Evening star., 1927-10-19

Dy sinclair ana MS 1amlIy ana y. W.
Zevely, Sinclair's attorney, who has
since died. Toward the close of the
visit, Littleton said. Sinclair asked
Fall If he intended to lease Teapot
Dome and Fall replied he was having
an investigation made about the oil
drainage situation and could not deter
mine what his action would be until
the investigation was completed.
AS a side chapter" Mr.. Littieton
explained to the jury the meaning or
the words royalty OIL" which he
summarized as being the land owners
share of the oil extracted by person
given a lease to drill for oil. he tnen
said that as the situation STOOD at t1at
time the Government was selling lts
royalty oil from % leases in reserves
No / and No. = and the money was
going into the Treasury.
On July %, 1921. Fail wrote a letter
to the Secretary of the Navy asking
what he desired should be done with
the royalty oil the Government was
receiving. The defense will offer this
to show that Fall was in constant
consultation with the Secretary or
the Navy whenever any question OF
oil and leases arose. Littleton eX-
plained
In this letter Fail suggested that
it would be wise to exchange the
royalty oil for fuel oil. Littleton said.
and then he told the jury that the
crude oil as it was extracted from
the ground was unfit for use as fuel
and had to be refined Fall thought
the royalty fuel oil could be used for
the current need of the Navy and he
a., Of frp
par+ment, said the attorney
Fall then left Washington and went
on an inspection trip to the Pacific
Coast. where he saw Comdr. Landis,
in charge of the Navy oil matters in
the West. and also some Bureau of
Mines officials. with whom he dis
cussed the disposition of the Govern
ments royalty oil.
While returning East and in Ne.
braska, Fail wrote to President Hard
ing on September "a, stating he had
had conferences on the matter and
thought it would be wise to obtain
two concrete reservoirs, each holding
100000 barrels of oil and to be 10.
Gated on the. Pacific Coast for the
current needs of the Navy. Fall did
not return to Washington until Oc-
tober a. Littleton said.
Robson to Testify.
In the meantime Rear Admiral
John X. Robson. chief of the Bureau
of Engineering of the Navy Depart.
ment, suggested for the first time, as
far as he knew. that the royalty oil
should be made reserve and not
used currently by the Navy. Little.
ton said that Robson would testify
to this and other parts he played in
the oil matter and which made him
q storm center in the Fail-Doheny
trial as well as in his closing days
on the active list OF the Navy.
Mr.. Littleton then went into 4 dis
cussion of the origin of the Navy'S
policy with respect to using the roy
atty oil. He made it clear that Tea.
pot Dome played no part in the mat.
ter. but the oil considered was from
the California reserves, around which
the Fall-Doheny trial centered. Vir-
tually the same steps as taken by the
defense in those proceedings were re-
traced today by Littleton in leading
up to the declaration of policy on the
matter of Government royalty oil.
Summarized in brief. these steps
were. as told the jury by Littleton:
The general board of the Navy
had created a plan for the defense of
the Nation by the Navy which called
for the storage of 45,000,000 barrels
of oil on the Atlantic and Pacific
coasts. to be held there until the time
of a national emergency. That was in
1919, and Admiral Robson. being
saturated with this program" entered
office as chief of the Bureau of
Engineering fully acquainted with this
program
"Po.icy Letter" Cited.
October IS Robson drafted letter
for Denby's signature, which he after
ward took to Fall and which letter
became known as "a policy letter.
In paragraph 10 of this letter two
alternatives were susgested--one that
the oil be used for the current needs
Of the Navy and the other for en-
met November 20, 1921. Rear Admiral
Robert L Coontz called attention to
the inadequate appropriations for fuel
for the Navy and that opened the dis
cussion as to the use of the royalty
OIL Robson was quoted by Littleton
as having said:
"I have cone to the conclusion that
you cannot use the royalty oils which
are coming in for the current needs
of the Navy. because it would defeat
the intent of the whole reserve idea.
which is to keep the oil as a reserve
for military necessity. and 1t would de-
feat the whole intent of Congress, be-
cause Congress has made appropria.
tions every year for the current needs
of the Navy, and that is Congress
business to do that"
The council yielded to "the sound
ness of his proposition" and after
DENLY obtained a ruling on his
authority to exchange the royalty oil
for fuel oil and storage tanks which
Robson had advocated, he approved
such steps, Assistant Secretary Fin
ney, then Acting Secretary. as Fail
left for Three Rivers, n. Mex, Decem-
ber and returned January q, 1922,
was informed of the policy on Decem-
Der 8, 1921.
Refutes Secrecy Charge.
BY way of showing there was mo
secrecy" as the Government charges,
Littleton said, the defense will offer
a letter written by Acting Secretary
of the Navy Theodore Roosevelt to
the Interior Department regarding
plans and specifications for the con-
struction of oil tanks at Parl Harbor
and which. he said, were EMBEDDED In
war plans and therefore must be kept
as confidential as possible.
AS a result of conferences between
Fall, Ambrose and Balm, Admiral
Robson was advised that strip leas-
ing" would be an effective way of pro-
tecting drainage in Teapot Dome.
When Fall asked Robson what ne
proposed to do, the latter declared ne
would not repeat the disasters in con-
nection with the California reserves
and therefore would not recommend
leasing Teapot Dome unless the lessee
| would agree to build 1,000.mile pipe
line to the coast so that the oil could
be made available to the Navy at
strategic points in event~f any emer'
gency.
After Secretary DENLY had been
f,,Il,t .nd,,icnd aS tn fhi9 situation LIT.