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Teapot Dome: A Scandal Full of Big Oil In the 1920s

Updated on October 11, 2013

Teapot Dome

US Navy petroleum field reserves were located near this rock formation in Wyoming. They became the center of a scandal.
US Navy petroleum field reserves were located near this rock formation in Wyoming. They became the center of a scandal. | Source

A Pocketful of Woe

The USA has always been attached to scandal. Even the wish of the colonists to break away from English Crown was considered a scandal by British Loyalists. Thus, being a scandalous nation from the start, the USA continued to bathe in scandalous waters – scandalous to someone, somewhere in the world, anyway.  No nation can please everyone.

After Industrialization, scandal became easier to produce in America, because this trend provided more and better methods and a greater number of technologies with which to do so.

A
Teapot Dome, Wyoming:
East Teapot Dome Oil Field, Wyoming, USA

get directions

Oil to the Left of Me, Oil to the Right of Me

Click thumbnail to view full-size
Murphy Oil Spill during Hurricane Katrina in Chalmette LA (public domain)Oil pooled from the Exxon Valdez - another Big Oil scandal, 1989.
Murphy Oil Spill during Hurricane Katrina in Chalmette LA (public domain)
Murphy Oil Spill during Hurricane Katrina in Chalmette LA (public domain)
Oil pooled from the Exxon Valdez - another Big Oil scandal, 1989.
Oil pooled from the Exxon Valdez - another Big Oil scandal, 1989.

Just a Little Teapot

One of the first scandals of the American 20th century involved the western states. Large American oil reserves were found at Elk Hills, California and at the town known as Teapot Dome, Wyoming. In 1912, the current US President, William Taft, declared that this government owned land in California and Wyoming, with its oil reserves, should all be held separate for the sole benefit of the US Navy. Elk Hills and Teapot Dome were given part and parcel to the Navy, along with everything underneath the land (i.e., oil). Oil was a sea of scandal at the beginning of the 20th century, just as it has been at the beginning of the 21st century.

The US Congress passed a bill on June 4, 1920 that permitted US Secretary of the Navy to have sole power "to conserve, develop, use and operate the same in his discretion, directly or by contract, lease, or otherwise, and to use, store, exchange, or sell the oil and gas products thereof, and those from all royalty oil from lands in the naval reserves, for the benefit of the United States." This meant that the Secretary of the Navy could do anything he pleased with the land and whatever was underneath it at Elk Hills and Teapot Dome. The related decisions were supposed to benefit the US.

This ripened the atmosphere with opportunity for scandal.

An oil spill in St. Bernard Parish, Louisiana added to the devastation left in the wake of Hurricane Katrina, 2005. Govt phot - University of Michigan Natural Resources and Environment (public domain-- http://sitemaker.umich.edu/respond/home).
An oil spill in St. Bernard Parish, Louisiana added to the devastation left in the wake of Hurricane Katrina, 2005. Govt phot - University of Michigan Natural Resources and Environment (public domain-- http://sitemaker.umich.edu/respond/home).

Oil Leases to Private Business

Nine months later, the new US President, Warren Harding, appointed Mr. Albert Fall to the office of Secretary of the Interior in March 1921. Harding then talked Edwin Denby (Secretary of the Navy) to take power over the Naval Reserves at Elk Hills and Teapot Dome.

Soon, Albert Fall chose two of his personal friends (that’s scandal right there), Mr. Harry F. Sinclair of the Mammoth Oil Corporation and Mr. Edward L. Doheny of Pan-American Petroleum and Transport Company to lease portions of the Naval Reserves at both sites. This was a case of personal friends in private business leasing government controlled lands and oil rights. A scandal was brewing.

All concern tried to keep this arrangement a secret, but word escaped and rumours flew, because Albert Fall suddenly began spending large amounts of money. Where did he get it? On 14th April, 1922, the Wall Street Journal printed the story that Albert Fall had leased Teapot Dome to Sinclair. President Warren Harding responded that this was perfectly within the law of the related Congressional Bill of 1920.

The Teapot Gas Station

Wyoming businessman Jack Ainsworth protested the Teapot Dome Scandal by building a gas station like a teapot. Today, it is to become a historic landmark in the city of Zillah.
Wyoming businessman Jack Ainsworth protested the Teapot Dome Scandal by building a gas station like a teapot. Today, it is to become a historic landmark in the city of Zillah. | Source

Go Directly to Jail

Not satisfied with this situation, the US Senate mounted and investigation of Mr. Fall and the Naval Reserves he appropriated. President Harding died at the beginning of August of 1923, while VP Calvin Coolidge took over and kept an eye on the investigation. Two months later, the US Senate Committee on Public Lands and Surveys began hearing on the Teapot Dome Scandal (as it is now known) in mid-October of 1923.

The investigation leader of the committee was the Senator Thomas J. Walsh, (D – Montana). After over three months, at the end of January of 1924, Edward Doheny of Pan-American finally admitted that he had given Albert Fall $100,000. He called it a “loan.” On January 31, the US Senate passed a resolution that leases to the Mammoth Oil Company and the Pan American Petroleum Company were fraudulent and corrupt. Albert Fall and Edwin Denby resigned from office.

Later, in October, 1927, Harry F. Sinclair was tried for conspiracy to defraud the United States. A mistrial was declared, because Sinclair hired a detective agency to follow the jury. He then was tried for criminal contempt, found guilty, and sentenced to 6 months prison time.

Albert Fall was charged with accepting a bribe and in October 1928, he was tried before the US Supreme Court. The judges further permitted additional testimony that showed financial relationships between Sinclair and Fall. At the end, Albert Fall was found guilty and sentenced to one year in prison, with a $100,000 fine.

One of our nation’s first scandals was over Big Oil and this apparently set a trend throughout the 20th century and into the 21st.

A political cartoon of the day.
A political cartoon of the day. | Source

Comments

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    • profile image

      Thomas Fenske 

      5 years ago

      TeaPoot Dome Scandal, today.Northern Ca, naval reserve, associated oil and gas, produced. Glenn and Tehama Counties. Shuttled out through P.G.E, gal lines.

    • Sal Walker profile image

      Sal Walker 

      9 years ago from Around the way

      Excellent Hub, Patty. Very well written and I especially like your art choices. I would highly suggest a Hub I read earlier today by Joe S. at hubpages.com/hub/Iraqi-journalist-throws-shoe-at-bush

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Greetings TOF - Yes, I am sure there must have been heightened UFO activity at the time. Thank you for adding you r information to the chronicles. Regurgitate here any time you wish!

    • The Old Firm profile image

      The Old Firm 

      9 years ago from Waikato/Bay Of Plenty, New Zealand

      I believe that I read something about Teapot Dome in a paperback published around forty years ago. Although most is lost in the mists of time, I have the strong feeling that it was to do with UFOs. Around then the3rdalien's mates were popping up or remembered as being seen in all sorts of places of significance.

      Thanks Patty for adding another little gem for me to try and remember and regurgitate to prove a point.

    • eovery profile image

      eovery 

      9 years ago from MIddle of the Boondocks of Iowa

      I'm originally from Wyoming, Never heard of Teapot Dome. I guess I will look in to it.

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Oh! Thanks for reminding me. That might be a good idea...

    • profile image

      newcapo 

      9 years ago

      During the revolution, America literally "tarred and feathered" rogue/corrupt politicians.....things seemed to work better then. Hmmmm... Very informative hub, great!

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Boil, boil, brew, and bubble - B.T. and delightful trouble..

    • B.T. Evilpants profile image

      B.T. Evilpants 

      9 years ago from Hell, MI

      I am brewing, as we speak!

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Natch! I'll look for the old ones, and you brew up some new ones for us BT. And then I'll become the Embedded Scandal Reporter.

    • B.T. Evilpants profile image

      B.T. Evilpants 

      9 years ago from Hell, MI

      I do love a good scandal!

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      I was fortunate to find some appropriate pictures, so this was double fun to write! There are dozens of scandals we could write about, I think...

      Thanks for the really good request, gamergirl!

    • Netters profile image

      Netters 

      9 years ago from Land of Enchantment - NM

      Very interesting. I am learning somuch from your hubs. Keep 'em coming!

    • gamergirl profile image

      Kiz 

      9 years ago from Antioch, TN

      Very informative, thanks for answering my request Patty!

    • Patty Inglish, MS profile imageAUTHOR

      Patty Inglish MS 

      9 years ago from USA. Member of Asgardia, the first space nation, since October 2016

      Yes, all of that! Thanks Hoodala.

    • Hoodala profile image

      Hoodala 

      9 years ago from Mesa

      Ahh the good old days when we used to hold our elected officials accountable for their actions. Brought back memories of middle school reading assignments.

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