Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-15T06:02:41.187Z Has data issue: false hasContentIssue false
  • English
  • Français

The Political Allocation of Mineral Rights: A Re–Evaluation of Teapot Dome

Published online by Cambridge University Press:  03 March 2009

Gary D. Libecap
Gary D. Libecap
Affiliation:
Associate Professor of Economics and Director of the Karl Eller Center, University of Arizona, Tucson, Arizona 85721
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper re–examines the naval reserve oil leases issued by Interior Secretary Fall in 1922 that led to the Teapot Dome controversy. The analysis shows that the leases were the only efficient oil rights arrangement on federal lands through 1930. They were superior to either the naval oil storage policy practiced prior to 1922 or to the general leasing practices found on other federal land. Nevertheless, they were attacked by conservation groups and small oil firms and cancelled in 1922. To explain the opposition to the leases, this paper examines interagency and interest group rivalries for control of federal land. During the period preceding Teapot Dome, the federal government began withholding title to vast tracts of land, and issues of agency jurisdiction and interest group access had not been resolved. The paper concludes that Teapot Dome had little to do with oil conservation and more to do with settling jurisdictional disputes over federal land. The Teapot Dome controversy led to the establishment of the Federal Oil Conservation Board.

Type
Papers Presented at the Forty-Third Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 44 , Issue 2 , June 1984 , pp. 381 - 391
Copyright
Copyright © The Economic History Association 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 For example, see Bates, J. Leonard, The Origins of Teapot Dome (Urbana, 1963)Google Scholar and Noggle, Burl, Teapot Dome, Oil and Politics in the 1920's (Baton Rouge, 1962).Google Scholar An exception is Nash, Gerald D., United States Oil Policy 1890–1964 (Pittsburgh, 1968).Google Scholar

2 Gates, Paul W., History of Public Land Law Development (Washington, D.C., 1968), p. 580.Google Scholar

3 The position of conservationists for land withdrawal is outlined in Gates, History, pp. 726–33;Google ScholarPeffer, Louise, The Closing of the Public Domain (Stanford, 1951), pp. 114–17;Google ScholarPinchot, Gifford, The Fight for Conservation (New York, 1910), and Breaking New Ground (New York, 1947).Google Scholar

4 Johnson, Ronald N. and Libecap, Gary D., “Efficient Markets and Great Lakes Timber: A Conservation Issue Reexamined,” Explorations in Economic History, 17 (1980), 372–85.CrossRefGoogle Scholar

5 Pogue, Joseph E., The Economics of Petroleum (New York, 1921);Google ScholarIse, John, The United States Oil Policy (New Haven, 1926);Google Scholar and Stocking, George W., The Oil Industry and the Competitive System, A Study in Waste (Boston, 1925, reissue, Clifton, N. J., 1973).Google Scholar

6 Ise, John, Oil Policy, pp. 91, 141;Google Scholar American Petroleum Institute, Facts and Figures (New York, 1951), p. 166.Google Scholar

7 Federal Oil Conservation Board, Complete Record of Public Hearings (Washington, D.C., 1926), 30; Report III (Washington, D.C., 1929), p. 10.Google Scholar

8 See Ragland, Reginald W., A History of the Naval Petroleum Reserves and of the Development of the Present National Policy Respecting Them (Washington, D.C., 1944), pp. 19–49.Google Scholar

9 The efforts behind the transfer of the Forest Service are described in Pinchot, Breaking New Ground.Google Scholar

10 Ragland, A History, pp. 107–10; Stocking, The Oil Industry, pp. 281–82.Google Scholar

11 Senate Document 196, 67th Congress, 2nd Session, Leases Upon Naval Oil Reserves, p. 32; Senate Report 794, 68th Congress, 1st Session, Leases Upon Naval Oil Reserves, p. 12.Google Scholar

12 For the conservationist position on small tracts, see Pinchot, The Fight, p. 12, and Bates, The Origins, p. 3. Concern over the power of large firms is reflected in Ise, Oil Policy, p. 126, and Stocking, The Oil Industry, p. 298.Google Scholar

13 The Interior Department position is outlined in the Annual Reports of the Secretary of the Interior, pp. 1911–14.Google Scholar

14 Gates, History, p. 740; Bates, The Origins, pp. 64–87.Google Scholar

15 Oil and Gas Journal, July 3, 1930.Google Scholar

16 Senate Document 196, 33. Ragland, A History, 107, 110–113, 117, and Exhibit IV.Google Scholar

17 Oil Weekly, April 15, 1922.Google Scholar

18 Senate Report 794, p. 12. Senate Document, 196, PP. 40–46, 58–90.Google Scholar

19 Ragland, A History, 135–43.Google Scholar

20 Oil and Gas Journal, April 20, 1922. Senate Report 794, pp. 11–33.Google Scholar

21 The problems with consolidation of small tracts are discussed in Libecap, Gary D. and Wiggins, Steven N., “Contractual Responses to the Common Pool: Prorationing of Crude Oil Production,” American Economic Review, 74 (03. 1984), 87–98.Google ScholarHam, Joe, The Economics of the Pacific Coast Petroleum Industry, Pt. 3 (Berkeley, 1947), p. 29.Google Scholar

22 Oil Weekly, April 22, 1922, May 13, 1922; Oil and Gas Journal, April 27, 1922.Google Scholar

23 Oil Weekly, 08 August 12, 1922; Oil and Gas Journal, August 10, 1922.Google Scholar For discussion, see Wailer, Robert A., “Business and the Initiation of the Teapot Dome Investigation,” Business History Review, 36 (Autumn, 1962), 334–53.Google Scholar

24 Federal Oil Conservation Board, Report to the President of the United States (Washington, D.C., 1926);Google ScholarNoggle, Teapot Dome, p. 179.Google Scholar