Policy Upset

Eight days after entering the White House, President Hoover announced a sweeping new policy for oil conservation on the public domain. Aware of petroleum overproduction, he ordered his Secretary of the Interior, Dr. Ray Lyman Wilbur, virtually to suspend the U. S. Leasing Act of 1920. Secretary Wilbur promptly executed the new policy by: 1) refusing to make new government oil leases; 2) rejecting most of the 20,000 applications for Federal permits to prospect for oil on the public domain; 3) revoking inactive permits already issued; 4) declining to receive any new permit applications.

Last week the Hoover conservation policy received a severe legal jolt when Associate Justice Jennings Bailey of the District of Columbia Supreme Court ruled that Secretary Wilbur had exceeded his authority under the Act of 1920. Two oilmen, Richard D. Vedder of California and Roy C. Barton of New Mexico, had asked Secretary Wilbur for a prospecting permit on U. S. lands. Secretary Wilbur had refused to receive their application. They sued for an order (mandamus) compelling him to consider their application as the law required.

Justice Bailey granted them their order against Secretary Wilbur on the ground that the purpose of the Act of 1920 was "clearly to promote the prospecting for oil," not to prevent it; that Congress had given the Secretary of the Interior discretion in granting drilling permits but no authority to deny them all as a matter of administrative policy. Ruled Justice Bailey:

"While it may be that the Secretary may deny individual applications as the facts may be deemed to warrant, his discretion is not to be exercised arbitrarily and without regard to law. . . . This [Leasing] Act does not give the Secretary of the Interior nor the President any such power as is claimed. The discretion vested in the Secretary is a judicial one and not an absolute one. . . . The authority given him by Congress is that he may 'do any and all things necessary to carry out this act' but not defeat the will of Congress by suspending its operation."

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