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 157½ 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.