In 1874, at the age of seventeen, Ballin lost his father. The business, which was carried on under the firm of Morris and Co., was an Emigration Agency, and its work consisted in booking emigrants for the transatlantic steamship lines on a commission basis. Office premises and dwelling accommodation were both—as already indicated—located in the same building, so that a sharp distinction between business matters and household affairs was often quite impossible, and the children acquired practical knowledge of everything connected with the business at an early age. This was especially so in the case of young Albert, who loved to do his home lessons in the office rooms. History does not divulge whether he did so because he was interested in the affairs of the office, or whether he obtained there some valuable assistance. The whole primitiveness of those days is illustrated by the following episode which Ballin once related to us in his own humorous way. The family possessed—a rare thing in our modern days—a treasure of a servant who, apart from doing all the hard work, was the good genius of the home, and who had grown old as the children grew up. “Augusta” had not yet read the modern books and pamphlets on women’s rights, and she was content to go out once a year, when she spent the day with her people at Barmbeck, a suburb of Hamburg. One day, when the young head of Morris and Co. was discussing some important business matters with some friends in his private office, the door was suddenly thrust open, and the “treasure” appeared on the scene and said: “Adjüs ook Albert, ick gah hüt ut!” ("Good-bye, Albert, I am going out to-day!") It was the occasion of her annual holiday.
The firm of Morris and Co., of which Ballin’s father had been one of the original founders in 1852, had never been particularly successful up to the time of his death. Albert, the youngest son, who was born on August 15th, 1857, joined the business when his father died. He had then just finished his studies at school. The one partner who had remained a member of the firm after Ballin’s death left in 1877, and in 1879 Albert Ballin became a partner himself. The task of providing for his widowed mother and such of his brothers and sisters as were still dependent on his help then devolved on him, and he succeeded in doing this in a very short time. He applied himself to his work with the greatest diligence, and he became a shining example to the few assistants employed by the firm. On the days of the departure of the steamers the work of the office lasted until far into the night, as was usually the case in Hamburg in former years. An incident which took place in those early days proves that the work carried on by Morris and Co. met with the approval of their employers. One day the head of one of the foreign lines for which the firm was doing business paid a personal visit to Hamburg to see what his agents were doing. On entering the office young Albert received him. He said he wanted to see Mr. Ballin, and when the youthful owner replied that he was Mr. Ballin the visitor answered: “It is not you I want to see, young man, but the head of the firm.” The misunderstanding was soon cleared up, and when Ballin anxiously asked if the visitor had come to complain about anything connected with the business, the reply was given that such was by no means the case, and that the conduct of the business was considered much more satisfactory than before.
To arrive at a proper understanding of the conditions ruling in Hamburg at the end of the ’seventies, it is necessary to remember that the shipping business was still in its infancy, and that it was far from occupying the prominent position which it gained in later years and which it has only lost again since the war. The present time, which also is characterized by the prevalence of foreign companies and foreign-owned tonnage in the shipping business of Hamburg, bears a strong likeness to that period which lies now half a century back. The “Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft,” although only running a few services to North and Central America, was even then the most important shipping company domiciled in Hamburg; but it counted for very little as an international factor, especially as it had just passed through a fierce struggle against its competitor, the Adler Line, which had greatly weakened it and had caused it to fall behind other lines with regard to the status of its ships. Of the other Hamburg lines which became important in later times, some did not then exist at all, and others were just passing through the most critical period of their infancy. The competitors of the Packetfahrt in the emigrant traffic were the North German Lloyd, of Bremen; the Holland-America Line, of Rotterdam, and the Red Star Line, of Antwerp. Apart from the direct traffic from Hamburg to New York, there was also the so-called indirect emigrant traffic via England, which for the most part was in the hands of the British lines. The passengers booked by the agents of the latter were first conveyed from Hamburg to a British port, and thence, by a different boat, to the United States. It was the time before the industrialization of Germany had commenced, when there was not sufficient employment going round for the country’s increasing population. The result was that large numbers of the inhabitants had to emigrate to foreign countries. That period lasted until the ’nineties, by which time the growth of industries required the services of all who could work. Simultaneously, however, with the decrease of emigration from Germany, that from Southern Europe, Austria-Hungary, and the Slavonic countries was assuming huge proportions, although the beginnings of this latter were already quite noticeable in the ’seventies and ’eighties. This foreign emigrant traffic was the mainstay of the business carried on by the emigration agencies of the type of Morris and Co., whereas the German emigrants formed the backbone of the business on which the German steamship lines relied for their passenger traffic. Either the companies themselves or their agencies were in possession of the necessary Government licences entitling them to carry on the emigration business. The agencies of the foreign lines, on the other hand, either held no such licence at all, or only one which was restricted to certain German federal states or Prussian provinces—such, for instance, as Morris and Co. possessed for the two Mecklenburgs and for Schleswig-Holstein. This circumstance naturally compelled them to tap foreign districts rather than parts of Germany; and since the German lines, in order to keep down their competition, refused to carry the passengers they had booked, they were obliged to work in conjunction with foreign ones. They generally provided the berths which the sub-agencies required for their clientèle, and sometimes they would book berths on their own account, afterwards placing them at the disposal of the agencies. They were the connecting link between the shipping companies and the emigrants, and the former had no dealings whatever with the latter until these were on board their steamers. The Hamburg emigration agents had therefore also to provide accommodation for the intending emigrants during their stay in Hamburg and to find the means for conveying them to the British port in question. A number of taverns and hostelries in the parts near the harbour catered specially for such emigrants, and the various agents found plenty of scope for a display of their respective business capacities. A talent for organization, for instance, and skill in dealing with the emigrants, could be the means of gaining great successes.
This was the sphere in which the youthful Albert Ballin gave the first proofs of his abilities and intelligence. Within a few years of his entering the firm the latter acquired a prominent position in the “indirect” emigration service via England, a position which brought its chief into personal contact with the firm of Richardson, Spence and Co., of Liverpool, who were the general representatives for Great Britain of the American Line (one of the lines to whose emigration traffic Morris and Co. attended in Hamburg), and especially with the head of that firm, Mr. Wilding. An intimate personal friendship sprang up between these two men which lasted a lifetime. These close relations gave him an excellent opportunity for studying the business methods of the British shipping firms, and led to the establishment of valuable personal intercourse with some other leading shipping people in England. Thus it may be said that Ballin’s connexions with England, strengthened as they were by several short visits to that country, were of great practical use to him and that, in a sense, they furnished him with such business training as until then he had lacked.
How successfully the new chief of Morris and Co. operated the business may be gauged from the fact that, a few years after his advent, the firm had secured one-third of the volume of the “indirect” emigration traffic via England. At that time, in the early ’eighties, a period of grave economic depression in the United States was succeeded by a trade boom of considerable magnitude. Such a transition from bad business to good was always preceded by the sale of a large number of “pre-paids,” i.e. steerage tickets which were bought and paid for by people in the United States and sent by them to those among their friends or relatives in Europe who, without possessing the necessary money, wished to emigrate to the States. A few months after the booking of these “pre-paids” a strong current of emigration always set in, and the time just referred to proved to be no exception to the rule. The number of steerage passengers leaving Hamburg for New York increased from 25,000 in 1879 to 69,000 in 1880, and 123,000 in 1881.
It was quite impossible for the biggest Hamburg shipping company—the Packetfahrt—to carry successfully this huge number of emigrants. And even if this had been possible, the Packetfahrt would not have undertaken it, because it intentionally ignored the stream of non-German emigrants. Besides, the Company had neglected for years to adapt its vessels to the needs of the times, and had allowed its competitors to gain so much that even the North German Lloyd, a much younger undertaking, had far outstripped it. The latter, under its eminent chairman, Mr. Lohmann, had not only outclassed the Packetfahrt by the establishment of its service of fast steamers—“Bremen-New York in 9 days"—which was worked with admirable regularity and punctuality, but had also increased the volume of its fleet to such an extent that, in 1882, 47 of the 107 transatlantic steamers flying the German flag belonged to this Company, whereas the Packetfahrt possessed 24 only. For all these reasons it would have been useless for Morris and Co. to suggest to the Packetfahrt that they should secure for it a large increase in its emigrant traffic; and even if they had tried to extend their influence by working in co-operation with the Packetfahrt, such an attempt would doubtless have provoked the liveliest opposition on the part of the firm of August Bolten, the owner of which was one of the founders of the Packetfahrt, and which, because they were acting as general agents for the North American cargo and passenger business, exercised a powerful influence over the management of the Packetfahrt. The firm of August Bolten, moreover, had, like the line they represented, always consistently refused to have any dealings with the emigrant agencies.
Ballin, knowing that the next few years would lead to a considerable increase in the emigrant traffic, therefore approached a newly established Hamburg shipping firm—which intended to run a cargo service from Hamburg to New York—with the proposal that it should also take up the steerage business. His British friends, when they were informed of this step, expressed the apprehension lest their own business with his firm should suffer from it, but Ballin had no difficulty in allaying their fears.
CHAPTER II
General Representative of the Carr Line
The new shipping line for which Morris and Co. contracted to act as General Passenger Agents was the privately owned firm of Mr. Edward Carr. The agreement concluded between the two firms shows distinct traces of Ballin’s enterprising spirit and of the largeness of his outlook. Morris and Co. undertook to book for the two steamships of the Carr Line then building, viz. the Australia and the America, as many passengers as they could carry, and guaranteed to pay the owners a passage price of 82 marks per head, all the necessary expenses and commissions, including those connected with the dispatch of the passengers, to be paid by Morris and Co. The steerage rate charged by the Packetfahrt at that time was 120 marks. It was agreed that, if this rate should be increased, a corresponding increase should be made in the rates of the Carr Line. The number of trips to be performed by each steamer should be about eight or nine per annum. If a third boat were added to the service, the agreement entered into should be extended so as to cover this boat as well. For every passenger short of the total capacity of each steamer Morris and Co. were to pay a compensation of 20 marks, if no arrangements had been made for the accommodation of the passenger, and 35 marks in case such accommodation had been arranged. It was expected that each boat would carry from 650 to 700 passengers. The actual number carried, however, turned out to be slightly less, and amounted to 581 when the first steamer left Hamburg on June 7th, 1881. Morris and Co. also undertook to hand over to the Carr Line all the through cargo they could secure. From the very start the work done by Ballin seems to have met with the unqualified approval of the Carr Line people; because the latter waived their claim to the compensation due to them for the sixty passengers short of the total number which were to be carried on the first trip, as Morris and Co. could prove that these passengers had failed to arrive, although the firm had been advised from Denmark that they were to come. On how small a scale the firm’s business was conducted may be gauged from the circumstance that the whole staff consisted of nine employees only, who were paid salaries aggregating 20,302 marks.
In one essential feature the service of the new line differed from those of its old-established competitors. The Australia and the America were ordinary cargo boats, but, in addition to a moderate amount of cargo, they also carried steerage passengers. They thus had not much in common with the usual passenger steamers by which both cabin and steerage passengers were carried. The advantage of the new type to the emigrants was that it gave them much more space than was at their disposal on the older boats. Whereas on the cabin steamers they were practically confined to a very small part of the boat, the Carr Line steamers made no restriction whatever as to their movements on board; all the available space, especially on deck, was thrown open to them. This type was not entirely a novelty, the sailing vessels of the older period used for the emigrant traffic being run on similar lines. The advantages accruing to the owners from their new type of steamers were obvious. The arrangements for the accommodation and provisioning of the emigrants, compared with what was needed in the case of cabin passengers, were of the simplest kind, and thus the cost price of the steamers was considerably less than that of vessels of the usual type. This also meant a saving in the wages bill, as it led to a reduction in the number of hands on board; and since the speed of the new boats was also less than that of the older ones, the working expenses were reduced in proportion. The financial results of the service, therefore, were better, in spite of the low rates charged to the steeragers, than those obtainable by running cabin steamers with steerage accommodation, and than those obtainable by running cargo steamers without any passenger accommodation.