The New York herald., 1921-08-13
MAIL Line SHIFTED
BACK TO OLD HANDS
Board of Directors, Elected
Thursday, Ousted When
Creditors Make Protest.
WILL CLING TO VESSELS
Plan to Return Nine Back
to Shipping Board Re-
ceiyes Setback.
INJUNCTION UP TO-DAY
Accusations of Secret Deals
Will Be Threshed Out in
Court To-day.
WILL CLING TO VESSELS
INJUNCTION UP TO-DAY

After a day crowded with surprising
developments in the fight between the
United States Mail Steamship Com
pany and the Shipping Board for pos
session of the nine steamships which
were seized July %, new turn came
late yesterday when the old board of
directors, with Francis i. Mayer as
president, again assumed control Of
the line.
The legal aspects Of the controversy,
despite the changes in the directorate
and the recriminations which were
passed between counsel for both sides,
apparently are the same as before the
upheaval The injunction restraining
the Shipping Board from interfering
with the operation of the ships is still
In effect
The next court action will be this
morning, when counsel for the Ship
ping Board will go before Judge Man
ton in the Federal District Court and
ask that a decree be entered dis
solving the injunction and restoring
the ships to the Shipping Board. This
request will be made with the con-
sent of the board of directors which
went out Of control late yesterday
and, therefore, according to counsel
for the line, their consent is worthless
and the action will amount to nothing
Counsel for the Shipping Board init
mated that something might come OF the
action and that the consent OF the
board, even though II IS out OF power,
is all that is necessary
Won't Give Up the Ships.
When the announcement was nade
Thursday that the United States Mail
line had changed hands it was assumed
that outside capital had come IN 70
purchase the nine ships from the Ship
ping Board Mr. Mayer and his father,
Charles Mayer. had been negotiating
with outside interests with view to
buying the ships outright. Control ap-
parently passed to Malcolm Chace OF
the Old Colony Trust Company of Bos-
ton and Alexander Smith of the broker
age firm OF Peabody, Hcughtelins Co.
of Chicago
have been picked by Chace and Smith.
took charge late Thursday. They
elected as president of the line Frank
Bynum i former employee Of the Ship
ping Board and now a partner of Q. ID.
Mallory & Co. of ] ] Broadway.
1t Immediately became apparent that
the new board of directors had no in
tenion whatever of either buying the
ships or of operating them on a modified
contract. The first thing they did was
to adopt a resolution. after which
Bynum wrote TO De Lancey Nicoll,
counsel for the Mayer regime. instruct
ing him to appear before Judge Manton
yesterday morning and agree TO abandon
the injunction so that the ships might
be turned back to the Shipping Board.
Bynum told him that In the event he
was not willing to do so he desired Ira
Campbell. formerly attorney for w.
Averill Hartman. to represent the line
in the matter.
Attacks w. Marshall BuIIitt.
But Mr.. Nicoll was not agreea Bile.
When he faced counsel for the other
side in Judge Mantons chambers he
declared emphatically that he would not
agree to give up the ships. as 1t would
be betrayal of the rights of the stock
holders and creditors, and then he
turned on w. Marshall Bullitt, counsel
for the Shipping Board, and charged
him with having gained control of the
line and of scheming to return the ships
to the Shipping Board through the ac-
tion of the new board of directors. He
called the new directors dummies y
When Mr.. Nicoll charged Bullitt with
having gained control Of the line the
Shipping Boards attorney sprang to his
feet.
1T Is not So" he shouted. That was
the beginning OF tilt which lasted for
some time. Mr.. Bullitt denied all
charges, bat he steadfastly refused to
tell who Chace and Smith were or how
the new board had obtained control Of
the line.
THE new board of directors OF the
line" said Mr.. Nicoll. tells me TO re-
turn the ships. The company Is appar-
emily, IL not actually. insolvent."
Mr.. Nicoll explained that he had
come before Judge Manton a few days
before and asked for receivership and
that within less than forty-eight hours
afterward he had appeared again and
said that inasmuch as new money had
been obtained by the line Ne receiver
ship would not be necessary.
But no more money has found its
way into the line" said Mr. Nicoll. The
company is just where it was when /
made the application for receivership.
Fears Hopeless bankruptcy.
What am ! asked to do? Surrender
these ships--to be a party 10 scheme
by which a corporation shall be left IN
hopeless bankruptcy and all OF the cred
itors be left 20 whistle for their money"
Judge Manton told both parties that
the thing TO do was TO move for sub
stitution or counsel and have tho whole
thing threshed out in court, but later de-
Velopments made this move unlikely.
The argument before Judge Manton fol-
lowed the attempt or Bullitt and Camp
bell on Thursday TO have Judge Knox
yacate the injunction. Judge Knox re-
fused, telling them that X was "ele-
mcntary principle" that the steamships
attorneys should be notified Of the move
Chace and Smith made a statement
late last night explaining their interest
in the case. They said they represented
the security holders Of the Swlftsure
oil Transport Corporation, and that n
short time ago they had declined an Of
fer of stock I'm the United States Mail
Later, however they were asked TO step
In and elect o new board OF directors.
with the understanding that the new
board would try to adjust matters with
the Shipping Board.
The first demand or the Shipping
Board before any negotiations could be
conducted was that the steamships be
turned over to them. This the new boa I'd,
put In by Chace and Smith. was willing
70 do. but the hitch cuf,e when To apga.y