NAVAL OIL RESERVES RETURNED TO THE PEOPLE
Naval Oil R eserves Returned to the People TEAPOT DOME after five years' hard fought legal battle is now the undisputed property of the United States. The Supreme Court, October "10, rendered a...
...Justice Butler in the Supreme Court opinion says, "There was never any legitimate reason for secrecy...
...And God knows how many thousand discouraged black men still held in semi-slavery...
...that such use furthered the violation of law and was contrary to the established conservation policy...
...Sinclair was chairman of the board of the former, and Stewart held Jike position in the latter...
...April 28, 1922, a little more than a year after President Harding's inauguration, when Senator La Follette made his four-hour speech which resulted in the adoption of the resolution for an investigation, the Naval Oil Crab had been consummated, the lease had been signed...
...Fall was employed "as legal advisor" by both Sinclair and Doheny...
...In both the Elk Hills and Teapot Dome decisions, the Supreme Court held that neither Doheny nor Sinclair had any legal right to the improvements made under their fraudulent leases...
...It was called the Continental Trading Company...
...Senator Walsh did prosecute the investigation vigorously and masterfully, as was expected, but it was not until February 8, 1924, that the Joint Resolution based on the investigation was adopted by the Senate and House of Representatives and signed by the President...
...He sent for Sinclair and his attorney, who were then told the necessary conditions of the Teapot Dome lease...
...In connection with his utter complacency toward these oil scandals it should be remembered that on December 22, 1923, at the very time when it was being arranged that Edward B. McLean should testify that he had loaned Fall the $100,-000 as stated by Fall in his telegram to former Senator Lenroot, McLean was advised by his attorney to employ Smith-ers, the White House telegraph operator, so that he could have "quick and easy access to the White House...
...The circumstances, terms of the arrangement and tes-mony of witnesses show that the lease and agreement were not made to prevent drainage...
...India's decision to curtail her opium exports 10% helped Persia in reaching her decision, which required great political courage on the part of the Persian Government in cutting down such a lucrative trade...
...In reply to a letter from Fall enclosing a copy of the one Fay had addressed to the Senior Senator from Wisconsin, the President said: "I quite approve of the manner in which you responded to his inquiry...
...Fall-Sinclair to despoil the nation of hundreds of millions of wealth...
...He believed Senator Walsh would conduct- the investigation with ability, power and pertinacity...
...delivered message...
...It was perfected and signed on April 7, 1922...
...that a hundred thousand dollars in currency was carried in a black satchel by Doheny's son to Fall- at his apartment in Washington, was admitted...
...A grand jury is now investigating the charges...
...This action affects opium smokers of the Orient, according to Col...
...and, taken in connection with other circumstances disclosed, it is persuasive evidence of such a conspiracy between him and Sinclair...
...Hoover is arranging to run for the presidency on his flood "record...
...This refers to a letter written by Secretary of Interior Fall to President Harding, cited in Judge Kenyon's opinion, in which Fall said: "Of course this matter of the process by which we are obtaining storage, etc., and the location of the storage, the contracts for the same, and in fact the plans of the Navy as they are being worked out by mysetf and Secretary Denby are military plans and, in my judgment, should not be given to Senator La Follette or anyone else...
...One need not be a prophet to foresee that as soon as public indignation has subsided artd these oil pirates get back their nerve, the Supreme Court suggestion as to the only source of relief will be made the basis of a raid on...
...The fact that the two civil suits have been decided favorably to the Government and that the Oil Reserves Have been restored to the people does not afford President Coolidge an alibi for the part he has played in the drama...
...It will be recalled that after he left the Cabinet, Mr...
...It is also, of course, in accord with the decision of the Supreme Court rendered last February, reviewed in the March Magazine, respecting the lease by Secretary of Interior Fall t6 Edward L. Doheny of the Elk Hills, California, Naval Oil Reserve...
...Fall's family present at the trial were so moved by Mr...
...The criminal trial of Fall and Doheny charged with having corruptly conspired to defraud the United States Government took place in the District Court at Washington last year...
...Following these decisions of the Supreme Court of the United States his record would prove very hurtful to his candidacy if he should succeed in having himself drafted at the 1928 convention...
...Fall left the Cabinet March 4, 1923...
...It declared the contracts and leases to be against public interest and that the lands should be recovered and held for the purposes to which they were dedicated...
...he continued as special aide to Denby, and was well qualified for that service...
...In its final decision the Court says, "Petitioners are bound to restore title and possession of the reserve to the United States, and must abide the judgment of Congress as to the use or removal of the improvements or other relief claimed by them...
...To make things run smoothly some changes in personnel in the Navy and Interior Departments were needed...
...The decisions of the Supreme Court in these Oil Reserve cases recall the eloquent prophecy of Chief Justice Ryan of the Supreme Court of Wisconsin made more than half a century ago: "The question will arise and arise in your day though perhaps not fully in mine, which shall rule—wealth,,or man...
...While (he negotiations were pending, Fall and Sinclair indicated that they thought such danger existed, but the evidence warrants a finding that their expressions were made in bad faith to make it appear that there was a reason for the exhaustion of the reserve and the proposed disposition of its products...
...Schemes to get possession of such vast loot, involving big risks, are not undertaken by men experienced in the game, without due caution and forethought...
...The use of such tanks to take oil from the reserve was part of the illegal scheme...
...Naval officers who vigorously opposed leasing of the oil reserves were sent to sea, their places filled by those who would acquiesce in the scheme...
...Perhaps the mass of testimony and the legal technicalities of conspiracy are too much for a jury selected on the basis that they have not read of the case and vhave not formed an opinion of the guilt or innocence of Ihe accused...
...That and other disclosed circumstances are sufficient to impute to it Sinclair's knowledge of the conspiracy to defraud by which the lease was obtained...
...Senator La Follette asked to have the resolution referred to the Committee on Public Lands of which Senator Walsh of Montana was a member...
...In November, 1921, in the City of New York there was created, overnight, a company incorporated in Canada, whose object was plainly to hide the disposition of its assets...
...The Court says, "Of that amount $200,000 were, by the numbers thereon, conclusively shown to have been included in the lots purchased by the New York agency (of the Continental Company) April 13 and April 17...
...Evidence was piled high in proof of their guilt...
...The final decision of the Supreme Court upholds the judgment of the Circuit Court of Appeals, whose remarkably strong and able opinion by Judge William S. Kenyon I reviewed in the October issue of our Magazine a year ago...
...Not once during, his service as President has Calvin Coolidge expressed indignation concerning this conspiracy to defraud the people of the United States...
...Denby was made Secretary of the Navy...
...Of far greater importance, however, than the financial stake is the assembling and confirmation by the Supreme Court of the essential facts and indisputable proof underlying the Harding-Coolidge Administration oil scandals...
...The Supreme Court gives a hint of what took place: "Commander H. A. Stuart had been put in charge of Naval Reserve matters by Secretary Daniels...
...Fall went West in the summer of 1921 to discuss matters with oiLmen...
...He had the opportunity and the responsibility to clear out the members of the Cabinet who were known to be disgracing the Government and betraying the people...
...Teapot Dome and Elk Hills civil cases have been tried in six United States Courts...
...which shall lead—money or intellect...
...D. W. McCormick of Boston, technical adviser of the Persian Government...
...It appears that another black chapter is to be written in this sordid story, and one remembers vividly the declaration of Francis J. Heney, the noted prosecutor, that you cannot convict $100,000,000...
...The Crisis...
...Harry Sinclair, noted sportsman and clubman, appeared in court with his aged mother on his arm...
...Then Fall, about to leave for New Mexico, locked it and the copies in his desk, instructing his office force to give out nothing...
...And the Supreme Court adds: "That fact is satisfactorily established...
...The final judgment of the Supreme Court rendered October 10, in the Teapot Dome civil case, has received a larger share of serious consideration from the press of the country...
...It is highly important, therefore, for the public to keep in mind for the future what the Supreme Court says about Sinclair's hypocritical claim as to his companies having relied on the validity of the lease in making extensive improvements...
...President Harding upheld Fall...
...The Continental Trading Company immediately sold the entire amount of oil it had purchased at $1.50 a barrel, to these guarantors at $1.75 a barrel...
...Advise Slemp with whom I shall confer...
...The Mississippi flood has sunk out of the newspaper headlines, but the four and one-half million acres are still devastated...
...In spite of the evidence the jury rendered a verdict "Not Guilty...
...Furthermore, "except for qualifying shares, it put out no stock, did no other business and kept no accounts...
...The Supreme Court disposed summarily of the claim made by the defense that the Teapot Dome lease was to protect the Naval Oil Reserve from drainage loss...
...In less than two years after its organization the Continental Trading Company "was dissolved, and all its records were destroyed...
...that he was anxious no details should be disclosed pending completion of the Elk Hills lease...
...The ownership of the Sinclair Pipe Line Company was a half and half affair like the ownership of the Purchasing Company, and the Court says: "It is chargeable with notice that the use of reserve oil to procure the construclion,-©f the pipe line was a part of the plan for the unauthorized exhaustion of the reserve...
...As this is written the Judge has declared a mistrial and dismissed the jury on evidence submitted to him by the Government that there was proof of improper tampering with the jury...
...The performance of this contract was guaranteed, says the Court, by "O'Neil acting for the Prairie Company and Sinclair and Stewart for the Purchasing Company...
...He expects reaction from unwarranted political attacks...
...who shall fill public stations —educated and patriotic free men, or the feudal serfs of corporate capital...
...May 31, 1921, about two months after his inauguration, President Harding made the order purporting to commit the administration of all oil and gas bearing lands in the Naval Reserves to the Secretary of the Interior...
...When Fall resigned from the high office he had used to betray the people of the United States, he was promptly taken care of and given employment for which he was wreH paid by these brazen -exploiters of the public domain...
...Justice Butler, who delivered the opinion in the Teapot Dome case, says the facts and circumstances require a finding: "that pending the making of the lease and agreement Fall and Sinclair, contrary to the Government's policy for the conserva-tion of oil reserves for the Navy and in disregard of law...
...McCormick, but more stringent measures are necessary to reach the drug addicts of the Western world, because of their higher purchasing power...
...He says that 00% of all the opium grown is consumed in the Orient, while 40% goes to manufacturing drugs for Occidental consumption...
...Justice Butler in the Teapot Dome decision refers to the fact that the contracts in the two cases were contemporaneous, that the leases and agreements in the Teapot Dome and Elk Hills cases cannot be distinguished so far as the power to make them is concerned...
...President Coolidge played a most unworthy part in the oil scandals...
...Judge Kenyon in the opinion for the Circuit Court of Appeals says, "The evidence negatives any idea of the military seed for secrecy in the leasing of Taapot Dome...
...Casual reading of the Supreme Court decisions may cause us to think the plot was clumsily executed — the usual verdict after the facts are known and a daring project has failed of its purpose...
...Calvin Coolidge as Vice President was in the Chair when Senator La Follette made his scathing arraignment of the oil leases, exposed the plunder, the illegality, rottenness and fraud of the transaction...
...Congress to recover millions in compensation for junk necessarily left on the premises when the Court declared the lease and agreement "fraudulently made to circumvent law and to defeat public policy...
...that "his failure to submit the lease to the Attorney General or to any lawyer in his own Department indicates that he knew the transaction was liable to be condemned as illegal, and that, without regard to law, he intended to put it through...
...Fall had some trouble with Mendenhall (of the Geological Survey) and Stuart, and expressed himself as 'dissatisfied with both of them.' Thereafter, neither of them was given anything to do in respect of reserve leases...
...On January 12, 1924, President Coolidge wired to McLean, "Prescott is away...
...The Supreme Court states briefly but scathingly the circumstantial evidence which conclusively proves that Fall was paid by Sinclair in Liberty bonds, in part at least, for making the Teapot Dome lease...
...To place control of the Naval Oil Reserves in Fall's hands both the President and the Secretary of the Navy must agree to it...
...It should be kept in mind that although the Teapot Dome and Elk Hills cases are separate legal actions, they are one and the same crime and betrayal of the public interest...
...that Fall so favored Sinclair and the making of the lease and agreement that it was not possible for him loyally or faithfully to serve the interests of the United States or impartially to consider the applications of others for leases in the reserve, and that the lease and agreement were made fraudulently by means of collusion and conspiracy between them...
...McLean...
...During its lifetime the Continental Company was shown to have bought and delivered over $3,000,000 in Liberty bonds...
...but they say evidence shows that he "was fully informed as to the substance of the transaction...
...A discussion of the evidence is not necessary...
...The Teapot Dome decision, October 10, together with the Elk Hills decision February 28, restores to the people of the United States property estimated to exceed $400,000,000 in value...
...When a few days after the Teapot Dome lease had been locked up, Senator Kendrick and Senator La Follette joined in an effort to get the facts from the Department of the Interior, Fall wrote his letter professing "military plans"" were involved, which "should not be given to Senator La Follette or anyone else...
...Because of this greater enlightenment we may expeot the people of the United States to have a better grasp of the significance of the decision and its bearing on the present day political situation...
...Reviewing what happened after Harding's election strengthens the conviction that there was truth in the rumors of a "Gentlemen's Agreement" at the 1920 Republican convention...
...At the conclusion of Senator La Follette's argument and exposure of the monstrous betrayal of the country by the oil grafters, no senator-dared to vote against his resolution for an investigation...
...This lease was made April 7, 1922, by Secretary of Interior Albert B. Fall representing the Government, and Harry F. Sinclair, representing the Mammoth Oil Company...
...Some of the Supreme Court's remarks about Denby are: "Circumstances indicate he intended to be passive and let Fall dominate...
...It is significant that very soon after, on November 15, the Continental Trading Company (of which the Supreme Court says, "it is plain the company was created for some illegitimate purpose") was in a single day organized and put over its extraordinary financial deal which netted the company over $8,000,000, "without capital, risk or effort...
...Fall was a beneficiary...
...To give these conspirators due credit for craft and intelligence we must consider what a big job they undertook and how near they came to putting it over...
...Harding had served with Fall in the Senate, knew his reputation as a spoilsman, his scorn of conservation...
...He returned about the middle Si October...
...Members of Mr...
...Very shortly afterwards Sinclair had $25,000 in bonds transferred to Fall under circumstances that caused the Court to say: "Coming so soon after the supplemental agreement made to perfect and carry out the scheme, it strengthens and confirms the inference that Fall had been willing to conspire to defraud the United States...
...Previous decisions in the Elk Hills and Teapot Dome civil cases have not been given the space and attention in the newspapers rightfully due matters of such grave national concern...
...Along with the civil suits growing out of government investigations and disclosures of the stealing of Elk Hills and Teapot Dome Naval Oil Reserves, three criminal actions were instituted...
...knew that his record, his votes, his speeches had been against the preservation of the Naval Oil Reserves when they were the subject of a long fight in the Senate...
...Fall's son-in-law, M. T. Everhart, had in his possession $230,500 in Liberty Bonds...
...Poppy juice represents 20%, of Persia's entire export trade and 10% of the government's revenue...
...It is like asking the United States to curtail h?r cotton exports, Great Britain her coal, Germany her textile products, and even more, says Col...
...Fall returned to Washington in about a month, the last of January, 1922...
...The Liberty Bonds were bought from the proceeds of an extraordinary deal of which Sinclair was the chief promoter...
...The failure of Fall-Sinclair-Doheny to accomplish their ends was not due to any lack of prompt and zealous cooperation on the part of President Harding and his Cabinet...
...He kept Daugherty and Denby in the Cabinet and would accept their resignations only when outraged public opinion made it imperative...
...and that "he is presumed to have had knowledge of what he signed ; there are direct evidence and proven circumstances that he did...
...Previously Assistant Secretary of . the Navy Theodore Roosevelt had written Secretary Fall that: "In view of the fact that this project is embodied in the war plans of the Navy Department we request that all matters in connection therewith be regarded us confidential as possible...
...Meanwhile, Mr...
...Shortly before the Purchasing Company bought the tanks these chairmen acted for and controlled it in respect of most important transactions...
...He sat in the Cabinet councils, was in intimate touch with what was going on in administration circles...
...There will be no rocking of the boat and no resignations...
...The crucial feature of the trial was to protect Fall's son-in-law from having to testify (lest he might incriminate himself) as to where he got the $230,500 in Liberty Bonds...
...The final Teapot Dome decision says Fall "was a faithless public officer...
...remaining proceeds from these Liberty Bonds were spent in paying Fall's debts and in business transactions in which...
...Thus the Continental Company was presented a handsome bonus of more than $8,000,-000 w:hich it obtained "without capital, risk or effort," which "make it plain the company was created for some illegitimate purpose," says the Court...
...It is in compliance with these specific instructions that the civil and criminal suits against Fall-Sinclair and Fall-Doheny have been fought out in the courts...
...Thus the boodle was provided five months in advance of the signing of the Teapot Dome lease...
...Everhart's dilemma that they sobbed audibly...
...Fall and Doheny still face a trial in the criminal court on the charge of bribery...
...There are one hundred fifty thousand dead pigs and a million and one-quarter dead chickens, twenty-five thousand dead horses and mules and fifty thousand dead cattle...
...conspired to procure for the Mammoth Company all the products ' the reserve on the basis of ex-ge of royalty oil for construction work, fuel oil...
...And it authorized and directed the President to cause suit to be prosecuted for the annulment and cancellation of the leases and all contracts incidental and supplementary thereto, and to prosecute such other actions or proceedings, civil and criminal, as might be warranted...
...Everhart deposited Liberty Bonds to the value of $90,000 in the bank for Fall...
...The last of December Fall went to his ranch in New Mexico where he was visited by Sinclair and his attorney...
...President Harding's attitude was typical of the reactionary forces at Washington and throughout the country...
...This resolution declared that the Teapot Dome and Elk Hills leases were executed under circumstances indicating fraud and corruption, without authority on the part of the officers purporting to act for the United States and in defiance of the settled policy of the Government to maintain in the ground a great reserve supply of oil adequate to the needs of the Navy...
...Early in February Sinclair wrote Fall he was willing to take out all the oil on those conditions...
...PERSIA BANS GROWING OF OPIUM Persia is leading the way with a real economic sacrifice in offering to curtail opium production and export 10% for three years...
...Most of the work of preparing the lease was done in the office of Sinclair's attorney in Washington...
...The intention to forestall such proceedings was indicated by placing Harry Daugherty at the head of the Department of Justice...
...But he knew that there was no committee of which an Old Guard majority would not prefer to bury the resolution rather than prosecute it...
...May 29, 1922...
...Within the last few days Fall and Sinclair were on trial in the District Court at Washington on the same criminal charge for which Fall and Doheny were tried last year—conspiracy to defraud the government...
...On January 29, 1924, Ira Bennett, editor of McLean's paper, wired to McLean: "Saw principal...
...Except for the courageous, persistent, relentless, fighting spirit of Robert M. La Follette they would have succeeded...
...These two oil magnates were Fall's personal friends, to whom in violation of law he fraudulently and corruptly leased Government Oil Reserves of enormous value...
...The reply of the Court to the claim of the petitioners—Sinclair Crude Oil Purchasing Company, Sinclair Pipe Line Company—should be interpreted not as approval of relief by Congress-, but as warning to future Congresses that such relief is unwarranted...
...If he had not previously resigned President Coolidge would doubtless have been just as reluctant to oust Fall from the Cabinet...
...The Supreme Court, October "10, rendered a final decision in the civil suit brought by the United States for the cancellation of the Government lease of this vast storehouse of oil covering 9,321 acres in Wyoming...
...April 13 and April 17, 1922 (Teapot Dome lease was signed April 7, 1922) the Continental Company bought Liberty Bonds of $300,000 par value...
...Fall-Dohcny-Sinciair plans to rob the people of Elk Hills and Teapot Dome Naval Oil Reserves were not the result of chance...
...Fall, the intimate associate and pal of Doheny and Sinclair, was made Secretary of the Interior...
...On the death of President Harding, Coolidge became President...
...He was known to be chief of the "Ohio Gang," a corruptionist and utterly unfit for the high office of Attorney General...
...If the leases and agreements by Fall and Denby to Doheny and Sinclair should prove illegal and fraudulent it would be the duty of the Department of Justice to institute actions for recovery of the loot and punishment of the thieves...
...On the day it was created this dummy .company executed a contract for the purchase of 33,000,000 barrels of oil at $1.50 a barrel...
...The same facts and circumstances are the basis of the civil and criminal actions...
...Moreover, the Purchasing Company was owned half and half by the Sinclair Consolidated Oil Corporation and the Standard Oil Company of Indiana...
...Justice Butler quotes Judge Kenyon, "The drainage danger was unquestionably not imminent enough to force immediate action in the leasing of the entire property...
...The Court decisions reveal that theyy constitute the same bold, unscrupulous conspiracy on the part of Fall-Doheny and...
...With the exception of the District Court of Wyoming, where Judge Kennedy Blake held the Teapot Dome transaction legal, all the other decisions have in effect agreed and declared that the Fall-Sinclair and the Fall-Doheny leases were not authorized by law and were consummated by fraud, conspiracy and corruption...
...He says greatly appreciates and sends regards to you and Mrs...
...Acknowledge...
...The Supreme Court opinion says further, "in order to support his refusal to furnish a senator information concerning these contracts, Fall insisted that they should not be given out because military plans were involved...
...But the Purchasing Company is presumed to have known that no l».w authorized the making of any such lease...
Vol. 19 • November 1927 • No. 11
