"The True History of Teapot Dome"

Magazine article

By: Thomas J. Walsh

Date: July 1924

Source: Walsh, Thomas J. "The True History of Teapot Dome." Forum Magazine 72 (July, 1924).

About the Author: American statesman and politician Thomas J. Walsh (1859–1933) was elected to the senate of the United States as a Democrat in 1912. As the chairman of the Senate Investigating Committee in 1922 and 1923, he headed the investigation into Teapot Dome. Walsh also chaired the Committee of Mines and the Committee of Pensions. He was a supporter of women's rights and an opponent of child labor. President Franklin Roosevelt appointed him Attorney General in 1933, but Walsh died before taking office.

INTRODUCTION

America's twenty-ninth president, Warren G. Harding, was remembered for having presided over one of the most corrupt administrations in American history. He was a principal player in the political scandal that came to be known as Teapot Dome, along with his Secretary of the Interior, Albert Fall; his Secretary of the Navy, Edward Denby; Admiral John Robison, Chief of the Navy's Bureau of Engineering and the administrator of the Naval Petroleum Reserves; and two oil tycoons, Harry F. Sinclair, head of the Mammoth Oil Corporation, and Edward L. Doheny, head of the Pan-American Petroleum and Transport Company.

In 1912, President William Howard Taft set aside government-owned land in three areas where oil had been discovered: Elk Hill, California; Buena Vista, California; and Teapot Dome, Wyoming (so called because of the shape of a large rock on the land). Taft designated these regions as reserves to be kept for use by the U.S. Navy in time of crisis. In 1920, the Congress of the United States passed legislation giving the Secretary of the Navy the authority to use these reserves as he saw fit, to conserve, develop, operate, or lease them, and to use, store, or sell the oil and gas they produced.

When Fall became Secretary of the Interior, with Harding's approval, he persuaded Denby to transfer control of Elk Hill, Buena Vista, and Teapot Dome from the Navy's jurisdiction to his at the Department of the Interior. Denby complied, and Fall proceeded to grant Sinclair and Doheny the rights to drill the land and sell the oil. In return they paid Fall more than $400,000, delivered to him in a little black bag by Doheny's son. They later characterized this transfer of funds as a no-interest loan—which Fall never repaid. From Sinclair, Fall also received six heifers, a yearling bull, two six-month-old boars, four sows, and an English thoroughbred horse.

The deal was intended to be secret, but the significant improvement that Fall immediately began to make in his manner of living, especially his land purchases, drew attention to him, and on April 14, 1922, a front-page story in the Wall Street Journal substantiated the rumors that Fall had leased Teapot Dome to Sinclair and had been paid off for doing so.

President Calvin Coolidge, who succeeded to the presidency after Harding's sudden death on August 2, 1923, appointed two special prosecutors, Atlee Pomerene (Democrat) and Owen Roberts (Republican). The Congress of the United States, guided by Thomas Walsh, subsequently began a detailed inquiry into the matter. (President Harding's well-timed and somewhat mysterious death was not connected to the Teapot Dome scandal but was, if not a natural event, thought to be the result of poisoning by his wife, who was enraged at his marital infidelity.)

Perhaps most interesting fact when reviewing accounts of Teapot Dome from the 1920s is that there is no mention of any environmental issues. Teapot Dome was a political, not an environmental or conservationist, scandal. Never was there concern for what drilling or building storage tanks would do to the landscape and the ecology of the region, nor was any thought given to oil conservation. By all parties involved, land and oil were regarded as commodities. The issues involved bribery, influence, and power: who benefited financially from those commodities and who had the power and authority to exploit them.

PRIMARY SOURCE

THE TRUE HISTORY OF TEAPOT DOME

In the spring of 1922, rumors reached parties interested that a lease had been or was about to be made of Naval Reserve No. 3 in the state of Wyoming,—popularly known, from its local designation, as the Teapot Dome. This was one of three great areas known to contain petroleum in great quantity which had been set aside for the use of the Navy—Naval Reserves No. 1 and No. 2 in California by President Taft in 1912, and No. 3 by President Wilson in 1915. The initial steps toward the creation of these reserves—the land being public, that is, owned by the government—were taken by President [Theodore] Roosevelt, who caused to be instituted a study to ascertain the existence and location of eligible areas, as a result of which President Taft in 1909 withdrew the tracts in question from disposition under the public land laws. These areas were thus set apart with a view to keeping in the ground a great reserve of oil available at some time in the future, more or less remote, when an adequate supply for the Navy could not, by reason of the failure or depletion of the world store, or the exigencies possibly of war, be procured or could be procured only at excessive cost; in other words to ensure the Navy in any exigency the fuel necessary to its efficient operation.

From the time of the original withdrawal order, private interests had persistently endeavored to assert or secure some right to exploit these rich reserves, the effort giving rise to a struggle lasting throughout the Wilson administration. Some feeble attempt was made by parties having no claim to any of the territory to secure a lease of all or a portion of the reserves, but in the main the controversy was waged by claimants asserting rights either legal or equitable in portions of the reserves antedating the withdrawal orders, on the one hand, and the Navy Department on the other. In that struggle Secretary Lane was accused of being unduly friendly to the private claimants, Secretary Daniels being too rigidly insistent on keeping the areas intact. President Wilson apparently supported Daniels in the main in the controversy which became acute and Lane retired from the cabinet, it is said, in consequence of the differences which had thus arisen.

The reserves were created, in the first place, in pursuance of the policy of conservation, the advocates of which, a militant body, active in the Ballinger affair, generally supported the attitude of Secretary Daniels and President Wilson.

They too became keen on the report of the impending lease of Teapot Dome. Failing to get any definite or reliable information at the departments, upon diligent inquiry, Senator Kendrick of Wyoming introduced and had passed by the Senate on April 16, 1922, a resolution calling on the secretary of the interior for information as to the existence of the lease which was the subject of the rumors, in response to which a letter was transmitted by the acting secretary of the interior on April 21, disclosing that a lease of the entire Reserve No. 3 was made two weeks before to the Mammoth Oil Company organized by Harry Sinclair, a spectacular oil operator. This was followed by the adoption by the Senate on April 29, 1922, of a resolution introduced by Senator LaFollette directing the Committee on Public Lands and Surveys to investigate the entire subject of leases of the naval oil reserves and calling on the secretary of the interior for all documents and full information in relation to the same.

In the month of June following, a cartload of documents said to have been furnished in compliance with the resolution was dumped in the committee rooms, and a letter from Secretary Fall to the President in justification of the lease of the Teapot Dome and of leases of limited areas on the other reserves was by him sent to the Senate. I was importuned by Senators LaFollette and Kendrick to assume charge of the investigation, the chairman of the committee and other majority members being believed to be unsympathetic, and assented the more readily because the Federal Trade Commission had just reported that, owing to conditions prevailing in the oil fields of Wyoming and Montana, the people of my state were paying prices for gasoline in excess of those prevailing anywhere else in the Union.

SIGNIFICANCE

Teapot Dome was about greed, the misuse of power, and the problematic relationship between money and influence—the control and exploitation of oil reserves just happening to be the matter at hand—and had far greater significance as a political scandal than as an environmental offense. It destroyed many men and many careers, while it also made some men and careers. Doheny's son was murdered in the course of the events, Sinclair and Fall were jailed. Roberts, one of the special prosecutors, was appointed to the United States Supreme Court in 1930. Pomerene, the other special prosecutor, was appointed by President Herbert Hoover to head the Reconstructionist Finance Corporation during the early years of the Depression.

On a national scale, Teapot Dome signified not only a political scandal but a test of the political machinery for combating corruption and recovering for the people what belongs to the people. In this respect, Teapot Dome showed a victory for justice and the strength of the government to right wrongs. Less important were the punishments meted out to the principals rather than the fact that the regions and resources stolen from the people were returned.

Teapot Dome itself, because of the magnitude of the scandal and because it was a scandal that reached to the highest levels of government and industry, has become a touchstone. When other stories of widespread corruption come to light, such as the Watergate scandal during the Nixon administration or the Enron scandal during the administration of George W. Bush, parallels with Teapot Dome inevitably arise.

FURTHER RESOURCES

Books

Davis, Margaret Leslie. Dark Side of Fortune: Triumph and Scandal in the Life of Oil Tycoon Edward L. Doheny. Berkeley, CA: University of California Press, 1998.

Stratton, David H. Tempest over Teapot Dome: The Story of Albert B. Fall. Norman, OK: University of Oklahoma Press, 1998.

Web sites

The Brookings Institute. "One Lesson from History: Appointment of Special Counsel and the Investigation of the Teapot Dome Scandal." 〈http://www.brook.edu/gs/ic/teapotdome/teapotdome.htm#TOC〉 (accessed November 8, 2005).

History News Network. "What Was Teapot Dome?" 〈http://hnn.us/articles/550.html〉 (accessed November 8, 2005).

Spartacus Educational. "Teapot Dome Scandal." 〈http://www.spartacus.schoolnet.co.uk/USAteapot.htm〉 (accessed November 8, 2005).