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 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 in- vestigate the entire subject of leases of the naval oil reserves and calling on the secre- tary 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.