Shipping Chapter

The protracted dickering over who shall rehabilitate U. S. Lines and complete the process of getting the Government out of the shipping business (TIME, June 29 ct seq.) continued all last week. Chief developments were: 1) a hitherto untold chapter of U. S. shipping history; 2) an apparent shift of advantage between the dickerers, an advantage for President Philip Albright Small Franklin of Roosevelt- International Mercantile Marine Co. over President Paul Wadsworth Chapman of U. S. Lines and his new backers from the Pacific Coast, Robert Stanley Dollar and Kenneth Thomas Dawson.

Two weeks ago Mr. Chapman's bid to keep his company failed to meet the specifications of the U. S. Shipping Board because he tried to dodge responsibility for S. S. Leviathan, the biggest money-loser (TIME, Aug. 24). Mr. Franklin hastened to point out that I. M. M.'s bid was the only proper one submitted. Chairman Thomas Ventry O'Connor of the Board took the matter to President Hoover. No doubt both were somewhat at a loss, for while Mr. Franklin complied with all conditions, Mr. Chapman offered more money. The Board, sympathetic with Mr. Chapman, allowed him to amend his bid, assume full responsibility for S. S. Leviathan instead of treating her as a monster stepchild.

At this large Philip Franklin exploded. He wrote a long letter of protest to the Shipping Board. It was not the first time, he declared, that I. M. M. had suffered grave injustice at the hands of the Government. Criticism of I. M. M. for owning foreign flag tonnage was unjustified; the company was entirely U. S.-controlled, anxious to spend more money to develop North Atlantic trade. Then Mr. Franklin revealed an astonishing fact. During the Wilson administration, he declared, his company received from a British syndicate an offer of $130,000,000 for I. M. M.'s foreign flag tonnage. The offer was accepted but papers had not been signed when President Wilson heard of the proposal. Through Bainbridge Colby, later Secretary of State but then a member of the Shipping Board, President Wilson asked that the sale be deferred. Mr. Colby said the Board would buy the ships, pay I. M. M. the same price. Contracts were drawn up and signed by I. M. M.. but eventually the Shipping Board withdrew. Mr. Franklin's company still owns the ships, now not worth, he said, more than one-fifth to one-tenth the sum of $130,000,000.

Impressed by Mr. Franklin's claims, the Board took under consideration his amended offer, raising the amount of cash offered from $3,000,000 to $3.500,000. The Board met, conferred four hours. Reporters waited anxiously to congratulate the winner of the bitter contest. When the doors finally opened a spokesman appeared, said neither the Franklin nor the Chapman-Dollar-Dawson bid was satisfactory; new conditions were to be prepared, new bids could be submitted by anyone interested. Astonished pressmen searched for Chairman O'Connor, found he had slipped out by a side door. Mr. Franklin's outburst had scored a major victory for his company.

With the bidding thus reopened, another contestant was expected to enter the fight. He is Joseph Edward Sheedy, smart vice president of U. S. Lines, the man who got Banker Chapman of Chicago into the shipping business, who has been running U. S. Lines for him for two years, and who now is on an indefinite leave of absence. But last week Steamship Row was inclined to bet on Shipper Franklin against all comers, especially if a means could be found to reconcile him and Banker Chapman by giving the latter a stock interest in a new company run by experienced I. M. M.

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