The Daily Alaska empire., 1927-10-10
OIL LEASE
 SET ASIDE,
 HlCH COURT
Supreme Court Afirms Decision of Eighth Cir
 cult Court of Appeals

fCOnt1nuCC .rom Page one. age tankage for the navy on the Atlantic coast in exchange for l royalty oil accruing to the govern ment under the lease.
 In an opinion by Judge William S. Kenyon. former United States Senator. the Eighth Circuit Court of Appeals sustained the district court on the proposition that there was authority in law fer
 making the lease, but cancelled it on the ground that fraud and corruption ran through the whole
 transaction between Sinclair and
 Fall.
 Contend No Fraud The wealthy oil operator and
 sportsman then appealed to the
 Supreme Court, contending- that
 the evidence had failed to show fraud and corruption, and insist
 ing that as both of the lower
 courts had declared that there
 was authority in the law for leaz-
 ing the naval oil reserve to pro ] tcct it against drainage, the lease l and the contract must be sustain i ed.
 1 On the other hand, the govern ment asserted that the facts dis
 closed by the evidence in the trial {, court were ample to warrant the ac.icn of the circuit court in can- | cling the lease and contract, and
 in refusing to compensate the i Sinclair Crude oil Purchasing company and the Sinclair Pipa ] Line company for expenditures upon the reserve because they had been willful trespassers. l Not Like Doheny Case l Sinclair insisted that the dues. tions at issue before the Supreme ] Court were materially different
 from those presented in the Do heny case. The government con tended that under the sweeping
 decision in the Doheny case the
 Sinclair lease was invalid for
 want of authority to make it. IL also insisted that had the lease E been authorized by law it must
 be cancelled for fraud and coz ruption.
 Counsel for Sinclair urged that the lease was justified because of the danger of the drainage oi Teapot Dome. but government at
 torneys replied that facts did not
 warrant a conclusion of danger l of drainage and that the real purpose of the lease was to en-
 able naval officials to use royalty oil for the erection of storage
 tankage for which Congress had refused to appropriate.
 1 The conclusion of the circuit
 court that there was fraud and i conspiracy to defraud in the
 Teapot Dome case was based largely upon it's finding that Sir clair had bribcd Fall with the
 $2s0,50 worth of Liberty bonds
 which went to Everhart and the
 Interior Secretary.
 Those Liberty eonds
 The Sinclair lease was signed ! On April '. 1922. and on May 2s' i 1922, the government contended, ! Everhart appeared in Pueblo wisii | s23O,50O in Liberty bonds. By means of their coupons the gov q ernment sought to trace these [; bonds to the Continental Trading }; Company. Limited. | Canadian con ! se~n organized by H. s. Osler, q lawyer of Toronto. to purchase < oil from A. E. Humphreys who ,! controlled the Mexia oil Company ,. and the Humphreys Texas Con- pany.
 l The governmcnt charged that ] subsequently Harry M. Blackme',
 chairman of the board of the Midwest ComDany. a subsidiary , Of the Standard OH Company ol
 indiana; JdlAes Y. O'Neil. presi-
 dent Of the Prairie OH and Gas :, company; 1kobeyt ". Stewart, lehsl1 " the la.