THE EXPANSION OF THE HAMBURG-AMERIKA LINIE
The principal work which fell to Ballin's share during the period
immediately following his nomination in 1888 on the Board of his company
was that connected with the introduction of the fast steamers and the
resulting expansion of the passenger business. Offices were established
in Berlin, Dresden, and Frankfort-On-Main in 1890, and arrangements were
made with the Hamburg-South American S.S. Co., the German East Africa
Line, and the Hansa Line--the latter running a service to Canada--by
which these companies entrusted the management of their own passenger
business to the Packetfahrt. Thus, step by step, the passenger
department developed into an organization the importance of which grew
from year to year.
The expansion of the passenger business also necessitated an enlargement
of the facilities for the dispatch of the Company's steamers. This work
had been effected until then at the northern bank of the main Elbe, but
in 1888 it was transferred to the Amerika-Kai which was newly built at
the southern bank; and when the normal depth of the fairway of the Elbe
was no longer sufficient to enable the fast steamers of considerable
draught to come up to the city, it was decided to dispatch them from
Brunshausen, a small place situated much lower down the Elbe. In the
long run, however, it proved very inconvenient to manage the passenger
dispatch from there, and the construction of special port facilities at
Cuxhaven owned by the Company was taken in hand. The accommodation at
the Amerika-Kai, although it was enlarged as early as 1889, was soon
found to be inadequate, so that it was resolved to provide new
accommodation at the Petersen-Kai, situated on the northern bank of the
Elbe, and this project was carried out in 1893.
The number of services run by the Company was augmented in those early
years by the establishment of a line to Baltimore and another to
Philadelphia. In 1889 a new line starting from New York was opened to
Venezuelan and Colombian ports. The North Atlantic services were
considerably enlarged in 1892, when the Company took over the Hansa
Line.
The desire to find remunerative employment for the fast steamers during
the dead season of the North Atlantic passenger business prompted the
decision to enter these boats into a service from New York to the
Mediterranean during the winter months. The same desire, however, also
gave rise to one of the most original ideas carried into practice
through Ballin's enterprise, i.e. the institution of pleasure trips and
tourist cruises. It may perhaps be of interest to point out in this
connexion that, about half a century earlier, another Hamburg shipping
man had thought of specially fitting out a vessel for an extended cruise
of that kind. I do not know whether this plan was carried out at the
time, and whether Ballin was indebted to his predecessor for the whole
idea; in any case, the following advertisement which appeared in the
_Leipziger Illustrierte Zeitung,_ and which I reprint for curiosity's
sake, was found among his papers.
"AN OPPORTUNITY FOR TAKING PART IN A VOYAGE
ROUND THE WORLD
"The undersigned Hamburg shipowner proposes to equip one of his
large sailing vessels for a cruise round the world, to start this
summer, during which the passengers will be able to visit the
following cities and countries, viz. Lisbon, Madeira, Teneriffe,
Cap Verde Islands, Rio de Janeiro, Rio de la Plata, Falklands
Islands, Valparaiso, and all the intermediate ports of call on the
Pacific coast of South America as far as Guayaquil (for Quito), the
Marquesas Islands, Friendly Islands (Otaheite), and other island
groups in the Pacific, China (Choosan, Hongkong, Canton, Macao,
Whampoa), Manilla, Singapore, Ceylon, Île de France or Madagascar,
the Cape of Good Hope, St. Helena, Ascension Island, the Azores,
and back to Hamburg.
"The cruise is not intended for business purposes of any kind; but
the whole equipment and accommodation of the vessel, the time spent
at the various ports of call, and the details of the whole cruise,
are to be arranged with the sole object of promoting the safety,
the comfort, the entertainment, and the instruction of the
passengers.
"Admission will be strictly confined to persons of unblemished
repute and of good education, those possessing a scientific
education receiving preference.
"The members of the expedition may confidently look forward to a
pleasant and successful voyage. A first-class ship, an experienced
and well-educated captain, a specially selected crew, and a
qualified physician are sufficient guarantees to ensure a complete
success.
"The fare for the whole voyage is so low that it only represents a
very slight addition to the ordinary cost of living incurred on
shore. In return, the passenger will have many opportunities of
acquiring a first-hand knowledge of the wonders of the world, of
the beautiful scenery of the remotest countries, and of the manners
and customs of many different nations. During the whole voyage he
will be surrounded by the utmost comfort, and will enjoy the
company of numerous persons of culture and refinement. The sea air
will be of immeasurable benefit to his health, and the experience
which he is sure to gain will remain a source of pleasure to him
for the rest of his life.
"Full particulars may be had on application to the undersigned, and
a stamped envelope for reply should be enclosed.
"ROB. M. SLOMAN,
"_Hamburg, January_, 1845. _Shipowner in Hamburg._"
Ballin's idea of running a series of pleasure cruises did not meet with
much support on the part of his associates; the public, however, took it
up with enthusiasm from the very start. Early in 1891 Ballin himself
took part in the first trip to the Far East on board the express steamer
_Auguste Victoria_. Organized pleasure trips on a small scale were by no
means an entire novelty in Germany at that time; the Carl Stangen
Tourist Office in Berlin, for instance, regularly arranged such
excursions, including some to the Far East, for a limited number of
participants. To do so, however, for as many as 241 persons, as Ballin
did, was something unheard-of until then, and necessitated a great deal
of painstaking preparation. Among other things, the itinerary of the
intended cruise, owing to the size and the draught of the steamer used,
had to be carefully worked out in detail, and arrangements had to be
made beforehand for the hotel accommodation and for the conveyance of
passengers during the more extended excursions on shore. All these
matters gave plenty of scope to the organizing talents of the youthful
director, and he passed the test with great credit.
The first Far Eastern cruise proved so great a success that it was
repeated in 1892. In the following year it started from New York, surely
a proof that the Company's reputation for such cruises was securely
established not in Germany alone, but in the States as well. Meanwhile,
however, Hamburg had been visited by a terrible catastrophe which
enormously interfered with the smooth working of the Company's express
steamer services. This was the cholera epidemic during the summer of
1892. It lasted several weeks, and thousands of inhabitants fell victims
to it. Those who were staying in Hamburg in that summer will never
forget the horrors of the time. In the countries of Northern Europe
violent epidemics were practically unknown, and the scourge of cholera
especially had always been successfully combated at the eastern frontier
of Germany, so that the alarm which spread over the whole country, and
which led to the vigorous enforcement of the most drastic measures for
isolating the rest of Germany from Hamburg, may easily be comprehended,
however ludicrous those measures in some instances might appear. There
are no two opinions as to the damage they inflicted on the commerce and
traffic of the city. The severest quarantine, of course, was instituted
in the United States, and the passenger services to and from Hamburg
ceased to be run altogether, so that the transatlantic lines decided to
temporarily suspend the steerage pool agreement they had just concluded.
The Packetfahrt, in order not to stop its fast steamer services
completely, first transferred them to Southampton, and afterwards to
Wilhelmshaven, thus abstaining from dispatching these boats to and from
Hamburg. The steerage traffic had to be discarded entirely, after an
attempt to maintain it, with Stettin as its home port, had failed.
Financially this epidemic and its direct consequences brought the
Company almost to the verge of collapse, and the Packetfahrt had to stop
altogether the payment of dividends for 1892, 1893, and 1894.
Business was resumed in 1893, but at first it was very slow. Every means
were tried to induce the United States to rescind her isolation
measures. An American doctor was appointed in Hamburg; disinfection was
carried out on a large scale; with great energy the city set herself to
prevent the recurrence of a similar disaster. The Packetfahrt, in
conjunction with the authorities, designed the plans for building the
emigrants' halls situated at the outskirts of the city, which are unique
of their kind and are still looked upon as exemplary. These plans owe
their origin to the extremely talented Hamburg architect, Mr. Thielen,
whose early death is greatly to be regretted.
An important innovation was the establishment of regular medical control
and medical treatment for the emigrants from the East of Europe on their
reaching the German frontier, a measure which was decided upon and taken
in hand by the Prussian Government. The expansion of the Packetfahrt's
business, of course, was most adversely affected by the epidemic and its
after-effects; and several years of consolidation were needed before the
latter could be overcome. Consequently, hardly any new services were
opened during the years immediately following upon the epidemic.
An important step forward, which greatly strengthened the earning
capacities of the Company's resources, was taken in 1895, when the
building orders for the steamers of the "P" class were given. These
vessels were of large size but of moderate speed. They were extremely
seaworthy, and were capable of accommodating a great many passengers,
especially steeragers, as well as of carrying large quantities of cargo.
The number of services run by the Company was added to in 1893 by a line
from New York to Italy, and in the following year by one from Italy to
the River Plate. Pool agreements were concluded with the Lloyd and the
Allan Line with respect to the first-named route, and with the Italian
steamship companies with respect to the other. The agreement with the
Italians, however, did not become operative until a few years
afterwards.
In 1897 the Packetfahrt celebrated the fiftieth anniversary of its
existence--an event in which large sections of the public took a keen
interest. Perhaps the most noteworthy among the immense number of
letters of congratulation which the Company received on that occasion is
the one sent by the chairman of the Cunard Line, of which the verbatim
text is given below. It was addressed to one of the directors in reply
to an invitation to attend the celebrations in person.
"It is with great regret I have to announce my inability to join
with you in celebrating the fiftieth anniversary of the foundation
of your Company, to be held on board your s.s. _Auguste Victoria_.
"I the more regret this as I have the greatest possible admiration
of the skill and enterprise which has directed the fortunes of your
Company, especially in recent years.
"You were the first to give the travelling public the convenience
of a speedy and reliable transit between the two great continents
of the world by initiating a regular service of twin-screw steamers
of high speed and unexceptionable accommodation.
"You also set the shipping world the example of the great economy
possible in the transit of the world's commodities in vessels of
greatly increased capacity and proportionate economy, which other
nations have been quick to follow and adopt to their great
advantage.
"Your Company had furthermore met a felt want in giving most
luxurious and well-appointed accommodation for visiting scenes,
both new and old, of world-wide interest, and making such
journeyings, hitherto beset with anxiety and difficulty, as easy of
accomplishment as the ordinary railway journey at home.
"You have succeeded in this, not through any adventitious aids,
such as Government subsidies, but by anticipating and then meeting
the wants of the travelling and commercial public; and no one, be
his nationality what it was, can, in the face of such facts,
abstain from offering his meed of praise to the foresight, acumen,
and ability that have accomplished such great results in such a
comparatively small time as the management and direction of the
Hamburg-American Packet Company.
"I would venture, therefore, to thus congratulate you and your
colleagues, and whilst reiterating my regret at being prevented
from doing so at your forthcoming meeting, allow me the expression
of the wish that such meeting may be a happy and satisfactory one,
and that a new era of, if possible, increased success to the
Hamburg-American Packet Company may take date from it."
Towards the latter end of the 'nineties, at last, a big expansion of the
Company's activities set in. In 1897 the Hamburg-Calcutta Line was
purchased, but the service was discontinued, the steamers thus acquired
being used for other purposes. Shortly before the close of the same year
a suggestion was put forward by some Hamburg firms that were engaged in
doing business with the Far East that the Packetfahrt should run a
service to that part of the world.
Just then the steamship companies engaged in the Far Eastern trade were
on the point of coming to a rate agreement among themselves; and the
management of the Packetfahrt which, owing to the offer held out to it
by Hamburg, Antwerp, and London firms, could hope to rely on finding a
sure basis for its Far Eastern business, did not consider it wise to let
the favourable opportunity slip. Quick decision and rapid action, before
the proposed agreement of the interested lines had become an
accomplished fact, were necessary; because, once the gates were closed,
an outsider would find it difficult to gain admission to the ring.
Hence the negotiations with a view to the Packetfahrt joining in the Far
Eastern business, which had only been started during the second half of
December, 1897, came to a close very soon; and in the early days of
January, 1898, the Packetfahrt advertised its intention of running
monthly sailings to Penang, Singapore, Hongkong, Shanghai, Yokohama, and
Hiogo. Six cargo steamers of 8,000 tons burden were entered into the new
service; and simultaneously an announcement was made to the effect that
large fast passenger boats would be added to it as soon as the need for
these should make itself felt.
The participation in the Far Eastern business, and the consequent taking
over of competing lines or the establishment of joint services with
them, was not the only important event of the year 1898 as far as the
development of the Packetfahrt is concerned. In the spring of that same
year an agreement was made with the Philadelphia Shipping
Company--which, in its turn, had an agreement with the Pennsylvania
Railroad Company--by which the Packetfahrt undertook to run a regular
service of cargo steamers between Hamburg and Philadelphia.
An event of still greater importance, however, was the outbreak of war
between the United States and Spain which also took place in that year.
The Spanish Government desired to strengthen the fighting power of its
navy by the addition of several auxiliary cruisers; and even some time
before the war broke out an offer reached the Packetfahrt through the
intermediary of a third party to purchase its two express steamers,
_Columbia_ and _Normannia_, which were among the fastest ocean-liners
afloat. Before accepting this offer, the Packetfahrt, in order to avoid
the reproach of having committed a breach of neutrality, first offered
these two steamers to the United States Government; but on its refusal
to buy them, they were sold to the British firm acting on behalf of the
Spanish Government, and re-sold to the latter. As the Packetfahrt had
allowed a high rate of depreciation on the two boats, their book-value
stood at a very low figure; and the considerable profit thus realized
enabled it to acquire new vessels for the extension of its passenger
services.
Meanwhile a new express steamer, the _Kaiser Wilhelm der Grösse_, had
been added to the fleet of the North German Lloyd. Ballin, having made a
voyage on board this vessel to New York, reported to the Trustees of his
Company that he considered her a splendid achievement. Owing to the
heavy working expenses, however, she would not, he thought, prove a
great success from a financial point of view. He held that the
remunerativeness of express steamers was negatived by the heavy working
expenses and, as early as 1897, had projected the construction of two
steamers of very large proportions, but of less speed. This, however,
was not carried out. Instead, the Packetfahrt decided to build a vessel
which was to be bigger and faster still than the _Kaiser Wilhelm der
Grösse_. The new liner was built by the Stettin Vulkan yard, and
completed in 1900. She was the _Deutschland_, the famous ocean
greyhound, a great improvement in size and equipment, and she held the
blue riband of the Atlantic for a number of years.
About the same time, the express service to New York had been
supplemented by the inauguration of an additional passenger service on
the same route, which proved a great success in every way. The steamers
employed were the combined passenger and cargo boats of moderate speed
of the "P" class referred to above; and, their working expenses being
very low, they could carry the cargo at very low rates, so that they
proved of great service to the rapidly expanding interchange of goods
between Germany and the United States. Their great size made it
necessary to accelerate their loading and discharging facilities as much
as possible. This necessity, among other things, led to the introduction
of grain elevators which resulted in a great saving of time, as the
grain was henceforth no longer discharged in sacks, but loose. The
Company also decided to take the loading and discharging of all its
vessels into its own hands. To accelerate the dispatch of steamers to
the utmost possible extent, it was decided in 1898 to enlarge once again
the Company's harbour facilities, and an agreement was concluded with
the Hamburg Government providing for the construction of large harbour
basins with the necessary quays, sheds, etc., in the district of
Kuhwärder on the southern banks of the Elbe.
It was typical of Ballin's policy of the geographical distribution of
risks and of the far-sighted views he held concerning the international
character of the shipping business that he attempted at the end of the
'nineties to gain an extended footing abroad for the Company's
activities. The Packetfahrt therefore ordered the building of two
passenger boats in Italian yards, and it was arranged that these vessels
should fly either the German or the Italian flag. In the end, however, a
separate Italian shipping company, the Italia, was set up, which was to
devote itself more particularly to the River Plate trade. When the
financial results of the new enterprise failed to come up to
expectations, the shares were sold to Italian financiers in 1905.
The closing years of the nineteenth and the opening years of the
twentieth century represented a period of extraordinary prosperity to
shipping business all over the world--a prosperity which was caused by
the outbreak of the South African war in 1899. An enormous amount of
tonnage was required to carry the British troops, their equipment,
horses, etc., to South Africa, and the circumstance that this tonnage
temporarily ceased to be available for the needs of ordinary traffic
considerably stiffened the freight rates. The favourable results thus
obtained greatly stimulated the spirit of enterprise animating the
shipping companies everywhere.
About the same time the business of the Company experienced a notable
expansion in another direction. A fierce rate war was in progress
between the Hamburg-South American S.S. Co. and the firm of A. C. de
Freitas & Co., and neither party seemed to be able to get the better of
the other. As early as 1893 Ballin, on behalf of the Hamburg-South
American S.S. Co., had carried on some negotiations with the firm of de
Freitas with the object of bringing about an amalgamation of the two
companies with respect to their services to Southern Brazil. In 1896 he
had done so again in compliance with the special request of Mr. Carl
Laeisz, the chairman of the former company, and in 1898 he did so for
the third time, but in this case on his own initiative. No practical
results, however, were reached, and as Ballin was desirous of seeing an
end being put to the hopeless struggle between the two rival firms, he
took up those negotiations for the fourth time in 1900, hoping to
acquire the de Freitas Line for his own Company. He was successful, and
an expert was nominated to fix the market value of the fourteen steamers
that were to change hands. As the valuation took place at a time when
the shipping business was in an exceedingly flourishing state, the price
which he fixed worked out at so high an average per ton as was never
again paid before the outbreak of the war. The valuer told me that he
himself considered the price very high, so that he felt in duty bound to
draw Ballin's attention to it beforehand. Ballin tersely replied: "I
know, but I want the business," thus making it perfectly clear that he
attached more than ordinary importance to the deal.
As soon as the purchase of the de Freitas Lines had become an
accomplished fact, arrangements were made with the Hamburg-South
American S.S. Company, which provided for a joint service to South
America, a service which was still further extended when the Packetfahrt
bought up a British line trading from Antwerp to the Plate, thus also
securing a footing at Antwerp in connexion with its South American
business. The necessity for taking such a step grew in proportion as
Antwerp acquired an increasing importance owing to the increasing German
export business.
Perhaps there is no country which can be served by the seaports of so
many foreign countries as Germany. Several Mediterranean ports attract
to themselves a portion of the South German trade; Antwerp and some of
the French ports possess splendid railway connexion with Southern and
Western Germany, and both Antwerp and Rotterdam are in a position to
avail themselves of the highway of the Rhine as an excellent means of
communication with the whole German hinterland. Finally, it must be
remembered that the Scandinavian seaports are also to a certain extent
competing for the German business, especially for the trade with the
hinterland of the Baltic ports of Germany. All this goes to show that
the countries surrounding Germany which have for centuries striven to
exercise a kind of political hegemony over Germany--or, rather,
generally speaking, over Central Europe--are not without plenty of
facilities enabling them to try to capture large portions of the
carrying trade of these parts of Europe. This danger of a never-ending
economic struggle which would not benefit any of the competing rivals
was the real reason underlying Ballin's policy of compromise. He clearly
recognized that any other course of action would tend to make permanent
the existing chaos ruling in the realm of ocean shipping.
In this struggle for the carrying trade to and from Central Europe the
port of Antwerp occupied a position all by itself. The more the
countries beyond the sea were opened up by the construction of new
railways and the establishment of industrial undertakings, and the more
orders the manufacturers in the Central European countries received in
consequence of the growing demand, the greater became the value of
Antwerp to the shipping companies in every country. In this respect the
early years of the twentieth century witnessed an extraordinary
development, which, in its turn, benefited the world's carrying trade to
an ever-increasing extent. Never before had so much European capital
been invested in overseas countries. Again, as a result of the Spanish
war the political and economic influence of the United States had
enormously expanded in the West Indian islands, whilst, at the same
time, the Monroe doctrine was being applied more and more thoroughly and
systematically. Consequently the attention of the American investors was
also increasingly drawn towards those same countries. In Central America
new railway lines were constructed by British and American capital,
including some right across the country from the Atlantic to the
Pacific, thus considerably facilitating trade with the Pacific coast of
America. Other lines were built in Brazil and in the Argentine, and
harbour and dock facilities were constructed in nearly all the more
important South American ports. French and Belgian capital shared in
these undertakings, and some German capital was also employed for the
same purpose. The Trans-Andine railway was completed, and numerous
industrial works were added to the existing ones. The great economic
advance was not exclusively restricted to South America; it extended to
the Far East, to the great British dominions beyond the sea, especially
to Canada and Australia, and--after the close of the South African
War--to Africa also. Russia built the great Trans-Siberian railway, and
Germany commenced to exploit the resources of her colonies. As a result
of all these activities the iron and steel manufacturers were
overwhelmed with export orders. This applies particularly to the German
iron and steel manufacturers, whose leading organization, the
Stahlwerks-Verband, largely favoured the route _via_ Antwerp, because it
was the cheapest, to the great detriment of the German ports. Thus the
German shipowners were compelled to follow the traffic, and the
importance of Antwerp increased from year to year. The Hamburg-Amerika
Linie met this development by opening a special branch office for
dealing with the Antwerp business.
In 1899, a year before the Hamburg-Amerika Linie established itself in
the services to Brazil and the River Plate, a line had been started by
the Company to Northern Brazil and the Amazon River. The conflict with
the Booth Line which resulted from this step was amicably settled in
1902 through negotiations conducted by Ballin. Later on, indeed, the
relations between the two companies became very cordial, and even led to
the conclusion of a far-reaching community of interest agreement, the
Booth Line being represented in Hamburg by the Hamburg-Amerika Linie,
and the latter in Brazil by the British company. An agreement of such
kind was only feasible when a particularly strong feeling of mutual
trust existed between the two contracting partners, and Ballin
repeatedly declared that he looked upon this agreement with the Booth
Line as the most satisfactory of all he had concluded.
In 1900 the West Indian business was extended by opening a passenger
service to Mexico, and another noteworthy event which took place during
the same year was the conclusion of an agreement with the big German
iron works in the Rhenish-Westphalian district by which the
Hamburg-Amerika Linie undertook to ship to Emden the Swedish iron ore
needed by them from the ports of Narvik and Lulea. Two special steamers
were ordered to be exclusively used for this service. Henceforth Emden
began to play an important part in connexion with the German ore supply,
and the real prosperity of that port dated from that time.
Early in 1901 Ballin decided to embark on a trip round the world. He
thought it desirable to do so in order to acquire a first-hand knowledge
of the Far Eastern situation, which had become of special interest to
the country owing to the acquisition by Germany of Tsingtau, and to the
unrest in China. His special object was to study the questions that had
become urgent in connexion with the organization of the passenger
service of which the Packetfahrt, in consequence of the agreement with
the Lloyd, had just become a partner. There was, in addition, the
project of starting a Pacific service, which engaged his attention. All
these important details could only be properly attended to on the spot.
It became necessary to acquire a business footing in the various ports
concerned, to organize the coast transport services which were to act as
feeders to the main line, etc. Besides, the Packetfahrt, and the Lloyd
as well, had special reasons for being interested in Far Eastern
affairs, as both companies had been entrusted with troop transports and
the transport of equipment needed for the German contingent during the
troubles in China. During his Far Eastern trip Ballin wrote detailed
accounts dealing with the business matters he attended to, and also
describing his personal impressions of persons and things in general,
the former kind addressed to the Board of his Company, the latter to his
mother. These letters are full of interest; they present a more faithful
description of his character as a man, and as a man of business, than
could be given in any other way. I shall therefore quote a few extracts
from the comprehensive reports, commencing with those he wrote to his
mother:--
"_On board the I.M.S._ '_Kiautschou_'
"_January 16th, 1901._
"The weather was cold and windy when we arrived late at night
outside Port Said, and midnight was well past when we had taken up
the pilot and were making our way into the port. The intense cold
had caused me to leave the navigating bridge; and as I did not
think it likely that our agent would arrive on board with his
telegrams until the next morning, I had followed the example of my
wife and of nearly all the other passengers and had gone to bed.
However, if we had thought that we should be able to sleep, we soon
found out our mistake. The steamer had scarcely taken up her
moorings when several hundreds of dusky natives, wildly screaming
and gesticulating, and making a noise that almost rent the skies,
invaded her in order to fill her bunkers with the 800 tons of coal
that had been ordered. Perhaps there is no place anywhere where the
bunkers are filled more rapidly than at Port Said, and certainly
none where this is done to the accompaniment of a more deafening
noise. Just imagine a horde of natives wildly screaming at the top
of their voices, and add to this the noise produced by the coal
incessantly shot into the bunkers, and the shouting of the men in
command going on along with it. You will easily understand that it
was impossible for anyone to go to sleep under conditions such as
these.... After trying for several hours, I gave up the attempt,
and, on entering the drawing-room, I found that willy-nilly (but,
as Wippchen would have said, more nilly than willy) practically all
the other passengers had done the same thing. There I was also
informed that those who were in the know had not even made an
attempt to go to sleep, but had gone ashore at 2 A.M. Port Said is
a typical brigands' den, and relies for its prosperity on the mail
packets calling there. The shops, the taverns, the music-halls, and
the gambling places are all organized on lines in accordance with
the needs of modern traffic. So it was not surprising to see that
the proprietors of these more or less inviting places of
entertainment had brightly lit up their premises, and hospitably
opened their doors despite the unearthly hour, being quite willing
to try and entice the unwary passengers into their clutches."
"_Between_ ADEN _and_ COLOMBO.
"_January 24th_, 1901.
" ... We did not stop long at Aden; and as the quarantine
regulations for all vessels arriving from Port Said were very
strict, it became impossible for the passengers on board the
_Kiautschou_ to land on the island. Aden, which the British would
like to turn into a second Gibraltar, is situated in a barren,
treeless district, and is wedged in between hills without any
vegetation. Small fortifications are scattered all over the island.
It must be a desolate spot for Europeans to live at. The British
officers call it 'The Devil's Punch Bowl,' and to be transferred to
Aden is equivalent to them to being deported."
"_January 28th_, 1901.
" ... In the meantime we have spent a most enjoyable and
unforgettable day at Colombo. The pilot brought the news of Queen
Victoria's death, which filled us with lively sympathy, and which
caused a great deal of grief among the British passengers. Shortly
before 9 o'clock we went ashore: and as the business offices do not
open until an hour later--thus preventing me from calling on my
business friends at that hour--I took a carriage-drive through the
magnificent park-like surroundings of the city. The people one
meets there are a fit match to the beautiful scenery; but whilst in
former times they were the rulers of this fertile island, they are
now, thanks to the blessings of civilization, the servants of their
European masters....
"When we reached the old-established Oriental Hotel where we had
our lunch, we met there a number of our fellow-passengers busily
engaged in bargaining with the Singhalese and Indian dealers who
generally flock to the terraces of the hotel as soon as a mail
packet has arrived. The picture presented by such Oriental
bargaining is the same everywhere, except that the Colombo dealers
undeniably manifest an inborn gracefulness and gentlemanly bearing.
When I tried to get rid of an old man who was pestering me with his
offers to sell some precious stones, he said to me, in the
inimitable singing tone of voice used by these people when they
speak English: 'Just touch this stone, please, but do not buy it: I
only wish to receive it back from your lucky hands.' In spite of
their manners, however, these fellows are the biggest cheats on
earth. Another dealer wanted to sell me a sheet of old Ceylon
stamps for which he demanded fifteen marks--a price which, as he
stated, meant a clean loss of five marks to him. When I offered him
two marks instead, merely because I had got tired of him, he handed
me the whole sheet, and said: 'Please take them; I know that one
day I shall be rewarded for the sacrifice which I bring.' Later on
I discovered that the same man had sold exactly the same stamps to
a fellow-passenger for 50 pfennigs, and that he had told the same
story to him as to me. Such are the blessings of our marvellous
civilization....
" ... In the afternoon we went for a magnificent drive to the Mount
Lavinia Hotel, which is beautifully situated on a hill affording an
extensive view of the sea. Boys and girls as beautiful as Greek
statues, and as swift-footed as fallow deer, pursued us in our
carriage, begging for alms. It was curious to see with what
unfailing certainty they managed to distinguish the German from the
English passengers, and they were not slow in availing themselves
of this opportunity to palm off what little German they knew on us.
'Oh, my father! My beautiful mother! You are a great lady! Please
give me ten cents, my good uncle!' We were quite astonished to meet
such a large progeny...."
"_February 2nd_, 1901.
".... The entrance to Singapore is superbly beautiful. The steamer
slowly wended her way through the channels between numerous small
islands clad with the most luxurious vegetation, so that it almost
took us two hours to reach the actual harbour.... The food question
is extremely complicated in this part of the tropics, which is
favoured by kind Nature more than is good. The excessive fertility
of the soil makes the cultivation of vegetables and cereals quite
impossible, as everything runs to seed within a few days, so that,
for instance, potatoes have to be obtained from Java, and green
vegetables from Mulsow's, in Hamburg. I am sure my geography master
at school, who never ceased to extol the richness of the soil of
this British colony, was not aware of this aspect of the matter.
"Singapore is a rapidly developing emporium for the trade with the
Far East. It has succeeded in attracting to itself much of the
commerce with the Dutch Indies, British North Borneo, the
Philippines, and the Federated Malay States. To achieve this, of
course, was a difficult matter, even with the aid of the shipping
companies, but its clever and energetic business community managed
to do it. We Germans may well be proud of the fact that our
countrymen now occupy the premier position in the business life of
the city....
" ... We spent about thirty-six hours at Saigon. This city has been
laid out by the French with admirable skill, and there is no doubt
but that Indo-China is a most valuable possession of theirs. As
regards the difference in the national character of the French and
the British, it is interesting to note that the former have just
erected a magnificent building for a theatre at Saigon, at a cost
of 2-1/2 million francs. The British would never have dreamt of
doing such a thing; I am sure they would have invested that money
in the building of club-houses and race-courses...."
"_February 16th_, 1901.
" ... As far as social life and social pleasures are concerned, it
must be said that the German colony at Hongkong is in no way
inferior to that at Singapore. Premier rank in this respect must be
assigned to the Siebs family. Mr. Siebs, the senior member of the
Hamburg firm of Siemssen and Co., has been a resident in the East
for a long term of years--forty-two, if I remember rightly; and he
now occupies an exceedingly prominent position both in German and
British society. That this is so is largely due--apart from his
intimate knowledge of all that concerns the trade and commerce of
China, and apart from his own amiability and never-failing
generosity--to his charming wife, who, by means of the hospitality,
the refinement, and the exemplary management characterizing her
home, has been chiefly instrumental in acquiring for the house of
Siebs the high reputation it enjoys. Whoever is received by Mrs.
Siebs, I have been told, is admitted everywhere in Hongkong
society.
"Even though I only give here an outline of my impressions, I
cannot refrain from adding a few details dealing with some aspects
of everyday life at Hongkong, this jewel among the crown colonies
of Britain. The offices of the big firms and of the shipping
companies' agencies, most of them housed in beautiful buildings,
flank the water's edge; farther back there is the extensive
shopping quarter, and still more in the rear there is the Chinese
quarter, teeming with an industrious population. Being myself so
much mixed up with the means of communication, I am surely entitled
to make a few remarks concerning this subject in particular. Horses
are but rarely seen, and are only used for riding, and sporting
purposes generally. Their place is taken by the coolies, who no
doubt represent the most pitiable type of humanity--at least, from
the point of view of a sensitive person. In the low-lying part of
the town the jinrikishas, which are drawn by coolies, predominate;
but the greater part of Hongkong is situated on the slopes of a
hill, and nearly all the private residences are built along the
beautifully kept, terrace-like roads leading up to the summit of
the peak. In this part the chair coolies take the place of the
jinrikisha coolies; and in the low-lying parts also it is
considered more stylish to be carried by chair coolies. The
ordinary hired chairs are generally carried by two coolies only,
but four are needed for the private ones. The work done by these
poor wretches is fatiguing in the extreme. They have to drag their
masters up and down the hill, which is very steep in places, and it
is a horrid sensation to be carried by these specimens of panting
humanity for the first time. In the better-class European
households each member of the family has his own chair, and the
necessary coolies along with it, who are paid the princely wage of
from 16 marks to 17 marks 50 pfennigs a month. They also receive a
white jacket and a pair of white drawers reaching to the knee, but
they have to provide their own food. The poor fellows are generally
natives from the interior parts of the island. They spend about one
mark a week on their food; the rest they send home to their
families. They are mostly married, and the money they earn in their
capacity as private coolies represents to them a fortune. They
rarely live longer than forty years; in fact, their average length
of life is said not to exceed thirty-five. As many as eight coolies
were engaged to attend to the needs of my wife and myself for the
time of our stay. The poor creatures, who, by the way, had quite a
good time in our service, spent the whole day from early in the
morning to late at night lying in front of a side entrance to our
hotel, except when they had to do their work for us....
" ... The Chinese have only one annual holiday--New Year. They are
hard at work during the whole year; they know of no Sundays and of
no holidays, but the commencement of the New Year is associated
with a peculiar belief of theirs. To celebrate the event, they take
their best clothes out of pawn (which, for the rest of the year,
they keep at the pawnbroker's to prevent them from being stolen).
To keep the evil spirits away during the coming twelvemonth, they
burn hundreds of thousands of firecrackers when the New Year
begins, and also during the first and second days of it,
accompanied by the noise of the firing of guns. One must have been
through it all in order to understand it. For the better part of
two days and two nights one could imagine a fierce battle raging in
the neighbourhood; crackers were exploding on all sides, together
with rockets and fireballs, and the whole was augmented by the
shouting and screaming of the revellers. It was a mad noise, and we
could scarcely get any sleep at night.
"The houses in the Chinese quarter were decorated up to the roofs
with bunting, beautiful big lanterns, paper garlands with religious
inscriptions, and a mass of lovely flowers.
"On such days--the only holidays they possess--the Chinese
population are in undisputed possession of their town, and the
British administration is wise enough not to interfere with the
enjoyment of these sober and hard-working people. I really wonder
how the German police would act in such cases...."
"SHANGHAI, _March 6th, 1901_.
" ... It is surely no exaggeration to describe Shanghai as the New
York of the Far East. The whole of the rapidly increasing trade
with the Yangtse ports, and the bulk of that with the northern
parts of the country, passes through Shanghai. The local German
colony is much larger than the one at Hongkong; and here, too, it
is pleasant to find that our countrymen are playing an extremely
important part in the extensive business life of the town...."
"_Between_ TSINGTAU _and_ NAGASAKI,
_on board the s.s_ _'Sibiria_.'
"_March 18th, 1901._
"Our s.s. _Sibiria_ had arrived in the harbour about ten days ago,
and was now ready for our use. I had decided first of all to make a
trip up the Yang-tse-Kiang on board the _Sibiria_, because I wanted
to get to know this important river, which flows through such a
fertile tract of country, and on the banks of which so many of the
busiest cities of China are situated. The Yangtse--as it is usually
called for shortness' sake--is navigable for very large-sized
ocean-going steamers for a several days' journey. During the summer
months it often happens that the level of the water in its upper
reaches rises by as much as 50 feet, which--on account of the
danger of the tremendous floods resulting from it--has made it
necessary to pay special attention to the laying-out of the cities
situated on its banks. The object of our journey was Nanking. This
city, which was once the all-powerful capital of the Celestial
Empire, has never again reached its former importance since its
destruction during the great revolution of 1862, and since the
choice of Peking as the residence of the Imperial family. Two years
ago it was thrown open to foreign commerce; and the Powers
immediately established their consulates in the city, not only
because a new era of development is looked forward to, but also
because Nanking is the seat of a viceroy.
"Our amiable consul, Herr v. Oertzen, received us with the greatest
hospitality. The German colony which he has to look after consists
of only one member so far. This young gentleman, who holds an
appointment in connexion with the Chinese customs administration,
feels, as is but natural, quite happy in consequence of enjoying a
practical monopoly of the protection extended to him by the home
government. He has helped himself to the consul's cigars and to his
moselle to such good effect that the _Sibiria_ arrived just in time
to prevent the German colony at Nanking from lodging a complaint
regarding the insufficiency of the supplies put at its disposal by
the Government. The consul told us that we should never have a
chance of coming across another Chinese town that could compare
with the interior of Nanking, and so we had to make up our minds
to pay a visit to these parts.
"I had seen plenty of dirt and misery at Jaffa and Jerusalem, but I
have never found so much filth and wretchedness anywhere as I
noticed at Nanking. My wife and a charming young lady who
accompanied us on our Yangtse expedition were borne in genuine
sedan chairs as used for the mandarins, preceded by the interpreter
of the consulate, and followed by the rest of us, who were riding
on mules provided with those typically Chinese saddles, which,
owing to their hardness, may justly claim to rank among the
instruments of torture.
"Our procession wended its way through a maze of indescribably
narrow streets crowded with a moving mass of human beings and
animals. Everywhere cripples and blind men lay moaning in front of
their miserable hovels, and it almost seemed that there were more
people suffering from some disease or other than there were healthy
ones. When we stopped outside the big temple of Confucius, where
the ladies of our party dismounted from their chairs, the people,
in spite of their natural timidity, flocked to see us, because they
had probably never seen any European ladies until then. We were
thankful when at last we reached the consulate building again, and
when, after having had a good bath, we are able to enjoy a cup of
tea.
" ... In the early hours of March 13th our steamer arrived at
Tsingtau. I was surprised and delighted with what I saw. There, in
spite of innumerable difficulties, a city had sprung up in an
incredibly short space of time.
"Rooms had been reserved for us at the handsome, but very cold,
Hotel Prinz Heinrich; and in the afternoon of the day of our
arrival we strolled up the roads, which were still somewhat dusty,
and in parts only half finished, to the summit of the hill where
the acting Governor and the officers of higher rank had their
homes. Even though it is true that up to now military necessities
have taken precedence in the laying-out of the town, so that the
needs of trade and traffic have not received due attention, it must
be admitted that a wonderful piece of constructive work has been
achieved. All the members of our party--especially those who, like
Dr. Knappe, our consul-general at Shanghai, had known the place two
years ago--were most agreeably surprised at the progress that had
been made.
"Our first few days at Tsingtau were spent much as they were
everywhere else--plenty of work during the day-time, and plenty of
social duties in the evenings. But things began to look different
on Saturday morning, when my old friend and well-wisher,
Field-Marshal Count Waldersee, arrived on board H.M.S. _Kaiserin
Auguste_. He had announced that his arrival would take place at 9
A.M., and his flagship cast anchor with military punctuality. The
Governor and I went on board to welcome the old gentleman, who was
evidently greatly touched at meeting me out here, and it was plain
to see that my presence in this part of the world made him almost
feel homesick. The Field-Marshal very much dislikes the
restrictions imposed on his activities; and judging from all he
told me, I must confess that a great military leader has hardly
ever before been faced with a more thankless task than he. On the
one hand he is handicapped through the diplomatists, and on the
other through the want of unanimity among the Powers. Thus, instead
of fulfilling the soldier's task with which he is entrusted, he is
compelled to waste his time in idleness, and to preside at endless
conferences at which matters are discussed dealing with the most
trivial questions of etiquette. He really deserves something better
than that...."
"TOKIO. _March 31st, 1901._
" ... What a difference between Japan and the cold and barren north
of China! There everything was dull and gloomy, whilst this country
is flooded with sunshine. Here we are surrounded by beautifully
wooded hills, and a magnificent harbour extends right into the
heart of the city. From the windows of our rooms we overlook big
liners and powerful men-of-war, and our own _Sibiria_ has chosen
such a berth that the Hapag flag merrily floating in the breeze
gives us a friendly welcome.
"The difference in the national character of the Chinaman and the
Japanese clearly proves the great influence which the climate and
the natural features of a country can exercise on its inhabitants.
The one always grave and sulky, and not inclined to be friendly;
the other always cheerful, fond of gossip, and overflowing with
politeness in all his intercourse with strangers. But it must not
be forgotten that the integrity of the Chinese, especially of the
Chinese merchants, is simply beyond praise, whereas the Japanese
have a reputation for using much cunning and very little sincerity,
so that European business men cannot put much faith in them.
"The women of Japan are known to us through 'The Mikado' and 'The
Geisha.' They make a direct appeal to our sympathies and to our
sense of humour. In one week the stranger will become more closely
acquainted with the womenfolk and the family life of Japan than he
would with those of China after half a dozen years of residence in
their midst. In China the women are kept in seclusion as much as
possible, but the whole family life of the Japs is carried on with
an utter indifference to publicity. This is due to a large extent
to the way their homes are built. Their houses are just as dainty
as they are themselves; and it is really quite remarkable to see
that the Japs, who closely imitate everything they see in Europe,
still build them exactly as they have done from time immemorial.
They are practically without windows, and in place of these the
openings in the walls are filled with paper stretched on to frames.
Instead of doors there are movable screens made of lattice-work;
and since everything is kept wide open during the day-time one can
look right into the rooms from the street. In the summer the
Japanese make their home in the streets, and we are told that then
the most intimate family scenes are enacted in the open air. I am
of opinion that this, far from pointing to a want of morality, is
really the outcome of a highly developed code of morals. Things
which are perfectly natural in themselves are treated as such, and
are therefore not hidden from the light of day....
" ... At 9 A.M. on March 23rd we arrived at Kobe, where we had to
spend several days.
"Our trip is now approaching its end; at least, we now experience
the pleasant feeling that we are daily nearing home. What will it
look like when we get back? At almost every port of call some sad
news has reached us, and our stay at Kobe was entirely overshadowed
by my grief at the loss of my old friend Laeisz. Even now I cannot
realize that I shall find his place empty when I return...."
The brief statement in which Ballin summarized the results of his trip
from a business point of view is appended:--
"Among the business transacted during my trip the following items
are of chief importance:
"(1) The establishment of a branch of our Company at Hongkong.
"(2) The acquisition of the Imperial Mail Packet Service to
Shanghai, Tsingtau, and Tientsin, formerly carried on by Messrs.
Diedrichsen, Jebsen and Co.
"(3) The acquisition of the Yangtse Line, hitherto carried on by
the firm of Rickmers.
"(4) The joint purchase with the firm of Carlowitz and Messrs.
Arnhold, Karberg and Co. of a large site outside Shanghai harbour
intended for the building of docks and quays, and the lease of the
so-called Eastern Wharf, both these undertakings to be managed by a
specially created joint-stock company.
"(5) The establishment of temporary offices at Shanghai.
"(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."