Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-10-18
DR.. WORK DEFENDS
OIL LEASE ACTION
Holds He Was Obliged to
Renew Contract Until It
Was Declared Invalid.

Claiming that he was legally bound
to renew the Salt Creek Purchasing
contract and that he acted on the adj
vice of his official counsel in so doing,
| DR.. Hubert Work, chairman of the Re-
publican National Committee. in
statement issued late yesterday declared
| that criticism of his renewal of the
contract was entirely of campaign
origin"
THE terms of the contract, as made
before 1 took office, required this re-
newal after the expiration of the first
/ five-year term Dr. Work said. IT re-
! ferred the matter in regular course to
the solicitor for the Department of the
Interior, my official legal adviser. He
reported that there was no choice but
to renew the contract. AS is CUSTOM
airy, I acted upon this official advice.
Question Of Initial Validity.
1.-THE Attorney General, in his opin-
ion of October 16, thus reciteS the cir
cumStanceS:
The Sinclair Crude Oil Purchasing
Co. assumed to exercise its option on
June z. 1927, and pursuant thereto, the
parties entered into a second five-year
term of performance under the con-
! tract on January |. 1928. 1t appears
that when the Secretary of the In
terror granted the renewal under the
| option, he did so upon the advice of
F.; the solicitor of the Interior Depart
ment, but the questions mere discussed
regarding the initial validity of the
contract were not raised by the so
| licitor, nor did they form the basis of
any protest against renewal then pend
| ing before that department.
During the Senate public lands COM
! Y1ittOofc nm
ming May 10, this year, Senator Walsh,
an active member of this committee.
who is a good lawyer and has made a
| special study of these matters, did not
call the attention of the committee to
:, the Salt Creek purchasing contract or
| it's renewal. nor has he in any way
! criticized it, so far as I am informed,
until now.
Quotes Walsh Letter.
| "On the contrary, Senator Walsh on
February II, 1928, while the renewal of
the contract was pending, wrote letter
to w. G.. Williams at ITO Broadway, in
which he said:
: 81 am unable to understand how the
Government can escape the obligation
! to renew the contract with the Sinclair
Crude Oil Purchasing Co. except it
treats it as void or voidable. 1t seems
| to me that neither the iniquities re-
vealed as to the Teapot Dome lease or
those that are unrevealed concerning
the acquisition of the lands in the Salt
| Creek field by the Standard or its sub
| salaries in violation of the leasing act,
/ can in any wise affect the validity of
! the contract by which the Sinclair
! Crude Oil Purchasing Co. bought the
Governments royalty oil. regret to say
that I am obliged to agree with the
Secretary that he is legally bound to
renew, although I have not been able
| to give the subject the study that it
ought to have in order to arrive at
conclusion such as would be reached
! by good lawer after careful study
assume the Secretary has taken the
advice of his counsel
II did exactly what Senator Walsh
declares in effect he would have done If
he had been the Secretary of the In
| terror. took the advice of my official
counsel. who told me that there was
nothing I could do except to make the
renewal"
West Stops Delivery.
Secretary West yesterday ordered de-
livery of Government royalty oil to the
! Sinclair Oil Purchasing Co. from the
Salt Greek field in Wyoming stopped
next Monday after q ruling Tuesday by
I p
tracts were invalid
Immediately upon issuing the order
and notifying the lessees and operators
in the Tllt Greek field of his action.
Secretary West dispatched DR.. George
Otis Smith, director of the Geological
Survey. to Tulsa, Okla, to look after
the payment for oil delivered this
month.
Secretary West announced that until
the royalty oil is disposed of in accord
ance with the law the Government
would take its royalties from the sale of
Salt Creek production in cash. This
was interpreted to mean that any pur-
chaser, including the Sinclair company,
which could transport the oil from the
wells in the Salt Greek production area
could buy the Gil for cash on delivery.
The action today is preliminary to the
working out of a plan for the sale Of
the royalty oil to the highest and best
bidders after 1t is readvertised for sale.
Secretary West said.
The question of how to handle the
sale of the approximately 100000 bar
rcls of oil that have been produced re-
Gently each month from the area is be-
ing worked out by First Assistant Secre-
tary Edward G. Finney and the chiefs
of the Geological Survey. the General
Land Office and the solicitor of the In
terror Department.