The New York herald., 1921-08-13

II was apparent that they could be Of
no further use In settling the contro-
versy, they stepped out and the new
board OF directors. made up OF men
from the firm OF c. y. Mallory q Co.,
went out with them.
De Lancey Nicoll. Jr., gave a detailed
account of the events leading up to the
forming of tbs directorate whose tenure
OF office was so brief. AS to the ques-
ton of the solyency Of the company. he
said that If the outstanding obligations
We're paid and all money due the line
was paid in there would not be $4,000
diffenance either way. The Government
owes the line approximately 100000, he
said. while the line owes the Govern
ment about S237 200 for charter hire.
According to the explanation Of coun-
sci for the line the Swiftsure oil Trans
port Corporation, OF which the Mayors
own stock amounting to rs per cent,
purchased q fleet of tankers from the
Shipping Board for s225 a deadweight
ton, and have paid 100000 on the pur-
chase. The money was raised by the
sale of secured notes by Peabody,
Houghteling & Co. of which Smith is
president. The France and Canada
Steamship Corporation. which owns a
largo part of the United States Mail,
gdare ntaed the notes.
The story is that the Swiftsure OH
Transport Corporation was in arrears on
payments and that the Shipping Board
threatened to take over the tankers.
Chace and Smith, whose firms have an
interest in the Swiftsure company
amounting to $4,000 900, stood to suffer
heavy loss. They went to Bullitt. II
Is charged, and made an agreement with
MIN whereby the Outside interests
would take over the United States Mail,
reorganize the line and operate the
ships, with all litigation dropped. This
agreement, 1t is further charged. was
not made in good faith, and A. ID.
Lasker. chairman Of the Shipping Board.
refused TO approve ii, as Smith and
Chace and Bullitt must have known he
would. But In the meantime. according
to counsel for the line, control of the
line had passed to Chace and Smith and
their dummy directors" who Were
ready to turn the ships back to the
Shipping Board.
Smith and Chace, it Is charged, did
not see the lines counsel, but carried
on their negotiations directly with the
officers of the company, who We're under
the impression that the company would
be reorganized with a view to continuing
operation OF the ships.
Creditors Forced ResfGnati0ns.
Mr.. Nicoll said that, in his opinion
the resignation Of the new board was
forced by irate creditors and stockhold-
ers who saw that they were about To
lose everything. Coal, ship repair and
other companies, he said, are due about
S2,613,0 900. Mr. Nicoll said that the
company, when the proper time comes
will be ready to show that other inter
to purchase the ships as 1t originally in
tended to do.
An agreement was all ready to go into
effect yesterday morning between the
Shipping Board and the United Amer
lean Lines, of which w. Averill Harri-
man is president, for the ALLEGATION OF
the nine ships to Hartman for ninety
days, with the promise of renewal. This
plan failed because of the fact that the
court action did not result as Bullitt had
hoped it would, and later in the day the
stock, which had been held in escrew by
Chace and Smith, was turned back tc
the old board. Mr.. Nicoll said he had
verified the agreement between Harri-
man and the Shipping Board by long
distance telephone call to j. Barstow
Smull, a director of the board, at Wash
ington.
Counsel for the United States Mail
pnofess to see Hartman in the offing
with paint brush ready to change the
colors Of the nine steamers to those Of
the United American lines as soon as
he can do SO.