Stat. 620), approved August 14, 1935, provides Federal assistance to the States, including Alaska (Section 1101 (a) (1)), to enable them to improve the welfare and security of their inhabitants, and establishes a Federal system of old age benefits for industrial employees. The act contemplates that with Federal assistance the States will give direct aid to three classes of individuals: "aged needy individuals" (Title I); "needy dependent children" (Title IV); and "needy individuals who are blind" (Title X) . The Act also provides Federal financial assistance in improving certain specific State social services: maternal and child health services, especially in rural and stricken areas; services for crippled children; child welfare services, vocational rehabilitation (Title V); and public health services (Title VI). Finally, the act authorizes Federal financial assistance in the administration of State unemployment compensation laws (Title III). Before the Federal assistance becomes available the State plans, or laws, for the provision of these aids and services must be approved by appropriate Federal agencies.

    In determining the eligibility of Indians to those aids and services it is necessary to look first to the provisions of the basic statute. The Social Security Act does not deal with participation by Indians and the intention of Congress is not apparent on the face of the act itself. Nor is its intention clear from the legislative history of the act. An amendment was at one point inserted in the Senate draft of the bill providing specifically for the payment of old-age pensions to the Indians but this was stricken out, indicating an opinion either that it was unnecessary or that it was undesirable. There are, however, certain terms, requirements and conditions in the act which indicate that all the aids and services are intended to be available to all "needy individuals" without regard to race or status, which can be summarized as follows:

    In connection with the three types of direct aid it is provided (1) that a State plan must be "in effect in all political subdivisions of the State". Title I, Sec. (2) (a) (1); Title IV, Sec. 402 (a) (1); Title X, Sec. 1002 (a) (1). Indian reservations are within State counties and other political subdivisions. Porter v. Hall, 271 Pat 411 (Ariz. 1928); LaDuke v. Melin, 45 N.D. 349, 177 N.W. 673; Lebo v. Griffiths, 42 S.N. 198. 173 N.W. 840. (2) Moreover, no State plan is acceptable which imposes as a condition of eligibility for the three forms of direct relief "any residence requirement which excludes any resident of the State" who has resided therein for certain periods. Title I, Sec. 2 (b) (2); Title IV, Sec. 402 (b) (1) (2); Title X, Sec. 1002 (b) (1). The Indian inhabitants of a State are residents thereof. Porter v. Hall, supra; In re Liquor Election in Boltrami County, 138
Minn. 42; 163 N.W. 988. An extension of benefits by State law or State administration only to those needy individuals who are not residents of a reservation within the State's borders would be an imposition of a "residence requirement" contrary to the terms of the Security Act. (3) Nor can a State impose "any citizenship requirement which excludes any citizen of the United States." Title I, Sec. 2 (b) (3) ; Title X, Sec. 1002 (b) (2). By the act of June 2, 1924 (43 Stat. 253) all Indians born within the United States who were not already citizens were made citizens of the United States. The fact that native born Indians are citizens and that citizenship is not incompatible with wardship (Williams v. Johnson, 239 U.S. 414; United States v. Ramsey, 271 U.S. 461) is not well known nor understood. There are reports that Indians are being excluded from needed aid because they are not citizens. This misapprehension should be promptly met by the presentation to the State authorities of the above-cited statute and judicial decisions.

    As regards the extension to the Indians and Indian communities of State services to be assisted with Federal contributions. the statute likewise contains language to indicate its inclusive scope. It is provided that special attention should be given "rural areas" and "areas suffering from severe economic distress", a description applicable to many Indian communities. But an inescapable indication that Indians may be beneficiaries of these subsidized services is the basis upon which the amount of an allotment by the Federal government is computed. In this case of maternal and child health services (Title V, Part I), Sec. 502 (a) provides for an allotment to each State in the proportion that the number of live births in the State bears to the number in the country as a whole. In the case of services to crippled children (Title V, Part 2), the State allotment will depend upon the number of crippled children in the State (Sec. 5 12 (a)). The allotment to a State for child welfare services (Title V, Part 3) will depend upon the proportion that the rural population of the State bears to the total rural population in the United States (Sec. 521 (a)). The first element in determining the amount of assistance for public health work (Title VI) is the population of the State (Sec. 602 (a)). In computing these statistics no omission is made of the Indians and official registration and census rolls have been used which, of course, include the Indian population. It would be manifestly con-
 


 

625

OPINIONS OF THE SOLICITOR

APRIL 22, 1936

trary to the intention of the act that funds allotted to cover a certain number of people should be used only for a chosen group to the exclusion of others included in the count.

    In the case of Federal and State unemployment benefits (Titles II, III, VIII, IX) the question of the exclusion of Indians cannot arise as it is apparent that in so far as they engaged in industrial employment the provisions of the act would automatically apply to them.

    From the foregoing it may be said that the language of the statute evidences an intent to insure that the State aids and services receiving Federal subsidy shall reach all the population of the States in need of them. Therefore, it could be said at this point that needy Indians were entitled to the benefits of the act, were it not for certain legal propositions of peculiar applicability to Indians which remain to be considered.

    The proposition that general acts of Congress do not apply to the Indians is properly limited to situations where the statute, if applied, would affect the Indians adversely. Lewellyn v. Colonial Trust Co., 275 U.S. 232; United States v. Crow Dog, 109 U.S. 556; Cf. McCandless v. United States, 25 Fed. (2d) 71 (C.C.A. 3d, 1928). And even this proposition is disregarded where the intent of Congress can be gleaned or where considerations of policy obtrude. The Cherokee Tobacco Case, 11 Wall. 616; United States v. Whiskey, 93 U.S. 188; 21 Op. Atty. Gen. 466. Certainly therefore, the bare proposition that general acts do not apply to the Indians, as construed, is not a barrier to the participation by the Indians in benefits intended for the entire population. Nor is the basic policy of the act out of line with the Federal policy of closer cooperation with the States and utilization of State agencies to improve the economic condition of the Indians. (See act of April 16, 1934, 48 Stat. 596.) And it may be assumed that Congress at the time it passed the Social Security Act was cognizant of the fact that in the administration of its statutes and resolutions providing emergency relief funds for grants to States for direct or work relief of persons in need" (See act of May 12, 1933, 48 Stat. 55, and Resolution of April 8, 1935, 49 Stat. 115) the Indians, ward and nonward, were considered entitled to, and received, assistance through the States with needy persons of other races. (Letters of July 17, 1933, and November 1, 1934, of the Federal Emergency Relief Administrator to State Emergency Relief Administrators.) Congress could therefore take for granted that in its analagous grants to States for aid to "needy persons" of the various classes specified in the Security Act that Indians ward or non-ward would be included. Furthermore, in H. J. Res. 495 now before Congress defining gratuities to Indians, Congress indicates a recognition of the fact that general public relief and security acts, while not mentioning Indians, nevertheless embrace them, by excluding from off set against Indian tribes money or property paid to Indians under any general public relief program or Social Security Act.

    More serious is the consideration pressed by the social security administrators of some States that those Indians who are wards of the Federal Government are entitled to Federal aid and therefore may be disregarded by State agencies. Another angle of the argument is that ward Indians who are living on land still held in trust by the United States are subject to the exclusive jurisdiction of the United States and are not amenable to State laws, therefore they should not be extended its privileges. However, except in certain areas of the southwest where reservations are still intact and self-contained, this is an extremely artificial and legalistic approach. Nor is it entirely accurate as will be shown.

    It is undisputed that the Federal Government has no responsibility of guardianship toward the Indians who have no property held in trust by the Federal Government, who are not living on a reservation and who have severed their tribal relations. The State has full control over and responsibility for them. But those Indians who remain wards of the Federal Government are not in a water-tight compartment into which State laws and functions do not penetrate. Ward Indians share in State burdens and privileges although entitled to Federal protection in various ways. This dual relationship may be illustrated by the following facts.

    Federal guardianship of ward Indians rests primarily upon the property of the Indians which is held in trust by the Federal Government or under other restrictions. It is significant that the Federal Government may engage in litigation on behalf of an Indian to protect his restricted property but has no legal interest in other civil suits in which he may be involved. United States v. Dewey County, 14 Fed. (2d) 784 (D.S.D. 1926). The Federal Government also has certain criminal jurisdiction over areas reserved by it for Indians by virtue of the status of the land. The Federal Government is also morally bound to advance their civilization and ability for self-support. But an Indian ward, whether a ward because of his trust property or the maintenance of tribal relations, as a person and a citizen of the State where he resides, has the benefit of and is subject to State laws in manifold phases of his life. The necessity of proving abandonment of tribal relations in order to show an Indian a citizen and entitled to a citizen's rights is unnecessary in view of the citizenship act of June 2, 1924,
 


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