White Star

The International Mercantile Marine Co. (J. P. Morgan & Co.) sold the White Star Line, the only profitable part of its fleets, last week to the Royal Mail Steam Packet Co. for $34,000,000. The late J. P. Morgan could find no Judge Gary for the shipping trust he planned in 1902, although he did get the ablest shipping executive on the Atlantic seaboard, Philip Albright Small Franklin, for president. Mr. Franklin has had many things to fight--foreign competition, inertia of U. S. shippers, a heavy $36,000,000 bonded indebtedness, most of all legislative handicaps. No other government regulates wages, conditions of work and contracts of its seamen as does the U. S., and to that extent at least foreign shipping concerns have had an advantage over U. S. competitors. Morgan's International Mercantile Marine has never paid a common dividend; its accumulated, unpaid preferred dividends are 64% of their face value; its yearly deficit has been, since 1923, $2,500,000. So the Morgan dream flits.

In 1839, a bigheaded, slim girl of 20, Queen Victoria of England, signed a charter authorizing the Royal Mail Steam Packet Co. to operate its 14 paddle-wheel steamers between England and the West Indies. That shipping business prospered although sometimes the new-fangled engines broke down and the captains had to hoist sails. When modern screw propellers were invented, the Royal Mail was the first to adopt the device. When there happened to be bargains in ships. Royal Mail bought them. Now its fleets, including the 500,000 tons of the White Star Line, count 2,500,000 gross tonnage, the largest shipping organization in the world, says Owen Cosby Philipps, Baron Kylsant, its chairman and managing director.

The White Star sale has no political significance. When J. P. Morgan bought the line 24 years ago, the British government stipulated that all its properties remain under British registry. That meant that the U. S. ownership was merely financial, just an investment (TIME, May 17). Great Britain retained control of the vessels in case of war or other emergency and the U. S. Government had no rights over them, ex cept such as might be ceded by a friendly Great Britain.