Evening Star Newspaper, December 1, 1926, Page 5

FALL TELEGRAM IS READ TO SUPPORT SECRECY CHARGE (Continued from First ®age to Congress June 7, 1922, in re- sponse to the resolution of Senator Robert M. La Follette asking for in- tormation about th> oil leases and the naval reserves. His letter said he had been consuited and had approved. Attorney Frank J. Hogan of coun- el for Doheny, gave such information before the jury in the course of his cross-examination of E. C. Finney, First Assistant Secretary of the In- terior. Finney Identifies Letter. Finney identified Public Document 210 of the Sixty-seventh Congress, which is the official designation of the message of President Harding to the Senate, in answer to the La Follette vesolution, and testified that he col- iaborated in the -preparation of the data on which the message was based. The defense, it is expected, will read this document to the jury in the; rourse of the presentation of its case | and will lay great stress upon it, as | showing presidential sanction for the oil leases, and approval of the action of Fall by President Harding. Judge Finney proved a valuable wit- ness for the defense, although offered by the Government, through his ad- miesion, under the cross-examination of Mr. Hogan, that the witness had handled the negotiations for the leas- ing of Naval Reserve No. 2, during the absence of Secretary Fall in De ember, 1921, He also stated that the recy in the nego- -, suggesting that the | ct was a part of | and should be | r plans of the N kept confidential. The witn, also identified letters of Secretary of the avy Denby and Aseistant Secretary Roosevelt, urging leases-and construc- tion of storage tanks. Upholds Value of Lease. Judge Finney also aided the defense when he explained that the Doheny leare was an advantageous one for the sovernment and compared favorably with the leases on other portions of 1he naval reserves, from which larger ties were recefved in some in- stances by the Government. He en- tered into the technical differences in quality of oil, known condition of the land as to oil deposits, and the like. Attorney Mark B. Thompson of New Mexico, of counsel for Fall, took up the cross-examination of Finney after Mr. Hogan. While the testimony of Judge Fin- ney was regarded ‘as being favorable 10 the defense, Attorney .Owen J. Roberts, chief counsel for the Gov. ernment, stated today that it was not unexpected. The bulk of the favor- able evidence, he declared, had been given by Judge Finney at the trial n Francisco and of the civil suit in § he had told his story of the leases before the grand jury which returned the indictment under which the ac- cused are now being tried. Mr. Roberts had expected to close the case for the Government this evening if a night session was held. A conference between counsel and Justice Hoehling resulted in an an- nouncement that there would be no night session this evening, so that the Government’s case will probably be concluded tomorrow. Roosevelt Awalts Summons. Theodore Roosevelt is in Washing- ton today, awaiting summons by Mr. Roberts to take the witness stand for the prosecution. He will be called to tell what he knew of the plans sur- rounding the birth of the proposal to huild two ofl tanks at Pearl Harbor, Hawali, for the storage of oll to aid the naval defense of the Philippine Islands and of the western coast of the United States from a threatened attack by the Japanese navy. President Harding's letter of trans- Meyer’s Shop An Unusual 850 and $60 Rogers Peet Suits, Now . . $65 and $70 Rogers § 49 Peet Suits. Now . . i All Sizes Rogers Peet Clothing mittal accompanying his report to the Senate reads: “To the President of the Senate: “On April 29 the Senate adopted resolution directing the Secretary of the Interior to furnish the Senate with certain documents, correspond- ence, papers, flles, executive orders and all contracts for drilling ofl wells on naval oll reserves of the United States, with all detailed information relating thereto. I am today in re- ceipt of a letter from the Secretary of the Interfor, in which he advises me of his compliance with the resolution of the Senate and in which he makes to me a full and comprehensive re- port, probably not contemplated in the resolution, in which he gives to he details of the handling of al' na reserves petroleum matters up to the present date, including full ex planation of the contracts for the dis- position of oil and the necessity for such action as has been taken. Had “Entire Approval.” “The report, with the exhibits there- to attached, I am sending to the Sen- ate herewith, with the hope that they may be referred to the Senate com- mittee on public lands, for such ready reference and informaion as they will afford the committes in making the investigation contemplated by the Senate “I am sure I am correct in constru- ing the impelling purpose of the Sec- retary of the Interfor in making to me this report. It is not to be con- strued 28 a defense of either specific acts. or the general policies followed in dealing with the problems incident to the handling of the naval reserves, but is designed to afford that explana- tion to which the Senate is entitled, and which will prove helpful to the country generally in appraising the administration of these matters of great public concern. I think it is only fair to say in this connection that the policy, which has been adopted by the Secretary of the Navy and the Secretary of the Interlor in dealing with these matters was sub- mited me prior to the adoption thereof, and the policy decided upon, and the subsequent acts have at all times had my entire approval.” (Signed) “WARREN G. HARDING, “The White House. Finney Again on Stand. Finney was again put on the stand when court reconvened at 10 o'clock this morning, a half hour later than its usual hour. Mr. Hogan sought to bring out that J."J. Cotter for the Pan-American Co. was the leader in negotations for the Pearl Harbor contract and that the Navy Department had objected to the cost-plus plan. Finney in_his testimony established this fact. He stated in response to question that the Navy Department had desired to put through the lump- sum plan. Between January 22, 1922, and April 15, 1922, Finney sald that he had talk- ed with Fall about the exchange of oil for the construction of the Hawallan_tanks and had told Fall that the Navy Department had said there was ample authority under the act of June 4, 1920, to make the lease. “That was your opinion also?? Hogan asked. “Yes, that was my opinion then, and it still is,” Finney replied. Fall Was Not in Washington. The greater portion of the cross- examination this morning was of a highly technical nature, the real pur- pose of the defense being to draw out information tending to bear out its contentlon that the lease awarded to Doheny’s company was 2 good thing for the Government. Mr. Hogan asked Finney if he had had any knowledge of the alternate bid of the Pan-American Co. prior to the opening of the bid. He declared he had none. He testified that Fall 1331 F St. 42 I en S l'cn 1= in This Special Reduction MEYER’S SHO “Everything for Men” 1331 F Street had had nothing to do with the draft- ing of the specifications and was not in Washington at that time. Mr. Hogan in his cross-examination brought out the reiteration of other testimony that Fall had told Finney that Director Bain was going to han- dle the matter for the Interior De- partment. Coples of the competitive bids sub- mitted by the General Petroleum Co., the Standard Oil, Associated and Pan- American Companies were ordered | produced and their terms read to the Jury. By this procedure the defense expected to impress on the jury the fact that the Government had made no sacrifice to the Pan-American Co. in the lease involving the drilling of 22 wells in number 1 reserve and also that the royalties were not as exces- sive as Government counsel contended. Disagreed Over Authority. ‘When Mr. Hogan completed his cross-examination of the witness with his reference to the Harding letter, Mr. Thompson, on behalf of Fall, entered into a long discussion of procedure followed in dealing with leases in the Interior Department. During this testimony the witness once more was called upon to refer to the contention of Osear Sutro,attorney for the Standard Oil Co. of California, that the Interior Department Secre. tary had not authority to enter into the Pearl Harbor fuel storage tank contract. “After your conversation with Mr. Sutro, did you report to the Secretary that you had shaken his views on the matter?” asked Mr. Thompson. “No, I told the Secretary I did not agree with Sutro’s views and that I thought they were wrong,” replied the witness. This concluded Mr. Thompson's questioning, and Mr. Hogan took the opportunity of getting the witness to emphasize the fact that other oil com- panies rendered ‘“no_ service to the Government in exchange for the leases, but merely took out the oil and paid royalties.” Mr. Roberts, on redirect examina- tion, desired to clear up the matter of oll leases in reserve No. 2, and he had the witness step down from the stand and mark off the places in question on fendants and had no direct bearing, he declared, on the contract of the Pan-American Co. Justice Hoehling, after a sharp tilt between counsel, decided that the letter should be read. The purport of this communication was to the effect that the Union Oil Co., through E. W. Clark, its execu- tive vice president, requested Mr. Penfleld to bring to the attention of the Secretary of the Interior and the Secretary of ths Navy the fact that the Union company was disappointed | at not having had an opportunity to submit a bid on the naval reserves. The letter reminded the Secretary of the Interfor that the Union Oil Co. was ‘“very much in the ofl business out there’” and expressed the hope that the department would bear the company in mind if any other bids are requested at a future time. A similar communication, it was said, was being sent to the Secretary of the Navy. The Government's purpose in intro- ducing this matter was to strengthen its contenticn that all had not been wide open in the solicitation of bids for the naval reserves. The court at this point adjourned for lunch. Finney Tells Story. Judge Finney took the stand at the opening of the afternoon ses- sion yesterday and at once was plunged into a long, detailed story of the maval reserve ofl leases and contracts to build fuel storage tanks, which were awarded to the Pan- American Petroleum and Transport Co., the Doheny concern. The witness said that under the organization chart of the Interlor Department he was charged with the execution of leases of oil and coal lands and that in this capacity he handled all of them except when absent from the city, in which event Mr. Fall took over the duties. When Fall first came into office, Judge Finney said, he asked ques- tions concerning pending claims of tha Stonotulu Ol Co. In- Naval Re- | serve No. 2. In. November, 1921, the witness continued, “a proposition was up for exchanging royalty oil for fuel oll for the Navy,” and Fall, from a green-colored map. It is the Govern- ment's contention that ofl leases in this reserve were granted other cor.- cerns at much higher royalties than the Pan-American Co. paid In No. 1. Willing to “Even Up.” The witness, in answer to question- ing by Mr. Roberts, reiterated his tes- tiimony of last night that the Pan- American Co. objected to the royal- ties it paid on the 22 wells in No. 1 re- serve and applied for a reduction. Finney explained to the company, He said, that this could not be granted because the award was made to Do- heny’s concern in competitive bidding. He told Fall, however, and the latter said, the witness declared, he ‘“would be willing to grant leases joining the 22 wells at a lower rate to even up on the other bid.” This conversation took place in Nov- ember, 1921. Mr. Roberts asked Judge Finney if he had any knowledge of the financial transaction between Fall and Doheny at that time, to which the witness replied in the negative. At this point the Government called as a witness Mrs. Olive C. Ham, the first woman who has yet testified dur- ing the trial. Mrs. Ham was identified as the private secretary to Walter S. Pen- fleld, Washington attorney for the Union 01l Co. of California be; precipitated a sharp clash with Mr. Hogan when he asked the witness to {dentify a letter writ- ten to the Secretary of the Interior by Mr. Penfield. Fall was absent on April 28, 1922, the date the letter was received at the department. Mr. Hogan objected to its introduc- tion since it affected one of the de- $4.45 $4.45. Velvet pumps much in sions. The cut steel buckles real Bargain! None Men's Daniel Green tailored felt “Comfy"” moceasins; “Hylos,” with adjustable collar, or slip- on mules. Several at- tractive colors— $1.95 and $2.50 “JO MEN’S Fashionable $5 Velvet Pumps—with handsome $2.00 Cut Steel Complete $7 outfit, special at mand for midwinter dress occa- tached, with “Hold Fast” fasten- ers—easily put on or taken off. Dan’l Green “Comfys’ for Women “Comfty" slippers and bootees, collar, able Daniel Green soft, noiseless, padded “Comfy" soles— “Lady Luxury” The perfect Silk Hosiery— belongs on every gift list! Service weight thread silks or chiffons—or silks with lisle tops, in all new colors. $1.35t0 $1.95 Yuma, Ariz., telegraphed him to have the Navy proposition for the ex- change of the two grades of ofl “in writing.” The telegram added: “Suggest mo action be taken until we have opportunity for conference.” The department, however, proceeded to carry out the proposition of ex- changing crude ofl for fuel ofl, which was to be stored. Plans Were Submitted. Director Bain of the Bureau of Mines and Fall went West and with ofl concerns on the Pacific Coast, Jadge Finney ex- plained, and upon their return Bain “prepared some plans and proposals and I went over them with him.” These proposals for the construction of the tanks were malled out to the Pan-American Co., the Associated Ol Co., the Standard Ol Co. of California, J. G. White Engineering Co. and Ford, Bacon & Davis, engineers. After some difficulty with the ‘“cost- Dplus” feature of the proposals, a re- vision was made and the time ex- tended for a reply until April 15. “When Fall left for New Mexico April 13,” said the witness, “he asked me when the matter of storage oil would be closed, and I told him not until the bids were opened on April 15" On the previous day Fall wrote to Secretary Denby, suggesting that the crude ofl in the naval reserves be sold for money and the proceeds used in constructing the tanks, as he antlcipated difficulty in getting a favorable answer to his proposals. 'n]rep\y was received, the witness ald. Judge Finney said the Standard Ol ‘o. of California expressed doubt that Yes! We'll Cheerfully Cash Your Xmas Savings Checks This 1s a Smart de- at- A At all our stores—except F and G St. shops In the Realm of Gift-Slippers so completely express Xmas warmth and cheer as— in, Girls' and boys' de luxe with adjustable Both with inimit- $1.75 and $2 414 9th Tallored, felt trim “Comfy" slippers; dainty negligee col- ors— Quilted satin boudoir slip- pers, leather or padded “Comty” soles— Daniel Green ‘“‘Mules"—sat. Patent or red kid— D'Orsay slippers with backs satin or black and _colored leathers— 3212 14th 233 Pa. Ave. S.E. “Women’s Shop”’—1207 F C. WEDNESDAY, DECEMBER 1, 1926. the Secretary of the Interior had au- thority to enter into such a contract. Bids were opened, however, in Fall's office at noon, April 15, and were re- ferred to A. W. Ambrose, petroleum technologist, for report. The latter recommended the second of two pro- posals submitted by the Pan-Amer- jcan Co. be accepted, as it was the most advantageous to the Govern- ment from every standpoint, said Judge Finney. | On April 17, the witness said, he sent this telegram to Fall at Three iuvers, N. Mex.; “Pan-American_ bid best offered. Should be accepted. Sug- gest you authorize completion of the contract. Why not make public de- talls of all naval reserve contracts?” To which Full replied that if Ad- miral J. K. Robison and Secretary Denby thought best to “close deal and make public entire contracts.” The award then was made to the Pan- American Co., after which Joseph Cotter, its attorney, called on Finney and asked for some leases as “‘assur- ance” that his concern would get more. “It was agreed that the com- pany be given two leases,” Judge Fin- ney said. ! Over the objection of the defense Mr. Roberts succeeded in offering in evidence a memorandum to emploves of the Interior Department, dated April 13, 1922, which stated that the matter of naval oil leases was being handled by the Secretary of the Navy and the Secretary of the Interior, and no information about them was available. Testimony strengthening the de- fense's contention that Fall, absent from Washington at the time, prac- tically had nothing to do with the awarding of the lease and contract to the Doheny company was brought m' the attention of the jury last night. Judge Finney, recalled last night to the stand, turned out to be a valuable witness for the defense under the adroit and persistent cross-examina- tion conducted by Attorney Hogan at the first evening session. Finney Drew Contracts. Judge Finney testified, in effect, that the contracts were drawn up and awarded by himself, the Navy De- partment, the Bureau of Mines and petroleum experts of his department while Fall was in or en route to Three Rivers, N. Mex. Another important point brought out by the defense was that secrecy of the Interior Depart- ment in connectlon with the leases was maintained at the explicit direc- tion of Assistant Secretary of the Navy Theodore Roosevelt because of the war plans of the Navy. Step by step, Hogan elicited from the witness the negotiations leading up to the award of the Pearl Harbor contract to the Pan-American Co. in April, 1922, and the subsequent leas- ing of the Elk Hills, Calif., oil re- serves to the same company in De- cember, 1922. Hogan asserted in his opening statement that the defense would show that the Navy Depart- ment's interest in leases and con- tracts involving the naval reserves precluded all possibility of collusion between Fall and Doheny in favor- ing the latter's company. During the cross-examination he developed that Fall had never given any instructions to A. W. Ambrose, petroleum technolqgist of the Bu- reau of Mines, or to Dr. Bain, as to which bid should be recommended. And to drive this point home the defense attorney also brought out that Doheny, then in Mexico, at no time had sought to influence the de- cision. Mr. Ambrose was sald by Finney to have recommended acceptance of the Pan-American bid, after which Finney called a conference with Ad- miral J. K. Robison, then chief of the Bureau of Engineering of the Navy, before asking Fall to tel graph for authority to accept it. 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