While President Warren G. Harding may have been a beloved figure across America, by February 1923, two years into his term, the scandals began to mount.

Actually, rumors of Interior Secretary Albert Fall's secret leasing of naval oil reserves to his two friends, Edward Doheny and Harry Sinclair, first came to light the prior April. At that time, Senator John Kendrick of Wyoming, alerted by one of his constituents, launched a probe into the Teapot Dome oil lands in Wyoming, specifically calling on Albert Fall to explain why the reserves were being secretly leased to Sinclair's Mammoth Oil Co. But it took awhile for this action to get going.

Meanwhile, on February 12, 1923, Charles Forbes, in charge of the Veterans Bureau, was asked to resign by Harding when it was discovered that hundreds of millions of dollars of supplies was lost or stolen. Forbes allegedly sold the goods and pocketed the proceeds. "You double-crossing bastard!" Harding screamed at Forbes. But rather than prosecute, Harding allowed Forbes to leave the country.

On March 4, Albert Fall resigned, under growing pressure from Harding, in order to take a job with buddy Sinclair. The Teapot Dome investigation was heating up.

On March 14, Charles Cramer, counsel for the Veterans Bureau, shot himself in the head.

Then on May 29, Jess Smith, assistant to attorney general Harry Daugherty, was confronted directly by Harding on evidence of influence peddling in an episode known as the case of "the little green house on K Street." [Of the many activities taking place at 1625 K, prostitution was at the top.] Smith shot himself the following day and this second suicide in just two months had a debilitating effect on Harding's morale. As historian Paul Johnson noted, "Harding could take care of his enemies. It was his friends who kept him up at night."

In July, President Harding took a trip to Alaska and the West Coast. One day he asked Commerce Secretary Herbert Hoover, "If you knew of a great scandal in our administration, would you for the good of the country and the party expose it publicly or would you bury it?" Hoover quickly replied, "Publish it, and at least get credit for integrity on your side." [Brown / Shi].

But on his way down the coast from Alaska, Harding was stricken in Seattle with a heart problem. He made it to San Francisco where he died on August 2nd.

On his death there was a huge outpouring of grief as the train bearing his body made its way across the country to Washington. The nation was in the midst of a boom and the people were quick to overlook a scandal, or two, or seven.

But later there was little but contempt and scorn for the president. While he, himself, was innocent, Harding was the captain of the ship and for years after his death, revelation upon revelation was provided before the various committees and the courts. And it didn't help that a relationship Harding had with one Nan Britton was brought to light. Harding allegedly fathered a child (today, deemed to be true), and later, love letters to another man's wife surfaced.

Nonetheless, a further reassessment shows Harding deserves some credit for leading the nation out of the turmoil of the postwar years and creating the foundation for the decade's remarkable economic boom. Alas, however, the problems of his administration were passed on to the new president, Calvin Coolidge.

On October 25, 1923, the first meeting of the Senate subcommittee to investigate the Teapot Dome oil leases was held, chaired by Senator Thomas Walsh, Democrat from Montana. Walsh had used the 18 months since his appointment in the spring of 1922 to study the case and during that time, public interest in it had died down. But it was quickly reawakened with the impaneling of a federal grand jury which indicted Albert Fall, along with Doheny and Sinclair.

As the real proceedings began, Secretary of the Navy Denby was forced to resign. Denby, while innocent, was an embarrassment to the Harding administration for allowing Secretary Fall to establish the oil leases with the oil companies.

Denby volunteered his resignation so that he would not be a burden to the new President Coolidge, Silent Cal having refused to ask for it saying, "(He would not) sacrifice any innocent [or] retain in office any unfit man for my own welfare."

Early in 1924, the Senate investigations indicated that oil titans Doheny and Sinclair had bribed Albert Fall, while he was Secretary of the Interior, in order to gain the leasing rights to the government's reserves at Teapot Dome (Wyoming) and Elk Hills (California).

Historian Robert Sobel relates that "Fall testified that he had leased Teapot Dome in return for a royalty and the construction of a pipeline to Kansas City. He said he also leased Elk Hill in return for a royalty and construction of storage tanks. Fall argued that the oil was being drained, quite legally, by wells on adjoining lands. As a result, the reserves would be depleted in a few years. By leasing the land, Fall argued, the government received revenues that would otherwise be lost."

Soon, many in the country were claiming that the entire cabinet and even Coolidge, himself, had been involved in the oil transactions. Coolidge remained calm, however, and he reaped an abundant amount of good will from the way in which he handled the charges. And he acted quickly.

On January 26, 1924, Coolidge appointed two special counsels, a Republican and a Democrat, to investigate and take appropriate action. The appointees, Owen Roberts and Atlee Pomerene, were beyond reproach as they had the professional expertise necessary to conduct a fair investigation.

At the same time, Senator Walsh was continuing with his Senate inquiry. Walsh also had a sterling reputation yet he faced intimidation from parties loyal to Fall and company. His office was ransacked, his phones tapped and his daughter warned that he should lay off. Instead, he followed the money and proved that Fall lied to the Senate. Experts were called who contradicted Fall's testimony that extensive drainage from the reserves would have transpired without his leases. And Doheny testified that there was at least 250 million barrels in the Elk Hills reserve, acknowledging that he expected to make about $100 million over 30 years on the deal. For his part, Sinclair testified that he had made $25 million off Teapot Dome just by fraudulent stock manipulation.

Senator Walsh further learned in picking up the money trail that Fall, not a wealthy man, had purchased land and made improvements to same in the amount of $175,000. When questioned as to this, Fall said he received loan money from a wealthy friend, Edward McLean. McLean was then asked to produce checks. But McLean said he gave Fall cash. Finally, McLean admitted he hadn't made the loan at all in the first place. It was shortly thereafter that Doheny and Sinclair said they had lent Fall $400,000.

As a result of this twisted tail, special counsels Roberts and Pomerene were able to gain indictments on June 30, 1924 against Fall, Doheny and Sinclair. But it wasn't until October 10, 1927 that the Supreme Court ruled that Sinclair's Mammoth Oil Co. had fraudulently negotiated the Teapot Dome oil lease.

And then on October 7, 1929, the trial of all three defendants began. On October 25, Sinclair and Fall were convicted, with Fall receiving a one-year prison sentence to go with a $100,000 fine. Sinclair received six months, ostensibly because he tried to bribe the jury. But Doheny actually won acquittal in March 1930.

Albert Fall became the first cabinet member in U.S. history to be sent to prison for misconduct while in office. Further investigations revealed that Democrats as well as Republicans were involved in the scandals that engulfed the Harding administration.

And maybe it wasn't just a simple coincidence that Fall was convicted on October 25…with the Dow Jones at 310. Because just 4 days later it crashed, closing at 230. And the Crash signaled the end of an era, in more ways than one.

Sources: See Part I

Brian Trumbore