Teapot Dome Scandal

7 Key excerpts on "Teapot Dome Scandal"

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  Separating Fools from Their Money

  A History of American Financial Scandals

  • Scott B. MacDonald(Author)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  2

  While most great American financial scandals occurred around Wall Street, this was not the case of the Teapot Dome Scandal. Far removed from the narrow confines of Manhattan’s lower end, Teapot Dome was the name of an oil field in Salt Creek, Wyoming. According to popular lore, it was given that name because of a teapot-shaped rock formation that stood atop a subterranean geological dome that contained oil. The scandal revolved around two of Harding’s cabinet secretaries and two of the leading figures in the budding U.S. oil industry. It was a mix of opaque government dealings with the private sector, sealed by friendships and complicated by greed. In the end, Harding’s reputation would be sullied, one of the members of his government would be the first cabinet minister to go to jail, and the tale of scandal would become a staple of American history.

  The American Stage—The Progressives Seek to Level the Playing Field

  The Teapot Dome Scandal came at a moment in U.S. history when many questions were still bubbling: Should capitalism be unbridled, should it be guided, or should it be regulated with a view that the government would function as a referee, seeking to maintain a level playing field for all players? The era of unbridled capitalism—of the earlier Gilded Age—had burned itself out in the antics of Gould, Fisk, Vanderbilt, and Drew. In its place came the guided financial capitalism of J. P. Morgan and his elite of bankers and insurance interests. Financial capitalism, however, raised serious questions about Wall Street’s dominance over industry vis-à-vis all other economic actors, a cast of characters including farmers, labor, and small and mediumsized businessmen. Wall Street’s guided capitalism and the power it represented were not to go unchallenged. In one of history’s ironic twists, the anarchist’s bullet that killed President William McKinley in 1901 was to set off a revolution in government activism that eventually led to Teapot Dome.

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• 

  eBook - ePub

  Separating Fools from Their Money

  A History of American Financial Scandals

  • Scott B. MacDonald(Author)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  2

  While most great American financial scandals occurred around Wall Street, this was not the case of the Teapot Dome Scandal. Far removed from the narrow confines of Manhattan’s lower end, Teapot Dome was the name of an oil field in Salt Creek, Wyoming. According to popular lore, it was given that name because of a teapot-shaped rock formation that stood atop a subterranean geological dome that contained oil. The scandal revolved around two of Harding’s cabinet secretaries and two of the leading figures in the budding U.S. oil industry. It was a mix of opaque government dealings with the private sector, sealed by friendships and complicated by greed. In the end, Harding’s reputation would be sullied, one of the members of his government would be the first cabinet minister to go to jail, and the tale of scandal would become a staple of American history.

  The American Stage—The Progressives Seek to Level the Playing Field

  The Teapot Dome Scandal came at a moment in U.S. history when many questions were still bubbling: Should capitalism be unbridled, should it be guided, or should it be regulated with a view that the government would function as a referee, seeking to maintain a level playing field for all players? The era of unbridled capitalism—of the earlier Gilded Age—had burned itself out in the antics of Gould, Fisk, Vanderbilt, and Drew. In its place came the guided financial capitalism of J. P. Morgan and his elite of bankers and insurance interests. Financial capitalism, however, raised serious questions about Wall Street’s dominance over industry vis-à-vis all other economic actors, a cast of characters including farmers, labor, and small and medium-sized businessmen. Wall Street’s guided capitalism and the power it represented were not to go unchallenged. In one of history’s ironic twists, the anarchist’s bullet that killed President William McKinley in 1901 was to set off a revolution in government activism that eventually led to Teapot Dome.

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  The United States Secret Service

  • Walter S. Bowen, Harry Edward Neal(Authors)
  • 2019(Publication Date)
  • Red Kestrel Books

    (Publisher)

  11 — Teapot Dome

  The exposure of crooked politicians and cattle barons in the Western land frauds had effectively spiked the good work of the Secret Service, yet in 1922 President Calvin Coolidge and some of his advisers decided to call on the Service again to make an important and delicate investigation which could not be entrusted to the Department of Justice, and because they considered the Secret Service to be completely incorruptible.

  “Teapot Dome” was to become a synonym for chicanery, fraud, greed, and deceit.

  Teapot Dome was the name given to an oil-producing area in Wyoming once known as Irish Park. Before 1909 various oil companies drilled wells there, but as extensive development of the field began, President William Howard Taft closed the public lands to private exploitation and in 1912 he issued an Executive Order which set aside certain land areas as “Naval Petroleum Reserves.” Reserve No. 1 (38,969 acres) was at Elk Hills, No. 2 ( 29,341 acres) at Buena Vista, both in California, and Reserve No. 3 (9,481 acres) was at Teapot Dome, some 40 miles north of Casper, Wyoming.

  These oil lands were intended to be held by and for the Navy, to provide oil for fuel if and when needed in a wartime emergency.

  The closing of the reserves to private development exasperated certain big oil promoters and producers, who were anxious to exploit the areas for themselves. Among these were Harry F. Sinclair and Edward L. Doheny, both of whom had made fortunes in petroleum.

  Pressures were brought to bear by some of the oil tycoons on President Woodrow Wilson and Secretary of the Navy Josephus Daniels to open the reserves to private interests, but Wilson and Daniels stood firm. Through lobbying and propaganda, subtle and otherwise, the oil promoters took another approach, claiming that if the reserves were not developed, the Government would lose a great deal of oil which would simply drain from these areas into active private oil fields adjoining the reserves. By letting private interests work the reserves, they said, the oil would not be lost through drainage, and the Government would profit from its leases.

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  Presidential Payola

  The True Stories of Monetary Scandals in the Oval Office that Robbed Taxpayers to Grease Palms, Stuff Pockets, and Pay for Undue Influence from Teapot Dome to Halliburton

  • Thomas J. Craughwell(Author)
  • 2011(Publication Date)
  • Fair Winds Press

    (Publisher)

  CHAPTER 4

  Warren Harding and the Teapot Dome Scandal: AMERICA’S OIL BARONS STRIKE A GUSHER DURING THE ROARING TWENTIES

  On the morning of July 27, 1923, the naval transport ship USS Henderson steamed into Puget Sound on its way to Seattle. Heavy fog had settled on the water, forcing the ship to a cautious pace. Suddenly another vessel loomed out of the murk. Henderson’s helm struggled to veer off, but to no avail, and the racket of colliding steel cut through the gray stillness.

  The other vessel, USS Zeilin , was a destroyer. She had been sent to escort Henderson and her precious cargo, only to find herself the unwitting victim of the transport’s considerable momentum in the confusion of a typically foggy Pacific Northwest morning. Crippled from the impact into her side, Zeilin took on water before beaching herself to avoid sinking.

  Henderson , though barely scratched, shuddered from the impact. Safe in his cabin and unaware of the accident unfolding outside, the ship’s most important passenger murmured, “I hope the boat sinks.”

  He was Warren Harding, president of the United States—the very cargo that Zeilin , along with other naval vessels, had been assigned to escort on this executive tour of the American West. The president’s acid remark was entirely in character, the result of a recent skepticism that his abilities were not up to the crushing burdens of his office. He had acquired, at moments of unguarded cynicism, a defeatist attitude. Literally and figuratively, Harding’s ship of state was in troubled waters.

  Nothing convinced him of this more surely than the scandals that seemed to fester within his administration. Like tumors, he had uncovered a few of them almost by accident, which served only to make him wonder how many others remained to be found. Men in his own clique, on whose support he had relied to become president, were cashing in on their closeness to the commander in chief. “I have no trouble with my enemies,” Harding once complained to newspaperman William Allen White. “But my friends...my goddamn friends, White, they’re the ones [who] keep me walking the floor nights!”

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  The Jazz Age President

  Defending Warren G. Harding

  • Ryan S. Walters(Author)
  • 2022(Publication Date)
  • Regnery History

    (Publisher)

  “Most of the chief executives who dwell [at the bottom] came from the Civil War era—like Franklin Pierce and James Buchanan, who sided with the slave owners on the way in, or Andrew Johnson, who screwed things up on the way out,” she wrote. “It doesn’t seem fair that Warren Harding is stuck with them. His appointees presided over several really juicy political scandals, including Teapot Dome, which was both one of the worst corruption cases in American history as well as the one with the most interesting name. That was definitely bad, but not really in the same ballpark.” 25 According to Jude Wanniski, a Reagan administration official, Teapot Dome was “a rinky-dink scandal by today’s standards” and Harding “had nothing to do with the scandal itself.” Lew Rockwell of the Ludwig von Mises Institute wrote that the affair that “wrecked his administration was a big nothing compared to the crimes of presidents past and future.” Thomas Bailey said Harding knew “what he was doing” when he signed the executive order transferring the oil reserves. “Incredibly enough, what Fall did in making his back-alley deal with Sinclair and Doheny was to some degree in the public interest, for private oilmen were draining adjacent oil pools, the money-pinched Navy needed refined oil, and Doheny did build the enormous storage tanks at Pearl Harbor that were of inestimable value to the Navy during World War II. But the one inescapable fact is that Fall accepted bribes and was jailed.” In the end it all worked out for the best, as the U.S. Supreme Court restored the oil fields to the government in 1927. 26 Harding’s administration, generally referred to as “scandal-plagued,” is often compared to that of Ulysses S. Grant. Yet there is really no comparison. Unlike Grant, Harding actually did something about the scandals when he found out about them. Harding discovered two scandals and dealt with both of them, which is far more than other scandalous presidents have done

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  The Education of an Anti-Imperialist

  Robert La Follette and U.S. Expansion

  • Richard Drake(Author)
  • 2013(Publication Date)
  • University of Wisconsin Press

    (Publisher)

  The senator began with a general statement about how Washington con- ducted the nation’s business: “Mr. President, all sorts of looting goes on in a Government as big as ours in spite of anything that can be done to prevent it.” In wartime, he continued, the plunderers operate through the War Depart- ment. In peacetime, “the sluiceway for a large part of the corruption to which this Government of ours is subjected is the Department of Interior.” Hence, the essential precondition for the Teapot Dome Scandal came to pass with the transfer of the oil reserves from the Navy Department to the Interior Depart- ment, then under former New Mexico senator Albert B. Fall. La Follette noted that during his time in the Senate Fall had been “the aggressive opponent of the policy of conservation.” As a senator from New Mexico, Fall relentlessly had opposed all attempts by the government to conserve the public domain. Conservation by the government of any resource, including oil, in the name of the common good Fall interpreted as a challenge to his free-market philos- ophy. As secretary of the interior, he had signed off on a lease for the Teapot Dome reserve, with its estimated half-billion dollars’ worth of oil, to Harry F. Sinclair of the Sinclair Oil Company and the recently incorporated Mammoth Oil Company. He had done so without entertaining competitive bids.

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  Public Affairs

  Politics in the Age of Sex Scandals

  • Paul Apostolidis, Juliet A. Williams, Paul Apostolidis, Juliet A. Williams(Authors)
  • 2004(Publication Date)
  • Duke University Press Books

    (Publisher)

  His death was received with national mourning, but revelations of corrupt acts continued, many of them going well beyond the con-fines of naval oil reserves. Although the Teapot Dome Scandal was essentially over in , the scandal bull market continued. Attorney General Harry Daugherty, who had been the engineer of the famous ‘‘smoke-filled room’’ nomi-nation of Harding for president, was implicated in illegal sales of liquor permits and pardons, leading to his removal after Harding’s death, a trial, and a bare escape from conviction, thanks to two hung juries. His brother, Mally Daugherty, was also implicated but gained his fame largely from his refusal to testify before Senate committees, leading to a contempt of Congress case that went clear to the Supreme Court. 8 The director of the Veterans’ Bureau was sentenced to a term in the federal pen for corrupt sale of government property and access. Lesser scandals, without prominent names attached, flowed, driven largely by House and Senate investigations, whose constitutional power of sub-poena was to be validated in  in McGrain v. Daugherty . Although Republicans controlled the House and the Senate, the revelations were driven by the efforts of Democratic Senators Thomas Walsh and Bur- Public Affairs ton K.Wheeler of Montana—with the support of Republican progres-sives who had recently rejoined the party after the Theodore Roosevelt insurgency and were not to remain happy campers in the Republican fold. One historian of the Senate was moved to write in , ‘‘At no other period in its history had the Senate been so engrossed with in-vestigations as during the six months [of the] first session of the th Congress [December , –June , ].’’ 9 The bull market in Harding scandals slowly petered out, with one revelation after another paraded before congressional committees, some reaching the courts. Interestingly, some of Harding’s sexual ad-ventures also came to light, but very little was made of them.

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