The New York herald., 1921-07-03


oper said: Canada knights capital where
we indict it."
Against the swift development of the oil
area in the north are two factors, one
medal, the other not irremedial but difficult.
Great Distances the Factor
That Must Be Overcome
The hard factor is the problem of the
enormous distances to be traversed. Fort
Norman is 800 miles from the outskirts
of settlement river broad as the Hudson
leads down to this oil area, but 1t freezes
UP from October to May 80 In winter the
river bank is an adamant bed Of rock and
frost hard enough for any rail bed and the
snowstorms not the freezing sleet and
ice that cripple Eastern and Western roads
The storms have snow fine and dry and
light as flour. Tracks can be kept easily
cleaned.
But the difficulty is the distance for either
pipe lines in a cold climate or tank cars
Capital cannot build either the pipe lines
or the railroads-even if it would-till fuller
reconnaissance proves what the potential
output of oil will be. This means some three
or four years more of pure experimental
development.
The next difficulty is one easily remedied.
Canadian laws permit the filing of individual
oil claims up to four square miles, of groups
claims up to $4,000 acres. The largest group
claim / encountered under these laws was
one of 5000 acres in Peace River. Since
that time one American company has leased
or subleased or bought from holders In fee
simple at least $4,000 acres of proved oil
areas, and has under examination announcer
100000 acres.
Since November some changes have been
made permitting claims down to 800 acres.
presumably to help the small holders for all
claimants must pay 20 cents an acre on
stalking claims and so cents an acre during
time of holding. which provides lease for
twenty-one years renewable for another
twenty-one years, with liberal allowance tor
delays in development owing to weather or
transportation.
But what Canada needs is not q leSsening
of the areas held under lease but widening.
If the American oil developers must not
only build the usual pipe lines. storage tanks,
refneries tank cars and tank steamers but
create living conditions in wilderness and
put in railroads for 500 miles they must
be allowed to hold areas large enough for
collateral security to the banks which finance
their railroad bonds: and to pay so cents tax
an acre a year on areas of, say, 1000, 900
acres before a gallon of oil can reach its
market is-as one of the largest developers
of Colombia and Mexico said to me -"coh-
fscatory.'
Colombia he acquired in fee simple 500 900
acres To pay a tax OF so cents an acre on
this for four five years of construction
before marketing gallon of output with
money at present rates would drive capital
out of business This man advocates-as all
the Premiers of the Western provinces adj
vocate-the granting of large areas to the
bona fide developer free of all tax till out
put is assured: then the usual royalty of
one-tenth, of one-eighth or one-sxth to the
Crown.
The joker in the Canadian law as II stands
o-day-whether 1t is meant as n joker or Is
the result of inexperience--is the provision
that on the finding Of oil on a claim three
fourths of the claim will revert to the Crown
Say man stakes out four square miles. He
finds a gusher one. 1t may have cost
him $4,000. or 1t may have cost him OOOO,
or it may have cost him $1,00OOOO to find
that well. The three claims adjoining his go
back to the Crown. to be released by the
Crown to whom? To n possible rival, who
has not spent cent finding the pool when
Government experts for forty years have
failed to find.
Benefits Only the Big Producer,
NJ ~. for LIZ ba ~, Was Made