Douglas daily dispatch., 1928-02-02
SENATE PROBE
STRIKES SNAG
ON OIL DEAL
Examination of Officials
Fails to Throw Light on
S3,OOO,OOO
w ALSH PRESSES
Balance Left After Fall Paid
$233, 900 Eludes Com
| mitteemen
W ALSH PRESSES

WASHINGTON, Feb / tP0-Inter-
esting sidelights were developed today
before the senate lands COMMITTEES
on how directors of great oil COM
panies approved without question
contracts by which the then unfearc
Of and now extinct Continental Trad
ing company, of Canada, made
$3.Q00,O00 in profits apparently al
their expense.
However, examination Of three adj
ditional witnesses failed 10 shed any
light ON the main subject of in
qui1y--what became of the residue
of these profits after Harry F. Sin
clair, lessee of the Teapot Dome
naval oil reserve, had paid over
$233,OOO Of them to Albert B. Fall
then interior secretary. for an interest
in ranch property for which he has
nothing to show.
Under driving questioning by Sen
ator Walsh, of Montana, prosecutor
of the new Gil inquiry, E. G.. Seubert,
now president of the Standard Oil
Company of Indiana finally told how
he and other directors in 1921 ap-
proved the Continental contract be-
cause the chairman OF the board,
Pobert w. Stewart, told them it was
a good one.
Under the contracts the Sinclair
Crude Oil Purchasing company,
jointly owned by the Indiana Stand
ard and the Sinclair Consolidated Oil
company, guaranteed the fulfillment
of the ContinentaPs contract and
then agreed to purchase at $1.75
a barrel oil which the Canadian
concern bought from the late A. E.
Humphreys, of Denver. fot $l.50 a
barrel
did the board question that 25
cents difference?" Walsh asked.
'Yes, I believe one director asked
about it, Seubert said Colonel
Stewart told us it was the best price
we could get"
Didn't anybody On your board ask
how it was the Continental, company
was able to buy the Humphreys oil
at $3.50 a barrel and cut out Mr..
Stewart, who had been seeking to
buy the same oil?" Walsh pursued,
"We had implicit confidence in
Colonel Stewart and were satisfied
that was the best bargain he could
make"
Seubert said that of course he
knew somebody was getting the Is
cents barrel differential and Walsh
asked him if he didn't think Stewart
had proved himself a poor business
man in making the deal
"I consider Colonel Stewart an ex-
cellent trader" Seubert shot back
1--WE all do," Walsh observed, amid
laughter.
Earlier, A. L. Carlson, secretary
and treasurer of the Sinclair crude,
conceded that he and the other
directors of that Oil company ap-
proved the Continental contracts
because they had been executed by
the principal directors, Stewart and
Sinclair
''Now we have seme kind of a
reasonable explanation of your direct
ors' action" Walsh said.
From the third witness, former
Senator Charles Thomas, of Colorado
the committee learned that while the
Sinclair Crude and Prairie Oil and
GdS company WAS 01CeflIS IuGC tile
$5O,0O0,oO0 deal to buy oil from the
Continental at $175 a barrel, the
Pure Oil company of Ohio was buying
oil from the same source as the
ContinentaI-th late A. E. Hum
phreys of Denver-at $1.5o barrel
The Pure Oil, however, 1laG stock
interest in the Humphreys companies
Thomas repeated to the committee
the testimony he gave at the recent
Fall Sinclair criminal conspiracy mis-
trial that Stewart, Sinclair and James
O'Neil, president of the Prairie Oil
and Gas company, and Henry M
(Contiued on Page Tem