The Waterbury Democrat., 1943-06-09

Navy whereby the Nays choicest O
over to Standard in toto for five
years, and after that operated for
the Navy on a percentage basis.
Elk Hills is the same oil reserve
which the late Edward Doheny leas-
ed from Secretary of the Interior
Albert B. Fall in the Harding days,
in return for which Doheny sent
him $4,000 in bills in little black
satchel. In this case there is no
suggestion of little black satchel.
However Elk Hills, totalling 43,-
900 acres, is considered by long odds
the richest oil reserve in the United
States and the second richest in the
world. Only one other, in Abrabia,
tops it. 1t had been held by the
Navy for the day when the nations
oil reserves should become depleted,
and had been jealousy guarded by
Josephus Daniels and his Assistant
Secretary, F.. u. Roosevelt,
ROOSEVELT SIGNED 1T
Despite this, however, Mr. Roose-
welt, as President, signed his APP
proval OF the contract, and returned
1t to the Navy Department in one,
day. Actually it would have taken
him full day to have read 1t, and
obviously he leaned heavily on his
Secretary of the Navy, Frank Knox,
who signed it as principal.
In the Harding oil scandals, 1t was
the Navy Department which OPP
posed transferring its oil lands to
weakened Secretary of the Navy
DENLY came into office. The In
terror Department, on the other
hand, had pressed for transfer
Of the precious oil lands so Fall
could lease them to his pals, Doheny
and Harry Sinclair
But in the current lease of Elk
Hills, the situation Is reversed. Sec
rotary of the Navy Knox was the one
anxious to lease Elk Hills this time,
and Secretary of the Interior 1ckes
knew nothing about the deal except
by accident. For some strange rea-
son, Furthermore, the Navy took
pains to keep the deal away from
the Justice Department, which is
supposed TO negotiate, or at least
approve, contracts dealing with
public lands.
Three officials of Standard Oil OF
California happen 10 hold import
ant positions in the Government:
Ralph Davies, Deputy Petroleum
Administrator for War, and former
president of Standard; Howard
Marshall, former counsel for Stand
ard, now counsel for the Petroleum
Administrator; and Max Thornburg,
oil adviser to the State Department.
Ed Pauley, who recently resigned
as secretary of the Democratic Ma
tional Committee, but remains as
treasurer, also has been close to
Standard Of California. There is
no evidence, however, that any Of
the above were involved In the deal.
NEGOTIATIONS SECRET
Inside story of what happened
is that the Navy carried on secret
negotiations with Standard Of Calf
ornia during more than two months.
finally sending the agreement to the
White House over Secretary KnoXs
signature on Nov. 10. The Pres
ident approved it Immediately. Two
days later, Nov. 20, Standard act
ually began work on this long
coveted oil preserve. 1t had owned
lands adjacent to the governments
In Elk Hills. and for years had want
ed to lay hands on the rest. So
eager was Standard that eight ex-
cellent wells we're drilled immedi-
ately, even though the contract Is
now held up by Mr.. ByrneS.
Finally, in March, five months
after it was signed, Secretary OF the
Interior Ickes heard about the deal.
Until that time it had been strict
secret. Why it was kept secret no.
body knows. Albert Fall at first de-
MED that Teapot Dome had been
leased. but was forced to admit 1t
publicly two weeks after signing the
contract.
But in this case, not even other
members OF the Roosevelt cabinet
knew about the deal until five
months later, when Ickes is reported
to have received tip from Howard
Marshall, of Standard Oil of Calf
ornia, now in Ickes employ. Ickes
then asked Under Secretary of the
Interior Fortas to study the matter.
Fortas wrote a one page memo
Directing to the contract as mon
opolistic throwing away of the ma
tons most precious oil reserves. He
pointed out that during the first five
years of operation the Navy would
not receive single cent barrel OF
oil. Even after the fiye-year period
is up, Fortas pointed out. the Navy
will get only one-third of the oil,
though 1t owns two thirds OF Elk