OFFICE OF THE ATTORNEY GENERAL.

To the Commissioner and Board of Agriculture:

In response to the request for my opinion as Attorney General, " if, under any charter, grant, permit or other agreement with or authority from the State, the Coosaw Mining Company is exempt from the provisions of the law which requires companies mining phosphate rock and phosphatic deposits to pay to the State a royalty of one dollar per ton on crude rock and one dollar and ten cents on steamed or kiln dried rock," I have the honor to reply as follows:

I addressed a communication to Mr. Robert Adger, chief manager of the Coosaw Mining Company, stating the question submitted to me by you, and requesting him to inform me whether his company claims any such exemption; and, if so, upon what grounds such claim is based; in order that I might be in possession of the facts before giving an opinion on the question submitted. Mr. Adger replied, enclosing me the opinion of Edward McCrady, Esq., senior counsel of the company, as setting out briefly the position of the Coosaw Company.

A copy of this correspondence is herewith enclosed.

"that the

Mr. McCrady advises Mr. Adger to answer my inquiry, company does not claim any special exemption from the provisions of the law referred to, because it maintains that there is no such provision of the law to make the company liable to such payment that you know of, and there is no right or authority given by law to any Board or officer to claim such royalty from them."

Mr. McCrady further states that the Coosaw Company has, from the first grant in 1870, paid the royalty imposed on it in the same manner, except as changed by the Act of 1876 as to the time of payment, by the addition to the words "dug, mined and removed," used in the Act of 1870, of the words "shipped or otherwise sent to market;" and that they have continued to pay one dollar per ton, whether crude or dried, upon every ton shipped or sent to market, and this they consider is all they are bound to pay under the provisions of the law, and they know of no provisions of the law making the company liable otherwise than as heretofore.

That the Act of 1878, chartering certain companies therein named, with the privilege of mining phosphate rock in the navigable waters of the State, and requiring them to pay the royalty of one dollar per ton on crude rock and one dollar and ten cents per ton on dried rock, and the Act of 1878, authorizing general rights to be granted to mine in the navigable waters of the State, and requiring the last mentioned royalty, are the only Acts in which a royalty of one dollar and ten cents is provided for, and neither of these Acts is applicable to the Coosaw Company.

The first provision made in relation to "royalty" upon phosphate was in the Act, March 1st, 1870, (XIV S. L., 381,) granting to certain persons therein named, and their assigns, the right to dig and mine in the navigable waters of the State phosphate rocks and deposits. This grant was made upon the express condition that said grantees shall pay to the State the sum of one dollar per ton for every ton of phosphate rock and phosphatic deposits dug, mined and removed from the navigable rivers and waters of the State.

"The Coosaw Mining Company is a joint stock and not an incorporated company. In 1870 it purchased or leased a part of Chisolm's Island, on Coosaw River, and there located its works and machinery and commenced mining operations in Coosaw River, by virtue of an agreement with the Marine and River Company, under the license or right granted by the State to that company" (under the Act 1st March, 1870.) "During the earlier portion of its career it made its returns and paid the royalty to the Marine and River Company. Subsequently it executed its own bond to the State in the sum of $50,000, and made its returns and paid directly to the State." (Report of Attorney General Conner concerning the phosphate interests of the State in 1877, and the testimony of Mr. Adger annexed.)

By "An Act to settle definitely the periods at which returns shall be made of phosphate rock and phosphatic deposits dug and mined in the beds of the navigable streams and waters of the State of South Carolina, and the royalty shall be paid thereon, and also to fix the terms on which this Act may be accepted by the parties named therein," approved March 28, 1876, (XVI S. L., 198,) it is recited as follows:

"Whereas differences have arisen between the Coosaw Mining Company and the Comptroller General as to the times and manner in which the said company shall make their returns of the number of tons of phosphate rocks and phosphatic deposits dug, mined and removed by them from the beds of the navigable streams and waters of the State, and also as to the times when the royalty thereon shall be paid; therefore, for remedy thereof, Be it enacted, &c., That the said Coosaw Mining Company, and all other companies and persons engaged in digging, mining and removing phosphate rocks and phosphatic deposits from the beds of the navigable streams and waters of the State, shall be, and they are hereby, required, from and after the passage of this Act, to make to the Comptroller General true and faithful returns of the number of tons of phosphate rock and phosphatic deposits they have so dug, mined and removed and shipped, or otherwise sent to market, at the end of every month; and shall punctually pay to the State Treasurer the royalty already provided by law to be paid thereon at the end of every quarter

or three months, the first quarter to commence on the first day of March of the present year."

By "An Act to protect the rights and interests of the State in the phosphate rocks and phosphatic deposits in the navigable streams and waters of the State," approved March 22, 1878, (XVI S. L., 615,) certain companies were incorporated for the purpose of digging, mining and removing phosphate rocks and phosphatic deposits from the beds of the navigable streams and waters therein mentioned; and the right to dig, mine and remove the same for the full term of ten years is given to said companies, upon the terms and conditions, and from the territory assigned the said companies respectively, in said Act.

Section 6 provides that each and every of the said companies, when organized, shall be required to make to the Comptroller General true and lawful returns of the number of tons of the phosphate rock and phosphatic deposits they may have dug, mined and removed and shipped, or otherwise sent to market, at the end of every month, and shall punctually pay to the State Treasurer the royalty provided by law to be paid thereon, to wit: One dollar upon each and every ton which has not been steamed or kiln dried, or one dollar and ten cents upon every ton which has been steamed or kiln dried, at the end of every quarter or three months." As a condition precedent to the right to the right to dig, mine and remove the said rocks and deposits, each company was required to enter into bond, with security in the penal sum of one-half of its capital, not to exceed $50,000, conditioned for the payment of the said royalty in accordance with the Act of Assembly entitled "An Act to settle definitely the periods at which returns shall be made, &c., approved 28 March, 1876.”

By "An Act to establish a system of general right to dig and mine phosphate rock and phosphatic deposits in the navigable streams and waters of the State, and to provide a mode of ascertaining and of protecting the interest of the State therein," approved December 24, 1878, (XVI S. L., 780,) the Comptroller General was authorized to issue to all citizens of the State and bodies corporate applying for the same licenses granting a general right to dig and mine phosphate rock and phosphatic deposits from the rivers and streams in the State therein enumerated, not then occupied by companies having exclusive rights. therein.

Those to whom such licenses shall be issued are required to make returns of the phosphate rock and phosphatic deposits they may have dug, mined, removed and shipped, or otherwise sent to market, at the end of every month, and to pay to the State Treasurer at the end of every quarter "the royalty provided by law to be paid thereon, to wit: one dollar upon each and every ton which has not been steamed or kiln dried, or one dollar and ten cents on every ton which has been steamed or kiln dried."

By Section 10, the Governor is authorized to appoint a special agent, whose duty it shall be to superintend and inspect all navigable waters of the State containing phosphates, and the work of all persons or corporations mining or gathering such rocks under license or otherwise, and to protect the interests of the State, not only by preventing unlicensed persons from mining from such streams, "but also in securing the prompt and accurate returns of the quantity dug, mined or removed, and the payment of all royalty thereon."

The Comptroller General (Hon. Johnson Hagood) on the 10th of November, 1879, reported to the Legislature as follows:

"ROYALTY.-The Oak Point Mines, the South Carolina Phosphate (limited) and the Coosaw Mining Company prepare their rock for market by steaming or kiln-drying, and their returns are made upon the weights after undergoing this process. The Oak Point Mines Company pays, under Section 6 of the Act of 1878, a royalty of $1.10 upon such weights. The other two companies are not amenable to the provisions of said Act, but pay their royalty under the grant to the Marine and River Company. (A. A., 1870, No. 275.)

"This Act provides a royalty of one dollar per tou, but does not say whether it shall be a ton of crude or dried rock. They have assumed and continue to pay upon the weight after drying. The present Comptroller has not seen fit to disturb the practice in this matter he found prevailing. It is a discrimination, however, of some consequence in favor of these two companies. All other companies and individuals now engaged in phosphate mining in the domain of the State, except the above mentioned, handle only crude rock and pay a royalty of one dollar thereon."

By "An Act to regulate the royalty on phosphate rocks and phosphatic deposits in the navigable streams in this State," approved February 9, 1882, (XVII S. L., 104,) it is enacted:

"SECTION 1. That on and after the passage of this Act, the royalty payable to the State on all phosphate rocks and phosphatic deposits dug or mined from the navigable streams of this State by any person, company or corporation, by virtue of any license, law, charter or other authority from this State, shall be estimated only upon the crude rock, and not upon the rock after it has been steamed or dried.

"SEC. 2. That all Acts and parts of Acts inconsistent and conflicting with the provisions of this Act be, and the same are hereby, repealed." To this Act Mr. McCrady does not allude in his letter.

"The Coosaw Mining Company" is a "company" by which "phosphate rocks and phosphatic deposits" are "dug or mined" "from the navigable streams of this State" "by virtue of" a "license, law, charter or other authority from this State," and is, therefore, embraced in the

provisions of this Act, and "the royalty payable to the State on all phosphate rocks and phosphatic deposits dug or mined from the navigable streams of this State" by said company should be estimated only upon the crude rock, and not upon rock "after it has been steamed or dried."

Mr. McCrady says the Coosaw Mining Company from 1870 "have continued to pay one dollar, whether crude or dried, upon every ton shipped or sent to market."

The royalty upon phosphate rock taken from the navigable waters of the State, imposed by the Act of 1870, was certainly to be estimated upon "crude rock," because it was required to be paid upon every ton dug, mined and removed" before it could be subjected to any other process. And, in fact, the practice of drying or steaming the phosphate rock so mined was not introduced until some time after the Act of 1870. The Act of 1876, as appears by the title, was only to settle definitely the periods at which returns of rock mined and the payment of royalty were to be made, and did not change the royalty already provided. It was passed, as appears by the recital, because of differences which had arisen between the Coosaw Company and the Comptroller General as to the times and manner in which the said company shall make their returns and pay royalty, and for remedy thereof; and provided that the Coosaw, and all other companies and persons engaged in mining phosphate rock from the navigable waters of the State, should thereafter be required to make to the Comptroller General returns of rock dug, mined and removed and shipped, or otherwise sent to market, at the end of every month, and pay to the State Treasurer at the end of every three months "the royalty already provided by law to be paid thereon." The only royalty "already provided by law" was that fixed by the Act of 1870, which, as already pointed out, must necessarily have been estimated upon the " crude" rock. This Act changed the time when returns should be made from the time when mined to the time when shipped or otherwise sent to market, but left the royalty the same-one dollar per ton upon crude rock.

After the passage of the Act of 1870, some of those mining under its provisions steamed or dried the rock after it had been mined and removed, and before it was shipped or otherwise sent to market. This treatment of the rock, by eliminating moisture, greatly reduces the bulk, changes the physical, and perhaps chemical, condition of the rock, and enhances its market value.

"Exclusive Rights" Act of 22d March, 1878, and the "General Rights' Act of 24th December, 1878, each required returns to be made, and royalty to be paid, "in accordance with the Act of 1876;" and in fixing the royalty used the same words as in the Act of 1876, "the royalty pro