The New York herald., 1921-07-29
ship SEIZURE CASE
| GOES TO U. S. court
Transfer Keeps Injunction
in Effect for Week y
at Least.
NEW SUIT is BEGUN
N. Y. HarbOr and Dry Dock
| Co. Asks $175,900 for
Work on Potomac.
BOARD rs CODEFENDANT
q. s. Mail Co. Explains Why
Company Is Behind in
Charter Hire.
BOARD rs CODEFENDANT

tied up for at least week the legal
proceedings resulting from the seizure
last Saturday of nine of the company's
vessels by officials of the United States
Shipping Board. The injunction Will
be operative during the interim. how
ever, thereby enabling the United
States Mail TO operate the ships.
But the troubles of the United States
Mail assumed a more complicated as
pect through the announcement II
would be named defendant to-day in
suit for $4,000 growing out Of the
reconditioning Of one Of the vessels
chartered from the Shipping Board.
The Shipping Board is to be named CO.
defendant in the action. which Will be
begun by the New York Harbor Dry
Dock Company. officers Of the steam
ship company intimated the proposed
suit is but further attempt to en-
barrass them and an effort to make u
appear the company Is not in souno
condition financially.
No action was taken by the Shipping
Board on the United States Mails ofrer
to buy the nine steamships. The Ship
| ping Board, on the contrary explained
it was up to the board rather than 70
| the United States Mail to name the
figure at which the ships could be
bought and quoted section OF the
steamship company's charter to show
| the vessels could not be purchased II
there was any default. which Is the
main charge OF the board against the
company.
Explains Purchase Oner.
| Officers Of the steamship company ex-
planned that the 100000 offered had
| not been raised overnight and that
neither had 1t been offered to the COM
pany BY finsnciers who felt the United
states Mail vas the injured party in It's
row with the Shipping Board. The offer
to buy TIN. ships was made possible,
semi official statement said. by d
group of large financial interests IN
New York" who had been negotiating
with the United States Mall for more
than four months. The identity of these
interests Is being withheld by the CON-
pany's officers for the present.
The supposed reason why the United
State Mail discontinued paying charter
hin. on March 81 was explained Tor tne
first time. Some time in February. IL
was stated. officers of the company
went to Rear Admiral Benson, then
head Of the Shipping Board, and asked
that the charter hire of $3.50 month a
dead ton be modifisd Admiral Benson.
the informant said, agreed the figure
was too high, and as he was about to
surrender the chairmanship Of the board
he suggested the matter be left over for
| the new board.
| Two notices of default were sent to
the United States Mail since March 81,
| and on each occasion, 1t was stated. tho
matter was taken up with an officer OF
the board, whose advice was to ignore
the notices pending a modification Of
| the contract The United States Mail
| still was awaiting this modification
when J. Barstow Smull. vice-president
of the Shipping Board. and Elmer
Schlesinger. the boards general coun-
sell pounced on the nine steamships. 1t
was learned that Rear Admiral B.nsoi,
probably will be called by the steam
ship company's attorneys to prove a
modification of the contract was under
consideration.
Statement From Board.
The United States Mails offer to buy
the vessels brought forth the first state
ment the Shipping Board has issued
since the Injunction was obtained last
Monday. W. Marshall Pullitt. specia,
counsel for the board in the suit was
authority for it, and 1t was as follows:
"The main purpose OF the Unred
States Shipping Board with reference to
the United States Mail Steamship Com
pany was and is to protect the Govern
ment's interests and to keep the boats
sailing. This the board proposes to do.
"Tt must not be forgotten that In such
vast enterprise there are many mat
ters OF pressing Importance, such. for
example. "a the request to Congress for
an appropriation for the conduct OF the
Shipping Board and It's operations.
80 far as the offer OF the United
States Mail Steamship Company is con-
cerned. Il will be treated as the board
has treated all matters. IN an orderly
way"
PreGicatod on this statement was n
verbal one by Mr. Bullitt In which ne
quoted clause 13 of the steamship COM
pany's charter. Under this clause, II
was claimed, the United states Mail has
no right TO purchase the ships. since II
is alleged II is in default OF charter
hire amounting to 100000. And fur
thermore. II was pointed ort, II II came
to a matter of sale the Shipping Board
would name the price. the intiniation
was given the figure would exceed
greatly the 100000 offered by the
United States Mail.
The proceedings attending the trans
fer Of argument OF the injunction tc
the United States District Court took
but a few minutes. The steamship com.
pany was represented by De Lancey
Nicoll, sr.. De Lancey Nicoll. .Jr.,' and
Harold @. Walter. Mr. Bullitt. Henry
w. Taft and George Cos@ill represented
the Shipping Board. Justice Martin was
sitting in Part H.. Special Term, Supreme
Court waiting for the lawyers to appear
and argue the motion when word was
brought to him that Justice Burr had
signed the transfer order in chambers.
Attorneys for the steamship company
announced afterward that they will move
to have the argument remanded tc
the Supreme Court when It comes up foi
argument next Thursday before Judge
Augustus NJ Hand In the United States