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:—