Chapter VI: The Expansion of the Hamburg-Amerika Linie (2)

"(6) In Japan discussions are still proceeding concerning the
running of a line from the Far East to the American Pacific coast.

"(7) In New York negotiations with the representative of the firm
of Forwood are under way regarding the purchase of the Atlas Line."

This list summarizes the contents of a long series of letters from all parts of the world where Ballin's keen insight, long foresight, and business acumen suggested to his alert mind possibilities of extending Packetfahrt shipping interests. Time translated many of his suggestions into flourishing actualities, some of which survived the 1914-18 years; others disappeared in the cataclysm; others, again, by the lapse of time have not the keen general interest that appertained to the ideas when they fell fresh-minted from his pen. The following, however, in regard to China and Japan, are worthy of record:

"_Shanghai._ _March 4th, 1901._

"I am not quite satisfied with the course which the negotiations
concerning the possible inauguration of a Yangtse line have taken
so far.

"The vessels employed are of the flat-bottomed kind, some being
paddle boats, others twin-screw steamers. In their outward
appearance the Yangtse steamers, owing to their high erections on
deck, greatly resemble the saloon steamers plying on the Hudson.
Their draught rarely exceeds 12 feet, and those which occasionally
go higher up the river than Hankau draw even less. Most of the
money earned by these boats is derived from the immense Chinese
passenger traffic they carry.... The chief difficulty we have
experienced in our preparations for the opening of a Yangtse line
of our own consists in the absence of suitable pier
accommodation...."

"_On board the s.s. Sibiria on the Yangtse._ _March 10th, 1901._

" ... After what I have seen of Nanking, I am afraid that the
development of that place which is being looked forward to will not
be realized for a fairly long time to come. Matters are quite
different with respect to Chin-kiang where we are stopping now, a
port which is even now carrying on a thriving trade with the
interior parts of the country. It can scarcely be doubted that, if
the Celestial Empire is thrown open to the Western nations still
more than has been done up to now, the commerce of the Yangtse
ports is bound to assume large proportions. During the summer
months, i.e. for practically two-thirds of the year, the Yangtse is
navigable for ocean-going steamers of deep draught, even more so
than the Mississippi. At that time of the year the volume of water
carried by the river increases enormously in certain reaches. This
increase has been found to amount to as much as 38 feet, and some
of the steamers of the Russian Volunteer Fleet going up to Hankau
possess a draught which exceeds 25 feet...."

"_On board the Sibiria between_ TSINGTAU AND JAPAN. _March 19th, 1901._

" ... We arrived at Tsingtau on the morning of March 14th. The
impression produced by this German colony on the new-comer is an
exceedingly favourable one. Everywhere a great deal of diligent
work has been performed, and one feels almost inclined to think
that the building activity has proceeded too fast, so that the
inevitable reaction will not fail to take place. Looked at from our
shipping point of view, it must be stated that the work
accomplished looks too much like Wilhelmshaven, and too little like
Hongkong. It was, of course, a foregone conclusion that in the
development of a colony which is completely ruled by the Admiralty
the naval interests would predominate. However, there is still time
to remedy the existing defects, and I left Kiautschou with the
conviction that a promising future is in store for it. Only the
landing facilities are hopelessly inadequate at present; and as to
the accommodation for merchant vessels which is in course of being
provided, it would seem that too extensive a use has been made of
the supposed fact that mistakes are only there in order to be
committed, and that it would be a pity not to commit as many as
possible...."

"_On board the s.s. Empress of China between_ YOKOHAMA AND VANCOUVER. _April 17th, 1901._

" ... In the meantime I have had opportunities of slightly
familiarizing myself in more respects than one with the conditions
ruling in Japan.

"The country is faced with an economic crisis. Encouraged by a
reckless system of credit, she has imported far more than
necessary; she is suffering from a shortage of money, which is sure
to paralyse her importing capacities for some time to come.

"It seems pretty certain too, that future development will be
influenced by another and far more serious factor, viz.: the
ousting of the German by the American commerce from the Japanese
market. The exports from the United States to Japan have increased
just as much as those to China.... I cannot help thinking that in
the coming struggle America will enjoy immense advantages over us;
but you must permit me to postpone the presentation of a detailed
statement showing my reasons for thinking so until my return to
Hamburg.... I believe we shall be well advised to establish as soon
as possible a service between the Far East and the Pacific coast of
America...."

In 1903 far-reaching alterations were made in the relations existing between the Hamburg-Amerika Linie and the North German Lloyd, which had become somewhat less friendly than usual in more respects than one; and in particular the agreement concerning the Far Eastern services of both companies was subjected to some considerable modifications.

The year 1903 is also remarkable for an event which, although not of great importance from the business point of view, is of interest in other respects. This event was the establishment of business relations with a Danish company concerning, in the first place, the West Indian trade, and later that with Russia also. The Danish concern in question was the East Asiatic Company, of Copenhagen. The founder of this company was a Mr. Andersen, one of the most successful business men known to modern commercial enterprise, and certainly not only the most successful one of his own country, but also one of high standing internationally. When still quite young he founded a business in Further India which, although conducted at first on a small scale only, he was able to extend by the acquisition of valuable concessions, especially of teak-wood plantations in Siam. In course of time this business developed into a shipping firm which, owing to the concessions just mentioned, was always in a position to ship cargo of its own--an advantage which proved inestimable when business was bad and no other freight was forthcoming. When Mr. Andersen returned to Europe he continued to enlarge his business, making Copenhagen its centre. He enjoyed the special patronage of the Danish Royal Family, and afterwards also that of the Imperial Russian family. His special well-wisher and a partner of his firm was the Princess Marie of Denmark, who became known in the political world because she incurred the enmity of Bismarck, chiefly on account of her attempt to stir up ill feeling between the Iron Chancellor and Tsar Alexander III. Bismarck, in the second volume of his memoirs, describes how he succeeded in circumventing her plans through a personal meeting with the Tsar. It was the exceptional business abilities of the Princess Marie which brought Mr. Andersen into contact with the Russian Imperial family. It is typical of the common sense of the Princess and of her unaffected manners that she arrived at the offices of the Hamburg-Amerika Linie one day without having been previously announced; and as she did not give her name to the attendant outside Ballin's private office, he could only tell him that "a lady" wanted to see him. The two letters addressed to Ballin which are given below are also illustrative of her style.

"MY DEAR SIR,

"_January 17th_, 1904.

"I hope you will excuse my writing in French to you, but you may
reply to me in English. I have had a chat with Director Andersen,
who told me that your discussions with him have led to nothing. I
greatly regret this, both for personal reasons and in the interests
of the business. I am convinced that your negotiations would have
had the desired result if it had not been for some special
obstacles with which this new company had to contend. It is such a
pity that Mr. Andersen had to attend to so many other things. If
you and he alone had had to deal with it, and if it had been purely
a business matter, the agreement would certainly have been
concluded at once. Perhaps you and Andersen will shortly discover a
basis on which you can co-operate. I personally should highly
appreciate an understanding between my company and yours if it
could be brought about, so that you could work together hand in
hand like two good friends. You _must_ help me with it. Mr.
Andersen was so charmed with your amiability when he came back. One
other thing I must tell you, because I possess sufficient business
experience to understand it, and that is that both he and I admire
you as a man of business. I should be delighted if you could come
here; but I request you to give a few days' notice of your arrival.
Wishing you every success in your undertakings and the best of luck
during the new year,

"I remain, Yours faithfully, (_signed_) "MARIE."

"MY DEAR DIRECTOR,

"_February 10th, 1905._

"I am so delighted to hear from Mr. Andersen that his company and
yours intend to co-operate in the Danish West Indies and in Russia
to your mutual interest. I have always held that such an
understanding between you and Mr. Andersen would lead to good
results, and you may feel convinced that I shall extend to you not
only my personal assistance and sympathy, but also that of my
family, and that of my Russian family, all of whom take a great
interest in this matter. I am looking forward to seeing you in
Hamburg early in March on my way to France. With my best regards,

"Yours faithfully, (_signed_) "MARIE."

In June, 1904, after the close of Kiel Week, Ballin paid a visit to Copenhagen. There he met the Princess Marie and the King and Queen of Denmark, and was invited to dine with them at Bernstorff Castle. The business outcome of the negotiations was that in 1905 a joint service to the West Indies was established between the Hamburg-Amerika Linie and the Danish West Indian Company. Four of the big new steamers of the latter were leased to the Packetfahrt, and operated by that company, which thus not only increased the tonnage at its disposal, but also succeeded in eliminating an unnecessary competition.

At the same time the Packetfahrt bought the larger part of the shares of the Russian East Asiatic S.S. Company owned by the Danish firm. The object of the purchase was to establish a community of interests with the Russian Company. The Kaiser took great interest in this scheme, and during his visits to Copenhagen in 1903 and 1905 Mr. Andersen reported to him on the subject. It was intended to bring about close business relations between Germany, Russia, and Denmark for the special purpose of developing Russian trade, and to organize the Russian East Asiatic S.S. Company on such lines as would make it a suitable instrument to this end. It is to be regretted that the community of interest agreement then concluded was not of long duration. The Russian bureaucracy made all sorts of difficulties, and it is possible that the representatives of the Hamburg-Amerika Linie in Russia did not display as much discretion in their dealings with these functionaries as they ought to have done. At any rate, the Packetfahrt was so little satisfied with its participation in this Russian concern that it re-sold its rights to the interested Copenhagen parties in 1906, not without incurring a considerable loss on the transaction. The West Indies agreement automatically lapsed when the Packetfahrt acquired sole possession of the four Danish steamers.

Later on some sort of co-operation with the Russian company was brought about once more by the admission of that company to the transatlantic steerage pool. The Packetfahrt also had an opportunity of profiting from the technical experience gained by the Danish East Asiatic Company, which was the first shipping concern to specialize in the use of motor-ships. It was enabled to do so by the support it received from the shipbuilding firm of Messrs. Burmeister and Wain, of Copenhagen, who had applied the Diesel engine, a German invention, to the propulsion of ships, and who subsequently built a fleet of excellent motor-ships for the East Asiatic Company. One of these vessels was afterwards acquired by the Hamburg-Amerika Linie for studying purposes. The new type of vessel proved exceedingly remunerative during the war, as it made the owners independent of the supply of British bunker coal, and relieved them of the numerous difficulties connected with obtaining it. This great practical success of the Danish shipbuilders became possible only because they applied themselves consistently to the development of one particular type of engine, whereas in Germany endless experiments were made with a great variety of different types which led to no tangible results. It was only when the war came, and when the building of numerous submarines became necessary that German engineering skill obtained a chance of showing what it could do, and then, indeed, it proved itself worthy of the occasion.

In 1904 war broke out between Russia and Japan, an event which exercised such an influence on the Packetfahrt that it is hardly an exaggeration to say that the rapid progress the company made during the next few years amounted to a re-birth. The war provided the company with a chance to sell a large number of its units at a considerable rate of profit, and the contract concluded with the Russian Government for the coal supply added enormously to its revenues. The Russian Government partly converted the purchased steamers into auxiliary cruisers for the purpose of checking and disorganizing Japanese sea-borne trade, and it partly used them to accompany its Baltic fleet on its way to the Far East. As an illustration of the magnitude and the complexity of this transaction, it may be permitted to quote a few extracts from Ballin's notes referring to it:

"_May, 1904._

"Much though my time has been occupied by the Hungarian affair (the
competition of the Cunard Line in Hungary), and great though the
strain on my nerves has been on that account, I must say that much
bigger claims are made on my time and on my nerves by the
negotiations we are now carrying on with the Russian Government
concerning the sale of some of our steamers. On Christmas Day I
sent some representatives to Petrograd who were to approach the
government in case it intended to acquire any merchant vessels for
purposes of war. These gentlemen are still staying at Petrograd,
where they have been all the time with the exception of a few
weeks, and we have carried on some extremely difficult negotiations
by cable which so far have led to the definite sale of the _Fürst
Bismarck_ and the _Belgia_. The _Auguste Victoria_, which is still
in dock until the necessary repairs have been executed, has also
been sold to Russia, and the prospects that the _Columbia_ will
follow suit are extremely good.

"The sales, of course, necessitate large alterations of the
existing schedules, and they lead to a great deal of inconvenience.
A particularly awkward situation has been brought about by the
circumstance that the _Fürst Bismarck_ has been chartered to the
firm of Thos. Cook and Sons for an excursion from Marseilles, in
which 500 members of a Sunday school are to take part, so that, in
order to release her, it has become necessary for the _Augusts
Victoria_ to interrupt her usual trip to the Near East, and for the
_Columbia_ to take her place....

"Our big coal contract with the Russian Government has, in the
meantime, been considerably added to. The execution of the
contract, however, is causing me a great deal of anxiety, as the
English press, notably _The Times_, is only too glad to make use of
this circumstance as a pretext for rousing suspicions as to
Germany's neutrality. As our government is not taking up a very
firm attitude, the effect of these articles, of course, is highly
disagreeable. On Friday, September 23rd, I had an opportunity of
discussing this matter with the Imperial Chancellor at Homburg. The
Chancellor did not disguise the anxiety he felt concerning these
contracts, especially as he had just then received a long telegram
from the German Ambassador in Tokio advising him to proceed with
much caution. I told the Chancellor that he need not study in any
way the damage which our company might suffer; that we did not ask
that any regard should be paid to our business interests in case
these should clash with those of the country, and that, if the
Government were of opinion that the interests of the country
necessitated the cancelling of the whole agreement, I should be
glad to receive instructions from him to that effect. Failing such
instructions, of course, I was not entitled to cancel a contract
which was in every respect a properly drawn-up legal instrument. At
the same time I pointed out to the Chancellor that Germany, if he
thought that he had reason to adopt such an attitude, would run the
risk of offending both antagonists; for it was but reasonable to
expect that, owing to the agitation carried on by the British, no
action on Germany's part would cause a change of feeling in Japan,
but that it would be a fatal blow to Russia, whose Baltic fleet in
that case would simply be unable to reach the Far East.

"From Frankfort I went to Berlin in order to discuss the question
of the coal contract with the Foreign Office, which the Chancellor
had requested me to do. I had a long conference with Richthofen....

" ... _October 1st, 1904._ Meanwhile our negotiations with the
Russian Government have made good progress, and practically the
whole of my time is taken up with these transactions, which have
given us a very exciting time. They compel me to go to Berlin
pretty frequently, as I consider it both fair to the Foreign
Office and advisable in our own interests that the former should
always be fully informed of all the steps I am taking. Several of
our gentlemen are constantly travelling from Hamburg to Petrograd,
and conferences of our directors are held nearly every morning,
necessitated by the telegrams which arrive from Petrograd
practically every day. In order to be in a position to carry out
the coal contracts, we have been obliged to charter a large number
of steamers, so that at times as many as 80 of these are employed
in this Russian transaction. Besides the old express steamers and
the _Belgia_ we have now sold to the Russians the _Palatia_ and the
_Phoenicia_, as well as nine other boats of our company,
including the _Belgravia_, _Assyria_, and _Granada_ (the remaining
ones are cargo vessels, mostly taken out of the West Indies
service), but as regards these latter, we have reserved to
ourselves the right of redemption.... We have successfully
accomplished the great task we had undertaken, although, owing to
the absence of coaling stations, it was thought next to impossible
to convey such a huge squadron as was the Baltic fleet all the way
from European to Far Eastern waters. It safely reached its
destination, because the previously arranged coaling of the vessels
was carried out systematically and without a hitch anywhere,
although in some cases it had to be done in open roadsteads. Its
inglorious end in the Korea Straits cannot, and does not, diminish
the magnitude of the achievement; and the experiences we have
gained by successfully carrying out our novel task will surely
prove of great value to the Government. This whole coaling business
has been a source of considerable profits to our company, although
if due regard is paid to the exceptional character of the work and
to the unusual risks we had to run, they cannot be called
exorbitant."

A few statistics will show what the whole undertaking meant to the Hamburg-Amerika Linie from a business point of view. During the years 1904 and 1905 the company increased its fleet by no less than 21 steamers--partly new buildings and partly new purchases--representing a value of 22-1/2 million marks. To these new acquisitions must be added the 19 steamers then building, of a value of 52 million marks, amongst them the two big passenger steamers _Amerika_ and _Kaiserin Auguste Victoria_ for the New York route, and other big boats for the Mexico, the River Plate, and the Far East services. A large fraction of the sums spent on this new tonnage--viz. no less than 24 million marks--represented the profits made on the sales of ships; another large portion was taken out of current earnings, and the remainder was secured by a debenture issue. Never again, except in 1913, has the company added such an amount of tonnage to its fleet in a single year as it did at that time. But the "re-birth" of the company did not only consist in this augmentation of tonnage, but also, and chiefly, in the entire reorganization of its New York service by the addition to its fleet of the _Amerika_ and the _Kaiserin Auguste Victoria_. This event meant that the era of the express steamers was being succeeded by one characterized by another type of vessel which, though possessing less speed, was mainly designed with a view to securing the utmost possible comfort to the passengers. The two steamers proved exceedingly remunerative investments, and added enormously to the clientèle of the company. The profits earned on the Russian transaction also made up to a large extent for the losses incurred in the keen rate war with the Cunard Line then in progress. In spite of this rate war the company was able to increase its dividend to 9 per cent. in 1904, and to 11 per cent. in 1905.

Another event which took place in 1904 was the conclusion of a contract with the German Government concerning the troop transports to German South-West Africa, and the year 1905 witnessed the settlement of a short-lived conflict with the North German Lloyd. This conflict attracted a great deal of attention at the time, and the Kaiser himself thought fit to intervene with a view to terminating it.

When it was seen that German commercial interests in the Middle East had considerably increased, the Hamburg-Amerika Linie opened a special line to the Persian Gulf in 1906. The year 1907 is chiefly remarkable for a rate war affecting the services from Hamburg to the West Coast of Africa, of which until then the Woermann Line had considered itself entitled to claim a monopoly.

The African shipping business had been jealously nursed by its founder, Adolph Woermann, who had always tried hard to guard this special domain of his against the encroachments of all outsiders. However much Ballin and Adolph Woermann differed in character, they were akin to each other in one essential feature--viz. the jealous love they bore to the undertaking with which they had identified themselves. Both men, grown up in absolutely different environments, yet resembled each other in the daring and the fearlessness with which they defended the interests of their businesses. The one had trained himself to employ moderation and commonsense to overcome resistance where the use of forcible means promised no success; the other was a pioneer in the colonial sphere, a king in his African empire, the discoverer of new outlets, but broken in spirit and bereft of his strength when compelled by circumstances to share with others. When Adolph Woermann had died, Ballin honoured his memory by contributing to the public Press an appreciation of his character, which is perhaps the best that has been written, and which ought to be saved from being forgotten. This fact, it is hoped, will be sufficient justification for reproducing in this connexion a translation of Ballin's article:

"The late Adolph Woermann was a man whom we may truly describe as
the ideal of what a Hanseatic citizen should be. Secretary of State
Dernburg himself once told me that he knew quite well that the work
he was doing for the benefit of our colonies would never come up to
what Adolph Woermann had achieved in the face of the greatest
imaginable difficulties.

"Never before, perhaps, has any private shipowner displayed so much
daring as we see embodied in the business he has built up through
his labours. Woermann has developed the means of communication
between Germany and her African colonies to such perfection that
even the similar work performed by British shipping men has been
overshadowed. He has done this without receiving any aid from the
Government; in fact, he had to overcome all sorts of obstacles
which were put in his way by the bureaucracy. His confidence in his
work was not shaken when losses had to be faced. Then, more than
ever, he had his eyes firmly fixed on his goal; and practically
every vessel which he had built to facilitate communication between
the German mother country and her colonies represented a fresh step
forward towards a higher type, thus increasing the immense personal
responsibility with which he burdened himself. His patriotism was
of the practical kind; he did his work without asking for the help
of others, especially without that of the Government.

"And now he has died in bitter disappointment. His striking outward
appearance has always reminded us of the Iron Chancellor, but the
similarity in the character of the two men has only become apparent
during the last few years. It is well known that when the troubles
in the colonies had been settled he was accused of having enriched
himself at the expense of the country. He never lost his resentment
of this accusation; and even though his accusers can point to the
fact that the court which had to investigate the claims put forward
by the Government gave judgment to the effect that some of these
claims were justified, it must be said in reply that this statement
of the case is inadequate and one-sided. All that was proved was
that Woermann, who hated red tape, and who never had recourse to
legal assistance when drawing up his agreements, did not use as
much caution in this matter as would have been advisable in his
own interest. The facts that have become known most clearly
disprove the accusation that he had made large profits at the
expense of the country, and that he had used the country's distress
to enrich himself. To the task of carrying out the troop transports
he devoted himself with his customary largeness of purpose, and he
accomplished it magnificently. In order to be able to do so, he had
enlarged his fleet by a number of steamers, and the consequence was
that, when the work was achieved, he had to admit himself that he
had over-estimated his strength. When my late colleague Dr.
Wiegand, the Director-General of the North German Lloyd, and I were
asked to express an expert opinion on the rates which Woermann had
charged the Government, we found them thoroughly moderate; in fact,
we added a rider to the effect that if either of our companies had
been entrusted with those transports, we could only have carried
out a very few expeditions at the rates charged by Woermann.
Woermann, however, carried through the whole task; and when it was
done he found himself compelled to pass on to the shoulders of the
Hamburg-Amerika Linie part of the excessive burden which he had
taken upon himself.

"His iron determination would have enabled him to dispense with the
assistance thus obtained. But by that time his accusers had
commenced their attacks on his character, and when the Government
had officially taken up an attitude against him, he became a prey
to that resentment to which I have referred before. All those who
had the privilege of being associated with him during the past few
years must have noted with grief how this great patriot gradually
became an embittered critic. The heavy blow also led to the
breakdown of his health, and during the last years of his life we
only knew him as a sick man.

"If it is borne in mind how strong, how masterful, and how
self-reliant a man has passed away with Adolph Woermann, it is sad
to think that in the end he was not strong enough after all to bear
on his own shoulders entirely the immense burden of responsibility
which he had taken upon himself, and that he received nothing but
ingratitude as the reward of his life's work, although he was
actuated by truly patriotic motives throughout. Still, this shall
not prevent us from acknowledging that he was the greatest, the
most daring, and the most self-sacrificing private shipowner whom
the Hanseatic cities have ever produced--a princely merchant if
ever there was one. He was a true friend and an earnest well-wisher
to the city in which he was born, and to the country which he
served as a statesman. We are sincerely grateful to him for the
work he has done, and in honouring his memory we know that we are
paying tribute to the greatest Hanseatic citizen who had been
living in our midst."

To complete the enumeration of the many rate wars which occurred during the first decade of the twentieth century, we must make brief reference to the competition emanating in 1909 from the so-called "Princes' Trust" (Fürstenkonzern) and its ally, viz. a Hamburg firm which had already fought the Woermann Line. The object of the fight was to secure the business from Antwerp to the Plate. The struggle ended with the acquisition of the shipping interests of the Princes' Trust, the business career of which came to a sudden end shortly afterwards by a financial disaster causing enormous losses to the two princely families concerned--the house of Hohenlohe and that of Fürstenberg. The details connected with this affair are still in everybody's memory, and it would be beyond the scope of this volume to enter into them. It should be mentioned, however, that in connexion with the settlement arrived at the two big companies undertook to start some transatlantic services from the port of Emden, and in particular to establish a direct line for the steerage traffic to North America. The necessary arrangements to this end had just been made when the war broke out, and further progress became impossible.

The transatlantic pool was considerably extended in scope during those years. More than once, however, after the rate war with the Cunard Line had come to an end, the amicable relations existing between the lines were disturbed, e.g. when the Russian Volunteer Fleet opened a competing service--a competition which was got rid of by the aid of the Russian East Asiatic S.S. Company; when some British lines temporarily withdrew from the steerage pool, and when some differences of policy arose between the Hamburg-Amerika Linie and the North German Lloyd. The Hamburg company demanded a revision of the percentages, contending that the arrangements made fifteen years ago no longer did justice to the entirely altered relative positions of the two companies. The discussions held in London in February, 1908, under Ballin's chairmanship, which lasted several days, and in which delegates of all the big Continental and British lines, as well as of the Canadian Pacific Railway Company took part, led to the formation of the Atlantic Conference (also known as the General Pool). It was supplemented in the following year by that of the Mediterranean Conference. Both these agreements were renewed in 1911, and further agreements were concluded with the Russian and Scandinavian lines to complete the system. Agreements on so large a scale had never before been concluded between any shipping companies.

This network of agreements existed until it was destroyed through the outbreak of the war.

During the fluctuating conditions which characterized the shipping business of those years the year 1908 witnessed a depression which, in its after-effects, is comparable only to that caused by the cholera epidemic sixteen years earlier. Business had been excellent for a fairly long time, but it became thoroughly demoralized in the second half of 1907, and an economic crisis of a magnitude such as has seldom been experienced began to affect every country. No part of the shipping business remained unaffected by it; hundreds and hundreds of ocean-going liners lay idle in the seaports of the world.

Very gradually prospects began to brighten up in the course of 1908, so that the worst of the depression had passed sooner than had been expected. Indeed, in one respect the crisis had proved a blessing in disguise, inasmuch as it had strengthened the inclination of the shipping concerns everywhere to compromise and to eliminate unnecessary competition--the formation of the general pool, in fact, being the outcome of that feeling. The subsequent recovery made up for the losses; and the succeeding years, with their very gratifying financial results, and their vast internal consolidation, represent the high-water mark in the development of the Hamburg-Amerika Linie.

Shortly after the end of the depression a renewed spell of building activity set in. First of all a new cargo steamer, possessing a burden of 12,000 tons--which was something quite unusual at the time--was ordered to be built by Messrs. Harland and Wolff, at a price which was also unusually low. It almost created a record for cheapness; and the courage of the builders who accepted such an order at such terms was greatly admired. A German yard--the Vulkan, of Bremen--then came forward with a similar offer, because the German shipbuilders, too, were glad to provide their men with work. The result of the combined labour of both these firms was a type of cargo boat which proved extremely useful, especially in the Far Eastern trade, and which represented a good investment to the company.

Gradually the other branches of the business began to increase their activity, and the service to North America especially received the close attention of the company's management. Meanwhile, other shipping companies had added some vessels of the very highest class to their fleets. The two big turbine steamers of the Cunard Line, the _Lusitania_ and the _Mauretania_, had attracted many passengers, and the White Star Line had the mammoth liner _Olympic_ building, which was to be followed by two others of the same type, the _Titanic_ and the _Gigantic_. The new Cunarder, the _Aquitania_, was to be of the same type, so that once more the public was offered the choice of steamers of a kind unknown until then. This competition compelled the Packetfahrt to follow suit, and Ballin commenced to evolve plans for the building of a new vessel which, of course, had to surpass the highest achievement of the competing lines, i.e. the _Olympic_. Thus, in co-operation with the Vulkan yard, of Stettin, and with Messrs. Blohm and Voss, of Hamburg, the plans for the three steamers of the "Imperator" class were designed. The competition among the various yards had been extremely keen, and the Vulkan yard secured the order for the building of the first unit of this class, the _Imperator_. From the point of view of speed, these new vessels resembled the fast steamers of the older kind; with regard to their equipment, they represented a combination of this type and that of the _Kaiserin_, but from the business point of view they were quite a novelty, as the basis of their remunerativeness was no longer the cargo and steerage business, but the cabin business. If the booking of a certain number of cabins could be relied on for each voyage an adequate return would be assured. Everything, therefore, was done to attract as many cabin passengers as possible. These vessels were a triumph of German shipbuilding and engineering skill; and the senior partner of Messrs. Blohm and Voss, when the _Vaterland_ was launched, stated with just pride that she was the biggest vessel in existence; that she was built on the biggest slip; that she had received her equipment under the biggest crane, and that she would be docked in the biggest floating dock in the world. The launching of the third and biggest of the three steamers, the _Bismarck_, represented a red-letter day in the life of Ballin and in the history of the company. Nominally she was christened by the granddaughter of the Iron Chancellor, but actually by the Kaiser. The bottle of champagne used for the purpose did not break when it left the young lady's hands; but the Kaiser seized it, and with a sweeping movement of the arm hurled it against the stem of the huge vessel. To remove as far as possible the last vestige of the unhappy estrangement between the Kaiser and the Chancellor had always been Ballin's earnest desire. So it filled him with great joy when he was enabled to dedicate the greatest product of his life-work to the memory of the Prince whom he admired intensely; and still more was he pleased when the Kaiser consented to take part in the ceremony. He had often expressed his regret at the unfortunate stage management in connexion with the Kaiser's visit to Hamburg after the unveiling of the Bismarck monument, when he was driven past it without an opportunity having been arranged for him to inspect it. Such a course, Ballin remarked, was bound to create the impression that the Kaiser had intentionally been led past it. "I wish I had been permitted to speak to the Kaiser about it beforehand," he told me afterwards. "I am sure he would have insisted upon seeing it." Proper stage management plays so prominent a part in the life of royalty, and it can be of such great use in avoiding certain blunders and in hiding certain shortcomings that it is much to be regretted that the Kaiser had so often to dispense with it.

The entering into the Packetfahrt's service of the "Imperator" type of steamers represented an extraordinary increase in the amount of tonnage which the company employed on the New York route; and when the North German Lloyd refused to allow the Packetfahrt a corresponding addition to its percentage share under the pool agreement, which the Packetfahrt believed itself justified in asking for, a conflict threatened once more to disturb the relations existing between the two companies. As a result the position of both was weakened in Austria, where the Government cleverly used the situation to its own advantage. Apart from this, however, not much damage was done, as negotiations were soon started with the object of securing the conclusion of a far-reaching community of interest agreement which was not merely to be restricted to the transatlantic services of the two companies. If these negotiations could be brought to a successful issue, Ballin thought that this would be the dawn of a new era in the contractual relations existing between shipping firms everywhere, because he believed that such development would not be confined to the German lines, but would assume international proportions. The agreements actually in force seemed to him obsolete--at least in part. That this should be so is but natural, as the factor which it is intended to eliminate by the terms of such agreements--man's innate selfishness--is, after all, ineradicable. "Nature," in the words of the Roman poet, "will always return, even if you expel it with a pitchfork." Wherever a human trait like selfishness is to be kept within certain bounds by means of written agreements, it becomes necessary not only to make small improvements from time to time, but to subject the whole system to a thorough overhauling every now and then.

Many events affecting the progress of the company's business have no reference in these pages, but the reader can visualize the importance of Albert Ballin's life-work if he keeps before his mind the fact that while in the early part of 1886 the Hamburg-Amerika Linie maintained but a mail service from Hamburg to New York and four lines to Mexico and the West Indies, from that date to 1913 fifty new services were added to the existing ones.

The fleet possessed by the Hamburg-Amerika Linie in 1886 consisted of 22 ocean-going steamers, totalling 60,531 G.R.T.[1] By the end of 1913 these figures had increased to 172 steamers and 1,028,762 G.R.T. respectively. During the twenty-eight years 269 vessels of 1,388,206 tons had been added, either by new building or by purchase, and 101 steamers of 346,927 tons had been sold. At the end of 1913 19 steamers of 268,766 tons were building, so that, including these, the total tonnage amounted to 1,360,360 G.R.T. at that date.

During the same period the joint-stock capital of the company had increased from 15 to 157-1/2 million marks, the debenture issues from 5·6 to 69·5 million marks, and the visible reserves from 3,595,285 to 58,856,552 marks.

The working profits of the company during those twenty-eight years amounted to 521,727,426 marks, 2,735,700 of which were Government subsidies received during the temporary participation in the Imperial Mail Service to the Far East.

The average dividend paid to the shareholders was 7·02 per cent. per annum. This figure, to my thinking, proves that the biggest steamship company the world has ever known was to a small extent only a "capitalist enterprise." Out of a total net profit of over 500 millions, no more than 140 million marks went to the shareholders as interest on their invested capital; by far the greater part of the remainder was used to extend the company's business, so that the country in general benefited by it.

Concerning one matter which played an important part in Ballin's career, viz., the relations between his company and the North German Lloyd, the reader may perhaps desire a more exhaustive account. There certainly was no want of rivalry between the two companies. One notable reason for this was the fact that at the time when Ballin joined the Packetfahrt the latter had fallen far behind its younger competitor in its development, both from the business and the technical point of view. The Packetfahrt, in particular, had not kept pace with the technical progress in steamship construction, and the consequence was that, when the pool was set up, it had to content itself with a percentage which was considerably less than that allotted to the Lloyd. The enormous advance made under the Ballin régime naturally caused it to demand a larger share. At the same time the Lloyd also increased its efforts more than ever before, and thus a race for predominance was started between the two big companies, which greatly assisted them in obtaining the commanding position they acquired as the world's leading shipping firms. I do not think this is the place to go into all the details of this struggle, and I shall confine myself to reproducing an article which Ballin himself contributed in 1907 on the occasion of the fiftieth anniversary of the foundation of the North German Lloyd. As this article throws several interesting sidelights on the development of transatlantic shipping enterprise, it may furnish a suitable conclusion to the account given in the present chapter:

"The year 1907 is one which will stand out prominently in the
history of our transatlantic shipping on account of the two
anniversaries which we are going to celebrate during its course. On
May 27th it will be sixty years since the Hamburg-Amerika Linie was
called into existence, and on February 20th the North German Lloyd
will celebrate the fiftieth anniversary of its foundation. I
suppose that a more competent pen than mine will present us on that
day with a detailed account of the development of the great Bremen
shipping firm, and my only object in writing this article is to
review in brief the period of more than twenty years during which I
have had the pleasure of working hand in hand with our Bremen
friends.

"Until the year 1885 the two big companies, the Lloyd and the
Packetfahrt, scarcely had any mutually profitable dealings with
each other; on the contrary, their relations were characterized by
open enmity. It is true that the attempts at a _rapprochement_,
which were made from time to time, did in some cases lead to the
conclusion of an agreement concerning certain rates to which both
companies bound themselves to adhere, but they never lasted more
than a short time, and ultimately, far from causing an improvement
of the existing state of things, they left matters worse than they
had been before. I think I may congratulate myself on being the
first to have brought about a better understanding between the two
companies which, in the end, paved the way to the establishment of
a lasting friendship which has grown closer and closer during the
past twenty years.

"In 1886, shortly after I had joined the Hamburg-Amerika Linie,
when I went to Bremen in order to find out what could be done to
lessen or, if possible, to remove altogether the competition
between both companies, the conduct of the firm's business had
passed from the hands of Consul Meier, who was getting on in years,
into those of Director Lohmann. Mr. Lohmann was a man of unusual
energy and possessed of a rare gift for organization. In the annals
of international shipping his name will be for ever associated with
the introduction into the North Atlantic route of fast steamers
under the German flag. He had been fortunate enough to meet with a
congenial mind on the technical side in the head of the firm of
Messrs. John Elder and Co., the Glasgow shipbuilders. At their
yard, starting in 1881, a series of fast steamers were built--the
_Elbe_, the _Werra_, the _Fulda_, the _Saale_, the _Trave_, the
_Aller_, and the _Lahn_--which opened up a new and memorable era in
the progress of the means of communication between the Old World
and the New. These boats proved of great benefit to the company
financially, and they were also a considerable boon to the
passengers owing to their speed and punctuality. I recollect
talking to the chairman of a big British steamship company on
board one of his steamers in New York harbour in 1888, when the
s.s. _Lahn_, of the North German Lloyd, steamed in. My British
colleague, filled with admiration, glanced at his watch, touched
his hat by way of salutation, and said with honest enthusiasm:
'Wonderful boats; they are really doing clockwork.' He only
expressed the sentiment felt by the travelling public generally;
everybody appreciated their reliability and punctuality, and the
excellence of their service.

"Director Lohmann died very suddenly on February 9th, 1892; he had
just concluded an address at a general meeting of the company held
at the 'Haus Seefahrt' when he dropped down dead. During the last
few years of his life he had not been well advised technically, and
failed to adopt the twin-screw principle, as had been done by the
Hamburg company. Thus, when the two fast single-screw steamers, the
_Havel_ and the _Spree_, were built at Stettin in 1890, they were
practically obsolete, because the travelling public by that time
had come to prefer those of the twin-screw type, owing to the
increased safety they afforded.

"In 1888 Consul Meier retired from the chairmanship of the Lloyd,
to be succeeded--after the short reign of Mr. Reck--by Mr. George
Plate. To Mr. Plate, if I am rightly informed, great credit is due
for having secured the services of Director-General Dr. Heinrich
Wiegand on the board of the company.

"What the Lloyd has achieved under the Wiegand régime far surpasses
anything accomplished in the past.

"The Hamburg-Amerika Linie, meanwhile, had been alive to the needs
of the times; and the consequence was a healthy competition between
these two steamship companies--by far the biggest the world has
ever seen--practically on all the seven seas. This competition, by
intelligent compromise, was restricted within reasonable limits,
the guiding spirits of the two concerns consciously adopting the
policy implied by the strategic principle: 'In approaching the
enemy's position we must divide our forces; in attacking him we
must concentrate them.'

"It would not be correct to say that this atmosphere of friendship
had never been clouded--it would, indeed, have been tedious had it
been otherwise than it was. Up to now, however, Wiegand and I have
always been able to maintain pleasant relations between our two
concerns, and in the interests of both of them it is sincerely to
be hoped that this spirit of mutual understanding will continue to
animate them in the future."