Albert Ballin

By
Bernhard Huldermann


Translated from the German
by
W. J. EGGERS, M.A. (London)





Cassell and Company, Limited
London, New York, Toronto and Melbourne
1922




To the Memory of
A L B E R T   B A L L I N
in true veneration and heartfelt gratitude

PREFACE

MY principal reason for publishing the information contained in this volume is to keep alive the memory of Albert Ballin. I particularly desire to show what was his share in bringing about the economic advance of Germany during the golden age of the Empire’s modern history, and to relate how he—unsuccessfully, alas!—strove to prevent the proud structure which he had helped to raise, from falling to ruin in the time of his country’s distress. I believe that much that concerns the latter aspect of his work will be new to most readers. In spite of all that has been said and written concerning the political activities which Ballin displayed (and is alleged to have displayed) both before and during the war, their object—and, more important still, their intimate connexion with his economic activities—is scarcely known. Eminently successful though Ballin had been in creating an atmosphere of mutual understanding between the various nations in the economic sphere, his attempts to reconcile the contending ambitions of those same nations where politics were concerned ended in failure. And yet it is impossible to understand his failure in one respect without first understanding his success in the other; indeed, the connexion between the two sides of his work forms the key to the character of the man and to the historical significance of his achievements.

It is possible that this volume may shed some new light on the causes of Germany’s collapse; this idea, at any rate, was before my mind when I decided upon publication. Frederick the Great somewhere remarked that, to the great loss of mankind, the experiences gained by one generation are always useless to the next, and that each generation is fated to make its own mistakes. If this is true, it is nevertheless to be hoped that Germany, considering the magnitude of the disaster that has overtaken her, will not allow the spirit of resignation implied by this remark to determine her actions in the present case.

In thus submitting to the public the information contained in this book, I am carrying out the behest of the deceased, who asked me to collect his papers, and to make whatever use I thought fit of them. Moreover, the fact that I had the privilege of being his collaborator for more than ten years gives me perhaps a special right to undertake this task.

My best thanks are due to Director A. Storm for supplying me with material illustrative of Ballin’s early career; to Chief Inspector Emil F. Kirchheim for assistance with the technical details, and to Professor Francke, who was on intimate terms of friendship with Ballin during a number of years, for information concerning many matters relative to Ballin’s personal character.

My constant endeavour has been to describe persons and events sine ira et studio, and to refrain from stating as a fact anything for which no documentary evidence is available.

The Author.

October, 1921.

CONTENTS

ALBERT BALLIN

CHAPTER I

Morris and Co.

Albert Ballin was a native of Hamburg. Before the large modern harbour basins of the city were built, practically all the vessels which frequented the port of Hamburg took up their berths along the northern shore of the Elbe close to the western part of the town. A long road, flanked on one side by houses of ancient architecture, extended—and still extends—parallel to this predecessor of the modern harbour. During its length the road goes under different names, and the house in which Ballin was born and brought up stood in that portion known as Steinhöft.

A seaport growing in importance from year to year is always a scene of busy life, and the early days which the boy Ballin spent in his father’s house and its interesting surroundings near the river’s edge left an indelible impression on his plastic mind.

Those were the times when the private residence and the business premises of the merchant and of the shipping man were still under the same roof; when a short walk of a few minutes enabled the shipowner to reach his vessel, and when the relations between him and the captain were still dominated by that feeling of personal friendship and personal trust the disappearance of which no man has ever more regretted than Albert Ballin. Throughout his life he never failed to look upon as ideal that era when every detail referring to the ship and to her management was still a matter of personal concern to her owner. He traced all his later successes back to the stimulating influence of those times; and if it is remembered how enormous was then the capacity for work, and how great the love of it for its own sake, it must be admitted that this estimate was no exaggeration. True, it is beyond doubt that the everyday surroundings in which his boyhood was spent, and the impressions gained from them, powerfully influenced his imagination both as boy and growing youth. It may, however, also be regarded as certain that the element of heredity was largely instrumental in moulding his character.

Ballin belonged to an old Jewish family, members of which—as is proved by ancient tombstones and other evidence—lived at Frankfort-on-Main centuries ago. Later on we find traces of them in Paris, and still later in Central and North Germany, and in Denmark. Documents dating from the seventeenth century show that the Ballins at that time were already among the well-to-do and respected families of Hamburg and Altona. Some of the earliest members of the family that can be traced were distinguished for their learning and for the high reputation they enjoyed among their co-religionists; others, in later times, were remarkable for their artistic gifts which secured for them the favour of several Kings of France. Those branches of the family which had settled in Germany and Denmark were prominent again for their learning and also for their business-like qualities. The intelligence and the artistic imagination which characterized Albert Ballin may be said to be due to hereditary influences. His versatile mind, the infallible discernment he exercised in dealing with his fellow-men, his artistic tastes, and his high appreciation of what was beautiful—all these are qualities which may furnish the key to his successes as a man of business. His sense of beauty especially made him extremely fastidious in all that concerned his personal surroundings, and was reflected in the children of his imagination, the large and beautifully appointed passenger steamers.

Ballin always disliked publicity. When the Literary Bureau of his Company requested him to supply some personal information concerning himself, he bluntly refused to do so. Hence there are but few publications available dealing with his life and work which may claim to be called authentic. Nevertheless—or perhaps for that very reason—quite a number of legends have sprung up regarding his early years. It is related, for instance, that he received a sound business training first in his father’s business and later during his stay in England. The actual facts are anything but romantic. Being the youngest of seven brothers and sisters, he was treated with especial tenderness and affection by his mother, so much so, in fact, that he grew up rather a delicate boy and was subject to all sorts of maladies and constitutional weaknesses. He was educated, as was usual at that time, at one of the private day-schools of his native city. In those days, when Hamburg did not yet possess a university of her own, and when the facilities which she provided for the intellectual needs of her citizens were deplorably inadequate for the purpose, visitors from the other parts of Germany could never understand why that section of the population which appreciated the value of a complete course of higher education—especially an education grounded on a classical foundation—was so extremely small. The average Hamburg business man certainly did not belong to that small section; and the result was that a number of private schools sprang up which qualified their pupils for the examination entitling them to one year’s—instead of three years'—military service, and provided them with a general education which—without any reflection on their principals—it can only be said would not bear comparison with that, for instance, which was looked upon as essential by the members of the higher grades of the Prussian Civil Service. Fortunately, the last few decades have brought about a great improvement in this respect, just as they have revolutionized the average citizen’s appreciation of intellectual culture and refinement.

Albert Ballin did not stand out prominently for his achievements at school, and he did not shine through his industry and application to his studies. In later life he successfully made up for the deficiencies of his school education by taking private lessons, especially in practical mathematics and English, in which language he was able to converse with remarkable fluency. His favourite pastime in his early years was music, and his performances on the ’cello, for instance, are said to have been quite excellent. None of his friends during his later years can furnish authoritative evidence on this point, as at that time he no longer had the leisure to devote himself to this hobby. Apart from music, he was a great lover of literature, especially of books on belles lettres, history, and politics. Thanks to his prodigious memory, he thus was able to accumulate vast stores of knowledge. During his extended travels on the business of his Company he gained a first-hand knowledge of foreign countries, and thus learned to understand the essential characteristics of foreign peoples as well as their customs and manners, which a mere study of books would never have given him. So he became indeed a man of true culture and refinement. He excelled as a speaker and as a writer; although when he occasionally helped his adopted daughter with her German composition, his work did not always meet with the approval of the teacher, and was once even returned with the remark, “newspaper German.”

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.

The new line soon made itself felt as a serious competitor to the Packetfahrt, especially so as by 1885 its fleet had increased from two to five steamers. The lower steerage rates charged by the Carr Line led to a general decrease of rates in the New York service, which was not confined to the lines running their services from Hamburg. The passage prices charged from the various ports are naturally closely related to each other, because each port tries to attract as much traffic as possible to itself, and this can only be brought about by a carefully thought-out differentiation. The struggle between the various lines involved which had started in Hamburg quickly extended to other seaports and affected a great many lines in addition to those of Hamburg. The rate-cutting process began in May, 1882. In the following October the Packetfahrt and the Lloyd had reduced their rates to 90 and in June, 1883, to 80 marks, whilst the British lines in February, 1884, charged so little as 30s. The Carr Line, of course, had to follow suit. It not only did so, but in proportion reduced its own rates even more than the other lines. The rates were even lower in practice than they appeared to be, owing to the constantly growing commissions payable to the agents. The agents of the competing lines, by publishing controversial articles in the newspapers, soon took the general public into their confidence; and in order to prevent such publicity being given as to their internal affairs, the managements of the various steamship lines entered into some sort of mutual contact. The worst result of the rate-slashing was that the agreements which the older lines had concluded amongst themselves for the maintenance of remunerative prices soon became unworkable. First those relating to the Westbound rates had to go down before the new competitor; and in 1883, when this competition had really commenced to make itself appreciably felt, the Packetfahrt found itself compelled to declare its withdrawal from the New York Continental Conference by which the Eastbound rate had been fixed at $30 for the passage from New York to the Continent, a rate which was so high that the Carr Line found it easy to go below it.

The Packetfahrt made great efforts to hold its own against the newcomer, but, as the following figures show, its success was but slight. In 1883 the Packetfahrt carried 55,390 passengers on 76 voyages, against 16,471 passengers carried on 29 voyages by the Carr Line, so that the traffic secured by the latter amounted to about 30 per cent. of that of the former. The figures for 1884 show that 58,388 passengers were carried by the Packetfahrt on 86 voyages, against 13,466 steeragers on 30 voyages by the Carr Line. If the figures relative to the direct and the indirect emigrant traffic from Hamburg are studied, it will be seen that a considerable decrease had taken place in the volume of the latter kind within a very few years, thus leading to an improvement in the position of the German lines as compared with that of their British competitors. These figures are as follows:

At the same time the Packetfahrt, in order to prevent French competition from becoming too dangerous on the Havre-New York route, had to reduce its rates from Havre, and a little later it had to do likewise with regard to the Eastbound freight rates and the steerage rates. The keen competition going on between the lines concerned had led to a lowering of the Eastbound rate to Hamburg from $30 to $18; and as the commission payable to the agents had gone up to $5, the net rate amounted to $13 only. At last the shareholders of the Packetfahrt became restless, and at the annual general meeting held in 1884 one of their representatives moved that the Board of the Company should be asked to enter into an agreement with the competing firm of Edward Carr. The motion, however, was lost; and the further proposal that a pool should be established among the Hamburg emigrant agents fared no better.

It was clear that the rate-war, which continued for a long period, would considerably affect the prosperity of the Carr Line in common with the other shipping companies. This circumstance prompted the proposal of Edward Carr, when the discussions were renewed in the spring of 1885, to carry them on upon a different basis altogether. He proposed, in fact, that the Carr Line itself should be purchased by the Packetfahrt. In the course of the ensuing negotiations Albert Ballin, as the representative of Edward Carr, who was absent from Hamburg for a time, played a prominent part. The Packetfahrt, in the meantime, had received advices from its New York office to the effect that the latter had reconsidered its attitude towards the claims of the Carr Line, that it looked upon a successful termination of the struggle against this Line as hopeless, and that it therefore recommended the granting of the differential rates which formed the obstacle to peace. Nevertheless, it was not until July, 1885, that, at a conference held in Hamburg, an agreement was concluded by the Packetfahrt, the Lloyd, the Carr Line, the Dutch, Belgian, and French lines, and the representative of the British lines. All these companies bound themselves to raise their rates to 100 marks, except that the Carr Line should be entitled to fix theirs at 90 marks. Thus the latter had at length received the recognition of its claim to a differentiation, and of its right to exist side by side with the older Company, although its steamers were not of an equal quality with those of the latter. An agreement was also concluded by which the rates of commission due to the Hamburg emigrant agents were fixed, and at the continued negotiations with the other lines Albert Ballin, from that time onward, in his capacity of representative of the Carr Line, was looked upon as on an equal footing with the representatives of the other lines.

The principal subject of the discussions was the question of eliminating, as far as possible, British influence from the emigrant traffic via Hamburg. The competition of the British was, naturally, very detrimental to the business of all the Continental, but more especially the German lines, because the interests of the respective sides were utterly at variance with each other. The firm foundations of the business transacted by the British lines were laid in England, and the Continental business was merely a source of additional profit; but to the German lines it was the mainstay of their existence, and to make it pay was of vital importance to them. The German lines, therefore, did not rest until, as the result of the continued negotiations among the Continental companies, it was agreed that the uniform rates just fixed should not apply to the traffic which was carried on by the two Hamburg lines from that city. Towards the end of 1885 the first object aimed at by this step was realized: the conclusion of an agreement between the two Hamburg lines and the representatives of the British lines settling the rates and the commissions; but apart from this, no changes of fundamental importance were made in this business until after Albert Ballin, under an agreement proposed by the Packetfahrt, had entered the service of the Packetfahrt, as head of their passenger department. An important exception, however, was the amalgamation suddenly announced in March, 1886, of the Carr Line and the Union Line, which latter company was operated by Rob. M. Sloman and Co., of Hamburg. The fact of this amalgamation considerably weakened the position of the Packetfahrt in its dealings with the Carr Line, because it gave additional strength to the latter.

The details of the five years’ agreement between Ballin and the Packetfahrt were approved by the Board of Trustees of that Company about the middle of May, 1886. It was stipulated that, in conformity with the pool agreement concluded between the two lines on May 22nd, the Packetfahrt should appoint Mr. Albert Ballin sole and responsible head of its North American passenger department (Westbound as well as Eastbound services); that his work should include the booking of steeragers for the Union Company’s steamers (which, in accordance with the pool agreement, the Packetfahrt had taken over), that he should appoint and dismiss the clerks employed by his department; that he should fix their salaries and commissions; that he should sign passage agreements on behalf of the Company, and that he should issue the necessary instructions to the agents and officers of the Company. All letters and other documents were to be signed “by proxy of the Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft,” and he was required annually to submit to the directors a draft estimate of the expenses of his department. On how modest a scale the whole arrangement was drawn up may be inferred from the figures given in the first year’s draft estimate, viz. Salaries, 35,000 marks; advertisements, 50,000 marks; posters and printed matter, 25,000 marks; travelling expenses, 6,000 marks; postage and telegrams, 10,000 marks; extras and sundries, 10,000 marks. Equally modest was the remuneration of the new head who was to receive a fixed salary of 10,000 marks per annum, plus a commission under the pool agreement, allowing the inference that the total annual income of the newly appointed head of the department would work out at something like 60,000 marks, which goes to show that the Company had a high opinion of his capacity for attracting traffic to its services. The conclusion of this agreement meant that the Packetfahrt henceforth took entire control of its passenger business—which, until then, had been looked after by the firm of Aug. Bolten—and that a passenger department had to be specially created. Thus an important step forward was made which could only be undertaken by the firm because such a well-qualified man as Ballin happened to be at their service just then.

If the course of the negotiations between the Packetfahrt and the Carr Line had not already shown it, this agreement would prove without a shadow of doubt that the then head of Morris and Co. had, at the age of twenty-nine, and after twelve years of practical work, gained the premier position in the emigrant business of his native city and also a leading one in the general European emigrant business which in itself is one of the most important branches of the shipping trade. The correspondence between Edward Carr and Ballin furnishes no indication that the latter himself had insisted upon his being taken over by the Packetfahrt or that he had worked with this object.

CHAPTER III

Head of the Packetfahrt’s Passenger Department

On May 31st, 1886, Albert Ballin first took part in a joint meeting of the Board of Trustees and the Board of Directors of the Packetfahrt. On this occasion two proposals were put forward by him: one, to provide new premises for the work connected with the booking of passengers at an annual rent of 5,000 marks; the other, to start a direct service from Stettin to New York via Gothenburg. This latter proposal was prompted by the desire to reduce the influence of the British lines competing for the Hamburg business. Such a reduction could only be brought about if it were proved to the British lines that their position was by no means unassailable. The Scandinavian emigrant business to the United States which for long had been a source of great profit to the British, lent itself admirably to such purposes. Ballin’s proposal was agreed to by the Company’s management, with the result that in July, 1886, a pool agreement was concluded between the Packetfahrt (on behalf of a Stettin Line of steamers) and the Danish Thingvalla Line. Steamers now began to call at Gothenburg and Christiansand on their voyages from Stettin to the United States. The new line was known as the “Scandia Line"; and in later years, when a similar object was aimed at, it was called into existence once more. The aim was not to establish a new steamer service for its own sake, but rather to create an object for compensation which, in the negotiations with the British lines, could be given up again in exchange for concessions on the part of the latter regarding the Hamburg business. If this plan failed, Ballin had another one mapped out: he threatened to attack the British in their own country by carrying steerage passengers either from Liverpool via Havre, or from Plymouth via Hamburg. People in England laughed at this idea. “Surely,” they said, “no British emigrant will travel on a German vessel.” The British lines replied to Ballin’s threat by declaring that they would again reduce to 30s. their rates from Hamburg to New York via a British port. However, the negotiations which Ballin entered into with them in England during the month of September, 1886, soon cleared the air, and led to the conclusion of an agreement towards the end of the year. The Packetfahrt promised to withdraw its Scandia Line, and the British lines, in return, agreed to raise their steerage rates from Hamburg to 85 marks gross, and those from Liverpool, Glasgow, and London to £2 10s. net. A clearing house which should be under the management of a representative of the British lines, and which was also to include the business done by the Bremen agents of the latter, was to be set up in Hamburg. This clearing house was kept on until other and more far-reaching agreements with the British lines made its continued existence superfluous.

The arrangements which Ballin made with the agents represented in the clearing house show his skill in his dealings with other people. The whole agreement, especially the fixing of the terms governing the share to be assigned to the agents—which amounted to 55 per cent, of the Hamburg business—was principally aimed at the realization of as high a rate as possible. This policy proved to be a great success. Another step forward was that the Packetfahrt now consented to accept passengers booked by the agents, thus reversing their previous policy of ignoring them altogether.

The agreement with the British lines also provided that the Union Line should raise its rates to 90 marks, the Packetfahrt to 95 marks, and the Lloyd those charged for its services to Baltimore and New York to 100 and 110 marks respectively. Henceforward both competing groups were equally interested in obtaining as high a rate as possible.

The practical working of the agreement did not fail to give satisfaction, and the Continental lines could, undisturbed by external interference, put their own house in order. A few years later, in 1890, the British lines complained that they did not succeed in getting the percentage of business to which they were entitled. Negotiations were carried on at Liverpool, during which Ballin was present. He pointed out that, considering the whole Continental position, the British lines would be ill-advised to withdraw from the agreement, and he stated that he would be prepared to guarantee them their share (33 per cent.) of the Hamburg business. The outcome was that the British lines declared themselves satisfied with these new stipulations. A few years later, when the British lines joined the Continental Pool, the Hamburg agreement ceased to be necessary, and in 1893 the clearing house was abolished.

The new Emigration Law of 1887—due to the exertions of the North German Lloyd and the Packetfahrt—strengthened the position of the lines running direct services from German ports. Another step forward was the increase of the passage rates which was agreed upon after negotiations had taken place at Antwerp and in England, and after the German, Dutch, and Belgian lines had had a conference at Cologne. Contact was also established with the chief French line concerned.

The improvement, however, was merely temporary. The termination of the struggle for the Hamburg business did not mean that all the differences between all the transatlantic lines had been settled. On the contrary, all the parties concerned gradually realized that it would be necessary to institute quite different arrangements; something to ensure a fairer distribution of the traffic and a greater consolidation of their common interests. A proposal to gain these advantages by the establishment of a pool was submitted by the representative of the Red Star Line at a conference held in the autumn of 1886, and a memorandum written by Ballin, likewise dating from 1886, took up the same idea; but an agreement was not concluded until the close of 1891.

That, in spite of Ballin’s advocacy, five years had to elapse before this agreement became perfect is perhaps to some extent due to the fact that Ballin—who at that time, after all, was only the head of the Passenger Department of his Company—could not always speak with its full authority where his own personal views were concerned. Moreover, the influence of his Company was by no means very considerable in those early days. The only passenger boat of any importance which the Company possessed in the early ’eighties, before Ballin had entered its services, was the Hammonia, and she was anything but a success. She was inferior both as regards her efficiency and her equipment. At last, however, Ballin’s desire to raise the prestige of the Company triumphed, and the building of several fast boats was definitely decided upon. In addition to a comparatively large number of passengers—especially those of the first cabin—they were to carry a moderate amount of cargo. In size they were subject to the restrictions imposed upon them by the shortcomings of the technical knowledge of that time, and by the absence of the necessary improvements in the fairway of the lower Elbe. Speed, after all, was the main consideration; and it was the struggle for the blue riband of the Atlantic which kept the attention of the travelling public riveted on these boats.

A statement giving details of the financial results obtained by the first four of the new fast steamers which were entered into the service of the Company between 1889 and 1891 showed that the earnings up to and including the year 1895 did not even cover the working expenses, and that those up to 1899 were not sufficient to allow for an interest of 4 per cent, on the average book values of the steamers. It must be remembered, however, that the first of these two periods included the disastrous season of 1892-93, when Hamburg was visited by an epidemic of cholera. And a different light is shed on the matter also if we further remember that depreciation had been allowed for on a generous scale, no less than 50 per cent, of the cost price plus the expenditure incurred through an enlargement of the Auguste Victoria, the oldest of the boats, having been deducted on that account. The Packetfahrt, like all the other German shipping companies, has always been very liberal in making ample provision for depreciation. When, therefore, these steamers were sold again at the time of the Spanish-American and Russo-Japanese wars, a considerable profit was realized on the transactions which enabled the Company to replace them by a very high-grade type of vessel (the Deutschland, Amerika, and Kaiserin Auguste Victoria). It must be admitted in this connexion that perhaps no shipowner has ever been more favoured by fortune than Ballin where the sale of such difficult objects as obsolete express steamers was concerned. The value which these boats had in relation to the prestige of the Company was very considerable; for, as Ballin expressed it to me one day: “The possession of the old express steamers of the Packetfahrt certainly proved to be something like a white elephant; but just consider how greatly they have enhanced the prestige of the Company.” They attracted thousands of passengers to the Line, and acted as feeders to its other services.

The orders for the first two of these steamers were given towards the close of 1887 to the Vulkan yard, at Stettin, and to the firm of Laird respectively, at a price of £210,000 each, and the boats were to be completed early in 1889. They were the first twin-screw steamers, and were provided with the system of “forced draught” for the engines. This system had just been introduced in British yards, and Ballin’s attention had been drawn to it by his friend Wilding, who was always ready to give him valuable advice on technical matters. In order to find the means for the construction of these and of some other boats, the general meeting of the shareholders, held on October 6th, 1887, voted a capital increase of 5,000,000 marks and the issue of 6,250,000 marks of debentures. Knowing that an improvement of the services was the great need of the time, Ballin, since the time of joining the Company, had done all he could to make the latter a paying concern again, and in this he succeeded. For the year 1886 a dividend of 5 per cent. was paid, and thus it became possible to sanction an increase of the joint-stock capital.

Further foundations for later successes were laid by the reform of the organization and of the technical services of the Company. His work in connexion with the Carr Line had taught the youthful head of the passenger department that careful attention to the material comfort of the steerage passengers could be of great benefit to the Company. He continued along lines such as these, and at his suggestion the steerage accommodation on two of the Packetfahrt’s steamers was equipped with electric light, and provided with some single berths as well. This latter provision was extended still further during the succeeding year. In addition to the fast steamers, some ordinary ones were also ordered to be built. In 1888 two steamers were ordered for the Company’s West Indies service, and shortly afterwards eight units of the Union Line were bought at a price of 5,200,000 marks. All these new orders and purchases of steamers led to the joint-stock capital being raised from 20 to 30 million marks. Two more boats were laid down in the Stettin Vulkan yard, and a third with the firm of Laird. The express steamer then building at the Vulkan yard was named Auguste Victoria in honour of the young Empress.

During the summer months of 1887 Ballin, together with Mr. Johannes Witt, one of the members of the Board of Trustees, went to New York in order to discuss with the agents a reorganization of the New York representation, which was looked after by Edward Beck and Kunhardt. In consequence of the negotiations which Ballin carried on to that end, the agents undertook to submit their business for the Company to the control of an officer specially appointed by the Packetfahrt. This small beginning led, in later years, to the establishment in New York of the Company’s direct representation under its own management.

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:

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:

The average of both sets of percentage figures worked out as follows:

“It would be necessary,” the memorandum continued, “to calculate each Company’s share annually on the basis of the average figures obtained for the five years immediately preceding, so that, for instance, the calculation for 1887 would be based on the figures for the five years from 1882 to 1886; that for 1888 on those for the period from 1883 to 1887, and so on. Uniform passage rates and uniform rates of commission would have to be agreed upon. To those lines which, like the North German Lloyd, maintained a service which was run by fast steamers exclusively, would have to be conceded the right to charge in their separate accounts passage money up to 10 marks in excess of the normal rates, seeing that their expenses were heavier than those of the other lines. Those Companies, however, claiming differential rates below the general ones agreed upon would have to make up the difference themselves, which was not to exceed the amount of 30 marks—i.e. they would have to contribute to the common pool a sum equal to the general rate without deduction.”

The two cardinal principles lying at the root of this proposal were (1) the assigning to each line of a definite percentage of the total traffic on the basis of the average figures ascertained for a definite period of time, and (2) the possibility of further grading these percentages by taking into account the amount of tonnage which each line placed at the disposal of the joint undertaking. This latter provision—which was known during the early stages of the movement as the tonnage clause—was intended to prevent any single line from stagnation, and to give scope to the spirit of enterprise.

The tonnage clause was not maintained for the whole time during which the pool agreement was in force. It was afterwards abolished at the instance of the North German Lloyd. This event led, in the long run, to the last big crisis which the pool had to pass through by the notice of withdrawal given by the Hamburg-Amerika Linie. When this Company proposed to considerably enlarge its steerage accommodation through the addition to its service of the three big boats of the Imperator class, it demanded a corresponding increase of its percentage figure, and, when this claim fell through owing to the opposition of the North German Lloyd, it gave formal notice of its withdrawal from the pool. Precautions taken to counteract this led to negotiations which had to be discontinued when the war broke out. Nevertheless, the pool, which was first proposed in 1886, and which came into existence in 1892, did a great deal of good. More than once, however, the agreement ceased to be effective for a time, and this was especially the case on the occasion of the struggle with the Cunard Line which followed upon the establishment of the Morgan Trust in 1903.

The secretary of the pool was Heinrich Peters, the former head of the passenger department of the Lloyd. The choice of Mr. Peters is probably not unconnected with the fact that it was he who, at a moment when the negotiations for establishing a pool had reached a critical stage, appeared on the scene with a clearly-defined proposal, so that he, with justice, has been described as “the father of the pool.” Shortly before his death in the summer of 1921 Mr. Peters wrote to me concerning his proposal and the circumstances of its adoption:—

“The history of the events leading up to the creation of the ‘North Atlantic Steamship Lines Association,’” he wrote in his letter, “was not without complications. So much so that after the Conference at Cologne, at which it had been found impossible to come to an understanding, I went to bed feeling very worried about the future. Shortly afterwards—I don’t know whether I was half awake or dreaming—the outline of the plan which was afterwards adopted stood out clearly before my mind’s eye, its main features being that each line should be granted a fixed percentage of the traffic on the basis of ‘Moore’s Statistics’ (reports issued periodically and showing the number of passengers landed in New York at regular intervals), and that the principle of compensation should be applied to adjust differences. When I was fully awake I found this plan so obviously right that, in order not to let it slip my memory, I jotted down a note concerning it on my bedside table. Next morning, when Ballin, Reuchlin (of the Holland American Line), Strasser (of the Red Star Line), and myself met again in the smoking-room of the Hotel du Nord, I told them of my inspiration, and my plan was looked upon by them with so much favour that Ballin said to me: ‘Well now, Peters, you have discovered the philosopher’s stone.’ We then left, previously agreeing amongst ourselves that we would think the matter over at our leisure, and that we should refrain from taking any steps leading to a conflict, at least for the time being. On my return to Bremen I went straight to Lohmann (who was director general of the Lloyd at that time), but he immediately threw a wet blanket over my enthusiasm. His objection was that such an agreement would interfere with the progressive development of the Lloyd. A few days later a meeting of the Board of Trustees was held at which I entered into the details of my proposal; but I am sorry to say that my oratorical gifts were not sufficient to defend it against the objections that were raised, nor to prevent its rejection. I can hardly imagine what the representatives of the other lines must have felt on hearing that it was the Lloyd itself which refused to accept the proposal which had been put forward by its own delegate, although the share allotted to it was very generous. Thus the struggle went on for another eighteen months, and it was not until January, 1892, that the principal lines concerned definitely concluded a pool agreement closely resembling the draft agreement I had originally proposed.

“The North Atlantic Steamship Lines Association was originally intended to remain in existence for the period of five years; but as it was recognized by all parties that it was necessarily a step in the dark, people had become so doubtful as to the wisdom of what they had done that a clause was added to the effect that it could be cancelled after the first six months provided a fortnight’s notice was given by any partner to it. Nevertheless, the agreement successfully weathered a severe crisis during the very first year of its existence, when the disastrous cholera epidemic paralysed the Hamburg trade and shipping.”

That this account is correct is confirmed by the minutes of the Cologne meeting of February 6th, 1890.

The British lines definitely declined in March, 1892, to join the pool. Thus the plan finally agreed upon in 1892 was subscribed to by the Continental lines alone, with the exception of the French line. In contrast with previous proposals, the eastbound traffic was also to be parcelled out by the lines forming the pool.

This so-called North Atlantic Steamship Lines Association, the backbone of the later and greater pool, was built up on the following percentages:

These percentages were subject to the effect of the tonnage clause by which it was provided that 50 per cent. of the tonnage (expressed in gross registered tons) which any line should possess at any time in excess of that possessed in 1890 should entitle such line to an increase of its percentage.

It has already been stated that Mr. Heinrich Peters was appointed secretary of the pool. He, in compliance with the provision that the secretariat should be domiciled at a “neutral” place, chose the small university town of Jena for his residence. Thus this town, so famous in the literary annals of Germany, became, for more than twenty years, the centre of an international organization with which few, if any, other places could vie in importance, especially since the four lines which had just concluded the original pool were joined, in course of time, by the British lines, the French line, the Austrian line, and some Scandinavian and Russian lines as well. Later on a special pool was set up for the Mediterranean business which, in addition to the German, British, and Austro-Hungarian lines, also comprised the French Mediterranean, the Italian, and the Greek lines, as well as one Spanish line. The business of all these lines was centred at Jena.

Of considerable importance to the smooth working of the pool was the court of arbitration attached to its organization. On account of the prominent position occupied by the German companies, German law was agreed to as binding for the decisions, and since at the time when the pool was founded, Germany did not possess a uniform Code of Civil Law for all parts of the Empire, the law ruling at Cologne was recognized to be applicable to such purposes. Cologne was the city at which the establishment of the pool was decided upon, and there all the important meetings that became necessary in course of time were held. The chairman of the Cologne Association of Solicitors was nominated president of the arbitration court, but later on this office devolved on President Hansen, a member of the Supreme Court for the Hanseatic cities, who filled his post for a long term of years—surely a proof of the confidence and esteem with which he was honoured by all parties concerned. Numerous awards issued by him, and still more numerous resolutions adopted at the many conferences, have supplemented the original pool agreement, thus forming the nucleus of a real code of legislation affecting all matters dealing with the pool in which a large number of capable men drawn from the legal profession and from the world of business have collaborated.

The knowledge of these regulations gradually developed into a science of its own, and each line had to possess one or more specialists who were experts in these questions among the members of its staff. I am sure they will unanimously agree that Albert Ballin surpassed them all in his knowledge of the intricate details. His wonderful memory enabled him, after a lapse of more than twenty years, to recall every phase in the history of the pool, so that he acquired an unrivalled mastery in the conduct of pool conferences. This is abundantly borne out by the fact that in 1908, when negotiations were started in London for the establishment of a general pool—i.e. one comprising the whole of Northern Europe, including Great Britain—Ballin, at the proposal of the British lines, was selected chairman of the conference which, after several critical phases had been passed through, led to a complete success and an all-round understanding.

In 1892 the normal development of business was greatly handicapped by the terrible epidemic of cholera then raging in Hamburg. For a time the United States completely closed her doors to all emigrants from the Continent, and it was not until the following year that conditions became normal again. Nevertheless Ballin, in order to extend the various understandings between the Northern European lines, took an important step, even before the close of 1892, by falling back upon a measure which he had already once employed in 1886. His object was to make the British lines more favourably inclined towards an understanding, and to this end he attacked them once more in the Scandinavian business. The actual occasion which led to the conflict was that the British lines, owing to differences of opinion among themselves, had given notice of withdrawal from the Hamburg agreement and from the Hamburg clearing house. This gave the Packetfahrt a free hand against its British competitors, and enabled it to carry as many as 2,500 Scandinavian passengers via Hamburg in 1892. The position of the Packetfahrt during the ensuing rate war was considerably improved by the agreement which it had concluded with the Hamburg agents of the British lines, who, although their principals had declared their withdrawal from the pool, undertook to maintain the rate which had been jointly agreed upon by both parties.

Some time had to elapse before this move had its desired effect on the British lines. Early in 1894 they declared themselves ready to come to an understanding with the Continental lines on condition that they were granted 7 per cent. of the Continental traffic (in 1891 they had been offered 14 per cent.), and that the Packetfahrt was to discontinue its Scandia Line.

This general readiness of the British companies, however, did not preclude the hostility of some of their number against any such agreement, and so the proposal fell through. The proposed understanding came to grief owing to the refusal of the Cunard Line to join a Continental pool at the very moment when the negotiations with the British lines had, after a great deal of trouble, led to a preliminary understanding with them. A letter which Ballin received from an English friend in January, 1894, shows how difficult it was to make the British come round to the idea of a pool. In this letter it was said that the time was not ripe then for successfully persuading the British lines to join any pool or any other form of understanding which would necessitate agreement on a large number of details. All that could be expected to be done at the time, the writer continued, was a rate agreement of the simplest possible kind, and he thought that if such an understanding were agreed to and loyally carried out, that would be an important step forward towards arriving at a general agreement of much wider scope.

To such vague agreements, however, the Continental lines objected on principle, and the opposition of the Cunard Line made it impossible to agree upon anything more definite. Thus the struggle was chiefly waged against this line. The Continental lines were assisted by the American Line, which had sailings from British ports, and with the management of which Ballin had been on very friendly terms ever since the time when he, as the owner of the firm of Morris and Co., had worked for it. After the conflict had been going on for several months, it terminated with a victory of the Continental lines. Thus the road was at last clear for an attempt to make the whole North Atlantic business pay.

The first step in that direction was the conclusion, in 1896, of an agreement concerning the cabin business. The Packetfahrt’s annual report for that year states that the results obtained through the carrying of cabin passengers could only be described as exceedingly unfavourable, considering that the huge working expenses connected with that kind of business had to be taken into account. Nevertheless, this traffic, which had reached a total of more than 200,000 passengers during the preceding year, could be made a source of great profit to the companies if they could be persuaded to act in unison. The agreement then concluded was at first restricted to the fixing of the rates on a uniform scale.

Both these agreements—the one dealing with the steerage and the one dealing with the cabin business—were concluded, in 1895, for three years in the first instance. In May, 1898, discussions were opened in London, at which Ballin presided, with a view to extending the period of their duration, and these proceedings, after a time, led to a successful conclusion, but in June, Ballin again presiding, the desired understanding was reached. A few weeks later an agreement concerning the second cabin rates was also arrived at, and towards the close of the year negotiations were started with a view to the extension of the steerage agreement. In 1899 the pool was extended to run for a further period of five years, under percentages:

To the Packetfahrt these new percentages meant a step forward, although the omission of the tonnage clause was a decided hindrance to its further progress.

The next important event in the development of the relations between the transatlantic lines was the establishment of the so-called Morgan Trust and the conclusion of a “community of interest” agreement between it and the German lines.

CHAPTER V

THE MORGAN TRUST

Speaking generally, the transatlantic shipping business may be said to consist of three great branches, viz. the cargo, the steerage, and the cabin business. The pool agreements that were concluded between the interested companies covered only the cargo business and the steerage traffic. The condition which alone makes it possible for the owners to work the shipping business on remunerative lines is that all needless waste of material must be strictly banned. The great advantage which was secured by concluding the pool agreement was that it satisfied this condition during the more than twenty years of its existence, to the mutual profit of the associated lines. Each company knew that the addition of new steamers to its fleet would only pay if part of a carefully considered plan, and if, in course of time, such an increase of tonnage would give it a claim to an increase of the percentage of traffic allotted to its services.

Much less satisfactory was the state of things with regard to the third branch of the shipping business, viz. the cabin traffic. A regular “cabin pool,” with a pro rata distribution of the traffic, was never established, although the idea had frequently been discussed. All that was achieved was an agreement as to the fares charged by each company which were to be graded according to the quality of the boats it employed in its services. Owing to the absence of any more far-reaching understandings, and to the competition between the various companies—each of which was constantly trying to outdo its competitors as regards the speed and comfort of its boats, in order to attract to its own services as many passengers as possible—the number of first-class boats increased out of all proportion to the actual requirements, and frequent and regular services were maintained by each line throughout the year. There was hardly a day on which first-class steamers did not enter upon voyages across the Atlantic from either side, and the result was that the boats were fully booked during the season only, i.e. in the spring and early part of summer on their East-bound, and in the latter part of summer and in the autumn on their Westbound, voyages. During the remaining months a number of berths were empty, and the fares obtainable were correspondingly unprofitable. Ballin, in 1902, estimated the unnecessary expenditure to which the companies were put in any single year owing to this unbusinesslike state of affairs at not less then 50 million marks. The desire to do away with conditions such as these by extending the pool agreement so as to develop it into a community-of-interest agreement of comprehensive scope was one of the two principal reasons leading to the formation of the Morgan Trust. The other reason was the wish to bring about a system of co-operation between the European and the American interests.

This desire was prompted by the recognition of the cardinal importance to the transatlantic shipping companies of the economic conditions ruling in the United States. The cargo business depended very largely on the importation of European goods into the United States, and on the exportation of American agricultural produce to Europe which varied from season to season according to the size of the crop and to the consuming capacity of Europe. The steerage business, of course, relied in the main on the capacity of the United States for absorbing European immigrants, which capacity, though fluctuating, was practically unlimited. The degree of prosperity of the cabin business, however, was determined by the number of people who travelled from the States to Europe, either on business, or on pleasure, or to recuperate their health at some European watering-place, at the Riviera, etc. Social customs and the attractions which the Paris houses of fashion exercised on the American ladies also formed a considerable factor which had to be relied on for a prosperous season. In the transatlantic shipping business, in fact, America is pre-eminently the giving, and Europe the receiving, partner. Thus it was natural to realize the advisability of entering into direct relations with American business men.

To the Packetfahrt, and especially to Ballin, credit is due for having attempted before anybody else to give practical shape to this idea. His efforts in this direction date far back to the early years of his business career. We possess evidence of this in the form of a letter which he wrote in 1891 to Mr. B. N. Baker, who was at the head of one of the few big American shipping companies, the Atlantic Transport Company, the headquarters of which were at Baltimore, and which ran its services chiefly to Great Britain. Mr. Baker was a personal friend of Ballin’s. The letter was written after some direct discussions had taken place between the two men, and its contents were as follows:—

It may be assumed that the writing of this letter was prompted not only by the Packetfahrt’s desire to strengthen its position in the United States, but also by its wish to obtain a foothold in Great Britain. This would enable it to exercise greater pressure on the competing British lines, which—indirectly, at least—still did a considerable portion of the Continental business. Ballin’s suggestion did not lead to any practical result at the time, but was taken up again eight years later, in 1899, on the advice of Mr. (now Lord) Pirrie, of Messrs. Harland and Wolff, of Belfast. Important interests, partly of a financial character, linked his firm to British transatlantic shipping; and his special reason for taking up Ballin’s proposal was to prevent an alliance between Mr. Baker’s Atlantic Transport Company and the British Leyland Line, a scheme which was pushed forward from another quarter. He induced Mr. Baker to come to Europe so that the matter might be discussed directly. The attractiveness of the idea to Ballin was still further enhanced by the circumstance that the Atlantic Transport Line also controlled the National Line which maintained a service between New York and London, and was, indeed, the decisive factor on the New York-London route. Ballin, accordingly, after obtaining permission from the Board of Trustees, went to London, where he met Mr. Baker and Mr. Pirrie.

It soon became clear, however, that the Board of Trustees did not wish to sanction such far-reaching changes. When Ballin cabled the details of the scheme to Hamburg, it was seen that 25 million marks—half the amount in shares of the Packetfahrt—would be needed to carry it through. Thus the discussions had to be broken off; but the attitude which the Board had taken up was very much resented by Ballin. Subsequent negotiations which were entered into in the early part of 1900 in Hamburg at the suggestion of Mr. Baker also failed to secure agreement, and shortly afterwards the American company was bought up by the Leyland Line.

At the same time a movement was being set on foot in the United States which aimed at a strengthening of the American mercantile marine by means of Government subsidies. This circumstance suggested to Mr. Baker the possibility of setting up an American shipping concern consisting of the combined Leyland and Atlantic Transport Company lines together with the British White Star Line, which was to profit by the expected legislation concerning shipping subsidies. Neither the latter idea, however, nor Mr. Baker’s project assumed practical shape; but the Atlantic Transport-Leyland concern was enlarged by the addition of a number of other British lines, viz. the National Line, the Wilson-Furness-Leyland Line, and the West Indian and Pacific Line, all of which were managed by the owner of the Leyland Line, Mr. Ellerman, the well-known British shipping man of German descent. The tonnage represented by these combined interests amounted to half a million tons, and the new combine was looked upon as an undesirable competitor, by both the Packetfahrt and the British lines. The dissatisfaction felt by the latter showed itself, among other things, in their refusal to come to any mutual understanding regarding the passenger business. In the end, Mr. Baker himself was so little pleased with the way things turned out in practice that he severed his connexion with the other lines shortly afterwards, and once more the question became urgent whether it would be advisable for the Packetfahrt—either alone, or in conjunction with the White Star Line and the firm of Messrs. Harland and Wolff—to purchase the Atlantic Transport Line.

That was the time when Mr. Pierpont Morgan’s endeavours to create the combine, which has since then become known as the Morgan Trust, first attracted public attention. Ballin’s notes give an exhaustive description of the course of the negotiations which lasted nearly eighteen months and were entered into in order to take precautions against the danger threatening from America, whilst at the same time they aimed at some understanding with Mr. Morgan, because the opportunity thus presented of setting up an all-embracing organization promoting the interests of all the transatlantic steamship concerns seemed too good to be lost. Ballin’s notes for August, 1901, contain the following entry:

“The grave economic depression from which Germany is suffering is assuming a more dangerous character every day. It is now spreading to other countries as well, and only the United States seem to have escaped so far. In addition to our other misfortunes, there is the unsatisfactory maize-crop in the States which, together with the other factors, has demoralized the whole freight business within an incredibly short space of time. For a concern of the huge size of our own such a situation is fraught with the greatest danger, and our position is made still worse by another circumstance. In the States, a country whose natural resources are wellnigh inexhaustible, and whose enterprising population has immensely increased its wealth, the creation of trusts is an event of everyday occurrence. The banker, Pierpont Morgan—a man of whom it is said that he combines the possession of an enormous fortune with an intelligence which is simply astounding—has already created the Steel Trust, the biggest combination the world has ever seen, and he has now set about to lay the foundations for an American mercantile marine.”

A short report on the position then existing which Ballin made for Prince Henckell-Donnersmarck, who had himself called into being some big industrial combinations, is of interest even now, although the situation has entirely changed. But if we want to understand the position as it then was we must try to appreciate the views held at that time, and this the report helps us to do. Ballin had been referred to Prince Henckell-Donnersmarck by the Kaiser, who had a high opinion of the latter’s business abilities, and who had watched with lively interest the American shipping projects from the start, because he anticipated that they would produce an adverse effect on the future development of the German shipping companies. The report is given below:—

The negotiations which Ballin carried on in this connexion are described as follows in his notes:—

The draft agreement, which was discussed at these meetings in London (and which was considerably altered later on), provided that it should run for ten years, and that a mutual interchange of shares between the two concerns should be effected, the amount of shares thus exchanged to represent a value of 20 million marks (equivalent to 25 per cent. of the joint-stock capital of the Hamburg-Amerika Linie). Mutual participation was provided for in case of any future increase in the capital of either company; but the American concern was prohibited from purchasing any additional shares of the Hamburg-Amerika Linie. The voting rights for the Hamburg shares should be assigned to Ballin for life, and those for the American shares to Morgan on the same terms. Instead of actually parting with its shares, the Hamburg company was to have the option of paying their equivalent in steamers. The agreement emphasized that, whilst recognizing the desirability of as far-reaching a financial participation as possible, Ballin did not believe that, with due regard to German public opinion and to the wishes of the Imperial Government, he was justified in recommending an interchange of shares exceeding the amount agreed upon. The American concern was prohibited from calling at any German ports, and the Hamburg company agreed not to run any services to such European ports as were served by the other party. A pool agreement covering the cabin business was entered into; and with respect to the steerage and cargo business it was agreed that the existing understandings should be maintained until they expired, and that afterwards a special understanding should be concluded between both contracting parties.

Immediately after Ballin’s return to Hamburg the Board of Trustees unanimously expressed its agreement in principle with the proposals.

“For my own part,” Ballin says in his notes on these matters, “I declared that I could only regard the practical execution of these proposals as possible if they receive the unequivocal assent of the Kaiser and of the Imperial Chancellor. Next evening I was surprised to receive two telegrams, one from the Lord Chamberlain’s office, and one from the Kaiser, commanding my presence on the following day for dinner at the Hubertusstock hunting lodge of the Kaiser, where I was invited to stay until the afternoon of the second day following. I left for Berlin on the same evening, October 16th (1901); and, together with the Chancellor, I continued my journey the following day to Eberswalde. At that town a special carriage conveyed us to Hubertusstock, where we arrived after a two-hours’ drive, and where I was privileged to spend two unforgettable days in most intimate intercourse with the Kaiser. The Chancellor had previously informed me that the Kaiser did not like the terms of the agreement, because Metternich had told him that the Americans would have the right to acquire 20 million marks’ worth of our shares. During an after-dinner walk with the Kaiser, on which we were accompanied by the Chancellor and the Kaiser’s A.D.C., Captain v. Grumme, I explained the whole proposals in detail. I pointed out to the Kaiser that whereas the British lines engaged in the North Atlantic business were simply absorbed by the trust, the proposed agreement would leave the independence of the German lines intact. This made the Kaiser inquire what was to become of the North German Lloyd, and I had to promise that I would see to it that the Lloyd would not be exposed to any immediate danger arising out of our agreement, and that it would be given an opportunity of becoming a partner to it as well. The Kaiser then wanted to see the actual text of the agreement as drafted in London. When I produced it from my pocket we entered the room adjacent to the entrance of the lodge, which happened to be the small bedroom of Captain v. Grumme; and there a meeting, which lasted several hours, was held, the Kaiser reading out aloud every article of the agreement, and discussing every single item. The Kaiser himself was sitting on Captain v. Grumme’s bed; the Chancellor and myself occupied the only two chairs available in the room, the Captain comfortably seating himself on a table. The outcome of the proceedings was that the Kaiser declared himself completely satisfied with the proposals, only commissioning me, as I have explained, to look after the interests of the North German Lloyd.

“On the afternoon of the following day, after lunch, the Chancellor and I returned to Berlin, this giving me a chance of discussing with the former—as I had previously done with the Kaiser—every question of importance. On October 18th I arrived back in Hamburg.”

The negotiations with the North German Lloyd which Ballin had undertaken to enter upon proved to be very difficult, the Director General of that company, Dr. Wiegand, not sharing Ballin’s views with respect to the American danger and the significance of the American combination. After Ballin, however, had explained the proposals in detail, the Lloyd people altered their previously held opinion, and in the subsequent London discussions, which were resumed in November, the President of the Lloyd, Mr. Plate, also took part. Nevertheless, it was found impossible to agree definitely there and then, and a further discussion between the two directors general took place at Potsdam on November 13th, both of them having been invited to dinner by the Kaiser, who was sitting between the two gentlemen at the table. Ballin’s suggestion that he and Dr. Wiegand should proceed to New York in order to ascertain whether the shipping companies and the American railroads had actually entered into a combination, was heartily seconded by the Kaiser, and was agreed to by Dr. Wiegand. The Lloyd people, however, were still afraid that the proposed understanding would jeopardize the independence of the German lines; but Ballin, by giving detailed explanations of the points connected with the financial provisions, succeeded in removing these fears, and the Board of Trustees of the Lloyd expressed themselves satisfied with these explanations. They insisted upon the omission of the clauses dealing with the financial participation, but agreed to the proposals in every other respect.

The arrangements for such mutual exchange of shares were thereupon dropped in the final drafting of the agreement, and were replaced by a mutual participation in the distribution of dividends, the American concern guaranteeing the German lines a dividend of 6 per cent., and only claiming a share in a dividend exceeding that figure. This change owed its origin to a proposal put forward by Mr. v. Hansemann, the Director of the Disconto-Gesellschaft, who had taken an active interest in the development of the whole matter.

In the course of the negotiations the Lloyd made a further proposal by which it was intended to safeguard the German national character of the two great shipping companies. It was suggested that a corporation—somewhat similar to the Preussische Seehandlung—should be set up by the Imperial Government with the assistance of some privately owned capital. This corporation should purchase such a part of the shares of each company as would defeat any attempts at destroying their national character. Ballin, however, to whom any kind of Government interference in shipping matters was anathema, would have nothing to do with this plan, and thus it fell through.

Ballin thereupon having informed the Kaiser in Kiel on board the battleship Kaiser Wilhelm II regarding the progress of the negotiations, a further meeting with the Lloyd people took place early in December, which led to a complete agreement among the two German companies as to the final proposals to be submitted to the American group; and shortly afterwards, at a meeting held at Cologne, agreement was also secured with Mr. Pirrie. The final discussions took place in New York early in February, Ballin and Mr. Tietgens, the chairman of the Board of Directors, acting on behalf of the Hamburg-Amerika Linie, and President Plate and Dr. Wiegand on that of the Lloyd. Meanwhile, Morgan’s negotiations with the White Star Line and other British companies had also led to a successful termination. Concerning the New York meetings we find an interesting entry in Ballin’s diary:

At the request of the American group the publication of the agreement was delayed for some time, because it was thought desirable to wait for the final issue of the Congress debates on the Subsidies Bill. A report which Ballin, after some further discussion with Morgan and his London friends had taken place, made for the German Embassy in London, describes the situation as it appeared in April, 1902. It runs as follows:

The first semi-official announcement dealing with the combine was published on April 19th by the British Press, and at an Extraordinary General Meeting of the Hamburg-Amerika Linie on May 28th, the public was given some carefully prepared information about the German-American agreement. At that meeting Dr. Diederich Hahn, the well-known chairman of the Bund der Landwirte (Agrarian League), rose, to everybody’s surprise, to inquire if it was the case that the national interests, and especially the agricultural interests of Germany, would be adversely affected by the agreement. The ensuing discussion showed Ballin at his best. He allayed Dr. Hahn’s fears lest the American influence in the combination would be so strong as to eliminate the German influence altogether by convincing him that the whole agreement was built up on a basis of parity, and that the German interests would not be jeopardized in any way. The argument that the close connexion established between the trust and the American railroad companies would lead to Germany being flooded with American agricultural produce he parried by pointing out that the interests of the American railroads did not so much require an increased volume of exports, but rather of imports, because a great disproportion existed between their eastbound and their westbound traffic, the former by far exceeding the latter, so that a further increase in the amount of goods carried from the western part of the country to the Atlantic seaports would only make matters worse from the point of remunerative working of their lines.

What Ballin thought of the system of Government subsidies in aid of shipping matters is concisely expressed by his remarks in a speech which he made on the occasion of the trial trip of the s.s. Blücher, when he said: “If it were announced to me to-day that the Government subsidies had been stolen overnight, I should heave a sigh of relief, only thinking what a pity it was that it had not been done long ago.”

In Great Britain the news that some big British shipping companies had been purchased by the American concern caused a great deal of public excitement. In Ballin’s diary we find the following entry under date of June 5th:

An outcome of the German-American arrangements was that Morgan and his friends were invited by the Kaiser to take part in the festivities connected with the Kiel Week. The American gentlemen were treated with marked attention by the Kaiser, and extended their visit so as to include Hamburg and Berlin as well.

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.

The Hungarian situation became still more complicated after the receipt of some information that reached Ballin from Vienna to the effect that the Austrian Government intended to imitate the example set by the Hungarian Government by running a service from Trieste. After prolonged discussions the Austrian Government also undertook not to grant an emigration licence to the Cunard Line so long as the struggle between the two competing concerns was not settled.

Thereupon this struggle of the pool lines—both the Continental and the British ones—against the Cunard Line was started in real earnest, not only for the British but also for the Scandinavian and the Fiume business. After some time negotiations for an agreement were opened in London in July on the initiative and with the assistance of Mr. Balfour, who was then President of the Board of Trade. These, however, led to no result, and a basis for a compromise was not found until August, 1904, when renewed negotiations took place at Frankfort-On-Main. A definite understanding was reached towards the close of the same year, and then at last this struggle, which was really one of the indirect consequences of the establishment of the Morgan Trust, came to an end.

Looked upon from a purely business point of view, the Morgan Trust—or, to call it by its real name, the “International Mercantile Marine Company,” which in pool slang, was simply spoken of as the “Immco Lines"—was doubtless a failure. Only the World War, yielding, as it did, formerly unheard-of profits to the shipping business of the neutral and the Allied countries, brought about a financial improvement, but it is still too early to predict whether this improvement will be permanent. The reasons why the undertaking was bound to be unremunerative before the outbreak of the war are not far to seek, and include the initial failure of its promoters to secure the adhesion of the Cunard Line—a failure which, as is shown by Ballin’s notes, was to a large extent due to the hesitating policy of the Hamburg company. To make business as remunerative as possible was the very object for which the Trust was formed, but the more economical working which was the means to reach this end could not be realized while such an essential factor as the Cunard Line not only remained an outsider, but even became a formidable competitor.

It can hardly be doubted that the adhesion of the Cunard Line to the Morgan Trust—or, in other words, the formation of a combine including all the important transatlantic lines without exception—would have brought about such a development of the pool idea as would have led to a much closer linking-up of the financial interests of the individual partners than could be achieved under a pool agreement. Under such a “community of interest” agreement, every inducement to needless competition could be eliminated, and replaced by a system of mutual participation in the net profits of each line. This was the ideal at which Ballin, taught by many years of experience, was aiming.

Over and over again the pool lines had an opportunity of finding out that it paid them better to come to a friendly understanding, even if it entailed a small sacrifice, than to put up a fight against a new competitor. Sometimes, indeed, an understanding was made desirable owing to political considerations. However, the number of participants ultimately grew so large that Ballin sarcastically remarked: “Sooner or later the pool will have to learn how to get along without us,” and he never again abandoned his plan of having it replaced by closely-knit community of interest agreements which would be worked under a centralized management, and therefore produce much better results. In other branches of his activities—e.g. in his agreements with the other Hamburg companies and in the one with the Booth Line, which was engaged in the service to Northern Brazil, he succeeded in developing the existing understandings into actual community of interest agreements, and it seems that these have given all-round satisfaction. The negotiations between himself and the North German Lloyd shortly before the outbreak of the war were carried on with the same object.

Throughout the endless vicissitudes in the history of the pool the formation of the Morgan Trust decidedly stands out as the most interesting and most dramatic episode. At the present time the position of the German steamship companies in those days seems even more imposing than it appeared to the contemporary observer. To-day we can hardly imagine that some big British lines should, one after the other, be offered for purchase first to some German, and then to the American concerns. Such a thing was only possible because at that time British shipping enterprise was more interested in the employment of tramp steamers than in the working of regular services, the shipowners believing that greater profits could be obtained by the former method. The result was a noticeable lack of leading men fully qualified to speak with authority on questions relating to the regular business, whereas in Germany such men were not wanting. The transatlantic business threatened, in fact, to become more and more the prerogative of the German-American combination. To-day, of course, it is no longer possible to say with certainty whether the Cunard Line could have been induced to join that combination, if the right moment had not been missed. The great danger with which British shipping was threatened at that time, and the great success which the German lines achieved, not only stirred British public opinion to its depths, but also acted as a powerful stimulus on the shipping firms themselves. This caused a pronounced revival of regular line shipping, which went so far that tramp shipping became less and less important, and which ultimately led to a concentration of the former within the framework of a few large organizations which exercise a correspondingly strong influence on present-day British shipping in general. These organizations differ from the big German companies by the circumstance that they represent close financial amalgamations and that they have not, like the German companies, grown up slowly and step for step with the expanding volume of transatlantic traffic.

CHAPTER VI

The Expansion of the Hamburg-Amerika Linie

The principal work which fell to Ballin’s share during the period immediately following his nomination in 1888 on the Board of his company was that connected with the introduction of the fast steamers and the resulting expansion of the passenger business. Offices were established in Berlin, Dresden, and Frankfort-On-Main in 1890, and arrangements were made with the Hamburg-South American S.S. Co., the German East Africa Line, and the Hansa Line—the latter running a service to Canada—by which these companies entrusted the management of their own passenger business to the Packetfahrt. Thus, step by step, the passenger department developed into an organization the importance of which grew from year to year.

The expansion of the passenger business also necessitated an enlargement of the facilities for the dispatch of the Company’s steamers. This work had been effected until then at the northern bank of the main Elbe, but in 1888 it was transferred to the Amerika-Kai which was newly built at the southern bank; and when the normal depth of the fairway of the Elbe was no longer sufficient to enable the fast steamers of considerable draught to come up to the city, it was decided to dispatch them from Brunshausen, a small place situated much lower down the Elbe. In the long run, however, it proved very inconvenient to manage the passenger dispatch from there, and the construction of special port facilities at Cuxhaven owned by the Company was taken in hand. The accommodation at the Amerika-Kai, although it was enlarged as early as 1889, was soon found to be inadequate, so that it was resolved to provide new accommodation at the Petersen-Kai, situated on the northern bank of the Elbe, and this project was carried out in 1893.

The number of services run by the Company was augmented in those early years by the establishment of a line to Baltimore and another to Philadelphia. In 1889 a new line starting from New York was opened to Venezuelan and Colombian ports. The North Atlantic services were considerably enlarged in 1892, when the Company took over the Hansa Line.

The desire to find remunerative employment for the fast steamers during the dead season of the North Atlantic passenger business prompted the decision to enter these boats into a service from New York to the Mediterranean during the winter months. The same desire, however, also gave rise to one of the most original ideas carried into practice through Ballin’s enterprise, i.e. the institution of pleasure trips and tourist cruises. It may perhaps be of interest to point out in this connexion that, about half a century earlier, another Hamburg shipping man had thought of specially fitting out a vessel for an extended cruise of that kind. I do not know whether this plan was carried out at the time, and whether Ballin was indebted to his predecessor for the whole idea; in any case, the following advertisement which appeared in the Leipziger Illustrierte Zeitung, and which I reprint for curiosity’s sake, was found among his papers.

Ballin’s idea of running a series of pleasure cruises did not meet with much support on the part of his associates; the public, however, took it up with enthusiasm from the very start. Early in 1891 Ballin himself took part in the first trip to the Far East on board the express steamer Auguste Victoria. Organized pleasure trips on a small scale were by no means an entire novelty in Germany at that time; the Carl Stangen Tourist Office in Berlin, for instance, regularly arranged such excursions, including some to the Far East, for a limited number of participants. To do so, however, for as many as 241 persons, as Ballin did, was something unheard-of until then, and necessitated a great deal of painstaking preparation. Among other things, the itinerary of the intended cruise, owing to the size and the draught of the steamer used, had to be carefully worked out in detail, and arrangements had to be made beforehand for the hotel accommodation and for the conveyance of passengers during the more extended excursions on shore. All these matters gave plenty of scope to the organizing talents of the youthful director, and he passed the test with great credit.

The first Far Eastern cruise proved so great a success that it was repeated in 1892. In the following year it started from New York, surely a proof that the Company’s reputation for such cruises was securely established not in Germany alone, but in the States as well. Meanwhile, however, Hamburg had been visited by a terrible catastrophe which enormously interfered with the smooth working of the Company’s express steamer services. This was the cholera epidemic during the summer of 1892. It lasted several weeks, and thousands of inhabitants fell victims to it. Those who were staying in Hamburg in that summer will never forget the horrors of the time. In the countries of Northern Europe violent epidemics were practically unknown, and the scourge of cholera especially had always been successfully combated at the eastern frontier of Germany, so that the alarm which spread over the whole country, and which led to the vigorous enforcement of the most drastic measures for isolating the rest of Germany from Hamburg, may easily be comprehended, however ludicrous those measures in some instances might appear. There are no two opinions as to the damage they inflicted on the commerce and traffic of the city. The severest quarantine, of course, was instituted in the United States, and the passenger services to and from Hamburg ceased to be run altogether, so that the transatlantic lines decided to temporarily suspend the steerage pool agreement they had just concluded. The Packetfahrt, in order not to stop its fast steamer services completely, first transferred them to Southampton, and afterwards to Wilhelmshaven, thus abstaining from dispatching these boats to and from Hamburg. The steerage traffic had to be discarded entirely, after an attempt to maintain it, with Stettin as its home port, had failed. Financially this epidemic and its direct consequences brought the Company almost to the verge of collapse, and the Packetfahrt had to stop altogether the payment of dividends for 1892, 1893, and 1894.

Business was resumed in 1893, but at first it was very slow. Every means were tried to induce the United States to rescind her isolation measures. An American doctor was appointed in Hamburg; disinfection was carried out on a large scale; with great energy the city set herself to prevent the recurrence of a similar disaster. The Packetfahrt, in conjunction with the authorities, designed the plans for building the emigrants’ halls situated at the outskirts of the city, which are unique of their kind and are still looked upon as exemplary. These plans owe their origin to the extremely talented Hamburg architect, Mr. Thielen, whose early death is greatly to be regretted.

An important innovation was the establishment of regular medical control and medical treatment for the emigrants from the East of Europe on their reaching the German frontier, a measure which was decided upon and taken in hand by the Prussian Government. The expansion of the Packetfahrt’s business, of course, was most adversely affected by the epidemic and its after-effects; and several years of consolidation were needed before the latter could be overcome. Consequently, hardly any new services were opened during the years immediately following upon the epidemic.

An important step forward, which greatly strengthened the earning capacities of the Company’s resources, was taken in 1895, when the building orders for the steamers of the “P” class were given. These vessels were of large size but of moderate speed. They were extremely seaworthy, and were capable of accommodating a great many passengers, especially steeragers, as well as of carrying large quantities of cargo. The number of services run by the Company was added to in 1893 by a line from New York to Italy, and in the following year by one from Italy to the River Plate. Pool agreements were concluded with the Lloyd and the Allan Line with respect to the first-named route, and with the Italian steamship companies with respect to the other. The agreement with the Italians, however, did not become operative until a few years afterwards.

In 1897 the Packetfahrt celebrated the fiftieth anniversary of its existence—an event in which large sections of the public took a keen interest. Perhaps the most noteworthy among the immense number of letters of congratulation which the Company received on that occasion is the one sent by the chairman of the Cunard Line, of which the verbatim text is given below. It was addressed to one of the directors in reply to an invitation to attend the celebrations in person.

Towards the latter end of the ’nineties, at last, a big expansion of the Company’s activities set in. In 1897 the Hamburg-Calcutta Line was purchased, but the service was discontinued, the steamers thus acquired being used for other purposes. Shortly before the close of the same year a suggestion was put forward by some Hamburg firms that were engaged in doing business with the Far East that the Packetfahrt should run a service to that part of the world.

Just then the steamship companies engaged in the Far Eastern trade were on the point of coming to a rate agreement among themselves; and the management of the Packetfahrt which, owing to the offer held out to it by Hamburg, Antwerp, and London firms, could hope to rely on finding a sure basis for its Far Eastern business, did not consider it wise to let the favourable opportunity slip. Quick decision and rapid action, before the proposed agreement of the interested lines had become an accomplished fact, were necessary; because, once the gates were closed, an outsider would find it difficult to gain admission to the ring.

Hence the negotiations with a view to the Packetfahrt joining in the Far Eastern business, which had only been started during the second half of December, 1897, came to a close very soon; and in the early days of January, 1898, the Packetfahrt advertised its intention of running monthly sailings to Penang, Singapore, Hongkong, Shanghai, Yokohama, and Hiogo. Six cargo steamers of 8,000 tons burden were entered into the new service; and simultaneously an announcement was made to the effect that large fast passenger boats would be added to it as soon as the need for these should make itself felt.

The participation in the Far Eastern business, and the consequent taking over of competing lines or the establishment of joint services with them, was not the only important event of the year 1898 as far as the development of the Packetfahrt is concerned. In the spring of that same year an agreement was made with the Philadelphia Shipping Company—which, in its turn, had an agreement with the Pennsylvania Railroad Company—by which the Packetfahrt undertook to run a regular service of cargo steamers between Hamburg and Philadelphia.

An event of still greater importance, however, was the outbreak of war between the United States and Spain which also took place in that year. The Spanish Government desired to strengthen the fighting power of its navy by the addition of several auxiliary cruisers; and even some time before the war broke out an offer reached the Packetfahrt through the intermediary of a third party to purchase its two express steamers, Columbia and Normannia, which were among the fastest ocean-liners afloat. Before accepting this offer, the Packetfahrt, in order to avoid the reproach of having committed a breach of neutrality, first offered these two steamers to the United States Government; but on its refusal to buy them, they were sold to the British firm acting on behalf of the Spanish Government, and re-sold to the latter. As the Packetfahrt had allowed a high rate of depreciation on the two boats, their book-value stood at a very low figure; and the considerable profit thus realized enabled it to acquire new vessels for the extension of its passenger services.

Meanwhile a new express steamer, the Kaiser Wilhelm der Grösse, had been added to the fleet of the North German Lloyd. Ballin, having made a voyage on board this vessel to New York, reported to the Trustees of his Company that he considered her a splendid achievement. Owing to the heavy working expenses, however, she would not, he thought, prove a great success from a financial point of view. He held that the remunerativeness of express steamers was negatived by the heavy working expenses and, as early as 1897, had projected the construction of two steamers of very large proportions, but of less speed. This, however, was not carried out. Instead, the Packetfahrt decided to build a vessel which was to be bigger and faster still than the Kaiser Wilhelm der Grösse. The new liner was built by the Stettin Vulkan yard, and completed in 1900. She was the Deutschland, the famous ocean greyhound, a great improvement in size and equipment, and she held the blue riband of the Atlantic for a number of years.

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:—

The brief statement in which Ballin summarized the results of his trip from a business point of view is appended:—

This list summarizes the contents of a long series of letters from all parts of the world where Ballin’s keen insight, long foresight, and business acumen suggested to his alert mind possibilities of extending Packetfahrt shipping interests. Time translated many of his suggestions into flourishing actualities, some of which survived the 1914-18 years; others disappeared in the cataclysm; others, again, by the lapse of time have not the keen general interest that appertained to the ideas when they fell fresh-minted from his pen. The following, however, in regard to China and Japan, are worthy of record:

In 1903 far-reaching alterations were made in the relations existing between the Hamburg-Amerika Linie and the North German Lloyd, which had become somewhat less friendly than usual in more respects than one; and in particular the agreement concerning the Far Eastern services of both companies was subjected to some considerable modifications.

The year 1903 is also remarkable for an event which, although not of great importance from the business point of view, is of interest in other respects. This event was the establishment of business relations with a Danish company concerning, in the first place, the West Indian trade, and later that with Russia also. The Danish concern in question was the East Asiatic Company, of Copenhagen. The founder of this company was a Mr. Andersen, one of the most successful business men known to modern commercial enterprise, and certainly not only the most successful one of his own country, but also one of high standing internationally. When still quite young he founded a business in Further India which, although conducted at first on a small scale only, he was able to extend by the acquisition of valuable concessions, especially of teak-wood plantations in Siam. In course of time this business developed into a shipping firm which, owing to the concessions just mentioned, was always in a position to ship cargo of its own—an advantage which proved inestimable when business was bad and no other freight was forthcoming. When Mr. Andersen returned to Europe he continued to enlarge his business, making Copenhagen its centre. He enjoyed the special patronage of the Danish Royal Family, and afterwards also that of the Imperial Russian family. His special well-wisher and a partner of his firm was the Princess Marie of Denmark, who became known in the political world because she incurred the enmity of Bismarck, chiefly on account of her attempt to stir up ill feeling between the Iron Chancellor and Tsar Alexander III. Bismarck, in the second volume of his memoirs, describes how he succeeded in circumventing her plans through a personal meeting with the Tsar. It was the exceptional business abilities of the Princess Marie which brought Mr. Andersen into contact with the Russian Imperial family. It is typical of the common sense of the Princess and of her unaffected manners that she arrived at the offices of the Hamburg-Amerika Linie one day without having been previously announced; and as she did not give her name to the attendant outside Ballin’s private office, he could only tell him that “a lady” wanted to see him. The two letters addressed to Ballin which are given below are also illustrative of her style.

“Yours faithfully,
(signed) “Marie.”

In June, 1904, after the close of Kiel Week, Ballin paid a visit to Copenhagen. There he met the Princess Marie and the King and Queen of Denmark, and was invited to dine with them at Bernstorff Castle. The business outcome of the negotiations was that in 1905 a joint service to the West Indies was established between the Hamburg-Amerika Linie and the Danish West Indian Company. Four of the big new steamers of the latter were leased to the Packetfahrt, and operated by that company, which thus not only increased the tonnage at its disposal, but also succeeded in eliminating an unnecessary competition.

At the same time the Packetfahrt bought the larger part of the shares of the Russian East Asiatic S.S. Company owned by the Danish firm. The object of the purchase was to establish a community of interests with the Russian Company. The Kaiser took great interest in this scheme, and during his visits to Copenhagen in 1903 and 1905 Mr. Andersen reported to him on the subject. It was intended to bring about close business relations between Germany, Russia, and Denmark for the special purpose of developing Russian trade, and to organize the Russian East Asiatic S.S. Company on such lines as would make it a suitable instrument to this end. It is to be regretted that the community of interest agreement then concluded was not of long duration. The Russian bureaucracy made all sorts of difficulties, and it is possible that the representatives of the Hamburg-Amerika Linie in Russia did not display as much discretion in their dealings with these functionaries as they ought to have done. At any rate, the Packetfahrt was so little satisfied with its participation in this Russian concern that it re-sold its rights to the interested Copenhagen parties in 1906, not without incurring a considerable loss on the transaction. The West Indies agreement automatically lapsed when the Packetfahrt acquired sole possession of the four Danish steamers.

Later on some sort of co-operation with the Russian company was brought about once more by the admission of that company to the transatlantic steerage pool. The Packetfahrt also had an opportunity of profiting from the technical experience gained by the Danish East Asiatic Company, which was the first shipping concern to specialize in the use of motor-ships. It was enabled to do so by the support it received from the shipbuilding firm of Messrs. Burmeister and Wain, of Copenhagen, who had applied the Diesel engine, a German invention, to the propulsion of ships, and who subsequently built a fleet of excellent motor-ships for the East Asiatic Company. One of these vessels was afterwards acquired by the Hamburg-Amerika Linie for studying purposes. The new type of vessel proved exceedingly remunerative during the war, as it made the owners independent of the supply of British bunker coal, and relieved them of the numerous difficulties connected with obtaining it. This great practical success of the Danish shipbuilders became possible only because they applied themselves consistently to the development of one particular type of engine, whereas in Germany endless experiments were made with a great variety of different types which led to no tangible results. It was only when the war came, and when the building of numerous submarines became necessary that German engineering skill obtained a chance of showing what it could do, and then, indeed, it proved itself worthy of the occasion.

In 1904 war broke out between Russia and Japan, an event which exercised such an influence on the Packetfahrt that it is hardly an exaggeration to say that the rapid progress the company made during the next few years amounted to a re-birth. The war provided the company with a chance to sell a large number of its units at a considerable rate of profit, and the contract concluded with the Russian Government for the coal supply added enormously to its revenues. The Russian Government partly converted the purchased steamers into auxiliary cruisers for the purpose of checking and disorganizing Japanese sea-borne trade, and it partly used them to accompany its Baltic fleet on its way to the Far East. As an illustration of the magnitude and the complexity of this transaction, it may be permitted to quote a few extracts from Ballin’s notes referring to it:

A few statistics will show what the whole undertaking meant to the Hamburg-Amerika Linie from a business point of view. During the years 1904 and 1905 the company increased its fleet by no less than 21 steamers—partly new buildings and partly new purchases—representing a value of 22½ million marks. To these new acquisitions must be added the 19 steamers then building, of a value of 52 million marks, amongst them the two big passenger steamers Amerika and Kaiserin Auguste Victoria for the New York route, and other big boats for the Mexico, the River Plate, and the Far East services. A large fraction of the sums spent on this new tonnage—viz. no less than 24 million marks—represented the profits made on the sales of ships; another large portion was taken out of current earnings, and the remainder was secured by a debenture issue. Never again, except in 1913, has the company added such an amount of tonnage to its fleet in a single year as it did at that time. But the “re-birth” of the company did not only consist in this augmentation of tonnage, but also, and chiefly, in the entire reorganization of its New York service by the addition to its fleet of the Amerika and the Kaiserin Auguste Victoria. This event meant that the era of the express steamers was being succeeded by one characterized by another type of vessel which, though possessing less speed, was mainly designed with a view to securing the utmost possible comfort to the passengers. The two steamers proved exceedingly remunerative investments, and added enormously to the clientèle of the company. The profits earned on the Russian transaction also made up to a large extent for the losses incurred in the keen rate war with the Cunard Line then in progress. In spite of this rate war the company was able to increase its dividend to 9 per cent. in 1904, and to 11 per cent. in 1905.

Another event which took place in 1904 was the conclusion of a contract with the German Government concerning the troop transports to German South-West Africa, and the year 1905 witnessed the settlement of a short-lived conflict with the North German Lloyd. This conflict attracted a great deal of attention at the time, and the Kaiser himself thought fit to intervene with a view to terminating it.

When it was seen that German commercial interests in the Middle East had considerably increased, the Hamburg-Amerika Linie opened a special line to the Persian Gulf in 1906. The year 1907 is chiefly remarkable for a rate war affecting the services from Hamburg to the West Coast of Africa, of which until then the Woermann Line had considered itself entitled to claim a monopoly.

The African shipping business had been jealously nursed by its founder, Adolph Woermann, who had always tried hard to guard this special domain of his against the encroachments of all outsiders. However much Ballin and Adolph Woermann differed in character, they were akin to each other in one essential feature—viz. the jealous love they bore to the undertaking with which they had identified themselves. Both men, grown up in absolutely different environments, yet resembled each other in the daring and the fearlessness with which they defended the interests of their businesses. The one had trained himself to employ moderation and commonsense to overcome resistance where the use of forcible means promised no success; the other was a pioneer in the colonial sphere, a king in his African empire, the discoverer of new outlets, but broken in spirit and bereft of his strength when compelled by circumstances to share with others. When Adolph Woermann had died, Ballin honoured his memory by contributing to the public Press an appreciation of his character, which is perhaps the best that has been written, and which ought to be saved from being forgotten. This fact, it is hoped, will be sufficient justification for reproducing in this connexion a translation of Ballin’s article:

To complete the enumeration of the many rate wars which occurred during the first decade of the twentieth century, we must make brief reference to the competition emanating in 1909 from the so-called “Princes’ Trust” (Fürstenkonzern) and its ally, viz. a Hamburg firm which had already fought the Woermann Line. The object of the fight was to secure the business from Antwerp to the Plate. The struggle ended with the acquisition of the shipping interests of the Princes’ Trust, the business career of which came to a sudden end shortly afterwards by a financial disaster causing enormous losses to the two princely families concerned—the house of Hohenlohe and that of Fürstenberg. The details connected with this affair are still in everybody’s memory, and it would be beyond the scope of this volume to enter into them. It should be mentioned, however, that in connexion with the settlement arrived at the two big companies undertook to start some transatlantic services from the port of Emden, and in particular to establish a direct line for the steerage traffic to North America. The necessary arrangements to this end had just been made when the war broke out, and further progress became impossible.

The transatlantic pool was considerably extended in scope during those years. More than once, however, after the rate war with the Cunard Line had come to an end, the amicable relations existing between the lines were disturbed, e.g. when the Russian Volunteer Fleet opened a competing service—a competition which was got rid of by the aid of the Russian East Asiatic S.S. Company; when some British lines temporarily withdrew from the steerage pool, and when some differences of policy arose between the Hamburg-Amerika Linie and the North German Lloyd. The Hamburg company demanded a revision of the percentages, contending that the arrangements made fifteen years ago no longer did justice to the entirely altered relative positions of the two companies. The discussions held in London in February, 1908, under Ballin’s chairmanship, which lasted several days, and in which delegates of all the big Continental and British lines, as well as of the Canadian Pacific Railway Company took part, led to the formation of the Atlantic Conference (also known as the General Pool). It was supplemented in the following year by that of the Mediterranean Conference. Both these agreements were renewed in 1911, and further agreements were concluded with the Russian and Scandinavian lines to complete the system. Agreements on so large a scale had never before been concluded between any shipping companies.

This network of agreements existed until it was destroyed through the outbreak of the war.

During the fluctuating conditions which characterized the shipping business of those years the year 1908 witnessed a depression which, in its after-effects, is comparable only to that caused by the cholera epidemic sixteen years earlier. Business had been excellent for a fairly long time, but it became thoroughly demoralized in the second half of 1907, and an economic crisis of a magnitude such as has seldom been experienced began to affect every country. No part of the shipping business remained unaffected by it; hundreds and hundreds of ocean-going liners lay idle in the seaports of the world.

Very gradually prospects began to brighten up in the course of 1908, so that the worst of the depression had passed sooner than had been expected. Indeed, in one respect the crisis had proved a blessing in disguise, inasmuch as it had strengthened the inclination of the shipping concerns everywhere to compromise and to eliminate unnecessary competition—the formation of the general pool, in fact, being the outcome of that feeling. The subsequent recovery made up for the losses; and the succeeding years, with their very gratifying financial results, and their vast internal consolidation, represent the high-water mark in the development of the Hamburg-Amerika Linie.

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:

CHAPTER VII

The Technical Reorganization of the Hamburg-Amerika Linie

In another chapter of this book the big passenger boats of the Hamburg-Amerika Linie have been described as the outcome of Ballin’s imaginative brain. This they were indeed, and in many instances it is scarcely possible to say how far the credit for having built them is due to the naval architect, and how far it is due to Ballin. He was profoundly against employing one system throughout, and on accepting the views of one expert exclusively; and this aversion was so pronounced that he objected on principle to the nomination of any technical expert to the Board of his company. The company, he said, is surely going to last longer than a lifetime or two. Besides, it must try to solve the problem of perpetual youth, and therefore it cannot afford to run the risk of staking its fortune on the views held by one single man who is apt to ignore the progress of his science without noticing it. The same dislike of onesidedness induced him to encourage to the best of his capacity a healthy competition among the various shipyards, and to avail himself of the experiences gained not only by the German yards but by their British rivals also. At an early stage of his career close business relations were established between himself and Messrs. Harland and Wolff, of Belfast; and a personal friendship connected him with the owner of that firm, Mr. (now Lord) Pirrie. Acting upon the example set by the White Star Line, Ballin made an agreement with Messrs. Harland and Wolff as early as 1898, by which the latter bound themselves always to keep a slip at the disposal of the Packetfahrt. The reason which prompted Ballin to make this arrangement was, as he explained to the Board of Trustees, that the company’s orders for new construction and repairs had nowhere been carried out more satisfactorily and more cheaply than by the Belfast yard, where all the new vessels ordered were built under a special agreement, i.e. at cost price with a definitely fixed additional percentage representing the profits and certain expenditure incurred by the builders. This arrangement enabled the Packetfahrt to become acquainted with whatever was latest and best in British shipyard production, and, as it were, to acquire models which it could improve upon in German yards after they had been tested on actual service. Some of the best and most important types of vessels which the Packetfahrt has produced owe their origin to this system; and it is only fair to say that it exercised an entirely beneficial influence on the progress of the German shipbuilding industry, the prosperity of which is largely due to the fact that it has profited from the century-old experience gained by the British yards and by British ocean-shipping.

Ballin held the view that, just as the shipbuilding expert had to watch the progress of naval architecture and to make practical application of its results, and just as the merchant had to exploit this progress for the benefit of his business, the shipowner—especially the one who maintains a service of passenger boats—has the special task of making every step in the direction of further advance serviceable to the needs of the passengers. Being himself, as has been pointed out elsewhere, gifted with a strong faculty for appreciating things beautiful, and raising no less high demands as regards the beauty and the comfort of all his surroundings, Ballin constantly endeavoured to make use of all the results of his own observations and of his own experience for the greater comfort of the passengers. Those who saw the finished products of his imagination, the beautifully appointed “floating hotels,” hardly realized how many apparently insignificant details—which, after all, in their entirety make what we call comfort—owe their origin to his own personal suggestions. Each time he made a sea voyage on board a steamer of his own, or of some other company, he brought home with him a number of new ideas, chiefly such as affected technicalities, and matters dealing with the personal comfort of the passengers. Numerous entries in the notebooks which he carried on such occasions are there to serve as illustrations; the following items, for instance, are selected from those which he jotted down, roughly, on a voyage to New York some time in the ’nineties. They speak for themselves, in spite of their sketchiness:

“List of Moselle purveyors wants revision—notices on board to be restricted as much as possible, those which are necessary to be tastefully framed—sailing lists and general regulations to be included in passengers’ lists—state cabin on board Kaiser Friedrich: key, latch, drawer; no room for portmanteaux and trunks; towels too small—Deutschland: soiled linen cupboard too small—stewards Oceanic white jackets—celery glasses—butter dishes too small—large bed pillows—consommé cups—playing cards: Packetfahrt complete name of firm—Packetfahrt complete name on Wehber’s wine bottles—toast to be served in a serviette (hot).”

Rough notes such as these were used to serve Ballin as the material underlying the detailed reports and instructions to the company’s servants which he composed during the voyage, so that not even a long sea voyage gave him the unbroken spell of leisure he so badly needed. Indeed, the longer it lasted the more chances did it provide for thoroughly inspecting the practical working of the steamer. Many other reports are in my possession, but the one given will serve to emphasize the meticulous quality of observation he possessed, and how practical was his mind in regard to details of comfort and convenience, and the special climatic needs of different routes.

Even where the peculiar conditions obtaining in tropical climates were concerned—conditions with which he was personally quite unacquainted—he unfailingly discovered any defects that might exist, and also the means by which they could be remedied.

Ballin’s connexion with the Packetfahrt practically coincides with the whole of that period during which the immense progress of modern steamship building from humble beginnings to its present stage of development took place; with the only exception that the North German Lloyd had already, before Ballin joined the Packetfahrt, established its services of fast steamers which were far ahead of those maintained by other shipping companies owing to their punctuality and reliability, and which Ballin then set himself to improve upon and to excel. Apart from this one type of vessel, the science of steamship construction, as seen from our modern point of view, was still in its infancy.

In 1886 the steamships owned by the Hamburg-Amerika Linie were mainly of two different types, viz., those used in the North Atlantic service (principally on the New York route), and those used in the Mexico-West Indies service.

The expansion of the Packetfahrt’s business after Ballin had joined the company, and especially the addition of new services together with the increase in the number of ports of departure and of destination, made it necessary constantly to increase the size and the carrying capacity of the cargo boats, and the size and the speed of the passenger steamers, as well as to improve and to modernize the passenger accommodation on board the latter. All this, of course, considerably added to the cost price of the vessels, so that, as a further consequence, the facilities for loading and discharging them had to be improved and extended. Four principal types of steamers may be distinguished in the development of the company’s fleet, especially of that part of it which was engaged on the North Atlantic route, where the main development took place.

Type One: Fast steamers—twin screws, 18 knots, 8,500 G.R.T.—possessing accommodation for passengers of all classes and provided with comparatively little cargo space, but comfortably and luxuriously appointed throughout. The three leading ideas governing their construction were safety, speed, and comfort; and progress was made to keep abreast of competing lines, until it culminated in the vessels of the “Imperator” class. The Imperator was built in 1913. They were quadruple screw turbine steamers, possessing no fewer than 42 multitubular boilers each, and, as they were of a capacity of 52,000 gross register tons, they were nearly three times the size of the Deutschland.

Type Two: Ships of medium speed and of considerable size, and therefore providing a high standard of comfort for passengers combined with ample facilities for cargo accommodation.

Type Three: Chiefly built as cargo boats, but in such a way that a part of their space could be utilized for the accommodation of a large number of steerage passengers.

Type Four: Cargo steamers without any passenger accommodation.

The difference between the floating palaces of type No. 1 in 1913 and those vessels which the Hamburg-Amerika Linie possessed when Ballin first entered upon his career as a shipping man was like that between day and night. A brief comparison of a few details will be the best means of illustrating the enormous progress achieved within less than the lifetime of a generation. The size of the vessels had increased from 3,000 to more than 50,000 tons; the speed from 14 to nearly 25 knots; the height of the decks from 6½ to 8 feet in the lower decks, whilst that of the upper ones, as far as the social rooms were concerned, amounted to as much as 20 feet. Large portions of the upper decks were reserved for the social rooms, the finest of which—the ball-room—could challenge comparison with almost any similar room in any hotel ashore with respect to its size and to the magnificence of its furnishings and of its decoration. From a technical point of view, too, the construction of such a huge room on board a vessel, which possessed a floor space of 4,800 square feet, and a ceiling unsupported by any columns or pillars of any kind, was an unprecedented achievement. Besides, there were immense dining-rooms for each class, smoking-rooms, ladies’ saloons, a restaurant, a winter garden, a swimming pool, and numerous smaller rooms suitable for the relaxation and amusement of the passengers.

On the older boats the arrangement was that the small cabins were all grouped round the one and only social room on board, so that the occupants of the cabins could hear all that was going on in the social room, and vice versa. The superficial area at the disposal of each passenger was gradually increased from 43 square feet in the double cabins to 172 square feet in the cabins of the Imperator, so that the latter were really no longer mere cabins, but actual rooms. The suites-de-luxe comprised up to twelve rooms, the largest of which covered an area of 247 square feet.

It must not be thought, however, that the first-class passengers were the only ones for whose comfort the company catered. The other classes progressed proportionately in added comfort, space, and social facilities, not excepting the steerage.

But by far the greatest improvements made were those in connexion with the enormous progress of the purely technical side of shipbuilding during the whole period under review. The more the vessels increased in size, the less were they liable to the pitching and rolling motion caused when the weather was rough. Moreover, special appliances, such as bilge keels and bilge tanks, were employed to lessen these movements still more, even when the sea was high. The reciprocating engines gradually gave place to higher types, and later on turbines and oil-engines were also introduced. In addition to the propelling machinery a number of auxiliary engines were used which were of various kinds and for various purposes, such as the ventilation of the cabins and the other rooms, the generation of light, the services in connexion with the personal welfare of the passengers and with their safety whilst on board ship. Instead of single bottoms, double bottoms were used, and the additional safety resulting therefrom was still further enhanced by dividing the space between the two by means of a whole network of partitions. The vessels of the “Imperator” class, indeed, possessed practically a double shell, which formed an effective protection against the danger of collision. The lifeboats increased in size and in number, and their shape and equipment were improved. Emergency lighting stations were arranged which could generate a sufficient amount of electric current if the ordinary supply should break down at any time. The whole vessels were divided into self-contained compartments by water-tight bulkheads, the doors of which could be automatically closed. This division into many compartments proved an effective protection against the risk of fire; but a number of special devices were also adopted to serve the same purpose, e.g. an extensive system of steampipes by which each single room could be rapidly filled with steam, so that the fire could be automatically extinguished. Fire-proof material was used for the walls separating adjacent rooms and cabins, and, not content with all this, the company provided its mammoth liners with an actual fire brigade, the members of which were fully trained for their work. The most important improvements affecting the navigation of the steamers were the introduction of wireless telegraphy apparatus, the gyroscopic compasses, the system of submarine direction indicator signalling, and the substitution of two steering gears instead of one, not to mention a series of minor improvements of all kinds.

The provisioning on board the German steamers was of proverbial excellence, the kitchen arrangements were modelled after those found in the big hotels, and were supplied with all manner of supplementary devices. The huge store rooms were divided into sections for those provisions that were of a perishable nature and for those that were not; and for the former refrigerating rooms were also provided in which the temperature could be regulated according to the nature of the articles.

Perhaps the most interesting development of the various types of steamers is that which type No. 2 has undergone. It originated in Great Britain, whence it was taken over in 1894. The first unit of this type added to the fleet of the Packetfahrt was the Persia, of 5,800 G.R.T., and a speed of 12 knots, built to accommodate a number of cabin and steerage passengers, and to carry a considerable amount of cargo as well. These boats possessed many advantages over similar ones, advantages which were due to their size, their shape, and the loading facilities with which they were equipped. Ballin immediately recognized the good points of this type, and he improved it until the vessels reached a size of 13,000 G.R.T., which still enabled them to travel at a speed of 13 knots. They were twin-screw steamers, and were provided with every safety device known at the time. A still further improvement of this type was represented by the Amerika and the Kaiserin Auguste Victoria, built in 1905 and 1906 respectively, luxuriously equipped throughout; by their large size—they possessed a capacity of very nearly 25,000 G.R.T.—extremely seaworthy, and as they could travel at the rate of 17½ knots, their speed was scarcely inferior to that possessed by the older type of fast steamers. From the point of view of actual remunerativeness they were far superior to the fast steamers, combining, as they did, all the earning possibilities of the passenger and of the cargo vessels.

The development of the types comprising the cargo steamers went hand in hand with the expansion of international trade relations, and with the constant increase in the amount of goods exchanged between the nations. To a certain extent development was limited by the dimensions of the Suez Canal. Still, improvements became possible in this respect too when the depth of the Canal was increased to 27 feet in 1908, 29 feet in 1912, and 30 feet in 1914.

Ballin carefully watched this development, incessantly improving the existing types of his company’s cargo boats, so that they should always meet the growing needs of sea-borne trade, and in some instances even anticipating them, until, when the war broke out, twin screw cargo boats of a capacity of 16,000 tons and possessing a speed of 13 knots were being built for the company.

In a brief outline such as this, it is not possible to enter into details concerning the expansion of the other lines which became affiliated to or otherwise associated with the Packetfahrt in course of time. One special type, however, ought to receive a somewhat more detailed treatment in this connexion, viz., that of the excursion steamers. The running of pleasure cruises, originally nothing but a mere expedient to prevent the express steamers from lying idle during the dead season, gradually became an end in itself. The Northern and Mediterranean cruises were soon followed by others, e.g. those to the West Indies and the pleasure trips round the globe. Two special steamers, the Prinzessin Victoria Luise, and the somewhat smaller and less sumptuous Meteor, both of them equipped after the style of pleasure yachts, were built when it was found advisable to make this service independent of the fast steamers and the big passenger boats which had also been employed for this purpose. After the loss of the Prinzessin Victoria Luise she was replaced first by a British passenger boat that had been purchased, and then by the Deutschland, specially reconditioned for her new purpose, and renamed Victoria Luise. Both vessels were extremely popular with the international travelling public, and year after year they carried thousands of tourists to countries and places distinguished for the beauty of their natural scenery or for their historical and artistic associations. They were largely instrumental in constantly augmenting the number of those who formed the regular clientèle of the company.

“Imitation is the sincerest form of flattery.” In the realm of shipping it has always been customary for each company to profit by the experience gained and the progress made by its competitors. This applies to the Packetfahrt and its management also; but in their case they have given infinitely more than they have received, and in the whole history of shipping there has never been one single person who has exercised a more stimulating influence on its technical progress than Albert Ballin.

CHAPTER VIII

Politics

Notwithstanding the many business controversies in which Ballin took an important part, it has occasionally been said that he was not really a “fighter.” This statement may be allowed to pass quite unchallenged, provided that by the term “fighter” we mean a man whose habit it is to fight to the bitter end. Ballin never indulged in fighting for its own sake, nor was it ever his object to see his vanquished opponent lie prostrate before him. Such a mental attitude he, in his own drastic way, would have described as a “perverted pleasure.” Always and everywhere it was his aim to secure to himself and to those he represented the maximum benefit obtainable consistent with the realities of the situation, so that he has been justly described as “a man of compromise.”

This feature of his personality, indeed, forms the key-note both to his policy and to the principles on which it was based. Perhaps in other spheres of economic activity it is possible for a struggle between two competing rivals to end in the complete victory of one of them; in the shipping business such an outcome is the exception but not the rule. There a really weak opponent is never met with, unless one’s rival happens to be exceptionally inexperienced or constitutionally unsound. The minor competitor, where shipping is concerned, is by no means always the less powerful of the two. On the contrary, the contest which inflicts small losses on him inflicts heavy losses on his big opponent, and may easily exhaust the latter first. The last few decades have witnessed the establishment of many new shipping firms under the auspices of national sentiment. Governments and whole peoples have backed them, and in such cases private undertakings have found it difficult to compete.

During his early training Ballin had so thoroughly convinced himself of the necessity for co-operation and compromise in matters economic that this conviction became the corner-stone of his policy. He also made it his principle never to tie an unwilling partner to an agreement which the latter considered to be detrimental to his vital interests, and he would only approve of an agreement if both parties to it felt satisfied that they had done a good stroke of business by concluding it. The numerous “community of interest” agreements to which he signed his name established, the longer they lasted and the further they were extended, an increasingly intimate contact between the shipping firms all over the world, thus proving that the consistent application of his principles was justified by its success.

In politics, too, he regarded this line of action as the only correct one. Over and over again he described the World War as a “stupid war” or as the “most stupid of all wars,” because its origin, the conflict between Austria-Hungary and Serbia, was so utterly meaningless to the progress of the world. Its actual outbreak was caused by the strained economic relations between Hungary and Serbia, or—to put it quite plainly—by the boycott of the Serbian pig, a matter which was surely of no importance to the world’s trade and traffic at large. “No Bismarck was needed to prevent this war,” he often said when speaking of its immediate origin.

This attitude of his does not mean that he shut his eyes to the deep-seated antagonisms which were at the back of these local squabbles, viz., the Franco-Russian coalition against Germany, and the Anglo-German rivalry. The latter he regarded as sufficient to turn the scale; if it could be adjusted a World War, he felt sure, would be avoided. The possibility of a universal conflagration had been pointed out to him by no less an authority than Prince Bismarck on the occasion of the latter’s visit to Hamburg, when he was shown over the express steamer of the Packetfahrt that was to bear his name. “I shall not live to see the World War,” Bismarck told him; “but you will, and it will start in the Near East.”

With ever-increasing anxiety, Ballin noticed how, as a result of the German naval armaments, the Anglo-German antagonism came into existence, and how in time the position became worse and worse. When the Government, about the year 1900, embarked upon its propaganda for the creation of a big navy, he lent it his active assistance, but in later years he strongly opposed the naval race with Great Britain, trying to the best of his ability to circumvent its disastrous consequences.

The British argument against Germany’s naval programme was that a nation which owned one-third of the inhabited globe and intended to maintain its supremacy could not renounce its naval predominance. His knowledge of British mentality—gained, as it was, through many years of intercourse with the English—told him that this reasoning was certainly unassailable from the British point of view, and that England would fight for its recognition to the bitter end. Therefore, he considered the situation could only be met by an Anglo-German understanding. The failure of arriving at such a solution was probably caused—apart from personal motives—by the fact that in Germany the spirit of compromise was not the predominant one, but that its place was taken by an exaggerated opinion of the country’s own strength combined with a certain ignorance regarding foreign countries.

This mental attitude is typical of the two factions which were all-powerful in Germany at the time, viz., what might be called the Old Prussian aristocracy, and the representatives of the heavy industries. The common platform on which these two groups met was the policy to be pursued regarding customs tariffs, which, although it formed the basis of the economic greatness of Germany, also prepared the way for serious international conflicts. During the war these two groups were in charge of what was meant to be the political policy of the country, but which was, in fact, nothing but an inferior substitute for it.

Ballin’s international position is illustrated by the fact that he was the first to be approached in the matter of a projected Anglo-German rapprochement, an affair which reached its climax with Lord Haldane’s visit to Berlin. Owing to its historical interest this episode is worth a detailed account.

The first steps in this direction date back as far as the year 1908, and the ultimate breakdown of the project did not take place until the outbreak of the war. The British negotiator was Sir Ernest Cassel, who, a native of Germany, had settled in England when quite young, and who had become one of the world’s most successful financiers. He was the intimate friend of King Edward from the time when the latter was Prince of Wales, and he also acted as his banker and as his political adviser. The King visited his home almost daily during the last few years of his life to take part in a game of bridge. The motives which may have prompted Sir Ernest to lend his assistance and his great influence to an endeavour which aimed at an understanding between his adopted country and the land of his birth need not, in the case of a man so clever and so experienced, be very far to seek. Sir Ernest repeatedly referred to himself as a German, and as such he was deprived of his privy-councillorship during the war. Thus it is quite likely that he might have been prompted no less by an inherited predilection for the one, than by an acquired preference for the other country. This very fact may also have enabled him to see matters with particular clearness of vision and without any prejudice. He and his friends reasoned somewhat along the following lines:

The policy of King Edward having led to a considerable strengthening of the position of France on the Continent, there arose the danger of an armed conflict between the continental Powers, especially as many points of dispute threatened at the same time to disturb the relations between Germany and Great Britain. These differences were caused on the one hand by the political activities of Germany as a world power, and on the other by her commercial and industrial expansion which bid fair to relegate Great Britain to a subordinate position. People in England regarded the want of a system of protection similar to the German protective tariffs as the real cause of this development, a want which retarded the progress of British industrialism, and which prevented British financiers from taking an active interest in these matters. The German financiers, however, exerted all their influence on behalf of the industrial expansion of their country, thus emancipating it more and more from foreign capital. The time during which the financing of the German industries by French money (the so-called French “pensions"), i.e. the discounting by French capitalists of bills drawn by German industrialists, played an important part, and even represented a serious menace in days of political tension, had only just passed, but, thanks to the increasing capital strength of Germany, its effects had now quite ceased to make themselves felt.

The advantage to Great Britain of an understanding with Germany was that it would guarantee her maritime supremacy which she was resolved to maintain at any price, whilst at the same time reducing the burden of her naval armaments which, in her case, too, had become wellnigh insupportable. The Liberal Government then in power was particularly interested in such financial retrenchment, being quite aware that the time had arrived for the State to enter upon an era of social legislation.

Contact between Ballin and the above-mentioned British groups was established through the agency of some friends of his connected with German high finance. The fact that the British selected Ballin to start these negotiations is probably due to his well-known friendship with the Kaiser, which suggested the possibility of approaching the German Government—even if only by informal channels in the first instance. This first attempt, should it prove successful, might at any moment be followed up by direct negotiations between the two governments. In view of the traditional close connexion existing in England between business circles on the one hand, and the politicians, the parties, and the Government on the other, such proceedings did not by any means imply a policy of backstairs, but might be relied upon to open up a way for sounding German official quarters in the most natural manner.

The general tenor of Anglo-German relations at that time was somewhat as follows.

The visit of King Edward to Wilhelmshöhe and that of the German Emperor and Empress to Windsor Castle in the summer of 1907 had been of a very friendly character, and, together with other manifestations of friendship exchanged between various German and British societies, they had exercised a favourable impression on public opinion in both countries. But very soon this friendly feeling was replaced by one of irritation. Great Britain and Russia had concluded an agreement concerning their frontiers in the Middle East, and this led to questions in the Reichstag as to whether German interests had been properly safeguarded. At the same time (in the summer of 1907) the Hague Conference came to an end without having led to an understanding regarding the limitation of armaments, which many people in England would have liked to be brought about. Towards the end of the year the German Government submitted to the Reichstag a Navy Bill by which the life of the capital ships was to be reduced from 25 to 20 years. This was tantamount to asking for the cost of three new ships of the line. Simultaneously a powerful propaganda for the navy was started, and when Prince Rupprecht of Bavaria resigned the protectorate of the Bavarian section of the Navy League, because the League which at that time was presided over by the well-known General Keim had engaged in party politics, his withdrawal had the undesirable effect of focusing public attention on the League’s share in this agitation. This step, as was but natural, brought about a change in the chairmanship of the League.

In England the agitation against Germany in general, and against her naval policy in particular, became very violent in the early part of 1908. In February The Times announced that the Kaiser, for the express purpose of interfering with the British naval budget, had sent a letter to that effect to Lord Tweedmouth, the First Lord of the Admiralty. His lordship categorically denied in Parliament that the document had any political character whatever, but in spite of this denial, and in spite of the support which he received from Lord Lansdowne and from Lord Rosebery, the matter produced a violent outburst of feeling on the part of the British Press and public. During March, 1908, both houses of Parliament discussed German and British naval policy in great detail. In an article published by the National Review, Lord Esher, the chairman of the Imperial Maritime League, demanded that for every keel laid down by Germany, Britain should lay down two, and General Baden-Powell described the danger of a German invasion as imminent. On the other hand, Sir Edward Grey, the Foreign Secretary, emphasized in one of his speeches the point of view referred to above, viz. that a reduction of the naval burdens would also be desirable in the interest of Britain, but that he could recommend such a policy only if the other governments consented to do the same.

All these considerations might easily suggest to the clear-headed men of business on either side of the North Sea how greatly it would be to the mutual advantage of both if a way could be found towards a limitation of naval armaments.

The first interview between Ballin and Sir Ernest Cassel took place in the summer of 1908, and Ballin afterwards gave the Kaiser a detailed account of it when the latter visited Hamburg and Kiel at the end of June. Another report, based on material supplied by Ballin, was composed by the chief of the Press Department of the Foreign Office, Geheimrat Hammann, for the use of the Imperial Chancellor and the Foreign Secretary, and in the absence of any original account by Ballin himself, it may be permitted to give an outline of its contents below.

Sir Ernest opened the conversation by saying that for a long time back he had desired to discuss the political situation simply in his capacity as a private person, and that he felt qualified to do so because of his intimate acquaintance with some of the leading personages and with politics in general. He would like to contribute his share towards the prevention of a dangerous development of the existing rivalry. The King felt very keenly that the rapid increase of the German naval forces constituted a menace to Britain’s maritime position. He was convinced, however, that his nephew would never provoke a wanton conflict, and that, in his heart of hearts, he loathed the horrors of war. Although, therefore, during his—the King’s—lifetime the danger of an Anglo-German war was remote, it was nevertheless necessary that, when his son succeeded him, the latter should find Britain’s maritime position so strong that the Kaiser’s successor should be unable to assail it.

When Ballin interposed at this stage that the British navy, because of its unchallenged superiority in numbers, need not be afraid of the newly created naval power of Germany, Sir Ernest replied that it was well known to British naval experts that the increase of the German navy was considerably greater than the official statements made in the Reichstag would let it appear. Undoubtedly the British navy would always preserve its superiority, not only numerically, but also technically with regard to material, construction, and armaments. Nevertheless, the advantages possessed by the German system of manning the ships and the great efficiency of German naval officers justified an apprehension lest the German superiority in the human factor might outweigh the British superiority in tonnage. The Boer war had taught England how difficult it was to conquer a high-spirited, though numerically weak enemy. He said that fear of the German danger formed the driving power of the whole policy of the Entente, and that this policy was only meant to guard against that menace. Therefore Russia had been advised at the Reval meeting to forgo the enlargement of her navy, and to concentrate all her energies on her army.

Upon Sir Ernest’s intimation that at some date Britain, together with France and Russia, might inquire of Germany when she intended to put a stop to her naval armaments, Ballin replied that his friend, if he was anxious to render a really valuable service to Britain and to the cause of peace, could do no better than make it perfectly plain that such an inquiry would mean war. Germany would resist with her whole strength any such attempt which unmistakably suggested the methods employed at Fashoda.

During the progress of the interview Sir Ernest—who showed that he possessed excellent information concerning Germany’s finances—observed that the state of the same would render it very difficult for her to make war. In that connexion he pointed out the intimate bearing of international finance on political relations, and he emphasized how much the borrowing countries were dependent on the lending ones. Still, even the creditor nations would sometimes be forced into an uncomfortable position, as was, for instance, the case with Great Britain after the United States had passed on to her the greater part of the Japanese debt. In Japan the disproportion between military burdens and economic strength was becoming more and more pronounced, and if the country were faced with the alternative of choosing between the total financial exhaustion of the people and a stoppage of the payment of interest, it would prefer to take the latter course.

In London Ballin was present at the Constitutional Club when a Member of Parliament made a speech in which he stated, with the general approval of his audience, that the position of Britain was not really so good as the policy pursued by the Entente might lead one to believe. The national balance-sheet had been much more satisfactory during the reign of Queen Victoria; the items now appearing on the credit side being partly bad debts incurred by Spaniards, Portuguese, and Japanese, for whose political good behaviour Britain paid far too high a price, and one should not allow oneself to be misled as to the value of these ententes by balance-sheets which were purposely kept vague.

Geheimrat Hammann told Ballin by letter that Prince Bülow, the Imperial Chancellor, and Herr v. Schön, the Foreign Secretary, were very grateful to him for his information, and that in the opinion of both gentlemen his reply to the suggestion concerning the stoppage of naval armaments was “as commendable as it was correct.” Meanwhile the Kaiser had also supplied the Chancellor with a general résumé of Ballin’s report to him.

Ballin’s visit gave rise to an exchange of letters which it may not be inappropriate to reproduce in this place. By way of explanation, it should first be said that the Sandjak Railway project, to which reference is made in Ballin’s letter, had greatly agitated public opinion all over Europe during the spring of 1908. In February, Count Aehrenthal, the Austrian Foreign Minister, at a committee meeting of the delegations, had announced the Government’s intention of constructing a railway line connecting the Bosnian system with the town of Mitrovitza in the Sandjak (or province) of Novi Bazar. This announcement led to a violent outburst of the Russian Press, which described this project as a political démarche on the part of Austria in the Balkans and as an interference with the Macedonian reforms aimed at by the Powers. In Austria it was thought that Germany would support her ally as a matter of course, and Prince Bülow, in an interview given to a journalist, tried to pacify the Novoie Vremia. He declared that the Russian papers were absolutely mistaken when they alleged that the project was inspired from Berlin, and he stated that Austria, like her German ally, pursued none but commercial aims in the Balkans.

These remarks will be a sufficient explanation of the allusions contained in Ballin’s letter of July 13th, 1908, which, after an expression of thanks for the hospitality extended to him, reads as follows:

Sir Ernest Cassel replied:

The meeting between the Kaiser and King Edward which was suggested in these letters actually took place on August 11th at Friedrichshof Castle, when the King was on his way to Ischl, and it was accorded a friendly reception in the German Press. It was followed up by an exchange of equally friendly manifestations on the part of the peoples of both countries. Mr. Lloyd George, then Chancellor of the Exchequer, went to Germany in August, 1908, to study the German system of workmen’s insurance against disability and old age, and British workmen came to visit German trade unions, and to gather information about German industrial conditions. Official Britain also pronounced herself in favour of an understanding between the two countries which Mr. Lloyd George described as the only means of relieving the European tension, and Mr. Churchill professed similar sentiments.

Shortly afterwards, however, at the end of October, an event took place which severely compromised the Kaiser’s policy, viz. the incident of the Daily Telegraph interview. In this the Kaiser, amongst other matters, bitterly complained that his friendship for England received such scant acknowledgment. As a proof of the friendly sentiments by which his actions were guided he stated that he, during the Boer war, had refused the humiliating suggestion put forward by France and Russia that the three Powers conjointly should compel Britain to put a stop to the war; that he had communicated this refusal to King Edward, and that he previously had presented Queen Victoria with a plan of campaign mapped out by himself, to which the one actually pursued by Britain bore a striking resemblance. With regard to Germany’s naval programme, he emphasized that his country needed a big fleet in order to command attention when the question of the future of the Pacific was discussed. Finally, with regard to Anglo-German relations, the Kaiser said that the middle and lower classes in Germany did not entertain very friendly feelings towards England.

The effect which this interview produced all over Germany was one of profound consternation. Its publication led to the well-known discussions in the Reichstag in November, 1908, during which the Kaiser, to the great dismay of the nation, was staying at Donaueschingen with Prince Fürstenberg, where he was hunting. In England, and abroad generally, people regarded this interview as proving a great want of consistency in the conduct of Germany’s foreign policy, and this impression was by no means changed when it became known that its publication was only due to an unfortunate oversight. The Kaiser had sent the account of it, as he was bound to do by the Constitution, to Prince Bülow, who was then staying at Norderney. Bülow, however, did not read it himself, but passed it on to the Berlin Foreign Office to be examined. There, indeed, an examination took place, but only with a view to finding out whether it contained any errors of fact, and when this was proved not to be the case, it was marked to that effect, passed the various ministries without any further examination, and was published. This unfortunate chain of accidents did not, however, alter the fact that the Kaiser ought to have been aware of the great political importance of his utterances. It has always been a chief fault of his to speak out too impulsively when it would have been politically more expedient to be less communicative. Nor can the entourage of the sovereign be excused for not drawing his and the Chancellor’s attention to the great political significance of his utterances. The Chancellor himself and the Foreign Office, profiting from their previous experiences with the Kaiser and his appearances in public, ought to have used a great deal more circumspection, and it would have been well if the permanent officials in the Foreign Office had shown rather more political insight.

The endeavours of the official circles to remove the tension existing between the two countries were not affected by the incident. On February 9th, 1909, King Edward and his Queen paid their visit to Berlin, thus bringing about the event which Ballin in his letter of July 13th, 1908, had described as so very desirable. To appreciate the importance of this strictly official visit, we must bear in mind the fact that it did not take place until the ninth year of the reign of King Edward. This long postponement was no doubt due to a large extent to the estrangement between uncle and nephew, and this, in its turn, had its origin in the natural dislike which the Kaiser felt for his uncle’s mode of conducting his private life while still Prince of Wales. It would have been preferable, however, to relegate such personal likes and dislikes to the background where politics or business were concerned. British official comments emphatically underlined the significance of the visit, and the German Press followed suit, although voices were not wanting to warn against any over-estimation of such acts of courtesy. The reply given in the Reichstag by Herr v. Schön, the Foreign Secretary, to a question as to whether any suggestions had been put forward by Great Britain with respect to a reduction of naval armaments was very cool in its tone. His statement amounted to this: that no formal proposal for an understanding which might have served as a basis for negotiations had been received, probably for the reason that it was not customary among friendly Powers to put forward any proposals of which it was doubtful to say whether they would be entertained.

In spite of this cold douche and in spite of other obstacles, the promoters of an understanding, Ballin and Sir Ernest Cassel, did not cease their efforts in that direction. In July, 1909, Ballin paid a second visit to Sir Ernest, during which the political discussions were continued. On these latter he reported to the Kaiser as follows:

This report was passed on by the Kaiser to Herr v. Tirpitz, the Secretary for the Navy, who not only expressed his approval of the project, but also recommended that the Imperial Chancellor, Herr v. Bethmann-Hollweg, who had succeeded Prince Bülow on July 14th should be kept informed of all that was done to bring about an understanding. The Chancellor, accordingly, was presented by the Kaiser himself with a copy of Ballin’s report. This was the correct thing to do, as it avoided a faux pas such as, during the chancellorship of Prince Bülow, had sometimes been made. Future developments, however, proved that this step deprived the whole action of its spontaneity, and its immediate effect was that the Secretary for the Navy was relieved of all responsibility in the matter. Ballin, in later days, summed up his views on this way of dealing with the subject by saying that if Herr v. Tirpitz had been left a free hand in the whole matter—if, for instance, he had conducted it as Imperial Chancellor—it would hardly have turned out a failure. The main object of the negotiations that Ballin had carried on was to ensure that a number of “experts and men of moderate views,” i.e. naval experts in the first instance, should join in conference in order to discuss how, without injury to their relative fighting efficiency, both countries could bring about a reduction of their naval armaments. This plan was so simple and so obviously right that, had it been carried out as a preliminary to something else, and had the attention of the experts been drawn to the enormous political importance of their decision, success would have been assured. The procedure, however, which the Chancellor adopted compelled him to combat the active opposition of the various departments involved even before a meeting of the naval experts could be arranged for, and this was a task which far exceeded the strength of Herr v. Bethmann-Hollweg, the most irresolute of all German chancellors, the man to whom Fate afterwards entrusted the most momentous decision which any German statesman has ever had to make.

An interview between Ballin and the Chancellor was followed up, with the consent of the latter, by an exchange of telegrams between Ballin and Sir Ernest Cassel. From these it became clear that official circles in London were favourably disposed towards the opening of discussions in accordance with the terms laid down in Ballin’s report, and Ballin approached the Chancellor with the request to let him know whether he should continue to work on the same lines as before, or whether the Chancellor would prefer a different method, by which he understood direct official negotiations. In a telegram to the Chancellor he explained that in his opinion Sir Ernest’s reference to the friendly disposition of official London implied that he was authorized to arrange the details about the intended meeting of experts. If, therefore, he went to England again, he would have to know what were the views and intentions of the Chancellor. The reply of the latter, dated August 11th, was as follows:

This reply clearly showed that the Chancellor had made up his mind to deal with the matter along official lines and in conformity with his own ideas.

The subsequent course of events is indicated by a letter of the Chancellor to Ballin, dated August 21st, in which he says:

This letter shows, and later events have also proved, that the guiding spirits of Germany’s political destiny were unable to meet on such terms as expediency would dictate the overtures of a man like Sir Ernest Cassel, whose status and whose good intentions were beyond criticism. If, on receipt of this news, Sir Ernest, who had been working so hard for an understanding, was not entirely discouraged, it was no doubt due to the diplomatic skill with which Ballin—who was a master of this art, as of so many others—interpreted the Chancellor’s rebuff when communicating it to his friend.

That the latter’s account of British feeling towards Germany was perfectly unbiased, may also be inferred from another piece of news which reached Ballin about the same time from a British source, and which reads as follows:

However, by that time, the matter was in the hands of the various departments, and they proved unable to make a success of it. Why they failed, and why the step which Herr v. Bethmann had taken with the British Ambassador produced no results, are questions which can only be answered by reference to the files of the Foreign Office.

Mr. Asquith, in a speech dealing with the British naval programme delivered on July 14th, 1910, explained why no understanding with Germany had been arrived at.

As these statements have never been contradicted, it must be assumed that the departments concerned sheltered themselves behind the formal objection that, owing to public feeling, a repeal or a modification of the Navy Law was out of the question. If this assumption is correct, it is evident that no touch of political genius was revealed in the treatment of this important question. Even the hope that the “crest of the wave” had been reached turned out a disappointment, as was proved by the introduction of the new Navy Bill in 1912.

The objections which Herr v. Bethmann, on March 30th, 1911, raised to an international limitation of armaments can likewise only be described as formal ones. He said:

If this explanation is intended to be a reply to such statements from the British side as the one just quoted from Mr. Asquith, the fact had been disregarded that the most serious problem under discussion—viz. the Anglo-German rivalry—could quite well be solved without convening an “international congress.”

As early as December 10th, 1910, Herr v. Bethmann, in a speech delivered before the Reichstag, had enlarged on this same subject from the political point of view:

The speech which Sir Edward Grey delivered in the House of Commons on March 14th, 1911, with special reference to this speech of Herr v. Bethmann shows unmistakably that the remarks of the latter did not reassure Great Britain with respect to the only point at issue in which she was interested, viz. the limitation of the German naval programme. Britain, according to Sir Edward, did not desire that her relations with any Power should be of such a nature as to impede the simultaneous existence of cordial relations with Germany. An Anglo-German agreement had been specially suggested. This suggestion required some careful thinking over. If he were to hold out any hope that Germany, in compliance with the terms of some such agreement would be willing to cancel or to modify her naval programme, he would be contradicted at once. Only within the limits of this programme would it be possible to come to some understanding between the two Governments. It might, for instance, be agreed to spread the expenditure voted for the navy over a longer term of years, or to arrange that the present German programme should not be increased in future. Matters such as these could form the subjects for discussion between the two Governments, and it would be desirable from every point of view that an understanding should be arrived at. To this speech the North German Gazette replied that Germany would be quite prepared to fall in with Sir Edward’s suggestions if agreements such as those outlined by him could in any way allay the feeling of distrust governing public opinion in Great Britain. If from this semi-official pronouncement it may be inferred that Herr v. Bethmann on his part was favourably disposed towards an agreement, the question arises: “Why was it not concluded?”

In order to understand why the British Cabinet attached so much value to the settlement of the Anglo-German naval questions and to the pacification of public opinion, it must be remembered that the Liberal Cabinet, owing to its hostile attitude towards the House of Lords, had drifted into a violent conflict with the Conservative party, and that the latter, in its turn, during the election campaign had accused the Cabinet of having neglected the navy, driving home its arguments by constantly pointing out the “German danger.” Moreover, King Edward had died in the meantime (May 6th, 1910), and of his son and successor it was said that he, at the time of his accession to the throne, was no longer a man of unbiased sentiment, that he was very anti-German, and that he was under the influence of a small group of Conservative extremists.

It may not be out of place to reproduce in this connexion the text of two accounts dealing with the situation in England which Ballin wrote in the spring and in the summer of 1910 respectively, when he was staying in London, and which he submitted to the Kaiser for his information.

In the early part of 1910 he wrote:

From the second report, in the summer of 1910, the following is the salient extract:

Up to the summer of 1911 the feeling remained friendly. Early in July Ballin wrote:

However, this readiness to come to an understanding received a setback during the course of the year, when it was adversely affected by the new developments in the Morocco affair and by the dispatch of the Panther to Agadir, which led to fresh complications with France, and later also with Great Britain. The grievances of the latter found expression in a sharply worded speech by Lloyd George in July, 1911, the main argument of which was that Great Britain, in questions affecting her vital interests, could not allow herself to be treated as though she were non-existent. In Germany this pronouncement led to violent attacks on the part of the Conservative opposition against Herr v. Bethmann and against England, and it was the latter against whom Herr v. Heydebrand directed his quotation from Schiller, to the effect that a nation which did not stake her everything on her honour was deserving only of contempt. It is also well known that the outcome of the whole affair, as well as its sequel, the Franco-German Congo agreement, produced much indignation in Germany, where it was felt that the material results obtained were hardly worth the great display of force, and that it was still less worth while to be drifted into a big war in consequence of this incident.

The measure of the anxiety which was felt at that time in business and financial circles all over the world may be gauged by reading the following letter from Ballin to the Secretary of State, Herr v. Kiderlen-Wächter, in which it is necessary to read between the lines here and there.

A most interesting document, and one which casts a clear sidelight on the divergence of opinion held in Germany and Great Britain, and on the chances of arriving at an agreement, is an article which dates from the latter part of 1911.

This article deals with the Anglo-German controversy and was published by the Westminster Gazette. It was sent to Ballin by an English friend with the remark that it presented a faithful picture of the views on foreign affairs held by the great majority of British Liberals. Ballin forwarded it to Berlin for the Kaiser’s information, with a note saying that he had received it from one of the most level-headed Englishmen he had ever met. It was subsequently returned to him, with the addition of a number of marginal notes and a lengthy paragraph at its close, all written in the Kaiser’s own handwriting. The numerous underlinings, too, are the Kaiser’s own work. On account of its historical interest a facsimile reproduction of this article is inserted at the end of the book. The following is a translation of the Kaiser’s criticism at the conclusion of the article:

The year 1912 opened with several pronouncements of the British Press in favour of an Anglo-German understanding. It was even hinted that Britain would raise no objections to a possible extension of Germany’s colonial activities, or, as one paper put it, “to the foundation of a German African empire stretching from the Atlantic to the Indian Ocean.” Similar sentiments were expressed in a letter from Sir Ernest Cassel to Ballin, dated January 9th, 1912.

The striking fact that after a long interval, and in spite of the failure of the previous endeavours, a renewed attempt was made to arrive at a naval understanding, and that special pains were taken to ensure its success, may be due to various causes. For instance, the Morocco incident of 1911 had shown how easily a series of comparatively unimportant events might lead within reach of a dangerous catastrophe, unless the atmosphere of general distrust could be removed, and it was felt in Great Britain that this distrust was largely the result of the constant and regular increase of Germany’s armaments. Moreover, it was known that a new Navy Bill was then forthcoming in Germany which, in its turn, would be bound to cause fresh alarm, and growing expenditure in Great Britain, and that the Liberal Cabinet would prefer to gain its laurels by bringing about a more peaceful frame of mind. Finally, Mr. Winston Churchill had been appointed First Lord of the Admiralty in October, 1911, and as he was known to be by no means anti-German, his entering upon office may have given rise to the hope that, while he was administering the affairs of the Navy, it would be possible to settle certain purely technical matters affecting his department, which could then furnish the conditions preliminary to an understanding with Germany. Ballin, at any rate, had cherished the hope—as is borne out by the letter quoted above—that Mr. Churchill could be induced to pay a visit to Germany, and that an opportunity might then be found to bring the naval experts of both countries face to face with each other. Ballin had always eagerly desired that such a meeting should take place, because his long experience in settling difficult business questions had taught him that there was no greater barrier between people, and certainly none that hampered their intellectual rapprochement to a larger extent, than the fact of their never having come into personal contact with one another, and of never having had a chance to actually familiarize themselves with the mentality and the whole personality of the man representing the other side. It might also be assumed that, once the two really responsible persons—Churchill and Tirpitz—had met in conclave, the feeling of their mutual responsibility would be too strong to allow the negotiations to end in failure.

Unfortunately, such a meeting never took place; all that was achieved was a preliminary step, viz. the visit of Lord Haldane to Berlin.

Owing to the lack of documentary evidence it is not possible to say who first suggested this visit, but it is clear that the suggestion—whoever may have been its author—was eagerly taken up by Sir Ernest Cassel and Ballin, and that it also met with a warm welcome on the part of Herr v. Bethmann. In reply to a telegram which Ballin, with the approval—if not at the actual desire—of the Chancellor, sent to his friend in London, a message reached him on February 2nd, 1912, when he was in Berlin engaged on these very matters. This reply, which originated with the Foreign Office, expressed the sender’s thanks for the invitation to attend a meeting of delegates in Berlin and his appreciation of the whole spirit which had prompted the German suggestion, and then went on to say that the new German Navy Bill would necessitate an immediate increase in the British naval estimates, because the latter had been framed on the supposition that the German programme would remain unaltered. If the British Government were compelled to find the means for such an increase, the suggested negotiations would be difficult, if not impossible. On the other hand, the German programme might perhaps be modified by spreading it out over a longer period of time or by some similar measure, so that a considerable increase of British naval construction in order to balance the German efforts could be avoided. In that case the British Government would be ready to proceed with the negotiations without loss of time, as it would be taken for granted that there was a fair prospect of the proposed discussions leading to a favourable result. If this suggestion was acceptable to Germany, the British Government thought the next step should be a private—and not an official—visit of a British Cabinet Minister to Berlin.

Perhaps it is now permissible to give the text of some documents without any further comment, as these latter speak for themselves. The first is a letter of the Chancellor addressed to Ballin, and reads as follows:

The next document is a letter of Ballin to Sir Ernest Cassel, intended to explain the situation.

I was instructed to hand the following note by the German Government to Sir Ernest Cassel with the request to pass it on to the British Government, and at the same time I was to explain verbally and in greater detail the contents of Ballin’s letter on the situation.

The text of the official note is as follows:

On the evening of the same day (February 4th) I left for London. I arrived there the following evening and went straight to Sir Ernest Cassel. I prepared the following statement for Ballin at the time, in which I described the substance of our conversation and the outcome of my visit:

The positive information which this report contained was passed on to the Chancellor.

By way of explanation it may be added that the German Navy Bill, which later on, at the end of March, 1912, was laid before the Reichstag, provided for the formation of a third active squadron in order to adapt the increase in the number of the crews to the increase in the material. This third squadron necessitated the addition of three new battleships and of two small cruisers, and it was also intended to increase the number of submarines and to make provision for the construction of airships.

The discussions with Lord Haldane took place at the Royal Castle, Berlin, on February 9th, the Kaiser being in the chair. The Chancellor did not attend, he had a separate interview with Haldane. The outcome of the conference is described in a statement from an authoritative source, viz. in a note which the Kaiser dispatched to Ballin by special messenger immediately after the close of the conference. It reads as follows:

After Lord Haldane’s departure from Berlin there was a gap of considerable length in the negotiations which had made such a promising start, and unfortunately during that time Mr. Churchill made a speech which not only the German papers but also the Liberal Press in Great Britain described as wanting in discretion. The passage which German opinion resented most of all was the statement that, in contrast with Great Britain, for whom a big navy was an absolute necessity, to Germany such navy was merely a luxury.

For the rest, the following two letters from the Chancellor to Ballin may throw some light on the causes of the break in the negotiations:

“Berlin.
“2.3.1912.

“Dear Mr. Ballin,

In order to find out whether any foreign influence might have been at work in London, I was commissioned to meet Sir Ernest Cassel in the South of Europe early in March. Ballin supplied me with a letter containing a detailed account of the general situation. Owing to a delay in the proposed meeting, I took the precaution of burning the letter, as I had been instructed to do, and I informed Sir Ernest of its contents by word of mouth.

In this document Ballin gave a brief résumé of the situation as it appeared to him after his consultations with the various competent departments in Berlin, somewhat on the following lines:

(1) After Lord Haldane’s return Sir Edward Grey officially told Count Metternich that he was highly pleased with the successful issue of Lord Haldane’s mission, and gave him to understand that he thought it unlikely that any difficulties would arise.

(2) A few days later Mr. Asquith made a statement in the House of Commons which amply confirmed the views held by Sir Edward Grey, and which produced a most favourable impression in Berlin.

(3) This induced the Chancellor to make an equally amicable and hopeful statement to the Reichstag.

(4) In spite of this, however, there arose an interval of several weeks, during which neither Count Metternich nor anybody in Berlin received any news from the proper department in London. This silence naturally caused some uneasiness.

(5) Count Metternich was asked to call at the Foreign Office, where Sir Edward Grey commenced to raise objections mainly in reference to the Navy Bill. “I must add in this connexion—as, no doubt, Lord Haldane has also told you verbally—that on the last day of his stay in Berlin an understanding was arrived at between the competent quarters on our side and Lord Haldane with regard to the building dates of the three battleships. As you will remember, it had been agreed not to discuss the proposed establishment of the third squadron on an active footing and the increase in the number of the crews connected with it, but to look upon these subjects as lying outside the negotiations.” Quite suddenly and quite unexpectedly we are now faced with a great change in the situation. Grey, as I have said before, objects—in terms of the greatest politeness, of course—to the increase in the number of the crews, asks questions as to our intentions with regard to torpedo boats and submarines, and—this is most significant—emphasizes that the Haldane mission has at any rate been of great use, even if the negotiations should not lead to any definite result.

(6) The next event was a further interview with Count Metternich during which it was stated that, according to the calculations of the First Lord of the Admiralty, the increase in the number of the crews amounted to 15,000 men, whilst it had been thought in England that it would be a question of from 4,000 to 5,000 men at the outset. It appeared that this large increase was looked upon with misgivings, and that it was desired to enter into fresh negotiations which would greatly interfere with the arrangements made by the German competent quarters with regard to the navy. Hence Metternich replied that, in his opinion, these explanations could only mean that the Cabinet did not agree to the arrangements made by Lord Haldane. Grey’s answer was full of polite assurances couched in the language of diplomacy, but, translated into plain German, what he meant was: “You are quite right.”

Ballin’s letter went on to say that the German Navy Bill had gradually been reduced to a minimum, and that it was not possible to cut it down any further. We could not, and we would not, give rise to the suspicion that great alterations had been made merely to meet British objections. Finally, Ballin requested his friend to go to London in order to make inquiries on the spot, and also declared his readiness to go there himself.

My report on my conversations with Sir Ernest Cassel, which took place at Marseilles on March 9th and 10th, is as follows:

In order to make further inquiries about the state of things and to assist in promoting the good cause, Ballin, immediately after my return, proceeded to Paris and then to London. He reported to the Chancellor upon the impressions he had received in Paris. The following is an extract from his report:

From London Ballin sent me some telegrams which I was instructed to pass on to the Chancellor. In these messages he stated that his conversations with the German Ambassador and with Haldane had convinced him that people in London believed that the increase in the number of the crews, if the proposed German Navy Bill became law, would be greater than the figures given by Berlin would make it appear. It would therefore be most desirable to arrange for a meeting of experts to clear up this discrepancy. Ballin’s impression was that the British Cabinet, and also the King, were still favourably disposed to the whole plan, and that the Cabinet was unanimous in this view. A conversation with Churchill, which lasted several hours, confirmed these impressions. In London the increase in the number of the crews had previously been estimated at half of what it would really be, and alarm was felt about the large number of torpedo boats and submarines demanded; but since the German Government had explained that the figures arrived at in London—i.e. those stated in the memorandum which had been addressed to the German Government some time before—were not correct, Churchill had agreed that both sides should nominate experts who would check the figures and put them right. Churchill was anxious to see that the matter was brought to a successful issue, and he was still hoping that a neutrality agreement would induce the German Government to make concessions in regard to the Navy Bill.

When Ballin had satisfied himself as to this state of things, he immediately returned to Berlin, as he did not consider it appropriate that any private person should do anything further for the time being, and as he thought that the conduct of the discussions concerning the neutrality agreement were best left to the Ambassador.

Meanwhile, however, the German Government had definitely made up its mind that the Navy Bill would have to remain as it stood. This was the information Ballin received from the Kaiser and the Chancellor when he returned from London on March 16th.

Sir Ernest Cassel then suggested to the British Government that the negotiations concerning the neutrality agreement should be re-opened as soon as the first excitement caused by the Navy Bill had subsided, which would probably be the case within a few months, and that the interval should be utilized for clearing up the details. In Berlin, however, the discussions were looked upon as having been broken off, as may be seen from the following telegram which the Kaiser sent to Ballin on March 19th in reply to Ballin’s information about his last exchange of telegrams with London:

That the negotiations had actually been broken off was confirmed to Ballin by a letter of the Chancellor of the same date:

The conviction of the inherent impossibility of solving the problem was shared by many people in Germany—chiefly, of course, by those connected with the Navy; and some critics went so far as to say that Great Britain had never honestly meant to arrive at an understanding, or at any rate that Haldane—whose honesty and sincerity were beyond doubt—was disowned by his fellow-members in the Cabinet.

When Ballin, in compliance with the wishes of the Foreign Office, went to London during the critical period before the outbreak of the war in 1914, he wrote a letter from there to a naval officer of high rank with whom he had been on terms of friendship for years. This document is of interest now because it shows what Ballin’s own standpoint was with regard to the views described in the previous paragraph:

It may be supposed that history, in the meantime, has proved whose standpoint was the correct one: that of the business man or that of the naval expert.

Not much need be said about the subsequent development of events up to the outbreak of the war.

The above-mentioned opinion which the Chancellor held regarding Churchill’s speech of March 18th, 1912, was probably arrived at on the strength of the cabled reports only. Whoever reads the full original text of the speech must fail to find anything aggressive in it, and there was no harm in admitting that it was a perfectly frank and honest statement concerning the naval rivalry of the two Powers. Among other things it contained the suggestion that a “naval holiday” should be agreed upon, i.e. both countries should abstain from building new ships for a definite period. We, at any rate, looked upon Churchill’s speech as a suitable means of making people see what would be the ultimate consequences of the interminable naval armaments. I made a German translation of it which, with the aid of one of the committees for an Anglo-German understanding, I spread broadcast all over the country. However, it proved a complete failure, as there were powerful groups in both countries who contended that the efforts to reconcile the two standpoints could not lead to any positive result, and that the old injunction, si vis pacem, para bellum, indicated the only right solution. Only a master mind could have overcome these difficulties. But Herr v. Bethmann, as we know, considered that the problem, for inherent reasons, did not admit of any solution at all, and the Kaiser’s initial enthusiasm had probably been damped by subsequent influences of a different kind. Ballin himself, in later years, ascribed the failure of the mission to the circumstance that the Kaiser and his Chancellor, between themselves only, had attempted to bring the whole matter to a successful issue instead of entrusting this task to the Secretary of Foreign Affairs and to Admiral Tirpitz, the Secretary for the Navy.

An interesting sidelight on the causes which led to the failure of this last important attempt to reach an understanding is thrown by the rumours which were spread in the German Press in March, 1912, to the effect that the Secretary of State for Foreign Affairs, Herr v. Kiderlen, wished to resign, because he felt that he had been left too much in the dark with regard to the Anglo-German negotiations. It was also reported that the Chancellor’s position had been shaken, and that Admiral Tirpitz felt dissatisfied, because the Navy Bill did not go far enough. Probably there was some vestige of truth in all these rumours, and this may have been connected with the attitude which the three gentlemen concerned had taken up towards the question of the negotiations with Great Britain.

Shortly after the visit of Lord Haldane Ballin received a letter from a personage belonging to the Kaiser’s entourage in which it was said:

When it had become certain that the last attempt to reach an understanding had definitely and finally failed, the ambassador in London, Count Metternich, did not shrink from drawing the only possible conclusion from it. He had always expressed his conviction that a war between Germany and a Franco-Russian coalition would find Great Britain on the side of Germany’s opponents, and his resignation—which, as usual, was explained by the state of his health—was really due to a report of his in which he stated it as his opinion that a continuation of German armaments would lead to war with Great Britain no later than 1915. It is alleged that the Kaiser added a very “ungracious” marginal note to this report. Consequently, the ambassador, who was a man of very independent character, did the only thing he could consistently do, and resigned his office. In taking this step he may have been influenced by the reception which the failure of the Haldane mission met with in Conservative circles in Great Britain, where no stone was left unturned to urge the necessity for continuing the policy of big armaments and to paint German untrustworthiness in the most glaring colours.

Count Metternich’s successor was Herr v. Marschall, a gentleman whose appointment the Press and the official circles welcomed with great cordiality, and from whose considerable diplomatic abilities, which were acknowledged on all sides, an improvement of Anglo-German relations was confidently expected. It was said that the Kaiser had sent “his best man,” thus demonstrating how greatly he also desired better relations. But Herr v. Marschall’s activities came to a sudden end through his early death in September, 1912, and in October his place was taken by Prince Lichnowsky, whose efforts in the direction of an improvement in the relations are familiar to everyone who has read his pamphlet. Apart from the work performed by the ambassadors, great credit is also due to the activities displayed by Herr v. Kühlmann, the then Secretary to the Legation and subsequent Secretary of State. The public did not see a deal of his work, which was conducted with skill and was consistent. His close personal acquaintance with some of the leading British politicians, especially with Sir Edward Grey, enabled him to do much work for the maintenance of good relations and in the interest of European peace, particularly during the time when the post of ambassador was vacant, and also during the Balkan War. He had, moreover, a great deal to do with the drafting of the two colonial agreements dealing with the Bagdad Railway and the African problems respectively, both of which were ready for signature in the summer of 1914. The former especially may be looked upon as a proof not only that a considerable improvement had taken place in Anglo-German relations, but also that Great Britain was not inclined to adjust the guiding lines of her policy in Asia Minor exclusively in conformity with the wishes of Russia. Anybody who takes an interest in the then existing possibilities of German expansion with the consent of Great Britain and on the basis of these colonial draft agreements cannot do better than read the anonymous pamphlet entitled “Deutsche Weltpolitik und kein Krieg” ("German World Power and No War"), published in 1913 by Messrs. Puttkamer & Mühlbrecht, of Berlin. The author is Dr. Plehn, the then representative of the Cologne Gazette in London, and it partly reflects the views of Herr v. Kühlmann.

In this connexion I should like to refer briefly to an episode which took place towards the close of 1912. The German periodicals have already discussed it, especially the Süddeutsche Monatshafte in June, 1921, in a review of the reports which Count Lerchenfeld, the Bavarian minister to the Court of Berlin, had made for the information of his Government. In these reports he mentions an event to which the Kaiser had already referred in a letter to Ballin dated December 15th, 1912. The Kaiser, in commenting on the state of tension then existing between Austria and Serbia, made some significant remarks concerning the policy of Germany towards Austria-Hungary. When the relations between Vienna and Petrograd, he wrote, had assumed a dangerous character, because it was recognized that the attitude of Serbia was based on her hope of Russian support, Germany might be faced with the possibility of having to come to the assistance of Austria.

Ballin did not omit to ask his friend for some details concerning the visit of Lord Haldane mentioned in the Kaiser’s letter, and was furnished with the following explanation by Lord Haldane himself.

Nothing had been further from his intentions, he said, than to call on Prince Lichnowsky for the express purpose of making any such declaration; and Balkan questions, to the best of his recollection, had not been touched at all. He had spent a very pleasant half-hour with the Prince, and in the course of their conversation he had seen fit to repeat the formula which had been discussed during his stay in Berlin, and which referred to Britain’s interest in the preservation of the integrity of France. This, possibly, might have given rise to the misunderstanding.

Prince Lichnowsky himself, in his pamphlet entitled “My London Mission,” relates the incident as follows:

The failure of the negotiations aiming at an understanding led to a continuance of the increase in the British armaments, a concentration of the British battle fleet in the North Sea, and to that of the French fleet in the Mediterranean. The latter arrangement was looked upon in Germany as a menace directed against Italy, and produced a sharp semi-official criticism in the Frankfurter Zeitung. In spite of all this, however, friendly messages from London concerning the possibilities of an understanding, the “naval holiday,” etc., reached Germany from time to time.

How closely Ballin clung to his favourite idea that the naval experts of both countries should come to an understanding is demonstrated by the circumstance that in 1914, when the British squadron was present during the Kiel yachting week, he tried to bring about a meeting and a personal exchange of views between Churchill and Tirpitz.

Churchill was by no means disinclined to come to Germany for this purpose, but unfortunately the desire was expressed by the German side, and especially by the Kaiser, that the British Government should make an official inquiry whether his visit would be welcomed. The Government, however, was not disposed to do so, and the whole thing fell through, although Churchill sent word that, if Tirpitz really wanted to see him, he would find means to bring about such a meeting.

Thus the last attempt at an understanding had resulted in failure, and before any further efforts in the same direction could be made, Europe had been overtaken by its fate.

CHAPTER IX

The Kaiser

The origin of the friendship between Ballin and the Kaiser, which has given rise to so much comment and to so many rumours, was traced back by the Kaiser himself to the year 1891, when he inspected the express steamer Auguste Victoria, and when he, accompanied by the Kaiserin, made a trip on board the newly-built express steamer Fürst Bismarck. Ballin, although he received the honour of a decoration and a few gracious words from His Majesty, did not think that this meeting had established any special contact between himself and his sovereign. He told me, indeed, that he dated their acquaintance from a memorable meeting which took place in Berlin in 1895, and which was concerned with the preparations for the festivities in celebration of the opening of the Kiel Canal.

The Kaiser wanted the event to be as magnificent as possible, and his wishes to this effect were fully met by the Hamburg civic authorities and by the shipping companies. Although Ballin had only been a short time in the position he then held, his versatile mind did not overlook the opportunity thus offered for advertising his company. The Kaiser was keenly interested in every detail. After some preliminary discussions with the Hamburg Senate, all the interested parties were invited to send their delegates to Berlin, where a general meeting was to be held in the Royal Castle with the Kaiser in the chair. It was arranged that the North German Lloyd and the Hamburg-Amerika Linie should provide one steamer each, which was to convey the representatives of the Government departments and of the Reichstag, as well as the remaining guests, except those who were to be accommodated on board the Hohenzollern, and that both steamers should follow in the wake of the latter all the way down the Elbe from Hamburg to the Canal. When this item was discussed the Kaiser said he had arranged that the Hohenzollern should be followed first by the Lloyd steamer and then by the Hamburg-Amerika liner. Thereupon Ballin asked leave to speak. He explained that, since the journey was to start in Hamburg territorial waters, it would perhaps be proper to extend to the Hamburg company the honour of the position immediately after the Imperial yacht. The Kaiser, in a tone which sounded by no means gracious, declared that he did not think this was necessary, and that he had already given a definite promise to the Lloyd people. Ballin replied that, if the Kaiser had pledged his word, the matter, of course, was settled, and that he would withdraw his suggestion, although he considered himself justified in making it.

At the close of the meeting Count Waldersee, who had been one of those present, took Ballin’s arm and said to him: “As you are now sure to be hanged from the Brandenburger Tor, let us go to Hiller’s before it comes off, to have some lunch together.” Ballin never ceased to be grateful to the Count for this sign of kindness, and his friendship with him and his family lasted until his death. The arrangements made by the Hamburg-Amerika Linie for the reception of its guests were carefully prepared and carried out. It is not easy to give an idea to a non-expert of the great many minute details which have to be attended to in order to accommodate a large number of exacting visitors on a steamer in such a manner that nobody finds anything to complain of, especially if, as is but natural on an occasion such as this, an endless variety of questions as to precedence and etiquette have to be taken into account. Great pains and much circumspection are necessary to arrange to everybody’s satisfaction all matters affecting the reception of the guests, the provision of food and drinks, the conveyance of luggage, etc. Thanks to the infinite care, however, with which Ballin and his fellow-workers attended to this matter, everything turned out eminently satisfactory. In the evening, when the guests of the Hamburg-Amerika Linie were returning to their steamer at the close of the festivities, the company agreeably surprised them by providing an artistically arranged collation of cold meats, etc., and the news of this spread so quickly that from the other vessels people who felt that the official catering had not taken sufficient account of their appetites, lost no time in availing themselves of this opportunity of a meal.

This event, at any rate, helped to establish the reputation of the company’s hospitality.

It may be presumed that this incident had shown the Kaiser—who, although he did not object to being contradicted in private, could not bear it in public—that the Hamburg Company was animated by a spirit of independence which did not subordinate itself to other influences without a protest, and which jealously guarded its position. It must be stated that the Kaiser never bore Ballin any ill will on account of his opposition, which may be partly due to the great pains the Packetfahrt took in order to make the festivities a success. The event may also have induced the Kaiser to watch the progress of the Hamburg-Amerika Linie after that with particular attention. His special interest was centred round the provision for new construction, and in this matter he exerted his influence from an early time in favour of the German yards.

The first occasion of the Kaiser’s pleading in favour of German yards dates from the time previous to his accession to the throne. Ballin, in a speech which he delivered when the trial trip of the s.s. Meteor took place, stated the facts connected with this intervention as follows: The directors had just started negotiations with British shipbuilding firms for the building of their first express steamer when the Prussian Minister to the Free City of Hamburg called to inform them, at the request of Prince Bismarck, that the latter, acting upon the urgent representations of Prince Wilhelm, suggested that they should entrust the building of the big vessel to a German yard. The Prince was profoundly convinced that Germany, for the sake of her own future, must cease to play the part of Cinderella among the nations, and that there was no want of engineers among his countrymen who, if given a chance, would prove just as efficient as their fellow-craftsmen in England. The Packetfahrt thereupon entrusted the building of the vessel to the Stettin Vulkan yard. She was the fast steamer Auguste Victoria, and was christened after the young Empress. Launched in 1888, she immediately won “the blue riband of the Atlantic” on her first trip.

Another and still more practical suggestion of the Kaiser was put forward at the time when the company were about to build an excursion steamer. The satisfactory results which their fast steamers had yielded during the dead season in the transatlantic passage business when used for pleasure cruises had induced them to take this step, and when the Kaiser’s attention was drawn to this project, he, on the strength of the experience he had made with his Hohenzollern, designed a sketch and composed a memorandum dealing with the equipment of such a steamer. It was Ballin’s opinion that this Imperial memorandum contained some suggestions worth studying, although it was but natural that the monarch could not be expected to be sufficiently acquainted with all the practical considerations which the company had to bear in mind in order to make the innovation pay, and that, therefore, some of his recommendations could not be carried out.

If we remember what vivid pleasure the Kaiser derived from his own holiday cruises, it cannot surprise us to see that he took such a keen interest in the company’s excursion trips. How keen it was may be inferred from an incident which happened early in his reign, and to which Ballin, when describing his first experiences on this subject, referred in his above-mentioned speech on the occasion of the trial trip of the Meteor. Ballin said: “Even among my most intimate associates people were not wanting who thought that I was not quite right in my mind when, at the head of 241 intrepid travellers, I set out on the first pleasure cruise to the Far East in January, 1891. The Kaiser had just inspected the vessel, and then bade farewell to the company and myself by saying: ‘That’s right. Make our countrymen feel at home on the open sea, and both your company and the whole nation will reap the benefit.’”

In after years the Kaiser’s interest in the company chiefly centred round those landmarks in its progress which marked the country’s expansion in the direction of Weltpolitik, e.g. its participation in the Imperial Mail Service to the Far East, its taking up a share in the African trade, etc. In fact, after 1901, when the Kaiser had keenly interested himself in the establishment of the Morgan Trust and its connexion with German shipping companies, there was scarcely an important event in the history of the company (such as the extension of its services, the addition of a big new steamer, etc.) which he allowed to pass without a few cordial words of congratulation. He also took the liveliest interest in the personal well-being of Ballin. He always sent him the compliments of the season at Christmas or for the New Year, generally in the shape of picture post-cards or photographs from his travels, together with a few gracious words, and he never failed to remember the anniversaries of important events in Ballin’s life or to inquire after him on recovering from an illness. Ballin, in his turn, acquainted the Kaiser with anything which he believed might be of interest to His Majesty, or might improve his knowledge of the economic conditions existing in his own as well as in foreign countries. He kept him informed about all the more important pool negotiations, e.g. those in connexion with the establishment, in 1908, of the general pool, and those referring to the agreements concluded with other German shipping companies, etc. Whenever he noticed on his travels any signs of important developments, chiefly those of a political kind, he furnished his Imperial friend with reports on the foreign situation.

In 1904 the Kaiser’s interest in Ballin took a particularly practical form. Ballin had suffered a great deal from neuralgic pains which, in spite of the treatment of various physicians, did not really and permanently diminish until the patient was taken in hand by Professor Schweninger, the famous medical adviser of no less a man than Bismarck. Ballin himself testified to the unvaried attention and kindness of Dr. Schweninger, and to the great success of his treatment. It is to be assumed that Schweninger, because of his energetic manner of dealing with his patients, was eminently suited to Ballin’s disposition, which was not an easy one for his doctor and for those round him to cope with.

The lively interest which the Kaiser took in the development of our mercantile marine was naturally closely connected with the growth of the Imperial Navy and with our naval policy in general. The country’s maritime interests and the merchant fleet were the real motives that prompted his own naval policy, whereas Tirpitz chiefly looked upon them as a valuable asset for propaganda purposes. During the first stage of the naval policy and of the naval propaganda—which at that time were conducted on quite moderate lines—Ballin, as he repeatedly told me, played a very active part. It was the time when the well-known periodical Nautikus, afterwards issued at regular annual intervals, was first published by the Ministry for the Navy, and when a very active propaganda in favour of the navy and of the country’s maritime interests was started. Experience has proved how difficult it is to start such a propaganda, especially through the medium of a Press so loosely organized as was the German Press in those days. But it is still more difficult to stop, or even to lessen, such propaganda once it has been started, because the preliminary condition for any active propaganda work is that a large number of individual persons and organizations should be interested in it. It is next to impossible to induce these people to discontinue their activities when it is no longer thought desirable to keep up the propaganda after its original aim has been achieved. Germany’s maritime interests remained a favourite subject of Press discussions, and the animation with which these were carried on reached a climax whenever a supplementary Navy Bill was introduced. Even when it was intended to widen the Kiel Canal, as it proved too narrow for the vessels of the “Dreadnought” type, the necessity for doing so was explained by reference to the constantly increasing size of the new steamers built for the mercantile marine; although, seeing that the shallow waters of the Baltic and of the channels leading into it made it quite impossible to use them for this purpose, nobody ever proposed to send those big ships through the canal. In later years Ballin often spoke with great bitterness of those journalists who would never leave off writing about “the daring of our merchant fleet” in terms of unmeasured eulogy, and whom he described as the greatest enemies of the Hamburg-Amerika Linie.

But it was not only the propaganda work for the Imperial Navy to which the Kaiser contributed by his own personal efforts: the range of his maritime interests was much wider. He gave his assistance when the problems connected with the troop transports to the Far East and to South West Africa were under discussion; he studied with keen attention the progress of the German mercantile marine, the vessels of which he frequently met on his travels; he often went on board the German tourist steamers, those in Norwegian waters for instance, when he would unfailingly make some complimentary remarks on the management, and he became the lavish patron of the sporting events known as Kiel Week, the scope of which was extending from year to year. The Kiel Week, originally started by the yachting clubs of Hamburg for the encouragement of their sport, gradually developed into a social event of the first order, and since 1902 it became customary for the Hamburg-Amerika Linie to dispatch one of their big steamers to Kiel, where it served as a hotel ship for a large number of the visitors. From 1897 Kiel Week was preceded by a visit of the Kaiser—and frequently of the Kaiserin as well—to Hamburg, where their Majesties attended the summer races and the yachting regatta on the lower Elbe. In 1897 the Kaiser had the intention of being present at a banquet which the Norddeutsche Regatta-Verein was giving on board the Packetfahrt liner Columbia, and he was only prevented from doing so at the last moment. In the following year the Hamburg-Amerika Linie sent their s.s. Pretoria to Kiel. On this vessel the well-known “Regatta dinner” took place which the Kaiser attended, and which, on future occasions, he continued to honour with his presence. Ballin received a special invitation to visit the Kaiser on board his yacht Hohenzollern. He could not, however, avail himself of it, because the message only reached him on his way home to Hamburg. The year after, the Kaiser commanded Ballin to sit next to him at the table, and engaged him in a long conversation on the subject of the load-line which he wanted to see adopted by German shipping firms for their vessels. The Packetfahrt carried this suggestion into practice shortly afterwards, and in course of time the other companies followed suit.

On the occasion of these festivities the Kaiser in 1904 paid a visit to the new premises of the Hamburg-Amerika Linie. In 1905 and in subsequent years he also visited Ballin’s private home and took lunch with him. The speeches which he made at the regatta dinners given in connexion with the regatta on the lower Elbe frequently contained some political references. In 1908, for instance, he said:

In 1912 he quoted the motto from the Lübeck Ratskeller:

And in 1914, after the launch of the big steamer Bismarck, he quoted Bismarck’s saying, slightly altered:

“We Germans fear God, but nothing and nobody besides.”

Kiel Week never passed without a great deal of political discussion. The close personal contact on such occasions between Ballin and the Kaiser furnished the former with many an opportunity for expressing his views on politics. Much has been said about William II’s “irresponsible advisers,” who are alleged to have endeavoured to influence him in the interests of certain cliques, and it cannot, of course, be denied that the men who formed the personal entourage of the monarch were very far from representing every shade of public opinion, even if that had been possible. The traditions of the Prussian Court and of princely education may have contributed their share to this state of things. The result, at any rate, was that in times of crises—as, for instance, during the war—it was impossible to break through the phalanx of men who guarded the Kaiser and to withdraw him from their influence. Events have shown how strong this influence must have been, and how little it was suited to induce the Kaiser to apply any self-criticism to his preconceived ideas. Added to this, there was the difficulty of obtaining a private conversation with the Kaiser for any length of time—a difficulty which was but rarely overcome even by persons possessing very high credentials. It has already been mentioned that the Kaiser did not like to be contradicted in the presence of others, because he considered it derogatory to his sovereign position. Ballin repeatedly succeeded in engaging the Kaiser in private conversations of some length, especially after his journeys abroad, when the Kaiser invited him to lunch with him, and afterwards to accompany him on a walk unattended.

Ballin’s notes more than once refer to such conversations with the Kaiser, e.g. on June 3rd, 1901, when he had been a member of the Imperial luncheon party:

The following passage, referring to the Kiel Week, is taken from the notes of the same year:

During his trip to the Far East Ballin had taken a great deal of trouble to bring about the establishment of a German-Japanese bank.

The following extracts are taken from the notes of subsequent years:

Whenever the Kaiser granted Ballin an interview without the presence of witnesses he cast aside all dignity, and discussed matters with him as friend to friend. Neither did he object to his friend’s counsel and admonitions, and he was not offended if Ballin, on such occasions, subjected his actions or his opinions to severe criticism.

On such occasions the Kaiser, as Ballin repeatedly pointed out, “took it all in without interrupting, looking at me from the depth of his kind and honest eyes.” That he did not bear Ballin any malice for his frankness is shown by the fact that he took a lively and cordial interest in all the events touching the private life of Ballin and his family, his daughter’s engagement, for instance—an interest which still continued after Ballin’s death.

In spite of this close friendship between Ballin and the Kaiser, it would be quite wrong to assume that Ballin exercised anything resembling a permanent influence on His Majesty. Their meetings took place only very occasionally, and were often separated by intervals extending over several months, and it happened only in rare cases that Ballin availed himself of the privilege of writing to the Kaiser in person. It is true that the latter was always pleased to listen to Ballin’s explanations of his views, and it is possible that every now and than he did allow himself to be guided by them; but it is quite certain that he never allowed these views to exercise any actual influence on the country’s politics. The events narrated in the chapter of this book dealing with politics show that in a concrete case, at any rate, Ballin’s recommendations and the weight of his arguments were not sufficient to cope successfully with the influence of others who were the permanent advisers of the sovereign, and who had at all times access to His Majesty.

If thus the effect of Ballin’s friendship with the Kaiser has frequently been greatly overrated in regard to politics, the same holds good—and, indeed, to a still greater extent—in regard to the advantages which the Hamburg-Amerika Linie is supposed to have derived from it. One of Ballin’s associates on the Board of the company was quite right when he said: “Ballin’s friendship with the Kaiser has done more harm than good to the Hamburg-Amerika Linie.” Indirectly, of course, it raised the prestige of the company both at home and abroad. But there is no doubt that it had also an adverse effect upon it: at any rate, outside of Germany. It gave rise to all sorts of rumours, e.g. that the company obtained great advantages from the Government; that the latter subsidized it to a considerable extent; that the Kaiser was one of the principal shareholders, etc. It is also quite certain that these beliefs were largely instrumental in making the Hamburg-Amerika Linie, as Ballin put it, one of the war aims of Great Britain, and it is even alleged that, at the close of the war, the British Government approached some of the country’s leading shipping firms with the suggestion that they should buy up the Hamburg-Amerika Linie or the North German Lloyd. This was at the time when it became desirable to secure the necessary organization for the intended commercial conquest of the Continent. It is quite possible—and, I am inclined to think, quite probable—that this suggestion was put forward because such a step would be in harmony with that frame of mind from which originated such stipulations of the Versailles treaty as deal with shipping masters, and with the assumption that German shipping—which was supposed to depend for its continuance mainly on the existence of the German monarchial system—would practically come to an end with the disappearance of the latter. It would, indeed, be difficult to name any historical document which pays less regard to the vital necessities of a nation and which actually ignores them more completely than does the treaty signed at Versailles.

The allegation that Ballin should ever have attempted to make use of his friendship with the Kaiser for his own or for his company’s benefit is, moreover, diametrically opposed to the established fact that he knew the precise limits of his influence, and that he never endeavoured to overreach himself. His “policy of compromise” was the practical outcome of this trait of his character.

The opinion which my close observation of Ballin’s work during the last ten years of his life enabled me to form was, as far as its political side is concerned, confirmed to me in every detail by no less a person than Prince Bülow, who, without doubt, is the most competent judge of German affairs in the first decade of the twentieth century. When I asked the Prince whether Ballin could be accused of ever having abused the friendship between himself and the Kaiser for any ulterior ends whatever, he replied with a decided negative. Ballin, he said, had never dreamt of doing such a thing. He had always exercised the greatest tact in his relations with the Kaiser, and had never made use of them to gain any private advantage. Besides, his views had nearly always coincided with those held by the responsible leaders of the country’s political destinies. Once only a conflict of opinion had arisen between Ballin and himself on a political question, and this was at the time when the customs tariffs were under discussion. Ballin held that these were detrimental to the country’s best interests, and it is a well-known fact that, at that time, there was a widespread feeling as to the impossibility of concluding any commercial treaties so long as those tariffs were in operation.

During the most critical period of the existence of the monarchy—i.e. during the war—Ballin’s influence on the Kaiser was but slight. Only on a very few occasions was he able to meet the Kaiser, and he never had an opportunity of talking to him privately, as in former times. It was the constant aim of the Kaiser’s entourage to maintain their controlling influence over the Kaiser unimpaired. Even when they last met—in September, 1918—and when Ballin, at the instance of the Supreme Army Command, was asked to explain to the Kaiser the situation as it actually was, he was not permitted to see the Kaiser without the presence of a witness, so that his influence could not assert itself. The fact that the Kaiser was debarred from knowing the truth was the cause of his and of his country’s ruin. “The Kaiser is only allowed to know the bright side of things,” Ballin used to say, “and therefore he does not see matters as they really stand.”

This is all the more regrettable because, as Ballin thought, the Kaiser was not wanting in either the capacity or the independence of mind which would have enabled him to pursue a policy better than the one in which he actually acquiesced. More than once, Ballin said, the Kaiser’s judgment on a political issue was absolutely sound, but he did not wish to act contrary to the recommendations of his responsible advisers. When, for instance, it was decided that the gunboat Panther should be dispatched to Agadir, a decision which was arrived at during Kiel Week of 1911, the Kaiser exclaimed, with much show of feeling, that a step of such far-reaching importance could not be taken on the spur of the moment and without consulting the nation, and he only gave his consent with great reluctance. Moreover, Ballin stated, he was by no means in sympathy with Tirpitz, and the latter was not a man after his own heart, but he was content to let him have his way, because he believed that the naval policy of Tirpitz was right, so that he was not entitled to jeopardize the interests of his country by dismissing him. The Kaiser was not moved by an ambitious desire to build up a powerful navy destined to risk all in a decisive struggle against Great Britain, and the numerous passages in his public speeches which foreign observers interpreted as implying such a desire, must be regarded as the explosive outbursts of a strong character which was sometimes directed into wrong channels by a certain sense of its own superiority, and which, in seeking to express itself, would occasionally outrun discretion. His inconsistency which made him an easy prey to the influence of his entourage, caused him to be looked upon by foreign critics as vacillating and unstable, and this impression—as was discovered when too late—discredited his country immensely in the eyes of Great Britain, who, after all, had to be reckoned with as the decisive factor in all questions relative to world policy. Such a character could be guided in the right direction only if the right influence could be brought permanently to bear on it. But who was to exercise such influence on the Kaiser? Certainly his entourage did not include anyone qualified to do so, because it was not representative of all sections of the nation; neither was any of the successive Chancellors able to undertake such a task, since none of them succeeded in solving the questions of internal policy in a manner approved by a reliable and solid majority in the Reichstag. The Kaiserin also was not free from prejudice as to the war and the causes of its outbreak. Ballin relates how, on one of the few occasions when he was privileged to see the Kaiser during the war, Her Majesty, with clenched fists, exclaimed: “Peace with England? Never!” The Imperial family considered themselves betrayed by England and the English court. Why this should be so is perhaps still more difficult to say now than Ballin could understand in those days. Arguments, however, were useless in such a case, and could produce nothing but harm. The Kaiser did not bear Ballin any malice because of the frankness with which he explained his views that day; on the contrary, members of the Kaiser’s entourage have confirmed that, after Ballin had left that evening, he even tried to make the Kaiserin see his (Ballin’s) point of view. Putting himself into Ballin’s position, he said, he could perfectly understand how he felt about it all; but he himself could not help thinking that his English relatives had played him false, so that he was forced to continue the struggle with England tooth and nail.

When Ballin, during the summer of 1918, gave me a character sketch of the Kaiser, of which the account I have endeavoured to present in the preceding paragraphs is an outline, he added: “But what is the good of it? He is, after all, the managing director, and if things turn out wrong he is held responsible exactly as if he were the director of a joint-stock company.”

This comparison of the German Empire and its ruler with a joint-stock company and its board of directors used to form a frequent subject of argument in our inner circle, and even before the war these discussions regularly led to the conclusion that, what with the policy carried on by the Government and that carried on by the parties in the Reichstag, the Hamburg-Amerika Linie would have gone bankrupt long ago if its affairs had been conducted on such lines as those of the German Empire. It was a never-ending cause of surprise to us to learn how completely the European situation was misjudged in the highest quarters, when, for instance, the following incident, which was reported to Ballin during the war, became known to us. One day, when the conversation at lunch in the Imperial headquarters turned to the subject of England, the Kaiser remarked: “I only wish someone had told me beforehand that England would take up arms against us,” to which one of those present replied in a quiet whisper: “Metternich.” It would have been just as proper, Ballin added, to have mentioned my own name, because I also warned the Kaiser over and over again. On another page in this book reference is made to the well-known fact that the reason why Count Metternich, the German ambassador at the Court of St. James, had to relinquish his post was that he, in one of his reports, predicted that Germany would be involved in war with Great Britain no later than 1915 unless she reduced the pace of her naval armaments. This was one of those numerous predictions to which, like so many others, especially during the war, no one wanted to listen. Even in the late summer of 1918, when Ballin saw the Kaiser for the last time, such warnings met with a deaf ear. This meeting, to which Ballin consented with reluctance, was the outcome of a friendship which, politically speaking, was devoid of practical results. A detailed account follows.

CHAPTER X

The War

About the middle of the month of July, 1914, Ballin, when staying at Kissingen for the benefit of his health, received a letter from the Foreign Secretary, Herr v. Jagow, which made him put an immediate end to his holiday and proceed to Berlin. The letter was dated July 15th, and its principal contents were as follows:

The Berliner Tageblatt, it said, had published some information concerning certain Anglo-Russian agreements on naval questions. The Foreign Office did not attach much value to it, because it was at variance with the general assumption that Germany’s relations with Great Britain had undergone a change for the better, and also with the apparent reluctance of British statesmen to tie their country to any such agreements. The matter, however, had been followed up all the same, and through very confidential channels it had been ascertained that the rumours in question were by no means devoid of an actual background of fact. Grey, too, had not denied them point blank at his interview with Lichnowsky. It was quite true that Anglo-Russian negotiations were proceeding on the subject of a naval agreement, and that the Russian Government was anxious to secure as much mutual co-operation between the two countries as possible. A definite understanding had not, so far, been reached, notwithstanding the pressure exercised by Russia. Grey’s attitude had become somewhat uncertain; but it was thought that he would ultimately give his consent, and that he would quieten his own conscience by arguing that the negotiations had not really been conducted between the Cabinets, but between the respective naval authorities. It was also quite likely that the British, who were adepts at the art of making nice distinctions, would be negotiating with the mental reservation that they would refrain from taking an active part when the critical moment arrived, if it suited them not to do so; and a casus fœderis would presumably not be provided for in the agreement. At any rate, the effect of the latter would be enormously to strengthen the aggressive tendencies of Russia. If the agreement became perfect, it would be useless for Germany to think any longer of coming to a rapprochement with Great Britain, and therefore it would be a matter of great importance to make a last effort towards counteracting the Russian designs. His (v. Jagow’s) idea was that Ballin, who had intimate relations with numerous Englishmen in leading positions, should send a note of warning across the North Sea. This suggestion was followed up by several hints as to the most suitable form of wording such a note, and the letter concluded with the statement that the matter was one of great urgency. A postscript dated July 16th added that a further article had been published by the Berliner Tageblatt, according to which the informants of the author also took a serious view of the situation.

Ballin, in response to the request contained in the letter, did not content himself with sending a written note to his London friends, but he immediately went to Berlin for the purpose of gaining additional information on the spot, with special reference to the general political outlook. He learned that Austria intended to present a strongly worded note to Serbia, and that it was expected that in reply a counter-note dictated by Russia would be received. He was also told that the Government not only wanted some information regarding the matter which formed the special subject of Herr v. Jagow’s letter, but also regarding the general political situation in London, as it was doubted whether the reports received from the ambassador were sufficiently trustworthy and complete. This was all that Ballin was told. Since then many facts have become known which throw a light on the way in which political questions were dealt with by the Berlin authorities during the critical period preceding the war, and if we, knowing what we know now, read the letter of Herr v. Jagow, we ask ourselves in amazement what was the object of the proposed action in London? Could it be that it was intended to intimidate the British Government? This could hardly be thought possible, so that some other result must have been aimed at. We can only say that the whole affair is still surrounded by much mystery, and we can sympathize with Ballin’s bitter complaints in later days that he thought people had not treated him with as much openness as they should have done, and that they had abused his intimate relations with leading British personages.

Ballin then left Berlin for Hamburg. He gave me his impressions of the state of political affairs—which he did not regard as critical—and went to London, ostensibly on business. In London he met Grey, Haldane, and Churchill, and there also he did not look upon the situation as critical—at least, not at first. When, however, the text of the Austrian note became known on Thursday, July 23rd, and when its full significance had gradually been realized, the political atmosphere became clouded: people asked what was Austria’s real object, and began to fear lest the peace might be disturbed. Nevertheless, Ballin returned from London on July 27th with the impression that a fairly capable German diplomat might even then succeed in bringing about an understanding with Great Britain and France which, by preventing Russia from striking, would result in preserving the peace. Great Britain and the leading British politicians, he said, were absolutely in favour of peace, and the French Government was so much against war that its representatives in London seemed to him to be rather nervous on the subject. They would, he thought, do anything in their power to prevent war. If, however, France was attacked without any provocation on her part, Great Britain would be compelled to come to her assistance. Britain would never allow that we, as was provided for in the old plan of campaign, should march through Belgium. It was quite true that the Austrian note had caused grave anxiety in London, but how earnestly the Cabinet was trying to preserve peace might be gauged by the fact that Churchill, when he took leave of Ballin, implored him, almost with tears in his eyes, not to go to war. These impressions of Ballin are confirmed by the reports of Prince Lichnowsky and other members of the German Embassy in their observations during the critical days.

Apart from these politicians and diplomatists on active service there were other persons of political training, though no longer in office, who did not think at that time that there was an immediate danger of war. In this connexion I should like to add a report of a very remarkable conversation with Count Witte, which took place at Bad Salzschlirf on July 24th. The Count—whose untimely death was greatly regretted—was without any doubt one of the most capable statesmen of his time—perhaps the only one with a touch of genius Europe possessed—and he certainly knew more about the complicated state of things in Russia than any living person. For these reasons his views on the events which form the first stage of the fateful conflict are of special interest. I shall reproduce the report of this conversation exactly as we received it at the time, and as we passed it on to Berlin. The authenticity of the statements of Count Witte as given here is beyond question.

The suggestion which formed the principal subject of the above conversations—viz. that a personal meeting of the two Emperors should be arranged in order to remove the existing tension—was not followed up, and the proposal would in any case have been doomed to failure, because the politicians who were responsible for the conduct of affairs at that time had done nothing to prevent the Kaiser from embarking on his customary cruise in Northern waters.

The latter end of July was full of excitement for the directors and the staff of the Hamburg-Amerika Linie. We endeavoured to acquaint the vessels that were under way with the critical situation, and we instructed each captain to make for a neutral port in case war should break out. The naval authorities warned us not to allow any ships to put to sea, and we were particularly asked not to permit the sailing of the s.s. Imperator, which was fixed for July 31st, because the attitude of Great Britain was uncertain. At a midnight meeting held at Ballin’s private residence it was decided to postpone the departure of the vessel “on account of the uncertain political situation.” Every berth on the steamer was booked, and hundreds of passengers were put to the greatest inconvenience. Most of them proceeded to a neutral or to a British port from which they subsequently embarked for the United States.

After this, events followed upon each other’s heels in swift succession. When war broke out, most of the ships succeeded in reaching neutral ports, so that comparatively few of them were lost in the early part of the war. By August 5th the cables had been cut. This circumstance made it very difficult to keep up communications with New York, and compelled the majority of our agencies and branches abroad to use their own discretion as to what to do. The place of regular business was taken by the work involved in carrying out the various agreements which the company had entered into during peace time, viz. those for the victualling and bunkering of various units of the Imperial Navy, for the supply of auxiliary vessels, and for the establishment of an organization which was to purchase the provisions needed by the navy.

In the meantime, the Ministry of the Interior had started to devise measures for provisioning the country as a whole, as far as that was still possible. It is well known that the responsible authorities had done far too little—indeed, hardly anything at all—to cope with this problem, because they had never taken a very serious view of the danger of war. Even the arrangements of the military authorities in connexion with the plans of mobilization were utterly deficient in this respect.

The first who seriously studied the question as to what would have to be done for the provisioning of the military and civil population if Germany had to fight against a coalition of enemies, and if the overseas supplies were stopped, was General Count Georg Waldersee, who became Quartermaster General in 1912. In a letter which he wrote to Ballin about that time, he gave a very clear description of the probable state of things in such an emergency. He pointed out that the amount of foodstuffs required during a war would probably be larger than the quantities needed in peace time—a contingency which had escaped attention in Germany altogether—and that above all there would be an enormous shortage of raw materials. Therefore, he said, if it was desired to guard the country against disagreeable surprises, it was imperative to make certain preparations for an economic and a financial mobilization. The military authorities at least had studied this problem theoretically, but the civil authorities would not make any move at all. The general said he thought it desirable that this question should receive more attention in the future, and he asked Ballin to let him know his views on the matter, and to give him some practical advice. The anxiety felt in military quarters was largely augmented by the receipt of disquieting rumours about the increase of Russian armaments.

In reply we furnished Count Waldersee with a brief memorandum written by myself in which, amongst other items, I referred him to some suggestions put forward by Senator Possehl, of Lübeck, in the course of a lecture delivered about the same time before a selected audience. In view of the fact that Germany depended for her food supply and for her raw materials to an increasing extent on foreign sources, there could be no doubt as to the necessity for making economic preparations against the possibility of a war, if a war was considered at all probable.

Nevertheless, and in spite of the newly awakened interest on the part of the military authorities, these economic preparations had, before the war, made absolutely no progress worth mentioning. The only practical step which, as far as my knowledge goes, had been taken by the civil authorities, was the conclusion of an agreement entered into with a Dutch firm dealing with the importation of cereals in case of war. When, in the fateful summer of 1914, this contingency arose, the firm in question had chartered some British steamers, which instead of carrying their cargoes to Rotterdam took them to British ports.

Thus, no serious efforts of any kind had been made to grapple with the problem. On Sunday, August 2nd, Geheimrat Frisch, who afterwards became the director of the Zentral-Einkaufs-Gesellschaft (Central Purchasing Corporation), came to Hamburg, in order to inform Ballin, at the request of the Ministry for the Interior, that the latter felt very anxious in regard to the quantity of food actually to be found in Germany, which, it was feared, would be very small, and that it was expected that a great shortage would arise after a very brief period. He therefore asked him to use his best endeavours in order to secure supplies from abroad. A Hamburg firm was immediately requested to find out how much food was actually available in the country, and, although the figures obtained were not quite so bad as it was expected, steps were taken at once to remedy the deficiencies by importing food from neutral countries. A great obstacle to the rapid success of these efforts was the absolute want of any preparatory work. The very attempt to raise the necessary funds abounded with difficulties of every kind, because no money had been set aside for such expenditure in connexion with the scheme of mobilization, and the time taken by the attempts made in this direction, as well as the circumstance that communication with the United States could only be maintained via neutral countries, were the causes of a great deal of serious delay.

At Ballin’s suggestion the Reichseinkauf (Government Purchasing Organization) was then formed. For this organization the Hamburg-Amerika Linie was to do all the purchasing, and it was arranged that it should put at the disposal of the new body all those members of its staff who were not called up, and who were considered suitable for the work. Buyers were sent to every neutral country; but the mobilization then in progress led to a complete stoppage of railway travelling for the civil population, thus causing no end of difficulties to these buyers, and making personal contact with the Berlin authorities almost impossible. Added to all this, there was the inevitable confusion which the replacement of the civil administration by the army commands brought in its train. It had, in fact, been assumed that this war would resemble its predecessors in every respect, and no one was prepared for a world war. Hence, such important matters as the importation of foodstuffs from abroad and the work of supplying political information to neutral countries concerning the German standpoint were sadly neglected; everything had to be provided at a moment’s notice, and had to be carried through in the face of a great deal of opposition. Funds and energy were largely wasted; the military, naval, and civil organizations were working against one another instead of co-operating; and it took a long time before a little order could be introduced into the chaos. It was also found that the German credits abroad were quite inadequate for such enormous requirements. An attempt to dispose of some treasury bills in New York was only moderately successful, and in consequence of this lack of available funds the supplies obtained from the United States were but small. Even the fact that the Hamburg-Amerika Linie immediately succeeded in establishing the necessary connexions with American shippers, and in securing a sufficient amount of neutral tonnage, did not improve matters in the least. To obtain the required funds in Berlin, as has been explained before, involved considerable loss of time; and as the months passed the British blockade became more and more effective. Thus, as the war continued, large quantities of food could only be procured from European countries.

Ballin took a large personal share in the actual business transacted by the Reichseinkauf. He did so, if for no other reason, because he needed some substitute for the work connected with the real shipping business which was rapidly decreasing in extent. The only benefit his company derived from its new work was that it gave employment to part of the members of its staff, thus reducing in some measure the expenses. With the stoppage of the company’s real business its principal source of income ran dry in no time, and the small profits made out of the supply of provisions to the navy was only a poor compensation.

The world’s economic activities in those days presented a picture of utter confusion. All the stock exchanges were closed; all dealings in stocks and shares had ceased, so that no prices could be quoted; several countries had introduced a moratorium, and numerous banks had stopped payment. Germany had no longer any direct intercourse with the overseas countries; the British censorship was daily increasing its hold on the traffic proceeding via neutral ports. At first those foreign steamship companies which maintained passenger services to America did splendid business, because Europe was full of American tourists and business men who were anxious to secure a berth to get home, and numerous cabin passengers had to be content with steerage accommodation. When this rush was past, however, shipping business, like international commerce, entered upon its period of decline. The freight rates came down, the number of steamers laid up assumed large proportions, and the world’s traffic, in fact, was paralysed.

After a comparatively brief period it was found too difficult to conduct the Reichseinkauf organization with its headquarters at Hamburg, because the intercourse with the Imperial Treasury at Berlin, which provided the funds, took up too much time, and also because it seemed highly advisable to purchase the foreign foodstuffs needed by the military as well as the civil population through one and the same organization. The state of things in respect to these matters was simply indescribable; indeed, if it had been purposely intended to encourage the growth of war profiteering, it would have been impossible to find a better method of setting about it. Numerous buyers, responsible to different centres, not merely purchased without regard to each other, but even outbid each other, thus causing a rise in prices which the public had to pay. Conditions such as these were brought about by the utter unpreparedness of the competent civil authorities and by the fact that the military authorities could dispose of the vast amounts of money placed at their command at the outbreak of the war. These conditions were doubtless the soil from which sprang all the evils which later on developed into the pernicious system we connect with the name of Kriegswirtschaft, and for which it will be impossible to demand reparation owing to the lost war and to the outbreak of the revolution.

In order to facilitate the intercourse with the proper Government boards, and to centralize the purchasing business as much as possible, Ballin’s suggestion that the seat of the organization should be removed to Berlin was adopted, and at the same time the whole matter was put on a sounder footing by its conversion into a limited company under the name of Zentral-Einkaufs-Gesellschaft (Central Purchasing Corporation). The history of the Z.E.G. is well known in the country, and its work has been subject to a great deal of criticism, largely due to the fact that all the annoyance caused by the many restrictions which the Government found it necessary to impose, and which had to be put up with during the war, was directed against this body. Generally speaking, this attitude of the population was very unfair, because the principal grievances concerned the distribution of the foodstuffs, and for this part the Z.E.G. was not responsible. Its only task was to obtain the necessary supplies from abroad. If it is remembered that the transactions of the corporation reached enormous proportions, and that, after all, it was improvised at a time of war, we cannot be surprised to see that some mistakes and even some serious blunders did occur occasionally, and that the right people were not always found in the right places. Moreover, some of the really amazing feats accomplished by the Z.E.G—e.g. the supply of grain from Roumania, which necessitated enormous labour in connexion with the transhipment from rail to steamer and with the conveyance up the Danube—were only known to a few people. It is obvious that nothing could be published during the war about these achievements nor about the agreements concluded, after endless negotiations, with neutral countries and thus the management of the Z.E.G. was obliged to suffer in silence the criticisms and reproaches hurled at it without being able to defend itself.

The volume of the work done by the Z.E.G. may be inferred from the fact that the goods handled by the organization during the four years from 1915 to 1918 represented a value of 6,500 million marks, in which connexion it must not be forgotten that at that time the purchasing power of the mark was still nearly the same as before the war. When the Roumanian harvest was brought in the daily imports sometimes reached a total of 800 truck-loads. However, the greatest credit, in my opinion, is due to the Z.E.G. for putting a stop to the above-mentioned confusion in the methods of buying abroad and for establishing normal conditions. To-day it is scarcely possible to realize how difficult it was and how much time it required to overcome the opposition often met with at home.

Not much need be said here about the activities of the Hamburg-Amerika Linie during the war. The longer the struggle lasted, and the larger the number of countries involved in the war against Germany became, the heavier became the company’s losses of tonnage and of other property. All the shore establishments, branch offices, pier accommodation, etc., situated in enemy countries, were confiscated, and the anxiety about the post-war reconstruction grew from month to month. Ballin never lost sight of this problem, and it is chiefly due to his efforts that the Government and the Reichstag passed a Bill (1917) providing the means for the rebuilding of the country’s mercantile marine. Along with this he tried to keep the company financially independent by cutting down expenses, by finding work for the inland offices of the company, by selling tonnage, and by other means. The families and dependents of those employees who had been called to the colours were assisted as far as the funds at the company’s disposal permitted. Of all these measures the company has already given the necessary information to the public, and I can confine myself to these brief statements. There is only one circumstance which requires special mention.

It is universally acknowledged that no German industry has suffered so greatly through the action of the German Government as the shipping business. When the discussions as to the rebuilding of the merchant fleet were being carried on, the Government frankly admitted this fact. I am not thinking, in this connexion, of those measures which were imposed upon the Government by the Versailles Treaty, such as the surrender of the German mercantile marine, but what I have in mind is the steps taken whilst the war was in actual progress. These have one thing in common with those imposed by the enemy: their originators have, more or less, arrived at the belated conviction that they have sacrificed much valuable property to no purpose. In Great Britain it is admitted quite openly that the confiscation of the German merchant fleet has very largely contributed to the ensuing collapse of the world’s shipping markets, and to the confusion which now prevails on every trade route. The war measures of the German Government—or, rather, of the German naval authorities—have sacrificed enormous values merely for the sake of a phantom, thus necessitating the compensation due to the shipowners—a compensation far from sufficient to make good even a moderate fraction of the loss. The vessels that can be built for the sums thrown out for this purpose will not be worth the twentieth part of the old ones, if quality is taken into account as well as quantity. This will become apparent when the compensation money has been spent, and when it will be possible to compare the fleet of German passenger boats then existing with what the country possessed previous to the war.

The phantom just referred to was the foolish belief that it would be possible to eliminate all ocean tonnage from the high seas—a belief which was in itself used to justify the submarine war, and which was responsible for the assumption that the withdrawal of German tonnage from the high seas would affect the food and raw material supply of the enemy countries. This mistaken idea was also the reason for prohibiting the sale of the German vessels in neutral ports, and for ordering the destruction of their engines when it became impossible to prevent their confiscation. The latter measure, and in particular the manner in which it was carried out, prove the utter inability of the competent authorities to grasp the very elements of the great problem they were tackling, and in view of such lack of knowledge it is easy to understand the bitterness of tone which characterizes Ballin’s criticism of these measures as contained in his memorandum to the Minister of the Interior (1917). He wrote:

To a man of the type of Ballin—who had, throughout his life, been accustomed to perform a huge amount of successful work—a period of enforced inactivity was unbearable. The longer it lasted the more he suffered from its effects, especially because the preparatory work for the post-war reconstruction, the work connected with the war organization of the German shipowners, etc., was only a poor substitute for the productive labour he had been engaged in during more than thirty years of peace. There is no doubt but that the Government could have made better use of Ballin’s gift of organization, but it must be remembered that there was really no effective central Government in Germany throughout the war. The civil administration was not exactly deposed, but it was subordinated to the military one from the very beginning, and the latter carried on its work along the guiding lines laid down in the scheme of mobilization. The authorities to whose care the economic aspects of the war were entrusted did not often—if at all—avail themselves of Ballin’s advice; and to offer it unbidden never entered his mind, because he was cherishing the hope that the war would not last long, and because it was his belief that the world would be sensible enough to put an end to the wholesale destruction before long. It was a bitter disappointment to him to find how greatly he was mistaken, and to see that the forces of unreason remained in the ascendancy, especially as he was always convinced that Time would be on the side of Germany’s enemies. The sole aim of his political activities during the war was to bring about peace as early as possible.

Of all the attempts at mediation known to me, the one which seemed to be most likely to succeed passed through the hands of Ballin. To give a detailed account of it must be left to a time which need no longer pay regard to governments and individuals. Ballin’s share in it was brought about through his former international connexions. Through him it reached the Kaiser and the Chancellor, and owing to his untiring efforts, which lasted for two years, the position in the early part of 1917 was such that the establishment of direct contact between the two sides was imminent. Then the unrestricted submarine war began, the intended direct contact could not be established, and the carefully woven thread was definitely snapped asunder; because from that time on the Allies were certain that the United States would join them, and they felt assured of victory. No other mediation scheme with which I am acquainted has been pursued with so much unselfishness, devotion, and energy as this one. This attempt, however, no more than any other, could have procured for us that kind of peace which public opinion in Germany had been led for years to expect, thanks to the over-estimation of the country’s strength, fostered by the military censorship and by the military reports.

From such exaggerated opinions Ballin always held himself aloof. He recognized without reservation the immense achievements of Germany in the war, but he was fearful lest the strength of the country could not cope in the long run with the ever-increasing array of enemies, and he therefore maintained that, if it was desired to bring about peace, the Government would have to be moderate in its terms. A much discussed article which he contributed to the Frankfürter Zeitung on January 1st, 1915, under the heading of “The Wet Triangle,” is not inconsistent with these views of his. In it he pointed out that Germany’s naval power, in order to make a future blockade impossible, should no longer be content to be shut up in the “wet triangle,” i.e. the North Sea, but ought to establish itself on the high seas. This statement has been alleged to refer to Belgium, and Ballin has been wrongly claimed a partisan by those who supported the annexation of that country. What he really meant was that Germany should demand a naval base on the Atlantic, somewhere in the northern parts of Africa, and this idea seemed to be quite realizable if taken in conjunction with the terms of peace he had in view, viz. no annexations, no indemnities, economic advantages, a permanent political and naval understanding with Great Britain, based on her recognition that a military defeat of Germany was impossible. All this would be somewhat on the lines of the article published by the Westminster Gazette, referred to in the eighth chapter and a facsimile of which is given at the end of the book. Ballin was firmly convinced that, even if a mere peace of compromise was the outcome, i.e. one which left Germany without any territorial gains and without any indemnities, the impression which the German achievements during the war would produce on the rest of the world would be so overwhelming that the country would secure indirectly far greater advantages than could be gained by means of the largest possible indemnity and the most far-reaching annexations. Besides, the experiences of former times had proved that Germany would be quite unable to absorb such large accessions of territory as certain people had in mind. These views of Ballin, of course, were looked upon as those of a “pacificist,” and Ballin was classified among their number.

In a letter which Ballin wrote to a friend of his, a naval officer, in April, 1915, he puts up a highly characteristic defence of himself against the accusations implied by describing him as “pacificist” and “pro-English.”

It is no secret that during the war many prominent politicians and economists—men of sound political training—viewed the question of the war aims which it was desirable to realize very much in the same light as did Ballin, but that the censorship made it impossible for anyone to give public expression to such opinions. Ballin’s appreciation of the probable gain which Germany would derive from a peace by compromise has now been amply confirmed by the undeniable fact that the rest of the world has been tremendously impressed by Germany’s achievements, an impression which has made foreigners regard her chances of recovery with much more confidence than she has felt herself, stunned as she was by the immensity of her débâcle.

The following notes, which are largely based on Ballin’s own diary, are intended to supplement the information given so far as to his political activities during the war.

The outbreak of war, as may be inferred from what has already been related, took him completely by surprise, and he did not think that the struggle would last very long. “The necessities of the world’s commerce will not stand a long war,” was his opinion during the early days. For the rest, he tried to find work for himself which would benefit his country. “What we need to-day,” he wrote to a friend, “is work. This will lift us up and keep us going, and will make those of us who are no longer fit to fight feel that we are still of some use after all.” But in connexion with this thought another one began to occupy his mind. He anxiously asked: “Which of the men now at headquarters will have the strength and the wisdom required to negotiate a successful peace when the time comes?” All his thoughts centred round the one idea of how to secure peace; what advantages his country would derive from it; and how it would be possible to bring about an international grouping of the Powers which would be of the greatest benefit to Germany. On October 1st, 1914, he wrote to Grand Admiral v. Tirpitz:

Apart from the peace problem there was another matter which gave Ballin grave cause for anxiety. This was the circumstance that the Kaiser, because of his long absences from Berlin, lost the necessary touch with the people, and could not, therefore, be kept properly informed of popular feeling. He expressed his fears on this account in a letter to a friend of his amongst the Kaiser’s entourage in which he wrote:

Among the problems of foreign policy with which Germany saw herself faced in the early part of the war, those referring to Italy and Roumania were of special interest to Ballin. The question was how to prevent these two countries from joining the ranks of Germany’s enemies. Ballin did all he could to bring about the Italian mission of Prince Bülow. He not only urged the Chancellor to select Bülow for this task, but he also tried hard to induce the Prince to undertake the thankless errand involved. In addition to the political importance of the mission, he laid great stress on its bearing on the food problem.

The German mission to Italy suffered through the vacillations of Austrian politics, and was therefore doomed to failure. Austrian feeling concerning a compromise with Italy was always dependent on the news from the Italian front; if this was favourable, people did not want to hear of it, and in the opposite case they would only discuss such an understanding most unwillingly. The proposed compromise was looked upon as a heavy sacrifice, and people were by no means favourably disposed towards German mediation. Prince Bülow was accused of having “presented Italy with the Trentino.” Disquieting news which Ballin received from Vienna induced him to report to the Chancellor on the state of Austrian feeling, and to offer his services if he thought that his old-established relations with Vienna could be of any use. His offer was also prompted by his conviction that the German diplomatic representation in Vienna was not adapted to Austrian mentality.

Thereupon Ballin, early in March, 1915, entered upon a semi-official mission to Vienna. He first acquainted himself with the actual state of the Austrian mind by calling on his old friend, his Excellency v. Schulz, the Vice-President of the Austrian Chief Court of Audits, who was regarded as one of the best informed personages in the capital, and who was one of the regular partners of the old Emperor Francis Joseph for his daily game of tarock. This gentleman told Ballin that the people of Austria felt a good deal of resentment towards Germany, who had stepped in far too early as the “advocate of Italy,” at a time when Austria was still hoping to settle Serbia all by herself. This hope, indeed, had proved an illusion; but Germany’s strategy had also turned out a failure, because she had misjudged the attitude of Great Britain, and had not finished with France as rapidly as she had expected to do. Now Austria, confronted by stern necessity, would have to make concessions to Italy which every true Austrian would view with bitter grief; and, to bring about the active assistance of Roumania, Count Tisza would consider a sacrifice in the Bukovina debatable, but never one in Transylvania. Ballin told his friend that, as far as Roumania was concerned, he would have to leave it to Austria to settle that question by herself; and that his mission with regard to Italy was so difficult that he preferred not to make it more so by trying to solve the Roumanian problem as well.

Ballin’s subsequent interviews with the Prime Minister, Count Stürgkh, and with the Minister v. Koerber, as well as those with other influential personages, confirmed these impressions, and he left Vienna buoyed up by the hope that the conference between German, Austrian, and Italian delegates which it was proposed to hold at Vienna would lead to a successful result. Such, however, was not the case, and it is quite probable that the possibility of arriving at an understanding with Italy had passed by that time, or, assuming the most favourable circumstances, that only immediate and far-reaching Austrian concessions could have saved the situation; but these were not forthcoming.

The next subject which caused much anxiety to Ballin was the question as to what Roumania would do, a country to whose attitude, considering her importance to Germany as a food-producing area, he attached even more value than to that of Italy. In his notes dating from that time he said:

In a letter of July 31st, 1915, Ballin wrote as follows:

In the early part of September, 1915, Admiral v. Holtzendorff was appointed Chief of the Admiralty Staff. This appointment gave rise to a conflict with Grand Admiral v. Tirpitz, who threatened to resign because, inter alia, the Kaiser had issued instructions to the effect that the Chief of the Admiralty Staff should no longer be subject to the authority of the Secretary for the Navy, but that he could communicate with the Kaiser and with the Chancellor direct. Ballin thought a possible resignation of Admiral v. Tirpitz would be fraught with serious consequences at that moment, as it would produce a bad impression on public opinion and be inimical to the position of the Kaiser. These considerations caused Ballin to intervene in person with Admiral v. Tirpitz and with the Chief of the Naval Cabinet, with the result that the Grand Admiral withdrew his intended resignation.

The following extracts are taken from Ballin’s notes during the next few months:

In the early part of 1916 Ballin went on a second mission to Vienna, and afterwards he prepared a detailed report for the Chancellor dealing with the state of public feeling as he found it. This document presents a faithful picture of the precarious conditions in that capital which the German Government had constantly to reckon with, and may therefore be of interest even now. The following passages are extracts from it:

The subject of an unrestricted submarine war, already touched upon by Ballin in his above-mentioned letter to the Kaiser written in January, 1916, was discussed with much animation in the course of the year, and a powerful propaganda in its favour was started by certain quarters. Ballin’s attitude towards this question, and particularly towards its bearing on the possible entry of the United States into the war, is described with great clearness in a letter addressed to a friend of his attached to the Army Headquarters. In this message he wrote:

Ballin was not the only one who, as early as 1916, regarded with such alarm the devastating effects of a possible entry of the United States into the war; other men of political training thought so too, although their number was not large. The following passages, taken from two letters which Ballin received from a member of the German diplomatic service, show that the feeling was there:

During the war Ballin tried over and over again to make the responsible authorities see the position in the same light as his own observations, and his repeated discussions with unprejudiced and clear-headed men had led him to see it himself. The letter reproduced below contains a description of the general situation at the time of writing (July, 1916). It was addressed to a friend of his in the diplomatic service who was looking after German interests in one of the countries allied with Germany, and who had asked him for some information concerning the situation at home:

A still more serious note is struck in the following letter written in September, 1916:

In contrast to such views as were expressed in the foregoing letters, the men who were at the head of affairs at that time maintained that nothing but the application of rigorous force, or, in other words, the unrestricted use of the submarine weapon against Great Britain, would lead to a successful termination of the world war. The propaganda in favour of that measure is still in everybody’s memory. Whatever may be said in defence of the authors of this propaganda, there is one reproach from which they cannot escape, viz. that they left no stone unturned to prevent their opponents from stating their views, and this, on account of the strict censorship to which the expression of every independent opinion was subject, was not a difficult matter. Their one-sided policy went so far that, when a pamphlet on the question of submarine warfare was written by order of the Admiralty Staff and circulated among a number of persons, including leading shipping men, Ballin was purposely excluded, because it was taken for granted that he would not express himself in favour of the contents. It is not likely, however, that the methods of reasoning put forward in this document—which was much more like an academic dissertation than an unprejudiced criticism of a political and military measure affecting the whole national existence of Germany—would have induced Ballin to change his views on the submarine war. Once only, and then merely for a brief period, was he in doubt as to whether his views on that question were right, but he soon returned to his first opinion when he found that he had been misinformed regarding the number and the effectiveness of submarines available.

The inauguration of unrestricted submarine warfare in January, 1917, not only put a sudden end to the peace movement in which Ballin, as has been explained on a preceding page, played an important part, but also to the attempt of President Wilson to bring the two sides together. The details of the President’s endeavours have meanwhile become public property through the revelations of Count Bernstorff, the German ambassador in Washington. In both instances a few weeks would have sufficed to ascertain whether the proposed action was likely to bring about the desired end, and the former attempt had even led to the impending establishment of mutual contact between the belligerents. The inability of the German political leaders to avail themselves of this opportunity, or at least their failure to do so, has doubtless been the greatest misfortune from which Germany had to suffer during the whole war.

Notwithstanding the successful exploits of the submarines, Ballin’s apprehensions never left him, and they were not allayed by the development of the position at home. The letter published below, which he wrote to the Chief of the Kaiser’s Civil Cabinet, believing that this gentleman would be most likely to assist him in laying his views before the Kaiser, admirably sums up his feelings, and testifies both to his real patriotism and to his presentiment of the fate that was to overtake his country:

In May, 1917, Ballin accepted an invitation received from the Supreme Army Command and paid a visit to General Headquarters, where he found a great deal of discontent prevailing with the policy of the Chancellor. He also met the Kaiser, and reports on his visit as follows:

In a letter addressed to a gentleman in the Kaiser’s entourage he gave a further detailed account of his views on the optimism prevailing in high places:

During the remaining part of 1917, and during the first months of 1918 as well, Ballin took an active interest in the preparations for the Bill dealing with the rebuilding of the German mercantile marine; in other respects, especially with regard to political matters, the course of events condemned him to remain passive. His notes during this period are few. I select the following passages from them:

In the month of September, 1917, Ballin wrote a memorandum for Dr. Schwander, the newly appointed Secretary of State for National Economy. Apart from politics this document deals with economic matters, and in particular with the legislation concerning these during the period of transition which would succeed the close of the war. Ballin gave a great deal of thought to these questions, and I shall refer to them later on. Meanwhile I will quote the text of the memorandum:

At Ballin’s suggestion, the members of the Reichstag were invited to attend a meeting which was to be held in Hamburg during the summer of 1918. Large sections of people in the three Hanseatic cities viewed with grave concern the plans which the Government entertained for the economic development after the war, and the meeting had been called to draw the attention of the visitors to this state of affairs. Three principal speeches were delivered, and at the close of the meeting Ballin briefly recapitulated the main arguments against too much Government interference. Much of what he said on that occasion, and much of what he had written in the memorandum quoted above, has been borne out by the events of the recent past, even though the actual terms of the peace imposed on Germany were much more unfavourable than he had expected them to be. In addressing himself to the Vice President of the Reichstag, Geheimrat Dove, and the large number of the elected representatives of the German people who accepted the invitation, Ballin said:

As regards the closing months of the war—which are also the closing months of Ballin’s life—it must suffice to refer here to one event only; one, however, which is of dramatic significance. I am speaking of Ballin’s last meeting with the Kaiser. His notes on this subject, roughly sketched though they are, require no further comment. I reproduce them in full:

Ballin’s notes on the Berlin meeting are confined to a few jottings, from which it appears that not Lieutenant-Colonel Bauer but Major v. Harbou in his stead took part in it, and that the question of selecting a suitable candidate for the Chancellorship proved impossible of a satisfactory solution. As a last resort, if everything else should fail, Ballin thought of proposing Stinnes himself, because in his opinion the situation demanded a man of dictatorial character and with the authority of a dictator.

Concerning his interview with the Kaiser, Ballin wrote down the following notes:

In order to illustrate further what has been shown to be Ballin’s views on the character of the Kaiser, I here quote the first part of a letter of his, dated October 25th, 1918:

Ballin’s last entry in his diary contains the following passage:

This note was written on November 2nd, 1918. One short week later, on November 9th, his heart had ceased to beat—a heart which had so warmly responded to the call of his Kaiser and country, and which had succumbed to its excessive load of grief and sorrow.

CHAPTER XI

Personal Characteristics

To present an exhaustive description of Albert Ballin’s life-work within the compass of this volume is an impossible task, and the more the writer entered into the details of his attempt to do so, the more thoroughly did he realize this impossibility.

The story of a life comprising thirty-two years of incessant hard work, only interrupted when nature’s law or a very imperative behest of his medical adviser made it necessary, and spent at the head of an undertaking which, as a result of this work, developed into one of the greatest that the economic history of the generation just passed has known, cannot be told in full by means of a mere description unless it be accompanied by volumes of statistics which, however, convey no meaning to anyone except the initiated.

The author, therefore, had to content himself with delineating a picture of his hero with a background formed by the events which he himself had helped to shape, and which, in many instances, had received their distinguishing stamp through his own genius. The essence of his character, and the importance of his work to his contemporaries, must stand out from this background as the portrait of a painter—as seen by himself—would stand out from a mirror. What the mirror does not show, and cannot show, is the immensity of the mental forces hidden below the surface which alone give expression to the portrait; all the factors which have brought about the final result—the strength, the courage, the daring, and the feeling of responsibility without which it would never have been achieved.

Still more difficult it is to interpret the very essence of the character of him whose work we see before us, or, indeed, to give a comprehensible account of it to the stranger.

The only way of doing justice to a man of such commanding genius as Ballin is to try to discover first of all the one essential root principle of his personality. Having succeeded in that, we shall find no more difficulty in reconciling the great number of apparently mutually contradictory traits of his character. This principle is the focus where all the rays of light are collected from all directions, and which forms the source of light, warmth, and vital energy.

Albert Ballin was a born business man if ever there was one. To him the noble words of Schiller’s lines apply: “The treasures which his ships carry across the oceans spell untold blessings to all who receive them.” His whole mind was drawn towards the sea; his inborn inclinations and the surroundings amidst which he grew up had destined him to be a shipping man. To the boy Ballin the Hamburg harbour was the favourite playground; and the seven seas were just large enough to serve as a field of action for the youth and the man. There was his real home, and there he felt at rest. How often, indeed, has he assured us that the sleeplessness to which he fell an unfortunate victim whenever he was ashore left him as soon as he was on board ship, and that a miserable river barge was sufficient to have this effect on him. He was proof against sea-sickness, both bodily and mentally. Thus he became a shipping man, because it was his natural vocation; and in this chosen profession of his he became one of the greatest and most brilliantly gifted rulers the world has ever seen.

Whenever there was a problem to be solved he attacked it in a spirit of boldness, yet tempered by the utmost conscientiousness and caution. No task he encountered was so big that his daring could not tackle it and overcome its difficulties; nothing was so insignificant that he would not attend to it somehow. Whatever decision his infallible instinct intuitively recognized as right, and to whatever idea his impulsive nature had given practical shape, had to pass muster during the sleepless hours of the night before the tribunal of his restless mind when, as he used to say, “everything appears wrapt up in a grey mist.” At such times his reason began to analyse and to criticize the decisions he had reached during the day. Then he would often shudder at his own boldness, and the torments of doubt would be aggravated by the thought of the enormous responsibility which he bore towards his company. For it must be understood that from the day he joined the Hamburg-Amerika Linie his interests and those of the company became parts of an inseparable whole.

The company’s affairs absorbed all his thoughts at all times; the company’s well-being was the object of his constant care; he devoted himself exclusively to the service of the company, and the opinions which he formed in his mind regarding persons and things were instinctively coloured according to their relationship to the company’s affairs. The gradual progress during its infancy, the later expansion, and the final greatness of the company, were as the events of his own life to him; when the proud structure which he had raised collapsed his life was ended. His thoughts incessantly converged towards this very centre of his being. All his work, all his words and deeds, were devoted to the furtherance of the company’s interests. He identified himself so completely with the company that he actually was the Packetfahrt, and the Packetfahrt was he. Even his love and hatred were rooted in the company. He remained a grateful and lifelong friend to anyone who had been of service to the company or to him as representing it.

This highly subjective and indissoluble relationship between himself and the company—which it had been the dream of his life to raise to the highest pinnacle of prosperity—is the key to the fundamental principle which lies at the root of his whole complex personality. But however well-defined his personal individuality stood out, his subjectivity was nevertheless animated by a strong sense of duty. His views, for instance, on the essential principles governing the most perfect organization which modern capitalism has produced—i.e. the joint-stock company—were free from any tinge of personal considerations whatever. He was himself the responsible head of a big joint-stock company, and instinctively this fact exercised such a powerful influence on all his thoughts and feelings that it is quite impossible to arrive at a just appreciation of his character unless this circumstance is borne in mind. His character which appears so complicated to the cursory onlooker, but which is in reality of singular simplicity and consistency, is best illustrated by his reply to a question of one of his friends who had asked him why he did not allow some piece of scathing criticism which he had just expressed in private to be made public. “My dear friend,” he said, “you forget that you are not the chairman of the board of directors of a joint-stock company.” What he meant to convey was that the enmity which he would incur by expressing those views in public would adversely affect the firm of which he was the head, and that the interests of his company compelled him to impose upon himself restrictions which he could ignore in his private capacity.

Although he had nothing but scorn for the very suggestion that this company should receive at any time any subsidies from public funds, he made it to the fullest extent subservient to the needs of the public and of the nation at large. He often remarked that such gigantic concerns as, e.g., the Hamburg-Amerika Linie, are no longer private ventures purely and simply. The ties that bind them to the whole economic life of the nation—and, for the matter of that, to the world in general—are so close and so manifold that it would be disastrous to ignore them or to sever them. Hundreds of industrial, commercial, and agricultural enterprises were lavishly supplied with work through the orders they received from the Hamburg-Amerika Linie in connexion with the building and the equipment of its steamers and with the needs of its organizations on shore. Its hundreds of thousands of passengers and emigrants, and the huge volume of German-made products and manufactured articles carried on board its vessels, spread the German name and German fame throughout the civilized world. Hence, to Albert Ballin the national flag and that of the Hapag were two symbols expressive of but one idea.

A man who, like Ballin, was at the head of the biggest German shipping company and therefore also, by implication, one of the leading spirits in the economic life of Germany, could not very well hold himself aloof where high politics were concerned. The more the economic problems gained in importance, the greater became their bearing on the course of the country’s politics. Ballin, however, would never have become a professional politician from inclination, because he invariably refused to be mixed up with the strife of parties. He never officially belonged to any political party; and although he made friends with members of all the non-Socialist parties, his general outlook on politics was mainly coloured by Liberal views, and he was a firm believer in Free Trade. Whenever questions dealing with the interests of shipping and trade were involved, he had no difficulty in making the responsible people listen to his claims and to his suggestions, but he never tried to make his influence felt on purely political affairs unless they affected the country’s vital international interests. His lengthy and extensive travels to the countries of Europe, to the North American continent, and to the Far East, had broadened his outlook. His profession as a shipping man not only brought him into frequent contact with the heads of the big shipping companies all the world over, but also with a number of the financial magnates and industrial captains of Great Britain, the United States, and other countries of economic importance. He took rank with the greatest economic leaders as an equal, and this unchallenged position of commanding authority was reflected by the esteem in which he was held by the principal statesmen and parliamentarians. He was familiar with the essential and vital needs of other nations, and he therefore not only stood up for the national rights whenever they appeared in jeopardy, but he also raised his warning voice against a policy provocative of conflicts whenever he thought it possible to avoid them. Whoever is conscious of his strength is also aware of the limitations set to his power.

In politics as well as in business he held that “a lean compromise was preferable to a fat lawsuit,” as the German proverb puts it. It has been mentioned elsewhere in this volume that Ballin was essentially the man of compromise. It is very probable that the experiences of his early life had helped to develop this outstanding feature of his personality. It may be assumed that he, a young man of unknown Jewish family, found his path beset with difficulties in a city-state like Hamburg, where the influence of the wealthy patriciate of the merchant classes was supreme, and that he was looked upon as an upstart even after he had reached a prominent position himself. The casual observer is far too much inclined to underestimate the conservative character—both politically and socially—of the three Hanseatic cities. Still, evidence is not wanting that Ballin’s unusual gifts were occasionally recognized and appreciated even in the days of his early career. An English journalist, for instance, who met him some time about 1895, characterized him by the following words: “He struck me as a great man; otherwise nothing so incongruous as such a type of man at the head of a big steamship line could be imagined.” That Field-Marshal Count Waldersee honoured him by his friendship at an early period has been mentioned in a different chapter of this volume. And even in patrician Hamburg he found an immensely powerful friend and patron shortly after he had entered the services of the Packetfahrt. This was no less a man than the shipowner Carl Laeisz, the most eminent representative of the “House of Laeisz.”

The firm of F. Laeisz, which was successfully owned by its founder, Ferdinand, his son Carl, and his grandson Carl Ferdinand, has stood sponsor to all the more important shipping companies established in Hamburg, and through its great authority helped them all to get over the critical years of their early youth. The sound principles by which the firm was guided might sometimes lead to much disappointment on the part of the shareholders, but they proved to be of unsurpassable benefit to the companies concerned, and nothing illustrates them better than the oft-told episode of the shareholder who went to see Carl Laeisz, complaining that the Hamburg South American S.S. Company did not pay any dividend. “The object of the company is to carry on the shipping trade, and not to distribute dividends,” was the blunt but characteristic reply. Being thoroughly unconventional in his habits, Carl Laeisz—no less than his singularly gifted son, who was one of those rare men whom it was really impossible to replace—nevertheless did invaluable service in connexion with the establishment of new firms in Hamburg, and with the encouragement of existing ones.

It was a great compliment to Ballin that in 1888, when he had only been associated with the Packetfahrt for a couple of years, and when the directors asked for authority to increase the joint-stock capital of the company from 20 to 25 million marks, Carl Laeisz informed them in advance that, at the general meeting of the shareholders, he would move an increase of 10 instead of 5 millions, and that this motion was unanimously carried. Those who have known Carl Laeisz personally will appreciate what it meant to Ballin when, by way of giving him an introduction to the London firm of Messrs. J. Henry Schröder, Laeisz scribbled the following note on the back of one of Ballin’s visiting cards:

As this card was found among the papers and documents which Ballin left at the time of his death, it would seem that it was not used for its intended purpose, but that he preferred to keep it as a souvenir of the man whom he always remembered with gratitude and affection, and of whose life he could tell a good number of characteristic anecdotes. The telegram of which the text is given below is also highly typical of Carl Laeisz. I have not been able to discover what was the occasion of sending it, but I am inclined to think that it must be in some manner connected with the conference held in the Berlin Royal Castle, and referred to on an earlier page, at which Ballin first attracted the Kaiser’s attention. The text is as follows:

Although there is scarcely anyone to whom the name of a Hamburg patriot can be applied with greater justice than to Ballin, and although there are few people who have done more to promote the well-being and the prosperity of their native city, and who have had a better appreciation of one of the most lovable features of her inhabitants, viz. their dry, unconventional, and kindly humour, it would be wrong to assume that this local patriotism of Ballin made him blind to the shortcomings and deficiencies of his native city. On the contrary, his eminent sense of the realities of life made him see most clearly the points of weakness in the position of Hamburg, e.g. those connected with the system of her finances. The so-called Köhlbrand agreement, which, after a hard struggle, put an end to the long controversy between Hamburg and Prussia by stipulating that the course of the lower Elbe should be regulated without detriment to the interests of the town of Harburg, imposed such a vast amount of expenditure upon Hamburg, and the Prussian local authorities concerned insisted on securing the payment of such large compensations to the owners whose rights were adversely affected by the improvement of the waterway, that it might well be doubted whether Hamburg could shoulder these enormous burdens.

It speaks volumes for Ballin’s unprejudiced mind that he frequently maintained nothing would be of greater benefit to Hamburg than her renunciation of her sovereignty as a city-state in favour of incorporation with Prussia. Prussia, he argued, was her natural hinterland, after all; and if she consented to be thus incorporated, she would be such a precious jewel in the crown of Prussia that she could secure without an effort all the advantages and privileges which Prussia, by pursuing the strictly Prussian line in her politics, now actually prevented her from acquiring. In course of time, however, her present isolation would undermine the foundations of her existence, especially if and when the increasing volume of traffic passing through her port should demand a further expansion of the latter, and, consequently, a further rise in the financial burdens. In that case the unnatural position which resulted from the fact that the “Elbe delta” belonged to two different states, and which had its origin in the political history of the district, would make itself felt with all its drawbacks, and the ultimate sufferer would be the country as a whole of which Hamburg, after all, was the connecting link with the nations beyond the sea.

These are the same arguments and considerations which are used when the modern problem of a “Greater Hamburg” is under discussion, with this difference only, that in Ballin’s time the only solution which was regarded as possible was that Hamburg should cast in her lot with her Prussian neighbour.

Ballin repeatedly vented the full force of his sarcasm against the advocates of an “out-and-out Hamburg policy” to whom his own views sounded like heresy, a policy which found perhaps its most comic expression in the speech of a former Hamburg burgomaster who referred to the King of Prussia as “our illustrious ally.” Ballin did not recognize the existence of a line of demarcation which, as many lesser minds imagined, separated republican Hamburg from the rest of Germany. In reality there is no such separation; Hamburg, indeed, receives year after year a constant influx of human material and of ideas from her German hinterland, without which she could not exist at all, and in spite of which she has never had a superfluity, but—at times, at least—rather a deficiency of specially gifted citizens. This latter circumstance and the frequent absence of that quality of mental alertness which Bismarck, in speaking of the German character in general, used to designate as the missing “dash of champagne in the blood” once made Ballin say: “I quite see that what this town wants is 10,000 Jews. I do not, by any means, shut my eyes to the disagreeable qualities of the Jewish character, but still, another 10,000 of them would be a decided advantage.” This utterance confirms how free from prejudice he was where the Jewish question was concerned. Although not at all orthodox, but rather indifferent in his religious views, he was far too proud to disavow his origin or his religion, or to change the latter. Of someone who had changed his name, he said, in a tone of bitter reproach, that he had insulted his father.

Ballin’s relations with the working classes and his attitude towards the Labour question were not such as the Socialist papers were fond of alleging, especially at the time when the Labour controversy was at its height, and when strikes were constantly occurring or threatening. The first big strike affecting Ballin’s special sphere of activity was that of the Hamburg dock labourers in 1896. It was caused by wages disputes which the Packetfahrt tried in vain to settle by raising the wages paid to the men. The interests of the employers in the ensuing struggle were not, however, specially represented by the associations of the shipping firms, but were looked after by the big “Association of Employers of Labour,” and therefore the attitude taken up by the employers as a whole was not determined by practical considerations from the point of view of the shipping companies. The Packetfahrt, however, seems to have emphasized the necessity of being guided by such practical considerations, as may be inferred from the fact that the Packetfahrt was the only one among the large firms of employers which advocated from the outset that certain concessions should be granted in respect of the demands put forward by the workmen. Although, as has been remarked, the company succeeded in seeing its recommendation adopted, the strike started on November 18th, 1896. At first it was restricted to the dockers, but the number of the strikers was soon swelled by the adhesion of the quay-labourers and of several other categories of port-labourers and seamen. When this had occurred, and when the Packetfahrt suggested that steps should be taken on the part of the employers with the object of reaching a friendly settlement, these suggestions did not secure a majority in the counsels of the employers, and it was in regard to this that Ballin’s notes, under date of December 9th, contain the following entry: “We are continuing our efforts to induce the Employers’ Association and the Shipowners’ Association to give the strikers a chance of an honourable retreat. What we propose in detail is that the men should be asked to resume work of their own accord in consideration of which the employers would promise to submit their grievances to a bona fide examination. All our efforts have failed because of the attitude taken up by the Employers’ Association. We can only hope that the Senate will consent to mediate in the conflict.” This body, however, was afraid of being accused of prejudice in favour of the employers, and declined to act as mediator. “It is very much against my wish,” Ballin’s notes continue, “that our own interests are represented by the Employers’ Association,” and on December 23rd, he wrote: “Meanwhile, the Senate, in reply to the resolution passed by the men, has asked them to resume work unconditionally against the promise to look into their grievances, and as far as they appeared to be justified, to redress them after a joint conference had been held between the employers and the strikers. This offer of a compromise was rejected by the workmen.” The employers were able to get the most urgent work done by substitute labour, and the strike came to an end in the early days of February.

Among the subsequent Labour troubles those of 1907 are of special significance. In that year, after a strike of the dockers and the seamen, all those employers who had occasion to employ any workmen in the port of Hamburg founded an organization somewhat on the lines of a Labour Bureau, called the Hafenbetriebsverein. The termination of the strike just referred to was brought about by Ballin’s personal influence, and it was he who conducted the prolonged negotiations with the heads of the Labour organization. Later on, in 1911, when the Hafenbetriebsverein began to conclude agreements with this organization by which the wages for the various categories of dock labourers were fixed—a policy which did not exactly meet with the full approval of large sections of employers, it was again due to Ballin’s influence that these agreements were generally accepted. It is just possible that a certain event, insignificant in itself, may have strengthened Ballin’s natural tendency towards a settlement along the lines of a compromise. As has been said before, the year 1907, which, from the business point of view, had been excellent (at least, during the first six months), and during which the above-mentioned strike occurred, was succeeded by a year which brought exceedingly unsatisfactory earnings to the company. Ballin did what he had done on a previous occasion, in 1901: he sent a memorandum to all the employees of the firm asking them to cut down expenses to the lowest possible extent, to contribute their share towards a more economical working of every department, and to submit to him any suggestions of their own as to how the necessary retrenchment could be effected. I was instructed to examine the general expenses account with a view to finding out in what way a reduction would be possible, and I drew Ballin’s attention to the fact that the considerable sums which had to be spent in 1907 in consequence of the strike would, of course, not appear again in the balance-sheet for 1908, so that this would lead to an automatic reduction of the working expenses. Ballin was surprised to see how large this particular item was, and the whole occurrence proved once more that a lean agreement would have been preferable to a fat lawsuit.

As Ballin was pre-eminently a man whose mind was bent on practical work and on the production of practical results, it is but natural that he was greatly interested in the practical aspects of social politics, and that he applied its principles to the activities in which he was engaged as far as he thought he was justified in doing so. Not in peace times only, but also during the war did he hold these views, and when he was connected with the work of provisioning the civil population, and, later, with that of preparing the economic post-war reconstruction, he was frequently brought into contact with men who occupied prominent positions in the world of Labour.

His capacity for work was enormous and seemed wellnigh inexhaustible. He made a most lavish use of it, especially in the early part of his life, and the personal assistance he required with his work was of the slightest. His greatest aid, indeed, was his marvellous memory, which almost enabled him to do his work without ever referring to the files of letters and documents. He could always recall to his mind every phase of past events, and every detail of all the ships he had built or purchased, and he was never wavering in the opinion he had formed of anyone who had ever crossed his path, because such opinion was founded on facts.

Very gradually only did his fellow-members on the Board of Directors succeed in persuading him to refrain from putting in an appearance at his office on Sundays, and to do such Sunday work as he wanted to do at home. The telegraph and the telephone always kept him busy, both on weekdays and on Sundays. Even on his travels and on his holidays he wanted to be informed of all that was going on, and he could be very annoyed when any important news had been withheld from him, or when he believed that this had been the case, so that his secretariat, to be on the safe side, had gone rather far in forwarding on his correspondence when he was away from town. When I first entered upon my duties with him he had just returned from a rest cure at Kissingen. He pointed at the huge pile of letters that had been forwarded to him on his so-called holiday, adding, in a tone of bitterness: “You see, every expansion of a business becomes a curse to its leader.” Sometimes his absences from Hamburg would amount to as much as eight months per annum, and it was certainly no easy task always to know what to send on and what to hold over until after his return. To do so one had to be well acquainted with all the details of each transaction and to know what was important, especially what was important to him; and if one wished to see his mind at ease it was necessary never to let him think that anything was kept back from him. Any apparent neglect in this respect he was apt to regard as a personal slight. And yet the time which he had at his disposal for attending to current correspondence, both when at the office and when travelling, was but limited.

The waiting-room outside his private office was nearly always crowded with intending visitors. The callers were carefully sifted, and all those who were strangers and those who had come without having an appointment were passed on to someone else as far as this was possible. Great credit is due to his ever faithful personal attendant at home and on his travels, Carl Fischer, for the perfect tact which he showed in the performance of this difficult task.

In spite of all this sifting, however, the time left for getting through a day’s mail was not sufficient. I therefore, shortly after entering the company’s services, made it a point to submit to his notice only those letters which I considered of real importance. According to the mood in which he seemed to be I then acquainted him with the contents of as much of the remainder as I thought it wise to do. I believe I gradually succeeded in acquiring a fair amount of skill in reading his mind, and this facility enabled me to avoid more dangerous rocks than one. I tried to proceed along similar lines when he was away from Hamburg, especially when he was taking a holiday. On such occasions I forwarded on to him only the important letters, taking great care, however, that he was not kept out of touch with any matter of real consequence, so that he should never feel that he was left in the dark about anything. After some time I had the satisfaction of being told by him when he returned from a holiday that that had been “his first real holiday since he had joined the Packetfahrt.”

Once one had learnt to understand his way of reasoning and his individual traits, it was not difficult to know how to treat him. If a mistake had been made, or if some oversight had taken place, the most foolish thing would be not to tell him so at once. To act otherwise would mean the immediate and permanent forfeiture of his confidence, whilst an open admission of the mistake would strengthen his faith enormously. He hated to be shut out from the actual practice of the company’s business by a Chinese wall of bureaucratic control. Whenever such a wall was in process of erection he quickly and inexorably pulled it down, and he always remained in personal contact with every department and with every prominent member of the staff as far as the size of the huge undertaking enabled him to do so. For this reason he but rarely, and only when the pressure of other business was encroaching too much on him, omitted to receive at his private office the captains who came to make their reports to the directors. He knew, of course, every one of them personally, as he had appointed many of them himself years ago. He was no stranger to their various idiosyncrasies, and he knew all their good qualities. He was also personally acquainted with a great many of those unconventional and often somewhat blunt but always good-natured individuals of humble rank who seem to thrive wherever much shipping is going on. He was not too proud to write an appreciative article on the death of one of them, which, since it reflects high credit on his own generosity and kindness of heart, ought not to be allowed to be forgotten altogether. It was published by the Hamburger Fremdenblatt, to the staff of which the subject of his appreciation might, in a sense, be said to have belonged.

Ballin very frequently went to New York—which might be called the most prominent outpost of the company—because he recognized the value of being in constant touch with every aspect of the many activities carried on by the Packetfahrt, and especially with those persons whose interests it was of importance to the company to cultivate. The numerous pool conferences often took him to London, where he always made a point of keeping on friendly terms with the leading British shipping firms, and, later on, with some of the leading politicians as well. There were few people in Germany who could rival him in his knowledge of the psychology of the American or the British mind. This knowledge resulted from his great capacity for rapidly and correctly summing up the character of anyone with whom he had to deal. He had developed to a high degree the art of treating the different types of people he met according to their different individualities. His kindness of heart, his brilliant powers of conversation, his prodigious memory, his quickness of repartee, and his keen sense of humour made him a favourite wherever he cared to be one. One felt his charm as soon as one came into personal contact with him. His wonderfully alert eye, which could express so much kindness, the soothing tones of his melodious voice, and the firm and friendly grip of his hand, made one forget that he was not a handsome man, although his powerfully developed forehead and his head which, in later years, was almost bald, were of classic perfection.

Albert Ballin would never have gained the commanding position he held if the keenness of his intellect and the force of his character had not been supplemented by that pleasing amiability which distinguishes all really good men. To him was given a large measure of that noble courtesy which springs from the heart. He who could be hard and unyielding where the business interests entrusted to his care were at stake, was full of generosity and sympathy towards the members of his family circle and his friends. Nothing delighted him more than the happiness of others. Those whom he cared for he treated with a tender regard which was deeply touching. He loved to give presents, and did so with the most delicate tact. He never expected any thanks; it was sufficient for him to see the happy face of the recipient. And if he ever met with ingratitude or spitefulness, he ignored it and dismissed it from his mind.

Personally generous to the limit of extravagance, he never spent a penny of the funds of his company without being convinced that it would be to its benefit. He left nothing undone when he thought he could realize a profit to the company, or cut down expenses. Money, to him, was only a means to an end; and the earnings of the company were in the first place intended to be spent on increasing its scope and prosperity wherever possible. Those who know what remuneration the heads of other concerns receive may well be surprised to see how little Ballin made for himself out of his position, but they would do him a great injustice if they thought he ought to have made more out of it. He even spent the greater part of his income for purposes of representation in the interests of his company. His amiable charm of manner and his brilliant conversational gifts did much towards making the entertainments he provided the successes they invariably were; and even if so much representation, especially that in connexion with Kiel Week, became somewhat of a burden to him, his company reaped rich benefit from his munificence.

But to appreciate to the full the charm of his personality one must have been his guest at his beautiful home in Hamburg or at his beloved country seat near Hamfelde, and have listened to his conversation while sitting round the fire of an evening, or been his companion on his long walks and rambles through the neighbouring Forest of Hahnheide. His conversation was always animated, his witty remarks were always to the point, and he was unsurpassed as a raconteur. He was excellent as a speaker at committee meetings, and he always hit upon the right words suitable for a political toast. The skill with which he wielded the pen is proved by numerous newspaper articles, memoranda, and descriptions of his travels, but above all by his voluminous correspondence. He was probably one of the most versatile letter-writers, and yet so conscientious in this as to be almost pedantic. In his early years he had also tried his hand at poetry. His beautiful home, which was adorned with pictures and sculptures by eminent masters, was a source of great pleasure to him. He was very fond of music and congenial company, and he knew how to appreciate the pleasures of a full and daintily arranged table.

When I intimated to one of Ballin’s old friends that I intended to write his Life, he told me that this would not be an easy task, and that he hoped I would not forget to depict Ballin as the amiable charmeur to which side of his character so many of his successes were due, and which was the secret of much of his great popularity. The number of people who claimed to be his friends, both before and after his death, but especially when they were trying to get some advantage out of the company, was surprisingly large. They were, in fact, so numerous that such a claim, when put forward, was generally—and rightly—looked upon with a great deal of suspicion. Very often, when such self-styled friends were announced to him, Ballin would reply: “I do not know the man,” or “I do not remember him, but I may have met him.” Ballin may justly be described as a man of world-wide fame, and whenever he went abroad the papers eagerly followed his movements. In New York especially it required all his cunning and resourcefulness to escape from the reporters desiring to interview him.

Owing to his prominent position before the public he received an abundance of honours during his life. The many distinctions and presents which the Kaiser bestowed on him were a source of gratitude and delight to him, and he valued them because they were a symbol of the personal ties that linked him to the Kaiser; but the foreign decorations, of which he also received a great many, were of so little interest to him that he did not even trouble to have those of them replaced which once were stolen from him. It was a great disappointment to him, however, not to be able to recover the Japanese ornamental swords which were taken on the same occasion, and which he had always carefully treasured because of their high artistic value. They were a present from the Marquis Ito, whom Ballin had once helped to obtain an audience of the Kaiser—an audience which, he hoped, would lead to the establishment on a permanent footing of Germany’s relations with the Empire of the Mikado. It would appear, indeed, that, if the leaders of Germany’s political destiny had shown some more circumspection, the same friendly relations might have been brought about between Germany and Japan as were entered into later on between Great Britain and the latter country. Personal souvenirs, like those just mentioned, were prized so highly by Ballin that no persuasion would induce him to part with them, and even Professor Brinckmann, the Director of the Hamburg Museum for Arts and Crafts, who was one of the leading authorities on the subject of Japanese applied art, and who tried hard to secure possession of them for his museum, met with a flat refusal.

Every year Ballin spent at least six months, and often more, away from Hamburg, and during such absences the work he had to accomplish was not less, but rather more than that which he did when in Hamburg. Conferences followed upon each other in quick succession at all times of the day, and the time that was left was filled up by visits. Often the amount of work was so great that he had to get through a whole series of difficult problems in a single day. The number of visits he had arranged was always considerably augmented by numerous others not allowed for in his arrangements for the day; because wherever he went the news of his arrival spread immediately. He could never even think of travelling incognito. It is literally true that he was known to every hotel porter all over the world. He was in the habit of extending his hospitality twice a day to a larger or smaller number of business friends when he was travelling. At first his love of congenial society had prompted him to do this, but in after years he continued it because he wanted to secure some benefit for his company even in his hours of relaxation. Still, he was often quite glad when, late at night, he had come to the close of his day’s work, and when he could let the happenings of the day pass before his mind’s eye in the quiet solitude of his room, or, as he liked to express it, “to draw the balance of the day’s account.”

Even before 1900 the never-tiring energy of his mind and the excessive strain on his nervous system brought about a practically permanent insomnia which never left him either in Hamburg or on his travels. Only when he was on the sea, or was staying at his country house, did he obtain any relief; and at such times he could dispense with the drugs to the use of which he had become a victim more and more regularly and extensively as time went on. The fact that this habit did not entirely ruin his nervous system proves that he was possessed of an iron constitution, which only gave way under the huge strain caused by the war. When he saw that his life’s work had been broken to fragments, and when he felt that he had not enough strength left for a second attempt of such magnitude, even his immense nerve force collapsed under the blow.

The anxieties caused by the war—a war which he knew would be lost—weighed more and more heavily on his mind the longer it lasted. Outwardly he bore himself bravely and steadfastly, but his mind was full of dark forebodings, especially when he was by himself. If he had not had the unvarying sympathy of the faithful partner of his life, with whom he shared thirty-five years of mutual happiness, and if he had not always derived fresh consolation from his beloved adopted daughter and from his grandchildren, he would indeed many a time have felt very lonely. In spite of his apprehensions as to the result of the war, he yet remained faithful to the task of his life, and he hoped against hope. His ardent love of his work was constantly struggling with his reason, which foretold him the ruin of the Empire and in consequence that of German shipping.

This fact explains some apparent contradictions in his views and actions. What was the general public to think of a man who was watching the progress of the war with the greatest pessimism, whilst at the same time bringing all his influence to bear on the passing of a law which was to make possible the reconstruction of Germany’s merchant fleet, knowing that such reconstruction could only be achieved if the Empire which was to set aside the funds were to remain intact. In this matter, as in others, it was the intuition of the born business-man which guided him, or perhaps a sort of instinct which made him discover new ways when the old ones had failed. These forces of his mind had nothing in common with logical reasoning, and they prevented him from drawing the practical inference from the sentiment so often expressed by us during the war: “If the Empire falls to pieces, we shall all be ruined; and if the Empire becomes bankrupt, we shall be insolvent too.” Events have shown that this sentiment was not justified by facts. Empires and individuals may perish; but the nations, and their trade and commerce which are the outcome of their economic needs and of their geographical position, will outlast them.

Neither is it likely that the life-work of those men who have left their mark on their epoch will ever be in vain. There are two great achievements which, it appears, will always stand out like two pillars in the wreck of destruction that has fallen upon Germany, viz. Bismarck’s work of political unification, and—a necessary preliminary of it—the powerful economic foundations laid with incessant toil by the great industrial leaders of whom Germany had so many during the era of her prosperity.

Albert Ballin was one of the most gifted among their number, and the world-wide fame of his achievements has outlived his death. When, after five years of isolation from the rest of the world, Germany appeared once more amongst the nations, she did so with the knowledge that the foundations of the proud structure which Ballin had built up were still unshaken, and this knowledge has proved one of her greatest assets when she entered upon the task of reconstruction.

If German shipping is to flourish again, and if German steamers are now ploughing the oceans once more, credit is due to Albert Ballin. His work it is from which new life is emanating, and it is to be hoped that his spirit will continue to animate German shipping both now and in the future.

INDEX

A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, R, S, T, U, V, W, Y, Z

Aden, 85
Adler Line, 7
Aehrenthal, Count, 141
Agadir incident, 162
Agents, emigration, work of, 8
Alsace-Lorraine, problem of, 272
America, 12
Amerika, 25, 106, 129
Andersen, Mr., and the Danish Royal Family, 99
Anglo-American Alliance, Ballin’s opinion of, 256
Anglo-German rapprochement, 134
shipping agreement, 18
understanding, 164, 165
advantage of, 136
Ballin as negotiator, 136
failure of, 133
Anglo-Russian agreement, 137
Antwerp, 81, 82
Aquitania, 113
Asquith, Mr. H. H., 262
on Lord Haldane’s mission, 177
speech on Navy, 154
Atlantic Conference, 111
Atlantic Transport-Leyland Co., enlargement of, 45
Auguste Victoria, 25, 27, 72, 75, 193, 196
Australia, 12
Austria, need of compromise with Italy, 242
Austria-Hungary, strained relations between, 251
Austro-German Zollverein, 251

Baden-Powell, General, and the German menace, 138
Bagdad Railway, 189
Baker, B. N., American shipping magnate, 42
comes to Europe, 44
Baker, B. N., discusses terms of community of interest agreement, 42
Balkan States, and Germany, 251
Ballin, Albert, adopts Lord Pirrie’s advice, 44
advises peace overtures, 245
after the war problems, 255
agreement with Harland and Wolff, 122
American appreciation of, 308
an English journalist on, 293
ancestry of, 2
and Admiral v. Tirpitz, 237
and Adolph Woermann, 107
and Anglo-German rapprochement, 134
and Carl Laeisz, 294
and Count Tisza, 252
and Count Waldersee, 194
and Government subsidies, 60
and Hamburg-Amerika Linie, 69
and Hugo Stinnes, 280
and Mr. Gerard, 246
and labour questions, 297
and politics, 131
and North German Lloyd, 116
and Princess Marie of Denmark, 99
and Reichstag, 279
and submarine warfare, 252, 254
and the Russo-Japanese War, 104
and Union Line, 19
and working classes, 297
and world war, 132
anxiety as to Roumania, 244
article in Frankfurter Zeitung on blockade, 234
as Anglo-German negotiator, 136
as arbitrator, 79
as general representative of Carr Line, 12
as head of Packetfahrt passenger department, 18, 21
at Constitutional Club, 140
at Neues Palais, 204
at the German front, 266
attempts at mediation during war, 233
boldness of, 289
business principle of, 132
capacity for work of, 300
chairman of Pool Conference, 36
complains of German official high-handedness, 232
conducts London emigration discussions, 1898, 38
death of, 286
defends himself, 235
dines with Danish Royal Family, 100
disagrees with use of submarines, 229
discusses Morgan Trust with William II, 53
early biographical details of, 6
education of, 3, 4
establishes German-Japanese Bank, 204
estimates British naval staying-power, 253
Far East investigations, 84
favours peace by compromise, 236
forcing the British Lines, 36
friendliness of William II toward, 206
further reports on Morgan Trust negotiations, 49-50
grave warning in 1918, 279
Hamfelde, his country home, 310
handling of labour troubles, 298-9
his father’s death, 5
his life-work, 115
his 1901 trip epitomized, 95
his observation of details, 123
his view on evading war, July 27, 1914, 216
ideal in forming Pool, 66
impressions of Paris after Morocco affair, 181
in London discussing Austrian ultimatum, 215
in Vienna, 1916, 249
Ballin, Albert, intense patriotism of, 291
international services of, vii
interview with Bethmann-Hollweg, 152
interview with Grey, Haldane, and Churchill, 215
last diary entry, 286
last meeting with William II, 209, 280
letter from William II, 175
letter to Kiderlen-Wächter, 163
letters to General v. Falkenhayn, 244
made Packetfahrt Director, 27
meets Sir Ernest Cassel, 138
mental versatility of, 2
mission to Vienna, 1915, 242
negotiations with Booth Line on Brazilian trade, 83
notes of conversations with William II, 203
official thanks to, 141
on Agadir incident, 163
on Blücher, 60
on death of Edward VII, 160
on engineering problems, 121
on foreign exchange, 274
on Hohenzollern, 202
on London in election time, 158
on naval armaments, 147
on neutrals, 245
on peace problems, 239
on sale of confiscated fleet, 230
on Sandjak Railway, 142
on security of William II, 241
on Serbian situation, 214
on war’s failures, 258 et seq.
opinion of German Chancellor, 259
opinion of war’s duration, 237
personal characteristics of, 287
pioneer in steerage business, 11
policy of, 79
political views, 291
premier position at twenty-nine, 19
present from Marquis Ito, 311
prodigious memory of, 4
report on British attitude to Germany, 161
report on development of German shipping, 47
reticence of, 3
reviews war position in 1916, 258
ridicules submarine warfare, 268-9
stimulating influences of his life, 2
strain of war on health, 313
sturdy honesty of, 309
suggested as negotiator of peace, 286
suggests Pool, 24
talks with Prince Bülow, 271
talks with William II on submarine war, 248
threatens British traffic, 22
trip round the world, 83
value of wonderful memory, 35
views on character of William II, 285
visits London in 1914, 184
war problems of foreign policy, 241
William II discusses politics with, 203
William II writes to, on Navy Bill, 183
William II’s personal interest in, 198
wire from Leopold de Rothschild, 163
with Prince Henry of Prussia on the Hohenzollern, 57
with William II at Front, 266
with William II in Italy, 204
with William II on Kaiser Wilhelm II, 55
work in Reichseinkauf, 224
writes frank letter on war to William II, 1916, 252 et seq.
writes on Morgan Trust, 46
writes to William II, April, 1917, 264
Bauer, Lieut.-Col., 280
Beck, Edward, 27
Berg, Herr von, 282
Berliner Tageblatt on Anglo-Russian naval agreement, 213
Bernstorff, Count, 264
Bethmann-Hollweg, von, 151, 152, 156, 262, 270, 277
attacked respecting Agadir, 162
on British delegation, 166-7
telegram to Mexico, 271
Bismarck, launch of, 202
Bismarck, Prince, 114
Blockade, German, futility of, 267
Blohm and Voss, 113
Blücher, Ballin on trial trip, 60
Boer War, European move to stop, 143
lesson of, 139
Bohlen, Krupp v., 282
Bolten, August, 10
British argument against German naval expansion, 133
Cabinet and German naval expansion, 182
confiscation of German merchant fleet, 229
convoys, how they outwitted the Germans, 267
emigration, comparison with German, 15
excitement over Morgan Trust, 60
feeling in Russo-Japanese war, at German attitude, 104
Ludendorff’s promise to crush, 266
Navy, Ballin on, 239
opinion on shipping deals, 67
rivalry with Germany, 133
shipbuilding, developments in, and Hamburg-Amerika Linie, 128, 208
shipbuilding, German move against, 17
shipping companies, Pierpont Morgan and, 55
shipping lines, and emigration, 7-14;
agreement with, 23;
join the Continental Pool, 23;
offered to German companies, 67
supremacy, Ballin on, 241
Bülow, Prince, 141, 247, 270

Canadian Pacific Railway, 62, 111
Cargo and steerage shipping, 13
Carr, Edward, 12
Carr Line, the, 12 et seq.
and Packetfahrt, 12
Cassel, Sir Ernest, 134
and Winston Churchill, 165
meets Ballin, 138
on Anglo-German understanding, 165
on naval problem, 179
on Sandjak Railway, 142
report of interview with, on Navy, 171
work for reduction of naval armaments, 134 et seq.
Cholera, epidemic at Hamburg, 36, 72
Christiansand, port of, 21
Churchill, Mr. Winston, 166
at Kiel, 1914, 192
complains of Germany, 180
Sir Ernest Cassel on, 165
speech on Navy, 175
suggests a naval holiday, 186
Colombo, 86
Columbia, 77, 201
Community of interest agreement (see “Pool” and “Morgan Trust")
Congo, Franco-German agreement, 162
Coolies, Chinese, 89
Cunard Line, and Austrian Government, 65
and Hungarian Government, 63
effect on Pool, 65
introduces turbines, 111
new liners, 113
opposition to cabin Pool, 61
refuses to join Pool, 37
Cuxhaven, development of, 69
regatta at, 205

Daily Telegraph, sent to William II, 270
the William II interview, 144
Dardanelles, the, operations in, 245
de Freitas and Co., A. C., 79
de Freitas Line, purchase of, 80
Denmark, emigration from, 13
Royal Family of, their interest in shipping, 99
Deutschland, 25, 78, 130
Diesel engine, application to steamship, 102
Dreadnoughts, 200

Eastern Asiatic Co., 98
Edward VII, 134
and Morgan Trust, 61
Edward VII, chances of Anglo-German war, during reign of, 139
death of, 158
policy of, 135
the Kiel week, 206
visit to Wilhelmshöhe, 136
visits Berlin, 145
visits Kaiser at Friedrichshof, 142
Elbe, enlargement of harbour facilities on the, 69, 70, 79
Ellerman, Mr., of Leyland Line, 45
Emden, rise of, 83
Emigrants, early accommodation of, 7, 8, 14
Emigration, anti-British action, 17
Ballin’s work for, 9
beginnings of pooling, 12
British and German, 15
British rates, 22
business, how controlled, 8
comparisons of Carr Line and Packetfahrt, 15
cost of, 12
Danish, 13
Hungarian, 63
in the ’seventies, 8
medical control established, 74
on pre-paid basis, 9 et seq.
rate war begins, 14
statistics of, 103
stopped by Hamburg cholera epidemic, 36
Emigration Law, German, 23
Erzberger, Herr, 244
Esher, Lord, and the Admiralty, 138
Europe, concerted inquiry to Germany, 140
situation in September, 1916, 262

Falkenhayn, General v., Ballin and, 244
Finland, 278
Forced draught, first vessels under, 26
Foreign exchange, Ballin on, 273
Francis Joseph, Emperor, 250
and Count Tisza, 250
Frederick the Great on experience, viii
Frisch, Geheimrat, 223
Furness, Sir Christopher, and Morgan Trust, 61
Fürst Bismarck, 193
Fürstenkonzern, 110

George V, King, Ballin’s letter respecting, 160
George, Mr. Lloyd, speech on Agadir incident, 162
visits Germany, 143
Gerard, Mr., and Ballin, 246
German-British shipping agreement, 18
German emigration fleet, in 1882, 10
German Government, note to British Government, 170
German Naval Bill, 137
German Navy, the 1908 affair, 138
Germany, and Belgian Relief Committee, 231
and the Merchant Service Bill, 228
bad feeling among neutrals to, 245
Ballin cries “everything is being gambled away,” 257
Ballin discusses after-the-war problems, 255
big naval programme, 143
British agitation against, 137
confiscation of merchant fleet, 229
control of trade and industries, 274
failure of political leaders, 264
favourable shipping situation of, 80
feeling towards British, 143
food problem, September, 1918, 284
habit of premature actions, 273
ignorance of British character, 260
internal condition in August, 1914, 223 et seq.
lack of effective administration during war, 233
mental attitude of, 134
plans to approach President Wilson, 283
Germany, state in 1916 “like living in a madhouse,” 257
useless sacrifices of, 229
war condition of, 257
war-hopes in ruins, 269
Germany’s industrial growth, 7
Gigantic, 113
Goschen, Sir Ernest, 153
Gothenburg, port of, 21
Grey, Sir Edward, 262
on Lord Haldane’s mission, 177
on naval armaments, 157
on the Navy, 138
Great War (see World War)
Grumme, Capt. v., joins Hamburg-Amerika Linie, 199
with William II at Morgan Trust discussion, 53.

Hague Conference, 137
Hahn, Dr. Diederich, Chairman Agrarian League, 59
Haldane, Lord, 171
and British neutrality, 190
Cabinet’s attitude toward, 184
explains to Ballin, 191
German opinion respecting, 187
success of his mission, 177
visits Berlin, 134, 167
William II’s discussions with, 174 et seq.
Hamburg, absorption into Prussia, 296
birthplace of Ballin, 1
cholera epidemic in, 36, 72
dock strike, 299
in the nineteenth century, 1-6
Hamburg-Amerika Linie, and Great Britain, 207
and Persia, 107
and Russo-Japanese war, 105
buys foodstuffs for isolated Germany, 223
far-reaching alterations, 98
fate of ships when war broke out, 220
financial stability of, 116
fleet of, 116
instructions to ships on eve of war, 220
new premises, 202
sixtieth anniversary,  117
William II and, 195
Hamburg-Amerika Linie (see also Packetfahrt)
Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft, 7
Hamburg Regattas, William II at, 201
Hamburg-South American S.S. Co., 79
Hammann, Geheimrat, 138, 141
Hammonia, 24
Hansa Line, 69
taken over by Hamburg-Amerika Linie, 70
Hansemann, v., director Disconto-Gesellschaft, 55
Hansen, President, Chief of Arbitration Court Pool, 35
Harbou, Major v., 282
Harland and Wolff, 112, 121
Henckell-Donnersmarck, Prince, Kaiser’s interest in, 47
Hintze, Herr v., 283
Hohenzollern, 194
Holland-America Line, 7
Holland, Queen of, offers mediation, 283
Holtzendorff, Admiral v., 246
Hongkong, 88
Huldermann, Bernhard, and Count Witte on averting war, 217
and Navy Bill, 170

Immco Lines, Pool name for Morgan Trust, 65
Immigrants, Scandinavian trade, 36
Imperator, 31, 113, 125, 126
International Mercantile Marine Company (see Morgan Trust)
Inverclyde, Lord, and Morgan Trust, 64
Italia Company, the, started, 79
Italy, agreement with, necessary to success of war, 241
Germany’s failure in, 242

Jagow, Herr v., 213, 214
Jewish ancestry of Ballin, 2
Jones, Sir A., and the Morgan Trust, 6
Jonquières, Herr v., 231
Kaiser Wilhelm der Grösse, 77
Kaiser Wilhelm II, 205
Kaiserin, 113
Kaiserin Auguste Victoria, 25, 106, 129
Kaiserin, the, and the war, 211
opposition to private life, 285
Kiautschou, 97
Kiel Canal, widening the, 200
Edward VII at, 206
Week, origin of, 201
Kirchheim, Chief Inspector Emil F., viii
Köhlhrand, agreement the, 295
Kühlmann, Herr v., 189
Kunhardt, M., 27
Kuskop, Karl, 303

Laeisz, Carl, 293
Laeisz, F., 293
Laird’s, orders to, 26
Law, German Emigration, of 1887, 23
Leuthold, Prof., 199
Leyland Line, acquired by Pierpont Morgan, 48
Liberal Cabinet, and naval armaments, 149
Liberal Government, and Anglo-German understanding, 136
Lichnowsky, Prince, 188
view on Haldane’s “neutrality” conversation, 191
Liners, developments in, 125 et seq.
Lohmann, Mr., 10
Director-General of Lloyd Line, 32
Ludendorff, and the Crown Prince, 280
and “to her knees” promise, 266
Lusitania, 62, 113

Marie, Princess, of Denmark, 99
Marine engineering, Ballin’s enterprise in, 122
development of, 119
Packetfahrt types, 125
progress in, 127
Marschall, Bieberstein v., 188
Mauretania, 62, 113
Mediterranean Conference, 111
Meteor, 197
Metternich, Count, at St. James’s, 212
on Anglo-German understanding, 187
predicts Great War, 188
sees Sir Edward Grey, 178
Morgan, Pierpont, guest of William II at Kiel, 61
Morgan, Trust, the, 40 et seq.
agreement reached, 52
announced to British Press, 59
effect of freight slump, 61
final discussions in New York, 55 et seq.
financial aspect, 45
inception of, 45
International Mercantile Marine Co., formal name of, 65
King Edward VII and, 61
outline of draft agreement, 51
Pierpont Morgan at London Conference, 49
Pierpont Morgan’s operations attract public attention, 46
telegram from William II, 56
terms of agreement, 58
William II discusses, 53
Morris and Co., 1 et seq.
Mutius, Herr v., 247

Nanking, 92
Naumann, Dr., and “Berlin to Bagdad,” 276
Nautikus, naval propaganda in, 200
Naval armaments, a cause of unrest, 133
Ballin’s report on, 146 et seq.
big navy propaganda, 133
Reichstag and reduction of, 145
Naval Bill of 1912, 155
Ballin writes to Sir Ernest Cassel on, 168
British alarm at, 166
Naval holiday, Mr. Churchill suggests a, 186
Navy, a bigger British, 171
Navy League, German, 137
New York, 49
New York, emigration to, in the ’eighties, 7 et seq.
steerage passengers to, statistics, 29
Normannia, 77
North Atlantic Steamship Lines Association, history of, 32
North German Gazette, 157
North German Lloyd, 7, 98, 106, 111
competes with Packetfahrt, 10
jubilee of, 117

Oertzen, Herr v., 91
Olympic, 113

Packetfahrt, the, a founder of, 10
agreement with Philadelphia Shipping Co. and Pennsylvania Railroad Co., 77
and Ballin, 289
and Carr Line, 12
and emigrants, 10
and Harland and Wolff, 121
and Russian coal, 104
and the Russo-Japanese War, 103
Ballin made director of, 27
celebration of jubilee, 74
1886 Pool, 21
extension of South American business, 80
improved appointments and accommodation on vessels, 26
increase of capital, 26
letter from chairman of Cunard Company, 75
more new vessels built, 25, 74
New York branch established, 27
passenger department created, 19
service to Mexico, 83
statistics (1886), 19
(see also Hamburg-Amerika Linie)
Panther, William II and, 210
Paris Economic Conference, 276
Passenger traffic, improvements in, 41
Peace negotiations, Ballin and, 286
Peters, Heinrich, central offices of, 34
secretary of Pool, 31
Philadelphia, 49
Pirrie, Lord, 121
advises Ballin, 44
discusses Morgan Trust, 63
Pleasure cruises, inception of, 70 et seq.
Pool accommodation discussions (1898), 38
actuarial basis of, 34
agreement on (1891), 24
agreement with Allan Line, 74
agreement with Italian Lines, 74
agreement with Lloyd Line, 74
Ballin’s opinions upon, 115
British Lines refuse (1892), 33
cardinal principles of, 30
Cunard Line refuses to join, 37
details of the, 28
Heinrich Peters, secretary of, 31
its most dramatic episode, 67
more internal troubles, 115
negotiations for a greater, 35
North Atlantic Steamship Lines Association, formal name of, 33
proposed by Ballin, 1886, 24
special, for Mediterranean business, 34
terms definitely made, 33
the General, 111
the transatlantic, 110
tonnage and passenger statistics, 29
U.S.A. Railway pool compared, 28
world war’s effect upon, 111
Port Said, 85
Pretoria, 201
Princes’ Trust, 110
Prinzessin Victoria Luise, 130
Prussia, Prince Henry of, 57

Rate war, the, 14, 110
Red Star Line, 7
Reichseinkauf, the, formation of, 223
Reuchlin, Mr., of Holland-American Line, 32
Richardson, Spence and Co., 9
Riga, fall of, 272
Roumania, anxiety regarding food from, 251
neutrality of, 244
supplies grain during war to Germany, 227
Rupprecht of Bavaria, Prince, 137
Russia, army of, 139
Russian East Asiatic S.S. Co., 101
Russian Press, outburst against Sandjak Railway, 141
Russian Volunteer Fleet, 111
Russo-Japanese War, 102
coaling problems for Russian fleet, 105
ships for, 25

St. Louis, 49
St. Paul, 49
Sandjak Railway, 141
Scandia Line, 21
Scandinavian emigration, 21
Schön, Herr v., 141
Schratt, Frau Kathi, 250
pro-English sympathies of, 252
Schwander, Dr., 272
Shanghai, 90
Shaughnessy, Lord, 62
Shipping agreement on rates, 17
agreements, enormous range of, 111
British tonnage in 1901, 49
crisis of 1907, 111
Imperial Government’s interest in, 55
some tonnage comparisons, 49
statistics (1881-1885), 29
transatlantic business, trend of, 67
Ships, speed of, in 1882, 10
Singapore, 87
Skoda, Baron, 251
Sloman and Co., R. M., 18
South African War, 79
South America, development of, 82
Southampton, Packetfahrt service transferred to, 73
Spanish-American War, ships for, 25
Steinhöft, Hamburg, 1
Stettin, Vulkan Yard, 78, 113
orders to, 26
Stinnes, Hugo, 280
Storm, Director A., viii
Strasser, Mr., of the Red Star Line, 32
Stürgkh, Count, 243
Francis Joseph and, 250
Submarine warfare, 248, 252, 258
amazing achievements, 268
unrestricted, beginning of, 263

Thingvalla Line, 21
Times, The, on German neutrality, 104
Tirpitz, Admiral v., 151, 152, 199
and Ballin, 237
threatens resignation, 246
Tisza, Count, 243
and Count Stürgkh, 250
Titanic, 113
Tokio, 93
Trans-Andine Railway, completion of, 82
Tsingtau, 92, 97
Tweedmouth, Lord, and the Kaiser, 137

Ukraine, the, 278
U.S.A., application of Monroe doctrine in, 82
cholera and isolation in, 73
devastating effects of entry into war, 255
economic depression of the ’eighties, 9
enters the war, 269
German fears of intervention, 252
immigration from Scandinavia, 21
Railway Pool, 29
railways and shipping co-operation, 44

Vaterland, 113
Versailles treaty, German view of, 208
Vienna, conditions in, 249
Vulkan Yard, Stettin, 26, 78, 113

Waldersee, General Count Georg, and Ballin, 194
on rationing Germany, 221
Westminster Gazette (article in facsimile at end), 163, 235
White Star Line, and Pierpont Morgan, 55
new liners, 113
Wiegand, Dr. Heinrich, 119
and Morgan Trust, 54
Wilding, Mr., Ballin’s friendship for, 9
William II, and “a place in the sun,” 202
and British Navy, British feeling aroused, 137
and Daily Telegraph interview, 143
and Nicholas, suggested talk to avert war, 220
and President Wilson’s note, 285
and the Bismarck, 114
at Hamburg, 193
Ballin explains situation in September, 1918, 209
Ballin reports to, on navy problem, 138
Ballin tells him the ugly truth in 1917, 267
blind to situation, September, 1918, 283
“brimful of optimism,” 272
comments on Westminster Gazette article, 163
designs excursion steamer, 196
discusses Morgan Trust with Ballin, 53
discusses Morocco question, 205
facsimile comments on Westminster Gazette article (see end of book)
interest in German shipbuilding, 196
interest in Morgan Trust, 197
intervenes in shipping struggle, 106
isolation of, 255
last meeting with Ballin, 280
letter on British Navy, 137
maritime interests of, 201
monarchical discussions, Ballin and, 285
on balance of power, 165
on Germany’s Austro-Hungarian policy, 189
on the Churchill speech, 183
outspoken letter in 1916 from Ballin, 252 et seq.
personal interest in Ballin, 198
persuaded to retire into private life, 285
sees Edward VII at Friedrichshof, 142
supports Ballin’s mission of inquiry
to U.S.A., 54
telegram to Morgan Trust, 56
venerated in Austria, 251
visits Windsor, 136
wants apology from Great Britain, 183
writes to Ballin on Haldane interview, 175
Wilson, President, 263
Witt, Mr. Johannes, 27
Witte, Count, on situation July, 1914, 217
Woermann, Adolph, 107
character sketch of, 108
World war, the, 213
Ballin attempts mediation, 233
Ballin describes 1917 situation to William II, 265
Ballin favours a compromise, 236
Ballin on neutrals, 245
Ballin on the blockade, 234
Ballin on the crisis, 215
Bismarck’s prophecy regarding, 133
British censorship in, 225
coal problems during, 102
Count Witte on situation, July 24th, 1914, 217
defection of German conscripts, 281
effect on Pool, 111
World war, the, entry of U.S.A., effect of, 253 et seq.
food problems of Germany, 222
forced upon William II, 285
foreign policy and food during, 241
German mistakes in, 258-9
Germany stunned by débâcle, 236
grain from Roumania, 227
indemnities, 261
Mexico telegram, 271
outbreak of, 132
peace overtures, 245
position in 1916, 258
provisioning Germany, 221
shipping profits during, 65
submarine warfare in, 229
the British blockade, 224
Tyrol, failure in the, 259
Verdun and Italian campaigns, political and military failures, 258
World’s shipping collapse, cause of, 229

Yang-Tse-Kiang, the, 91, 96

Zentral-Einkaufs-Gesellschaft, 226 et seq.

Printed in England by Cassell & Company, Limited, London, E. C. 4.