The New York herald., 1921-08-15
us. MAIL Line BROKE,
SHIPPING CHIEF SAYS
Chairman Lasker Asserts That
Affairs of Company Are
Hopelessly Tangled.
KNEW IT ON JULY p
Says That Nobody Was Paid
and That Z. s. Is Respon-
sible for Huge Debts.

Albert d. Lasker, chairman of the
United States Shipping Board, in the
first public explanation which he has
made of the seizure on July % of nine
ships operated by the United States
Mail Steamship Company, gave out a
statement yesterday IN which he de-
clared that the line was insolvent;
that it had been insolvent from the
beginning, and that 1t was foreseen by
the board that disastrous crash must
come unless 1t stepped in.
"On July 22 we knew that the Uniteo
States Mail was insolvent," he said
"and the action we took, far from
being the cause of the company's EN-.
barrassment at any later time, was
taken because we felt, with the knowl-
edge the Government had of the
Mayors financial condition, we were
not justified in allowing innocent
creditors to be further duped."
In explaining the reasons for the
action of the board against the United
States Mail, OF which Francis r. Mayer
is president, and his father, Charles
Mayer, is chairman of the board Of
directors Mr.. Lasker said:
"The hopelessly tangled financial
situation OF the United States Mall and
the Mayers was known to the board
when 1t undertook to retake the ships
| The board was advised by its owr
| n
sci that II would surely get possession
OF the ships by filing possessory libel.
There can be no doubt that under the
possessory libel procedure the Shipping
Board could have got its ships back
But such procedure, counsel also ad
vised. would tie the ships up for an
indefinite time.
THE Shipping Board was unwilling
to take any action. even that which In
sured its legal rights. which might take
the stars of its fleet temporarily OF
the seas Immediately the United States
Mail went into court the board refrained
from making public statements in the
hope that the Mayors would come to
their senses In the full realization OF
the financial difficulties in which they
had involved themselves. and in good
conscience act as good Americans and
ers-the Shipping Board"
Mr. Lasker's prepared statement
which has been sworn to and will be
filed with Judge Manton in the United
States District Court this morning. sets
forth that the insolvency of the United
States Mall not only endangered the
existence of the only American pas
senger fleet on the North Atlantic
capable of competing with established
European lines. but threatened to pile
up against the ships further large
charges which the new Shipping Board
believed the Government in the end
would be forced to pay.
SIN addition" said Mr.. Lasker, ''the
company had pursued and was pursu-
ing a practice that could not be toll
Grated. that is of an insolvent company
selling tickets in advance for passengers
and accepting money for future fregh,
transportation, and diverting the none,
TO other purposes without making any
provision for the expenses of the voy-
ages for which It was collected.
I'm other words. the company. hav-
ing no funds of Its own, and in order
to keep afioat. was placing a mortgage
upon the future operation OF the ships
which was constantly mounting in size
BY this means II was postponing the
hour when the bubble would break
and when this inevitable time should
arrive tthe company's books discios,
that II has always been insolvent) the
Shipping Board would be morally bound
to honor the tickets which had been
and we're being sold"
Moreover. Mr.. Lasker said. there wore
indications that various creditors of the
United States Mall intended 10 insti.
tute bankruptcy proceed ings and TO libel
ships IL the Shipping Board dld no,
guarantee the lines bills. He pointed
out that the Pocahontas already has
been iibeiled in Italy. and threat o,
like action was made after the frs,
voyage OF the George Washington.
''The new Shipping Board" said Mr.
Lasker. could be guided only bv IN,
facts as 1t knew them, and those fact,
proved that the United States Mail ba,
never been able to finance. even re
motely. tho contract II had undertaken
that because of this inability IL haf
sought constantly to shift to the boar,
the financial and other obIig, tions ii
had voluntarily assumed tina, II wa,
entangled IN a morass of debt that tn,
patience OF it's private creditors hac
become exhausted; that Il was resortIns
TO every expcdient II could Govise Il
evade payments overdue to the Govern.
Continued on Third Pdoe