Evening star., 1943-12-09
Navy Defends Revised
Elk Hills Oil Contract
At House Inquiry
BY the Associated Press.

A congressional study of whethe
the Elk Hills (CalifD oil reserv,
should be acquired by Government
condemnation or operated by con
tract with private interests was un
der way today.
The controversy started when tht
Justice Department rejected pro
posed new contract between tn,
Navy and Standard OH Co of Cali
fornia for opera ton of the reserve
AS the House Naval Affairs Com
mittee began its study yesterda,
the Navy issued a statement eX.
pressing belief that the proposed
new contract eliminated feature.
of the prior contract which have
been the subject of criticism
COnServes Government Oil.
1t conserves. the Navy said, all o.
the Government oil in the grounc
until Congress authorizes production
and gives the Navy control ovel
production of very large part
of Standards oil
In contrast with condemnation,
the Navy said. the obiectives are
achieved without cost to the Gov
eminent at present and unless ex-
penditures are hereafter authorized
by Congress.
The Navy disclosed that ATTORNEY
General Biddle, witness at a closed
meeting of the House committee
yesterday, had told Secretary oil
Navy Knox that the contract
should not be executed" without
more specific approval of Congress
He approved the contract, how
ever, as "a carefully considered unit
plan of action, which now furnishes
a concrete basis for congressional
consideration"
Navy Has Final Say.
Other authoritative sources said a
principal provision of the contrac,
was that the Secretary of the Navy
shall have final jurisdiction in al
disputes. Committee members op.
posed to condemnation felt this pro.
vision offered adequate protection
to the Navy.
Chairman Peterson of the Housl
Public Lands Committee comment.
ed Immediately that the intent anC
purpose of present laws will have
to be reversed" If the operating
agreement is to win congressional
support.
He added he was opposed to such
action, because the oil should be
held for emergency use" and said he
favored full acquisition of the prop
erty by the Government.
1t was Mr.. Peterson's committee
which first considered the Elk Hills
case, with Mr.. Knox acknowledging
he had ''muffed" early negotiations
and the Justice Department ruling
the first Navy-Standard contract
illegal because 1T gave private
company interest in Government
property 'oil in the groundD.'
Contract Was Cancelled.
Assistant Attorney General Nor
man M. Littell contended the con-
tract went beyond" provisions in
the Harding administration Tea
pot Dome" contracts and President
Roosevelt and Mr. Knox subse-
quently Cancelled the contract.
Chairman Vinson of the Naval
Affairs Committee would not com.
ment following the hearing, simply
announcing the committee woulc
conduct hearings in January or
legislation to be prepared by in.
terested members. He did say, now
ever, that the chief question woulc
be whether the Navy ought t(
condemn the reserve or enter into
a new contract"
Representative Grant. Republican
of Indiana said he understood E
temporary agreement between Navy
and Standard would continue unit
after the hearings.
At San Francisco. H. D. Collier
president of Standard of California