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Albert Ballin 



By 

Bernhard Huldermann 



Translated from the German 

by 

W. J. EGGERS, M.A. (London) 



7. i . :^M 



Gassell and Company, Limited 
London, New York, Toronto and Melbourne 

1922 



To the Memory of 

ALBERT BALLIN 

in true veneration and heartfelt gratitude 



" He was a man ; take him for all in all, 
I shall not look upon his like again." 

Shakespeare, Hamlet {Ad I, Scene z). 



L 



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 



Vlll 



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 perhaps a 
special right to undertake this task. 

My best thanks are due to Director A. Storm for 
supplying me with material illustrative of Ballin's early 
career ; to Chief Inspector Emil F. Kirchheim for 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 sitie ira et studio, and to refrain from stating 
as a fact anything for which no documentary evidence 
is available. 

The Author. 

October, 1921. 



CONTENTS 



CHAPTER PACK 

1. Morris and Co. i 

2. General Representative of the Carr 

Line . 12 

3. Head of the Packetfahrt's Passenger 

Department 21 

4. The Pool 28 

5. The Morgan Trust 40 

6. The Expansion of the Hamburg-Amerika 

LiNIE 69 

7. The Technical Reorganization of the 

Hamburg-Amerika Linie . . . 121 

8. Politics 131 

9. The Kaiser 193 

10. The War 213 

11. Personal Characteristics . . . 287 
Extract annotated by William II . .316 
Index 317 



ALBERT BALLIN 

CHAPTER I 

Morris and Co. 

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

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 



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- 



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 
in England. The actual facts are anything but romantic. 
Being the youngest of seven brothers and sisters, he was 
treated with especial tenderness and affection by his 
mother, so much so, in fact, that he grew up rather a 
delicate boy and was subject to all sorts of maladies 
and constitutional weaknesses. He was educated, as 
was usual at that time, at one of the private day-schools 
of his native city. In those days, when Hamburg did 
not yet possess a university of her own, and when the 
facilities which she provided for the intellectual needs 
of her citizens were deplorably inadequate for the 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 leitres, 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 



6 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 



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 f;-om 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 of industries required the services of all who 
could work. Simultaneously, however, with the decrease 
of emigration from Germany, that from Southern Europe, 



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 clientele, 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 busiriess capacities. A 



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 
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 



10 Albert BalHn 

by them to those among their friends or relatives in 
Europe who, without possessing the necessary money, 
wished to emigrate to the States. A few months after 
the booking of these " pre-paids " a strong current of 
emigration always set in, and the time just referred to 
proved to be no exception to the rule. The number 
of steerage passengers leaving Hamburg for New 
York increased from 25,000 in 1879 to 69,000 in 1880, 
and 123,000 in 1881. 

It was quite impossible for the biggest Hamburg 
shipping company — the Packetfahrt — to carry 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 9 days " — which was worked with admirable 
regularity and punctuality, but had also increased the 
volume of its fleet to such an extent that, in 1882, 47 
of the 107 transatlantic steamers flying the German 
flag belonged to this Company, whereas the Packetfahrt 
possessed 24 only. For all these reasons it would have 
been useless for Morris and Co. to suggest to the 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 
Arm 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 
influence over the management of the Packetfahrt, The 
firm of August Bolten, moreover, had, like the line they 
represented, always consistently refused to have any 
dealings with the emigrant agencies. 

Ballin, knowing that the next few years would lead 
to a considerable increase in the emigrant traffic, 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 
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 581 when the first steamer left 



General Representative of Carr Line 13 

Hamburg on June 7th, 1881. 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. "WTiereas 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 unwoikable. 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 : 



i6 Albert Ballin 



Numbey of Emigrants carried 
Packetfahrt Carr Line via British porta 



1880 


47,000 


— 


20,000 


I88I . 


68,000 


4,000 


47,600 


1882 


68,000 


11,000 


31,000 


1883 . 


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 
their rates to 100 marks, except that the Carr Line 
should be entitled to fix theirs at 90 marks. Thus the 
latter had at length received the recognition of its claim 
to a differentiation, and of its right to exist side by side 
with the older Company, although its steamers were 
not of an equal quality with those of the latter. An 
agreement was also concluded by which the rates of 
commission due to the Hamburg emigrant agents were 
fixed, and at the continued negotiations with the other 
lines Albert Ballin, from that time onward, in his 
capacity of representative of the Carr Line, was looked 
upon as on an equal footing with the representatives 
of the other lines. 

The principal subject of the discussions was the 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 



i8 Albert Ballln 

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 



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 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. 



CHAPTER III 

Head of the Packetfahrt's Passenger Department 

On May 31st, 1886, Albert Ballin first took part in a 
joint meeting of the Board of Trustees and the Board 
of Directors of the Packetfahrt. On this occasion two 
proposals were put forward by him : one, to provide 
new premises for the work connected with the booking 
of passengers at an annual rent of 5,000 marks ; the 
other, to start a direct service from Stettin to New 
York via Gothenburg. This latter proposal was prompted 
by the desire to reduce the influence of the British lines 
competing for the Hamburg business. Such a 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 
5" 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 Thing valla 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- 



22 Albert BalHn 

change for concessions on the part of the latter regarding 
the Hamburg business. If this plan failed, Ballin had 
another one mapped out : he threatened to attack the 
British in their own country by carrying steerage 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 los. net. A clearing house which should be under 
the management of a representative of the British lines, 
and wliich 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 wliich 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 
to 100 and no marks respectively. Henceforward both 
competing groups were equally interested in obtaining 
as high a rate as possible. 

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



24 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 arrange- 
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 Deuisch- 
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 BalHn 

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 ;f2io,ooo 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 



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 Pool 

The term " pool " may be defined in a variety of ways, 
but, generally speaking, the root idea underlying its 
meaning is always the same, both in its application to 
business and to betting. A pool, in brief, is a 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 

aS 



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 .... 33*45 

North German Lloyd (Baltimore Line) 14-80 

Packetfahrt 27-00 

Union Line 5-53 

Red Star Line ..... 12-26 
Holland American Line . . . 6-96 

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





Tons 


Percentage 


North German Lloyd 


' 275,520 


33-91 


North German Lloyd (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 


10-10 


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 ..... 25-77J 

Union Line . . . . .5-40 

Red Star Line ..... 15 -33^ 
Holland American Line . . . 8-53 

" 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 (i) 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 wliich 



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 
i8y2, 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 1921 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 tliis 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- 



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 sufi&cient to defend it against 
the objections that were raised, nor to prevent its re- 
jection. I can hardly imagine what the representatives 
of the other lines must have felt on hearing that it was 
the Lloyd itself which refused to accept the proposal 
which had been put forward by its own delegate, although 
the share allotted to it was very generous. Thus the 
struggle went on for another eighteen months, and it 
was not until January, 1892, that the principal lines 
concerned definitely concluded a pool agreement closely 
resembling the draft agreement I had originally 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, 1890. 

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

This so-called North Atlantic Steamship Lines Asso- 



34 Albert Ballin 

elation, 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'i6 


44-53 


Packetfahrt (including the Union 




Line) 28-84 


18.47 


Red Star Line . . . .1570 


20-68 


Holland American Line . . 9'30 


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

The knowledge of these regulations gradually 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 



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 ynes 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 

granted 7 per cent, of the Continental traffic (in 1891 
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 
imfavourable, 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 lust 
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 


. 30-71 


26-47 


Red Star Line . 


- 15-37 


18-68 


Holland American Line 


. 9-78 


13-32 



The Pool 39 

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

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



CHAPTER V 

THE MORGAN TRUST 

Speaking generally, the transatlantic shipping business 
may be said to consist of three great branches, viz. 
the cargo, the steerage, and the cabin business. The 
pool agreements that were concluded between the 
interested companies covered only the cargo business 
and the steerage traffic. The condition which alone 
makes it possible for the owners to work the shipping 
business on remunerative lines is that all needless waste 
of material must be strictly banned. The great 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 41 

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, i.e. in the spring and 
early part of summer on their East-bound, and in the 
latter part of summer and in the autumn on their West- 
bound, voyages. During the remaining months a number 
of berths were empty, and the fares obtainable were 
correspondingly unprofitable. Ballin, in 1902, estimated 
the unnecessary expenditure to which the companies 
were put in any single year owing to this unbusinesslike 
state of affairs at not less then 50 million marks. The 
desire to do away with conditions such as these by 
extending the pool agreement so as to develop it into 
a community-of-interest agreement of comprehensive 
scope was one of the two principal reasons leading to 
the formation of the Morgan Trust. The other reason 
was the wish to bring about a system of co-operation 
between the European and the American interests. 

This desire was prompted by the recognition of the 
cardinal importance to the transatlantic shipping 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 : — 

" I replied a few days ago ofi&cially 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 



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 8| per cent., 
1889 II 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 modem ships (average age only about 
five years), and the book values of them being very low. 

" I should be obUged 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 poUcy 
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 
finn 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 45 

National Line which maintained a service between 
New York and London, and was, indeed, the decisive 
factor on the New York-London route. BaUin, 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. 'WTien 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. EUerman, 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, 1901, 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 

whole freight business within an incredibly short space 
of time. For a concern of the huge size of our own 
such a situation is fraught with the greatest danger, 
and our position is made still worse by another cir- 
cumstance. In the States, a country whose natural 
resources are wellnigh inexhaustible, and whose enter- 
prising population has immensely increased its wealth, 
the creation of trusts is an event of everyday occurrence. 
The banker, Pierpont Morgan — a man of whom it is 
said that he combines the possession of an enormous 
fortune with an intelligence which is simply astounding 
— has already created the Steel Trust, the biggest 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 
BalUn 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 
imderstand 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. BalUn 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 90 per cent, of the United States sea- 
borne trade was still carried by vessels ^ying 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 9 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 rim 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, totaUing 155,489 gross register tons. This purchase 
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 reUable 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 hues 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 arrive at the following figures : German lines — 390,000 
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 Atlantic route. It can also challenge comparison 
with the regular British lines — ^grand total, 438,566 G.R.T. 

"In 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 obhged 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. 

"It 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 foreign-owned 
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 ofif. 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 (1901), I had an oppor- 
tunity of discussing this American business with Mr. Pirrie. 
Pirrie had already informed me some time ago that he 
would Uke 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 
most friendly terms with us, as far as this could be done 
without endangering the interests of the syndicate ; but 
the fact was that the biggest American railroad companies 
had already approached the syndicate, and that they had 
offered terms of co-operation which were practically identiccd 
with a combination between themselves and the syndicate. 
" In 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 estabhshed 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 i6th (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 
explained the whole proposals in detail. I pointed out 
to the Kaiser that whereas the British lines engaged 
in the North Atlantic business were simply absorbed 
by the trust, the proposed agreement would leave the 
independence of the German lines intact. This made 
the Kaiser inquire what was to become of the North 
German Lloyd, and I had to promise that I would see 
to it that the Lloyd would not be exposed to any imme- 
diate danger arising out of our agreement, and that 
it would be given an opportunity of becoming a partner 
to it as well. The Kaiser then wanted to see the actual 
text of the agreement as drafted in London. When I 
produced it from my pocket we entered the room 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 i8th 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 

concern guaranteeing the German lines a dividend of 
6 per cent., and only claiming a share in a dividend 
exceeding that figure. This change owed its origin to 
a proposal put forward by Mr. v. Hansemann, the 
Director of the Disconto-Gesellschaft, who had taken 
an active interest in the development of the whole 
matter. 

In the course of the negotiations the Lloyd made a 
further proposal by which it was intended to safe- 
guard the German national character of the two great 
shipping companies. It was suggested that a cor- 
poration — somewhat similar to the Preussische Seehand- 
lung — should be set up by the Imperial Government 
with the assistance of some privately owned capital. 
This corporation should purchase such a part of 
the shares of each company as would defeat any 
attempts at destroying their national character. Ballin, 
however, to whom any kind of Government 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 



56 Albert BalHn 

termination. Concerning the New York meetings we 
find an interesting entry in Ballin's diary : 

" In the afternoon of February 13th, 1902, Messrs. Griscom, 
Widener, Wilding, and Battle, and two sons of Mr. Griscom 
met us in conference. Various suggestions were put forward 
in the course of the proceedings which necessitated further 
deliberations in private between ourselves and the Bremen 
gentlemen, and it was agreed to convene a second general 
meeting at the private office of Mr. Griscom on the 15th 
floor of the Empire Building. This meeting was held in 
the forenoon of the following day, and a complete agreement 
was arrived at concerning the more important of the ques- 
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, the 
representative of the Holland American Line, and after a series 
of meetings a preliminary agreement was reached giving 
Morgan the option of purchasing 51 per cent, of the shares 
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 



The Morgan Trust 57 

rae in the same place where the outUnes gained form and 
substance 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. — Wilhelm I.R.' 

" Morgan gave a dinner in our honour at his private 
residence 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 compHment 
by giving a dinner at the Holland House which was of special 
interest because it was attended not only by the partners 
of Morgan, but also by Mr. Jacob SchifE, 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 aU 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 : 

" (i) Acquisition of the joint control of the Cunard Line 
by the two German companies and the American sjmdicate. 
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. 

" (2) PubUc 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 pubUc 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 annucJ subsidy from the Government, must place these 
boats at the disposal of the Admiralty in case of war. The 
First Lord has now asked Mr. Ismay whether there is any 



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 
declared that, this being so, he would be compelled to exercise 
his right of pre-emption. 

" It would be extremely awkward in the interests of the 
combine if the three vessels had to be placed at the service 
of 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 
Admiralty 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- 
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 pubHc 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-ofhcial 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 



6o Albert Ballin 

der Landwirtc (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. Blucher, 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 : 



The Morgan Trust 6i 

" In 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 auxihary 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." 

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 1901, 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 diificulties 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 BalHn 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 BaUin 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, 



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 Hues 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 Unes of the whole of their Hungarian 
emigrant business. Discussions between BalUn 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 imheard-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 



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

The desire to find remunerative employment for the 
fast steamers during the dead season of the North Atlantic 
passenger business prompted the decision to enter these 
boats into a service from New York to the Mediterranean 
during the winter months. The same desire, however, 
also gave rise to one of the most original ideas carried 
into practice through Ballin's enterprise, i.e. the 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 Illusirierie Zeiiung, 
and which I reprint for curiosity's sake, was found among 
his papers. 

" An Opportunity for Taking Part in a Voyage 
Round the World 

" 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 

able to visit the following cities and countries, viz. Lisbon, 
Madeira, Teneriffe, Cap Verde Islands, Rio de Janeiro, Rio 
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, He 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 wiU 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. 

" Rob. M. Sloman, 
" Hamburg, January, 1845. Shipowner in Hamburg." 



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 Aiignste 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 as 
many as 241 persons, as Ballin did, was something 
unheard-of until then, and necessitated a great deal 
of painstaking preparation. Among other things, the 
itinerary of the intended cruise, owing to the size and 
the draught of the steamer used, had to be carefully 
worked out in detail, and arrangements had to be made 
beforehand for the hotel accommodation and for the 
conveyance of passengers during the more extended 
excursions on shore. All these matters gave plenty of 
scope to the organizing talents of the youthful director, 
and he passed the test with great credit. 

The first Far Eastern cruise proved so great a success 
that it was repeated in 1892. In the following year 
it started from New York, surely a proof that the Com- 
pany's reputation for such cruises was securely estab- 
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, 



Hamburg-Amerika Expansion 73 

and 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 



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 yeais 
immediately following upon the epidemic. 

An important step forward, which greatly strengthened 
the earning capacities of the Company's resources, was 
taken in 1895, when the building orders for the steamers 
of the " P " class were given. These vessels were of 
large size but of moderate speed. They were extremely 
seaworthy, and were capable of accommodating a great 
many passengers, especially steeragers, as well as of 
carrying large quantities of cargo. The number of 
services run by the Company was added to in 1893 
by a line from New York to Italy, and in the following 
year by one from Italy to the River Plate. Pool 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. 



"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 
s.s. 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 raitiating 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 abiUty that have 
accomplished such great results in such a comparatively 
small time as the management and direction of the Hamburg- 
American Packet Company. 

" I 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. 

Just then the steamship companies engaged in the 
Far Eastern trade were on the point of coming to a rate 
agreement among themselves ; and the management of 
the Packetfahrt which, owing to the offer held out to it by 
Hamburg, Antwerp, and Lx)ndon firms, could hope to rely 
on finding a sure basis for its Far Eastern business, did 
not consider it wise to let the favourable opportunity 
slip. Quick decision and rapid action, before the 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 difi&cult 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 shoiild make 
itself felt. 



Hamburg-Amerika Expansion 77 

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

An event of still greater importance, however, was 
the outbreak of war between the United States and 
Spain which also took p\3.cejn 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 der Grosse, 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 BalHn 

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- 
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., 



8o 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 nomin- 
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 
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 
acquired an increasing importance owing to the increasing 
German export business. 

Perhaps there is no country which can be served by 



Hamburg-Amerika Expansion 8i 

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 capttire 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 thoroughly 
and systematically. Consequently the attention of the 
American investors was also increasingly drawn towards 
those same countries. In Central America new railway 
lines were constructed by British and American capital, 
including some right across the country from the Atlantic 
to the Pacific, thus considerably facilitating trade with 
the Pacific coast of Ameiica. Other lines were built 
in Brazil and in the Argentine, and harbour and dock 
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 1902 through negotiations conducted by 
Ballin. Later on, indeed, the relations between the two 
companies became very cordial, and even led to the 
conclusion of a far-reaching community of interest 
agreement, the Booth Line being represented in 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 
feeUng of mutual trust existed between the two contract- 
ing partners, and Ballin repeatedly declaied 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 1901 Ballin decided to embark on a trip 
round the world. He thought it desirable to do so in 
order to acquire a first-hand knowledge of the Far 
Eastern situation, which had become of special interest 
to the country owing to the acquisition by Germany of 



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 pioperly 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 affaii^, as both companies had been entru&ted 
with troop transports and the transport of equipment 
needed for the German contingent during the troubles 
in China. During his Far Eastern trip Ballin wrote 
detailed accounts dealing with the business matters he 
attended to, and also describing his personal impressions 
of persons and things in general, the former kind 
addressed to the Board of his Company, the latter to 
his mother. These letters are full of interest ; they 
present a more faithful description of his character as 
a man, and as a man of business, than could be given 
in any other way. I shall therefore quote a few extracts 
from the comprehensive reports, commencing with those 
he wrote to his mother : — 

" On board the I. M.S. ' Kiautschou ' 

" Jantiary i6th, 1901. 
" 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 navigating 
bridge ; and as I did not think it likely that our agent would 
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 

other 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 
no 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 
said, more nilly than willy) practically aU the other passengers 
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, 190 1. 
"... We did not stop long at Aden ; and as the quaran- 
tine regulations 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 scattered 
all over the island. It must be a desolate spot for Euro- 
peans to live at. The British officers call it ' The Devil's 
Punch Bowl,' and to be transferred to Aden is equivalent to 
them to being deported." 

" January 28th, 1901. 

"... In the meantime we have spent a most enjoyable 
and unforgettable day at Colombo. The pilot brought the 
news of Queen Victoria's death, which filled us with lively 
sympathy, and which caused a great deal of grief among the 
British passengers. Shortly before 9 o'clock we went ashore : 
and as the business offices do not open until an hour later 
— thus preventing me from calling on my business friends 
at that hour — I took a carriage-drive through the magni- 
ficent park-like surroundings of the city. The people one 
meets there are a fit match to the beautiful scenery ; but 
whilst in former times they were the rulers of this fertile 
island, they are now, thanks to the blessings of civilization, 
the servants of their European masters. . . . 

" When we reached the old-established Oriental Hotel 
where we had our lunch, we met there a number of our fellow- 
passengers busily engaged in bargaining with the Singhalese 
and Indian dealers who generally flock to the terraces of the 
hotel as soon as a mail packet has arrived. The picture 
presented by such Oriental bargaining is the same every- 
where, except that the Colombo dealers undeniably mani- 
fest an inborn gracefulness and gentlemanly bearing. When 
I tried to get rid of an old man who was pestering me with 
his offers to sell some precious stones, he said to me, in the 
inimitable singing tone of voice used by these people when 
they speak English : ' Just touch this stone, please, but 
do not buy it : I only wish to receive it back from your 
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 two 
marks instead, merely because I had got tired of him, he 
handed me the whole sheet, and said : ' Please take them ; 



Hamburg-Amerika Expansion 87 

I 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 
50 pfennigs, and that he had told the same story to him 
as to me. Such are the blessings of our marvellous 
civilization. . . . 

" . . .In the afternoon we went for a magnificent 
drive 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. 
It was curious to see with what unfailing certainty they 
managed to distinguish the German from the English pas- 
sengers, and they were not slow in availing themselves of 
this opportunity to palm off what little German they knew 
on us. ' Oh, my father I My beautiful mother ! You are 
a great lady ! Please give me ten cents, my good uncle ! ' 
We were quite astonished to meet such a large progeny. ..." 

" February 2nd, 1901. 

" . . . . 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 compUcated 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 



88 Albert Ballin f 

and energetic business community managed to do it. We 
Germans may well be proud of the fact that our country- 
men now occupy the premier position in the business life of 
the city. . . . 

*' . . . We spent about thirty-six hours at Saigon. This 
city has been laid out by the French with admirable skill, 
and there is no doubt but that Indo-China is a most valuable 
possession of theirs. As regards the difference in the national 
character of the French and the British, it is interesting to 
note that the former have just erected a magnificent building 
for a theatre at Saigon, at a cost of 2 J million francs. The 
British would never have dreamt of doing such a thing ; 
I am sure they would have invested that money in the 
building of club-houses and race-courses. . . ." 

" February 16th, 1901. 

" . . . As far as social life and social pleasures are 
concerned, it must be said that the German colony at Hong- 
kong is in no way inferior to that at Singapore. Premier 
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 — apart 
from his intimate knowledge of all that concerns the trade 
and commerce of China, and apart from his own amiability 
and never-failing generosity — to his charming wife, who, by 
means of the hospitality, the refinement, and the exemplary 
management characterizing her home, has been chiefly 
instrmnental in acquiring for the house of Siebs the high 
reputation it enjoys. Whoever is received by Mrs. Siebs, 
I have been told, is admitted everywhere in Hongkong 
society. 

" Even though I only give here an outline of my impres- 
sions, I cannot refrain from adding a few details dealing 
with some aspects of everyday life at Hongkong, this jewel 
among the crown colonies of Britain. The offices of the big 
firms and of the shipping companies' agencies, most of them 
housed in beautiful buildings, flank the water's edge ; farther 



Hamburg-Amerika Expansion 89 

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 hiU, 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 



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 during the 
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 Shanghai 
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 Ufe of the town. ..." 



Hamburg-Amerika Expansion 91 

" Between Tsingtau and Nagasaki, 
on hoard the s.s ' Sihiria.' 

"March i8th, 1901. 

" Our s.s. Sihiria 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 Sihiria, because I wanted to get to know this important 
river, 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 Sihiria 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 



92 Albert Ballin 

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

" I 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. 

" 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 suffering 
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 European 
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 
ofl&cers 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 



i 



Hamburg-Amerika Expansion 93 

those who, like Dr. Knappe, our consul-general at Shanghai, 
had 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 everjrwhere 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 
that. ..." 

" ToKio. March ■^ist, 1901. 

"... What a difference between Japan and the cold 
and barren north of China I 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 Sihiria 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 hfe 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 pubhcity. 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 A.M. 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 



Hamburg-Amerika 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. . . ." 

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 : 

" (i) The estabHshment 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 flouiishing 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 : 

" Shanghai. 
March 4th, 1901. 

" 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 fiat-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 loih, 1901. 
"... 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 

volume of water carried by the river increases enormously 
in certain reaches. This increase has been found to amount 
to 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 igth, 1901. 
"... 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. 
Everywhere a great deal of diligent work has been performed, 
and one feels almost inclined to think that the building 
activity has proceeded too fast, so that the inevitable reac- 
tion will not fail to take place. Looked at from our shipping 
point of view, it must be stated that the work accomplished 
looks too much like Wilhelmshaven, and too little like 
Hongkong. 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 lyth, 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 



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 



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 
miaffected 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 lyth, 1904. 

" I hope you wUl 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, " I remain, Yours faithfully, 

(signed) " Marie," 

" My Dear Director, " February loth, 1905. 

" I 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 



Hamburg-Amerika Expansion loi 

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.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 imits at a considerable rate of profit, and the 
contract concluded with the Russian Government for 



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 
carrying 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 stUl 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 Fiirst Bismarck and the Belgia. 
The Auguste Victoria, which is still in dock rnitil 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 Fiirst 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 Enghsh 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 pait 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 BerUn pretty frequently, as I con- 



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 Phoenicia, 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 anjrvvhere, 
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 21 
steamers — partly new buildings and partly new pur- 



io6 Albert BalHn 

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 clientde 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. 



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 
Woermanfi 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 W^oermann diftered 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 ; 



io8 Albert BalHn 

" 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 



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 upon 
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. 

"If 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 



no Albert BalHn 

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 maJce 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 imdertook 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 



Hamburg-Amerika Expansion iii 

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 191 1, 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 



112 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 
gratif5dng 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 Uner Olympic building, which was to 
be followed by two others of the same type, the Titanic 
and the Gigantic. The new Cunarder, the Aquitania, 
was to be of the same type, so that once more the public 
was offered the choice of steamers of a kind unknown 
until then. This competition compelled the 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 



114 Albert Ballin 

of the third and biggest of the three steamers, the Bis- 
marck, represented a red-letter day in the Hfe of BalHn 
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. 
" I wish I had been permitted to speak to the Kaiser 
about it beforehand," he told me afterwards. " I am 
sure he would have insisted upon seeing it." Proper 
stage management plays so prominent a part in the life 
of royalty, and it can be of such great use in avoiding 
certain blunders and in hiding certain shortcomings that 
it is much to be regretted that the Kaiser had so often 
to dispense with it. 

The entering into the Packetfahrt's service of the 
" Imperator " type of steamers represented an 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 beUeved 
itself justified in asking for, a conflict threatened once 
more to disturb the relations existing between the two 
companies. As a result the position of both was weakened 
in Austria, where the Government cleverly used the 
situation to its own advantage. Apart from this, 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 
aJl, 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 



ii6 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.^ 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 loi 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 157^ 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. 



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 
regime 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 ray only object in writing this article is 



ii8 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 
years. 

" 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 punctuaUty. 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 Havd 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 
regime 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 



122 Albert Ballin 

Messrs. Haxland 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 maJdng 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- 



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 — Deutschland : soiled linen cupboard too small 
— stewards Oceanic white jackets — celery glasses — ^butter 
dishes too small — large bed pillows — consomm^ cups — 
playing cards : Packetfahrt complete name of firm — 
Packetfahrt complete name on Webber'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 



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 
t3rpes 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, i8 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 BalHn 

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, a swimming 
pool, and numerous smaller rooms suitable for the 
relaxation and amusement of the passengers. 

On the older boats the arrangement was that the 
small cabins were all grouped round the one and only 
social room on board, so that the occupants of the 
cabins could hear all that was going on in the social 
room, and vice versa. The superficial area at the 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 



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 



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 Arnerika 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 17^ 
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 
1912, 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 affiUated 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 maJke 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 nvmiber of those who formed 
the regular cUentde 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 r.nd its management also ; but in 
their case they have given infinitely more than they 
have received, and in the whole history of shipping 
there has never been one single person who has exercised 
a more stimulating influence on its technical progress 
than Albert Ballin. 



CHAPTER VIII 

Politics 

Notwithstanding the many business controversies in 
which Ballin took an important part, it has occasionally 
been said that he was not really a " fighter." This 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 the rule. There a really weak opponent 
is never met with, unless one's rival happens to be 
exceptionally inexperienced or constitutionally unsound. 
The minor competitor, where shipping is concerned, is 
by no means always the less powerful of the two. On 
the contrary, the contest which inflicts small losses on 
him inflicts heavy losses on his big opponent, and may 
easily exhaust the latter first. The last few decades 

131 



132 Albert Ballin 

have witnessed the estabhshment 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 " commimity 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 trafiic 
at large. " No Bismarck was needed to prevent this 
war," he often said when speaking of its immediate 
origin. 

This attitude of his does not mean that he shut his 
eyes to the deep-seated antagonisms which were at the 
back of these local squabbles, viz., the Franco-Russian 



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 pohtical 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 
BerUn. 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 imder- 
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 



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 were caused on the one hand by the 
political activities of Germany as a world power, and 
on the other by her commercial and industrial expansion 
which bid fair to relegate Great Britain to a subordinate 
position. People in England regarded the want of a 
system of protection similar to the German protective 
tariffs as the real cause of this development, a want which 
retarded the progress of British industrialism, and which 
prevented British financiers from taking an active 
interest in these matters. The German financiers, 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 "), i.e. 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 
ofiicial 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 Wilhelmshohe 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 Jime. 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 y 
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 repHed 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 
coimtries 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 



Politics 141 

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 rdsum6 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 demarche 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 Novoie 
Vremia. He declared that the Russian papers were 
absolutely mistaken when they alleged that the project 
was inspired from Berlin, and he stated that Austria, 



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. 

" I 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 : 

" I 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 ajid King Edward 
which was suggested in these letters actually took place 
on August nth at Friedrichshof Castle, when the King 



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 9th, 1909, King 
Edward and his Queen paid their visit to Berlin, thus 
bringing about the event which Ballin in his letter of 
July 13th, 1908, had described as so very desirable. To 
appreciate the importance of this strictly official visit, 
we must bear in mind the fact that it did not take place 
until the ninth year of the reign of King Edward. This 
long postponement was no doubt due to a large extent 
to the estrangement between uncle and nephew, and 
this, in its turn, had its origin in the natural dislike 
which the Kaiser felt for his uncle's mode of conducting 
his private life while still Prince of Wales. It would 
have been preferable, however, to relegate such 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. Schon, 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 BalHn 

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 Uke 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 EngUsh 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 S5mipathize 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 ha^ 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 fooUsh 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. 

"If it was admitted — and he thought this admission 
was impUed 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 
beheved 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 



Politics 151 

at all necessary that Germany should insist upon her demand 
in connexion with this question. As the colonies enjoyed y 
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 



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 BalUn had carried on was to ensure 
that a number of " experts and men of moderate views," 
i.e. naval experts in the first instance, should join in 
conference in order to discuss how, without injury to 
their relative fighting efficiency, both countries could 
bring about a reduction of their naval armaments. This 
plan was so simple and so obviously right that, had it 
been carried out as a preliminary to something else, 
and had the attention of the experts been drawn to the 
enormous political importance of their decision, success 
would have been assured. The procedure, however, 
which the Chancellor adopted compelled him to combat 
the active opposition of the various departments 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-HoUweg, 
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 nth, 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 21st, 
in which he says : 

" I 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 demarche, might possibly be regarded 
as an 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 imable to meet on such terms as expediency would 

1 <Phen British Ambassador in Berlin. 



154 Albert BalHn 

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 Ofl&ce. 

Mr. Asquith, in a speech dealing with the British 
naval programme delivered on July 14th, 1910, 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 



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, 1911, raised to an international limitation of 
armaments can likewise only be described as formal 
ones. He said : 

" If 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 loth, 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 poHtical spheres of interest to be 
followed up by a mutual understanding on these points 
would constitute the safest way of destrojdng 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, 191 1, 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, 1910), and 
of his son and successor it was said that he, at the time 
of his accession to the throne, was no longer a man of 
unbiased sentiment, that he was very anti-German, 
and that he was under the influence of a small group 
of Conservative extremists. 

It may not be out of place to reproduce in this 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 1910 respectively, when he was 
staying in London, and which he submitted to the 
Kaiser for his information. 

In the Ccirly part of 1910 he wrote : 

" If 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 



^ Politics 159 

a Conservative candidate is cheered by them to the echo. 
Uader these circumstances, even in the City, the fear of war 
has grown. If we ask ourselves what it is that has brought 
about such an extraordinary change in the attitude of common- 
sense, business people, we find that there are several reasons 
for it, viz. the general slump in business ; the unfortunate 
policy (if Lloyd George with regard to the Irish Nationalists ; 
the advances he made to the Labour Party, and the effects 
of his social 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 poUcy. This disposition is 
further strengthened by the constant reiteration of the 
promise that it wUl 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. 

" It 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 



i6o Albert Ballin 

said before, Tariff Reform and a ZoUverein with the Colonies 
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 Aiture. 
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 boihng-pofnt. 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 : 

"I 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 



Politics i6i 

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 quantite negligeable 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 1911 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 



i62 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 



1 



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. 

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

" I 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 191 1. 

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 



i64 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 Ijnng 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 9th, 1912. 

" 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. 

"If 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 



i66 Albert Ballin 

incident of 191 1 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, 191 1, 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 



I 



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, 1912, 
when he was in Berlin engaged on these very matters. 
This reply, which originated with the Foreign Office, 
expressed the sender's thanks for the invitation to 
attend a meeting of delegates in Berlin and his 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- 



i68 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. Fehr. 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 i 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 kindly 
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 BiU 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 

" I 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. 

" I 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 preUminary condition laid down 
by your Government has been complied with. 

" I 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 Uberty 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. 

" I 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 maister 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 warhke 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 neutraUty. 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 obHgations 
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 



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 dechne 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 Balhn 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) : 

" (i) 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 1919 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 wiU 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 ^which 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 resume of the 
situation as it appeared to him after his consultations 
with the various competent departments in Berlin, 
somewhat on the following lines : 

(i) 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. " I 
must add in this connexion — as, no doubt. Lord Haldane 
has also told you verbally — that on the last day of his 
stay in Berlin an understanding was arrived at between 
the competent quarters on our side and Lord Haldane 
with regard to the building dates of the three 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 9th 
and loth, 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 



i8o Albert BalHn 

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 Ust 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 BUI 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 i8i 

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 unhkely that an 
agreement wiU be reached, because it is beheved that popular 
feehng in Germany is too much opposed to it. If, notwith- 



i82 Albert Ballin 

standing these pacific views held by influential and competent 
sections, the casual visitor to the French capital is impressed 
by a certain beUicose 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 
to clear 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 i6th. 

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 19th 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 



i84 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 i8th. 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 2ist, 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 interegt 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 beheve 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 poUcy 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 
ChurchiU 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 
stiU 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." 



i86 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 i8th, 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, si vis pacem, 
para bellum, indicated the only right solution. Only a 
master mind could have overcome these difficulties. 
But Herr v. Bethmann, as we know, considered that 
the problem, for inherent reasons, did not admit of any 
solution at all, and the Kaiser's initial enthusiasm had 
probably been damped by subsequent influences of a 
different kind. Ballin himself, in later years, ascribed 
the failure of the mission to the circumstance that the 
Kaiser and his Chancellor, between themselves only, 
had attempted to bring the whole matter to a successful 



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 oflftcial 
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. 



i88 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 untrustwortliiness 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. Maxschall'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 1912. 
The German periodicals have already discussed it, 
especially the Suddeutsche 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 by the 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 
Gennan. 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 support ed the Austro-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 191 

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 Wilhehnstrasse. 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 Zeiiung. 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 Augnste Victoria, and when he, accompanied 
by the Kaiserin, made a trip on board the newly-built 
express steamer Fiirst 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 Hner. 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 hospitaUty. 

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 favoui 



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, lor 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 



igS 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 pictmre 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 igo8, 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 
Krupp case — ^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 Uked 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 dif&cult 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 difl&cultyhe 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 



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 limch 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 LUbeck — 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 Liibeck 
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 nothing 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, 1901, 
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 : 

" I 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 loth (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 Berhn 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 



The Kaiser 20$ 

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 fuU 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 Eckernforde on board the 
Meteor, and we discussed the poHtical situation, particularly 
in its bearing on the Morocco question and on the attitude of 
Great Britain." 

" On June 19th, 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 Deidschland, I heard the news — 
which the Kaiser had just communicated to Kaempfi (the 
captain of the Deidschland) — 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 
Deidschland. 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 



2o6 Albert Ballin 

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 



The Kaiser 207 

extending over several months, and it happened only in 
rare cases that Ballin availed himself of the privilege 
of writing to the Kaiser in person. It is true that the 
latter was always pleased to listen to Ballin's explana- 
tions cf his views, and it is possible that every now 
and thtn he did allow himself to be guided by them ; 
but it ii quite certain that he never allowed these views 
to exercBe any actual influence on the country's politics. 
The everts narrated in the chapter of this book dealing 
with politics show that in a concrete case, at any rate, 
Ballin's re:ommendations 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 sovereign, and who had at all times access to His 
Majesty. 

If thus the effect of Ballin's friendship with the Kaiser 
has frequently teen 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 coimtry's 



2o8 Albert Ballin 

leading shipping firms with the suggestion that ihey 
should buy up the Hamburg-Amerika Linie or the >orth 
German Lloyd. This was at the time when it became 
desirable to secure the necessary organization f^r 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 ^ame of 
mind from which originated such stipulations of the 
Versailles treaty as deal with shipping masters, and 
with the assumption that German shipping— which was 
supposed to depend for its continuance mainly on the 
existence of the German monarchial system — would 
practically come to an end with the disappearance of 
the latter. It would, indeed, be difficult to name any 
historical document which pays less regard to the vital 
necessities of a nation and which actually ignores 
them more completely than does the treaty signed at 
Versailles. 

The allegation that Ballin should ever have 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 repUed 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 191 1, 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 Kciiser 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 211 

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 imderstand 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, 
poUtically speaking, was devoid of practical results. 
A detailed account follows. 



CHAPTER X 

The War 

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

The Berliner TageUatt, 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 BalHn 

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 
fczderis 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 i6th 
added that a further article had been published by the 
Berliner Tagehlatt, 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 



2i6 Albert BalHn 

about an understanding with Great Britain and France 
which, by preventing Russia from striking, would result 
in preserving the peace. Great Britain and the leading 
British politicians, he said, were absolutely in favour 
of peace, and the French Government was so much 
against war that its representatives in London seemed 
to him to be rather nervous on the subject. They would, 
he thought, do anything in their power to prevent war. 
If, however, France was attacked without any 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 SalzschUrf, 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 Uke 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 repUed : ' 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 wiU please Sasonov, 
Poincar6 and Paleologue (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 rapprochement 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 



2i8 Albert BalHn 

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 vithout 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 obUterated. 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 manoeuvres 
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 dif&culty.' 

" I 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 repUed : ' 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.' 

" I 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.' 

" I 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 difii- 
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 hable 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 BalHn 

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. In a letter 
which he wrote to Ballin about that time, he gave a 
very clear description of the probable state of things 
in such an emergency. He pointed out that the amount 
of foodstuffs required during a war would probably 
be larger than the quantities needed in peace time — a 
contingency which had escaped attention in Germany 
altogether — and that above all there would be an enor- 
mous shortage of raw materials. Therefore, he said, 
if it was desired to guard the coimtry 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 2nd, 



. 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 amoimt 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 Zentral-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 
comitries, 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 ofiices 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 



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 
aU 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- 
quieres 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 eneniies 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 



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 hberty 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 . . . 

" . . .1 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 
1917 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 Frankfurter 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 imder- 
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." 

" If," 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 especially 
with the Americans. Strangely enough, influential circles 
on our side, and even His Majesty himself, look upon me as 
' pro-EngUsh,' and yet I am the only German who can say 
with truth that he has been fighting the EngUsh 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 debdcle. 

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 : 

" . . .1 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 difl&cult 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. 

" I am aware that this idea will find but shght favour with 
you, but you will never secure a reasonable peace with Great 
Britain without a naval agreement. 

" By a reasonable 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 difiiculty 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 clamom* 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. 

" I 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 cir cuius 



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 pohcy. 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 navail 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. 

"I 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'etre 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 
Ufe 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 mobihzation 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 BerUn, but also by distinguished men 
from the Rhineland and WestphaUa." 

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

" 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 seciuity 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 don6, is a question 



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 ItaHan 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 sine qua non for the successful ter- 
mination of this war. If it 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. 

" . . . . Pohtical 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 the 
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 Billow 
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, 19 15, 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, assimiing 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- 



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 2ist, 1915. The news which I received from 
X. regarding the poUtical 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 mihtary 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 mihtary situation without any camouflage. This sugges- 
tion was favourably received, and it is to be passed on to the 
Chancellor. . . . 

" . . . . The Chancellor informed me that he w£is 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 oiu next 
meeting." 



The War 245 

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

" I 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 wiU 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. 

"... 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 loth, 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, 

" I also called the Chancellor's urgent attention to the 
need for deeding with the food problem during the ensuing 
winter, especially with relation to the price of meat." 

"... August I2th, 1915. The United States Ambas- 
sador, Mr. Gercurd, had expressed the desire to discuss with 
me the question as to the advisabiUty of suggesting that 
President Wilson should mediate between the belligerents. 
I therefore called on him on Tuesday, August loth, 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 20th, 1915. I am annoyed at the 
importunity with which some interested parties, such as 



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 charge 
d'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 loth, 1916, 1 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 
^ The head of the Press Department of the Foreign Office. 
Q 



248 Albert BalHn 

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 
obhged 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 against 
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. 

" ' I 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. 

" ' I therefore beg to respectfully suggest to Your Majesty 
that the work of the mine-lajnng 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. 

" ' I 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 sufi&cient excuse 
for me.' " 

In the early part of 19 16 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 : 

" If we desire to keep the Austrian fighting spirit un- 
impaired we must avoid at all hazards suggesting the pos- 
sibihty of an understanding with Italy. The ItaHan 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 Biilow 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 mihtary 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 GaHcia, 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. 

" If 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 cUngs 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 eUminated 
altogether, and which provides the Government with every 
conceivable hberty 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. 



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 everjrwhere 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 Uvely consent of members 
of the coiurt 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, ei 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 BalHn 

" . . .1 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 inchnations. He is evidently a strong if obstinate 
character, and he does not impress me as a man who will 
give up bis post without a protest. He, too, thinks the real 
war aims of Austria-Hungary have been accomplished. 
Serbia is crushed, Galicia Ubcrated, 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 



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 aU costs. As far as miUtary 
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 
voUe-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 an 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, governed 
by the axiom to which I have over and over again drawn the 
attention of the heads of the Berhn 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 fimdamental improvement 
in the position of either of the belligerent groups of Powers. 
That, apart from all other considerations, the imrestricted 
submarine war would have exposed us to the open hostiUty 
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. 

" If 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. 

" It is not 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 
party 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 poUtical and economic life, as he should 
do considering the fateful time through which the Empire 
is passing. 

" If 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-LSwitz, etc., to 
visit him from time to time at headquarters, and to acquaint 
him with their wishes and anxieties. 

" I cannot help telhng 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 i6th, 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 sjmipathy 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 estabUsh 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 alUance 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. 

" Berhn, 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 I delusions and folly are rampant 
everjrwhere. 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 : 

" I 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 
feeUng 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 BerUn 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. 

" 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 ol 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 Unes behind it. 

" In the meantime our good Austrians have trans- 
ferred all their rehable 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. 



26o 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 Wilhehnstrasse 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 Uke 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 of&ce, 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. We are, 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. 

" I 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 ist. 
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 becoming very 
serious. In country districts it may be possible to tell people 
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. 

" I 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 



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. 

" I 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 t)ie few countries 



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. 

"If 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. 

" If 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. 

" It 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. 

" I hope Your Excellency will pardon me for thus frankly 
expressing my anxieties, but I considered it my duty to let 
Your Excellency know my feeUngs." 

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 prevaiUng 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 reaJization, unless we can sink the ships which 
carry ammimition 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 

" I 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 fooHsh 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. 

" I 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 BalHn 

" This fact, to my mind, points to the limits of the success 
obtainable by our submarines. I have constantly explsiined, 
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 oS 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 I 

" 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 



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 (i) 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. 

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

" I 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 Btilow, 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 appUcation 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, 19 17. Yesterday I called on Prince 
Bulow at his Flottbek residence, and found him looking 
better than I had seen him for years. After I had left him 
I had the feehng 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 MichaeUs 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 poUcy 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 cUents' 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 Kopenick, 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. 

"... 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 The 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 BalHn 

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, 19 17. In the meantime, on August 19th, 
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, 19 17. 
" 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 beUeved 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 succh 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 I In the 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 deaHng with the question 
of the foreign exchanges and the provision of foreign bills. 

" My beUef 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 
are 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. 

" I 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 



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 estabUshed. 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. 

" I 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 efi&cient ? 

" 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 Gov- 
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 retahatory 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 ot time after the close of the war. The 



The War 277 

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 pubhsher, 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 quaUfied 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 wiU 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. 

" I 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 
hfe." 

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 imfavourable 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 : 



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, shedl 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 I 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. 

" I 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 



28o 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 have a 
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. 

" I 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. 



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 : 

" I arrived at Wilhelmshohe 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 be in 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 ii o'clock, 

" I 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. 

" I 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. 

" I 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. 

" I 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 alUance 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 poUtics, 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 : 



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 HohenzoUerns, 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 BalHn 

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

" Stinnes has sent word to me that the Socialist and 
Centre parties are of opinion that I ought to be nominated 
to conduct the peace negotiations. I have told him that 
I should not shirk it, but that I should be much better pleased 
if somebody else would do it." 

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



CHAPTER XI 

Personal Characteristics 

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

The story of a life comprising thirty-two years of 
incessant hard work, only interrupted when nature's 
law or a very imperative behest of his medical adviser 
made it necessary, and spent at the head of an 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. 

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. 

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 pulDlic would adversely affect the firm of which he 
was the head, and that the interests of his company 
compelled him to impose upon himself restrictions which 
he could ignore in his private capacity. 

Although he had nothing but scorn for the very 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 meeting 
of the shareholders, he would move an increase of 10 
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 Schroder, 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, 

" (Signed) Laeisz." 

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 



Personal Characteristics 295 

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 Kohlbrand 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. 



296 . 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. 

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

Ballin repeatedly vented the full force of his sarcasm 
against the advocates of an " out-and-out Hamburg 
policy " to whom his own views sounded like heresy, 
a policy which found perhaps its most comic expression 
in the speech of a former Hamburg burgomaster who 
referred to the King of Prussia as " our illustrious ally." 
Ballin did not recognize the existence of a line of demarca- 



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 paid to the men. The interests of the employers 
in the ensuing struggle were not, however, specially 
represented by the associations of the shipping firms. 



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 i8th, 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 



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 1911, when 
the Hafenbetriebsverein began to conclude agreements 
with this organization by which the wages for the various 
categories of dock labourers were fixed — a policy which did 
not exactly meet with the full approval of large sections 
of employers, it was again due to Ballin's influence that 
these agreements were generally accepted. It is just 
possible that a certain event, insignificant in itself, may 
have strengthened Ballin's natural tendency towards a 
settlement along the lines of a compromise. As has been 
said before, the year 1907, which, from the business point 
of view, had been excellent (at least, during the first 
six months), and during which the above-mentioned 
strike occurred, was succeeded by a year which brought 



300 Albert BalHn 

exceedingly unsatisfactory earnings to the company. 
Ballin did what he had done on a previous occasion, in 
1901 : he sent a memorandum to all the employees of 
the firm asking them to cut down expenses to the lowest 
possible extent, to contribute their share towards a 
more economical working of every department, and to 
submit to him any suggestions of their own as to how 
the necessary retrenchment could be effected. I was 
instructed to examine the general expenses account 
with a view to finding out in what way a reduction would 
be possible, and I drew Ballin's attention to the fact 
that the considerable sums which had to be spent in 
1907 in consequence of the strike would, of course, not 
appear again in the balance-sheet for 1908, so that this 
would lead to an automatic reduction of the working 
expenses. Ballin was surprised to see how large this 
particular item was, and the whole occurrence proved 
once more that a lean agreement would have been 
preferable to a fat lawsuit. 

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

His capacity for work was enormous and seemed 
wellnigh inexhaustible. He made a most lavish use of 
it, especially in the early part of his life, and the personal 
assistance he required with his work was of the slightest. 



Personal Characteristics 30^ 

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. 

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 personal 
attendant at home and on his travels, Carl Fischer, for 
the perfect tact which he showed in the performance 
of this difficult task. 

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

Once one had learnt to understand his way of 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. 
" It was not until my return from England that I 
learnt, through reading the Fremdenblatt, 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 sense 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 
FremdenhUUt. I 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 ' Fremdenhlatt.' 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 unfaiHngly saw to it that the Hamburg steamers, at what- 
ever port of the globe they arrived, found a Fremdenhlatt 
waiting for them, thus providing a valuable ajid 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- 
denhlatt 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 FremdenUatt 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 dehghtful 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 
minimum. 

" 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 a launch. 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 



3o6 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 stop 
to finish his glass of port, but hurried to the offices of ' his ' 
paper which, in its next edition, published it as a fact that a 
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 beUeving himself justified in depriving the readers of the 
Fremdenblati 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 estabUsh 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 



3o8 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 wiD 
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 much 
representation, especially that in connexion with Kiel 
Week, became somewhat of a burden to him, his company 
reaped rich benefit from his munificence. 

But to appreciate to the full the charm of his 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 meetings, 
and he always hit upon the right words suitable for a 
political toast. The skill with which he wielded the 
pen is proved by numerous newspaper articles, 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 full 
and daintily arranged table. 

When I intimated to one of Ballin's old friends that 
I intended to write his Life, he told me that this would 
not be an easy task, and that he hoped I would not 
forget to depict Ballin as the amiable charmeur to which 
side of his character so many of his successes were due, 
and which was the secret of much of his great popularity. 



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 Uttle 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 



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 
who have left their mark on their epoch will ever be in 
vain. There are two great achievements which, it 
appears, will always stand out like two pillars in the 
wreck of destruction that has fallen upon Germany, 
viz. Bismarck's work of political unification, and — a 
necessary preliminary of it — the powerful economic 
foundations laid with incessant toil by the great 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. 



f)T. At 

- high \ 
crwicc I 
other. ' 
t Or- j 
will be ! 

ontent i 
riy, if 
tiol be 
to the 
iction, 
hBmatic 



"" L 



INDEX 



Aden, 85 

Adler I,ine, 7 

Aehrenthal, Count, 141 

Agadir incident, 162 

Agents, emigration, work of, 8 

Alsace-Ivorraine, 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, in 
Atlantic Transport-I,eyland 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 ZoUvereiu, 251 



Baden-Powei,!,, General, and the 

German menace, 138 
Bagdad Railway, 189 
Baker, B. N., American shipping 

magnate, 42 
comes to Europe, 44 



Baker, B. N., discusses terms of 
community of interest 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 Carl Laeisz, 294 
and Count Tisza, 252 
and Count Waldersee, 194 
and Government subsidies, 60 
and Hamburg- Amerika Linie, 69 
and Hugo Stinnes, 280 
and Mr. Gerard, 246 
and labour questions, 297 
and politics, 131 
and North German Idoyd, 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 



317 



3i8 



Index 



Ballio, Albert, as head of Packet- 
fahrt passenger department, 

l8, 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 Ivondon 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 Bast 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 



Ballin, Albert, intense patriotism 
of, 291 
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 
notes of conversations with Wil- 
liam II, 203 
official thanks to, 141 
on Agadir incident, 163 
on Bluckey, 60 
on death of Edward VII. 160 
on engineering problems, I2i 
on foreign exchange, 274 
on HohenzoUern, 202 
on London in election time, 158 
on naval armaments, 147 
on neutrals, 245 
on peace problems, 239 
on sale of confiscated fleet, 230 
on Sandjak Railway, 142 
on security of William II, 241 
on Serbian situation, 214 
on war's failures, 258 et seq. 
opinion of German Chancellor, 

259 
opinion of war's duration, 237 
personal characteristics of, 287 
pioneer in steerage business, 11 

policy of, 79 
political views, 291 
premier position at twenty-nine, 

19 
present from Marquis Ito, 311 
prodigious memory of, 4 
report on British attitude to 

Germany, 161 
report on development of Ger- 
man shipping, 47 
reticence of, 3 



Index 



319 



Ballin, Albert, reviews war position 

in 1916, 258 
ridicules submarine warfare, 

268-9 
stimulating influences of his life, 

2 
strain of war on health, 313 
sturdy honesty of, 309 
suggested as negotiator of peace, 

286 
suggests Pool, 24 
talks with Prince 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, 

,285 
visits I/ondon in 1914, 184 
war problems of foreign policy, 

241 
William II discusses politics with, 

203 
William II writes to, on Navy 

Bill, 183 
William II's personal interest in, 

198 
wire from I,eopold de Rothschild, 

163 
with Prince Henry of Prussia on 

the Hohenzollern, 57 
with William II at Front, 266 
with William II in Italy, 204 
with William II on Kaiser Wil- 

helm II, 55 
work in Reichseinkauf, 224 
writes frank letter on war to 

William II, 1916, 252 ei seq. 
writes on Morgan Trust, 46 
^vritesto William II, April, 191 7, 

264 
Bauer, Lieut. -Col., 280 
Beck, Edward, 27 
Berg, Herr von, 282 
Berliner Tageblatt 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 



Bismarck, Prince, 114 

Blockade, German, futility of, 267 

Blohm and Voss, 113 

Blticher, 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 
Ludendorff's promise to crush, 

266 
Navy, Ballui on, 239 
opinion on shipping deals, 67 
rivalry with Germany, 133 
shipbuilding, developments in, 

and Hambiurg-Amerika Linie, 

128, 208 
shipbuilding, German move 

against, 1 7 
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 Raii,way, 62,111 
Cargo and steerage shipping, 13 
Carr, Edward, 12 
Carr Line, the, 12 et seq. 

and Packetfahrt, 12 
Cassel, Sir Ernest, 134 

and Winston Churchill, 165 

meets Ballin, 138 

on Anglo-German understanding, 
165 



320 



Index 



Cassel. Sir Ernest, on naval 
problem, 179 
on Sandjak Railway, 142 
report of interview with, on Navy, 

171 
work for reduction of naval 
armaments, 134 et seq. 
Cholera, epidemic at Hamburg. 

36, 72 
Christiansand, port of, 21 
Churchill, Mr. Winston, 166 
at Kiel, 1914, 192 
complains of Germany, 180 
Sir Ernest Cassel on, 165 
speech on Navy, 175 
suggests a naval holiday, 186 
Colombo, 86 
Columbia, 77, 201 
Commimity of interest agreement 
{see " Pool " and " Morgan 
Trust ") 
Congo, Franco-German agreement, 

162 
Coolies, Chinese, 89 
Cunard I<ine, and Austrian Govern- 
ment, 65 
and Hungarian Government, 63 
effect on Pool, 65 
introduces turbines, iii 
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 Asiatic Co., 98 
Edward VII, 134 

and Morgan Trust, 61 



Edward VI I, chances of Anglo- 
Germau war, during reign of, 

139 
death of, 158 
policy of, 135 
the Kiel week, 206 
visit to Wilhelmshohe, 136 
visits Berlin, 145 
visits Kaiser at Friedrichshof, 
142 
Elbe, enlargement of harbour facili- 
ties on the, 69, 70, 79 
EUerman, Mr., of ijeylaud Line, 45 
Emden, rise of, 83 
Emigrants, early accommodation 

of, 7, 8, 14 
Emigration, anti-British action. 

17 

Ballin's work for, 9 

beginnings of pooling, 12 

British and German, 15 

British rates, 22 

business, how controlled, 8 

comparisons of Carr Line and 
Packetfahrt, 15 

cost of, 12 

Danish, 13 

Hungarian, 63 

in the 'seventies, 8 

medical control established, 74 

on pre-paid basis, 9 et seq. 

rate war begins, 14 

statistics of, 103 

stopped by Hamburg cholera 
epidemic, 36 
Emigration Law, German, 23 
Erzberger, Herr, 244 
Esher, Lord, and tlie Admiralty, 

138 
Europe, concerted inquiry to Ger- 
many, 140 

.situation in September, 1916, 262 



Fai,kenhayn, 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 



321 



Frisch. Geheimrat, 223 
Furness, Sir Christopher, and Mor- 
gan Trust, 61 
Fiirst Bismarck, 193 
Fiirstenkonzern, no 



George V, King, Ballin's letter re- 
specting, 160 

George, Mr. Ivloyd, speech on 
Agadir incident, 162 
visits Germany, 143 

Gerard, Mr., and Ballin, 246 

German-British shipping agree- 
ment, 18 

German emigration fleet, in 1882, 
10 

German Government, note to British 
Government, 170 

German Naval Bill, 137 

German Navy, the 1908 affair, 
138 

Germany, and Belgian Relief Com- 
mittee, 231 
and the Merchant Service Bill, 

228 
bad feeling among neutrals to, 

245 
Ballin cries " everything is being 

gambled away," 257 
B^in 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, 191 4, 

223 et seq. 
lack of effective administration 

during war, 233 
mental attitude of, 134 
plans to approach President 

Wilson, 283 



Germany, state in 1916 " like living 
in a madhouse," 257 

useless sacrifices of, 229 

war condition of, 257 

war-hopes in ruins, 269 
Germany's industrial growth, 7 
Gigantic, 113 
Goschen, Sir Ernest, 153 
Gothenburg, port of, 21 
Grey, Sir Edward, 262 

on lyord Haldane's mission, 177 

on naval armaments, 157 

on the Navy, 138 
Great War (see World War) 
Grumme, Capt. v., joins Hamburg- 
Amerika I,inie, 199 

with William II at Morgan Trust 
discussion, 53. 



Hague Conference, 137 

Hahn, Dr. Diederich, Chairman 

Agrarian I^eague, 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, i 
cholera epidemic in, 36, 72 
dock strike, 299 
in the nineteenth century, 1-6 
Hamburg- Amerika I^inie, and Great 

Britain, 207 
and Persia, 107 
and Russo-Japanese war, 105 
buys foodstuffs 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 



Index 



Hamburg-Amerika Linie {see also 

Packetfahrt) 
Hamburg - Amerikanische Packet- 

fahrt-Actien-Gesellschaft, 7 
Hamburg Regattas, William II at, 

201 
Hamburg-South American S.S. Co., 

79 
Hammann, Geheimrat, 138, 141 
Hammonia, 24 
Hansa Line, 69 
taken over by Hamburg-Amerika 

Ivinie, 70 
Hansemann, v., director Disconto 

Gesellschaft, 55 
Hansen, President, Chief of Arbi- 
tration Court Pool, 35 
Harbou, Major v., 282 
Harland and Woln, 112, 121 
Henckell - Donnersmarck, Prince, 

Kaiser's interest in, 47 
Hintze, Herr v., 283 
Hohenzollern, 194 
Holland-America Line, 7 
Holland, Queen of, offers mediation, 

283 
Holtzendorff, Admiral v., 246 
Hongkong, 88 
Huldermann, Bernhard, and Count 

Witte on averting war, 217 
and Navy Bill, 170 

Immco Lines, Pool name for Morgan 

Trust, 65 
Immigrants, Scandinavian trade, 

36 
Itnperaior, 31, 113, 125, 126 
International Mercantile Marine 

Company {see Morgan Trust) 
Inverclyde, Lord, and Morgan 

Trust, 64 
Italia Company, the, started, 

79 
Italy, agreement with, necessary 

to success of war, 241 
Germany's failure in, 242 



Jagow, Herr v., 213, 214 
Jewish ancestry of Ballin, 2 
Jones, Sir A., and the Morgan Trust, 

6 
Jonqui^res, Herr v., 231 



Kaiser Wilhelm der Grosse, TJ 
Kaiser Wilhelm 11, 205 
Kaiserin, 113 
Kaiserin Auguste Victoria, 25, 106, 

129 
Kaiserin, the, and the war, 211 

opposition to private life, 285 
Kiautschou, 97 
Kiel Canal, widening the, 200 

Edward VII at, 206 

Week, origin of, 201 
Kirchheim, Chief Inspector Emil F., 

viii 
Kohlhrand agreement the, 295 
Kiihlmann, Herr v., 189 
Kimhardt, M., 27 
Kuskop, Karl, 303 



Laeisz, Carl, 293 

Laeisz, P., 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 Anglo- 
German understanding, 136 

Lichnowsky, Prince, 188 

ynew on Haldane's " neutrality " 
conversation, 191 

Liners, developments in, 125 et seq. 

Lohmann, Mr., 10 

Director-General of Lloyd Line, 
32 

Ludendorff, and the Crown Prince, 
280 
and " to her knees " promise, 266 

Lusitania, 62, 113 



Marie, Princess, of Denmark, 99 
Marine engineering, Ballin's 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 



323 



Mettemich, Count, at St. James's, 
212 
on Anglo-German understanding, 

187 
predicts Great War, 188 
sees Sir Edward Grey, 178 
Morgan, Pierpont, guest of William 

II at Kiel, 61 
Morgan, Trust, the, 40 et seq. 
agreement reached, 52 
annoimced 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., i et seq. 
Mutius, Herr v., 247 



Nanking, 92 

Naumaim, Dr., and " Berlin to 

Bagdad," 276 
Nautikus, naval propaganda in, 200 
Naval armaments, a cause of mirest, 

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 et seq. 
steerage passengers to, statistics, 
29 
Normannia, 77 



North Atlantic Steamship Lines 

Association, history of, 32 
North German Gazette, 157 
North German Lloyd, 7, 9», 106, 
III 
competes with Packetfahrt, 10 
jubilee of, 117 



Oertzen, Herr v., 91 
Olympic, 113 



Packetfahrt, the, a founder of, 10 
agreement with Philadelphia 
Shipping Co. and Pennsylvania 
Railroad Co., 77 
and Ballin, 289 
and Carr Line, 12 
and emigrants, 10 
and Harland and Wolff, 121 
and Russian coal, 104 
and the Russo-Japanese War, 

103 
Ballin made director of, 27 
celebration of jubilee, 74 
1886 Pool, 21 
extension of South Ameritan 

business, 80 
improved appointments and ac- 
commodation on vessels, 26 
increase of capital, 26 
letter from cnairman 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 



Index 



Pleasure cruises, inception of, 70 

et seq. 
Pool accommodation discussions 

(1898). 38 
actuarial basis of, 34 
agreement on (1891), 24 
agreement with Allan Line, 74 
agreement with Italian Lines, 74 
agreement with Lloyd Line, 74 
Ballin's opinions upon, 115 
British Lines refuse (1892), 33 
cardinal principles of, 30 
Cunard Line refuses to join, 37 
details of the, 28 
Heinrich Peters, secretary of, 31 
its most dramatic episode, 67 
more iutemal troubles, 115 
negotiations for a greater, 35 
North Atlantic Steamship Lines 

Association, formal name of, 

33 
proposed by Ballin, 1886, 24 
special, for Mediterranean busi- 
ness, 34 
terms definitely made, 33 
the General, iii 
the transatlantic, no 
tonnage and passenger statistics, 

29 
U.S.A. Railway pool compared, 

28 
world war's effect upon, in 
Port Said, 85 
Pretoria, 201 
Princes' Trust, no 
Prinzessin Victoria Luise, 130 
Prussia, Prince Henry of, 57 



Rate war, the, 14, no 

Red Star Line, 7 

Reichseinkauf, the, formation of, 

223 
Reuchlin, Mr., of Holland- American 

Line, 32 
Richardson, Spence and Co., 9 
Riga, fall of, 272 
Roumania, anxiety regarding food 

from, 251 
neutrality of, 244 
supplies grain during war to 

Germany, 227 
Rupprecht of Bavaria, Prince, 137 
Russia, army of, 139 



Russian East Asiatic S.S. Co., loi 
Russian Press, outburst against 

Sandjak Railway, 141 
Russian Volunteer Fleet, in 
Russo-Japanese War, 102 

coaling problems for Russian 

fleet, 105 
ships for, 25 



St. Louis, 49 
St. Paul, 49 
Sandjak Railway, 141 
Scandia Line, 21 
Scandinavian emigration, 21 
Schon, Herr v., 141 
Schratt, Frau Kathi, 250 

pro-English sympathies of, 252 
Schwander, Dr., 272 
Shanghai, 90 
Shaughnessy, Lord, 62 
Shipping agreement on rates, 17 

agreements, enormous range of, 
III 

British tonnage in 1901, 49 

crisis of 1907, in 

Imperial Government's interest 
in. 55 

some tonnage comparisons, 49 

statistics (1881-1885), 29 

transatlantic business, trend of, 
67 
Ships, speed of, in 1882, 10 
Singapore, 87 
Skoda, Baron, 251 
Sloman and Co., R. M., 18 
South African War, 79 
South America, development of, 82 
Southampton, Packetfahrt service 

transferred to, 73 
Spanish - American War, ships for, 

25 
Steinhoft, Hamburg, i 
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 



325 



Thing VAi,i<A Line, 21 

Times, The, on German neutraJity, 

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 
Tsingtau, 92, 97 

Tweedmouth, Lord, 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 of the 
'eighties, 9 

enters the war, 269 

German fears of intervention, 
252 

immigration from Scandinavia, 
21 

Railway Pool, 29 

railways and shipping co-opera- 
tion, 44 



Vaterland, 113 

Versailles treaty, German view of, 

208 
Vienna, conditions in, 249 
Vulkan Yard, Stettin, 26, 78, 113 



Wai<dersee, 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 
Wilding, Mr., Ballin's friendship 
for, 9 



William II, and " a place in the 
sun," 202 
and British Navy, British feeling 

aroused, 137 
and Daily telegraph interview, 

143 

and Nicholas, suggested talk to 
avert war, 220 

and President Wilson's note, 285 

and the Bismarck, 114 

at Hamburg, 193 

Ballin explains situation in Sep- 
tember, 1 91 8, 209 

Ballin reports to, on navy 
problem, 138 

B^lin tells him the ugly truth in 

1917, 267 

blind to situation, September, 

1918, 283 

" brimful of optimism," 272 
comments on Westminster Gazette 

article, 163 
designs excursion steamer, 196 
discusses Morgan Trust with 

Ballin, 53 
discusses Morocco question, 205 
facsimile comments on West- 
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, Ballin 

and, 285 
on balance of power, 165 
on Germany's Austro-Hungarian 

policy, 189 
on the Churchill speech, 183 
outspoken letter in 1916 from 

Ballin, 252 et seq. 
personal interest in Ballin, ig8 
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 



326 



Index 



Waiiam II, venerated in Austria, 

251 
visits Windsor, 136 
wants apology from Great Britain, 

183 
writes to Ballin on Haldane in- 
terview, 175 

"Wilson, President, 263 

Witt, Mr. Johannes, 27 

Witte, Count, on situation July, 

1914. 217 
Woermann, Adolph, 107 

character sketch of, io8 
World war, the, 213 

Ballin attempts mediation, 233 
Ballin describes 1917 situation 

to William II, 265 
Ballin favours a compromise, 

236 
Ballin on neutrals, 245 
Ballin on the blockade, 234 
Ballin on the crisis, 215 
Bismarck's prophecy regarding, 

133 
British censorship in, 225 
coal problems during, 102 
Count Witte on situation, July 

24th, 1914, 217 
defection of German conscripts, 

281 
effect on Pool, 1 1 1 



World war, the, entry of U.S.A., 

effect of, 253 et seq. 
food problems of Germany, 222 
forced upon William II, 285 
foreign policy and food during, 

241 
German mistakes in, 258-9 
Germany stunned by dibdcle, 236 
grain from Roumania, 227 
indemnities, 261 
Mexico telegram, 271 
outbreak of, 132 
peace overtures, 245 
position in 191 6, 258 
provisioning Germany, 221 
shipping profits during, 65 
submarine warfare in, 229 
the British blockade, 224 
Tyrol, failure in the, 259 
Verdun and Italian campaigns, 

political and military failures, 

258 
World's shipping collapse, cause of, 

229 



Yang-tse-Kiang, the, 91, 90 



Zentrai<-Einkaufs-Gesei:,i<schaft, 
226 et seq. 



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

K. 17. 622 



3553 



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