LEASES UPON NAVAL OIL RESERVES. MONDAY, OCTOBER 22, 1923. UNITED STATES SENATE, COMMITTEE ON PUBLIC LANDS AND SURVEYS, Washington, D. C. The committee met at 10 o'clock a. m. in room 210, Senate Office Building, Hon. Reed Smoot, chairman, presiding. Present: Senators Smoot, Lenroot, Ladd, Jones of New Mexico, and Walsh of Montana. The CHAIRMAN. If the committee will come to order, we will proceed with the consideration of Senate Resolution 282, as amended by Senate Resolution 294. I ask that those resolutions be made a part of the record. If any member of the committee desires to have the resolutions read, I will have the clerk do so now. I hardly think it necessary. (The two resolutions referred to, being Senate Resolution 282 and Senate Resolution 294, are here printed in full, as follows:) [Senate Resolution 282, Sixty-seventh Congress, second session.] Resolved, That the Secretary of the Interior is directed to send to the Senate: (a) Copies of all oil leases made by the Department of the Interior within naval oil reserve numbered one, and separately, naval oil reserve numbered two, both in the State of California, and naval oil reserve numbered three, in the State of Wyoming, showing as to each the claim upon which the lease was based or issued; the name of the lessee; the date of the lease; the area of the leased property; the amount of the rent, royalty, bonus, and all other compensation paid and to be paid to the United States. (b) All Executive orders and other papers in the files of the Department of the Interior and its bureaus, or copies thereof if the originals are not in the files, authorizing or regulating such leases, including correspondence or memoranda embodying or concerning all agreements, instructions, and requests by the President or the Navy Department as to the making of such leases and the terms thereof. (c) All correspondence, papers, and files showing and concerning the applications for such leases and the action of the Department of the Interior and its bureaus thereon and upon all the several claims upon which such leases were based or issued, all in said naval reserves. (d) And all contracts for drilling wells on naval oil reserves, date and terms of same, reasons therefor, and the number and date of the drilling of wells on private lands adjacent to oil reserves. Resolved further, That the Committee on Public Lands and Surveys be authorized to investigate this entire subject of leases upon naval oil reserves, with particular reference to the protection of the rights and equities of the Government of the United States and the preservation of its natural resources, and to report its findings and recommendations to the Senate. [Senate Resolution 294, Sixty-seventh Congress, second session.] Resolved, That S. Res. 282 is hereby amended by adding at the end of said resolution the following: "That the said committee is hereby authorized to sit and perform its duties at such times and places as it deems necessary or proper and to require the attendance of witnesses by subpoenas or otherwise; to require the production of books, papers, and documents; and to employ counsel, experts, and other assistants, and stenographers, at a cost not exceeding $1.25 per printed page. The chairman of the committee, or any member thereof, may administer oaths to witnesses and sign subpoenas for witnesses; and every person duly summoned before said committee, or any subcommittee thereof, who refuses or fails to obey the process of said committee or appears and refuses to answer questions pertinent to said investigation shall be punished as prescribed by law. The expenses of said investigation shall be paid from the contingent fund of the Senate on vouchers of the committee or subcommittee, signed by the chairman and approved by the Committee to Adult and Control the Contingent Expenses of the Senate." The CHAIRMAN. At the request of a member of the committee 1 am going to ask the secretary to read at this time Senate Documents Nos. 191, 196, and 210. This is done for the purpose of refreshing the memory of members of the committee as to the issues involved. (The clerk thereupon proceeded to read Senate Document No. 191, which is here printed in full, as follows:) Senate Document No. 191, Sixty-seventh Congress, second session. NAVAL PETROLEUM RESERVE NO. 3, WYOMING. LETTER FROM THE SECRETARY OF THE INTERIOR AND THE SECRETARY OF THE NAVY IN RESPONSE TO A SENATE RESOLUTION OF APRIL 15, 1922, TRANSMITTING INFORMATION RELATIVE TO NEGOTIATIONS WITH PRIVATE PARTIES FOR THE OPERATION OF LANDS IN NAVAL PETROLEUM RESERVE NO. 3, WYOMING. APRIL 20 (calendar day, APRIL 22), 1922.-Ordered to be printed. DEPARTMENT OF THE INTERIOR, DEAR MR. PRESIDENT: In response to S. Res. 277, relating to naval petroleum reserve No. 3, Wyoming, commonly known as the Teapot Dome, requesting the Secretary of the Interior and the Secretary of the Navy to inform the Senate, if not incompatible with the public interests, whether negotiations are pending with private parties for the operation of lands included in said reserve, and if so, the names of the parties, the terms and conditions of proposed agreements, and whether opportunity will be given the public for competitive bidding for operation of the lands, or whether it is proposed to award a lease or operating contract or agreement for the entire area to one person, corporation, or association, we have the honor to advise as follows: For more than a year the Secretary of the Interior and the Secretary of the Navy have had under consideration the handling of the two naval reserves in California and the naval reserve in Wyoming, commonly known as the Teapot Dome, with the idea of working out a policy which would secure the greatest conservation and benefit for the Navy of the oils in such reserves, and secure to the Navy an available storage of fuel oil at convenient points readily accessible wherever and whenever needed, particularly for future needs. The crude oil in none of these reserves, nor in fact any crude oil, is suitable for use by the Navy as fuel in an unrefined state, and before being available for storage and naval use must be placed in the form of fuel oil. Experts state that the storage of fuel oil in suitable tanks results in practically no loss from evaporation, etc.; certainly not exceeding one-tenth of 1 per cent per annum. The naval reserves in California have, by drilling and production. on privately owned lands adjoining, already been drained to a very large extent, involving a loss to the Government of millions of barrels of oil, and from a careful geologic study recently made by an |