Villains? Goat?

"People are tired of hearing of these oil leases."--Dr. Hubert Work, onetime (1923-28) Secretary of the Interior, now Chairman of the Republican National Committee.

The Oil Scandals, as everyone knows, began in the administration of President Harding. It looked last week as though the oldtime sins of commission had been followed, in the Coolidge era, by sins of omission.

Lease. Besides the Teapot Dome oil reserve in Wyoming, whilom Secretary of the Interior Albert Bacon Fall leased to Oilman Harry Ford Sinclair a tract adjacent to Teapot Dome on the north, in the field known as Salt Creek. Some 42 miles north of Casper, Wyo., the Salt Creek field is bigger than Teapot Dome. Its 2,000 wells produce some 38,000 bbls. per day, about 19 times the output of the 63 wells in Teapot Dome.

As in the case of the Teapot Dome lease, there were irregularities in this Fall-Sinclair transaction.

Investigation. Last January, while investigating Teapot Dome, the Senate Committee on Public Lands discovered that just before and just after Dec. 20, 1922, the date of the Salt Creek lease, Oilman Sinclair gave or loaned Secretary Fall $35,000. The day the bids for the Salt Creek contract were supposed to close, Oilman Sinclair was on a train returning from a visit to the Fall ranch in New Mexico. It was nine hours after the legal time was up when Oilman Sinclair sent in his bid, by telegram from Pratt, Kan. Simultaneously, Fall wired Assistant Secretary of the Interior Edward Clingan Finney not to be too formal about the bids. The belated Sinclair bid was accordingly admitted. When Fall returned to Washington he threw out twelve other bids and awarded the contract to Sinclair. It was a contract to extract oil from U. S. property on a royalty basis. In Fall's advertisement for bids nothing had been said about including in the lease an option to renew if the successful bidder found his bargain profitable. Yet into Sinclair's five-year contract was inserted such an option, to renew for another five years.

Renewal. The discovery of all these facts was in progress last winter just before and at the moment that Secretary Work had to decide about letting Sinclair exercise his Salt Creek option. Besides the Senate's investigation, the trial of Sinclair for criminal conspiracy was then fresh in Washington's mind. Sinclair's was an extraordinary name indeed, but Dr. Work took no extraordinary precautions. He simply asked the Solicitor of the Interior Department if he thought Sinclair's option was valid. Solicitor Ernest Odell Patterson said he thought it was.

Secretary Work renewed the contract. Last week, after the contract had been voided by Attorney General Sargent, Dr. Work cited a letter written by Senator Walsh last winter in which the Inquisitor had said: "I am unable to understand how the Government can escape the obligation to renew the contract. . . ." Dr. Work apparently ignored or failed to comprehend the whole import of what Senator Walsh had said. For Senator Walsh had qualified his view that the option was inescapable, by saying: ". . . except it [the U. S.] treats it [the lease] as void or voidable." Senator Walsh's opinion at that time was tentative. Further investigation of the Salt Creek affair was in store and Senator Walsh further said: "I have not been able to give the subject the study that it ought to have in order to arrive at a conclusion such as would be reached by a good lawyer."

Further Investigation. Last April, stirred by the Senate's activity, President Coolidge ordered the Department of Justice to look into and report on the Salt Creek lease to Sinclair. Attorney General Sargent turned the matter over to Assistant Attorney General William J. ("Wild Bill") Donovan. The result was awaited attentively, not only by Senator Walsh, but by Senator Capper of Kansas. The latter, a faithful Republican, did not seek to embarrass the Administration, but there were potent oil men in Kansas who wanted to know what was what. Not the lease provocative feature of Oilman Sinclair's Salt Creek contract was that it was exceedingly bad business for the U. S. Prices had risen and Sinclair was getting high grade oil from the U. S. far below the market.

As late as Sept. 20, Senator Capper asked for news at the Department of Justice. Assistant Attorney General Donovan said a decision would not be issued ''for several weeks."

Exposure. The alert Kansas City Star, the Universal Service (Hearst), and the arch-Democratic New York World were on the job. On Oct. 14. the World said that, with Senator Walsh's assistance, it was going to expose "another oil scandal." On Oct. 15. the World and Senator Walsh began telling the story of the Salt Creek lease and its renewal. On Oct. 16, the World continued the story. That afternoon. Attorney General Sargent signed and issued an opinion holding the Salt Creek lease void in the first instance and its renewal void as a result.

This was not a coincidence, President Coolidge, seeing what the World and Senator Walsh were doing had demanded from his Attorney General immediate delivery of the opinion he had requested 224 days before. If it was obvious that the World and Senator Walsh had chosen a politically important moment to force the issue, it seemed equally obvious that Attorney General Sargent had meant to delay his unfortunate news until after Election Day.

Action. The present Secretary of the Interior, Roy O. West, at once acted on Attorney General Sargent's advice and notified Oilman Sinclair's Crude Oil Purchasing Co.* to stop removing Salt Creek oil. To some 100 other lessors in the Salt Creek field, word was sent that the U. S. elected to take all its royalties in cash until further notice. The Department of Justice began preparing a new fraud suit against Oilman Sinclair. Secretary West cancelled all extension contracts for U. S. royalty oil, and ordered investigation of all oil leases made by Fall and still running. Secretary West locked the pump after the oil was gone.

"Villains." The U. S. public speculated as to the relative "villainy" of the principals in the Salt Creek affair. To Oilman Sinclair's record, another black mark was added. It hardly showed against the background. Similarly with Albert Bacon Fall.

To Attorney General Sargent, Assistant Attorney General Donovan, Dr. Work and Secretary West, a "conspiracy of silence" was imputed by Senator Walsh.

To Dr. Work, shrewd businessmen and active Democrats charged gross negligence. Republicans varied in their opinions and said he had been either unfortunate or thickheaded. Most embarrassing to Dr. Work was the comment of the strongly pro-Hoover New York Telegram, leader of the 26 Scripps-Howard chain-papers. Said the Telegram: "Stupidity is the most charitable interpretation. . . . Dr. Hubert Work is a liability, not an asset, to Herbert Hoover. . . . It has long been our opinion that Work is a lightweight. . . . Herbert Hoover would immeasurably strengthen his position with millions of American voters if he would drop that particular pilot."

Goat? Where there are "villains," there is likely to be a "goat." Hard though the thing was on Dr. Work, danger as well as pain threatened the man to whom Dr. Work pointed as the author of his error--Solicitor Ernest Odell Patterson of the Interior Department, the one lawyer whose opinion Dr. Work sought in renewing Sinclair's lease. Dr. Work is, or was, a bland, trusting, optimistic soul, full of cheery conversation and good spirits. Solicitor Patterson was his own choice. He had him appointed in 1926 by President Coolidge--a typical smalltown lawyer-politician from the Midwest, born and raised in Iowa, taken to Washington by a patron (Roosevelt's Secretary of the Treasury Leslie Mortier Shaw), experienced in the work of the Department by two years there (1906-08) as a junior attorney, further trained through holding offices as mayor, judge and state senator in South Dakota. In June 1927, when Sinclair served notice of his intention of exercising his option. Dr. Work asked Solicitor Patterson to study the Sinclair lease. Solicitor Patterson at that time took the view "that Fall rejected all the bids under the advertisement and negotiated a private sale not covered by the advertisement, as he had a right to do." To this view Solicitor Patterson stuck last spring. Last week, he said: "It's a matter of legal interpretation The Attorney General took one view of the facts and I took another. That's all. I have no apologies or excuses to make."

* Half-owner of this company with Oilman Sinclair is the Standard Oil Co. of Indiana, whose board chairman, Col. Robert W. Stewart, figured with Sinclair in earlier oil scandals.