Evening star., 1926-12-10

son were social ones, at which nego-
tiations were not discussed, he said.

son were social ones. at which nego-
tiations were not discussed, he said.
Doubts of Leases Legality.
"Do you not recall Robson telling
you of the grave doubts raised by GER
tain companies On the Coast as to the
legality of the leases?" asked Rob
ertS.
Doheny said NE did not know.
Roberts persisted along this line,
again asking if Robson had not told
him he was having great difficulty In
getting bids because of that DOUBT.
He got little satisfaction from Doheny.
This was before the April 25, 1922,
lease.
Mr.. Doheny admitted that the ques-
tion of offset wells had been discussed,
that he was aware that
his son had.informed Robson that he
would ask him Doheny) to talk this
matter over with him.
Roberts brought out that late In
January or February, 1921, DR.. Balm
had reported on the doubts OF certain
California companies as to the ieganty
of the lease. Didn't Robson then
report to you what Balm had found
out on the coast and ask you If you
would still make bid?" asked
Roberts. The witness replied that he
had not.
Questioned About Profits.
Defense counsel have contended
that under the April Is contract, the
Co. was to make no
profit, and Mr.. Roberts questioned the
witness concerning this. Mr.. DohenY
admitted a small profit accrued to
the fleet of tankers which would con-
vey the Navy's oil to Hawaii and also
a profit of 100000 made on resale of
the Navys royalty oil which was
given in exchange of fuel OIL.
Roberts inquired into the first in
formation DQheny had about the
legality or illegality of the first con-
tract The witness replied this came
to him after the bids were made, in
the air, or gossip, or some way
Prior to the award of the, contract he
had heard nothing of the discussion
about it, but after his company had
been given the award such informa-
ton came to him from various sources.
Regardless of these charges about
the legality of the contract we were
determined to carry out the project
because we knew the source of the
charges" Mr.. Doheny declared. He
did not need an option by the attorney
general, because, he said, "our own
opinion had been given, Mr.
F'inney's opinion had been given and
we had talked with Admiral Robson"
All Sold at Loss.
Roberts went into the question of
oil sales to the Government at San
Pedro, Calf, and Doheny explained
that every gallon of oil sold by his
company to the Government was at
a loss, 10 per cent under the market
price. The Government counsel in
sisted that there was competitive bid
ding, but Mr.. Doheny said that his
had bid each year 10 per
cent under the market price, and one
year 80 per cent.
Doheny then was asked about the
stock which Fall had given him in
the Trios Ritos Land and Cattle Co.
as security in return for the $780, 900
loan, brought out yesterday for the
first time.
did you. know who were the other
stockholders" asked Roberts.
NO" replied Doheny.
In response to questioning along
this line the oil man said he did not
know anything about the company,
stockholders or the directors nor had
he ever attended a directors meeting.
You are quite sure Fall had never
told you who the other stockholders
were?" asked Roberts.
YES" Doheny said.
And you never asked him?"
"And | never asked him." DOheny
Roberts shifted to the anticipated
profit which Doheny expected to make
out of the December II Pearl Harbor
contract. The Government counsel
siad that the witness has testified that
he had a right to expect to make
500, 100000 on $2OO.000,000 invest
ment.
Would Take Many Years.
In other words, Mr.. Roberts ex-
planned, the defendant expected that
it would take a period of 80 or 40
years to develop such territory. He
and Doheny then exchanged technical
comments about amortization of capi-
tai At this point the Government
counsel excused the witness from
further cross-eXamination, and at
Ills o'clock Mr.. Hogan began his re-
direct examination.
'Who called you as a witness at
the Los Angeles trial?" asked Mr..
Hogan.
Doheny replied that he was called
as a Government witness.
The defense attorney then read
from the Los Angeles record to show
that the defense did not permit Do.
heny to testify at the trial because
two indictments had been filed and
were pending against him in the Dis
trict Of Columbia courts. The de.
fendant exercised his constitutional
rights and did not testify.
Mr.. Hogan then briefly interrogated
the witness about the expenses of de-
veloping oil territory. His purpose
was to show that The actual drilling
of a we'll was a comparatively small
volved. Mr.. Doheny said it required
an enormous investment to begin the
business of development.
Excused From Stand.
The defendant then was excused
from the stand, after having testified
nearly two hours and a half.
The defense called J: M. Danzinger
vice president and assistant to the
president Of the Pan-American Pc
troleum Co. from 1921 to 1922. Dan.
Finger said he had resigned from the
Doheny CO. about three years ago and
did not now have any business con
nection with Doheny.
Mr.. Hogan asked him about Bain's
trip to the coast during which he took
up with the Doheny Co. the question
of bidding on Pearl Harbor work.
He was present at the conference be.
tween Balm, Doheny and Cotter.
II told Mr.. Doheny l did not think
the Company was justified in going
into the matter because it was appar-
ent there was no, profit in it." said
Mr.. Danzinger.
At another conference with Doheny,
the witness said, he told the oil mag
nate he thought the Pearl HarbOr
project was an "unwise piece of bust
ness"
IT. %l,ic bo coiI fhaf Mr. DnhanU