Evening star., 1925-05-29
NAVY STAYS ON OIL
LAND, WITH V0IDING
OF DOHENY LEASE
Continued from First Page J

Continued from First Page.)
sentations OF fact" in persuading the
President to order the illegal transfer
OF the 100000 payment, however,
Judge Mccormick declares ii 'consti-
tutes a fraud upon the United States
of America and renders void all CON
tracts and transactions made between
the Pan-American Petroleum and
Transport Co. or it's subsidiary, the
Pan-American Petroleum Co., and the
United States of America subsequent
thereto"
The payment Of the 500 900 to Fall
at time when Doheny's oil lease and
contract proposals were pending in
the Interior Department the court
adds in Latin, was contrary TO good
morals
"Satchel" Transfer Injected
What was widely discussed at the
time of the Senate oil Investigations
as the little black satchel' angle
of the Fall payment also came in for
few paragraphs of comment in the
courts decision. Judge Mccormick
pointing out that said Edward l..
Doheny did not transmit said sum in
the usual manner customary in bust
ness transactions" but chose to de-
liver 1t 'in a satchel by the hands of
Edward l.. Doheny, jr.''
Fall, the court emphasizes, was the
dominating figure in the Governments s
negotiations with Doheny. Edwin
DENLY, then Secretary of the Navy
is described as passive throughout
all of the negotiations, signing the
leases and contracts giving the Do
heny interests control of the $780,
900, 900 oil lands under nisapprehen-
sion and without full knowledge of
the contents of said documents"
AS early as July 3, 1921, almost
year before the first 1922 contract was
signed. the decision rectes Fall wrote
to Doheny, There will be no posi-
bility of any further conflict with
Navy officials and this department. as
I have notified Secretary DENLY that
leases"
Sees Bar to Competition.
In general, the actions of Fall and
Doheny are described by the court as
a maneuver to give the Pan-American
Petroleum and Transport Co. and its
subsidiaries such complete control of
naval oil reserve No. that all com
petitors OF Doheny would be virtually
barred from participation in it's ex-
ploitation.
Declaring the leases and contracts
null and void. the court commands
that the defendant companies should
cease to trespass upon the lands Of
the United States and surrender the
leases and contracts to the Govern
ment for cancellation.
The Doheny companies are ordered
to pay all the costs of the lease can
collation. suit brought against them
but 1t Is also ruled that the defend
ants are entitled to be paid and al:
lowed credit for money actually ex-
pended in the construction of stora ge
facilities for crude products at Pearl
Harbor'
A master in chancery, to be ap-
pointed later. is TO make this settle
ment is well as that for all oil taken
by the Doheny companies from Elk
Hills
Charges Deal Was Hidden.
Doheny's contention that the nego-
tiations for the Pearl Harbor con-
tract were kept secret for patriotic
reasons, reasons of military expedi-
ency is disposed of with the fiat
statement that the secrecy was lin
order that Congress and the public
should not know what was being
done"
Meanwhile. Doheny's counsel in
Washington and los Angeles pre-
dicted that whichever side wins
when the case comes before the
United States Circuit Court of Ap-
peals in San Francisco next Fall. it
will go to the Supreme Court of the
United States for final decision. An
appeal probably will be filed here
within a week
In Washington speculation was rife
as to the effect the courts decision
might have on the Pearl Harbor fuel
base situation. where tanks have been
reported depreciating through cor
rosion while Navy officials awaited
the outcome of the Elk Hills suit.
Although official comment was lack
ing, it was believed the decision
would free the hands of the Navy
to save the fuel base from further
damage.
Case Was First.
The trial of this suit. in equity
against the Doheny oil interests open
ed in Los Angeles October "a last
and continued for several weeks.
1t was the first of the cases grow
ing out of the United States Senate
investigation into naval oil reserves
to be brought to trial. The Govern
ment asked that the court cancel two
contracts and two lases entered into
between the Government and the de-
Tending companies, providing for the
operation of wells in the Elk Hills re-
serve No. /. and the building by the
companies of tanks, pipe lines and
pumping facilities for the storage of
/ SOC, 900 barrels of fuel oil at the
Pearl Harbor naval base, Hawaii The