Issues Developed in the Teapot Dome Inquiry

The following is a summary of the significant testimony taken by the Senatorial Committee investigating the leasing of Naval Reserve No.3 to the Mammoth Oil Company by former Secretary of the Interior Fall, It is intended to indicate the lines the investigation will take when it is resumed, and also to give some indication of the conclusion thus far formed in the minds of members of the Committee.

While the validity of the lease is questioned, and some effort to secure its abrogation may be expected, a much larger issue appears to be taking shape in the progress of the investigation. It concerns the right of the executive departments to formulate and execute large national policies, calling for vast expenditures, without consulting Congress, and to defray the expense involved by alienating property of the Government which is in their care.

1. The Naval Petroleum Reserves were set apart with the idea that recourse would be had to them at some time in the future when some emergency such as a war either in progress or in prospect threatened the nation, and fuel oil and other petroleum products were not available or could be secured only at unreasonable prices.

2. Private parties had occupied more or less of the lands within the reserves set apart by the Government. Some claimed title and development under the Placer Mining Laws from a time antedating the withdrawal orders; others had intrude upon the Reserve in defiance, or at least in disregard of those orders. For a number of years the contest between those seeking to preserve the Reserves for the Navy and the private claimants and their representatives was waged in the courts and before Congress. The controversy resulted in certain relief sections of the General Leasing Law of Feb. 25, 1920, from the operation of which the Naval Reserves were expressly excluded, except as they might be in that Act specifically mentioned. By the act, the Secretary of the Interior was authorized to lease to claimants producing wells within the Reserves, and the President was authorized, in his discretion, to lease the whole or any part of any claim upon which there was a producing well.

3. In the course of the above mentioned controversy the Navy and Interior Department were not in entire harmony, the Interior Department advocating a more generous policy toward private claimants than the Navy was willing to accord. Congress at that time, was averse to extending to the Interior Department any authority over the Naval Reserves, other than the limited power mentioned. By another Act, approved June 4, 1920, the Secretary of the Navy was given power to conserve and develop the Reserves by lease,