New Britain herald., 1924-01-26
OFFERS ID
 CALL OFF CONTRACTS
States That Govt. Can Call 0n Tea Pot Agreement

Doheny, California oil magnate, who
 testified he loaned former Interior
 Secretary Fall s1o0,0o0 while he was
 member of the cabinet, informed
 the senate oil committee today that
 he was willing to cancel the oil con-
 tract with the government.
 The government would be called
 upon, however, to reimburse the Pan.
 American Petroleum and Transport
 Co. for its actual expenditure under
 the contract.
 Thus is a modification of Doheny's
 original offer to cancel if a board of
 experts decided that the contracts
 were not advantageous to the govern
 ment.
 Mir. Doheny's offer was made by his
 counsel. Gacin McNab, but no inn mediate action was taken on it.
 MT. NcNab made this statement:
 MT. F. l.. Doheny yesterday pro- posed to your committee that he would cause the Pan-Amer.can Petro- leum & Transport company to recon Ney all interest in the contracts of that company known as the Pearl Harbor contracts if board of ex- perts were appointed to examine into the contracts and that board decided they were not wise, advantageous and the best that the government could have made, upon the condition that the government reimburse the com pany for it's actual expenditures made under the contracts without profit.
 ''At the hearing on January 24, the chairman of the committee asked Mir. Doheny if he would be willing to have these contracts so reconveyed without the intervention of the suggested board of experts.
 Upon further consideration of the matter, Mir. Doheny now wishes to in- form you that he is willing, in order that there may be no basis for criti- cism of his company's dealings with the government, to recommend the acceptance of the modification of his original offer suggested by the chair man.
 ''of course. you arc aware that Mir Doheny has at all times contend cd and contends that all of his com panys leases and contracts arc en- tirely legal and valid and that this letter is without prejudice to him and his company's position, if the ar rangement herein referred to be not concluded.
 "The following is an approximate statement (made up as accurately as possible at the date of this lettor) of inc situation regarding the Pearl Harbor constructions:
 cost as per contract Of Pearl IT.. "a haannahnF I 1928, s4,500,00o
 Value. as per contract, of fuel oil delivered to Pearl Harbor, tcompleted | contracD, si,sss.ooo.
 Total. s6,4s6,00o.
 "The excess of development and | operating expenditures over income | derived from sale Of production from | naval reserve lands amounts to s50o,- | O00.
 "rotai, s6,ssG, 900.
 ''vslue of royalty products deliv- cred by government to company, s3,- 4SS,o00.
 Net s3,503. .o0Q.
 "'rhcre will be credited against this approximate amount the value of working materials and supplies on hand and which can be utilized else- where by the company.
 "In addition to the foregoing the company is obligated on construction contracts heretofore let to expend ap- proximateiy s2,OO0.0oo in connection with the Pearl Harbor development should the government not wish to complete these contracts and cancel the same. the company's obligations to the sub-contrsctors would be only the estimated amount of profit on the contracts cancelled. ll
 Mir. Doheny does not understand that the several small leases compris- ing approximately two sections alto sether and the leasing or which was determined upon for the purpose of drilling offset wells to prevent drain age by wells on adjoining private lands, has been in any way subjected to criticism by the committee and he lakes it that tile committee and con- gross will desire the continued oper- ation of these wells in order that the interest may be protected.
 "As to these leases, whether or not they are recognized by the committee as valid, MT. Dohehy is willing to recommend that they be operated by his company until such time as the entire net revenue therefrom Gnclud- Ing royalty oil incuring to the govern ment), together with any other credits which may exist, shall have equalled whatever balance Is or may become due to the company for expenditures heretofore made or incurred as here nbefore state. said amount to be de- by government audit, and hat they then be surrendered to the government.
 Paris, Jan. 26.--Harry r. Sinclair, he American oil magnate, is being tept fully advised by private cables [ Jf the senate investigation of the . Teapot Dome lease but is resolutely [ determined to make no comment 2 whatever in regard to the proceedings [ fl nresruf v