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ALBERT BALLIN

By
Bernhard Huldermann

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

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

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To the Memory of
ae ALBERT BALLIN
in true veneration and heartfelt gratitude

ees “He was a man; take him for all in all,
i: I shall not look upon his like again.”
SHAKESPEARE, Hamlet (Act I, Scene 2).

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PREFACE

My principal reason for publishing the information con-
tained 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 concern-
ing 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 under-
standing between the various nations in the economic
sphere, his attempts to reconcile the contending ambi-
tions of those same nations where politics were con-
cerned ended in failure. And yet it is impossible to
understand his failure in one respect without first under-
standing his success in the other; indeed, the con-
nexion 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

vil

viii Preface

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 Ger-
many, considering the magnitude of the disaster that
has overtaken her, will not allow the spirit of resigna-
tion 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. More-
over, the fact that I had the privilege of being his col-
laborator for more than ten years gives me perhape 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 assist-
ance 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 iva et studio, and to refrain from stating
as a fact anything for which no documentary evidence
is available.

THE AUTHOR.

October, 1921.

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Morris AND Co, P ; ‘ ; ;

GENERAL REPRESENTATIVE OF -THE CARR
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_ 6. THE EXPANSION OF THE HAMBURG-AMERIKA
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10. Ma Se we
a II. PERSONAL CHARACTERISTICS Sct eet
4 EXTRACT ANNOTATED BY WILLIAM II as

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ALBERT BALLIN

CHAPTER I
MorRIS AND Co.

_ Atsert 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 Steinhéft.

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 interest-

_ ing 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
I

2 Albert Ballin

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 exaggera-
tion. 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. Docu-
ments 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 prom-

inent again for their learning and also for their business-.

like qualities. The intelligence and the artistic imagina-
tion 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 apprecia-

lS Se ee

Morris and Co. 3

tion of what was beautiful—all these are qualities which

may furnish the key to his successes as a man of busi-
ness. His sense of beauty especially made him extremely

fastidious in all that concerned his personal surround-
ings, 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
_ inEngland. 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 pur-
pose, 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—

4 Albert Ballin

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 improve-
ment 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 lan-
guage 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

Morris and Co. 5

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 house-
hold 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 Barm-
beck, 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: ‘ Adjiis ook Albert,
ick gah hiit 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

- Albert Ballin

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 Ham-
burg 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 busi-
ness, 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 condi-
tions 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 occupy-
ing the prominent position which it gained’ in later

ie a

Morris and Co. — 7

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 ton-
nage in the shipping business of Hamburg, bears a
strong likeness to that period which lies now half a cen-
tury back. The “ Hamburg-Amerikanische Packetfahrt-
Actien-Gesellschaft,’’ although only running a few ser-
vices to North and Central America, was even then the
most important shipping company domiciled in Ham-
burg ; 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 employ-
ment going round for the country’s increasing popula-
tion. The result was that large numbers of the in-
habitants had to emigrate to foreign countries. That
period lasted until the ‘nineties, by which time the
growth ci industries required the services of all who
could work. Simultaneously, however, with the decrease

of emigration from Germany, that from Southern Europe,
B

8 Albert Ballin

Austria-Hungary, and the Slavonic countries was assum-
ing 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 Prus-
sian 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 clientéle, and some-
times 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

=

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=

Morris and Co. 9

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 intelli-

gence. Within a few years of his entering the firm

ce

the latter acquired a prominent position in the “ indi-
rect ’ 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 especi-
ally with the head of that firm, Mr. Wilding. An inti-
mate 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

= Albert Ballin

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 188r.

It was quite impossible for the biggest Hamburg
shipping company—-the Packetfahrt—to carry success-
fully 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 Com-
pany 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 establish-
ment of its service of fast steamers—‘‘ Bremen-New
York in yg 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 Packet-
fahrt 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

Morris and Co. II

_ they were acting as general agents for the North American
cargo and passenger business, exercised a powerful
a . over the management of the Packetfahrt. The
a 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, there-
fore 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
bf 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 con-
cluded 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 accommoda-
tion of the passenger, and 35 marks in case such accom-
modation 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 58z when the first steamer left
12

General Representative of Carr Line 13

Hamburg on June 7th, 188z. Morris and Co. also under-
took 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 emi-
grants 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

14 Albert Ballin

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 com-
petitor 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 Ham-
burg. 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

General Representative of Carr Line 15

payable to the agents. The agents of the competing
lines, by publishing controversial articles in the news-
papers, soon took the general public into their confi-
dence; 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 unwotkable. 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 appre-
ciably 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 Packet-
fahrt 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 :

16 y: Albert Ballin

Number of Emigrants carried
Packetfahrt Carr Line via British ports

1880 . ‘ . 47,000 —_ 20,000
rggr_. ‘ ‘ 68,000 4,000 47,600
1882. ; : 68,000 II,000 31,000
1883. ; i 55,000 16,000 13,000
1884 . , , 58,000 13,000 16,000

At the same time the Packetfahrt, in order to pre-
vent 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 East-
bound 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 share-
holders of the Packetfahrt became restless, and at the
annual general meeting held in 1884 one of their re-
presentatives 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 com-
panies. 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.

General Representative of Carr Line 17

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 Packet-
fahrt, 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

i 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

_ toa 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 ques-
tion 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 busi-
ness 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

YC Sane a Albert Ballin

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 Ham-
burg 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 agree-
ment 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

~

ed
“

ae

“ a r Se Ae ae
=o Ree

General Representative of Carr Line 19
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-Gesell-
schaft,” and he was required annually to submit to the
directors a draft estimate of the expenses of his depart-
ment. 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 com-
mission under the pool agreement, allowing the infer-
ence 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 Com-
pany 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 con-
trol 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 Packet-
fahrt 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

20 0 Albert Ballin ¥

native city and also a leading one in the general Euro-
pean emigrant business which in itself is one of the
most important branches of the shipping trade. The
correspondence between Edward Carr and Ballin fur-
nishes no indication that the latter himself had insisted
upon his being taken over by the Packetfahrt or that
he had worked with this object.

pen Toi aA ee

CHAPTER III
i "Heap 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 reduc-
_ tion 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 ex-
2I

a Albert Ballin

change for concessions on the part of the latter

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 passen-
gers 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 ros. 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 Ham-
burg. 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.

Packetfahrt’s Passenger Department 23
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

oe
on

to 100 and 110 marks respectively. Henceforward both
r # 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 i 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 them-
Selves 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 exer-
tions 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 busi-

ness did not mean that all the differences between all
Cc

as Albert Ballin

the transatlantic lines had been settled. On the con-
trary, all the parties concerned gradually realized that
it would be necessary to institute quite different

ments; 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 repre-
sentative 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 per-
haps 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 Com-
pany 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 con-
sideration ; and it was the struggle for the blue riband

Packetfahrt’s Passenger Department 25

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 depre-
ciation. 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 Deutsch-
land, Amerika, and Kaiserin Auguste Victoria). It must
be admitted in this connexion that perhaps no ship-
owner has ever been more favoured by fortune than
Ballin where the sale of such difficult objects as obso-
lete express steamers was concerned. The value which
these boats had in relation to the prestige of the Com-
pany 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

26 Albert Ballin

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

4 oF isis
7 ane Peer -

Packetfahrt’s Passenger Department 27

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 dis-
cuss 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 under-
took to submit their business for the Company to the
control of an officer specially appointed by the Packet-
fahrt. 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 acknowledg-
ment 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 Poor

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 com-
bination 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 commu-
nity of interests concluded upon the basis of dividing
the profits realized in a certain ratio. I have been un-
able to discover when and where this kind of com-
bination 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 memoran-
dum refers to it as something well known. Ballin begins
by stating that the ‘‘ Conference of the Northern Euro-
pean 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

28

The Pool 29
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 respec-
_ tive interests; and a way leading out of the impasse
_ would be found by adopting the pooling system pro-
_ posed by the representative of the Red Star Line. If
__we take the number of steeragers carried to New York
from 1881 to 1885 by the six lines concerned as a basis,
the respective percentages of the total traffic are as
follows :

Percentage
North German Lloyd . 7 - 33°45
North German Lloyd peers Line) 14:80
Packetfahrt ‘ . . 27°00
Union Line : ; ; ; - 5°53
Red Star Line . " , . 12°26
Holland American Line : ‘ . .. 696

It was, however, justly pointed out at a meeting of
the Conference that the amount of tonnage must also
be taken into account in laying down the principles
which were to govern the distribution of the profits.
The average figures of such tonnage employed by the
six lines during the same period were:

Tons Percentage

North German Lloyd - 275,520 33°91
North German Lloyd (Balti- )
more Line) . ; - 63,000 7°76
Packetfahrt ’ : - 199,500 24°55
Union Line ; . - 42,840 5°27
Red Star Line . ; - 149,600 18-41
Holland American Line - 82,080 tIoro

Total tonnage _ , 812,540

30 Albert Ballin

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

_ Percentage
North German Lloyd 33°68
North German Lloyd (Baltimore Line) 11-28
Packetfahrt ; ; - 25°77%
Union Line ‘ . ; ‘ - 5°40
Red Star Line . ; ‘ - 15°33¢
Holland American Line . : . 853

“It would be necessary,’ the memorandum con-
tinued, “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, how-
ever, 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

The Pool 31

each line placed at the disposal of the joint under-
taking. 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 stagna-
tion, 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 Ham-
burg-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 in-
crease 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
18y2, did a great deal of good. More than once, how-
ever, 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 rg2r Mr. Peters wrote to

32 Albert Ballin

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 after-
wards 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 1 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 con-
cerning 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 our-
selves 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 agree-
ment would interfere with the progressive develop-

Se

The Pool 33

ment 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 re-
jection. I can hardly imagine what the representatives

_ 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 pro-
posed.
* “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, 18yo.
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 Asso-

34 Albert Ballin

ciation, the backbone of the later and greater pool, was
built up on the following percentages :

Westbound Eastbound
traffic (p.c.) traffic (p.c.)
North German Lloyd . - 46°16 44°53
Packetfahrt satel co the Union
Line) . : . 2884 18:47
Red Star Line . ; . 5°70 20°68
Holland American Line . - 930 16:32

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 compli-
ance with the provision that the secretariat should be
domiciled at a “ neutral” place, chose the small uni-
versity 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 inter-
national 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 addi-
tion 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

The Pool 35

- occupied by the German companies, German law was
to as binding for the decisions, and since at
Dike 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
n, 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
Dofiice 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 devel-
oped 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 un-
rivalled 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 estab-
lishment of a general pool—i.e. one comprising the

a

36 Albert Ballin

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 ljnes more favour-
ably inclined towards an understanding, and to this —
end he attacked them once more in the Scandinavian
business. The actual occasion which led to the con-
flict was that the British lines, owing to differences of
opinion among themselves, had given notice of with-—
drawal 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 Packet-
fahrt 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

The Pool 37

ie i they had been offered 14 per cent. ‘ and that the Packet-
. _fahrt 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 pro-
_ posal 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 nego-
_ tiations 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

38 Albert Ballin

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 ex-
penses 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 ex-
tending the period of their duration, and these proceed-
ings, 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 concern-
ing the second cabin rates was also arrived at, and to-
wards 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 :

Westbound Eastbound
traffic (p.c.) traffic (p.c.)-

North German Lloyd . : - 44°14 41°53
Packetfahrt ‘ , ‘ a, Fort 26°47
Red Star Line . ; Ms - 15°37 18-68

Holland American Line ; - 978 13°32

po one

The Pool 39

e “asc wsahe these new percentages meant a
, although the omission of the tonnage
was a ‘decided hindrance to its further progress.
> next important event in the development of
4 tions between the transatlantic lines was the
eon nt of the so-called Morgan Trust and the
clusion of a “community of interest” agreement
een 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 advan-
tage which was secured by concluding the pool agree-
ment 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

40

The Morgan Trust 4I

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 ser-

vices 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, ie. 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 West-

bound, voyages. During the remaining months a number
of berths were empty, and the fares obtainable were
correspondingly unprofitable. Ballin, in rg02, 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 com-
panies 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

42 Albert Ballin

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 busi-

ness 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 :—

“T replied a few days ago officially to your valued favour
of the 4th ult. to the effect that in consonance with your
expressed suggestion one of the Directors will proceed to
New York in September with a view to conferring with you
about the matter at issue.

“ Having in the meantime made it a point to go more
fully into your communication, I find that the opinions
which I have been able to form on your propositions meet

Ps

iE

%

— § ees
il

—

The Morgan Trust 43

your expressed views to a much larger extent than you will
probably have supposed. I have not yet had an opportu-
nity of talking the matter over with my colleagues, and I
therefore do not know how far they will be prepared to fall
in with my views. But in order to enable me to frame
and bring forward my ideas more forcibly here, I think it
useful to write to you this strictly confidential letter, re-
questing you to inform me—if feasible by cable—what you
think of the following project :

“(I) You take charge of our New York Agency for the
freight, and also for the passage business, etc.

“ (2) You engage those of our officials now attached to
our New York branch whom we may desire to retain in the
business.

“ (3) You take over half of our Baltimore Line in the manner
that each party provides two suitable steamers fitted for the
transport of emigrants. To this end I propose you should
purchase at their cost price the two steamers which are
in course of construction in Hamburg at present for our
Baltimore Line (320 feet length, 40 feet beam, 27 feet moulded,
steerage 8 feet, carrying 3,500 tons on 22 feet and about
450 steeragers, guaranteed to steam 11 knots, ready in
October this year), and we to provide two similar steamers
for this service. The earnings to be divided under a pool
system.

“(4) Your concern takes up one million dollars of our
shares with the obligation not to sell them so long as you
control our American business. I may remark that just
at present our shares are obtainable cheaply in consequence
of the general depression prevailing in the European money
market, and further, owing to the fact that only a small
dividend is expected on account of the very poor return
freight ruling from North America. I think you would
be able to take the shares out of the market at an average
of about 7 per cent. above par. We have paid in the last
years since we concluded the pool with the Union Line,
viz. in 1886 4 per cent., 1887 6 per cent., 1888 84 per cent.,
1889 Ir per cent., 1890 8 per cent. in the way of dividends,
and during this time we wrote off for depreciation and added
to the reserve funds about 60 per cent.

44 Albert Ballin

“The position of our Company is an excellent one, our
fleet consisting of modern ships (average age only about
five years), and the book values of them being very low.

“I should be obliged to you for thinking the matter
over and informing me—if possible by cable—if you would
be prepared to enter into negotiations on this basis. I my-
self start from the assumption that it might be good policy
for our Company to obtain in the States a centre of interest
and a position similar to that held by the Red Star Line
and the Inman Lines in view of their connexion with the
Pennsylvania Railroad, etc. It further strikes me that if
this project is brought into effect one of your concern should
become a member of our Board. I should thank you to
return me this letter which, as I think it right expressly to
point out to you, contains only what are purely my individual
ideas.”

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 busi-
ness. 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

—_

The Morgan Trust AS

National Line which maintained a service between
New York and London, and was, indeed, the decisive
factor on the New York-London route. Ballin, accord-
ingly, 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. Sub-
sequent 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 strengthen-
ing 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 pro-
ject assumed practical shape; but the Atlantic Trans-
port-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

46 Albert Ballin

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 dissatis-
faction felt by the latter showed itself, among other
things, in their refusal to come to any mutual under-
standing 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 con-
nexion 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 con-
junction 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 threaten-
ing 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 trans-
atlantic steamship concerns seemed too good to be
lost. Ballin’s notes for August, rgoz, contain the
following entry :

“The grave economic depression from which Ger-
many 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

The Morgan Trust 47

3 whole freight business within an incredibly short space

of time. For a concern of the huge size of our own

2 such a situation is fraught with the greatest danger,
‘¢ and our position is made still worse by another cir-

PS cumstance. In the States, a country whose natural

resources are wellnigh inexhaustible, and whose enter-

q prising population has immensely increased its wealth,

é:

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 com-
bination 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 com-
binations, 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 :—

“In 1830 about go per cent, of the United States sea-
borne trade was still carried by vessels flying the American
flag. By 1862 this percentage had gone down to 50 per
cent., and it has shown a constant decrease ever since. In
1880 it had dwindled down to 16 per cent., and in 1890 to
as low a figure as g per cent. During recent years this fall-

48 Albert Ballin

ing off, which is a corollary of the customs policy pursued
by the United States, has given rise to a number of legisla~- _
tive measures intended to promote the interests of American —
shipping by the granting of Government subsidies. No
practical steps of importance, however, have been taken so
far; all that has been done is that subsidies have been |
granted to run a North Atlantic mail service maintained by
means of four steamers, but no success worth mentioning
has been achieved until now.

“Quite recently the well-known American banker, Mr.
J. Pierpont Morgan, conjointly with some other big American
capitalists, has taken an interest in the plan. The following
facts have become known so far in connexion with his efforts :

“Morgan has acquired the Leyland Line, of Liverpool,
which, according to the latest register, owns a fleet of 54
vessels, totalling 155,489 gross register tons. This
includes the West India and Pacific Line, which was absorbed
into the Leyland Line as recently as a twelvemonth ago.
The Mediterranean service formerly carried on by the Ley-
land Line has not been acquired by Morgan. He has, how-
ever, added the Atlantic Transport Company. Morgan’s
evident intention is to form a big American shipping
trust, and I have received absolutely reliable information
to the effect that the American Line and the Red Star Line
are also going to join the combine. The shares of the two
last-named lines are already for the most part in American
hands, and both companies are being managed from New
York. Both lines together own 23 steamers representing
86,811 tons.

“A correct estimate of the size of the undertaking can
only be formed if the steamers now building for the various
companies, and those that have been aded to their fleets
since the publication of the register from which the above
figures are taken, are also taken into account. These vessels
represent a total tonnage of about 200,000 tons, so that the
new American concern would possess a fleet representing
430,000 gross register tons. The corresponding figures for
the Hamburg-Amerika Linie and for the Lloyd, including
steamers building, are 650,000 and 600,000 tons respectively.

“The proper method of rightly appreciating the import-

The Morgan Trust 49

ance of the American coalition is to restrict the comparison,
as far as the two German companies are concerned, to the
_ amount of tonnage which they employ in their services to
- and from United States ports. If this is borne in mind,
_ we atrive at the following figures: German lines—3g0,000
_ G.R.T.; American concern—about 430,000 G.R.T. These
figures show that, as regards the amount of tonnage employed,
the Morgan Trust is superior to the two German companies
on the North Atlanticroute. It can also challenge comparison
with the regular British lines—grand total, 438,566 G.R.T.
BS “Tn all the steps he has taken, Morgan, no doubt, has
_ been guided by his confidence in his ability to enforce the
_ passing of a Subsidy Act by Congress in favour of his under-
_ taking. So long as he does not succeed in these efforts of
_ his he will, of course, be obliged to operate the lines of
_ which he has secured control under foreign flags. Up to
_ the present only four steamers of the American Line, viz.
_ the New York, Philadelphia, St. Louis, and St. Paul, are
flying the United States flag, whereas the remaining vessels
of the American Line, and those of the Leyland, the West
India and Pacific, the American Transport, the National,
and the Furness-Boston lines, are sailing under the British,
and those of the Red Star Line under the Belgian flag.
“The organization which Mr. Morgan either has created,
or is creating, is not in itself a danger to the two German
shipping companies ; neither can it be said that the Govern-
ment subsidies—provided they do not exceed an amount
that is justified by the conditions actually existing—are in
themselves detrimental to the German interests. The real
danger, however, threatens from the amalgamation of the
American railway interests with those of American shipping.
“Tt is no secret that Morgan is pursuing his far-reaching
plans as the head of a syndicate which comprises a number
of the most important and most enterprising business men
in the United States, and that the railway interests are
particularly well represented in it. Morgan himself, during
his stay in London a few months ago, stated to some British
shipping men that, according to his estimates, nearly 70 per
cent. of the goods which are shipped to Europe from, the
North Atlantic ports are carried to the latter by the rail-

50 Albert Ballin

roads on Through Bills of Lading, and that their further
transport is entrusted to foreign shipping companies. He —
and his friends, Morgan added, did not see any reason why
the railroad companies should leave it to
companies to carry those American goods across the Atlantic.
It would be much more logical to bring about an amalgama- —
tion of the American railroad and shipping interests for the
purpose of securing the whole profits for American capital.
“This projected combination of the railroad and sea-
borne traffic is, as I have pointed out, a great source of
danger to the foreign shipping companies, as it will expose
them to the possibility of finding their supplies from the
United States hinterland cut off. This latter traffic is in-
dispensable to the remunerative working of our North ©
American services, and it is quite likely that Morgan’s state-
ment that they amount to about 70 per cent. of the total —
sea-borne traffic is essentially correct.”

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

“‘ When I was in London in July (190z), I had an oppor-
tunity of discussing this American business with Mr. Pirrie. —
Pirrie had already informed me some time ago that he
would like to talk to me on this subject, but he had never
indicated until then that Morgan had actually instructed
him to discuss matters with me. A second meeting took
place at which Ismay (the chairman of the White Star Line)
was present in addition to Pirrie and myself, and it was
agreed that Pirrie should go to New York and find out
from Morgan himself what were his plans regarding the —
White Star Line and the Hamburg-Amerika Linie.

“Shortly after Pirrie’s return from the States I went
to London to talk things over with him. He had already
sent me a wire to say that he had also asked Mr. Wilding
to take part in our meeting ; and this circumstance induced
me to call on Mr. Wilding when I passed through Southamp-
ton en route for London. What he told me filled me with
as much concern as surprise. He informed me that the
syndicate intended to acquire the White Star Line, but

The Morgan Trust 51

that, owing to my relations with the Kaiser, the acquisition
of the Hamburg-Amerika Linie was not contemplated.
Morgan, he further told me, was willing to work on the
i est friendly terms with us, as far as this could be done
_ without endangering the interests of the syndicate; but
fact was that the biggest American railroad companies
already approached the syndicate, and that they had
Se ©: terms of co-operation which were practically identical
Pa with a combination between themselves and the syndicate.
“Tn the course of the discussions then proceeding between
_ Pirrie, Wilding, and myself the situation changed to our
_ advantage, and I was successful in seeing my own proposals
accepted, the essence of which was that, on the one hand,
¢ our independence should be respected, that the nationality
_ of our company should not be interfered with, and that no
_ American members should be added to our Board of
_ Trustees ; whilst, on the other hand, a fairly close contact
was to be established between the two concerns, and
_ competition between them was to be eliminated.”

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

52 Albert Ballin

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 Govern-
ment, 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 under-
standing 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, command-
ing 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 Ebers-
walde. 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 unfor-
gettable days in most intimate intercourse with the
Kaiser. The Chancellor had previously informed me

The Morgan Trust 53

that the Kaiser did not like the terms of the agree-
_ ment, 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 Chan-
cellor and the Kaiser’s A.D.C., Captain v. Grumme, I
c. explained the whole proposals in detail. I pointed out
~ to the Kaiser that whereas the British lines engaged
pa in the North Atlantic business were simply absorbed
_ by the trust, the proposed agreement would leave the
Pi 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 imme-
_ diate danger arising out of our agreement, and that
_ it would be given an opportunity of becoming a partner
_ toit 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 ad-
jacent 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

54 Albert Ballin

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 pre-
viously held opinion, and in the subsequent London
discussions, which were resumed in November, the Pre-
sident of the Lloyd, Mr. Plate, also took part. Never-
theless, 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 independ- :
ence 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 partici-
pation in the distribution of dividends, the American

The Morgan Trust 55

oncern guaranteeing the German lines a dividend of
6 per cent., and only claiming a share in a dividend

seding that figure. This change owed its origin to
proposal put forward by Mr. v. Hansemann, the
<I ‘or of the Disconto-Gesellschaft, who had taken

as the course of the negotiations the Lloyd made a
further proposal by which it was intended to safe-
guard the German national character of the two great
shipping companies. It was suggested that a cor-
4 poration—somewhat similar to the Preussische Seehand-
_lung—should be set up by the Imperial Government
_ with the assistance of some privately owned capital.
a 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. inter-
_ ference 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 meet-
ing 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
E

56 Albert Ballin

termination. Concerning the New York m
find an interesting entry in Ballin’s diary :

“ In the afternoon of February 13th, 1902, Messrs.
Widener, Wilding, and Battle, and two sons of Mr.
met us in conference. Various suggestions were put
in the course of the proceedings which necessitated
deliberations in private between ourselves and the
gentlemen, and it was agreed to convene a second
meeting at the private office of Mr. Griscom on the
floor of the Empire Building. This meeting was
the forenoon of the following day, and a complete agreement —
was arrived at concerning the more important of the
tions that were still open. I took up the position that the
combine would only be able to make the utmost possible
use of its power if we succeeded in securing control of the —
Cunard and Holland American Lines. I was glad to find
that Mr. Morgan shared my view. He authorized me to
negotiate on his behalf with Director Van den Toorn,
representative of the Holland American Line, and after a series
of meetings a preliminary agreement was reached gi
Morgan the option of purchasing 51 per cent. of the

i

Hy

ae ee ee ee eee —

E
Be

Fes

g

2

of the Holland American Line. Morgan undertook to nego- —

tiate with the Cunard Line through the intermediary of some
British friends. It has been settled that, if the control of
the two companies in question is secured to the combine,
one half of it should be exercised by the American group,

and the other half should be divided between the Lloyd ~

and ourselves. This arrangement will assure the German
lines of a far-reaching influence on the future development —
of affairs.

“On the following Thursday the agreements, which were

meanwhile ready in print, were signed. We addressed a joint —

telegram to the Kaiser, informing him of the definite con-
clusion of the agreement, to which he sent me an exceedingly
gracious reply. The Kaiser’s telegram was dispatched from
Hubertusstock, and its text was as follows:

“* Ballin, Director General of the Hamburg-Amerika
Linie, New York. Have received your joint message with
sincere satisfaction, Am especially pleased that it reached

4

|

The Morgan Trust 37

_ me in the same place where the outlines gained form and
Be eietance in October last. You must be grateful to St.
Hubertus. He seems to know something about shipping
as well. In recognition of your untiring efforts and of the
success of your labours I confer upon you the Second Class
of my Order of the Red Eagle with the Crown. Remember
me to Henry.—WiLHeEwm I.R.’
“Morgan gave a dinner in our honour at his private
_ tesidence which abounds in treasures of art of all descrip-
tions, and the other gentlemen also entertained us with
lavish hospitality. Tietgens and I returned the compliment
4 _ by giving a dinner at the Holland House which was of special
_ imterest because it was attended not only by the partners
_ of Morgan, but also by Mr. Jacob Schiff, of Messrs. Kuhn,
_ Loeb & Co., who had been Morgan’s opponents in the con-
_ flict concerning the Northern Pacific. During the following
_ week the Lloyd provided a big dinner on board the Kron-
prinz Wilhelm for about 200 invited guests.

“Prince Henry of Prussia was one of the passengers of
the Kronprinz Wilhelm which, owing to the inclemency of
the weather, arrived in New York one day behind her
scheduled time. On the day of her arrival—Sunday, February
23rd—I had dinner on board the Hohenzollern. We also
took part in a number of other celebrations in honour of
the Prince. Especially memorable and of extraordinary
sumptuousness was the lunch at which Mr. Morgan presided,
and at which one hundred captains of industry—leading
American business men from all parts of the States—were
present. On the evening of the same day the press dinner
took place which 1,200 newspaper men had arranged in
honour of the Prince. Mr. Schiff introduced me to Mr.
Harriman, the chairman of the Union Pacific, with whom
I entered into discussions concerning our participation in
the San Francisco-Far East business.”

At the request of the American group the publica-
tion of the agreement was delayed for some time, be-
cause it was thought desirable to wait for the final issue
of the Congress debates on the Subsidies Bill. A report

58 Albert Ballin

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:

“ (x) Acquisition of the joint control of the Cunard Line
by the two German companies and the American syndicate.
On this subject discussions have taken place with Lord
Inverclyde, the chairman of the Cunard Line. Neither Lord
Inverclyde nor any of the other representatives of British
shipping interests objected in any way to the proposed
transaction for reasons connected with the national interest. —
He said, indeed, that he thought the syndicate should not
content itself with purchasing 51 per cent. of the shares,
but that it should rather absorb the whole company in-
stead. The purchase price he named appeared to me some-
what excessive; but he has already hinted that he would
be prepared to recommend to his company to accept a
lower offer, and it is most likely that the negotiations will
lead to a successful issue, unless the British Government
should pull itself together at the eleventh hour. e

“‘(2) Public announcement of the formation of the
Combine. Whereas until quite recently the American
gentlemen maintained that it would be advisable to wait
for the conclusion of the negotiations going on at Washing-
ton with respect to the proposed subsidy legislation, Mr.
Morgan now shares my view that it is not desirable to do
so any longer, but that it would be wiser to proceed without —
any regard to the intentions of Washington. The combine,
therefore—unless unexpected obstacles should intervene—
will make its public appearance within a few weeks.

“ (3) The British Admiralty. An agreement exists be-
tween the British Admiralty and the White Star Line con- —
ceding to the former the right of pre-emption of the three —
express steamers Oceanic, Teutonic, and Majestic. This
agreement also provides that the White Star Line, against —
an annual subsidy from the Government, must oes ae these —
boats at the disposal of the Admiralty in case of war. The
First Lord has now asked Mr. Ismay whether there is any

t

:
:
:
|
:
:

The Morgan Trust 59

truth in the report that he wants to sell the White Star
Line; and when he was told that such was the case, he
lared that, this being so, he would be compelled to exercise
his right of pre-emption.
_ “Tt would be extremely awkward in the interests of the
‘combine if the three vessels had to be placed at the service
f the Admiralty, especially as it is probable that they would
be employed in competition with the combine. Therefore
a compromise has been effected in such a form that Mr.
Morgan is to take over the agreement on behalf of the com-
bine for the three years it has still to run. This means that
the steamers will continue to fly the British flag for the pre-
sent, and that they must be placed at the disposition of the
| iralty in case of war. The Admiralty suggested an
| extension of the terms of the agreement for a further period
of three years; but it was content to withdraw its sug-
5 gestion when Mr. Morgan declined to accept it. The agree-
_ ment does not cover any of the other boats of the line which
are the biggest cargo steamers flying the Union Jack, and
consequently no obligations have been incurred with respect
to these.
. “ (4) Text of the public announcement. A memorandum
is in course of preparation fixing the text of the announce-
* ment by which the public is to be made acquainted with
_ the formation of the combine. In compliance with the
wishes emanating from prominent British quarters, the whole
transaction will be represented in the light of a big Anglo-
American ‘community of interest’ agreement; and the
fact that it virtually cedes to the United States the control
of the North Atlantic shipping business will be kept in the
background, as far as it is possible to do so.”

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

60 Albert Ballin

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 rail-
road companies would lead to Germany being flooded
with American agricultural produce he parried by point-
ing 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 ex-

pressed by his remarks in a speech which he made on
the occasion of the trial trip of the s.s. Bliicher, 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:

4 The Morgan Trust 6x
_ “Tn England, in consequence of the national excitement,
a very awkward situation has arisen. Sir Alfred Jones and
_ Sir Christopher Furness know how to make use of this excite-
ment as an opportunity for shouldering the British nation
with the burden which the excessive tonnage owned by
their companies represents to them in these days of depres-
_ sion. King Edward has also evinced an exceedingly keen
interest in these matters of late, which goes to show that
what makes people in England feel most uncomfortable is
_ not the passing of the various shipping companies into
_ American hands, but the fact that the German companies
have done so well over the deal. Mr. Morgan has had an
interview with some of the British Cabinet ministers at
which he declared his readiness to give the Government
_ additional facilities as regards the supply of auxiliary cruisers.
_ We are hopeful that such concessions will take the wind out
_ Of the sails of those who wish to create a counter-combination
subsidized by grants-in-aid from the Government.”

a

i
a
eae
ar

: f
or:

’ oe ae Ca

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 estab-
lished. The proposal, however, fell through owing to
the opposition from the Cunard. Line.

The depression in the freight business which had set
in in Igor, and which was still very pronounced towards
the close of 1902, seriously affected the prospects of the
transatlantic shipping companies, especially those com-
bined 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

62 Albert Ballin

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 agree-
ment with the British Government by which the Govern-
ment 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 pay-
ment 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 threaten-
ing 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 satis- _
factory to both parties that Ballin corresponded hence- —
forth 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, _

i eh gm = — s " »
ES a Mase Sy ry es
- ~ 7 > -

The Morgan Trust 63

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. “‘ Mor-
gan,” 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

64 Albert Ballin

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 suit-
able 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 com-
plicated after the receipt of some information that
reached Ballin from Vienna to the effect that the

The Morgan Trust 65

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 Frank-
fort-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 con-
sequences 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, yield-
ing, as it did, formerly unheard-of profits to the ship-
ping 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

66 Albert Ballin

of the Hamburg company. To make business as re-
munerative 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 oppor-
tunity 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 com-
petitor. 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 agree-
ments 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

SS

The Morgan Trust 67

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 out-
break 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 pur-
chase 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 inter-
ested 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 ques-
tions relating to the regular business, whereas in Ger-
many 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

68 Albert Ballin

became less and less important, and which ultimately
led to a concentration of the former within the frame-
work of a few large organizations which exercise a corre-
spondingly strong influence on present-day British ship-
ping 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 manage-
ment 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 necessi-
tated 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 consider-
able 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-

69

70 Albert Ballin

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, situ-
ated 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. "cae

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 insti-
tution 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 advertise- —
ment which appeared in the Leipziger Illustrierte Zeitung, —
and which I reprint for curiosity’s sake, was found among ~
his papers.

“ AN OPPORTUNITY FOR TAKING PART IN A VOYAGE ©
ROUND THE WORLD 4

‘“‘ The undersigned Hamburg shipowner proposes to equip
one of his large sailing vessels for a cruise round the world, .
to start this summer, during which the passengers will be

Hamburg-Amerika Expansion 71

a able to visit the following cities and countries, viz. Lisbon,
_ Madeira, Teneriffe, Cap Verde Islands, Rio de Janeiro, Rio
a de la Plata, Falklands Islands, Valparaiso, and all the inter-
mediate ports of call on the Pacific coast of South America

: as far as Guayaquil (for Quito), the Marquesas Islands,

" Friendly Islands (Otaheite), and other island groups in the

Pacific, China (Choosan, Hongkong, Canton, Macao,

Whampoa), Manilla, Singapore, Ceylon, Ile de France or

“Madagascar, the Cape of Good Hope, St. Helena, Ascension

Island, the Azores, and back to Hamburg.

_ “The cruise is not intended for business purposes of

. any kind; but the whole equipment and accommodation
of the vessel, the time spent at the various ports of call,

and the details of the whole cruise, are to be arranged with

_ the sole object of promoting the safety, the comfort, the

entertainment, and the instruction of the passengers.

. “ Admission will be strictly confined to persons of un-
blemished repute and of good education, those possessing a
scientific education receiving preference.

“The members of the expedition may confidently look
forward to a pleasant and successful voyage. A first-class
ship, an experienced and well-educated captain, a specially
selected crew, and a qualified physician are sufficient

. guarantees to ensure a complete success.

“The fare for the whole voyage is so low that it only
represents a very slight addition to the ordinary cost of
living incurred on shore. In return, the passenger will have
many opportunities of acquiring a first-hand knowledge of
the wonders of the world, of the beautiful scenery of the
remotest countries, and of the manners and customs of many
different nations. During the whole voyage he will be sur-
rounded by the utmost comfort, and will enjoy the com-
pany of numerous persons of culture and refinement. The
sea air will be of immeasurable benefit to his health, and
the experience which he is sure to gain will remain a source
of pleasure to him for the rest of his life.

“ Full particulars may be had on application to the under-
signed, and a stamped envelope for reply should be enclosed.

“ Ros. M. SLOMAN,
“ Hamburg, January, 1845. Shipowner in Hamburg.”
F

72 Albert Ballin

Ballin’s idea of running a series of pleasure cruises —
did not meet with much support on the part of his asso- —

ciates ; 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 excur- —
sions, including some to the Far East, for a limited —
number of participants. To do so, however, for ca

many as 24I persons, as Ballin did, was so
unheard-of until then, and necessitated a great

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 directa é

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 Com- —
pany’s reputation for such cruises was securely estab- q
lished 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 thou- —
sands 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, i

Hamburg-Amerika Expansion 73

pant the scourge of cholera especially had always been
| - successfully combated at the eastern frontier of Ger-
: many, 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 Ger-
many 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 ser-
_ vices 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 con-

_ cluded. 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

°°. -.orry
Fi i.
Ba hi:

1)

74 Albert Ballin

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 ex-
pansion 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. a

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

Fost

~t

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 followin
year by one from Italy to the River Plate. Pool agree-
ments 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 anni-—
versary 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

| . Hamburg-Amerika Expansion 75

“was addressed to one of the directors in reply to an
- invitation to attend the celebrations in person.

4,
a

“It is with great regret I have to announce my inability
= to join with you in celebrating the fiftieth anniversary of
the foundation of your Company, to be held on board your
“8s, Auguste Victoria.
_ __ “I the more regret this as I have the greatest possible
_ admiration of the skill and enterprise which has directed
_ the fortunes of your Company, especially in recent years.
} “You were the first to give the travelling public the
convenience of a speedy and reliable transit between the two
great continents of the world by initiating a regular service
_ of twin-screw steamers of high speed and unexceptionable
accommodation.

“You also set the shipping world the example of the
great economy possible in the transit of the world’s commo-
dities in vessels of greatly increased capacity and propor-
tionate economy, which other nations have been quick to
follow and adopt to their great advantage.

“Your Company had furthermore met a felt want in
giving most luxurious and well-appointed accommodation
for visiting scenes, both new and old, of world-wide interest,
and making such journeyings, hitherto beset with anxiety
and difficulty, as easy of accomplishment as the ordinary
railway journey at home.

“You have succeeded in this, not through any adventi-
tious aids, such as Government subsidies, but by anticipating
and then meeting the wants of the travelling and com-
mercial public ; and no one, be his nationality what it was,
can, in the face of such facts, abstain from offering his meed
of praise to the foresight, acumen, and ability that have
accomplished such great results in such a comparatively
small time as the management and direction of the Hamburg-
American Packet Company.

“IT would venture, therefore, to thus congratulate you
and your colleagues, and whilst reiterating my regret at being
prevented from doing so at your forthcoming meeting, allow
me the expression of the wish that such meeting may be

76 Albert Ballin

a happy and satisfactory one, and that a new era of, if possible, _
increased success to the Hamburg-American Packet Company _
may take date from it.”

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. af

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 « a
the Packetfahrt which, owing to the offer held out to it by
Hamburg, Antwerp, and London firms, could hope to
on finding a sure basis for its Far Eastern business, d
not consider it wise to let the favourable opportunity —
slip. Quick decision and rapid action, before the pro-
posed 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 Packet- —
fahrt 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, Hong- —
kong, 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.

Hamburg-Amerika Expansion 77

_ 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
igs of that same year an agreement was made with
_ the Philadelphia Shipping Company—which, in its turn,
_ had an agreement with the Pennsylvania Railroad Com-

- a. 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 Wil-
helm dey Grésse, 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 achieve-

78 Albert Ballin

ment. 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 remunerative-
ness 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 propor-
tions, 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 Grosse. 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 addi- —
tional 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 Govern-
ment providing for the construction of large harbour

~Hamburg-Amerika Expansion 79

basins with the necessary quays, sheds, etc., in the dis-

or 8 so," oe boar a os

trict of Kuhwarder 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 ship-

ping 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 build-

ing 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 out-
break 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 every-
where.

About the same time the business of the Company
experienced a notable expansion in another direc-
tion. 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.,

80 Albert Ballin

had carried on some negotiations with the firm of de
Freitas with the object of bringing about an amalgama-
tion 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 Com- —
pany. He was successful, and an expert was nomir
ated 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 — i
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 con- —
nexion with its South American business. The neces- —
sity for taking such a step grew in proportion as Antwerp iy
acquired an increasing importance owing to the increasing _
German export business. “s
Perhaps there is no country which can be served by —

Hamburg-Amerika Expansion 81

_ 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 capttre 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 posi-
tion all by itself. The more the countries beyond the
sea were opened up by the construction of new rail-
ways 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 wit-
nessed an extraordinary development, which, in its turn,
benefited the world’s carrying trade to an ever-increasing

82 Albert Ballin

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

and systematically. Consequently the attention of the
American investors was also increasingly drawn towards —
those same countries. In Central America new railway g
lines were constructed by British and American a
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 a
facilities were constructed in nearly all the more im- —
portant 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 particu- —
larly 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

Hamburg-Amerika Expansion 83

_ 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 I902 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 Ham-
burg 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 contract-

ing 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 dis-
trict 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 190r 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

84 Albert Ballin

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 agree- —
ment 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 trans-
port 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 equipuieaas .
needed for the German contingent during the d
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 :—

“On board the I.M.S. ‘ Kiautschou’
“ January 6th, 190%.
“ The weather was cold and windy when we arrived late —
at night outside Port Said, and midnight was well past when —
we had taken up the pilot and were making our way into the ~
port. The intense cold had caused me to leave the pele Ss
bridge ; and as I did not think it likely that our agent

arrive on board with his telegrams until the next morning, —
I had followed the example of my wife and of nearly all the © ‘.

Hamburg-Amerika Expansion 85

ler passengers and had gone to bed. However, if we had
_ thought that we should be able to sleep, we soon found out
our mistake. The steamer had scarcely taken up her moor-
_ ings when several hundreds of dusky natives, wildly scream-
_ ing and gesticulating, and making a noise that almost rent
the skies, invaded her in order to fill her bunkers with the
- 800 tons of coal that had been ordered. Perhaps there is
ne place anywhere where the bunkers are filled more rapidly
than at Port Said, and certainly none where this is done
to the accompaniment of a more deafening noise. Just
imagine a horde of natives wildly screaming at the top of
‘their voices, and add to this the noise produced by the coal
incessantly shot into the bunkers, and the shouting of the
men in command going on along with it. You will easily
understand that it was impossible for anyone to go to sleep
‘under conditions such as these. . . . After trying for several
hours, I gave up the attempt, and, on entering the drawing-
room, I found that willy-nilly (but, as Wippchen would have
oe ‘said, more nilly than willy) practically all the other passengers
sid had done the same thing. There I was also informed that
_ those who were in the know had not even made an attempt
to go to sleep, but had gone ashore at 2 A.M. Port Said is
_ a typical brigands’ den, and relies for its prosperity on the
* mail packets calling there. The shops, the taverns, the music-
halls, and the gambling places are all organized on lines
in accordance with the needs of modern traffic. So it was
not surprising to see that the proprietors of these more or
less inviting places of entertainment had brightly lit up
their premises, and hospitably opened their doors despite
the unearthly hour, being quite willing to try and entice the
unwary passengers into their clutches.”

“* Between ADEN and COLOMBO.
“ January 24th, rgor.

. We did not stop long at Aden ; and as the quaran-
tine Sexes for all vessels arriving from Port Said were
very strict, it became impossible for the passengers on board
the Kiautschou to land on the island. Aden, which the
British would like to turn into a second Gibraltar, is situated
in a barren, treeless district, and is wedged in between hills

86 Albert Ballin

without any vegetation. Small fortifications are <
all over the island. It must be a desolate spot for E
peans to live at. The British officers call it ‘The Devil’s”
Punch Bowl,’ and to be transferred to Aden is equivalent -
them to being deported.”

“ January 28th, 10
. In the meantime we have spent a most enjoyable
and unforgettable day at Colombo. The pilot brought t
news of Queen Victoria’s death, which filled us with 1
sympathy, and which caused a great deal of grief among th ai
British passengers. Shortly before 9 o’clock we went artes
and as the business offices do not open until an hour |,
—thus preventing me from calling on my business frien a ;
at that hour—I took a carriage-drive through the m: en
ficent park-like surroundings of the city. The people o
meets there are a fit match to the beautiful scenery ;
whilst in former times they were the rulers of this fertile
island, they are now, thanks to the blessings of civilize it 7
the servants of their European masters. . . q

“When we reached the old-established Oriental Tc

where we had our lunch, we met there a number of our fe!
passengers busily engaged in bargaining with the Singhal
and Indian dealers who generally flock to the terraces oe5
hotel as soon as a mail packet has arrived. The picture
presented by such Oriental bargaining is the.same eve g
where, except that the Colombo dealers undeniably m
fest an inborn gracefulness and gentlemanly bearing. \ Me at
I tried to get rid of an old man who was pestering me
his offers to sell some precious stones, he said to me, in tk 1°
inimitable singing tone of voice used by these people w
they speak English: ‘ Just touch this stone, please, ba t
do not buy it; I only wish to receive it back from ;
lucky hands.’ In spite of their manners, however, these
fellows are the biggest cheats on earth. Another dealer
wanted to sell me a sheet of old Ceylon stamps for which he
demanded fifteen marks—a price which, as he stated, meant
a clean loss of five marks to him. When I offered him t
marks instead, merely because I had got tired of him, he
handed me the whole sheet, and said: ‘ Please take them;

a

ce

7
2 eit

Hamburg-Amerika Expansion 87

: “TL know that one day I shall be rewarded for the sacrifice
_ which I bring.’ Later on I discovered that the same man
“had sold exactly the same stamps to a fellow-passenger for
) pfennigs, and that he had told the same story to him
‘as to me. Such are the blessings of our marvellous
ae . In ‘the afternoon we went for a magnificent
ve to the Mount Lavinia Hotel, which is beautifully situ-
ated on a hill affording an extensive view of the sea. Boys
and girls as beautiful as Greek statues, and as swift-footed
as fallow deer, pursued us in our carriage, begging for alms.
SD | was curious to see with what unfailing certainty they
_ managed to distinguish the German from the English pas-
a -sengers, and they were not slow in availing themselves of
4 this opportunity to palm off what little German they knew
on us. ‘Oh, my father! My beautiful mother! You are
7 a great lady! Please give me ten cents, my good uncle!’
We were quite astonished to meet such a large progeny. :

e February 2nd, Igo.

. . . The entrance to Singapore is superbly beau-

tiful. “The steamer slowly wended her way through the

channels between numerous small islands clad with the most

. luxurious vegetation, so that it almost took us two hours

to reach the actual harbour. . . . The food question is

extremely complicated in this part of the tropics, which is

favoured by kind Nature more than is good. The excessive

fertility of the soil makes the cultivation of vegetables and

cereals quite impossible, as everything runs to seed within

a few days, so that, for instance, potatoes have to be obtained

from Java, and green vegetables from Mulsow’s, in Hamburg.

I am sure my geography master at school, who never ceased

to extol the richness of the soil of this British colony, was
not aware of this aspect of the matter.

“Singapore is a rapidly developing emporium for the
trade with the Far East. It has succeeded in attracting
to itself much of the commerce with the Dutch Indies, British
North Borneo, the Philippines, and the Federated Malay
States. To achieve this, of course, was a difficult matter,

even with the aid of the shipping companies, but its clever
G

ee

88 Albert Ballin

and energetic business community managed to do it. We
Germans may well be proud of the fact that our count fi
men now oceupy the premier position in the business life ¢
the city. .

We spent about thirty-six hours at Saigon.
city has been laid out by the French with admirable skill,
and there is no doubt but that Indo-China is a most vy her D ble .
possession of theirs. As regards the difference in the national
character of the French and the British, it is interesting
note that the former have just erected a magnificent buildi
for a theatre at Saigon, at a cost of 2} million francs. s
British would never have dreamt of doing such a thir +.
I am sure they would have invested that money =
building of club-houses and race-courses. . . . x
i

“ February 16th, IQOI. if

ats se Sar "ae social Ute! Se
concerned, it must be said that the German colony at FE
kong is in no way inferior to that at Singapore. Prem
rank in this respect must be assigned to the Siebs family.
Mr. Siebs, the senior member of the Hamburg firm of Siems-
sen and Co., has been a resident in the East for a long term
of years—forty-two, if I remember rightly; and he now
occupies an exceedingly prominent position both in German
and British society. That this is so is largely due—ag
from his intimate knowledge of all that concerns the t
and commerce of China, and apart from his own amiabilit
and never-failing generosity—to his charming wife, who,
means of the hospitality, the refinement, and the exemp
management characterizing her home, has been chie m
instrumental in acquiring for the house of Siebs the hk
reputation it enjoys. Whoever is received by Mrs. Ss,
I have been told, is admitted everywhere in Hongkong
society. . [
“ Even though I only give here an outline of my imp
sions, I cannot refrain from adding a few details ¢
with some aspects of everyday life at Hongkong, this j e1 =
among the crown colonies of Britain. The offices of the t
firms and of the shipping companies’ agencies, most of t!
housed in beautiful buildings, flank the water’s edge ; fartl

Hambure-Amerika Expansion 89
4 back there is the extensive shopping quarter, and still more

in the rear there is the Chinese quarter, teeming with an
industrious population. Being myself so much mixed up
_ with the means of communication, I am surely entitled to
_ make a few remarks concerning this subject in particular.

Horses are but rarely seen, and are only used for riding, and
_ sporting purposes generally. Their place is taken by the
— coolies, who no doubt represent the most pitiable type of
- humanity—at least, from the point of view of a sensitive
_ person. In the low-lying part of the town the jinrikishas,
which are drawn by coolies, predominate ; but the greater
part of Hongkong is situated on the slopes of a hill, and
nearly all the private residences are built along the beauti-
fully kept, terrace-like roads leading up to the summit of
the peak. In this part the chair coolies take the place of
the jinrikisha coolies; and in the low-lying parts also it is
_ considered more stylish to be carried by chair coolies. The

_ ordinary hired chairs are generally carried by two coolies
only, but four are needed for the private ones. The work
done by these poor wretches is fatiguing in the extreme.
They have to drag their masters up and down the hill, which
is very steep in places, and it is a horrid sensation to be
carried by these specimens of panting humanity for the
first time. In the better-class European households each
member of the family has his own chair, and the necessary
coolies along with it, who are paid the princely wage of
from 16 marks to 17 marks 50 pfennigs a month. They
also receive a white jacket and a pair of white drawers reach-
ing to the knee, but they have to provide their own food.
The poor fellows are generally natives from the interior
parts of the island. They spend about one mark a week
on their food; the rest they send home to their families.
They are mostly married, and the money they earn in their
capacity as private coolies represents to them a fortune.
They rarely live longer than forty years; in fact, their
average length of life is said not to exceed thirty-five. As
many as eight coolies were engaged to attend to the needs
of my wife and myself for the time of our stay. The poor
creatures, who, by the way, had quite a good time in our
service, spent the whole day from early in the morning

ws

go Albert Ballin

to late at night lying in front of a side entrance to our hotel,
except when they had to do their work for us. . .

“. . . The Chinese have only one annual holiday— .
New Year. They are hard at work during the whole year ;
they know of no Sundays and of no holidays, but the com-
mencement of the New Year is associated with a peculiar —
belief of theirs. To celebrate the event, they take their —
best clothes out of pawn (which, for the rest of the year,
they keep at the pawnbroker’s to prevent them from being —
stolen). To keep the evil spirits away during the coming
twelvemonth, they burn hundreds of thousands of fire-
crackers when the New Year begins, and also the jj
first and second days of it, accompanied by the noise of the
firing of guns, One must have been through it all in order
to understand it. For the better part of two days and two
nights one could imagine a fierce battle raging in the neigh- —
bourhood ; crackers were exploding on all sides, together
with rockets and fireballs, and the whole was augmented ~
by the shouting and screaming of the revellers. It was a
mad noise, and we could scarcely get any sleep at night.

“The houses in the Chinese quarter were decorated up
to the roofs with bunting, beautiful big lanterns, paper —
garlands with religious inscriptions, and a mass of lovely —
flowers.

“On such days—the only holidays they possess—the
Chinese population are in undisputed possession of their —
town, and the British administration is wise enough not to —
interfere with the enjoyment of these sober and hard-working
people. I really wonder how the German police would act
in such cases... .”

“SHANGHAI, March 6th, 1901.
“. . . It is surely no exaggeration to describe $
as the New York of the Far East. The whole of the rapidly —
increasing trade with the Yangtse ports, and the bulk of —
that with the northern parts of the country, passes through
Shanghai. The local German colony is much larger than —
the one at Hongkong; and here, too, it is pleasant to find —
that our countrymen are playing an extremely important .
part in the extensive business life of the town... . q

Hamburg-Amerika Expansion QI

“ Between TSINGTAU and NAGASAKI,
a °:, on board the s.s ‘ Sibiria.’
fi es, “ March 18th, 19or.
“Our s.s. Sibiria had arrived in the harbour about ten
_ days ago, and was now ready for our use. I had decided
_ first of all to make a trip up the Yang-tse-Kiang on board
the Sibiria, because I wanted to get to know this important
_ fiver, which flows through such a fertile tract of country,
and on the banks of which so many of the busiest cities of
_ China are situated. The Yangtse—as it is usually called
_ for shortness’ sake—is navigable for very large-sized ocean-
_ going steamers for a several days’ journey. During the
summer months it often happens that the level of the water
in its upper reaches rises by as much as 50 feet, which—
on account of the danger of the tremendous floods resulting
_ from it—has made it necessary to pay special attention to
__ the laying-out of the cities situated on its banks. The object
_ of our journey was Nanking. This city, which was once
the all-powerful capital of the Celestial Empire, has never
again reached its former importance since its destruction
during the great revolution of 1862, and since the choice of
Peking as the residence of the Imperial family. Two years
ago it was thrown open to foreign commerce; and the
Powers immediately established their consulates in the city,
not only because a new era of development is looked forward
to, but also because Nanking is the seat of a viceroy.
“Our amiable consul, Herr v. Oertzen, received us with
the greatest hospitality. The German colony which he has
to look after consists of only one member so far. This
young gentleman, who holds an appointment in connexion
with the Chinese customs administration, feels, as is but
natural, quite happy in consequence of enjoying a practical
monopoly of the protection extended to him by the home
government. He has helped himself to the consul’s cigars
and to his moselle to such good effect that the Sibirvia arrived
just in time to prevent the German colony at Nanking from
lodging a complaint regarding the insufficiency of the supplies
put at its disposal by the Government. The consul told
us that we should never have a.chance, of coming across
another Chinese town that could compare with the interior

+ a

92 Albert Ballin

of Nanking, and so we had to make up our minds to pay a
visit to these :

“T had seen plenty of dirt and misery at Jaffa and Jeru-
salem, but I have never found so much filth and wretched-
ness anywhere as I noticed at Nanking. My wife and a
charming young lady who accompanied us on our Yangtse —
expedition were borne in genuine sedan chairs as used for —
the mandarins, preceded by the interpreter of the consulate,
and followed by the rest of us, who were riding on mules —
provided with those typically Chinese saddles, which, owing —
to their hardness, may justly claim to rank among the —
instruments of torture. 1

“Our procession wended its way through a maze of
indescribably narrow streets crowded with a moving mass —
of human beings and animals. Everywhere cripples and
blind men lay moaning in front of their miserable hovels,
and it almost seemed that there were more people ;
from some disease or other than there were healthy ones. —
When we stopped outside the big temple of Confucius,
where the ladies of our party dismounted from their chairs,
the people, in spite of their natural timidity, flocked to see
us, because they had probably never seen any E
ladies until then. We were thankful when at last we reached
the consulate building again, and when, after having had —
a good bath, we are able to enjoy a cup of tea.

“. . . In the early hours of March 13th our steamer
arrived at Tsingtau. I was surprised and delighted with
what I saw. There, in spite of innumerable difficulties, a
city had sprung up in an incredibly short space of time.

“Rooms had been reserved for us at the handsome, but —
very cold, Hotel Prinz Heinrich; and in the afternoon of
the day of our arrival we strolled up the roads, which were
still somewhat dusty, and in parts only half finished, to
the summit of the hill where the acting Governor and the
officers of higher rank had their homes. Even though it
is true that up to now military necessities have taken pre-
cedence in the laying-out of the town, so that the needs of —
trade and traffic have not received due attention, it must
be admitted that a wonderful piece of constructive work
has been achieved. All the members of our party—especially

Hamburg-Amerika Expansion 93

_ those who, like Dr. Knappe, our consul-general at Shanghai,
rie d known the place two years ago—were most agreeably
surprised at the progress that had been made.
_ “Our first few days at Tsingtau were spent much as
_ they were everywhere else—plenty of work during the day-
__ time, and plenty of social duties in the evenings. But things
began to look different on Saturday morning, when my old
friend and well-wisher, Field-Marshal Count Waldersee,
arrived on board H.M.S. Kaiserin Auguste. He had an-
_ nounced that his arrival would take place at 9 A.M., and
his flagship cast anchor with military punctuality. The
_ Governor and I went on board to welcome the old gentle-
man, who was evidently greatly touched at meeting me
out here, and it was plain to see that my presence in this
part of the world made him almost feel homesick. The
_ Field-Marshal very much dislikes the restrictions imposed
_ on his activities ; and judging from all he told me, I must
_ confess that a great military leader has hardly ever before
been faced with a more thankless task than he. On the
one hand he is handicapped through the diplomatists, and
on the other through the want of unanimity among the
Powers. Thus, instead of fulfilling the soldier’s task with
which he is entrusted, he is compelled to waste his time
in idleness, and to preside at endless conferences at which
matters are discussed dealing with the most trivial questions
of etiquette. He really deserves something better than
Mat... +.”
“Tokio. March 31st, Igor.

“. . . What a difference between Japan and the cold
and barren north of China! There everything was dull
and gloomy, whilst this country is flooded with sunshine.
Here we are surrounded by beautifully wooded hills, and a
magnificent harbour extends right into the heart of the
city. From the windows of our rooms we overlook big
liners and powerful men-of-war, and our own Sibivia has
chosen such a berth that the Hapag flag merrily floating
in the breeze gives us a friendly welcome.

“The difference in the national character of the China-
man and the Japanese clearly proves the great influence
which the climate and the natural features of a country

94 Albert Ballin

can exercise on its inhabitants. The one always grave and
sulky, and not inclined to be friendly; the other always —
cheerful, fond of gossip, and overflowing with politeness in —
all his intercourse with strangers. But it must not be for- —
gotten that the integrity of the Chinese, especially of the —
Chinese merchants, is simply beyond praise, whereas the
Japanese have a reputation for using much cunning and ~
very little sincerity, so that European business men cannot —
put much faith in them. .

“The women of Japan are known to us through ‘The
Mikado’ and ‘The Geisha.’ They make a direct appeal
to our sympathies and to our sense of humour. In one week —
the stranger will become more closely acquainted with the ~
womenfolk and the family life of Japan than he would
with those of China after half a dozen years of residence —
in their midst. In China the women are kept in seclusion —
as much as possible, but the whole family life of the Japs
is carried on with an utter indifference to publicity. This
is due to a large extent to the way their homes are built.
Their houses are just as dainty as they are themselves;
and it is really quite remarkable to see that the Japs, who
closely imitate everything they see in Europe, still build
them exactly as they have done from time immemorial.
They are practically without windows, and in place of these
the openings in the walls are filled with paper stretched on
to frames. Instead of doors there are movable screens made
of lattice-work; and since everything is kept -wide open —
during the day-time one can look right into the rooms from
the street. In the summer the Japanese make their home
in the streets, and we are told that then the most intimate
family scenes are enacted in the open air. I am of opinion —
that this, far from pointing to a want of morality, is really —
the outcome of a highly developed code of morals. Things —
which are perfectly natural in themselves are treated as —
such, and are therefore not hidden from the light of day... .

“. . . At 9 AM. on March 23rd we arrived at Kobe,
where we had to spend several days.

“Our trip is now approaching its end; at least, we
now experience the pleasant feeling that we are daily nearing —
home. What will it look like when we get back? At almost

a DP Hiamburg-Aimerika Expansion 95

- every port of call some sad news has reached us, and our
_ stay at Kobe was entirely overshadowed by my grief at the
loss of my old friend Laeisz. Even now I cannot realize
that I shall find his place empty when I return... .”

y ihe to

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

“Among the business transacted during my trip the
following items are of chief importance :
__- **(z) The establishment of a branch of our Company at
_ Hongkong.
____ “ (2) The acquisition of the Imperial Mail Packet Service
_ to Shanghai, Tsingtau, and Tientsin, formerly carried on
by Messrs. Diedrichsen, Jebsen and Co.
___“ (3) The acquisition of the Yangtse Line, hitherto carried
_ on by the firm of Rickmers.
; “ (4) The joint purchase with the firm of Carlowitz and
_ Messrs. Arnhold, Karberg and Co. of a large site outside
Shanghai harbour intended for the building of docks and
quays, and the lease of the so-called Eastern Wharf, both
these undertakings to be managed by a specially created
joint-stock company.

“(5) The establishment of temporary offices at Shanghai.

“(6) In Japan discussions are still proceeding concerning
the running of a line from the Far East to the American
Pacific coast.

“(7) In New York negotiations with the representative
of the firm of Forwood are under way regarding the purchase
of the Atlas Line.”

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 sug-
gestions into flourishing actualities, some of which

96 Albert Ballin

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 :
ae Shanghai.

March 4th, 190%.

“I am not quite satisfied with the course which the nego-
tiations concerning the possible inauguration of a Yangtse_
line have taken so far.

“The vessels employed are of the flat-bottomed kind,
some being paddle boats, others twin-screw steamers. In
their outward appearance the Yangtse steamers, owing to
their high erections on deck, greatly resemble the saloon
steamers plying on the Hudson. Their draught rarely exceeds ~
12 feet, and those which occasionally go higher up the river —
than Hankau draw even less. Most of the money earned —
by these boats is derived from the immense Chinese pas- —
senger traffic they carry. . . . The chief difficulty we
have experienced in our.preparations for the opening of a
Yangtse line of our own consists in the absence of suitable ~
pier accommodation. . . .” .

“On board the s.s. Sibiria on the Yangtse.

March toth,1g0ol.

“. . . After what I have seen of Nanking, I am afraid
that the development of that place which is being looked
forward to will not be realized for a fairly long time to come. —
Matters are quite different with respect to Chin-kiang where —
we are stopping now, a port which is even now carrying on
a thriving trade with the interior parts of the country. It —
can scarcely be doubted that, if the Celestial Empire is —
thrown open to the Western nations still more than has been
done up to now, the commerce of the Yangtse ports is bound ~
to assume large proportions. During the summer months,
i.e. for practically two-thirds of the year, the Yangtse is
navigable for ocean-going steamers of deep draught, even —
more so than the Mississippi. At that time of the year the —

- Hamburg-Amerika Expansion 97

lum of water carried by the river increases enormously
certain reaches. This increase has been found to amount
) as much as 38 feet, and some of the steamers of the Russian
Volunteer Fleet going uP to Hankau possess a draught
which exceeds 25 feet.

“On board the Sibiria between
TSINGTAU AND JAPAN.
March 19th, rgot.
. . We arrived at Tsingtau on the morning of
March 14th. The impression produced by this German
colony on the new-comer is an exceedingly favourable one.
verywhere a great deal of diligent work has been performed,

i 2 tivity has proceeded too fast, so that the inevitable reac-
tees will not fail to take place. Looked at from our shipping
_ point of view, it must be stated that the work accomplished
too much like Wilhelmshaven, and too little like
iM cone It was, of course, a foregone conclusion that
| in the development of a colony which is completely ruled
_ by the Admiralty the naval interests would predominate.
_ However, there is still time to remedy the existing defects,
_ and I left Kiautschou with the conviction that a promising
_ future is in store for it. Only the landing facilities are hope-
lessly inadequate at present ; and as to the accommodation
_ for merchant vessels which is in course of being provided,
it would seem that too extensive a use has been made of
_ the supposed fact that mistakes are only there in order to
_ be committed, and that it would be a pity not to commit
as many as possible... .”

“On board the s.s. Empress of China between
YOKOHAMA AND VANCOUVER.
April 17th, 1901.
. - In the meantime I have had opportunities of
slightly familiarizing myself in more respects than one with
the conditions ruling in Japan.
“The country is faced with an economic crisis. Encour-
aged by a reckless system of credit, she has imported far more

~~

* ¢e

98 Albert Ballin

than necessary; she is suffering from a shortage of money,
which is sure to paralyse her importing capacities for some
time to come.

“It seems pretty certain too, that future development
will be influenced by another and far more serious factor,
viz. : the ousting of the German by the American commerce
from the Japanese market. The exports from the United
States to Japan have increased just as much as those to
China. . . I cannot help thinking that in the coming struggle
America will enjoy immense advantages over us; but you
must permit me to postpone the presentation of a detailed
statement showing my reasons for thinking so until my return
to Hamburg . . . I believe we shall be well advised to
establish as soon as possible a service between the Far East
and the Pacific coast of America. . . .”

In 1903 far-reaching alterations were made in the
relations existing between the Hamburg-Amerika Linie
and the North German Lloyd, which had become some-

what 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 com-
pany 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 inter-
nationally. When still quite young he founded a
business in Further India which, although conducted at

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Hamburg-Amerika Expansion 99

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 busi-
ness 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 in-
estimable 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 patron-
age 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.

“My Dear Sir, ““ January 17th, 1904.

“T hope you will excuse my writing in French to you,
but you may reply to me in English. I have had a chat with
Director Andersen, who told me that your discussions with
him have led to nothing. I greatly regret this, both for per
sonal reasons and in the interests of the business. I am con-

100 Albert Ballin

vinced that your negotiations would have had the desired
result if it had not been for some special obstacles with which
this new company had to contend. It is such a pity that
Mr. Andersen had to attend to so many other things. If
you and he alone had had to deal with it, and if it had been
purely a business matter, the agreement would certainly
have been concluded at once. Perhaps you and Andersen
will shortly discover a basis on which you can co-operate.
I personally should highly appreciate an understanding
between my company and yours if it could be brought
about, so that you could work together hand in hand like
two good friends. You must help me with it. Mr. Andersen
was so charmed with your amiability when he came back.
One other thing I must tell you, because I possess sufficient
business experience to understand it, and that is that both
he and I admire you as a man of business. I should be
delighted if you could come here ; but I request you to give
a few days’ notice of your arrival. Wishing you every
success in your undertakings and the best of luck during

the new year, “TI remain, Yours faithfully,
(signed) “‘ MARIE.”
“My DEAR DIRECTOR, “ February toth, 1905.

“T am so delighted to hear from Mr. Andersen that his
company and yours intend to co-operate in the Danish

West Indies and in Russia to your mutual interest. I have.

always held that such an understanding between you and
Mr. Andersen would lead to good results, and you may feel
convinced that I shall extend to you not only my personal
assistance and sympathy, but also that of my family, and
that of my Russian family, all of whom take a great interest
in this matter. I am looking forward to seeing you in Ham-
burg early in March on my way to France. With my best
regards, “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

OE ——————— .
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Hamburg-Amerika Expansion io1

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 be-
tween 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 oper-
ated 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. Com-
pany 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 dis-
play 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 partici-
pation in this Russian concern that it re-sold its rights
to the interested Copenhagen parties in 1906, not with-
out 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

102 Albert Ballin

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 Ger-
man invention, to the propulsion of ships, and who sub-
sequently built a fleet of excellent motor-ships for the
East Asiatic Company. One of these vessels was after-
wards 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 suc-
cess 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 pro-
vided 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

a

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Hamburg-Amerika Expansion 103

the coal supply added enormously to its revenues. The
Russian Government partly converted the purchased
steamers into auxiliary cruisers for the purpose of check-
ing 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 magni-
tude and the complexity of this transaction, it may be
permitted to quote a few extracts from Ballin’s notes
referring to it:

“ May, 1904.

“Much though my time has been occupied by the Hun-
garian affair (the competition of the Cunard Line in Hungary),
and great though the strain on my nerves has been on that
account, I-must say that much bigger claims are made on
my time and on my nerves by the negotiations we are now
catrying on with the Russian Government concerning the
sale of some of our steamers. On Christmas Day I sent
some representatives to Petrograd who were to approach
the government in case it intended to acquire any merchant
vessels for purposes of war. These gentlemen are still staying
at Petrograd, where they have been all the time with the
exception of a few weeks, and we have carried on some
extremely difficult negotiations by cable which so far have
led to the definite sale of the First Bismarck and the Belgia.
The Auguste Victoria, which is still in dock until the
necessary repairs have been executed, has also been sold to
Russia, and the prospects that the Columbia will follow suit
are extremely good.

“The sales, of course, necessitate large alterations of
the existing schedules, and they lead to a great deal of incon-
venience. A particularly awkward situation has been brought
about by the circumstance that the First Bismarck has been
chartered to the firm of Thos. Cook and Sons for an excursion
from Marseilles, in which 500 members of a Sunday school
are to take part, so that, in order to release her, it has
become necessary for the Auguste Victoria to interrupt her
usual trip to the Near East, and for the Columbia to take
her place. .

H

104, Albert Ballin

Our big coal contract with the Russian Government
has, in the meantime, been considerably added to. The
execution of the contract, however, is causing me a great
deal of anxiety, as the English press, notably The Times,
is only too glad to make use of this circumstance as a pretext
for rousing suspicions as to Germany’s neutrality. As our
government is not taking up a very firm attitude, the effect

of these articles, of course, is highly disagreeable. On

Friday, September 23rd, I had an opportunity of discussing
this matter with the Imperial Chancellor at Homburg. The
Chancellor did not disguise the anxiety he felt concerning these
contracts, especially as he had just then received a long
telegram from the German Ambassador in Tokio advising
him to proceed with much caution. I told the Chancellor
that he need not study in any way the damage which our
company might suffer ; that we did not ask that any regard
should be paid to our business interests in case these should
clash with those of the country, and that, if the Government
were of opinion that the interests of the country necessitated
the cancelling of the whole agreement, I should be glad to

receive instructions from him to that effect. Failing such —

instructions, of course, I was not entitled to cancel a contract
which was in every respect a properly drawn-up legal instru-
ment. At the same time I pointed out to the Chancellor
that Germany, if he thought that he had reason to adopt
such an attitude, would run the risk of offending both antag-
onists ; for it was but reasonable to expect that, owing to
the agitation carried on by the British, no action on Ger-
many’s part would cause a change of feeling in Japan, but
that it would be a fatal blow to Russia, whose Baltic fleet
in that case would simply be unable to reach the Far East.
“From Frankfort I went to Berlin in order to discuss
the question of the coal contract with the Foreign Office,

which the Chancellor had requested me to do. I had a long

conference with Richthofen... .

““. . . October 1st, 1904. Meanwhile our negotiations
with the Russian Government have made good progress,
and practically the whole of my time is taken up with these
transactions, which have given us a very exciting time.
They compel me to go to Berlin pretty frequently, as I con-

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Sh SE EY SC no

Hamburg-Amerika Expansion 105

sider it both fair to the Foreign Office and advisable in our
own interests that the former should always be fully informed
of all the steps I am taking. Several of our gentlemen are
constantly travelling from Hamburg to Petrograd, and

conferences of our directors are held nearly every morning,

necessitated by the telegrams which arrive from Petrograd
practically every day. In order to be in a position to carry
out the coal contracts, we have been obliged to charter a
large number of steamers, so that at times as many as 80
of these are employed in this Russian transaction. Besides
the old express steamers and the Belgia we have now sold to

the Russians the Palatia and the Phenicia, as well as nine

other boats of our company, including the Belgravia, Assyria,
and Granada (the remaining ones are cargo vessels, mostly
taken out of the West Indies service), but as regards these
latter, we have reserved to ourselves the right of redemption
. . . We have successfully accomplished the great task we
had undertaken, although, owing to the absence of coaling
stations, it was thought next to impossible to convey such a
huge squadron as was the Baltic fleet all the way from European
to Far Eastern waters. It safely reached its destination,
because the previously arranged coaling of the vessels was
carried out systematically and without a hitch anywhere,
although in some cases it had to be done in open roadsteads.
Its inglorious end in the Korea Straits cannot, and does
not, diminish the magnitude of the achievement; and
the experiences we have gained by successfully carrying
out our novel task will surely prove of great value to
the Government. This whole coaling business has been a
source of considerable profits to our company, although if
due regard is paid to the exceptional character of the work
and to the unusual risks we had to run, they cannot be
called exorbitant.”

A few statistics will show what the whole under-
taking 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 ar
steamers—partly new buildings and partly new pur-

106 Albert Ballin

chases—representing a value of 22} 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 augmenta-
tion 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 clientéle 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.

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Hamburg-Amerika Expansion 107

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 remark-
able 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 char-
acter, they were akin to each other in one essential
feature—viz. the jealous love they bore to the under-
taking with which they had identified themselves. Both
men, grown up in absolutely different environments,
yet resembled each other in the daring and the fear-
lessness 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 for-
gotten. This fact, it is hoped, will be sufficient justifi-
cation for reproducing in this connexion a translation
of Ballin’s article ;

108 _ Albert Ballin

“The late Adolph Woermann was a man whom we may

truly describe as the ideal of what a Hanseatic citizen should ~

be. Secretary of State Dernburg himself once told me that
he knew quite well that the work he was doing for the benefit
of our colonies would never come up to what Adolph Woer-
mann had achieved in the face of the greatest imaginable
difficulties,

“Never before, perhaps, has any private shipowner dis-
played so much daring as we see embodied in the business he
has built up through his labours. Woermann has developed
the means of communication between Germany and her
African colonies to such perfection that even the similar-work
performed by British shipping men has been overshadowed.
He has done this without receiving any aid from the Govern-
ment; in fact, he had to overcome all sorts of obstacles
which were put in his way by the bureaucracy. His con-
fidence in his work was not shaken when losses had to be faced.
Then, more than ever, he had his eyes firmly fixed on his goal ;
and practically every vessel which he had built to facilitate
communication between the German mother country and her
colonies represented a fresh step forward towards a higher
type, thus increasing the immense personal responsibility
with which he burdened himself. His patriotism was of the
practical kind ; he did his work without asking for the help
of others, especially without that of the Government. ;

“ And now he has died in bitter disappointment. His
striking outward appearance has always reminded us of the
Iron Chancellor, but the similarity in the character of the
two men has only become apparent during the last few years.
It is well known that when the troubles in the colonies had
been settled he was accused of having enriched himself at
the expense of the country. He never lost his resentment
of this accusation ; and even though his accusers can point
to the fact that the court which had to investigate the claims
put forward by the Government gave judgment to the effect
that some of these claims were justified, it must be said in
reply that this statement of the case is inadequate and one-
sided. All that was proved was that Woermann, who hated
red tape, and who never had recourse to legal assistance when
drawing up his agreements, did not use as much caution in

ahh i ak ——

Hamburg-Amerika Expansion 109

this matter as would have been advisable in his own interest.
The facts that have become known most clearly disprove the

- accusation that he had made large profits at the expense of the

country, and that he had used the country’s distress to enrich
himself. To the task of carrying out the troop transports

he devoted himself with his customary largeness of purpose,

and he accomplished it magnificently. In order to be able
to do so, he had enlarged his fleet by a number of steamers,
and the consequence was that, when the work was achieved, he
had to admit himself that he had over-estimated his strength.
When my late colleague Dr. Wiegand, the Director-General
of the North German Lloyd, and I were asked to express an
expert opinion on the rates which Woermann had charged
the Government, we found them thoroughly moderate; in
fact, we added a rider to the effect that if either of our com-
panies had been entrusted with those transports, we could
only have carried out a very few expeditions at the rates
charged by Woermann. Woermann, however, carried through
the whole task ; and when it was done he found himself com-
pelled to pass on to the shoulders of the Hamburg-Amerika
Linie part of the excessive burden which he had taken upori
himself.

“His iron determination would have enabled him to
dispense with the assistance thus obtained. But by that
time his accusers had commenced their attacks on his character,
and when the Government had officially taken up an atti-
tude against him, he became a prey to that resentment to
which I have referred before. All those who had the privilege
of being associated with him during the past few years must
have noted with grief how this great patriot gradually became
an embittered critic. The heavy blow also led to the break-
down of his health, and during the last years of his life we
only knew him as a sick man.

“Tf it is borne in mind how strong, how masterful, and
how self-reliant a man has passed away with Adolph Woer-
mann, it is sad to think that in the end he was not strong
enough after all to bear on his own shoulders entirely the
immense burden of responsibility which he had taken upon
himself, and that he received nothing but ingratitude as the
reward of his life’s work, although he was actuated by

II0 Albert Ballin

truly patriotic motives throughout. Still, this shall not pre-
vent us from acknowledging that he was the greatest, the most
daring, and the most self-sacrificing private shipowner whom
the Hanseatic cities have ever produced—a princely merchant
if ever there was one. He was a true friend and an earnest
well-wisher to the city in which he was born, and to the
country which he served as a statesman. We are sincerely
grateful to him for the work he has done, and in honouring
his memory we know that we are paying tribute ta the
greatest Hanseatic citizen who had been living in our midst.”

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 competi-
tion emanating in 1909 from the so-called “ Princes’
Trust ” (Fiirstenkonzern) 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 Fiirstenberg. 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

—_—

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Hamburg-Amerika Expansion 111

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 with-
drew 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 Ig1I, and further agree-
ments were concluded with the Russian and Scandi-
navian 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 character-
ized the shipping business of those years the year 1908
witnessed a depression which, in its after-effects, is com-
parable only to that caused by the cholera epidemic
sixteen years earlier. Business had been excellent for
a fairly long time, but it became thoroughly demoral-
ized 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

II2 Albert Ballin

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 dis-
guise, inasmuch as it had strengthened the inclination
of the shipping concerns everywhere to compromise
and to eliminate unnecessary competition—the forma-
tion 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 con-
solidation, represent the high-water mark in the develop-
ment 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 for-
ward with a similar offer, because the German ship-
builders, 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 repre-
sented 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

Hamburg-Amerika Expansion 113

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 Aguitania,
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 Packet-
fahrt 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. Every-
thing, 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 Vater-
land 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

II4 Albert Ballin

of the third and biggest of the three steamers, the Bis-
marck, 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 monu-
ment, 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 impres-
sion that the Kaiser had intentionally been led past it.
“TI 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 extra-
ordinary 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 Packet-

Hamburg-Amerika Expansion 115

fahrt 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 aresult the position of both was weakened
in Austria, where the Government cleverly used the
situation to its own advantage. Apart from this, how-
ever, 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 trans-
atlantic services of the two companies. If these nego-
tiations 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

116 | Albert Ballin

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. respec-
tively. During the twenty-eight years 269 vessels of
1,388,206 tons had been added, either by new building
or by purchase, and ror 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 1574 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 cer-

1 Gross registered tonnage.

q

Hamburg-Amerika Expansion 117

tainly 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 develop-
ment, both from the business and the technical point
of view. The Packetfahrt, in particular, had not kept
pace with the technical progress in steamship construc-
tion, 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 con-
tributed in 1907 on the occasion of the fiftieth anniver-
sary of the foundation of the North German Lloyd.
As this article throws several interesting sidelights on
the development of transatlantic shipping enterprise, it
may furnish a suitable conclusion to the account given
in the present chapter :

“The year 1907 is one which will stand out prominently
in the history of our transatlantic shipping on account of
the two anniversaries which we are going to celebrate during
its course. On May 27th it will be sixty years since the
Hamburg-Amerika Linie was called into existence, and on
February 20th the North German Lloyd will celebrate the
fiftieth anniversary of its foundation. I suppose that a more
competent pen than mine will present us on that day with a
detailed account of the development of the great Bremen
shipping firm, and my only object in writing this article is

118 Albert Ballin

to review in brief the period of more than twenty years
during which I have had the pleasure of working hand in
hand with our Bremen friends.

“Until the year 1885 the two big companies, the Lloyd
and the Packetfahrt, scarcely had any mutually profitable
dealings with each other; on the contrary, their relations
were characterized by open enmity. It is true that the
attempts at a rapprochement, which were made from time
to time, did in some cases lead to the conclusion of an agree-
ment concerning certain rates to which both companies
bound themselves to adhere, but they never lasted more than
a short time, and ultimately, far from causing an improve-
ment of the existing state of things, they left matters worse
than they had been before. I think I may congratulate
myself on being the first to have brought about a better
understanding between the two companies which, in the end,
paved the way to the establishment of a lasting friendship
which has grown closer and closer during the past twenty

ears.

“In 1886, shortly after I had joined the Hamburg-
Amerika Linie, when I went to Bremen in order to find
out what could be done to lessen or, if possible, to remove
altogether the competition between both companies, the
conduct of the firm’s business had passed from the hands of
Consul Meier, who was getting on in years, into those of
Director Lohmann. Mr. Lohmann was a man of unusual
energy and possessed of a rare gift for organization. In the
annals of international shipping his name will be for ever
associated with the introduction into the North Atlantic
route of fast steamers under the German flag. He had been
fortunate enough to meet with a congenial mind on the tech-
nical side in the head of the firm of Messrs. John Elder and Co.,
the Glasgow shipbuilders. At their yard, starting in 1881, a
series of fast steamers were built—the Elbe, the Werra, the
Fulda, the Saale, the Trave, the Aller, and the Lahn—which
opened up a new and memorable era in the progress of the
means of communication between the Old World and the New.
These boats proved of great benefit to the company financially,
and they were also a considerable boon to the passengers
owing to their speed and punctuality. I recollect talking to

Hamburg-Amerika Expansion 119

the chairman of a big British steamship company on board
one of his steamers in New York harbour in 1888, when the
s.s. Lahn, of the North German Lloyd, steamed in. My
British colleague, filled with admiration, glanced at his watch,
touched his hat by way.of salutation, and said with honest
enthusiasm: ‘Wonderful boats; they are really doing
clockwork.’ He only expressed the sentiment felt by
the travelling public generally; everybody appreciated
their reliability and punctuality, and the excellence of their
service.

“Director Lohmann died very suddenly on February 9th,
1892; he had just concluded an address at a general meeting
of the company held at the ‘ Haus Seefahrt ’ when he dropped
down dead. During the last few years of his life he had not
been well advised technically, and failed to adopt the twin-
screw principle, as had been done by the Hamburg company.
Thus, when the two fast single-screw steamers, the Havel and
the Spree, were built at Stettin in 1890, they were practically
obsolete, because the travelling public by that time had come
to prefer those of the twin-screw type, owing to the increased
safety they afforded.

“In 1888 Consul Meier retired from the chairmanship of
the Lloyd, to be succeeded—after the short reign of Mr. Reck
—by Mr. George Plate. To Mr. Plate, if I am rightly in-
formed, great credit is due for having secured the services
of Director-General Dr. Heinrich Wiegand on the board
of the company.

“What the Lloyd has achieved under the Wiegand
régime far surpasses anything accomplished in the
past.

“The Hamburg-Amerika Linie, meanwhile, had been
alive to the needs of the times; and the consequence was a
healthy competition between these two steamship companies
—by far the biggest the world has ever seen—practically
on all the seven seas. This competition, by intelligent com-
promise, was restricted within reasonable limits, the guiding
spirits of the two concerns consciously adopting the policy
implied by the strategic principle: ‘In approaching the
enemy’s position we must divide our forces; in attacking

him we must concentrate them.’
I

120 Albert Ballin

“It would not be correct to say that this atmosphere of
friendship had never been clouded—it would, indeed, have
been tedious had it been otherwise than it was. Up to now,
however, Wiegand and I have always been able to maintain
pleasant relations between our two concerns, and in the
interests of both of them it is sincerely to be hoped that this
spirit of mutual understanding will continue to animate them
in the future.” ;

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 pos-
sible 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 pro-
blem 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 busi-
ness 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

I2I

122 Albert Ballin

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 ship-
building 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 direc-
tion 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 surround-

eS

——_ — 7

ee OO

Hamburg-Amerika Reorganized 123

ings, 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 insignifi-
cant 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 com-
pany, 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 them-
selves, 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—Deuischland : 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 com-
posed during the voyage, so that not even a long sea
voyage gave him the unbroken spell of leisure he so

124 Albert Ballin

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

_—, i en

Hamburg-Amerika Reorganized 125

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 accommoda-
tion 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 develop-
ment 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 con-
siderable 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. I in 1913 and those vessels which the Hamburg-

126 Albert Ballin

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 6} 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 unsup-
ported by any columns or pillars of any kind, was an
unprecedented achievement. Besides, there were im-
mense dining-rooms for each class, smoking-rooms,
ladies’ saloons, a restaurant, a winter garden, as

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 dis-
posal 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

oC EE ee

Hamburg-Amerika Reorganized 127

passengers were the only ones for whose comfort the
company catered. The other classes progressed pro-
portionately 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 recipro-
cating engines gradually gave place to higher types,
and later on turbines and oil-engines were also intro-
duced. 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 light-
ing stations were arranged which could generate a suffi-
cient 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

128 Albert Ballin

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 steam-
pipes 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, advan-
tages which were due to their size, their shape, and the
loading facilities with which they were equipped. Ballin

———, ee ee

ad

Hamburg-Amerika Reorganized 129

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 pos-
sessed a capacity of very nearly 25,000 G.R.T.—extremely
seaworthy, and as they could travel at the rate of 174
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 inter-
national 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
r9g12, and 30 feet in 1914.

Ballin carefully watched this development, inces-
santly 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 possess-
ing 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

130 Albert Ballin

type, however, ought to receive a somewhat more de-
tailed 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 Vic-
toria Luise, and the somewhat smaller and less sump-
tuous 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 Vic-
toria Luise she was replaced first by a British passenger
boat that had been purchased, and then by the Deutsch-

land, 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 con-
stantly augmenting the number of those who formed
the regular clientéle 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 end 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.

—

_

ae

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 state-
ment may be allowed to pass quite unchallenged, pro-
vided that by the term “ fighter’ we mean a man whose
habit it is to fight to the bitter end. Ballin never in-
_dulged 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 him-
self 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 com-
peting rivals to end in the complete victory of one of
them ; in the shipping business such an outcome is the
exception but not therule. 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
131

132 Albert Ballin

have witnessed the establishment of many new ship-
ping 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
0 ‘
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

Politics 133

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 con-
flagration 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 pro-
gramme was that a nation which owned one-third of
the inhabited globe and intended to maintain its supre-
macy 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

134 Albert Ballin

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 pro-
ject 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 under-
standing 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

CO

Politics 135

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 consider-
able 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 wefe 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, how-
ever, exerted all their influence on behalf of the indus-
trial 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 ”’), ie. the dis-
counting by French capitalists of bills drawn by German
industrialists, played an important part, and even re-
presented 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.

J

136 Albert Ballin

The advantage to Great Britain of an understanding
with Germany was that it would guarantee her mari-
time 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 Govern-
ment 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 friend-
ship 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 con-
nexion 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 Wilhelmshéhe and that
of the German Emperor and Empress to Windsor Castle
in the summer of 1907 had been of a very friendly char-
acter, and, together with other manifestations of friend-
ship exchanged between various German and British
societies, they had exercised a favourable impression on
public opinion in both countries. But very soon this

Politics 137

friendly feeling was replaced by one of irritation. Great
Britain and Russia had concluded an agreement con-
cerning 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 power-
ful 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 Lans-
downe 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

138 Albert Ballin

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 Depart-
ment 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

——————————

Politics 139

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 state-
ments made in the Reichstag would let it appear. Un-
doubtedly 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 concen-
trate all her energies on her army.

Upon Sir Ernest’s intimation that at some date

140 Albert Ballin

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 inti-
mate bearing of international finance on political rela-
tions, 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

——— yo

ee

Politics | I4I

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 one-
self 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 Biilow, the Imperial Chancellor, and Herr v.
Schon, 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 construct-
ing 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 Mace-
donian reforms aimed at by the Powers. In Austria
it was thought that Germany would support her ally
as a matter of course, and Prince Biilow, in an inter-
view given to a journalist, tried to pacify the Novote
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,

142 Albert Ballin

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 :

“ By the way, the views I expressed to you on the matter
of the Sandjak Railway are now completely borne out by
the facts. Both the Kaiser and, later, Prince Biilow have
given me positive assurances that the German Government
was just as much taken by surprise on hearing of this Aus-
trian project as were the London and Petrograd Cabinets.

“T hope that our respective monarchs may soon meet
now. There is nothing that we on our side would welcome
more heartily than the establishment and the maintenance
of the most friendly and most cordial relations between the
two sovereigns and their peoples. The Kaiser will not return
home from his Northern cruise and from his visit to the
Swedish Royal Court until the middle of August, but I
think it is probable that the two monarchs may meet when
King Edward returns from Marienbad, and that their Majesties
will then fix the date for the official return visit to Berlin.
I sincerely trust that this Berlin visit will be of the utmost
benefit to both countries.”

Sir Ernest Cassel replied :

“T also feel that the meeting of their Majesties must
produce a great deal of good, and, as I now hear, it will
after all be possible to arrange for this meeting to take place
on the outward journey of the King. I am still as convinced
as ever that our side is animated by the same friendly senti-
ments as yours.”

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

eo

- Politics 143

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 com-
municated 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 empha-
sized that his country needed a big fleet in order to com-
mand 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.

144 Albert Ballin

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 Fiirstenberg, 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 Biilow, who was then staying at Norderney.
Biilow, 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 circum-
spection, and it would have been well if the permanent
officials in the Foreign Office: had shown rather more
political insight.

Politics 145

The endeavours of the official circles to remove the
tension existing between the two countries were not
affected by the incident. On February gth, 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 per-
sonal 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. Schén, 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

146 Albert Ballin

continued. On these latter he reported to the Kaiser
as follows:

“My friend to whom I had intimated in a private letter
written about a week earlier that it was my intention to
visit him—at the same time hinting that, for my personal
information, I should like very much to take up the threads
of the conversation we had had a twelvemonth ago on
the subject of the question of the navy—had evidently
used the interval to supply himself at the proper quarters
with authoritative information about this matter. During
the whole of our long talk he spoke with extraordinary
assurance, and every word seemed to be thought out
beforehand.

“ At the commencement of our conversation I said to
_ my friend that in view of the great excitement which reigned
in England on account of the German naval armaments, and
which was assuming a decidedly anti-German character, he
would quite understand that I should desire to take up once
more the interesting discussions which we had had on the
same subject a year ago. I pointed out that this excitement
—spread as it was by an unscrupulous press and fostered by
foolish politicians—was apt to produce results altogether
different from those which the Government might perhaps
consider it desirable to bring about within the scope of its
programme. I emphasized the fact that, of course, I was
merely speaking as a private citizen, reading with interest
the English papers and the letters of his English friends,
so that all my knowledge of the subject was derived from
private sources.

“A year ago, I said, my friend, in the clear and concise
manner that distinguished him, had explained to me the
need for an understanding between Germany and Britain
governing the future development of their naval forces, at
the same time requesting me to exert myself in that sense.
This suggestion of his had not been made in vain. The fact
that I had been successful in establishing complete concord
amongst Germans, British, French, Italians, Austrians, and
a whole series of small nations on questions affecting their
highly important shipping interests, and in replacing an

Politics 147

unbridled and economically disastrous competition by friendly
agreements to the benefit of each partner, was bound to make
me sympathize with any measures that it was possible to
take in order to bring about a similar result between the
Governments if only they were met in the right spirit. I,
therefore, had made up my mind to submit such a plan
to our Government, but before doing so, it would be neces-
sary for me to know whether Britain still adhered to the
principles which my friend had enunciated to me at our
previous meeting.

“ Sir Ernest’s reply was that as far as Britain was con-
cerned a great change had taken place during the interval,
and that he was no longer able to endorse the views he had
held at that time. The necessity for his country to main-
tain her supremacy on the sea at all hazards, and subject
to no engagements of any kind, was now more clearly recog-
nized than it had been a year ago. A one-sided understand-
ing between Germany and Britain could no longer be thought
of, since both Austria and France had now voted large sums
for the enlargement of their respective navies. Austria
would certainly be found on the German side, but France
could by no means be said to be an asset on which it would
be safe for Britain to rely, to say nothing about the two
‘ dark horses,’ Russia and Italy. If Britain, in view of these
uncertainties, were to permit Germany to nail her down to
a fixed programme, she would dwindle down to a fifth-rate
Power. Germany possessed her overwhelmingly large army
with which she could keep in check Austria, Italy, Russia,
and France, but Britain had nothing but her navy to
guarantee her existence as a world power and to safeguard
the roads that linked her to her colonies. For many decades
Britain had enjoyed opportunities for accumulating big
fortunes. These times, however, had now passed. During
the reign of the Emperor William II, who, with a consistency
which it would be difficult to praise too highly, had made
his country a commercial power of world-wide importance,
and who had raised German industrial enterprise and German
merchant shipping to a condition of undreamt-of prosperity,
Britain sustained immense losses in her overseas com-
merce. British trade was declining, and there was no doubt

148 Albert Ballin

but that in the long run Britain would be compelled to
abandon her principles of Free Trade.

“ The question of the Austrian naval armaments appeared
to trouble my friend more than anything, and this circum-
stance, combined with the doubtful attitude of Russia and
the uncertainty of the situation in France, was evidently
a source of great anxiety to the King. My friend remarked
in this connexion that in his opinion the moment chosen for
the conclusion of an understanding was very favourable to
German but very unfavourable to British interests. It
was useless to talk of an agreement so long as an element
of mutual fear had to be reckoned with. At present this
fear manifested itself in Britain in a manner which was
most inopportune, so that it was bound to make the German
public believe that Britain would be ready to come to an
understanding even if the terms of it were detrimental to
her own interests. Britain had got behindhand both with
her commerce and with her naval programme. To fight her
competitors in the world’s trade with a fair chance of success
was impossible for more reasons than one, but the elimina-
tion of the disadvantage from which she suffered with respect
to her naval armaments was merely a question of money.
The funds that were required to bring the British Navy
up to the necessities of the international situation would
certainly be found, because they had to be found.

“I told my friend that I was astonished to hear how
completely his views had changed on these matters. Not
what he did say, but what he had left unsaid, made me
suspect that official circles in England—partly, perhaps,
through the fault of the German Government—had arrived
at the conclusion that the latter would refrain from a further
strengthening of the navy after the existing naval programme ~
had been carried out, and that it would merely content itself —
with the gradual replacement of the units as they became —
obsolete. Such a proceeding could be justified only if the
same plan were adopted by Britain also. If, however, his —
remarks implied that in the opinion of his Government the ©
moment had now arrived for altering the ratio of naval ©
strength existing between both countries by a comprehensive
programme of new building, it would soon become evident

Politics 149

that there were some flaws in that calculation. In view of
any such intentions it was my opinion—which, however,
was quite personal and unofficial—that Germany would have
to decide upon such an increase of her navy as would enable
her to carry on a war of defence with the certainty of success.
If, therefore, Britain meant to go on building warships on
a large scale, this would merely lead to an aimless naval
race between the two countries.

* These remarks of mine concluded our first conversation,
and I accepted my friend’s invitation to dine with him that
evening in company with some prominent men of his

acquaintance,

“In the evening I was greatly surprised to see that I
was the only guest present. My friend told me that, in order
to be alone with me, he had cancelled his invitations to
the other gentlemen, stating that he did not yet feel well
enough to see them. It was obvious to me that he had,
‘meanwhile, reported on the outcome of our conversation,
and that the atmosphere had changed. This change had
without doubt been brought about by my remarks concern-
ing the necessity for a further enlargement of the German
Navy, if the action of Britain compelled our Government
to take such a course. The long discussions that followed
proved that this view of mine was correct in every detail.

“ Sir Ernest explained that the Liberal Cabinet had acted
penny wise and pound foolish in dealing with the question
of the navy. This was the conviction of the great majority
of the British people, and this action had caused the feelings
of apprehension and of hostility animating them. The
Liberal Government had thus made a serious blunder, and
had, in his opinion, prepared its own doom by doing so.
He thought the days of the Liberal party were numbered,
and another party would soon be in office. Anti-German
feeling would be non-existent to-day if the Liberal cabinet
had not, because of its preoccupation with questions of
social policy, neglected the navy. The whole matter was
further aggravated by other questions of a political kind.
France, on account of the French national character, had
always been a doubtful asset to Britain, and, considering
the state of her internal politics, she was so now more than

150 Albert Ballin

ever. Germany, on the other hand, possessed a great advan-
tage in that her military preponderance enabled her to rely
with absolute certainty on her Austrian ally. He would
say nothing about Russia, because he had never regarded
the Anglo-Russian rapprochement as politically expedient.

“Tf it was admitted—and he thought this admission
was implied by my remarks—that her colonial and her com-
mercial interests made it imperative for Britain to maintain
an unchallenged supremacy on the seas, he felt certain that
some reasonable men would, after all, be able to discover
a formula which would make an understanding between
both countries possible. A great difficulty, however, was
presented by my often reiterated demand that Britain must
not abandon her principles of Free Trade. In questions
such as these, she could, indeed, speak for herself, but not
for her great colonies. History had proved that she lost
her American colonies as soon as she tried to foist her own
commercial policy on the colonists. He had no doubt that
Germany, despite the disagreeable surprises which she had
experienced when adjusting the system of her Imperial
finances, possessed sufficient wealth to go on increasing her
navy in the same proportion as Britain. The great mis-
take committed by the Liberal cabinet and by the other
advisers of the King had been their assumption that financial
considerations would prevent Germany from carrying out
her naval programme in its entirety. German prosperity
had grown far more rapidly, he thought, than even the
German Government and German financial experts had
believed to be possible. Signs of it could be noticed wherever
one went, and one would turn round in astonishment if,
during the season, one heard the tourists in Italy or in
Egypt talk in any language but German. He, at any rate,
felt certain of Germany’s ability to keep pace with Britain
in the naval race, even if that pace was very greatly
accelerated.

“Reasons of internal policy had convinced him that
Britain would not in any case abandon her Free Trade
principles within a measurable period of time, and as it was
not intended to conclude a perpetual agreement, but only
one for a limited number of years, he thought it was not

OO

Politics 151

at all necessary that Germany should insist upon her demand
in connexion with this question. As the colonies enjoyed
complete independence in these as in other matters, the
difficulties would be insurmountable. In return for such a
concession on Germany’s part, Britain would doubtless be
willing to meet the views of the German Government in other
respects. For these reasons he would be quite ready to
change the opinion he had expressed in the morning, and
to agree that it could produce nothing but good if either
side were to appoint some moderate men for the purpose
of discussing the whole question. Such a meeting would
have to be kept absolutely secret, and both parties should
agree that there should be no victor and no vanquished if
and when an agreement was concluded. This condition
would have to be a sine qua non.

“I promised Sir Ernest that I would use my best en-
deavours to this end when an opportunity should present
itself, and we arranged to have another meeting in the near
future.

“There is no doubt but that my friend is an extremely
well-qualified negotiator. I do not recollect that during my
long experience, extending over many years, I have ever
come across a man who could discuss matters for hours at
a time with so much self-reliance, deliberation, and fixity
of purpose.”

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 recom-
mended that the Imperial Chancellor, Herr v. Bethmann-
Hollweg, who had succeeded Prince Biilow 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 Biilow, had sometimes been made. Future
developments, however, proved that this step deprived

the whole action of its spontaneity, and its immediate
K

152 Albert Ballin

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,”
ie. 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 in-
volved 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 open-
ing 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,

Politics » 153

or whether the Chancellor would prefer a different
method, by which he understood direct official negotia-
tions. 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 author-
ized 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 in-
tentions of the Chancellor. The reply of the latter,
dated August 11th, was as follows:

“Many thanks for your welcome telegram, which has
found my closest attention. I shall send you further details
as soon as I have interviewed the gentlemen concerned,
which I intend to do to-morrow and during the next few
days.”

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 a2rst,
in which he says:

“TI have to-day taken the official steps of which I told
you. As Sir Ernest Goschen! and I have agreed to observe
absolute secrecy in this matter, and as a statement of your
friend to the British Government to the effect that I had
undertaken an official démarche, might possibly be regarded
as afi indiscretion, I suggest that if you inform your friend
at all, you should word your reply in such a way that this
danger need not be feared.”

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

1 @hen British Ambassador in Berlin.

154 Albert Ballin

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 diplo-
matic 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 :

“My only object in writing just now is to say that if
there is any feeling in high quarters in your country favour-
able to coming to an understanding with this country
concerning naval matters, I am quite satisfied from the
inquiries I have made that the present would be an
opportune time for approaching this question, and that the
present Government of this country would be found entirely
favourable to coming to such an arrangement.”

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, I9gI0, ex-
plained why no understanding with Germany had been
arrived at.

“The German Government told us—I cannot-complain,
and I have no answer to make—that their procedure in this

——— ee eee

Politics 155
matter is governed by an Act of the Reichstag under which
the programme automatically proceeds year by year. That
is to say, after the year 1911-12, the last year in which under
that law four Dreadnoughts are constructed, the rate of
construction drops in the two succeeding years to two each
year, so that we are now, we may hope, at the very crest
of the wave. If it were possible, even now, by arrangement
to reduce the rate of construction no one would be more
delighted than his Majesty’s Government. We have ap-
proached the German Government on the subject. They
have found themselves unable to do anything ; they cannot
do it without an Act of the Reichstag, repealing their Navy
Law. They tell us—and no doubt with great truth—they
would not have the support of public opinion in Germany
to a modified programme.”

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 assump-
tion 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, I91I, raised to an international limitation of
armaments can likewise only be described as formal
ones. He said:

“Tf it is the intention of the Powers to come to an under-
standing with regard to general international armaments,
they must first of all agree upon a formula defining the rela-
tive position of each. . . . Practically, it might be said,
such_an order of precedence has already been established
by Great Britain’s claim that, notwithstanding her anxiety

156 Albert Ballin

to effect a reduction of her expenditure on armaments, and
notwithstanding her readiness to submit any disputes to
arbitration, her navy must under all circumstances be equal
—or even superior—to any possible combination. Great
Britain is perfectly justified in making this claim, and in con-
formity with the views I hold on the disarmament problem,
I am the last person in the world to question her right to
do so. But it is quite a different matter to use such a claim
as the basis of an agreement which is to receive the peaceful
consent of the other Powers. What would happen if the
latter raised any counter-claims of their own, or if they
were dissatisfied with the percentage allotted to them? The
mere suggestion of questions such as these is sufficient to
make us realize what would happen if an international con-
gress—because one restricted to the European Powers alone
could not be comprehensive enough—had to adjudicate on
such claims,”

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 roth, 1910, Herr v. Bethmann,
in a speech delivered before the Reichstag, had enlarged
on this same subject from the political point of view:

** As to the relations between ourselves and Great Britain,
and as to the alleged negotiations with the latter country
concerning a mutual curtailment of naval armaments, I
am bound to say that the British Government, as everybody
knows, has more than once expressed its conviction that
the conclusion of an agreement fixing the naval strengths
of the various Powers would conduce to an important
improvement of international relations, . . . We, too, share
Great Britain’s desire to eliminate the question of naval
competition, but during the informal pourparlers which
have taken place from time to time, and which have been

Politics 157

conducted in a spirit of mutual friendship, we have always
given prominence to our conviction that a frank discussion
of the economic and political spheres of interest to be
followed up by a mutual understanding on these points
would constitute the safest way of destroying the feeling
of distrust which is engendered by the question of the re-
spective strengths of the military and naval forces maintained
by each country.”

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 Ger-
many. An Anglo-German agreement had been specially
suggested. This suggestion required some careful think-
ing over. If he were to hold out any hope that Ger-
many, in compliance with the terms of some such agree-
ment 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 Govern-
ments. 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

158 Albert Ballin

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, r9ro0), 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 con-
nexion the text of two accounts dealing with the situa-
tion in England which Ballin wrote in the spring
and in the summer of rgro 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:

“Tf I were to say that London was completely domin-
ated by the election campaign, this would be a very mild
way of characterizing the situation as it is. The whole
population has been seized with a fit of madness. The
City men who, until quite recently, had preserved an admir-
able calm, have now lost their heads altogether, and are the
most ardent advocates of Tariff Reform. Every victory of

yi or Ae a

x Politics 159

a Conservative candidate is cheered by them to the echo.
der these circumstances, even in the City, the fear of war
hai grown. If we ask ourselves what it is that has brought
abont such an extraordinary change in the attitude of common-
sensé business people, we find that there are several reasons
for it, viz. the general slump in business; the unfortunate
policy of Lloyd George with regard to the Irish Nationalists;
the advances he made to the Labour Party, and the effects
of his sodial legislation which are now felt with increasing
seriousness, .

“ Business is bad in England, and up to now very little
has been seen of the improvement which is so marked{in
Germany. It is but natural that, in view of the extended
trade depression which has so far lasted more than two
years, a people endowed with such business instincts as the
British should feel favourably disposed towards a change
of the country’s commercial policy. This disposition is
further strengthened by the constant reiteration of the
promise that it will be possible to provide the money needed
for new warship construction and for the newly inaugurated
social policy by means of the duties which the foreigner
will be made to pay.

“Tt seems pretty certain that the present Government,
in spite of the great election successes gained by the Con-
servative party, will still retain a slight majority if it can
rely on the Nationalist vote. That is what I had always
predicted. But the majority on which the Liberal Cabinet
depends will doubtless be a very uncomfortable one to work
with, and the opinion is general that it will hardly take
more than a twelvemonth before another dissolution of
Parliament will be necessary. It is said that the elections
that will then be held will smash up the Liberal party
altogether, but I consider this is an exaggeration. In this
country everything depends on the state of business. If,
in the course of the year, trade prospects brighten up again,
and if everything becomes normal once more, the Tariff
Reformers in the City will turn Free Traders again and will
take great care not to kill the goose that lays the golden
eggs. I am quite convinced that everything hangs on the
future development of trade and traffic. To-day, as I have

160 Albert Ballin

said before, Tariff Reform and a Zollverein with the Colonis
are the catchwords that are on everybody’s lips, and the
anti-German feeling is so strong that it is scarcely possible
to discuss matters with one’s oldest friends, because the
people over here have turned mad and talk of nothing but
the next war and the protective policy of the near ‘uture.
Large crowds are spending hours every night in the principal
squares such as Trafalgar Square, where they have come to
watch the announcements of the election results in the
provinces. Their behaviour is exemplary. It is a curious
thing that in this country the election game is spread over
several weeks, in consequence of which the political excite-
ment of the masses is raised to boiling-point. Within a
few months’ time, I am sure, things will look entirely different
again.”

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

“T am now returned from England, and it may not
be out of place to report the impressions I received of the
political and economic conditions over there.

‘“‘My previous visit to London coincided with the big
election campaign, and I have already described the fit of
mad excitement which had taken possession of the people,
and which was directed against Germany.

“ The situation has now undergone a complete change,
which is noticeable everywhere and which is caused by the
close of the election campaign, by the death of the King,
and, finally, by the visit of the Kaiser on the occasion of
the Royal funeral. Everyone whom I met in London—
Liberals and Conservatives alike—spoke in terms of the
highest praise of the Kaiser’s sympathetic attitude displayed
during his stay in England, and which was all the more
commendable as it was not denied that he had suffered
many slights during the lifetime of his late uncle,

“The attitude of the people towards the new monarch
is one of reserve, but also—in conformity with the national
character of the English—one of loyalty and good faith.
The situation with regard to home politics is as difficult

ee

Politics 161

now as it has been all along. Unless a compromise between
the parties is arrived at new elections will be unavoidable
in the spring or even before. I have met a great many
persons of political experience who are of opinion that, even
if a compromise is made, it will be necessary to submit such
an arrangement to the decision of the electorate by an appeal
to the country. It is difficult to predict the result of such
new elections. The views held by large sections of the
Press and of the public bear out the truth of the remarks
in my previous letter when I emphasized the fact that the
British are a nation of business men who act on the principle
of ‘leave well alone,’ and who will refuse to have anything
to do with Tariff Reform as soon as there is an improvement
in trade.

*“ Business has, indeed, improved in the meantime, but
only very slightly, and much less than in Germany. This
slight improvement, however, has not failed to give a fillip
to the cause of Free Trade among the City men. If elec-
tions in the spring are regarded as likely, much will depend
on the further development of trade. I must confess that
I take a very pessimistic view as to the future of Great
Britain in this respect. The British can really no longer
compete with us, and if it were not for the large funds they
have invested, and for the sums of money which reach the
small mother-country from her great dominions, their satur-
ated and conservative habits of life would soon make them
a quantité néglhigeable as far as their competition with us in
the world’s markets is concerned.

“Of course, their financial strength and their excellent
system of foreign politics, in which they have now been
trained for centuries, will always attract business to their
country, the possession of which we shall always begrudge
them (for is not envy one of the national characteristics of
the German race ?).”

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

“To-day the feeling, as far as the City is concerned,
is thoroughly friendly towards Germany. The visit in the

162 Albert Ballin

spring of the Kaiser and the Kaiserin, on the occasion of
the unveiling of the monument to Queen Victoria, has created
a most sympathetic impression—an impression which has
been strengthened by the participation of the Crown Prince
and Princess in the Coronation festivities. At present the
Kaiser is actually one of the most popular persons in England,
and the suggestion of bringing about an Anglo-German
understanding is meeting with a great deal of approval from
all sections of the population.”

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 pro-
nouncement 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

Politics 163

to the Secretary of State, Herr v. Kiderlen-Wachter,
in which it is necessary to read between the lines here
and there.

“ Baron Leopold de Rothschild has just sent me a wire
from London in which he says that, on the strength of in-
formation he has received from the Paris Rothschilds, people
there are greatly disappointed to see that the German answer
—the details of which are still unknown there—leaves some
important questions still unsolved. Public sentiment in the
French capital, he says, is beginning to get excited, and it
would be to the interest of everybody to settle matters as
speedily as possible.

“T felt it my duty to draw your attention to this state-
ment, and you may take it for what it is worth.

“T need not tell your Excellency that people here and,
I suppose, all over Germany, are watching the progress of
events with growing anxiety. In this respect, therefore,
the desires of the German people seem identical with those of
the French.

“It would also be presumptuous on my part to speak
to your Excellency about the feeling in England and the
British armaments, as the information you derive from
your official sources is bound to be better still than that
which I can obtain through my connexions.

“ With best wishes for a successful solution of this difficult
and important problem, I have the honour to remain,

“Your Excellency’s most obedient servant,
“ (Signed) BALLIN.”

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 Igrr.

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

164 Albert Ballin

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:

“Quite good, except for the ridiculous insinuation that
we are aspiring after the hegemony in Central Europe. We
simply are Central Europe, and it is quite natural that other
and smaller nations should tend towards us and should be
drawn into our sphere of action owing to the law of gravity,
particularly so if they are of our own kin. To this the
British object, because it absolutely knocks to pieces their
theory of the Balance of Power, i.e. their desire to be able
to play off one European Power against another at their
own pleasure, and because it would lead to the establish-
ment of a united Continent—a contingency which they want
to prevent at all costs. Hence their lying assertion that we
aim at a predominant position in Europe, while it is a fact
that they claim such a position for themselves in world
politics. We Hohenzollerns have never pursued such am-
bitious and such fantastic aims, and, God granting it, we

shall never do so.
“* (Signed) WILHELM I.R.”

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 founda-
tion of a German African empire stretching from the

Politics 165

Atlantic to the Indian Ocean.” Similar sentiments
were expressed in a letter from Sir Ernest Cassel to Ballin,
dated January gth, 1912.

oy

“Since writing to you last,” says Sir Ernest, “I have
had the opportunity of a confidential chat with Mr. Winston
Churchill. He is aware that the position which he has now
occupied for some time ties him down to some special limita-
tions which will not allow him to pay a visit of the kind
you suggest so long as the situation remains what it is.
Should the King go to Germany, and should he take Winston
with him, he—Winston—would feel highly honoured if he were
permitted to discuss the important questions that were
demanding a solution. Such an opportunity would have to
come about quite spontaneously, and Winston would have
to secure the previous consent of the Prime Minister and of
Sir Edward Grey.

“Thus far Winston. His friendly sentiments towards
Germany are known to you. I have been acquainted with
him since he was quite a young man, and he has never made
a secret of his admiration of the Kaiser and of the German
people. He looks upon the estrangement existing between
the two countries as senseless, and I am quite sure he would
do anything in his power to establish friendly relations.

“The real crux of the situation is that Great Britain
regards the enormous increase of the German Navy as a
grave menace to her vital interests. This conviction is a
deep-rooted one, and there are no two opinions in London
as to its significance.

“Tf it were possible to do something which, without
endangering the safety of Germany, would relieve Great
Britain of this nightmare, it is my opinion that people over
here would go very far to conciliate German aspirations.”

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

166 Albert Ballin

incident of r91r had shown how easily a series of com-
paratively 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 arma-
ments. 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 pos-
sible to settle certain purely technical matters affecting
his department, which could then furnish the con-
ditions 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

Politics 167

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 tele-
gram 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, Igi2,
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 apprecia-
tion 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 favour-
L

168 Albert Ballin

able result. If this suggestion was acceptable to Ger-
many, 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:

“ BERLIN. Febr. 4th, 1912.
“ DEAR Mr. BALLIN, —

“We are still busy wording the text of our reply,
and I shall not be able to see you at 11 o’clock. As soon
as the text is settled, I shall submit it to His Majesty for
his approval. Under these circumstances I think it is doubt-
ful whether we ought to adhere to the time fixed for our
appointment. I rather fancy that I cannot tell you any-
thing definite before 12 or x o’clock, and I shall ring you up
about that time. You have already made such great sacri-
fices in the interest of our cause that I hope you will hier

accept this alteration as well.
“In great haste.
“ (Signed) BETHMANN-HOLLWEG.”

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

“The demand raised by your official telegram rather
complicates matters. The fact is that the Bill as it stands
now only asks for half as much as was contained in the
original draft. This reduced demand is much less than the
nation and the Reichstag had expected. If after this a still
further curtailment is decided upon, such a step will create
the highly undesirable impression that, in order to pave
the way for an understanding with London, it had become
necessary to make very considerable sacrifices. This, of
course, must be avoided at all costs, because if and when
an understanding is arrived at, there must be neither victors
nor vanquished.

Politics 169

-“T need not emphasize the fact that our Government
is taking up the matter with the greatest interest and that
it is keenly anxious to bring about a successful issue. The
reception with which you have met on our side must have
given you convincing and impressive proofs of this attitude.

“ T have now succeeded in making our gentlemen promise
me—although not without much reluctance on their part—
that they would not object to the formula proposed by your
Government, viz. ‘It is agreed to submit the question of
the proposed increase of naval tonnage to a bona fide dis-
cussion.’ Thus there is now a fair prospect of reaching a
favourable result, and the preliminary condition laid down
by your Government has been complied with.

“TI think that the delegate sent should be accompanied
by a naval expert. The gentleman in question should also
understand that he would have to use the utmost frankness
in the discussions, and that he must be able to give an assur-
ance that it is intended to subject the British programme,
too, to such alterations as will make it not less, but rather
more, acceptable than it is now. Surely, your Government
has never desired that we should give you a definite under-
taking on our part, whereas you should be at liberty to extend
your programme whenever you think fit to do so. A clearly
defined neutrality agreement is another factor which will
enter into the question of granting the concessions demanded
by your Government. .

“** Reciprocal assurances’ is a term which it is difficult
to define; if, for instance, the attitude of Great Britain
and her action last summer had been submitted to a court
of law, it would hardly be found to have violated the obliga-
tions implied by such ‘reciprocal assurances,’ and yet we
were at the edge of war owing to the steps taken by your
people.

“TI thought it my duty, my dear friend, to submit these
particulars to you, so that you, for the benefit of the great
cause we are engaged in, may take whatever steps you con-
sider advisable before the departure of the delegate.

“Our people would appreciate it very much if you would
make the great sacrifice of coming over to this country
when the meeting takes place. I personally consider this

170 Albert Ballin

also necessary, and it goes without saying that I shall be
present as well.

“ P.S.—The Chancellor to whom I have shown this letter
thinks it would be better not to send it, because the official
note contains all that is necessary.

“‘ However, I shall forward it all the same, because I
believe it will present a clearer picture of the situation to
you than the note. Please convince the delegate that it
is a matter of give and take, and please come. It entails
a great sacrifice on your part, but the cause which we have
at heart is worth it.

“The bearer of this note is our general secretary, Mr.
Huldermann. He is a past master of discretion, and fully
acquainted with 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 :

“We are willing to continue the discussion in a friendly
spirit. The Navy Bill is bound to lead to a discussion of
the naval plans of both countries, and in this matter we
shall be able to fall in with the wishes of the British Govern-
ment if we, in return, receive sufficient guarantees as to
a friendly disposition of British policy towards our own
interests. Any agreement would have to state that either
Power undertakes not to join in any plans, combinations,
or warlike complications directed against the other. If con-
cluded, it might pave the way for an understanding as to
the sums of money to be spent on armaments by either
country.

““We assume that the British Government shares the
views expressed in this note, and we should be glad if a
British Cabinet minister could proceed to Berlin, in the first

instance for the purpose of a private and confidential dis-

cussion only.”

Politics 171

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 note which I had brought with me did not at
first satisfy our friend. He made a brief statement to the
effect that we saw a fair prospect of reaching a successful
solution of the problem was all that was needed, and that
our answer was lengthy, but evasive. This opinion, however,
he did not maintain after the close of our conversation,
which lasted more than two hours. I pointed out to him
that, as I understood it, the phrase ‘ We are willing to con-
tinue the discussion in a friendly spirit’ amounted to a
declaration on the part of the German Government that,
in its opinion, there was a ‘ fair prospect,’ and that an accom-
modating spirit was all one could ask at present. He
thought that Lord Haldane had been asked to go to Berlin
so that a member of the Cabinet should have an opportunity
of ascertaining on the spot that Berlin was really disposed
to discuss matters in a friendly spirit, On this point posi-
tive assurances were needed before Sir Edward Grey and Mr.
Winston Churchill went across, who, if they did go, would
not return without having effected the object of their visit.
Sir Ernest always emphasized that he only stated his own
private views, but it was evident that he spoke with the
highest authority. The demand for three Dreadnoughts, he
said, which the new German Navy Bill asked for, amounted
to a big increase of armaments, and Great Britain would
be compelled to counterbalance it by a corresponding in-
crease, which she would not fail to do. If, however, Germany
were prepared not to enlarge her existing programme, Great
Britain would be pleased to effect a reduction on her part.
When I referred to the apprehension of the German Govern-
ment lest Great Britain should take advantage of the fact
that Germany had her hands tied, in order to effect big arma-
ments which it would be impossible for us to equal, our

172 Albert Ballin

friend remarked that, for the reason stated above, such fears ‘

were groundless. In spite of this assurance, I repeatedly
and emphatically drew his attention to the necessity for
limiting the British programme just as much as the German
one. He evidently no longer fancied the suggestion pre-
viously put forward that the question of agreeing upon a
definite ratio of strength for the two navies should be dis-
cussed ; because, if this was done, one would get lost in the
details. Nevertheless, he did not, as the discussion pro-
ceeded, adhere to this standpoint absolutely. He agreed
_ that the essential thing was to establish friendly political
relations, and if, as I thought, Germany had reason to com-
plain of British opposition to her legitimate expansion, one
could not do better than discuss the various points at issue
one by one, similar to the method which had proved so
successful in the case of the Anglo-French negotiations.
Great Britain would not raise any objections to our desire
for rounding-off our colonial empire, and she was quite
willing to grant us our share in the distribution of those
parts of the globe that were still unclaimed.

“ By keeping strictly to the literal text of the German
note, he found the latter quite acceptable as far as it referred
to the question of a declaration of neutrality. He said
there was a great difference between such declarations, and
often it was quite possible to interpret them in various ways.
I imagined that what was in his mind were the obligations
which Britain had taken upon herself in her agreement with
France, and I therefore asked him for a definition of the
term ‘neutrality.’ His answer was very guarded and con-
tained many reservations. What he meant was something
like this: Great Britain has concluded agreements with
France, Russia, and other countries which oblige her to
remain neutral where the other partner is concerned, except
when the latter is engaged in a war of aggression.

“Applied to two practical cases, this would mean: If
an agreement such as the one now under consideration had
been in existence at the time of the Morocco dispute last
summer, Great Britain would have been free to take the
side of France if war had broken out between that country
and ourselves, because in this case we—as he argued with

ae oe ee ee ee oe

Politics 173

much conviction—had been the aggressors. On the other
hand, if we had severed our relations with Italy during the
Turco-Italian war and had come to the support of Turkey,
Great Britain would not have been allowed to join Italy
in conspiring against us if we had an agreement such as
the one in question.

“In the interval between my first and my second visit
Sir Ernest evidently had, by consulting his friend Haldane,
arrived at a very definite opinion, and when I visited him
for the second time he assured me most emphatically that
Great Britain would concede to us as much as she had con-
ceded to the other Powers, but not more. We could rely
on her absolute loyalty, ‘and,’ he added, ‘our attitude
towards France proves that we can be loyal to our friends.’

“ For the rest, the manner in which he pleaded the British
point of view was highly interesting. Great Britain, he
argued, had done great things in the past, but owing to her
great wealth a decline had set in in the course of the last
few decades. (‘Traces of this development,’ he added,
“have also been noticeable in your country.’) Germany,
however, had made immense progress, and within the next
fifteen or twenty years she would overtake Great Britain.
If, then, such a dangerous competitor commenced to increase
his armaments in a manner which could be directed
only against Britain, he must not be surprised if the latter
made every effort to check him wherever his influence was
felt. Great Britain, therefore, could not remain passive
if Germany attempted to dominate the whole Continent ;
because this, if successful, would upset the Balance of Power.
Neither could she hold back in case Germany attacked and
annihilated France. Thus, the situation being what it was,
Britain was compelled—provided the proposed agreement
with Germany was not concluded—to decide whether she
would wait until her competitor had become still stronger
“and quite invincible, or whether she would prefer to strike
at once. The latter alternative, he thought, would be the
safer for her interests.

“ Our friend had a copy of the German note made by his
secretary, and then forwarded it to Haldane. In the course
of the evening the latter sent an acknowledgment of its

174 Albert Ballin

receipt, from which Sir Ernest read out to me the words:
‘So far very good.’ It was evident that his friend’s opinion
had favourably influenced his own views on the German
note.

“On Tuesday Sir Ernest and Lord Haldane drove to the
former’s house after having attended Thanksgiving Service.
Lord Haldane stayed for lunch, and was just leaving when
I arrived at 3 o’clock. He did not want to be accompanied
by a naval expert, for, although he did not pretend to. under-
stand all the technical details, he said that he knew all that
was necessary for the discussion. He stated that he would
put all his cards on the table and speak quite frankly.

“Our friend spoke of our German politics in most dis-
paraging terms, saying that they had been worth nothing
since Bismarck’s time. What Ballin had attained in his
dealings with the shipping companies was far superior to
all the achievements of Germany’s diplomatists.”

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:

Politics 175

“THE CASTLE, BERLIN.
“ Dear BALLIN, “9.2.1912. 6 P.M.
“The conversation has taken place, and all the pros
and many cons have been discussed. Our standpoint has
been explained in great detail, and the Bill has been examined.
At my suggestion, it was resolved to agree on the following
basis (informal line of action) :

“ (1) Because of its scope and its importance, the Agree-
ment must be concluded, and it must not be jeopardized by
too many details.

“ (2) Therefore, the Agreement is not to contain any refer-
ence to the size of the two fleets, to standards of ships, to
constructions, etc.

“ (3) The Agreement is to be purely political.

““(4) As soon as the Agreement has been published here,
and as soon as the Bill has been laid before the Reichstag,
I, in my character of commander-in-chief, instruct Tirpitz
to make the following statement to the Committee: The
third squadron will be asked for and voted, but the building
of the three additional units required to complete it will
not be started until 1913, and one ship each will be demanded
in 1916 and Ig1g respectively.

“Haldane agreed to this and expressed his satisfaction.
I have made no end of concessions. But this must be the
limit. He was very nice and very reasonable, and he per-
fectly understood my position as commander-in-chief, and
that of Tirpitz, with regard to the Bill. I really think I
have done all I could do.

“ Please remember me to Cassel and inform him.

“Your sincere friend,
“ (Signed) WILHELM I.R.”

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 unfor-
tunately 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 dis-
cretion. The passage which German opinion resented

176 Albert Ballin

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.
“ DEAR Mr. BALLIN, “ 2.3.1912.

“ Our supposition that it is the contents of the Bill
which have brought about the change of feeling is con-
firmed by news from a private source. It is feared that
the Bill as it stands will have such an adverse influence on
public opinion that the latter will not accept a political
agreement along with it. Nevertheless, the idea of an
understanding has not been lost sight of, even though it
may take six months or a year before it can be accomplished.

“In consequence of this information the draft reply to
London requires to be reconsidered, and it has not been
dispatched so far. I shall let you know as soon as it has left.

“ Sincerely yours.
“ (Signed) BETHMANN-HOLLWEG.”

“ BERLIN,
“DEAR Mr. BALLIN, “8.3.1912.

“This is intended for your confidential information.
Regarding the naval question Great Britain now, as always,
lays great stress on the difficulty of reconciling public opinion
to the inconsistency implied by a big increase in the Naval
Estimates hand in hand with the conclusion of a political
and colonial agreement. However, even if an agreement
should not be reached, she hopes that the confidential rela-
tions and the frank exchange of opinions between both
Governments jwhich have resulted from Lord Haldane’s
mission may continue in future. The question of a colonial

understanding is to be discussed in the near future.
“It is imperative that the negotiations should not break
down. Success is possible in spite of the Navy Bill if the
discussions are carried on dispassionately. As matters

Politics 177

stand, the provisions of the Bill must remain as they are.
Great Britain has no right to interfere with our views on the
number of the crews which we desire to place on board our
existing units. As far as the building dates of the three
battleships are concerned, I should have preferred—as you
are aware—to leave our hands untied, but His Majesty’s
decision has definitely fixed 1913 and 1916 as the years for
laying them down, This is a far-reaching concession to
Great Britain.

“ Discreet ‘support from private quarters will be appre-
ciated.

“Many thanks for your news. You know that and why
I was prevented from writing these last few days.

“Sincerely yours,
“* (Signed) BETHMANN-HOLLWEG.”

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:

(rt) 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.

178 Albert Ballin

(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. “TI
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 battle-
ships. 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 tor-
pedo 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, accord-
ing 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

Politics 179

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 explana-
tions 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 goth
and roth, is as follows:

“ Our friend arrived about four hours late, but he received
me all the same at 10 P.M. on that evening. I told him all
about my journey and related to him verbally the contents
of Ballin’s letter. When I described the incident of how
Grey had raised new objections at his interview with Metter-
nich, and when I explained how, after that, the matter had
come to a dead stop, so that nothing further was heard of
it in Germany, our friend interrupted me by saying that
since then the British Government had presented a memoran-
dum containing the objections raised against the German
Navy Bill. The latter, he suggested, was the only stumbling-
block, as could be inferred from a letter which he had received
en route from Haldane.

“When I remarked that Ballin, in a postscript to his
letter, had expressed an apprehension lest some foreign
influence had interfered with the course of events, our friend

180 Albert Ballin

positively denied this. France, he said, was on good terms
with Great Britain, and had no reason for intriguing against
an Anglo-German agreement destined, as it was, to promote
the cause of peace.

“When I then proceeded with my account, drawing his
special attention to the reduction of the estimates contained
in the Navy Bill, Sir Ernest interposed that he was not
sufficiently au courant as to the details. He himself, in his
statement prepared for the British Government, had only
referred to the battleships, and he thought he had per-
haps given too cursory an account of the other factors of
the case. He also threw out some fairly plain hints that
Haldane had gone too far in Berlin, and that he had made
statements on a subject with which he was not sufficiently
conversant. Later on, he continued, the Navy Bill had been
subjected to a careful examination by the British Admiralty,
and before his departure from Cannes he, Sir Ernest, had
received a letter from Mr. Churchill, the tone of which was
very angry. Churchill complained that Germany had pre-
sented such a long list of the wishes with which she wanted
Great Britain to comply, that the least one could hope for
was an accommodating spirit in the question of the Navy.
Everything now depended on Churchill; if he could be
satisfied, all the rest would be plain sailing. He and Lloyd
George were the greatest friends of the agreement. Sir
Ernest also made it fairly clear that Great Britain would
be content with a postponement of the building dates, or
in other words with a ‘ retardation of the building programme.’
The negotiations would be bound to fail, unless Ballin could
secure such a postponement. It was necessary to strike
whilst the iron was hot, and this particular iron had already
become rather cool. He quite accepted Grey’s statement
that the Haldane mission had not been in vain, as the feeling
had doubtless become more friendly since then. Some few
individual indiscretions, such as Churchill’s reference to the
German Navy as an article of luxury, should not be taken
too seriously. If the German Bill were passed into law in
its present shape, the British Government would be obliged
to introduce one asking for three times as much, but it could
not possibly do this and declare at the same time that it had

—

Politics 181

reached an understanding with Germany. Such a pro-
ceeding would be absurd. The argument that it is incon-
sistent with common sense to conclude an agreement and
yet to continue one’s armaments, is evidently still maintained
in Great Britain, and is one which, of course, it is impossible
to refute.

“In the course of our conversation Sir Ernest produced
the letter which he had received from Haldane en route.
This letter stated that the discussions with Metternich were
then chiefly on the subject of the Navy Bill, and that the
Admiralty had prepared a memorandum for the German
Government dealing with these questions. The letter was
dated February 25th, and its tone was not pessimistic ;
Churchill, however, as stated above, had previously written
him a ‘very angry’ letter. In this connexion it must not
be forgotten that the man on whom everything depends is
not the amiable negotiator Haldane, but Churchill.”

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 :

“ Owing to the brief time at my disposal when I was in
Paris, I could only learn the views of the members of the
* haute finance.’ It is well known that in France the attitude
taken up by financial circles is always regarded as authorita-
tive. They look upon the present situation as decidedly
pacific ; they are pleased that the Morocco affair is settled,
and they feel quite sure that the political sky is unclouded by
complications. They would gladly welcome an agreement
between Germany and Great Britain. My friends assure me
that the Government also does not view the idea of such an
understanding with displeasure ; on the contrary, it looks upon
it as an advantage. It is, however, thought unlikely that an
agreement will be reached, because it is believed that popular
feeling in Germany is too much opposed to it. If, notwith-

182 Albert Ballin

standing these pacific views held by influential and competent

sections, the casual visitor to the French capital is impressed
by a certain bellicose attitude of the nation as a whole, it is
largely due to the propaganda carried on by the Matin with
the purpose of obtaining voluntary subscriptions for the
furtherance of aviation. The French are enthusiastic over
this idea, and as it has a strong military bearing, the man in the
street likes to connect the French aviation successes with a
victorious war.”

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 there-
fore be most desirable to arrange for a meeting of experts
toclear up this discrepancy. Ballin’s impression was that
the British Cabinet, and also the King, were still favour-
ably 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

Politics 183

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 con-
cerning 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 Govern-
ment 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 roth in reply to Ballin’s information
about his last exchange of telegrams with London :

“Many thanks for letter. The latest proposals arriving
here immediately after you had left raised impossible demands
and were so offensive in form that they were promptly
rejected. Further harm was done by Churchill’s arrogant
speech which a large section of the British press justly described
as a provocation of Germany. The ‘agreement’ has thus
been broken by Great Britain, and we have done with it.
The negotiations must be started afresh on quite a different
basis. What apology has there been offered to us for the
passage in the speech describing our fleet as an article of luxury?

“ (Signed) WILHELM I.R.”
M

184 Albert Ballin

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

* DEAR Mr. BALLIN,

‘‘ My cordial thanks for your letter of the 18th. What
your friend told Metternich is identical with what he wired
you. Churchill’s speech did not come up to my expectations.
He really seems to be a firebrand past praying for. The Army
and Navy Bills will probably not go up to the Federal Council
until the 21st, as the Army Bill requires some amendments
at the eleventh hour. Their contents will be published
simultaneously.

“ My opinion is that our labours will now have to be
stopped altogether for some time. The problem before us
suffers from the defect that, because of its inherent difficulties,
it admits of no solution. I shall always remain sincerely
grateful to you for your loyal assistance. When you come to
Berlin next time, please don’t forget to call at the Wilhelm-
strasse. “With kindest regards,

“Sincerely yours,
“ (Signed) BETHMANN-HOLLWEG.”

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 sin-
cerity 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

Politics 185

Ballin’s own standpoint was with regard to the views
described in the previous paragraph :

“‘ People over here,” he wrote, ‘“ do not believe that nego-
tiations with Great Britain on the subject of a naval agreement
could possibly be crowned with success, and you yourself
contend that it would have been better if such negotiations
had never been started. Your standpoint is that the failure of
any efforts in that direction would merely tend to aggravate the
existing situation, a point of view with which I entirely
concur.

“ On the other hand, however, you cannot deny the sound-
ness of the argument that, if the responsible leaders of British
naval policy keep expressing their desire to enter into a dis-
cussion, the refusal of Germany to do so must cause the British
to believe that we are pursuing aims far exceeding
those we have openly avowed. My somewhat fatigued
brain is unable to see whether the German contention is
right or wrong. But naturally, I always look upon things
from the business man’s point of view, and so I always think
it better to come to some kind of an agreement with a
competitor rather than allow him an unlimited measure of
expansion. Once, however, I have come to the conclusion
that for financial or other reasons this competitor can no longer
keep pace with me, his further existence ceases altogether
to interest me.

“‘ Thus the views of the expert on these matters and those
of the business man run counter to each other, and I am en
titled to dismiss this subject without entering upon a discussion
of the interesting and remarkable arguments which Winston
Churchill put before me last night. I cannot, however,
refrain from contradicting by a few brief words the contention
that the motives which had prompted the Haldane mission
were not sincere. A conversation with Sir Edward Grey
the night before last has strengthened this conviction of mine
still further. I regard Sir Edward as a serious, honest, and
clever statesman, and I am sure you will agree with my view
that the Haldane mission has cleared the atmosphere surround-
ing Anglo-German relations which had become very strained.”

186 Albert Ballin

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 develop-
ment 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 per-
fectly frank and honest statement concerning the naval
rivalry of the two Powers. Among other things it con-
tained 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 under-
standing, I spread broadcast all over the country. How-
ever, 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, sz 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

Politics 187

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:

“The impression which has taken root with me during
the many hours which I spent as an attentive listener is that
your broad-minded scheme is being wrecked by our official
circles, partly through their clumsiness, and partly through
their bureaucratic conceit, and—which is worse—that we have
failed to show ourselves worthy of the great opportunity.”

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 con-
clusion 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 Ger-
many’s opponents, and his resignation—-which, as usual,

188 Albert Ballin

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 ambas-
sador, 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 influ-
enced 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. Kiihlmann, the then Secretary to
the Legation and subsequent Secretary of State. The
public did not see a deal of his work, which was con-
ducted 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

Politics 189

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”’ (“ Ger-
man World Power and No War”), published in 1913
by Messrs. Puttkamer & Miihlbrecht, 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. Kiihlmann.

In this connexion I should like to refer briefly to an
episode which took place towards the close of Ig12.
The German periodicals have already discussed it,
especially the Siddeutsche 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 re-
ports 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 rela-
tions between Vienna and Petrograd, he wrote, had

190 Albert Ballin

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.

“The Slav subjects of Austria,” the letter continued,
“had become very restless, and could only be brought to
reason bythe resolute action of the whole Dual Monarchyagainst
Serbia. Austria had arrived at the cross roads, and her whole
future development hung in the balance. Either the German
element would retain its ascendancy, in which case she would
remain a suitable ally, or the Slav element would gain the
upper hand, and she would cease to be an ally altogether.
If we were compelled to take up arms, we should do so to
assist Austria not only against Russian aggression, but also
against the Slavs in general, and in her efforts to remain
German. That would mean that we should have to face a
racial struggle of the Germanic element against Slav
insolence. It is beyond our power to prevent this struggle,
because the future of the Habsburg monarchy and that of our
own country are both at stake. (This was the real meaning
of Bethmann’s very plain speaking.) It is therefore a question
on which depends the very existence of the Germanic race
on the continent of Europe.

“It was of great importance to us that Great Britain had
so far supportedtheAustro-German standpoint in these matters,
Now, since a war against Russia would automatically imply a
war with France as well, it was of interest to us to know
whether, in this purely continental case, Great Britain could
and would declare her neutrality in conformity with her
proposals of last February.

““On December 6th, Haldane, obviously sent by Grey,
called on Lichnowsky and explained to the dumbfounded
ambassador in plain words that, assuming Germany getting
involved in war against Russia and France, Great Britain
would not remain neutral, but would at once come to the
assistance of France. The reason given for this attitude was
that Britain could not and would not tolerate at any time
that we should acquire a position of continental predominance

Politics I9QI

which might easily lead to the formation of a united
continent. Great Britain could therefore never allow France
to be crushed by us. You can imagine the effect of this piece
of news on the whole of the Wilhelmstrasse. I cannot say
that I was taken by surprise, because I, as you know, have
always looked upon Great Britain as an enemy in a military
sense. Still, this news has decidedly cleared matters up,
even if the result is merely of a negative character.”

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 :

“In my dispatches sent to Berlin I pointed out again and
again that Great Britain, being a commercial country, would
suffer enormously through any war between the European
Powers, and would prevent it by every means within her
power. At the same time, however, she could never tolerate
the weakening or the crushing of France, because it would
disturb the Balance of Power and replace it by the ascendancy
of Germany. This view had been expressed to me by Lord
Haldane shortly after my arrival, and everybody whose
opinion counts for anything told me the same thing.”’

192 Albert Ballin

The failure of the negotiations aiming at an under-
standing 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 possi-
bilities 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 over-
taken 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 Fiiyst 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

193

194 Albert Ballin

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 care-
fully 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

The Kaiser 195

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 Packet-
fahrt 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

196 Albert Ballin

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 con-
vinced that Germany, tor 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 satis-
factory 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

The Kaiser 197

natural that the monarch could not be expected to be
sufficiently acquainted with all the practical considera-
tions 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 com-
pany’s excursion trips. How keen it was may be in-
ferred 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 establish-
ment 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

198 Albert Ballin

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 con-
ditions 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 par-
ticularly practical form. Ballin had suffered a great
deal from neuralgic pains which, in spite of the treat-
ment of various physicians, did not really and permanently
diminish until the patient was taken in hand by Pro-
fessor 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.

*“ As early as January, 1904,” Ballin remarks in his notes,
“the Kaiser had sent a telegram inviting me to attend the
Ordensfest celebrations in Berlin, and during the subsequent
levee he favoured me with a lengthy conversation, chiefly

The Kaiser 199

because he wanted to tell me how greatly he was alarmed at
the state of my health. His physician, Professor Leuthold,
had evidently given him an unfavourable account of it. The
Kaiser explained that he could no longer allow me to go on with-
out proper assistance or without a substitute who would do
my work when I was away for any length of time. This
state of things caused him a great deal of anxiety, and, as it
was a matter of national interest, he was bound to occupy
himself with this problem. He did not wish to expose himself
to a repetition of the danger—which he had experienced in the
Kruppcase—that a large concern like ours should at any moment
be without a qualified steersman at the helm. He said he knew
that of all the gentlemen in his entourage Herr v. Grumme
was the one I liked best, and that I had an excellent opinion
of him. He also considered Grumme the best man he had
ever had round him, and it would be difficult to replace him.
Nevertheless he would be glad to induce Grumme to join
the services of the Hamburg-Amerika Linie, if I thought that
this would solve the difficulty he had just referred to, and that
such a solution would fall in with my own wishes. He was
convinced that I should soon be restored to my normal
health if I were relieved of some part of my work, and that this
would enable me to do much useful service to the nation and
himself ; so he would be pleased to make the sacrifice. I
sincerely thanked His Majesty, and assured him that I could
not think of any solution that I should like better than the one
he had proposed, and that, if he were really prepared to do so
much for me, I would beg him to discuss the matter with
Grumme. That very evening he sent for Grumme, who
immediately expressed his readiness to enter the services of
our company if such was. His Majesty’s pleasure.”

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

N

200 Albert Ballin

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 pro-—
paganda 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 dis- —
continue 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 mer-
cantile 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

The Kaiser 201

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 dis-
cussion; 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 pre-
vented 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

202 Albert Ballin

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:

“ Although we do not possess such a navy as we ought to
have, we have gained a place in the sun. It will now be my
duty to see to it that we shall keep this place in the sun
against all comers . . . I, as the supreme head of the Empire,
can only rejoice whenever I see a Hanseatic citizen—let him
be a native of Hamburg, or Bremen, or Liibeck—striking out
into the world with his eyes wide open, and trying to find a
spot where he can hammer a nail into the wall from which to
hang the tools needed to carry on his trade.”

In 1912 he quoted the motto from the seins
Ratskeller :

“It is easy to hoist the flag, but it costs a great deal to
haul it down with honour.”

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

“We Germans fear God, but —— and nobody
besides.”

The Kaiser 203

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 con-
versations with the Kaiser, e.g. on June 3rd, Igor,
when he had been a member of the Imperial luncheon

party :

204 Albert Ballin

“ After lunch the Kaiser asked me to report on my trip to
the Far East, and he, in his turn, told me some exceedingly
interesting pieces of news relating to his stay in England,
and to political affairs connected with it.”

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

““T received many marks of the Kaiser’s attention, who,
on July 27th, summoned me to Kiel once more, as he wished
to discuss with the Chancellor and me the question of the
Japanese bank.”

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 :

“On December roth (1903) I received a wire asking me
to see the Kaiser at the Neues Palais. To my infinite joy
the Kaiser had quite recovered the use of his voice. He looked
well and fit, and during a stroll through the park I had a long
chat with him concerning my trip to America and other
matters. In February the Kaiser intends to undertake a
Mediterranean cruise on board the Hohenzollern for the benefit
of his health. He will probably proceed to Genoa on board
one of the Imperial mail packets, which is to be chartered for
him.”

\April 1904). “ The Kaiser had expressed a wish to see
me in Italy. On my arrival at Naples I found a telegram
waiting for me in which I was asked to proceed to Messina if
necessary. Owing, however, to the state of our negotiations
with the Russian Government, I did not think it desirable to
meet the Kaiser just then, and thus I had no opportunity of
seeing him until May 3rd when I was in Berlin to attend a
meeting of the Disconto-Gesellschaft, and to confer with
Stiibel on the question of some further troop transports to
South West Africa. I received an invitation to join the
Imperial luncheon party at which the birthday of the Crown
Prince was to be celebrated in advance, since his Majesty would

= id

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a ee

— ———

SS Le eee ee

The Kaiser 205

not be in town on May 6th. The Kaiser’s health had much im-
proved through his cruise ; he had lost some of his stoutness,
and the Kaiserin, too, was greatly pleased to see him looking
so well. We naturally discussed the topics of the day, and
the Kaiser, as always, was full of kindness and goodwill
towards me.”

“On June 21st, 1904, the usual Imperial Regatta took
place at Cuxhaven, and the usual dinner on board the Bliicher.
These events were followed by Kiel Week, which lasted from
June 22nd to 28th. We stayed on board the Victoria Luise,
and I was thus brought into especially close contact with the
Kaiser. I accompanied him to Eckernférde on board the
Meteor, and we discussed the political situation, particularly
in its bearing on the Morocco question and on the attitude of
Great Britain.”

“On June roth, 1904, the Kaiser, the Kaiserin, and some
of their sons were staying in Hamburg. I dined with them
at Tschirschky’s (the Prussian Minister in Hamburg), and
we drove to the races. On June 20th we proceeded to Cux-
haven, where, on board the Deutschland, I heard the news—
which the Kaiser had just communicated to Kaempff (the
captain of the Deutschland)—that the North German Lloyd
steamer Kaiser Wilhelm II, in consequence of her being
equipped with larger propellers, had won the speed record.
Late at night the Kaiser asked me to see him on board the
Hohenzollern, where he engaged me in a long discussion on the
most varied subjects. On June 21st the regatta took place
at Cuxhaven. The Kaiser and Prince Heinrich were amongst
the guests who were entertained at dinner on board the
Deutschland. The Kaiser was in the best of health and spirits.
Owing to the circumstance that Burgomaster Burchard—
who generally engages the Kaiser in after-dinner conversation
—was prevented by his illness from being present, I was
enabled to introduce a number of Hamburg gentlemen to
His Majesty. As the Kaiser had summoned me to dine with
him on board the Hohenzollern on the 22nd, I could not return
to Hamburg, but had to travel through the Kiel Canal that
same night on board-a tug steamer. On the 22nd I stayed at
the club house of the Imperial Yachting Club, whilst at my

we ti ttt

own house a dinner party was given for 36 persons. On the
23rd I changed my quarters to the Prinzessin Victoria
Luise, and the other visitors arrived there about noon. A
special feature of Kiel Week of 1904 was the visit of King
Edward to the Kaiser whom he met at Kiel. For the accommo-
dation of the ministers of state and of the other visitors whom
the Kaiser had invited in connexion with the presence of the
King, we had placed our s.s. Prinz Joachim at his disposal, in
addition to the Prinzessin Victoria Luise. We also supplied,
for the first time, a hotel ship, the Graf Waldersee, all the
cabins of which were engaged. On June 27th my wife and I,
and a number of other visitors from the Prinzessin Victoria
Luise, were invited to take afternoon tea with the Kaiser and
Kaiserin on board the Hohenzollern, and I had a lengthy
conversation with King Edward.”

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 admon-
itions, 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 influ-
ence on His Majesty. Their meetings took place only
very occasionally, and were often separated by intervals

ee ae
a ¥ < = a me

The Kaiser 207

extending over several months, and it happened only in
rare cases that Ballin availed himself of the privilege
of wiiting to the Kaiser in person. It is true that the
latter was always pleased to listen to Ballin’s explana-
tions df his views, and it is possible that every now
and thin he did allow himself to be guided by them ;
but it i; quite certain that he never allowed these views
to exercse 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 argu-
ments were not sufficient to cope successfully with the
influence of others who were the permanent advisers
of the soverdgn, and who had at all times access to His
Majesty.

If thus the effect of Ballin’s friendship with the Kaiser
has frequently heen 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 Ham-
burg-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

208 Albert Ballin

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 prob-
able—that this suggestion was put forward because
such a step would be in harmony with that ‘rame of
mind from which originated such stipulations of the
Versailles treaty as deal with shipping matters, and
with the assumption that German shipping—which was
supposed to depend for its continuance ma‘nly 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 at-
tempted 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 Biilow, 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 friend-
ship between himself and the Kaiser for any ulterior

The Kaiser 209

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 rela-
tions 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 impossi-
bility 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 occa-
sions 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

210 Albert Ballin

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 re-
commendations 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 rgr1, 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 out-
bursts 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.

The Kaiser 2II

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 Chan-
cellors 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 con-
trary, members of the Kaiser’s entourage have con-
firmed 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 para-
graphs 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

212 Albert Ballin

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 dis-
cussions 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

Asout 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 agree-
ments 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 states-
men 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 be-
come somewhat uncertain; but it was thought that he

213

214 Albert Ballin

would ultimately give his consent, and that he would
quieten his own conscience by arguing that the nego-
tiations 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
federis 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 informa-
tion 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

The War 215

Government not only wanted some information regard-
ing 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 ques-
tions 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, Hal-
dane, 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 dis-
turbed. Nevertheless, Ballin returned from London on
July 27th with the impression that a fairly capable
German diplomat might even then succeed in bringing

fo)

216 Albert Ballin

about an understanding with Great Britain and France
which, by preventing Russia from striking, would result
in preserving the peace. Great Britain and the

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 provoca-
tion 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 with-
out 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

The War 217

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.

“ Yesterday (on July 24th) I paid a visit to Count Witte
who was staying at Bad Salzschlirf, and in the course of the
day I had several conversations with him, the first of which
took place as early as ten o’clock in the morning. After a
few words of welcome, and after discussing some matters
of general and personal interest, I said to the Count:
‘I should like to thank you for your welcome letter and for
your telegram. The question which you raise in them of a
meeting between our two emperors appears of such funda-
mental importance to me that I may perhaps hope to be
favoured with some details by you personally.’

“Witte replied: ‘In the first instance I wish to reaffirm
what I have repeatedly told you, both verbally and by letter,
viz. that I am not in the least anxious to be nominated
Russian delegate for the proposed negotiations concerning a
commercial treaty between Germany and Russia. Whoever
may be appointed from the Russian side will gain no laurels.
I think a meeting between the Kaiser and the Tsar some time
within the next few weeks would be of very great importance.
Have you read the French papers ? The tone now assumed by
Jules Hedeman is a direct challenge. I know Hedeman, and
I also know that he only writes what will please Sasonov,
Poincaré and Paléologue (the French ambassador in Petro-
grad). Now that the Peterhof meeting has taken place the
language employed by all the French and Russian papers will
become more arrogant.than ever. It is quite certain that the
Russian diplomatists and their French colleagues will now
assume a different tone in their intercourse with the German
diplomatists. The vapprochement with Great Britain is
making considerable progress, and whether a naval conven-
tion exists or not, Great Britain will now side with Russia and
France. If even now a meeting could be arranged between
the two Emperors, this would be of immense significance.
The mischief-makers both in Russia and in France would

218 Albert Ballin

be made to look small, and public opinion would calm
down again.”

“I asked Witte: ‘Do you think, Sergei Yulyevitch,
that the Tsar would avail himself of a possible opportunity
of meeting the Kaiser ?’ .

“Witte replied: ‘I am firmly convinced of it; I may,
indeed, state without hesitation that the Tsar would be
delighted to do so. The personal relations between the
Tsar and the Kaiser are not of an ordinary kind. They
converse with each other in terms of intimate friendship,
and each time the Tsar has had a chat with the Kaiser he
has been in better spirits. Believe me, if this meeting comes
off, the impression which the French visit has left on the Tsar
will be entirely wiped out. The effect of the showy reception
of the French visitors which the press agitators have not
failed to use for their own ends will be obliterated. Such a
meeting will express in unambiguous terms that, whatever
value the Tsar attaches to the Franco-Russian alliance, he
insists on the maintenance of amicable relations with Germany.
The meeting will have to be arranged without loss of time,
in about four or six weeks, because in two months from now
the Tsar will be leaving for Livadia. The army manceuvres
will be held within the next few weeks, and the Tsar will
then go to the Finnish skerries where, in my opinion, the
meeting might take place without difficulty.’

“TI asked Witte: ‘ Do you not think that, if the meeting
were officially proposed by Germany, it might be looked
upon as a sign of weakness on her side, especially in view of
the now existing tension between the two countries ?’

“Witte replied: ‘By no means. One has always to
take into account the fact that the relations between the
Tsar and the Kaiser, as I explained before, are in the highest
degree friendly and intimate. I do not know how the Kaiser
would feel on the subject, but I am convinced that he is
possessed of the necessary political sagacity to find the way
that will lead to a meeting. He might, e.g., write to the Tsar
quite openly that, as the relations between their two countries
had lately been somewhat under a cloud in consequence of
the inefficient diplomacy of their respective representatives, he
would be particularly happy to meet him at this juncture,

The War — 219

Or the suggestion might reach the Tsar via the Grand Duke
of Hesse and his sister, the Tsarina. But this is immaterial,
because the Kaiser is sure to find the right way. I can only
repeat that the effect of the meeting would be enormous.
The Russian press and Russian society would change their
whole attitude, and the agitation in the French press would
receive a severe setback.’

“T said to Witte: ‘I shall communicate the gist of our
conversation to Mr. Ballin. As it is quite possible that he
will be ready to endorse this suggestion, I should like to know
your answer to one more question, viz., whether, if Mr. Ballin
were to submit the proposal to the proper quarters, you would
allow him to refer to you as the originator of the suggestion.’

“Witte replied: ‘Certainly. He may say that I look
upon this meeting as an event of the utmost importance to
both countries at the present moment.’

“TI said: ‘Seeing that you will be leaving Germany.
within five days from now, would you be prepared to go to
Berlin if the Kaiser would receive you unofficially ? ’

“Witte replied: ‘Certainly. At any moment.’

“When we went for a walk in the afternoon, Witte made
reference, amongst other things, to various political questions.
I shall confine myself to quoting only a few of his remarks.

“© Practically speaking,’ he said, ‘I think that there will
be no war, although theoretically the air is thick with diffi-
culties which only a war can clear away. But nowadays
there is nobody who, like William the First, would put his
foot down and say: “‘ Now I will not yield another inch!”
The spot at Ems where this happened is now adorned with
a monument. Within a few years when the armaments
which for the present are on paper only, shall be completed,
Russia will really be strong. But even then, one has still to
reckon with the possibility of internal complications. France,
however, need not fear any such difficulties, because countries
possessing a constitution acknowledged by all their inhabitants
are not liable to revolutionary movements, no matter how often
their governments change.’

“In speaking of Hartwig, Witte remarked: ‘ His death
is the severest blow to Russian diplomacy. He was unques-
tionably the most gifted Russian diplomatist, When Count

220 Albert Ballin

Lammsdorff, who was a great friend of mine, was Minister
for Foreign Affairs, he used to do nothing without first asking
my advice. Hartwig, at that time, was the chief of his de-
partmental staff, and he often came to see me. Even in those
early days I had an opportunity of admiring his eminent
diplomatic gifts.’ ’’

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 pro-
ceeded 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 com-
paratively few of them were lost in the early part of

The War 221

the war. By August 5th the cables had been cut. This
circumstance made it very difficult to keep up com-
munications 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 busi-
ness 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. Ina 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 enor-
mous shortage of raw materials. Therefore, he said,
if it was desired to guard the country against disagree-

222 Albert Ballin

able surprises, it was imperative to make certain pre-
parations for an economic and a financial mobilization.
The military authorities at least had studied this prob-
lem 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 Liibeck, 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 abso-
lutely no progress worth mentioning. The only prac-
tical 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 and,

. The War 223

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 de-
ficiencies 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 circum-
stance 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 (Govern-
ment 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 con-
sidered 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

224 Albert Ballin

Berlin authorities almost impossible. Added to all this,
there was the inevitable confusion which the replace-
ment 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 informa-
tion to neutral countries concerning the German stand-
point 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 ex-
plained 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 busi-
ness 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

The War 225

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 pre-
sented 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 food-
stuffs needed by the military as well as the civil popula-
tion through one and the same organization. The state

226 Albert Ballin

of things in respect to these matters was simply in-
describable ; 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 unprepared-
ness 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 Zeniral-Einkaufs-
Gesellschaft (Central Purchasing Corporation). The his-
tory 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. Gener-
ally 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 neces-

The War 227

sary 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 condi-
tions. To-day it is scarcely possible to realize how diffi-
cult 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 coun-

228 Albert Ballin

tries 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 re-
building 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 dis-
posal 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 in-
dustry 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 Govern-
ment 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

EEE

The War 229

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 com-
pensation 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:

230 Albert Ballin

“When Your Excellency decided to permit the sale of
our vessels in the United States it was too late to do so,
because the U.S. Government had already seized them.
Previous to that, when we saw that war would be inevitable,
and when we had received an exceedingly favourable purchas-
ing offer from an American group, we had asked permission
to sell part of our tonnage laid up in that country.

“Your Excellency, acting on behalf of the Chancellor,
declined to grant this permission. I am quite aware that
neither the Chancellor nor Your Excellency as his representa-
tive were responsible for this refusal, but that it was due to
a decision of the Admiralty Staff. However, the competent
authority to which the protection and the furtherance of
the country’s shipping interests are entrusted is the Ministry
of the Interior. With the Admiralty Staff itself, as I need not
remind Your Excellency, we have no dealings whatever,
and we are not even entitled to approach that body directly
in such matters.

“Our company which was the biggest undertaking of its
kind in the world, and which previous to the war possessed
a fleet aggregating about 1,500,000 tons, has lost practically
all its ships except a very few. The losses are not so much
due to capture on the part of the enemy as to the measures
taken by our own Government. If our Government had acted
with the same foresight as did the Austro-Hungarian Govern-
ment with respect to its ships in United States and Chinese
waters, the German vessels then in Italy, Portugal, Greece,
the United States, Brazil, and elsewhere, might have been
either retained by us or disposed of at their full value.

“The Austrian ships, with their dismantled engines were,
at the instance of the Austrian Government, sold in such good
time that the shipping companies concerned are not only in
a position to-day to refrain from asking their Government to
pass a Shipowners’ Compensation Bill, as we are bound to do,
but they have even enriched the Austrian national wealth by
such handsome additions that their capital strength has
reached a sum never dreamt of before, and that they are now
able to rebuild their fleet by drawing upon their own funds,
and to make such further additions to their tonnage that in
future we shall not only be compelled to compete with the

The War 231

shipping companies of neutral and enemy countries—which
have accumulated phenomenal profits—but with the Austrian
mercantile marine as well.

“From the point of view of our country’s economic
interests it is greatly to be regretted that the policy of the
Government has not changed in this respect even now. We
have received reliable news from private sources to the effect
that the engines of the German vessels now in Argentine
waters have been destroyed without Your Excellency having
so far informed us of this action, and without Your Excellency
having asked us to take steps to utilize the vessels, if possible,
for the benefit of the country’s economic interests and for that
of the completely decimated German merchant fleet.

“Moreover, a wire sent by His Excellency Herr v. Jon-
quiéres to the competent Hamburg and Bremen authorities
states that the ships in Uruguayan waters are also in great
jeopardy. The Government of that country, according to
this report, would prefer to purchase them rather than con-
fiscate them. After what has been done before, we fear that
the Admiralty Staff will either not permit the sale at all, or
only grant its permission when it is too late.

“ Your Excellency, I am sure, is fully aware of the fact
that the methods of the Admiralty Staff—ignoring, as it does,
all other considerations except its own—have caused one
country after the other to join the ranks of Germany’s
enemies. In view of the shortage of tonnage which Great
Britain and other of our enemies systematically try to bring
about—evidently with the intention of inconveniencing
neutral countries as much as possible—these latter feel com-
pelled, for the very reason of this lack of tonnage, to declare
war upon us, because the politics of our country are guided
by a body of men who, unfortunately, shut their eyes to
the economic and political consequences of their decisions.

“Several months ago, at a time when nobody thought of
unrestricted submarine warfare, an opportunity presented
itself to us of concluding an agreement with the Belgian
Relief Committee by which it would have been possible for
us to withdraw our steamers, one after the other, from
American ports and, under the flag of that committee, to
bring them to Rotterdam. At that time, it was again the

P

232 Albert Ballin

Admiralty Staff which prevented the conclusion of this agree-
ment, because, for reasons best known to itself, it would grant
permission for only three of these vessels, although Great
Britain had agreed that the whole of our fleet interned in
U.S. ports, representing 250,000 tons in all, could sail under the
terms of the proposed agreement, and although the Allies as a
whole had signed a written declaration to the effect that they
would not interfere with our ships so long as they were used for
the provisioning of Belgium. I took the liberty of pointing
out to Captain Grashoff, the representative of the Admiralty
Staff, that nothing could have prevented us from letting the
ships remain at Rotterdam after they had completed their
mission, and that afterwards, as has been borne out by later
facts, they could have been safely taken to Hamburg.

“I respectfully ask Your Excellency whether it is not
possible to enter a protest against such unnecessary dis-
memberment of part of the German national assets. . .

- . I must also protest most emphatically against the

insinuation—which is sure to be made—that I have no right ©

to criticize any steps which the Admiralty Staff has regarded
as necessary for reasons of our naval strategy. Without
reservation the German shipowners agree to any measures
which are strategically necessary, however greatly they may
injure their interests. The criticism which I beg to make on
behalf of German shipping—although possessing no formal
mandate—concerns itself with those steps which might have
been taken without jeopardizing the success of our naval
strategy if the vital necessities of German mercantile shipping
had been studied with as much consideration as this branch
of the economic activities of our country has a right to
claim.

‘“‘ What we principally take exception to in this connexion
is that no information was sent to us before the decision to
destroy the engines of our ships was arrived at, and that we
were not assisted in making use of these dismantled vessels
in the financial interests of our country. Nothing of this
kind was done, although it was the most natural thing to do
so, and although such action would have deprived many a
country of a reason to declare war upon Germany.”

The War 233

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 organiza-
tion, 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, be-
cause 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 dis-
appointment to him to find how greatly he was mis-
taken, and to see that the forces of unreason remained
in the ascendancy, especially as he was always con-
vinced 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

234 Albert Ballin

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
Ig17 was such that the establishment of direct contact
between the two sides was imminent. Then the un-
restricted 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 vic-
tory. No other mediation scheme with which I am
acquainted has been pursued with so much unselfishness,
devotion, and energy as this one. This attempt, how-
ever, 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 Frankfirter Zeitung
on January Ist, 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

The War 235

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 under-
standing 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 annexa-
tions. 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 accusa-
tions implied by describing him as “ pacificist’”’ and
“ pro-English.”

“Tf,” he wrote, “the fact that I have been privileged
to spend a considerable part of my life in close contact with
you, entitles me to add a few personal remarks, I should like to
say that I have made up my mind to retire from my post after

236 Albert Ballin

the end of the war altogether. I told you shortly after the
outbreak of the war that my life’s work was wrecked. To-
day I am convinced that it will soon come to life again, but
my youth would have to be restored to me before I could ever
dream of taking up again that position in international shipping
which I held before the war. I cannot imagine that I would —
ever go to London again and take the chair at the conferences
at which the great problems of international shipping would
come up for discussion, and nobody, I think, can expect that
I should be content to play second fiddle at my age. Indeed,
I cannot see how I could ever re-enter upon intimate relations
with the British, the French, the Italians, and es

with the Americans. Strangely enough, influential circles
on our side, and even His Majesty himself, look upon me as
‘ pro-English,’ and yet I am the only German who can say
with truth that he has been fighting the English for suprem-
acy in the shipping world during the last thirty years. During
this long period I have, if I am allowed to make use of so bold
a comparison, conquered one British trench after the other,
and I have renewed my attacks whenever I could find the
means for doing so.”

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 Ger-
many 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 débdcle.

The following notes, which are largely based on
Ballin’s own diary, are intended to supplement the

The War 237

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 sur-
prise, and he did not think that the struggle would
last very long. “ The necessities of the world’s com-
merce 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 head-
quarters 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 Ist, 1914, he wrote to Grand Admiral v. Tirpitz :

«ce

. . « I quite agree with what you say in your welcome
letter. Indeed, you could not view these matters! with
graver anxiety than I do myself. I hope I shall soon have
the opportunity I desire of discussing these things with you
personally.

“To win the peace will be hardly less difficult than to
win the war. My opinion is that the result of this world war,
if it lasts 12 months, will be exactly the same as if it lasts six
months. I mean to say that, if we do not succeed in acquiring
the guarantees for our compensation demands within a few
months, the further progress of events will not appreciably
improve our chances in this direction.

1 This refers to the political events in Berlin immediately prior
to the outbreak of war.

238 Albert Ballin

“What we must aim at is a new grouping of the Powers
round an alliance between Germany, Great Britain and
France. This alliance will become possible as soon as we
shall have vanquished France and Belgium, and as soon as
you shall have made up your mind to bring about an
understanding with Great Britain concerning the naval
programme.

“T am aware that this idea will find but slight favour with
you, but you will never secure a reasonable peace with Great
Britain without a naval agreement.

“ By areasonable peace I mean one which will enable both
Germany and Britain to sheathe their swords in honour, and
which will not burden either nation with a hatred which
would contain within it the germs of future war.

“ We have had no difficulty in putting up with the French
clamour for revanche for a period of 44 years, because in this
case we had only to deal with a small group of nationalist
firebrands, but a British clamour for revenge would produce
an exceedingly adverse effect on the future of our national
well-being and of our share in the world’s trade and commerce.

“For a long time past it has been my conviction that the
era of the super-Dreadnoughts has passed, and some time ago
I asked Admiral von Miiller if it was not possible to consider
the question of a naval understanding simply on the basis
of an agreement as to the sum of money which either Govern-
ment should be entitled to spend annually on naval construc-
tion, leaving it to the discretion of each side how to make use
of the money agreed upon for the building of the various
types of ships.

“ Great Britain is putting up a fight for her existence just
as much as we do, if not to an even greater extent. Her con-
tinuance as a world power depends on the superiority—the
numerical superiority at least—of her navy.

“T am convinced—always supposing that we shall succeed
in conquering France and Belgium—that the British terms
concerning her naval supremacy will be very moderate, and
I cannot help thinking that a fair understanding regarding
naval construction is just as important to Germany as it is
to Great Britain.

“The present state of things is the outcome of a circulus

The War 239

vitiosus, and is bound to produce a soreness which will never
permit of a sound understanding... .

. - And what about the further course of the war ?
I sincerely hope that your Excellency will not risk the navy.
The expression ‘The Fleet in being’ which has never left
my memory, and which has lately been heard of again, implies
exactly all I mean.

“ The navy, in my opinion, has never been, and never ought
to be, anything but the indispensable reserve of a healthy
international policy. Just as a conscientious director-
general would never dream of reducing the reserve funds of
his company, unless compelled to do so by sheer necessity,
we ought not to drag the navy into the war, if it could pos-
sibly be avoided.

“What would it profit you to risk a naval battle on the
high seas? Not only our own, but British experts as well,
believe that our ships, our officers, and our crews are superior
to the British, and King Edward emphasized at every oppor-
tunity that the crews on British warships are not a match
to those on German vessels. But what are you going to do?
Are you going to make them fight against a numerically
superior enemy ? Such a course would be open to great objec-
tions, and even, if the battle turned out successfully, the
victors would not escape serious damage.

“IT do not know how your Excellency, and their
Excellencies v. Miiller and Pohl look upon these matters,
but since you yourself have asked me to state my views, I
hope you will not take it amiss if my zeal causes me to enlarge
upon a subject which is not quite within my province. Besides,
I have another reason for doing so.

“It is our duty to prepare ourselves in good time for the
peace that is to come, Does your Excellency believe it
would augur well for the future peace if Germany succeeded
in inflicting a naval victory on the British? I do not think
so myself, but I rather fancy that the opposite effect would
take place. . . . If the British should suffer a big naval
defeat, they would be forced to fight to the bitter end.
That is inherent in the nature of things ; even those who can
only argue in terms of a Continental policy must understand it.

“Even a partial loss of her naval prestige would spell

240 Albert Ballin

ruin to Great Britain. It would imply the defection of the
great dominions which now form part of her world empire.
The raison d’ére for Great Britain’s present position ceases
to exist as soon as she has lost her naval supremacy. . . «

“. . . And, please, do not lose sight of one further
consideration. | We must find our compensation by an-
nexing valuable territories beyond the seas; but for the
peaceful enjoyment of such overseas gains we shall be depen-
dent on the good will of Great Britain. . . . At present,
men of German blood occupy leading positions in the economic
life of almost every British colony, and the open door has been
the means by which we have acquired a great deal of that
national wealth of ours which caused the smooth working of
our financial mobilization when the war broke out.

“. . , For all these reasons I consider it a great mistake
that the press should be allowed to excite German public
opinion against Great Britain to the extent it is done. I was
in Berlin during the week, and I was alarmed when I became
acquainted with the wild schemes which are entertained not
only by the people of Berlin, but also by distinguished men
from the Rhineland and Westphalia.”

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 éxpressed his fears on this
account in a letter to a friend of his amongst the Kaiser’s
entourage in which he wrote:

“I hope you will soon be able to induce His Majesty to
remove his winter quarters to Germany. My common
sense tells me that, if a war is waged on French and Russian
soil, the headquarters ought to be situated in Germany.
From the point of view of security also I consider this very
desirable, and I feel a great deal of anxiety concerning
His Majesty. . . . Whether it is wise to exercise the
censorship of the press to the extent it is doné, is a question

a SS

The War 241

on which more opinions than one are possible. . . . I have
just had a call from a Mr. X., a former officer, and an exceed-
ingly reliable and capable man. He complained bitterly of
the rigid censorship, and he thought it would be a mistake
from which we should have to suffer in days to come. It
would certainly be a blessing if such a man who is highly
esteemed by the Foreign Office could be given a chance of
explaining his views at headquarters.”

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 Ger-
many’s enemies. Ballin did all he could to bring about
the Italian mission of Prince Biilow. He not only
urged the Chancellor to select Biilow 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 question of provisioning the German people,” he
wrote in a letter to the Army Headquarters, “is closely
connected with the solution of the Italian and Roumanian
difficulties. No pressure is, in my opinion, too strong in order
to make it perfectly clear to Austria that some sort of an
agreement with Italy is a sime qua non for the successful ter-
mination of this war. Ifit were argued that Italy would come
forward with fresh demands as soon as her original claims had
been satisfied, I think the German Government could combat
this objection by insisting upon a written promise on the
part of Italy to the effect that she would not extend her
demands.

““. . . . Political and military considerations make it
plain beyond any question of doubt that Italy, who will be
armed to the teeth in March, will not be able to lay down
her arms again unless Austria arrives at an understanding

242 Albert Ballin

with her. Thus our greatest danger is the uncertainty as to
what these neutrals will do, and I hope that the ministerial
changes in Austria will smooth the way for a reasonable
attitude towards this regrettable but unavoidable necessity.
Our aim should be to prevent the scattering of our forces;
for the burden imposed upon ourselves because of the inade-
quacy of our allies is almost superhuman, and contains =
danger of exhaustion.”

The German mission to Italy suffered through the
vacillations of Austrian politics, and was therefore
doomed to failure. Austrian feeling concerning a com-
promise 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 un-
willingly. The proposed compromise was looked upon
as a heavy sacrifice, and people were by no means favour-
ably disposed towards German mediation. Prince Biilow
was accused of having “ presented Italy with the Tren-
tino.” 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 repre-
sentation 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 Aus- —
trian 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

The War 243

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 Ger-
many’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 con-
cerned, 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 Stiirgkh, and with the Minister v.
Koerber, as well as those with other influential person-
ages, confirmed these impressions, and he left Vienna
buoyed up by the hope that the conference between
. German, Austrian, and Italian delegates which it was pro-
posed 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 im-

te! I =
4S ae

244 Albert Ballin

portance 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:

. . » June 21st, 1915. The news which I received from
X. regarding the political situation in Roumania and Bul-
garia was so serious that I felt bound to send copies of these
letters to the Chief of the General Staff, General v. Falkenhayn,
and to inform him that, in my opinion, our Foreign Office had
now done all it could possibly do, and that nothing but some
forcible military pressure such as he and Baron Conrad
could exercise on Count Tisza would induce this obstinate
gentleman to settle his differences with the Balkan
States... .”
“. . . On this occasion X. expressed a great deal of
contempt at the suggestion that we should draw upon the —
members of the old diplomacy for additional help. On the
whole, he seemed to be very proud of the achievements of
the Foreign Office, whereas I am of opinion that this body
has entirely failed, and is of no practical use any longer.
Things must be in a pretty bad state if Herr Erzberger, of
all people, is looked upon as the last hope of the country.
I suggested to the gentlemen that it would do some good if
the Chancellor were to request the more virulent of the Pan-
Germans to see him, and to ask Hindenburg to explain to them
the military situation without any camouflage.
tion was favourably received, and it is to be passed on to the
Chancellor. ee
. . . The Chancellor informed me that he was con-
sidering whether, if Roumania remained neutral, and if the
operations against the Dardanelles terminated successfully
for us, he ought to submit any official proposals for peace
to our enemies. I expressed my admiration of the plan, but —
told the Chancellor of my objections to its practical execution,
The Entente, I feared, would refuse to entertain the proposals,
and the German people would regard it as a sign of weakness.
The Chancellor asked me to refrain from pronouncing a definite —
opinion for the present, but to think it over until our next —
meeting.”

a

The War 245

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

“T should like to express my heartfelt gratitude to you
for sending on to me the report which contains some of the
finest observations that have come to my knowledge since
the outbreak of the war.

. The writer lays great stress on the belief prevalent
in enemy and neutral countries alike that Germany is making
a bid for universal supremacy and for supremacy on the high
seas—a belief which has spurred on the resistance of the
enemy to the utmost, and has caused a good deal of bad feel-
ing amongst the neutrals. I repeatedly brought this fact
to the knowledge of the Chancellor and I urgently suggested
to him that in some way—e.g., by an Imperial proclamation
on the anniversary of the outbreak of war, or by some other
suitable means—we should announce to all and sundry that
such hare-brained schemes are not entertained by any respon-
sible person or body of persons in Germany. I sincerely
trust that some such steps will be taken at an early oppor-
tunity, because otherwise I do not see when the war will be
over. Though not a pessimist I do not believe in taking
too rosy a view of things. I envy the British because they
have the courage openly to discuss in their press and parlia-
ment the reverses as well as the successes they have had.

s - You see I am not taking too cheerful a view of
matters. I have nothing but the most enthusiastic admira-
tion for the achievements of the German people, both at the
front and at home. Although not gifted politically this
people could do wonders if led by great statesmen and by
great politicians.”

. August roth, 1915. This morning I spent an
hour with the Chancellor, who had requested me to call on
him. . . . We had a long discussion as to the advisability
of publishing a statement to the effect that Germany would be
ready at any moment to discuss an honourable peace. She
had achieved great successes in the field, she was in posses-
sion of important mortgages, her armies were occupying
large tracts of the enemy’s country, and she was not carrying
on a war of aggression but one of defence: therefore such a
step could not be regarded as a sign of weakness. The

246 Albert Ballin

Chancellor, nevertheless, was afraid that such a step might

after all be interpreted in that sense. I suggested to him that

it might be of some use if the Pope could be induced to

address a peace message to the rulers of the various countries.
“T also called the Chancellor’s urgent attention to the

need for dealing with the food problem during the

winter, especially with relation to the price of meat.”

. . « August rath, 1915. The United States Ambas-
sador, Mr. Gerard, had expressed the desire to discuss with
me the question as to the advisability of suggesting that
President Wilson should mediate between the belligerents.
I therefore called on him on Tuesday, August roth, and
advised him to refrain from any official action in that
direction, but said that I thought he might ask the
President to sound opinion in Great Britain as to the chances
of such peace proposals.”

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:

“. . « October 2oth, 1915. I am annoyed at the
importunity with which some interested parties, such as

|

a

j

.
f

The War 247

the Central Association of German Manufacturers and the
representatives of agriculture, are pushing forward their views
on the peace terms. Moreover, my alleged readiness to con-
clude a ‘ bad peace’ with Great Britain is being talked about
so widely that even His Excellency Herr v. Zimmermann has
drawn my attention to the ill effects of such calumnies. All
this has prompted me to avail myself of the opportunity
presented by the annual meeting of the Association of
Hamburg Shipowners of making a speech in which I have
explained my views as to the freedom of the seas.

“ Prince Biilow will be leaving for Lucerne to-day where
he intends to stay for some time, and the Prussian chargé
@ affaires, Herr v. Mutius—of whom it has been alleged that
the Chancellor appointed him to his post on the death of his
predecessor (the excellent Herr v. Biilow, Prussian Minister
to Hamburg) for the reason that he might have a watchful
eye on Prince Biilow and myself—has been promptly trans-
ferred to Warsaw. Evidently the Berlin authorities now
think the danger has passed, since Prince Biilow has left.”

. - November 23rd, 1915. Hammann! asked me why
I did not call on the Chancellor, and I told him that I thought
the Chancellor might feel annoyed with me for my interference
in favour of Tirpitz, which, however, would not affect me in
any way, because I was convinced that I had acted in the
best interests of the Kaiser, and that it would have been
unwise to remove Tirpitz from his post so long as the war
lasted.”

_“, . . The Chancellor asked me to see him on Wed-
nesday at 6.30 p.m., and I spent nearly two hours with him.
I urgently advised him to make a frank statement in the
Reichstag as to our readiness for peace, and to do so in such
a form that it could not possibly be looked upon as a sign of
weakness.”

. On January roth, 1916, I was commanded to dine with
Their Majesties at the Neues Palais. The only other guests
apart from myself were the Minister of the Royal Household,
Count Eulenburg, and the Minister of Agriculture, Herr
v. Schorlemer. None of the suite were present so that the
company consisted of five persons only. The Kaiser was in
1 The head of the Press Department of the Foreign Office.
Q

248 Albert Ballin

high spirits and full of confidence. The after-dinner con-
versation extended to such a late hour that we did not catch
the train by which we intended to return, and we were
obliged to leave by the last train that night.

“A remark of mine concerning the possibility of an
extension of submarine warfare had, as the Chancellor had
been informed, caused the Kaiser to assume that I completely
shared the point of view of Admirals v. Holtzendorff and
v. Tirpitz, who now recommend a submarine campaign
Great Britain on a large scale. I therefore, at the Chancellor’s
request, addressed the following letter to the Kaiser:

“* A few days ago I had occasion to discuss with Grand

Admiral v. Tirpitz and Admiral v. Holtzendorff the question

of a resumption of the submarine campaign.

“*JT was then given confidential information as to the

number of submarines at our disposal, and I am bound to
say that even if due allowance is made for the activity of the
mine-seeking auxiliaries I regard the number of large sub-
marines as insufficient for the purposes of such a finally
decisive measure.

“* The first attempt at submarine warfare proved unsuc-
cessful on account of the insufficiency of the means employed
to carry it through ; and it is my humble opinion that a second
attempt should only be undertaken if its success were beyond
the possibility of a doubt. If this cannot be guaranteed the
consequences of such a measure appear to me to be out of all
proportion to the risks attached to it.

““*T therefore beg to respectfully suggest to Your Majesty
that the work of the mine-laying auxiliaries should be carried
on as hitherto, and should even be extended. I also consider
that the submarines should be made use of to the fullest
extent of their capacity, with the proviso, however, that their

employment against passenger steamers should be subject —

to the restrictions recently laid down by Your Majesty.

“* When the number of the big submarines shall be
sufficient effectively to cut off the British food supply, I think
the time will have arrived for us to employ this weapon
against Great Britain without paying regard to the so-called
neutrals.

“* At present about two hundred ocean steamers or more

The War 249

enter British ports every day, and an equal number leave for
foreign ports. If we sink a daily average of 30 or 40 we can,
indeed, greatly inconvenience England, but we shall assuredly
not be able to compel her to sue for peace.

“*T humbly apologize to Your Majesty for thus stating
my views on this matter ; but I am of opinion that the extreme
importance of the proposed steps will be a sufficient excuse
for me.’”

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:

“Tf we desire to keep the Austrian fighting spirit un-
impaired we must avoid at all hazards suggesting the pos-
sibility of an understanding with Italy. The Italian war is
popular down to the lowest classes of the people, and the
successful stand against Italy is a subject of pride and hope
to all Austrians.

“Hence the circumstance that Prince Billow has tem-
porarily taken up his abode at Lucerne has roused a con-
siderable amount of suspicion. Even the officials in the various
ministerial departments fear that the Prince might intend to
make unofficial advances to Italy when in Lucerne, and that
these steps might be followed in Berlin by a movement in
favour of a separate peace with Italy by which Austria would
have to cede the Trentino. People were obviously pleased
and relieved when I could explain to them that the Prince
was greatly embarrassed on account of having lost his Villa
Malta, and that the choice of a suitable residence during the
winter had been very difficult. They were particularly
gratified when I told them—what I had heard from the Prince’s
own lips—that he had had no official mission, and that he had
not been engaged upon any negotiations.

250 Albert Ballin

“ People are especially proud of the Isonzo battles, but
they do not shut their eyes to the uncertain prospects of a
successful Austrian offensive. They really consider that
Austria has gained her war aims, and the old Emperor
described the military situation to Frau Kathi Schratt by
Saying that the war was in many respects like a game of
tarock, in which the winner was not allowed to cease playing
because the losers insisted upon him going on with the game
so that they might have their revenge. Matters at first had
been to the advantage of our enemies: the Russians had over-
run Galicia, the Serbians had defeated the Austrians at Bel-
grade, and the French had looked upon the retreat from the
Marne as a great success. Now, however, the war was all in
favour of Germany and Austria, and therefore our opponents
did not want to call a truce just yet.

“Tf this comparison which the venerable old gentleman
has borrowed from his favourite game of cards is correct,
the war will not be over until one side has nothing further to
stake, and the decision will be brought about by that side
whose human and financial resources shall last longest.

“ Banking circles, of course, view the financial situation
with the utmost gravity, but the general public—in spite of
the high prices ruling here, and in spite of the great want of
food which is much more noticeable than with us—regard
matters a great deal more serenely. This is simply due to the
greater optimism so characteristic of the Austrians, whose
motto is: ‘ Life is so short, and death so very, very long.’
They prefer to assign to future generations the worries which
would spoil their sublunary existence.

“ The present Cabinet is looked upon as weak and mediocre.
The old Emperor clings to Count Stiirgkh because of the ex-
tensive use to which the latter puts the celebrated paragraph
14 of the Constitution, by which Parliament is eliminated
altogether, and which provides the Government with every
conceivable liberty of action. The all-powerful Tisza gives
his support to Count Stiirgkh just because of his weakness.
Hence the attempt to replace the latter by Prince Hohenlohe,
the present Minister of the Interior, is beset with much diffi-
culty. The Emperor wants to avoid a break with Tisza at all
costs. This state of things makes people feel very worried.

t=

|

The War 251

The strain in the relations between Austria and Hungary has
greatly increased since my last visit, whereas the friendly
feelings for Germany are now more pronounced than ever.

“Our Kaiser everywhere enjoys an unexampled venera-
tion. Within the next few days he will be made the subject
of great celebrations in his honour. Although the tickets of
admission are sold at enormous prices, even General v.
Georgi, the Chief of the National Defence Organization—
whom I met last night—did not succeed in obtaining a box,
notwithstanding his high connexions. This morning the
well-known member of the Hofburg Theatre, Herr Georg
‘Reimers, read to me two poems dedicated to the Kaiser
which he is going to recite that night, and I feel bound to say
that it can hardly be an unmixed pleasure to the members of
the court to witness this act of enthusiastic homage paid to
our ruler.

“The Roumanian question, particularly in its bearing on
the food supply, is regarded by people who are able to judge
with great anxiety. It is believed that the only thing to do
is to send to Bucharest experienced men connected with the
supply and the distribution of food who must be properly
authorized to purchase as much grain as possible : for ourselves
and for our allies.

“The big Austro-German Zollverein—or by whatever
other name it is intended to describe the proposed customs
union—is looked upon with very mixed feelings. Last night
Baron Skoda (the Austrian Krupp) explained to me after a
dinner given at his house, with the lively consent of members
of the court and of the big manufacturers, that the Austrian
interests might indeed profit from such a union with the Balkan
States, but that it would be better that Germany should remain
an outsider for a period of fifteen years. This is evidently
a case of timeo Danaos, e dona ferentes, and people feel
that Austria, owing to her economic exhaustion, would be
easily absorbed by Germany after the conclusion of the war.
The Hungarians, naturally, view matters from a different angle,
not only because the Hungarian farmers would like to sell
their grain to Germany free of any duty, and because industry
counts for very little in their country, but also because they
dislike the Austrians.

252 Albert Ballin

“. , . I also dined with Count Tisza. He is a purely
Magyar politician who regards the international situation
from his Hungarian point of view, and in conformity with
his Magyar inclinations. He is evidently a strong if obstinate
character, and he does not impress me as a man who will
give up his post without a protest. He, too, thinks the real
war aims of Austria-Hungary have been accomplished.
Serbia is crushed, Galicia liberated, and Russian supremacy
in the Balkans—formerly viewed with so much apprehension
—is a thing of the past. All that is wanting now is to
bring the Italian campaign to a successful conclusion and
the war may be regarded as over as far as Austro-Hungarian
interests are involved.

“ Both Tisza and the Austrian society showed strong
symptoms of an Anglophile leaning. Frau Schratt, who in
such matters simply re-echoes the views of the old Emperor,
seemed very pro-English, and had something to say about
‘ German atrocities.’

“I mention these facts because I cannot help thinking
that, notwithstanding the war, some friendly threads must
have been spun across from England to Austria.”

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 dis-
cussed 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:

“. + + You ask me to tell you something about the
political and military situation as I see it, and I shall gladly
comply with your wish.

“The American danger seems to be averted for the
moment at least. A severance of diplomatic relations with

. om | . e
ee a ee ae ee ee ee ee

The War 253

the United States would have been nothing short of fatal to
Germany at the present stage. Just because the war may be
looked upon as won in a military sense, we were obliged to
avoid such a catastrophe at all costs. As far as military
exertions are concerned, it is quite correct to say that Germany
has won the war, because in order to turn the present position
into a military defeat our enemies, in the first instance,
would have to gain military victories in Russia, France, and
Belgium. These would have to be followed up by our retreat
from the occupied countries and by their invasion of ours,
and they would have to defeat us at home. Every sensible
critic must see that neither their human material nor their
organizing powers are sufficient for such achievements. The
fact is that we have reached the final stage of a progressive
war of exhaustion, which nothing but the intervention of the
United States could have prolonged.

“ The accession of Italy to the ranks of our opponents has
shown what it means if an additional Power enters the war
against us. From a military point of view the entry of Italy
did not materially aggravate our position; but the whole
aspect of the war, as viewed by our enemies, underwent a
complete change, and Grey, who shortly before had announced
that ‘there is nothing between us and Germany except
Belgium,’ stated a few weeks subsequent to the Italian
volte-face that he could not find a suitable basis for peace
negotiations anywhere.

“The entry of the United States would have been of
immeasurably greater effect on the imagination and the
obstinacy of our enemies.

“The very intelligent gentlemen who even now preach
the unrestricted submarine war, especially the leading
members of the Conservative and National Liberal parties,
are misinformed about what the submarines can do. They
not only regard it as possible, but even as practically certain,
that the starvation of Great Britain could be achieved if the
unrestricted submarine war were introduced. I need not tell
Your Excellency that such dn assumption fails to estimate
things at their true value. Great Britain will always be able to
maintain her connexion with the French Channel ports.
Quite apart from that, she will always succeed in importing

254 Albert Ballin

the 14,000 tons of cereals which she needs every day to
feed her population even if the number of our submarines is
trebled, because it must not be forgotten that the submarines
cannot operate during the night.

“Hence the whole problem is now, as ever, gveveiiad
by the axiom to which I have over and over again drawn the
attention of the heads of the Berlin economic associations,
viz. that we can no more force the British into subjection
through our submarines than they can hope to wear us out by
their starvation blockade. Both the submarine war and the
blockade are extremely disastrous measures, inflicting heavy
losses on either side; but neither of them can determine the
fate of the war nor bring about a fundamental improvement
in the position of either of the belligerent groups of Powers.
That, apart from all other considerations, the unrestricted
submarine war would have exposed us to the open hostility
of the neutral countries, and might even have caused them
to join the ranks of our enemies, is an additional contingency
which the submarine enthusiasts have found it most convenient
to dismiss by a wave of the hand.

“Tf after the war Germany remains isolated from the rest
of the world, she cannot feed her population, and the doctrine
of Central European brotherhood promulgated by some of
our amiable poets has given rise to a movement which is
apt to be of the greatest detriment to the interests of our
country when the war is over.

“If we had wished to invest large parts of our German
national wealth in countries like Austria-Hungary, Bulgaria,
and Turkey, nothing could have prevented us from realizing
such a plan at any time previous to the war, provided we had
thought it economically sound.

“‘ Such a return to a continental policy, I maintain, would
be a disaster to Germany. Our needs and our aspirations
have increased to such an extent that we can no longer hope
to satisfy them by economic isolation or within the framework
of a Central European economic league of states.

“ Tt isnot because I am at the head of the biggest German
shipping concern that I tell you these things, but I do so with
the disinterestedness of a man who hopes to be allowed to
retire into private life when this terrible war is over. No one

‘The War 255

can perform his life’s work more than once, and no one can

make a fresh start at the age of sixty.

_ “The war has considerably strengthened the moral fibre
of the Chancellor; he has learnt to take upon his shoulders
responsibilities which, I think, he would formerly have
shirked. It is much to be regretted that the Conservative

cannot see eye to eye with him in so many questions.

He is blamed for the fact that the Kaiser is so difficult of
access, and that he does not every now and then receive

‘the leaders of our political and economic life, as he should
do considering the fateful time through which the Empire
is passing.

“Tf the Chancellor is to succeed in carrying through the
huge tasks still before him, it is, in my opinion, imperative
that he should not lose touch with Conservative circles, and I
think there is no reason why the Kaiser should not ask men
like Herr v. Wangenheim, Count Schwerin-Léwitz, etc., to
visit him from time to time at headquarters, and to acquaint
him with their wishes and anxieties.

“T cannot help telling you that the whole nation views
with profound regret the Kaiser’s isolation. Since the out-
break of the war I have only once had an interview with His
Excellency v. Falkenhayn, and the main purpose of my asking
for it was to request him to bring about a change in this
state of things by using his influence with the Kaiser. His
Excellency frankly told me that he had some objections to
doing this, but he promised me nevertheless that he would
exercise his influence in this direction. I am only afraid that,
because of the excessive burden of work he has to get through,
the matter has slipped his memory.

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:

256 Albert Ballin

“February 16th, 1916. My chief apprehensions are
purely political. Although it seems that for the moment
our differences with the United States will be smoothed over,
there can be no doubt but that at times the tension has been
so great that a wrong move at the critical moment would have
caused America to take up arms against us. Contrary to
what most people seem to think, I regard this danger as having
by no means passed ; in fact I look upon it as always lurking
in the background. Those who, like myself, have seen that
the secret ideal of British policy is an alliance and permanent
co-operation with America, will agree with me that such
an Anglo-American understanding for the period of this war
would be of lasting detriment to our whole future. You know
England, and you know that the course of events has turned
the Entente automatically into an alliance, although the
British, especially those who look beyond the actual present,
have always felt a great deal of aversion towards such a
development. The individual Frenchman, indeed, is mostly
looked upon as a somewhat grotesque and slightly ludicrous
character, but all the same there exists some sympathy with
the French as a nation, however artificially this may have
been brought about ; but towards Russia the average English-
man never felt anything but an icy aloofness and a great
deal of antipathy. Hence, the so-called allies of the British —
have never been the cause of unalloyed joy to them.

“ On the other hand, to establish permanent relations with
that part of the Anglo-Saxon race inhabiting the huge con-
tinent across the Atlantic has at all times been the aim
pursued by every really far-sighted British statesman.
By means of such an alliance, it is hoped to consolidate and
to strengthen for many generations the foundations on which
_ the venerable but also slightly dilapidated structure of the
United Kingdom rests. From a purely maritime point of
view, such an alliance would be of overwhelming strength.
In my opinion it would be perfectly hopeless for our country,
constantly menaced as it is by serious Continental com-
plications, to gain the trident of Neptune in opposition to
these two Powers. I believe an Anglo-American league,
whose object it would be to prevent us from becoming a
commercial, naval, and Continental Power, would restrict

The War 257

us once more to a purely Continental policy, a policy which
we have so successfully discarded since the accession of our
present Kaiser.

“To frustrate such an alliance must be our principal
task. To call it into being or even to facilitate its conclusion
would be the greatest crime against Germany’s future which
anyone could commit.

“Let us by all means sink as much enemy tonnage as
possible, let us lay mines, and let us proceed with our submarine
warfare as hitherto, or even with more energy, but let
the people who are at the head of the whole movement
be aware of the immense responsibility that rests on their
shoulders. If our leading men speak of a war with America
just as cheerfully as though San Marino or Montenegro were
involved, I cannot help viewing such an attitude with the
utmost apprehension. The British will use all their astute-
ness and all their energy to exploit any mistakes committed
by Germany. If they succeed in this, and if, in consequence,
our relations with the United States become very strained
again or drift towards a rupture, I fear that we shall not be
able to bring this war to a successful close, or derive from it
any security for our future development.

“ Berlin, February 26th, 1916. During the two days
I have now been here it has greatly depressed me to see a
number of fanatics who cannot gauge the consequences of their
doings attempting to drive this splendid German people
towards a new abyss. Alas! delusions and folly are rampant
everywhere. If I were you, I should now disregard every
other consideration, and explain to the Kaiser as a friend
that everything is being gambled away: the existence of
his Empire, his crown, and possibly the fate of the dynasty.
It is like living in a madhouse; everyone talks about war
with Holland, America, Denmark and Roumania as though
a mere picnic were concerned.”

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

258 Albert Ballin

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 informa-
tion concerning the situation at home: |

“IT am sorry that I can send you no good news at all.
The conduct of the war and its probable outcome are more of
a mystery now than ever, and with all that I cannot help
feeling that our responsible quarters do not even now realize
the profound gravity of the situation. The political and
the military leaders are frequently at variance. There is
a lack of proper co-operation between Berlin and Vienna.’
We imagine ourselves to be the rider, but we are only the horse.
The road between Berlin and Vienna is studded with com-
promises of doubtful value, and incapable archdukes are
given the most important positions.

“ The military situation was favourable until the Austrians
thought their day of reckoning with Italy had come, and when
our own Supreme Command set out to cover themselves with
laurels in France.

“Both these undertakings turned out to be political
and military failures. For hundreds of reasons an early
peace is imperative to us. As matters stand at present
only Great Britain and Russia can conclude peace, because
France and Italy must be regarded as mere British vassals.

“Since the Cabinets of London and Petrograd remain
absolutely deaf to our publicly expressed overtures for
peace, we have no choice but to try to utterly defeat the one
or the other of these, our principal enemies, either Russia
or Great Britain. F 7

“ We could have finished with Great Britain if we had had
at least 300 first-class submarines, and in that case we might
have regarded a war against America with complacency.

“However, even if we possessed, as some optimists
believe, as many as 150 first-class submarines, we could not
strike a mortal blow at Great Britain and defy the United

The War: 259

States as well. Therefore, we have only one choice left: we
must force Russia, our second chief enemy, to her knees.

“Russia has been badly hit through the loss of the in-
dustrial regions of Poland. If we had exerted all our strength
in that direction, and if we had taken Kiev, the economic key
to Russia, the Tsar would have had no alternative but to con-
clude a separate peace, and this would have settled the
-Roumanian question at the same time.

_ * With less certainty, but also, perhaps, with less exertion,
it might have proved possible to make peace via Petrograd.
But what have we done instead ? We have squandered our
forces. The Eastern theatre of war was denuded of troops,
because at first Falkenhayn felt sure he could take Verdun
in a fortnight, then by Easter, and finally by Whitsuntide.
All our forces have been hurled at Verdun ; rivers of blood
have been spilt, and now, in July, we are still outside it.
And what does it profit us if we do get it? We shall only
find other and more formidable lines behind it.

“In the meantime our good Austrians have trans-
ferred all their reliable officers and men to the Tyrol, and have
left nothing but the rubbish and their inefficient generals to
guard the points of danger. And what are the results?
A graceful retirement for Salandra and the formation of an
anti-German coalition government in Italy on the one hand,
and a manifestation of Austrian superiority on the other,
but a failure, nevertheless, because the Austrians were not
strong enough numerically to get down into the plain. And
even if they had compelled the evacuation of Venetia nothing
would have been gained. The fate of Italy, as it happens,
does not depend on Austria, but on Great Britain, who will
rather watch her starve and perish for want of coal than
permit her to sue for peace.

“ Although all this is perfectly plain to everyone, our
Supreme Command seems to be undecided as to whether an
offensive with all the means at our disposal should be started
on the Western Front simultaneously with one against Russia,
or whether it should be directed against Russia only. As
far back as last year I exerted all my influence—small though
it has become—in favour of an energetic and whole-hearted
offensive against Russia.

260 Albert Ballin
“ Well-informed and far-seeing men have justly pointed

out that, if fortune so wills it, the Kaiser, arm in arm with

Hindenburg and Ludendorff, could risk a ‘bad peace’
without danger to himself and his dynasty, but it appears
beyond doubt that the influence of Falkenhayn is all-powerful.

. . « If we were to arrive at an understanding with
Russia to-day, we should be able to go on with the war
against Great Britain for a long time to come, and, by means
of unimpeded submarine activity, to carry it to a successful
issue. In that case we could also estimate the danger threat-

ening us from America at as low a figure as many who are

unacquainted with the position are putting it now.
“ Thus it is my view that it is necessary to abandon defi-

nitely the belief that the war can be brought to a successful —

issue on the Western Front, and without first defeating
Russia. It is greatly to be deplored that many observers

assert that the Western Powers will make peace when they —

have found out that the big offensive now in progress remains
without any visible success. Only people who do not know
Great Britain can put forward such a proposition, but how
many people are there at the Wilhelmstrasse who do know
Great Britain? Very few indeed, if any .

. « » You said you would rejoice to hear from me,
and I can only regret with all my heart that I have not been

able to report anything to you in which it would really be —

possible to rejoice.”

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

“ Very many thanks for your welcome letter of yesterday's -
date, with the contents of which I agree in every detail.

“ I quite share your belief that Hindenburg and Ludendorff
must each feel like a great physician who is only called in
when it is too late. Two declarations of war within 24 hours
were necessary to bring about this change which the German
people had been looking forward to for months and months.
The Chancellor is justly reproached for not having had the
courage to insist upon the appointment of these two men

The War 261

and on the resignation of Falkenhayn long ago. It is con-
tended that he should have tendered his own resignation if
his recommendations were refused, and his neglect to do so
makes him principally responsible for the fate that is in store
for us. For a long time back I have kept emphasizing the
need for transferring our main activities to the Eastern
theatre of war, and for definitely settling these personal
questions.

“The Chancellor clings to his post because he believes
that there is no one better qualified than himself to be at the
head of affairs. Such an attitude reminds me of the old
gentleman who neither wanted to die nor to retire from his
post as president of the Berlin Chamber of Commerce, and
who bitterly complained to those who came to congratulate
him on his ninetieth birthday that he was compelled to stick
to his office, in spite of his advanced years, because he could
not see a better man to succeed him.

“It is very sad that we have arrived at such an impasse,
and I am convinced that the present internal political situation
is untenable. No German Chancellor can possibly carry the
business of the country to a successful issue if, in the midst
of a terrible war, he is obliged to fight against an opposition
consisting of the Conservatives, the representatives of the
Heavy Industries, and the majority of the National Liberals.

“ As far as I can make out, the Chinese wall surrounding
the Kaiser has not disappeared with the exit of Falkenhayn
from the scene. No one is granted access to him who knows
something about the events that led up to this war, and who,
in the interests of his dynasty as well as his own, would tell
him the unvarnished truth. Weare, after all, a constitutional
country. It would doubtless be best to transfer General
Headquarters to Berlin, but, of course, people are not wanting
who object to such a proceeding, asserting that it would enable
outside influences to acquire a hold on the conduct of
affairs.

“ How badly people are informed with regard to the actual
situation was brought home to me when I was in Berlin a
short while ago, and when X. contended with great emphasis
that we should have to attach more value to huge indem-
nities than to annexations. If it is possible that the men

262 Albert Ballin

round the Kaiser count on heavy indemnities even now, it

shows how sadly they misjudge the real state of affairs.

‘‘ My feeling tells me that the present Cabinets, containing

as they do men who are compromised by their actions since

the outbreak of war, cannot give us peace. How can anyone
imagine that men like Bethmann, Asquith and Grey, who

have hurled such incredible insults at each other, can ever sit
together at the same table ?

“The question as to who is to succeed them, of course,

abounds with difficulties.
“T recently met some Austrian gentlemen in Berlin.
They are completely apathetic ; they have lost all interest in

the future, and they themselves suggest that Germany should

no longer permit Austria to have a voice in the conduct of
affairs. Her food supply will only last until March 1st.

After that date she will depend on Hungary and ourselves for

her food. She fears that she is not likely to get much, if
anything, from Hungary; on the other hand, she feels sure

that we are compelled for our own sake to save her from

famine.

“Constantinople, too, has only supplies for a few more

weeks.

“ With us at home the paraffin question is i
serious. In country districts it may be possible to tell Soll
to go to bed at curfew time, but the working population of

our large cities will never consent to dispense with artificial

light. Serious riots have already taken place in connexion
with the fat shortage.

“J am afraid that Great Britain is trying to bring about

such a change in the situation as will enable her shortly to

tell the small neutral countries that no one in Europe will be
permitted any longer to remain neutral, and that they must >

make up their minds to enter one or the other of the two big

syndicates. You see nothing I can write to you has even —

a semblance of comfort in it. I regard the future with the
utmost apprehension.”

In contrast to such views as were expressed in the

foregoing letters, the men who were at the head of

— ee le a

.

a

The War 263

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 in-
dependent 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 docu-
ment—which was much more like an academic dis-
sertation 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 war-
fare in January, 1917, not only put a sudden end to
the peace movement in which Ballin, as has been ex-
plained 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

“ |

264 Albert Ballin
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 im-
pending 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 sub-

marines, 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 :

“ YouR EXCELLENCY, “ April 4th, 1917.
The internal conditions of our country fill me with
grave alarm, and I therefore venture to approach Your
Excellency privately with this expression of my apprehen-
sions.
“TI do not doubt for a moment that our competent
authorities intend to extract the utmost advantage to our-
selves from the situation which is developing in Russia.

This Russian revolution may enable us to bring the war to ~
a close, and to obtain peace terms which, relatively speaking, —

are not unfavourable.

“ What Germany has achieved in this war is beyond all
praise. A glance at the map shows how small she is compared
with her opponents in the field ; and yet she is bravely strug-
gling against a world in arms in which even the few countries

a

The War 265

that have remained neutral are not our friends. It is, indeed,
one grand epic. But unfortunately the position at home
becomes more untenable every day.

“Tf we find ourselves compelled to reduce the bread
ration still more, you will, I am sure, agree with me that the
bulk of the people will suffer enormously through being under-
fed. In Austria, conditions are said to be worse still, and I
am afraid that we shall even have to part with some of our
stores to feed her population.

“ At first sight the Chancellor’s speech in the Prussian
House of Deputies appeared to be somewhat too compre-
hensive in its range of vision; but a few days later, when the
news of the Russian revolution arrived, it almost seemed that
his words had been prompted by Divine inspiration. After
this Russian news had become known, it would have been
impossible for him to make this speech without giving rise
to the suspicion that these events had cast their shadow in
advance on the Prussian Parliament. Unfortunately, how-
ever, this favourable development was not followed up by the
right steps. On the contrary, the Chancellor, after his breezy
advance in the House of Deputies, has now retired from the
position he then took up, thus creating the impression that
our policy is constantly shaped by all sorts of mutually con-
tradictory views and currents. Up to now, although the
people have to suffer greatly through the shortage of food
and fuel, their patriotism has put up with it because of their
faith in the promised electoral reforms. It would have been
so simple to reiterate this promise, and at the same time to
point out that so many other things claimed precedence
during the war, and that so much was at stake, that it would
hardly be advisable to introduce this great reform at present,
seeing that there was no time to give proper attention to the
careful working out of all the details.

“Tf now, however, such bills as those dealing with the
entailed property legislation and with the repeal of the Polish
laws are to be discussed, such a postponement is no longer
justifiable.

“Tt almost seems as if the Government is unable to read
the signs of the times. The fate of the Prussian suffrage
reform bids fair to resemble that of the sibylline books, of

266 ' Albert Ballin

which it was said that the longer one hesitated to buy them
the more expensive they became. To-day the people would
still be content to agree to plural voting, but when the war
is over, and when the Socialist leaders are demobilizing their
men, inducing tens of thousands of them, decorated with
the Iron Cross, to air their grievances, it will be too late to
stop the ball from rolling. It is true that people say revolu-
tions are impossible in the era on the machine-gun. I have no
faith in this theory, especially since the events that have
happened in Petrograd have become known to us. That, in
a country like Russia, the reigning family could disappear
from the scene without any opposition, and without a single
Grand Duke or a single soldier attempting to prevent it, is
certainly food for much reflection.

“T hope Your Excellency will pardon me for thus frankly
expressing my anxieties, but I considered it my duty to let
Your.Excellency know my feelings.”

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:

“ After sharing the Kaiser’s repast—which was plain
and on a war diet—I had several hours’ private conversation
with His Majesty. I found him full of optimism, far more so
than I thought was justified. Both he and Ludendorff seem
to put too much faith in the success of the submarines ; but
they fail to see that this weapon is procuring for us the enmity
of the whole world, and that the promise held out by its
advocates, viz., that Great Britain will be brought to her
knees within two months, is, to put it mildly, extremely
doubtful of realization, unless we can sink the ships which
carry ammunition and pit-props to England.” :

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:

The War 267

“T cannot help thinking of the enthusiastic and at the
same time highly optimistic letter which you had the great
kindness to show me last night. My opinion is that the
gentlemen who form the entourage of His Majesty ought not
to view matters as that interesting epistle suggests that
they do.

“You are a believer in the statistics of Mr. X. I took
the liberty of telling you last night that statistics are a mathe-
matical form of telling a lie, and that, to use the expression
of a clever Frenchman, a statistical table is like a loose woman
who is at the service of anyone who wants her. ‘There are
different ways of arranging figures,’ as they say in England.
I do not know Mr. X, neither do I know his statistics, but
what I have been told about them seemed foolish to me.
If we carry on the war, and particularly the unrestricted sub-
marine war, on the basis of statistics such as he and
other jugglers with figures have compiled, we are sure to fail
in the ends we are aiming at.

“As concerns the unrestricted submarine war itself, I
still maintain the view I have always held, viz., that we shall
never succeed in starving out Great Britain to such an extent
as to force her Government to sue for a peace of our dictation.

“T have just had a visit from a Danish friend whom His
Majesty also knows quite well, and who, together with a
committee of delegates sent by the Danish Government, will
be leaving for England to-night. The two members of this
committee who represent the Ministry of Agriculture have been
instructed, inter alia, to complain that Great Britain now im-
ports much less bacon, butter, and other articles from Denmark
than she had undertaken to do, and that the prices she pays
for these imports are much below those originally stipulated.

“Apart from the cargo carried by two small steamers
that have been torpedoed, Denmark has been able, notwith-
standing our submarines, to supply Great Britain with all
the food required of her. The vessels remain in territorial
waters until a wireless message informs them of the spot where
they will meet the British convoy which is to take them safely
to England. They have to pass through only a small danger
zone which, as I have said, has hitherto proved fatal to no
more than two vessels,

268 Albert Ballin

“ This fact, to my mind, points to the limits of the success
obtainable by our submarines. I have constantly explained,

especially to the Chief of the Admiralty Staff, that I can only —

regard the submarine as a successful weapon if it enables us
to cut off the British supplies of ore from Spain and Sweden,
and also those of pit-props, because without the possession of
these two necessities, Great Britain is no longer able to con-
tinue the war. I have been assured that our submarines
would achieve this task, even if torpedo boats were employed
as convoys ; but the experiences gained so far do not bear out

these predictions. We succeed, indeed, in sinking a few vessels

out of many; but suppose there are ten ships in a convoy,
it still means that nine of them, with their supplies of ore
and pit-props, safely reach their destination.

“Let me repeat, the starvation of Great Britain is im-

possible ; because, in addition to her own harvests, she only
needs from twelve to fifteen thousand tons of cereals every
day, and these she can, if necessary, always obtain at night-
time through her Channel service, via Spain and France.
Even this necessity will hardly arise, because two medium-
sized steamers are sufficient to carry the fifteen thousand
tons, and things would have to be very bad, indeed, if these
did not succeed in reaching a British port. And if our
statistical tricksters juggle with crop failures, please do not
forget that new harvests are soon to be expected, and that
it will not do always to count on crop failures.

“You will be doing a good work if you can persuade
people at headquarters to abandon their belief that Great
Britain can be starved to submission. Unfortunately their
other belief, viz., that we can cut off her supplies of ore and
pit-props, will also have to be abandoned.

“ Certainly, the achievements of our submarines have
been amazing. At their present rate they will enormously
diminish the British tonnage figures, and raise the hatred of
everything German to boiling point; but they will not,
unfortunately, lead to such an end of the war as our Pan-
Germans desire. It is a thousand pities |

“When the submarine problem began to assume practical —

shape, I pointed out to the Chief of the Admiralty Staff that,
to be successful, the submarine war must be brief; that its

a

The War 269

principal object was not to sink a large number of ships, but
to produce such a feeling of alarm in neutral countries as to
prevent them from risking their ships (1) because of the great
value of tonnage immediately after the war, (2) because of the
impossibility of finding crews, and (3) because of the insurance
difficulty. These conditions of success were, indeed, realized
during the first four weeks; but since that time people, as
I had predicted, have got used to the danger. The crews are
coming forth again, the insurance companies issue their poli-
cies again, and the ships are put to sea again.

“Tf the Admiralty Staff, who is doubtless in possession of
the figures, would submit to you a list of the number of vessels
laid up in Dutch and Scandinavian ports on March rst, owing
to the submarine danger, and another one showing the
position as it is to-day, you would discover that, at a low
estimate, at least 30 per cent. of the cargo vessels are
running again, and that, after another month or so, the
number of those still idle will have dwindled down to
20 per cent. or less.

“These are my views on the situation. If we have no
other means of finishing the war but the submarine menace,
it will go on for years. I should like to protest in anticipation
against any suggestion to the effect that I am trying to mini-
mize the achievements of the submarines. On the contrary,
I have nothing but the highest admiration for them, and I
really find it quite impossible to praise in ordinary prose
all that our country has done during this war; the whole
achievement is one grand epic.

“ Within the next few months the problem will have to be
solved how to put an end to this devastating catastrophe which
is ruining the progress of the world. There is no need for me
to tell you that the position of Germany has grown consider-
ably worse through the active intervention of the United
States. The fact that this enormously wealthy country with
its one hundred million inhabitants has turned against us is
fraught with the most dangerous consequences. Now it will
no longer be possible for us to continue the war for several
more years, and then to enforce a peace on lines such as are
laid down by a noisy section of our people, unless we succeed
in exploiting the extremely fortunate change in the Russian

270 ‘Albert Ballin

situation in such a way that the vast resources of that country
will be at our disposal. :

“This letter has become longer than it ought to be,
but the gravity of the subject with which it deals must be
my excuse for going into so many details. Perhaps I may
avail myself of some future occasion to acquaint you with my
hopes and fears on other political matters; because, as I have
aready explained, the present state of affairs makes it urgently —
desirable that the gentlemen whose privilege it is to be near
His Majesty should see things as they really are, and not as
they would wish them to be.

“Compare, if you have a chance, the advertisement pages
of an English paper with those of a German one. I have just
come across a copy of the Daily Telegraph which I beg to
enclose for this purpose. I have been in the habit of studying ©
these advertisements for many months; they are excellent
means of gauging the difference in the effects of the war on
the two countries.”

_

During the remaining part of 1977, 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 follow-
ing passages from them:

- . July 17th, 1917. The Erzberger resolution
which was chiefly aimed at Helfferich and the naval authori-
ties has made the Chancellor’s position untenable. Every-
body turned against Herr von Bethmann, and General von
Ludendorff informed me by telephone that he would resign —
if Bethmann remained in office. o

“ T then had a lengthy talk with His Excellency v. Valentini
who agreed that it was necessary for the Chancellor to retire ;
but he found it just as difficult as other people to name a
suitable successor. Vienna had raised strong objections to
the appointment of Prince Biilow, and, acting upon Valen-

The War — 271

tini’s suggestion, I made up my mind to approach the Kaiser
with a view to discussing with him the situation which appeared
to me fraught with the greatest danger. I therefore asked
His Excellency von Reischach to arrange such a meeting for
me, but on Thursday night I was rung up from headquarters
and informed that Hindenburg and Ludendorff were already |
on their way to the Kaiser to report to His Majesty on this
subject. Under these circumstances I did not like to interfere,
and on Friday I withdrew my application for an interview.
The Kaiser has told the two generals that he had accepted
Bethmann’s resignation the previous evening. He is thus
able to save himself from a perplexing situation by contending
that he had to give in to the wishes of the Supreme Army
Command.

. July 25th, 1917. Yesterday I called on Prince
Bilow a his Flottbek residence, and found him looking
better than I had seen him for years. After I had left him
I had the feeling that the Prince, who regards the whole
situation with a great deal of misgiving, would even be willing
to accept the post of Foreign Secretary under Michaelis himself,
in order to be able to guide our foreign policy along sensible
lines once more. Contrary to the reserve which he formerly
showed, he now condemns Bethmann’s policy with. great
bitterness. Bethmann, he maintains, by yielding to the
demand for universal suffrage, acted like a banker on the
day before bankruptcy who would try to save himself from
disaster by using his clients’ deposits. :

“The Mexico telegram! he treated with a good deal of
sarcasm, remarking that it was the maddest prank since the
exploits of the Captain of Képenick, with which I agreed.
If anyone, he said, ever wrote a comedy on the subject, he
would scarcely venture to lay the plot in modern times, but
would go back to the period when pigtails and wigs were the
fashion.

3 . July 30th, 1917. I had several messages over
the telephone, as well as a visit, from Lieutenant-Colonel von
Voss, the Chief of Staff with the Altona Army Command, who

1 (he telegram which the Foreign Office sent to the German

Minister in Mexico, and which was partly responsible for the entry
of the United States into the war.

272 Albert Ballin

wanted to consult me as to whether Prince Biilow should be
offered the post of Foreign Secretary. I am afraid, however,
that there is not much chance of his being appointed. The
Prince shares this opinion, and would not like the Press to
make any propaganda in his favour.

“ . . . Sept. 14th,1917. Inthe meantime, on August roth,
the Kaiser has been to Hamburg on a one day’s visit. He
came from Heligoland, and was brimful of optimism.

“He pretended to be very well satisfied with his new
Chancellor, and was very optimistic as to a German victory,
an attitude which, I am afraid, is not in the least justified by
the situation as it is.”

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 :

“ September 6th, 1917.

“ The fall of Riga shows once more how far superior our
military achievements are to the work performed by our
politicians. With the dispatch of the Mexico telegram
their folly appeared to me to have reached its height ; but

the descent from that point is but slow. The news recently

published by the Press to the effect that the Federal Council
is to deal with the question of the constitutional and adminis-
trative reforms which are to be granted to Alsace-Lorraine,
makes me fear that some big political blunder is going to be
committed again. It is evidently believed that, if Alsace-
Lorraine were to be established as an independent federal
state with perhaps some South German prince as its Grand
Duke, such a measure would remove an obstacle to peace. I,
however, consider it a great tactical mistake to attempt such
a solution of the Alsace-Lorraine problem before the war is

——-

The War 273

over. We must never lose sight of the fact that each one of
the leading actors in the political drama has to play to his own
gallery, and that therefore at the conclusion of peace—
which in my opinion can only be one of compromise—French
diplomacy must be able to show up something which the man
in the street can be induced to regard as a succés d’estime.
No doubt it would be easier and more to our liking to solve
the problem in our own way, and at the initiative of our
Government ; but by doing so we would deprive ourselves
of another possibility for compromising which we ought to
keep in order to enable the French to retire from the struggle
with a fair measure of success.

“We have a bad habit of spoiling the chances of peace by
premature actions intended to help it on and to prepare the
way for it. Just think of what we did in Poland! Inthe same
way we deliberately diminished the great value of the im-
portant asset which we possess in the shape of Belgium
when we set up the Council of Flanders and introduced the
administrative partition of that country.

“ Besides these political matters there are others which
were better left alone for the present. I am thinking of the
steps taken to regulate our economic restoration after the
war. War corporations are springing from the ground like
mushrooms after rain, and the preparations made in order to
solve the difficult economic post-war problems have an ugly
tendency toward establishing too many Government-con-
trolled organizations. To my mind the appointment of a
“Government Commissioner for the period of Economic
Transition ’ is altogether superfluous. We must refrain from
all attempts at interfering by artificial means with the natural
development of events. This, however, is precisely what the
Commissioner would have to do. He would have to act
according to instructions received from the Bank of Germany
or from some specially created body dealing with the question
of the foreign exchanges and the provision of foreign bills.

“ My belief is that our foreign exchanges which have so
completely got out of order will prove an excellent means of
diminishing the hatred against us and of making our enemies
less disinclined to resume business with us. The Americans
who are now able to obtain goods to the value of M 6.20 for

274 Albert Ballin

their dollar, instead of M 4.20, as they used to do, will soon
discover their liking for us. again.

“Another point is that the coming peace, even if we
derive no other gain from it, will enormously raise German
prestige all over the world. Prussia became a European
Power after the Seven Years’ War, in spite of the fact that
the peace treaty brought her neither a territorial nor a financial
gain, merely confirming the right of Frederick the Great to
the possessions he had defended in the war. Prestige, however,
means credit, and this circumstance makes me believe that
all these anxious discussions of the foreign exchange question
and of the need for controlling German payments abroad

aré just as superfluous as the Government control of our econ-

omic activities during the period of transition.

“The nations now at war will be impoverished after the
war, and the state of our exchange and the high prices of raw
material will compel us to live from hand to mouth as far as
the importation of raw material is concerned. Pending
the return of normal conditions, no sensible manufacturer
will want to import more raw material than he urgently
requires,

“T therefore think we ought to try to induce the Govern-
ment to desist from its proposed control of trade and industries,
and to restore the old conditions. If the Government’s
proposal to carry on under its own management large sections
of our import and export trade—in order to make these valu-
able sources of profit available for the reduction of its debts—
were allowed to materialize, our economic doom would be
certain, however attractive the plan might be in view of the
huge national debt. One must be careful not to ignore the
fact that the flourishing state of trade and manufactures
is always largely due to the existence of personal relations.

“If I think of the lessons of the past forty years—a period
during which the freedom of trade, the freedom of industrial
enterprise, and the freedom of shipping have led to marvellous
successes and to the accumulation of huge wealth—I ask
myself: ‘How is it possible that a wise statesman could
seriously occupy himself with the plan of establishing a Gov-
ernment-bound system in place of it?’ How, I ask you,

can a State-managed industrial organization avail itself of

A ee me _—

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The War 275

the advantages to be had when trade is booming, or to guard
itself against the losses when there is a slump ? What will be
the attitude of such an organization towards dealings in futures
and speculation, both of which are indispensable forms of
modern business enterprise? True, it has been suggested that
these difficulties could be overcome if some business men were
requested to accept appointments under this system, and if
so-called ‘mixed’ concerns worked by the co-operation of public
funds and private capital were established. May Heaven grant
that this will never be done! I am sure you have had even
more to do than I with business men who had been promoted
to the higher dignity of Government officials. Most of them
have turned out complete failures in their new spheres ; they
have become more bureaucratic than our bureaucrats them-
selves ; their initiative and their eagerness to take upon them-
selves responsibilities have never lasted very long. Let there
always be a fair field and no favour! Personal relations and
personal efficiency are all that we need for the rebuilding
of our national economic system. The ‘ mixed’ concerns
are bad because they lack the necessary elasticity, because
they disregard the personal equation, and because they im-
pede the indispensable freedom of action.

“TI am quite prepared for these views of mine to meet
with much criticism. People will say: ‘ All that is very well,
but the Government’s huge indebtedness compels it to take
recourse to extraordinary measures.’ Quite right, but would
it not be much wiser to reduce this indebtedness by increasing
direct and indirect taxation, instead of depriving those who
have proved during the past few decades what they can do
of the means that have made them so efficient ?

“Even among the efficient business men, unless they be
born geniuses, a distinction must be drawn between those
who can make profits and those who can organize. The
former kind—who are, moreover, but few and far between
—will never submit to the personal restrictions to which they
would be subjected in state-managed or ‘ mixed’ concerns.
The second kind alone, however, would never make any con-
cern prosper.

“ Another consideration is that the enemy countries would
view with much suspicion any such institutions controlled

276 Albert Ballin

partly or wholly by the Government. I remember quite
well the scant respect with which the French delegates were
treated at the International Shipping Conferences before the
war. Everyone knew that the big French shipping companies,
owing to the huge Government subsidies, had to put up with
a great deal of supervision on the part of the Government,
and that they could often vote neither for nor against the
most important proposals with which the Conference had to
deal, because they had first to obtain the consent of the Goy-
ernment commissioner. They were, therefore, simply ignored,
as it was clear that they could raise no counter-proposals at
their own initiative.

“ And truly there is every reason for us to use the utmost
caution whenever any questions connected with the recon-
struction of our country are concerned. The excellent
Dr. Naumann, with his ‘ Berlin—Bagdad ’ slogan, has already
smashed a good many window panes which will have to be
paid for after the war by the producing classes. The sugges-
tion that an economic union of the Central European countries
should be established was put forward at a most inopportune
moment, and the propaganda in its favour was bound to
bring about the retaliatory measures agreed upon by our
enemies at the Paris Economic Conference.

“ The resolutions of this Conference were of little practical
importance to us until the day when America entered the field
against us. If the United States assents to them, it will
become possible to enforce them, and for this reason I am
watching the further development of the economic question
with growing concern. I maintain that peace negotiations
should only be started after a previous agreement has been
arrived at between the belligerents to the effect that, on the
conclusion of peace, the commercial relations formerly exist-
ing between them should be restored as far as possible, and
that the resolutions passed at the Paris Economic Conference

and at the Central European Conference should be rescinded.

Such an attitude, however, can only be taken up by our
delegates if they agree that the former commercial treaties,
no matter whether they are still running or whether they have
elapsed, should automatically become valid again for a fairly
extensive period of time after the close of the war. The

Se

a a a a a

ee ee | ee

The War 297

disadvantages which some of these treaties involve for
us are easily outbalanced by the advantages secured by
the others.

“Our Government cannot be reminded too often that it
is necessary to consult experienced men of business in all
such questions. Since the early days of the war I have
vainly tried to convince Herr v. Bethmann of this necessity.
After all, nobody can possibly be an expert in everything.
Yesterday, when reading the letters of Gustav Freytag to
his publisher, Mr. Hirzel, I came across the following admir-
able piece of self-criticism: ‘I do not know yet what is to
become of my work; but I fear I am doing what others,
better qualified than I, ought to be doing, and that I am leaving
undone what I ought to do.’ Every great leader in our
political and economic life must have experienced that it is
extremely unsatisfactory to waste one’s time and energy on
work which another man could do just as well as, or even
better than, oneself. This the Government should remember
whenever it attempts to interfere with the big industrial
combines, such as trusts, syndicates, etc. Wherever a syndi-
cate is necessary in the best interests of any industry, a leader
will be forthcoming who will create it; and only in cases
where inferior minds, acting for selfish reasons of their own,
do not wish to acknowledge the need for combining, the Gov-
ernment should be asked to exercise whatever pressure it
considers advisable in order to further the great aims that are
involved.

“T am afraid that after the war we shall lack the funds
needed for the solution of the traffic problems with which we
shall then be confronted, especially with regard to our inland
waterways. At any rate, if we do build the necessary canals
immediately after the war, we shall find ourselves compelled
to charge such high rates to the vessels using these water-
ways that their advantages will largely tend to become
illusory. Even as it is now, our trade and our manufactures
are seriously handicapped by the high canal dues existing,
by the tugboat monopoly, etc. A really far-sighted policy
which would make it its principal object to assist the progress
of our foreign trade would have to guard against the mistaken
idea that the levying of high rates was the only means of

278 Albert Ballin

obtaining interest on the capital invested. After all, even
the turnpikes had to be abolished in the end.

“ The agitation in favour of separating from Russia the
Ukraine, Finland, and other parts inhabited by alien peoples
—an agitation which is becoming noisier every day—troubles
me very much. Since the early days of the war I have main-
tained that it must be our main war aim to detach Russia from
the Entente, and that we must endeavour to establish close
relations between our own country and Russia so that the two
of us shall be strong enough to face a possible alliance between
Great Britain, the United States, and France. This should
be our aim even now. But if we are going deliberately to
dismember the Russian Empire and to parcel it out into a
number of independent units, our political influence after the
war will be slight indeed, and the result must necessarily
make itself felt to the detriment of our whole economic
life.”

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 enter-
tained 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 :

—E—————eEeEeEeee

_— <<

The War 279

“We should be glad if you would see to it that the
Government does not put a halter round our necks, and that
it refrains from the dangerous attempt to employ barrack-
room methods where economic questions of national and
international importance are at stake. Let us have air, and
light, and freedom to act ; and we, by availing ourselves of
our relations with the overseas countries, shall be able to
carry out the work that lies before us . . .

“ . . . I am convinced that all the measures which are
contemplated to stabilize economic conditions during the
period of transition from war to peace will do more harm
than good. If carried into practice, they will merely prepare
the soil for an economic struggle to succeed the present war
of arms. We need a peace that is doubly secure! We cannot
ask our enemies to give us freedom where we impose com-
_ pulsion. We cannot fight for the freedom of the seas, and at
the same time surround Central Europe with a barbed wire.

“TI do not wish to deny that in order to carry out our
economic tasks a certain amount of Government control
will be necessary. That, of course, goes without saying ;
but anything beyond it is an unmixed evil. If it is said to-day
that the measures to be adopted during the period of economic
transition are, in some instances, intended to remain in force
for three years, and if it is announced semi-officially that the
thousand and one war corporations are to be made use of
for the purposes of this policy, and that their disappearance
is to be very gradual—I can only sound a serious note of
warning against any such designs. When the war is over
all those who can do efficient work will return to their normal
occupations ; and those who then prefer to remain attached
to the war corporations in one capacity or other are surely
to some extent people who have discovered some hidden
charms in these institutions, or, if not, they are persons who,
fearful of the risks connected with the unfettered interplay
of forces, feel that they are better off under the protecting
wing of the Government. If you are going to entrust the
future of our country to such organizations for better or worse,
the economic war after the war, as I have said before, will be
sure to follow, and you will have to face a war that will last
years and years.”

S

280 Albert Ballin

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:

“ Hamfelde, August 25th (Sunday), 1918.
“Last Tuesday Herr Deters' rang me up to ask me on
behalf of Hugo Stinnes if I would meet him in Berlin on the
Thursday. Lieut.-Colonel Bauer, one of Ludendorff’s aides-

de-camp, a gentleman largely responsible for the Pan-German _

leanings of the General and for his close association with the
interests of the big manufacturers, had been to see Stinnes,

and on the strength of the information he had received —
from Lieut.-Colonel Bauer he thought it advisable to havea

talk with me. I declined the invitation because I expected
that the work they wanted me to do would be anything but
pleasant.

“ Next morning Herr Deters rang me up again and told

me that Stinnes would call on me in Hamburg on Friday
morning.

“T left for Hamfelde on Wednesday afternoon, but re-
turned to town again on Thursday, because Stinnes had
arranged to call on me as early as 10.30 a.m. on Friday.

“ The proposed meeting thus took place on Friday, August
23rd, from 10.40 a.m. to 1.15 p.m. Stinnes, with admirable
frankness and directness, started our conversation by stating
that the military situation had become much worse. Our
troops, he said, began to fail us in our task, and the number
of deserters had been very large lately (he mentioned, I
believe, that their number was 32,000). Ludendorff had told
the Crown Prince the plain truth ; but it was still necessary

to explain the true state of affairs to the Kaiser, and to make -

it clear to His Majesty that Hertling, who was completely
laid up with sickness, could no longer effectively fill his post.
The real work was done by his son, Captain v. Hertling, and

1 Director of the Hamburg branch of the firm of Hugo Stinnes.

a

”

The War 281

no efforts were being made to come to a cessation of hostilities.
In other directions, too, matters were drifting towards a
catastrophe. The Minister of War, v. Stein, lacked the neces-
sary authority. In many instances the men called up did not
enlist at all; in Silesia large numbers of them had concealed
themselves in the woods and forests, and their wives provided
them with food, while no energetic steps to check these occur-
rences were taken by the Chief Army Command. I replied
to Stinnes that if Ludendorff agreed I would be ready to
undertake the unpleasant task of informing the Kaiser, but_
that it would first be necessary that Ludendorff and myself
should come to an understanding as to whom to propose to
His Majesty for the Chancellorship.

“ Continuation. Hamburg, August 26th, 1918.

“Stinnes said he thought that Ludendorff had Prince
Biilow in his mind. I told Stinnes that Biilow, in my opinion,
might perhaps be suitable at the head of a peace delegation,
but that it was too late to think of him as a possible Chan-
cellor, and that the German people—more particularly the
Socialists—had not now the requisite confidence in his ability
to fill the post of Chancellor. Neither would he be acceptable
to our enemies. It would be difficult to persuade Great
Britain, the United States and France that a prince, especi-
ally Prince Biilow, would seriously carry out the democra-
tization of Germany. If, however, we really were to discuss
peace at last it would be necessary that the office of Chancellor
should be vested in a man to whom our enemies could take
no possible exception. Stinnes perfectly agreed with me in
this matter.

“We continued to discuss other possible candidates for
the post, but we could not agree on anyone. Finally Stinnes
proposed that we should both go to Berlin and there continue
the discussion together with Lieut.-Colonel Bauer, Ludendorff’s
representative. He would in the meantime report to Berlin
about our conversation, and he was hopeful that we could
see Bauer either to-night (Monday), or to-morrow (Tuesday,
August 27th).

“This morning Stinnes informed me through Deters
that he had sent me a wire stating that the proposed meeting

282 Albert Ballin

could not take place until Monday next, September 2nd,
at 8 p.m. He proposed that we should have a preliminary
meeting at the Hotel Continental at 7 p.m. the same evening.
I suggested that it would be better to fix this preliminary
meeting at 6.30 p.m.

“I must add that Bauer’s (that is Ludendorff’s) sugges-
tion was that I should not see the Kaiser by myself, but to-
gether with Stinnes, Duisburg, and Krupp v. Bohlen.

“I replied to Stinnes that I considered it very inad-
visable for such a deputation to visit the Kaiser, who would
never tolerate that four gentlemen—two of whom were
perfect strangers to him—should speak to him about such
matters. It would be better that Herr v. Bohlen, or, if Luden-
dorff attached special value to it, I myself should call on the
Kaiser in private, and that either Herr v. Bohlen or I should
then endeavour to induce the Kaiser to see the other three —
gentlemen as well.

“ Stinnes was greatly depressed and took as grave a view
of the situation as I did myself.”

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:

“J arrived at Wilhelmshéhe on the morning of September |

5th, and I was asked to ‘ report’ to the Kaiser at 12.45 p.m.

This expression was chosen because the new head of the ~
Kaiser’s Civil Cabinet, Herr v. Berg, evidently wished to —
invest my visit with an official character which would enable —
him to bein attendance. After a while, however, the Kaiser

The War 283

became impatient: and did not wish to wait till the hour
appointed for the interview. So I was requested by telephone
to hold myself in readiness by 11 o’clock. :

“T went to the Castle at that hour and waited in the room
of the aide-de-camp until the Kaiser came and asked me to
go for a walk with him. However, Herr v. Berg was also
there and accompanied us. Consequently the conversation
lost much of the directness which would have been highly
desirable in the Kaiser’s own interest, as well as in that of
the country.

“T found the Kaiser very misinformed, as usual, and full
of that apparent buoyancy of spirit which he likes to dis-
play in the presence of third persons. The facts have been
twisted to such an extent that even the serious failure of
our offensive—which, at first, had depressed him very much
—has been described to him as a success. It is now in-
tended to retire to the old Hindenburg line, so that the
only result of the offensive has been the loss of several hun-
dreds of thousands of valuable lives. All this, as I have
said, is dished up to the poor Kaiser in such a fashion that
he remains perfectly blind to the catastrophic effect of it.

“ He now puts his whole trust in Herr v. Hintze, whom
he evidently looks upon as a great light.

“TI told the Kaiser of my grave misgivings and made
him clearly understand that I did not think there would
be much use in entering into peace negotiations with Great
Britain. I urged that no time should be lost in immediately
approaching Wilson, who was an idealist and who had no
territorial aspirations in Europe. If, however, the war
should continue much longer Wilson would most probably
become subject to the influences of a war party, and then
we could no longer hope that he would still insist upon a
settlement along the lines of his idealist programme.

“The Kaiser agreed that my views were well founded,
but he thought we ought not to enter into peace negotiations
before the approach of autumn, by which time we should
have returned to the safe position afforded by the Hinden-
burg line. Then, he thought, we should avail ourselves of
the offer of mediation which had been made by the Queen
of Holland.

284 Albert Ballin

“‘ Whenever I was too frank in my criticisms and sug-
gestions, Herr v. Berg skilfully interposed. He declared to
me when the Kaiser had left that it would not do to make
His Majesty too pessimistic.

“T also discussed with the Kaiser the question of doing
away with the restrictions imposed upon the sale of perish-
able articles of food, such as butter, eggs, etc. ; and I pointed
out to him that the fixing of maximum prices and the issuing
of regulations dealing with illicit trading merely forced the
people to pay exorbitant prices, at the same time helping
those engaged in underhand trading to amass huge for-
tunes. On this subject, too, the Kaiser fell in with my own
views, and it was decided to release at least the perishable
articles, and to allow them to be sold once more through the
ordinary channels without restriction.

“The Kaiser also declared that this war would soon

be followed by another, to which he referred as the Second
Carthaginian War. He spoke a great deal of an Anglo-
American alliance which would, of course, be directed against

Japan, and the views on political subjects which he ex- .

pressed in this connexion showed that he is being very badly
advised indeed.

“Herr v. Berg is obviously conservative and Pan-German
in his politics, and it seems that his influence is predominant
at Court. Only on the Prussian suffrage question did he
agree with my own standpoint, which is that universal suf-
frage must be granted now that the King has promised it.

‘‘Since the Kaiser and the Kaiserin, on account of the —

latter’s illness, were dining alone, I joined the so-called
‘Court Marshal’s table,’ together with the Countesses Keller
and Rantzau, the gentlemen-in-waiting on the Kaiser, and

the physician-in-ordinary and the chamberlain of the Kaiserin,

The duty of acting as court marshal fell to General v. Gontard,
as Herr v. Reischach had unfortunately fallen seriously ill.” _

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:

#
~
7

= ee

The War 285

“In the meantime,” he writes, “‘ Wilson’s reply has been
received, and it is certain that compliance with its terms
will be equivalent to capitulation.

“To my mind Wilson’s note clearly shows that he and
his allies will demand that the Hohenzollerns, or at any rate
the Kaiser and the Crown Prince, shall relinquish their rights
to the throne, and that, in consideration of such an act,
they will ease their terms of peace.

“‘ Each of the men who are at the head of their respective
Governments has to play to his gallery, and if these men
desire to give their audience a convincing proof of the com-
pleteness of the success they have achieved, they can do
no better than demand condign punishment for the man
who has been held responsible for the war, and inflict it upon
him. I do not believe that the Kaiser would grieve very
much if he were given a chance now of retiring into private
life without much loss of dignity. The war, which was
something absolutely uncongenial to his whole nature, has
had such bad effect on his health that it would be desirable
in his own interest if he were enabled to retire comfort-
ably into private life. He must see the force of this argu-
ment himself, and it is not likely that he would refuse to
accept such a chance, as a refusal would prejudice the best
interests of his country. The Kaiserin, however, may be
expected to oppose any such solution with much feeling.
If the Kaiser’s grandson were now appointed his successor,
and if a regent were nominated in whom everybody had
confidence, the whole German situation would lose much
of its seriousness. Of course, the abdication of the Kaiser
would not take place without certain disturbances, but it
would be necessary to face these disadvantages with a good
grace. No doubt the outlook would be better if they could be
avoided, and if the Kaiser, without losing his position, could be
invested with rights and duties similar to those of the British
king, who, broadly speaking, enjoys all the advantages of
his dignity without having to take upon himself responsi-
bilities which he is unable to bear. I quite believe that
the Kaiser never derived much pleasure from his sovereign
powers ; at any rate, if he did, he has ceased to do so since
this unfortunate war has been forced upon him.”

286 Albert Ballin :
Ballin's ast entry in bis ary Sontalne Gata win
isl tas nick Goel @0 toe 7

Centre parties are of opinion that I ought to be

to conduct the peace negotiations. I have told h

I should not shirk it, but that I should be much better pleased
if somebody else would do it.” Pa

This note was written on November 2nd, 118, 0
short week later, on November gth, bi ee
tiaterihs S.cmaaat Cray cata
call of his Kaiser and country, and which had s
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 under-
taking 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 back-
ground 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

287

288 Albert Ballin

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. a
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 person-

ality. 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. a
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 play- —
ground ; 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.

Personal Characteristics 289

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 insigni-
ficant that he would not attend to it somehow. What-
ever 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

290 Albert Ballin

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 repre-
senting 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 influ- —
ence 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 con-
sistency, 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. 7
Although he had nothing but scorn for the very sug-

Personal Characteristics 291

gestion 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. Hun-
dreds of industrial, commercial, and agricultural enter-
prises 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 pro-
ducts 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 impli-
cation, 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

292 Albert Ballin

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 con-
tinent, 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 essen- —
tial 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 con-
scious 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 else-
where in this volume that Ballin was essentially the
man of compromise. It is very probable that the ex-
periences 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

Personal Characteristics 293

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 grand-
son 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 some-
times lead to much disappointment on the part of the
shareholders, but they proved to be of unsurpassable
benefit to the companies concerned, and nothing illus-
trates 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.

294 Albert Ballin

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 con-
nexion 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 in-
formed them in advance that, at the general ae
of the shareholders, he would move an increase of Io
instead of 5 millions, and that this motion was unani-

mously 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 Schréder, Laeisz scribbled the —

following note on the back of one of Ballin’s visiting
cards :

“It gives me pleasure to introduce to you the bearer
of this card, whom I am proud to name my friend, and to —
recommend him to your protection and to your unfailing —

kindness. “ Sincerely yours,
“e (Signed) I AFISZ.””

As this card was found among the papers and docu-
ments 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 affec-
tion, 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 q

Personal Characteristics 205

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:

“Persons who give in without a protest are miserable
creatures, and being such, they are deserving of nothing but
contempt. Suggest that you obstinately stick to Hamburg
point of view, not only from personal conviction, but for
other weighty reasons as well. Meeting hardly convened
simply to induce you to give in.”

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 Kéhlbrand 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 Ham-
burg, and the Prussian local authorities concerned in-
sisted on securing the payment of such large compensa-
tions 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.
T

2096 . Albert Ballin

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 hinter-
land, after all; and if she consented to be thus incor-
porated, 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 draw-
backs, and the ultimate sufferer would be the country
as a whole of which Hamburg, after all, was the con-
necting link with the nations beyond the sea. d

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. 7

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 demarca- —

a

Personal Characteristics 297

tion 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 paidtothemen. The interests of the employers
in the ensuing struggle were not, however, specially
represented by the associations of the shipping firms,

298 Albert Ballin

but were looked after by the big “ Association of Em- —
ployers 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 settle-
ment, 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 ©

a) 4
|

Personal Characteristics 299

against my wish,” Ballin’s notes continue, “ that our
own interests are represented by the Employers’ Asso-
ciation,’ 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 re-
jected 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 Ig1zI, 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

| ao

300 Albert Ballin

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 ite
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. a
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.

Personal Characteristics 301

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

302 Albert Ballin

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. e

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 appoint-
ment were passed on to someone else as far as this was
possible. Great credit is due to his ever faithful al
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 todo. 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 reason-
ing and his individual traits, it was not difficult to

Personal Characteristics 303

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 other-
wise would mean the immediate and permanent for-
feiture 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 erec-
tion he quickly and inexorably pulled it down, and he
always remained in personal contact with every depart-
ment 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 person-
ally acquainted with a great many of those uncon-
ventional 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 pub-
lished by the Hamburger Fremdenblatt, to the staff of
which the subject of his appreciation might, in a sense,
be said to have belonged °

KUSKOP.
“Tt was not until my return from England that I
learnt, through reading the Fremdenblait, the news of the

304 Albert Ballin

death of Karl Kuskop—news which made me feel very sad
indeed. Kuskop ranked high among the few remaining
real ‘ characters’ of whom he was a type, and as I was not
able to pay my last respects to him I feel a desire to do honour
to his memory by a few words of personal recollection,
although Dr. Obst has already done so by means of an excel-
lent article of his own. For I believe I owe a few words
of farewell to a man of whom I have heard nothing but what
was good and generous throughout the better part of thirty —
years.

“ Karl Kuskop was a ‘ character’ in the best sensé of
the term. He was as harmless as a big child; and although
he could scarcely be said to be prominently gifted for his —
work, he did, indirectly at least, a great deal of good within
his humble sphere. His popularity amongst all sorts and —
conditions of men connected with shipping was tremendous. —
My personal acquaintance with him dates back to the early
trial trips of our steamers and similar occasions—occasions —
at which Kuskop was present as the ‘ representative’ of the
Fremdenblatt. 1 still have a vivid recollection of a magni- —
ficent summer evening when we, a party of about eighty people, —
left the passenger reception halls by our saloon-steamer
Blankensee on our way to Brunshausen where we intended to —
go on board one of our new boats which was ready for her —
trial trip. Kuskop, who was wearing his yachting cap and —
was armed with a pair of huge binoculars, had taken up a
position on deck. He stood out very conspicuously, and a —
port labourer who was working on board an English steamer —
as soon as he saw him, raised the cry of ‘ Fremdenblatt.’ This —
cry was immediately taken up by the people on the quay- —
sides, on the river-vessels, on the ferry-boats, on the barges, -
and all other vessels in the neighbourhood, and developed
into quite an ovation which was as spontaneous as it was
popular. The worthy Kuskop appeared to be visibly gaining —
in importance; he had taken off his cap, and the tears —
trickled down his kindly face. .

“ He well deserved this popularity. For years and years —
he unfailingly saw to it that the Hamburg steamers, at what-
ever port of the globe they arrived, found a Fremdenblatt
waiting for them, thus providing a valuable and much appre-

Personal Characteristics 305

ciated link between the crews and the old home. I myself
have also reaped the benefit of his attentive care. Years ago
when I was making a trip round the world I found the Frem-
denblait waiting for me wherever I went ; and after having
been so much out of touch with the civilized world for weeks,
that even Kuskop’s genius could not discover my where-
abouts, I was agreeably surprised to find on arriving at
Vancouver all the old copies of the Fremdenblatt that had
failed to reach me, carefully piled up in one of the sleeping
compartments of the saloon carriage which had been placed
at my disposal for the railway journey from the Pacific to
the Atlantic seaboard.

“At that time I personally experienced the pleasant
sensation—of which our captains and the other officers had
often spoken to me—which one feels on reading the back
copies of old newspapers, calling up, as it does, vivid recol-
lections of home. In company with my wife, and some
German officers who were returning from the scene of unrest
in China in order to complete their convalescence at home,
I greedily devoured the contents of the old papers from begin-
ning to end, thus passing in a delightful way the time taken by
travelling the long distance from Vancouver to Montreal.
The idea, which was afterwards made use of by Oskar
Blumenthal in a witty article, occurred to me to edit a paper
which would publish the news of the day a week after it had
been reported, and even then only as much of it as had proved
to be true. Such a newspaper would save us a great deal of
unnecessary worry, as the contents of this ‘ Periodical for
the Dissemination of Truthful News’ would be sifted to a

“ But it is time to cut short this digression. When I
met my friend Kuskop again after my trip, it was at Stettin
on the occasion of alaunch. He happened to be in especially
high spirits, and even more communicative than usual. He
then told me the tale of his friend Senator Petersen, and it is
such a good story that it would be a pity not to record it
here.

“It had become customary for the ships’ captains and
the other ships’ officers who could boast his friendship to
treat poor Kuskop to the wildest canards in return for his

306 Albert Ballin

supplying them with reading matter from their far-away
home. One afternoon, when they were sitting over a bottle
of old port in Hermann Bade’s wine restaurant at Stubbenhuk
and it was getting late, one of them—he always referred
to them as ‘ them young fools ’—told him that a river barge
loaded with arsenic had just sprung a leak in the harbour,
so that it might become necessary to prohibit the use of water
for drinking purposes for some time. It was about five o’clock
and Kuskop, according to his own account, did not even
to finish his glass of port, but hurried to the offices of ‘his’
paper which, in its next edition, published it as a fact thata
quantity of arsenic had vitiated the water of the Elbe. Next —
morning, when Kuskop was still soundly asleep, two detec- —
tives appeared at the house in which he lived, and escorted _
him to headquarters, where he was locked up. At ten o’clock _
he was taken up before Mr. Livonius—or whoever was the ~
chief of police at that time—who, with much abuse, demanded _
particulars concerning the arsenic affair. Kuskop, seeing at
once that one of ‘ them young fools’ had been pulling his leg,
refused to supply any information whatever. He was then —
brought before Senator Petersen, who, with a great display of
persuasion, tried to make him reveal the name of his informant.
Kuskop, however, remained obstinate, and the Senator, —
changing his methods from persuasion to coercion, had him
locked up again. He remained in confinement till five o’clock
in the afternoon, and was then taken before Senator Petersen
for the second time, who now peremptorily demanded that —
he should state his informant’s name. Kuskop replied: —
‘ Herr Senator, if you were in my position, you would not give
him away yourself.’ The Senator turned round to the police —
officials and said: ‘Mr. Kuskop is a gentleman, you see.
We shall not get anything out of him. The best thing you —
can do is to chuck him out,’ which suggestion was thereupon
promptly and most efficiently carried out by some of those
who were present.
“ Another of his adventures he confided to me when a
trial trip had taken us right out into the North Sea. One
of ‘them young fools,’ he said, whom he regularly met at
Mutzenbecher’s tavern, had told him as the very latest news
that Captain Kier had been taken into custody at Rio on the

Personal Characteristics 307

unfounded allegation of having committed theft. Kuskop,
feeling somewhat sceptical on hearing this intelligence, but
not believing himself justified in depriving the readers of the
Fremdenblatt of such a highly interesting item of news,
thought he would be extra careful this time, and so did not
mention the captain by name, but merely referred to him as
“a Mr. K , captain of a Hamburg steamer.’ This happened
in the good old times when there were still real winters in
Hamburg, and when the Elbe was sometimes ice-bound for
months. The Hamburg steamers were then compelled to
take up winter quarters at Gliickstadt—of all places—and
Kuskop used to establish a ‘ branch office’ at that town on
such occasions. As bad luck would have it, he was fated
one day to meet Captain Kier there, who, with some of his
friends, was dining at his hotel. A huge tureen of soup with
an enormous ladle stood on the table in front of the captain,
who was just about to serve the soup when Kuskop entered
the room. Without a moment’s hesitation the captain seized
the ladle, the tureen, and everything he could lay his hands
on, and hurled them at him. He was, as the latter after-
wards confessed to me with the most innocent expression,
offended by the newspaper report, because, as it happened,
he was the only captain K—— on the route from Hamburg to
Rio at that particular time. He subsequently brought an
action against Kuskop, who had to retire from his business
for some weeks in order to get over the consequences of the
mistake he had made.

“ These are onlytwo of the minor adventures from Kuskop’s
ample store of reminiscences. It is a pity that our sea-
faring men are so reticent ; otherwise they would be able to
furnish a volume of material concerning Kuskop that
would far exceed that relating to Kirchhoff, that other
well-known Hamburg ‘character.’ I wish someone would
collect all the Kuskop stories; for I do not believe that
we shall ever again come across such a perfect specimen of his
kind as he was, and it would be sad to allow such a man to be
forgotten.

“ Kuskop, however, was not only a ‘ character’: he was
also a ‘real good sort,’ and he has been of real service to all
those who have ever travelled on Hamburg vessels. Because

308 Albert Ballin

of that it is certain that he will long be remembered ; for it
is not to him that the following quotation can be applied :
“May each one of us—whether he works with his hands or
with his brain to earn a living wage—always bear in mind
that all that is best in him is gradually lost in the process of
toil, and that, after he has departed this life, nobody will —
remember that he ever existed.’ :

“Our friend Kuskop never lost his good qualities in the —
process of toil, and he was always a friend and a helpmate to
all decent people. I am sure in saying this I have the sup- —
port of all who knew him, and so with us his memory will —
always be kept green.” -

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

Personal Characteristics 309

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 command-
ing 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 representa-

310 Albert Ballin

tion 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
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 person- —
ality 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 com-
panion 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 m sy

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, memor-
anda, 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 con-
scientious 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 fang
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.

Personal Characteristics 311

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 occa-
sion, 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
U

312 Albert Ballin

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. Con-
ferences 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 diffi-

cult 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.”

.

Personal Characteristics 313

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

314 Albert Ballin

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 re-
construction 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
whe 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 indus-
trial 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 achieve-
ments 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

:
;

Personal Characteristics 315

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

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

317

Baker, B. N., discusses terms of
community of interest agree-
ment, 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 rapproche-
ment, 134

and Cari 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

Index
Ballin, Albert, intense patriotism

318
Ballin, Albert, as head of Packet-

oe 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 to-
ward, 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 Mor-
occo affair, 181

in London discussing Austrian
ultimatum, 215

in Vienna, 1916, 249

of, 291 i
international services of, vii
interview with Bethmann-Holl-

weg, 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-Wachter, 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 aoa

notes of conversations with Wil-
liam II, 203

official thanks to, 141

on Agadir incident, 163

on Blicher, 60

on death of Edward VII, 160

on engineering problems, 121

on foreign exchange, 274

on Hohenzolleyn, 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 e¢ seq.

opinion of German Chancellor,
259

opinion of war’s duration, 237

personal characteristics of, 287

pioneer in steerage business, II
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 Ger-
man shipping, 47

reticence of, 3

:
3

Index

Ballin, Albert, reviews war position

in 1916, 258
ridicules submarine warfare,
268-9

stimulating influences of his life,

z

strain of war on health, 313

sturdy honesty of, 309

— as negotiator of peace,
286

suggests Pool, 24

talks with Prince Biilow, 271

talks with William II on sub-
marine war, 248

threatens British traffic, 22

trip round the world, 83

value of wonderful memory, 35

views on character of William II,

205
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
hiner oy II’s personal interest in,
19
wire from Leopold de Rothschild,
163
with Prince Henry of Prussia on
the Hohenzolleyn, 57
with William II at Front, 266
with William II in Italy, 204
with William II on Kaiser Wil-
helm ITI, 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 Tageblait on Anglo-Rus-
sian 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

319

Bismarck, Prince, 114
Blockade, German, futility of, 267
Blohm and Voss, 113
Blicher, 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 ex-
pansion, 182
confiscation of German merchant
fleet, 229
convoys, how they outwitted the
Germans, 267
emigration, comparison with Ger-
man, 15
excitement over Morgan Trust,
60
feeling in Russo - Japanese war,
at German attitude, 104
Ludendorfi’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

Biilow, Prince, 141, 247, 270

CANADIAN PaciFIc RAILWAY, 62, III
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

320

Cassel, Sir Ernest,
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, 20%
Community of interest agreement

on naval

(see “Pool” and ‘ Morgan
Trust ’’)

Congo, Franco-German agreement,
162

Coolies, Chinese, 89
Cunard Line, and Austrian Govern-
ment, 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 steam-
ship, 102
Dreadnoughts, 200

Eastern Asratic Co., 98
Edward VII, 134
and Morgan Trust, 61

Index

Edward VII, chances of Anglo-
German war, during reign of,

139
= st 158
policy of, 135
the Kiel week, 206
visit to Wilhelmshéhe, 136
visits Berlin, 145
visits Kaiser at Friedrichshof,
142
Elbe, enlargement of harbour facili-
ties 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

oe for, ee

gs 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 , 14

statistics of, 103

Erzberger, Herr, 244
Esher, Lord, and the Admiralty,

138
Europe, concerted inquiry to Ger-
many, 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

Index

Frisch, Geheimrat, 223

Furness, Sir Christopher, and Mor-
gan Trust, 61

First Bismarck, 193

Fiirstenkonzern, 110

Grorce V, King, Ballin’s letter re-
specting, 160

George, Mr. Lloyd, speech on
Agadir incident, 162

visits Germany, 143

Gerard, Mr., and Ballin, 246

German-British shipping agree-

ment, 18

German emigration fleet, in 1882,
Io

German Government, note to British
Government, 170

German Naval Bill, 137

wage Navy, the 1908 affair,

a 13
Germany, and Belgian Relief Com-
mittee, 231

and oe Merchant Service Bill,
22

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

321

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.

HacuE 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 foodstufis for isolated Ger-
many, 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

322

Hamburg-Amerika Linie (see also
Packetfahrt)

Hamburg-Amerikanische Packet-
fahrt-Actien-Gesellschaft, 7

Hamburg Regattas, William II at,
201

Hamburg-South American §.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 Arbi-
tration 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,

293
Holtzendorff, Admiral v., 246
Hongkong, 88
Fruldeseanns. Bernhard, and Count
Witte on averting war, 217
and Navy Bill, 170

Immco Lines, Pool name for Morgan
Trust, 65
Immigrants, Scandinavian trade,
6

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

Jacow, Herr v., 213, 214

Jewish ancestry of Ballin, 2

Jones, Sir A., and the Morgan Trust,
6

Jonquiéres, Herr v., 231

Index

Kaiser Wilhelm der Grésse, 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, o of, 201
ee ef Inspector Emil F.,

K6hlhrand agreement the, 295
Kiihlmann, Herr v., 189 '
Kunhardt, M., 27

Kuskop, Karl, 303

Laxisz, Carl, 293
Laeisz, F., 293
Laird’s, orders to, 26

Law, German Emigration, of 1887,

23
Leuthold, Prof., 199

Leyland Line, acquired by Pier-—

pont Morgan, 48

Liberal Cabinet, and naval arma-
ments, 149

Liberal Government, and
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
png st and the Crown Prince, —
2 .
and “‘ to her knees’ promise, 266

Lusitania, 62, 113 .

Marik#, Princess, of Denmark, 99
Marine engineering, Ballin’s enter-
prise in, 122

development of, 119

Packetfahrt types, 125

progress in, 127
Marschall, Bieberstein v., 188
Mauretania, 62, 113
Mediterranean Conference, III
Meteor, 197

{
:

Index

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 ef 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 Con-
ference, 49
Pierpont Morgan’s operations at-
tract public attention, 46
telegram from William II, 56
terms of agreement, 58
William II discusses, 53
Morris and Co., 1 e¢ 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 sug-
gests a, 186
Navy, a bigger British, 171
Navy League, German, 137
New York, 49
New York, emigration to in the
eighties, 7 e¢ seq.
steerage passengers to, statistics,
29
Normannia, 77

323

North Atlantic Steamship Lines
Association, history of, 32
North German Gazette, 157
North German Lloyd, 7, 93, 106,
IIL
competes with Packetfahrt, 10
jubilee of, 117

OERTZEN, Herr v., 91
Olympic, 113

PACKETFAHRT, the, a founder of, ro
agreement with Philadelphia
Shipping Co. and Pennsylvania
Railroad Co., 77
and Ballin, 289
and Carr Line, 12
and emigrants, 10
and Harland and Wolff, r21
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 ac-
commodation 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

324

shape pes 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 thee 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
nee plone formal name of,

peemue by Ballin, 1886, 24
7m for Mediterranean busi-

Rare coat es ONE made, 33

the General, 111

the transatlantic, 110

tonnage and passenger statistics,

29
U.S.A. Railway pool compared,
8

2
world war’s effect upon, III

Port Said, 85

Pretoria, 201

Princes’ Trust, 110

Prinzessin Victoria Luise, 130

Prussia, Prince Henry of, 57

RATE war, the, 14, IIo
Red Star Line, 7
coe the, formation of,

223
Reuchlin, of Holland-American
Line, 3
Pideardaoa, 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

Index

Russian East Asiatic S.S. Co., ror
Russian Press, outburst
Sandjak Railway, 141
Russian Volunteer IIL
Russo-Japanese War, 102 ~
problems for Russian —
fleet, 105 ;
ships for, 25 ‘

Sand ak ‘iehoun 14!
Scandia Line, 21 ;
Scandinavian emigration, 21
Schén, Herr v., 141 i
Schratt, Frau Kathi, 250 . :
ght nnslish sympathies of, gale ;
Schwander, Dr., 272
Shanghai, 90
Shaughnessy, Lord, 62
Shipping agreement on rates, 17
agreements, enormous range of, |
IiI
British tonnage in 1901, 49
crisis of 1907, III a
interest

Imperial Government's

in, 55
some tonnage company 49
statistics (1881-1885), 29 4
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, devel tof, 82 —
Southampton, Packe service

transferred to, 73
Spanish - American War, ships for,

25
Steinhéft, 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
Stiirgkh, Count, 243
Francis Joseph and, 250
Submarine warfare, 248, 252, 258 '
amazing achievements, 268
unrestricted,’ beginning of, 263

Index

THINGVALLA Line, 21 j
Times, The, on German neutrality,
104

Tirpitz, Admiral v., 151, 152, 199

and Ballin, 237

threatens resignation, 246
Tisza, Count, 243

and Count Stiirgkh, 250
Titanic, 113

Tokio, 93

Trans-Andine Railway, completion
of, 82

fsingtau, 92, 9

Tweedmouth, ee and the Kaiser,
137

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

of the

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 fac-
simile at end), 163, 235
White Star Line, and Pierpont
Morgan, 55
new liners, 113
Wiegand, Dr. Heinrich, 119
and Morgan Trust, 54
bilge Mr., Ballin’ s friendship
or, 9

325

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 Sep-
tember, 1918, 209

Ballin reports to,
problem, 138

Ballin tells him the ugly truth in
1917, 267

blind to situation, September,
1918, 283

“ brimful of optimism,” 272

comments on Westminster Gazeite
article, 163

designs excursion steamer, 196

discusses Morgan Trust with
Ballin, 53

discusses Morocco question, 205

facsimile comments on Wesi-

on navy

minster 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,
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 in-
quiry to U.S.A., 54

telegram to Morgan Trust, 56

Ballin

326

William II, venerated in Austria,
251
visits Windsor, 136
—— apology from Great Britain,
I

3
writes to Ballin on Haldane in-
terview, 175
Wilson, President, 263
Witt, Mr. Johannes, 27
Witte, Count, on situation July,

IQI4, 217
Woermann, Adolph, 107
character sket of, 108

World war, the, 213

Ballin —. ts mediation, 233

Ballin descri 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

— of German conscripts,
281

effect on Pool, 111

Index

World war, the, entry of USA, .
effect of

food problems of Germany. 4
forced upon Willian: a anid ;
ey polley and food during, |

Genus mistakes in, 258-9 _ ;
Germany stunned by débdcle, 236
grain from sme: 227

am, 271
outbreak of, 132
peace overtures, 245
position in 1916, 258
provisioning y, 221
shipping profits during, 65
ubmarine warfare in, 229
the British blockade, 224
Tyrol, failure in the, 259
Verdun and Italian campaigns,
oy bay and military failures,

World's shipping collapse, cause of, —
229

YANG-TSE-KIANG, the, 91, 96

ZENTRAL-EINKAUFS-GESELLSCHAFT, —
226 et seq. 4

os

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