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.