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The Making of Federal Coal Policy

The Making of Federal Coal Policy

by Robert H. Nelson

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The Making of Federal Coal Policy provides a unique record of—as well as important future perspectives on—one of the most significant ideological conflicts in national policymaking in the last decade. The management of federally owned coal, almost one-third of the U.S.'s total coal resources, has furnished an arena for the contest between energy


The Making of Federal Coal Policy provides a unique record of—as well as important future perspectives on—one of the most significant ideological conflicts in national policymaking in the last decade. The management of federally owned coal, almost one-third of the U.S.'s total coal resources, has furnished an arena for the contest between energy development and environmental protection, as well as between the federal government and the states. Robert H. Nelson has written an important historical document and a useful guide for policy analysts.

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Duke University Press
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Duke Press policy studies
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The Making of Federal Coal Policy

By Robert H. Nelson

Duke University Press

Copyright © 1983 Duke University Press
All rights reserved.
ISBN: 978-0-8223-0497-5


Conservationism and the Mineral Leasing Act of 1920

The management of federal coal is part of the history of the public lands—indeed, a generally obscure part until the 1970s. During the nineteenth century the policies to dispose of the public lands were among the central public issues of the day. One recent study commented that "the social, political and economic life of the United States was surrounded by questions of the public domain" during the nineteenth century. The Homestead Act, the railroad land grants, the range wars, and other episodes involving the public lands are now part of American folklore. The early laws for federal coal were mainly an adaptation of the general land laws to the special circumstances of federal coal.

The Coal Land Laws

Coal received no special treatment in the public land laws until the 1860s; until then, if someone needed coal from public lands, he simply acquired the land containing it and received the coal rights as well. But in 1864 Congress enacted the first legislation dealing specifically with federal coal resources. Reflecting a concern that federal lands already known to possess coal were worth much more than ordinary land, the legislation provided for sale of coal lands at public auction for a minimum price of $20 per acre (at that time the government sold ordinary land for a minimum of $1.25 per acre). In 1865 Congress modified the law to require that purchasers be miners and limited the acreage acquired to 160 acres. The Coal Lands Act of 1873 established a minimum price related to the distance from a railroad—$20 per acre for coal lands within fifteen miles and $10 beyond; it also provided for purchase of up to 640 acres by qualified associations. The 1873 Act subsequently controlled the sale of federal coal for almost fifty years until the Mineral Leasing Act of 1920.

Unlike coal, most minerals on the federal lands were disposed of under the location and patent system established by the Mining Law of 1872, which today is still the basic legislation for gold, silver, copper, and other "hardrock" minerals. Unless the land is withdrawn, prospectors are free to enter federal lands to explore for these minerals, file a claim if anything appears promising, and obtain a patent (ownership) if they can demonstrate the presence of a sufficiently valuable mineral deposit. The mining laws were designed to create the incentive to explore for minerals that were usually very hard to find. However, huge amounts of coal were already known to lie in continuous beds that sometimes could even be identified from visible surface outcroppings. Where coal was already known to be present, even if in uncertain amounts, it made more sense for the government to sell it, rather than give it away without charge. As a result, there was much less need to create an exploration incentive, and federal coal was sold directly, instead of being made available under the usual mining laws.

The coal laws proved to be a limited example of why almost all the public land laws of the time encountered great difficulties and often failed in their stated purposes. The attempts to limit unrealistically the size of coal lands that could be acquired were one main source of the problem. The mine owner could not be confident he would be able to acquire enough coal to meet his mining requirements. As one observer put it, "The coal lands ... provide for maximum entries hardly sufficient to establish a profitable mine." Equally troublesome, it was much more expensive to acquire lands under the coal laws than under the general land laws. The lines between coal lands and other lands were not always well defined. Hence, the familiar practice of the time, wide evasion of the public land laws, resulted in this case as well. Multiple entries were often filed to obtain larger coal acreages than legally permitted, and lands with valuable coal were improperly acquired under the Homestead and other laws intended for grazing and agricultural lands. Even on lands sold under the coal laws, the government failed to receive full value; the price was much less than going prices for comparable private coal properties.

The railroads were the main consumers of western coal and not that much was needed for their use. Only 400,000 acres were sold under the coal laws in the first thirty-four years. Hence, the abuses of the coal laws were less conspicuous than other public land laws and for a long time received little attention. However, the conservation movement during the Theodore Roosevelt administration brought to light abuses that led Roosevelt in 1906 to withdraw a huge area of 66 million acres from coal entry (although not as large as his withdrawals of 148 million acres for the national forest system). The massive removal of federal coal from availability for use—along with similar Roosevelt actions with respect to other public land resources—stirred bitter resentment in the West, which contested their legality. By 1908, however, more than half the coal lands, 38 million acres, had been restored to the public domain; the hasty withdrawals in 1906 had in fact included many lands actually having little if any coal.

But the large areas remaining withdrawn, in addition to all the other lands that might be identified to have coal reserves and thus required to be sold at a much higher price, threatened to put a crimp in the Homestead and other general land disposal laws. To resolve this problem, Congress adopted a new policy of separating surface and mineral ownership. A 1909 act allowed those who had previously entered coal lands to acquire surface ownership with the coal rights reserved to the federal government. Legislation in 1910 permitted ordinary entry, under the Homestead and other land laws, of areas previously withdrawn or classified as coal lands, again with the rights to federal coal retained. In 1912 Congress provided for state selections and certain sales limited to surface rights. Finally, the Stock-Raising Homestead Act of 1916 had the widest impact; henceforth, it reserved all mineral rights to the federal government on land acquired under the act.

As a result of these laws a widespread separation of surface and coal ownership now exists; according to one study of the prime coal lands in the West, only 47 percent of federally owned coal also has federally owned surface rights. In the coal-rich Powder River region only about 23 percent of the federal coal also has federal surface ownership. The Powder River region had fairly productive lands and much homesteading occurred there in the early part of the century. Now that large-scale federal coal development is finally occurring, the Interior Department today must contend with the difficult problems caused by the separation of surface and mineral ownership.

Progressivism and the Conservation Movement

After 1906 the withdrawal of federal coal lands raised a number of basic questions. Should the federal government simply clean up the abuses and then go back to selling coal resources whenever and wherever anyone asked to buy them? Should the government instead seek to limit its sales of coal to the amounts needed right away for actual coal production? What should be the role for speculative purchasers of coal? Should a leasing system instead be adopted? What federal controls should be maintained over production of federal coal? At the turn of the century the federal government was sharply revising the old disposal policies for other public lands; for example, by 1908 it had created most of the present system of national forests under Forest Service management. Should a similar revision of disposal policies be undertaken with respect to federal coal as well?

The answers to such questions were in large part provided by the conservation movement. Indeed, the ideology of conservationism underlay the establishment of the Bureau of Reclamation in 1902, the creation of the Forest Service in 1905, and other major changes in public land policy that occurred from 1890 to 1920. Conservationism was one of the principal themes of the administration of President Theodore Roosevelt. As a result of conservationist influence, the basic philosophy of public land management shifted from disposal to retention during this period. In form at least, the public lands today are still being managed under the institutional framework and guiding principles of the conservationist ideology. To be sure, the actual nature of public land management has changed significantly since the turn of the century, even while the formal appearance has been much less altered.

As noted above, the conservation movement was itself a central part of the broader progressive movement. Progressivism arose from a wide discontent with many results of an unfettered individualism in nineteenth-century America, sanctioned under the free-market principles of classical liberalism. The classical liberal ideology offered a vision of rapid social and economic progress, wide individual opportunity for all, and wide personal liberty—achieved in economic affairs by means of the free market and in political affairs by democratic government. Nevertheless, as the historian Richard Hofstadter observes, a crisis of confidence in the existing system had developed by the turn of the century:

The world with which the majority even of the reformers was most affectionately familiar was the passing world of individual enterprise, predominately small or modest-sized business, and a decentralized, not too highly organized life. In the Progressive era the life of business, and to some degree even of government, was beginning to pass from an individualistic form toward one demanding industrial discipline and engendering a managerial and bureaucratic outlook.... Most Americans who came from the Yankee-Protestant environment, whether they were reformers or conservatives, wanted economic success to continue to be related to personal character, wanted the economic system not merely to be a system for the production of sufficient goods and services but to be an effectual system of incentives and rewards. The great corporation, the crass plutocrat, the calculating political boss, all seemed to defy these desires. Success in the great corporation seemed to have a very dubious relation to character and enterprise; and when one observed the behavior of the plutocracy, it seemed to be inversely related to civic responsibility and personal restraint. The competitive process seemed to be drying up. All of society was felt to be threatened—not by economic breakdown but by moral and social degeneration and the eclipse of democratic institutions.

In these circumstances Americans saw a necessity to turn to government to bring greater control over the new order. New social principles, however, were necessary; the new government role could not be reconciled with traditional nineteenth-century ideology. In a famous 1887 article Woodrow Wilson, then a rising young professor, set out several key themes of a newly emerging ideological foundation, progressivism. He explained the critical distinction that was to underlie progressive thinking—a division of the governing process into two separate spheres, ordinary politics and scientific administration. Wilson considered that "the field of administration ... is removed from the hurry and strife of politics." The political realm would maintain the traditions of American democratic government; the administrative realm, which would be large, could be entrusted to technical experts in management removed from politics. These experts would apply modern scientific methods to introduce an efficiency in the administration of government that would match the efficiency that new technologies and skillful planning were demonstrating throughout the world of business. Democratic politics would set the broad goals, and the new corps of professional administrators would achieve them with maximum efficiency. As a leading student of progressive ideology commented in 1948:

Every era ... has a few words that epitomize its world-view and that are fixed points by which all else can be measured. In the Middle Ages they were such words as faith, grace and God; in the eighteenth century they were such words as reason, nature, and rights; during the past fifty years in America they have been such words as cause, reaction, scientific, expert, progress—and efficient....

However natural, it is yet amazing what a position of dominance "efficiency" assumed, how it waxed until it had assimilated or overshadowed other values, how men and events came to be degraded or exalted according to what was assumed to be its dictate. It became a movement, a motif of Progressivism, a "Gospel."

Progressives had a great faith in the benefits of public planning; it was to be the scientific instrument for the achievement of efficiency and other progressive objectives: "Planning is the means by which the discipline of Science applied to human affairs will enable man to incarnate his purposes. It is the inevitable link between means and ends. Moreover, it is in itself an inspiring ideal." To provide for such planning, considerable expansion of the government role would be necessary. But progressives were not concerned about this prospect: "The Good Life will be planned—but to what extent? ... Almost without exception they look favorably upon government, regard it as a desirable instrument for the accomplishment of individual and community purposes, profess indifference or express favor at proposals to extend the range of its operation or control." How are we to be assured that the power of an expanding government will actually serve the general interest? Here the progressive belief in science becomes most crucial. The answer "to the problem of the basis of decision is that 'science,' 'facts,' 'measurement' answer questions of 'what to do?' It asserts that what is objective can and should 'determine,' that the imperative of 'the facts' should be substituted for chance and will." To discover the scientific truth in the facts of the situation, progressives considered that a new set of scientifically trained public administrators would be required: "Prominent in the early writings is insistence upon the necessity for 'experts' in government service."

The Federal Reserve System—established in 1913—is the quintessential existing embodiment of progressive principles such as administrative independence from democratic politics. Although it seems a curious concept today, perhaps the best way to grasp the true progressive vision is to imagine a large number of organizations like the Federal Reserve System administering almost all matters for which government is currently responsible. The creation of the Interstate Commerce Commission, Federal Trade Commission, and other independent regulatory agencies was also in part a reflection of progressive ideology.

The conservation movement took the basic tenets of progressivism and applied them to the special area of natural resources. The leading conservationist of his day, Gifford Pinchot, advocated government management of natural resources because it would be the quickest way to obtain the efficiencies of true scientific management. Atomistic producers might lay waste to forests from lack of knowledge or incentive to apply expert forestry methods; federal ownership would instead bring modern science and the latest planning techniques. The historian Samuel Hays writes that the conservation movement preached a "gospel of efficiency" based on applied science: "Conservation, above all, was a scientific movement, and its role in history arises from the implications of science and technology in modern society." Moreover, following progressive tenets, politics clearly had little place: "Since resource matters were basically technical in nature, conservationists argued, technicians, rather than legislators, should deal with them." Instead of the traditional patronage and generally lax management of the political appointees of the time, the new expert administrators would employ disinterested, "rational planning to promote efficient development and use of all natural resources." As Hays sums up conservationism:

The broader significance of the conservation movement stemmed from the role it played in the transformation of a decentralized, nontechnical, loosely organized society, where waste and inefficiency ran rampant, into a highly organized, technical, and centrally planned and directed social organization which could meet a complex world with efficiency and purpose. This spirit of efficiency appeared in many realms of American life, in the professional engineering societies, among forward-looking industrial management leaders, and in municipal government reform, as well as in the resource management concepts of Theodore Roosevelt. The possibilities of applying scientific and technical principles to resource development fired federal officials with enthusiasm for the future and imbued all in the conservation movement with a kindred spirit. These goals required public management, of the nation's streams because private enterprise could not afford to undertake it, of the Western lands to adjust one resource use to another. They also required new administrative methods, utilizing to the fullest extent the latest scientific knowledge and expert, disinterested personnel. This was the gospel of efficiency—efficiency which could be realized only through planning, foresight, and conscious purpose.


Excerpted from The Making of Federal Coal Policy by Robert H. Nelson. Copyright © 1983 Duke University Press. Excerpted by permission of Duke University Press.
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