Evening star., 1943-06-22

North Dakota, that the Justice De-
partment's request for continued de-
ferment made him suspicious.
What is there about the report
which is so mysterious?" Mr. Lemke
asked. Il am getting suspicious. 1t
seems about time we found out what
this is all about. I don't like this
mysterious buck passing"
Meanwhile, Keith Kane, legal ad-
wiser to the Navy Department, told
the committee the Navy considered
the contract an excellent one and
in the public's interest. He said the
Navy Is studying the Justice Depart
ment's report and will present to
congressional committees and Gov
ernment ofdcials, including War
Mobilization Director Byrnes, its
views on the merits of the contract
Mi. Kane said Mr.. Knox's cancel
lation of the contract followed ad-
vice he received from Attorney
General Biddle and Mr. Byrnes.
Provisions of Contract.
me contract PROVIDED.
That the Navy would pay Stand
ard sl,74s,4 ,40S for perptual title to
approximately $500 acres the COM
pany owned in the reserve
That Standard would operate the
field for itself and the Navy.
That the oil produced would go,
roughly, one-third to Standard and
two-thirds to the Navy.
That Standard would withdraw
$4,000 barrels of oil daily, but not
more than 27375 900 barrels over
flve-year period unless specif-
cally authorized by the Navy
Congressional critics have charged
that the contract would exhaust
rather than conserve the supply,
but Navy spokesmen have declared
the contract was designed to pro-
tect and conserve Navy lands in the
reserve.
Eight wells we're completed under
the contract, which became effective
last November 20.
The Navy and the company, Mr..
Kane said. agreed mutually to re-
scind the contract and now are con-
cluding negotiations for its termi-
nation. He added, however, that
final suspension awaits filing of the
Attorney Generals decision.
Mr.. Kane said Standard was
under great pressure to produce oil
from its lands. but he did not ex-
plain why. Government officials.
however. have expressed the belief
that water seepage was impairing
the company's property In the re-
serve.
Wants to Study Ruling.
Mr.. Little said in asking the COM
mlttee to postpone its investigations
that the request was made to give
the Navy an opportunity to study
the Justice Departments report to
the President.
Mr.. Kane told the committee the
Navy has not finished its study, but
that Navy officials contend the con-
tract is legal and will present in
formation to show what he termed
the merits of the "installment
method Of payment" on which the
contract was based.
He said the Navy considers this
method better than condemnation
procedures in the Elk Hills case be-
cause the latter would involve large
expenditures by the Government.
Representative O'Connor, Demo-
crat, of Montana, asked why the
contract was not submitted to the
Justice Department for a review be-
fore its approval.
Mr.. Littell, terming that "a rea-
sonable question" replied that it
would have been quite natural for
the Navy to have submitted it be-
cause of its importance.
He emphasized, however, that not
all departmental contracts were sub
mitted for review because, he added.
such course would burden down
the department and force substan-
tial increase in its staff.
Representative Mott, Republican,
OF oregon interrupted to say that
under the law the President had to
approve the contract, and that ap-
parently he had approved it with
out first submitting it to the Justice
Department.
Mr.. O'Connor quickly declared
that the President has the right to