Biggest Pool

Some new, some old, some beautiful, some needing paint, some for Senators and cinemaqueens, and some which the rats love; in all 181 seaworthy vessels came together last week under one flag.

But the flag has not yet been made of bunting; it consists of ink and paper, constitutes not a merger but a pooling, a combination--the greatest in U. S. history. Involved in the deal are the Dollars, Kenneth Dawson, Paul Chapman, the Fleishhackers, P. A. S. & Son Franklin, Kermit Roosevelt, and a name famed on the seas but hitherto negligible in serious shipping, Vincent William Astor.

Immediate cause was the hapless fate of U. S. Lines. This consists of the following ships: Leviathan, George Washington, President Roosevelt, President Harding, America, Banker, Farmer, Merchant, Shipper, Trader, Importer, Exporter--also two fine vessels abuilding in Camden, N. J. As everyone knows this fleet was spectacularly purchased from the Government in the boom of 1929 by Banker Paul Wadsworth Chapman who proceeded to sell stock to the public on patriotic grounds. But in days when no Atlantic fleet makes any money to speak of, and with Britain's greatest Royal Mail losing millions, the prospects for an American fleet in the New York-Europe run, with the extra handicap of high wages and Prohibition, were indeed forlorn.

Mr. Chapman was forced to cry for more Government help (TIME, June 29). In reply, the Shipping Board directed that the U. S. Lines be sold to the highest bidder. The deadline on Aug. 13 found two sealed envelopes in Shipping Board's mail box. One was a $3,000,000 offer from a brilliant young combination called International Mercantile Marine-Roosevelt. The other had come from irrepressible Banker Chapman who had found financial allies in the Pacific--the Robert ("Round the World") Dollars, the San Francisco Fleishhackers and Steamshipman Kenneth Dawson of Portland. Their bid topped the rival offer by $170,900 but dodged responsibility for operating the elephantine S. S. Leviathan by asking the Government to assume ownership and lease the ship for a minimum schedule of five sailings at U. S. Lines' expense.

The Shipping Board, accustomed to being in a quandary, pondered. Witnesses were called. Recriminations became bitter. I. M. M.-Roosevelt said its bid was the only one which fulfilled all conditions. Mr. Chapman countered by charging that the I. M. M. offer did not take care of U. S. Lines stockholders. "The Board is all up in the air," said Commissioner Jefferson Myers and asked the rivals to come to Washington, and do something, anything. The Westerners came, went home. Young Kermit Roosevelt and young John M. Franklin (son of big bald P. A. S.) followed them out to San Francisco.

Last week was announced the result of two weeks' negotiations between the New York and the Pacific shipmasters. What they did was to compose their own differences (competition in U. S. intercoastal shipping and in Far Eastern trade), in order to be able to undertake jointly operation of the Leviathan and its fellow ships of the U. S. Lines. The agreement therefore provided:

1) That International Mercantile Marine will sell one-half of its wholly-owned Roosevelt Steamship Co. to the Dollar-Dawson-Fleishhacker group.

2) That the present U. S. Lines, Inc. will be taken over by a newly formed holding unit, U. S. Lines Co., chartered a fortnight ago in arid Nevada. This holding company will be owned 50-50 by the New York and San Francisco groups.

3) That non-conflicting sailing schedules will be worked out for Dollar Steamship Lines and I. M. M.'s Panama Pacific Line. Thus, the Roosevelt-Astor-Franklin-Dollar-Dawson-Chapman-Fleishhacker combination will be engaged in world-wide trade as follows:

1) A fleet of six lines (Red Star, Atlantic Transport, Leyland, Baltimore Mail, U. S. Lines, American Merchant Lines) plying the main Atlantic route with weekly and bi-weekly sailings.

2) The famed Dollar-round-the-world (Westbound) system, whose newest liner, President Coolidge, is now bound for the Philippine Islands on her maiden voyage.

3) Luxurious New York-Panama Pacific Coast sailings headed by the turbo-electric marvels, S. S. Pennsylvania, S. S. Virginia and S. S. California (I. M. M.), to be supplemented with the Dollar freight service.

4) The Roosevelt Line's service to the Far East and India, whose jute cargoes were the foundation of Kermit Roosevelt's shipping career.

5) A service to South & Central America, operated by Leyland Line.

In addition to strengthening the lines involved, the pool will increase the prestige in shipping of the young men who have been the driving force in the I. M. M.-Roosevelt combination. Of these the central figure is Kermit Roosevelt, diffident, able son of the late great Theodore. To his success with a small jute-carrying line was added the vast wealth of that solemn yacht-lover, Vincent Astor, who describes himself as "head of the Astor family in the U. S." Roosevelt ambition plus Astor money plus the friendship of young John M. Franklin, resulted in control of I. M. M. of which young Mr. Franklin's father remains titular head. That the young men are determined to make the landed Astor money succeed on the high seas is the big new fact on Steamship Row.

Ships flying the U. S. flag with which this biggest U. S. combination will still compete include the fleets of Standard Shipping, American-Hawaiian, Munson, Matson, Oceanic & Oriental, United Fruit, Grace.

While the U. S. plans were maturing last week National Council of American Shipbuilders announced the U. S. Merchant fleet had declined 3,408,000 tons in the past decade, against increases of 731,000 tons for Great Britain, 3,537,000 for Germany, 685,000 for Italy, 921,000 for Japan and a small decrease of 86,000 for France.

This file is automatically generated by a robot program, so reader's discretion is required.