OIL: Teapot Dome

Oil was once a word that lubricated the jaws of the nation. Newspapers screamed it, preachers damned it, Mr. Average Citizen swallowed it andwas shocked. That was back in 1923 when the Senate was airing the Teapot Dome and Elk Hills oil scandals of the Harding Administration.Soon the tumult died, the people forgot, and the wheels of justice beganto churn ponderously.

Last week, the civil proceedings moved another stage nearer completion. The Government won a victory in its attempt to recover the Teapot Dome naval oil reserves which onetime (1921-23) Secretary of the Interior Albert B. Fall had leased to the Mammoth Oil Co. (a Harry F. Sinclair institution). Judge William Squire Kenyon— presiding judge of Iowa, in the Federal Circuit Court of Appeals at St. Louis, reversed the decision of the Wyoming district court (TIME, June 29, 1925); ordered it to cancel the Mammoth Oil Co.’s leases and to demand an accounting of the oil which had been taken from Teapot Dome.+ The company was enjoined from trespassing further on Government property. Judge Kenyon’s decision cut straight to the point of the fraud: “There is no corruption in this case as to any officers of the Government except Albert B. Fall. It has been the theory of the Government that onetime Secretary Fall received from Harry F. Sinclair, organizer and owner of the Mammoth Co., a pecuniary consideration which influenced him to grant the company a lease for Teapot Dome. . . .

“If a Government official, engaged in making contracts for the Government, receives pecuniary favors from one with whom such contracts are made, a fraud is committed on the Government, and it matters not that the Government is subjected to no pecuniary loss or that the contract might have been an advantageous one to it. The entire transaction is tainted with favoritism, collusion and corruption, defeating the proper and lawful functions of the Government.”

In the Teapot Dome case the Government’s triumph is complete in all points. The only remaining recourse of the Sinclair interests is an appeal to the Supreme Court.

The Government has already won in both the Federal District Court at Los Angeles and in the Federal Circuit Court of Appeals at San Francisco, in its other civil suit to annul Edward L. Doheny leases of the Elk Hills naval oil reserves in California. Last week this case went before the Supreme Court for final decision.

Meanwhile, the criminal suits against Albert B. Fall, Edward L Doheny, Edward L. Doheny Jr and Harry F. Sinclair, on charges of conspiracy and bribery, are still pending in the District of Columbia Court of Appeals. Here there has been little progress in two and a half years. None of the four men indicted has yet appeared in court.

Last week, however, the District Court refused to allow them a special appeal on their conspiracy indictments, and thus brought their trial nearer. This action was based on a new law rushed through the last session of Congress by Senator Thomas J. Walsh of Montana, which deprives the District Court of Appeals of the right to allow or hear special appeals in criminal cases.

—He was a onetime (1911-13, 1913-22 [resigned]) Senator, and in 1924 refused the post of Secretary of the Navy when Edwin Denby resigned (TIME, March 24, 1924.) Judge Kenyon is often mentioned as potential material for a future Supreme Court appointment. +The day after Judge Kenyon’s decision, the common stock of the Sinclair Consolidated Oil Corp. fell to a new low for the year (18%). Meanwhile, statisticians busied themselves, announced that the oil yields from Teapot Dome had been disappointing after all.