Falling White Star

There was many a doubt expressed last year concerning the competency of Owen Crosby Philipps, Lord Kylsant, sometimes called "Lord of the Seven Seas," chairman of the huge far-flung Royal Mail Steam Packet Co. which includes among its many steamship lines the White Star. Last year Lord Kylsant was publicly accused of mismanagement by his brother Viscount St. Davids. Royal Mail stock sank swiftly and dangerously, Royal Mail passed its dividend (TIME, Dec. 23). Lord Kylsant, it appeared, had purchased investments in "other than shipping companies." Good-will was not augmented by the knowledge that Lord Kylsant draws a huge salary based on a percentage not of the profits, but of the gross.

Further and unreassuring developments came last week with White Star's announcement that it would be unable to meet its half-yearly dividend on approximately $25,000,000 worth of preferred stock, that it had called on Royal Mail, its present parent company, to fulfill its guaranty. Almost simultaneously, however, came announcement that Royal Mail itself would be unable to meet its dividends. Fortnight ago Lord Kylsant announced that he had appointed a committee of bankers to investigate Royal Mail's financial position.

Many a reporter of the incident last week assigned its cause to the decrease in Atlantic travel due to Wall Street imbroglios. But shipping men know that cancellations of passages this year were mostly in first and de luxe class and that these, in turn, are not a major part of passenger travel. Besides all of which, there is freight. It seemed more likely that blame for the depression would again be laid upon the frock-coated, almost mysterious figure of Lord Kylsant.

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