ANDREW JOHNSON.

WASHINGTON, D.C., _June 15, 1866_.

_To the Senate of the United States_:

The bill entitled "An act to enable the New York and Montana Iron Mining

and Manufacturing Company to purchase a certain amount of the public

lands not now in market" is herewith returned to the Senate, in which it

originated, with the objections which induce me to withhold my approval.

By the terms of this bill the New York and Montana Iron Mining and

Manufacturing Company are authorized, at any time within one year after

the date of approval, to _preempt_ two tracts of land in the Territory

of Montana, not exceeding in the aggregate twenty sections, and not

included in any Indian reservation or in any Government reservation for

military or other purposes. Three of these sections may be selected from

lands containing _iron ore and coal_, and the remainder from _timber_

lands lying near thereto. These selections are to be made under

regulations from the Secretary of the Interior and be subject to his

approval. The company, on the selection of the lands, may acquire

immediate possession by permanently marking their boundaries and

publishing description thereof in any two newspapers of general

circulation in the Territory of Montana. Patents are to be issued on

the performance, within two years, of the following conditions:

First. The lands to be surveyed at the expense of the company, and each

tract to be "as nearly in a square form as may be practicable."

Second. The company to furnish evidence satisfactory to the Secretary of

the Interior that they have erected and have in operation in one or more

places on said lands iron works capable of manufacturing at least 1,500

tons of iron per annum.

Third. The company to have paid for said lands the minimum price of

$1.25 per acre.

It is also provided that the "patents shall convey no title to any

mineral lands except iron and coal, or to any lands held by right of

possession, or by any other title, _except Indian title_, valid at

the time of the selection of the said lands." The company are to have

the privileges of _ordinary preemptors_ and be subject to the same

restrictions as such preemptors with reference to wood and timber on the

lands, with the exception of so much as may be necessarily used in the

erection of buildings and in the legitimate business of manufacturing

iron.

The parties upon whom these privileges are conferred are designated in

the bill as "The New York and Montana Iron Mining and Manufacturing

Company." Their names and residence not being disclosed, it must be

inferred that this company is a corporation, which, under color of

corporate powers derived from some State or Territorial legislative

authority, proposes to carry on the business of mining and manufacturing

iron, and to accomplish these ends seeks this grant of public land in

Montana. Two questions thus arise, viz, whether the privileges the bill

would confer should be granted to any person or persons, and, secondly,

whether, if unobjectionable in other respects, they should be conferred

upon a corporation.

The public domain is a national trust, set apart and held for the

general welfare upon principles of equal justice, and not to be bestowed

as a special privilege upon a favored class. The proper rules for the

disposal of public land have from the earliest period been the subject

of earnest inquiry, grave discussion, and deliberate judgment. The

purpose of _direct_ revenue was the first object, and this was attained

by public sale to the highest bidder, and subsequently by the right of

private purchase at a fixed minimum. It was soon discovered that the

surest and most speedy means of promoting the wealth and prosperity of

the country was by encouraging actual settlement and occupation, and

hence a system of preemption rights, resulting most beneficially, in all

the Western Territories. By progressive steps it has advanced to the

homestead principle, securing to every head of a family, widow, and

single man 21 years of age and to every soldier who has borne arms for

his country a landed estate sufficient, with industry, for the purpose

of independent support.

Without tracing the system of preemption laws through the several

stages, it is sufficient to observe that it rests upon certain just

and plain principles, firmly established in all our legislation. The

object of these laws is to encourage the expansion of population and

the development of agricultural interests, and hence they have been

invariably restricted to settlers. Actual residence and cultivation are

made indispensable conditions; and, to guard the privilege from abuses

of speculation or monopoly, the law is rigid as to the mode of

establishing claims by adequate testimony, with penalties for perjury.

Mining, trading, or any pursuit other than culture of the soil is

interdicted, mineral lands being expressly excluded from preemption

privileges, excepting those containing coal, which, in quantities not

exceeding 160 acres, are restricted to individuals in actual possession

and commerce, with an enhanced minimum of $20 per acre.

For a quarter of a century the quantity of land subject to agricultural

preemption has been limited so as not to exceed a quarter section, or

160 acres; and, still further to guard against monopoly, the privilege

of preemption is not allowed to any person who owns 320 acres of land in

any State or Territory of the United States, nor is any person entitled

to more than one preemptive right, nor is it extended to lands to which

the Indian usufruct has not been extinguished. To restrict the

privilege within reasonable limits, credit to the ordinary preemptor on

_offered_ land is not extended beyond twelve months, within which time

the minimum price must be paid. Where the settlement is upon _unoffered_

territory, the time for payment is limited to the day of public offering

designated by proclamation of the President; while, to prevent

depreciation of the land by waste or destruction of what may constitute

its value, penal enactments have been made for the punishment of persons

depredating upon public timber.

Now, supposing the New York and Montana Iron Mining and Manufacturing

Company to be entitled to all the preemption rights which it has been

found just and expedient to bestow upon natural persons, it will be seen

that the privileges conferred by the bill in question are in direct

conflict with every principle heretofore observed in respect to the

disposal of the public lands.

The bill confers preemption right to _mineral lands_, which, excepting

coal lands, at an enhanced minimum, have heretofore, as a general

principle, been carefully excluded from preemption. The object of the

company is not to cultivate the soil or to promote agriculture, but is

for the sole purpose of mining and manufacturing iron. The company is

not limited, like ordinary preemptors, to one preemptive claim of a

quarter section, but may preempt two bodies of land, amounting in

the aggregate to twenty sections, containing 12,800 acres, or eighty

ordinary individual preemption rights. The timber is not protected, but,

on the contrary, is devoted to speedy destruction; for even before the

consummation of title the company are allowed to consume whatever may be

necessary in the erection of buildings and the business of manufacturing

iron. For these special privileges, in contravention of the land policy

of so many years, the company are required to pay only the minimum price

of $1.25 per acre, or one-sixteenth of the established minimum, and are

granted a credit of two years, or twice the time allowed ordinary

preemptors on offered lands.

Nor is this all. The preemption right in question covers three sections

of land containing iron ore and _coal_. The act passed on the 1st of

July, 1864, made it lawful for the President to cause tracts embracing

coal beds or coal fields to be offered at public sale in suitable legal

subdivisions to the highest bidder, after public notice of not less than

three months, at a minimum price of $20 per acre, and any lands not thus

disposed of were thereafter to be liable to private entry at said

minimum. By the act of March 3, 1865, the right of preemption to coal

lands is granted to any citizen of the United States who at that date

was engaged in the business of coal mining on the public domain for

purposes of commerce; and he is authorized to enter, according to legal

subdivisions, at the minimum price of $20 per acre, a quantity of land

not exceeding 160 acres, to embrace his improvements and mining

premises. Under these acts the minimum price of three sections of coal

lands would be thirty-eight thousand four hundred dollars ($38,400).

By the bill now in question these sections containing _coal and iron_

are bestowed on this company at the nominal price of $1.25 per acre, or

two thousand four hundred dollars ($2,400), thus making a gratuity or

gift to the New York and Montana Iron Mining and Manufacturing Company

of thirty-six thousand dollars ($36,000).

On what ground can such a gratuity to this company be justified,

especially at a time when the burdens of taxation bear so heavily upon

all classes of the people?

Less than two years ago it appears to have been the deliberate judgment

of Congress that tracts of land containing coal beds or coal fields

should be sold, after three months' notice, to the bidder at public

auction who would give the highest price over $20 per acre, and that

a citizen engaged in the business of actual coal mining on the public

domain should only secure a tract of 160 acres, at private entry, upon

payment of $20 per acre and formal and satisfactory proof that he in all

respects came within the requirements of the statute. It can not be that

the coal fields of Montana have depreciated nearly twenty fold in value

since July, 1864. So complete a revolution in the land policy as is

manifested by this act can only be ascribed, therefore, to an

inadvertence, which Congress will, I trust, promptly correct.

Believing that the preemption policy--so deliberately adopted, so long

practiced, so carefully guarded with a view to the disposal of the

public lands in a manner that would promote the population and

prosperity of the country--should not be perverted to the purposes

contemplated by this bill, I would be constrained to withhold my

sanction even if this company were, as natural persons, entitled to the

privileges of ordinary preemptors; for if a corporation, as the name and

the absence of any designation of individuals would denote, the measure

before me is liable to another fatal objection.

Why should incorporated companies have the privileges of individual

preemptors? What principle of justice requires such a policy? What

motive of public welfare can fail to condemn it? Lands held by

corporations were regarded by ancient laws as held in mortmain, or by

"dead hand," and from the time of Magna Charta corporations required

the royal license to hold land, because such holding was regarded as in

derogation of public policy and common right. Preemption is itself a

special privilege, only authorized by its supposed public benefit in

promoting the settlement and cultivation of vacant territory and in

rewarding the enterprise of the persons upon whom the privilege is

bestowed. "Preemption rights," as declared by the Supreme Court of the

United States, "are founded in an enlightened public policy, rendered

necessary by the enterprise of our citizens. The adventurous pioneer,

who is found in advance of our settlements, encounters many hardships,

and not unfrequently dangers from savage incursions. He is generally

poor, and it is fit that his enterprise should be rewarded by the

privilege of purchasing the spot selected by him, not to exceed 160

acres."

It may be said that this company, before they obtain a patent, must

prove that within two years they "have erected and have in operation

in one or more places on the said lands iron works with a capacity for

manufacturing at least 1,500 tons of iron per annum." On the other hand,

they are to have possession for two years of more than 12,000 acres of

the choice land of the Territory, of which nearly 2,000 acres are to

contain _iron ore and coal_ and over 10,000 acres to be of _timber_

land selected by themselves. They will thus have the first and exclusive

choice. In fact, they are the only parties who at this time would have

any privilege whatever in the way of obtaining titles in that Territory.

Inasmuch as Montana has not yet been organized into a land district, the

general preemption laws for the benefit of individual settlers have not

yet been extended to that country, nor has a single acre of public

land in the Territory yet been surveyed. With such exclusive and

extraordinary privileges, how many companies would be willing to

undertake furnaces that would produce 5 tons per day in much less time

than two years?

It is plain the pretended consideration on which the patent is to issue

bears no just proportion to that of the ordinary preemptor, and that

this bill is but the precursor of a system of land distribution to a

privileged class, unequal, unjust, and which ought not to receive the

sanction of the General Government. Many thousand pioneers have turned

their steps to the Western Territories, seeking, with their wives and

children, homesteads to be acquired by sturdy industry under the

preemption laws. On their arrival they should not find the timbered

lands and the tracts containing iron ore and coal already surveyed and

claimed by corporate companies, favored by the special legislation of

Congress, and with boundaries fixed even in advance of the public

surveys--a departure from the salutary provision requiring a settler

upon unsurveyed lands to limit the boundaries of his claim to the lines

of the public survey after they shall have been established. He receives

a title only to a legal subdivision, including his residence and

improvements. The survey of the company may not accord with that which

will hereafter be made by the Government, while the patent that issues

will be descriptive of and confer a title to the tract as surveyed by

the company.

I am aware of no precedent for granting such exclusive rights to a

manufacturing company for a nominal consideration. Congress have made

concessions to railway companies of alternate sections within given

limits of the lines of their roads. This policy originated in the belief

that the facilities afforded by reaching the parts of the country remote

from the great centers of population would expedite the settlement and

sale of the public domain. These incidental advantages were secured

without pecuniary loss to the Government, by reason of the enhanced

value of the reserved sections, which are held at the double minimum.

Mining and manufacturing companies, however, have always been

distinguished from public-improvement corporations. The former are, in

law and in fact, only private associations for trade and business on

individual account and for personal benefit. Admitting the proposition

that railroad grants can stand on sound principle, it is plain that such

can not be the case with concessions to companies like that contemplated

by this measure. In view of the strong temptation to monopolize the

public lands, with the pernicious results, it would seem at least of

doubtful expediency to lift corporations above all competition with

actual settlers by authorizing them to become purchasers of public lands

in the Territories for any purpose, and particularly when clothed with

the special benefits of this bill. For myself, I am convinced that the

privileges of ordinary preemptors ought not to be extended to

incorporated companies.

A third objection may be mentioned, as it exemplifies the spirit in

which special privileges are sought by incorporated companies.

Land subject to Indian occupancy has always been scrupulously guarded by

law from preemption settlement or encroachment under any pretext until

the Indian title should be extinguished. In the fourth section of this

act, however, lands held by "Indian title" are excepted from prohibition

against the patent to be issued to the New York and Montana Iron Mining

and Manufacturing Company.

The bill provides that the patent "shall convey no title to any mineral

lands _except iron and coal_, or to any lands held by right of

possession, or by any other title, _except Indian title_, valid at

the time of the selection of the said lands." It will be seen that by

the first section lands in "Indian reservations" are excluded from

individual preemption right, but by the fourth section the patent may

cover any Indian title except a _reservation_; so that no matter what

may be the nature of the Indian title, unless it be in a reservation,

it is unprotected from the privilege conceded by this bill.

Without further pursuing the subject, I return the bill to the Senate

without my signature, and with the following as prominent objections to

its becoming a law:

First. That it gives to the New York and Montana Iron Mining and

Manufacturing Company preemption privileges to iron and coal lands on a

large scale and at the ordinary minimum--a privilege denied to ordinary

preemptors. It bestows upon the company large tracts of _coal_ lands at

one-sixteenth of the minimum price required from ordinary preemptors.

It also relieves the company from restrictions imposed upon ordinary

preemptors in respect to _timber lands_; allows double the time for

payment granted to preemptors on offered lands; and these privileges are

for purposes not heretofore authorized by the preemption laws, but for

trade and manufacturing.

Second. Preemption rights on such a scale to private corporations are

unequal and hostile to the policy and principles which sanction

preemption laws.

Third. The bill allows this company to take possession of land, use it,

and acquire a patent thereto before the Indian title is extinguished,

and thus violates the good faith of the Government toward the aboriginal

tribes.

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