Atlantic Auction

What looked like a long-drawn, cautious auction was going on in the offices of the U. S. Shipping Board at No. 45 Broadway all last week. If it was an auction, it was one of the major deals of U. S. shipping history, for on the block was no less a prize--or white elephant--than the U. S. Lines, proudest Atlantic fleet in the country. Discussions had been going on slowly for weeks, ever since mid-June when President Paul Wadsworth Chapman and the U. S. Lines' directors went to Washington to explain their troubles to Shipping Board Chairman Thomas Ventry O'Connor (TIME, June 29).

In Washington President Chapman had explained that there was no immediate crisis, but with the general decline in trade it might be hard for his company to meet certain future obligations.

What he wanted was longer credits from the Government. What the Government did was to cry out for other deep water financiers to lend a hand. Some $2,500,000 was needed and was not forthcoming: not, that is, without bringing new men into the management of U. S. Lines. Chairman O'Connor, accompanied by Rear-Admiral Hutchinson Ingham Cone, also of the Shipping Board, journeyed to

New York to hear offers from bankers and merchants dreaming of the profits and prestige of the U. S. merchant marine.

From Portland (Ore.) came Kenneth D. Dawson representing the powerful Dollar interests of the Pacific and Herbert Fleischhacker, San Francisco's burly banker. Cautious Mr. Dawson studied the situation. Last week Robert Stanley Dollar arrived in New York to see for himself what might be done to help the tottering Eastern interests. Large, spectacled Mr. Dollar, son of 87-year-old Captain Robert Dollar, believes, like his father, in a U. S. merchant marine even if it must be founded on Government subsidy. Should the Dollars become the eventual purchasers of U. S. Lines it would mean new faces and figures on lower Broadway, for until now these western merchants have avoided the North Atlantic trade, most highly competitive route in the world.

Meanwhile Steamship Row buzzed with other possibilities. President Chapman continued conferences with Chairman O'Connor, continued talking of "an adjustment, rather than a sale" of the lines. Mr. Chapman wanted to be relieved of the expensive duty of operating the largest U. S. steamship, S. S. Leviathan, which is also his largest money loser. He wanted also to be rid of the George Washington, next most costly steamer of his fleet. The Government could then sell the Republic, he suggested, leaving him the America, President Roosevelt, President Harding, and the five ships of the American Merchant Line. Last week U. S. Lines still owed the Government $11,250,000 representing the unpaid portion of the purchase price. The Government has this secured by 4 1/4% mortgages, payable in 15 yearly installments, 1930 to 1944.

Then Chairman O'Connor and Rear Admiral Cone changed their minds. Last Monday a sympathetic attitude became apparent when they issued a memorandum admitting the original price paid for the Lines was too high. They would, it was announced, take back the George Washington and America, trade two Army transports for the Republic and base the commitments of the future owners on the value of the fleet thus reduced.

Meanwhile International Mercantile Marine, rejuvenated, Morgan-sponsored, and strengthened by the alliance with Roosevelt Steamship Co. was reported to have made an unsatisfactory bid last week. This did not mean that Philip Albright Small Franklin's company was out of the running, for the Shipping Board was reconsidering other initial bids at first rejected.

Another possibility was picturesque. "Can he do it again?" was what shipping men were asking about Joseph Edward Sheedy, executive vice president of U. S. Lines and onetime (1922-24) vice president in charge of operations of Emergency Fleet Corp. It was Sheedy who was credited two years ago with bringing successful Banker Chapman from Chicago into the marble corridors of No. 45 Broadway with his $16,000,000. Last week Mr. Sheedy said he was going to bid again, backed this time by nobody knew whom, but with a reported stake of $10,000,000. Rumor connected this fresh capital with Harvey C. Miller, tidewater terminal man of Philadelphia, good friend of President William Wallace Atterbury of Pennsylvania Railroad.

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