Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1926-11-24
Lauded and Knocked
Continued from Page One)

as the government expects to pre-
sent 1t by oral testimony and a great
raft of official documents.
Frank J. Hogan, counsel for Do
heuy, traced the history of all Of the
transactions involved in the naval
oil leases and contracts step, by step,
spending four hours in a vigorous
and at times impassioned statement
of what the defense contends the evil
dence will prove.
Doheny was described by Hogan
as a patriotic citizen who acted in
the national interest when he re-
quired his company to enter into the
contract for the Pearl Harbor naval
storage.
Fall was declared to be a man who
had given his life in the public ser
vice and one who throughout all of
the oil reserve negotiations acted in
the best interests of the country and
only with and by the consent of Sec
rotary DENLY and other high officials
of the navy department.
The 100000 transaction between
Doheny and Fall doomed large in the
statement of both counsel. Roberts
said the loan was made after nego-
tiationS had been opened between
Fall and Doheny for the Pearl Har-
Dor contract, and that, when the
senate Oll committee found out that
Fall had spent this sum in improv-
ing his New Mexico ranch holdings,
the former secretary did not tell the
truth about it, but tried in every way
to conceal it,
Calling attention that nearly
month after the loan was made Do
heny had advised the government his
firm would not undertake the Pearl
Harbor, development, Hogan insisted
there had been no secrecy; that Fall
had given his demand note; had used
the money to buy ranch property.
paying $4,000 in cash in the pres
ence Of witnesses, and making the
other payments in the usual way.
Hogan insisted that the project
for the storing of 150.000,000 gallons
of fuel oil for the navy at Pearl Har-
Dor had originated with high naval
officers after reports had come that
the japanese were planning to mobi-
lie war vessels for attacks on the
Philippines and the Hawaiian Is
lands.
Government counsel emphasized
the secrecy attending the awarding
of the original contract to Doheny's
company and charged this was part
of the scheme to defraud the govern
ment. Hogan countered with the de-
claration that secrecy had been re-
quested by Theodore Roosevelt, Jr.,
then acting secretary of the navy.
because confidential war rlans of
the navy were involved
Defense counsel also said the evil
dence would show that the bids for
the storage contract were opened In
the presence of competing companies
and interior department officials.
Roberts declared that the government
would show that three Oil companies
had declined to bid because they did
not believe such contract was legal.
The government lawyer also de-
clared that solicitors in both the in
terror department and the depart
ment of justice had held the scheme
to be illegal. The jury was told by
Hogan that the proposal had been ap-
proved as legal by the judge advocate
general of the navy and that Cap
tain John X. Robinson, Secretary
Denby's personal representative In oil
matters, then went ahead to develop
the plan.
Robson re-interested Doheny in
the first contract, Hogan said. by ex-.
nlaini in confidential detail the
then threatened situation in the Pa
cific. After listening to naval Off
GERS. Doheny, Hogan declared. agreed
that his company would go in and
a gree to do the work without profit,
as a patriotic duty.
The contract as finally approved
gave the American Petroleum
Company preferential rights IN Elk
Hills and it Is the governments con-
tention that this was all part OF the
conspiracy by which the California
oil man was to get possession of the
reserves.
when Hogan concluded. the gov
eminent brought out from its frst
witness, George Otis Smith director
of the Geological Survey. that he
and Fl. Foster Balm, director Of the
bureau of mines, had called to the
attention of Fall at the time the con-
tract. were being negotiated. that
there was a large over production or
oil which was sending down the
price.
Dr. Smith estimated that the Elk
Hills reserve contained 250,000,0o0
barrels of crude OIL He disagreed
that wells drilled on adjacent land
would drain some of this supply, but
said the operation of .fhese wells
might make it more difficult AND
costly to get out some of the OIL