Evening Star Newspaper, January 25, 1924, Page 10

FALL ILL HERE, WILL TESTIFY « MONDAY IN LEASE SENSATION kemaim in Bed at Home of Sinclair Attorney. Doheny Willing to See Oil Rights s (Continued from First Page.) tame street level below the main con- course on which thelr train had a rived, thereby avoiding photographers and possibly crowds. They were met Dby Mrs. Zevely in an automoblle and driven to the Zevely home in a down- pour of rain. Crowds, including a score of sen- ators, packed the big committee room almost to suffocation in the expecta- tion of further sensations, but It was apparent that they were unprepared for the bombshell which the oll mag- nate exploded almost at the beglnning of a carefully prepared statement, in which he argued vigorously against «ny construction that the personal loan to Secretary, Fall had any con- Pection with the subscquent award to | Lis company of government ofl con- tracts. At the conclusion of the reading of Lis statement Mr. Doheny, through his counsel, Gavin McNab, proposed to the committee that his company Would reconvey to the government all interest in the contracts if a board of experts, to be named by the Fresident, should find that at the time of the making of the contracts they Vere “not wise, desirable and advan- {ugeous for the government to make ul the very best that the govern- 1rent could have obtuined.” Cross-Questioning Vigorous. During the more than two hours ©f vigorous cross-examination of Mr. Volieny that followed, Chairman Len- Yoot asked hlm 1f, In view of the voesibility that he had secured an advantage in getting the contracts Lecause of the loan to Mr. Fall, he Wwas not willng to turn back the lease. Mr. Doheny replied that it 1t would flca‘r Mr. Fall of any suspiclon of 1aving been influenced Ly the I Be would be “perfectly willing” ta ;:n;‘a‘mmend such a course to his com- There was but brief S cussion yesterday. Commenting on the testimony of Mr. Doheny, Sen- ator Heflin, democrat, Alabama, de- ¢lared that the Doheny loan "makes 3200,000" known to have passed in the course of the leasing of the reserves, “Some one ought to go to th e penl- se of this trnnuc(lnn,"; tentlary becau: be sald, An angle of the Teapot Do Yuersy dovelobed toduy on the House 3 e Capltol, when th committee asked Rear Admlrl‘i E::: ory, Who was before it on other maj. for®yo preduce. Monday, ‘the leases naval ofi r v ll’!“’ '¢|1bd Cll\fbl'llll-exel’veB e Members of the committee # Drivately “that they desired 1o jorca what had become of royaities paid 1n ¥ the Doheny and Sinclair infercsts and whether there was any eroand for storles that the Navy Department ‘was usin, th Das sing them for unauthorized allembers of the uring the heari minded Mr. Dohen: he expe 600,000 Mr. Doheny declared to th - mittee, however, that the ln:nc%‘:‘d no relation to' any of the subse- Quent transactions”; that it was made By him “personally” and that “In con- nection with this loan there was no discussion between Mr. Fall and my- self a5 to any contracts whatever.” The transactions themselves the order in which they occurred, Mr. Doheny sald, “dispose of any fontention that thiey were influenced ¥ my making a personal loa Ufelong friend.” s Planned to Cellect Loan. The oll magnate testified that he had advanced the money to enable Mr. Fall to enlarge his New Mexico ranch holdings and that he ha@ ful- 1y intended to collect ghe loan if Mr. Fall's health remained good and that, if necessary, he had planned to em- ploy the former Secretary to look after his Mexico holdings so as to enable him to repay the debt. ' . Responding to questions on cross- examination, Mr. Doheny said the note sent him by Mr. Fall was un- Daid; that it bore no interest rate, 2nd that no interest had been paid on it. He sald he had drawn a check for the $100,000 on a New York bank and that his son had tal%en the cash irom New York to Washington, re- ceiving in return the note, which he ;honghl was in Mr. Fall’s handwrit- ng. gSenltet ll:_ammmee yeaterda; - r. Doheny ho had testifcd ects to make a profit of $100,- in Unable to Find Note. The witness was unable to produce either the nte or the check, al- though he sald he had conducted a search for them before leaving Los Angelew. He declared they were not nd possibly were in New York. Jle was cxcused after three hours on the witness stand, with the under- standing that he would endeavor to find the check and notes for the committee. Mr. Doheny's testimony threw a bombshell into what already has de- veloped into one of the most sen- sational investigations conducted by #_congressional committee in recent years.” In view of it. Mr. Fall will be questioned when he appears be- fore the committee next Monday re- arding his statement of December 7 to the committee, in which he 1 \ wal: “It whould be needless for me to #ay that in the purchase of the Harris yanch or in_any other purchase or exp.nditure I have never approached 1. L. Doheny or any one connected itk him. or any of his corporations, or dr. H. F. Sinclair, or any one wonnected with him or any of his corporations, nor have I ever. re- elved from either of sald parties one cent on account of any oll lease or upon any other account whatso- ever.” Mentioned McLean. At the same time Mr. Fall declared in. his statement to the committee that he had obtalned the 3100,000 vsed in enarging his ranch from JWwara B, McLean, Washington ewspaner publisher. Mr. McLean clegraphed the committee from lorida to the same effect, but when .xamined_at Palm Beach later by tienator Walsh, democrat, Montans, Te testified that he had’ given M %2l checks for $100,000, they Bad been returned to him un- cughed. Appearance Voluntary. Mr. Doheny appeared before the committes as a voluntary witness tnd, ag he put it, “to state to the committes and the public ‘the full jacts” regarding the loan. He said lie had come from Los ‘Angeles for 1hfs purpose, and had traveled via ew Orleans to apprise Mr. Fall of s intention, and had “found him al yéady in entire accord with my pur. yose.” Mr. Doheny began his testimony by rauding a long-and carefully prepared statement, explaining the loan and the circumstances under which it was made and the conditions of the contracts subseguently entered fif« by hl-teompullu with the Navy partm After Doheny and McNab had read thelr statements to the committes, Eenator Walsh began the questioning. I was In New York whea the losun was made to Senator Fall in Wash- ington. He telephoned me he was ready to receive the loan if I was ready to make it as T had told him previously 1 would do. “I have known Senator Iall for about thirty years or more. We are old-time friends. We both worked in the same mining district in New Mexico, and were bound together by the tles formed while we were lving in camps under trying circumstances. 1 started in law at the same time Senator Fall did and practiced In the same dlstrict.” The witness then related to the committee in homely terms how he had followed Fall's career. explain- ing his deep sympathy with him fn his many business adversities and family tribulations. He said that his sympathies had been deeply aroused, and that he had taken a kecn per- sonal interest in Fall's troubles. The former Secretary has several times discussed his business affairs with him, Doheny said, and had told him of his hope to acquire the Harris ranch. Fall Set Heart on Ranch. “uil's heart seemed set on that bus.ness enterprise, continued the witness, “and I told him that if he wanted it, I would loan him -the {money to purchasg t.” “He told me of the possibility of borrowing it from Mr. McLean.” he went on. “When I told him I would Joan him the money, he suid it would relleve him greatly. 1 sent him the money in cash. T do not know whether I did it at his suggestion or not, I think it was in response to u conversation we had three or four weeks previous. “The money was obtained upon check drawn upon Blair & Co., New York city, and it is my recollectio that the check was cashed by them. When members of the committee expressed surprise over what they suggested seemed loose business methods, Doheny replied that he had paid out more than a million dollars that way during the last five years. A loan of $100,000 by him was not more than a loan of $20 or $50 to most men, he sald. Not Made to Influence. The wdtness insisted that the loan was not made with any expectation of influencing Fall in his officlal acts. He asserted that Fall was not in any position_to favor him, and declared the negotiations leading up to the leases were: carried on by men in his department who were not under the Secretary’s direct control. Dohen ply to further questions, insist upon him repaying. “Did your company at that time have any leases on the public re- asked Senator Walsh. “Only on section 6, adjoining the naval reserve, which we obtained from the Interior Department” the witness veplicd. “We got that lease from Secretary Payne” (Jobn Barton Payne, Interior Secretary in the cab- inet of President Wilson). Senator Walsh had the witness ex- plain the transactions which even- tually led up to his company being awarded the contract for construc- on of storage tanks for Navy oll and for improvements at Pearl Har- bor, Hawall, Doheny going Into con- siderable detall concerning his ¢re- quent conferences on the subject with Admiral Robison, who he said was apprehensive thut the Navy wouls not be able to find any one who would do the work and pay for it in the form of government royalty ol Much against the judgment of some of the officers of his company, he said, he assured Admiral Robison that he could rely upon recelving at least one bid, which would be made by the Doheny company Ho insisted that the contract was awarded to his com- pany after the Navy Department had received two bids in addition to his o sald, in re. hich I will ‘How long were you in New Or- on your trip here?” Senator h then asked. Conferred’ With Fall. w “I arrived on Sunday evening last, - about 8 o'clock, and remained in New Orleans until about 6 o'clock the next morning, When I went to one of our refineries, about twenty miles from New Orleans, and remained there throughout the day. I had a confer- ence with Secretary Fall on the eve- ning I arrived, that was last Sunday night.” “Who was present at the confer- ence? asked Senator Walsh. “Senator Fall, Mr. McNab, my coun- sel. and myself.” ““Who accompanied you on the train from Los Angeles to New Orleans?” “Mr. W, A. Hawkins, an old law artner of Secretary Fall, joined Mr. BicNab and myself on the train at Ei Paso. I invited him to come along. 1 expected to have a talk with Sena- tor Fall and wanted him along, he being an old friend of the senator’s. I wanted to present to Senator Fall the statement I intended to make to- day. I did not want him to be sur- prised about it. Thought Statement Proper. “When I spoke to Mr. Fall about the statement, he thought it was the proper thing to do. Mr. Hawkins also was of the same opinion. “Did you have any talk with Sena- tor Fall with regard to the statement you fntended to make which might be in conflict with statements previously made to this asked enator Walsh. s “That may seem incredible, but we did not have any general discussion of the matter. I simply stated to him that I wag going to tell all the facts, and the only question was whether he should come on' and tell them or whether I should. It was agreed that I would come on and tell them.” Did you have any conference with any one else?” o, sir.” Did you see Col. Zevely?” No Desire to See Zevely. ‘No, I did not. I was asked to see him, but I did not have any business with him and I did not want to see him. Somebody sald he was in town and said I might like to see him. I liad no-desire to mix my matters up with those with which Col. Zevely is connected.” ‘'Who was it that suggested that you meet Mr. Zevely committee’ ) ! [ ) { H NG _STAR, WASHINGTON, D. sory, note given by Fall was transmitted to Doheny. Son Broughkt Case to Fall. “I placed the $100,000 in cash in a grip, which T sent from New York to Secretary Fall by my son, and when he delivered it to Secretary 'Fall he was glven a note by Mr.Fall, which he rought back to me." Replying to questions by Senator Len- root,” the witness declared that Fall himself had nothing to do with the framing of the original contract of | April 25, 1922, by which the Doheny in- terests ‘acquired preferential rights to lease certain naval reserve land. The negotiations, he said, were all conduct- ed by Fall's subordinates. Senator Lenroot asked the witness to explain why, in the statement submitted today, he had only made reference to this contract, which he had insisted would return him no profit, and had made no reference to the December, 1922, contract, out of which he had stated he cxpected to make profits of $100.000,000. 1t was this contract by which the Doheny interests leas- ed the Californla reserves. After the question peated in various forms several times, the witness replied that it could be gontended that Fall's part ‘in = the awarding of the Decemb might have been sonced by the loan which had been made, If therc is a_suspicion that Se ator Fall was influenced by the loan," Doheny added, “I am wiliing to ree- ommend to my directors to agree to the cancellation of the lease, pro- vided that suspicion is based upon Jompthing stronger than public opin- A "I am asking vou, in view DosIBILY that You' aecured o h vantage® because of the loan,” pur- sued Senator Lenroot, “are you not Willlng to turn back the lease ‘Would Faver Cancellation. “If that will clear Mr. Fa will clear "Senator Fall of any suspicion of having been influenced by the loan 1 am perfectly willing to The attention of the witness then was directed to parts of the previous testimony given before the committee by Fall with regard to the raising of money for the ranch purchase in New Mexico. “I told Mr. Fall,” sald Doheny, “to 8o before the committee. I also told another man. one of my attorneys, Mr. Harold Walker§I wanted him to urge upon Mr. Fall to make a clean breast of this entire affair. That was either December 6 or 7. I think Walker did. I told Fall not to do anything else but make a clean breast i “At the time you made this loan,” asked Senator Lenroot, “had you any applications for leases pending with the Interior Department, or did you expect to have other relations with that department?” “Had _nothing else in sight at that time. We expected always to be in the fleld to bid on any contracts the government had to make.” “Did it occur to you that to get a contract from the department - under these circumstances other than by competitive bidding would be a mat- ter of embarrassment?” “I never got anything that way. Silent on Question. “This contract was not by com- petitive bidding? There was no reply. Mentions Denby Letter. Doheny insisted that the December contract was a mere modification of the April contract. made upon the suggestion of the Navy Department. “Secretary Denby was the one that suggested that modification of our contract be made in order to enable the department to {improve _port facllities at Pearl Harbor,” said the witness. A letter to that .;flecl is In_evidence here somewhere.’ “But Secretary Denby told us that he did not know anything about it interjected Senator Walsh. Senator Lenroot suggested that the April contract “did not grant the lease of a single foot of lan the December contract gave a lease to all the land in naval reserve No. 1, ithout any bid." 1 do not want to assent to tha id Doheny. S ¥ou ot the lease of naval reserve No. 1 without any competitive bid- ding.” replied Senator Lenroot. “The lease was supplemental to that of April 25, which we got after bid- ding.” insisted the witness. At this point, as an explanation of why he wanted Doheny to call at his office today, Senator Smoot recalled that he had asked the oil magnate some time ago to look over a plece of oil land in Callfornia in which “a friend of mine” was inter- ested, and glve an opinfon on it. Smoot Explains Note. “I have never heard from you" contihued Senator Smoot. “I wanted to hear from you today and that is why 1 wanted you to go into my office.” “We looked at the properties of that concern,” replied Doheny, “and Anderson of our company made ar- rangements with them to buy their ofl, which means he expects to get want 1t understood.” Senator Smoot then said to his colleagues on the committee, “that I have never handled_an inch of public ground in my life.” \ After asking several questions about the board of experts proposed by the witness in his statement, Sen- ator DIll, democrat, Washington, wanted to know whether Doheny would be willing to turn the lease back to the government if he were reimbursed tfor expenditures made under it. “To turn back the lease as pro- posed,” replied Doheny, “would be an evidence of wrong. I do not want this question to be declded by public opinion on testimony before this com- mittee, but by a board of experts. Asked whether he had made a profit out of the lease so far, the witness replied in the negative. “Have you loaned anybody else in the Interior Department or the Navy Department any money,” asked Sen- ator Dill, “or have you offered to make any loans to any one in either department, in addition to Mr. Fall?" “No, sir. AWhen i the Fall note due “It is payable on demand.” “What is the rate of interest? “No rate of interest was agreed upon. It was left blank for me to fill in.” “Has any payment been made on the note?" “No. = “Where 13 the note to be paid?” “New York or Los Angeles.” “You gave him the money before he_sent you the note?” “Yes, sir. No Instructions on Terms. Senator Lenroot interrupted to ask whether Doheny had given any in- McNab interrupted the witness to|structions about the terms of the ay that it was Mr. Hawkins, 1 said no,” continued McNab. wp explained to.him that it ag Mr. note. “No, replied the witness. ho made out the note?” con- Doheny’s intention to see Mr. Fali | tinued Senator Lenroot. nd ask him if he would be willing to see Mr. Doheny and myself alone. 1 sent for Mr. Doheny to come to my room in the St. Cha Mr. Doheny arrived, he said he would not see Mr. Zevely, but that he would like to see Mr. Fall before coming | terest. “I think it was in Mr. Fall's hand- writing. “Is this note listed among your se- rles. When | curities in your income tax return asked Senator Walsh. 't is not. It does not bear any in- I have received no income here to the committee. I called up| from it. Mr. Fall, and Mr. Doheny and I went | to 'his room. Mrs. Fall letting us in. The conversation was very brief, con- cerning Mr. Doheny coming he di fon arose followin heny’s question to Mr. him’ why he had not told things when he told him to.’ Senator Walsh then asked Doheny ‘whether he had had any conversa- tion on this subject with any one {w;e elve and since arriving in Washt *“No_ one, except with and the men who are with me, plied the witness. Not in Income Tax. Do you not mention in your in- come report any property except that which brings in income?” pursued do not know. T have a personal attorney who takes care of my money matters and makes out my in- come tax report. He knows all money I the checks I draw. ‘I want your check for 3,000 to pay the first in- on your income tax,’ I send 1 do not know exactly n_he check. “Have you communicated: with any | what items aré covered in the re- members of the committee”? No, sir.” port.’ Senator Walsh then Inquired sbout ] was told Senator Smoot handed K J. V. Cotter, asking whether a ma: you a note when you were coming in,” P nlhd Senator Walsh. ‘es, sir.” Let us see it.” Doheny drew from his pocket & col- lection of tiny scraps of paper and de- posited them on the table, I think will have some. trouble in reading it,’ Tll tell you what was in it. It sald, ‘After .?Ill‘ before the commits I like to see you in my rooi by thiat name had gone into Doheny's employ from the Interior Department. The witness replied that Cotter had left the department along with. the late Secretary Lane, and with Mr. Lane had gone to work for the Do- heny interests. 5 ve -you in mploy say r sald the witness. “But} men who served: I:"“tl- Interior De- der Secretary Fall?” rtment Pe. levd- we. have. . I think ki .000 em- “I_don't we_have Senator Walsh asked how the promis- ployes and 1 e influenced by the | ALBERT B. FALL. “Have you a Mr. Clunn in your em- ploy? “He is an assistant in our office in Los Angeles.” “How long has he been in your em- ploy?” “Five or six months.” “Was he not employed in the In- terlor Department under Secretary Fan fe was a clerk in the outer office of Secretary Fall” Senator Walsh recalled previous testimony by Doheny and his state- ments with reference to the April lease having ben made by subordi- nates of Fall, and asked the witness whether he thought Assistant Secre- tary Finney had signed the lcase without the knowledge of Fall. “I do not know,” replied Doheny. Senator Lenroot then took up the questioning again. “What are your expectations with regard to the repauyment of this loan?” he asked. May Employ Fal. do mot know whether Senator Fall will be able to pay it out of any profits from his properties,” the wit- ness replicd. “I expect him to pay the loan. If he is not successful in his business venture, 1 may employ him in my affairs in Mexico, with which he {s conversant, and pay him a salary out of which he could get rid of the loan. I had that in mind at the time I made the Ipan.” “If Mr. Fall does not enter your em ploy will you press him for the pay. ment of the not think T will. Did you think this loan would re- flect upon Mr. Fall?” “I did not think it would reflect upon him as much it now will, had & statement of it been madc In his previous testimony.” “What do you mean by that?" Thinks Truth Better. “I think it would have been much Detter had the truth been told rather than the statement that the loan had been obtained from Mr. McLea: “Do you think it constitutes any reflection upon Mr. Fall?” “I do not. “Then why did you not tell the committes about It when you were here in December?* “I thought It was Mr. Fall's busi- ness. It was not pertinent to any question which had been asked of :ne when 1 was before the commit- ‘e Where were you.” asked Senator Walsh, again taking the witness, “when' Mr. Fall's statement about ob- taining the loan from Mr. McLean was made to the committee? “I was in California.” “Why did you not advise the com- mittee? thought velopments." You appreciate that a greater de- gree of suspicion would attach to u transaction of this kind by reason of that fact? it best to await de- developments were awalting? Why did you not come for- ward at that time? Hap Acted Promptly. think 1 eame forward promptly. It is January, and the holldays have intervened. I think I have acted promptly.” A committee member suggested that Doheny had visited the White House “two or three weeks ago. “It was two months &go.” rejoined the witness. “T was there about a half an hour. Maybe it was longer than that. I had luncheon with President and Mrs. Coolidge and may have remained a half hour in the lounging room. other gentlemen present at the time, One of them was Mr. Quinn of California, lately”elected head of the American Legion, and another was a gentleman from Kentucky. We were invited in to take lunch Not Worried About Loan. Senator Stanfield, republican, Ore- n, asked whether Doheny had been nxious about the use Fall woull e of the money, you loaned him? None whatever.” was the reply. Did he tell you,” asked Senator Adams, democrat, Colorado, “he got money from bankers in Colorado?" ‘No_sir." Did he say he was hard pressed?” inued Senator Adams. ‘He told me about his hopes and expectations. His statements made such an impression upon me that, as an old friend, I advanced him out of my plenty. T had to relleve his n “Was there any discussion about repaying you the money put in Senator Pittman, democrat, Nevada. o_si He never said when he thought he could repay it.” ny question of security?” went on Senator Pittman. “He offered me the ranch he was solng to buy as securlty.” “Did he ever buy the ranch? Wanted No Security. “I understand he did. T would not have taken it as security if he had offered it. We talked about the ranch after he bought it.” “Did you expect him to go into your employ while he was Secretary of the Interior?” “No, after that. He often said he was not going to remain in the cablnet very long.” “When he borrowed the $100,000 he had in mind that he was going to perform only a few more official acts?" do not know.” I did not know how soon he would retire; whether he would stay throughout his term or only a small part of it “Then you attach some value to the note?” attach $100,000 value to it.” “Where do you usually keep your notes?” keep most of them in Los Angeles. I keep some in New York.” “Did you make a search for this note?” % “I made a hurried search,” said the witness, and then, taking from his ipocket a gold-bound morocco bill case, he adde “When the note was brought to me vy my son I placed it in this book pt it thers for some time. It may be that the note is in my se- curity vault in New. York. I know I have not lost it. I will have my son and my wife sssist in looking it. “As soon as I can find it T will pro- rduce it before you. I know the note is not lost.” Asked by Senator Stanfleld why the money was paid over to Fall in cash, Dobeny, sald he saw “nothing un- usual” in that He recalled his ex- periences in Mexico, where he said mmumn was' "to get, and ds d he was sccustomed to handle lu,c sums in that'form. He sald, in reply to. another question, that’ he _considered the cash feature of th b: iand ke you! There were three| v EDWARD L. DOHENY, deal “no reflection on Mr. Fall” Senator Smoot asked whether Fall, in discussing the loan, had told of the {mprovements he would have to make on the ranch property. “He told me that he would have to have $100,000 to met the ranch, returned the witness. “I wanted to satisfy his ambition to own the ranch.” “He did not tell you he had sold his newspaper for $45,0007" Senator Smoot. No, he did not tell me about that. The commlttee inquired at some length into the organization and re lationship of the various Doheny ol propertics. The witness said he owned 8 or 9 per cent, and his family 27 per cent of the stock of the hold- ing company having control over the Caiifornia naval ofl leases. He added that he was able to control the com- pany through a majority of the board of directors. “Did it occur to you that there was any impropriety in loaning money to an officer of the government with whom you had business transac- tions?” Senator Lenroot asked. Often Alds Friends. “It 4id not,” was the reply. “If T was limited to loaning my money to persons with whom I am not associ- ated and who are not my friends, I w-uld not loan any. It fs common fo= mo to loan money to my old friends. My office is fliled with them. {I do not do it because they are en- jtitled to it, but simply through | friendship. T loan them ~money in sums that may surprise you as to the amount. A loan of $100,000 to Mr. Fall was not an unusual thing with me at that time. I want to iInsist rectly, and for that reason it would [not put him under any obligations to, me. | °“You told us that it was a matter where Mr. Fall did have discretion, sald Senator Lenroot. “If he couyld exercise his discretion, do you not think the loan may have caused him to exercise it in your favor? o “That did not occur to me at that me. At the suggestion of the itness, McNab further explained the plan for an expert commission to inquire Into the lease, and Doheny 'supplemented him by again reading his prepared \statement on the subject. Senato Walsh replied that the question wa not one for experts, but involved a question of public policy, which should be determined by Congress. | “Then T do not see.” returned Do- heny, “how a proposition fair to the ! government can be passed upon. |_“You would like to have experts i pass upon the policy of leasing the {naval reserves?’ asked Walsh. “If action by Congress is necessary for the leasing of the reserves.” re- turned the witness, “then the leases which have been made are, of course, null and void.” Calls Attention to Letter. Senators Walsh and Adams called attention to portions of a letter writ- ten by Fall to Doheny on July 8, 1921, in which the Secretary said he would handle the oil leases “exactly as I think best, and will not consult with any officials of any bureaus in this department, but only with my- self. and such consultation will be confined strictly and entirely to mat- iters of general policy.” | Doheny must atandon his contention that he was not aware of Secretary | Fall's control of the ofl lease situ: tion at the time he made the loan and that he could not sustain his ar- {gument_that the leases were made iby Mr. Fall's subordinates. Just before he was excused from the witness stand, closing the hearing for the day, Doheny agreed to search again for the canceled $100.000 check and the Fall note and to present them to_the committee at a later date. ‘When Mr. Doheny concluded, his at- torney. Calvin McNab, suggested that President Coolidge be requested to ap- point a board of experts to examine all facts regarding the contract, and that if this board reported that the con- tracts at the time of thelr making were not “wise, desirable and advantageous for the government fo make the Pan- American Company reconvey to the government all interest in such con- tracts.” “I have been following the reports of the proceedings before your commit- | tee,” sald Mr. Doheny’s statement, “and have concluded that notwithstanding my authorization to ex-Secretary Fall early in December to state the full and complete facts in connection with a personal transaction had in 1921 be- tween Mr. Fall and myself. Mr. Fall 1 has been making an effort to keep my name out of the discussion for the rea- son that a full statement might be mia- underatood.” Regrets Former Silemce. “WWhether there is a possibility of such misunderstanding or not. I wish to state to the committee and to the public the full facts, and I may say here that I regret that when I wa before your committee I did not tell you what I am now telling you.” “I did not do so for the reason that such statement was not perti- nent in answer to any of the gu i tions asked me'by members of t committee and to have done 8o would {have been volunteering something in |no way connected with the contracts {made with the Pan-American Pe- troleum and Transport Company. “When asked by your chairman hether Mr. Fall has profited by the contract, directly or Indirectly, I answered In the negative. That an- swer 1 now relterate. wish to_inform the committee that on the 30th day of November, 1921, 1 loaned Albert B. Fall $100,000 on his promissory note to enable him to purchase a ranch in New Mexico. This sum was loaned to Mr. Fall by me personally. It was my own money o nd did not belong in whole or in|mated, provided that the government ; part to any oil company with which Iam or have been connected. In con- nection with this loan there was no discussion betweer” Mr. Fall and my- self as to any contract whateve: Friends for 30 Years. “This loan had no relation to any of the subsequent transactions. The transactions themselves in the order | in which . they occurred dispose, of | D! any connection that they were In- fluenced by my making a personal loan to a lifelong friend.” ‘The reason for my making and Mr. Fall accepting the loan ‘was tha we had been friends for more than thirty years, He had invested his savings . for .those years in his hom ranch in New Mexico, which I un: derstood ‘was' all that remained to him after the failure of minink in. vestments in Mexico and nine years of. public service . ia. Washington, during whi 3ot properly that T did no business with him di-| They {insisted that in view of this| t|tract. It is my understand! RIDAY, JANUARY 25, 1924. Doheny Willing to Surrender Oil Lease if Action Will Clear Fall of Suspicion Record of Events In California and Teapot Oil Leases The following outstanding devel- ments in the history of the how famous Teapot Dome oil reserve lease are given in chronological order: On May 31, 1921, control over the naval ofl reserves was transferred from the Navy Department to the Interior Department by executive :nder signed by President Hard- ng. On November 30, 1921, E. L. Do- heny sent to Washington by his son, $100,000 in cash, which he had drawn from a New York bank and agreed to lend to Mr. Fall in the nature of a friendly service to a man he had known for thirty years. On April 7, 1922, the lease of Teapot Dome naval oil reserve No. 3, In Wyoming, was made with the Mammoth Ol Company, head- ed by H. F_Sinclafr. On Aprfl 25, 1922, a contract was signed by the Interfor Depart- ment on behalf of the government glving Mr. Doheny's company Ppreference right on ofl reserve No. 1 in California when the property was leased. On April 29, 1922, the Senate adopted w resolution offered by tor La Follette of Wisconsin providing for an investigation of the naval oll reserve leases by the public lands committee of the Sen- ate, On December 12, 1922, serve No. 1 was leased to Mr: Dohey by the government. the contract being signed by Mr. Fall as Secretary of the Interior and Edwin B. Denby as Secretary of the Navy. On October 22, 1923, the inves- tigation of the naval ofl leaso was begun by ‘the public lands committee. ofl re- asked | — jattend to the management of bhis ranch. - “His troubles had been’ increased in 1918 by the death of his daughter 2nd his son. who, up to then, had taken his place in the management of his ranch. “In our frequent talks it was clear that the acquisition of a neighboring property controlling the water that flows through his home ranch was a hope of his amounting to an obses- on. His failure to raise the nece ary funds by realizing on his ex- tensive and once valuable Mexican mine holdings had made Mim feel he was a victim of an untoward fate. Time Was Ripe. “In one of these talks I indicated to him that I would be willing to make him the loan and this seemed to re- lieve his mind greatly. In the autumn of 1921 he told me that the purchase kad become possible by reason of the willingness of the then-owners of the Harria ranch to sell, and that the time had arrived when he was ready to take advantage of my offer to make the loan. “The lease on naval reserve No. ! was the direct outgrowth of the con- tract which the Pan-American Pe- {troleum and Transport Company made with the Navy, as a result of competitive bids, in which that com- pany was the lowest bidder, for the construction of certain storage facili- ties and the furnishing of fuel oil at Pearl Harbor, T. H., and in the ab- sence of that contract, the lease would never have been executed. “The Navy Department, through its representative, toock up Wwith us the question of constructing the improve- ments and facilities at Pearl Harbor and of paying for them with the royalty oll which the Navy was then obtaining from the various leases in naval re- serves Nos. 1 and 2, and of filling the tankage constructed with a large quan- tity of fuel oll. 1 was entirely fn sympathy with the purpose of the Navy, the reasons for ‘which have perbaps been better ex- plained to your committee by the Navy’'s representative, Admiral Robi- son, that I could hope to do.* I prom- ised Admiral Robison that our com- pany would at least submit a bid to perform the work under those condi- tions; that is, furnish the money to pay for the work of construction a: the harbor and of filling the ganks with oil, and received in return ryalty of the money so expended. The inci- dents up to the date of the contract and the fact that the contract was let on competitive bidding eliminate any ! possibility of favor to the company by either the Navy Department or the In- terior Department. “The megotlations for this contract between the Navy Department and the company were conducted by our local Washington attorney, who was assisted in determining the neces- |sary calculatfons by our California | general manager, who is president of i the California company. of their exchange of ideas, our Cali- fornla general manager decided that the terms of the proposed c were not such as to be of any ad- vantage to the company and that the company could not afford to take the risks attached to the performance of the contract for the conjectural prafit that might result therefrom, and he so stated in a letter which he wrote to our Washington attorney. Neither our Washington attorney nor our California general manager nor any other officer or attorney of the company had any knowledge of the loan which I made to Mr. Fall, that being an entirely private mat- ter, Involving in no way the com- pany’s funds. found that the bid of the Pan-Ameri- can Petroleum and Transport Com- Pany was the lowest.- The Washing- ton attorney of the company had con- ceived the idea of making. in accord- ance with the provisions of the call for bids, in addition to an unquali- fled bid, ernative bld showing a considi «aving to the govern- ment in iual cost of the con- structic the contract, and a recomp: the Petroleu Transport Company for such w...cr of profit by giving it an opportunity later on to extend its petroleum business in _ California through the acquisition of additional oll territory whenever the Navy might be disposed to make additional contracts for the development of its regerve. he alternative bid was considered the most favorable by the represen tatives of the government, as is shown by a letter addressed to the Washington attorney of the com- pany under date of April 25, 1922, and signed In the absence of Mr. Fall from Washington by the acting sec- retary of the Interior and the Sec- retary of the Navy." Mr. Doheny read the letter into the record. t follows: “In your proposals (A) and (B) of April 14, 1922, under each of which your bid was the lowest received by the government, your company sub- mitted two bids for the erection and conatruction of storage facilities at Pearl Harbor. T. H., and the filling of these with fuei oil. In proposal (B) you offer to accept an amount of royalty crude ofl for fulfilling the contract, which expressed in money $335,184.40 less than the amount in proposal (A), and your company offered to give the government in .addition any saving in the cost of construction under the amount esti- would' give the company preferential right to lease certain lands in Naval Reserve No. 1 in Califormia. “It is evident from our conversa- tion of il 18 that yout interpre- tation of “preferential right was to the efféct that the Pan-American Petroleum and Transport Company desiréd the right to lease certain ifled_lends in naval petroleum s well as prefer- right to lease other land in val petroleum reserve No. 1, to the extent described in Article II of con- Tk "the reserve No. 1, tio un! L mirblon e, i port Company could. get & lease tz cortain lands, your company Woyl not to cnuru ‘lnt: 1: mounulnl- der terms outline T8> ‘and_ preferred §n:A)¢uvamq-nt e T ops roment of the Interior | | tracts of land referred to above wiil ofl at the posted field price to the value | As a result! tract | “When the bids were opened it was | Pan-American | looks favorably. upon proposal (B) {for the following reasons: First, it provides for an immediate and cer- tain saving to the government of $236,184.40 over proposal (A); second, you suggest that it gives opportunity to effect an additional possible sav- ing of a considerable amount should the contractor succeed in erecting the storage facilitles for less than the amount estimated. “It {s my understanding that unless you secure definite assurance from the department that your company would obtain leases for certain tracts in naval reserve No. 1 the Pan-Amer- ican Petroleum and Transport Com- pany would prefer not to enter into a_contract as outlined in proposal (B). In order that the government may take advantage of a contract embodying the terms outlined in pro- posal (B), I wish to advise you that the Department of the Interior will agree to grant to the Pan-American Petroleum and Transport Company, within one year from the date of the delivery of a contract relative to the Pearl Harbor project, leases to drill the following tracts of land: The NE. i of section 3. T3IS. R24E, and the strip of land lylng fn the east half of section 34, T30S, R24E, bounded on the east by the tract of land to be leased to the Belridge Oil Com- pany. b Give Royalty Rates. “The rate of royalty which the de- partment will require in the two be greater than the following: or all oil produced of less than ~grees Baume: n that portion of the average production per well not exceeding twenty barrels per day for the calen- production per well twenty barrels and mot more than fifty barrels per day for the calendar month, 14 2-7 per cent. “On that portion of the average production per well of more thag fitty barrels and not more than 10 barrels per_ day for the calendar month, 16 2-3 per cent. “On that portion of the average production per well of more than 100 barrels and not more than 200 barrels per day for the calendar month, 20 per cent. “On 'that portion of the average production per well of more than 200 barrels and not more than 300 \barrels ner day for the calendar month, 25 per “On 'that portion of the average production per weil of more than! 1300 barrels and not more than 400 barrels per day for the calendar month, 30 per cent. “On that portion of the average production per well of more than 400 barrels per day for the calendar month, 35 per cent.” Cites Figures in Leane, “These facts conclusively demon- strate he continued, “that there could not have been any collusion be- tween the Pan-American Petroleum and Transport Company and any- body whomsoever. “The original contract provided for an expenditure by the company of $6,466,795.50, which amount reduced through economies made by the com pany in its construction work and its purchase of fuel oil by about $525,000, which, together with the sum of $235,000, the difference between the company's unqualified bid and its! alternative bid, amounts to $760,000. To this might fairly be added the sum of $120,000, by which sum the i company’s ‘unqualified bid was lower than its competitor's bid, thus making the contract an extremely advantage- ous one for the government and, as before stated, uncertain in its benefits to the compan “In addition, the government has received, under a_provision of the contract, the benefit of a decline of 50 cents per barrel in the purchase of {fuel oil furnished it, amounting to iabout $125,000. The construction work under this contract is practically completed and the fuel oil has been delivered into the tanks at Pearl Harbor. “Later in the year 1922, and nearly a vear efter I had made the loan to Mr. Fail, the Navy Department, de- siring _additional _storage facilities and petroleum products at Pearl Har- bor, Tequested that the original con- {tract of the Pan-American Petroleum Jand Transport Company be supple- imented or that a new contract be {made providing for the additional iwork and supplies, as is shown by the letter of the Secretary of the | N dated November 39, 1922. “For some time negotiations were carried on in which the president of { our California company, who came on to Washington for that purpose, | together with. our Washington at- | torney. discussed all phases of the rroposed cupplemental arrangements with_the representattives of the Navy and Interfor Departments. Declared Risks Great. “On the Jast day before the contract was signed, the President of the Cali- |fornia company absolutely turned down the contract stating that he be lieved there was no adequate bene- fits commensurate with the great risks assumed by the advancement on the part of the company of the necessary millions to pay the con- tractors, who were to_ perform the construction work at Pearl Harbor, and to furnish the petroleum prod- ucts required. ‘The estimated expenditure to be made under this supplemental con- tract for tankage facilities and pe- troleum products is $9,017,000. about one-half for petroleum supplies and { one-half for storage facilities. The Work is well under way and about £1,000,000 has been expended by the company on it. “This contract gaye to the y just that service from the naval re- serves that the Navy Department, through its acting engineer head, de- sired, which was immediately of avail- ability of its anticipated productions, delivered where the Navy wanted it, lat the time it wanted it, in such quantities as were needed, and of the character and * quality which the Navy's requirements called for. h addition, & burden, the advant- age of which to the Navy can scarce- 1y be measured, was assumed by the company; that of providing for the Navy in southern California one mil- lion_ barrels of free ofl storage, and of devoting 3.000.000 barrels of the company’s Atlantic seaboard storage to the holding of that gquantity of fuel oil, subject to the Navy's call for any time for a period of fifteen years. \ i i Navy Held Option. “The contract also gave the option to the Navy of purchasing at the company’s terminal etation at San Pedro such petroleum supplies as the Navy may require at 10 per cent below the market price, “In_closing, 1 wish to state that I left Los Angeles on January 17 to come to Washington to present & statement of all the facts to the | liberty “bonds SEEKS OKLAHOMA LAND LEASE AIRIN State Senator Also Suspects Election Connected With Teapot Dome Case. By the Associated Press. OKLAHOMA CITY, Okla, Januar( 25.—The granting by A. E. Fall, for- mer Secretary of the Interior, of g lease on Quapaw Indian zinc and lead mining land in northeast Oklahoma would be offered &s tho subject for a Unlted States senatorial committes Investigation under a resolution which Senator Courtland M. Feuquay of Chandler has prepared for in- struction in the upper house of the state legislature. The resolution also would request the Senate committee investigating the Teapot Dome naval oil leaso te develop further the recent testimony of W. G. Wahiberg to the effect that ;llrry F. Sinclair, president of the inclair Ofl Corporation. had £ over to his friend, (‘o!.l 'l‘}mlz Zevely of Muskogee, Okla., $25,000 i~ 1 which were not counted for to him (Wahlberg). - Election Facts Sough s inquiry would be o termine wheiher any of the mons was brought into Oklahoma for {1+ last gubernatorial campaign, accord Ing to the resolution, which cails at tention to the testimony given duris the impeachment trial of former Go. i’hmfix'gnomal:r?" indicating e be’;n done. SERLES At . The mining lease now Eagle-Picher Lead Company co prises approximately 2,100 acres restricted Indian land in the Quap; Iestriction, the richest section of tt.: 'klahcml lead and zinc fields. 1 was granted by the Interlor Depart- ment last August under the act of . cember, 1921, governing the leasing o such properties and yields mans tho sands of dollars in roy; Indians each year. TRities oic GIVEN LEASE RENEWAL. rumors such hag held by the Indian Land Holdings of Les: Company in Rich Section. JOPLIN, Mo, January 25.—T! Eagle-Picher Lead Coempany w granted a renewal of a lease o approximately 2,100 shares of r. stricted Indian land in the Quapa reservation of northeast Oklahon last August. The land is situated the richest section of the Oklaho: zine andale?d district and vields man; usands in royal ans pvtld yalties to the Indian According to 0. K. Chandler « Miaml, Okla., superi (Enfl»;:‘dolr(“" Quapaw Indian agency, the renew: of the lease was granted the Eag! Picher Company by the Departme of the Interior at Washington in & i:r?ance ““I(h xr;l act of December 921, covering the le: i s g asing of Indlan Between 8.000 and 10,000 o restricted Indian acreage a’(‘nres[ he Oklahoma mining field is under lease to various mining companies, includ ing the Quapaw Mining Company. o’ which Charles M. Schwab, the steci magnate, 18 the principal owner. The Schwah interests obtained a lea e on approximately 2,200 acres of the land last March. " The mining land has ylelded mere than a milllon dollars in royalties since 1921, which is the part the Quapaw Indians share the rich mining holdings. MELLON IGNORES COUZENS’ QUERIES IN DEFENDING PLAN (Continued from First Page.) such a requirement, and the Treasu:: Secretary said today he had recom- mended incorporation of the provision in the tax bill. Repeal of the excise tax on sof drinks and beverages was tentativel agreed on today by the House wavs and means committee. which is re vising tax legislation. Chairmar Green estimated $11,000,000 in revenue thus would be lost. Committee members reported that thus far all attempts to repeal the tax on automobiles and accessorie had been defeated. The question, however, has not been disposed of Consider Party Bill. House republicans studled the pro- posal of Representative Treadway, Massachusetts, a republican member of the ways and means committee. that they prepare a party tax bill today, while the committee sought to conclude its work on the miscellane- ous or so-called nuisance tax rates. Mr. Treadway put forward the part: suggestion yesterday after attacks had been made by the democrats on the Mellon bill on the floor of the House, and as a resuit of their failure to accept the repuolicans’ offer frame a compromise revenue measurc on the basis of the income rate sug- gestions of both Secretary Mellon and Representative Garner, democrat Texas. A party measure, fome me bers predicted, would follow closely the rates proposed by Mr. Mellon. Upon completion of the miscellane- ous tax rate schedules the committee will consider the recommendations of Mr. Mellon involving greater exemp- tion for earned than unearned in- comes and that community property income be taxed against one person instead of permitting the filling of separate returns by husbands and wives, a5 allowed in some states Representative O'Connor, democrat New York, made public today a letter to Joseph S. McCoy, actuary of the Treasury, in which he said he had asked the Treasury on January 17 for to committee and, having been informed that Mr. Fall was in New Orleans, took that route in order to apprise him of my intentions and found him already in entire accord with my purpose.” 27,840 ACRES LEASED. California Records Show Extent of Doheny Holdings. By the Associated Press. SAN FRANCISCO, January 25.— Doheny leases on government ofl lands in California, under the name of the Pan American Petroleum and Transport, include 27,840 acres, or forty-three and one-half sections of the fifty-eight sections in the oil re- serve, according to maps prepared by the state bureau of mines. - The Doheny leases inciude lands conceded to of immense value. Some of it has been drilled, but much is untouched. The land is in the rich Elk Hills ofl fleld, on territory five to thirteen miles from Taft, Calif. FALL FOREMAN CALLED. By the Associated Press. ALBUQUERQUE, N. M., January 25. —Tom Johuson, foreman of A. B. Fall's ranch at Three Rivers, N. M., left there yesterday for Washington, where. he "has been subpoenaed as ‘witness before the Senate commiittee inv the Teapot Dome oll § to a report here to- |mu report, sald the B estimates on certain tax figures which had not been received. He charged the Treasury neglected dem- ocrats and asked if “there is any- thing to hid 5.CENT FARE BILL UP. Hearings on McKellar Proposal to Be BResumed Monday. Hearings on the McKellar 5-cent street carfare bill will be resumed before the subcommittee on public utilitles of the Senats District com- mittee at 10:30 a.m. Monday, in the office of the District committee. Sena- tor McKellar will continue his state- ment in advocacy of the 5-cent fare New—lron Fields Opened. Iron flelds in Brazil are so rich and promising, though hardly touched. that they will soon eclipse others that are world famous, according to Dr. Oliver C. Farrington, curator of the Fleld Museum of Natural History in Chicago. Dr. D. W. Nichols, asso- clate curator, in anticipating the. for- illan {ron flelds were not on]{ vast, but of the highest grade—so high in fact, that the iron flelds over which Germany and France have been quarrejf unimpertant. by comparizon.