Scandal?

For six months the Senate Committee on Public Lands has been delving in and out of the question of the leasing of Government oil reserves, especially that reserve in Wyoming generally known as Teapot Dome. Under the regime of Albert B. Fall as Secretary of the Interior that reserve was leased to the Sinclair Oil interests. There was much conflicting technical testimony about the wisdom of that lease—and some smoke was raised. It was not until last week, when an apparent contradiction in Mr. Fall’s declarations was discovered, that the Senate burst into the full flame of oratory.

The point was raised in previous hearings that after being apparently none too prosperous, Mr. Fall had suddenly reached apparent affluence. Mr. Fall before the investigating committee testified that this “affluence” was the result of a loan of $100,000 from Edward B. McLean, Washington newspaper publisher, that he had taken this money to Texas and bought lands with it. Through A. Mitchell Palmer, his attorney, he let it be known that he had lent such a sum to Mr. Fall on a personal note.

Thereafter Senator Walsh of Montana went to Palm Beach and examined Mr. McLean. McLean then admitted that he had given Fall some checks but that in two or three days they were returned uncashed, Fall saying that he had obtained the necessary money elsewhere. Senator Walsh then wrote Mr. Fall about McLean’s testimony, and Fall answered: “McLean told the truth.” Both Fall and McLean were last week ill in the South.

On these facts Senator Caraway of Arkansas (Democrat) rose in the Senate and delivered a Philippic:

“I ask this question: If there was nothing wrong with the source of the Fall money, why did he not tell the source in the first place? Why did he tell a willful and deliberate falsehood to the committee when he said:

” ‘I got this money from the Hon. Edward B. McLean of Washington, and I took it with me in cash.’ He did not do that. Why did he say that ?

“For 150 years America has held up as a man beyond whose place of degradation no one could travel, a man known as Benedict Arnold. He was a traitor because he undertook to sell an American fortification to Britain.

“Much more infamous it is to have sold every gallon of our reserve oil than it was for Benedict Arnold who wanted to sell only a rocky fortress on the Hudson River.

“Incidentally, I observe that whenever a man does not want to go before a Grand Jury or other inquisitorial body his health fails. I have known more robust constitutions to be ruined by criminal courts than by all other plagues put together.”

From New Orleans Mr. Fall replied by a press interview:

“Senator Caraway of Arkansas, Democrat, who is leading in these senseless attacks, has shot his shaft against me repeatedly in the past, before the oil matter came up. I do not care to dignify it by discussion. But in general terms I will say that the charges by Caraway or anybody else that I received compensation from outside interests for anything I did in my official capacity in serving the country, or any innuendo that, directly or indirectly, I got money or other consideration, or expected to do so, is absolutely false.

The Democratic National Commitee countered by exhuming the fame “Ballinger Case”*

“From the minute Senator Albert Bacon Fall took office as Secretary of the Interior and Edwin Denby was made Secretary of the Navy the sluice gates were apparently opened to unrestrained of the nation’s resources by private interests … The Teapot Dome scandal has its direct parallel in The Ballinger scandal which shook the Taft Administration to its foundation.”

Shortly after these expressions Archibald B. Roosevelt and Colonel Theodore Roosevelt, Assistant secretary of the Navy (sons of the late President), appeared before the investigating Committee and volunteered testimony. Colonel Roosevelt little more than introduced his brother “Archie Roosevelt declared that he had just resigned as Vice President of the Union Petroleum Co., the export auxiliary of the Sinclair Consolidated Oil Co., because his suspicions had been aroused over the activities of the Sinclair interest in connection with Teapot Dome. Following Senator Caraways declaration Mr Sinclair had sailed hurriedly for Europe, and he believed several others connected with the affair had done likewise. Mr. Sinclair’s private Secretary Mr. G. D. Wahlberg had advised Mr. Roosevelt to resign for fear of damage to his reputation, and Mr Wahlberg had mentioned the pass age of $68,000 to the foreman of secretary Fall’s ranch. In concluding Archie Roosevelt declared that his, testimoney was all hearsay but that he believed the Committee should have benefit of it.

Subsequently Mr. Wahlberg denied that he had said “$68,000” but had said “six or eight cows,” which Mr. Roosevelt must have misunderstood. He admitted, however, that he also had become suspicious of the transactions involved, was “very unhappy” in his post and was about to resign.

* President Taft had appointed Richard Achilles Ballinger as head of the Department of the Interior. Ballinger was a Seattle lawyer and politician, and for a time had been commissioner of the general land-office under Roosevelt. Before his advent into the the public service he had become attorney for the so-called “Cunningham claims” to valuable coal deposits in Alaska. The legality of these claims was doubtful, and it was widely believed that they were false, and were part of a Machiavellian plan on the part of the Morgan-Guggenheim Syndicate-popularly dubbed the “Morganheims”-to gobble the untold natural wealth and resources of Alaska.

Among those who believed the claims fraudulent were Gifford Pinchot, then Chief Forester, and three other men also in the Forestry Service-Shaw, Glavis, Price. All being in the Department of the Interior, they were of course subordinates of Barringer. Convinced Ballinger was betraying the interests of Conservation, they ignored bureaucratic red tape, carried the matter directly over his head to the President and the people. Mr. Taft deemed them guilty of insubordination, dismissed them from the Service, and at the same time declaring his confidence in Ballinger.

The controversy filled the press and caused a great uproar, many newspapers and periodicals and Progressive tendencies and clutching at this large and timely straw, and upholding Pinchot and attacking Ballinger. Charges were made that Taft had not sufficiently investigated the matter, and though both sides of the question were warmly defended, opinion was quite widespread that Taft had laid too much emphasis upon mere “official punctilio” and not enough upon public efficiency.

Subsequently a representative of the Morgan-Guggenheim Syndicate made admission that his company held options on many of the Cunningham claims, and, it may be added, the courts finally held all of them to be void.

A congressional investigation committee then “whitewashed” Ballinger, but he remained too good a target for hostile criticism, and eventually he resigned. (March 6, 1911), returning to his law practice at Seattle, as senior member of the firm of Ballinger, Battle, Hulbert and Shorts.