The Birmingham age-herald., 1924-02-04
GREGORY TELLS l
 OIL CONNECTIONS
Writes Letter To Coolidge Ex- plaining Attitude On His
 Choice As Counsel

q ' WASHINGTON, Feb. 3.-Thomas w. Gregory, former Attorney General, and one of those originally selected by President Coolidge as counsel in the oil lease annullment proceedings, delty- cred to President Coolidge today g let ter explaining his attitude on the ques- tion. At the same time President Cool idge issued a statement in which he said:
 "The statement in the letter of MT. Attorney General Gregory regarding the conversation between him and me over the telephone. and the inferences to be drawn from it are correct"
 MT. Gregory's letter, dated February 2, follows:
 s.Mr. President: On last Tuesday night when | was in Austin, Tex, you telephone that you wished to employ me in the investigation of the leases of the naval oil reserves.
 4 "You will recall that after expressing my appreciation, stated that I was not in close touch with the develop ments in the matter; that nothing oc- cured to me that would prevent me from serving, but that would be in Washington Saturday afternoon (to- day) and would then confer with you on the subject. had no idea that in saying this I was accepting an ap- pointment or that you so understood it. I assumed that that would be decided when we conferred and that in the meantime I would have an opportunity to go through my books and cOrrespon- dence to see whether in the course of my private practice I had ever had any employment which might stand ins the way. It was also my desire beforeSdef- initely committing myself to confer with Senator Walsh of Montana, who has conducted the investigation of the Senate committee. I was very much surprised to read in the Texas news papers the next morning that had been appointed, but did mot feel at lib erty to make any public statement, and consistently declined to do so until had seen you.
 Did Not Recall Doheny Connection
 "Of course, if it had been in my mind at the time of our telephone conver- sation that I had been employed by Doheny, directly or indirectly, or at any time, near or remote, that would have ended the matter at once, because L would have realized that however free from criticism such employment might have been, it would have dis qualified me from acting as your coun- sel on the present occasion. have no recollection of having seen or communi- cated with Mir. Doheny in my life, and at that time did no. recall ever having had any business connection with him or with any company controlled by him.
 "I returned to Washington as quickly as possible for the purpose of keeping my engagement with you and arrived here this afternoon.
 Yesterday while on the train my at- tention was called to a statement made the day before to the Senate public lands committee by E. L. Doheny to the effect that his company and several others employed me to represent them before the President in regard to getting permits to drill oil wells in Mexico. and that the Island Oil Company billed us for $2,0O0 as our share of the fee that they paid Judge Gregory for this particular work.
 II would have been at a loss to know what he was refrring to except fors his mention of the Island Oil company. T remembered perfectly my employment by that company, although some of, the details had passed out of my mind I have now refreshed by recollection by examining data in my office. The facts are as follows:
 ''In the fall of 1919 the firm with which was then associated had among its regular clients the Island Oil and Transport company, which is evidently the Island Oil company referred to. It was a small independent company with out any connection whatever, so far as I have ever known, with either Mir. Sinclair! Or MT. Doheny. i
 Acted in Mexican Connection
 The Island company asked me to act for it in the concerted effort then being made by American oil companies to get the state department to take action to prevent the threatened confiscation of their properties in Mexico, the Car ranza government having refused to grant them permits to drill on their provision of the new constitution vest ing title to oil and other minerals in the government.
 months, and the Mexican authorities finally extended to the American com panies the privilege enjoyed by those of Great Britain.
 This result was brought about in December, 1919, or January, 1920, and my employment in the matter ended then and there. rendered bill to the Island company fol; $15,ooO, which it paid.
 At some stage of the transaction the Island company stated that the work l did redounded to the benefit of other companies besides itself, and that, it being a small company, it would try to induce several of the others simi- larly situated to make contributions to the fee charged. understood that some of them did SO. The Huasteca Petro- leum company, which was controlled by MT. Doheny, was one of these, and no doubt paid the Island company the $2,000 referred to by Mir. Doheny.
 II have never thought that the trans action involved the slightest necessity for apologies, nor even for explanation, but for the unusual conditions which have arisen.
 Ut is obvious, nevertheless, that the fact that one of Mir. Doheny's com panies bore part, however indirect, and however small, of the expense of my employment by the Island company, makes it inappropriate for me to act as your counsel in this matter"
 easily Obtainable from the above fig ures.
 In 1922-1923 approximately 46 per cent of the board of education fund was received from the state and county ap- propriation, 42 per cent from the city 3 mill tax levy, per cent from tenn porary loans and the remaining 3 per cent from tIIifiOna raut infaro3t nm