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make further extensions, may be extended for a period of two years from the date of the passage of this Act."

The manifest object of the extension of a prospecting permit is to enable the permittee to continue the work of exploration and complete a producing well within the additional period granted. The Extension Acts do not, like the initial Act of February 25, 1920, fix specific times within the maximum period, for the beginning, prosecution, and completion of a test well. In the nature of things, that would be impracticable, as the actual drilling situation on the various tracts (some 34,000 permits have been granted) will vary greatly. At the dates of expiration of the permits, the exploration work will be in many different stages of development, ranging all the way from the mere placing of machinery on the ground or the erection of a derrick (or not even that much) to actual wells in all stages of progress from "spudding in" to within a few feet of completion. But though the Extension Acts do not prescribe the rate of progress to be made by dates, like the original Act, which begins with nothing done, they do, like the original Act, look forward to the completion of a well or wells and to the ripening of the prospecting permits into a formal lease under the original Act.

I am informed that it has been the general practice of the Secretary of the Interior to grant extensions of permits without requiring any specific work to be done by the permittee. The form of extension used merely recites: "It is expected that substantial progress will be made toward development." The permittee was left to work out his own program of development, having regard to the progress already made and the particular conditions confronting him. The permittee had the right to postpone the completion of a well to any convenient time within the period of extension granted by the Secretary.

Since the Extension Acts do not require the permittee to do specific acts within specific times and the administrative practice has recognized that the permittee has a discretion not incompatible with diligence, as to the apportionment of drilling work within the limit of the extension period, I am of the opinion that the Secretary and the permittee may agree, or the Secretary may grant an extension conditioned

that drilling operations shall be postponed or suspended, dependent on the circumstances of each case, leaving, however, remaining within the extension period, adequate time to complete a well to the maximum depth required by the Act of February 25, 1920, by the exercise of reasonable diligence. This plan seems not inconsistent with the interpretation and administrative practice of the Department (which are entitled to respect, Logan v. Davis, 233 U. S. 613, 627); it accomplishes the object of the Mineral Leasing Act both as regards the prevention of waste (Section 16) and the completion of a test well within the statutory time (Section 13); and it secures to the permittee all of the substantial benefits of the Extension Act. I see no legal objection to it.

Respectfully,

WILLIAM D. MITCHELL.

To the SECRETARY OF THE INTERIOR.

VALIDITY OF CONTRACT AWARDED BY GOVERNMENT TO PAN AMERICAN-GRACE AIRWAYS, INC.

A contract was awarded by the Postmaster General to the Pan American-Grace Airways, Inc., for the transportation of mail from the Canal Zone to points in South America and return, which contract was authorized by the Act of March 2, 1929 (45 Stat. 1449) and was awarded after that Act became effective, but the bids for this specific service were invited and received prior to the passage of said Act authorizing the contract.

Held, under the circumstances of this case, that the course followed in securing bids was in substantial compliance with the requirements of law and within the limits of discretion vested in the Postmaster General, and that the contract is valid.

DEPARTMENT OF JUSTICE,
May 6, 1929.

SIR: In your letter of April 1, 1929, you called my attention to a contract awarded by your predecessor to the Pan American-Grace Airways, Inc., dated March 2, 1929. but executed and delivered on March 4, 1929, and asked whether, under the facts disclosed in the large record which you sent, the award was lawfully made; and, if not, whether you may rescind the contract without rendering the Government

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liable in damages for breach of contract. Accompanying your letter was an opinion by the Solicitor of your Department, in which he answered the first question in the affirmative and the second question in the negative.

On January 31, 1929, the Post Office Department advertised for proposals for the transportation of mail by aircraft on Route No. 9, from the Canal Zone to points in South America and return, the bids to be filed by noon on February 28, 1929. Five bids were received. On March 2, 1929, Postmaster General New awarded the contract to the Pan American-Grace Airways, Inc., and on March 4, 1929, a formal contract for the service was signed by him and by the company. An unsuccessful bidder protested against the award and urged several grounds for its rescission. The only ground which, in my opinion, is worthy of any serious consideration is that the contract was void because, at the time the bids were invited and received, there was no statute which authorized the Postmaster General to make the contract contemplated by the advertisement.

The Act of March 8, 1928, c. 149, 45 Stat. 248, U. S. C. Title 39, sec. 465 (a), provided as follows:

"That when, in his judgment, the public interest will be promoted thereby, the Postmaster General is authorized to enter into contracts for the transportation of mails by air to foreign countries and insular possessions of the United States for periods of not more than ten years, and to pay for such service at fixed rates per pound or per mile; and the Postmaster General is hereby authorized to award such contracts to the bidders that he shall find to be the lowest responsible bidders that can satisfactorily perform the service required to the best advantage of the Government: Provided, That the rate to be paid for such service shall not in any case exceed $2 per mile: And provided further, That in the award and interpretation of the contracts herein authorized, the decision of the Postmaster General shall be final, and not subject to review by any officer or tribunal of the United States, except by the President and the Federal

courts.

SEC. 2. The Postmaster General shall make and issue such rules and regulations as may be necessary to carry out the provisions of this Act."

On January 10, 1929, a bill was introduced in the House of Representatives which, after some amendments, was passed and became the Act of March 2, 1929, affecting in some respects the contract now under consideration. This Act amended the Act of March 8, 1928. The earlier Act authorized contracts for transportation of mails to foreign countries with no express provision covering mails from foreign countries to the United States. Any doubt as to the power of the Postmaster General to contract for transportation of mails both ways was removed by the Act of March 2, 1929.

The earlier Act dealt with transportation of mail to foreign countries and insular possessions, and the later Act contained a provision definitely including the Canal Zone.

The most important amendment to the law affecting the present case related to the compensation to be paid. The earlier Act required fixed rates per pound or per mile; whether a combination basis was permissible was doubtful, and in any event there was an express provision that the compensation should not exceed $2.00 per mile. The later Act made it clear that a combination rate, including weight and distance, could be used and it modified the limit of $2.00 per mile by allowing additional compensation per pound per thousand miles for mails in excess of the specified load.

The advertisement for bids in the present case specified a price basis, which allowed bids at rates in excess of the limit fixed by the earlier Act but authorized by the Act of March 2, 1929, and the bid actually submitted by the successful bidder fixed a basis for compensation which might on any trip exceed the limit fixed by the earlier Act. In these respects the published advertisement for bids proceeded on the theory that the authority to make a contract on the basis of the advertisement would be granted by Congress before the contract was awarded.

The contract under consideration was authorized by the Act of March 2, 1929, and was not awarded until after that Act had become law. The advertisement followed the introduction of the bill in Congress, and the reason for advertising for bids at that time was to save time so that the Postmaster General would be in a position to consider and act upon the bids as soon as statutory right to do so was con

ferred. In his judgment unnecessary delay would thereby be avoided. The advertisement was such as would have been proper under the Act of March 2, 1929, had advertisement been delayed until after the passage of that Act. The Act itself does not provide any specific method of obtaining bids. The sole direction in that respect being that

"the Postmaster General is hereby authorized to award such contracts to the bidders that he shall find to be the lowest responsible bidders that can satisfactorily perform the service required to the best advantage of the Government." This language clearly contemplates competitive bidding, and it is equally clear that it leaves to the Postmaster General a very wide measure of discretion as to the means and methods of securing the bids. There was at the time the bids were invited no statute of general application which prescribed any particular method to be followed in inviting bids for postal service, except section 3951 of the Revised Statutes, relating to "general mail lettings" in the various States and Territories of the United States, which clearly did not apply to the present case. There were, however, several statutes relating to particular kinds of mail service, as, for instance, the Act of April 21, 1902, c. 563, 32 Stat. 114, as amended by the Act of March 2, 1907, c. 2513, 34 Stat. 1211, and by the Act of May 27, 1908, c. 206, 35 Stat. 412, authorizing contracts for pneumatic tube service after advertising once a week for a period of six weeks in not less than five newspapers; also the Merchant Marine Act of May 22, 1928, c. 675, 45 Stat. 694, sec. 406, requiring advertising once a week for three weeks. The Act of March 1, 1921, c. 88, 41 Stat. 1152, and the Act of February 2, 1925, c. 128, 43 Stat. 805, as amended by the Act of June 3, 1926, c. 460, 44 Stat. 692, authorized the Postmaster General to contract for the transportation of mail by aircraft without mentioning advertising, and the Act of March 8, 1928, c. 149, 45 Stat. 248, as amended by the Act of March 2, 1929 (H. R. 16131, Public No. 904), contained no specific direction as to advertising.

There was also in effect section 3709 of the Revised Statutes, which provides generally that all purchases and contracts for supplies in any of the Departments of the Government, except for personal services and in case of public

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