Senator WALSH. And the next after that? Mr. BENTON. Then November 22, 1922, $15,150. Senator WALSH. That is all. There was another line I had expected to interrogate this witness, but after talking with him. I think it is unnecessary. Just one more question: Do you know anything about that deposit of $7,500, what it was? Mr. BENTON. No; I do not. Senator WALSH. There is no memorandum on it? Mr. BENTON. There was a memorandum on the deposit ticket, but it was made by Mr. Chase; evidently he presented it at the window. Senator WALSH. That is all. (The witness was excused.) Senator WALSH. I will call Mr. Garnett. TESTIMONY OF MR. LESLIE C. GARNETT, MILLS BUILDING, WASHINGTON, D. C. (The witness was duly sworn by the chairman.) Senator WALSH. Mr. Garnett, what is your full name? Mr. GARNETT. Leslie C. Garnett. Senator WALSH. Where do you reside, Mr. Garnett? Mr. GARNETT. I practice law in Washington. My home is in Virginia. Mills Building is my office address here. Senator WALSH. Were you at any time associated with the Department of Justice? Mr. GARNETT. From July, I think it was, 1917, until October, 1919, I was attorney in the Public Lands Division of the Department of Justice, in charge of that division under the Assistant Attorney General, and in charge in his absence. Mr. Kearful was at that time, most of the time, Assistant Attorney General. After that, from October, 1920, until March 4, 1921, I was assistant Attorney General in charge of the Public Lands Division, but not confirmed by the Senate. I went out of office on March 4, 1921. Subsequent to that I was sent an appointment by Mr. Daugherty as Special Assistant to the Attorney General to argue, in the Supreme Court of the United States, cases theretofore assigned to me. I think there were eleven in the Department of Justice. That terminated when the Court adjourned, or when it recessed in May, 1921, my position terminated, I think the 11th of that month. Senator WALSH. So that you remained under the present Attorney General from March 4, 1921, until some time in May? Mr. GARNETT. May 11, 1921. My appointment, as I say, the terms of it were merely to argue the cases theretofore assigned to me. I was sent all the stuff that came to the Public Lands Division, as if I had been Acting Assistant Attorney General, although I had no official status as such. Senator WALSH. You practically continued in the discharge of the same duties? Mr. GARNETT. Well, nominally so. However, not having actual authority, I don't know that I discharged all of the duties of the Assistant Attorney General in that behalf. Senator WALSH. Well, at any time during your service in the department did the matter of proceedings with reference to section 36 in naval reserve No. 1 come before you? Mr. GARNETT. Yes; my first attention that I now recall as to section 36 and section 16 in naval reserve No. 1 was on a visit to California the first of February, 1921, in connection with condemnation proceedings on North Island. There I met Mr. Henry F. May, who was in charge of oil litigation of the United States, and his assistant, Charles D. Hamel. They called my attention to the fact that a special agent of the Department of the Interior, the General Land Office, I think Mr. Favorite, if I remember correctly, had unearthed, in the local land office, a report made by some earlier agent of the Land Office, made to the Department of the Interior, that sections 16 and 36-school sections, were mineral lands and known mineral lands at the time of the survey. This report was made in 1915, but had been lost or mislaid, or at any rate had not been brought to light, after it had been acted upon in the Interior Department and sent back to the Land Office for hearing, until discovered by Mr. Favorite, in the latter part of 1920, perhaps. They told me that that matter had been taken up with the Interior Department and the Navy Department and some action would likely be taken recommending suit by the Department of Justice. Senator WALSH. Did you understand that drilling had taken place on there, on both sections? Mr. GARNETT. I understand that on section 36 a great deal of oil had been drilled out, probably by the Standard Oil or the Standard Oil of California, and the National Petroleum Co., is my recollection, and I am testifying only from recollection; I have not seen the papers since I left the department that drilling had not been commenced on section 16, but millions of dollars worth of oil was taken out on section 36, which was perhaps the most valuable oil land in the United States. That was the information I got, and that was later confirmed by the file that came through from the Interior Department to the Department of Justice recommending that suit be instituted to protect the interests of the Government until the character of the land was determined by the Land Office. That reached the Department of Justice either the 2d, 3d, or 7th of March. 1921. The matter would have been immediately sent out to Mr. May in the natural order of business for appropriate action, since he and Mr. Hamel were entirely familiar with the whole territory and the oil litigation in that State, and had been for years. But, of course, the approach of the end of the administration was at hand, and knowing I would not be Assistant Attorney General after the 4th of March, I naturally held it on my desk until some appropriate action should be taken by the incoming administration. I made several attempts to see the Attorney General with reference to it, but never had the pleasure of seeing him. I made several appointments with his secretary, but never saw him. Finally I got some of the attorneys in my division to take the matter up with Mr. Fowler, who was an old Department of Justice man and was familiar with the proceedings there, and sent the record up to him-I believe previous to sending it to him-yes; I am a little ahead of my story. On the 30th of March, not being able to get in touch with the Attorney General, I wrote a formal memorandum to the Attorney General, setting out the facts as they were disclosed in the record, and sent this file up to him for such action as he might deem necessary. Among other things that I remember appeared in the file, unless I am mistaken, was that these lands had been returned by the surveyor-designated by the surveyor-as mineral lands at the time of the survey. Senator WALSH. That is, the plat so showed? Mr. GARNETT. The plat so showed. Of course, they had not been classified, but merely designated by the surveyor. The CHAIRMAN. Do you remember what date that was? Mr. GARNETT. No; I do not. I think, however, that the survey was made some time in 1902. Mr. Hamel is here, I see, and Mr. Coldwell, both. They will recollect, or probably have some records. I am testifying, as I say, purely from recollection. At any rate, we were informed, and I think the file showed, that the State of California had made application for lieu selections, on account of the fact that these lands were designated by the surveyor as mineral lands. I am not quite clear as to what was done with that applica-' tion for lieu selections, but I think that they were rejected because these selections had already been disposed of by the Department of the Interior. At any rate, shortly thereafter they were sold to Mr.I rather think Mr. Sutro. The CHAIRMAN. What was sold? Mr. GARNETT. Sections 36 and 16. The CHAIRMAN. By the State? Mr. GARNETT. I think to Mr. Sutro. At any rate, they passed into the hands of the Standard of California, and other companies, that I do not recall. Senator NORRIS. As I understand, there were wells at that time on section 36? Mr. GARNETT. Yes; my memorandum shows-I think it is about $10,000,000 worth of oil had been taken out of there-out of 36. Senator NORRIS. That is before title passed? Mr. GARNETT. I did not keep up with developments at any time after that. The CHAIRMAN. Do you know the date of the sale? Mr. GARNETT. I do not know. But Mr. Coldwell is here, and I see he has a file there, and he has probably the records in that. Senator WALSH. You spoke about the memorandum that you sent to the Attorney General. Is that the memorandum? [Handing a paper to Mr. Garnett]. Mr. GARNETT. That is the memorandum. Senator WALSH. Will you kindly read it? Memorandum for the Attorney General. Senator LENROOT. What is the date? MARCH 30, 1921. Mr. GARNETT. I say, "Herewith are two letters from the Secretary of the Interior of March 2, 1921". Senator WALSH (interposing). The memorandum is what date? Mr. GARNETT. March 30, 1921. [Continuing reading:] Memorandum for the Attorney General. MARCH 30, 1921. Herewith are two letters from the Secretary of the Interior of March 2, 1921, recommending appropriate action through the courts for the protection of the Government's interest, pending final action on proceedings through the land office at Visalia, Calif., relative to charges that sections 16 and 36 in township 30 south, range 23 east, M. D. M., are mineral in character and were known to be such at the time of their survey as school land sections. These lands have now been sold to the Standard Oil Co. of California, the General Petroleum Co. and others, and while there is no development on section 16, section 36 is perhaps the most valuable section of oil land in the Elk Hills in California, if not in any other State. Probably $10,000,000 has been taken from the land in oil and the value of the two sections is enormous. Recommendation for this suit was received on March 3, 1921, while I was Assistant Attorney General, but owing to the impending change of administration it was not sent to Henry F. May, Esq., special assistant in charge of the oil litigation in California, for appropriate action. My appointment to argue the cases heretofore assigned to me in the Supreme Court carries no further authority in the premises, and for that reason I submitted the matter to the solicitor general, and attorneys in this division have informally taken it up with Mr. Flower, special assistant to the Attorney General, while I have called it to the attention of Mr. Gibbs, your private secretary. Having received no suggestions as to the disposition of the matter I am formally presenting it for your consideration. My information from the Interior Department is that oil to the value of thousands of dollars is being daily taken from section 36, and an injunction should be sought to preserve the status quo pending the determination of the charges in the Land Department that these lands were of known mineral character at the date of the survey. Of course, an accounting should be asked for. Mr. May, who was appointed to this work on the recommendation of former Assistant Attorney General Knaebel, is thoroughly familiar with the situation. Respectfully, LESLIE C. GARNETT, Special Assistant to the Attorney General. I heard nothing from my memorandum, but three or four days after it was sent Mr. Loomis, the vice president of the Standard Oil of California, came to my office and asked me what action had been taken on the recommendation of the Interior Department for proceedings in this matter. I told him that the case had been formally sent to the Attorney General's office by me, and I had no information as to what his attitude would be. Three or four days after that Mr. Loomis again came to my office and brought a letter from the Attorney General, written in his own handwriting, asking me to see that no action was taken in the case until he could have a personal conference with me. And I never had any conference with the Attorney General during my stay there, up until May 11. I had sent this file up with the memorandum; I then had my messengers hunt the department and obtain the file, and bring it back to me, and I left it on my desk when I left the department. My personal contact with the matter ended there; anything that happened after that is only from the information that I have received. Senator WALSH. That is all. Senator LENROOT. I would like to ask a few questions. The CHAIRMAN. We shall have to go now. The committee stand adjourned until 10 o'clock to-morrow morning. (Whereupon, at 11.55 o'clock a. m., the committee adjourned until the following day, Friday, December 7, 1923, at 10 o'clock a. m.) |