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Show 748 HISTORY OF PUBLIC LAND LAW DEVELOPMENT could be paid in oil certificates which could be exchanged for oil, storage facilities, or cash. The strange storage-facilities agreement contemplated that the government would relinquish two-thirds of its oil royalty in order that the lessee might build tanks to store the other one-third of the government royalty. In Teapot, there was no evidence of the danger of drainage from private adjoining landowners. The reserve actually contained much less oil than had been anticipated, thwarting what was said to have been Sinclair's boast that he would make over $100 million on the deal. Sin-clair was alleged to have paid Fall well over $300,000 for the leases. The Teapot Dome lease was cancelled on the ground of a fraudulent conspiracy between Fall and Sinclair in Mammoth Oil Co. v. United States,34** which effectively documents the case against Secretary Fall. Fall was later convicted of accepting a bribe from Doheny350 although Doheny himself was acquitted of giving the bribe on much the same evidence. Sinclair was convicted only of contempt of the Senate for refusal to answer, among others, questions relating to the purchase of outstanding claims in the Teapot Dome Reserve.351 Recent historians have been reluctant to consign Fall to the villainous role generally painted during the twenties. In a light most favorable to him, it must still be said that it is unlikely that his sudden wealth 349 275 U.S. 13 (1927). 350 United States v. Fall, 49 F.2d 506 (D.C. App. 1931) cert. den. 283 U.S. 867 (1931). ^Sinclair v. United States, 279 U.S. 263 (1929). Other litigation involved Attorney General Harry M. Daugherty (McGrain v. Daugherty, 273 U.S. 135 [1927]) and H. M. Blackmer who will go down in history as contributing an interesting point of Conflict of Laws in Blackmer v. United States, 284 U.S. 421 (1932) . There was also litigation with Standard Oil in connection with school lands in a portion of Reserve No. 1. West v. Standard Oil Co., 278 U.S. 200 (1929) ; Standard Oil Co. v. United States, 107 F.2d 402 (9th Cir. 1940) cert. den. 309 U.S. 673 (1940). was from money loaned to him, as he so earnestly contended. He also displayed poor judgment in lying initially about the source of the loan. Whether he actually believed that the reserves were in danger of drainage and that the international situation necessitated immediate development are matters which perhaps can never be determined with any degree of accuracy. The exclusive jurisdicition of the Secretary of the Navy over outstanding uncan-celled leases was confirmed by congressional action in 1928.352 Teapot was sealed in 1927 and since then has returned to the government only nominal grazing fees. 353 In 1956354 there was a general revision of the statutes relating to the reserves. The Secretary of the Navy is given discretionary power to "explore, prospect, conserve, develop, use and operate" the reserves. In 1962 portions of the naval oil shale reserve in Rifle, Colorado, were authorized to be leased for research under the supervision of the Interior Department.355 The Secretary's powers may be performed directly or through leases or contracts. In Reserve No. 1, the Secretary is authorized to enter into cooperative or unit plans involving land owned by the government and privately owned land which is within the reserve or within the same geologic structure. Reserve No. 2 has been leased for years because of drainage problems, the leases being administered by the Secretary of the Navy under rules and regulations promulgated by the Secretary of the Interior.356 Whether the reserves should be turned over to commercial exploitation by private oil companies has been considered often 352 45 Stat. 148 (1928). ¦¦"Oil: Footnote to a Scandal," 53 Newsweek 62 (Feb. 2, 1959) points out that in 1958 the revenue from grazing leases was $758. 354 The present statutes are found in 10 U.S.C. § 7421 (b) et seq. (1964) . 35510 U.S.C. § 7438 (1964) . 358 43 C.F.R. § § 3120.2-3120.3-2 (1967). |
