April 7th, 1922 – The Teapot Dome Scandal

On April 7th, 1922, as part of the Teapot Dome scandal, the United States Secretary of the Interior leased Teapot Dome petroleum reserves in Wyoming.

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Oil businessman Edward L. Doheny (second from right, at table) testifying before the Senate Committee investigating the Teapot Dome oil leases in 1924

The Teapot Dome scandal was a bribery incident that took place in the United States from 1921 to 1922, during the administration of President Warren G. Harding. Secretary of the Interior Albert Bacon Fall had leased Navy petroleum reserves at Teapot Dome in Wyoming and two other locations in California to private oil companies at low rates without competitive bidding. In 1922 and 1923, the leases became the subject of a sensational investigation by Senator Thomas J. Walsh. Fall was later convicted of accepting bribes from the oil companies and became the first Cabinet member to go to prison. No person was ever convicted of paying a bribe, however.

In the early 20th century, the U.S. Navy largely converted from coal to oil fuel. To ensure the Navy would always have enough fuel available, several oil-producing areas were designated as Naval Oil Reserves by President Taft. In 1921, President Harding issued an executive order that transferred control of Teapot Dome Oil Field in Natrona County, Wyoming, and the Elk Hills and Buena Vista Oil Fields in Kern County, California from the Navy Department to the Department of the Interior. This was not implemented until 1922, when Interior Secretary Fall persuaded Navy Secretary Edwin C. Denby to transfer control.

Later in 1922, Albert Fall leased the oil production rights at Teapot Dome to Harry F. Sinclair of Mammoth Oil, a subsidiary of Sinclair Oil Corporation. He also leased the Elk Hills reserve to Edward L. Doheny of Pan American Petroleum and Transport Company. Both leases were issued without competitive bidding. This manner of leasing was legal under the Mineral Leasing Act of 1920.

The lease terms were very favorable to the oil companies, which secretly made Fall a rich man. Fall had received a no-interest loan from Doheny of $100,000 (about $1.33 million today) in November 1921. He received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.36 million today). It was this money changing hands that was illegal, not the leases. Fall attempted to keep his actions secret, but the sudden improvement in his standard of living was suspect.

Before the Watergate scandal, Teapot Dome was regarded as the “greatest and most sensational scandal in the history of American politics”. The scandal damaged the public reputation of the Harding administration, which was already severely diminished by its controversial handling of the Great Railroad Strike of 1922 and the President’s veto of the Bonus Bill in 1922.

“Today in History” on The Pandora Society dot com is primarily focused on Victorian and Edwardian history and does not always have a direct connection to Steampunk, Dieselpunk, or whatever punk; in fact it rarely does, but it is our hope that in sharing these historical events they might serve as some inspiration to the writers in our community to create potential alternative history stories which we look forward to reading 🙂


 

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