The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-08
GERMANS SHUT OUT,
IS HARRIMAN'S VIEW
Cannot Control American
Ship Corporation, He Writes
to Benson.
STOCK PURCHASE BARRED
Only Working Agreement, 1t
Is Declared, Is to Prevent
Any Discrimination.
STOCK PURCHASE BARRED

German money will own no part OF the
stock In the company which signs the
final contract with the Hamburg-Amer-
lean Line, according to letter made
public yesterday by w. A Hartman,
which was written by him in July to
Admiral Benson. chairman OF the United
States Shipping Board, In reply to the
Admirars request for information in that
connection.
Admiral Benson asked for an explans-
ton Of clause in the general agree
ment between the American corporation
and the German line. which reads:
"A corporation now organized or to
be organized, having at least 10000
600 paid up capital and at least 81 per
cent. of the stock of which is to be
owned by the American Ship and Com
merce Corporation"
Mr.. Hartman explained that because
the American Ship and Commerce Cor
poration is not incorporated in this
State. and because the laws Of the State
are not as favorable to such a corpora
tion as to one formed here, 1t was de-
cided to have the final agreement signed
by new subsidiary company. the Kerr
Navigation Corporation company
now owned by the Hartman corpora
ton. and Incorporated in this State.
He explained Furthermore that the
Hamburg American officials wished to
be sure that the operations Of this new
company would be controlled by the
American Ship and Commerce Corpora
ton, and for that reason the clause was
inserted.
Assures American Control.
"As a matter Of practical fact" the
letter adds, ''the American Ship and
Commerce Corporation will probably
own all the stock of the new company.
If, however, this was for some reason
inadvisable. certainly all the stock
would be owned by American interests
and none by the neutrality-suspicious.
Line. I may state definitely that there
Is no agreement, either expressed or i'm
piled for foreign interest in this stock.
II read your second question as to
whether the line draws its income from
the line only, or whether 1t shaeS In the
proceeds from the corporation as well.
The answer to this is that 1t draws its
income from the line only and has no
interest in the proceeds from the cor
poration.
you refer to q statement that mutual
arrangements as TO the settlement of
financial questions would be entered
into. / am not just sure of what you
refer to unless 1t be to the final para
graph of section 2 of the general agree
ment exhibit Al, which reads:
Parties will agree from time to time
upon basis Of accounting and settle
ment as between themselves in regard
to the earnings of the services to be
conducted hereunder
Applies to Parallel Routes.
This clause Is operative only when
both parties have ships in the same SER
vice, and the Intent Is that in working
out the steamers of both parties run
ming side by side with each other there
shall be no incentive for one party to
discriminate against the other in the
cargoes carried or the revenues derived
therefrom and 1t is the idea, at stated
intervals to level the earnings of all
steamers of each party in a particular
service, so that they will participate
with each other on an equal gross
revenue basis. ton for ton, as far as 1t
can lawfully be done. Such an arrange
ment will clearly prevent the Hamburg
American Line from discriminating
against American shipping by giving
their own ships the more desirable and
higher paying cargoes.
81 thank you for bringing up these
points and, after you have read our
explanation OF same and done so in con-
nection with our letter earlier in the day
I trust ali will be explained to your
satisfaction but should be glad to
further elaborate II you wish, or answer
any other criticisms that may later
occur to your"