New-York tribune., 1919-04-04
Z. s. Calls Off
Deal for Ships of
Mercantile Marine
Government Notifies Com
pany That 1t Cannot Con-
slider Proposal; Directors
May Reopen Negotiations

The international Mercantile Marine
deal, by which the ships and other as
sets of the company's British sub
salaries were to have been purchased
by the United States Shipping Board,
was officially declared off yesterday.
At the same time it was stated that
conditions had SO changed since this
government checked the negotiations
with a British syndicate for the ac-
QUESTION of the company's English
fleet that the matter of renewal was
a question which the board of direc-
tors would have to decide.
In statement announcing the break
ing off Of the negotiations with the
Shipping Board, P. A. s. Franklin,
president of the International Mercan-
tile Marine Company, said:
Offer Acceptable
During the year 1918 we had pro-
tracted negotiations with British
syndicate regarding the purchase of
the steamships belonging to the Brit
ish companies in which we are inter
ested. These negotiations eliminated
in November last in an offer which,
under the then existing conditions,
was acceptable to our board of direc-
tors.
"While the details of the transaction
were being adjusted we were requested
by our government not to proceed
further with the matter, and on No
vember 26 we were informed by our
government that approval of this sale
could not be given and that our gov
ernment, in the circumstance was
prepared to take over the ownership
of these vessels upon the terms of
the British offer.
"Since that date we have used our
best endeavor to obtain consumma-
tion of the transaction with our gov
ernment. We yesterday received
letter from our government dated
April 1 informing us that they could
not consider further the possible ac
QUESTION of our British tonnage, and
that we were free, SO far as it was
concerned, to deal with the properties
as we may consider desirable.
"Thc conditions in shipping have
materially altered since our negotia-
tions with the British syndicate The
armlstlce, in the mean time, has been
signed, and there have been changes
in the United States income and excess
profits tax laws and in the exchange
situation. All of these matters make
it essential that the board of directors
should carefully review the whole sit
uatfon before deciding whether it is
now desirable to renew the negotia-
tions with the British syndicate, or
whether it might not be preferable to
continue our ownership of the various
properties, with the view of develop-
ing them under the American and for
eign flags"
Financial Condition
Mr.. Franklin said the position of
the international Mercantile Marine
Company is very satisfactory. Liquid
assets, INCLUDING cash, amount to
about $73000,000. OF this sum. he
added, approximately S41,OOO,0OO rep
resents the proceeds of steamers sold
or lost in replacement, of which other
vessels must ultimately be acquired to
adequatel y maintain the company's
service at its preWar standard.
1T should be further understood"
continued Mr.. Franklin, chat the
larger part of the above cash is in
possession of the British companies.
and that the earnings of these com
panles can be obtained from them onlv
through current dividends"
Concerning the 1918 earnings Of tho
company, Mr.. Franklin said the ,
most recent estimates indicated that
they will be pproximately the same
as for 1917, when about e ' per cent cenf
was earned for the common stock.
The tonnage of the I. M. M. fleet
including the company's interest in
steamers jointly owned amounts to
approximately $4,000 tons gross, d.
vlded substantially as to flag as fol-
lows; o-o american, 10000 tons; Brit
tons. io'ooo
r, me British syndicate's offer for the
English tonnage and assets invo1vad
an an outlay, of approximately $3.50. 900
ooo, of which it was understood that
S9o'ooo,ooo was for the fleet alone.