Evening star., 1925-05-29
NAVY STAYS ON OIL
LAND, WITH VO|D|NG
OF DOHENY LEASE
Wilbur Says Court Action
Was Expected-Receivers
Due to Remain.
PEARL HARBOR PROJECT
ALSO ORDERED CANCELLED
Doheny to Appeal Verdict Brand
ing Him "Trespasser," and
Charging Fraud.
By the Associated Press.


Administration of the Elk Hills
naval oil reserve in California prob
ably will continue as al present under
the decision OF the Federal court at
Los Angeles Yesterday holding the
Doheny lease of the property invalid.
In anticipation of such ruling the
Navy has been going forward with
plans to continue the present arrange
nent, and although Secretary Wilbur
Will confer with the special Govern
ment oil counsel shortly there is no
indication OF an impending change.
Rear Admiral II. 4. Rousseau and
j. I. Anderson. president of the Pan
American Petroleum Co., year ago
were appointed receivers for the prop
erty, and yesterdays decision points
to their continuance in office until
hnal action has been taken by the
Supreme Court.
Pearl HarbOr Status Doubtful.
Whether action can be taken toward
preserving the empty oil tanks at
Pearl Harbor, which are to be filled
with royalty oil from the Elk Hills,
is question on which no Navy De-
partment official now in Washington
VIII express an opinion. Not only
Secretary Wilbur, but Atlee Pomerene
and Owen Roberts of the special oil
counsel are out OF the city.
The litigation over the validity of
the agreement under which these
tanks were constructed was instituted
before they were completed. and Sec
retary Wilbur, following the advice of
the special oil counsel, has refused to
take them over or have them filled
with oil because of the possibility that
such action might have some bearing
on the court proceedings.
1t recently developed, however. that
the bottoms OF these tanks were de-
ting through corroson. which
could be stopped if oil were put in
them. and it was said in responsible
circles then that, although no such
action could he taken unless the
Doheny interests wished to do so on
their own responsibility and without
obligation or charge to the Govern
ment. a different course might be per-
missible after the Los Angeles court
had announced its decision.
Production is continuing at the Elk
Hills reserve, but no new wells are
being drilled unless for necessary off
sets. Official estimates have given 140,-
600, 900 barrels OF oil as in the ground
originally at Elk Hills. OF which il is
said about Il 900 900 had been removed
to date.
Teapot Dome Case Next
One other important ca Sc is pending
in the civil oil litigation. that involving
the lease of the Teapot Dome reserve
to the Mammoth Oil Co, a Sinclair
subsidiary.
A decision on that lease, which has
been challenged broadly on the same
grounds as the Doheny lease, at Elk
Hills, is awaited from the Federal dis
strict courts at Cheyenne.
An appeal will be taken from the
Los Angeles decision. it was an
nounced by Frank j. Hogan of coun-
sci for Z. l.. Doheny.
The following statement was issued
by Mr.. Hogan.
Judge McCormick's decision is
only preliminary to a hearing of the
case before the United States Circuit
Court of Appeals in San Francisco
and an ultimate hearing before the
Supreme Court of the United States
in Washington. We look upon this as
only the first step in the litigation
and not by any means rs a decisive
one. On the hearing before the Cir
cult Court of Appeals all of the facts
and law in the case will be reviewed
by the three circuit judges. The ap-
peal will be noted about the middle
of June, when counsel for the Gov
ernment and for the Pan-American n
companies meet in Judge McCor-
nyick's court in Los Angeles. 1t will
he argued in San Francisco next
Fall"