New York Paper - The Disposition of Natural Resources (with Discussion)

In the utilization of natural resources owner, operator, and consumer* should share the attendant benefits. Development needs to be planned under terms recognizing fully the interests of all concerned, for ally undue advantage given to any one of these participants is apt to involve even greater and disproportionate injury to one or both of the others. For this reason it is well to preface any consideration of needed reforms in legislation affecting the disposition of public land with a survey of certain fundamental principles that determine the general conditions of a11 land transfers preliminary to development, utilization, and production. The disposition of any undeveloped natural resource, whether timber, oil, coal, or water power, as a transaction to which land owner and prospective developer are parties, must be based in theory upon a division of expected returns.' Whatever the terms of such disposition, neither party can reasonably ask for anything other than an equitable division of the returns. Under this analysis three and only three questions need to be discussed; namely, what are those profits, how is this division to be accomplished, and what is the equitable basis of division ? The answer to the third question should probably be found by applying to the problem the principles of theoretical sociology, and the question need not be mentioned further at this time, inasmuch as it does not involve the practical considerations to be kept in mind in connection with the other questions, which are concerned with only the measure of returns and their division. That is to say, whether the land owner's equity is to be stated as 95 per cent, ox as 6 per cent, of the profits attending the development of the particular resource, no change would be necessary in the method to be adopted of arriving at the closest approximation of the prospective total profit. If on this basis we now compare the two methods of disposing of