Evening star., 1924-01-27
The Naval Oil Leases.

Apart from the question of official
morality in the matter Of the naval
oil reserves, suddenly brought forward
by the disclosures of the last few
days before the Senate investigating
committee. is the matter Of the leases
granted to private concerns for the
taking Of Oil from these reserves.
Those leases We're formally entered
into by the government through the
Secretary of the Interior, with the ap-
proval Of the Secretary Of the Navy.
They are valid in law at present. But
il reason arises for belief that they
were improperly made, that they were
given as result of a corrupt bargain,
or that they were based upon terms
unfair and unfavorable TO the govern
ment. they may be Cancelled. That
question Of their cancellation, their in
valuation. is now under consideration.
When these leases were made it
was explained that the reason for
them lay in the fact that owing to the
peculiar geological conditions prevail
ing within the regions both in Wyom-
ing and in California these great oil
purposes, were liable to drainage
through borings made by private con-
Germs beyond the boundaries of the
governmental areas. 1t was contended
that unless the government itself pro-
ceeded to drain and store the Oil for
future use it would have none left
after the course of years, owing to
this drainage. Consequently, II is
urged in behalf Of the leases. 1t was
decided to be wise to lease certain por-
tions OF the Oil reserves to private con-
Germs. who should pay the government
royalties for oil taken. and should at
the same time construct great storage
reservoirs in which a certain percent
age Of the oil taken should be held for
naval uses.
These are technical questions, tech
nical and economic. II no taint of al
legged corruption rested upon the trans
action there would still be question
as to the wisdom Of making such
leases. But with the demonstration
through the testimony given before
the Senate committee Of a dubious and
suspicious financial relationship be-
tween the leasing corporation and the
official who in the name Of the govern
ment made the leases, the presump
ton arises against the propriety of the
leases on both technical and economic
lines.
II the United States stands to gain
through this bargain by the saving Of
Oil that would otherwise be lost ir-
retrievably through drainage, the
leases are good. II the terms Of the
leases are fair to the government as
to the amounts to be paid in royalties
and the quantities Of oil to be stored
they constitute a good bargain. pro-
viding there is acceptance Of the pre-
vious premise that the oil is subject
to leakage. If, however, there is no
leakage and no danger Of loss, if that
was an excuse, a subterfuge, the max
ing Of those leases was an act Of
malfeasance. II there was such leak
age, but II tne leases were not lalr 10
the government in their terms, giving
an unduly rich bargain to their hold.
ers, there was at least gross neglt-
gence.
All these elements must be taken
into account, and these questions must
be weighed with the greatest care.
Now that the possible revocation Of
the leases is under consideration both
by legislators and by the Executive, it
is at best difficult question. 1t in
wolves liabilities through forfeitures
as we'll as the possible condemnation
of all who are implicated in the trans
actions. The matter of political ex-
pediency. must not weigh. Justice
alone should be the measure Of action.