Merchant Marine

Two major developments important to the U. S. merchant marine were taking shape last week.

Dollars. On the Pacific littoral, that astute, thin-bearded Scotsman, Robert ("Robbie") Dollar, working these last few years through his able son, R. Stanley Dollar, has jibbed and tacked shipping so skillfully that transpacific commerce moves under his virtual control. Some 30 months ago he bought seven "President" steamers from the U. S. Shipping Board. The Board was glad to sell. At the same time the Dollars (as the Admiral-Oriental Line) were operating for the Board five other "President" boats from Seattle to Japan, China, the Philippines and return, and the competitive Pacific Mail Steamship Co. was operating five more. The Dollars did not like that situation. So they offered the Shipping Board six and a quarter million dollars, one-third cash, for the five boats the Pacific Mail was operating.

The Pacific Mail protested vehemently, but the Dollars won. The Pacific Mail broke up.

That left the Dollars as ship owners competing with themselves as ship operators for the Government (the Admiral-Orient Line), another situation which they did not like, even though the operating losses of the Admiral-Orient Line cost them not a cent. Nevertheless the Dollars wanted to own the boats, offered last fall $600,000 for each of the five (they cost $6,000,000 each when built during the War). They were rebuffed. So they raised their offer to $900,000 a ship, a sum pleasing to the Board, which accepted a deposit.

Last week the Senate Committee on Commerce was wrangling talmudically over whether the deposit completed the sale. If not, certain Northwest interests, which fear the Dollars will deflect shipping away from the Columbia River and Puget Sound territory, may still have opportunity to bid on the boats. At any rate, a good proportion of boats on the Pacific will fly the U. S. flag.

On the Atlantic the situation is less satisfactory. U. S. operating costs are so high, that in the face of the merciless European competition the Shipping Board can keep less than a fifth of its ships in operation.* Private capital shies from operating under the U. S. flag.

Nevertheless native operators as well as shippers know the basic need for a national merchant marine. They hope perpetually that operating costs will contract or that some managerial genius will arise to keep national ships moving so efficiently that they can really meet foreign competition.

Last week such hope dawned again. President Philip Albright Small Franklin of the International Mercantile Marine Co. was on the high seas coming home to Manhattan from several weeks of negotiation with British interests for the sale of his White Star Line. He had virtually in his pocket some $36,500,000, and P. A. S. Franklin is not the man to let money lie idle or even to earn puny interest.

Franklin. As high on the seven seas as is Robert Dollar so high, perhaps even higher, on those seas is Mr. Franklin.

Mr. Franklin has made his life more irksome than necessary. He is the nephew of General William Buel Franklin (1823-1903) and of Admiral Samuel Rhoads Franklin (1825-1909) and son of Colonel Walter Simmonds Franklin (1836-1911), who retired from the Army and made a fortune in iron and steel. Young Philip was educated at public and private schools and could have gone to college. But the opportunity to go to France as clerk to the U. S. Commissioner-General--it was his uncle, General Franklin--at the Paris Exposition in 1889, was too tempting to his 18 years.

He came back from Paris full of plans, took a job as office boy in the Baltimore office of the Atlantic Transport Co. Quick intelligence, energy, originality won him quick promotions--to the general managership in 1898. In 1902 the International Mercantile Marine Co. was created and took over the Atlantic Transport as a subsidiary. Mr. Franklin became president of the subsidiary.

The I. M. M. grew, grew under the nurturing hands of J. P. Morgan Sr., who dreamed of his financial empire extending over seas as well as continents. Eventually P. A. S. Franklin became, in 1921, president of I. M. M.

Meanwhile he expanded his personal financial interests; is now a director in several shipping, industrial and banking concerns.**

What makes Philip Albright Small Franklin of especial interest to those worried about the future of the national merchant marine is his sale of the White Star Line. This line is owned by the I. M. M./- which is a U. S. corporation and 95% of whose stock is held by U. S. citizens.

Shippers have been praying that the money derived from the sale be spent on the purchase of U. S. Shipping Board vessels, which perforce must sail under the U. S. flag. In fact such wishful thinkers have worked out a pretty syllogism: Mr. Franklin has the money and powerful associates; he (his I. M. M.) owns the Atlantic Transport Line (U. S.), has as a subsidiary the American Steamship Co. which in turn operates for the Shipping Board the Panama-Pacific Lines: ergo he ought as a "good American" to buy U. S. ships and thus insure a great U. S. fleet on the Atlantic, operating under its own financial steam, without help from a politically uncertain Government.

* Private companies last year operated some 200 ships at a loss to the Government of $30,000,000. About 900 more War-built ships lay inactive.

**One of his boys, P. A. S. Jr., is with the Harriman National Bank. Another, John M., is general manager of the Argonaut Line, owned by Norton, Lilly & Co., Manhattan steamship agents and brokers.

/- I. M. M. also owns the International Navigation Co., Ltd., the Red Star Line, the Atlantic Transport Line and the Leyland Line, all under British registry except the Atlantic Transport, which is under U. S. registry.