When Ballin joined the Packetfahrt, he did not strictly confine his attention to matters connected with the passenger services. When, for instance, the head of the freight department was prevented from attending a meeting called by the Board of Trustees, Ballin put forward a proposal for raising the rates on certain cargo. It was therefore only but fit acknowledgment of his many-sided talents, and recognition that his energetic character had been the guiding spirit in the Company’s affairs, that the Board of Trustees appointed Ballin in 1888 a member of the Board of Directors after two years with the Packetfahrt. This appointment really filled a long-felt gap.
CHAPTER FOUR
THE POOL
The term “pool” may be defined in a variety of ways, but, generally speaking, the root idea underlying its meaning is always the same, both in its application to business and to betting. A pool, in brief, is a combination of a number of business concerns for their own mutual interests, all partners having previously agreed upon certain principles as to the distribution of the common profits. In other words, it is a community of interests concluded upon the basis of dividing the profits realized in a certain ratio. I have been unable to discover when and where this kind of combination was first used in actual practice. Before the transatlantic steamship companies did so, the big trunk lines of the United States railway system are said to have used it in connexion with the westbound emigrant traffic, and possibly for other purposes also.
When Ballin wrote his memorandum of February 5th, 1886, the steamship lines must already have been familiar with the meaning of the term, for the memorandum refers to it as something well known. Ballin begins by stating that the “Conference of the Northern European Lines” might be looked upon as having ceased to exist, seeing that two parties were represented on it whose claims were diametrically opposed to each other. Whereas the North German Lloyd insisted on the right to lower its rates, the Red Star Line claimed that these rates should be raised, so that it might obtain a better differential rate for itself. A reconciliation of these mutually contradictory views, the memorandum went on to say, appeared to be impossible, unless all parties agreed upon an understanding which would radically alter the relations then existing between their respective interests; and a way leading out of the impasse would be found by adopting the pooling system proposed by the representative of the Red Star Line. If we take the number of steeragers carried to New York from 1881 to 1885 by the six lines concerned as a basis, the respective percentages of the total traffic are as follows:
| Percentage | |
| North German Lloyd | 33·45 |
| North German Lloyd (Baltimore Line) | 14·80 |
| Packetfahrt | 27·00 |
| Union Line | 5·53 |
| Red Star Line | 12·26 |
| Holland American Line | 6·96 |
It was, however, justly pointed out at a meeting of the Conference that the amount of tonnage must also be taken into account in laying down the principles which were to govern the distribution of the profits. The average figures of such tonnage employed by the six lines during the same period were:
| Tons | Percentage | |
| North German Lloyd | 275,520 | 33·91 |
| North German Lloyd (Baltimore Line) | 63,000 | 7·76 |
| Packetfahrt | 199,500 | 24·55 |
| Union Line | 42,840 | 5·27 |
| Red Star Line | 149,600 | 18·41 |
| Holland American Line | 82,080 | 10·10 |
| Total tonnage | 812,540 |
The average of both sets of percentage figures worked out as follows:
| Percentage | ||
| North German Lloyd | 33·68 | |
| North German Lloyd (Baltimore Line) | 11·28 | |
| Packetfahrt | 25·77 | ½ |
| Union Line | 5·40 | |
| Red Star Line | 15·33 | ½ |
| Holland American Line | 8·53 |