Evening star., 1926-12-03

"tied in a knot" as to the legality of
the executive order under which the
reserves were transferred from the
Navy Department to the Interior De-
partment. It was brought out by
counsel that under this order the de-
partment had approved preliminary
plans for it's agents with respect to
the exchange of crude oil for fuel oil.
Obtaining a statement from Balm to
the effect that the Standard. General
Petroleum and Union companies were
loath to go into the project because
their attorneys doubted it's legality
Attorney Roberts produced n letter
written by Balm on May II. 1922, and
addressed to Secretary Fall who was
then at Three Rivers, n, Mex.
Doubts About Contract.
In this letter Balm told Fall that the
Standard and General Petroleum COM
panies. particularly, were adopting a
very technical attitude toward the
plan with regard to the transfer of
Oil He said that Mr.. Story of the
Sa ndard Co. had gone so far as to
doubt the right of the Standard Co.
to transfer oil to the Pan-American
Co. under the plan.
None of us want Mr. Doheny to
get into any trouble" the director
wrote Fall. I'VE want to do all we
can to help him.
Balm suggested to FAN that the de
partment join with some, small oil
company in a friendly suit in a Fed
eral court so as to bring out n definite
ruling on the proposition involved.
He suggested also that it would be
better for the Attorney General to put
into writing the opinion which he
understood the Attorney General had
expressed Informally as to the legality
of the departments action.
When former Attorney General
Daugherty was a witness at the trial
last Tuesday he was asked specifically
II he had ever rendered an opinion on
this proposition. Daugherty had re-
piled that he did not recollect whether
he had given an official opinion OK
not, but that the records would
show
Mild Sensation Caused.
The introduction of this letter to
Secretary Fall, a reply to which was
not put into evidence, produced mild
sensation in court.
Under further questioning, Balm
said that the companies which had
protested the plan stated that they
in it unless it's legality was well estab-
lished.
Balm was asked if he had not for
warded letter to Senator Smoot of
the public lands committee saying
that Doheny's plan had first come to
his attention in August. There was
considerable controversy as to the
exact date. Balm explaining that the
notation that he had made on the let
ter had been written some time later.
He thought he was in error as to
the date. That it was a month later.
At one point during his cross-exami-
nation Balm became confused over the
rapid exchange of names. He re-
ferred to the oil defendant as 'Secre
tary Doheny," which caused consid-
erable merriment among the spec
tators and even to the II jurors who
had been sitting somewhat Wearied
throughout the proceedings. Balm
hastily corrected himself.
Balm then was excused as a wit
ness. for the time being at any rate.
and the defense called Harry B. Holly
Of New York. purchasing agent for
the Pan-American Co. He was ques-
toned briefly by Attorney Hogan as
to correspondence with Doheny as to
the purchase Of supplies and material
for the construction of oil tanks at
Pearl Harbor. These inquiries were
made prior to November l, 1922.
Pearl HarbOr Project.
Referring to the Pearl Harbor pro-
ject, Admiral Gregory testified that it
was exceedingly desirable and neces-
sary to have the work under both
contracts done by the same company
Mr.. Hogan asked the witness If any
one from the Department of the In
terror performed any functions in
carrying out the construction work.
He replied that no one had taken part
nor had Secretary Fall offered any
suggestions.
Mr.. Doheny's attorney precipitated
a clash with Mr.. Roberts when he
asked Admiral Gregory whether in
his opinion the Government had re-
ceived value by the construction work
at Pearl Harbor. Roberts sought to
keep the question out of the record
Justice Hoehling permitted the de
fense attorney to go into this phase
of the situation after Hogan had
changed his query to ask: WAS the
work done below the cost provided in
the April 25 contract?"
1T was done below cost" replied
the witness. Il have not the exact
figures but it was approximately
$197, ,000."
"who got the benefit of this?"
Hogan asked.
1.-THE Government" replied Admiral
Gregory.
Mr.. Hogan asked if there was dis
cussed in the Navy at that time the
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