The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-08-15

| fnent; and that, in short il could not
command the financial resources which
were essential--first,, TO pay its debts i:
second, to run the limited number OF
vessels 1t had placed in service and
third, to Increase that number by put
ting In condition the additional vessels
which It had agreed to operate"
! Mr.. Lasker further declared that the
| records of the Shipping Board showed
that when the contract with the United
States Mail was signed on May 2S, 1920
Charles Mayer said he was ready to
invest sl0,000.000 In reconditioning the
vessels. The board never was able to
find any of this money. according to
Mr. Lasker. and no actual cash ever
was paid by the United States Mail
into its treasury.
There were a number of companies
organized by the Mayors" said Mr.
I,asker. which interlocked to the point
OF bewiderment. and with all of those
with which the Shipping Board had re-
lations 1t suffered large losses. The
interlocking which existed permitted a.
species of juggling with some S475,000
Shipping Board fiduciary funds. and
1t is the purpose of the board to estab-
lish the facts regarding this procedure
and take such action as seems jusu-
fable.
THE United States Mail was incor-
porated ostensibly with a capital of
$1,000. 900. The stock, however was and
is nothing but water Not share was
issued. Mere pencil notations were
initiated on the stubs of the stock book.
The required Federal stamp tax of
$4,000 was not even paid. No actual
money was put into the treasury
Mr.. Lasker charged that the alleged
100000 consisted of three Items
uncashed checks "a worthless guaranty
Of an interlocking corporation. and the
use of valueless stock of still another
interlocking corporation.
The company according to Mr.. Lasker,
agreed to pay all the costs of recondi-
tioning the vessels turned over to It.
to charter the ships for five years and at
the end OF that time to receive from
the Government say per cent OF the
amount spent on reconditioning. I'm
mediately after the contract was signed
Mr.. Lasker said, the company began its
efforts to induce the former Shipping
Board to pay for the reconditioning. At
last 1t persuaded those in authority to
spend more than $5.000.000 in recondi-
tioning the ships, though the contract
according to Mr.. Lasker, specifically
provided that the company should pay
such excuses.
Big Claims Detailed.
Mr. Lasker said that claims will be
made against the Shipping Board for
recondtioning bills contracted by the
United States Mail amounting to more
than 100000, for voyage repairs
amounting to moro than 100000. for
another 100000 to prevent the ships
being seized to satisfy contractors and
for hundreds of thousands Of dollars
worth Of supplies, including coal. meat
and butter and eggs. This is exclusive
of vast foreign debts which the company
Is alleged to have contracted In one way
or another,
In addition Mr.. Lasker gave an item
lied statement showing that the line
owes the Board S4S9,43o.6 for charter
hire. To sum up. he said that "ther,
Is hardly single clause in the original
contract or supplementary agreements
which the company has not at one time
or another evaded or violated" And
the primary reason. he charged, was
that the company was insolvent ana
seeking to meet expenses with revenues
derived from the operation of the ships.
1.-THE Shipping Board" said Mr.. Las
ker. could not disregard the warning
contained In the action of the Mayors
and their various companies In pledging
all of their assets which had any real
value to other creditors and thereby
placing them peyond the reach of the
board for meeting the various defaults
OF the company to the Government;
nor the Mayers's transfer to third per-
sons of an interlocking company which
had purchased Shipping Board ships
upon which heavy mortgages lay.
above all the new Board could not
allow the American merchant marine
TO be blackened in the eyes Of the world
by the removal from the ocean of the
fleet of the greatest advertising valu--
that In the North Atlantic passenger ser
vice.
when the Board acted on July p
IL deliberately selected the United Amer
lean Lines to operate temporarily the
United States Mails boats when pos.
session of them was obtained for the
dual reason-first because 1t would
not engage in direct Government opera
ton. and second. because the United
American Lines had the necessary i'm
mediate terminal facilities and agencies
at home and abroad. The United Ameri-
can Lines have purchased (not char
tered) other ships from the board. and
the board holds mortgages upon them,
which can be promptly foreclosed In
case of default. The boards agree
ment with the United American Lines
was purely temporary and did not obli-
gate the board as to the future dispo-
sition of the ships"