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PEPARTME§T_lTEM NUH§EBgE§H
This item requests an examination of the records
of USPC to determine whether the charter hire from Trans-
Atlantica Financicra Industrial, Panama, S.A., was actually . '
paid to USPC. _
The following investigation was conducted by bsA<Ai= 70
An examination of the books and records of USPC -
failed to reflect any charter hire agreements between USPC
and Trans-Atlantioa. However, the records of Pacific Tankers,
Inc. name later changed to Western Tankers, Inc.! reflect
that the following tankers owned by this company were time
chartered to Trans-Atlantica on the following dates:
MONTABELLO HILLS
- HCKITTRICK HILLS
WILLIhM A. BURDEN ' OLY IC GAMES ' i
7 -V Y < / : --'--7--1-_ - '~=- -- "-'-:2; :;=.;*_*?=; _#_'T.iTETiF.;'_;-.-_-"- F_C~£z;..' **:E.- 1;}. V '-TJ-FTMarch 9, l9h9
March 9, 19h9 _
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ust 2Q_ 1950 - .~.-'--=- --_ T,-J,-f __ --_--:,*, -.-. ~ rah " 4 ~='. -7 r -r: -:1-1:1:-' -4 »- -211 ;$'1:"-A-'**-1'1;
The above-mentioned t
on November 8, 1951, November 8,
July 28, 1951, respectively,imo charters were terminated
1951, July 25, 1951, and
The records of Pacific Tankers, Inc, reflected
that invoices for charter hire on the foregoing vessels were
sent to Trans-Atlantica or its agent, Cargo, S.A., by_Pacific
Tankers, Payments for instant invoices were made to Pacific
Tankers by argo, $.L., and Trans-Atlantica.
. In addition, the books and records of the Victory
carriers, Inc. reflect that the following Victory ships owned
by this company wcre_time chartered to Trans-Atlantica fora period of ton years: '
July
July31» 19h9
7, 19l+9
July 2?, 19h _ -AMES VICTORY
COE VICTORY '
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JEFFERSON CITY VICTORY
MANKATO VICTORY
NORTHWESTERN VICTORY
LONGVIEW VICTORYJuly 11, l9h9-
. June 30, 19k9
July l9,n19h9|
October 0, 1949 .- .
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An examination of the records of Victory Carriers
reflected that invoices for charter hire relating to the
foregoing vessels were sent to Trans-Atlantica by Victory;
Payments for instant invoices were made to Victory Carriers
by TransAtlantica. '"' ." .
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' psrisgmgm ITEM us. 51 ' _
This item states that on January 15 1951, two- liberty vessels were purchased from the Maritime Commission
under Contract 62786 on a mortgage aid basis. .It is requested
that a check be made of the financial statements filed with_
the application to qualify for mortgage aid against the actual
cash position of that time and also the source of funds used
111" fine 1 The 5! to make the 25% downpayment and to qua y c
following investigation wsseondiifzte by SA_
The files of the Maritime Administration at Washington,
D.C., reflected that by letter dated April 27, 1951, H, 0. BECKER,
Assistant Treasurer, Victory carriers, Inc., forwarded a Balance
Sheet of Victory Carriers, Inc, as at December 31, 1950, to the
Maritime Administration, Washington, D.C. There was attached to
instant statement an affidavit executed by BECKER on April 26,
1951. In this affidavit BECKER stated that he has carefully
gxamined instant Balance Sheet and believes it to be a true
and correct statement of the financial condition. '
a
' Photostatic copies of the letter dated April 27, 1951;
t d t d A ril 26 1951 and Bance Sheet as at December 31, -- affidavi a e -p , ,1950, are being forwarded with this report as enclosure number 10.
According to the above-mentioned Balance Sheet as at"-
Dccember 31, 1950, Victory Carriers, Inc. had a cash balance of
$10-I-2|-is 3600 310
BECKER examined the files of Victory Carriers, Inc.
with negative results in an effort to locate the aforementioned
Balance sheet. However, he did locate two Balance Sheets as at
December 31, 1950, bee. of which show a cash balance of »
$1,630,360.31. BECKER advised that those Balance Sheets were
forwarded to the law firm of GOODHIN, ROSEHBAUM & MEAGHAM,
presumably to be forwarded to the Maritime Administration,
One of those Balance Shoots is certified by ROBERT L. BERENSON,
President, and the other Balance Sheet is certified by H. O._
BECKER, Assistant Treasurer. BERENSON made the following ~ '
remarEs_in certifying one of the Balance Sheets:
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"I hereby certify to tho best of my knowledge aad
belief this Balance Sheet is a true and correct statement of
the financial affairs of Victory Carriers, Inc, for the period
ending December 31, 1950, adjusted as indicated-in footnote."
This Balance Sheet contains the following footnote:
"Indicates increase in Capital Surplus'» 6,000
on January 15, 1951," ' n _
In certifying tho other Balance Sheet, BECKER made
the following statement: .deposited
. "I hereby certify to the best of my knowledge and '
belief this Balance Sheet is a true and correct statement of
the financial affairs of the Victory Carriers, Inc, for the'
period ending December 31, 1950, Thereafter, on January ll,
1951, and on January 15, 1951, sums aggregating $h06,000 were
received by the Corporation and credited to the following
accounts in accordance with the purpose for which they were
received: $51,000 to capital surplus, and $325,000 to non~curraccounts payable," " .ent
Photostatic copies of the Balance sheets certified by
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An examination of the Cash Disbursements Journal ef_ .
Victory Carriers, Inc. revealed that on January 2, 1951, -
Victory Carriers, Inc. Check Number S80 was drawn payable to
SIMPSON, SPENCE & YOUNG. An examination of instant check -
revealed that it was certified on January 3, 1951. BECKER
made available a photostatic copy of check Number 550 which
is being forwarded uith this report as enclosure number 13.
BEO&ER advised that the cash figure of §l,B30.360s31, -
shown on the Balance Sheets as at December 31, 1950, which were
certified by BEREHSON and himself, were arrived at by'including
deposits made to the bank account of Victory Carriers, Inc. in
mnounts of $000,000.00 on January 11, 1951 and $6,000.00 on
January 15, 1951. - ~_
There is set forth below a schedule showing the cash
balance per General Lodger at December 31, 1950, together with
» deposits totaling $006,000.00 that were made in January, 1951
_ and were added to the Lodger balance of $1,h2h,360.3l as at
December 31, 1950. Uhere is also set forth the source of
deposits, In each instance the deposit of the various checks
was made the some day that the check was dated;
_ Victory_Carri0r,3Inc.
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Add January, l9§l Deposits: '
U.S.P.C. Check Ho. 2980 dated 1/11/51 75,000.00 9
Pacific Tankers, Inc. Check No. 301 '
0 dated 1/11/51 225,000.00 .
Oceanic Transport Corp. Check No. lh ' "
dated 1/11/51
U.s.P.0. Inc. Check Ne. 2983 dated .I 1/15/51 _ e,000,0o
1 ' Total $1,830,3eo,31
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j -S thatthe purpose of the $750, opeS 1950, was to enable Victory Carriers, Inc. to improve its sash
position as at December 31, 1950, to qualify for Maritime _
mcngege aid, He stated that Victory carriers, lnce had over '
$750,000.00 on deposit at sxmrson, srsncs s rouse on December 29,1950,_and he considered it to be in order to withdraw $750,000.00 '
- from this account to increase the cash balance of Victory Carriers,"
Inc. ' D '
Ti stones stated that SIMPSON, SPENCE e rouse acts as a
" ' disbursing agent with the following concerns with which he is
affiliated:
U.S.P.C. '
. - Victory Carriers, Inc-
. -. Western Tankers, Inc,
Trafalgar Steamship Corporation
f -A Oceanic Transport Corp,
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, _ He stated'thnt the following concerns do not use
-42-: Q1-FINE}-3 .1: VOTHM1 an n dinhnlrnirgn ga_o'nr;1;.e -1- ; 5.! L-I-lI92-I I 4-92-Ivan; -no un we -r-vw-c -r I 6 Qvq I
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3 Marine Trading, Inc. -
-, Ocean Trading, Inc,1
u _ ., Q. u __0 . 7- Y,1 He stated during the past two years all of the above concerns for which SIMPSON, SPENCE & YOUNG acts as disbursing
4 agents would normally have funds with SIMPSON, SPENCE & YOUG.
; . H - so also stated that prior to that time U.S.P.G. had owed SIMFSGN,
_ _ SPENCE & YQUNG Q largo amount of money for about six months.
= ;, Ho also stated that the reason the funds with SIMPSON, SPENCE &_11 _; YQUNG were not carried on the company books as cash was because
. the U.S. Maritime Cmmnission would not allow it because of
; - Maritime regulations. Ho stated that he assumed that the reason
i Maritime would not allow those funds tn be carried as cash was
' * because the parent company possibly could use these funds for f
other purposes, ' '
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He stated that he knows of no reason fbr Victory
Carriers! check to SIMPSON, SPENCE & YOUNG being certified, '
, He stated that he was not aware of this check being certified S
until a request for a copy of this check was made by this office
and he assumes SSY obtained this OOPtifiO8tiDnq _ "
Ha stated that the reason the check of January 2, 1951,
7 was paid to SIMPSON, SPENCE & YOUNG approximately four days _
after it was received from SIMPSON; SPENCE & YOUNG was because
he was instructed to do so by the President of Victory Carriers,
Inc., ROBERT L. BERENSON. He stated that it was his understand-
ing that the President was acting in this regard on the stock-
holders instructions. He also stated that he does not knew
why the stockholders wanted these monies returned to SIMPSON,
SPENCE & YOUNG.
A review of the minutes of the.Board of Directors -
meeting of Victory Carriers, Inc, felled to reflect an authoriza-
tion er request for the transfer of the $750,000.00 to SIMPSON,
SPENCE & YOUNG, - '
_ BECKER stated that he knows of no situation where
SIMFSON, SPEFCE & YOUNG diverted the funds of one concern for'
the use of another concern. He stated that he has never seen
SIMPSON, SPEHCE & YOUNGFS books and, therefore, does not know
what use SIMPSON, SPEHCE 2 YOUNG made of the various companies
monies advanced other than making regular disbursement for these
concerns. '
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. - 1 P the records of SIMPSON, srsmcs e YOUNG byss reflected that b L7H y letter dated December 29, ;_
-~ 1990, n. u. usunsnj nSsiSt0nt Treasurer, Victory Carriers, Inc.,
made the following request of SIMPSON, SPENCE & YOUNG: .~ _
"Please let us have your check for $750,000 against
the amount wwich is credited to our account of your books,"
A photestatic copy of the above letter is being forwarded
with this report as enclosure number 1h. ..
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SIMPSON, SPENCE & YOUNG records reflected that in
compliance with the nbovo requested two SIMPSON SPENGE & YOUGchecks, dated December 29, 1950, in amounts of $700,000.00 and
$50,000.00, were issued payable to Victory Carriers, Inc. An
examination of the endorsements of instant checks reflected that
they were deposited to the account of Victory Carriers, Inc. on
December 29, 1950. _
- yhotostetic copies of the two checks in amounts of
$700,000.00 and $50,000.00 are being forwarded with this report
as enclosures number 15 and 16.
Ln examination of the SIMPSON ENCE & YOUNG recordedwith the assistance of ¥7c/
reflected that on December , up , a cas or s
§700,000.00 to the order of SIMPSON, SPENCE & YOUNG had been N
received from the Notional City Bank. An accompanying memorandum
from ;RION4 instructed SIMPSON, SPENCE k YOUNG to credit its -
account. The check was deposited in £1 SIMPSON, SPENCE 8:: YOUNG '
inactive account ct the National City Bonk, 26 Broadway branch. "
The above-mentioned check:for$700,000.00,-to Victory Carriers,
Inc., was drawn on'J inactive account at the National City
-Bunk, 26 Broadway. The receipt from ARIONA and the subsequent
disbursanont to Victory Carrier was entered upon SIMPSON, SPENCE Q
YOUNG'S books by means of a single journal entry debiting Victey
Carriers and crediting AHIONA with the explanation, "To adjust-
tronsaotions ip Nntiolml City Bank Account December 29, 1950." that SIHPSOEE, SPEI-ICE 8: YOUNG did not have a cash
-cceun on L s books for that inactive bank account and said
that the turnal entry was, therefore, the means used to record the
receipt and subsequent payment.
As mentioned above, Victory Carriers transmitted its
chrc ' r $';'_5'0, 000.00 to SIMPSON, SPENCE 81: YOUNG on January 3,& asked why such a check to be credited to a client's
account would bu certified. Ne stated that the company policy
to request 0. certified check or to arrange its certification1951.99
W518
themselves only if immediate disbursements were contemplated from
the involved funds. The SIMPSON, SPENCE & YOUNG cash disburnauont
beck reflected that on January 3, 1951, a payment of $700,000.00
was nude to the National city Bank and that this payment was charged
to the atcount of '.'.HIO1~L~',. ' '
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CHQRLES AUGENTHALER, Partner, SIMPSON, SPENCE & YOUNG, were asked whether the $700,000.00 receipt from rmomon Deco ul 29, 1950, was necessary for smesos, srsncs a rouse L/!.jl
to have paid the $750,000.00 to Victory Carriers on the same
date, -4UGEFP}' R maintained that he had no knewled 0 of thematter k;]¢¢
rno 18 presently abroad, roqu re o s recs of .
, .00 because the group of companies as e whole would have
gone into a debit position upon the payment of the $750,000.00
without said receipt, _
' Ln examination of the Cash Receipts Journal of Victory
Carriers, Inc. from tho inception of the corporation to January
15, 1951, revealed that the chief source of funds were capital
investments made by USPC and the charter hire paid by Trans-
atlantica Financiera Industrial, Panama, S.A, -
on January 15, 1051, according to the Victory Carriers,
1nc,books and records, this company had a cash balance of
$813,267.19 before the issuance of any checks on January,l5, 1951,. 0_ »
e on January 15, 1951, Victory Carriers, Inc. check
" -number 591, in the amount of $127,600.00, was drawn payable to
' National City Bank. iccording to the cash Disbursements Book
and the General Ledger, this check was e 10% downpeyment on the
HEYWOOD BROUH and SS LEWIS EHERY, JR.
' The books and records of Victory Carriers, Inc,
reflected that an actual 25% downpayment was not made directly
to the Maritime Commission. Instead, the above-mentioned 10%
payment was made, Victory Carriers, Inc, then received class
_ allowances for the two vessels which were of sufficient amount
to be considered the balance on ue 25% downpayment, The class
allowances were for repairs made by Victory Carriers, Inc,
which were necessary to place the two vessels in proper operating
condition, -
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This item requests information regarding the
$2,800,000.00 loan of May 27, 19u9 obtained for the use of -
Victory Carriers; Inc., and its relation to a sum of $5,569,062.00
which Victory Carriers, In0., represented as having or would
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" DEPARTMENT 7 ITEM liUMBE@iQ
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¢ This item requests that the officers, directors '
and stockholders of Pacific Tankers, Inc. be ascertained
,_ as of January 20, 191;!, the date when USPG agreed to buy all .-, - ; of the stock of Pacific Tankers, Inc.
E . investigation was conducted by- * ' _ _; SAM! ' 5-;_
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P TORKILD RIEBER, President of Barber Oil Corporation,
Rockef 1130 e er Plaza, New York, New York, and f a.. '. Director 0 Pacific Tankers, Inc., advised SAA
and SA that the following ind vi ue s were
officer§'EhdPHTrEE¬6FE'of Pacific Tankers, Inc., as of _ '
January 20, 19h9, when that concern was sold to USPC:
OFFICERS
.?.., Chairmen of the Board or Directors - JOHN A. McCONE
1' -'_¥-. 1 President - A. F. canrss
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'1'._ e= Vice President - S. D. BECHTEL
R '1",E Vice President and Genera nager
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* , Secretary and Treasurer - ARTHUR A.
I -- r~ 5 Asst. Secretary and Asst.
s ; _ H. E. HEDHICK .
5 G _e __ ;-> :-Treésurer
Asst. Secretary and Asst. Treasurer
H. C. JENSTN. n:..
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. §§ Asst. secretary and Asst. Treasurer
,i E. G. HAYES'1 -'
_ -Asst. Secretary and Asst.
- HALTER E. FOXTreasurer
1 : ; DIRECTORS
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1 ;" s. D. BECHTEL
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F 5 JOHN H. FRANKLIN_ $-~ AnnahQ, Executive Vice President - J. M. WARFIELD '
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JOHN A. McCONE
EDMOND J . MORAN
T; RIEBER '
ALDEN G. ROACH l
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NY 1.6- 2507 _
DEPARTMENT I11TE_M_NUHBER so - '
- This item relates to the negotiations leading up
to the agreement of January 20, l9H9p wherein USPC acquired
all of the outstanding stock of the Pacific Tankers, Incor-
porated. i ' ;
The following investigation was conducted by SA A!
Admiral E. J. MORAN, a member of the firm of Moran
Towing and Transportation Company, 17 Battery Place, New York,
New York, advised that he was formerly a director of Pacific
Tankers, Incorporated. He stated that the negotiations in the
sale of the capital stock of Pacific Tankers, Incorporated,
to USPC was instituted by himself at the request of the Board N
of Directors, He stated that the directors foresaw a decline
in the tanker market and after considerable discussion, decided
to sell their interests in tankers. He stated that he por-
sonally made considerable inquiry relative to possible pur-
chasers of Pacific Tankers, Incorporated, and as a result
thereof discussed it with ROBERT BEHENSON. He stated that
the negotiations were conducted by J. M. WARFIELD, Executive N
!i<.=91-£r.aa isie-11?-J?£e.._lf<§¥9.-i.§.i.e,.. I.a;11;=er.s.~..;.lac@;ra;enatec1 P-u._a<le-r»-the
sup¬rVision of'JOHN L. MC CONE for Pacific Tankers, Incor-
porated. He stated that he believed that ALLAN CAMERON also
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Admiral MORAN further advised that it is known
in the shipping trade that HICOLAS COKKINIS. frequently .
acts as a representative for ARISTOTLE ONASSIS, and that
it was also known that ONASSIS had an interest in USPC
during the negotiations between Pacific Tankers, Inc., and
CSPC for the purchase of Pacific Tankers, Inc., in January,
l9h9. However, the extent of this interest was unknown
E
regard to the citizenship status of USPC,
Admiral MORAN stated that it is his belief that, during
these negotiati
of Directors of
United
thinks
McCONE
status
Inc. However, heto hhn. g
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a States M
that-the
a statement
Speci, JOHN McCCNE, Chairman of the Board
Pacific Tankers, Inc., made inquiry of the
ritime Commission. He stated that he 7
United States Maritime Commission gave
to the effect that USPC's citizenship
was in legal order for the purchase of Pacific Tankers,
was unable to give details in that regard.
a1 Agents of the Los Angeles Division -
interviewed JOHN A. HcCONE, President of Joshua Handy ,
Corporation, Los Angcles, California. _ '
'.I*;92'r92f '92TI'IP n-urla-z.92.r} -I-'Hn+ Hz, r921.gv92qr1 n 4"Il§-Ann run-I! gain-lu-»92/v1.1z.¢ r1uv.|.auu uasuu LID Ur.J..lL-92.-I G ALL US$11 yUl. DGLIU
interest in the_st ock of Pacific Tankers, Inc., in early -
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a dominating and controlling interest in USPC. Ha
stated that he told HTASSIS that Pacific Tankers, Inc., would
only sell its ships to USPC if the United States Maritime
Commission was in agreement with such sale from a moral and
legal standpoint. He stated that he instructed Admiral
A. F. CARTER, President, and J. M. WARFIELD, Executive
Vice President of Pacific Tankers, Inc., to keep the United A
- States Maritime Commission, including the Chairman thereof, '
Admiral SMITH, completely advised and to be certain that
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legal standpoint. He stated that he knows that the Com-
mission was so advised, but does not know how it was advised.
J M WlP1"" V mote ea edmon V Q 0 . .. ' ' - 1'1 R d t, 'Cal , advised S.. ='1nd S- the San Francisco lVlS on that he was e '
ice President of Pacific.Tankers, Inc., during the period
of negotiations and sale of that concern to USPC. He stated
that he subscribed to 159 shares of Pacific Tsnkcrs- Inc.-stoek on March 13, 19b6, and 100 shares on August lé, l9hé, ,
for the purpose of purchasing two tankers, namely-IIcKI'I"I'RICK.
HILLS and HGNTEBELLO. HILLS, from the Unitéd States Maritime
Commission. - .
NARFIELD advised that he was requested by
either JCHN A. HcCOH?, Chairman of the Board of Directors,
or STEVE BECUTEL, stockholder, Director, and possibly
Vice President, oi Pacific Ienhers, lnc., to go to ew Kerk
for the purpose of negotiating with USPC for the sale of two
tankers by his concern during the latter part of November
or early December, l9hB. He advised that these negotiations
by him were with ROBERT L. BERHNSOF, President, USPC, and
N. CCRKINIS, President of Contra-American Steamship Agency,
Inc., both of whom represented ARISTOTLT ONASSIS. He
advised that ALLAN CAMERON, who was Operating Manager of
Pacific Tankers, Inc., attended approximately two of these
meetings for the purpose of attending to details of physical
inspection and transfer of tankers.
It is noted that the office of Joshua Hendy
Corporation, San Francisco, California, advised that CAMERON
' is presently in Japan. _ , -
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HARFIELD advised some time during the negotiations
USPC decided to purchase all of the outstanding stock of
_ Pacific Tankers, Inc., rather than the two tankers. He ad- -
vised that Pacific Tankers, Inc., had a contract with the
United States Navy covering the operation of Navy ships at
_ the time of this sale. However, this contract was not
_7c transferred but retained and operated under a separate "
" company, which is presently known as Pacific TankersLt Division of Joshua Handy Corporation.O
4 ._; WARFIELD advised the he and other officials of
l Pacific Tankers, Inc., were aware that OHASSIS had some, if
not a great mnount e control over USPC, but does not recall
_ the citizenship status of LHASSIS or USPC. He further stated
¢ that efforts were made to ascertain their citizenship status
~ -and an affidavit was furnished by USPC which reflected that
iv a majority of the officers and stockholders of that corp-
;- - oration were United States citizens. He advised that the
," original of this affidavit was furnished to the United States
C -i S Maritime Commission and a copy of the same retained in the
" files of Pacific Tankers, Inc., presently in the custody--_
.2; V_. .7 V _ I ' ' _ I J D I __ _, __ . .,, .-4
._l Maritime Commission was aware of the activities of Pacific
K: Tankers, Inc., at all times, to which the United Statesgi Maritime Commission gave its approval. He further stated
Z that Admiral A. F. CARTER, President of Pacific Tankers,
Q; Inc., had handled this matter with Admiral SMITH of ther.
1.1;; United States Maritime Commission and HARFIELD handled it ' through financial representatives of the Commission, whose
names he does not presently recall.
WARFIELD stated that he worked on the above
,1 negotiations until March B, l9H9. when the transaction was
2 finally consummated. He advised that attorneys for USPC% attended some of these conferences, as well as attorneys
r ROBERT BRIDGES and WILLIS S. SLUSSER of the firm THELEN1"; MARRIN, JOHNSON and BRIDGFS, San Francisco, California.,l
PCRKILD RIEBER, President of Berber Oil
_ Corporation and formerly a Director of Pacific Tankers, -
Incorporated, 30 Rockefeller Plaza, New York, New York,
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advised S and S.'. hat he Lvk -
had no know edge o who instituted the negotia ions leading
up to the agreement of sale of Pacific Tankers, Inc., on A
January 20, l9h9. Ho stated, however, that Pacific Tankersl,
Inc., part in the negotiations was handled by McCONE, CARTER,
WARFIELD, S. D. BECHTEL and ALLAN CAMERON. He also stated
that he is not aware of the details of the actual negotiations
in this matter. However, he believes that Iaeific Tankers,
Inc., was probably sold to e foreign group of Greeks, whose .
names are unknown to him. -
RIEBER stated that the purpose of Pacific-
Tankers, Inc., was to operate surplus tankers under an
original plan to accumulate about hO ships. However, by
the time they actually started operations they were able
to acquire only two such surplus tankers.
RIEBER further stated that the Barber Oil
Corporationls total and final interest in Pacific Tankers,
Inc., was 17%, which ha purchased for the purpose of _
investment and not to obtain control. He advised that he .
did not take an active part_in the operations of Pacific»
Tankers, Inc., while n Director of that concern.
FRED L. GREENLEY, Assistant to JOHN W. HANES,
Olin Industries, S70 Lexington Avenue, New York, New York,
and HQLTER E. FOX, Assistant to JOHN H. FRANKLIN, President
of United States Lines, 1 Broadway, New York, New York,
advised that Messrs. HAUES and FPLNKLIN were presently
travelling outside of New York City. They further stated
that they had been associated with Messrs. HANES and
FRANKLIN for many years as their administrative assistants
and they could recall that Messrs. HANTS and FRANKLIN
participated in Pacific Tankers, Inc., for the sole purpose
of financial investments and took no active part in the y
operation of that concern. GREEILEY stated that, while e
JOHN W. HANES, was n momhcr of the Board of Directors of
Pacific Tankers, Inc., his son, JOHN N. HANES, JR., actually
owned the stock.
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p13>;e2TrnnT ITEM rm_r;':s§:_n_ 61 ' -
The interviews of officers of Pacific Tankers,
Inc., prior to agreement of January 20, 19h9, to determine
whether any of these officers knew that USPC was under
the economic control of ONASSIS or whether any efforts
were made by these officers to determine the citizenship
of USPC has been answered under Department Item Number 60,
which also relates to that concern.
PEPAREEUlllT@H.¥UE?35 53
This item requests that it be determined who
participated in the newotiations leading up to the loan
agreement of march B, 19b9, for the sum of $l,EO0,000.
The followinc s ration was conducted by SA A! _=nd SA Ia! 574/
574
£2;
Further information in t?is respect is contained
in the inierview of ROBERT L. BhRE*3tH as set forth at the end
Of this report.
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if .%4 1 DEPARTMENT ITEM NUNBERWQQ _ 2 0 e as e 92
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7 ' This item states that $500,000 was allegedly
with the $1,500,000 loan, was used to purchase the Pacific
-- Tankers stock- The item requests that it be determined
. -f who negotiated with National City Bank for this advance-
_ ' 1e fell - 1 aticn was conducted by sh A!
5": 7c_
' As explained under Department Item Number 53, only Ii Eh- £000,000 use secured from the Gcllateral Loan account and this
- 7! sum, together with ¢1,S00,000, was used to purchase the Pacific. -.;,-.1--,.-1-I 0-1.... A-L... r92,.11.-.-L._..-.1 1...... .__.,_.......a. ..92_z ..92_ n._.__;.1____ ! D!-vi-Aluu .|..|.uu1 hut: UUJ.-l»'J~b92:l'U-J. l.|U¢-111 rlUUUU..IH.r Illlllill; DOBUDIIUP
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QEB1'.RT[jENT ITEM NUI*IBER alt _ ' "
t ' This item requested that the amount due on the"
CLMAS MEADOWS, FOR? ERIDGEH, and LnFE GEORGE when the
second pxnfurrcd ship's mortgage was issued for security
for the $1,500,000 loan on Maren 8, l9h9, be determined.
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_-iThis item requests that it be ascertained whether
there was a trustee or escrow agent used in connection with
the sale of Pacific Tankers stock to USPC and if so, requests _'
- that such trustee er escrow agent be interviewed relative to
the transaction. - - e
As set forth in Department Item Number 60, it was -
ascertained that Schroder Bank and Trust Company acted as
escrow agent in the aforementioned transaction.
- investigation was conducted by L7shun - Q___ .. .
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nsrsnrasyr ITEM NotJQI
> . _
' This item requested information concerning the suba
chartering of vessels owned by USPC and its subsidiaries»
HnROID 0. BECKER, Treasurer and Secretory of USPC,,'
advised that information relative to the sub-charter revenues
on vessels owned by USPC and its subsidiaries would be a matter
of record on the books of Transntlantica Financiera Industrial,
Panama, S.A. and Petroleum Carriers of Panama. He stated that
the books and records of Tra1sat1antica and Petroleum Carriers
of Panama are maintained at Montevideo, Uruguay, BECKER
indicated that USPS might have some information concerning the
sub-chartering of these vessels contained in their records or
in the form of memoranda rather than actual records of account,
s BECKER, after a review of the information available,
submitted to agents u schedule reflecting the charters, sub-
chartcrs, and all changes in charters and sub-charters and the
dato_the company acquired the various vessels, He claimed that
_ no fvrth2t_ia§9rmati9n was availaeletat the 9££ic@see:eQsRc.___.1ere c
1 photestatic copy of the foregoing schedule is being
attached to this report as Exhibit F,
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This item deals with the purchase by Pacific Tankers,
Incorporated, of the vessels SS HERMAN F. WHITON and SS WILLIAM
A. M. BURDEN from the Union Sulfur Company, Incorporated, New
York City, for the amount of $1,800,000. I _
~ iunion sum. *=Q} Compan , 33 Rector Street, New York City, advised saw!? i that the firm of Union Sulfur Company, Incorpora e ,ti ' ' S application on October 29, l9h7. with the United States
Maritime Commission for the purchase of four T-2 tankers. This
application was later amended for one additional tanker. United
States Maritime Commission allocated the Union Sulfur Company,
Incorporated, two tankers and a contract of sale for the vessels
was signed on January 13, l9h8. The allocated tankers were
the SS OREGON TRAIL, renamed SS HERMAN F. WHITON, and the U
SS BROOKFIELD. renamed the SS WILLIAM A. M. BURDEN. The
WHITON was purchased at a price of $1,505,352.00 and the BURDENfor $1,583,?23.63. then signing the ccntract qf Bale, a dep0&1:t-
of $202,660.00 was made for each vessel. The balance of the
purchase price was paid in cash upon date of delivery. Ihe
cash used forthis purpose was from the companyis own funds.
- On February lh, l9h8, Union Sulfur Company, Incor-
porated, signed a two consecutive voyage charter with Compagnie
Francaise de Raffinage of Paris at a rate of United States
Maritime Commission Rate Order U38 plus 175 Per cent and com
mitted the SS WILLIAM A. M. BURDEN to perform the charter agree-
ment. On the same date,another charter was signed subject to
the approval of the United States Maritime Commission, which _
was later granted, whereby Union Sulfur Company, Incorporated,
chartered the SS BURDEN to Compagnie Francaise de Raffinage of
Paris at United States Maritime Commission Rate Order h3B plus
sixty per cent for as many consecutive voyages as could be
performed by the last loading date, December 31, 1950. '
The Union Sulfur Company, Incorporated, on April
30, 19b8, signed a consecutive voyage charter with the Standard
Oil Companyofew Jerse , at a rate Of United States MaritimeCommission Rate Order E36 plus fifty per cent committing the
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SS HERMAN F. WHITON to perform the agreement. The oonsecu- y
tive voyage charter was to extend to the last loading date, e
September 30, 19b9, and the cargo was to be discharged at a
United States Atlantic port. ' A
informed that in the spring or early ~ * A
sumaer of 1949 the ilrm had an opportunity to increase oil -P
operations, which is their main business, but needed ready Q"
cash for the purchase of the additional oil producing properties,
As the firm had decided they had aadisproportionate amount-of
capital invested in the shipping business and as the firm was
faced with a layup of the SS WHITON at a cost of $200,000 a
year after the vesselis completion of the Standard charter !
due to the tanker market collapse, it was decided to sell the
vessel. As an inducement to buy, it was decided to sell both
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.price and include the assignment of the Compagnie Francaise de
Raffinage of Paris charter. The assignment of this charter
.to be performed by a new owner of the vessel was somewhat A
,dubious as the United States Maritime Law does not clearly '
indicate the rights of the new owner or the person chartering
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vessels to this trust. Later the name of USPC was inserted '
in the negotiations and finally a subsidTankers, incorporated, was substituted. -'
" that the citizenship status of USPC and acific ankers, necr-
porated, was not questioned as it was known that the United
' States Maritime Commission had sold seven T-2 tankers to USPC.
and two T-2 tankers to Pacific Tankers, Incorporated.
stated that the following persons entered 1,1}
into the nego ions for the sale of the vessels to Pacific _
Tankers, Incorporated, but that he did not recall the details
concerning their participation? -
Mr. DANIEL B. LOVEJOY, Secretary-Treasurer, Mr.
LESTER COLWELL, Assistant Secretary and Manager of the Steam-
ship Division, both of Union Sulfur Company, Incorporated;
Mr. EDWARD H. MOHLA and Mr. THOMAS K. ROCHE, attorneys with
the firm of Height, Deming, Gardner, Poor and Havens, who
represented Union Sulfur Company; Mr. R. L. BERENSON, Mr.
H. O. BECKER, Mr. SCHAEFFER, Mr. NICOLAS COKKIEIIS, Mr. A. S.
QNASSIS, representing A. S. Onassis, Incorporated, USPC, and
Pacific Tankers, Incorporated; the lawyers for the latter
group, the names of which he does not remember; and Mr. CHARLES
AUGENTHALER of SSY. - 1 -
The Contract of Sale dated July 29, 1919. between
Union Sulfur Company, Incorporated, and Pacific Tankers,
Incorporated, concerning the vessels SS HERMAN F. WHITON and
the SS BURDEN reflects that title was to be transferred at the
First National Bank, Jersey City, New Jersey, on August 3,
l9h9. The purchase price was to be $1,?hl,5O0 for both vessels
plus $2,500_per day from July 19, l9U9. to the date of the
transfer of the vessel SS BURDEN, plus $7 SOO which repre-sented canal tolls to be paid from July 10, l9h9, to date of
transfer of the SS BURDEH and minus any amount which the O
Standard Oil Company of New Jersey agreed to pay to the Union
Sulfur Company to cancel the charter on the SS BURDEN. It was
determined that the Standard Oil Company paid $112,000 to
Union Sulfur Company, Incorporated, on August 12, l9h9. Of
the purchase price, $180,000 was to be paid on the date of
the signing of the contract and the balance on the date of
.
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- transfer. No mortgages existed on either vessel at the time
e of the contract sale date. '
,_ In the Contract of Sale, the buyer agreed to take
- delivery of title to the vessels although either or both of
them were.damaged or in need of repair at closing time as long
as the damage to either of the vessels did not constitute an
actual or constructive total loss." The buyer further agreed
to pay any sales tax and also warranted,"That he is and will
be a United States citizen as defined in Section 2 of the e
Shipping Act of"19l6 as amended." , A
The Contract of Sale also set forth that the seller
sold, assigned, and transferred all of his rights to the '
Compagnie Francaise do Raffinage of Paris charter to the
buyer. The buyer also agreed to perform the charter. The
risk involved by the buyer in assuming the charter was pre-
viously set forth. _
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r |. This Contract of Sale was signed by Hr. FALLON as
a Vice-President of URIOH Suliur Company, Incorporated, and
R. L. BERENSON as President of Pacific Tankers, Incorporated.
" Iniaddition, R. L. BEnEHSON signed as President of USPC and
' guaranteed the performance of the contract by Pacific Tankers,
Incorporated. _, . Q THL -.
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§§ A brokerage fee of $b3,537.50, representing a two '
P} and one-half per cent cmmnission, was paid on August 3, l9L9,is by Union Sulfur Company, Incorporated, to SSY. -
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;. The officers and directors of Union Sulfur Company,¬ Incorporated, on the date of sale are as follows:
°_1*1"_1_=L'e e
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HERMAN F. WHITON, President
FRANK B. MAHKLE, Vice-President l
MAXWELL L. EUWER, Assistant Vice-President
ARTHUR R. FQLLON, Vice-President and Assistant
Treasurer '
? DANIEL B. LOVEJOY, Secretary and Treasurerr=¥I i .
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LAWRENCE W. PRUITT, Assistant Secretary . ~
e HILLIAM A. Mi BURDEN, Chairman of the Policy_Comittee
Directors
WILLIAM A. M. BURDEN
ARTHUR R. FALLCU
H. HRRPER MC KEE
BARKLIE HENRY
FRANK-F. RUSSELL
RQBERT MC LEAN STEWART '
WILLIAM A. W. STEWART
_ HERMAN F. HHITON
I iinforwd-: Incorporatea,aoes not charter any vessels or have any business
' dealings with the Onassis group at the present time nor did
they before or after the sale of the aforementioned vessels.
In addition, he stated that the Union Sulfur Company, Incor-
porated, has very limited business dealings with SSY. A1
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- The folluuing investi ation was conducted by sea L7i ed S-in '=-
r " " " " *CHéRLE5'sU6ENTHsLER, Partner, glpSQn}*§?6G5*!n§ - **" '
Young, 52 Broadway,wNew York City advised that his firm was -
retained by Union Sulphur Company, Inc. as brokers to sell the
vessels HERMAN F. HHITON and WILLIuM. A. N. BURDEN. AUGENTHALER,
stated that he personally handled th sale of these ships for
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tankers and he experienced difficulty in attempting to sell the
WRITON and BURDEN. This he stated accounts for the sale of the
two vessels for a total price of $1,800,000. AUGENTHALER
stated that there were no inducements for the sales agreenent, '
He believed that there was a mortgage on the vessels but is not
certain of this. ' I0'
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The participants for Union Sulphur according to ...
AUGENTPALER were ARTWUR J, FALLON and Mr. LOVEJOY who was ' .
Financial Officer of the company, The participants for Pacific
_ Tankers Inc. were ROBERT L. BERENSON and ARISTUTLE S. ONASSIB.1
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file
TheThe file of SSE relative to this sale reflects
SSY received the WHITON for sale on April 21, l9h9. The
reflects the activity of SSY toward selling this vessel. _
file includes a copy of a letter dated May 20, l9h9 to Central
American Steamship agency, 52 Broadway, New York City.' This "
letter advised that the WHITOX was for sale at a rice of$1,300,000. A copy of.a letter dated Jue 29, l99 states that
SSY has an offer'of $1,800,000. for the PURIEN and the HHITON,
By a letter dated July 6, 19h9 Union Sulphur advised they
would accept this offer with certain conditions, By letter
dated July 21, l9h9 to the standard Oil Uompany of New Jersey, .
relative to the charter of one of these ships, SSY advised that
the proposed purchaser will be ALEX S. ONASSIS, Ino., a trust.
The trustees are Admiral EELUND MORAN, CLIFFORD CARVER, ROBERT
- ., -_. IT -H -. .L. BERENSON and N. COKKINIS, Lha letter states that this trust
has been approved by the US Maritime Uommission. It further
states that the vessels will be operated by the USPC and/or- Pacific Tankers Incorporated. ' - .
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In reviewing the records of SS!,'who acted as broker
in the sale of the two vessels, it was determined that on
February 26, 1950 SSY made u paynnnt of ¥2S,0O0.00 to the
firm of Goodwin, Rosenbaum, Meschsm & Bsilen end charged
the account of Pacific Tankers Incorporated. The supporting
voucher from Goodwin, Rosenbeum, eeohem & Beilen dated
august 31, 19h9 contained the notation "legal services rendered
in connection with ucquisition of vessels from Union Sulphur":
It was also ascertained thst on august 17, 1950 SSY made a -
psyment of $10,000.00 to the some firm and charged the ac-
count of Olympic Whaling Co., Inc, The supporting voucher in
this instances ststed "For services rendered in connection
with trm sfer of ST Hbl-1nN F. 'n'HI'.[0N". ' "
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Qsranfmssr ITEILNUMBER 69 - - - - ;
This item requests that we ascertain why all of the
stock of Pacific Tankers, Incorporated, was transferred from
USPC to Victory Carriers on June 21, 1950. - ~~
The following investigation was conducted by SA A!_ '57:. '
It was~obsorved from an examination of the minutes
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An examination of the books and records of Victory
Carriers, Incorporated, reflected that USPC had advanced a
total of $3,607,215.50 in cash to Victory Carriers, Incor- -poratcd, up to July 21, 1950. This_advance was credited to
Paid in Surplus on the books of Victory Carriers, Incor-
porated. .
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NY -us-2507 '
-PE"!?-*'1l?i5YT ITE*L1iU1i§PR I2 -
This item deals with the identity of the officers
and directors of the Olympic Trading Corporation and deals
- with the financial arrangements entered into by Olympic
Trading Corporation in connection with the construction of
the OLYMPIC GAMES and other tankers by ONASSIS at Bethlehem
Sparrows Point, Baltimore, Maryland. It alsocieals with the
assistance USPC may have rendered in connection with the
aforesaid construction program to Olympic Oil Lines.
The fol = at on was conducted b
SA A!s
It s we
NICHOLAS COKKINIS, President, Olympic Trading
' Corporation, made available the books and records of instant '
firm. '-'
An examination of the minute book of the corporation
reflected that the Olympic Trading Corporation was originally
organized under the name of Olympic Financial Corporation, in
the State of Delaware, on April 1, l9hB with a capital stock
_ of 1000 shares of no par value stock. ~
On April 9, 19h8 the Corporation filed a Certificate
of Amendment changing the corporate name to Olympic Trading
Corporation. A review of the minute book reflected that the
purpose of the firm was to engage in general financing in
the loaning of money and the dealing in stocks, bonds and
debentures.
This record reflected that
inoorporators of the Olympic Trading Corporation on June 17,
191+-Q the following individuals were elected as officers of
the firm, it being noted that the position of president was
left vacant: -' - '
' Vice President - aoaaar L. asasnsos ~
Treasurer_- NICHOLAS COKKINIS -
Secretary - A. P. BARRANCO :-at a meeting of the
- - The directors of the Corporation were three in
numbcrand were identical with the aforesaid officers. '
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. The minute book farther reflected that at instant
meeting the subscription of Socieded Maritime Miraflores,
Ltd., Paama, involving 1000 shares of stock, no par value,
was &pDPOV6d and a resolution was passed issuing same-to
MIRAFLORES. The minute book contained a copy of a certifica-
tion apeointing ARISTOTELES SOCHATES ONASSIS Attorneyfin '
Fact for Sociedad Maritime Mirafleres Ltd., a Panamanian _ -
Corporation. The certification bore the date November 10,
1939. - - .
On November 30, 19hB, at e meeting of the Director
of the Olympic Trading Corporation, NICHOLAS COKKINIS was
elected President of the firm and also served in his previous
capacity as Treasurer of the company. There were no other
changes in the officers or directors. s
On'January S, lens Miss THOMASITA HUSANTE was
, elected Assistant Secretary of the aampany, there being no
, other changes in the officers or directors of the firm.
On April 20, l9h9 ELIOT BAILEN was elected Assistant
Secretary to serve with "iss MUSANTE. No other changes'were O
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On August ll, 19h9 H. 0. BEEKER was elected Assistant
Treasurer of the firm with no other changes being made. -gg*
On Deccmmer 20, 19h9 the number of directors was
increased from three to five with ELIOT BAILEN and GEORGE
COUTSOUVELIS being elected Directors to serve with COKKINIS,
BEREIJSON and BARHANCO. There were no changes in the officer
of the firm on instant date. _ _
On May 1, 1950 the Ibliowing individuals were
elected as officers and directors of the corporation:
0fficors_ '
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On Augaste2l, 1950 G.%RGE WUTSO... S was sis...
Assistant Secretary and Assistant Treasurer of the firm, 1!
apparently to replace Miss MUSANTE; however, there was no .
. mention in the minutes of the corporation of Miss M'USANTE's t
resigaation. This change was the only one affecting either
the officers or directors of the company."
These officials remained the same until March S, ,
1952 when ELIOT'-BAILEN resigned as Assistant Secretary and
Director of the firm and JEaN;G. PEG-QUET was elected Assistant *
Secretary and Assistant Treasurer, as well as a Director of
the corporation. _ Q
.'Ihe minute book reflected no changes in officers - E_
or directors of the firm from March S, 1952 until the ' ' I
' present time. i 1
-' In reviewing theminute book there was noted" a O l
' document bearing no date other than 1951 which indicated I
that the stockholders were NICHOLAS CXJKKINIS, who owned S00 . l
shares of no par value stock, and GIDRGE COUTSOUUELIS, H_ho_owned the remaining authorized stock in the amount of S00" _ é
__ shares, The minute book did not indicate when the-ownership - " _r
"=6r"n&fel'see=czFsaaeagsa freon" MIRAFLORESlt6=YGO1GHlH*S*nnd e
covwsouvmzs. - _ ~ _ ;
The minutes of an adjourned meeting of the Board O
of Directors of the Olympic Trading Corporation, dated Ame .
17, l9hB, at which COKKINIS, BERENSOII and BARRANCO were
present, reflect a resolution was passed approving a proposed"
loan agreement between Olympic Trading Corporation and Olympic
Oil Lines, Panama, S. 11., a Panamanian corporation, dated I l
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Trading Corporation and the purchase by Metropolitan from
time to time of 3§% sinking fund collateral trust bonds
totaling $22,hO0,000.00. These minutes also reflect the
purpose of the above $22,hO0,000.00 bond issue was to pro-
vide funds to loan Olympic Oil Lines, Panama, S. A. These V
»L loans, dated as above, were approved b the Board of- .Directors in a meeting on June 19, 19kg. s .v
1
The minutes of a meeting of the Board of Director
dated January 18, l9h9, at which were present BERENSON,
. COKKINIS and BARRANCO reflect a proposed loan agreementdated December 1, l9hé was presented to the Board covering
_% e loan by Olympic Trading Corporation to Olympic Oil Lines,
" Panama, S. A. This agreement proposed that Olympic Trading
_ _ Corporation would loan the Olympic Oil Lines sums not more
a; than se,7oqooo,oo to enable Olympic Oil Lines to nance the
purchase from ARIONA of a steam turbine tank vessel named the
OLYMPIC GAMES and also the interest of ARIONA in a contract
providing for the construction of a stean turbine tank vessel,
Builders Hull Number hh69, to be named OLYMPIC TORCH, and to
finance the construction of the OLYMPIC TORCH. A resolution
approving this proposed loan agreement was passed by the
=l ~ _Board of Directors on January 13, l9h9._~
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~L!The financial arrangements entered into by Olympic
Trading Co a~ation in connection with the loan agreement ofJune 17, lg in the amount of $22,h00,000.00 and the loan
agreement approved January 18, 19b9, are set forth in Enclosure
Q Number 17 - Enclosure Number 20. These enclosures were made
5 available by NICHOLAS COKKINIS and set forth in detail the
E1 entire scope of the financial arrangements involved, -
In connection with
c _ onts it is to b I1li@!|||iIIIIIIIIIl!!| ane entire nego u one Metroao an s
of the aforesaid vessels were ed by ARISTOTLE OIASSI8. -
. concmxs advis ed SA A!s b' qthat the only purpose for the organ z on of O ympic 75-
». Tra ing Corporation was to assist Olympic Oil Lines in
' financingrthe tanker construction program. He stated that
no assets of USPC and its subsidiaries were oonndtted to re- -
;1 pny the funds borrowed by Olympic Trading Corporation for Ais ,___-?'vI
avat L7;
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NY Lie-2507
BECKER c roborated this information in an inter
view with we did CPRVER when interviewed by H7¢,-
.i_ comums further advised Agents-_thnt the vessel OLYMPIC emwss wns p L1Pacific Tankers at a price of *3,000,000 00 because at C"
7 he time of purchase the tanker market was depressed and
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D§l_PAB§'_biENT zjran NUMBER 71 ' _ -
This item npquests information concerning the sale
of the vessel SS HLRNJN F. WHITON to Transatlantica for
_ $1,000,000 by Pacific Tankers, Incorporated. "2
ing investigation was conducted by SMA!
_ 57¢, p
The minutes of the directors of Pacific Tankers,
Incorporated, reflect that a resolution was passed by the
Board of Directors on December 5, l9h9, transferring the
T-2-sea-tanker "Herman F. Whiton" to a New Delaware corpora-
tion known as Olympic Whaling Company upon the issuance to
Pacific Tankers of one hundred shares of the common stock of
Olympic Whaling Company, Incorporated, with a par value of
one dollar per share. ' _
. The Property andesorve Accounts carried on the
» books of Pacific Tankers, Incorporated, reflect that the
. SS HERMAN F. WHITOH was transferred to the Olympic Whaling _
Company, Incorporated, at a book value of $832,121.39 on
December 31, l9h9. . '-
T ~- The books of Olympic whaling Company, Incorporated,
reflect that the SS HERMAN F. WHITON was sot up on the books, -
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F. HEITON to Transatlantica Financiera Industrial, Panama, r
Scuth America. This certified Bill cf Ss1e'is signed "Robert
L. Berenson, President, Olympic Whaling Company, Ineorperated."~W
The Property records of Olympic Whaling Company, '
Incorporated, reflect that the SS HERMLN F. WHITON was trans-
ferred back to Pacific Tankers, Incorporated, on ovember 30,._
1950, at a value of $967 087.99, representing an increased 'book value of #a33,13h.hé and reconstruction costs of $133,953.51.
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The Property, accounts Receivable, and Journal"
Voucher records of Pacific Tankers, Incorporated, record the
sale of the SS HERMAN F5 WHITON to Transatlantiea Financiera '
Industrial, Panama, South America, in the amount of $1,000,000
on November 30, 1950, representing $967,087.99 as the value
of the Property account and a profit on the sale of $32,912.01.
The $1,000,000 due from Transatlantica was recorded on these
records as an Account Receivable from Transatlantica. ,
' The records of Western Tankers Incorporated. formerly
known as Pacific Tankers, Incorporated, reflect that the
' $1,000,000 due from Transatlantica as a result of this sale
was carried as an Account Receivable until hpril 18, 1951,
when the entire $1,000,000 was transferred to a Note Receiv--
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An unsecured and uncertified promissory note dated
January 25, 1951, as of August 25, 1950 payable in one yoar'from August 25, 1950, in the amount of £1,000,000 at three and
one-half per cent interest per annum was given by Transatlantica
to Pacific Tankers, Incorporated. This promissory note is
signed by COSTA KONIALIDIS, Corporate Officer of Transatlcntiea
Financiera Industrial, Panama, South America.
The Cash Receipts record of Western Tankers, Incor~
porated, reflects that Transatlantica paid the $1,000,000 due
under the foregoing note on September 7, 1951,
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1>EPa1-HMENT. ITEM NUMBER 12, ' C L
This item requested that the officers of Petroleum .'
Navigation Corporation be interviewed relative to the - '
negotiation concerning the sale of two tankers, SS FEDERALan; REPUBLIC, to Trafalgar Steamship Company about December ll,
19 0.
follo investi a on was conducted by SAS _and _ £§7Q_
_ TORKILD RIEBER, President of Barber Oil Corporation, -
Room 33b0, 30 Rockefeller Plaza, New York City, was inter-
viewed in the presence of CLIFFORD A. THOMAS, Vice President
and Becretary, and LEO R. PCRTNEY, Controller.
RIEBER advised that all of instant negotiations 7
concerning sale of tankers, 35 FEDERAL and REPUBLIC, to- Trafalgar Steamship Company were conducted solely by him, I
RIEBER advised that as of December ll, 1950, the
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Directors - C. T. CARNES; J. M. COOK; J. Y. POWELL;
' G0 Lo
RIEBER stated that at the present time J. M. COOKas a ship agent in Houston, Texas, and that he rep-
Barber Oil orporation in Houston.- operated
resented
arsssa stated that all of the other officers and
directors named above still are associated with American
Republics Corporation and still are located in Houston,
Texas. "
RIEBER advised that .. of December 11, 1950,
the officers and directors of the American Republics Corporation
were as follows:
President ~ A. K. TYSON
Executive Vice President - JAMES H. DUHBIN
Vice President - FRANK CULLINAN
Vice President - J. Y. POWELL
Treasurer - C. T. CARNES
Secretary D. B. WISE
Controller - G. L. TOWNSAN. "
_ Directors - T. RIEBER, Chairman of the Board;
' " SCHOFTELD ANDREWS; FRANK CULLINAN;
_ JAMES H. DURBIN; E. F. KINKEAD;
A. K. TYSON; A. J. HRAY.
In connection with the above officers and directors
of American Republics Corporation, RIEBER advised that
at present all are located in Houston, Texas, with the
exception of E. F. KINKEAD and SCHOFIELD ANDREWS. It is '
RIEBER'S belief that SCHOFTELD ANDREWS at present is an_
1"-18 A25 3 £23i.s§2 §Ffcif?;%t~l6é°5.§§2§.¬"%1{$é§s....¬§. M 8° that
RIEBER stated that interviews with the above-
personnel of Petroleum Navigation Corporation and American
Republics Corporation would be of little value since all of
the negotiations in this matter were handled entirely by
him.
RIEBER stated that as Chairman of the Board of
- the American Republics Corporation, he decided in the fall '
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of 1950 that the time was propitious for the American
Bepublicsaorporation to act solely in thecdl producing busi-
ness and to eliminate from its holdings all non-oil producing
subsidiaries.
plwgwn ctnfna that he nhcnnntn this master fgrgg-I I-I LII I-I Id-92-I92-I villi? .II92-F :IQ92dIIblll7II92 Tl-IT II 7
fully to the Board of Directors of the American Republics _
Corporation at a Board of Directors meeting which occurred
on November 2B,_1Q50.
A review of the minutes of the board of Directors
for the meeting held November 28, 1950 page 233k! reflected
that the Board of Directors had authorized the sale of the SS
FEDERAL and the REPUBLIC to a non-affiliated company.
RIEBER stated that the above mentioned resolution
of the Board of Directors was passed because for a nuber
of months prior to thaneoting, he, RIEBER, had been
negotiating with ONASSIS for the sale of the two tankers,
RIEBER advised that the sale of these two tankers
had first been introduced by ONASSIS at the time the .'
Barber Oil Corporation launched a new ship at Quincy, "
Massachusetts, through one of its affiliates, the Trinidad
Petroleum Corporation. RIEBER was unable to supply the
date of this initial contact by ONASSIS but he estimated
that it was a little over two months prior to the actual
sale date.L7¢_,
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BY 116-2507 _
of the shipping industry, it was obvious to him that
ONASSIS would have a large personal investment in any associated_
interests which he represented.
RIEBER advised that his knowledge of the shipping
industry indicated to him that the Greek interests in the
past years had retained excellent counsel, and that it was
his understanding that all sales and purchases of ships by
the Greek interests were in absdlute conformity with the
existing statutes and regu1ations.' In this connection
RIEBER produced an original document from his file signed by
RUPERT BERENSON, President of the Trafalgar Steamship
Corporation, which docuent warrants that the corporation is
a citizen of the United States within the meaning of the
Shipping Act, lqlo. RIEBER provided a photostatic copy
of this document, which is enclosed herewith as enclosure
number 21.
RIEBER advised that neither he nor any of his
associated officers were aware of the source of the money
used for the purchase of instant tankers. He stated, -_
however, that in his negotiations with CHASSIS, he had. _ H
-- ~1n=1s1=ed th.at-.as.-a_.gc>nd1t.iQ.n.-o.1.sales-the.-taa1rens.esere__.... .. ' "'to he'paid'for ihcash'ImmediafeIy"pbn the'signing'of the 1" m ""
sales agreement.
RIEBER further advised in connection with the
sales conditions that at the time instant negotiations were
being made, the two tankers concerned were being operated
by the Texas Company under a five year charter for the
purpose of coastwise shipping. RIEBER further advised in
this connection that at the time of the negotiations,
approximately one-half of the charter period had expired,
and that it was the desire of the Texas Company to continue
the coastwisc operation of the ships for the life of the
charter. RIEBER advised that because of the existing
charter arrangement with the Texas Company,he insisted that
as a condition of tho sale ONASSIS would agree to allow the .
Texas Company to approve of the sale and the resulting
transfer of the charter. In further explanation of this,
RIEBER advised that if the Texas Company did not approve
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of the purchaser, the sale would not be consumated, and,
if necessary, Petroleum Navigation Corporation would have
continued to operate the two tankers for the life of the
charter despite the company's desire to divorce itself from
non-oil producing companies. In this same connection,
RIEBER stated that the proof of citizenship of the purchaser
was of paramount importance to the Texas Company, and he
recalls that THOMAS E. BULHANAN, Manager of the Marine
Deparonent, Texas Company, was the Texas Company official
who approved the charter transfer. '
RIEBER has no recollection as to the exact date
upon which he received a check from ONASSIS in payment for
instant tankers, but he recalls that it was shortly after
December 11, 1750.
CLIFFORD A. THOMAS, identified above, stated that
shortly before Christmas 1950 in his capacity as RIEBER'S
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NY H6-2507 .
* This item also requested that it be determined
-who entered into negotiations with the National City Bank
to establish a collateral account for Trafalgar. Informa-
tion concerning these negotiations is set out under
Department Item Number 73.
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DEPARTHEET ITEH KQQBER Z} - -
T r tion was conducted by SA A!a "g
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This item requests that it be ascertained who '
entered into negotiations with the Metropolitan Life
Insurance Company relative to the loan agreement dated _
December 1, l9h9, for $7,000,000 to Marine Trading, Inc.,
USPC, Pacific Tankers, Inc., and Sociedad Maritime
Miraflores.
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psPARTnEgg;1gsM NUMBER 1; -
_ This item requests that it be ascertained who
initiated the negotiations for the $3,350,000 loan dated
February 9, 1951, by Ocean Trading, Inc., with Metropolitan
Life Insurance Company.
e following
SAA and SAAconducted-by h
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COKKINIS advised that after their contribution,
the $10,000 total capital was as follows:
$6500 - COFKINIS 7.
1 Q00 - AUGEHTHALER .
500 - COUTSOUVELIS v 1
C0-ILKINIS made available phetostatic copies of four of his _
personal checks, all dated February 13, 1¢!Li7,- hhichwane payatie to
GEORGE CCUTSOUVELIS and CHABLLS AUGENTHALER, Central American
steamship Agency and central American Ste&mShip Agency in ,amounts or $100, $100, $100 and $9700 respectively. 0
C An inspection of the endorsement of instant _
checks reflected that the four checks were deposited to the
bank account of Central American Steamship Agency, Inc.,
* on February 13, 19h7. The photostatic copies of these checks
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2§B&BT 3¥T "O-~111iQ¥UTERYlEHiQFl3°3ERTaE@;5EBEH$°E ' ' - q
L, 0/On May 8, 1952, SAB Fond
interviewed ROBERT L. ERENSON in the rese is
oxne EDWARD J. ROSS of Breed, Abbott and Morgan, at the -
office of United States Petroleum Carriers; Inc=, 655 Madison
Avenue, New York City. -
He advised that his present legal residence is B23
Park Avenue, New York City. He stated that he was employed by _
Grace Lines from 1931 to l9h6. He started at a salary of $30.
per week and during the first four or five years of his employ-
ment with Grace Lines he was employed in all their departments
under their Executive Training Program.
Starting about l9h0 he became
tive of Grace Lines with headquarters in
,19h2 to l9H5 he was in the United States
,to General MARK CLARK. He rose from the rank of private to -
captain. Upon his discharge from the United States Army, he "
resumed his position as European representative for Grace Lines.the European representa-
Holland. From about
Army serving as aide
BERENSON estimated that his average salary during the
~ei»=elast:£i§e<Qr:aix-¥Q&§B;@£+hi8;Qmnl9ImQn§¢Hi§h§P8§§;LlB§$;H§:e_;_ Gaels;
about $6,000. During 19h6 he returned to New York City and
organized Continental American Travel Inc., a travel agency with
offices in the Ritz Towers Hotel. when he organized Continental
American Travel Inc., he resigned his position at Grace Lines.
BERENSON stated that during the early part of
September 19h? he read in the papers that the United States Maritime
Commission had surplus vessels for sale. He stated he became
*_= interested in getting in this phase of the shipping industry if -
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ONASSIS told BERENSON that he could endeavor to pur-
chase the ships either through a broker or a Washington, D. G.
law firm. ONASSTS offered to accompany BERENSON to Washington,
D. C. and introduce him to JOE ROSENBAUM. He stated that at _
this time he had no offer from ONASSIS to furnish financial
assistance.
BERENSON insisted that the original idea to secure the
vessels was his own; however, he stated that he had discussed the
idea with CHASSIS because ONASSIS had tanker experience, in fact
had several ships at this time. The general discussion followed
the lines as follows: -
A proposition would be made to the oil companies to
secure a barcboat charter which would be based on the
condition of obtaining a vessel allotment and delivery from the -
Maritime Commission. ~
92
BERENSON stated that he, ONASSIS and a friend of
CHASSIS by the name of === GRATSCS went to Washington, D. C.
When they arrived in Washington, D. 0., ONASSIS and BERENSON
went to ROSENBAUM's law firm where they met ROSENBAUM, He statedit use
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BERENSON returned to New York City. Shortly thereafter,
probably the following day, DUDLEY telephoned him and suggested
the name of United States Petroleum Carriers, Inc. for the new
company. BEQENSON advised that the name appealed to him and he
offered no objections. »
A few days later he went to Washington, D. C. alone
and attended a meeting at ROSENBhUM's law office. DUDLEY and
ROSENBAUM were present, and possibly CASEY. He stated that he
cannot recall exactly when he first met CASEY but does remember
that DUDLEY introduced CASEY as his brother-in-law. He advised
that for several months he was under the impression that CASEY
was a member of the ROSENBAUM law firm. L
BERENSON discussed generally the plan to bareboat the
vessels in order to swing the financing. The law firm at this
time was interested in a fee. BERENSON stated that if the
allocation could be obtained, BERENSON would pay l§% of the value
as a fee. In round figures, this would approximate $25,000. per
ship. BERENSON conmcnted that this was not a high fee because
it compared to the normal broker's fee._ y
The lnw firm had no questions as to the financing of
the deal and was silent on that matter. .BERENSON authorized the .
corporation; however, no retainer was signed by BERENSON and _ '
there was no discussion as to who would be on the petition for
incorporation. Then BEREHSOK returned to New York. '
Shortly after his return to New York, DUDLEY telephoned
him and said that hu was about to organize the corporation. He
asked BERENSON whether he had anyone in mind to consider as an a
officer in the new corporation. DUDLEY stated that he suggested
one Admiral HAROLD BOWEN, to whom his brothcrin-law CASEY had
introduced him. He stated that admiral BOWEN had an excellent
technical background, n good reputation and would be an asset to
tho corporation. B£REN30N stated ho would be pleased to have
BOWEN in tho corporation. BERENSON stated he did not know BOWEN
at that time nnd DUDLEY told him he would, and did in fact, send
a summary of BOWEN's history to RERENSON, _
BEREHSON stated that during the next several days he
had three or four_telephone calls with DUDLEY Concerning officers,
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_ -. . _ ..L'- . -. _--_a- . n In A. Q_-a-----Q __and directors. DUDLIY suggested BOWEN as president, usuumsuu as
vice president and himself, DUDLEY, as secretary. BERENSON
advised he had no objection to this arrangement.
Shortly thereafter, DUDLEY either wrote or telephoned
BERENSON and told him that he was now forming the USPC. He -
asked BERENSON to forward him a $200. chock in payment for the
stock of tho corporation. The telephone contacts from DUDLEY
were made with BEBENSON through telephone N0. PLaza 9-5302.
This was the telephone number for the Continental ameriean
Travel Inc. at the Ritz Towers Hotel, of which concern BERENSON
was president, _ '
BEREN50N advised that he forwarded the $200. check to.
DUDLEY, He stated DUDLEY told him he would issue stock to ' -
' BERENSON, BOWEN and himself. He did not ask DUDLEY concerning
the capital investments of either BOWEN or DUDLEY and at that _
92 time did not ask him concerning the number of shares of stock
- that would be issued to each of the stockholders. BERENSOH I
advised that he does not know new and never did know whether ,
DUDLEY and BOWEN madea capital contribution to USPC. _ .
' BERENSON-advised that DUDLEY made out the applioation_
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e BERBNSON stated that during October, November and
December l9h7, many other individuals had applied for tankers
to the United States Maritime Commission and were contacting _,
the various financial institutions in an effort to arrange "
financing for the purchase of the tankcrs.. Ho stated that _
because of this the financial institutions told him and othersi
to come back when they had a definite allocation of tankers from
the United States Maritime Comission. -
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jjll-{_b_;N5U]92i EICIVISBO, HOWBVOI, "B11815 lll I115
able to arrange a time charter even though he had not received
the allocation. Through the efforts of JACK VINING, BERENSON
fixed a time charter at the rate of $h.50 for five years with.
Jupiter Petroleum Company, a French subsidiary of Shell 011.
These arrangements were consummated through Mr. BAXTER in charge
of charters of Shell Oil. ~ "»case he was
Once he had the time charter fixed, BERENSON thought
it would be a good idea to work through the banks for Shell and
Jupiter in order to complete his financing. He was referred to
Lazard Freres who was the banker for Jupiter Petroleum. »In this '
matter, the French Government had to approve the loan which would
have been made.bx,Laeard.Erere§ ' __ .0 .. ___.._..._ _ ._ . _-_. . . -c7.7_..__p- g V, _a.~-- - -_ _ .,_~:, -_- _ -. _ _'-: __ _".'T -.w--L-_'_.7 7".."I."_.".T'.~$'-.'.r ":_é"':'_'-. . -' ~ .-- " ;.
BERENSON advised that this was considered very important
fhrthe French economy since France did not have any tankers avail»
able. As a guarantee on the financing to insure that Jupiter
would perform under the charter, the Shell Oil Company arranged
to have its subsidiaries, Asiatic Petroleu Corporation and,
Anglo-Saxon, guarantee the charter performance. BERENSON stated
that even in fact the French Government itself offered to put 4_
up a considerable sum of money as a guarantee of performance by
Jupiter. However, due to the existing condition of French
internal political problems, no one would take the risk and the
entire financing fell through.
During Qetober and subsequently, CHASSIS had made
inquiries of BERENSON in rcgard to his financing programs and _
had offered help in this matter.
assesses stated that the United States Maritime - "
. Commissipn allocated four tankers to USPS during the latter part
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of December 19h7. when these tankers were allocated to USPC,
BERENSON had not made financial arrangements to purchase instant
tankers. During the period up to the allocation of the tankers,
' DUDLEY and ROSENBAUM kept in contact with the United States "
Maritime Commission in en effort to make sure that some tankers
would be allocated to USPC. BERENSON also went to the Maritime
Commission from time to time to follow up on the matter. -
BEHENSON stated that it was his recollection that
USPC had about ten days to make the down payment on the four
tankers. He stated that at this time he had a net worth of -
about $7,000. and had no perscnal means to raise the down pay-
ment. - p A '
- BEHEHSON stated he telephoned ONASSIS and made an
appointment to discuss the possible financing of the four
tankers. He told ONLSSIS that he had been unable to make
financial arrangements for the financing of the four tankers._*J
BERENSON advised that he realized that he had no commitments
in regard to charter hire for the vessels, inasmuch as the
Jupiter deal had fallen through. He further did not have the
a financing or money needed for the down payment on_the four -- 4
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BEREHSON remarked that had he received an allocation
in October he believed that ho could have financed the down pay-
ment and the other sums needed to purchase the vessels. However,
at this point his immediate problem was to secure money to meet
the down payment due in the near future. _ _
ONLSSIS offered to loan USPC about $300,000.00 to
meet the down payment on the four tankers. In return for this
loan, ONASSIS wanted a substantial stock interest in USPC.
BERENSON offered to permit ONASSIS to subscribe for the unissued
capital stock of USPC. BERBNSON accepted 0NASSIS' offer to
advance approximately $800,000.00 for the down payment on thefour ships. ' V '
He also agreed to permit ONASSIS to subscribe to the
R00 shares of unissued capital stock at $250. per share, for a
total price of t1oe,oee.0o. BERENSON was unable to recall how '
the price of $250. per share was arrived at. -
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BERENSON stated that although he'made these arrange-
ments with ONASSIS, such arrangements were subject to the
approval of the Board of Directors of USPC. ..
ONASSIS and BERENSCN both went to Socony. BERENSOH -
advised that at this time he also had VIKING working on another
French deal pertaining to chartering. At Socony, ONASSIS and
BEHENSON talked to HILCOAT and FRED PRATT and together they T
worked out one five-year bareboat charter on the vessel AHICKAREE 'i
at the rate of $2. per month. . ' " ;i _ "
BERENSON advised that Socony also took the FORT
BRIDGER at lh5% over the United States Maritime Commission rate
of consecutive voyage charters for eighteen months. Secony also
took the LnKE GEORGE on consecutive voyage charters 100% over
' the United States Maritime Commission rate for the first year -
and 50% over the United States Maritime Commission rate for the
second year. BERENSON advised that through the assistance of
.-' vmme, he arranged to charter the e:.w1s msaoows to the
Groupement d'Achat Corburants. At this point BEHENSCN had four
comitments. X. 1
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Bank to arrange for financing the balance due on the four vessels.
He stated that according to officials at the National City Bank
they had never financed voyage charters but finally gave the "ck"
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financed through a mortgage bond issue of the etropolitan Life
Insurance company. He stated that Lehman Brothers was paid a.
commission for their assistance in this matter. t
BERENSON advised that probably by early October 19h?
he knew wha he distribution of stoc was; that is, hares92D-XV to DUDLEY,shares to BOWEN andqshares to himse Aspreviously_se th, he advised the o paid per":share for theshares of stock issued to h m. -
that he does not know whether DUDLEY ar "EN ever -
for tho stock issued to them. ' ' 92
Ho stated that he assumed that DUDLEY and BOWEN were
merely nominees and that actually he was the principal stock-
holder of USPC. He stated that he questioned DUDLEY concerning
- the stock setup and DUDLEY gave him a rather vague answer. He
said that he was busy with other matters concerning USPC and
never questioned DUDLEY specifically about the stock setup but
actually assumed that they were merely QDMiQQ@§e
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BBRENSON advised that he did not understand how the
stdek had boon issued to DUDLEY. BERENSOH went down to -
Washington, D. C. and spoke to ROSENBLUM. This discussion took
place shortly after the officers in the corporation had been +=--
chosen. BERENSON told ROSENBLUM that USPC was his, BERENSON's,
'baby"and ROSEHBAUM commented that'%his may be a pretty good thing
yous will have in your hands if you get the ships."
BERENSOW remarked that ho had agreed to pay a fee to
ROSENBAUM, and ROSEHBAUM cemented, "well, the least you can do
is to give Goodwin, Rosenbaum and Meacham a five-year retainer
to be the corporation's attorneys." BERENSON asked ROSENBAUM
__i how about the stock. ROSENBLUM replied, "when the allocation
comes through, you will get the stock at $2. a share"and than -
ROSENBAUM added, "Lot's put something on paper,"
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his attorney EDWLRD
paper would be madeQ - t '% %tltlqE< ~ ;t C y =--
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JJ. ROSS. when questioned as to whether this '
available to the interviewing agents, Mr.
Ross advised that he would decide in the next few days whether
or not he would make this.paper available. e
when the allocation came through, BERENSOH went to
DUDLEY and HOSENBAUM and asked about the stock. ROSENBAUM said
h g '1 _ . r e had a new formula for BLRENSOF. He suggested mklii a stock
purchasing agreement with DUDLEY BBQ BQWEN I0- i
ROSEI-IB.'.UM described this form 0!!
agreement as the same as a legal fee. ROSENBAUM drew up the
paper dictating it himself.
L BERENSONsigned the paper saying that he trusted
. ROSENBLUM as his attorney and particularly because it was
described as the same as a legal fee. It is to be noted J -
that the above-mentioned agreement is the agreement dated January
_ . ',7. 19115 between BEREJNSON and DUDLEY, wherebv BERENSON agreed to JU7 t/purchase DUDLEY's Qsh-Ires of USPC stock..'! The first payment' was due in January 9hB. - -
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- BERENSON advised that shortly after the agreement
~ .was si ned he instructed his accountant, HERB?T+MAXwELL,mte ~ »- send to Goodwin, Rosonbaum and Me-acham as down paymentt;7l//unde is agreement. Ho also instructed MAXWELL to charge the& ayment as a_1egal fee. BISRENSON advised that sometime_during 1956 he could not recall the exact date! it was brought
to his attention that the agreement was not actually an agreement
to pay legal fees over n five-year period but was definitely anagreement to purchase the- shares of stock from DUDLEY.
He thereupon wont to Washington, D. C. to see ROSENBAUM
about the January 7, l9h6 agreement. He complained to ROSENBAUH
that this agreement was not an arrangement for legal fees and
requested ROSRNBLUM to change the agreement. He stated that when
he contacted ROSENBnUM regarding this matter, DUDLEY was also
there, and he thinks that CLSHY was also present. They discussed
ways of straightening out the matter.
511/ One 1" the 1-.m-to said "You p-lid 1.1 we can' carry the i as a payment for stock and we will not charge
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"legal fees for the next four years." Thisfconunent was a mere
propose]. and notdefinite,
DUDLEY dictated a memorandum on this meeting and
conference. BERENSON has a copy of this memorandum and it is
presently in the file of Br-cod, Abbott and Morgan. It is ~
noted that Mr. EDWLRD J. ROSS advised he would consider -mnkixg e
this available to the interviewing agents. d . '
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BERENSON advised that subsequently he saw
ROSENBAUM at which time RO&ENBAUM remarked that the 7
firm's books had been audited and the Internal Revenue
had examined their records. R0§5gBAUM added, "I don't
see how we can change it. bomehew we will figure out
something. BERENSON remarked the law firm did not press
for payments. _ ' _ ;.saaarzson advised that the original
payment that was made by Us$C to the law firm of Goo W ,51¢/'Resenbaum and Meachsm was repaid by him durini Dicember,19MB BEREhb0N stated that he borrowed from
§impson, bpence and Zoung to make this repayment.
BEHENLOW advised that he made a ayment ofin19L|-9anda a et rid 1 9 -Parana urnsy;/ 19 l.i He stated he has not made additional payments -
Munder the Januar agreement. He said theqand payments were made from his
persona checking a 0
' when questioned concerning the statement,
"Applicant has made preliminary arrangements to borrow
substantially all the funds needed to defray the purchase
price of the vessels from banks in the United States,
which statement appeared on the application to purchase
Exhibit 1!» BERENSON advised that financial arrangements
had not been made at that time. He stated that he did
not file Exhibit 1 and did not know what information'was
contained on this exhibit until after it had been filedo
BEREHSON advised that he has known C. N. _
CARVER for many years. He advised that CARVER operates
a ship chandling business and had a good background in
the shipping business. He stated he has known GLHVER
for a considerable period of time as they both come from
the same community and are members of the Creek Club.
CARVER contacted BERENSON in order for CARVER
to get the ship chandling business Iron UéEG. it that time
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BERENSON needed directors. He recognized CLRVER as s
good prospect for a director. CARVER also knew ONASSIS,
and he believed that CARVER would therefore get along
well with ONASSIS.
BERENSOH offered CLRVEH a directorship;
however, CQRVLR wanted stock in the company. BERENSONoffered CLRVER 1%, clthougg CARVER wanted more butn . ;|l|Il|F settled on the amount of 1 t a price o
share.
BEREn50N advised that bTOREN was a Marine
engineer who had been engaged by USPC to handle the
decommissioning of the vessels after delivery. He stated
that he noted that ETOREH appeared to be very capable,
had an excellent knowledge of ship repair, and he felt -
that LTOREN would be a good man to have as a director.
He offered sronsaq a directorship and a 1%c/ st interest in UEPC. bTOREN accepted both, paying.9207 0- shares of were N.$0N stated that
__ h il .'t th ' h d e ar rar y no .0 price e a s are, an
could not recall exactly how he arrived at this figure.
BERENSOH advised that he met COKKINIS about
December, 19h? in 0NA5SIS' office. He described COKKINIB
as 0N;bSI5' operating man. During the next three or
four months he advised that he had en opportunity to
observe COKKINIS work as an operations man and was
impressed by his ability. He stated COKKINIS was not
a citizen at that time.
BERENLOH advised that in June, 19MB when
COKKINl$ became e citizen, he had c conference with
COKKIHIL and 0NA3éIS| at which time he told COKKINIS
that he would like him to become an officer of USPC.
advised that COKKINIS accepted the offer.He
COILRINIS asked BERENSON whether he could0_ ,1 i u-L7,,
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92°,!c41ereupon offered him -shares for_ which
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that he offered GQKKINIS a directorship, which offer
was also accepted by the latter. '
BERENSON advised that about Juno, l9hB
ONASSIL told him that he wanted a h9% stock interest
because of his investment in U5PC. BEREHb0N stated that
he felt ertzssls was entitled to s LL97:-I interest because
it was actually ONA$$IS' financial assistance that made
the very existence of USPC possible. He stated that he
did not haggle or argue with 0N;5LI£ concerning his _
tr %.t1;"t» t e11111 ldhim reques or a k9 s oc in ores an w ng y so_ -shares of his stock at as share. .
BERENSON, when questioned concerning why
the transfer of stock to COKKIHIS and others came from
BEREN£0N'b share and not from 0N45SI5' share, cemented
that he had never discussed with 0Nn5£IS any transfer
sf stock held by 0NQsSIS. He stated that he~: ..w -
never gave it much thought that he would lose the
majority stock interest when he sold shares to CLRVER,
COKKINI5 and STOREN. -BERENLON stated that he had.n0Ver
discussed the prospect of ON435I5 selling some of his
shares rather than BERENSON to any of the above-mentioned
individuals. _ _
BERENs0N advised that Goodwin, Resenbaum
and Meacham_incorporated Eetroleum Carriers of Panama.
He could not recall the date of incorporation. He
stated it was his recollection that USPC paid the
incorporation fee. "'
BEREHLON was questioned concerning the
reason for ULPC substituting a twelve-year bareboat V
charter at $1.00 per dead weight ten between UbPC and
Petroleum Carriers of Panama for a fiveyear bareboat
charter at §2.00 per dead weight ton between U£PC and
bocony Vacuum Oil Company.' BERENbON advised that he p
made the decision for this transaction, but was unable
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l to give the exact reason for this arrangement. He
explained that it was in accordance with a pattern of
seeurity that usPe was planning at the tine,4.
- It was pointed out to BEBENSON that the
revenue under a five-year barebeat charter at $2.00 per
igl dead weight ten would amount to the same figure as total
revcne for the first ten years under a twelve-year
; bareboat at $1.00 per ton. BERENSON stated that there
* was probably an excellent reason for entering into the
twelve-year bareboat charter at $1.00 per ten, but could
not recall exactly what the reason was. .vEuI
' ' BERENb0N advised that the reason for the
sale by USPC en May 10, 19MB of all of its stock in '
Petroleum Carriers of Panama to MIRAFLORES was solely
* "*~. ~ e e t stared into an
vessels
of Panama would,
barobeat- - JI
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arrangement with MIRAFLORES whereby the
chartered by USPC to rctroleum Carriers
be guaranteed $1.00 per dead weight ten;
a1;naaa.. -_ .i?a.r__'a. 1éaI;t9_s1.n£;ote_a.1aa1: an -32c;.a.tata§_:.§-1-.cH¢1'.._
hisdjudgmentat*th3 tie"thEt 1t wd§ eceesry fef USPU
to obtain the security offered by such an arrangement;'-I
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those charter arrangements were the best possible deal
that could have boon made by U5PC and its subsidiaries
at the time such agreements were entered into. '
BERENSON advised that he does not know who '
incorporated American Marine Corporation on October 11,
19h7. He stated that to his knowlodgo,ONnLSI5 had
nothing to do with the incorporation of this company. '92
BERENSON stated that it was common knowledge
in shipping circles that a corporation by the name of
hmsrican Merino Corporation had been allocated three
tankers by the United States Maritime Commission. He
stated that various brokers had mentioned to him that
American Marine Corporation had been allocated three
tankers by the United btates Maritime Cemissien.
nmnmusou avised that nnsaunrnm . a .tad Cl POI! Rf
him and told him that an allocation of tankers had been
made to American Marine Corporation. He stated that .
twe_individuals by the ncmdaof IJRKER and MILLs_wanted
to talk to him about the tankers allocated to American
sssshe1eereerstiehi"osostsit*ré§usetsa*sssssosto**"
talk to PARKER and MILLS.
BERENSON stated that IARKER and MILLS came
to his office in New York sometime in January. He
advised that 0NA5SI§ was not present at this meeting.
ILRKER and HILLS told BERENb0N that the United btates
Maritime Commission had allocated three tankers to their
corporation, the American Marine Corporation. They
stated that they had been unsuccessful in their endeavors
to finance the purchase of these tankers, and asked
BERENSON whether he would be interested in taking over
the allocation, _" _
PARKER and MILLS also mentioned that through e
one BURBANK, a broker, they had made tentative arrangements
to baroboat charter tho three tankers at $2.00 or $2.05
e dead weight ten.
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. BERENSON told them that he was interested
in taking ever the allocation and would think the matter_
over. He stated he then discussed the matter with
ONASSH; pointing out that the three ships had already
been tentatively committed te barebeat charters with
bocony Vacuum. ONASSIS told BERENSON that he thought
it would be a good deal for USPO to acquire the three
tankers, and offered to arrange to loan the down payment
for the tankers. ' _ ' . _
BEHEN&0N stated that over the next several
5Y5. he had meetings with I;RKER and MILLS concerning
the purchase of their allocation. He stated that ONLSSIS
met EAHKER and MILL5, and participated in the discussions
during the course of these meetings. "
BERENSOH stated that they finally settled
on a figure of $200,000.00 for the allocation and about
$1,600.00 for the capital investment.that was allegedly
made by the PARKER-MILLb group. He advised that he ,
typed up the agreement which was signed by him and '
the raEKER§MlLLS.group. . l. .;_N s W .H . . .
0N$5bIb advanced to hmerican Marine
Corporation the necessary funds to make the down payment
en the tankers. BEREESON stated he then called up
BURBANK and asked him what the status was on the charters.
He advised that arrangements were then made with
BURB;NK'b assistance to bereboat the three tankers to
bocony Vacuum at $2.00 a dead weight ten. He stated USPC
paid BURBANK a brokerage fee for his assistance in this
matter. _
BERENSOH added that ROSENBAUM suggested that
payments under the agreement between USPC and the PnRKER-
MILLs group be made to the law firm of Goodwin, Resenbaum
and Meacham since he. H0&E?BUM, had introduced the .
business to BEREHSON. BERENLON advised that he offered an
objection to H05ENB;UM'b suggestion and included a
provision in the agreement that the payments would be made
to Goodwin, Resenbaum and Heeeham.
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BERENb0N advised that he and ONAESIS
negotiated the original financing of the three tankers
allocated to nmorican Merino Corporation with the Chase
National Bonk, and also negotiated the subsequent re-
financing of those vessels with the Metropolitan Life
Insurance Company. I
BEREUb0N stated he had no recollection of
the attempt to substitute sub-charters from Petroleum
Carriers of Panama instead of direct-barebost charters
. to USPC from the above-mentioned three vessels. _
BERENSON stated that Lmerican Marine
Corporation and U$TC were merged on March 3, l9h9 in tho _
interests of economy and efficiency. He stated there was
no point in having'5morican Marine Corporation function _ _
' as a separate corporation. -
BEREN$0N advised that it is his recollection
that the law firm of Goodwin, Rosonbaum and Meacham ,
incorporated Victory Carriers, Inc. - '
BEREHEON was questioned concerning the
Proforww Balance hheot of Victory Carriers, Inc. that was
attached to the application filed by Victory Carriers, Inc.
on February 26, l9h9 to purchase vessels from the United
btatos Maritime Commission. Lccording-to the Proforma »
Balance bhcct, it was stated that as of the date of -
signing contract, Victory barriers, Inc. would have assets
consisting of cash in amount of $5,56%062 and capital
stock and capital surplus in amount of @5,S6%£b2, The
' application was signed by BERENb0N, _
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BERFMSOU advised that he could not specifically
recall negotiations in connection with the_Hationa1 City Bank
loan dated Hay 27, lose, in the amount of $2,800,000. He
stated, however, that in the case of this loan and all other
loans he fully discussed the details of such loans with
ONASSIS. He said that, after discussing the details of_a
prospective loan, either he er CHASSIS or both would go
to the insurance~cozpany or bank to arrange for the
prospective loan. He advised that ONASSIS was always
willing to put up any additional collateral that might be
required by the lending institution.
BERENSOH advised that the following is his
recollection concerning the purchase of the stock of Pacific
cTankers, Inc., by USPC:
He believes that CYASSIS lunched with Captain
RIEBER, a Pacific Tankers stockholder who told OHASSIS that
he believed it would be possible to ourchase the tankers of
this corporation. PVRENSOF advised that ONASSIS told him
this and that he and CUAS%lS discussed the possibility of
rs. Subsequently, he contacted
+59 mmqg§k1F H0 nanny- -An zq:_~V-I 4 LJ92-In s J-U-I--4-J-UJ 92JJ. U01 U D C9292a92Ul'.J-J. J.I.l-5
iced th~t from that point USPC
IYLD, CAHEROH and McCONE, who '
crs. BFREHSOH advised that,on
INIS, and LORD, DAY and LORD, USPCpurchasing Pacific Tanks
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Pacific Tankers. He adv
had negotiated with WARP
represented Pacific Tank
behalf of USPC, he, COKE
Admiralty Attorneys, wer
In connecti
HHITOH and WILLIAM A. H.
from the Union Sulohur C
YCUUG, who acted as brsk1:?-'3 .'! ."|5
on with
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CPS.
ERT SvH advised that he Un unable to recall
the reason for 131112 it-:=.ri:*."e1* oi P:-:|ei.i'ic i"z-113:1,-rs. stock from
USPC to Victory Carriers, Inc., on June 21, l9§O. .the details of the transaction.
the purchase of the HERHAN F.
by Pacific Tankers, Inc.,
lne IFR SQN advi_ed that _ _ :1j,r 1}", 0., , .L,H?]Z. , _ , s _ ,
this business was brought to USPC by SIMPSON, SPENCE and
BERENSCN ndvised that none of the assets of
USPC and its subsidiaries were committed to repay the funds. *_ Ib']¢,
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borrowed by Olympic Trading Corporation for the construction
program of Olympic Oil Lines.
.2USON advised that Captain RIEBER, an official
of Petroleum ' igqtion Corporation, advised ONASSIS that
the tanker: FEDERAL and REPUBLIC could be purchased.
BEREFSOH stated that he could not remember the exact details
of the purchase by'Trafa1gar Steamship Company of the above-
C mentioned tankers, but did know that the information was
first brought to tte attention of CHASSIS by Captain HIE
He advised that RITBEQ and CULSQIS were friends of long
standing in the shipping business.
_ 3ER"TSCH advised that up to about September,
l9h3, USPC had borrowed 2 considerable amount of money from
* CHASSIS. He stated that CZSRGE Leno of LORD, DAY and LORD,
Admiralty Attorneys, would write up citizenship opinions
on the package deals. In C CEGE LCHD'S opinion, he had
felt that it would be fsv-rablc from the point of view of
financing institutions for their sccurity,as considerable
sums of noney were loened by forcigncrs,to have the money
come frq1 American berks with foreign collateral, ratherl
than directly from foreign funds. Because of this
recomwendsticn of GECRGE LURE, the collateral fund arrange-
ment was crested. '
BERETSCH advised that "ASSIS agreed to furnish
the collateral to the Natioral City Dark so that the-bank
could direct loans to USPS secured by this collateral.
He advised that, when USPC needed money, one of tho USPC
officials would either write or telephone to Ariona at
Montevideo, Uruguay. Arrangements would then be made by
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loan from the National Cit; Es to USPC,
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qnn t etrolcwn Carriers of Panama
is a wholly oancd subsidiary of United States Petroleum
carriers, Inc. _This corporationlhas been set up for tax
purposes, and it is our hope that we may charter the ships"
of United States Potroleu Carriers, Inc, and American
Marine Corporation on a long term basis to the Petroleum .5
carriers of Panama. We have epvlied to the Maritime Comis-H
sion in this regard and hope to have confirmation from them
within the next few days,"
-QQQp_b
ENCLOSWRES TQpTW5_§§EEnU:
29 enclosures for transmittal to the Ibpartnent ;y~F: as referred to in this report, _ Q
- REFERRED "PEN CUMPLuTION TO Tn OFFICE OF ORIGIN -
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