The Washington times., 1916-01-18
CONGRESSMAN
UPSET OSAGE
OIL LAND PLAN
1t Is Investigating interior De-
partment's Management Of
Oklahoma Field.
By JUDSON C. WELLIyER.

by JODSoN -. w El.lIl Ch'
Congress is investigating the manage
ment. by the Interior Department. OF
tho great Oklahoma oil field owned by
the Usage Indian nation.
The department has advertised that
on February Is n great auction sale will
he held, at which the rights to pro-
duce oil and gas from the holdings OF
the Osages will be sold TO the highest
bidders These rights represent many
millions of dollars in value For twenty
years the oil and gas rights have been
worked under subleases dependent on
the original Foster lease" made in
1896. That lease, originally covering
ton years and afterward extended
another ten years. will expire on March
II. The question of future control in
this field will be determined by the bid
ding at the forthcoming sale, unless
Congress shall meanwhile interfere.
Taking Case To Congress.
Senator Oliver has introduced a reso-
luton to tie up the whole matter until
Congress shall have Il chance to leGis-
late. His resolution has been sent to
The Indian Affairs Committee. to which
secretary Of the Interior Lane has ad
dressed a letter giving a history of the
long series Of transactions involving
lliis PERHAPS the greatest government
rOntrollcd prize in the oil world.
lt IS understood that the Oliver rGso-
luton represents the interest Of T. n.
Harnsdall. Of Pittsburgh. who is the
ntost important operator under the Eos
ter lease. The Barnsdall forces have
invested millions in their leases, and
want them renewed in order to protect
lheir investments. Secretary Lane IN
his letter shows that the BarnSdall Oil
Il. tad lsIs1 n
oil Company: and the Secretary OBJ
jccts to giving to the Barnsdall interests
:; renewal of all the privileges heretofore
.neld. unless they shall acquire thG
tights in the auction bidding. COnsid-
rring that this is an injustice, in view
Of their large Investments in the field
The BHrnsdall group are taking their
case to Congress, through the Oliver
resolution.
The story of the "Foster lease" and
the developments from it is one of
the romanCCS of the oil industry l..
=. Foster secured the lease to take
oil from G%0.001 acres of the Indian
lnndS on raNmcnt Of 10 p"r cent OF
the value OF the oil to the Indians
Nftcr the lease had run for ton years.
this payment was increased to l. x.
per cont: and this, owing to the i'm
mCnsc productivity of the field has
lladc the osages 50 prosperous that
they are "OmprUnlN described as the
liChcst community in the world.
Would Eliminate Company.
After Foster lad secured his origt-
nal lease from the Indian tribal cuun-
cil and the Gov critm"nt had approved
il. the indian Territory Illuminating
oil Company was formed and took
over the Foster rights. This company
IN turn leased out the lands in va.
ious parcels to operators. cXaCting
from them 10 20 per cent. The dif-
lerenCe between this aud tie amount
paid to the Indians amounted to a
fortune annually, and l.; described by
secretary Lane as "a piItr bonus for
having secured the lcHsc from Con-
lross." 1t has now been determined
10 eliminate this Indian Territory H.
luminat ting OH Company, and to give
jhc Indians the fun II 2-3 per cent,
lhus adding Very lHrgcly to the al
rcady Imp"ns" wealth of tn" tribe.
Tho sublcSScrs under the lnumnnI-
ing Oil Cnmpuny's lease numbered
lr3, controlling parcels of from 10 to
over $4,000 acres, while the Barnsda II
I'll Company leased 10000, or half
# the 6N0,"o0 ares. In addition. the
Earn Sdall company was "a partner in
the OwH'rship nf many Of the other
leases, 20 that II Was altogether the
'untr"llmg tigur" in the ticld.
Secretary Lane describes III" tie be-
tween the Iiarnsdall and STANDARD in -
lereStS. After ,0rpnratin% his com
pany. Mr.. Harnsdall borrowed $500.
900 from the standard Oil Company,
i'ledginE ell his holdings in the com
pany (S9,50l 300 par valuc) and many
other securities. The company has
invested in its leases and their de-
Nelopment. by it's own statement. s.
@I3,"0o; il has paid S',1Ol,000 in Cbvi-
dends, and it sim Dyed tn" Standard
oil Company ON June i last. S5,9l3.-
600
All the oil produced by the Barns
call interest has been sold to the
! rairie Oil and Gas Company. de-
yCrihed by Secretary Lam as u Stand
ard concern.
To Be Offered At Auction.
For two or three years, pending the
expiration Of the Foster lease and
consequent terminn tium of all rights
.,udcr il. the Indian bureau, the De-
.'nrlment Of the Interior, and the
sage council have been investigat-
tHE. calculating. considering, planning,
80 detcTmiI" whether the old lease
-hould be renewed. or how the Usage
ucld should j." handled. 1t was pro-
posed very seriously at one time that
The GOvcrnm' ut terminate the whole
teasing program, take over and. a.
trustee for tho Indians, operate the
whole field. build pipe lines and REIN
cries. market The product and. ~
short. go into The oil products bust
ness itself on a huge scale. This
idea was not abandoned until inveSi-
Gatious had proved that it would re-
Yuire millions in investment. the
creation OF i market the establish
pnent of tn, Government As direct
competitor vim "A great business, an'
the risks inCiUcnt to business opera
IionS.
This Government operation having
been ahauIJ3sd, the question arose
whether the old leases should be con
tlnUcd. 1t wa! decided to raise the
royalty to l6 - per cent on quarter
section Cl60 acrcD units that produce
under 100 barrels yer day, and to y
per cent on all producing over thi'
amount; to cancel all the old lease!
which were CAPABLE OF producing more
than TWENTY-FIVE barrels per day tC
the producinG we'll; and to make
new leases to the present leSsees. o
their prescn; holdings. up to "A maxi
mum acreage Of 4,SO0 acres. Al
aCreages above i,S00 held by a siHgl
lessee should I've offered at the auc
lion. to the highest bidder.