OIL: Action

While the Legislative Branch of the Government continued its manifold inquiries into oil and other allied matters, the Executive Branch of the Government began action in the same.

Owen J. Roberts and Atlee Pomerene, special counsel for the Government, took train from the Capital and reached Cheyenne. Harry F. Sinclair and his lawyers also went west. In the Federal District Court of Cheyenne, Messrs. Roberts and Pomerene asked a temporary injunction to restrain the Mammoth Oil Co. from drilling or operating wells on Teapot Dome. They alleged that the lease to the Mammoth Co. was illegal, 1) because it rested on an in-valid Executive Order of President Harding transferring control of the naval oil reserve to the Department of the Interior; 2) because it was executed without authority of law; 3) because it was made without advertisement or competitive bidding; 4) because Albert B. Fall and Harry F. Sinclair “did combine, conspire and confederate” to defraud the Govern-ment in making it; 5) because Edwin Denby, the then Secretary of the Navy, “exercised no discretion,” but signed the lease as a matter of form. The Court granted the temporary injunction. Joseph Strauss (Rear Admiral) and Albert E. Wates (Vice President of the Sinclair Consolidated Oil Companies) were appointed receivers. Harry F. Sinclair declared: “It is a great relief that the Teapot Dome controversy has at last been transferred to a court of justice.”

Thereupon Messrs. Roberts and Pomerene set out for Los Angeles to file a similar complaint against the Doheny lease on Naval Oil Reserve No. 1, at Elk Hills.

Mr. Doheny also stepped westward. Before going he declared: “The leases we signed for Naval Reserve No. 1 are the best the United States ever got financially. And now let me tell you something else about them. Admiral Robison when I last saw him said to me: ‘Doheny, they may put up one gibbet and hang me on it and another gibbet and hang you beside me. If they do I’ll die happy in the knowledge that we have saved the Pacific coast from attack. We have done our duty to the United States. We have made it possible to protect the Pacific Islands and to put up a good naval fight for the Philippines.’ ”

In the Federal District Court at Los Angeles, the special counsel for the Government obtained a temporary injunction on the Doheny companies to prevent them from operating their leases. The charges made were much the same as those of the Teapot Dome complaint. Rear Admiral Harry H. Rousseau and J. Crampton Anderson, President of the Pan-American Petroleum Co., were named joint receivers. In order to protect the Government’s naval and oil interests as well as the interests of the lessee, the receivers were empowered to carry out the existing contracts, and to drill additional wells, if necessary to protect the Government’s oil from drainage into private wells nearby. Mr. Doheny’s companies will also complete the Government’s oil storage at Hawaii, at an estimated cost of about $2,000,000, Mr. Doheny having personally guaranteed to bear the loss if the Government should not pay for the work.