At a conference of the transatlantic lines held in December, 1902, at Cologne, Ballin put forward once more his suggestion that a cabin pool should be established. The proposal, however, fell through owing to the opposition from the Cunard Line.
The depression in the freight business which had set in in 1901, and which was still very pronounced towards the close of 1902, seriously affected the prospects of the transatlantic shipping companies, especially those combined in the Morgan Trust, who were the owners of a huge amount of tonnage used in the cargo business, and whose sphere of action was restricted to the North Atlantic route. “Experience now shows,” Ballin wrote in his notes, “that we were doing the right thing when we entered into the alliance with the Trust. If we had not done this, the latter would doubtless have tried to invade the German market in order to keep its many idle ships going.”
Meanwhile the Cunard Line had concluded an agreement with the British Government by which the Government bound itself to advance to the company the funds for the building of its two mammoth express liners, the Mauretania and the Lusitania, while at the same time granting it a subsidy sufficient to provide for the payment of the interest on and for the redemption of the loan advanced by the Government for the building of the vessels.
Further difficulties seemed to be ahead owing to the aggressive measures proposed by the Canadian Pacific Company, which was already advertising a service from Antwerp to Canada. To ward off the danger threatening from this quarter, Ballin proceeded to New York to take up negotiations with Sir Thomas Shaughnessy, the president of the Canadian Pacific. He went there on behalf of all the Continental shipping companies concerned, and the results he arrived at were so satisfactory to both parties that Ballin corresponded henceforth on terms of close personal friendship with Sir Thomas, who was one of the leading experts on railway matters anywhere. These friendly relations were very helpful to Ballin afterwards when he was engaged in difficult negotiations with other representatives of Sir Thomas’s company, and never failed to ensure a successful understanding being arrived at.
On the occasion of this trip to America Ballin had some interesting—or, as he puts it, “rather exciting"—discussions with Morgan and his friends. He severely criticized the management of the affairs of the Trust, and tried to make Morgan understand that nothing short of a radical improvement—i.e. a change of the leading personages—would put matters right. “Morgan,” he writes, “finds it impossible to get the right men to take their places, and he held out to me the most alluring prospects if I myself should feel inclined to go to New York as president of the Trust, even if only for a year or two; but I refused his offer, chiefly on account of my relations with the Kaiser.”
Ballin’s suggestions, nevertheless, led to a change in the management of the Trust. This was decided upon at meetings held in London, where Ballin stayed for a time on his way back to Hamburg. Mr. Pirrie also took part in these meetings.
In the meantime the relations between the Cunard Line and the other transatlantic shipping companies had become very critical. The Hungarian Government, for some time past, had shown a desire to derive a greater benefit from the considerable emigrant traffic of the country—a desire which was shared by important private quarters as well. The idea was to divert the stream of emigrants to Fiume—instead of allowing them to cross the national frontiers uncontrolled—and to carry them from that port to the United States by direct steamers. Ballin had repeatedly urged that the lines which were working together under the pool agreement should fall in with these wishes of the Hungarian Government; but his proposals were not acted upon, mainly owing to the opposition of the North German Lloyd, which company carried the biggest share of the Hungarian emigrants.
To the great surprise of the pool lines it was announced in the early part of 1904 that the Hungarian Government was about to conclude an agreement with the Cunard Line—the only big transatlantic shipping company which had remained outside the Trust—by which it was provided that the Cunard Line was to run fortnightly services from Fiume, and by which the Hungarian Government was to bind itself to prevent—by means of closing the frontiers or any other suitable methods—emigrants from choosing any other routes leading out of the country. Such an agreement would deprive the pool lines of the whole of their Hungarian emigrant business. Discussions between Ballin and the representatives of the Cunard Line only elicited the statement on the part of the latter that it had no power any longer to retrace its steps. An episode which took place in the course of these discussions is of special interest now, as it enables us to understand why the amalgamation of the Cunard Line with the Morgan Trust never took place.
Ballin asked Lord Inverclyde why the attitude of the Cunard Line had been so aggressive throughout. The reply was that the Morgan Trust, and not the Cunard Line, was the aggressor, because Morgan’s aim was to crush it. When Ballin interposed that this had never been intended by the Trust—that the Trust, indeed, had attempted to include the Cunard Line within the combination, that Lord Inverclyde himself had also made a proposal towards that end, and that the project had only come to grief on account of the strong feeling of British public opinion against it—Lord Inverclyde answered that, far from this being the case, the Trust had never replied to his proposal, and that he had not even received an acknowledgment of his last letter.
In a letter to Mr. Boas, the general representative of his company in New York, in which he described the general situation, Ballin stated that the statement of Lord Inverclyde was indeed quite correct.