Evening star., 1933-12-08
LYKES SHIPPING
DEAL DESCRIBED
Texan Says Dixie "Gift" Of
so Per Cent of Earnings
Resulted in MonopoIy.
BY the Associated Press.


A gift" Of so per cent Of its earn
ings which the Dixie Steamship Co was
forced by the Shipping Board to mako
to the Lykes Brothers Tampa Inter-
ocean Co. In 1880 resulted in absorption
OF the Dixie and creation Of a monopoly
in Gulf-Mediterranean shipping, r r
Hancock, Galveston, Tex, shipping man.
charged before the Senate Mail Investi.
eating Committee yesterday.
Hancock was called to the stand by
Chairman Black at the end Of hear
ings on the companies controlled by
j. M. and J. T. Lykes, during which
the Tampa Interocean-Dixie profit
sharing arrangement had been dis
closed.
"The owners iot the Dixie Co., which
operated exclusively to the West Medi-
terranean," said Hancock. one-sixth
owner Of the old Dixie Co., were called
TO Washington and told by jenkins q.
Caldwell Jenkins, former vice president
Of the Merchant Fleet Corporation) and
Gendron tU. j. Gendron, administrative
assistant to the Fleet Corporation presi-
dent) that If we were to retain that
operation We would be forced to give
the Tampa Interocean so per cent of
all net income.
1 SoHSAuCIcu OEQCE VICIOUS.
"This considered most unfair and
vicious because that company didn't
own one dollar of the Dixie stock or
make any effort to develop the COM
pany.
"As view it, it was a gift. see no
more reason for giving it to them than
to some Methodist preacher. It didn't
rebound to the credit of the Fleet Cor
poration or help the American merchant
marine. The Government didn't save
dollar through this unusual procedure"
| Asserting he did not see why his com.
pany, with record Of efficient opera
ton and ability to compete with foreign
trade was forced out, the Texan said
| the Fleet Corporation gave the reason
| that the entire Mediterranean service
should be consolidated as an economic
measure. Hancock contended it had
the opposite effect, since a single oper-
| ator could not alternate services TO-
foreign ports through the unwieldly
set-up.
| Protest Unheeded.
'I protested to jenkins and Gendron,' .
he said, against this unfair and un-i
ethical procedure, but as usual received
no encouragement. During that period
the president of the corporation was
being changed every wash day, and
jenkins and Gendron were in virtual
control"
He testified to his knowledge the
Lykes Bros. never consulted him or the
other Dixie eXecutives-E. S. Trosdale
and George Plant-"or put forth one
effort to justify Dixie turning over ap.
proximately $4,000 to them"
He said he and Trosdale had been
designated by the Shipping Board to
form the Dixie Co. He said the
sharing move was approved by
the board on the Fleet Corporations
recommendation, but that the board
gave no reason for it.
Black asked what happened to his
line, and Hancock said it went the
same way the profits did-to the Lykes
interests.
Not in Harmony With Act.
"The Fleet Corporations withdraw
ing services from company with a
splendid record is not in harmony with
the shipping act," he added, "as it in
| reality will react against American
shippers and receivers and viii not re-
suit in any good for the American
Merchant Marine. Not only has the
Fleet Corporation and Shipping Board
policy put virtual monopoly in gulf
shipping, but such large operations are
so unwieldy as to make it almost i'm
possible for one company to develop
to maximum point any one service. y
The committee developed today that
the various Lykes companies from 1919
to last June 80, while operating Govern
ment ships and holding three mail con-
tracts, made net profits, after paying
salaries and the like, of s5,891 ,222, Of
which $306,000 was stock dividends.
Combined salaries and dividends totaled
$2,902, ,487.
Black brought out that the Lykes
set-up grew without any other outside
investment, except from operations
earnings, from the parent Florida hold
ing company started in 1919 by absorb
ing $4,000 cash and $4,000 other
assets of the GALVESTON and Neg
Orleans branches.
The committee tomorrow will take up
the Barber Steamship Lines. Inc,
owners and operators of the American
West African Line.