New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-15
II. S. Mail Line
Dipping Public,
I,aslxer Insists

lcsntinuca srou nsas ege)
S-urt to-day. Rc invited attention to
49, tart that AL quotations in the docu-
-, were taken from steno~ra phcrs'
..s,,,ss OF tho hoard's minutes.
SSsveral tnses he stopped TO dilate
,hf Importance of paragraph or to
X .1,ls;n 4 statement Frequently his
sssfor,sses assisted him in clarifying
re ssS legal air surrounding The conten-
tion:.
Chairman Iasker's Statement
The statement follows:
sThe inapelling reason Tor the action
& the newly constituted Shipping
posrd IN retaking its giant passenger
i;ncrs from the United States Mail
wss its knowledge that the company
mas insolvept.
ne existence o. the sole American pas
ss,ser sest upon the North Atlantic
ocean capable Of competing with estab-
1sshed European lines, but threatened
s - nile up against the ships further
i ~ charges besides those already Com
ssraesed which the new Shipping BOARD
nnnreherdad the government liz the end
rould be forced to pay.
an addition. the company had pur-
.ued and was pursuing & practice that
sosld not be tolerated. that is, of an
ssssolvent company selling tickets in adj
.sree for passengers and accepting
snnev for future freight transporta-
,an and diyerting the money TO other
,,rnoses without making any provision
~ @he expenses of the voyages Tor
,st;eh II was collected.
an other words. the company, having
- FINDS of its own, and in order to
lssn afoat, was placing mortgage
s',-,,, the future operation of the ships,
'ys,eh was constantly mounting in size.
no This means it was postponlng the
Fbour when the bubble would break; and
rshsr this inevitable time should arrive
.tsbs cou,panys books disclose that 1t
.sss always been insolvent), the Snip
n;nr Board would be morally bound TO
sansr the tickets which had been and
were being sold J.,
ANoreover, various creditors were de-
-,sanding that the Shipping Board guai
sntee the bills they were holding
--gainst the United states Malt snc
ce',nIed the demands with indications
,sst thev proposed TO institute bank
~nntcy proceedings and to libel ships
II he bills were not so guaranteed. The
SHINING Board could not, Of course,
comnly with such demands. The con-
seonence was the lbeling OF the Poca-
boatas in Italy, and the blow thus dea. :
sse credit Of American shipping abroad;
5bs fling of libel on account OF the
pafouse in New York, and the threat
II ike action against the 6eoTge
Washington upon return from her hcst
veyage under the Mail flag.
aTIe United states Mail is operating
s;x chartered ships. so that libels have
sser actually flied on account CT one
third of It's chartered seagoing passen :
odY feet. and the menace existed thaS
fa,s nroportion would increase to one
4sf iust as soon as the George Wash
ngtor reached New York
Board Must Keep Flag Flying
aTbe imperative duty OF the board
rsoulrcd and requires. it TO keep the
lag flying in tnc passenger servo ),
across the Atlantic Ocean. II could
nof hermit the colors to be hauled
,ouu' nor could ii permit Interruptions
AID embarrassment through creditors
rroceedinrs, which inevitably would
be produced intermittency in and Ill
hatelv complete stopDage OF salllnSs
s 1.-The studious examination made OIL
NJ ID the careful consideration which the
new board gave to the history and ac-
sual financial condition of the United
States Mail from the inception OF It's
relations with former boards estaD
.ishpd that a point rad been reached
where inaction would be fatal to the
maintenance Of an American trans
Atlantic passenger fleet.
.Thc new board could be guided only
IS the facts as it knew them. and those
facts proved that the United States
Mail had never been able TO tinance
,'vcn remotely the contract il had un
llertasen: that because Of this inability
+ had snuent constantly 10 SHIFT TO the
beard the financial and other cbllgar
tons it had voluntarily assumed; that
itwas entangled in q morass of debt;
that the patience of It's private credl-
tors had become exhausted that 1t was
scsc~ting to every eNpedient 1t could
devise to cvadc payments overdue to
thc government; and that, in short, 1t
could net command the financial re-
sources which were essential, first, TO
pay it's debts; second. to run the limited
number OF vessels it had placed IN serT-
ICE, and third. TO Increase that number
hy putting in condition the additional
vessels which it had agreed to operate.
Tine history Of sne relations Of Tor
NOR boards with the United States Mail
end its cuarautor OF the contract, an
other Mayor controlled corporation. is
illuminating in this connection. MI
aaerous and fruitless attempts were
pnedc by those boards to obtain IN
formation As to tho capitalization and
,.iuancia RESPONSE bility Of both the
scmnany and the guarantor. The COM
s'any and the guarantor refused to dis
Siose their real resources. When the
original contract was under negotiation
~ the srrlng Of 1920 Charles cJudge
Nayer. who acted as representative o.
snc company, gave an oral assurance
kRat it was ready TO invest $4,000 0ao
IN recondltioling tho vessels. That
contract was signed OF May 2S, 1920
beard:
won't say we won't get any money
pa' Of them (bankcrs), but you cant
gef money now
On August 2. 1920, Mr. Mayer re-
s'ea'ed ms original assurance in these
Says Mayer Asked for Help
am perfectly willing. as SAID in
IT, IT, pey'nnlng, | am perfectly willing
Taa have got the money, and have
tas consolidated balance sheet here; !
e,a perfectly wiling to lose $4,000 ,0Oo
- 'als business; perfectly willing TO
IT, tat to keen this flag on the seas.
paa ! need help
es,itner TIC old board nor the new
}Nro Was ever able to find any trace
sse larsc amount OF money about
~a SIR. Mayer talked so glihIy: i.
go %A'tAfi sum 80 }Ht dS inc rec