Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-03-11
DENLY, ANSWERING
QUIZ, SAYS DANIELS
STARTED LEASING

| WASHINGTON, March S.-Leas
ing of the naval oil reserves was
made possible, by Il suggestion first
made TO congress by Joseph Dan
ielS, navy secretary in the Wilson
administration, Secretary of the
| Navy DENLY wrote the house. naval
affairs committee
Daniels, in letters to the house
and senate naval affairs committees
on March 5, 1920, and March 30
1920, suggested legislation permit
ting the navy department to oper-
ate the naval reserve directly or
by contract, lease or otherwise, -
! DENLY said
This suggestion was enacted in
law in 1920, DENLY said
Denby's statement regarding Dan
| iels' responsibility for the leasing
| policy was made in a letter to
| Chairman Butler, of the house naval
affairs committee, in answer to the
| Britten resolution in which DENLY
was expected to reply to % ques-
tions concerning the leasing and
drilling on naval reserves.
Says Daniels Approved
DENLY further stated that Dan
iels approved the leasing by former
Interior Secretary John Barton
Payne, without public ADVERTISE
ment, of naval reserves and the
drilling of new wells on the re-
serves.
Britten's first questions related to
Daniels suggestions regarding leas-
ing and their enactment into law
Then BItten asked whether, if Dan
iels wished to keep the oil in the
ground, any explanation was need
ed DENLY replied no explanation
was necessary under such circum-
stances, indicating that Daniels pur-
pose in suggesting the leasing was
to have naval oil removed from the
ground.
Giving details of approval by
Daniels of John Barton Payne's
leasing, DENLY said that on August
p, 1920, Daniels wrote Payne that
lease granted the BCston-Pacific
Oil company in naval reserve, No
2, was satisfactory to the navy de-
partment. In this connection DENLY
pointed out that the royalty agreed
on was % per cent while under the
leases to 4. l.. Doheny which DENLY
later approved the actual net
royalty" he said has amounted to
27.14 per cent"
On January 25, 1921, DENLY said
Daniels Indicated to Payne willing
ness to lease 120 acres in reserve.
No. ., to the Consolidated Mutual
Oil company and "this land was
leased without restriction as to the
number of wells that might be
drilled"
Cnmn1I'nC ROUaItioc
DENLY again compared the royal
ties accruing from this lease, which
he said, ranged from II to 25 per
cent to the 2714 per cent royalties
on the Doheny lease
Britten's next question was design.
ed to show that it is not only Gus
tom but law for one department Of
the government to perform services
for another and that therefore the
interior department contracts to
nave tanks built TO- storing naval
oil taken% from the reserves was
proper. DENLY said this was a fact.
Brltten then went into the leasing
OF Teapot Dome and the California
reserves. DENLY said the Texas Oil
company and Harry +. Sinclair bid
for the lease Of the Teapot Dome
and Mr.. Doheny had an oppor-
tunity to bid"
DENLY answered yes" to a ques-
ton as to whether competiti, i
prompted by the leasing of Teapot
Dome brought the government more
than $3,00O,000 premium on royalty
Oil from the Salt Creek district in
1921