Evening star., 1943-06-25
Knox Agrees 10 Probe
OF Navy's Oil Policy
By House Committee
Naval Affairs Unit States
Investigation After He
Explains Elk Hills Deal
BY the Associated Press

bs INC hSSOCldleQ fTeSS.
With Secretary of the Navy
Knox signifying complete agree
ment with the procedure, the
House Naval Affairs Committee
decided today to order a full in
vestigation into the Navy's oil
policy in general and that de-
partment's now abrogated Elk
Hills contract in particular.
The House Public Lands Com
mittee already is investigating the
Elk Hills matter.
The Naval Affairs Committee
acted after Mr.. Knox appeared be-
fore 1t to explain the contract which
he concluded with Standard Oil Co.
of California for joint development
of the rich Elk Hills reserve, and
which he subsequently p, Cancelled
when the Justice Department ruled
it illegal and invalid"
When the Secretary appeared
later before the Public Lands Com
mittee, Representative White. Dem
ocrat, of Idaho asked for an ex-
planation of the delay between an
Interior Department opinion last
March on validity of the contract
and the actual cancellation last
week.
Admits He "Muffed" 1t.
Mr.. Knox replied he had immedi-
ately taken up the question with the
President after receiving the In.
terror Department opinion anc
added:
Il regret that I did not ask the
opinion of the Justice Department
before I sent the contract to the
President for approval 1 should
have done so. I just muffed i,
there"
In response to another question
he said the Navy and Standard had
mutually agreed to rescind the con-
tract. but meanwhile were working
under "a temporary agreement
pending. final settlement of the
question.
Mr.. Knox told the Naval Affair.
Committee that the Nation faced {
shortage of crude oil, with the likeli.
hood that it would become seriou.
late this year and most certainly
next year" He emphasized his in.
terest in conservation of reserve!
and expansion of sources of supply
Sees Lengthy Litigation.
A statement by the Secretar,
that condemnation proceedings ir
Elk Hills would undoubtedly involve
lengthy litigation and the posting
OF a large su INTO cover Standard.
interests in the field, coincided with
release of the. Justice Department s
report on the Navy contract in which
condemnation was recommended.
After Mr.. Knox completed hi!
testimony, Acting Chairman Drewry
asked him, DO You agree that W,
should go into this whole situation
thoroughly"
Yes" Mr.. Knox responded.
He told the committee that "thi.
is no time for two departments Of
the Government to be engaged II
q legalistic dispute. When we were
told by the Justice Department thai
the contract was invalid, that wa.
that, and we rescinded. We coult
not waste any time over legalisms.
Fortas DISTRESSED"
Mr.. Knox disclosed he had re.
ceived letter from Abe Fortas
Undersecretary of the Interior, whe
conducted an inquiry into the con.
tract for Secretary of the interior
Ickes, N which Mr.. Fortas said hi
was distressed" over some of tht
comment revocation of the contract
provoked, and particularly at ref.
erences to the Teapot Dome leases.
Mr.. Fortas, Mr.. Knox said, wa.
Indignant" that difference o
opinion over the contract should bt
distorted so as to impute collusior
or improper conduct, however in.
direct that imputation may be-"
Representative Mas. Republican
of Minnesota, ranking minority
member, asked Mr.. Knox whether
he "still stood on the DEAL
Were In a war now" replied the
Secretary. Lets not squabble ovel
this particular contract, over the
dotting of an a." Let's get con.
tract that will be approved
Mr.. Knox told the committee thai
the naval officials who handled the
arrangements leading up to the con.
tract were all experienced men ir
the oil held, a statement which drew
lGnxafix.aiaS axa pana A.1a Col