## Facts

- The United States sued in debt on a $10,000 penal bond executed in 1834 by John P. B. Gratiot, Robert Burton, Charles S. Hempstead, and Dickerson B. Moorehouse.
- The bond conditioned liability on Gratiot and Burton’s faithful performance of a contemporaneous written “License for Smelting.”
- The license, signed by a federal superintendent acting under the Secretary of War and accepted by Gratiot and Burton, permitted them (with presidential approval) for one year to purchase and smelt lead ore at federal lead mines on the Upper Mississippi, subject to detailed conditions.
- One condition limited ore purchases to persons authorized to work the mines under federal arrangements (e.g., lessees, smelters, or diggers).
- The federal program relied on an Act of March 3, 1807 authorizing the President to lease lead mines belonging to the United States.
- In the Circuit Court for the District of Illinois, defendants demurred, challenging the United States’ legal theory and the President’s authority under the 1807 Act.
- The circuit judges divided on a controlling legal question and certified it to the Supreme Court.

## Issues

1. Whether, under the Act of March 3, 1807, the President had authority to make the smelting contract/licensing arrangement on which the bond suit was based.
2. Whether Congress’s power under the Property Clause permits Congress to authorize leasing of federal mineral lands, rather than limiting disposition to outright sale.

## Decision

- The Supreme Court answered the certified question yes: the President had power under the 1807 Act to make the contract on which the suit was instituted.
- The Court construed Congress’s Property Clause authority broadly and treated leasing as a permissible means of “disposing of” federal property.
- The Court concluded the statutory five-year limit on leases constrained duration but did not bar renewals, and preserved Congress’s ability to choose different dispositions later.
- The Court recognized that lease consideration need not be money; rent reserved in kind is legally sufficient.
- Because the matter arrived by certificate of division, the Court’s disposition was an answer to the certified question, clearing the way for further proceedings in the circuit court.

## Legal Principles

- Congress’s Property Clause power to “dispose of” and regulate federal property includes authority to permit leases of public lands, including mineral lands.
- Congress may delegate to the President authority to manage and lease federal property within statutory limits, and executive contracts made pursuant to that authority are valid.
- A lease for years is a contract for possession and profits for a determinate time in exchange for rent; rent may be payable in kind rather than in money.
- Federal leasing of federal lands within a state is not, by itself, an unconstitutional infringement of state authority, particularly where the federal disposition authority predates statehood.

## Conclusion

The Court upheld federal authority to manage and lease mineral resources on public lands, holding that the 1807 statute validly authorized the President to enter the smelting-license arrangement underlying the bond action and that leasing and in-kind rent fall within Congress’s Property Clause power.


United States v. Gratiot, 39 U.S. (14 Pet.) 526 (1840)