The business and economic implications of the Tidelands controversy

175 Pages·08.219 MB·English

by  Day, Earl Wright

THE BUSINESS AND ECONOMIC IMPLICATIONS
OP THE TIDELANDS CONTROVERSY
A Thesis
Presented to
the Faculty of the Graduate School
The University of Southern California
In Partial Fulfillment
of the Requirements for the Degree
Master of Business Administration
By
Earl Wright Day
June 1950
UMI Number: EP43242
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This thesis, written by
EARL WRIGHT M Y
under the guidance of hJL&... Faculty Committee,
and approved by all its members, has been
presented to and accepted by the Council on
Graduate Study and Research in partial fulfill­
ment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION
Date...
Faculty Committee
a.
Chairman
TABLE OP CONTENTS
CHAPTER PAGE
I. THE PROBLEM AND DEFINITIONS 0)P TERMS USED. . . . 1
The problem. ............................ 2
Statement of the problem ........ 2
Importance of the study. .................. 5
Definitions of terms used............... 6
Equal footing theory ...................... 6
Marginal sea......................... 6
Inland waters of a state ................ 7
Distance terminology .................. „. 7
II. THE DEVELOPMENT OP THE CONCEPT OP THE MARGINAL
SEA. . . ................................. 9
Prom the Roman law to the ’’battle of books”. 10
The range of cannon. .................... 13
Prom the nineteenth century to modern times. 16
The writings of publicists......... 16
The development of the concept In the
United States. ...................... 18
The development of the concept In Great
Britain............. 23
The development of the concept in other
nations. . . . . . .................... 28
iv
CHAPTER PAGE
The concept in international councils. . . 29
III. REVIEW OF THE LITERATURE ........ 33
Ownership of the marginal sea............. 33
The nature of sovereignty In the light of
international law..................... 34
The nature of sovereignty in the light of
the framework of government established
by the Constitution................... 39
Operation of equal footing theory. .......... 46
Constitutions and statutes . . . . . . . . . 48
Charters and grants of the Crown....... 52
The treaty of 1783 . .................... 56
The courts and other common-law authorities. 57
International law. ...................... 59
The writings of publicists........... 59
Early statutes, treaties, and executive
documents of the United States ........ 61
European treaties and decrees......... 69
IV. HISTORICAL BACKGROUND....................... 72
Theories on origin of petroleum. . . . . . . . 79
Inorganic theories . . . . ................ 79
Organic theories . . . . . ................ 82
How men find oil .................. 84
V
CHAPTER PAGE
Submarine seepages .................... 94
California oil fields. .............. 97
V. STATE OP CALIFORNIA AND THE LAW.................. 103
State’s program under the public resources
code......... 106
Sliding royalty scale..........................106
Attitude of petroleum industry regarding
controversy. ............... 107
Prospecting off California’s shores............ 110
United States Supreme Court decision of 1947 . 117
VI. OPERATIONS IN THE GULP OP MEXICO................ 123
The issues at stake.............i .......... 123
Costs of wildcatting in the Gulf.............. 131
Primary problems encountered . . . .......... 137
Competitive bidding............................140
The effect of the California decision on the
Gulf states. ..............................143
VII. POTENTIALITIES OP THE SUPREME COURT DECISION
OP 1947..................................... 146
Explanation for justification of United
States assumption of the tide lands.......... 146
State support in history .............. 147
Comparative smallness of improvements in
comparison to potential value of tidelands . • 148
Vi
CHAPTER PAGE
Government recognition of state............148
Practical considerations pertinent to federal
assumption of permanent Jurisdiction . . . . 149
VIII. SUMMARY AND CONCLUSIONS................... 151
Summary..............* .................. 151
The arguments of the states..............151
The arguments of the federal government. . . 155
Conclusion........................ 157
BIBLIOGRAPHY................................. 159
LIST OP TABLES
TABLE PAGE
I. UNITED STATES PRODUCTION OF CRUDE PETROLEUM,
BY STATE AND RANK............................... 80
II. UNITED STATES OIL FIELDS DISCOVERED AND EXTENDED
IN 1946, BY STATES............................ 102
III. UNITED STATES INCOME FROM CRUDE OIL, NATURAL
GAS, AND NATURAL GASOLINE ON GOVERNMENT LANDS,
BY STATES, 1946 ......................... 127
LIST OP CITATIONS
CASES PAGE
FEDERAL:
Cunard S.S. Company v. Mellon, 262 U.S. 100,
43 Sup. Ct. Rep. 504, 67 L. ed. .............. 19
Cook v. United States, 288 U.S. 102, 53 Sup. Ct.
Rep. 305, 77 L. ed................... 22
United States v. Curtiss-Wright Corporation,
299 U.S. 304, 57 Sup. Ct. Rep. 216, 81 L. ed. . . 36
United States v. Belmont, 301 U.S. 324, 57 Sup.
Ct. Rep. 758, 81 L. ed. ......... 37
Lord v. Steamship Company, 102 U.S. 541, S.C.,
12 Otto, 541, 26 L. ed. . . ................... 42
Chinese Exclusion Case, The, 130 U.S. 581, Sup.
Ct. Rep. 1068, 32 h. ed.......................... 42
Maul v. United States, 274 U.S. 501, 47 Sup.
Ct. Rep. 735, 71 E. ed........................ 43
Manchester v. Massachusetts, 139 U.S. 240, 35
Sup. Ct. Rep. 159, 35 L. ed................. 51
United States v. Newark Meadows Imp. Company,
173 Fed. 426.......... ....................... 52
Shively v. Bowlby, 152 U.S. 1, 38 Sup. Ct. Rep.
331, 38 L. ed................................... 57
United States v. California, 332 U.S. 19, 91
Sup. Ct. Rep. 1877, 91 L. ed.......................120
FOREIGN:
Queen, The v. Keyn, L.R. 2 Exch. Div. 63 (1876) . . 26
CASES PAGE
Attorney-General for British Columbia v.
Attorney-General for Canada, (1914) A.C. 153 • . 27
Secretary of the State for India v. Chelikani
Hama Hao (1916) . . . . . . . . . . . . . . . . 28