Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1926-01-08
Decision strips DOheny OF Leases

OtfipS DOuouy VI LouSSS'
A decision. which il upheld by the
United States Supreme Court, will strip
the Edward L. Doheny interests Of all their
protested leases in Naval Oil Reserve No.
in California and deny them any relief for
work performed in such reserves and at
the Pearl Harbor oil station at Honololu.
was handed down at San Francisco. Califor-
mia, Monday by the United States Circuit
Court Of Appeals
The court upheld the action Of the United
States District Court in Los Angeles in
ordering the cancellation Of the leases in
question on the ground that they were
obtained through conspiracy and collision.
The court. however, reversed the findings
Of the trial court that the Pan-American
Petroleum and Transportation Company.
the lessees. should be compensated by SILL
7S6.928 for work done in establishing the
Pearl Harbor oil base and for exploration
and drilling work in the Elk Hills fields.
the focal point Of the controversy.
In effect the court held that II the leases
themselves were obtained through an Illegal
exchange Of any sort the lesses most GER
tainly were not entitled to the return Of
any moneys expended as an outgrowth Of
such Illegal act
The Governments suit against the E. l..
Doheny oil interests was the first case inves-
tigated by the United States Senate COM
mittee to come to trial. During the Senate
investigation Doheny testified that he ex-
pected to realize $l0O.000.000 on the
leases and contracts involving the Elk Hill
naval oil reserve. Kern county. California.
and construction of the navy oil lease at
Pearl Harbor. Hawaii.
Federal Judge Paul J. Mccormick, at Los
Angeles. after hearing the case. which
opened in October. 1924. ordered the leases
and contracts Cancelled on two grounds.
First. that they were against public policy
because the action Of the then Secretary
of the Interior, Albert B. Fall. in making
them was fraudulent. and second, because
the executive order under which the in
struments were executed was invalid.
In its complaint the Government charged
that fraudulent conspiracy between Fall
and Doheny entered into negotiations sur
rounding the leases. Government counsel
charged specifically that the 100000
"loan" Doheny made to Fall in November.
1921. was bribe and constituted fraud
on the United States.
The leases TO Doheny were executed
under the executive order Of May 81, 1921,
signed by President Harding. delegating
power to lease naval oil lands to the Sec
rotary Of the Navy. Preceding this order
was the Congressional act Of June 4. 1920.
Known as the naval oil reserve act, which
authorized the Secretary Of the Navy to
ease and operate these lands I'm his dis
aretion" and "for the benefit Of the United
States"
The contracts entered into between the
Government and Doheny provided for the
construction of a naval oil base at Pearl
IIarbor and to supply total Of 100000
barrels Of fuel oil at the Hawaiian base.
The Government agreed to exchange roy
lily crude oil accruing from the leases
for fuel oil and the tankage facilities.
This exchange was attacked and defended.
State May Feel Fruit Quarantine.
CALIFORNIA; latest quarantine on certain
nds Of fruit will be felt seriously by
daryland nurserymen, according to Chas
. Prince. plant quarantine inspector oil
le Baltimore branch of the United States
apartment Of Agriculture.
An Associated Press dispatch from Cali
rnia said that H. G. Hecke. director Of the
ate Department Of Agriculture, has an.
,uIced quarantine against any and al
rieties of peach. nectarine, almond, apri'
/, plum, cherry, ounce or plants or parts
hereof arriving in California from terri
The order was made necessary. Mr.. Heckt
Is reported to have declared. by the pres.
enae of this moth in Maryland, the District
% Columbia. Connecticut, New York, New
sey. Pennsylvania, North Carolina, Vir'
slnia. Tennessee, Delaware, Georgia, Flor
ida. Alabama, Mississippi, Texas, Arkansa,
and Indiana.
How serious would be the effect Of THU
quarantine upon Maryland growers. Mr.
Prince said, would depend upon the amour
Of trade done with California. judging
from the amount of fruit stock he inspected
In shipments from France, however. he said
he felt that some Of Maryland's nurseries
did wide business that might feel tht
California ban.
The Oriental moth, he said. has beer
known for some time to be difficulty il
these regions and the determined effort,
Of the Government scientists. as well al
officers engaged in preventing its spread
have been directed against it.
Its life history by now has been learned
he said. and studies are being made 4
seek its most vulnerable stage togethe
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