The Indianapolis times., 1924-01-24
WALSH SAYS
DOME LEASE
is ILLEGAL
Montana SoIon Declares Con-
tract With Sinclair Com
pany Must Be Voided,
Times Washington Bureau,
1922 New York Ave.

.IWI day adds to the public suspt-
- cion dishonesty and ma1prac-
tice were involved the leasing Of
the naval oil reserves to private ex-
ploiters, says Senator Thomas J.
Walsh, Democrat, of Montana. Falls
nemesis on the Teapot Dome investi-
eating committee.
Walsh pointed to Falls evasions and
misleading statements before the Sen
ate committee and his elusiveness
when the committee members sought
information as to details Of the leases
"It is difficult to place any other
Interpretation upon Secretary Falls
deliberate attempt to misinform the
committee" Senator Walsh declared
IF the money was honestly obtained,
why did he give the committee a
fictitious source?"
Walsh was referring to Falls let
ter to the complittee in which ne said
he had borrowed $4,000 from Edward
B. Mclean. Mclean subsequ entity
swore no such loan had been made
and Fall indorsed this statement.
Breaking Lease Warranted
Wholly aside from Secretary Falls
particular activities at this time, the
committee, believe has already gath
cred sufficient evidence of illegality to
warrant the breaking Of the leases,
Senator Walsh continued
For one thing, no competent legal
authority claims President Harding
was within his rights when he trans
ferred the administration Of the naval
reserves from the Navy Department
to the Department of the Interior.
Congress in June, 1920, was averse
to extending to the Interior Depart
ment any authority over the naval oil
reserves, other than the very lin.
tied power conveyed by the general
leasing law of Feb. 25, 1920. On
June 4, 1920, Congress specifically IN
structed the Secretary of the Navy
to administer the naval oil reserves.
Purpose Is Ignored
Notwithstanding this purpose of
Congress, President Harding on May
81, 1921. turned over to the Interior
Department the entire administration
of the naval reserves.
THAT is one ground on which the
leases may he abrogated. Other rea-
sons also exist II is believed the
entire contract with the Mammoth Oil
Company is void because 1t was en-
tered into without competitive bid
ding.
The leasing Of the reserves was
justified mainly on the ground # was
being drained by the wells in the ad- |
jacent Salt Creek field.
The investigation brought out the |
fact that OF 100000 barrels of oil !
In the Teapot Dome reserve. 16. O0O, 900 !
barrels are subject to some drainage
Experts estimated the maximum pos.
sible drainage to be 20 per cent.
Loss Is Calculated
''If the Government should lose the /
% per cent OF the 10000 600 barrels |
through drainage, there would still re-
main between q 900 900 and %. 900 900 |
barrels Of oil in the total reserve. |
The question is presented whether |
$4,000 900 barrels in the. ground is to |
be preferred to 1866 .666 barrels in |
tanks
The present investigation was
brought about by leasing OF naval |
reserve No. 3, known as Teapot Dome. |
During the hearings It was disclosed |
reserves Nos. l and 2, in California, |
had also been leased. in this case to |
the Par American Petroleum Com |
pany, controlled by the Doheny inter.
ests
Indeed, IT is perfectly plain the
act Of June 4, 1920. was stretched un-
til It cracked In order to give Sin
clair and Doheny these leases. ri
Congress had ben appealed to fer ap-
preparation for building tanks IT.
would have become necessary to Gis- |
close the secret purpose OF the Inter
ior Department to make the leases, |
and Congress would never authorize |
such dissipation Of the property"