The present Congress, as already said, has separated the surface of coal lands either classified or withdrawn to be classified from the coal beneath, so as to permit at all times homestead entries upon the surface of lands useful for agriculture, and to reserve the ownership in the coal to the Government.
The question which remains to be considered is whether the existing law for the sale of the coal in the ground should continue in force or be repealed and a new method of disposition adopted. Under the present law the absolute title in the coal beneath the surface passes to the grantee of the Government. The price fixed is upon an estimated amount of the tons of coal per acre beneath the surface, and the prices are fixed so that the earnings will only be a reasonable profit upon the amount paid and the investment necessary. But, of course, this is more or less guesswork, and the Government parts with the ownership of the coal in the ground absolutely. Authorities in the Geological Survey estimate that in the United States today there is a supply of about three thousand billion tons of coal, and that of this one-third, or about one thousand billion, are in the public domain. Of course, the other two thousand billion are within private ownership and under no more control as to the use or the prices at which the coal may be sold than any other private property.
If the Government leases the coal lands and acts as any landlord would, and imposes conditions in its leases like those which are now imposed by the owners in fee of coal mines in the various coal regions of the East, then it would retain over the disposition of the coal deposits a choice as to the assignee of the lease, a power of resuming possession at the end of the term of the lease, or of readjusting terms at fixed periods of the lease, which might easily be framed to enable it to exercise a limited but effective control in the disposition and sale of the coal to the public (applause). It has been urged that the leasing system has never been adopted in this country, and that its adoption would largely interfere with the investment of capital and the proper development and opening up of coal resources. I venture to differ entirely from this view (applause). My investigations show that many owners of mining property of this country do not mine it themselves, and do not invest their money in the plants necessary for the mining, but they lease their properties for a term of years varying from twenty to thirty and forty years, under conditions requiring the erection of a proper plant and the investment of a certain amount of money in the development of the mines, and fixing a rental and a royalty, sometimes an absolute figure and sometimes one proportioned to the market value of the coal. Under this latter method the owner of a mine shares in the prosperity of his lessees when coal is high and the profits good, and also shares to the same extent in their disappointment when the price of coal falls.
I have looked with some care into a report made at the instance of President Roosevelt upon the disposition of coal lands in Australia, Tasmania, and New Zealand. These are peculiarly mining countries, and their experience ought to be most valuable. In all these countries the method for the disposition and opening of coal mines originally owned by the Government is by granting a leasehold, and not by granting an absolute title. The terms of the leases run all the way from twenty to fifty years while the amount of land which may be leased to any individual there is from 320 acres to 2,000 acres. It appears that a full examination was made and the opinions of all the leading experts on the subject were solicited and given, and that with one accord they approved in all respects the leasing system (applause). Its success is abundantly shown.
It is possible that at first considerable latitude will have to be given to the Executive in drafting these forms of lease, but as soon as experiment shall show which is the most workable and practicable, its use should be provided for specifically by statute. The question as to how great an area ought to be included in a lease to one individual or corporation is not free from difficulty; but in view of the fact that the Government retains control as owner, I think there might be some liberality in the amount leased, and that 2,500 acres would not be too great a maximum.
By the opportunity to register the terms upon which the coal shall be held by the tenant, either at the end of each lease or at periods during the term, the Government may secure the benefit of sharing in the increased price of coal and the additional profit made by the tenant. By imposing conditions in respect to the character of work to be done in the mine, the Government may control the character of the development of the mine and the treatment of employees with reference to safety (applause). By denying the right to transfer the lease except by written permission of Government authorities, it may withhold the needed consent when it is proposed to transfer the leasehold to persons interested in establishing a monopoly of coal production in any State or neighborhood (applause).
As one-third of all the coal supply is held by the Government, it seems wise that it should retain such control over the mining and the sale as the relation of lessor to lessee furnishes. The change from the absolute grant to the leasing system will involve a good deal of trouble in the outset, and the training of experts in the matter of making proper leases; but the change will be a good one and can be made. The change is in the interest of Conservation, and I am glad to approve it. (Great applause)
ALASKA COAL LANDS
The investigations of the Geological Survey show that the coal properties in Alaska cover about 1,200 square miles, and that there are known to be available about fifteen billion tons. This is, however, an underestimate of the coal in Alaska, because further developments will probably increase this amount many times; but we can say with considerable certainty that there are two fields on the Pacific slope which can be reached by railways at a reasonable cost from deep water—in one case of about 50 miles and in the other case of about 150—which will afford certainly six billion tons of coal, more than half of which is of a very high grade of bituminous and of anthracite. It is estimated to be worth, in the ground, one-half cent a ton, which makes its value per acre from $50 to $500. The coking-coal lands of Pennsylvania are worth from $800 to $2,000 an acre, while other Appalachian fields are worth from $10 to $386 an acre, and the fields in the central States from $10 to $2,000 an acre, and in the Rocky mountains from $10 to $500 an acre.
The demand for coal on the Pacific Coast is for about 4,500,000 tons a year. It would encounter the competition of cheap fuel oil, of which the equivalent of 12,000,000 tons of coal a year is used there. It is estimated that the coal could be laid down at Seattle or San Francisco, a high-grade bituminous at $4 a ton, and anthracite at $5 or $6 a ton. The price of coal on the Pacific slope varies greatly from time to time in the year and from year to year—from $4 to $12 a ton. With a regular coal supply established, the expert of the Geological Survey, Mr Brooks, who has made a report on the subject, does not think there would be an excessive profit in the Alaska coal mining because the price at which the coal could be sold would be considerably lowered by competition from these fields and by the presence of crude fuel oil. The history of the laws affecting the disposition of Alaska coal lands shows them to need amendment badly. Speaking of them, Mr Brooks says: