Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-02-16
Usage LAND LEASES
Monopoly Of Oil 3 and Gas
Produced. y
THE STANDARD OIL co.
Il s1s e.
SAID TO BE RACK OF COMPANY
CONTROLLING OUTPUT.
Secretary Hitchcock Opposed to Re-
newing the Blanket Lease, but
Favors Penrose Amendment.

EaVOrS Peur0Se amendment.
Within the past twentyfour hours con-
siderable opposition has been developed to
the action of the Senate committee in re-
ducing the area of the Usage oil lands now
under lease by two-thirds the area now
controlled under the lease and in increasing
the royalty to be paid the Indians for the
use of the land. 1t Is claimed that the
Standard OIL Company is behind the In
dian Territory Illuminating Oil Company,
which now controls the output from the
wells located on the Indians land. Secre.
tary Hitchcock has been fighting the grant
ing of continuance of the lease now held
on the ground that the company obtains
Herewith an unheard Of monopoly, con-
trolling as it does an area of million
and a half acres, in which it has the eX-
elusive right to prospect, develop and sublet
for oil and gas. The lease under which
operations are being carried on now will
expire in a short time and for two years
past active efforts have been made by the
representatives of the Illuminating Oil Com
pany, which, it is said, is either a part of
the Standard Oil Company or has very close
relations Herewith.
These efforts have been consistently
ated il his energies not only by a desire
to see he fair thing done to the Indians, but
to prevent the renewal OF lease which
gives so much power to one concern
and individual. The Secretary also desires
to see the many small Sublessees, who are
working wells for oil and gas, properly pro-
tected. The facts in the case, when laid
before the Senate committee, led to the Of
fering of an amendment to the Dill making
the regular Indian appropriations by the
terms of which the Secretary of the In
terror is empowered to lease for period of
ten years from March IL, 1906 an area of
6SO,OOO acres with all the conditions of the
original lease except that after March 16,
1905. a royalty of 500 per annum for each
gas well shall be paid instead of $50 as
heretofore. AS stated although the amend
ment was agreed to In committee there has
been developed considerable opposition
within the past twenty-four hours. Secre-
tary Hitchcock has authorized the follow
ing statement of the conditions of the old
lease and the proposed amendment:
Secretary Hitchcock's Statement.
what is known as the Usage oil lease
was approved by the then Secretary of the
Interior. Mr.. Hoke Smith, for the period
of ten years from March 16, 1886, and con-
seuuently expires on the same date, March
10 1906 This lease was originally granted
to Edwin B. Foster, and after checkered
existence is now known as the Indian Ter
ritory Illuminating Oil Company.
The lease granted the right to prospect
for oil and gas throughout the entire area
of the Usage reservation, amounting to a
million and half acres and carried the
exclusive right to prospect, develop and
subiet for oil and gas throughout this vast
territory. In other words, it was one of
the most gigantic monopolies ever issued
for an Individual or company by any Sec
retary of the Interior. lfitJ
Mr. Cornelius N. Bliss, upon entering the
Office of Secretary of the Interior, had an
investigation of this lease made with a
view of canceling it, but found he could
not legally do SO, and it has accordingly
been in operation for some nine years. Mr..
Foster and his associates not having ex-
perience in prospecting for or producing
oil, and evidently being without sufficient
capital to utilize the great monopoly that
had been granted him, endeavored to OBJ
tain such capital by granting subleases
upon conditions which yielded to himself,
associates and their successors Uhe 1llum1-
mating Oil Company one-sixteenth or, at
present prices for oil about 49, cents bar
rel, from the suitcase, after the latter had
paid 10 per cent royalty to the Indians, or
about ~ cents barrel.
During the last two years efforts have
been actively made by the representatives
of the Illuminating OH Company to obtain
a renewal of the blanket lease for another
ten years, but have met with no favor from
the present Secretary of the Interior. These
efforts were based upon the claim that not
withstanding the Illuminating Oil Company
had only about twenty-five wells in opera
ton in the territory, sublessees had drilled
and were operating approximately some 400
wells, producing somewhere between 12o,OCO
and 10000 barrels of oil per month, the
claim being that the investments of these
sublessees, amounting to large sums Of
money, should be protected as well as the
rights of those interested in the 1lluminat-
ing Oil Company, the ground of their
having secured these investments. Within
the last ten days this matter has been ac-
lively discussed before the Senate commit
tee Indian affairs because of an amend
ment proposed to be introduced to the In
dian appropriation bill by Senator Penrose
extending the original lease of a million and
a half acres for ten years from Its eXpira-
ton, March 16, 1906.