- Historic Sites
Tempest Over Teapot
When the wheeling and dealing of some of President Harding’s closest friends was revealed, the mud spattered Cabinet members, the heads of oil companies, the chairman of the Republican party, and eventually the President himself
August 1965 | Volume 16, Issue 5
Smith and another man from Ohio rented what came to be known as “the Little Green House” at i6ï5 K Street, and it soon was a center of revelry almost twenty-four hours a day. For the right people, good liquor was available in unlimited amounts; much of it had been confiscated by the government, and sometimes it was delivered in official vehicles by armed guards in uniform. The Ohio Gang eagerly solicited bribes from bootleggers seeking immunity, men in jail who wanted to be released, men under indictment who wanted the proceedings dropped, and German owners of property sequestered during the war. Nobody knows what the take amounted to in the thirty months or so that the Ohio Gang was in the saddle, but it has been estimated that, in graft and waste, this group cost the country about two billion dollars.
What was the President’s role in all this? At the beginning, he certainly did not know what was going on. Harding did not frequent the Little Green House on K Street, where he would have met bootleggers, dope peddlers or their agents, women of easy virtue, professional gamblers, and other sordid types. He did, however, spend much time in a similar establishment on H Street. One of his cronies was Ned McLean, young multimillionaire playboy, whose family had come from Cincinnati; Ned obligingly rented this second refuge. If some underworld character proved hard to convince that a few hundred thousand dollars put into the right hands would give him a license to break the law, Jess Smith or one of his colleagues woidd take the doubting Thomas over to stand near the door of “the House on H Street,” to see Daugherty or some other high-level crook emerge from a presidential limousine and enter the house arm in arm with the President and his lady. This usually worked.
Just how much Harding knew of what was going on is not certain; but it is clear that he had some information about it. In the summer of 1923, just a few weeks before his death in San Francisco of a cerebral hemorrhage, he was visibly worried and depressed; he kept asking those about him what a President should do when he was betrayed by his friends.
The most famous and in some ways the most important of the scandals that came to light after Harding’s death had to do with oil, and is commonly known as “Teapot Dome,” from the name of one of the naval oil reserve areas involved.
In those days before nuclear power, there was concern lest our Navy in time of emergency might run out of its precious fuel. As early as 1910, Congress began setting aside special oil fields. Two of them, Elk Hills and Buena Vista, were only a few miles apart, near liakersfield, California; the third, Teapot Dome, was not far from Casper, Wyoming. (Geologists speak of a “dome” when the earth strata curve upward and then down again, a situation that may bring oil (lose to the surface.)
There were commercial fields nearby, and supposcdly there was some danger that the government oil might he drained oil. Accordingly, in 1920 Congress gave the Secretary of the Navy almost unlimited power to save it. He might drill new wells anywhere within any reserve, pump out lh” oil, and stoic it. He might permit private operators to drill inside these areas, but only on condition that a certain proportion of the oil be turned over to the Navy for storage.
One of Harding’s best friends while in the Senate had been Senator Albert K. Kail, of Three Rivers, New Mexico. With his western clothes, his luxuriant, drooping mustache, and his weather-beaten face, he looked like a movie sheriff. Fall had a terrible temper, which he made no elfort to control; there were rumors that as a youth he had “killed his man,” though he denied this. He had studied law, and President Cleveland had once put him on the Supreme Court bench of New Mexico Territory. Km he had to be removed when he abruptly left the courtroom one day to join the pursuit of a Hecing bandit. Harding actually wanted to make him Secretary of State—which would not have suited Fall’s plans at all. He persuaded the President to make him Secretary of the Interior instead.
Three months after the Cabinet was sworn in, Fall got Harding to transfer all the oil reserves from the Navy to the Interior Department, on the grounds that they would thus be better protected from depletion through private drilling nearby. Many people thought the transfer was unwise. Senator Robert M. La Follette of Wisconsin made a vigorous objection on the floor of the Senate; though he later gave his reluctant approval, Secretary of the Navy Edwin Denby protested to the President, but his letter mysteriously disappeared in transit.