The Washington times., 1920-09-11
REVEALS KERR ;
SH|PSRAKE-OFF
Britishers' Contract Called for
5 Per Cent on Gross
incomes.

NEW YORK. Sept. ll.-Whether
millions In shipping profts under the
American nag go to III. Farquharson
Kerr and Alfred Il. clegs. British
subjects. or to the w. Averill Harri-
man interests in the new Kerr Navi-
cation Company Is the subject OF liti-
cation over the steamship Kerlew, In
the supreme court.
After Justice Mitchell yesterday
signed an order adjudging Hartman
and two officials OF his firm In con-
tempt, but suspending punishment.
John B. Stanchheld, attorney for .hs
Kerr Steamship Company, controlled
by the Britishers. appeared before
Supreme Court Justice Lehman to
argue their application for a perma-
nent injunction restraining the Har-
riman interests from taking posses
sion of the Kerlew. He revealed In
court that the Kerr-Clegg company
was getting 5 per cent commission on
the gross income OF all ships operated
by IL for the Hartman interests.
The operating contract between the
Kerr Navigation Company and the
Kerr Steamship Company was de-
nounced as one-sided by George A
Ellis, representing the Hartman in
when Kerr and Clegg were in control
of both corporations, just before they
turned over the navigation company
to Mr.. Hartman and his associates.
UNIQUE CONTRACT DISCLOSED.
A unique feature of the contract
which gave Kerr and Clegg all the
functions OF owners except the hold
ing OF title to the ships, was that 1t
should apply for five years not only
TO the eight Austrian ships which
Kerr and Clegg bought just before
the declaration of war against Aus
tria, but to all other ships which
the transferred company might ac-
quire.
The American Ship and Commerce
Corporation owns, among other ship
yards. the Cramp yards at Philadel-
phia, and the 8 per cent commission
to the company, of which Kerr and
Clegg retained control, would amount
TO many millions.
The charge that Mr.. Hartman and
his associates contemplated a monop-
oily of shipping was made by Mr..
Stanchfield. He also charged that
Hartman and his associates gave the
information which led to the Internal
Revenue Department impounding.
pending excess profits, tax inquiries.
the S4,eOU,UOO wnlcn pdSseu peLwecn
Hartman and Kerr and Clegg.
Mr.. Ellis argued that the contract
between the companies was simple
agency contract. despite it's unique
/ provisions, and that the only remedy
of Kerr and Clegg was a suit for
damages.
FAVORED BY BOARD.
Mr.. Stanchfield argued that by serv-
ing notice of termination of the
agency contract on September A, and
by putting a United States marshal
on board the Kerlew. the Hartman
interests waived their rights to ter
inmate the contract under it's ninety
day cancellation clause, notice OF
which was given July "a, and that
his clients were entitled to operate
all the Hartman ships for the Ave
year contract period under a con-
tinuing injunction.
Mr.. Stanchfield asserted that Ship
ping Board officials not only expe-
dited the purchase of the eight in
termed Austrian ships by Kerr and
Iegg, but actually suggested to them
that they buy the-vessels.
Justice Lehman reserved decision
as to making the temporary injunc-
tion permanent.