Senate Revelations 6:1

Only once up to last week had Oilman Harry Ford Sinclair faced a Senate committee since that historic spring day in 1924 when, on the advice of his personal counsel, Martin Wiley Littleton, he defied the late great Senator Thomas James Walsh and the whole U. S. Senate in the Teapot Dome investigation. For doggedly refusing to answer any & all questions on his private business affairs he was cited for contempt of the Senate, clapped into a Washington jail for 199 days (TIME. Dec. 2, 1929). Yet of all the black sheep of the Harding oil scandals he alone has been able not only to hold his own but also to strengthen vastly his business prestige. Now he even has as his largest individual stockholder righteous John Davison Rockefeller Jr.

Last week lumbering, poker-faced Harry Sinclair (who is the crudest practical-joker among U. S. tycoons) again faced a circle of investigating Senators who wanted to know why the chairman of a competing oil company later merged with Sinclair Consolidated, had received a 2 1/2% cut in the $12,000,000 profits of the 1928-29 Sinclair stockmarket pool. Prairie Oil's William Samuel Fitzpatrick had not been a syndicate member and the pool's manager Arthur Cutten had been able to shed no light on the transaction (TIME, Nov. 20). Haggard from a recent illness, Harry Sinclair resignedly puffed a black stogy, warily eyed Inquisitor Pecora and added little to the Senators' own book of revelations.

Mr. Pecora: You were anxious to find out, were you not, why Fitzpatrick got that 2 1/2%?

Mr. Sinclair: I was not.

Mr. Pecora: What did you discuss this transaction with Mr. Cutten for last Saturday?

Mr. Sinclair: As a matter of fact I thought his testimony was a joke.

Mr. Pecora: Thought his testimony was what?

Mr. Sinclair (uneasily): More or less of a joke.

Mr. Pecora: What was there funny about it?

Mr. Sinclair: The whole transaction was funny.

Mr. Pecora: What transaction do you mean?

Mr. Sinclair: I mean this investigation.

Mr. Pecora: Oh, this investigation is funny?

Mr. Sinclair: Yes.

Mr. Pecora: Quite a joke?

Mr. Sinclair: A little.

Senator Couzens: A good many people thought Teapot Dome was a joke.

The only thing that Oilman Sinclair knew about the Fitzpatrick payment was what Mr. Fitzpatrick had told him. In view of Mr. Fitzpatrick's long service in Prairie, the Rockefellers had confided that they were going to make some money for him, that they had arranged for Blair & Co. to turn the trick. "I told him that it was pretty soft for him," Mr. Sinclair added.

"Nice & Lovely" Next day the Senators let Mr. Fitzpatrick tell his own story. As a small-town Kansas lawyer he became general counsel for Prairie in 1908, rose to president by 1928. Like Harry Sinclair in Independence, Sam Fitzpatrick played in the brass band in Sedan, Kans. In later years in Independence he lived near Harry Sinclair, always rated a standing salute when he spoke in public. But last week Independence citizens, shocked by the $300.000 gift, talked about how Sam Fitzpatrick had sold out their home-town company.

Sam Fitzpatrick testified that back in 1928 some of the Rockefeller trusts (but not the Rockefellers themselves) had sold $38,000,000 of Prairie stock to Blair & Co. When he asked Bertram Cutler, potent but untitled Rockefeller lieutenant, what removal of one-half the Rockefeller influence would mean to a loyal employe, Mr. Cutler said that "they had arranged to do something for me." The "something," Mr. Fitzpatrick understood, was a slice in whatever profits Blair & Co. made out of the sale of the Prairie stock. Soon he received checks from Blair for $149,000 and later for an additional $300,000. "I thought it was a nice and lovely thing for Mr. Rockefeller to remember a faithful employe," he explained. But when Mr. Fitzpatrick thanked Mr. Cutler for making "me more money than my combined salaries during my twenty-some years with Prairie Oil," Mr. Cutler had advised: "I would not say anything about it."

"Mr. Cutler's Memory." All this threatened to sully the good name of John Davison Rockefeller Jr. who had personally led the fight to oust Colonel Robert Stewart from Standard Oil of Indiana for his part in the oil scandals (TIME, March 18, 1929). Down to Washington sped Bertram Cutler to refute Mr. Fitzpatrick's whole story. What really happened, Mr. Cutler testified, was that Mr. Fitzpatrick had expressed a wish to buy some Prairie stock. Mr. Cutler obligingly asked a Blair executive to see that Mr. Fitzpatrick had this opportunity.

Back on the stand hopped Mr. Fitzpatrick: "I know that Mr. Cutler's memory is not good. . . . Mr. Cutler is an important man. Mr. Cutler represents perhaps the most powerful influence in this country-possibly in the world. I served them for twenty-some years, and I have never heard anything fall from the lips of anybody connected with the Rockefeller organization-until I heard this testimony--that impaired my respect for or my confidence in them."

Walker. From the dignified banking house of Kuhn, Loeb & Co. where he is now a partner, emerged Elisha Walker, onetime head of Blair & Co., to testify that he "thought" that he had suggested that Mr. Fitzpatrick be cut in on the profits of both the syndicate that bought Prairie stock from the Rockefellers and the syndicate which bought Sinclair stock from Sinclair.

But by the end of the week neither Mr. Sinclair nor Mr. Fitzpatrick nor Mr. Cutler nor Mr. Walker had definitely revealed just why the gifts were made. The fact remained that three years later Mr. Rockefeller climbed, with some misgivings, into Mr. Sinclair's bed when he merged his Prairie Oil with Sinclair Consolidated.

This file is automatically generated by a robot program, so reader's discretion is required.