The New York herald., 1922-04-30
Orders Investigation Into
Lease of Teapot Dome and
Other Reserves.
CONTRACTS CALLED FOR
Hitchcock Shocked by Turn
ing Over Of Vast Fields to
Private Interests.
Special Dispatch to THE NEW Yosk HERALD.

Special Dispatch to THE NEW York HERALD
New York Herald Bureau.
Washington, ID. c.. April 20.
An investigation OF the lease of the
Teapot Dome oil reserve in Wyoming
to the Mammoth OIL Company. SUBJ
sidiary of the Sinclair Oil Company,
and of the leasing Of the two oil re-
serves in California. was ordered to-
day by unanimous vote of the Sem
ate. This action followed charges
made yesterday by Senator La Toilette
owls }, including one that spectators
in Wall Street had advance informa-
ton on the Wyoming lease and cleaned
up $30,000,000.
A copy of the lease Of Teapot Dome
was submitted to the Senate by the
Navy and Interior departments. An
analysis of the contract, according to
Senator Kendrick (Wyo.), shows that
most of the royalties to the Govern
ment range from 12h to rs per cent.
and only in certain specific instances
do the royalties run up to so per cent.
Senator Kendrick is convinced that
the Government, under the contract,
will get comparatively small portion
of the oil which comes off the Teapot
Dome.
Secretary DENLY and Secretary Fall,
in defending the lease, say the con-
tract carefully guards the interests of
the Government, and that the royalties
will average so per cent.
The contracts are very complicated
and involved. according to Senator'S who
have examined 1t, and only an oil expert
can say just how the Government fares
In the deal That phase of the contro-
versy is likely to be aired in the Senate
in the near future.
Considerable discussion followed the
adoption of the La Toilette resolution
calling for an investigation Of the oil
leases. Under an amendment to the reso-
luton by Senator Potndexter (Wash.)
the Secretary of the Navy and the Sec
retary Of the Interior are called upon to
include In the information to be laid be-
fore the Senate list pf the private wells
which. 1t Is asserted. are draining Teapot
Dome reserve, with the dates when they
were drilled and their location.
Senator Hitchcock (Neb.) started the
debate OF the La Toilette resolution. He
said II was a shocking surprise" when
he learned that the great oil reserves In
Wyoming. valued at hundreds of mill
ions OF dollars" were to be turned over
to private interests.
Senator Hitchcock took occasion to
highly praise the Wilson Administration
for preserving the naval oil Reserves
which brought forth q sharp rejoinder
from his colleague. Senator Norris. The
latter deplored the injection of politics
into the matter and he read a letter
from Josephus Daniels, Secretary OF the
Navy during the Wilson regime to show
that the naval reserves originally were
set aside during the Taft Administra-
tion and were highly regarded by that
Administration
Senator Harold (Okla.) read letter
he had received from Secretary Fall OF
the Interior Department in which the
latter stated that under the gas and oil
leasing act of 1920 he had ample au-
thority to lease oil lands owned by the
Government to private interests.
II am not uphoTding the contention
held by Secretary FALL" said Senator
Harold. II do not know whether he lis
right or not, but his letter sheds light on
the position he has taken"
Senator Harold also read letter
sent to him recently by Secretary Dem
by. aimed to justify the transfer OF the
naval oil reserves from the Navy De-
partment to the Interior Department.
Secretary DENLY said there was ample
Congressional legislation and authorize
tion for such action.