Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-06-07
FLOUT|NC Of LAW
CHARGED IN NAVAL
OIL LAND LEASES
Falls Part in Deals. Termed
ReprehensibIe by
Investigators


Walsh, of Montana.
The executive order by which
President Harding transferred the
oil reserves from the navy to thu
interior department was held in the
report to have been illegal.
The manner in which the lease!
were negotiated secretly by former
Secretary Fall was described as II
disregard of the statutes.
The leases themselves were de
clared 'indefensibly wasteful" ant
based on a policy which congress:
alone had authority to determine.
Falls acceptance of S1O0,OO0 IRON
E. l.. Doheny was characterized al
''in the last degree reprehens1ble,
although no opinion was expressed
as to whether the payment was II
fact a loan.
Shipment by Harry F. Sinclair o.
g. consignment of blooded cattle &c
Falls New Mexico ranch, and Sin
clair's subsequent employment o.
Fall after he left the cabinet were
cited without comment.
Likewise without comment the re
port related how Sinclair expended
$1,000 to clear Teapot Dome o.
conflicting claims some of which
at least, were "shadowy.
DENLY Exonerated
Former Secretary DENLY, of the
navv department, and Assistant Sec
rotary Roosevelt were eXoneratet
from "any part whatever" In the
# was declared that despite dill
gent inquiry. the committee founC
.sno facts of sufficient importance t(
report" in support OF the rufnor tha
public officers had speculated II
stocks Of the Sinclair and Doheh'
companies. eat,
Similarly. the report said, "tht
evidence failed to establish existence
of any conspiracy between OIL opera
tors and others at the Republican
national convention in l92O Tor eA
citation of public resources.
Only a passing reference wa
made to the conflicting statement
IT, which it had been sought TO con
meet Edward B. Mclean with
100000 payment to Fall, and ne
opinion on that subject was express
ed.
The only recommendation contain
ed in the report, aside from rel
erence to court proceedings now II
progress, was contained in the 1ol
lowing summary:
Had the legislation enacted b5
congress been observed in its splrl
IL dealing with the reserves, had /
not been wrested out of all reason
to afford some appearance of JUS
LITIGATION for the course pursued
further action by the law making
branch might not be necessary. lr
view of what has transpired /
should be mace plain:
Should Protect Reserves
81. That no lease or other con
tract authorizing or providing fCl
the extraction of oil or gas shoult
be entered into except upon com
petitive bids, for which proposal:
should be duly advertised.
so. That no such lease or contract
should be cred into for any pur
pose except to protect the reserves
from drainage, and for such limited
areas as should be drilled to tha
end, unless in the case of emergency
to be proclaimed by the presiden
OF the United States.
IS. That every such lease or con
tract should be submitted to anC
approved by the comptroller genera
1 before taking effect.
- "A. That the authority conferred
Z by the act of June 4, 1920, to eX
change, is restric ID 20 thu ex
change of crude oil or gas for fue
oil or other products or deriVates o
oil or gas"
Conceding the danger of drainag
Of oil from the reserves which haC
been emphasized by Fall as one o
the principal reasons which actual
ed him in making the lease-the re
port declared the crucial inquiry, S
far as Teapot Dome is concerned
was whether it is better for tn
government to have 100000 ban
rels of oil in the ground or 1866
666 barrels in tanks at the sea
board" This question, it was as
serted. should have been left TO
congress to decide.
The Elk Hill lease to Doheny wa
described as ''uneXceptional," blu
the subsequent contracts with DO
heny under which government royal
~ oil was exchanged for tankag,
were attacked
Reviewing the testimony regardin:
the 100000 payment to Fall by Do
heny, the report declared that tn
essentially corrupt character of
loan made under such circumstance
required no comment.
1T would be impossible for an of
ficer to accept a loan OF such al
IF
under the circumstances, it con
tihued, without a sense of obliga
ton to the lender which, unless hi
character was cast in heroic mould
would be revealed in subsequent of
fetal transaction with him.
Its sinister import is appreciate,
when it is borne in mind that with
out competitive bidding, Dohen,
got from Fall, in the month of Apri
following, the contract for the con
struction of the tanks at Pearl Har
Dor, and with it preference right t
n lease of a large share of naval OF
reserve No. l to be followed, with
out competitive bidding, by Jeas
of the entire reserve. comprisin;
over 10000 acres, estimated to con
tain 250,000.000 barrels of oil. on
OF which. Doheny told the commit
tee, he would be in bad luck if h
did not make S100, 200, 900 profit"
Oil Payment Attached
In criicizing the use OF royalt,
oil for construction of steel stora 8
tankase the report declared tina
steel storage tankage should be con
structed only upon a contract cal
Ing for the payment of money to b
appropriated by congress for tina
specific purpose.
The sending of marines to drjv
claimants from Teapot Dome afte
the Sinclair lease had been sisne
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