Evening star., 1924-06-05
Committee Brands Fall, Sim
clair and Doheny Dealings
ShadoWy - Clears Denby
, and Roosevelt.
PRESIDENTIAL ORDER
OF TRANSFER ILLEGAL"
100000 Loan and Cattle Gift
Condemned-0nly Passing Ref
, erence Made to McLean-Stock
Speculation and Deal" at 1920
COP. Convention Fail of Proof.

With all of the organization Re-
Bublicans on the committee absent,
the Senate oil committee today
approved with minor changes the
oili Investigation report drawn up
by Senator Walsh of Montana.
Four Democrats and two Repub-
Hcans took part in the action. The
Republicans were Chairman Ladd
and Senator Norbeck of South Da-
kota, both of whom have consist
entity supported throughout the
inquiry the position taken by SEN
ator Walsh.
Flagrant disregard OF the law in
negotiation OF the Sinclair and Do
heny oil leases was charged in a
report to the Senate today prepared
Tor the oil committee by its prose
cutor, Senator Walsh OF Montana.
The executive order by which
President Harding transferred the
OIL reserves from the Navy to the
Interior Department was held in the
report to have been illegal.
he manner in which the leases
were negotiated secretly bv former
Secretary Fall was described as in
disregard OF the statutes.
Leases Held WastefuI.
The leases themselves were declared
"indefensibly wastefuT' and based on
policy which Congress alone had
authority TO determine.
Falls acceptance of 100000 from
J.. L. Doheny was characterized as
in the last degree reprehensible." al
though no opinion was expressed as
TO whether the payment was in fact
a loan.
shipment by Harry F. Sinclair of
consignment of blooded cattle to
clair's subsequent employment of
Fall after he left the cabinet were
cited without comment.
Likewise, without comment, the re-
port related how Sinclair expended
$l,o00,o00 to clear Teapot Dome of
conflicting claims, some of which, a
least, were ''Shadowy."
DENLY Fully Exonerated.
Former Secretary DENLY of the
Navy Department and Assistant Sec
retary Roosevelt were eXonerated
from "any part whatever" in the ne
gotiations leading up to the leases.
1t was declared that despite dill
gent inquiry the committee found mo
facts of sufficient Importance to re-
port" in support of the rumor that
public officers had speculated in
stocks of the Sinclair and Doheny
Similarly, the report said, the evil
dence failed to establish the exist
ence" of any conspiracy between OIL
operators and others at the Repubil-
can national convention in 1920 for
exploitation of public resources.
Mexican Reference Slight.
Only passing reference was made
TO the conflicting statements by
which it had been sought to connect
Edward B. Mclean with 100000
payment to Fall, and no opinion on
that subject was expressed
Tho only recommendation contained
in the report, aside from a reference
TO court proceedings now in progress,
was contained in the following sum-
Had the legislation enacted by
Congress been observed in its spirit
in dealing with the reserves; had it
not been wrested out of all reason to
afford some appearance of justifica-
tion for the course pursued, further
action by the 1aw-making branch
might not be necessary. In view of
what has transpired it should be
made plain:
Il. That no lease or other con-
tract authorizing or providing for
the extraction of oil or gas from the
reserves should be entered into ex-
cept upon competitive bids. for which
proposals should be duly advertised.
Cites Basis for Leases.
"a. That no such lease or contract
should be entered into for any pu--
pose except to protect the reserves
from drainage. and for such limited
areas as should be drilled to that
end, unless in the case of an emerg
ency to be proclaimed by the Presi-
dent of the United States.
"3 That every such lease or con-
tract should be submitted 20 and ap-
proved by the controller general be-
fore taking effect
4. THAT the authority conferred by
,ac act of June 4, 1920. to exchange is
restricted to the exchange OF crude oil
or gas for fuel oil or other products or
deriyitives of oil or gas"
Conceding the danger of drainage Of
oil from the reserves, which has been
en- empha lh sized by FAN as one of the prin-
cipal reasons which actuated him in
,naking the leases, the report declared
me crucial inquiry so lar as Teapot
Dome is concerned was whether II Is
better for the government to have
- 600. 900 barrels of oil in the ground
or /, ,6SS, ,666 barrels in tanks at the sea
board" This question, 1t was asserted,
should have been left to Congress to
decide.
Reviewing the testimony regarding
The s1Oo. 900 payment to Fall by Doheny,
the report declared that the essentially
Corrupk character of a loan made under
such circumstances required no COM
ment.
1T would be impossible for an Off
Ger to accept loan of such an amount
or, perhaps, of any amount, under the
circumstances, it continued, without
a sense of obligation to the lender,
which, unless his character was cast in
heroic mold, would be revealed in sub
seuuent official transactions with him.
when it is borne in mind that, with
out competitive bidding Do
heny got from Fall, in April follow
ing, the contract for the construction
nf the tanks at Pearl Harbor, and
with it a preference right to lease
Of a large share of naval oil reserve
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