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diff --git a/old/44135-8.txt b/old/44135-8.txt deleted file mode 100644 index 36bf573..0000000 --- a/old/44135-8.txt +++ /dev/null @@ -1,11959 +0,0 @@ -The Project Gutenberg EBook of Albert Ballin, by Bernhard Huldermann - -This eBook is for the use of anyone anywhere at no cost and with -almost no restrictions whatsoever. You may copy it, give it away or -re-use it under the terms of the Project Gutenberg License included -with this eBook or online at www.gutenberg.org/license - - -Title: Albert Ballin - -Author: Bernhard Huldermann - -Translator: Wilhelm Johann Eggers - -Release Date: November 8, 2013 [EBook #44135] - -Language: English - -Character set encoding: ISO-8859-1 - -*** START OF THIS PROJECT GUTENBERG EBOOK ALBERT BALLIN *** - - - - -Produced by Chuck Greif and the Online Distributed -Proofreading Team at http://www.pgdp.net (This file was -produced from images generously made available by The -Internet Archive) - - - - - - -[Illustration: Albert Ballin] - - - - - ALBERT BALLIN - - By - Bernhard Huldermann - - _Translated from the German - by - W. J. EGGERS, M.A. (London)_ - - [Illustration: decoration] - - Cassell 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_ (_Act I, Scene 2_). - - - - -PREFACE - - -My principal reason for publishing the information contained in this -volume is to keep alive the memory of Albert Ballin. I particularly -desire to show what was his share in bringing about the economic advance -of Germany during the golden age of the Empire's modern history, and to -relate how he--unsuccessfully, alas!--strove to prevent the proud -structure which he had helped to raise, from falling to ruin in the time -of his country's distress. I believe that much that concerns the latter -aspect of his work will be new to most readers. In spite of all that has -been said and written concerning the political activities which Ballin -displayed (and is alleged to have displayed) both before and during the -war, their object--and, more important still, their intimate connexion -with his economic activities--is scarcely known. Eminently successful -though Ballin had been in creating an atmosphere of mutual understanding -between the various nations in the economic sphere, his attempts to -reconcile the contending ambitions of those same nations where politics -were concerned ended in failure. And yet it is impossible to understand -his failure in one respect without first understanding his success in -the other; indeed, the connexion between the two sides of his work forms -the key to the character of the man and to the historical significance -of his achievements. - -It is possible that this volume may shed some new light on the causes of -Germany's collapse; this idea, at any rate, was before my mind when I -decided upon publication. Frederick the Great somewhere remarked that, -to the great loss of mankind, the experiences gained by one generation -are always useless to the next, and that each generation is fated to -make its own mistakes. If this is true, it is nevertheless to be hoped -that Germany, considering the magnitude of the disaster that has -overtaken her, will not allow the spirit of resignation implied by this -remark to determine her actions in the present case. - -In thus submitting to the public the information contained in this book, -I am carrying out the behest of the deceased, who asked me to collect -his papers, and to make whatever use I thought fit of them. Moreover, -the fact that I had the privilege of being his collaborator for more -than ten years gives me perhaps a special right to undertake this task. - -My best thanks are due to Director A. Storm for supplying me with -material illustrative of Ballin's early career; to Chief Inspector Emil -F. Kirchheim for assistance with the technical details, and to Professor -Francke, who was on intimate terms of friendship with Ballin during a -number of years, for information concerning many matters relative to -Ballin's personal character. - -My constant endeavour has been to describe persons and events _sine ira -et studio_, and to refrain from stating as a fact anything for which no -documentary evidence is available. - -THE AUTHOR. - -_October, 1921._ - - - - -CONTENTS - - -CHAPTER PAGE - -1. MORRIS AND CO. 1 - -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 -Steinhöft. - -A seaport growing in importance from year to year is always a scene of -busy life, and the early days which the boy Ballin spent in his father's -house and its interesting surroundings near the river's edge left an -indelible impression on his plastic mind. - -Those were the times when the private residence and the business -premises of the merchant and of the shipping man were still under the -same roof; when a short walk of a few minutes enabled the shipowner to -reach his vessel, and when the relations between him and the captain -were still dominated by that feeling of personal friendship and personal -trust the disappearance of which no man has ever more regretted than -Albert Ballin. Throughout his life he never failed to look upon as -ideal that era when every detail referring to the ship and to her -management was still a matter of personal concern to her owner. He -traced all his later successes back to the stimulating influence of -those times; and if it is remembered how enormous was then the capacity -for work, and how great the love of it for its own sake, it must be -admitted that this estimate was no exaggeration. True, it is beyond -doubt that the everyday surroundings in which his boyhood was spent, and -the impressions gained from them, powerfully influenced his imagination -both as boy and growing youth. It may, however, also be regarded as -certain that the element of heredity was largely instrumental in -moulding his character. - -Ballin belonged to an old Jewish family, members of which--as is proved -by ancient tombstones and other evidence--lived at Frankfort-on-Main -centuries ago. Later on we find traces of them in Paris, and still later -in Central and North Germany, and in Denmark. Documents dating from the -seventeenth century show that the Ballins at that time were already -among the well-to-do and respected families of Hamburg and Altona. Some -of the earliest members of the family that can be traced were -distinguished for their learning and for the high reputation they -enjoyed among their co-religionists; others, in later times, were -remarkable for their artistic gifts which secured for them the favour of -several Kings of France. Those branches of the family which had settled -in Germany and Denmark were prominent again for their learning and also -for their business-like qualities. The intelligence and the artistic -imagination which characterized Albert Ballin may be said to be due to -hereditary influences. His versatile mind, the infallible discernment he -exercised in dealing with his fellow-men, his artistic tastes, and his -high appreciation of what was beautiful--all these are qualities which -may furnish the key to his successes as a man of business. His sense of -beauty especially made him extremely fastidious in all that concerned -his personal surroundings, and was reflected in the children of his -imagination, the large and beautifully appointed passenger steamers. - -Ballin always disliked publicity. When the Literary Bureau of his -Company requested him to supply some personal information concerning -himself, he bluntly refused to do so. Hence there are but few -publications available dealing with his life and work which may claim to -be called authentic. Nevertheless--or perhaps for that very -reason--quite a number of legends have sprung up regarding his early -years. It is related, for instance, that he received a sound business -training first in his father's business and later during his stay in -England. The actual facts are anything but romantic. Being the youngest -of seven brothers and sisters, he was treated with especial tenderness -and affection by his mother, so much so, in fact, that he grew up rather -a delicate boy and was subject to all sorts of maladies and -constitutional weaknesses. He was educated, as was usual at that time, -at one of the private day-schools of his native city. In those days, -when Hamburg did not yet possess a university of her own, and when the -facilities which she provided for the intellectual needs of her citizens -were deplorably inadequate for the purpose, visitors from the other -parts of Germany could never understand why that section of the -population which appreciated the value of a complete course of higher -education--especially an education grounded on a classical -foundation--was so extremely small. The average Hamburg business man -certainly did not belong to that small section; and the result was that -a number of private schools sprang up which qualified their pupils for -the examination entitling them to one year's--instead of three -years'--military service, and provided them with a general education -which--without any reflection on their principals--it can only be said -would not bear comparison with that, for instance, which was looked upon -as essential by the members of the higher grades of the Prussian Civil -Service. Fortunately, the last few decades have brought about a great -improvement in this respect, just as they have revolutionized the -average citizen's appreciation of intellectual culture and refinement. - -Albert Ballin did not stand out prominently for his achievements at -school, and he did not shine through his industry and application to his -studies. In later life he successfully made up for the deficiencies of -his school education by taking private lessons, especially in practical -mathematics and English, in which language he was able to converse with -remarkable fluency. His favourite pastime in his early years was music, -and his performances on the 'cello, for instance, are said to have been -quite excellent. None of his friends during his later years can furnish -authoritative evidence on this point, as at that time he no longer had -the leisure to devote himself to this hobby. Apart from music, he was a -great lover of literature, especially of books on _belles lettres_, -history, and politics. Thanks to his prodigious memory, he thus was able -to accumulate vast stores of knowledge. During his extended travels on -the business of his Company he gained a first-hand knowledge of foreign -countries, and thus learned to understand the essential characteristics -of foreign peoples as well as their customs and manners, which a mere -study of books would never have given him. So he became indeed a man of -true culture and refinement. He excelled as a speaker and as a writer; -although when he occasionally helped his adopted daughter with her -German composition, his work did not always meet with the approval of -the teacher, and was once even returned with the remark, "newspaper -German." - -In 1874, at the age of seventeen, Ballin lost his father. The business, -which was carried on under the firm of Morris and Co., was an Emigration -Agency, and its work consisted in booking emigrants for the -transatlantic steamship lines on a commission basis. Office premises and -dwelling accommodation were both--as already indicated--located in the -same building, so that a sharp distinction between business matters and -household affairs was often quite impossible, and the children acquired -practical knowledge of everything connected with the business at an -early age. This was especially so in the case of young Albert, who loved -to do his home lessons in the office rooms. History does not divulge -whether he did so because he was interested in the affairs of the -office, or whether he obtained there some valuable assistance. The whole -primitiveness of those days is illustrated by the following episode -which Ballin once related to us in his own humorous way. The family -possessed--a rare thing in our modern days--a treasure of a servant who, -apart from doing all the hard work, was the good genius of the home, and -who had grown old as the children grew up. "Augusta" had not yet read -the modern books and pamphlets on women's rights, and she was content to -go out once a year, when she spent the day with her people at Barmbeck, -a suburb of Hamburg. One day, when the young head of Morris and Co. was -discussing some important business matters with some friends in his -private office, the door was suddenly thrust open, and the "treasure" -appeared on the scene and said: "Adjüs ook Albert, ick gah hüt ut!" -("Good-bye, Albert, I am going out to-day!") It was the occasion of her -annual holiday. - -The firm of Morris and Co., of which Ballin's father had been one of the -original founders in 1852, had never been particularly successful up to -the time of his death. Albert, the youngest son, who was born on August -15th, 1857, joined the business when his father died. He had then just -finished his studies at school. The one partner who had remained a -member of the firm after Ballin's death left in 1877, and in 1879 Albert -Ballin became a partner himself. The task of providing for his widowed -mother and such of his brothers and sisters as were still dependent on -his help then devolved on him, and he succeeded in doing this in a very -short time. He applied himself to his work with the greatest diligence, -and he became a shining example to the few assistants employed by the -firm. On the days of the departure of the steamers the work of the -office lasted until far into the night, as was usually the case in -Hamburg in former years. An incident which took place in those early -days proves that the work carried on by Morris and Co. met with the -approval of their employers. One day the head of one of the foreign -lines for which the firm was doing business paid a personal visit to -Hamburg to see what his agents were doing. On entering the office young -Albert received him. He said he wanted to see Mr. Ballin, and when the -youthful owner replied that he was Mr. Ballin the visitor answered: "It -is not you I want to see, young man, but the head of the firm." The -misunderstanding was soon cleared up, and when Ballin anxiously asked if -the visitor had come to complain about anything connected with the -business, the reply was given that such was by no means the case, and -that the conduct of the business was considered much more satisfactory -than before. - -To arrive at a proper understanding of the conditions ruling in Hamburg -at the end of the 'seventies, it is necessary to remember that the -shipping business was still in its infancy, and that it was far from -occupying the prominent position which it gained in later years and -which it has only lost again since the war. The present time, which also -is characterized by the prevalence of foreign companies and -foreign-owned tonnage in the shipping business of Hamburg, bears a -strong likeness to that period which lies now half a century back. The -"Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft," although only -running a few services to North and Central America, was even then the -most important shipping company domiciled in Hamburg; but it counted for -very little as an international factor, especially as it had just passed -through a fierce struggle against its competitor, the Adler Line, which -had greatly weakened it and had caused it to fall behind other lines -with regard to the status of its ships. Of the other Hamburg lines which -became important in later times, some did not then exist at all, and -others were just passing through the most critical period of their -infancy. The competitors of the Packetfahrt in the emigrant traffic were -the North German Lloyd, of Bremen; the Holland-America Line, of -Rotterdam, and the Red Star Line, of Antwerp. Apart from the direct -traffic from Hamburg to New York, there was also the so-called indirect -emigrant traffic _via_ England, which for the most part was in the hands -of the British lines. The passengers booked by the agents of the latter -were first conveyed from Hamburg to a British port, and thence, by a -different boat, to the United States. It was the time before the -industrialization of Germany had commenced, when there was not -sufficient employment going round for the country's increasing -population. The result was that large numbers of the inhabitants had to -emigrate to foreign countries. That period lasted until the 'nineties, -by which time the growth of industries required the services of all who -could work. Simultaneously, however, with the decrease of emigration -from Germany, that from Southern Europe, Austria-Hungary, and the -Slavonic countries was assuming huge proportions, although the -beginnings of this latter were already quite noticeable in the -'seventies and 'eighties. This foreign emigrant traffic was the mainstay -of the business carried on by the emigration agencies of the type of -Morris and Co., whereas the German emigrants formed the backbone of the -business on which the German steamship lines relied for their passenger -traffic. Either the companies themselves or their agencies were in -possession of the necessary Government licences entitling them to carry -on the emigration business. The agencies of the foreign lines, on the -other hand, either held no such licence at all, or only one which was -restricted to certain German federal states or Prussian provinces--such, -for instance, as Morris and Co. possessed for the two Mecklenburgs and -for Schleswig-Holstein. This circumstance naturally compelled them to -tap foreign districts rather than parts of Germany; and since the German -lines, in order to keep down their competition, refused to carry the -passengers they had booked, they were obliged to work in conjunction -with foreign ones. They generally provided the berths which the -sub-agencies required for their clientèle, and sometimes they would book -berths on their own account, afterwards placing them at the disposal of -the agencies. They were the connecting link between the shipping -companies and the emigrants, and the former had no dealings whatever -with the latter until these were on board their steamers. The Hamburg -emigration agents had therefore also to provide accommodation for the -intending emigrants during their stay in Hamburg and to find the means -for conveying them to the British port in question. A number of taverns -and hostelries in the parts near the harbour catered specially for such -emigrants, and the various agents found plenty of scope for a display of -their respective business capacities. A talent for organization, for -instance, and skill in dealing with the emigrants, could be the means of -gaining great successes. - -This was the sphere in which the youthful Albert Ballin gave the first -proofs of his abilities and intelligence. Within a few years of his -entering the firm the latter acquired a prominent position in the -"indirect" emigration service _via_ England, a position which brought -its chief into personal contact with the firm of Richardson, Spence and -Co., of Liverpool, who were the general representatives for Great -Britain of the American Line (one of the lines to whose emigration -traffic Morris and Co. attended in Hamburg), and especially with the -head of that firm, Mr. Wilding. An intimate personal friendship sprang -up between these two men which lasted a lifetime. These close relations -gave him an excellent opportunity for studying the business methods of -the British shipping firms, and led to the establishment of valuable -personal intercourse with some other leading shipping people in England. -Thus it may be said that Ballin's connexions with England, strengthened -as they were by several short visits to that country, were of great -practical use to him and that, in a sense, they furnished him with such -business training as until then he had lacked. - -How successfully the new chief of Morris and Co. operated the business -may be gauged from the fact that, a few years after his advent, the firm -had secured one-third of the volume of the "indirect" emigration traffic -_via_ England. At that time, in the early 'eighties, a period of grave -economic depression in the United States was succeeded by a trade boom -of considerable magnitude. Such a transition from bad business to good -was always preceded by the sale of a large number of "pre-paids," i.e. -steerage tickets which were bought and paid for by people in the United -States and sent by them to those among their friends or relatives in -Europe who, without possessing the necessary money, wished to emigrate -to the States. A few months after the booking of these "pre-paids" a -strong current of emigration always set in, and the time just referred -to proved to be no exception to the rule. The number of steerage -passengers leaving Hamburg for New York increased from 25,000 in 1879 to -69,000 in 1880, and 123,000 in 1881. - -It was quite impossible for the biggest Hamburg shipping company--the -Packetfahrt--to carry successfully this huge number of emigrants. And -even if this had been possible, the Packetfahrt would not have -undertaken it, because it intentionally ignored the stream of non-German -emigrants. Besides, the Company had neglected for years to adapt its -vessels to the needs of the times, and had allowed its competitors to -gain so much that even the North German Lloyd, a much younger -undertaking, had far outstripped it. The latter, under its eminent -chairman, Mr. Lohmann, had not only outclassed the Packetfahrt by the -establishment of its service of fast steamers--"Bremen-New York in 9 -days"--which was worked with admirable regularity and punctuality, but -had also increased the volume of its fleet to such an extent that, in -1882, 47 of the 107 transatlantic steamers flying the German flag -belonged to this Company, whereas the Packetfahrt possessed 24 only. For -all these reasons it would have been useless for Morris and Co. to -suggest to the Packetfahrt that they should secure for it a large -increase in its emigrant traffic; and even if they had tried to extend -their influence by working in co-operation with the Packetfahrt, such an -attempt would doubtless have provoked the liveliest opposition on the -part of the firm of August Bolten, the owner of which was one of the -founders of the Packetfahrt, and which, because they were acting as -general agents for the North American cargo and passenger business, -exercised a powerful influence over the management of the Packetfahrt. -The firm of August Bolten, moreover, had, like the line they -represented, always consistently refused to have any dealings with the -emigrant agencies. - -Ballin, knowing that the next few years would lead to a considerable -increase in the emigrant traffic, therefore approached a newly -established Hamburg shipping firm--which intended to run a cargo service -from Hamburg to New York--with the proposal that it should also take up -the steerage business. His British friends, when they were informed of -this step, expressed the apprehension lest their own business with his -firm should suffer from it, but Ballin had no difficulty in allaying -their fears. - - - - -CHAPTER II - -GENERAL REPRESENTATIVE OF THE CARR LINE - - -The new shipping line for which Morris and Co. contracted to act as -General Passenger Agents was the privately owned firm of Mr. Edward -Carr. The agreement concluded between the two firms shows distinct -traces of Ballin's enterprising spirit and of the largeness of his -outlook. Morris and Co. undertook to book for the two steamships of the -Carr Line then building, viz. the _Australia_ and the _America_, as many -passengers as they could carry, and guaranteed to pay the owners a -passage price of 82 marks per head, all the necessary expenses and -commissions, including those connected with the dispatch of the -passengers, to be paid by Morris and Co. The steerage rate charged by -the Packetfahrt at that time was 120 marks. It was agreed that, if this -rate should be increased, a corresponding increase should be made in the -rates of the Carr Line. The number of trips to be performed by each -steamer should be about eight or nine per annum. If a third boat were -added to the service, the agreement entered into should be extended so -as to cover this boat as well. For every passenger short of the total -capacity of each steamer Morris and Co. were to pay a compensation of 20 -marks, if no arrangements had been made for the accommodation of the -passenger, and 35 marks in case such accommodation had been arranged. It -was expected that each boat would carry from 650 to 700 passengers. The -actual number carried, however, turned out to be slightly less, and -amounted to 581 when the first steamer left Hamburg on June 7th, 1881. -Morris and Co. also undertook to hand over to the Carr Line all the -through cargo they could secure. From the very start the work done by -Ballin seems to have met with the unqualified approval of the Carr Line -people; because the latter waived their claim to the compensation due to -them for the sixty passengers short of the total number which were to be -carried on the first trip, as Morris and Co. could prove that these -passengers had failed to arrive, although the firm had been advised from -Denmark that they were to come. On how small a scale the firm's business -was conducted may be gauged from the circumstance that the whole staff -consisted of nine employees only, who were paid salaries aggregating -20,302 marks. - -In one essential feature the service of the new line differed from those -of its old-established competitors. The _Australia_ and the _America_ -were ordinary cargo boats, but, in addition to a moderate amount of -cargo, they also carried steerage passengers. They thus had not much in -common with the usual passenger steamers by which both cabin and -steerage passengers were carried. The advantage of the new type to the -emigrants was that it gave them much more space than was at their -disposal on the older boats. Whereas on the cabin steamers they were -practically confined to a very small part of the boat, the Carr Line -steamers made no restriction whatever as to their movements on board; -all the available space, especially on deck, was thrown open to them. -This type was not entirely a novelty, the sailing vessels of the older -period used for the emigrant traffic being run on similar lines. The -advantages accruing to the owners from their new type of steamers were -obvious. The arrangements for the accommodation and provisioning of the -emigrants, compared with what was needed in the case of cabin -passengers, were of the simplest kind, and thus the cost price of the -steamers was considerably less than that of vessels of the usual type. -This also meant a saving in the wages bill, as it led to a reduction in -the number of hands on board; and since the speed of the new boats was -also less than that of the older ones, the working expenses were reduced -in proportion. The financial results of the service, therefore, were -better, in spite of the low rates charged to the steeragers, than those -obtainable by running cabin steamers with steerage accommodation, and -than those obtainable by running cargo steamers without any passenger -accommodation. - -The new line soon made itself felt as a serious competitor to the -Packetfahrt, especially so as by 1885 its fleet had increased from two -to five steamers. The lower steerage rates charged by the Carr Line led -to a general decrease of rates in the New York service, which was not -confined to the lines running their services from Hamburg. The passage -prices charged from the various ports are naturally closely related to -each other, because each port tries to attract as much traffic as -possible to itself, and this can only be brought about by a carefully -thought-out differentiation. The struggle between the various lines -involved which had started in Hamburg quickly extended to other seaports -and affected a great many lines in addition to those of Hamburg. The -rate-cutting process began in May, 1882. In the following October the -Packetfahrt and the Lloyd had reduced their rates to 90 and in June, -1883, to 80 marks, whilst the British lines in February, 1884, charged -so little as 30s. The Carr Line, of course, had to follow suit. It not -only did so, but in proportion reduced its own rates even more than the -other lines. The rates were even lower in practice than they appeared to -be, owing to the constantly growing commissions payable to the agents. -The agents of the competing lines, by publishing controversial articles -in the newspapers, soon took the general public into their confidence; -and in order to prevent such publicity being given as to their internal -affairs, the managements of the various steamship lines entered into -some sort of mutual contact. The worst result of the rate-slashing was -that the agreements which the older lines had concluded amongst -themselves for the maintenance of remunerative prices soon became -unworkable. First those relating to the Westbound rates had to go down -before the new competitor; and in 1883, when this competition had really -commenced to make itself appreciably felt, the Packetfahrt found itself -compelled to declare its withdrawal from the New York Continental -Conference by which the Eastbound rate had been fixed at $30 for the -passage from New York to the Continent, a rate which was so high that -the Carr Line found it easy to go below it. - -The Packetfahrt made great efforts to hold its own against the newcomer, -but, as the following figures show, its success was but slight. In 1883 -the Packetfahrt carried 55,390 passengers on 76 voyages, against 16,471 -passengers carried on 29 voyages by the Carr Line, so that the traffic -secured by the latter amounted to about 30 per cent. of that of the -former. The figures for 1884 show that 58,388 passengers were carried by -the Packetfahrt on 86 voyages, against 13,466 steeragers on 30 voyages -by the Carr Line. If the figures relative to the direct and the indirect -emigrant traffic from Hamburg are studied, it will be seen that a -considerable decrease had taken place in the volume of the latter kind -within a very few years, thus leading to an improvement in the position -of the German lines as compared with that of their British competitors. -These figures are as follows: - - _Number of Emigrants carried_ - _Packetfahrt_ _Carr Line_ _via British ports_ - - 1880 47,000 -- 20,000 - 1881 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 prevent French competition -from becoming too dangerous on the Havre-New York route, had to reduce -its rates from Havre, and a little later it had to do likewise with -regard to the Eastbound freight rates and the steerage rates. The keen -competition going on between the lines concerned had led to a lowering -of the Eastbound rate to Hamburg from $30 to $18; and as the commission -payable to the agents had gone up to $5, the net rate amounted to $13 -only. At last the shareholders of the Packetfahrt became restless, and -at the annual general meeting held in 1884 one of their representatives -moved that the Board of the Company should be asked to enter into an -agreement with the competing firm of Edward Carr. The motion, however, -was lost; and the further proposal that a pool should be established -among the Hamburg emigrant agents fared no better. - -It was clear that the rate-war, which continued for a long period, would -considerably affect the prosperity of the Carr Line in common with the -other shipping companies. This circumstance prompted the proposal of -Edward Carr, when the discussions were renewed in the spring of 1885, to -carry them on upon a different basis altogether. He proposed, in fact, -that the Carr Line itself should be purchased by the Packetfahrt. In the -course of the ensuing negotiations Albert Ballin, as the representative -of Edward Carr, who was absent from Hamburg for a time, played a -prominent part. The Packetfahrt, in the meantime, had received advices -from its New York office to the effect that the latter had reconsidered -its attitude towards the claims of the Carr Line, that it looked upon a -successful termination of the struggle against this Line as hopeless, -and that it therefore recommended the granting of the differential rates -which formed the obstacle to peace. Nevertheless, it was not until July, -1885, that, at a conference held in Hamburg, an agreement was concluded -by the Packetfahrt, the Lloyd, the Carr Line, the Dutch, Belgian, and -French lines, and the representative of the British lines. All these -companies bound themselves to raise their rates to 100 marks, except -that the Carr Line should be entitled to fix theirs at 90 marks. Thus -the latter had at length received the recognition of its claim to a -differentiation, and of its right to exist side by side with the older -Company, although its steamers were not of an equal quality with those -of the latter. An agreement was also concluded by which the rates of -commission due to the Hamburg emigrant agents were fixed, and at the -continued negotiations with the other lines Albert Ballin, from that -time onward, in his capacity of representative of the Carr Line, was -looked upon as on an equal footing with the representatives of the other -lines. - -The principal subject of the discussions was the question of -eliminating, as far as possible, British influence from the emigrant -traffic _via_ Hamburg. The competition of the British was, naturally, -very detrimental to the business of all the Continental, but more -especially the German lines, because the interests of the respective -sides were utterly at variance with each other. The firm foundations of -the business transacted by the British lines were laid in England, and -the Continental business was merely a source of additional profit; but -to the German lines it was the mainstay of their existence, and to make -it pay was of vital importance to them. The German lines, therefore, -did not rest until, as the result of the continued negotiations among -the Continental companies, it was agreed that the uniform rates just -fixed should not apply to the traffic which was carried on by the two -Hamburg lines from that city. Towards the end of 1885 the first object -aimed at by this step was realized: the conclusion of an agreement -between the two Hamburg lines and the representatives of the British -lines settling the rates and the commissions; but apart from this, no -changes of fundamental importance were made in this business until after -Albert Ballin, under an agreement proposed by the Packetfahrt, had -entered the service of the Packetfahrt, as head of their passenger -department. An important exception, however, was the amalgamation -suddenly announced in March, 1886, of the Carr Line and the Union Line, -which latter company was operated by Rob. M. Sloman and Co., of Hamburg. -The fact of this amalgamation considerably weakened the position of the -Packetfahrt in its dealings with the Carr Line, because it gave -additional strength to the latter. - -The details of the five years' agreement between Ballin and the -Packetfahrt were approved by the Board of Trustees of that Company about -the middle of May, 1886. It was stipulated that, in conformity with the -pool agreement concluded between the two lines on May 22nd, the -Packetfahrt should appoint Mr. Albert Ballin sole and responsible head -of its North American passenger department (Westbound as well as -Eastbound services); that his work should include the booking of -steeragers for the Union Company's steamers (which, in accordance with -the pool agreement, the Packetfahrt had taken over), that he should -appoint and dismiss the clerks employed by his department; that he -should fix their salaries and commissions; that he should sign passage -agreements on behalf of the Company, and that he should issue the -necessary instructions to the agents and officers of the Company. All -letters and other documents were to be signed "by proxy of the -Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft," and he was -required annually to submit to the directors a draft estimate of the -expenses of his department. On how modest a scale the whole arrangement -was drawn up may be inferred from the figures given in the first year's -draft estimate, viz. Salaries, 35,000 marks; advertisements, 50,000 -marks; posters and printed matter, 25,000 marks; travelling expenses, -6,000 marks; postage and telegrams, 10,000 marks; extras and sundries, -10,000 marks. Equally modest was the remuneration of the new head who -was to receive a fixed salary of 10,000 marks per annum, plus a -commission under the pool agreement, allowing the inference that the -total annual income of the newly appointed head of the department would -work out at something like 60,000 marks, which goes to show that the -Company had a high opinion of his capacity for attracting traffic to its -services. The conclusion of this agreement meant that the Packetfahrt -henceforth took entire control of its passenger business--which, until -then, had been looked after by the firm of Aug. Bolten--and that a -passenger department had to be specially created. Thus an important step -forward was made which could only be undertaken by the firm because such -a well-qualified man as Ballin happened to be at their service just -then. - -If the course of the negotiations between the Packetfahrt and the Carr -Line had not already shown it, this agreement would prove without a -shadow of doubt that the then head of Morris and Co. had, at the age of -twenty-nine, and after twelve years of practical work, gained the -premier position in the emigrant business of his native city and also a -leading one in the general European emigrant business which in itself is -one of the most important branches of the shipping trade. The -correspondence between Edward Carr and Ballin furnishes no indication -that the latter himself had insisted upon his being taken over by the -Packetfahrt or that he had worked with this object. - - - - -CHAPTER III - -HEAD OF THE PACKETFAHRT'S PASSENGER DEPARTMENT - - -On May 31st, 1886, Albert Ballin first took part in a joint meeting of -the Board of Trustees and the Board of Directors of the Packetfahrt. On -this occasion two proposals were put forward by him: one, to provide new -premises for the work connected with the booking of passengers at an -annual rent of 5,000 marks; the other, to start a direct service from -Stettin to New York _via_ Gothenburg. This latter proposal was prompted -by the desire to reduce the influence of the British lines competing for -the Hamburg business. Such a reduction could only be brought about if it -were proved to the British lines that their position was by no means -unassailable. The Scandinavian emigrant business to the United States -which for long had been a source of great profit to the British, lent -itself admirably to such purposes. Ballin's proposal was agreed to by -the Company's management, with the result that in July, 1886, a pool -agreement was concluded between the Packetfahrt (on behalf of a Stettin -Line of steamers) and the Danish Thingvalla Line. Steamers now began to -call at Gothenburg and Christiansand on their voyages from Stettin to -the United States. The new line was known as the "Scandia Line"; and in -later years, when a similar object was aimed at, it was called into -existence once more. The aim was not to establish a new steamer service -for its own sake, but rather to create an object for compensation which, -in the negotiations with the British lines, could be given up again in -exchange for concessions on the part of the latter regarding the -Hamburg business. If this plan failed, Ballin had another one mapped -out: he threatened to attack the British in their own country by -carrying steerage passengers either from Liverpool _via_ Havre, or from -Plymouth _via_ Hamburg. People in England laughed at this idea. -"Surely," they said, "no British emigrant will travel on a German -vessel." The British lines replied to Ballin's threat by declaring that -they would again reduce to 30s. their rates from Hamburg to New York -_via_ a British port. However, the negotiations which Ballin entered -into with them in England during the month of September, 1886, soon -cleared the air, and led to the conclusion of an agreement towards the -end of the year. The Packetfahrt promised to withdraw its Scandia Line, -and the British lines, in return, agreed to raise their steerage rates -from Hamburg to 85 marks gross, and those from Liverpool, Glasgow, and -London to £2 10s. net. A clearing house which should be under the -management of a representative of the British lines, and which was also -to include the business done by the Bremen agents of the latter, was to -be set up in Hamburg. This clearing house was kept on until other and -more far-reaching agreements with the British lines made its continued -existence superfluous. - -The arrangements which Ballin made with the agents represented in the -clearing house show his skill in his dealings with other people. The -whole agreement, especially the fixing of the terms governing the share -to be assigned to the agents--which amounted to 55 per cent, of the -Hamburg business--was principally aimed at the realization of as high a -rate as possible. This policy proved to be a great success. Another step -forward was that the Packetfahrt now consented to accept passengers -booked by the agents, thus reversing their previous policy of ignoring -them altogether. - -The agreement with the British lines also provided that the Union Line -should raise its rates to 90 marks, the Packetfahrt to 95 marks, and the -Lloyd those charged for its services to Baltimore and New York to 100 -and 110 marks respectively. Henceforward both competing groups were -equally interested in obtaining as high a rate as possible. - -The practical working of the agreement did not fail to give -satisfaction, and the Continental lines could, undisturbed by external -interference, put their own house in order. A few years later, in 1890, -the British lines complained that they did not succeed in getting the -percentage of business to which they were entitled. Negotiations were -carried on at Liverpool, during which Ballin was present. He pointed out -that, considering the whole Continental position, the British lines -would be ill-advised to withdraw from the agreement, and he stated that -he would be prepared to guarantee them their share (33 per cent.) of the -Hamburg business. The outcome was that the British lines declared -themselves satisfied with these new stipulations. A few years later, -when the British lines joined the Continental Pool, the Hamburg -agreement ceased to be necessary, and in 1893 the clearing house was -abolished. - -The new Emigration Law of 1887--due to the exertions of the North German -Lloyd and the Packetfahrt--strengthened the position of the lines -running direct services from German ports. Another step forward was the -increase of the passage rates which was agreed upon after negotiations -had taken place at Antwerp and in England, and after the German, Dutch, -and Belgian lines had had a conference at Cologne. Contact was also -established with the chief French line concerned. - -The improvement, however, was merely temporary. The termination of the -struggle for the Hamburg business did not mean that all the differences -between all the transatlantic lines had been settled. On the contrary, -all the parties concerned gradually realized that it would be necessary -to institute quite different arrangements; something to ensure a fairer -distribution of the traffic and a greater consolidation of their common -interests. A proposal to gain these advantages by the establishment of a -pool was submitted by the representative of the Red Star Line at a -conference held in the autumn of 1886, and a memorandum written by -Ballin, likewise dating from 1886, took up the same idea; but an -agreement was not concluded until the close of 1891. - -That, in spite of Ballin's advocacy, five years had to elapse before -this agreement became perfect is perhaps to some extent due to the fact -that Ballin--who at that time, after all, was only the head of the -Passenger Department of his Company--could not always speak with its -full authority where his own personal views were concerned. Moreover, -the influence of his Company was by no means very considerable in those -early days. The only passenger boat of any importance which the Company -possessed in the early 'eighties, before Ballin had entered its -services, was the _Hammonia_, and she was anything but a success. She -was inferior both as regards her efficiency and her equipment. At last, -however, Ballin's desire to raise the prestige of the Company triumphed, -and the building of several fast boats was definitely decided upon. In -addition to a comparatively large number of passengers--especially those -of the first cabin--they were to carry a moderate amount of cargo. In -size they were subject to the restrictions imposed upon them by the -shortcomings of the technical knowledge of that time, and by the absence -of the necessary improvements in the fairway of the lower Elbe. Speed, -after all, was the main consideration; and it was the struggle for the -blue riband of the Atlantic which kept the attention of the travelling -public riveted on these boats. - -A statement giving details of the financial results obtained by the -first four of the new fast steamers which were entered into the service -of the Company between 1889 and 1891 showed that the earnings up to and -including the year 1895 did not even cover the working expenses, and -that those up to 1899 were not sufficient to allow for an interest of 4 -per cent, on the average book values of the steamers. It must be -remembered, however, that the first of these two periods included the -disastrous season of 1892-93, when Hamburg was visited by an epidemic of -cholera. And a different light is shed on the matter also if we further -remember that depreciation had been allowed for on a generous scale, no -less than 50 per cent, of the cost price plus the expenditure incurred -through an enlargement of the _Auguste Victoria_, the oldest of the -boats, having been deducted on that account. The Packetfahrt, like all -the other German shipping companies, has always been very liberal in -making ample provision for depreciation. When, therefore, these steamers -were sold again at the time of the Spanish-American and Russo-Japanese -wars, a considerable profit was realized on the transactions which -enabled the Company to replace them by a very high-grade type of vessel -(the _Deutschland_, _Amerika_, and _Kaiserin Auguste Victoria_). It must -be admitted in this connexion that perhaps no shipowner has ever been -more favoured by fortune than Ballin where the sale of such difficult -objects as obsolete express steamers was concerned. The value which -these boats had in relation to the prestige of the Company was very -considerable; for, as Ballin expressed it to me one day: "The possession -of the old express steamers of the Packetfahrt certainly proved to be -something like a white elephant; but just consider how greatly they -have enhanced the prestige of the Company." They attracted thousands of -passengers to the Line, and acted as feeders to its other services. - -The orders for the first two of these steamers were given towards the -close of 1887 to the Vulkan yard, at Stettin, and to the firm of Laird -respectively, at a price of £210,000 each, and the boats were to be -completed early in 1889. They were the first twin-screw steamers, and -were provided with the system of "forced draught" for the engines. This -system had just been introduced in British yards, and Ballin's attention -had been drawn to it by his friend Wilding, who was always ready to give -him valuable advice on technical matters. In order to find the means for -the construction of these and of some other boats, the general meeting -of the shareholders, held on October 6th, 1887, voted a capital increase -of 5,000,000 marks and the issue of 6,250,000 marks of debentures. -Knowing that an improvement of the services was the great need of the -time, Ballin, since the time of joining the Company, had done all he -could to make the latter a paying concern again, and in this he -succeeded. For the year 1886 a dividend of 5 per cent. was paid, and -thus it became possible to sanction an increase of the joint-stock -capital. - -Further foundations for later successes were laid by the reform of the -organization and of the technical services of the Company. His work in -connexion with the Carr Line had taught the youthful head of the -passenger department that careful attention to the material comfort of -the steerage passengers could be of great benefit to the Company. He -continued along lines such as these, and at his suggestion the steerage -accommodation on two of the Packetfahrt's steamers was equipped with -electric light, and provided with some single berths as well. This -latter provision was extended still further during the succeeding year. -In addition to the fast steamers, some ordinary ones were also ordered -to be built. In 1888 two steamers were ordered for the Company's West -Indies service, and shortly afterwards eight units of the Union Line -were bought at a price of 5,200,000 marks. All these new orders and -purchases of steamers led to the joint-stock capital being raised from -20 to 30 million marks. Two more boats were laid down in the Stettin -Vulkan yard, and a third with the firm of Laird. The express steamer -then building at the Vulkan yard was named _Auguste Victoria_ in honour -of the young Empress. - -During the summer months of 1887 Ballin, together with Mr. Johannes -Witt, one of the members of the Board of Trustees, went to New York in -order to discuss with the agents a reorganization of the New York -representation, which was looked after by Edward Beck and Kunhardt. In -consequence of the negotiations which Ballin carried on to that end, the -agents undertook to submit their business for the Company to the control -of an officer specially appointed by the Packetfahrt. This small -beginning led, in later years, to the establishment in New York of the -Company's direct representation under its own management. - -When Ballin joined the Packetfahrt, he did not strictly confine his -attention to matters connected with the passenger services. When, for -instance, the head of the freight department was prevented from -attending a meeting called by the Board of Trustees, Ballin put forward -a proposal for raising the rates on certain cargo. It was therefore only -but fit acknowledgment of his many-sided talents, and recognition that -his energetic character had been the guiding spirit in the Company's -affairs, that the Board of Trustees appointed Ballin in 1888 a member of -the Board of Directors after two years with the Packetfahrt. This -appointment really filled a long-felt gap. - - - - -CHAPTER FOUR - -THE POOL - - -The term "pool" may be defined in a variety of ways, but, generally -speaking, the root idea underlying its meaning is always the same, both -in its application to business and to betting. A pool, in brief, is a -combination of a number of business concerns for their own mutual -interests, all partners having previously agreed upon certain principles -as to the distribution of the common profits. In other words, it is a -community of interests concluded upon the basis of dividing the profits -realized in a certain ratio. I have been unable to discover when and -where this kind of combination was first used in actual practice. Before -the transatlantic steamship companies did so, the big trunk lines of the -United States railway system are said to have used it in connexion with -the westbound emigrant traffic, and possibly for other purposes also. - -When Ballin wrote his memorandum of February 5th, 1886, the steamship -lines must already have been familiar with the meaning of the term, for -the memorandum refers to it as something well known. Ballin begins by -stating that the "Conference of the Northern European Lines" might be -looked upon as having ceased to exist, seeing that two parties were -represented on it whose claims were diametrically opposed to each other. -Whereas the North German Lloyd insisted on the right to lower its rates, -the Red Star Line claimed that these rates should be raised, so that it -might obtain a better differential rate for itself. A reconciliation of -these mutually contradictory views, the memorandum went on to say, -appeared to be impossible, unless all parties agreed upon an -understanding which would radically alter the relations then existing -between their respective interests; and a way leading out of the -_impasse_ would be found by adopting the pooling system proposed by the -representative of the Red Star Line. If we take the number of steeragers -carried to New York from 1881 to 1885 by the six lines concerned as a -basis, the respective percentages of the total traffic are as follows: - - _Percentage_ - - North German Lloyd 33·45 - North German Lloyd (Baltimore Line) 14·80 - Packetfahrt 27·00 - Union Line 5·53 - Red Star Line 12·26 - Holland American Line 6·96 - -It was, however, justly pointed out at a meeting of the Conference that -the amount of tonnage must also be taken into account in laying down the -principles which were to govern the distribution of the profits. The -average figures of such tonnage employed by the six lines during the -same period were: - - _Tons_ _Percentage_ - - North German Lloyd 275,520 33·91 - North German Lloyd (Baltimore - Line) 63,000 7·76 - Packetfahrt 199,500 24·55 - Union Line 42,840 5·27 - Red Star Line 149,600 18·41 - Holland American Line 82,080 10·10 - ------- ----- - Total tonnage 812,540 - -The average of both sets of percentage figures worked out as follows: - - _Percentage_ - - North German Lloyd 33·68 - North German Lloyd (Baltimore Line) 11·28 - Packetfahrt 25·77-1/2 - Union Line 5·40 - Red Star Line 15·33-1/2 - Holland American Line 8·53 - -"It would be necessary," the memorandum continued, "to calculate each -Company's share annually on the basis of the average figures obtained -for the five years immediately preceding, so that, for instance, the -calculation for 1887 would be based on the figures for the five years -from 1882 to 1886; that for 1888 on those for the period from 1883 to -1887, and so on. Uniform passage rates and uniform rates of commission -would have to be agreed upon. To those lines which, like the North -German Lloyd, maintained a service which was run by fast steamers -exclusively, would have to be conceded the right to charge in their -separate accounts passage money up to 10 marks in excess of the normal -rates, seeing that their expenses were heavier than those of the other -lines. Those Companies, however, claiming differential rates below the -general ones agreed upon would have to make up the difference -themselves, which was not to exceed the amount of 30 marks--i.e. they -would have to contribute to the common pool a sum equal to the general -rate without deduction." - -The two cardinal principles lying at the root of this proposal were (1) -the assigning to each line of a definite percentage of the total traffic -on the basis of the average figures ascertained for a definite period of -time, and (2) the possibility of further grading these percentages by -taking into account the amount of tonnage which each line placed at the -disposal of the joint undertaking. This latter provision--which was -known during the early stages of the movement as the tonnage clause--was -intended to prevent any single line from stagnation, and to give scope -to the spirit of enterprise. - -The tonnage clause was not maintained for the whole time during which -the pool agreement was in force. It was afterwards abolished at the -instance of the North German Lloyd. This event led, in the long run, to -the last big crisis which the pool had to pass through by the notice of -withdrawal given by the Hamburg-Amerika Linie. When this Company -proposed to considerably enlarge its steerage accommodation through the -addition to its service of the three big boats of the _Imperator_ class, -it demanded a corresponding increase of its percentage figure, and, when -this claim fell through owing to the opposition of the North German -Lloyd, it gave formal notice of its withdrawal from the pool. -Precautions taken to counteract this led to negotiations which had to be -discontinued when the war broke out. Nevertheless, the pool, which was -first proposed in 1886, and which came into existence in 1892, did a -great deal of good. More than once, however, the agreement ceased to be -effective for a time, and this was especially the case on the occasion -of the struggle with the Cunard Line which followed upon the -establishment of the Morgan Trust in 1903. - -The secretary of the pool was Heinrich Peters, the former head of the -passenger department of the Lloyd. The choice of Mr. Peters is probably -not unconnected with the fact that it was he who, at a moment when the -negotiations for establishing a pool had reached a critical stage, -appeared on the scene with a clearly-defined proposal, so that he, with -justice, has been described as "the father of the pool." Shortly before -his death in the summer of 1921 Mr. Peters wrote to me concerning his -proposal and the circumstances of its adoption:-- - -"The history of the events leading up to the creation of the 'North -Atlantic Steamship Lines Association,'" he wrote in his letter, "was not -without complications. So much so that after the Conference at Cologne, -at which it had been found impossible to come to an understanding, I -went to bed feeling very worried about the future. Shortly afterwards--I -don't know whether I was half awake or dreaming--the outline of the plan -which was afterwards adopted stood out clearly before my mind's eye, its -main features being that each line should be granted a fixed percentage -of the traffic on the basis of 'Moore's Statistics' (reports issued -periodically and showing the number of passengers landed in New York at -regular intervals), and that the principle of compensation should be -applied to adjust differences. When I was fully awake I found this plan -so obviously right that, in order not to let it slip my memory, I jotted -down a note concerning it on my bedside table. Next morning, when -Ballin, Reuchlin (of the Holland American Line), Strasser (of the Red -Star Line), and myself met again in the smoking-room of the Hotel du -Nord, I told them of my inspiration, and my plan was looked upon by them -with so much favour that Ballin said to me: 'Well now, Peters, you have -discovered the philosopher's stone.' We then left, previously agreeing -amongst ourselves that we would think the matter over at our leisure, -and that we should refrain from taking any steps leading to a conflict, -at least for the time being. On my return to Bremen I went straight to -Lohmann (who was director general of the Lloyd at that time), but he -immediately threw a wet blanket over my enthusiasm. His objection was -that such an agreement would interfere with the progressive development -of the Lloyd. A few days later a meeting of the Board of Trustees was -held at which I entered into the details of my proposal; but I am sorry -to say that my oratorical gifts were not sufficient to defend it against -the objections that were raised, nor to prevent its rejection. I can -hardly imagine what the representatives of the other lines must have -felt on hearing that it was the Lloyd itself which refused to accept the -proposal which had been put forward by its own delegate, although the -share allotted to it was very generous. Thus the struggle went on for -another eighteen months, and it was not until January, 1892, that the -principal lines concerned definitely concluded a pool agreement closely -resembling the draft agreement I had originally proposed. - -"The North Atlantic Steamship Lines Association was originally intended -to remain in existence for the period of five years; but as it was -recognized by all parties that it was necessarily a step in the dark, -people had become so doubtful as to the wisdom of what they had done -that a clause was added to the effect that it could be cancelled after -the first six months provided a fortnight's notice was given by any -partner to it. Nevertheless, the agreement successfully weathered a -severe crisis during the very first year of its existence, when the -disastrous cholera epidemic paralysed the Hamburg trade and shipping." - -That this account is correct is confirmed by the minutes of the Cologne -meeting of February 6th, 1890. - -The British lines definitely declined in March, 1892, to join the pool. -Thus the plan finally agreed upon in 1892 was subscribed to by the -Continental lines alone, with the exception of the French line. In -contrast with previous proposals, the eastbound traffic was also to be -parcelled out by the lines forming the pool. - -This so-called North Atlantic Steamship Lines Association, the backbone -of the later and greater pool, was built up on the following -percentages: - - _Westbound_ _Eastbound_ - _traffic_ (_p.c._) _traffic_ (_p.c._) - - North German Lloyd 46·16 44·53 - Packetfahrt (including the Union - Line) 28·84 18·47 - Red Star Line 15·70 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 compliance with the provision that the -secretariat should be domiciled at a "neutral" place, chose the small -university town of Jena for his residence. Thus this town, so famous in -the literary annals of Germany, became, for more than twenty years, the -centre of an international organization with which few, if any, other -places could vie in importance, especially since the four lines which -had just concluded the original pool were joined, in course of time, by -the British lines, the French line, the Austrian line, and some -Scandinavian and Russian lines as well. Later on a special pool was set -up for the Mediterranean business which, in addition to the German, -British, and Austro-Hungarian lines, also comprised the French -Mediterranean, the Italian, and the Greek lines, as well as one Spanish -line. The business of all these lines was centred at Jena. - -Of considerable importance to the smooth working of the pool was the -court of arbitration attached to its organization. On account of the -prominent position occupied by the German companies, German law was -agreed to as binding for the decisions, and since at the time when the -pool was founded, Germany did not possess a uniform Code of Civil Law -for all parts of the Empire, the law ruling at Cologne was recognized to -be applicable to such purposes. Cologne was the city at which the -establishment of the pool was decided upon, and there all the important -meetings that became necessary in course of time were held. The chairman -of the Cologne Association of Solicitors was nominated president of the -arbitration court, but later on this office devolved on President -Hansen, a member of the Supreme Court for the Hanseatic cities, who -filled his post for a long term of years--surely a proof of the -confidence and esteem with which he was honoured by all parties -concerned. Numerous awards issued by him, and still more numerous -resolutions adopted at the many conferences, have supplemented the -original pool agreement, thus forming the nucleus of a real code of -legislation affecting all matters dealing with the pool in which a large -number of capable men drawn from the legal profession and from the world -of business have collaborated. - -The knowledge of these regulations gradually developed into a science of -its own, and each line had to possess one or more specialists who were -experts in these questions among the members of its staff. I am sure -they will unanimously agree that Albert Ballin surpassed them all in his -knowledge of the intricate details. His wonderful memory enabled him, -after a lapse of more than twenty years, to recall every phase in the -history of the pool, so that he acquired an unrivalled mastery in the -conduct of pool conferences. This is abundantly borne out by the fact -that in 1908, when negotiations were started in London for the -establishment of a general pool--i.e. one comprising the whole of -Northern Europe, including Great Britain--Ballin, at the proposal of the -British lines, was selected chairman of the conference which, after -several critical phases had been passed through, led to a complete -success and an all-round understanding. - -In 1892 the normal development of business was greatly handicapped by -the terrible epidemic of cholera then raging in Hamburg. For a time the -United States completely closed her doors to all emigrants from the -Continent, and it was not until the following year that conditions -became normal again. Nevertheless Ballin, in order to extend the various -understandings between the Northern European lines, took an important -step, even before the close of 1892, by falling back upon a measure -which he had already once employed in 1886. His object was to make the -British lines more favourably inclined towards an understanding, and to -this end he attacked them once more in the Scandinavian business. The -actual occasion which led to the conflict was that the British lines, -owing to differences of opinion among themselves, had given notice of -withdrawal from the Hamburg agreement and from the Hamburg clearing -house. This gave the Packetfahrt a free hand against its British -competitors, and enabled it to carry as many as 2,500 Scandinavian -passengers via Hamburg in 1892. The position of the Packetfahrt during -the ensuing rate war was considerably improved by the agreement which it -had concluded with the Hamburg agents of the British lines, who, -although their principals had declared their withdrawal from the pool, -undertook to maintain the rate which had been jointly agreed upon by -both parties. - -Some time had to elapse before this move had its desired effect on the -British lines. Early in 1894 they declared themselves ready to come to -an understanding with the Continental lines on condition that they were -granted 7 per cent. of the Continental traffic (in 1891 they had been -offered 14 per cent.), and that the Packetfahrt was to discontinue its -Scandia Line. - -This general readiness of the British companies, however, did not -preclude the hostility of some of their number against any such -agreement, and so the proposal fell through. The proposed understanding -came to grief owing to the refusal of the Cunard Line to join a -Continental pool at the very moment when the negotiations with the -British lines had, after a great deal of trouble, led to a preliminary -understanding with them. A letter which Ballin received from an English -friend in January, 1894, shows how difficult it was to make the British -come round to the idea of a pool. In this letter it was said that the -time was not ripe then for successfully persuading the British lines to -join any pool or any other form of understanding which would necessitate -agreement on a large number of details. All that could be expected to be -done at the time, the writer continued, was a rate agreement of the -simplest possible kind, and he thought that if such an understanding -were agreed to and loyally carried out, that would be an important step -forward towards arriving at a general agreement of much wider scope. - -To such vague agreements, however, the Continental lines objected on -principle, and the opposition of the Cunard Line made it impossible to -agree upon anything more definite. Thus the struggle was chiefly waged -against this line. The Continental lines were assisted by the American -Line, which had sailings from British ports, and with the management of -which Ballin had been on very friendly terms ever since the time when -he, as the owner of the firm of Morris and Co., had worked for it. After -the conflict had been going on for several months, it terminated with a -victory of the Continental lines. Thus the road was at last clear for -an attempt to make the whole North Atlantic business pay. - -The first step in that direction was the conclusion, in 1896, of an -agreement concerning the cabin business. The Packetfahrt's annual report -for that year states that the results obtained through the carrying of -cabin passengers could only be described as exceedingly unfavourable, -considering that the huge working expenses connected with that kind of -business had to be taken into account. Nevertheless, this traffic, which -had reached a total of more than 200,000 passengers during the preceding -year, could be made a source of great profit to the companies if they -could be persuaded to act in unison. The agreement then concluded was at -first restricted to the fixing of the rates on a uniform scale. - -Both these agreements--the one dealing with the steerage and the one -dealing with the cabin business--were concluded, in 1895, for three -years in the first instance. In May, 1898, discussions were opened in -London, at which Ballin presided, with a view to extending the period of -their duration, and these proceedings, after a time, led to a successful -conclusion, but in June, Ballin again presiding, the desired -understanding was reached. A few weeks later an agreement concerning the -second cabin rates was also arrived at, and towards the close of the -year negotiations were started with a view to the extension of the -steerage agreement. In 1899 the pool was extended to run for a further -period of five years, under percentages: - - _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 - -To the Packetfahrt these new percentages meant a step forward, although -the omission of the tonnage clause was a decided hindrance to its -further progress. - -The next important event in the development of the relations between the -transatlantic lines was the establishment of the so-called Morgan Trust -and the conclusion of a "community of interest" agreement between it and -the German lines. - - - - -CHAPTER V - -THE MORGAN TRUST - - -Speaking generally, the transatlantic shipping business may be said to -consist of three great branches, viz. the cargo, the steerage, and the -cabin business. The pool agreements that were concluded between the -interested companies covered only the cargo business and the steerage -traffic. The condition which alone makes it possible for the owners to -work the shipping business on remunerative lines is that all needless -waste of material must be strictly banned. The great advantage which was -secured by concluding the pool agreement was that it satisfied this -condition during the more than twenty years of its existence, to the -mutual profit of the associated lines. Each company knew that the -addition of new steamers to its fleet would only pay if part of a -carefully considered plan, and if, in course of time, such an increase -of tonnage would give it a claim to an increase of the percentage of -traffic allotted to its services. - -Much less satisfactory was the state of things with regard to the third -branch of the shipping business, viz. the cabin traffic. A regular -"cabin pool," with a _pro rata_ distribution of the traffic, was never -established, although the idea had frequently been discussed. All that -was achieved was an agreement as to the fares charged by each company -which were to be graded according to the quality of the boats it -employed in its services. Owing to the absence of any more far-reaching -understandings, and to the competition between the various -companies--each of which was constantly trying to outdo its competitors -as regards the speed and comfort of its boats, in order to attract to -its own services as many passengers as possible--the number of -first-class boats increased out of all proportion to the actual -requirements, and frequent and regular services were maintained by each -line throughout the year. There was hardly a day on which first-class -steamers did not enter upon voyages across the Atlantic from either -side, and the result was that the boats were fully booked during the -season only, i.e. in the spring and early part of summer on their -East-bound, and in the latter part of summer and in the autumn on their -Westbound, voyages. During the remaining months a number of berths were -empty, and the fares obtainable were correspondingly unprofitable. -Ballin, in 1902, estimated the unnecessary expenditure to which the -companies were put in any single year owing to this unbusinesslike state -of affairs at not less then 50 million marks. The desire to do away with -conditions such as these by extending the pool agreement so as to -develop it into a community-of-interest agreement of comprehensive scope -was one of the two principal reasons leading to the formation of the -Morgan Trust. The other reason was the wish to bring about a system of -co-operation between the European and the American interests. - -This desire was prompted by the recognition of the cardinal importance -to the transatlantic shipping companies of the economic conditions -ruling in the United States. The cargo business depended very largely on -the importation of European goods into the United States, and on the -exportation of American agricultural produce to Europe which varied from -season to season according to the size of the crop and to the consuming -capacity of Europe. The steerage business, of course, relied in the main -on the capacity of the United States for absorbing European immigrants, -which capacity, though fluctuating, was practically unlimited. The -degree of prosperity of the cabin business, however, was determined by -the number of people who travelled from the States to Europe, either on -business, or on pleasure, or to recuperate their health at some European -watering-place, at the Riviera, etc. Social customs and the attractions -which the Paris houses of fashion exercised on the American ladies also -formed a considerable factor which had to be relied on for a prosperous -season. In the transatlantic shipping business, in fact, America is -pre-eminently the giving, and Europe the receiving, partner. Thus it was -natural to realize the advisability of entering into direct relations -with American business men. - -To the Packetfahrt, and especially to Ballin, credit is due for having -attempted before anybody else to give practical shape to this idea. His -efforts in this direction date far back to the early years of his -business career. We possess evidence of this in the form of a letter -which he wrote in 1891 to Mr. B. N. Baker, who was at the head of one of -the few big American shipping companies, the Atlantic Transport Company, -the headquarters of which were at Baltimore, and which ran its services -chiefly to Great Britain. Mr. Baker was a personal friend of Ballin's. -The letter was written after some direct discussions had taken place -between the two men, and its contents were as follows:-- - - "I replied a few days ago officially to your valued favour of the - 4th ult. to the effect that in consonance with your expressed - suggestion one of the Directors will proceed to New York in - September with a view to conferring with you about the matter at - issue. - - "Having in the meantime made it a point to go more fully into your - communication, I find that the opinions which I have been able to - form on your propositions meet your expressed views to a much - larger extent than you will probably have supposed. I have not yet - had an opportunity 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, requesting you to inform - me--if feasible by cable--what you think of the following project: - - "(1) 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 8-1/2 per cent., 1889 11 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. - - "The position of our Company is an excellent one, our fleet - consisting of modern ships (average age only about five years), and - the book values of them being very low. - - "I should be obliged to you for thinking the matter over and - informing me--if possible by cable--if you would be prepared to - enter into negotiations on this basis. I myself start from the - assumption that it might be good policy for our Company to obtain - in the States a centre of interest and a position similar to that - held by the Red Star Line and the Inman Lines in view of their - connexion with the Pennsylvania Railroad, etc. It further strikes - me that if this project is brought into effect one of your concern - should become a member of our Board. I should thank you to return - me this letter which, as I think it right expressly to point out to - you, contains only what are purely my individual ideas." - -It may be assumed that the writing of this letter was prompted not only -by the Packetfahrt's desire to strengthen its position in the United -States, but also by its wish to obtain a foothold in Great Britain. This -would enable it to exercise greater pressure on the competing British -lines, which--indirectly, at least--still did a considerable portion of -the Continental business. Ballin's suggestion did not lead to any -practical result at the time, but was taken up again eight years later, -in 1899, on the advice of Mr. (now Lord) Pirrie, of Messrs. Harland and -Wolff, of Belfast. Important interests, partly of a financial character, -linked his firm to British transatlantic shipping; and his special -reason for taking up Ballin's proposal was to prevent an alliance -between Mr. Baker's Atlantic Transport Company and the British Leyland -Line, a scheme which was pushed forward from another quarter. He induced -Mr. Baker to come to Europe so that the matter might be discussed -directly. The attractiveness of the idea to Ballin was still further -enhanced by the circumstance that the Atlantic Transport Line also -controlled the National Line which maintained a service between New -York and London, and was, indeed, the decisive factor on the New -York-London route. Ballin, accordingly, after obtaining permission from -the Board of Trustees, went to London, where he met Mr. Baker and Mr. -Pirrie. - -It soon became clear, however, that the Board of Trustees did not wish -to sanction such far-reaching changes. When Ballin cabled the details of -the scheme to Hamburg, it was seen that 25 million marks--half the -amount in shares of the Packetfahrt--would be needed to carry it -through. Thus the discussions had to be broken off; but the attitude -which the Board had taken up was very much resented by Ballin. -Subsequent negotiations which were entered into in the early part of -1900 in Hamburg at the suggestion of Mr. Baker also failed to secure -agreement, and shortly afterwards the American company was bought up by -the Leyland Line. - -At the same time a movement was being set on foot in the United States -which aimed at a strengthening of the American mercantile marine by -means of Government subsidies. This circumstance suggested to Mr. Baker -the possibility of setting up an American shipping concern consisting of -the combined Leyland and Atlantic Transport Company lines together with -the British White Star Line, which was to profit by the expected -legislation concerning shipping subsidies. Neither the latter idea, -however, nor Mr. Baker's project assumed practical shape; but the -Atlantic Transport-Leyland concern was enlarged by the addition of a -number of other British lines, viz. the National Line, the -Wilson-Furness-Leyland Line, and the West Indian and Pacific Line, all -of which were managed by the owner of the Leyland Line, Mr. Ellerman, -the well-known British shipping man of German descent. The tonnage -represented by these combined interests amounted to half a million tons, -and the new combine was looked upon as an undesirable competitor, by -both the Packetfahrt and the British lines. The dissatisfaction felt by -the latter showed itself, among other things, in their refusal to come -to any mutual understanding regarding the passenger business. In the -end, Mr. Baker himself was so little pleased with the way things turned -out in practice that he severed his connexion with the other lines -shortly afterwards, and once more the question became urgent whether it -would be advisable for the Packetfahrt--either alone, or in conjunction -with the White Star Line and the firm of Messrs. Harland and Wolff--to -purchase the Atlantic Transport Line. - -That was the time when Mr. Pierpont Morgan's endeavours to create the -combine, which has since then become known as the Morgan Trust, first -attracted public attention. Ballin's notes give an exhaustive -description of the course of the negotiations which lasted nearly -eighteen months and were entered into in order to take precautions -against the danger threatening from America, whilst at the same time -they aimed at some understanding with Mr. Morgan, because the -opportunity thus presented of setting up an all-embracing organization -promoting the interests of all the transatlantic steamship concerns -seemed too good to be lost. Ballin's notes for August, 1901, contain the -following entry: - -"The grave economic depression from which Germany is suffering is -assuming a more dangerous character every day. It is now spreading to -other countries as well, and only the United States seem to have escaped -so far. In addition to our other misfortunes, there is the -unsatisfactory maize-crop in the States which, together with the other -factors, has demoralized the whole freight business within an -incredibly short space of time. For a concern of the huge size of our -own such a situation is fraught with the greatest danger, and our -position is made still worse by another circumstance. In the States, a -country whose natural resources are wellnigh inexhaustible, and whose -enterprising population has immensely increased its wealth, the creation -of trusts is an event of everyday occurrence. The banker, Pierpont -Morgan--a man of whom it is said that he combines the possession of an -enormous fortune with an intelligence which is simply astounding--has -already created the Steel Trust, the biggest combination the world has -ever seen, and he has now set about to lay the foundations for an -American mercantile marine." - -A short report on the position then existing which Ballin made for -Prince Henckell-Donnersmarck, who had himself called into being some big -industrial combinations, is of interest even now, although the situation -has entirely changed. But if we want to understand the position as it -then was we must try to appreciate the views held at that time, and this -the report helps us to do. Ballin had been referred to Prince -Henckell-Donnersmarck by the Kaiser, who had a high opinion of the -latter's business abilities, and who had watched with lively interest -the American shipping projects from the start, because he anticipated -that they would produce an adverse effect on the future development of -the German shipping companies. The report is given below:-- - - "In 1830 about 90 per cent. of the United States sea-borne trade - was still carried by vessels flying the American flag. By 1862 this - percentage had gone down to 50 per cent., and it has shown a - constant decrease ever since. In 1880 it had dwindled down to 16 - per cent., and in 1890 to as low a figure as 9 per cent. During - recent years this falling off, which is a corollary of the customs - policy pursued by the United States, has given rise to a number of - legislative measures intended to promote the interests of American - shipping by the granting of Government subsidies. No practical - steps of importance, however, have been taken so far; all that has - been done is that subsidies have been granted to run a North - Atlantic mail service maintained by means of four steamers, but no - success worth mentioning has been achieved until now. - - "Quite recently the well-known American banker, Mr. J. Pierpont - Morgan, conjointly with some other big American capitalists, has - taken an interest in the plan. The following facts have become - known so far in connexion with his efforts: - - "Morgan has acquired the Leyland Line, of Liverpool, which, - according to the latest register, owns a fleet of 54 vessels, - totalling 155,489 gross register tons. This 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 Leyland Line has not been acquired by - Morgan. He has, however, added the Atlantic Transport Company. - Morgan's evident intention is to form a big American shipping - trust, and I have received absolutely reliable information to the - effect that the American Line and the Red Star Line are also going - to join the combine. The shares of the two last-named lines are - already for the most part in American hands, and both companies are - being managed from New York. Both lines together own 23 steamers - representing 86,811 tons. - - "A correct estimate of the size of the undertaking can only be - formed if the steamers now building for the various companies, and - those that have been added 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 importance 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 undertaking. So long as he - does not succeed in these efforts of his he will, of course, be - obliged to operate the lines of which he has secured control under - foreign flags. Up to the present only four steamers of the American - Line, viz. the _New York_, _Philadelphia_, _St. Louis_, and _St. - Paul_, are flying the United States flag, whereas the remaining - vessels of the American Line, and those of the Leyland, the West - India and Pacific, the American Transport, the National, and the - Furness-Boston lines, are sailing under the British, and those of - the Red Star Line under the Belgian flag. - - "The organization which Mr. Morgan either has created, or is - creating, is not in itself a danger to the two German shipping - companies; neither can it be said that the Government - 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 railroads 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 amalgamation of the American railroad and - shipping interests for the purpose of securing the whole profits - for American capital. - - "This projected combination of the railroad and sea-borne traffic - is, as I have pointed out, a great source of danger to the foreign - shipping companies, as it will expose them to the possibility of - finding their supplies from the United States _hinterland_ cut off. - This latter traffic is indispensable to the remunerative working of - our North American services, and it is quite likely that Morgan's - statement 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 opportunity of - discussing this American business with Mr. Pirrie. Pirrie had - already informed me some time ago that he would like to talk to me - on this subject, but he had never indicated until then that Morgan - had actually instructed him to discuss matters with me. A second - meeting took place at which Ismay (the chairman of the White Star - Line) was present in addition to Pirrie and myself, and it was - agreed that Pirrie should go to New York and find out from Morgan - himself what were his plans regarding the White Star Line and the - Hamburg-Amerika Linie. - - "Shortly after Pirrie's return from the States I went to London to - talk things over with him. He had already sent me a wire to say - that he had also asked Mr. Wilding to take part in our meeting; and - this circumstance induced me to call on Mr. Wilding when I passed - through Southampton _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 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 identical 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 established between the two concerns, and - competition between them was to be eliminated." - -The draft agreement, which was discussed at these meetings in London -(and which was considerably altered later on), provided that it should -run for ten years, and that a mutual interchange of shares between the -two concerns should be effected, the amount of shares thus exchanged to -represent a value of 20 million marks (equivalent to 25 per cent. of the -joint-stock capital of the Hamburg-Amerika Linie). Mutual participation -was provided for in case of any future increase in the capital of either -company; but the American concern was prohibited from purchasing any -additional shares of the Hamburg-Amerika Linie. The voting rights for -the Hamburg shares should be assigned to Ballin for life, and those for -the American shares to Morgan on the same terms. Instead of actually -parting with its shares, the Hamburg company was to have the option of -paying their equivalent in steamers. The agreement emphasized that, -whilst recognizing the desirability of as far-reaching a financial -participation as possible, Ballin did not believe that, with due regard -to German public opinion and to the wishes of the Imperial Government, -he was justified in recommending an interchange of shares exceeding the -amount agreed upon. The American concern was prohibited from calling at -any German ports, and the Hamburg company agreed not to run any services -to such European ports as were served by the other party. A pool -agreement covering the cabin business was entered into; and with respect -to the steerage and cargo business it was agreed that the existing -understandings should be maintained until they expired, and that -afterwards a special understanding should be concluded between both -contracting parties. - -Immediately after Ballin's return to Hamburg the Board of Trustees -unanimously expressed its agreement in principle with the proposals. - -"For my own part," Ballin says in his notes on these matters, "I -declared that I could only regard the practical execution of these -proposals as possible if they receive the unequivocal assent of the -Kaiser and of the Imperial Chancellor. Next evening I was surprised to -receive two telegrams, one from the Lord Chamberlain's office, and one -from the Kaiser, commanding my presence on the following day for dinner -at the Hubertusstock hunting lodge of the Kaiser, where I was invited to -stay until the afternoon of the second day following. I left for Berlin -on the same evening, October 16th (1901); and, together with the -Chancellor, I continued my journey the following day to Eberswalde. At -that town a special carriage conveyed us to Hubertusstock, where we -arrived after a two-hours' drive, and where I was privileged to spend -two unforgettable days in most intimate intercourse with the Kaiser. The -Chancellor had previously informed me that the Kaiser did not like the -terms of the agreement, because Metternich had told him that the -Americans would have the right to acquire 20 million marks' worth of our -shares. During an after-dinner walk with the Kaiser, on which we were -accompanied by the Chancellor and the Kaiser's A.D.C., Captain v. -Grumme, I explained the whole proposals in detail. I pointed out to the -Kaiser that whereas the British lines engaged in the North Atlantic -business were simply absorbed by the trust, the proposed agreement would -leave the independence of the German lines intact. This made the Kaiser -inquire what was to become of the North German Lloyd, and I had to -promise that I would see to it that the Lloyd would not be exposed to -any immediate danger arising out of our agreement, and that it would be -given an opportunity of becoming a partner to it as well. The Kaiser -then wanted to see the actual text of the agreement as drafted in -London. When I produced it from my pocket we entered the room adjacent -to the entrance of the lodge, which happened to be the small bedroom of -Captain v. Grumme; and there a meeting, which lasted several hours, was -held, the Kaiser reading out aloud every article of the agreement, and -discussing every single item. The Kaiser himself was sitting on Captain -v. Grumme's bed; the Chancellor and myself occupied the only two chairs -available in the room, the Captain comfortably seating himself on a -table. The outcome of the proceedings was that the Kaiser declared -himself completely satisfied with the proposals, only commissioning me, -as I have explained, to look after the interests of the North German -Lloyd. - -"On the afternoon of the following day, after lunch, the Chancellor and -I returned to Berlin, this giving me a chance of discussing with the -former--as I had previously done with the Kaiser--every question of -importance. On October 18th I arrived back in Hamburg." - -The negotiations with the North German Lloyd which Ballin had undertaken -to enter upon proved to be very difficult, the Director General of that -company, Dr. Wiegand, not sharing Ballin's views with respect to the -American danger and the significance of the American combination. After -Ballin, however, had explained the proposals in detail, the Lloyd people -altered their previously held opinion, and in the subsequent London -discussions, which were resumed in November, the President of the Lloyd, -Mr. Plate, also took part. Nevertheless, it was found impossible to -agree definitely there and then, and a further discussion between the -two directors general took place at Potsdam on November 13th, both of -them having been invited to dinner by the Kaiser, who was sitting -between the two gentlemen at the table. Ballin's suggestion that he and -Dr. Wiegand should proceed to New York in order to ascertain whether the -shipping companies and the American railroads had actually entered into -a combination, was heartily seconded by the Kaiser, and was agreed to by -Dr. Wiegand. The Lloyd people, however, were still afraid that the -proposed understanding would jeopardize the independence of the German -lines; but Ballin, by giving detailed explanations of the points -connected with the financial provisions, succeeded in removing these -fears, and the Board of Trustees of the Lloyd expressed themselves -satisfied with these explanations. They insisted upon the omission of -the clauses dealing with the financial participation, but agreed to the -proposals in every other respect. - -The arrangements for such mutual exchange of shares were thereupon -dropped in the final drafting of the agreement, and were replaced by a -mutual participation in the distribution of dividends, the American -concern guaranteeing the German lines a dividend of 6 per cent., and -only claiming a share in a dividend exceeding that figure. This change -owed its origin to a proposal put forward by Mr. v. Hansemann, the -Director of the Disconto-Gesellschaft, who had taken an active interest -in the development of the whole matter. - -In the course of the negotiations the Lloyd made a further proposal by -which it was intended to safeguard the German national character of the -two great shipping companies. It was suggested that a -corporation--somewhat similar to the Preussische Seehandlung--should be -set up by the Imperial Government with the assistance of some privately -owned capital. This corporation should purchase such a part of the -shares of each company as would defeat any attempts at destroying their -national character. Ballin, however, to whom any kind of Government -interference in shipping matters was anathema, would have nothing to do -with this plan, and thus it fell through. - -Ballin thereupon having informed the Kaiser in Kiel on board the -battleship _Kaiser Wilhelm II_ regarding the progress of the -negotiations, a further meeting with the Lloyd people took place early -in December, which led to a complete agreement among the two German -companies as to the final proposals to be submitted to the American -group; and shortly afterwards, at a meeting held at Cologne, agreement -was also secured with Mr. Pirrie. The final discussions took place in -New York early in February, Ballin and Mr. Tietgens, the chairman of the -Board of Directors, acting on behalf of the Hamburg-Amerika Linie, and -President Plate and Dr. Wiegand on that of the Lloyd. Meanwhile, -Morgan's negotiations with the White Star Line and other British -companies had also led to a successful termination. Concerning the New -York meetings we find an interesting entry in Ballin's diary: - - "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 questions 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 negotiate 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 conclusion 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 me in the same place where the - outlines 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 descriptions, and the other - gentlemen also entertained us with lavish hospitality. Tietgens and - I returned the compliment 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 Schiff, of Messrs. - Kuhn, Loeb & Co., who had been Morgan's opponents in the conflict - concerning the Northern Pacific. During the following week the - Lloyd provided a big dinner on board the _Kronprinz Wilhelm_ for - about 200 invited guests. - - "Prince Henry of Prussia was one of the passengers of the - _Kronprinz Wilhelm_ which, owing to the inclemency of the weather, - arrived in New York one day behind her scheduled time. On the day - of her arrival--Sunday, February 23rd--I had dinner on board the - _Hohenzollern_. We also took part in a number of other celebrations - in honour of the Prince. Especially memorable and of extraordinary - sumptuousness was the lunch at which Mr. Morgan presided, and at - which one hundred captains of industry--leading American business - men from all parts of the States--were present. On the evening of - the same day the press dinner took place which 1,200 newspaper men - had arranged in honour of the Prince. Mr. Schiff introduced me to - Mr. Harriman, the chairman of the Union Pacific, with whom I - entered into discussions concerning our participation in the San - Francisco-Far East business." - -At the request of the American group the publication of the agreement -was delayed for some time, because it was thought desirable to wait for -the final issue of the Congress debates on the Subsidies Bill. A report -which Ballin, after some further discussion with Morgan and his London -friends had taken place, made for the German Embassy in London, -describes the situation as it appeared in April, 1902. It runs as -follows: - - "(1) Acquisition of the joint control of the Cunard Line by the two - German companies and the American syndicate. On this subject - discussions have taken place with Lord Inverclyde, the chairman of - the Cunard Line. Neither Lord Inverclyde nor any of the other - representatives of British shipping interests objected in any way - to the proposed transaction for reasons connected with the national - interest. He said, indeed, that he thought the syndicate should not - content itself with purchasing 51 per cent. of the shares, but that - it should rather absorb the whole company instead. The purchase - price he named appeared to me somewhat 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) Public announcement of the formation of the Combine. Whereas - until quite recently the American gentlemen maintained that it - would be advisable to wait for the conclusion of the negotiations - going on at Washington with respect to the proposed subsidy - legislation, Mr. Morgan now shares my view that it is not desirable - to do so any longer, but that it would be wiser to proceed without - any regard to the intentions of Washington. The combine, - therefore--unless unexpected obstacles should intervene--will make - its public appearance within a few weeks. - - "(3) The British Admiralty. An agreement exists between the British - Admiralty and the White Star Line conceding to the former the right - of pre-emption of the three express steamers _Oceanic, Teutonic,_ - and _Majestic._ This agreement also provides that the White Star - Line, against an annual subsidy from the Government, must 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 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 combine for the three years it has still - to run. This means that the steamers will continue to fly the - British flag for the present, 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 - suggestion when Mr. Morgan declined to accept it. The agreement - does not cover any of the other boats of the line which are the - biggest cargo steamers flying the Union Jack, and consequently no - obligations have been incurred with respect to these. - - "(4) Text of the public announcement. A memorandum is in course of - preparation fixing the text of the announcement by which the public - is to be made acquainted with the formation of the combine. In - compliance with the wishes emanating from prominent British - quarters, the whole transaction will be represented in the light of - a big Anglo-American 'community of interest' agreement; and the - fact that it virtually cedes to the United States the control of - the North Atlantic shipping business will be kept in the - background, as far as it is possible to do so." - -The first semi-official announcement dealing with the combine was -published on April 19th by the British Press, and at an Extraordinary -General Meeting of the Hamburg-Amerika Linie on May 28th, the public was -given some carefully prepared information about the German-American -agreement. At that meeting Dr. Diederich Hahn, the well-known chairman -of the _Bund der Landwirte_ (Agrarian League), rose, to everybody's -surprise, to inquire if it was the case that the national interests, and -especially the agricultural interests of Germany, would be adversely -affected by the agreement. The ensuing discussion showed Ballin at his -best. He allayed Dr. Hahn's fears lest the American influence in the -combination would be so strong as to eliminate the German influence -altogether by convincing him that the whole agreement was built up on a -basis of parity, and that the German interests would not be jeopardized -in any way. The argument that the close connexion established between -the trust and the American railroad companies would lead to Germany -being flooded with American agricultural produce he parried by pointing -out that the interests of the American railroads did not so much require -an increased volume of exports, but rather of imports, because a great -disproportion existed between their eastbound and their westbound -traffic, the former by far exceeding the latter, so that a further -increase in the amount of goods carried from the western part of the -country to the Atlantic seaports would only make matters worse from the -point of remunerative working of their lines. - -What Ballin thought of the system of Government subsidies in aid of -shipping matters is concisely expressed by his remarks in a speech which -he made on the occasion of the trial trip of the s.s. _Blücher_, when he -said: "If it were announced to me to-day that the Government subsidies -had been stolen overnight, I should heave a sigh of relief, only -thinking what a pity it was that it had not been done long ago." - -In Great Britain the news that some big British shipping companies had -been purchased by the American concern caused a great deal of public -excitement. In Ballin's diary we find the following entry under date of -June 5th: - - "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 excitement 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 depression. King Edward has also evinced an - exceedingly keen interest in these matters of late, which goes to - show that what makes people in England feel most uncomfortable is - not the passing of the various shipping companies into American - hands, but the fact that the German companies have done so well - over the deal. Mr. Morgan has had an interview with some of the - British Cabinet ministers at which he declared his readiness to - give the Government additional facilities as regards the supply of - auxiliary cruisers. We are hopeful that such concessions will take - the wind out of the sails of those who wish to create a - counter-combination subsidized by grants-in-aid from the - Government." - -An outcome of the German-American arrangements was that Morgan and his -friends were invited by the Kaiser to take part in the festivities -connected with the Kiel Week. The American gentlemen were treated with -marked attention by the Kaiser, and extended their visit so as to -include Hamburg and Berlin as well. - -At a conference of the transatlantic lines held in December, 1902, at -Cologne, Ballin put forward once more his suggestion that a cabin pool -should be established. The proposal, however, fell through owing to the -opposition from the Cunard Line. - -The depression in the freight business which had set in in 1901, and -which was still very pronounced towards the close of 1902, seriously -affected the prospects of the transatlantic shipping companies, -especially those combined in the Morgan Trust, who were the owners of a -huge amount of tonnage used in the cargo business, and whose sphere of -action was restricted to the North Atlantic route. "Experience now -shows," Ballin wrote in his notes, "that we were doing the right thing -when we entered into the alliance with the Trust. If we had not done -this, the latter would doubtless have tried to invade the German market -in order to keep its many idle ships going." - -Meanwhile the Cunard Line had concluded an agreement with the British -Government by which the Government bound itself to advance to the -company the funds for the building of its two mammoth express liners, -the _Mauretania_ and the _Lusitania_, while at the same time granting it -a subsidy sufficient to provide for the payment of the interest on and -for the redemption of the loan advanced by the Government for the -building of the vessels. - -Further difficulties seemed to be ahead owing to the aggressive measures -proposed by the Canadian Pacific Company, which was already advertising -a service from Antwerp to Canada. To ward off the danger threatening -from this quarter, Ballin proceeded to New York to take up negotiations -with Sir Thomas Shaughnessy, the president of the Canadian Pacific. He -went there on behalf of all the Continental shipping companies -concerned, and the results he arrived at were so satisfactory to both -parties that Ballin corresponded henceforth on terms of close personal -friendship with Sir Thomas, who was one of the leading experts on -railway matters anywhere. These friendly relations were very helpful to -Ballin afterwards when he was engaged in difficult negotiations with -other representatives of Sir Thomas's company, and never failed to -ensure a successful understanding being arrived at. - -On the occasion of this trip to America Ballin had some interesting--or, -as he puts it, "rather exciting"--discussions with Morgan and his -friends. He severely criticized the management of the affairs of the -Trust, and tried to make Morgan understand that nothing short of a -radical improvement--i.e. a change of the leading personages--would put -matters right. "Morgan," he writes, "finds it impossible to get the -right men to take their places, and he held out to me the most alluring -prospects if I myself should feel inclined to go to New York as -president of the Trust, even if only for a year or two; but I refused -his offer, chiefly on account of my relations with the Kaiser." - -Ballin's suggestions, nevertheless, led to a change in the management of -the Trust. This was decided upon at meetings held in London, where -Ballin stayed for a time on his way back to Hamburg. Mr. Pirrie also -took part in these meetings. - -In the meantime the relations between the Cunard Line and the other -transatlantic shipping companies had become very critical. The Hungarian -Government, for some time past, had shown a desire to derive a greater -benefit from the considerable emigrant traffic of the country--a desire -which was shared by important private quarters as well. The idea was to -divert the stream of emigrants to Fiume--instead of allowing them to -cross the national frontiers uncontrolled--and to carry them from that -port to the United States by direct steamers. Ballin had repeatedly -urged that the lines which were working together under the pool -agreement should fall in with these wishes of the Hungarian Government; -but his proposals were not acted upon, mainly owing to the opposition of -the North German Lloyd, which company carried the biggest share of the -Hungarian emigrants. - -To the great surprise of the pool lines it was announced in the early -part of 1904 that the Hungarian Government was about to conclude an -agreement with the Cunard Line--the only big transatlantic shipping -company which had remained outside the Trust--by which it was provided -that the Cunard Line was to run fortnightly services from Fiume, and by -which the Hungarian Government was to bind itself to prevent--by means -of closing the frontiers or any other suitable methods--emigrants from -choosing any other routes leading out of the country. Such an agreement -would deprive the pool lines of the whole of their Hungarian emigrant -business. Discussions between Ballin and the representatives of the -Cunard Line only elicited the statement on the part of the latter that -it had no power any longer to retrace its steps. An episode which took -place in the course of these discussions is of special interest now, as -it enables us to understand why the amalgamation of the Cunard Line with -the Morgan Trust never took place. - -Ballin asked Lord Inverclyde why the attitude of the Cunard Line had -been so aggressive throughout. The reply was that the Morgan Trust, and -not the Cunard Line, was the aggressor, because Morgan's aim was to -crush it. When Ballin interposed that this had never been intended by -the Trust--that the Trust, indeed, had attempted to include the Cunard -Line within the combination, that Lord Inverclyde himself had also made -a proposal towards that end, and that the project had only come to grief -on account of the strong feeling of British public opinion against -it--Lord Inverclyde answered that, far from this being the case, the -Trust had never replied to his proposal, and that he had not even -received an acknowledgment of his last letter. - -In a letter to Mr. Boas, the general representative of his company in -New York, in which he described the general situation, Ballin stated -that the statement of Lord Inverclyde was indeed quite correct. - -The Hungarian situation became still more complicated after the receipt -of some information that reached Ballin from Vienna to the effect that -the Austrian Government intended to imitate the example set by the -Hungarian Government by running a service from Trieste. After prolonged -discussions the Austrian Government also undertook not to grant an -emigration licence to the Cunard Line so long as the struggle between -the two competing concerns was not settled. - -Thereupon this struggle of the pool lines--both the Continental and the -British ones--against the Cunard Line was started in real earnest, not -only for the British but also for the Scandinavian and the Fiume -business. After some time negotiations for an agreement were opened in -London in July on the initiative and with the assistance of Mr. Balfour, -who was then President of the Board of Trade. These, however, led to no -result, and a basis for a compromise was not found until August, 1904, -when renewed negotiations took place at Frankfort-On-Main. A definite -understanding was reached towards the close of the same year, and then -at last this struggle, which was really one of the indirect consequences -of the establishment of the Morgan Trust, came to an end. - -Looked upon from a purely business point of view, the Morgan Trust--or, -to call it by its real name, the "International Mercantile Marine -Company," which in pool slang, was simply spoken of as the "Immco -Lines"--was doubtless a failure. Only the World War, yielding, as it -did, formerly unheard-of profits to the shipping business of the neutral -and the Allied countries, brought about a financial improvement, but it -is still too early to predict whether this improvement will be -permanent. The reasons why the undertaking was bound to be -unremunerative before the outbreak of the war are not far to seek, and -include the initial failure of its promoters to secure the adhesion of -the Cunard Line--a failure which, as is shown by Ballin's notes, was to -a large extent due to the hesitating policy of the Hamburg company. To -make business as remunerative as possible was the very object for which -the Trust was formed, but the more economical working which was the -means to reach this end could not be realized while such an essential -factor as the Cunard Line not only remained an outsider, but even became -a formidable competitor. - -It can hardly be doubted that the adhesion of the Cunard Line to the -Morgan Trust--or, in other words, the formation of a combine including -all the important transatlantic lines without exception--would have -brought about such a development of the pool idea as would have led to a -much closer linking-up of the financial interests of the individual -partners than could be achieved under a pool agreement. Under such a -"community of interest" agreement, every inducement to needless -competition could be eliminated, and replaced by a system of mutual -participation in the net profits of each line. This was the ideal at -which Ballin, taught by many years of experience, was aiming. - -Over and over again the pool lines had an opportunity of finding out -that it paid them better to come to a friendly understanding, even if it -entailed a small sacrifice, than to put up a fight against a new -competitor. Sometimes, indeed, an understanding was made desirable owing -to political considerations. However, the number of participants -ultimately grew so large that Ballin sarcastically remarked: "Sooner or -later the pool will have to learn how to get along without us," and he -never again abandoned his plan of having it replaced by closely-knit -community of interest agreements which would be worked under a -centralized management, and therefore produce much better results. In -other branches of his activities--e.g. in his agreements with the other -Hamburg companies and in the one with the Booth Line, which was engaged -in the service to Northern Brazil, he succeeded in developing the -existing understandings into actual community of interest agreements, -and it seems that these have given all-round satisfaction. The -negotiations between himself and the North German Lloyd shortly before -the outbreak of the war were carried on with the same object. - -Throughout the endless vicissitudes in the history of the pool the -formation of the Morgan Trust decidedly stands out as the most -interesting and most dramatic episode. At the present time the position -of the German steamship companies in those days seems even more imposing -than it appeared to the contemporary observer. To-day we can hardly -imagine that some big British lines should, one after the other, be -offered for purchase first to some German, and then to the American -concerns. Such a thing was only possible because at that time British -shipping enterprise was more interested in the employment of tramp -steamers than in the working of regular services, the shipowners -believing that greater profits could be obtained by the former method. -The result was a noticeable lack of leading men fully qualified to speak -with authority on questions relating to the regular business, whereas in -Germany such men were not wanting. The transatlantic business -threatened, in fact, to become more and more the prerogative of the -German-American combination. To-day, of course, it is no longer possible -to say with certainty whether the Cunard Line could have been induced to -join that combination, if the right moment had not been missed. The -great danger with which British shipping was threatened at that time, -and the great success which the German lines achieved, not only stirred -British public opinion to its depths, but also acted as a powerful -stimulus on the shipping firms themselves. This caused a pronounced -revival of regular line shipping, which went so far that tramp shipping -became less and less important, and which ultimately led to a -concentration of the former within the framework of a few large -organizations which exercise a correspondingly strong influence on -present-day British shipping in general. These organizations differ from -the big German companies by the circumstance that they represent close -financial amalgamations and that they have not, like the German -companies, grown up slowly and step for step with the expanding volume -of transatlantic traffic. - - - - -CHAPTER VI - -THE EXPANSION OF THE HAMBURG-AMERIKA LINIE - - -The principal work which fell to Ballin's share during the period -immediately following his nomination in 1888 on the Board of his company -was that connected with the introduction of the fast steamers and the -resulting expansion of the passenger business. Offices were established -in Berlin, Dresden, and Frankfort-On-Main in 1890, and arrangements were -made with the Hamburg-South American S.S. Co., the German East Africa -Line, and the Hansa Line--the latter running a service to Canada--by -which these companies entrusted the management of their own passenger -business to the Packetfahrt. Thus, step by step, the passenger -department developed into an organization the importance of which grew -from year to year. - -The expansion of the passenger business also necessitated an enlargement -of the facilities for the dispatch of the Company's steamers. This work -had been effected until then at the northern bank of the main Elbe, but -in 1888 it was transferred to the Amerika-Kai which was newly built at -the southern bank; and when the normal depth of the fairway of the Elbe -was no longer sufficient to enable the fast steamers of considerable -draught to come up to the city, it was decided to dispatch them from -Brunshausen, a small place situated much lower down the Elbe. In the -long run, however, it proved very inconvenient to manage the passenger -dispatch from there, and the construction of special port facilities at -Cuxhaven owned by the Company was taken in hand. The accommodation at -the Amerika-Kai, although it was enlarged as early as 1889, was soon -found to be inadequate, so that it was resolved to provide new -accommodation at the Petersen-Kai, situated on the northern bank of the -Elbe, and this project was carried out in 1893. - -The number of services run by the Company was augmented in those early -years by the establishment of a line to Baltimore and another to -Philadelphia. In 1889 a new line starting from New York was opened to -Venezuelan and Colombian ports. The North Atlantic services were -considerably enlarged in 1892, when the Company took over the Hansa -Line. - -The desire to find remunerative employment for the fast steamers during -the dead season of the North Atlantic passenger business prompted the -decision to enter these boats into a service from New York to the -Mediterranean during the winter months. The same desire, however, also -gave rise to one of the most original ideas carried into practice -through Ballin's enterprise, i.e. the institution of pleasure trips and -tourist cruises. It may perhaps be of interest to point out in this -connexion that, about half a century earlier, another Hamburg shipping -man had thought of specially fitting out a vessel for an extended cruise -of that kind. I do not know whether this plan was carried out at the -time, and whether Ballin was indebted to his predecessor for the whole -idea; in any case, the following advertisement which appeared in the -_Leipziger Illustrierte Zeitung,_ and which I reprint for curiosity's -sake, was found among his papers. - - "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 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 intermediate 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, Île 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 unblemished - 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 surrounded by the utmost comfort, and will enjoy the - company of numerous persons of culture and refinement. The sea air - will be of immeasurable benefit to his health, and the experience - which he is sure to gain will remain a source of pleasure to him - for the rest of his life. - - "Full particulars may be had on application to the undersigned, and - a stamped envelope for reply should be enclosed. - -"ROB. M. SLOMAN, - -"_Hamburg, January_, 1845. _Shipowner in Hamburg._" - -Ballin's idea of running a series of pleasure cruises did not meet with -much support on the part of his associates; the public, however, took it -up with enthusiasm from the very start. Early in 1891 Ballin himself -took part in the first trip to the Far East on board the express steamer -_Auguste Victoria_. Organized pleasure trips on a small scale were by no -means an entire novelty in Germany at that time; the Carl Stangen -Tourist Office in Berlin, for instance, regularly arranged such -excursions, including some to the Far East, for a limited number of -participants. To do so, however, for as many as 241 persons, as Ballin -did, was something unheard-of until then, and necessitated a great deal -of painstaking preparation. Among other things, the itinerary of the -intended cruise, owing to the size and the draught of the steamer used, -had to be carefully worked out in detail, and arrangements had to be -made beforehand for the hotel accommodation and for the conveyance of -passengers during the more extended excursions on shore. All these -matters gave plenty of scope to the organizing talents of the youthful -director, and he passed the test with great credit. - -The first Far Eastern cruise proved so great a success that it was -repeated in 1892. In the following year it started from New York, surely -a proof that the Company's reputation for such cruises was securely -established not in Germany alone, but in the States as well. Meanwhile, -however, Hamburg had been visited by a terrible catastrophe which -enormously interfered with the smooth working of the Company's express -steamer services. This was the cholera epidemic during the summer of -1892. It lasted several weeks, and thousands of inhabitants fell victims -to it. Those who were staying in Hamburg in that summer will never -forget the horrors of the time. In the countries of Northern Europe -violent epidemics were practically unknown, and the scourge of cholera -especially had always been successfully combated at the eastern frontier -of Germany, so that the alarm which spread over the whole country, and -which led to the vigorous enforcement of the most drastic measures for -isolating the rest of Germany from Hamburg, may easily be comprehended, -however ludicrous those measures in some instances might appear. There -are no two opinions as to the damage they inflicted on the commerce and -traffic of the city. The severest quarantine, of course, was instituted -in the United States, and the passenger services to and from Hamburg -ceased to be run altogether, so that the transatlantic lines decided to -temporarily suspend the steerage pool agreement they had just concluded. -The Packetfahrt, in order not to stop its fast steamer services -completely, first transferred them to Southampton, and afterwards to -Wilhelmshaven, thus abstaining from dispatching these boats to and from -Hamburg. The steerage traffic had to be discarded entirely, after an -attempt to maintain it, with Stettin as its home port, had failed. -Financially this epidemic and its direct consequences brought the -Company almost to the verge of collapse, and the Packetfahrt had to stop -altogether the payment of dividends for 1892, 1893, and 1894. - -Business was resumed in 1893, but at first it was very slow. Every means -were tried to induce the United States to rescind her isolation -measures. An American doctor was appointed in Hamburg; disinfection was -carried out on a large scale; with great energy the city set herself to -prevent the recurrence of a similar disaster. The Packetfahrt, in -conjunction with the authorities, designed the plans for building the -emigrants' halls situated at the outskirts of the city, which are unique -of their kind and are still looked upon as exemplary. These plans owe -their origin to the extremely talented Hamburg architect, Mr. Thielen, -whose early death is greatly to be regretted. - -An important innovation was the establishment of regular medical control -and medical treatment for the emigrants from the East of Europe on their -reaching the German frontier, a measure which was decided upon and taken -in hand by the Prussian Government. The expansion of the Packetfahrt's -business, of course, was most adversely affected by the epidemic and its -after-effects; and several years of consolidation were needed before the -latter could be overcome. Consequently, hardly any new services were -opened during the years immediately following upon the epidemic. - -An important step forward, which greatly strengthened the earning -capacities of the Company's resources, was taken in 1895, when the -building orders for the steamers of the "P" class were given. These -vessels were of large size but of moderate speed. They were extremely -seaworthy, and were capable of accommodating a great many passengers, -especially steeragers, as well as of carrying large quantities of cargo. -The number of services run by the Company was added to in 1893 by a line -from New York to Italy, and in the following year by one from Italy to -the River Plate. Pool agreements were concluded with the Lloyd and the -Allan Line with respect to the first-named route, and with the Italian -steamship companies with respect to the other. The agreement with the -Italians, however, did not become operative until a few years -afterwards. - -In 1897 the Packetfahrt celebrated the fiftieth anniversary of its -existence--an event in which large sections of the public took a keen -interest. Perhaps the most noteworthy among the immense number of -letters of congratulation which the Company received on that occasion is -the one sent by the chairman of the Cunard Line, of which the verbatim -text is given below. It was addressed to one of the directors in reply -to an invitation to attend the celebrations in person. - - "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 initiating a regular service of twin-screw steamers - of high speed and unexceptionable accommodation. - - "You also set the shipping world the example of the great economy - possible in the transit of the world's commodities in vessels of - greatly increased capacity and proportionate 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 adventitious aids, - such as Government subsidies, but by anticipating and then meeting - the wants of the travelling and commercial public; and no one, be - his nationality what it was, can, in the face of such facts, - abstain from offering his meed of praise to the foresight, acumen, - and ability that have accomplished such great results in such a - comparatively small time as the management and direction of the - Hamburg-American Packet Company. - - "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 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 London firms, could hope to rely on finding a -sure basis for its Far Eastern business, did not consider it wise to let -the favourable opportunity slip. Quick decision and rapid action, before -the proposed agreement of the interested lines had become an -accomplished fact, were necessary; because, once the gates were closed, -an outsider would find it difficult to gain admission to the ring. - -Hence the negotiations with a view to the Packetfahrt joining in the Far -Eastern business, which had only been started during the second half of -December, 1897, came to a close very soon; and in the early days of -January, 1898, the Packetfahrt advertised its intention of running -monthly sailings to Penang, Singapore, Hongkong, Shanghai, Yokohama, and -Hiogo. Six cargo steamers of 8,000 tons burden were entered into the new -service; and simultaneously an announcement was made to the effect that -large fast passenger boats would be added to it as soon as the need for -these should make itself felt. - -The participation in the Far Eastern business, and the consequent taking -over of competing lines or the establishment of joint services with -them, was not the only important event of the year 1898 as far as the -development of the Packetfahrt is concerned. In the spring of that same -year an agreement was made with the Philadelphia Shipping -Company--which, in its turn, had an agreement with the Pennsylvania -Railroad Company--by which the Packetfahrt undertook to run a regular -service of cargo steamers between Hamburg and Philadelphia. - -An event of still greater importance, however, was the outbreak of war -between the United States and Spain which also took place in that year. -The Spanish Government desired to strengthen the fighting power of its -navy by the addition of several auxiliary cruisers; and even some time -before the war broke out an offer reached the Packetfahrt through the -intermediary of a third party to purchase its two express steamers, -_Columbia_ and _Normannia_, which were among the fastest ocean-liners -afloat. Before accepting this offer, the Packetfahrt, in order to avoid -the reproach of having committed a breach of neutrality, first offered -these two steamers to the United States Government; but on its refusal -to buy them, they were sold to the British firm acting on behalf of the -Spanish Government, and re-sold to the latter. As the Packetfahrt had -allowed a high rate of depreciation on the two boats, their book-value -stood at a very low figure; and the considerable profit thus realized -enabled it to acquire new vessels for the extension of its passenger -services. - -Meanwhile a new express steamer, the _Kaiser Wilhelm der Grösse_, had -been added to the fleet of the North German Lloyd. Ballin, having made a -voyage on board this vessel to New York, reported to the Trustees of his -Company that he considered her a splendid achievement. Owing to the -heavy working expenses, however, she would not, he thought, prove a -great success from a financial point of view. He held that the -remunerativeness of express steamers was negatived by the heavy working -expenses and, as early as 1897, had projected the construction of two -steamers of very large proportions, but of less speed. This, however, -was not carried out. Instead, the Packetfahrt decided to build a vessel -which was to be bigger and faster still than the _Kaiser Wilhelm der -Grösse_. The new liner was built by the Stettin Vulkan yard, and -completed in 1900. She was the _Deutschland_, the famous ocean -greyhound, a great improvement in size and equipment, and she held the -blue riband of the Atlantic for a number of years. - -About the same time, the express service to New York had been -supplemented by the inauguration of an additional passenger service on -the same route, which proved a great success in every way. The steamers -employed were the combined passenger and cargo boats of moderate speed -of the "P" class referred to above; and, their working expenses being -very low, they could carry the cargo at very low rates, so that they -proved of great service to the rapidly expanding interchange of goods -between Germany and the United States. Their great size made it -necessary to accelerate their loading and discharging facilities as much -as possible. This necessity, among other things, led to the introduction -of grain elevators which resulted in a great saving of time, as the -grain was henceforth no longer discharged in sacks, but loose. The -Company also decided to take the loading and discharging of all its -vessels into its own hands. To accelerate the dispatch of steamers to -the utmost possible extent, it was decided in 1898 to enlarge once again -the Company's harbour facilities, and an agreement was concluded with -the Hamburg Government providing for the construction of large harbour -basins with the necessary quays, sheds, etc., in the district of -Kuhwärder on the southern banks of the Elbe. - -It was typical of Ballin's policy of the geographical distribution of -risks and of the far-sighted views he held concerning the international -character of the shipping business that he attempted at the end of the -'nineties to gain an extended footing abroad for the Company's -activities. The Packetfahrt therefore ordered the building of two -passenger boats in Italian yards, and it was arranged that these vessels -should fly either the German or the Italian flag. In the end, however, a -separate Italian shipping company, the Italia, was set up, which was to -devote itself more particularly to the River Plate trade. When the -financial results of the new enterprise failed to come up to -expectations, the shares were sold to Italian financiers in 1905. - -The closing years of the nineteenth and the opening years of the -twentieth century represented a period of extraordinary prosperity to -shipping business all over the world--a prosperity which was caused by -the outbreak of the South African war in 1899. An enormous amount of -tonnage was required to carry the British troops, their equipment, -horses, etc., to South Africa, and the circumstance that this tonnage -temporarily ceased to be available for the needs of ordinary traffic -considerably stiffened the freight rates. The favourable results thus -obtained greatly stimulated the spirit of enterprise animating the -shipping companies everywhere. - -About the same time the business of the Company experienced a notable -expansion in another direction. A fierce rate war was in progress -between the Hamburg-South American S.S. Co. and the firm of A. C. de -Freitas & Co., and neither party seemed to be able to get the better of -the other. As early as 1893 Ballin, on behalf of the Hamburg-South -American S.S. Co., had carried on some negotiations with the firm of de -Freitas with the object of bringing about an amalgamation of the two -companies with respect to their services to Southern Brazil. In 1896 he -had done so again in compliance with the special request of Mr. Carl -Laeisz, the chairman of the former company, and in 1898 he did so for -the third time, but in this case on his own initiative. No practical -results, however, were reached, and as Ballin was desirous of seeing an -end being put to the hopeless struggle between the two rival firms, he -took up those negotiations for the fourth time in 1900, hoping to -acquire the de Freitas Line for his own Company. He was successful, and -an expert was nominated to fix the market value of the fourteen steamers -that were to change hands. As the valuation took place at a time when -the shipping business was in an exceedingly flourishing state, the price -which he fixed worked out at so high an average per ton as was never -again paid before the outbreak of the war. The valuer told me that he -himself considered the price very high, so that he felt in duty bound to -draw Ballin's attention to it beforehand. Ballin tersely replied: "I -know, but I want the business," thus making it perfectly clear that he -attached more than ordinary importance to the deal. - -As soon as the purchase of the de Freitas Lines had become an -accomplished fact, arrangements were made with the Hamburg-South -American S.S. Company, which provided for a joint service to South -America, a service which was still further extended when the Packetfahrt -bought up a British line trading from Antwerp to the Plate, thus also -securing a footing at Antwerp in connexion with its South American -business. The necessity for taking such a step grew in proportion as -Antwerp acquired an increasing importance owing to the increasing German -export business. - -Perhaps there is no country which can be served by the seaports of so -many foreign countries as Germany. Several Mediterranean ports attract -to themselves a portion of the South German trade; Antwerp and some of -the French ports possess splendid railway connexion with Southern and -Western Germany, and both Antwerp and Rotterdam are in a position to -avail themselves of the highway of the Rhine as an excellent means of -communication with the whole German hinterland. Finally, it must be -remembered that the Scandinavian seaports are also to a certain extent -competing for the German business, especially for the trade with the -hinterland of the Baltic ports of Germany. All this goes to show that -the countries surrounding Germany which have for centuries striven to -exercise a kind of political hegemony over Germany--or, rather, -generally speaking, over Central Europe--are not without plenty of -facilities enabling them to try to capture large portions of the -carrying trade of these parts of Europe. This danger of a never-ending -economic struggle which would not benefit any of the competing rivals -was the real reason underlying Ballin's policy of compromise. He clearly -recognized that any other course of action would tend to make permanent -the existing chaos ruling in the realm of ocean shipping. - -In this struggle for the carrying trade to and from Central Europe the -port of Antwerp occupied a position all by itself. The more the -countries beyond the sea were opened up by the construction of new -railways and the establishment of industrial undertakings, and the more -orders the manufacturers in the Central European countries received in -consequence of the growing demand, the greater became the value of -Antwerp to the shipping companies in every country. In this respect the -early years of the twentieth century witnessed an extraordinary -development, which, in its turn, benefited the world's carrying trade to -an ever-increasing extent. Never before had so much European capital -been invested in overseas countries. Again, as a result of the Spanish -war the political and economic influence of the United States had -enormously expanded in the West Indian islands, whilst, at the same -time, the Monroe doctrine was being applied more and more thoroughly and -systematically. Consequently the attention of the American investors was -also increasingly drawn towards those same countries. In Central America -new railway lines were constructed by British and American capital, -including some right across the country from the Atlantic to the -Pacific, thus considerably facilitating trade with the Pacific coast of -America. Other lines were built in Brazil and in the Argentine, and -harbour and dock facilities were constructed in nearly all the more -important South American ports. French and Belgian capital shared in -these undertakings, and some German capital was also employed for the -same purpose. The Trans-Andine railway was completed, and numerous -industrial works were added to the existing ones. The great economic -advance was not exclusively restricted to South America; it extended to -the Far East, to the great British dominions beyond the sea, especially -to Canada and Australia, and--after the close of the South African -War--to Africa also. Russia built the great Trans-Siberian railway, and -Germany commenced to exploit the resources of her colonies. As a result -of all these activities the iron and steel manufacturers were -overwhelmed with export orders. This applies particularly to the German -iron and steel manufacturers, whose leading organization, the -Stahlwerks-Verband, largely favoured the route _via_ Antwerp, because it -was the cheapest, to the great detriment of the German ports. Thus the -German shipowners were compelled to follow the traffic, and the -importance of Antwerp increased from year to year. The Hamburg-Amerika -Linie met this development by opening a special branch office for -dealing with the Antwerp business. - -In 1899, a year before the Hamburg-Amerika Linie established itself in -the services to Brazil and the River Plate, a line had been started by -the Company to Northern Brazil and the Amazon River. The conflict with -the Booth Line which resulted from this step was amicably settled in -1902 through negotiations conducted by Ballin. Later on, indeed, the -relations between the two companies became very cordial, and even led to -the conclusion of a far-reaching community of interest agreement, the -Booth Line being represented in Hamburg by the Hamburg-Amerika Linie, -and the latter in Brazil by the British company. An agreement of such -kind was only feasible when a particularly strong feeling of mutual -trust existed between the two contracting partners, and Ballin -repeatedly declared that he looked upon this agreement with the Booth -Line as the most satisfactory of all he had concluded. - -In 1900 the West Indian business was extended by opening a passenger -service to Mexico, and another noteworthy event which took place during -the same year was the conclusion of an agreement with the big German -iron works in the Rhenish-Westphalian district by which the -Hamburg-Amerika Linie undertook to ship to Emden the Swedish iron ore -needed by them from the ports of Narvik and Lulea. Two special steamers -were ordered to be exclusively used for this service. Henceforth Emden -began to play an important part in connexion with the German ore supply, -and the real prosperity of that port dated from that time. - -Early in 1901 Ballin decided to embark on a trip round the world. He -thought it desirable to do so in order to acquire a first-hand knowledge -of the Far Eastern situation, which had become of special interest to -the country owing to the acquisition by Germany of Tsingtau, and to the -unrest in China. His special object was to study the questions that had -become urgent in connexion with the organization of the passenger -service of which the Packetfahrt, in consequence of the agreement with -the Lloyd, had just become a partner. There was, in addition, the -project of starting a Pacific service, which engaged his attention. All -these important details could only be properly attended to on the spot. -It became necessary to acquire a business footing in the various ports -concerned, to organize the coast transport services which were to act as -feeders to the main line, etc. Besides, the Packetfahrt, and the Lloyd -as well, had special reasons for being interested in Far Eastern -affairs, as both companies had been entrusted with troop transports and -the transport of equipment needed for the German contingent during the -troubles in China. During his Far Eastern trip Ballin wrote detailed -accounts dealing with the business matters he attended to, and also -describing his personal impressions of persons and things in general, -the former kind addressed to the Board of his Company, the latter to his -mother. These letters are full of interest; they present a more faithful -description of his character as a man, and as a man of business, than -could be given in any other way. I shall therefore quote a few extracts -from the comprehensive reports, commencing with those he wrote to his -mother:-- - -"_On board the I.M.S._ '_Kiautschou_' -"_January 16th, 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 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 - moorings when several hundreds of dusky natives, wildly screaming - 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 all - 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_, 1901. - - " ... We did not stop long at Aden; and as the quarantine - 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 without any - vegetation. Small fortifications are scattered all over the island. - It must be a desolate spot for Europeans 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 - magnificent 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 everywhere, except that the Colombo dealers - undeniably manifest 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; 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 situated 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 passengers, and they were not slow in availing themselves - of this opportunity to palm off what little German they knew on us. - 'Oh, my father! 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 beautiful. The steamer - slowly wended her way through the channels between numerous small - islands clad with the most luxurious vegetation, so that it almost - took us two hours to reach the actual harbour.... The food question - is extremely complicated in this part of the tropics, which is - favoured by kind Nature more than is good. The excessive fertility - of the soil makes the cultivation of vegetables and cereals quite - impossible, as everything runs to seed within a few days, so that, - for instance, potatoes have to be obtained from Java, and green - vegetables from Mulsow's, in Hamburg. I am sure my geography master - at school, who never ceased to extol the richness of the soil of - this British colony, was not aware of this aspect of the matter. - - "Singapore is a rapidly developing emporium for the trade with the - Far East. It has succeeded in attracting to itself much of the - commerce with the Dutch Indies, British North Borneo, the - Philippines, and the Federated Malay States. To achieve this, of - course, was a difficult matter, even with the aid of the shipping - companies, but its clever and energetic business community managed - to do it. We Germans may well be proud of the fact that our - countrymen 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 2-1/2 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 Hongkong 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 Siemssen 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 instrumental 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 impressions, 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 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 - beautifully kept, terrace-like roads leading up to the summit of - the peak. In this part the chair coolies take the place of the - jinrikisha coolies; and in the low-lying parts also it is - considered more stylish to be carried by chair coolies. The - ordinary hired chairs are generally carried by two coolies only, - but four are needed for the private ones. The work done by these - poor wretches is fatiguing in the extreme. They have to drag their - masters up and down the hill, which is very steep in places, and it - is a horrid sensation to be carried by these specimens of panting - humanity for the first time. In the better-class European - households each member of the family has his own chair, and the - necessary coolies along with it, who are paid the princely wage of - from 16 marks to 17 marks 50 pfennigs a month. They also receive a - white jacket and a pair of white drawers reaching 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 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 commencement 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 firecrackers 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 neighbourhood; 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 life of the town...." - -"_Between_ TSINGTAU _and_ NAGASAKI, -_on board the s.s_ _'Sibiria_.' -"_March 18th, 1901._ - - "Our s.s. _Sibiria_ had arrived in the harbour about ten days ago, - and was now ready for our use. I had decided first of all to make a - trip up the Yang-tse-Kiang on board the _Sibiria_, because I wanted - to get to know this important 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 _Sibiria_ 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 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 Jerusalem, but I - have never found so much filth and wretchedness 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 officers of higher rank had their - homes. Even though it is true that up to now military necessities - have taken precedence 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 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 - everywhere else--plenty of work during the day-time, and plenty of - social duties in the evenings. But things began to look different - on Saturday morning, when my old friend and well-wisher, - Field-Marshal Count Waldersee, arrived on board H.M.S. _Kaiserin - Auguste_. He had announced 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 gentleman, 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 31st, 1901._ - - " ... What a difference between Japan and the cold and barren north - of China! There everything was dull and gloomy, whilst this country - is flooded with sunshine. Here we are surrounded by beautifully - wooded hills, and a magnificent harbour extends right into the - heart of the city. From the windows of our rooms we overlook big - liners and powerful men-of-war, and our own _Sibiria_ 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 Chinaman and the - Japanese clearly proves the great influence which the climate and - the natural features of a country 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 forgotten that the integrity of the Chinese, especially of the - Chinese merchants, is simply beyond praise, whereas the Japanese - have a reputation for using much cunning and very little sincerity, - so that European business men cannot put much faith in them. - - "The women of Japan are known to us through 'The Mikado' and 'The - Geisha.' They make a direct appeal to our sympathies and to our - sense of humour. In one week the stranger will become more closely - acquainted with the womenfolk and the family life of Japan than he - would with those of China after half a dozen years of residence in - their midst. In China the women are kept in seclusion as much as - possible, but the whole family life of the Japs is carried on with - an utter indifference to publicity. This is due to a large extent - to the way their homes are built. Their houses are just as dainty - as they are themselves; and it is really quite remarkable to see - that the Japs, who closely imitate everything they see in Europe, - still build them exactly as they have done from time immemorial. - They are practically without windows, and in place of these the - openings in the walls are filled with paper stretched on to frames. - Instead of doors there are movable screens made of lattice-work; - and since everything is kept wide open during the day-time one can - look right into the rooms from the street. In the summer the - Japanese make their home in the streets, and we are told that then - the most intimate family scenes are enacted in the open air. I am - of opinion that this, far from pointing to a want of morality, is - really the outcome of a highly developed code of morals. Things - which are perfectly natural in themselves are treated as such, and - are therefore not hidden from the light of day.... - - " ... At 9 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 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: - - "(1) The establishment of a branch of our Company at Hongkong. - - "(2) The acquisition of the Imperial Mail Packet Service to - Shanghai, Tsingtau, and Tientsin, formerly carried on by Messrs. - Diedrichsen, Jebsen and Co. - - "(3) The acquisition of the Yangtse Line, hitherto carried on by - the firm of Rickmers. - - "(4) The joint purchase with the firm of Carlowitz and Messrs. - Arnhold, Karberg and Co. of a large site outside Shanghai harbour - intended for the building of docks and quays, and the lease of the - so-called Eastern Wharf, both these undertakings to be managed by a - specially created joint-stock company. - - "(5) The establishment of temporary offices at Shanghai. - - "(6) In Japan discussions are still proceeding concerning the - running of a line from the Far East to the American Pacific coast. - - "(7) In New York negotiations with the representative of the firm - of Forwood are under way regarding the purchase of the Atlas Line." - -This list summarizes the contents of a long series of letters from all -parts of the world where Ballin's keen insight, long foresight, and -business acumen suggested to his alert mind possibilities of extending -Packetfahrt shipping interests. Time translated many of his suggestions -into flourishing actualities, some of which survived the 1914-18 years; -others disappeared in the cataclysm; others, again, by the lapse of time -have not the keen general interest that appertained to the ideas when -they fell fresh-minted from his pen. The following, however, in regard -to China and Japan, are worthy of record: - -"_Shanghai._ -_March 4th, 1901._ - - "I am not quite satisfied with the course which the negotiations - concerning the possible inauguration of a Yangtse line have taken - so far. - - "The vessels employed are of the flat-bottomed kind, some being - paddle boats, others twin-screw steamers. In their outward - appearance the Yangtse steamers, owing to their high erections on - deck, greatly resemble the saloon steamers plying on the Hudson. - Their draught rarely exceeds 12 feet, and those which occasionally - go higher up the river than Hankau draw even less. Most of the - money earned by these boats is derived from the immense Chinese - passenger 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 10th, 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 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 19th, 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 reaction 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 hopelessly inadequate at present; and as to - the accommodation for merchant vessels which is in course of being - provided, it would seem that too extensive a use has been made of - the supposed fact that mistakes are only there in order to be - committed, and that it would be a pity not to commit as many as - possible...." - -"_On board the s.s. Empress of China between_ -YOKOHAMA AND VANCOUVER. -_April 17th, 1901._ - - " ... In the meantime I have had opportunities of slightly - familiarizing myself in more respects than one with the conditions - ruling in Japan. - - "The country is faced with an economic crisis. Encouraged by a - reckless system of credit, she has imported far more 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 somewhat less friendly than usual in more respects than one; and -in particular the agreement concerning the Far Eastern services of both -companies was subjected to some considerable modifications. - -The year 1903 is also remarkable for an event which, although not of -great importance from the business point of view, is of interest in -other respects. This event was the establishment of business relations -with a Danish company concerning, in the first place, the West Indian -trade, and later that with Russia also. The Danish concern in question -was the East Asiatic Company, of Copenhagen. The founder of this company -was a Mr. Andersen, one of the most successful business men known to -modern commercial enterprise, and certainly not only the most successful -one of his own country, but also one of high standing internationally. -When still quite young he founded a business in Further India which, -although conducted at first on a small scale only, he was able to -extend by the acquisition of valuable concessions, especially of -teak-wood plantations in Siam. In course of time this business developed -into a shipping firm which, owing to the concessions just mentioned, was -always in a position to ship cargo of its own--an advantage which proved -inestimable when business was bad and no other freight was forthcoming. -When Mr. Andersen returned to Europe he continued to enlarge his -business, making Copenhagen its centre. He enjoyed the special patronage -of the Danish Royal Family, and afterwards also that of the Imperial -Russian family. His special well-wisher and a partner of his firm was -the Princess Marie of Denmark, who became known in the political world -because she incurred the enmity of Bismarck, chiefly on account of her -attempt to stir up ill feeling between the Iron Chancellor and Tsar -Alexander III. Bismarck, in the second volume of his memoirs, describes -how he succeeded in circumventing her plans through a personal meeting -with the Tsar. It was the exceptional business abilities of the Princess -Marie which brought Mr. Andersen into contact with the Russian Imperial -family. It is typical of the common sense of the Princess and of her -unaffected manners that she arrived at the offices of the -Hamburg-Amerika Linie one day without having been previously announced; -and as she did not give her name to the attendant outside Ballin's -private office, he could only tell him that "a lady" wanted to see him. -The two letters addressed to Ballin which are given below are also -illustrative of her style. - - "MY DEAR SIR, - -"_January 17th_, 1904. - - "I hope you will excuse my writing in French to you, but you may - reply to me in English. I have had a chat with Director Andersen, - who told me that your discussions with him have led to nothing. I - greatly regret this, both for personal reasons and in the interests - of the business. I am convinced 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 10th, 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 - Hamburg 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 invited to dine with them at Bernstorff Castle. The -business outcome of the negotiations was that in 1905 a joint service to -the West Indies was established between the Hamburg-Amerika Linie and -the Danish West Indian Company. Four of the big new steamers of the -latter were leased to the Packetfahrt, and operated by that company, -which thus not only increased the tonnage at its disposal, but also -succeeded in eliminating an unnecessary competition. - -At the same time the Packetfahrt bought the larger part of the shares of -the Russian East Asiatic S.S. Company owned by the Danish firm. The -object of the purchase was to establish a community of interests with -the Russian Company. The Kaiser took great interest in this scheme, and -during his visits to Copenhagen in 1903 and 1905 Mr. Andersen reported -to him on the subject. It was intended to bring about close business -relations between Germany, Russia, and Denmark for the special purpose -of developing Russian trade, and to organize the Russian East Asiatic -S.S. Company on such lines as would make it a suitable instrument to -this end. It is to be regretted that the community of interest agreement -then concluded was not of long duration. The Russian bureaucracy made -all sorts of difficulties, and it is possible that the representatives -of the Hamburg-Amerika Linie in Russia did not display as much -discretion in their dealings with these functionaries as they ought to -have done. At any rate, the Packetfahrt was so little satisfied with its -participation in this Russian concern that it re-sold its rights to the -interested Copenhagen parties in 1906, not without incurring a -considerable loss on the transaction. The West Indies agreement -automatically lapsed when the Packetfahrt acquired sole possession of -the four Danish steamers. - -Later on some sort of co-operation with the Russian company was brought -about once more by the admission of that company to the transatlantic -steerage pool. The Packetfahrt also had an opportunity of profiting from -the technical experience gained by the Danish East Asiatic Company, -which was the first shipping concern to specialize in the use of -motor-ships. It was enabled to do so by the support it received from the -shipbuilding firm of Messrs. Burmeister and Wain, of Copenhagen, who had -applied the Diesel engine, a German invention, to the propulsion of -ships, and who subsequently built a fleet of excellent motor-ships for -the East Asiatic Company. One of these vessels was afterwards acquired -by the Hamburg-Amerika Linie for studying purposes. The new type of -vessel proved exceedingly remunerative during the war, as it made the -owners independent of the supply of British bunker coal, and relieved -them of the numerous difficulties connected with obtaining it. This -great practical success of the Danish shipbuilders became possible only -because they applied themselves consistently to the development of one -particular type of engine, whereas in Germany endless experiments were -made with a great variety of different types which led to no tangible -results. It was only when the war came, and when the building of -numerous submarines became necessary that German engineering skill -obtained a chance of showing what it could do, and then, indeed, it -proved itself worthy of the occasion. - -In 1904 war broke out between Russia and Japan, an event which exercised -such an influence on the Packetfahrt that it is hardly an exaggeration -to say that the rapid progress the company made during the next few -years amounted to a re-birth. The war provided the company with a chance -to sell a large number of its units at a considerable rate of profit, -and the contract concluded with the Russian Government for the coal -supply added enormously to its revenues. The Russian Government partly -converted the purchased steamers into auxiliary cruisers for the purpose -of checking and disorganizing Japanese sea-borne trade, and it partly -used them to accompany its Baltic fleet on its way to the Far East. As -an illustration of the magnitude and the complexity of this transaction, -it may be permitted to quote a few extracts from Ballin's notes -referring to it: - -"_May, 1904._ - - "Much though my time has been occupied by the Hungarian 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 still staying at Petrograd, - where they have been all the time with the exception of a few - weeks, and we have carried on some extremely difficult negotiations - by cable which so far have led to the definite sale of the _Fürst - Bismarck_ and the _Belgia_. The _Auguste Victoria_, which is still - in dock until the necessary repairs have been executed, has also - been sold to Russia, and the prospects that the _Columbia_ will - follow suit are extremely good. - - "The sales, of course, necessitate large alterations of the - existing schedules, and they lead to a great deal of inconvenience. - A particularly awkward situation has been brought about by the - circumstance that the _Fürst 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 _Augusts - Victoria_ to interrupt her usual trip to the Near East, and for the - _Columbia_ to take her place.... - - "Our big coal contract with the Russian Government has, in the - meantime, been considerably added to. The execution of the - contract, however, is causing me a great deal of anxiety, as the - English press, notably _The Times_, is only too glad to make use of - this circumstance as a pretext for rousing suspicions as to - Germany's neutrality. As our government is not taking up a very - firm attitude, the effect of these articles, of course, is highly - disagreeable. On Friday, September 23rd, I had an opportunity of - discussing this matter with the Imperial Chancellor at Homburg. The - Chancellor did not disguise the anxiety he felt concerning these - contracts, especially as he had just then received a long telegram - from the German Ambassador in Tokio advising him to proceed with - much caution. I told the Chancellor that he need not study in any - way the damage which our company might suffer; that we did not ask - that any regard should be paid to our business interests in case - these should clash with those of the country, and that, if the - Government were of opinion that the interests of the country - necessitated the cancelling of the whole agreement, I should be - glad to receive instructions from him to that effect. Failing such - instructions, of course, I was not entitled to cancel a contract - which was in every respect a properly drawn-up legal instrument. 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 antagonists; for it was but reasonable to - expect that, owing to the agitation carried on by the British, no - action on Germany's part would cause a change of feeling in Japan, - but that it would be a fatal blow to Russia, whose Baltic fleet in - that case would simply be unable to reach the Far East. - - "From Frankfort I went to Berlin in order to discuss the question - of the coal contract with the Foreign Office, which the Chancellor - had requested me to do. I had a long conference with Richthofen.... - - " ... _October 1st, 1904._ Meanwhile our negotiations with the - Russian Government have made good progress, and practically the - whole of my time is taken up with these transactions, which have - given us a very exciting time. They compel me to go to Berlin - pretty frequently, as I consider 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 anywhere, - although in some cases it had to be done in open roadsteads. Its - inglorious end in the Korea Straits cannot, and does not, diminish - the magnitude of the achievement; and the experiences we have - gained by successfully carrying out our novel task will surely - prove of great value to the Government. This whole coaling business - has been a source of considerable profits to our company, although - if due regard is paid to the exceptional character of the work and - to the unusual risks we had to run, they cannot be called - exorbitant." - -A few statistics will show what the whole undertaking meant to the -Hamburg-Amerika Linie from a business point of view. During the years -1904 and 1905 the company increased its fleet by no less than 21 -steamers--partly new buildings and partly new purchases--representing a -value of 22-1/2 million marks. To these new acquisitions must be added -the 19 steamers then building, of a value of 52 million marks, amongst -them the two big passenger steamers _Amerika_ and _Kaiserin Auguste -Victoria_ for the New York route, and other big boats for the Mexico, -the River Plate, and the Far East services. A large fraction of the sums -spent on this new tonnage--viz. no less than 24 million -marks--represented the profits made on the sales of ships; another large -portion was taken out of current earnings, and the remainder was secured -by a debenture issue. Never again, except in 1913, has the company added -such an amount of tonnage to its fleet in a single year as it did at -that time. But the "re-birth" of the company did not only consist in -this augmentation of tonnage, but also, and chiefly, in the entire -reorganization of its New York service by the addition to its fleet of -the _Amerika_ and the _Kaiserin Auguste Victoria_. This event meant that -the era of the express steamers was being succeeded by one characterized -by another type of vessel which, though possessing less speed, was -mainly designed with a view to securing the utmost possible comfort to -the passengers. The two steamers proved exceedingly remunerative -investments, and added enormously to the clientèle of the company. The -profits earned on the Russian transaction also made up to a large extent -for the losses incurred in the keen rate war with the Cunard Line then -in progress. In spite of this rate war the company was able to increase -its dividend to 9 per cent. in 1904, and to 11 per cent. in 1905. - -Another event which took place in 1904 was the conclusion of a contract -with the German Government concerning the troop transports to German -South-West Africa, and the year 1905 witnessed the settlement of a -short-lived conflict with the North German Lloyd. This conflict -attracted a great deal of attention at the time, and the Kaiser himself -thought fit to intervene with a view to terminating it. - -When it was seen that German commercial interests in the Middle East had -considerably increased, the Hamburg-Amerika Linie opened a special line -to the Persian Gulf in 1906. The year 1907 is chiefly remarkable for a -rate war affecting the services from Hamburg to the West Coast of -Africa, of which until then the Woermann Line had considered itself -entitled to claim a monopoly. - -The African shipping business had been jealously nursed by its founder, -Adolph Woermann, who had always tried hard to guard this special domain -of his against the encroachments of all outsiders. However much Ballin -and Adolph Woermann differed in character, they were akin to each other -in one essential feature--viz. the jealous love they bore to the -undertaking with which they had identified themselves. Both men, grown -up in absolutely different environments, yet resembled each other in the -daring and the fearlessness with which they defended the interests of -their businesses. The one had trained himself to employ moderation and -commonsense to overcome resistance where the use of forcible means -promised no success; the other was a pioneer in the colonial sphere, a -king in his African empire, the discoverer of new outlets, but broken in -spirit and bereft of his strength when compelled by circumstances to -share with others. When Adolph Woermann had died, Ballin honoured his -memory by contributing to the public Press an appreciation of his -character, which is perhaps the best that has been written, and which -ought to be saved from being forgotten. This fact, it is hoped, will be -sufficient justification for reproducing in this connexion a translation -of Ballin's article: - - "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 Woermann had achieved in the face of the greatest - imaginable difficulties. - - "Never before, perhaps, has any private shipowner displayed 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 - Government; in fact, he had to overcome all sorts of obstacles - which were put in his way by the bureaucracy. His confidence 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 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 companies 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 compelled 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 attitude 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 - breakdown 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 Woermann, 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 truly patriotic motives throughout. Still, this shall - not prevent 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 to the greatest Hanseatic citizen who had been - living in our midst." - -To complete the enumeration of the many rate wars which occurred during -the first decade of the twentieth century, we must make brief reference -to the competition emanating in 1909 from the so-called "Princes' Trust" -(Fürstenkonzern) and its ally, viz. a Hamburg firm which had already -fought the Woermann Line. The object of the fight was to secure the -business from Antwerp to the Plate. The struggle ended with the -acquisition of the shipping interests of the Princes' Trust, the -business career of which came to a sudden end shortly afterwards by a -financial disaster causing enormous losses to the two princely families -concerned--the house of Hohenlohe and that of Fürstenberg. The details -connected with this affair are still in everybody's memory, and it would -be beyond the scope of this volume to enter into them. It should be -mentioned, however, that in connexion with the settlement arrived at the -two big companies undertook to start some transatlantic services from -the port of Emden, and in particular to establish a direct line for the -steerage traffic to North America. The necessary arrangements to this -end had just been made when the war broke out, and further progress -became impossible. - -The transatlantic pool was considerably extended in scope during those -years. More than once, however, after the rate war with the Cunard Line -had come to an end, the amicable relations existing between the lines -were disturbed, e.g. when the Russian Volunteer Fleet opened a competing -service--a competition which was got rid of by the aid of the Russian -East Asiatic S.S. Company; when some British lines temporarily withdrew -from the steerage pool, and when some differences of policy arose -between the Hamburg-Amerika Linie and the North German Lloyd. The -Hamburg company demanded a revision of the percentages, contending that -the arrangements made fifteen years ago no longer did justice to the -entirely altered relative positions of the two companies. The -discussions held in London in February, 1908, under Ballin's -chairmanship, which lasted several days, and in which delegates of all -the big Continental and British lines, as well as of the Canadian -Pacific Railway Company took part, led to the formation of the Atlantic -Conference (also known as the General Pool). It was supplemented in the -following year by that of the Mediterranean Conference. Both these -agreements were renewed in 1911, and further agreements were concluded -with the Russian and Scandinavian lines to complete the system. -Agreements on so large a scale had never before been concluded between -any shipping companies. - -This network of agreements existed until it was destroyed through the -outbreak of the war. - -During the fluctuating conditions which characterized the shipping -business of those years the year 1908 witnessed a depression which, in -its after-effects, is comparable only to that caused by the cholera -epidemic sixteen years earlier. Business had been excellent for a fairly -long time, but it became thoroughly demoralized in the second half of -1907, and an economic crisis of a magnitude such as has seldom been -experienced began to affect every country. No part of the shipping -business remained unaffected by it; hundreds and hundreds of -ocean-going liners lay idle in the seaports of the world. - -Very gradually prospects began to brighten up in the course of 1908, so -that the worst of the depression had passed sooner than had been -expected. Indeed, in one respect the crisis had proved a blessing in -disguise, inasmuch as it had strengthened the inclination of the -shipping concerns everywhere to compromise and to eliminate unnecessary -competition--the formation of the general pool, in fact, being the -outcome of that feeling. The subsequent recovery made up for the losses; -and the succeeding years, with their very gratifying financial results, -and their vast internal consolidation, represent the high-water mark in -the development of the Hamburg-Amerika Linie. - -Shortly after the end of the depression a renewed spell of building -activity set in. First of all a new cargo steamer, possessing a burden -of 12,000 tons--which was something quite unusual at the time--was -ordered to be built by Messrs. Harland and Wolff, at a price which was -also unusually low. It almost created a record for cheapness; and the -courage of the builders who accepted such an order at such terms was -greatly admired. A German yard--the Vulkan, of Bremen--then came forward -with a similar offer, because the German shipbuilders, too, were glad to -provide their men with work. The result of the combined labour of both -these firms was a type of cargo boat which proved extremely useful, -especially in the Far Eastern trade, and which represented a good -investment to the company. - -Gradually the other branches of the business began to increase their -activity, and the service to North America especially received the close -attention of the company's management. Meanwhile, other shipping -companies had added some vessels of the very highest class to their -fleets. The two big turbine steamers of the Cunard Line, the -_Lusitania_ and the _Mauretania_, had attracted many passengers, and the -White Star Line had the mammoth liner _Olympic_ building, which was to -be followed by two others of the same type, the _Titanic_ and the -_Gigantic_. The new Cunarder, the _Aquitania_, was to be of the same -type, so that once more the public was offered the choice of steamers of -a kind unknown until then. This competition compelled the Packetfahrt to -follow suit, and Ballin commenced to evolve plans for the building of a -new vessel which, of course, had to surpass the highest achievement of -the competing lines, i.e. the _Olympic_. Thus, in co-operation with the -Vulkan yard, of Stettin, and with Messrs. Blohm and Voss, of Hamburg, -the plans for the three steamers of the "Imperator" class were designed. -The competition among the various yards had been extremely keen, and the -Vulkan yard secured the order for the building of the first unit of this -class, the _Imperator_. From the point of view of speed, these new -vessels resembled the fast steamers of the older kind; with regard to -their equipment, they represented a combination of this type and that of -the _Kaiserin_, but from the business point of view they were quite a -novelty, as the basis of their remunerativeness was no longer the cargo -and steerage business, but the cabin business. If the booking of a -certain number of cabins could be relied on for each voyage an adequate -return would be assured. Everything, therefore, was done to attract as -many cabin passengers as possible. These vessels were a triumph of -German shipbuilding and engineering skill; and the senior partner of -Messrs. Blohm and Voss, when the _Vaterland_ was launched, stated with -just pride that she was the biggest vessel in existence; that she was -built on the biggest slip; that she had received her equipment under the -biggest crane, and that she would be docked in the biggest floating dock -in the world. The launching of the third and biggest of the three -steamers, the _Bismarck_, represented a red-letter day in the life of -Ballin and in the history of the company. Nominally she was christened -by the granddaughter of the Iron Chancellor, but actually by the Kaiser. -The bottle of champagne used for the purpose did not break when it left -the young lady's hands; but the Kaiser seized it, and with a sweeping -movement of the arm hurled it against the stem of the huge vessel. To -remove as far as possible the last vestige of the unhappy estrangement -between the Kaiser and the Chancellor had always been Ballin's earnest -desire. So it filled him with great joy when he was enabled to dedicate -the greatest product of his life-work to the memory of the Prince whom -he admired intensely; and still more was he pleased when the Kaiser -consented to take part in the ceremony. He had often expressed his -regret at the unfortunate stage management in connexion with the -Kaiser's visit to Hamburg after the unveiling of the Bismarck monument, -when he was driven past it without an opportunity having been arranged -for him to inspect it. Such a course, Ballin remarked, was bound to -create the impression that the Kaiser had intentionally been led past -it. "I wish I had been permitted to speak to the Kaiser about it -beforehand," he told me afterwards. "I am sure he would have insisted -upon seeing it." Proper stage management plays so prominent a part in -the life of royalty, and it can be of such great use in avoiding certain -blunders and in hiding certain shortcomings that it is much to be -regretted that the Kaiser had so often to dispense with it. - -The entering into the Packetfahrt's service of the "Imperator" type of -steamers represented an extraordinary increase in the amount of tonnage -which the company employed on the New York route; and when the North -German Lloyd refused to allow the Packetfahrt a corresponding addition -to its percentage share under the pool agreement, which the Packetfahrt -believed itself justified in asking for, a conflict threatened once more -to disturb the relations existing between the two companies. As a result -the position of both was weakened in Austria, where the Government -cleverly used the situation to its own advantage. Apart from this, -however, not much damage was done, as negotiations were soon started -with the object of securing the conclusion of a far-reaching community -of interest agreement which was not merely to be restricted to the -transatlantic services of the two companies. If these negotiations could -be brought to a successful issue, Ballin thought that this would be the -dawn of a new era in the contractual relations existing between shipping -firms everywhere, because he believed that such development would not be -confined to the German lines, but would assume international -proportions. The agreements actually in force seemed to him obsolete--at -least in part. That this should be so is but natural, as the factor -which it is intended to eliminate by the terms of such agreements--man's -innate selfishness--is, after all, ineradicable. "Nature," in the words -of the Roman poet, "will always return, even if you expel it with a -pitchfork." Wherever a human trait like selfishness is to be kept within -certain bounds by means of written agreements, it becomes necessary not -only to make small improvements from time to time, but to subject the -whole system to a thorough overhauling every now and then. - -Many events affecting the progress of the company's business have no -reference in these pages, but the reader can visualize the importance of -Albert Ballin's life-work if he keeps before his mind the fact that -while in the early part of 1886 the Hamburg-Amerika Linie maintained but -a mail service from Hamburg to New York and four lines to Mexico and -the West Indies, from that date to 1913 fifty new services were added to -the existing ones. - -The fleet possessed by the Hamburg-Amerika Linie in 1886 consisted of 22 -ocean-going steamers, totalling 60,531 G.R.T.[1] By the end of 1913 -these figures had increased to 172 steamers and 1,028,762 G.R.T. -respectively. During the twenty-eight years 269 vessels of 1,388,206 -tons had been added, either by new building or by purchase, and 101 -steamers of 346,927 tons had been sold. At the end of 1913 19 steamers -of 268,766 tons were building, so that, including these, the total -tonnage amounted to 1,360,360 G.R.T. at that date. - -During the same period the joint-stock capital of the company had -increased from 15 to 157-1/2 million marks, the debenture issues from -5·6 to 69·5 million marks, and the visible reserves from 3,595,285 to -58,856,552 marks. - -The working profits of the company during those twenty-eight years -amounted to 521,727,426 marks, 2,735,700 of which were Government -subsidies received during the temporary participation in the Imperial -Mail Service to the Far East. - -The average dividend paid to the shareholders was 7·02 per cent. per -annum. This figure, to my thinking, proves that the biggest steamship -company the world has ever known was to a small extent only a -"capitalist enterprise." Out of a total net profit of over 500 millions, -no more than 140 million marks went to the shareholders as interest on -their invested capital; by far the greater part of the remainder was -used to extend the company's business, so that the country in general -benefited by it. - -Concerning one matter which played an important part in Ballin's career, -viz., the relations between his company and the North German Lloyd, the -reader may perhaps desire a more exhaustive account. There certainly -was no want of rivalry between the two companies. One notable reason for -this was the fact that at the time when Ballin joined the Packetfahrt -the latter had fallen far behind its younger competitor in its -development, both from the business and the technical point of view. The -Packetfahrt, in particular, had not kept pace with the technical -progress in steamship construction, and the consequence was that, when -the pool was set up, it had to content itself with a percentage which -was considerably less than that allotted to the Lloyd. The enormous -advance made under the Ballin régime naturally caused it to demand a -larger share. At the same time the Lloyd also increased its efforts more -than ever before, and thus a race for predominance was started between -the two big companies, which greatly assisted them in obtaining the -commanding position they acquired as the world's leading shipping firms. -I do not think this is the place to go into all the details of this -struggle, and I shall confine myself to reproducing an article which -Ballin himself contributed in 1907 on the occasion of the fiftieth -anniversary of the foundation of the North German Lloyd. As this article -throws several interesting sidelights on the development of -transatlantic shipping enterprise, it may furnish a suitable conclusion -to the account given in the present chapter: - - "The year 1907 is one which will stand out prominently in the - history of our transatlantic shipping on account of the two - anniversaries which we are going to celebrate during its course. On - May 27th it will be sixty years since the Hamburg-Amerika Linie was - called into existence, and on February 20th the North German Lloyd - will celebrate the fiftieth anniversary of its foundation. I - suppose that a more competent pen than mine will present us on that - day with a detailed account of the development of the great Bremen - shipping firm, and my only object in writing this article is 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 agreement 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 improvement - 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 technical side in the head of the firm of - Messrs. John Elder and Co., the Glasgow shipbuilders. At their - yard, starting in 1881, a series of fast steamers were built--the - _Elbe_, the _Werra_, the _Fulda_, the _Saale_, the _Trave_, the - _Aller_, and the _Lahn_--which opened up a new and memorable era in - the progress of the means of communication between the Old World - and the New. These boats proved of great benefit to the company - financially, and they were also a considerable boon to the - passengers owing to their speed and punctuality. I recollect - talking to the chairman of a big British steamship company on - board one of his steamers in New York harbour in 1888, when the - s.s. _Lahn_, of the North German Lloyd, steamed in. My British - colleague, filled with admiration, glanced at his watch, touched - his hat by way of salutation, and said with honest enthusiasm: - 'Wonderful boats; they are really doing clockwork.' He only - expressed the sentiment felt by the travelling public generally; - everybody appreciated their reliability and punctuality, and the - excellence of their service. - - "Director Lohmann died very suddenly on February 9th, 1892; he had - just concluded an address at a general meeting of the company held - at the 'Haus Seefahrt' when he dropped down dead. During the last - few years of his life he had not been well advised technically, and - failed to adopt the twin-screw principle, as had been done by the - Hamburg company. Thus, when the two fast single-screw steamers, the - _Havel_ and the _Spree_, were built at Stettin in 1890, they were - practically obsolete, because the travelling public by that time - had come to prefer those of the twin-screw type, owing to the - increased safety they afforded. - - "In 1888 Consul Meier retired from the chairmanship of the Lloyd, - to be succeeded--after the short reign of Mr. Reck--by Mr. George - Plate. To Mr. Plate, if I am rightly informed, great credit is due - for having secured the services of Director-General Dr. Heinrich - Wiegand on the board of the company. - - "What the Lloyd has achieved under the Wiegand régime far surpasses - anything accomplished in the past. - - "The Hamburg-Amerika Linie, meanwhile, had been alive to the needs - of the times; and the consequence was a healthy competition between - these two steamship companies--by far the biggest the world has - ever seen--practically on all the seven seas. This competition, by - intelligent compromise, 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.' - - "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 possible to say how far the credit for having built them is due -to the naval architect, and how far it is due to Ballin. He was -profoundly against employing _one_ system throughout, and on accepting -the views of _one_ expert exclusively; and this aversion was so -pronounced that he objected on principle to the nomination of any -technical expert to the Board of his company. The company, he said, is -surely going to last longer than a lifetime or two. Besides, it must try -to solve the problem of perpetual youth, and therefore it cannot afford -to run the risk of staking its fortune on the views held by one single -man who is apt to ignore the progress of his science without noticing -it. The same dislike of onesidedness induced him to encourage to the -best of his capacity a healthy competition among the various shipyards, -and to avail himself of the experiences gained not only by the German -yards but by their British rivals also. At an early stage of his career -close business relations were established between himself and Messrs. -Harland and Wolff, of Belfast; and a personal friendship connected him -with the owner of that firm, Mr. (now Lord) Pirrie. Acting upon the -example set by the White Star Line, Ballin made an agreement with -Messrs. Harland and Wolff as early as 1898, by which the latter bound -themselves always to keep a slip at the disposal of the Packetfahrt. The -reason which prompted Ballin to make this arrangement was, as he -explained to the Board of Trustees, that the company's orders for new -construction and repairs had nowhere been carried out more -satisfactorily and more cheaply than by the Belfast yard, where all the -new vessels ordered were built under a special agreement, i.e. at cost -price with a definitely fixed additional percentage representing the -profits and certain expenditure incurred by the builders. This -arrangement enabled the Packetfahrt to become acquainted with whatever -was latest and best in British shipyard production, and, as it were, to -acquire models which it could improve upon in German yards after they -had been tested on actual service. Some of the best and most important -types of vessels which the Packetfahrt has produced owe their origin to -this system; and it is only fair to say that it exercised an entirely -beneficial influence on the progress of the German shipbuilding -industry, the prosperity of which is largely due to the fact that it has -profited from the century-old experience gained by the British yards and -by British ocean-shipping. - -Ballin held the view that, just as the shipbuilding expert had to watch -the progress of naval architecture and to make practical application of -its results, and just as the merchant had to exploit this progress for -the benefit of his business, the shipowner--especially the one who -maintains a service of passenger boats--has the special task of making -every step in the direction of further advance serviceable to the needs -of the passengers. Being himself, as has been pointed out elsewhere, -gifted with a strong faculty for appreciating things beautiful, and -raising no less high demands as regards the beauty and the comfort of -all his surroundings, Ballin constantly endeavoured to make use of all -the results of his own observations and of his own experience for the -greater comfort of the passengers. Those who saw the finished products -of his imagination, the beautifully appointed "floating hotels," hardly -realized how many apparently insignificant details--which, after all, in -their entirety make what we call comfort--owe their origin to his own -personal suggestions. Each time he made a sea voyage on board a steamer -of his own, or of some other company, he brought home with him a number -of new ideas, chiefly such as affected technicalities, and matters -dealing with the personal comfort of the passengers. Numerous entries in -the notebooks which he carried on such occasions are there to serve as -illustrations; the following items, for instance, are selected from -those which he jotted down, roughly, on a voyage to New York some time -in the 'nineties. They speak for themselves, in spite of their -sketchiness: - -"List of Moselle purveyors wants revision--notices on board to be -restricted as much as possible, those which are necessary to be -tastefully framed--sailing lists and general regulations to be included -in passengers' lists--state cabin on board _Kaiser Friedrich_: key, -latch, drawer; no room for portmanteaux and trunks; towels too -small--_Deutschland_: soiled linen cupboard too small--stewards -_Oceanic_ white jackets--celery glasses--butter dishes too small--large -bed pillows--consommé cups--playing cards: Packetfahrt complete name of -firm--Packetfahrt complete name on Wehber's wine bottles--toast to be -served in a serviette (hot)." - -Rough notes such as these were used to serve Ballin as the material -underlying the detailed reports and instructions to the company's -servants which he composed during the voyage, so that not even a long -sea voyage gave him the unbroken spell of leisure he so badly needed. -Indeed, the longer it lasted the more chances did it provide for -thoroughly inspecting the practical working of the steamer. Many other -reports are in my possession, but the one given will serve to emphasize -the meticulous quality of observation he possessed, and how practical -was his mind in regard to details of comfort and convenience, and the -special climatic needs of different routes. - -Even where the peculiar conditions obtaining in tropical climates were -concerned--conditions with which he was personally quite -unacquainted--he unfailingly discovered any defects that might exist, -and also the means by which they could be remedied. - -Ballin's connexion with the Packetfahrt practically coincides with the -whole of that period during which the immense progress of modern -steamship building from humble beginnings to its present stage of -development took place; with the only exception that the North German -Lloyd had already, before Ballin joined the Packetfahrt, established its -services of fast steamers which were far ahead of those maintained by -other shipping companies owing to their punctuality and reliability, and -which Ballin then set himself to improve upon and to excel. Apart from -this one type of vessel, the science of steamship construction, as seen -from our modern point of view, was still in its infancy. - -In 1886 the steamships owned by the Hamburg-Amerika Linie were mainly of -two different types, viz., those used in the North Atlantic service -(principally on the New York route), and those used in the Mexico-West -Indies service. - -The expansion of the Packetfahrt's business after Ballin had joined the -company, and especially the addition of new services together with the -increase in the number of ports of departure and of destination, made it -necessary constantly to increase the size and the carrying capacity of -the cargo boats, and the size and the speed of the passenger steamers, -as well as to improve and to modernize the passenger accommodation on -board the latter. All this, of course, considerably added to the cost -price of the vessels, so that, as a further consequence, the facilities -for loading and discharging them had to be improved and extended. Four -principal types of steamers may be distinguished in the development of -the company's fleet, especially of that part of it which was engaged on -the North Atlantic route, where the main development took place. - -_Type One_: Fast steamers--twin screws, 18 knots, 8,500 -G.R.T.--possessing accommodation for passengers of all classes and -provided with comparatively little cargo space, but comfortably and -luxuriously appointed throughout. The three leading ideas governing -their construction were safety, speed, and comfort; and progress was -made to keep abreast of competing lines, until it culminated in the -vessels of the "Imperator" class. The _Imperator_ was built in 1913. -They were quadruple screw turbine steamers, possessing no fewer than 42 -multitubular boilers each, and, as they were of a capacity of 52,000 -gross register tons, they were nearly three times the size of the -_Deutschland_. - -_Type Two_: Ships of medium speed and of considerable size, and -therefore providing a high standard of comfort for passengers combined -with ample facilities for cargo accommodation. - -_Type Three_: Chiefly built as cargo boats, but in such a way that a -part of their space could be utilized for the accommodation of a large -number of steerage passengers. - -_Type Four_: Cargo steamers without any passenger accommodation. - -The difference between the floating palaces of type No. 1 in 1913 and -those vessels which the Hamburg-Amerika Linie possessed when Ballin -first entered upon his career as a shipping man was like that between -day and night. A brief comparison of a few details will be the best -means of illustrating the enormous progress achieved within less than -the lifetime of a generation. The size of the vessels had increased from -3,000 to more than 50,000 tons; the speed from 14 to nearly 25 knots; -the height of the decks from 6-1/2 to 8 feet in the lower decks, whilst -that of the upper ones, as far as the social rooms were concerned, -amounted to as much as 20 feet. Large portions of the upper decks were -reserved for the social rooms, the finest of which--the ball-room--could -challenge comparison with almost any similar room in any hotel ashore -with respect to its size and to the magnificence of its furnishings and -of its decoration. From a technical point of view, too, the construction -of such a huge room on board a vessel, which possessed a floor space of -4,800 square feet, and a ceiling unsupported by any columns or pillars -of any kind, was an unprecedented achievement. Besides, there were -immense dining-rooms for each class, smoking-rooms, ladies' saloons, a -restaurant, a winter garden, a swimming pool, and numerous smaller rooms -suitable for the relaxation and amusement of the passengers. - -On the older boats the arrangement was that the small cabins were all -grouped round the one and only social room on board, so that the -occupants of the cabins could hear all that was going on in the social -room, and _vice versa_. The superficial area at the disposal of each -passenger was gradually increased from 43 square feet in the double -cabins to 172 square feet in the cabins of the _Imperator_, so that the -latter were really no longer mere cabins, but actual rooms. The -suites-de-luxe comprised up to twelve rooms, the largest of which -covered an area of 247 square feet. - -It must not be thought, however, that the first-class passengers were -the only ones for whose comfort the company catered. The other classes -progressed proportionately in added comfort, space, and social -facilities, not excepting the steerage. - -But by far the greatest improvements made were those in connexion with -the enormous progress of the purely technical side of shipbuilding -during the whole period under review. The more the vessels increased in -size, the less were they liable to the pitching and rolling motion -caused when the weather was rough. Moreover, special appliances, such as -bilge keels and bilge tanks, were employed to lessen these movements -still more, even when the sea was high. The reciprocating engines -gradually gave place to higher types, and later on turbines and -oil-engines were also introduced. In addition to the propelling -machinery a number of auxiliary engines were used which were of various -kinds and for various purposes, such as the ventilation of the cabins -and the other rooms, the generation of light, the services in connexion -with the personal welfare of the passengers and with their safety whilst -on board ship. Instead of single bottoms, double bottoms were used, and -the additional safety resulting therefrom was still further enhanced by -dividing the space between the two by means of a whole network of -partitions. The vessels of the "Imperator" class, indeed, possessed -practically a double shell, which formed an effective protection against -the danger of collision. The lifeboats increased in size and in number, -and their shape and equipment were improved. Emergency lighting stations -were arranged which could generate a sufficient amount of electric -current if the ordinary supply should break down at any time. The whole -vessels were divided into self-contained compartments by water-tight -bulkheads, the doors of which could be automatically closed. This -division into many compartments proved an effective protection against -the risk of fire; but a number of special devices were also adopted to -serve the same purpose, e.g. an extensive system of steampipes by which -each single room could be rapidly filled with steam, so that the fire -could be automatically extinguished. Fire-proof material was used for -the walls separating adjacent rooms and cabins, and, not content with -all this, the company provided its mammoth liners with an actual fire -brigade, the members of which were fully trained for their work. The -most important improvements affecting the navigation of the steamers -were the introduction of wireless telegraphy apparatus, the gyroscopic -compasses, the system of submarine direction indicator signalling, and -the substitution of two steering gears instead of one, not to mention a -series of minor improvements of all kinds. - -The provisioning on board the German steamers was of proverbial -excellence, the kitchen arrangements were modelled after those found in -the big hotels, and were supplied with all manner of supplementary -devices. The huge store rooms were divided into sections for those -provisions that were of a perishable nature and for those that were not; -and for the former refrigerating rooms were also provided in which the -temperature could be regulated according to the nature of the articles. - -Perhaps the most interesting development of the various types of -steamers is that which type No. 2 has undergone. It originated in Great -Britain, whence it was taken over in 1894. The first unit of this type -added to the fleet of the Packetfahrt was the _Persia_, of 5,800 G.R.T., -and a speed of 12 knots, built to accommodate a number of cabin and -steerage passengers, and to carry a considerable amount of cargo as -well. These boats possessed many advantages over similar ones, -advantages which were due to their size, their shape, and the loading -facilities with which they were equipped. Ballin immediately recognized -the good points of this type, and he improved it until the vessels -reached a size of 13,000 G.R.T., which still enabled them to travel at a -speed of 13 knots. They were twin-screw steamers, and were provided with -every safety device known at the time. A still further improvement of -this type was represented by the _Amerika_ and the _Kaiserin Auguste -Victoria_, built in 1905 and 1906 respectively, luxuriously equipped -throughout; by their large size--they possessed a capacity of very -nearly 25,000 G.R.T.--extremely seaworthy, and as they could travel at -the rate of 17-1/2 knots, their speed was scarcely inferior to that -possessed by the older type of fast steamers. From the point of view of -actual remunerativeness they were far superior to the fast steamers, -combining, as they did, all the earning possibilities of the passenger -and of the cargo vessels. - -The development of the types comprising the cargo steamers went hand in -hand with the expansion of international trade relations, and with the -constant increase in the amount of goods exchanged between the nations. -To a certain extent development was limited by the dimensions of the -Suez Canal. Still, improvements became possible in this respect too when -the depth of the Canal was increased to 27 feet in 1908, 29 feet in -1912, and 30 feet in 1914. - -Ballin carefully watched this development, incessantly improving the -existing types of his company's cargo boats, so that they should always -meet the growing needs of sea-borne trade, and in some instances even -anticipating them, until, when the war broke out, twin screw cargo boats -of a capacity of 16,000 tons and possessing a speed of 13 knots were -being built for the company. - -In a brief outline such as this, it is not possible to enter into -details concerning the expansion of the other lines which became -affiliated to or otherwise associated with the Packetfahrt in course of -time. One special type, however, ought to receive a somewhat more -detailed treatment in this connexion, viz., that of the excursion -steamers. The running of pleasure cruises, originally nothing but a mere -expedient to prevent the express steamers from lying idle during the -dead season, gradually became an end in itself. The Northern and -Mediterranean cruises were soon followed by others, e.g. those to the -West Indies and the pleasure trips round the globe. Two special -steamers, the _Prinzessin Victoria Luise_, and the somewhat smaller and -less sumptuous _Meteor_, both of them equipped after the style of -pleasure yachts, were built when it was found advisable to make this -service independent of the fast steamers and the big passenger boats -which had also been employed for this purpose. After the loss of the -_Prinzessin Victoria Luise_ she was replaced first by a British -passenger boat that had been purchased, and then by the _Deutschland_, -specially reconditioned for her new purpose, and renamed _Victoria -Luise_. Both vessels were extremely popular with the international -travelling public, and year after year they carried thousands of -tourists to countries and places distinguished for the beauty of their -natural scenery or for their historical and artistic associations. They -were largely instrumental in constantly augmenting the number of those -who formed the regular clientèle of the company. - -"Imitation is the sincerest form of flattery." In the realm of shipping -it has always been customary for each company to profit by the -experience gained and the progress made by its competitors. This applies -to the Packetfahrt and its management also; but in their case they have -given infinitely more than they have received, and in the whole history -of shipping there has never been one single person who has exercised a -more stimulating influence on its technical progress than Albert -Ballin. - - - - -CHAPTER VIII - -POLITICS - - -Notwithstanding the many business controversies in which Ballin took an -important part, it has occasionally been said that he was not really a -"fighter." This statement may be allowed to pass quite unchallenged, -provided that by the term "fighter" we mean a man whose habit it is to -fight to the bitter end. Ballin never indulged in fighting for its own -sake, nor was it ever his object to see his vanquished opponent lie -prostrate before him. Such a mental attitude he, in his own drastic way, -would have described as a "perverted pleasure." Always and everywhere it -was his aim to secure to himself and to those he represented the maximum -benefit obtainable consistent with the realities of the situation, so -that he has been justly described as "a man of compromise." - -This feature of his personality, indeed, forms the key-note both to his -policy and to the principles on which it was based. Perhaps in other -spheres of economic activity it is possible for a struggle between two -competing rivals to end in the complete victory of one of them; in the -shipping business such an outcome is the exception but not the rule. -There a really _weak_ opponent is never met with, unless one's rival -happens to be exceptionally inexperienced or constitutionally unsound. -The minor competitor, where shipping is concerned, is by no means always -the less powerful of the two. On the contrary, the contest which -inflicts small losses on him inflicts heavy losses on his big opponent, -and may easily exhaust the latter first. The last few decades have -witnessed the establishment of many new shipping firms under the -auspices of national sentiment. Governments and whole peoples have -backed them, and in such cases private undertakings have found it -difficult to compete. - -During his early training Ballin had so thoroughly convinced himself of -the necessity for co-operation and compromise in matters economic that -this conviction became the corner-stone of his policy. He also made it -his principle never to tie an unwilling partner to an agreement which -the latter considered to be detrimental to his vital interests, and he -would only approve of an agreement if both parties to it felt satisfied -that they had done a good stroke of business by concluding it. The -numerous "community of interest" agreements to which he signed his name -established, the longer they lasted and the further they were extended, -an increasingly intimate contact between the shipping firms all over the -world, thus proving that the consistent application of his principles -was justified by its success. - -In politics, too, he regarded this line of action as the only correct -one. Over and over again he described the World War as a "stupid war" or -as the "most stupid of all wars," because its origin, the conflict -between Austria-Hungary and Serbia, was so utterly meaningless to the -progress of the world. Its actual outbreak was caused by the strained -economic relations between Hungary and Serbia, or--to put it quite -plainly--by the boycott of the Serbian pig, a matter which was surely of -no importance to the world's trade and traffic at large. "No Bismarck -was needed to prevent _this_ war," he often said when speaking of its -immediate origin. - -This attitude of his does not mean that he shut his eyes to the -deep-seated antagonisms which were at the back of these local squabbles, -viz., the Franco-Russian coalition against Germany, and the -Anglo-German rivalry. The latter he regarded as sufficient to turn the -scale; if it could be adjusted a World War, he felt sure, would be -avoided. The possibility of a universal conflagration had been pointed -out to him by no less an authority than Prince Bismarck on the occasion -of the latter's visit to Hamburg, when he was shown over the express -steamer of the Packetfahrt that was to bear his name. "I shall not live -to see the World War," Bismarck told him; "but you will, and it will -start in the Near East." - -With ever-increasing anxiety, Ballin noticed how, as a result of the -German naval armaments, the Anglo-German antagonism came into existence, -and how in time the position became worse and worse. When the -Government, about the year 1900, embarked upon its propaganda for the -creation of a big navy, he lent it his active assistance, but in later -years he strongly opposed the naval race with Great Britain, trying to -the best of his ability to circumvent its disastrous consequences. - -The British argument against Germany's naval programme was that a nation -which owned one-third of the inhabited globe and intended to maintain -its supremacy could not renounce its naval predominance. His knowledge -of British mentality--gained, as it was, through many years of -intercourse with the English--told him that this reasoning was certainly -unassailable from the British point of view, and that England would -fight for its recognition to the bitter end. Therefore, he considered -the situation could only be met by an Anglo-German understanding. The -failure of arriving at such a solution was probably caused--apart from -personal motives--by the fact that in Germany the spirit of compromise -was not the predominant one, but that its place was taken by an -exaggerated opinion of the country's own strength combined with a -certain ignorance regarding foreign countries. - -This mental attitude is typical of the two factions which were -all-powerful in Germany at the time, viz., what might be called the Old -Prussian aristocracy, and the representatives of the heavy industries. -The common platform on which these two groups met was the policy to be -pursued regarding customs tariffs, which, although it formed the basis -of the economic greatness of Germany, also prepared the way for serious -international conflicts. During the war these two groups were in charge -of what was meant to be the political policy of the country, but which -was, in fact, nothing but an inferior substitute for it. - -Ballin's international position is illustrated by the fact that he was -the first to be approached in the matter of a projected Anglo-German -rapprochement, an affair which reached its climax with Lord Haldane's -visit to Berlin. Owing to its historical interest this episode is worth -a detailed account. - -The first steps in this direction date back as far as the year 1908, and -the ultimate breakdown of the project did not take place until the -outbreak of the war. The British negotiator was Sir Ernest Cassel, who, -a native of Germany, had settled in England when quite young, and who -had become one of the world's most successful financiers. He was the -intimate friend of King Edward from the time when the latter was Prince -of Wales, and he also acted as his banker and as his political adviser. -The King visited his home almost daily during the last few years of his -life to take part in a game of bridge. The motives which may have -prompted Sir Ernest to lend his assistance and his great influence to an -endeavour which aimed at an understanding between his adopted country -and the land of his birth need not, in the case of a man so clever and -so experienced, be very far to seek. Sir Ernest repeatedly referred to -himself as a German, and as such he was deprived of his -privy-councillorship during the war. Thus it is quite likely that he -might have been prompted no less by an inherited predilection for the -one, than by an acquired preference for the other country. This very -fact may also have enabled him to see matters with particular clearness -of vision and without any prejudice. He and his friends reasoned -somewhat along the following lines: - -The policy of King Edward having led to a considerable strengthening of -the position of France on the Continent, there arose the danger of an -armed conflict between the continental Powers, especially as many points -of dispute threatened at the same time to disturb the relations between -Germany and Great Britain. These differences were caused on the one hand -by the political activities of Germany as a world power, and on the -other by her commercial and industrial expansion which bid fair to -relegate Great Britain to a subordinate position. People in England -regarded the want of a system of protection similar to the German -protective tariffs as the real cause of this development, a want which -retarded the progress of British industrialism, and which prevented -British financiers from taking an active interest in these matters. The -German financiers, however, exerted all their influence on behalf of the -industrial expansion of their country, thus emancipating it more and -more from foreign capital. The time during which the financing of the -German industries by French money (the so-called French "pensions"), -i.e. the discounting by French capitalists of bills drawn by German -industrialists, played an important part, and even represented a serious -menace in days of political tension, had only just passed, but, thanks -to the increasing capital strength of Germany, its effects had now quite -ceased to make themselves felt. - -The advantage to Great Britain of an understanding with Germany was that -it would guarantee her maritime supremacy which she was resolved to -maintain at any price, whilst at the same time reducing the burden of -her naval armaments which, in her case, too, had become wellnigh -insupportable. The Liberal Government then in power was particularly -interested in such financial retrenchment, being quite aware that the -time had arrived for the State to enter upon an era of social -legislation. - -Contact between Ballin and the above-mentioned British groups was -established through the agency of some friends of his connected with -German high finance. The fact that the British selected Ballin to start -these negotiations is probably due to his well-known friendship with the -Kaiser, which suggested the possibility of approaching the German -Government--even if only by informal channels in the first instance. -This first attempt, should it prove successful, might at any moment be -followed up by direct negotiations between the two governments. In view -of the traditional close connexion existing in England between business -circles on the one hand, and the politicians, the parties, and the -Government on the other, such proceedings did not by any means imply a -policy of backstairs, but might be relied upon to open up a way for -sounding German official quarters in the most natural manner. - -The general tenor of Anglo-German relations at that time was somewhat as -follows. - -The visit of King Edward to Wilhelmshöhe and that of the German Emperor -and Empress to Windsor Castle in the summer of 1907 had been of a very -friendly character, and, together with other manifestations of -friendship exchanged between various German and British societies, they -had exercised a favourable impression on public opinion in both -countries. But very soon this friendly feeling was replaced by one of -irritation. Great Britain and Russia had concluded an agreement -concerning their frontiers in the Middle East, and this led to questions -in the Reichstag as to whether German interests had been properly -safeguarded. At the same time (in the summer of 1907) the Hague -Conference came to an end without having led to an understanding -regarding the limitation of armaments, which many people in England -would have liked to be brought about. Towards the end of the year the -German Government submitted to the Reichstag a Navy Bill by which the -life of the capital ships was to be reduced from 25 to 20 years. This -was tantamount to asking for the cost of three new ships of the line. -Simultaneously a powerful propaganda for the navy was started, and when -Prince Rupprecht of Bavaria resigned the protectorate of the Bavarian -section of the Navy League, because the League which at that time was -presided over by the well-known General Keim had engaged in party -politics, his withdrawal had the undesirable effect of focusing public -attention on the League's share in this agitation. This step, as was but -natural, brought about a change in the chairmanship of the League. - -In England the agitation against Germany in general, and against her -naval policy in particular, became very violent in the early part of -1908. In February _The Times_ announced that the Kaiser, for the express -purpose of interfering with the British naval budget, had sent a letter -to that effect to Lord Tweedmouth, the First Lord of the Admiralty. His -lordship categorically denied in Parliament that the document had any -political character whatever, but in spite of this denial, and in spite -of the support which he received from Lord Lansdowne and from Lord -Rosebery, the matter produced a violent outburst of feeling on the part -of the British Press and public. During March, 1908, both houses of -Parliament discussed German and British naval policy in great detail. In -an article published by the _National Review_, Lord Esher, the chairman -of the Imperial Maritime League, demanded that for every keel laid down -by Germany, Britain should lay down two, and General Baden-Powell -described the danger of a German invasion as imminent. On the other -hand, Sir Edward Grey, the Foreign Secretary, emphasized in one of his -speeches the point of view referred to above, viz. that a reduction of -the naval burdens would also be desirable in the interest of Britain, -but that he could recommend such a policy only if the other governments -consented to do the same. - -All these considerations might easily suggest to the clear-headed men of -business on either side of the North Sea how greatly it would be to the -mutual advantage of both if a way could be found towards a limitation of -naval armaments. - -The first interview between Ballin and Sir Ernest Cassel took place in -the summer of 1908, and Ballin afterwards gave the Kaiser a detailed -account of it when the latter visited Hamburg and Kiel at the end of -June. Another report, based on material supplied by Ballin, was composed -by the chief of the Press Department of the Foreign Office, Geheimrat -Hammann, for the use of the Imperial Chancellor and the Foreign -Secretary, and in the absence of any original account by Ballin himself, -it may be permitted to give an outline of its contents below. - -Sir Ernest opened the conversation by saying that for a long time back -he had desired to discuss the political situation simply in his capacity -as a private person, and that he felt qualified to do so because of his -intimate acquaintance with some of the leading personages and with -politics in general. He would like to contribute his share towards the -prevention of a dangerous development of the existing rivalry. The King -felt very keenly that the rapid increase of the German naval forces -constituted a menace to Britain's maritime position. He was convinced, -however, that his nephew would never provoke a wanton conflict, and -that, in his heart of hearts, he loathed the horrors of war. Although, -therefore, during his--the King's--lifetime the danger of an -Anglo-German war was remote, it was nevertheless necessary that, when -his son succeeded him, the latter should find Britain's maritime -position so strong that the Kaiser's successor should be unable to -assail it. - -When Ballin interposed at this stage that the British navy, because of -its unchallenged superiority in numbers, need not be afraid of the newly -created naval power of Germany, Sir Ernest replied that it was well -known to British naval experts that the increase of the German navy was -considerably greater than the official statements made in the Reichstag -would let it appear. Undoubtedly the British navy would always preserve -its superiority, not only numerically, but also technically with regard -to material, construction, and armaments. Nevertheless, the advantages -possessed by the German system of manning the ships and the great -efficiency of German naval officers justified an apprehension lest the -German superiority in the human factor might outweigh the British -superiority in tonnage. The Boer war had taught England how difficult it -was to conquer a high-spirited, though numerically weak enemy. He said -that fear of the German danger formed the driving power of the whole -policy of the Entente, and that this policy was only meant to guard -against that menace. Therefore Russia had been advised at the Reval -meeting to forgo the enlargement of her navy, and to concentrate all her -energies on her army. - -Upon Sir Ernest's intimation that at some date Britain, together with -France and Russia, might inquire of Germany when she intended to put a -stop to her naval armaments, Ballin replied that his friend, if he was -anxious to render a really valuable service to Britain and to the cause -of peace, could do no better than make it perfectly plain that such an -inquiry would mean war. Germany would resist with her whole strength any -such attempt which unmistakably suggested the methods employed at -Fashoda. - -During the progress of the interview Sir Ernest--who showed that he -possessed excellent information concerning Germany's finances--observed -that the state of the same would render it very difficult for her to -make war. In that connexion he pointed out the intimate bearing of -international finance on political relations, and he emphasized how much -the borrowing countries were dependent on the lending ones. Still, even -the creditor nations would sometimes be forced into an uncomfortable -position, as was, for instance, the case with Great Britain after the -United States had passed on to her the greater part of the Japanese -debt. In Japan the disproportion between military burdens and economic -strength was becoming more and more pronounced, and if the country were -faced with the alternative of choosing between the total financial -exhaustion of the people and a stoppage of the payment of interest, it -would prefer to take the latter course. - -In London Ballin was present at the Constitutional Club when a Member of -Parliament made a speech in which he stated, with the general approval -of his audience, that the position of Britain was not really so good as -the policy pursued by the Entente might lead one to believe. The -national balance-sheet had been much more satisfactory during the reign -of Queen Victoria; the items now appearing on the credit side being -partly bad debts incurred by Spaniards, Portuguese, and Japanese, for -whose political good behaviour Britain paid far too high a price, and -one should not allow oneself to be misled as to the value of these -ententes by balance-sheets which were purposely kept vague. - -Geheimrat Hammann told Ballin by letter that Prince Bülow, the Imperial -Chancellor, and Herr v. Schön, the Foreign Secretary, were very grateful -to him for his information, and that in the opinion of both gentlemen -his reply to the suggestion concerning the stoppage of naval armaments -was "as commendable as it was correct." Meanwhile the Kaiser had also -supplied the Chancellor with a general résumé of Ballin's report to him. - -Ballin's visit gave rise to an exchange of letters which it may not be -inappropriate to reproduce in this place. By way of explanation, it -should first be said that the Sandjak Railway project, to which -reference is made in Ballin's letter, had greatly agitated public -opinion all over Europe during the spring of 1908. In February, Count -Aehrenthal, the Austrian Foreign Minister, at a committee meeting of the -delegations, had announced the Government's intention of constructing a -railway line connecting the Bosnian system with the town of Mitrovitza -in the Sandjak (or province) of Novi Bazar. This announcement led to a -violent outburst of the Russian Press, which described this project as a -political _démarche_ on the part of Austria in the Balkans and as an -interference with the Macedonian reforms aimed at by the Powers. In -Austria it was thought that Germany would support her ally as a matter -of course, and Prince Bülow, in an interview given to a journalist, -tried to pacify the _Novoie Vremia_. He declared that the Russian papers -were absolutely mistaken when they alleged that the project was inspired -from Berlin, and he stated that Austria, like her German ally, pursued -none but commercial aims in the Balkans. - -These remarks will be a sufficient explanation of the allusions -contained in Ballin's letter of July 13th, 1908, which, after an -expression of thanks for the hospitality extended to him, reads as -follows: - - "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 Bülow have given me positive assurances - that the German Government was just as much taken by surprise on - hearing of this Austrian 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 sentiments as yours." - -The meeting between the Kaiser and King Edward which was suggested in -these letters actually took place on August 11th at Friedrichshof -Castle, when the King was on his way to Ischl, and it was accorded a -friendly reception in the German Press. It was followed up by an -exchange of equally friendly manifestations on the part of the peoples -of both countries. Mr. Lloyd George, then Chancellor of the Exchequer, -went to Germany in August, 1908, to study the German system of workmen's -insurance against disability and old age, and British workmen came to -visit German trade unions, and to gather information about German -industrial conditions. Official Britain also pronounced herself in -favour of an understanding between the two countries which Mr. Lloyd -George described as the only means of relieving the European tension, -and Mr. Churchill professed similar sentiments. - -Shortly afterwards, however, at the end of October, an event took place -which severely compromised the Kaiser's policy, viz. the incident of the -_Daily Telegraph_ interview. In this the Kaiser, amongst other matters, -bitterly complained that his friendship for England received such scant -acknowledgment. As a proof of the friendly sentiments by which his -actions were guided he stated that he, during the Boer war, had refused -the humiliating suggestion put forward by France and Russia that the -three Powers conjointly should compel Britain to put a stop to the war; -that he had communicated this refusal to King Edward, and that he -previously had presented Queen Victoria with a plan of campaign mapped -out by himself, to which the one actually pursued by Britain bore a -striking resemblance. With regard to Germany's naval programme, he -emphasized that his country needed a big fleet in order to command -attention when the question of the future of the Pacific was discussed. -Finally, with regard to Anglo-German relations, the Kaiser said that the -middle and lower classes in Germany did not entertain very friendly -feelings towards England. - -The effect which this interview produced all over Germany was one of -profound consternation. Its publication led to the well-known -discussions in the Reichstag in November, 1908, during which the Kaiser, -to the great dismay of the nation, was staying at Donaueschingen with -Prince Fürstenberg, where he was hunting. In England, and abroad -generally, people regarded this interview as proving a great want of -consistency in the conduct of Germany's foreign policy, and this -impression was by no means changed when it became known that its -publication was only due to an unfortunate oversight. The Kaiser had -sent the account of it, as he was bound to do by the Constitution, to -Prince Bülow, who was then staying at Norderney. Bülow, however, did not -read it himself, but passed it on to the Berlin Foreign Office to be -examined. There, indeed, an examination took place, but only with a view -to finding out whether it contained any errors of fact, and when this -was proved not to be the case, it was marked to that effect, passed the -various ministries without any further examination, and was published. -This unfortunate chain of accidents did not, however, alter the fact -that the Kaiser ought to have been aware of the great political -importance of his utterances. It has always been a chief fault of his to -speak out too impulsively when it would have been politically more -expedient to be less communicative. Nor can the entourage of the -sovereign be excused for not drawing his and the Chancellor's attention -to the great political significance of his utterances. The Chancellor -himself and the Foreign Office, profiting from their previous -experiences with the Kaiser and his appearances in public, ought to have -used a great deal more circumspection, and it would have been well if -the permanent officials in the Foreign Office had shown rather more -political insight. - -The endeavours of the official circles to remove the tension existing -between the two countries were not affected by the incident. On February -9th, 1909, King Edward and his Queen paid their visit to Berlin, thus -bringing about the event which Ballin in his letter of July 13th, 1908, -had described as so very desirable. To appreciate the importance of this -strictly official visit, we must bear in mind the fact that it did not -take place until the ninth year of the reign of King Edward. This long -postponement was no doubt due to a large extent to the estrangement -between uncle and nephew, and this, in its turn, had its origin in the -natural dislike which the Kaiser felt for his uncle's mode of conducting -his private life while still Prince of Wales. It would have been -preferable, however, to relegate such personal likes and dislikes to the -background where politics or business were concerned. British official -comments emphatically underlined the significance of the visit, and the -German Press followed suit, although voices were not wanting to warn -against any over-estimation of such acts of courtesy. The reply given in -the Reichstag by Herr v. Schön, the Foreign Secretary, to a question as -to whether any suggestions had been put forward by Great Britain with -respect to a reduction of naval armaments was very cool in its tone. His -statement amounted to this: that no formal proposal for an understanding -which might have served as a basis for negotiations had been received, -probably for the reason that it was not customary among friendly Powers -to put forward any proposals of which it was doubtful to say whether -they would be entertained. - -In spite of this cold douche and in spite of other obstacles, the -promoters of an understanding, Ballin and Sir Ernest Cassel, did not -cease their efforts in that direction. In July, 1909, Ballin paid a -second visit to Sir Ernest, during which the political discussions were -continued. On these latter he reported to the Kaiser as follows: - - "My friend to whom I had intimated in a private letter written - about a week earlier that it was my intention to visit him--at the - same time hinting that, for my personal information, I should like - very much to take up the threads of the conversation we had had a - twelvemonth ago on the subject of the question of the navy--had - evidently used the interval to supply himself at the proper - quarters with authoritative information about this matter. During - the whole of our long talk he spoke with extraordinary assurance, - and every word seemed to be thought out beforehand. - - "At the commencement of our conversation I said to my friend that - in view of the great excitement which reigned in England on account - of the German naval armaments, and which was assuming a decidedly - anti-German character, he would quite understand that I should - desire to take up once more the interesting discussions which we - had had on the same subject a year ago. I pointed out that this - excitement--spread as it was by an unscrupulous press and fostered - by foolish politicians--was apt to produce results altogether - different from those which the Government might perhaps consider it - desirable to bring about within the scope of its programme. I - emphasized the fact that, of course, I was merely speaking as a - private citizen, reading with interest the English papers and the - letters of his English friends, so that all my knowledge of the - subject was derived from private sources. - - "A year ago, I said, my friend, in the clear and concise manner - that distinguished him, had explained to me the need for an - understanding between Germany and Britain governing the future - development of their naval forces, at the same time requesting me - to exert myself in that sense. This suggestion of his had not been - made in vain. The fact that I had been successful in establishing - complete concord amongst Germans, British, French, Italians, - Austrians, and a whole series of small nations on questions - affecting their highly important shipping interests, and in - replacing an unbridled and economically disastrous competition by - friendly agreements to the benefit of each partner, was bound to - make me sympathize with any measures that it was possible to take - in order to bring about a similar result between the Governments if - only they were met in the right spirit. I, therefore, had made up - my mind to submit such a plan to our Government, but before doing - so, it would be necessary 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 concerned 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 maintain her supremacy on the sea at - all hazards, and subject to no engagements of any kind, was now - more clearly recognized than it had been a year ago. A one-sided - understanding 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 commerce. British - trade was declining, and there was no doubt 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 circumstance, combined with - the doubtful attitude of Russia and the uncertainty of the - situation in France, was evidently a source of great anxiety to the - King. My friend remarked in this connexion that in his opinion the - moment chosen for the conclusion of an understanding was very - favourable to German but very unfavourable to British interests. It - was useless to talk of an agreement so long as an element of mutual - fear had to be reckoned with. At present this fear manifested - itself in Britain in a manner which was most inopportune, so that - it was bound to make the German public believe that Britain would - be ready to come to an understanding even if the terms of it were - detrimental to her own interests. Britain had got behindhand both - with her commerce and with her naval programme. To fight her - competitors in the world's trade with a fair chance of success was - impossible for more reasons than one, but the elimination 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 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 concerning the - necessity for a further enlargement of the German Navy, if the - action of Britain compelled our Government to take such a course. - The long discussions that followed proved that this view of mine - was correct in every detail. - - "Sir Ernest explained that the Liberal Cabinet had acted penny wise - and pound foolish in dealing with the question of the navy. This - was the conviction of the great majority of the British people, and - this action had caused the feelings of apprehension and of - hostility animating them. The Liberal Government had thus made a - serious blunder, and had, in his opinion, prepared its own doom by - doing so. He thought the days of the Liberal party were numbered, - and another party would soon be in office. Anti-German feeling - would be non-existent to-day if the Liberal cabinet had not, - because of its preoccupation with questions of social policy, - neglected the navy. The whole matter was further aggravated by - other questions of a political kind. France, on account of the - French national character, had always been a doubtful asset to - Britain, and, considering the state of her internal politics, she - was so now more than ever. Germany, on the other hand, possessed a - great advantage 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 implied by - my remarks--that her colonial and her commercial 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 - mistake committed by the Liberal cabinet and by the other advisers - of the King had been their assumption that financial considerations - would prevent Germany from carrying out her naval programme in its - entirety. German prosperity had grown far more rapidly, he thought, - than even the German Government and German financial experts had - believed to be possible. Signs of it could be noticed wherever one - went, and one would turn round in astonishment if, during the - season, one heard the tourists in Italy or in Egypt talk in any - language but German. He, at any rate, felt certain of Germany's - ability to keep pace with Britain in the naval race, even if that - pace was very greatly accelerated. - - "Reasons of internal policy had convinced him that Britain would - not in any case abandon her Free Trade principles within a - measurable period of time, and as it was not intended to conclude a - perpetual agreement, but only one for a limited number of years, he - thought it was not at all necessary that Germany should insist - upon her demand in connexion with this question. As the colonies - enjoyed complete independence in these as in other matters, the - difficulties would be insurmountable. In return for such a - concession on Germany's part, Britain would doubtless be willing to - meet the views of the German Government in other respects. For - these reasons he would be quite ready to change the opinion he had - expressed in the morning, and to agree that it could produce - nothing but good if either side were to appoint some moderate men - for the purpose of discussing the whole question. Such a meeting - would have to be kept absolutely secret, and both parties should - agree that there should be no victor and no vanquished if and when - an agreement was concluded. This condition would have to be a _sine - qua non_. - - "I promised Sir Ernest that I would use my best endeavours 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 recommended that the Imperial Chancellor, Herr v. -Bethmann-Hollweg, who had succeeded Prince Bülow on July 14th should be -kept informed of all that was done to bring about an understanding. The -Chancellor, accordingly, was presented by the Kaiser himself with a copy -of Ballin's report. This was the correct thing to do, as it avoided a -_faux pas_ such as, during the chancellorship of Prince Bülow, had -sometimes been made. Future developments, however, proved that this step -deprived the whole action of its spontaneity, and its immediate effect -was that the Secretary for the Navy was relieved of all responsibility -in the matter. Ballin, in later days, summed up his views on this way of -dealing with the subject by saying that if Herr v. Tirpitz had been left -a free hand in the whole matter--if, for instance, _he_ had conducted it -as Imperial Chancellor--it would hardly have turned out a failure. The -main object of the negotiations that Ballin had carried on was to ensure -that a number of "experts and men of moderate views," i.e. naval experts -in the first instance, should join in conference in order to discuss -how, without injury to their relative fighting efficiency, both -countries could bring about a reduction of their naval armaments. This -plan was so simple and so obviously right that, had it been carried out -as a preliminary to something else, and had the attention of the experts -been drawn to the enormous political importance of their decision, -success would have been assured. The procedure, however, which the -Chancellor adopted compelled him to combat the active opposition of the -various departments involved even before a meeting of the naval experts -could be arranged for, and this was a task which far exceeded the -strength of Herr v. Bethmann-Hollweg, the most irresolute of all German -chancellors, the man to whom Fate afterwards entrusted the most -momentous decision which any German statesman has ever had to make. - -An interview between Ballin and the Chancellor was followed up, with the -consent of the latter, by an exchange of telegrams between Ballin and -Sir Ernest Cassel. From these it became clear that official circles in -London were favourably disposed towards the opening of discussions in -accordance with the terms laid down in Ballin's report, and Ballin -approached the Chancellor with the request to let him know whether he -should continue to work on the same lines as before, or whether the -Chancellor would prefer a different method, by which he understood -direct official negotiations. In a telegram to the Chancellor he -explained that in his opinion Sir Ernest's reference to the friendly -disposition of official London implied that he was authorized to arrange -the details about the intended meeting of experts. If, therefore, he -went to England again, he would have to know what were the views and -intentions of the Chancellor. The reply of the latter, dated August -11th, was as follows: - - "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[2] and I have agreed to observe absolute secrecy in - this matter, and as a statement of your friend to the British - Government to the effect that I had undertaken an official - _démarche_, might possibly be regarded as 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 unable to meet on such terms -as expediency would dictate the overtures of a man like Sir Ernest -Cassel, whose status and whose good intentions were beyond criticism. -If, on receipt of this news, Sir Ernest, who had been working so hard -for an understanding, was not entirely discouraged, it was no doubt due -to the diplomatic skill with which Ballin--who was a master of this art, -as of so many others--interpreted the Chancellor's rebuff when -communicating it to his friend. - -That the latter's account of British feeling towards Germany was -perfectly unbiased, may also be inferred from another piece of news -which reached Ballin about the same time from a British source, and -which reads as follows: - - "My only object in writing just now is to say that if there is any - feeling in high quarters in your country favourable to coming to an - understanding with this country concerning naval matters, I am - quite satisfied from the inquiries I have made that the present - would be an opportune time for approaching this question, and that - the present Government of this country would be found entirely - favourable to coming to such an arrangement." - -However, by that time, the matter was in the hands of the various -departments, and they proved unable to make a success of it. Why they -failed, and why the step which Herr v. Bethmann had taken with the -British Ambassador produced no results, are questions which can only be -answered by reference to the files of the Foreign Office. - -Mr. Asquith, in a speech dealing with the British naval programme -delivered on July 14th, 1910, explained 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 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 approached 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 assumption is correct, it -is evident that no touch of political genius was revealed in the -treatment of this important question. Even the hope that the "crest of -the wave" had been reached turned out a disappointment, as was proved by -the introduction of the new Navy Bill in 1912. - -The objections which Herr v. Bethmann, on March 30th, 1911, raised to an -international limitation of armaments can likewise only be described as -formal ones. He said: - - "If it is the intention of the Powers to come to an understanding - with regard to general international armaments, they must first of - all agree upon a formula defining the relative 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 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 conformity 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 congress--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 10th, 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 conducted in a spirit - of mutual friendship, we have always given prominence to our - conviction that a frank discussion of the economic and political - spheres of interest to be followed up by a mutual understanding on - these points would constitute the safest way of destroying the - feeling of distrust which is engendered by the question of the - respective strengths of the military and naval forces maintained by - each country." - -The speech which Sir Edward Grey delivered in the House of Commons on -March 14th, 1911, with special reference to this speech of Herr v. -Bethmann shows unmistakably that the remarks of the latter did not -reassure Great Britain with respect to the only point at issue in which -she was interested, viz. the limitation of the German naval programme. -Britain, according to Sir Edward, did not desire that her relations with -any Power should be of such a nature as to impede the simultaneous -existence of cordial relations with Germany. An Anglo-German agreement -had been specially suggested. This suggestion required some careful -thinking over. If he were to hold out any hope that Germany, in -compliance with the terms of some such agreement would be willing to -cancel or to modify her naval programme, he would be contradicted at -once. Only within the limits of this programme would it be possible to -come to some understanding between the two Governments. It might, for -instance, be agreed to spread the expenditure voted for the navy over a -longer term of years, or to arrange that the present German programme -should not be increased in future. Matters such as these could form the -subjects for discussion between the two Governments, and it would be -desirable from every point of view that an understanding should be -arrived at. To this speech the _North German Gazette_ replied that -Germany would be quite prepared to fall in with Sir Edward's suggestions -if agreements such as those outlined by him could in any way allay the -feeling of distrust governing public opinion in Great Britain. If from -this semi-official pronouncement it may be inferred that Herr v. -Bethmann on his part was favourably disposed towards an agreement, the -question arises: "Why was it not concluded?" - -In order to understand why the British Cabinet attached so much value to -the settlement of the Anglo-German naval questions and to the -pacification of public opinion, it must be remembered that the Liberal -Cabinet, owing to its hostile attitude towards the House of Lords, had -drifted into a violent conflict with the Conservative party, and that -the latter, in its turn, during the election campaign had accused the -Cabinet of having neglected the navy, driving home its arguments by -constantly pointing out the "German danger." Moreover, King Edward had -died in the meantime (May 6th, 1910), and of his son and successor it -was said that he, at the time of his accession to the throne, was no -longer a man of unbiased sentiment, that he was very anti-German, and -that he was under the influence of a small group of Conservative -extremists. - -It may not be out of place to reproduce in this connexion the text of -two accounts dealing with the situation in England which Ballin wrote in -the spring and in the summer of 1910 respectively, when he was staying -in London, and which he submitted to the Kaiser for his information. - -In the early part of 1910 he wrote: - - "If I were to say that London was completely dominated 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 admirable calm, have now lost their heads altogether, - and are the most ardent advocates of Tariff Reform. Every victory - of a Conservative candidate is cheered by them to the echo. Under - 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 commonsense business - people, we find that there are several reasons for it, viz. the - general slump in business; the unfortunate policy cf 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 policy. This disposition is - further strengthened by the constant reiteration of the promise - that it will be possible to provide the money needed for new - warship construction and for the newly inaugurated social policy by - means of the duties which the foreigner will be made to pay. - - "It seems pretty certain that the present Government, in spite of - the great election successes gained by the Conservative 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 said - before, Tariff Reform and a Zollverein 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 future. 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 - excitement of the masses is raised to boiling-point. Within a few - months' time, I am sure, things will look entirely different - again." - -From the second report, in the summer of 1910, the following is the -salient extract: - - "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 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 elections 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 saturated and - conservative habits of life would soon make them a _quantité - négligeable_ 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 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 pronouncement led to violent attacks on -the part of the Conservative opposition against Herr v. Bethmann and -against England, and it was the latter against whom Herr v. Heydebrand -directed his quotation from Schiller, to the effect that a nation which -did not stake her everything on her honour was deserving only of -contempt. It is also well known that the outcome of the whole affair, as -well as its sequel, the Franco-German Congo agreement, produced much -indignation in Germany, where it was felt that the material results -obtained were hardly worth the great display of force, and that it was -still less worth while to be drifted into a big war in consequence of -this incident. - -The measure of the anxiety which was felt at that time in business and -financial circles all over the world may be gauged by reading the -following letter from Ballin to the Secretary of State, Herr v. -Kiderlen-Wächter, in which it is necessary to read between the lines -here and there. - - "Baron Leopold de Rothschild has just sent me a wire from London in - which he says that, on the strength of information 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 statement, 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 1911. - -This article deals with the Anglo-German controversy and was published -by the _Westminster Gazette_. It was sent to Ballin by an English friend -with the remark that it presented a faithful picture of the views on -foreign affairs held by the great majority of British Liberals. Ballin -forwarded it to Berlin for the Kaiser's information, with a note saying -that he had received it from one of the most level-headed Englishmen he -had ever met. It was subsequently returned to him, with the addition of -a number of marginal notes and a lengthy paragraph at its close, all -written in the Kaiser's own handwriting. The numerous underlinings, too, -are the Kaiser's own work. On account of its historical interest a -facsimile reproduction of this article is inserted at the end of the -book. The following is a translation of the Kaiser's criticism at the -conclusion of the article: - - "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 establishment - of a united Continent--a contingency which they want to prevent at - all costs. Hence their lying assertion that we aim at a predominant - position in Europe, while it is a fact that they claim such a - position for themselves in world politics. We Hohenzollerns have - never pursued such ambitious 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 foundation of a German -African empire stretching from the Atlantic to the Indian Ocean." -Similar sentiments were expressed in a letter from Sir Ernest Cassel to -Ballin, dated January 9th, 1912. - - "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 limitations 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 -incident of 1911 had shown how easily a series of comparatively -unimportant events might lead within reach of a dangerous catastrophe, -unless the atmosphere of general distrust could be removed, and it was -felt in Great Britain that this distrust was largely the result of the -constant and regular increase of Germany's armaments. Moreover, it was -known that a new Navy Bill was then forthcoming in Germany which, in its -turn, would be bound to cause fresh alarm, and growing expenditure in -Great Britain, and that the Liberal Cabinet would prefer to gain its -laurels by bringing about a more peaceful frame of mind. Finally, Mr. -Winston Churchill had been appointed First Lord of the Admiralty in -October, 1911, and as he was known to be by no means anti-German, his -entering upon office may have given rise to the hope that, while he was -administering the affairs of the Navy, it would be possible to settle -certain purely technical matters affecting his department, which could -then furnish the conditions preliminary to an understanding with -Germany. Ballin, at any rate, had cherished the hope--as is borne out by -the letter quoted above--that Mr. Churchill could be induced to pay a -visit to Germany, and that an opportunity might then be found to bring -the naval experts of both countries face to face with each other. Ballin -had always eagerly desired that such a meeting should take place, -because his long experience in settling difficult business questions had -taught him that there was no greater barrier between people, and -certainly none that hampered their intellectual _rapprochement_ to a -larger extent, than the fact of their never having come into personal -contact with one another, and of never having had a chance to actually -familiarize themselves with the mentality and the whole personality of -the man representing the other side. It might also be assumed that, once -the two really responsible persons--Churchill and Tirpitz--had met in -conclave, the feeling of their mutual responsibility would be too strong -to allow the negotiations to end in failure. - -Unfortunately, such a meeting never took place; all that was achieved -was a preliminary step, viz. the visit of Lord Haldane to Berlin. - -Owing to the lack of documentary evidence it is not possible to say who -first suggested this visit, but it is clear that the suggestion--whoever -may have been its author--was eagerly taken up by Sir Ernest Cassel and -Ballin, and that it also met with a warm welcome on the part of Herr v. -Bethmann. In reply to a telegram which Ballin, with the approval--if not -at the actual desire--of the Chancellor, sent to his friend in London, a -message reached him on February 2nd, 1912, when he was in Berlin engaged -on these very matters. This reply, which originated with the Foreign -Office, expressed the sender's thanks for the invitation to attend a -meeting of delegates in Berlin and his appreciation of the whole spirit -which had prompted the German suggestion, and then went on to say that -the new German Navy Bill would necessitate an immediate increase in the -British naval estimates, because the latter had been framed on the -supposition that the German programme would remain unaltered. If the -British Government were compelled to find the means for such an -increase, the suggested negotiations would be difficult, if not -impossible. On the other hand, the German programme might perhaps be -modified by spreading it out over a longer period of time or by some -similar measure, so that a considerable increase of British naval -construction in order to balance the German efforts could be avoided. In -that case the British Government would be ready to proceed with the -negotiations without loss of time, as it would be taken for granted that -there was a fair prospect of the proposed discussions leading to a -favourable result. If this suggestion was acceptable to Germany, the -British Government thought the next step should be a private--and not an -official--visit of a British Cabinet Minister to Berlin. - -Perhaps it is now permissible to give the text of some documents without -any further comment, as these latter speak for themselves. The first is -a letter of the Chancellor addressed to Ballin, and reads as follows: - -"BERLIN. _Febr. 4th, 1912._ - -"DEAR MR. BALLIN,-- - - "We are still busy wording the text of our reply, and I shall not - be able to see you at 11 o'clock. As soon as the text is settled, I - shall submit it to His Majesty for his approval. Under these - circumstances I think it is doubtful whether we ought to adhere to - the time fixed for our appointment. I rather fancy that I cannot - tell you anything definite before 12 or 1 o'clock, and I shall ring - you up about that time. You have already made such great sacrifices - 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 Bill as it stands now only asks for - half as much as was contained in the original draft. This reduced - demand is much less than the nation and the Reichstag had expected. - If after this a still further curtailment is decided upon, such a - step will create the highly undesirable impression that, in order - to pave the way for an understanding with London, it had become - necessary to make very considerable sacrifices. This, of course, - must be avoided at all costs, because if and when an understanding - is arrived at, there must be neither victors nor vanquished. - - "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_ discussion.' Thus there is now a fair - prospect of reaching a favourable result, and the preliminary - condition laid down by your Government has been complied with. - - "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 assurance 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 - undertaking on our part, whereas you should be at liberty to extend - your programme whenever you think fit to do so. A clearly defined - neutrality agreement is another factor which will enter into the - question of granting the concessions demanded by your Government. - - "'Reciprocal assurances' is a term which it is difficult to define; - if, for instance, the attitude of Great Britain and her action last - summer had been submitted to a court of law, it would hardly be - found to have violated the obligations 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 consider 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 also necessary, and it - goes without saying that I shall be present as well. - - "P.S.--The Chancellor to whom I have shown this letter thinks it - would be better not to send it, because the official note contains - all that is necessary. - - "However, I shall forward it all the same, because I believe it - will present a clearer picture of the situation to you than the - note. Please convince the delegate that it is a matter of give and - take, and please come. It entails a great sacrifice on your part, - but the cause which we have at heart is worth it. - - "The bearer of this note is our general secretary, Mr. Huldermann. - He is a past master of discretion, and fully acquainted with the - situation." - -I was instructed to hand the following note by the German Government to -Sir Ernest Cassel with the request to pass it on to the British -Government, and at the same time I was to explain verbally and in -greater detail the contents of Ballin's letter on the situation. - -The text of the official note is as follows: - - "We are willing to continue the discussion in a friendly spirit. - The Navy Bill is bound to lead to a discussion of the naval plans - of both countries, and in this matter we shall be able to fall in - with the wishes of the British Government if we, in return, receive - sufficient guarantees as to a friendly disposition of British - policy towards our own interests. Any agreement would have to state - that either Power undertakes not to join in any plans, - combinations, or warlike complications directed against the other. - If concluded, 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 discussion only." - -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 - continue 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 accommodating - 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 positive 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 increase, 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 - Government lest Great Britain should take advantage of the fact - that Germany had her hands tied, in order to effect big armaments - which it would be impossible for us to equal, our 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 previously put forward that the question of agreeing - upon a definite ratio of strength for the two navies should be - discussed; because, if this was done, one would get lost in the - details. Nevertheless, he did not, as the discussion proceeded, - 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 complain of British opposition to - her legitimate expansion, one could not do better than discuss the - various points at issue one by one, similar to the method which had - proved so successful in the case of the Anglo-French negotiations. - Great Britain would not raise any objections to our desire for - rounding-off our colonial empire, and she was quite willing to - grant us our share in the distribution of those parts of the globe - that were still unclaimed. - - "By keeping strictly to the literal text of the German note, he - found the latter quite acceptable as far as it referred to the - question of a declaration of neutrality. He said there was a great - difference between such declarations, and often it was quite - possible to interpret them in various ways. I imagined that what - was in his mind were the obligations which Britain had taken upon - herself in her agreement with France, and I therefore asked him for - a definition of the term 'neutrality.' His answer was very guarded - and contained 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 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 conceded to the other Powers, but not more. We - could rely on her absolute loyalty, 'and,' he added, 'our attitude - towards France proves that we can be loyal to our friends.' - - "For the rest, the manner in which he pleaded the British point of - view was highly interesting. Great Britain, he argued, had done - great things in the past, but owing to her great wealth a decline - had set in in the course of the last few decades. ('Traces of this - development,' he added, 'have also been noticeable in your - country.') Germany, however, had made immense progress, and within - the next fifteen or twenty years she would overtake Great Britain. - If, then, such a dangerous competitor commenced to increase his - armaments in a manner which could be directed only against Britain, - he must not be surprised if the latter made every effort to check - him wherever his influence was felt. Great Britain, therefore, - could not remain passive if Germany attempted to dominate the whole - Continent; because this, if successful, would upset the Balance of - Power. Neither could she hold back in case Germany attacked and - annihilated France. Thus, the situation being what it was, Britain - was compelled--provided the proposed agreement with Germany was not - concluded--to decide whether she would wait until her competitor - had become still stronger and quite invincible, or whether she - would prefer to strike at once. The latter alternative, he thought, - would be the safer for her interests. - - "Our friend had a copy of the German note made by his secretary, - and then forwarded it to Haldane. In the course of the evening the - latter sent an acknowledgment of its 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 understand 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 disparaging terms, - saying that they had been worth nothing since Bismarck's time. What - Ballin had attained in his dealings with the shipping companies was - far superior to all the achievements of Germany's diplomatists." - -The positive information which this report contained was passed on to -the Chancellor. - -By way of explanation it may be added that the German Navy Bill, which -later on, at the end of March, 1912, was laid before the Reichstag, -provided for the formation of a third active squadron in order to adapt -the increase in the number of the crews to the increase in the material. -This third squadron necessitated the addition of three new battleships -and of two small cruisers, and it was also intended to increase the -number of submarines and to make provision for the construction of -airships. - -The discussions with Lord Haldane took place at the Royal Castle, -Berlin, on February 9th, the Kaiser being in the chair. The Chancellor -did not attend, he had a separate interview with Haldane. The outcome of -the conference is described in a statement from an authoritative source, -viz. in a note which the Kaiser dispatched to Ballin by special -messenger immediately after the close of the conference. It reads as -follows: - -"THE CASTLE, BERLIN. -"9.2.1912. 6 P.M. - -"DEAR BALLIN, - - "The conversation has taken place, and all the pros and many cons - have been discussed. Our standpoint has been explained in great - detail, and the Bill has been examined. At my suggestion, it was - resolved to agree on the following basis (informal line of action): - - "(1) Because of its scope and its importance, the Agreement must be - concluded, and it must not be jeopardized by too many details. - - "(2) Therefore, the Agreement is not to contain any reference 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 perfectly 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 unfortunately during that time Mr. Churchill made a speech -which not only the German papers but also the Liberal Press in Great -Britain described as wanting in discretion. The passage which German -opinion resented most of all was the statement that, in contrast with -Great Britain, for whom a big navy was an absolute necessity, to Germany -such navy was merely a luxury. - -For the rest, the following two letters from the Chancellor to Ballin -may throw some light on the causes of the break in the negotiations: - -"BERLIN. -"2.3.1912. - -"DEAR MR. BALLIN, - - "Our supposition that it is the contents of the Bill which have - brought about the change of feeling is confirmed by news from a - private source. It is feared that the Bill as it stands will have - such an adverse influence on public opinion that the latter will - not accept a political agreement along with it. Nevertheless, the - idea of an understanding has not been lost sight of, even though it - may take six months or a year before it can be accomplished. - - "In consequence of this information the draft reply to London - requires to be reconsidered, and it has not been dispatched so far. - I shall let you know as soon as it has left. - -"Sincerely yours. -"(_Signed_) BETHMANN-HOLLWEG." - - - -"BERLIN. -"8.3.1912. - -"DEAR MR. BALLIN, - - "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 relations 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 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 appreciated. - - "Many thanks for your news. You know that and why I was prevented - from writing these last few days. - -"Sincerely yours, -"(_Signed_) BETHMANN-HOLLWEG." - - - -In order to find out whether any foreign influence might have been at -work in London, I was commissioned to meet Sir Ernest Cassel in the -South of Europe early in March. Ballin supplied me with a letter -containing a detailed account of the general situation. Owing to a delay -in the proposed meeting, I took the precaution of burning the letter, as -I had been instructed to do, and I informed Sir Ernest of its contents -by word of mouth. - -In this document Ballin gave a brief résumé of the situation as it -appeared to him after his consultations with the various competent -departments in Berlin, somewhat on the following lines: - -(1) After Lord Haldane's return Sir Edward Grey officially told Count -Metternich that he was highly pleased with the successful issue of Lord -Haldane's mission, and gave him to understand that he thought it -unlikely that any difficulties would arise. - -(2) A few days later Mr. Asquith made a statement in the House of -Commons which amply confirmed the views held by Sir Edward Grey, and -which produced a most favourable impression in Berlin. - -(3) This induced the Chancellor to make an equally amicable and hopeful -statement to the Reichstag. - -(4) In spite of this, however, there arose an interval of several weeks, -during which neither Count Metternich nor anybody in Berlin received any -news from the proper department in London. This silence naturally caused -some uneasiness. - -(5) Count Metternich was asked to call at the Foreign Office, where Sir -Edward Grey commenced to raise objections mainly in reference to the -Navy Bill. "I must add in this connexion--as, no doubt, Lord Haldane has -also told you verbally--that on the last day of his stay in Berlin an -understanding was arrived at between the competent quarters on our side -and Lord Haldane with regard to the building dates of the three -battleships. As you will remember, it had been agreed not to discuss the -proposed establishment of the third squadron on an active footing and -the increase in the number of the crews connected with it, but to look -upon these subjects as lying outside the negotiations." Quite suddenly -and quite unexpectedly we are now faced with a great change in the -situation. Grey, as I have said before, objects--in terms of the -greatest politeness, of course--to the increase in the number of the -crews, asks questions as to our intentions with regard to torpedo boats -and submarines, and--this is most significant--emphasizes that the -Haldane mission has at any rate been of great use, even if the -negotiations should not lead to any definite result. - -(6) The next event was a further interview with Count Metternich during -which it was stated that, according to the calculations of the First -Lord of the Admiralty, the increase in the number of the crews amounted -to 15,000 men, whilst it had been thought in England that it would be a -question of from 4,000 to 5,000 men at the outset. It appeared that this -large increase was looked upon with misgivings, and that it was desired -to enter into fresh negotiations which would greatly interfere with the -arrangements made by the German competent quarters with regard to the -navy. Hence Metternich replied that, in his opinion, these explanations -could only mean that the Cabinet did not agree to the arrangements made -by Lord Haldane. Grey's answer was full of polite assurances couched in -the language of diplomacy, but, translated into plain German, what he -meant was: "You are quite right." - -Ballin's letter went on to say that the German Navy Bill had gradually -been reduced to a minimum, and that it was not possible to cut it down -any further. We could not, and we would not, give rise to the suspicion -that great alterations had been made merely to meet British objections. -Finally, Ballin requested his friend to go to London in order to make -inquiries on the spot, and also declared his readiness to go there -himself. - -My report on my conversations with Sir Ernest Cassel, which took place -at Marseilles on March 9th and 10th, is as follows: - - "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 Metternich, 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 - memorandum 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 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 perhaps 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 presented such a long list of - the wishes with which she wanted Great Britain to comply, that the - least one could hope for was an accommodating spirit in the - question of the Navy. Everything now depended on Churchill; if he - could be satisfied, all the rest would be plain sailing. He and - Lloyd George were the greatest friends of the agreement. Sir Ernest - also made it fairly clear that Great Britain would be content with - a postponement of the building dates, or in other words with a - 'retardation of the building programme.' The negotiations would be - bound to fail, unless Ballin could secure such a postponement. It - was necessary to strike whilst the iron was hot, and this - particular iron had already become rather cool. He quite accepted - Grey's statement that the Haldane mission had not been in vain, as - the feeling had doubtless become more friendly since then. Some few - individual indiscretions, such as Churchill's reference to the - German Navy as an article of luxury, should not be taken too - seriously. If the German Bill were passed into law in its present - shape, the British Government would be obliged to introduce one - asking for three times as much, but it could not possibly do this - and declare at the same time that it had reached an understanding - with Germany. Such a proceeding would be absurd. The argument that - it is inconsistent 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 authoritative. They look upon the - present situation as decidedly pacific; they are pleased that the - Morocco affair is settled, and they feel quite sure that the - political sky is unclouded by complications. They would gladly - welcome an agreement between Germany and Great Britain. My friends - assure me that the Government also does not view the idea of such - an understanding with displeasure; on the contrary, it looks upon - it as an advantage. It is, however, thought unlikely that an - agreement will be reached, because it is believed that popular - feeling in Germany is too much opposed to it. If, notwithstanding - these pacific views held by influential and competent sections, the - casual visitor to the French capital is impressed by a certain - bellicose attitude of the nation as a whole, it is largely due to - the propaganda carried on by the _Matin_ with the purpose of - obtaining voluntary subscriptions for the furtherance of aviation. - The French are enthusiastic over this idea, and as it has a strong - military bearing, the man in the street likes to connect the French - aviation successes with a victorious war." - -From London Ballin sent me some telegrams which I was instructed to pass -on to the Chancellor. In these messages he stated that his conversations -with the German Ambassador and with Haldane had convinced him that -people in London believed that the increase in the number of the crews, -if the proposed German Navy Bill became law, would be greater than the -figures given by Berlin would make it appear. It would therefore be most -desirable to arrange for a meeting of experts to clear up this -discrepancy. Ballin's impression was that the British Cabinet, and also -the King, were still favourably disposed to the whole plan, and that the -Cabinet was unanimous in this view. A conversation with Churchill, which -lasted several hours, confirmed these impressions. In London the -increase in the number of the crews had previously been estimated at -half of what it would really be, and alarm was felt about the large -number of torpedo boats and submarines demanded; but since the German -Government had explained that the figures arrived at in London--i.e. -those stated in the memorandum which had been addressed to the German -Government some time before--were not correct, Churchill had agreed that -both sides should nominate experts who would check the figures and put -them right. Churchill was anxious to see that the matter was brought to -a successful issue, and he was still hoping that a neutrality agreement -would induce the German Government to make concessions in regard to the -Navy Bill. - -When Ballin had satisfied himself as to this state of things, he -immediately returned to Berlin, as he did not consider it appropriate -that any private person should do anything further for the time being, -and as he thought that the conduct of the discussions concerning the -neutrality agreement were best left to the Ambassador. - -Meanwhile, however, the German Government had definitely made up its -mind that the Navy Bill would have to remain as it stood. This was the -information Ballin received from the Kaiser and the Chancellor when he -returned from London on March 16th. - -Sir Ernest Cassel then suggested to the British Government that the -negotiations concerning the neutrality agreement should be re-opened as -soon as the first excitement caused by the Navy Bill had subsided, which -would probably be the case within a few months, and that the interval -should be utilized for clearing up the details. In Berlin, however, the -discussions were looked upon as having been broken off, as may be seen -from the following telegram which the Kaiser sent to Ballin on March -19th in reply to Ballin's information about his last exchange of -telegrams with London: - - "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." - - - -That the negotiations had actually been broken off was confirmed to -Ballin by a letter of the Chancellor of the same date: - -"DEAR MR. BALLIN, - - "My cordial thanks for your letter of the 18th. What your friend - told Metternich is identical with what he wired you. Churchill's - speech did not come up to my expectations. He really seems to be a - firebrand past praying for. The Army and Navy Bills will probably - not go up to the Federal Council until the 21st, as the Army Bill - requires some amendments at the eleventh hour. Their contents will - be published simultaneously. - - "My opinion is that our labours will now have to be stopped - altogether for some time. The problem before us suffers from the - defect that, because of its inherent difficulties, it admits of no - solution. I shall always remain sincerely grateful to you for your - loyal assistance. When you come to Berlin next time, please don't - forget to call at the Wilhelmstrasse. - -"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 sincerity were beyond doubt--was -disowned by his fellow-members in the Cabinet. - -When Ballin, in compliance with the wishes of the Foreign Office, went -to London during the critical period before the outbreak of the war in -1914, he wrote a letter from there to a naval officer of high rank with -whom he had been on terms of friendship for years. This document is of -interest now because it shows what Ballin's own standpoint was with -regard to the views described in the previous paragraph: - - "People over here," he wrote, "do not believe that negotiations - 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 soundness of the - argument that, if the responsible leaders of British naval policy - keep expressing their desire to enter into a discussion, 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 entitled to - dismiss this subject without entering upon a discussion of the - interesting and remarkable arguments which Winston Churchill put - before me last night. I cannot, however, refrain from contradicting - by a few brief words the contention that the motives which had - prompted the Haldane mission were not sincere. A conversation with - Sir Edward Grey the night before last has strengthened this - conviction of mine still further. I regard Sir Edward as a serious, - honest, and clever statesman, and I am sure you will agree with my - view that the Haldane mission has cleared the atmosphere - surrounding Anglo-German relations which had become very strained." - -It may be supposed that history, in the meantime, has proved whose -standpoint was the correct one: that of the business man or that of the -naval expert. - -Not much need be said about the subsequent development of events up to -the outbreak of the war. - -The above-mentioned opinion which the Chancellor held regarding -Churchill's speech of March 18th, 1912, was probably arrived at on the -strength of the cabled reports only. Whoever reads the full original -text of the speech must fail to find anything aggressive in it, and -there was no harm in admitting that it was a perfectly frank and honest -statement concerning the naval rivalry of the two Powers. Among other -things it contained the suggestion that a "naval holiday" should be -agreed upon, i.e. both countries should abstain from building new ships -for a definite period. We, at any rate, looked upon Churchill's speech -as a suitable means of making people see what would be the ultimate -consequences of the interminable naval armaments. I made a German -translation of it which, with the aid of one of the committees for an -Anglo-German understanding, I spread broadcast all over the country. -However, it proved a complete failure, as there were powerful groups in -both countries who contended that the efforts to reconcile the two -standpoints could not lead to any positive result, and that the old -injunction, _si vis pacem, para bellum_, indicated the only right -solution. Only a master mind could have overcome these difficulties. But -Herr v. Bethmann, as we know, considered that the problem, for inherent -reasons, did not admit of any solution at all, and the Kaiser's initial -enthusiasm had probably been damped by subsequent influences of a -different kind. Ballin himself, in later years, ascribed the failure of -the mission to the circumstance that the Kaiser and his Chancellor, -between themselves only, had attempted to bring the whole matter to a -successful issue instead of entrusting this task to the Secretary of -Foreign Affairs and to Admiral Tirpitz, the Secretary for the Navy. - -An interesting sidelight on the causes which led to the failure of this -last important attempt to reach an understanding is thrown by the -rumours which were spread in the German Press in March, 1912, to the -effect that the Secretary of State for Foreign Affairs, Herr v. -Kiderlen, wished to resign, because he felt that he had been left too -much in the dark with regard to the Anglo-German negotiations. It was -also reported that the Chancellor's position had been shaken, and that -Admiral Tirpitz felt dissatisfied, because the Navy Bill did not go far -enough. Probably there was some vestige of truth in all these rumours, -and this may have been connected with the attitude which the three -gentlemen concerned had taken up towards the question of the -negotiations with Great Britain. - -Shortly after the visit of Lord Haldane Ballin received a letter from a -personage belonging to the Kaiser's entourage in which it was said: - - "The impression which has taken root with me during the many hours - which I spent as an attentive listener is that your broad-minded - scheme is being wrecked by our official circles, partly through - their clumsiness, and partly through their bureaucratic conceit, - and--which is worse--that we have failed to show ourselves worthy - of the great opportunity." - -When it had become certain that the last attempt to reach an -understanding had definitely and finally failed, the ambassador in -London, Count Metternich, did not shrink from drawing the only possible -conclusion from it. He had always expressed his conviction that a war -between Germany and a Franco-Russian coalition would find Great Britain -on the side of Germany's opponents, and his resignation--which, as -usual, was explained by the state of his health--was really due to a -report of his in which he stated it as his opinion that a continuation -of German armaments would lead to war with Great Britain no later than -1915. It is alleged that the Kaiser added a very "ungracious" marginal -note to this report. Consequently, the ambassador, who was a man of very -independent character, did the only thing he could consistently do, and -resigned his office. In taking this step he may have been influenced by -the reception which the failure of the Haldane mission met with in -Conservative circles in Great Britain, where no stone was left unturned -to urge the necessity for continuing the policy of big armaments and to -paint German untrustworthiness in the most glaring colours. - -Count Metternich's successor was Herr v. Marschall, a gentleman whose -appointment the Press and the official circles welcomed with great -cordiality, and from whose considerable diplomatic abilities, which were -acknowledged on all sides, an improvement of Anglo-German relations was -confidently expected. It was said that the Kaiser had sent "his best -man," thus demonstrating how greatly he also desired better relations. -But Herr v. Marschall's activities came to a sudden end through his -early death in September, 1912, and in October his place was taken by -Prince Lichnowsky, whose efforts in the direction of an improvement in -the relations are familiar to everyone who has read his pamphlet. Apart -from the work performed by the ambassadors, great credit is also due to -the activities displayed by Herr v. Kühlmann, the then Secretary to the -Legation and subsequent Secretary of State. The public did not see a -deal of his work, which was conducted with skill and was consistent. His -close personal acquaintance with some of the leading British -politicians, especially with Sir Edward Grey, enabled him to do much -work for the maintenance of good relations and in the interest of -European peace, particularly during the time when the post of ambassador -was vacant, and also during the Balkan War. He had, moreover, a great -deal to do with the drafting of the two colonial agreements dealing with -the Bagdad Railway and the African problems respectively, both of which -were ready for signature in the summer of 1914. The former especially -may be looked upon as a proof not only that a considerable improvement -had taken place in Anglo-German relations, but also that Great Britain -was not inclined to adjust the guiding lines of her policy in Asia Minor -exclusively in conformity with the wishes of Russia. Anybody who takes -an interest in the then existing possibilities of German expansion with -the consent of Great Britain and on the basis of these colonial draft -agreements cannot do better than read the anonymous pamphlet entitled -"_Deutsche Weltpolitik und kein Krieg_" ("German World Power and No -War"), published in 1913 by Messrs. Puttkamer & Mühlbrecht, of Berlin. -The author is Dr. Plehn, the then representative of the _Cologne -Gazette_ in London, and it partly reflects the views of Herr v. -Kühlmann. - -In this connexion I should like to refer briefly to an episode which -took place towards the close of 1912. The German periodicals have -already discussed it, especially the _Süddeutsche Monatshafte_ in June, -1921, in a review of the reports which Count Lerchenfeld, the Bavarian -minister to the Court of Berlin, had made for the information of his -Government. In these reports he mentions an event to which the Kaiser -had already referred in a letter to Ballin dated December 15th, 1912. -The Kaiser, in commenting on the state of tension then existing between -Austria and Serbia, made some significant remarks concerning the policy -of Germany towards Austria-Hungary. When the relations between Vienna -and Petrograd, he wrote, had assumed a dangerous character, because it -was recognized that the attitude of Serbia was based on her hope of -Russian support, Germany might be faced with the possibility of having -to come to the assistance of Austria. - - "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 Monarchy against Serbia. Austria had - arrived at the cross roads, and her whole future development hung - in the balance. Either the German element would retain its - ascendancy, in which case she would remain a suitable ally, or the - Slav element would gain the upper hand, and she would cease to be - an ally altogether. If we were compelled to take up arms, we should - do so to assist Austria not only against Russian aggression, but - also against the Slavs in general, and in her efforts to remain - German. That would mean that we should have to face a racial - struggle of the Germanic element against Slav insolence. It is - beyond our power to prevent this struggle, because the future of - the Habsburg monarchy and that of our own country are both at - stake. (This was the real meaning of Bethmann's very plain - speaking.) It is therefore a question on which depends the very - existence of the Germanic race on the continent of Europe. - - "It was of great importance to us that Great Britain had so far - supported 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 - which might easily lead to the formation of a united continent. - Great Britain could therefore never allow France to be crushed by - us. You can imagine the effect of this piece of news on the whole - of the Wilhelmstrasse. I cannot say that I was taken by surprise, - because I, as you know, have always looked upon Great Britain as an - enemy in a military sense. Still, this news has decidedly cleared - matters up, even if the result is merely of a negative character." - -Ballin did not omit to ask his friend for some details concerning the -visit of Lord Haldane mentioned in the Kaiser's letter, and was -furnished with the following explanation by Lord Haldane himself. - -Nothing had been further from his intentions, he said, than to call on -Prince Lichnowsky for the express purpose of making any such -declaration; and Balkan questions, to the best of his recollection, had -not been touched at all. He had spent a very pleasant half-hour with the -Prince, and in the course of their conversation he had seen fit to -repeat the formula which had been discussed during his stay in Berlin, -and which referred to Britain's interest in the preservation of the -integrity of France. This, possibly, might have given rise to the -misunderstanding. - -Prince Lichnowsky himself, in his pamphlet entitled "My London Mission," -relates the incident as follows: - - "In my dispatches sent to Berlin I pointed out again and again that - Great Britain, being a commercial country, would suffer enormously - through any war between the European Powers, and would prevent it - by every means within her power. At the same time, however, she - could never tolerate the weakening or the crushing of France, - because it would disturb the Balance of Power and replace it by the - ascendancy of Germany. This view had been expressed to me by Lord - Haldane shortly after my arrival, and everybody whose opinion - counts for anything told me the same thing." - -The failure of the negotiations aiming at an understanding led to a -continuance of the increase in the British armaments, a concentration of -the British battle fleet in the North Sea, and to that of the French -fleet in the Mediterranean. The latter arrangement was looked upon in -Germany as a menace directed against Italy, and produced a sharp -semi-official criticism in the _Frankfurter Zeitung_. In spite of all -this, however, friendly messages from London concerning the -possibilities of an understanding, the "naval holiday," etc., reached -Germany from time to time. - -How closely Ballin clung to his favourite idea that the naval experts of -both countries should come to an understanding is demonstrated by the -circumstance that in 1914, when the British squadron was present during -the Kiel yachting week, he tried to bring about a meeting and a personal -exchange of views between Churchill and Tirpitz. - -Churchill was by no means disinclined to come to Germany for this -purpose, but unfortunately the desire was expressed by the German side, -and especially by the Kaiser, that the British Government should make an -official inquiry whether his visit would be welcomed. The Government, -however, was not disposed to do so, and the whole thing fell through, -although Churchill sent word that, if Tirpitz really wanted to see him, -he would find means to bring about such a meeting. - -Thus the last attempt at an understanding had resulted in failure, and -before any further efforts in the same direction could be made, Europe -had been overtaken by its fate. - - - - -CHAPTER IX - -THE KAISER - - -The origin of the friendship between Ballin and the Kaiser, which has -given rise to so much comment and to so many rumours, was traced back by -the Kaiser himself to the year 1891, when he inspected the express -steamer _Auguste Victoria_, and when he, accompanied by the Kaiserin, -made a trip on board the newly-built express steamer _Fürst Bismarck_. -Ballin, although he received the honour of a decoration and a few -gracious words from His Majesty, did not think that this meeting had -established any special contact between himself and his sovereign. He -told me, indeed, that he dated their acquaintance from a memorable -meeting which took place in Berlin in 1895, and which was concerned with -the preparations for the festivities in celebration of the opening of -the Kiel Canal. - -The Kaiser wanted the event to be as magnificent as possible, and his -wishes to this effect were fully met by the Hamburg civic authorities -and by the shipping companies. Although Ballin had only been a short -time in the position he then held, his versatile mind did not overlook -the opportunity thus offered for advertising his company. The Kaiser was -keenly interested in every detail. After some preliminary discussions -with the Hamburg Senate, all the interested parties were invited to send -their delegates to Berlin, where a general meeting was to be held in the -Royal Castle with the Kaiser in the chair. It was arranged that the -North German Lloyd and the Hamburg-Amerika Linie should provide one -steamer each, which was to convey the representatives of the Government -departments and of the Reichstag, as well as the remaining guests, -except those who were to be accommodated on board the _Hohenzollern_, -and that both steamers should follow in the wake of the latter all the -way down the Elbe from Hamburg to the Canal. When this item was -discussed the Kaiser said he had arranged that the _Hohenzollern_ should -be followed first by the Lloyd steamer and then by the Hamburg-Amerika -liner. Thereupon Ballin asked leave to speak. He explained that, since -the journey was to start in Hamburg territorial waters, it would perhaps -be proper to extend to the Hamburg company the honour of the position -immediately after the Imperial yacht. The Kaiser, in a tone which -sounded by no means gracious, declared that he did not think this was -necessary, and that he had already given a definite promise to the Lloyd -people. Ballin replied that, if the Kaiser had pledged his word, the -matter, of course, was settled, and that he would withdraw his -suggestion, although he considered himself justified in making it. - -At the close of the meeting Count Waldersee, who had been one of those -present, took Ballin's arm and said to him: "As you are now sure to be -hanged from the Brandenburger Tor, let us go to Hiller's before it comes -off, to have some lunch together." Ballin never ceased to be grateful to -the Count for this sign of kindness, and his friendship with him and his -family lasted until his death. The arrangements made by the -Hamburg-Amerika Linie for the reception of its guests were carefully -prepared and carried out. It is not easy to give an idea to a non-expert -of the great many minute details which have to be attended to in order -to accommodate a large number of exacting visitors on a steamer in such -a manner that nobody finds anything to complain of, especially if, as is -but natural on an occasion such as this, an endless variety of -questions as to precedence and etiquette have to be taken into account. -Great pains and much circumspection are necessary to arrange to -everybody's satisfaction all matters affecting the reception of the -guests, the provision of food and drinks, the conveyance of luggage, -etc. Thanks to the infinite care, however, with which Ballin and his -fellow-workers attended to this matter, everything turned out eminently -satisfactory. In the evening, when the guests of the Hamburg-Amerika -Linie were returning to their steamer at the close of the festivities, -the company agreeably surprised them by providing an artistically -arranged collation of cold meats, etc., and the news of this spread so -quickly that from the other vessels people who felt that the official -catering had not taken sufficient account of their appetites, lost no -time in availing themselves of this opportunity of a meal. - -This event, at any rate, helped to establish the reputation of the -company's hospitality. - -It may be presumed that this incident had shown the Kaiser--who, -although he did not object to being contradicted in private, could not -bear it in public--that the Hamburg Company was animated by a spirit of -independence which did not subordinate itself to other influences -without a protest, and which jealously guarded its position. It must be -stated that the Kaiser never bore Ballin any ill will on account of his -opposition, which may be partly due to the great pains the Packetfahrt -took in order to make the festivities a success. The event may also have -induced the Kaiser to watch the progress of the Hamburg-Amerika Linie -after that with particular attention. His special interest was centred -round the provision for new construction, and in this matter he exerted -his influence from an early time in favour of the German yards. - -The first occasion of the Kaiser's pleading in favour of German yards -dates from the time previous to his accession to the throne. Ballin, in -a speech which he delivered when the trial trip of the s.s. _Meteor_ -took place, stated the facts connected with this intervention as -follows: The directors had just started negotiations with British -shipbuilding firms for the building of their first express steamer when -the Prussian Minister to the Free City of Hamburg called to inform them, -at the request of Prince Bismarck, that the latter, acting upon the -urgent representations of Prince Wilhelm, suggested that they should -entrust the building of the big vessel to a German yard. The Prince was -profoundly convinced that Germany, for the sake of her own future, must -cease to play the part of Cinderella among the nations, and that there -was no want of engineers among his countrymen who, if given a chance, -would prove just as efficient as their fellow-craftsmen in England. The -Packetfahrt thereupon entrusted the building of the vessel to the -Stettin Vulkan yard. She was the fast steamer _Auguste Victoria_, and -was christened after the young Empress. Launched in 1888, she -immediately won "the blue riband of the Atlantic" on her first trip. - -Another and still more practical suggestion of the Kaiser was put -forward at the time when the company were about to build an excursion -steamer. The satisfactory results which their fast steamers had yielded -during the dead season in the transatlantic passage business when used -for pleasure cruises had induced them to take this step, and when the -Kaiser's attention was drawn to this project, he, on the strength of the -experience he had made with his _Hohenzollern_, designed a sketch and -composed a memorandum dealing with the equipment of such a steamer. It -was Ballin's opinion that this Imperial memorandum contained some -suggestions worth studying, although it was but natural that the -monarch could not be expected to be sufficiently acquainted with all the -practical considerations which the company had to bear in mind in order -to make the innovation pay, and that, therefore, some of his -recommendations could not be carried out. - -If we remember what vivid pleasure the Kaiser derived from his own -holiday cruises, it cannot surprise us to see that he took such a keen -interest in the company's excursion trips. How keen it was may be -inferred from an incident which happened early in his reign, and to -which Ballin, when describing his first experiences on this subject, -referred in his above-mentioned speech on the occasion of the trial trip -of the _Meteor_. Ballin said: "Even among my most intimate associates -people were not wanting who thought that I was not quite right in my -mind when, at the head of 241 intrepid travellers, I set out on the -first pleasure cruise to the Far East in January, 1891. The Kaiser had -just inspected the vessel, and then bade farewell to the company and -myself by saying: 'That's right. Make our countrymen feel at home on the -open sea, and both your company and the whole nation will reap the -benefit.'" - -In after years the Kaiser's interest in the company chiefly centred -round those landmarks in its progress which marked the country's -expansion in the direction of _Weltpolitik_, e.g. its participation in -the Imperial Mail Service to the Far East, its taking up a share in the -African trade, etc. In fact, after 1901, when the Kaiser had keenly -interested himself in the establishment of the Morgan Trust and its -connexion with German shipping companies, there was scarcely an -important event in the history of the company (such as the extension of -its services, the addition of a big new steamer, etc.) which he allowed -to pass without a few cordial words of congratulation. He also took the -liveliest interest in the personal well-being of Ballin. He always sent -him the compliments of the season at Christmas or for the New Year, -generally in the shape of picture post-cards or photographs from his -travels, together with a few gracious words, and he never failed to -remember the anniversaries of important events in Ballin's life or to -inquire after him on recovering from an illness. Ballin, in his turn, -acquainted the Kaiser with anything which he believed might be of -interest to His Majesty, or might improve his knowledge of the economic -conditions existing in his own as well as in foreign countries. He kept -him informed about all the more important pool negotiations, e.g. those -in connexion with the establishment, in 1908, of the general pool, and -those referring to the agreements concluded with other German shipping -companies, etc. Whenever he noticed on his travels any signs of -important developments, chiefly those of a political kind, he furnished -his Imperial friend with reports on the foreign situation. - -In 1904 the Kaiser's interest in Ballin took a particularly practical -form. Ballin had suffered a great deal from neuralgic pains which, in -spite of the treatment of various physicians, did not really and -permanently diminish until the patient was taken in hand by Professor -Schweninger, the famous medical adviser of no less a man than Bismarck. -Ballin himself testified to the unvaried attention and kindness of Dr. -Schweninger, and to the great success of his treatment. It is to be -assumed that Schweninger, because of his energetic manner of dealing -with his patients, was eminently suited to Ballin's disposition, which -was not an easy one for his doctor and for those round him to cope with. - - "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 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 without 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 - liked best, and that I had an excellent opinion of him. He also - considered Grumme the best man he had ever had round him, and it - would be difficult to replace him. Nevertheless he would be glad to - induce Grumme to join the services of the Hamburg-Amerika Linie, if - I thought that this would solve the difficulty he had just referred - to, and that such a solution would fall in with my own wishes. He - was convinced that I should soon be restored to my normal health if - I were relieved of some part of my work, and that this would enable - me to do much useful service to the nation and himself; so he would - be pleased to make the sacrifice. I sincerely thanked His Majesty, - and assured him that I could not think of any solution that I - should like better than the one he had proposed, and that, if he - were really prepared to do so much for me, I would beg him to - discuss the matter with Grumme. That very evening he sent for - Grumme, who immediately expressed his readiness to enter the - services of our company if such was His Majesty's pleasure." - -The lively interest which the Kaiser took in the development of our -mercantile marine was naturally closely connected with the growth of the -Imperial Navy and with our naval policy in general. The country's -maritime interests and the merchant fleet were the real motives that -prompted his own naval policy, whereas Tirpitz chiefly looked upon them -as a valuable asset for propaganda purposes. During the first stage of -the naval policy and of the naval propaganda--which at that time were -conducted on quite moderate lines--Ballin, as he repeatedly told me, -played a very active part. It was the time when the well-known -periodical _Nautikus_, afterwards issued at regular annual intervals, -was first published by the Ministry for the Navy, and when a very active -propaganda in favour of the navy and of the country's maritime interests -was started. Experience has proved how difficult it is to start such a -propaganda, especially through the medium of a Press so loosely -organized as was the German Press in those days. But it is still more -difficult to stop, or even to lessen, such propaganda once it has been -started, because the preliminary condition for any active propaganda -work is that a large number of individual persons and organizations -should be interested in it. It is next to impossible to induce these -people to discontinue their activities when it is no longer thought -desirable to keep up the propaganda after its original aim has been -achieved. Germany's maritime interests remained a favourite subject of -Press discussions, and the animation with which these were carried on -reached a climax whenever a supplementary Navy Bill was introduced. Even -when it was intended to widen the Kiel Canal, as it proved too narrow -for the vessels of the "Dreadnought" type, the necessity for doing so -was explained by reference to the constantly increasing size of the new -steamers built for the mercantile marine; although, seeing that the -shallow waters of the Baltic and of the channels leading into it made it -quite impossible to use them for this purpose, nobody ever proposed to -send those big ships through the canal. In later years Ballin often -spoke with great bitterness of those journalists who would never leave -off writing about "the daring of our merchant fleet" in terms of -unmeasured eulogy, and whom he described as the greatest enemies of the -Hamburg-Amerika Linie. - -But it was not only the propaganda work for the Imperial Navy to which -the Kaiser contributed by his own personal efforts: the range of his -maritime interests was much wider. He gave his assistance when the -problems connected with the troop transports to the Far East and to -South West Africa were under discussion; he studied with keen attention -the progress of the German mercantile marine, the vessels of which he -frequently met on his travels; he often went on board the German tourist -steamers, those in Norwegian waters for instance, when he would -unfailingly make some complimentary remarks on the management, and he -became the lavish patron of the sporting events known as Kiel Week, the -scope of which was extending from year to year. The Kiel Week, -originally started by the yachting clubs of Hamburg for the -encouragement of their sport, gradually developed into a social event of -the first order, and since 1902 it became customary for the -Hamburg-Amerika Linie to dispatch one of their big steamers to Kiel, -where it served as a hotel ship for a large number of the visitors. From -1897 Kiel Week was preceded by a visit of the Kaiser--and frequently of -the Kaiserin as well--to Hamburg, where their Majesties attended the -summer races and the yachting regatta on the lower Elbe. In 1897 the -Kaiser had the intention of being present at a banquet which the -Norddeutsche Regatta-Verein was giving on board the Packetfahrt liner -_Columbia_, and he was only prevented from doing so at the last moment. -In the following year the Hamburg-Amerika Linie sent their s.s. -_Pretoria_ to Kiel. On this vessel the well-known "Regatta dinner" took -place which the Kaiser attended, and which, on future occasions, he -continued to honour with his presence. Ballin received a special -invitation to visit the Kaiser on board his yacht _Hohenzollern_. He -could not, however, avail himself of it, because the message only -reached him on his way home to Hamburg. The year after, the Kaiser -commanded Ballin to sit next to him at the table, and engaged him in a -long conversation on the subject of the load-line which he wanted to see -adopted by German shipping firms for their vessels. The Packetfahrt -carried this suggestion into practice shortly afterwards, and in course -of time the other companies followed suit. - -On the occasion of these festivities the Kaiser in 1904 paid a visit to -the new premises of the Hamburg-Amerika Linie. In 1905 and in subsequent -years he also visited Ballin's private home and took lunch with him. The -speeches which he made at the regatta dinners given in connexion with -the regatta on the lower Elbe frequently contained some political -references. In 1908, for instance, he said: - - "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 - Lübeck--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 Lübeck 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." - -Kiel Week never passed without a great deal of political discussion. The -close personal contact on such occasions between Ballin and the Kaiser -furnished the former with many an opportunity for expressing his views -on politics. Much has been said about William II's "irresponsible -advisers," who are alleged to have endeavoured to influence him in the -interests of certain cliques, and it cannot, of course, be denied that -the men who formed the personal entourage of the monarch were very far -from representing every shade of public opinion, even if that had been -possible. The traditions of the Prussian Court and of princely education -may have contributed their share to this state of things. The result, at -any rate, was that in times of crises--as, for instance, during the -war--it was impossible to break through the phalanx of men who guarded -the Kaiser and to withdraw him from their influence. Events have shown -how strong this influence must have been, and how little it was suited -to induce the Kaiser to apply any self-criticism to his preconceived -ideas. Added to this, there was the difficulty of obtaining a private -conversation with the Kaiser for any length of time--a difficulty which -was but rarely overcome even by persons possessing very high -credentials. It has already been mentioned that the Kaiser did not like -to be contradicted in the presence of others, because he considered it -derogatory to his sovereign position. Ballin repeatedly succeeded in -engaging the Kaiser in private conversations of some length, especially -after his journeys abroad, when the Kaiser invited him to lunch with -him, and afterwards to accompany him on a walk unattended. - -Ballin's notes more than once refer to such conversations with the -Kaiser, e.g. on June 3rd, 1901, when he had been a member of the -Imperial luncheon party: - - "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 10th (1903) I received a wire asking me to see the - Kaiser at the _Neues Palais_. To my infinite joy the Kaiser had - quite recovered the use of his voice. He looked well and fit, and - during a stroll through the park I had a long chat with him - concerning my trip to America and other matters. In February the - Kaiser intends to undertake a Mediterranean cruise on board the - _Hohenzollern_ for the benefit of his health. He will probably - proceed to Genoa on board one of the Imperial mail packets, which - is to be chartered for him." - - (April 1904). "The Kaiser had expressed a wish to see me in Italy. - On my arrival at Naples I found a telegram waiting for me in which - I was asked to proceed to Messina if necessary. Owing, however, to - the state of our negotiations with the Russian Government, I did - not think it desirable to meet the Kaiser just then, and thus I had - no opportunity of seeing him until May 3rd when I was in Berlin to - attend a meeting of the _Disconto-Gesellschaft_, and to confer with - Stübel 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 not be in town on - May 6th. The Kaiser's health had much improved through his cruise; - he had lost some of his stoutness, and the Kaiserin, too, was - greatly pleased to see him looking so well. We naturally discussed - the topics of the day, and the Kaiser, as always, was full of - kindness and goodwill towards me." - - "On June 21st, 1904, the usual Imperial Regatta took place at - Cuxhaven, and the usual dinner on board the _Blücher_. 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 - Eckernförde on board the _Meteor_, and we discussed the political - situation, particularly in its bearing on the Morocco question and - on the attitude of Great Britain." - - "On June 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 Cuxhaven, where, on board the - _Deutschland_, I heard the news--which the Kaiser had just - communicated to Kaempff (the captain of the _Deutschland_)--that - the North German Lloyd steamer _Kaiser Wilhelm II_, in consequence - of her being equipped with larger propellers, had won the speed - record. Late at night the Kaiser asked me to see him on board the - _Hohenzollern_, where he engaged me in a long discussion on the - most varied subjects. On June 21st the regatta took place at - Cuxhaven. The Kaiser and Prince Heinrich were amongst the guests - who were entertained at dinner on board the _Deutschland_. The - Kaiser was in the best of health and spirits. Owing to the - circumstance that Burgomaster Burchard--who generally engages the - Kaiser in after-dinner conversation--was prevented by his illness - from being present, I was enabled to introduce a number of Hamburg - gentlemen to His Majesty. As the Kaiser had summoned me to dine - with him on board the _Hohenzollern_ on the 22nd, I could not - return to Hamburg, but had to travel through the Kiel Canal that - same night on board a tug steamer. On the 22nd I stayed at the club - house of the Imperial Yachting Club, whilst at my 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 accommodation 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 -admonitions, and he was not offended if Ballin, on such occasions, -subjected his actions or his opinions to severe criticism. - -On such occasions the Kaiser, as Ballin repeatedly pointed out, "took it -all in without interrupting, looking at me from the depth of his kind -and honest eyes." That he did not bear Ballin any malice for his -frankness is shown by the fact that he took a lively and cordial -interest in all the events touching the private life of Ballin and his -family, his daughter's engagement, for instance--an interest which still -continued after Ballin's death. - -In spite of this close friendship between Ballin and the Kaiser, it -would be quite wrong to assume that Ballin exercised anything resembling -a permanent influence on His Majesty. Their meetings took place only -very occasionally, and were often separated by intervals extending over -several months, and it happened only in rare cases that Ballin availed -himself of the privilege of writing to the Kaiser in person. It is true -that the latter was always pleased to listen to Ballin's explanations of -his views, and it is possible that every now and than he did allow -himself to be guided by them; but it is quite certain that he never -allowed these views to exercise any actual influence on the country's -politics. The events narrated in the chapter of this book dealing with -politics show that in a concrete case, at any rate, Ballin's -recommendations and the weight of his arguments were not sufficient to -cope successfully with the influence of others who were the permanent -advisers of the sovereign, and who had at all times access to His -Majesty. - -If thus the effect of Ballin's friendship with the Kaiser has frequently -been greatly overrated in regard to politics, the same holds good--and, -indeed, to a still greater extent--in regard to the advantages which the -Hamburg-Amerika Linie is supposed to have derived from it. One of -Ballin's associates on the Board of the company was quite right when he -said: "Ballin's friendship with the Kaiser has done more harm than good -to the Hamburg-Amerika Linie." Indirectly, of course, it raised the -prestige of the company both at home and abroad. But there is no doubt -that it had also an adverse effect upon it: at any rate, outside of -Germany. It gave rise to all sorts of rumours, e.g. that the company -obtained great advantages from the Government; that the latter -subsidized it to a considerable extent; that the Kaiser was one of the -principal shareholders, etc. It is also quite certain that these beliefs -were largely instrumental in making the Hamburg-Amerika Linie, as Ballin -put it, one of the war aims of Great Britain, and it is even alleged -that, at the close of the war, the British Government approached some of -the country's leading shipping firms with the suggestion that they -should buy up the Hamburg-Amerika Linie or the North German Lloyd. This -was at the time when it became desirable to secure the necessary -organization for the intended commercial conquest of the Continent. It -is quite possible--and, I am inclined to think, quite probable--that -this suggestion was put forward because such a step would be in harmony -with that frame of mind from which originated such stipulations of the -Versailles treaty as deal with shipping masters, and with the assumption -that German shipping--which was supposed to depend for its continuance -mainly on the existence of the German monarchial system--would -practically come to an end with the disappearance of the latter. It -would, indeed, be difficult to name any historical document which pays -less regard to the vital necessities of a nation and which actually -ignores them more completely than does the treaty signed at Versailles. - -The allegation that Ballin should ever have attempted to make use of his -friendship with the Kaiser for his own or for his company's benefit is, -moreover, diametrically opposed to the established fact that he knew the -precise limits of his influence, and that he never endeavoured to -overreach himself. His "policy of compromise" was the practical outcome -of this trait of his character. - -The opinion which my close observation of Ballin's work during the last -ten years of his life enabled me to form was, as far as its political -side is concerned, confirmed to me in every detail by no less a person -than Prince Bülow, who, without doubt, is the most competent judge of -German affairs in the first decade of the twentieth century. When I -asked the Prince whether Ballin could be accused of ever having abused -the friendship between himself and the Kaiser for any ulterior ends -whatever, he replied with a decided negative. Ballin, he said, had never -dreamt of doing such a thing. He had always exercised the greatest tact -in his relations with the Kaiser, and had never made use of them to gain -any private advantage. Besides, his views had nearly always coincided -with those held by the responsible leaders of the country's political -destinies. Once only a conflict of opinion had arisen between Ballin and -himself on a political question, and this was at the time when the -customs tariffs were under discussion. Ballin held that these were -detrimental to the country's best interests, and it is a well-known fact -that, at that time, there was a widespread feeling as to the -impossibility of concluding any commercial treaties so long as those -tariffs were in operation. - -During the most critical period of the existence of the monarchy--i.e. -during the war--Ballin's influence on the Kaiser was but slight. Only on -a very few occasions was he able to meet the Kaiser, and he never had an -opportunity of talking to him privately, as in former times. It was the -constant aim of the Kaiser's entourage to maintain their controlling -influence over the Kaiser unimpaired. Even when they last met--in -September, 1918--and when Ballin, at the instance of the Supreme Army -Command, was asked to explain to the Kaiser the situation as it actually -was, he was not permitted to see the Kaiser without the presence of a -witness, so that his influence could not assert itself. The fact that -the Kaiser was debarred from knowing the truth was the cause of his and -of his country's ruin. "The Kaiser is only allowed to know the bright -side of things," Ballin used to say, "and therefore he does not see -matters as they really stand." - -This is all the more regrettable because, as Ballin thought, the Kaiser -was not wanting in either the capacity or the independence of mind which -would have enabled him to pursue a policy better than the one in which -he actually acquiesced. More than once, Ballin said, the Kaiser's -judgment on a political issue was absolutely sound, but he did not wish -to act contrary to the recommendations of his responsible advisers. -When, for instance, it was decided that the gunboat _Panther_ should be -dispatched to Agadir, a decision which was arrived at during Kiel Week -of 1911, the Kaiser exclaimed, with much show of feeling, that a step of -such far-reaching importance could not be taken on the spur of the -moment and without consulting the nation, and he only gave his consent -with great reluctance. Moreover, Ballin stated, he was by no means in -sympathy with Tirpitz, and the latter was not a man after his own heart, -but he was content to let him have his way, because he believed that the -naval policy of Tirpitz was right, so that he was not entitled to -jeopardize the interests of his country by dismissing him. The Kaiser -was not moved by an ambitious desire to build up a powerful navy -destined to risk all in a decisive struggle against Great Britain, and -the numerous passages in his public speeches which foreign observers -interpreted as implying such a desire, must be regarded as the explosive -outbursts of a strong character which was sometimes directed into wrong -channels by a certain sense of its own superiority, and which, in -seeking to express itself, would occasionally outrun discretion. His -inconsistency which made him an easy prey to the influence of his -entourage, caused him to be looked upon by foreign critics as -vacillating and unstable, and this impression--as was discovered when -too late--discredited his country immensely in the eyes of Great -Britain, who, after all, had to be reckoned with as the decisive factor -in all questions relative to world policy. Such a character could be -guided in the right direction only if the right influence could be -brought permanently to bear on it. But who was to exercise such -influence on the Kaiser? Certainly his entourage did not include anyone -qualified to do so, because it was not representative of all sections of -the nation; neither was any of the successive Chancellors able to -undertake such a task, since none of them succeeded in solving the -questions of internal policy in a manner approved by a reliable and -solid majority in the Reichstag. The Kaiserin also was not free from -prejudice as to the war and the causes of its outbreak. Ballin relates -how, on one of the few occasions when he was privileged to see the -Kaiser during the war, Her Majesty, with clenched fists, exclaimed: -"Peace with England? Never!" The Imperial family considered themselves -betrayed by England and the English court. Why this should be so is -perhaps still more difficult to say now than Ballin could understand in -those days. Arguments, however, were useless in such a case, and could -produce nothing but harm. The Kaiser did not bear Ballin any malice -because of the frankness with which he explained his views that day; on -the contrary, members of the Kaiser's entourage have confirmed that, -after Ballin had left that evening, he even tried to make the Kaiserin -see his (Ballin's) point of view. Putting himself into Ballin's -position, he said, he could perfectly understand how he felt about it -all; but he himself could not help thinking that his English relatives -had played him false, so that he was forced to continue the struggle -with England tooth and nail. - -When Ballin, during the summer of 1918, gave me a character sketch of -the Kaiser, of which the account I have endeavoured to present in the -preceding paragraphs is an outline, he added: "But what is the good of -it? He is, after all, the managing director, and if things turn out -wrong he is held responsible exactly as if he were the director of a -joint-stock company." - -This comparison of the German Empire and its ruler with a joint-stock -company and its board of directors used to form a frequent subject of -argument in our inner circle, and even before the war these discussions -regularly led to the conclusion that, what with the policy carried on by -the Government and that carried on by the parties in the Reichstag, the -Hamburg-Amerika Linie would have gone bankrupt long ago if its affairs -had been conducted on such lines as those of the German Empire. It was a -never-ending cause of surprise to us to learn how completely the -European situation was misjudged in the highest quarters, when, for -instance, the following incident, which was reported to Ballin during -the war, became known to us. One day, when the conversation at lunch in -the Imperial headquarters turned to the subject of England, the Kaiser -remarked: "I only wish someone had told me beforehand that England would -take up arms against us," to which one of those present replied in a -quiet whisper: "Metternich." It would have been just as proper, Ballin -added, to have mentioned my own name, because I also warned the Kaiser -over and over again. On another page in this book reference is made to -the well-known fact that the reason why Count Metternich, the German -ambassador at the Court of St. James, had to relinquish his post was -that he, in one of his reports, predicted that Germany would be involved -in war with Great Britain no later than 1915 unless she reduced the pace -of her naval armaments. This was one of those numerous predictions to -which, like so many others, especially during the war, no one wanted to -listen. Even in the late summer of 1918, when Ballin saw the Kaiser for -the last time, such warnings met with a deaf ear. This meeting, to which -Ballin consented with reluctance, was the outcome of a friendship which, -politically speaking, was devoid of practical results. A detailed -account follows. - - - - -CHAPTER X - -THE WAR - - -About the middle of the month of July, 1914, Ballin, when staying at -Kissingen for the benefit of his health, received a letter from the -Foreign Secretary, Herr v. Jagow, which made him put an immediate end to -his holiday and proceed to Berlin. The letter was dated July 15th, and -its principal contents were as follows: - -The _Berliner Tageblatt_, it said, had published some information -concerning certain Anglo-Russian agreements on naval questions. The -Foreign Office did not attach much value to it, because it was at -variance with the general assumption that Germany's relations with Great -Britain had undergone a change for the better, and also with the -apparent reluctance of British statesmen to tie their country to any -such agreements. The matter, however, had been followed up all the same, -and through very confidential channels it had been ascertained that the -rumours in question were by no means devoid of an actual background of -fact. Grey, too, had not denied them point blank at his interview with -Lichnowsky. It was quite true that Anglo-Russian negotiations were -proceeding on the subject of a naval agreement, and that the Russian -Government was anxious to secure as much mutual co-operation between the -two countries as possible. A definite understanding had not, so far, -been reached, notwithstanding the pressure exercised by Russia. Grey's -attitude had become somewhat uncertain; but it was thought that he -would ultimately give his consent, and that he would quieten his own -conscience by arguing that the negotiations had not really been -conducted between the Cabinets, but between the respective naval -authorities. It was also quite likely that the British, who were adepts -at the art of making nice distinctions, would be negotiating with the -mental reservation that they would refrain from taking an active part -when the critical moment arrived, if it suited them not to do so; and a -_casus foederis_ would presumably not be provided for in the -agreement. At any rate, the effect of the latter would be enormously to -strengthen the aggressive tendencies of Russia. If the agreement became -perfect, it would be useless for Germany to think any longer of coming -to a _rapprochement_ with Great Britain, and therefore it would be a -matter of great importance to make a last effort towards counteracting -the Russian designs. His (v. Jagow's) idea was that Ballin, who had -intimate relations with numerous Englishmen in leading positions, should -send a note of warning across the North Sea. This suggestion was -followed up by several hints as to the most suitable form of wording -such a note, and the letter concluded with the statement that the matter -was one of great urgency. A postscript dated July 16th added that a -further article had been published by the _Berliner Tageblatt_, -according to which the informants of the author also took a serious view -of the situation. - -Ballin, in response to the request contained in the letter, did not -content himself with sending a written note to his London friends, but -he immediately went to Berlin for the purpose of gaining additional -information on the spot, with special reference to the general political -outlook. He learned that Austria intended to present a strongly worded -note to Serbia, and that it was expected that in reply a counter-note -dictated by Russia would be received. He was also told that the -Government not only wanted some information regarding the matter which -formed the special subject of Herr v. Jagow's letter, but also regarding -the general political situation in London, as it was doubted whether the -reports received from the ambassador were sufficiently trustworthy and -complete. This was all that Ballin was told. Since then many facts have -become known which throw a light on the way in which political questions -were dealt with by the Berlin authorities during the critical period -preceding the war, and if we, knowing what we know now, read the letter -of Herr v. Jagow, we ask ourselves in amazement what was the object of -the proposed action in London? Could it be that it was intended to -intimidate the British Government? This could hardly be thought -possible, so that some other result must have been aimed at. We can only -say that the whole affair is still surrounded by much mystery, and we -can sympathize with Ballin's bitter complaints in later days that he -thought people had not treated him with as much openness as they should -have done, and that they had abused his intimate relations with leading -British personages. - -Ballin then left Berlin for Hamburg. He gave me his impressions of the -state of political affairs--which he did not regard as critical--and -went to London, ostensibly on business. In London he met Grey, Haldane, -and Churchill, and there also he did not look upon the situation as -critical--at least, not at first. When, however, the text of the -Austrian note became known on Thursday, July 23rd, and when its full -significance had gradually been realized, the political atmosphere -became clouded: people asked what was Austria's real object, and began -to fear lest the peace might be disturbed. Nevertheless, Ballin returned -from London on July 27th with the impression that a fairly capable -German diplomat might even then succeed in bringing about an -understanding with Great Britain and France which, by preventing Russia -from striking, would result in preserving the peace. Great Britain and -the leading British politicians, he said, were absolutely in favour of -peace, and the French Government was so much against war that its -representatives in London seemed to him to be rather nervous on the -subject. They would, he thought, do anything in their power to prevent -war. If, however, France was attacked without any provocation on her -part, Great Britain would be compelled to come to her assistance. -Britain would never allow that we, as was provided for in the old plan -of campaign, should march through Belgium. It was quite true that the -Austrian note had caused grave anxiety in London, but how earnestly the -Cabinet was trying to preserve peace might be gauged by the fact that -Churchill, when he took leave of Ballin, implored him, almost with tears -in his eyes, not to go to war. These impressions of Ballin are confirmed -by the reports of Prince Lichnowsky and other members of the German -Embassy in their observations during the critical days. - -Apart from these politicians and diplomatists on active service there -were other persons of political training, though no longer in office, -who did not think at that time that there was an immediate danger of -war. In this connexion I should like to add a report of a very -remarkable conversation with Count Witte, which took place at Bad -Salzschlirf on July 24th. The Count--whose untimely death was greatly -regretted--was without any doubt one of the most capable statesmen of -his time--perhaps the only one with a touch of genius Europe -possessed--and he certainly knew more about the complicated state of -things in Russia than any living person. For these reasons his views on -the events which form the first stage of the fateful conflict are of -special interest. I shall reproduce the report of this conversation -exactly as we received it at the time, and as we passed it on to Berlin. -The authenticity of the statements of Count Witte as given here is -beyond question. - - "Yesterday (on July 24th) I paid a visit to Count Witte who was - staying at Bad Salzschlirf, and in the course of the day I had - several conversations with him, the first of which took place as - early as ten o'clock in the morning. After a few words of welcome, - and after discussing some matters of general and personal interest, - I said to the Count: 'I should like to thank you for your welcome - letter and for your telegram. The question which you raise in them - of a meeting between our two emperors appears of such fundamental - importance to me that I may perhaps hope to be favoured with some - details by you personally.' - - "Witte replied: 'In the first instance I wish to reaffirm what I - have repeatedly told you, both verbally and by letter, viz. that I - am not in the least anxious to be nominated Russian delegate for - the proposed negotiations concerning a commercial treaty between - Germany and Russia. Whoever may be appointed from the Russian side - will gain no laurels. I think a meeting between the Kaiser and the - Tsar some time within the next few weeks would be of very great - importance. Have you read the French papers? The tone now assumed - by Jules Hedeman is a direct challenge. I know Hedeman, and I also - know that he only writes what will please Sasonov, Poincaré and - Paléologue (the French ambassador in Petrograd). 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 - convention 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 be made to look - small, and public opinion would calm down again." - - "I asked Witte: 'Do you think, Sergei Yulyevitch, that the Tsar - would avail himself of a possible opportunity of meeting the - Kaiser?' - - "Witte replied: 'I am firmly convinced of it; I may, indeed, state - without hesitation that the Tsar would be delighted to do so. The - personal relations between the Tsar and the Kaiser are not of an - ordinary kind. They converse with each other in terms of intimate - friendship, and each time the Tsar has had a chat with the Kaiser - he has been in better spirits. Believe me, if this meeting comes - off, the impression which the French visit has left on the Tsar - will be entirely wiped out. The effect of the showy reception of - the French visitors which the press agitators have not failed to - use for their own ends will be obliterated. Such a meeting will - express in unambiguous terms that, whatever value the Tsar attaches - to the Franco-Russian alliance, he insists on the maintenance of - amicable relations with Germany. The meeting will have to be - arranged without loss of time, in about four or six weeks, because - in two months from now the Tsar will be leaving for Livadia. The - army 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 difficulty.' - - "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 replied: 'By no means. One has always to take into account - the fact that the relations between the Tsar and the Kaiser, as I - explained before, are in the highest degree friendly and intimate. - I do not know how the Kaiser would feel on the subject, but I am - convinced that he is possessed of the necessary political sagacity - to find the way that will lead to a meeting. He might, e.g., write - to the Tsar quite openly that, as the relations between their two - countries had lately been somewhat under a cloud in consequence of - the inefficient diplomacy of their respective representatives, he - would be particularly happy to meet him at this juncture. 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 difficulties - which only a war can clear away. But nowadays there is nobody who, - like William the First, would put his foot down and say: "Now I - will not yield another inch!" The spot at Ems where this happened - is now adorned with a monument. Within a few years when the - armaments which for the present are on paper only, shall be - completed, Russia will really be strong. But even then, one has - still to reckon with the possibility of internal complications. - France, however, need not fear any such difficulties, because - countries possessing a constitution acknowledged by all their - inhabitants are not liable to revolutionary movements, no matter - how often their governments change.' - - "In speaking of Hartwig, Witte remarked: 'His death is the severest - blow to Russian diplomacy. He was unquestionably the most gifted - Russian diplomatist. When Count 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 departmental 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 proceeded to a neutral or to a British port -from which they subsequently embarked for the United States. - -After this, events followed upon each other's heels in swift succession. -When war broke out, most of the ships succeeded in reaching neutral -ports, so that comparatively few of them were lost in the early part of -the war. By August 5th the cables had been cut. This circumstance made -it very difficult to keep up communications with New York, and compelled -the majority of our agencies and branches abroad to use their own -discretion as to what to do. The place of regular business was taken by -the work involved in carrying out the various agreements which the -company had entered into during peace time, viz. those for the -victualling and bunkering of various units of the Imperial Navy, for the -supply of auxiliary vessels, and for the establishment of an -organization which was to purchase the provisions needed by the navy. - -In the meantime, the Ministry of the Interior had started to devise -measures for provisioning the country as a whole, as far as that was -still possible. It is well known that the responsible authorities had -done far too little--indeed, hardly anything at all--to cope with this -problem, because they had never taken a very serious view of the danger -of war. Even the arrangements of the military authorities in connexion -with the plans of mobilization were utterly deficient in this respect. - -The first who seriously studied the question as to what would have to be -done for the provisioning of the military and civil population if -Germany had to fight against a coalition of enemies, and if the overseas -supplies were stopped, was General Count Georg Waldersee, who became -Quartermaster General in 1912. In a letter which he wrote to Ballin -about that time, he gave a very clear description of the probable state -of things in such an emergency. He pointed out that the amount of -foodstuffs required during a war would probably be larger than the -quantities needed in peace time--a contingency which had escaped -attention in Germany altogether--and that above all there would be an -enormous shortage of raw materials. Therefore, he said, if it was -desired to guard the country against disagreeable surprises, it was -imperative to make certain preparations for an economic and a financial -mobilization. The military authorities at least had studied this problem -theoretically, but the civil authorities would not make any move at all. -The general said he thought it desirable that this question should -receive more attention in the future, and he asked Ballin to let him -know his views on the matter, and to give him some practical advice. The -anxiety felt in military quarters was largely augmented by the receipt -of disquieting rumours about the increase of Russian armaments. - -In reply we furnished Count Waldersee with a brief memorandum written by -myself in which, amongst other items, I referred him to some suggestions -put forward by Senator Possehl, of Lübeck, in the course of a lecture -delivered about the same time before a selected audience. In view of the -fact that Germany depended for her food supply and for her raw materials -to an increasing extent on foreign sources, there could be no doubt as -to the necessity for making economic preparations against the -possibility of a war, if a war was considered at all probable. - -Nevertheless, and in spite of the newly awakened interest on the part of -the military authorities, these economic preparations had, before the -war, made absolutely no progress worth mentioning. The only practical -step which, as far as my knowledge goes, had been taken by the civil -authorities, was the conclusion of an agreement entered into with a -Dutch firm dealing with the importation of cereals in case of war. When, -in the fateful summer of 1914, this contingency arose, the firm in -question had chartered some British steamers, which instead of carrying -their cargoes to Rotterdam took them to British ports. - -Thus, no serious efforts of any kind had been made to grapple with the -problem. On Sunday, August 2nd, Geheimrat Frisch, who afterwards became -the director of the _Zentral-Einkaufs-Gesellschaft_ (Central Purchasing -Corporation), came to Hamburg, in order to inform Ballin, at the request -of the Ministry for the Interior, that the latter felt very anxious in -regard to the quantity of food actually to be found in Germany, which, -it was feared, would be very small, and that it was expected that a -great shortage would arise after a very brief period. He therefore asked -him to use his best endeavours in order to secure supplies from abroad. -A Hamburg firm was immediately requested to find out how much food was -actually available in the country, and, although the figures obtained -were not quite so bad as it was expected, steps were taken at once to -remedy the deficiencies by importing food from neutral countries. A -great obstacle to the rapid success of these efforts was the absolute -want of any preparatory work. The very attempt to raise the necessary -funds abounded with difficulties of every kind, because no money had -been set aside for such expenditure in connexion with the scheme of -mobilization, and the time taken by the attempts made in this direction, -as well as the circumstance that communication with the United States -could only be maintained _via_ neutral countries, were the causes of a -great deal of serious delay. - -At Ballin's suggestion the _Reichseinkauf_ (Government Purchasing -Organization) was then formed. For this organization the Hamburg-Amerika -Linie was to do all the purchasing, and it was arranged that it should -put at the disposal of the new body all those members of its staff who -were not called up, and who were considered suitable for the work. -Buyers were sent to every neutral country; but the mobilization then in -progress led to a complete stoppage of railway travelling for the civil -population, thus causing no end of difficulties to these buyers, and -making personal contact with the Berlin authorities almost impossible. -Added to all this, there was the inevitable confusion which the -replacement of the civil administration by the army commands brought in -its train. It had, in fact, been assumed that this war would resemble -its predecessors in every respect, and no one was prepared for a world -war. Hence, such important matters as the importation of foodstuffs from -abroad and the work of supplying political information to neutral -countries concerning the German standpoint were sadly neglected; -everything had to be provided at a moment's notice, and had to be -carried through in the face of a great deal of opposition. Funds and -energy were largely wasted; the military, naval, and civil organizations -were working against one another instead of co-operating; and it took a -long time before a little order could be introduced into the chaos. It -was also found that the German credits abroad were quite inadequate for -such enormous requirements. An attempt to dispose of some treasury bills -in New York was only moderately successful, and in consequence of this -lack of available funds the supplies obtained from the United States -were but small. Even the fact that the Hamburg-Amerika Linie immediately -succeeded in establishing the necessary connexions with American -shippers, and in securing a sufficient amount of neutral tonnage, did -not improve matters in the least. To obtain the required funds in -Berlin, as has been explained before, involved considerable loss of -time; and as the months passed the British blockade became more and more -effective. Thus, as the war continued, large quantities of food could -only be procured from European countries. - -Ballin took a large personal share in the actual business transacted by -the _Reichseinkauf_. He did so, if for no other reason, because he -needed some substitute for the work connected with the real shipping -business which was rapidly decreasing in extent. The only benefit his -company derived from its new work was that it gave employment to part of -the members of its staff, thus reducing in some measure the expenses. -With the stoppage of the company's real business its principal source of -income ran dry in no time, and the small profits made out of the supply -of provisions to the navy was only a poor compensation. - -The world's economic activities in those days presented a picture of -utter confusion. All the stock exchanges were closed; all dealings in -stocks and shares had ceased, so that no prices could be quoted; several -countries had introduced a moratorium, and numerous banks had stopped -payment. Germany had no longer any direct intercourse with the overseas -countries; the British censorship was daily increasing its hold on the -traffic proceeding _via_ neutral ports. At first those foreign steamship -companies which maintained passenger services to America did splendid -business, because Europe was full of American tourists and business men -who were anxious to secure a berth to get home, and numerous cabin -passengers had to be content with steerage accommodation. When this rush -was past, however, shipping business, like international commerce, -entered upon its period of decline. The freight rates came down, the -number of steamers laid up assumed large proportions, and the world's -traffic, in fact, was paralysed. - -After a comparatively brief period it was found too difficult to conduct -the _Reichseinkauf_ organization with its headquarters at Hamburg, -because the intercourse with the Imperial Treasury at Berlin, which -provided the funds, took up too much time, and also because it seemed -highly advisable to purchase the foreign foodstuffs needed by the -military as well as the civil population through one and the same -organization. The state of things in respect to these matters was -simply indescribable; indeed, if it had been purposely intended to -encourage the growth of war profiteering, it would have been impossible -to find a better method of setting about it. Numerous buyers, -responsible to different centres, not merely purchased without regard to -each other, but even outbid each other, thus causing a rise in prices -which the public had to pay. Conditions such as these were brought about -by the utter unpreparedness of the competent civil authorities and by -the fact that the military authorities could dispose of the vast amounts -of money placed at their command at the outbreak of the war. These -conditions were doubtless the soil from which sprang all the evils which -later on developed into the pernicious system we connect with the name -of _Kriegswirtschaft_, and for which it will be impossible to demand -reparation owing to the lost war and to the outbreak of the revolution. - -In order to facilitate the intercourse with the proper Government -boards, and to centralize the purchasing business as much as possible, -Ballin's suggestion that the seat of the organization should be removed -to Berlin was adopted, and at the same time the whole matter was put on -a sounder footing by its conversion into a limited company under the -name of _Zentral-Einkaufs-Gesellschaft_ (Central Purchasing -Corporation). The history of the Z.E.G. is well known in the country, -and its work has been subject to a great deal of criticism, largely due -to the fact that all the annoyance caused by the many restrictions which -the Government found it necessary to impose, and which had to be put up -with during the war, was directed against this body. Generally speaking, -this attitude of the population was very unfair, because the principal -grievances concerned the distribution of the foodstuffs, and for this -part the Z.E.G. was not responsible. Its only task was to obtain the -necessary supplies from abroad. If it is remembered that the -transactions of the corporation reached enormous proportions, and that, -after all, it was improvised at a time of war, we cannot be surprised to -see that some mistakes and even some serious blunders did occur -occasionally, and that the right people were not always found in the -right places. Moreover, some of the really amazing feats accomplished by -the Z.E.G--e.g. the supply of grain from Roumania, which necessitated -enormous labour in connexion with the transhipment from rail to steamer -and with the conveyance up the Danube--were only known to a few people. -It is obvious that nothing could be published during the war about these -achievements nor about the agreements concluded, after endless -negotiations, with neutral countries and thus the management of the -Z.E.G. was obliged to suffer in silence the criticisms and reproaches -hurled at it without being able to defend itself. - -The volume of the work done by the Z.E.G. may be inferred from the fact -that the goods handled by the organization during the four years from -1915 to 1918 represented a value of 6,500 million marks, in which -connexion it must not be forgotten that at that time the purchasing -power of the mark was still nearly the same as before the war. When the -Roumanian harvest was brought in the daily imports sometimes reached a -total of 800 truck-loads. However, the greatest credit, in my opinion, -is due to the Z.E.G. for putting a stop to the above-mentioned confusion -in the methods of buying abroad and for establishing normal conditions. -To-day it is scarcely possible to realize how difficult it was and how -much time it required to overcome the opposition often met with at home. - -Not much need be said here about the activities of the Hamburg-Amerika -Linie during the war. The longer the struggle lasted, and the larger the -number of countries involved in the war against Germany became, the -heavier became the company's losses of tonnage and of other property. -All the shore establishments, branch offices, pier accommodation, etc., -situated in enemy countries, were confiscated, and the anxiety about the -post-war reconstruction grew from month to month. Ballin never lost -sight of this problem, and it is chiefly due to his efforts that the -Government and the Reichstag passed a Bill (1917) providing the means -for the rebuilding of the country's mercantile marine. Along with this -he tried to keep the company financially independent by cutting down -expenses, by finding work for the inland offices of the company, by -selling tonnage, and by other means. The families and dependents of -those employees who had been called to the colours were assisted as far -as the funds at the company's disposal permitted. Of all these measures -the company has already given the necessary information to the public, -and I can confine myself to these brief statements. There is only one -circumstance which requires special mention. - -It is universally acknowledged that no German industry has suffered so -greatly through the action of the German Government as the shipping -business. When the discussions as to the rebuilding of the merchant -fleet were being carried on, the Government frankly admitted this fact. -I am not thinking, in this connexion, of those measures which were -imposed upon the Government by the Versailles Treaty, such as the -surrender of the German mercantile marine, but what I have in mind is -the steps taken whilst the war was in actual progress. These have one -thing in common with those imposed by the enemy: their originators have, -more or less, arrived at the belated conviction that they have -sacrificed much valuable property to no purpose. In Great Britain it is -admitted quite openly that the confiscation of the German merchant -fleet has very largely contributed to the ensuing collapse of the -world's shipping markets, and to the confusion which now prevails on -every trade route. The war measures of the German Government--or, -rather, of the German naval authorities--have sacrificed enormous values -merely for the sake of a phantom, thus necessitating the compensation -due to the shipowners--a compensation far from sufficient to make good -even a moderate fraction of the loss. The vessels that can be built for -the sums thrown out for this purpose will not be worth the twentieth -part of the old ones, if quality is taken into account as well as -quantity. This will become apparent when the compensation money has been -spent, and when it will be possible to compare the fleet of German -passenger boats then existing with what the country possessed previous -to the war. - -The phantom just referred to was the foolish belief that it would be -possible to eliminate all ocean tonnage from the high seas--a belief -which was in itself used to justify the submarine war, and which was -responsible for the assumption that the withdrawal of German tonnage -from the high seas would affect the food and raw material supply of the -enemy countries. This mistaken idea was also the reason for prohibiting -the sale of the German vessels in neutral ports, and for ordering the -destruction of their engines when it became impossible to prevent their -confiscation. The latter measure, and in particular the manner in which -it was carried out, prove the utter inability of the competent -authorities to grasp the very elements of the great problem they were -tackling, and in view of such lack of knowledge it is easy to understand -the bitterness of tone which characterizes Ballin's criticism of these -measures as contained in his memorandum to the Minister of the Interior -(1917). He wrote: - - "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 purchasing 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 representative were responsible for this - refusal, but that it was due to a decision of the Admiralty Staff. - However, the competent authority to which the protection and the - furtherance of the country's shipping interests are entrusted is - the Ministry of the Interior. With the Admiralty Staff itself, as I - need not remind Your Excellency, we have no dealings whatever, and - we are not even entitled to approach that body directly in such - matters. - - "Our company which was the biggest undertaking of its kind in the - world, and which previous to the war possessed a fleet aggregating - about 1,500,000 tons, has lost practically all its ships except a - very few. The losses are not so much due to capture on the part of - the enemy as to the measures taken by our own Government. If our - Government had acted with the same foresight as did the - Austro-Hungarian Government 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 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. Jonquières 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 confiscate them. After what has been done before, we - fear that the Admiralty Staff will either not permit the sale at - all, or only grant its permission when it is too late. - - "Your Excellency, I am sure, is fully aware of the fact that the - methods of the Admiralty Staff--ignoring, as it does, all other - considerations except its own--have caused one country after the - other to join the ranks of Germany's enemies. In view of the - shortage of tonnage which Great Britain and other of our enemies - systematically try to bring about--evidently with the intention of - inconveniencing neutral countries as much as possible--these latter - feel compelled, 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 Admiralty Staff which prevented the conclusion of this - agreement, because, for reasons best known to itself, it would - grant permission for only three of these vessels, although Great - Britain had agreed that the whole of our fleet interned in U.S. - ports, representing 250,000 tons in all, could sail under the terms - of the proposed agreement, and although the Allies as a whole had - signed a written declaration to the effect that they would not - interfere with our ships so long as they were used for the - provisioning of Belgium. I took the liberty of pointing out to - Captain Grashoff, the representative of the Admiralty Staff, that - nothing could have prevented us from letting the ships remain at - Rotterdam after they had completed their mission, and that - afterwards, as has been borne out by later facts, they could have - been safely taken to Hamburg. - - "I respectfully ask Your Excellency whether it is not possible to - enter a protest against such unnecessary dismemberment of part of - the German national assets.... - - " ... I must also protest most emphatically against the - insinuation--which is sure to be made--that I have no right to - criticize any steps which the Admiralty Staff has regarded as - necessary for reasons of our naval strategy. Without reservation - the German shipowners agree to any measures which are strategically - necessary, however greatly they may injure their interests. The - criticism which I beg to make on behalf of German - shipping--although possessing no formal mandate--concerns itself - with those steps which might have been taken without jeopardizing - the success of our naval strategy if the vital necessities of - German mercantile shipping had been studied with as much - consideration as this branch of the economic activities of our - country has a right to claim. - - "What we principally take exception to in this connexion is that no - information was sent to us before the decision to destroy the - engines of our ships was arrived at, and that we were not assisted - in making use of these dismantled vessels in the financial - interests of our country. Nothing of this kind was done, although - it was the most natural thing to do so, and although such action - would have deprived many a country of a reason to declare war upon - Germany." - -To a man of the type of Ballin--who had, throughout his life, been -accustomed to perform a huge amount of successful work--a period of -enforced inactivity was unbearable. The longer it lasted the more he -suffered from its effects, especially because the preparatory work for -the post-war reconstruction, the work connected with the war -organization of the German shipowners, etc., was only a poor substitute -for the productive labour he had been engaged in during more than thirty -years of peace. There is no doubt but that the Government could have -made better use of Ballin's gift of organization, but it must be -remembered that there was really no effective central Government in -Germany throughout the war. The civil administration was not exactly -deposed, but it was subordinated to the military one from the very -beginning, and the latter carried on its work along the guiding lines -laid down in the scheme of mobilization. The authorities to whose care -the economic aspects of the war were entrusted did not often--if at -all--avail themselves of Ballin's advice; and to offer it unbidden never -entered his mind, because he was cherishing the hope that the war would -not last long, and because it was his belief that the world would be -sensible enough to put an end to the wholesale destruction before long. -It was a bitter disappointment to him to find how greatly he was -mistaken, and to see that the forces of unreason remained in the -ascendancy, especially as he was always convinced that Time would be on -the side of Germany's enemies. The sole aim of his political activities -during the war was to bring about peace as early as possible. - -Of all the attempts at mediation known to me, the one which seemed to be -most likely to succeed passed through the hands of Ballin. To give a -detailed account of it must be left to a time which need no longer pay -regard to governments and individuals. Ballin's share in it was brought -about through his former international connexions. Through him it -reached the Kaiser and the Chancellor, and owing to his untiring -efforts, which lasted for two years, the position in the early part of -1917 was such that the establishment of direct contact between the two -sides was imminent. Then the unrestricted submarine war began, the -intended direct contact could not be established, and the carefully -woven thread was definitely snapped asunder; because from that time on -the Allies were certain that the United States would join them, and they -felt assured of victory. No other mediation scheme with which I am -acquainted has been pursued with so much unselfishness, devotion, and -energy as this one. This attempt, however, no more than any other, could -have procured for us that kind of peace which public opinion in Germany -had been led for years to expect, thanks to the over-estimation of the -country's strength, fostered by the military censorship and by the -military reports. - -From such exaggerated opinions Ballin always held himself aloof. He -recognized without reservation the immense achievements of Germany in -the war, but he was fearful lest the strength of the country could not -cope in the long run with the ever-increasing array of enemies, and he -therefore maintained that, if it was desired to bring about peace, the -Government would have to be moderate in its terms. A much discussed -article which he contributed to the _Frankfürter Zeitung_ on January -1st, 1915, under the heading of "The Wet Triangle," is not inconsistent -with these views of his. In it he pointed out that Germany's naval -power, in order to make a future blockade impossible, should no longer -be content to be shut up in the "wet triangle," i.e. the North Sea, but -ought to establish itself on the high seas. This statement has been -alleged to refer to Belgium, and Ballin has been wrongly claimed a -partisan by those who supported the annexation of that country. What he -really meant was that Germany should demand a naval base on the -Atlantic, somewhere in the northern parts of Africa, and this idea -seemed to be quite realizable if taken in conjunction with the terms of -peace he had in view, viz. no annexations, no indemnities, economic -advantages, a permanent political and naval understanding with Great -Britain, based on her recognition that a military defeat of Germany was -impossible. All this would be somewhat on the lines of the article -published by the _Westminster Gazette_, referred to in the eighth -chapter and a facsimile of which is given at the end of the book. Ballin -was firmly convinced that, even if a mere peace of compromise was the -outcome, i.e. one which left Germany without any territorial gains and -without any indemnities, the impression which the German achievements -during the war would produce on the rest of the world would be so -overwhelming that the country would secure indirectly far greater -advantages than could be gained by means of the largest possible -indemnity and the most far-reaching annexations. Besides, the -experiences of former times had proved that Germany would be quite -unable to absorb such large accessions of territory as certain people -had in mind. These views of Ballin, of course, were looked upon as those -of a "pacificist," and Ballin was classified among their number. - -In a letter which Ballin wrote to a friend of his, a naval officer, in -April, 1915, he puts up a highly characteristic defence of himself -against the accusations implied by describing him as "pacificist" and -"pro-English." - - "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 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-English,' and yet I am the only German who can say with truth - that he has been fighting the English for supremacy 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 Germany would derive from a peace by compromise has -now been amply confirmed by the undeniable fact that the rest of the -world has been tremendously impressed by Germany's achievements, an -impression which has made foreigners regard her chances of recovery with -much more confidence than she has felt herself, stunned as she was by -the immensity of her _débâcle_. - -The following notes, which are largely based on Ballin's own diary, are -intended to supplement the information given so far as to his political -activities during the war. - -The outbreak of war, as may be inferred from what has already been -related, took him completely by surprise, and he did not think that the -struggle would last very long. "The necessities of the world's commerce -will not stand a long war," was his opinion during the early days. For -the rest, he tried to find work for himself which would benefit his -country. "What we need to-day," he wrote to a friend, "is work. This -will lift us up and keep us going, and will make those of us who are no -longer fit to fight feel that we are still of some use after all." But -in connexion with this thought another one began to occupy his mind. He -anxiously asked: "Which of the men now at headquarters will have the -strength and the wisdom required to negotiate a successful peace when -the time comes?" All his thoughts centred round the one idea of how to -secure peace; what advantages his country would derive from it; and how -it would be possible to bring about an international grouping of the -Powers which would be of the greatest benefit to Germany. On October -1st, 1914, he wrote to Grand Admiral v. Tirpitz: - - " ... I quite agree with what you say in your welcome letter. - Indeed, you could not view these matters[3] with graver anxiety - than I do myself. I hope I shall soon have the opportunity I desire - of discussing these things with you personally. - - "To win the peace will be hardly less difficult than to win the - war. My opinion is that the result of this world war, if it lasts - 12 months, will be exactly the same as if it lasts six months. I - mean to say that, if we do not succeed in acquiring the guarantees - for our compensation demands within a few months, the further - progress of events will not appreciably improve our chances in this - direction. - - "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 slight 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 difficulty in putting up with the French clamour - for _revanche_ for a period of 44 years, because in this case we - had only to deal with a small group of nationalist firebrands, but - a British clamour for revenge would produce an exceedingly adverse - effect on the future of our national well-being and of our share in - the world's trade and commerce. - - "For a long time past it has been my conviction that the era of the - super-Dreadnoughts has passed, and some time ago I asked Admiral - von Müller 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 Government should be entitled to spend - annually on naval construction, 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 continuance 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 _circulus - vitiosus_, and is bound to produce a soreness which will never - permit of a sound understanding.... - - " ... And what about the further course of the war? I sincerely - hope that your Excellency will not risk the navy. The expression - 'The Fleet in being' which has never left my memory, and which has - lately been heard of again, implies exactly all I mean. - - "The navy, in my opinion, has never been, and never ought to be, - anything but the indispensable reserve of a healthy international - policy. Just as a conscientious director-general would never dream - of reducing the reserve funds of his company, unless compelled to - do so by sheer necessity, we ought not to drag the navy into the - war, if it could possibly be avoided. - - "What would it profit you to risk a naval battle on the high seas? - Not only our own, but British experts as well, believe that our - ships, our officers, and our crews are superior to the British, and - King Edward emphasized at every opportunity 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 - objections, 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. - Müller 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 ruin to - Great Britain. It would imply the defection of the great dominions - which now form part of her world empire. The _raison d'être_ 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 annexing valuable territories - beyond the seas; but for the peaceful enjoyment of such overseas - gains we shall be dependent on the good will of Great Britain.... - At present, men of German blood occupy leading positions in the - economic life of almost every British colony, and the open door has - been the means by which we have acquired a great deal of that - national wealth of ours which caused the smooth working of our - financial mobilization when the war broke out. - - " ... For all these reasons I consider it a great mistake that the - press should be allowed to excite German public opinion against - Great Britain to the extent it is done. I was in Berlin during the - week, and I was alarmed when I became acquainted with the wild - schemes which are entertained not only by the people of Berlin, but - also by distinguished men from the Rhineland and Westphalia." - -Apart from the peace problem there was another matter which gave Ballin -grave cause for anxiety. This was the circumstance that the Kaiser, -because of his long absences from Berlin, lost the necessary touch with -the people, and could not, therefore, be kept properly informed of -popular feeling. He 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 security also I - consider this very desirable, and I feel a great deal of anxiety - concerning His Majesty.... Whether it is wise to exercise the - censorship of the press to the extent it is done, is a question on - which more opinions than one are possible.... I have just had a - call from a Mr. X., a former officer, and an exceedingly 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 Germany's enemies. -Ballin did all he could to bring about the Italian mission of Prince -Bülow. He not only urged the Chancellor to select Bülow for this task, -but he also tried hard to induce the Prince to undertake the thankless -errand involved. In addition to the political importance of the mission, -he laid great stress on its bearing on the food problem. - - "The question of provisioning the German people," he wrote in a - letter to the Army Headquarters, "is closely connected with the - solution of the Italian and Roumanian difficulties. No pressure is, - in my opinion, too strong in order to make it perfectly clear to - Austria that some sort of an agreement with Italy is a _sine qua - non_ for the successful termination 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. - - " ... Political and military considerations make it plain beyond - any question of doubt that Italy, who will be armed to the teeth in - March, will not be able to lay down her arms again unless Austria - arrives at an understanding 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 - inadequacy 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 compromise with Italy was always dependent on the news from -the Italian front; if this was favourable, people did not want to hear -of it, and in the opposite case they would only discuss such an -understanding most unwillingly. The proposed compromise was looked upon -as a heavy sacrifice, and people were by no means favourably disposed -towards German mediation. Prince Bülow was accused of having "presented -Italy with the Trentino." Disquieting news which Ballin received from -Vienna induced him to report to the Chancellor on the state of Austrian -feeling, and to offer his services if he thought that his -old-established relations with Vienna could be of any use. His offer was -also prompted by his conviction that the German diplomatic -representation in Vienna was not adapted to Austrian mentality. - -Thereupon Ballin, early in March, 1915, entered upon a semi-official -mission to Vienna. He first acquainted himself with the actual state of -the Austrian mind by calling on his old friend, his Excellency v. -Schulz, the Vice-President of the Austrian Chief Court of Audits, who -was regarded as one of the best informed personages in the capital, and -who was one of the regular partners of the old Emperor Francis Joseph -for his daily game of tarock. This gentleman told Ballin that the -people of Austria felt a good deal of resentment towards Germany, who -had stepped in far too early as the "advocate of Italy," at a time when -Austria was still hoping to settle Serbia all by herself. This hope, -indeed, had proved an illusion; but Germany's strategy had also turned -out a failure, because she had misjudged the attitude of Great Britain, -and had not finished with France as rapidly as she had expected to do. -Now Austria, confronted by stern necessity, would have to make -concessions to Italy which every true Austrian would view with bitter -grief; and, to bring about the active assistance of Roumania, Count -Tisza would consider a sacrifice in the Bukovina debatable, but never -one in Transylvania. Ballin told his friend that, as far as Roumania was -concerned, he would have to leave it to Austria to settle that question -by herself; and that his mission with regard to Italy was so difficult -that he preferred not to make it more so by trying to solve the -Roumanian problem as well. - -Ballin's subsequent interviews with the Prime Minister, Count Stürgkh, -and with the Minister v. Koerber, as well as those with other -influential personages, confirmed these impressions, and he left Vienna -buoyed up by the hope that the conference between German, Austrian, and -Italian delegates which it was proposed to hold at Vienna would lead to -a successful result. Such, however, was not the case, and it is quite -probable that the possibility of arriving at an understanding with Italy -had passed by that time, or, assuming the most favourable circumstances, -that only immediate and far-reaching Austrian concessions could have -saved the situation; but these were not forthcoming. - -The next subject which caused much anxiety to Ballin was the question as -to what Roumania would do, a country to whose attitude, considering her -importance to Germany as a food-producing area, he attached even more -value than to that of Italy. In his notes dating from that time he said: - - " ... June 21st, 1915. The news which I received from X. regarding - the political situation in Roumania and Bulgaria was so serious - that I felt bound to send copies of these letters to the Chief of - the General Staff, General v. Falkenhayn, and to inform him that, - in my opinion, our Foreign Office had now done all it could - possibly do, and that nothing but some forcible military pressure - such as he and Baron Conrad could exercise on Count Tisza would - induce this obstinate gentleman to settle his differences with the - Balkan States...." - - " ... On this occasion X. expressed a great deal of contempt at the - suggestion that we should draw upon the members of the old - diplomacy for additional help. On the whole, he seemed to be very - proud of the achievements of the Foreign Office, whereas I am of - opinion that this body has entirely failed, and is of no practical - use any longer. Things must be in a pretty bad state if Herr - Erzberger, of all people, is looked upon as the last hope of the - country. I suggested to the gentlemen that it would do some good if - the Chancellor were to request the more virulent of the Pan-Germans - to see him, and to ask Hindenburg to explain to them the military - situation without any camouflage. This suggestion was favourably - received, and it is to be passed on to the Chancellor.... - - " ... The Chancellor informed me that he was considering whether, - if Roumania remained neutral, and if the operations against the - Dardanelles terminated successfully for us, he ought to submit any - official proposals for peace to our enemies. I expressed my - admiration of the plan, but told the Chancellor of my objections to - its practical execution. The Entente, I feared, would refuse to - entertain the proposals, and the German people would regard it as a - sign of weakness. The Chancellor asked me to refrain from - pronouncing a definite opinion for the present, but to think it - over until our next meeting." - -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 feeling 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 responsible - person or body of persons in Germany. I sincerely trust that some - such steps will be taken at an early opportunity, because otherwise - I do not see when the war will be over. Though not a pessimist I do - not believe in taking too rosy a view of things. I envy the British - because they have the courage openly to discuss in their press and - parliament 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 admiration 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 10th, 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 possession 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 - 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 - dealing with the food problem during the ensuing winter, especially - with relation to the price of meat." - - " ... August 12th, 1915. The United States Ambassador, Mr. Gerard, - had expressed the desire to discuss with me the question as to the - advisability of suggesting that President Wilson should mediate - between the belligerents. I therefore called on him on Tuesday, - August 10th, 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 Central Association of - German Manufacturers and the representatives of agriculture, are - pushing forward their views on the peace terms. Moreover, my - alleged readiness to conclude 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 Bülow will be leaving for Lucerne to-day where he intends - to stay for some time, and the Prussian _chargé 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. Bülow, Prussian Minister to Hamburg) for the - reason that he might have a watchful eye on Prince Bülow and - myself--has been promptly transferred to Warsaw. Evidently the - Berlin authorities now think the danger has passed, since Prince - Bülow has left." - - " ... November 23rd, 1915. Hammann[4] 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 Wednesday 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 10th, 1916, I was commanded to dine with Their - Majesties at the _Neues Palais_. The only other guests apart from - myself were the Minister of the Royal Household, Count Eulenburg, - and the Minister of Agriculture, Herr v. Schorlemer. None of the - suite were present so that the company consisted of five persons - only. The Kaiser was in high spirits and full of confidence. The - after-dinner conversation extended to such a late hour that we did - not catch the train by which we intended to return, and we were - obliged to leave by the last train that night. - - "A remark of mine concerning the possibility of an extension of - submarine warfare had, as the Chancellor had been informed, caused - the Kaiser to assume that I completely shared the point of view of - Admirals v. Holtzendorff and v. Tirpitz, who now recommend a - submarine campaign 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 submarines as insufficient for the - purposes of such a finally decisive measure. - - "'The first attempt at submarine warfare proved unsuccessful 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-laying auxiliaries should be carried on as - hitherto, and should even be extended. I also consider that the - submarines should be made use of to the fullest extent of their - capacity, with the proviso, however, that their employment against - passenger steamers should be subject to the restrictions recently - laid down by Your Majesty. - - "'When the number of the big submarines shall be sufficient - effectively to cut off the British food supply, I think the time - will have arrived for us to employ this weapon against Great - Britain without paying regard to the so-called neutrals. - - "'At present about two hundred ocean steamers or more 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 sufficient excuse for me.'" - -In the early part of 1916 Ballin went on a second mission to Vienna, and -afterwards he prepared a detailed report for the Chancellor dealing with -the state of public feeling as he found it. This document presents a -faithful picture of the precarious conditions in that capital which the -German Government had constantly to reckon with, and may therefore be of -interest even now. The following passages are extracts from it: - - "If we desire to keep the Austrian fighting spirit unimpaired we - must avoid at all hazards suggesting the possibility of an - understanding with Italy. The Italian war is popular down to the - lowest classes of the people, and the successful stand against - Italy is a subject of pride and hope to all Austrians. - - "Hence the circumstance that Prince Bülow has temporarily taken up - his abode at Lucerne has roused a considerable 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. - - "People are especially proud of the Isonzo battles, but they do not - shut their eyes to the uncertain prospects of a successful Austrian - offensive. They really consider that Austria has gained her war - aims, and the old Emperor described the military situation to Frau - Kathi Schratt by saying that the war was in many respects like a - game of tarock, in which the winner was not allowed to cease - playing because the losers insisted upon him going on with the game - so that they might have their revenge. Matters at first had been to - the advantage of our enemies: the Russians had overrun Galicia, the - Serbians had defeated the Austrians at Belgrade, 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 clings to Count Stürgkh because of the extensive use to - which the latter puts the celebrated paragraph 14 of the - Constitution, by which Parliament is eliminated altogether, and - which provides the Government with every conceivable liberty of - action. The all-powerful Tisza gives his support to Count Stürgkh - 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 difficulty. The Emperor wants to avoid a break - with Tisza at all costs. This state of things makes people feel - very worried. The strain in the relations between Austria and - Hungary has greatly increased since my last visit, whereas the - friendly feelings for Germany are now more pronounced than ever. - - "Our Kaiser everywhere enjoys an unexampled veneration. Within the - next few days he will be made the subject of great celebrations in - his honour. Although the tickets of admission are sold at enormous - prices, even General v. Georgi, the Chief of the National Defence - Organization--whom I met last night--did not succeed in obtaining a - box, notwithstanding his high connexions. This morning the - well-known member of the Hofburg Theatre, Herr Georg Reimers, read - to me two poems dedicated to the Kaiser which he is going to recite - that night, and I feel bound to say that it can hardly be an - unmixed pleasure to the members of the court to witness this act of - enthusiastic homage paid to our ruler. - - "The Roumanian question, particularly in its bearing on the food - supply, is regarded by people who are able to judge with great - anxiety. It is believed that the only thing to do is to send to - Bucharest experienced men connected with the supply and the - distribution of food who must be properly authorized to purchase as - much grain as possible for ourselves and for our allies. - - "The big Austro-German _Zollverein_--or by whatever other name it - is intended to describe the proposed customs union--is looked upon - with very mixed feelings. Last night Baron Skoda (the Austrian - Krupp) explained to me after a dinner given at his house, with the - lively consent of members of the court and of the big - manufacturers, that the Austrian interests might indeed profit from - such a union with the Balkan States, but that it would be better - that Germany should remain an outsider for a period of fifteen - years. This is evidently a case of _timeo Danaos, et 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. - - " ... I also dined with Count Tisza. He is a purely Magyar - politician who regards the international situation from his - Hungarian point of view, and in conformity with his Magyar - inclinations. He is evidently a strong if obstinate character, and - he does not impress me as a man who will give up his post without a - protest. He, too, thinks the real war aims of Austria-Hungary have - been accomplished. Serbia is crushed, Galicia liberated, and - Russian supremacy in the Balkans--formerly viewed with so much - apprehension--is a thing of the past. All that is wanting now is to - bring the Italian campaign to a successful conclusion and the war - may be regarded as over as far as Austro-Hungarian interests are - involved. - - "Both Tisza and the Austrian society showed strong symptoms of an - Anglophile leaning. Frau Schratt, who in such matters simply - re-echoes the views of the old Emperor, seemed very pro-English, - and had something to say about 'German atrocities.' - - "I mention these facts because I cannot help thinking that, - notwithstanding the war, some friendly threads must have been spun - across from England to Austria." - -The subject of an unrestricted submarine war, already touched upon by -Ballin in his above-mentioned letter to the Kaiser written in January, -1916, was discussed with much animation in the course of the year, and a -powerful propaganda in its favour was started by certain quarters. -Ballin's attitude towards this question, and particularly towards its -bearing on the possible entry of the United States into the war, is -described with great clearness in a letter addressed to a friend of his -attached to the Army Headquarters. In this message he wrote: - - " ... 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 United States would - have been nothing short of fatal to Germany at the present stage. - Just because the war may be looked upon as won in a military sense, - we were obliged to avoid such a catastrophe at all costs. As far as - military exertions are concerned, it is quite correct to say that - Germany has won the war, because in order to turn the present - position into a military defeat our enemies, in the first instance, - would have to gain military victories in Russia, France, and - Belgium. These would have to be followed up by our retreat from the - occupied countries and by their invasion of ours, and they would - have to defeat us at home. Every sensible critic must see that - neither their human material nor their organizing powers are - sufficient for such achievements. The fact is that we have reached - the final stage of a progressive war of exhaustion, which nothing - but the intervention of the United States could have prolonged. - - "The accession of Italy to the ranks of our opponents has shown - what it means if an additional Power enters the war against us. - From a military point of view the entry of Italy did not materially - aggravate our position; but the whole aspect of the war, as viewed - by our enemies, underwent a complete change, and Grey, who shortly - before had announced that 'there is nothing between us and Germany - except Belgium,' stated a few weeks subsequent to the Italian - _volte-face_ that he could not find a suitable basis for peace - negotiations anywhere. - - "The entry of the United States would have been of immeasurably - greater effect on the imagination and the obstinacy of our enemies. - - "The very intelligent gentlemen who even now preach the - unrestricted submarine war, especially the leading members of the - Conservative and National Liberal parties, are misinformed about - what the submarines can do. They not only regard it as possible, - but even as practically certain, that the starvation of Great - Britain could be achieved if the unrestricted submarine war were - introduced. I need not tell Your Excellency that such 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 - 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 Berlin economic associations, viz. that we can no more force - the British into subjection through our submarines than they can - hope to wear us out by their starvation blockade. Both the - submarine war and the blockade are extremely disastrous measures, - inflicting heavy losses on either side; but neither of them can - determine the fate of the war nor bring about a fundamental - improvement in the position of either of the belligerent groups of - Powers. That, apart from all other considerations, the unrestricted - submarine war would have exposed us to the open hostility of the - neutral countries, and might even have caused them to join the - ranks of our enemies, is an additional contingency which the - submarine enthusiasts have found it most convenient to dismiss by a - wave of the hand. - - "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 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 political 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-Löwitz, etc., to visit him from time to time at - headquarters, and to acquaint him with their wishes and anxieties. - - "I cannot help telling you that the whole nation views with - profound regret the Kaiser's isolation. Since the outbreak 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: - - "February 16th, 1916. My chief apprehensions are purely political. - Although it seems that for the moment our differences with the - United States will be smoothed over, there can be no doubt but that - at times the tension has been so great that a wrong move at the - critical moment would have caused America to take up arms against - us. Contrary to what most people seem to think, I regard this - danger as having by no means passed; in fact I look upon it as - always lurking in the background. Those who, like myself, have seen - that the secret ideal of British policy is an alliance and - permanent co-operation with America, will agree with me that such - an Anglo-American understanding for the period of this war would be - of lasting detriment to our whole future. You know England, and you - know that the course of events has turned the Entente automatically - into an alliance, although the British, especially those who look - beyond the actual present, have always felt a great deal of - aversion towards such a development. The individual Frenchman, - indeed, is mostly looked upon as a somewhat grotesque and slightly - ludicrous character, but all the same there exists some sympathy - with the French as a nation, however artificially this may have - been brought about; but towards Russia the average Englishman never - felt anything but an icy aloofness and a great deal of antipathy. - Hence, the so-called allies of the British have never been the - cause of unalloyed joy to them. - - "On the other hand, to establish permanent relations with that part - of the Anglo-Saxon race inhabiting the huge continent across the - Atlantic has at all times been the aim pursued by every really - far-sighted British statesman. By means of such an alliance, it is - hoped to consolidate and to strengthen for many generations the - foundations on which the venerable but also slightly dilapidated - structure of the United Kingdom rests. From a purely maritime point - of view, such an alliance would be of overwhelming strength. In my - opinion it would be perfectly hopeless for our country, constantly - menaced as it is by serious Continental complications, 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 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 - astuteness and all their energy to exploit any mistakes committed - by Germany. If they succeed in this, and if, in consequence, our - relations with the United States become very strained again or - drift towards a rupture, I fear that we shall not be able to bring - this war to a successful close, or derive from it any security for - our future development. - - "Berlin, February 26th, 1916. During the two days I have now been - here it has greatly depressed me to see a number of fanatics who - cannot gauge the consequences of their doings attempting to drive - this splendid German people towards a new abyss. Alas! delusions - and folly are rampant everywhere. If I were you, I should now - disregard every other consideration, and explain to the Kaiser as a - friend that everything is being gambled away: the existence of his - Empire, his crown, and possibly the fate of the dynasty. It is like - living in a madhouse; everyone talks about war with Holland, - America, Denmark and Roumania as though a mere picnic were - concerned." - -During the war Ballin tried over and over again to make the responsible -authorities see the position in the same light as his own observations, -and his repeated discussions with unprejudiced and clear-headed men had -led him to see it himself. The letter reproduced below contains a -description of the general situation at the time of writing (July, -1916). It was addressed to a friend of his in the diplomatic service who -was looking after German interests in one of the countries allied with -Germany, and who had asked him for some information concerning the -situation at home: - - "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 feeling that our responsible - quarters do not even now realize the profound gravity of the - situation. The political and the military leaders are frequently at - variance. There is a lack of proper co-operation between Berlin and - Vienna. We imagine ourselves to be the rider, but we are only the - horse. The road between Berlin and Vienna is studded with - compromises 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 States as well. Therefore, we - have only one choice left: we must force Russia, our second chief - enemy, to her knees. - - "Russia has been badly hit through the loss of the industrial - 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 conclude a separate - peace, and this would have settled the Roumanian question at the - same time. - - "With less certainty, but also, perhaps, with less exertion, it - might have proved possible to make peace _via_ Petrograd. But what - have we done instead? We have squandered our forces. The Eastern - theatre of war was denuded of troops, because at first Falkenhayn - felt sure he could take Verdun in a fortnight, then by Easter, and - finally by Whitsuntide. All our forces have been hurled at Verdun; - rivers of blood have been spilt, and now, in July, we are still - outside it. And what does it profit us if we do get it? We shall - only find other and more formidable lines behind it. - - "In the meantime our good Austrians have transferred all their - reliable officers and men to the Tyrol, and have left nothing but - the rubbish and their inefficient generals to guard the points of - danger. And what are the results? A graceful retirement for - Salandra and the formation of an anti-German coalition government - in Italy on the one hand, and a manifestation of Austrian - superiority on the other, but a failure, nevertheless, because the - Austrians were not strong enough numerically to get down into the - plain. And even if they had compelled the evacuation of Venetia - nothing would have been gained. The fate of Italy, as it happens, - does not depend on Austria, but on Great Britain, who will rather - watch her starve and perish for want of coal than permit her to sue - for peace. - - "Although all this is perfectly plain to everyone, our Supreme - Command seems to be undecided as to whether an offensive with all - the means at our disposal should be started on the Western Front - simultaneously with one against Russia, or whether it should be - directed against Russia only. As far back as last year I exerted - all my influence--small though it has become--in favour of an - energetic and whole-hearted offensive against Russia. - - "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 threatening 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 definitely the - belief that the war can be brought to a successful issue on the - Western Front, and without first defeating Russia. It is greatly to - be deplored that many observers assert that the Western Powers will - make peace when they have found out that the big offensive now in - progress remains without any visible success. Only people who do - not know Great Britain can put forward such a proposition, but how - many people are there at the Wilhelmstrasse who do know Great - Britain? Very few indeed, if any.... - - " ... You said you would rejoice to hear from me, and I can only - regret with all my heart that I have not been able to report - anything to you in which it would really be possible to rejoice." - -A still more serious note is struck in the following letter written in -September, 1916: - - "Very many thanks for your welcome letter of yesterday's date, with - the contents of which I agree in every detail. - - "I quite share your belief that Hindenburg and Ludendorff must each - feel like a great physician who is only called in when it is too - late. Two declarations of war within 24 hours were necessary to - bring about this change which the German people had been looking - forward to for months and months. The Chancellor is justly - reproached for not having had the courage to insist upon the - appointment of these two men and on the resignation of Falkenhayn - long ago. It is contended that he should have tendered his own - resignation if his recommendations were refused, and his neglect to - do so makes him principally responsible for the fate that is in - store for us. For a long time back I have kept emphasizing the need - for transferring our main activities to the Eastern theatre of war, - and for definitely settling these personal questions. - - "The Chancellor clings to his post because he believes that there - is no one better qualified than himself to be at the head of - affairs. Such an attitude reminds me of the old gentleman who - neither wanted to die nor to retire from his post as president of - the Berlin Chamber of Commerce, and who bitterly complained to - those who came to congratulate him on his ninetieth birthday that - he was compelled to stick to his office, in spite of his advanced - years, because he could not see a better man to succeed him. - - "It is very sad that we have arrived at such an _impasse_, and I am - convinced that the present internal political situation is - untenable. No German Chancellor can possibly carry the business of - the country to a successful issue if, in the midst of a terrible - war, he is obliged to fight against an opposition consisting of the - Conservatives, the representatives of the Heavy Industries, and the - majority of the National Liberals. - - "As far as I can make out, the Chinese wall surrounding the Kaiser - has not disappeared with the exit of Falkenhayn from the scene. No - one is granted access to him who knows something about the events - that led up to this war, and who, in the interests of his dynasty - as well as his own, would tell him the unvarnished truth. 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 indemnities than to annexations. If it is - possible that the men 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 1st. After that date she will depend on - Hungary and ourselves for her food. She fears that she is not - likely to get much, if anything, from Hungary; on the other hand, - she feels sure that we are compelled for our own sake to save her - from famine. - - "Constantinople, too, has only supplies for a few more weeks. - - "With us at home the paraffin question is 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 affairs at that time maintained that -nothing but the application of rigorous force, or, in other words, the -unrestricted use of the submarine weapon against Great Britain, would -lead to a successful termination of the world war. The propaganda in -favour of that measure is still in everybody's memory. Whatever may be -said in defence of the authors of this propaganda, there is one reproach -from which they cannot escape, viz. that they left no stone unturned to -prevent their opponents from stating their views, and this, on account -of the strict censorship to which the expression of every independent -opinion was subject, was not a difficult matter. Their one-sided policy -went so far that, when a pamphlet on the question of submarine warfare -was written by order of the Admiralty Staff and circulated among a -number of persons, including leading shipping men, Ballin was purposely -excluded, because it was taken for granted that he would not express -himself in favour of the contents. It is not likely, however, that the -methods of reasoning put forward in this document--which was much more -like an academic dissertation than an unprejudiced criticism of a -political and military measure affecting the whole national existence of -Germany--would have induced Ballin to change his views on the submarine -war. Once only, and then merely for a brief period, was he in doubt as -to whether his views on that question were right, but he soon returned -to his first opinion when he found that he had been misinformed -regarding the number and the effectiveness of submarines available. - -The inauguration of unrestricted submarine warfare in January, 1917, not -only put a sudden end to the peace movement in which Ballin, as has been -explained on a preceding page, played an important part, but also to the -attempt of President Wilson to bring the two sides together. The details -of the President's endeavours have meanwhile become public property -through the revelations of Count Bernstorff, the German ambassador in -Washington. In both instances a few weeks would have sufficed to -ascertain whether the proposed action was likely to bring about the -desired end, and the former attempt had even led to the impending -establishment of mutual contact between the belligerents. The inability -of the German political leaders to avail themselves of this opportunity, -or at least their failure to do so, has doubtless been the greatest -misfortune from which Germany had to suffer during the whole war. - -Notwithstanding the successful exploits of the submarines, Ballin's -apprehensions never left him, and they were not allayed by the -development of the position at home. The letter published below, which -he wrote to the Chief of the Kaiser's Civil Cabinet, believing that this -gentleman would be most likely to assist him in laying his views before -the Kaiser, admirably sums up his feelings, and testifies both to his -real patriotism and to his presentiment of the fate that was to overtake -his country: - - "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 apprehensions. - - "I do not doubt for a moment that our competent authorities intend - to extract the utmost advantage to ourselves 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 struggling against a - world in arms in which even the few countries 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 underfed. 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 comprehensive 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, - however, 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 contradictory 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 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 - revolutions are impossible in the era of 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 feelings." - -In May, 1917, Ballin accepted an invitation received from the Supreme -Army Command and paid a visit to General Headquarters, where he found a -great deal of discontent prevailing with the policy of the Chancellor. -He also met the Kaiser, and reports on his visit as follows: - - "After sharing the Kaiser's repast--which was plain and on a war - diet--I had several hours' private conversation with His Majesty. I - found him full of optimism, far more so than I thought was - justified. Both he and Ludendorff seem to put too much faith in the - success of the submarines; but they fail to see that this weapon is - procuring for us the enmity of the whole world, and that the - promise held out by its advocates, viz., that Great Britain will be - brought to her knees within two months, is, to put it mildly, - extremely doubtful of realization, unless we can sink the ships - which carry ammunition and pit-props to England." - -In a letter addressed to a gentleman in the Kaiser's entourage he gave a -further detailed account of his views on the optimism prevailing in high -places: - - "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 mathematical form - of telling a lie, and that, to use the expression of a clever - Frenchman, a statistical table is like a loose woman who is at the - service of anyone who wants her. 'There are different ways of - arranging figures,' as they say in England. I do not know Mr. X, - neither do I know his statistics, but what I have been told about - them seemed foolish to me. If we carry on the war, and particularly - the unrestricted submarine 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 imports 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, notwithstanding 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. - - "This fact, to my mind, points to the limits of the success - obtainable by our submarines. I have constantly explained, - especially to the Chief of the Admiralty Staff, that I can only - regard the submarine as a successful weapon if it enables us to cut - off the British supplies of ore from Spain and Sweden, and also - those of pit-props, because without the possession of these two - necessities, Great Britain is no longer able to continue 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 impossible; - because, in addition to her own harvests, she only needs from - twelve to fifteen thousand tons of cereals every day, and these she - can, if necessary, always obtain at night-time through her Channel - service, _via_ Spain and France. Even this necessity will hardly - arise, because two medium-sized steamers are sufficient to carry - the fifteen thousand tons, and things would have to be very bad, - indeed, if these did not succeed in reaching a British port. And if - our statistical tricksters juggle with crop failures, please do not - forget that new harvests are soon to be expected, and that it will - not do always to count on crop failures. - - "You will be doing a good work if you can persuade people at - headquarters to abandon their belief that Great Britain can be - starved to submission. Unfortunately their other belief, viz., that - we can cut off her supplies of ore and pit-props, will also have to - be abandoned. - - "Certainly, the achievements of our submarines have been amazing. - At their present rate they will enormously diminish the British - tonnage figures, and raise the hatred of everything German to - boiling point; but they will not, unfortunately, lead to such an - end of the war as our Pan-Germans desire. It is a thousand pities! - - "When the submarine problem began to assume practical shape, I - pointed out to the Chief of the Admiralty Staff that, to be - successful, the submarine war must be brief; that its principal - object was not to sink a large number of ships, but to produce such - a feeling of alarm in neutral countries as to prevent them from - risking their ships (1) because of the great value of tonnage - immediately after the war, (2) because of the impossibility of - finding crews, and (3) because of the insurance difficulty. These - conditions of success were, indeed, realized during the first four - weeks; but since that time people, as I had predicted, have got - used to the danger. The crews are coming forth again, the insurance - companies issue their policies 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 1st, 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 minimize 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 considerably 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 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 already explained, the present state of affairs - makes it urgently desirable that the gentlemen whose privilege it - is to be near His Majesty should see things as they really are, and - not as they would wish them to be. - - "Compare, if you have a chance, the advertisement pages of an - English paper with those of a German one. I have just come across a - copy of the _Daily Telegraph_ which I beg to enclose for this - purpose. I have been in the habit of studying these advertisements - for many months; they are excellent means of gauging the difference - in the effects of the war on the two countries." - -During the remaining part of 1917, and during the first months of 1918 -as well, Ballin took an active interest in the preparations for the Bill -dealing with the rebuilding of the German mercantile marine; in other -respects, especially with regard to political matters, the course of -events condemned him to remain passive. His notes during this period are -few. I select the following passages from them: - - " ... July 17th, 1917. The Erzberger resolution which was chiefly - aimed at Helfferich and the naval authorities has made the - Chancellor's position untenable. Everybody 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 Bülow, and, acting upon Valentini's suggestion, I made - up my mind to approach the Kaiser with a view to discussing with - him the situation which appeared to me fraught with the greatest - danger. I therefore asked His Excellency von Reischach to arrange - such a meeting for me, but on Thursday night I was rung up from - headquarters and informed that Hindenburg and Ludendorff were - already on their way to the Kaiser to report to His Majesty on this - subject. Under these circumstances I did not like to interfere, and - on Friday I withdrew my application for an interview. The Kaiser - has told the two generals that he had accepted Bethmann's - resignation the previous evening. He is thus able to save himself - from a perplexing situation by contending that he had to give in to - the wishes of the Supreme Army Command. - - " ... July 25th, 1917. Yesterday I called on Prince Bülow at his - Flottbek residence, and found him looking better than I had seen - him for years. After I had left him I had the feeling that the - Prince, who regards the whole situation with a great deal of - misgiving, would even be willing to accept the post of Foreign - Secretary under Michaelis himself, in order to be able to guide our - foreign policy along sensible lines once more. Contrary to the - reserve which he formerly showed, he now condemns Bethmann's policy - with great bitterness. Bethmann, he maintains, by yielding to the - demand for universal suffrage, acted like a banker on the day - before bankruptcy who would try to save himself from disaster by - using his clients' deposits. - - "The Mexico telegram[5] he treated with a good deal of sarcasm, - remarking that it was the maddest prank since the exploits of the - Captain of Köpenick, 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 wanted to consult me as to - whether Prince Bülow should be offered the post of Foreign - Secretary. I am afraid, however, that there is not much chance of - his being appointed. The Prince shares this opinion, and would not - like the Press to make any propaganda in his favour. - - " ... Sept. 14th, 1917. 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, 1917._ - - "The fall of Riga shows once more how far superior our military - achievements are to the work performed by our politicians. With the - dispatch of the Mexico telegram their folly appeared to me to have - reached its height; but the descent from that point is but slow. - The news recently published by the Press to the effect that the - Federal Council is to deal with the question of the constitutional - and administrative reforms which are to be granted to - Alsace-Lorraine, makes me fear that some big political blunder is - going to be committed again. It is evidently believed that, if - Alsace-Lorraine were to be established as an independent federal - state with perhaps some South German prince as its Grand Duke, such - a measure would remove an obstacle to peace. I, however, consider - it a great tactical mistake to attempt such a solution of the - Alsace-Lorraine problem before the war is 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 _succès - 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! In the same way we deliberately - diminished the great value of the important 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-controlled organizations. To my mind the appointment of - a 'Government Commissioner for the period of Economic Transition' - is altogether superfluous. We must refrain from all attempts at - interfering by artificial means with the natural development of - events. This, however, is precisely what the Commissioner would - have to do. He would have to act according to instructions received - from the Bank of Germany or from some specially created body - dealing with the question of the foreign exchanges and the - provision of foreign bills. - - "My belief is that our foreign exchanges which have so completely - got out of order will prove an excellent means of diminishing the - hatred against us and of making our enemies less disinclined to - resume business with us. The Americans who are now able to obtain - goods to the value of M 6.20 for 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 economic - 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 Government 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 valuable 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 Government-bound system in place of it?' How, I - ask you, can a State-managed industrial organization avail itself - of the advantages to be had when trade is booming, or to guard - itself against the losses when there is a slump? What will be the - attitude of such an organization towards dealings in futures and - speculation, both of which are indispensable forms of modern - business enterprise? True, it has been suggested that these - difficulties could be overcome if some business men were requested - to accept appointments under this system, and if so-called 'mixed' - concerns worked by the co-operation of public funds and private - capital were established. May Heaven grant that this will never be - done! I am sure you have had even more to do than I with business - men who had been promoted to the higher dignity of Government - officials. Most of them have turned out complete failures in their - new spheres; they have become more bureaucratic than our - bureaucrats themselves; their initiative and their eagerness to - take upon themselves 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 impede 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 efficient? - - "Even among the efficient business men, unless they be born - geniuses, a distinction must be drawn between those who can make - profits and those who can organize. The former kind--who are, - moreover, but few and far between--will never submit to the - personal restrictions to which they would be subjected in - state-managed or 'mixed' concerns. The second kind alone, however, - would never make any concern prosper. - - "Another consideration is that the enemy countries would view with - much suspicion any such institutions controlled 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 Government - 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 reconstruction 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 suggestion that an economic union of the Central - European countries should be established was put forward at a most - inopportune moment, and the propaganda in its favour was bound to - bring about the retaliatory measures agreed upon by our enemies at - the Paris Economic Conference. - - "The resolutions of this Conference were of little practical - importance to us until the day when America entered the field - against us. If the United States assents to them, it will become - possible to enforce them, and for this reason I am watching the - further development of the economic question with growing concern. - I maintain that peace negotiations should only be started after a - previous agreement has been arrived at between the belligerents to - the effect that, on the conclusion of peace, the commercial - relations formerly existing between them should be restored as far - as possible, and that the resolutions passed at the Paris Economic - Conference and at the Central European Conference should be - rescinded. Such an attitude, however, can only be taken up by our - delegates if they agree that the former commercial treaties, no - matter whether they are still running or whether they have elapsed, - should automatically become valid again for a fairly extensive - period of time after the close of the war. The disadvantages which - some of these treaties involve for us are easily outbalanced by the - advantages secured by the others. - - "Our Government cannot be reminded too often that it is necessary - to consult experienced men of business in all such questions. Since - the early days of the war I have vainly tried to convince Herr v. - Bethmann of this necessity. After all, nobody can possibly be an - expert in everything. Yesterday, when reading the letters of Gustav - Freytag to his publisher, Mr. Hirzel, I came across the following - admirable piece of self-criticism: 'I do not know yet what is to - become of my work; but I fear I am doing what others, better - qualified than I, ought to be doing, and that I am leaving undone - what I ought to do.' Every great leader in our political and - economic life must have experienced that it is extremely - unsatisfactory to waste one's time and energy on work which another - man could do just as well as, or even better than, oneself. This - the Government should remember whenever it attempts to interfere - with the big industrial combines, such as trusts, syndicates, etc. - Wherever a syndicate is necessary in the best interests of any - industry, a leader will be forthcoming who will create it; and only - in cases where inferior minds, acting for selfish reasons of their - own, do not wish to acknowledge the need for combining, the - Government 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 waterways 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 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 maintained that it must be our - main war aim to detach Russia from the Entente, and that we must - endeavour to establish close relations between our own country and - Russia so that the two of us shall be strong enough to face a - possible alliance between Great Britain, the United States, and - France. This should be our aim even now. But if we are going - deliberately to dismember the Russian Empire and to parcel it out - into a number of independent units, our political influence after - the war will be slight indeed, and the result must necessarily make - itself felt to the detriment of our whole economic life." - -At Ballin's suggestion, the members of the Reichstag were invited to -attend a meeting which was to be held in Hamburg during the summer of -1918. Large sections of people in the three Hanseatic cities viewed with -grave concern the plans which the Government entertained for the -economic development after the war, and the meeting had been called to -draw the attention of the visitors to this state of affairs. Three -principal speeches were delivered, and at the close of the meeting -Ballin briefly recapitulated the main arguments against too much -Government interference. Much of what he said on that occasion, and much -of what he had written in the memorandum quoted above, has been borne -out by the events of the recent past, even though the actual terms of -the peace imposed on Germany were much more unfavourable than he had -expected them to be. In addressing himself to the Vice President of the -Reichstag, Geheimrat Dove, and the large number of the elected -representatives of the German people who accepted the invitation, Ballin -said: - - "We should be glad if you would see to it that the Government does - not put a halter round our necks, and that it refrains from the - dangerous attempt to employ barrack-room methods where economic - questions of national and international importance are at stake. - Let us have air, and light, and freedom to act; and we, by availing - ourselves of our relations with the overseas countries, shall be - able to carry out the work that lies before us.... - - " ... I am convinced that all the measures which are contemplated - to stabilize economic conditions during the period of transition - from war to peace will do more harm than good. If carried into - practice, they will merely prepare the soil for an economic - struggle to succeed the present war of arms. We need a peace that - is doubly secure! We cannot ask our enemies to give us freedom - where we impose compulsion. 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." - -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[6] 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 returned 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 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 - necessary 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 occurrences 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 Bülow in his - mind. I told Stinnes that Bülow, 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 Chancellor, 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, - especially Prince Bülow, would seriously carry out the - democratization 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 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) suggestion was that - I should not see the Kaiser by myself, but together with Stinnes, - Duisburg, and Krupp v. Bohlen. - - "I replied to Stinnes that I considered it very inadvisable 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 Ludendorff 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 Wilhelmshöhe 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 became impatient and did not wish to - wait till the hour appointed for the interview. So I was requested - by telephone to hold myself in readiness by 11 o'clock. - - "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 display 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 intended to retire to the old Hindenburg line, - so that the only result of the offensive has been the loss of - several hundreds 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 Hindenburg line. Then, he thought, we - should avail ourselves of the offer of mediation which had been - made by the Queen of Holland. - - "Whenever I was too frank in my criticisms and suggestions, 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 perishable 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 fortunes. On this subject, too, the Kaiser fell in - with my own views, and it was decided to release at least the - perishable articles, and to allow them to be sold once more through - the ordinary channels without restriction. - - "The Kaiser also declared that this war would soon be followed by - another, to which he referred as the Second Carthaginian War. He - spoke a great deal of an Anglo-American alliance which would, of - course, be directed against Japan, and the views on political - subjects which he expressed in this connexion showed that he is - being very badly advised indeed. - - "Herr v. Berg is obviously conservative and Pan-German in his - politics, and it seems that his influence is predominant at Court. - Only on the Prussian suffrage question did he agree with my own - standpoint, which is that universal suffrage 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: - - "In the meantime," he writes, "Wilson's reply has been received, - and it is certain that compliance with its terms will be equivalent - to capitulation. - - "To my mind Wilson's note clearly shows that he and his allies will - demand that the Hohenzollerns, or at any rate the Kaiser and the - Crown Prince, shall relinquish their rights to the throne, and - that, in consideration of such an act, they will ease their terms - of peace. - - "Each of the men who are at the head of their respective - Governments has to play to his gallery, and if these men desire to - give their audience a convincing proof of the completeness 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 comfortably into private - life. He must see the force of this argument 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 - responsibilities 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." - -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 -undertaking which, as a result of this work, developed into one of the -greatest that the economic history of the generation just passed has -known, cannot be told in full by means of a mere description unless it -be accompanied by volumes of statistics which, however, convey no -meaning to anyone except the initiated. - -The author, therefore, had to content himself with delineating a picture -of his hero with a background formed by the events which he himself had -helped to shape, and which, in many instances, had received their -distinguishing stamp through his own genius. The essence of his -character, and the importance of his work to his contemporaries, must -stand out from this background as the portrait of a painter--as seen by -himself--would stand out from a mirror. What the mirror does not show, -and cannot show, is the immensity of the mental forces hidden below the -surface which alone give expression to the portrait; all the factors -which have brought about the final result--the strength, the courage, -the daring, and the feeling of responsibility without which it would -never have been achieved. - -Still more difficult it is to interpret the very essence of the -character of him whose work we see before us, or, indeed, to give a -comprehensible account of it to the stranger. - -The only way of doing justice to a man of such commanding genius as -Ballin is to try to discover first of all the one essential root -principle of his personality. Having succeeded in that, we shall find no -more difficulty in reconciling the great number of apparently mutually -contradictory traits of his character. This principle is the focus where -all the rays of light are collected from all directions, and which forms -the source of light, warmth, and vital energy. - -Albert Ballin was a born business man if ever there was one. To him the -noble words of Schiller's lines apply: "The treasures which his ships -carry across the oceans spell untold blessings to all who receive them." -His whole mind was drawn towards the sea; his inborn inclinations and -the surroundings amidst which he grew up had destined him to be a -shipping man. To the boy Ballin the Hamburg harbour was the favourite -playground; and the seven seas were just large enough to serve as a -field of action for the youth and the man. There was his real home, and -there he felt at rest. How often, indeed, has he assured us that the -sleeplessness to which he fell an unfortunate victim whenever he was -ashore left him as soon as he was on board ship, and that a miserable -river barge was sufficient to have this effect on him. He was proof -against sea-sickness, both bodily and mentally. Thus he became a -shipping man, because it was his natural vocation; and in this chosen -profession of his he became one of the greatest and most brilliantly -gifted rulers the world has ever seen. - -Whenever there was a problem to be solved he attacked it in a spirit of -boldness, yet tempered by the utmost conscientiousness and caution. No -task he encountered was so big that his daring could not tackle it and -overcome its difficulties; nothing was so insignificant that he would -not attend to it somehow. Whatever decision his infallible instinct -intuitively recognized as right, and to whatever idea his impulsive -nature had given practical shape, had to pass muster during the -sleepless hours of the night before the tribunal of his restless mind -when, as he used to say, "everything appears wrapt up in a grey mist." -At such times his reason began to analyse and to criticize the decisions -he had reached during the day. Then he would often shudder at his own -boldness, and the torments of doubt would be aggravated by the thought -of the enormous responsibility which he bore towards his company. For it -must be understood that from the day he joined the Hamburg-Amerika Linie -his interests and those of the company became parts of an inseparable -whole. - -The company's affairs absorbed all his thoughts at all times; the -company's well-being was the object of his constant care; he devoted -himself exclusively to the service of the company, and the opinions -which he formed in his mind regarding persons and things were -instinctively coloured according to their relationship to the company's -affairs. The gradual progress during its infancy, the later expansion, -and the final greatness of the company, were as the events of his own -life to him; when the proud structure which he had raised collapsed his -life was ended. His thoughts incessantly converged towards this very -centre of his being. All his work, all his words and deeds, were devoted -to the furtherance of the company's interests. He identified himself so -completely with the company that he actually was the Packetfahrt, and -the Packetfahrt was he. Even his love and hatred were rooted in the -company. He remained a grateful and lifelong friend to anyone who had -been of service to the company or to him as representing it. - -This highly subjective and indissoluble relationship between himself and -the company--which it had been the dream of his life to raise to the -highest pinnacle of prosperity--is the key to the fundamental principle -which lies at the root of his whole complex personality. But however -well-defined his personal individuality stood out, his subjectivity was -nevertheless animated by a strong sense of duty. His views, for -instance, on the essential principles governing the most perfect -organization which modern capitalism has produced--i.e. the joint-stock -company--were free from any tinge of personal considerations whatever. -He was himself the responsible head of a big joint-stock company, and -instinctively this fact exercised such a powerful influence on all his -thoughts and feelings that it is quite impossible to arrive at a just -appreciation of his character unless this circumstance is borne in mind. -His character which appears so complicated to the cursory onlooker, but -which is in reality of singular simplicity and consistency, is best -illustrated by his reply to a question of one of his friends who had -asked him why he did not allow some piece of scathing criticism which he -had just expressed in private to be made public. "My dear friend," he -said, "you forget that you are not the chairman of the board of -directors of a joint-stock company." What he meant to convey was that -the enmity which he would incur by expressing those views in public -would adversely affect the firm of which he was the head, and that the -interests of his company compelled him to impose upon himself -restrictions which he could ignore in his private capacity. - -Although he had nothing but scorn for the very suggestion that this -company should receive at any time any subsidies from public funds, he -made it to the fullest extent subservient to the needs of the public and -of the nation at large. He often remarked that such gigantic concerns -as, e.g., the Hamburg-Amerika Linie, are no longer private ventures -purely and simply. The ties that bind them to the whole economic life of -the nation--and, for the matter of that, to the world in general--are so -close and so manifold that it would be disastrous to ignore them or to -sever them. Hundreds of industrial, commercial, and agricultural -enterprises were lavishly supplied with work through the orders they -received from the Hamburg-Amerika Linie in connexion with the building -and the equipment of its steamers and with the needs of its -organizations on shore. Its hundreds of thousands of passengers and -emigrants, and the huge volume of German-made products and manufactured -articles carried on board its vessels, spread the German name and German -fame throughout the civilized world. Hence, to Albert Ballin the -national flag and that of the Hapag were two symbols expressive of but -one idea. - -A man who, like Ballin, was at the head of the biggest German shipping -company and therefore also, by implication, one of the leading spirits -in the economic life of Germany, could not very well hold himself aloof -where high politics were concerned. The more the economic problems -gained in importance, the greater became their bearing on the course of -the country's politics. Ballin, however, would never have become a -professional politician from inclination, because he invariably refused -to be mixed up with the strife of parties. He never officially belonged -to any political party; and although he made friends with members of all -the non-Socialist parties, his general outlook on politics was mainly -coloured by Liberal views, and he was a firm believer in Free Trade. -Whenever questions dealing with the interests of shipping and trade were -involved, he had no difficulty in making the responsible people listen -to his claims and to his suggestions, but he never tried to make his -influence felt on purely political affairs unless they affected the -country's vital international interests. His lengthy and extensive -travels to the countries of Europe, to the North American continent, and -to the Far East, had broadened his outlook. His profession as a shipping -man not only brought him into frequent contact with the heads of the big -shipping companies all the world over, but also with a number of the -financial magnates and industrial captains of Great Britain, the United -States, and other countries of economic importance. He took rank with -the greatest economic leaders as an equal, and this unchallenged -position of commanding authority was reflected by the esteem in which he -was held by the principal statesmen and parliamentarians. He was -familiar with the essential and vital needs of other nations, and he -therefore not only stood up for the national rights whenever they -appeared in jeopardy, but he also raised his warning voice against a -policy provocative of conflicts whenever he thought it possible to avoid -them. Whoever is conscious of his strength is also aware of the -limitations set to his power. - -In politics as well as in business he held that "a lean compromise was -preferable to a fat lawsuit," as the German proverb puts it. It has been -mentioned elsewhere in this volume that Ballin was essentially the man -of compromise. It is very probable that the experiences of his early -life had helped to develop this outstanding feature of his personality. -It may be assumed that he, a young man of unknown Jewish family, found -his path beset with difficulties in a city-state like Hamburg, where the -influence of the wealthy patriciate of the merchant classes was -supreme, and that he was looked upon as an upstart even after he had -reached a prominent position himself. The casual observer is far too -much inclined to underestimate the conservative character--both -politically and socially--of the three Hanseatic cities. Still, evidence -is not wanting that Ballin's unusual gifts were occasionally recognized -and appreciated even in the days of his early career. An English -journalist, for instance, who met him some time about 1895, -characterized him by the following words: "He struck me as a great man; -otherwise nothing so incongruous as such a type of man at the head of a -big steamship line could be imagined." That Field-Marshal Count -Waldersee honoured him by his friendship at an early period has been -mentioned in a different chapter of this volume. And even in patrician -Hamburg he found an immensely powerful friend and patron shortly after -he had entered the services of the Packetfahrt. This was no less a man -than the shipowner Carl Laeisz, the most eminent representative of the -"House of Laeisz." - -The firm of F. Laeisz, which was successfully owned by its founder, -Ferdinand, his son Carl, and his grandson Carl Ferdinand, has stood -sponsor to all the more important shipping companies established in -Hamburg, and through its great authority helped them all to get over the -critical years of their early youth. The sound principles by which the -firm was guided might sometimes lead to much disappointment on the part -of the shareholders, but they proved to be of unsurpassable benefit to -the companies concerned, and nothing illustrates them better than the -oft-told episode of the shareholder who went to see Carl Laeisz, -complaining that the Hamburg South American S.S. Company did not pay any -dividend. "The object of the company is to carry on the shipping trade, -and not to distribute dividends," was the blunt but characteristic -reply. Being thoroughly unconventional in his habits, Carl Laeisz--no -less than his singularly gifted son, who was one of those rare men whom -it was really impossible to replace--nevertheless did invaluable service -in connexion with the establishment of new firms in Hamburg, and with -the encouragement of existing ones. - -It was a great compliment to Ballin that in 1888, when he had only been -associated with the Packetfahrt for a couple of years, and when the -directors asked for authority to increase the joint-stock capital of the -company from 20 to 25 million marks, Carl Laeisz informed them in -advance that, at the general meeting of the shareholders, he would move -an increase of 10 instead of 5 millions, and that this motion was -unanimously carried. Those who have known Carl Laeisz personally will -appreciate what it meant to Ballin when, by way of giving him an -introduction to the London firm of Messrs. J. Henry Schröder, Laeisz -scribbled the following note on the back of one of Ballin's visiting -cards: - - "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 documents which Ballin left -at the time of his death, it would seem that it was not used for its -intended purpose, but that he preferred to keep it as a souvenir of the -man whom he always remembered with gratitude and affection, and of whose -life he could tell a good number of characteristic anecdotes. The -telegram of which the text is given below is also highly typical of Carl -Laeisz. I have not been able to discover what was the occasion of -sending it, but I am inclined to think that it must be in some manner -connected with the conference held in the Berlin Royal Castle, and -referred to on an earlier page, at which Ballin first attracted the -Kaiser's attention. The text is as follows: - - "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 Köhlbrand agreement, which, after a hard -struggle, put an end to the long controversy between Hamburg and Prussia -by stipulating that the course of the lower Elbe should be regulated -without detriment to the interests of the town of Harburg, imposed such -a vast amount of expenditure upon Hamburg, and the Prussian local -authorities concerned insisted on securing the payment of such large -compensations to the owners whose rights were adversely affected by the -improvement of the waterway, that it might well be doubted whether -Hamburg could shoulder these enormous burdens. - -It speaks volumes for Ballin's unprejudiced mind that he frequently -maintained nothing would be of greater benefit to Hamburg than her -renunciation of her sovereignty as a city-state in favour of -incorporation with Prussia. Prussia, he argued, was her natural -hinterland, after all; and if she consented to be thus incorporated, she -would be such a precious jewel in the crown of Prussia that she could -secure without an effort all the advantages and privileges which -Prussia, by pursuing the strictly Prussian line in her politics, now -actually prevented her from acquiring. In course of time, however, her -present isolation would undermine the foundations of her existence, -especially if and when the increasing volume of traffic passing through -her port should demand a further expansion of the latter, and, -consequently, a further rise in the financial burdens. In that case the -unnatural position which resulted from the fact that the "Elbe delta" -belonged to two different states, and which had its origin in the -political history of the district, would make itself felt with all its -drawbacks, and the ultimate sufferer would be the country as a whole of -which Hamburg, after all, was the connecting link with the nations -beyond the sea. - -These are the same arguments and considerations which are used when the -modern problem of a "Greater Hamburg" is under discussion, with this -difference only, that in Ballin's time the only solution which was -regarded as possible was that Hamburg should cast in her lot with her -Prussian neighbour. - -Ballin repeatedly vented the full force of his sarcasm against the -advocates of an "out-and-out Hamburg policy" to whom his own views -sounded like heresy, a policy which found perhaps its most comic -expression in the speech of a former Hamburg burgomaster who referred to -the King of Prussia as "our illustrious ally." Ballin did not recognize -the existence of a line of demarcation which, as many lesser minds -imagined, separated republican Hamburg from the rest of Germany. In -reality there is no such separation; Hamburg, indeed, receives year -after year a constant influx of human material and of ideas from her -German hinterland, without which she could not exist at all, and in -spite of which she has never had a superfluity, but--at times, at -least--rather a deficiency of specially gifted citizens. This latter -circumstance and the frequent absence of that quality of mental -alertness which Bismarck, in speaking of the German character in -general, used to designate as the missing "dash of champagne in the -blood" once made Ballin say: "I quite see that what this town wants is -10,000 Jews. I do not, by any means, shut my eyes to the disagreeable -qualities of the Jewish character, but still, another 10,000 of them -would be a decided advantage." This utterance confirms how free from -prejudice he was where the Jewish question was concerned. Although not -at all orthodox, but rather indifferent in his religious views, he was -far too proud to disavow his origin or his religion, or to change the -latter. Of someone who had changed his name, he said, in a tone of -bitter reproach, that he had insulted his father. - -Ballin's relations with the working classes and his attitude towards the -Labour question were not such as the Socialist papers were fond of -alleging, especially at the time when the Labour controversy was at its -height, and when strikes were constantly occurring or threatening. The -first big strike affecting Ballin's special sphere of activity was that -of the Hamburg dock labourers in 1896. It was caused by wages disputes -which the Packetfahrt tried in vain to settle by raising the wages paid -to the men. The interests of the employers in the ensuing struggle were -not, however, specially represented by the associations of the shipping -firms, but were looked after by the big "Association of Employers of -Labour," and therefore the attitude taken up by the employers as a whole -was not determined by practical considerations from the point of view of -the shipping companies. The Packetfahrt, however, seems to have -emphasized the necessity of being guided by such practical -considerations, as may be inferred from the fact that the Packetfahrt -was the only one among the large firms of employers which advocated from -the outset that certain concessions should be granted in respect of the -demands put forward by the workmen. Although, as has been remarked, the -company succeeded in seeing its recommendation adopted, the strike -started on November 18th, 1896. At first it was restricted to the -dockers, but the number of the strikers was soon swelled by the adhesion -of the quay-labourers and of several other categories of port-labourers -and seamen. When this had occurred, and when the Packetfahrt suggested -that steps should be taken on the part of the employers with the object -of reaching a friendly settlement, these suggestions did not secure a -majority in the counsels of the employers, and it was in regard to this -that Ballin's notes, under date of December 9th, contain the following -entry: "We are continuing our efforts to induce the Employers' -Association and the Shipowners' Association to give the strikers a -chance of an honourable retreat. What we propose in detail is that the -men should be asked to resume work of their own accord in consideration -of which the employers would promise to submit their grievances to a -_bona fide_ examination. All our efforts have failed because of the -attitude taken up by the Employers' Association. We can only hope that -the Senate will consent to mediate in the conflict." This body, however, -was afraid of being accused of prejudice in favour of the employers, and -declined to act as mediator. "It is very much against my wish," -Ballin's notes continue, "that our own interests are represented by the -Employers' Association," and on December 23rd, he wrote: "Meanwhile, the -Senate, in reply to the resolution passed by the men, has asked them to -resume work unconditionally against the promise to look into their -grievances, and as far as they appeared to be justified, to redress them -after a joint conference had been held between the employers and the -strikers. This offer of a compromise was rejected by the workmen." The -employers were able to get the most urgent work done by substitute -labour, and the strike came to an end in the early days of February. - -Among the subsequent Labour troubles those of 1907 are of special -significance. In that year, after a strike of the dockers and the -seamen, all those employers who had occasion to employ any workmen in -the port of Hamburg founded an organization somewhat on the lines of a -Labour Bureau, called the _Hafenbetriebsverein_. The termination of the -strike just referred to was brought about by Ballin's personal -influence, and it was he who conducted the prolonged negotiations with -the heads of the Labour organization. Later on, in 1911, when the -_Hafenbetriebsverein_ began to conclude agreements with this -organization by which the wages for the various categories of dock -labourers were fixed--a policy which did not exactly meet with the full -approval of large sections of employers, it was again due to Ballin's -influence that these agreements were generally accepted. It is just -possible that a certain event, insignificant in itself, may have -strengthened Ballin's natural tendency towards a settlement along the -lines of a compromise. As has been said before, the year 1907, which, -from the business point of view, had been excellent (at least, during -the first six months), and during which the above-mentioned strike -occurred, was succeeded by a year which brought exceedingly -unsatisfactory earnings to the company. Ballin did what he had done on a -previous occasion, in 1901: he sent a memorandum to all the employees of -the firm asking them to cut down expenses to the lowest possible extent, -to contribute their share towards a more economical working of every -department, and to submit to him any suggestions of their own as to how -the necessary retrenchment could be effected. I was instructed to -examine the general expenses account with a view to finding out in what -way a reduction would be possible, and I drew Ballin's attention to the -fact that the considerable sums which had to be spent in 1907 in -consequence of the strike would, of course, not appear again in the -balance-sheet for 1908, so that this would lead to an automatic -reduction of the working expenses. Ballin was surprised to see how large -this particular item was, and the whole occurrence proved once more that -a lean agreement would have been preferable to a fat lawsuit. - -As Ballin was pre-eminently a man whose mind was bent on practical work -and on the production of practical results, it is but natural that he -was greatly interested in the practical aspects of social politics, and -that he applied its principles to the activities in which he was engaged -as far as he thought he was justified in doing so. Not in peace times -only, but also during the war did he hold these views, and when he was -connected with the work of provisioning the civil population, and, -later, with that of preparing the economic post-war reconstruction, he -was frequently brought into contact with men who occupied prominent -positions in the world of Labour. - -His capacity for work was enormous and seemed wellnigh inexhaustible. He -made a most lavish use of it, especially in the early part of his life, -and the personal assistance he required with his work was of the -slightest. His greatest aid, indeed, was his marvellous memory, which -almost enabled him to do his work without ever referring to the files of -letters and documents. He could always recall to his mind every phase of -past events, and every detail of all the ships he had built or -purchased, and he was never wavering in the opinion he had formed of -anyone who had ever crossed his path, because such opinion was founded -on facts. - -Very gradually only did his fellow-members on the Board of Directors -succeed in persuading him to refrain from putting in an appearance at -his office on Sundays, and to do such Sunday work as he wanted to do at -home. The telegraph and the telephone always kept him busy, both on -weekdays and on Sundays. Even on his travels and on his holidays he -wanted to be informed of all that was going on, and he could be very -annoyed when any important news had been withheld from him, or when he -believed that this had been the case, so that his secretariat, to be on -the safe side, had gone rather far in forwarding on his correspondence -when he was away from town. When I first entered upon my duties with him -he had just returned from a rest cure at Kissingen. He pointed at the -huge pile of letters that had been forwarded to him on his so-called -holiday, adding, in a tone of bitterness: "You see, every expansion of a -business becomes a curse to its leader." Sometimes his absences from -Hamburg would amount to as much as eight months per annum, and it was -certainly no easy task always to know what to send on and what to hold -over until after his return. To do so one had to be well acquainted with -all the details of each transaction and to know what was important, -especially what was important to him; and if one wished to see his mind -at ease it was necessary never to let him think that anything was kept -back from him. Any apparent neglect in this respect he was apt to -regard as a personal slight. And yet the time which he had at his -disposal for attending to current correspondence, both when at the -office and when travelling, was but limited. - -The waiting-room outside his private office was nearly always crowded -with intending visitors. The callers were carefully sifted, and all -those who were strangers and those who had come without having an -appointment were passed on to someone else as far as this was possible. -Great credit is due to his ever faithful personal attendant at home and -on his travels, Carl Fischer, for the perfect tact which he showed in -the performance of this difficult task. - -In spite of all this sifting, however, the time left for getting through -a day's mail was not sufficient. I therefore, shortly after entering the -company's services, made it a point to submit to his notice only those -letters which I considered of real importance. According to the mood in -which he seemed to be I then acquainted him with the contents of as much -of the remainder as I thought it wise to do. I believe I gradually -succeeded in acquiring a fair amount of skill in reading his mind, and -this facility enabled me to avoid more dangerous rocks than one. I tried -to proceed along similar lines when he was away from Hamburg, especially -when he was taking a holiday. On such occasions I forwarded on to him -only the important letters, taking great care, however, that he was not -kept out of touch with any matter of real consequence, so that he should -never feel that he was left in the dark about anything. After some time -I had the satisfaction of being told by him when he returned from a -holiday that that had been "his first real holiday since he had joined -the Packetfahrt." - -Once one had learnt to understand his way of reasoning and his -individual traits, it was not difficult to know how to treat him. If a -mistake had been made, or if some oversight had taken place, the most -foolish thing would be not to tell him so at once. To act otherwise -would mean the immediate and permanent forfeiture of his confidence, -whilst an open admission of the mistake would strengthen his faith -enormously. He hated to be shut out from the actual practice of the -company's business by a Chinese wall of bureaucratic control. Whenever -such a wall was in process of erection he quickly and inexorably pulled -it down, and he always remained in personal contact with every -department and with every prominent member of the staff as far as the -size of the huge undertaking enabled him to do so. For this reason he -but rarely, and only when the pressure of other business was encroaching -too much on him, omitted to receive at his private office the captains -who came to make their reports to the directors. He knew, of course, -every one of them personally, as he had appointed many of them himself -years ago. He was no stranger to their various idiosyncrasies, and he -knew all their good qualities. He was also personally acquainted with a -great many of those unconventional and often somewhat blunt but always -good-natured individuals of humble rank who seem to thrive wherever much -shipping is going on. He was not too proud to write an appreciative -article on the death of one of them, which, since it reflects high -credit on his own generosity and kindness of heart, ought not to be -allowed to be forgotten altogether. It was published by the _Hamburger -Fremdenblatt_, to the staff of which the subject of his appreciation -might, in a sense, be said to have belonged. - - KUSKOP. - - "It was not until my return from England that I learnt, through - reading the _Fremdenblatt_, the news of the 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 - excellent 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 _Fremdenblatt_. I still have a vivid - recollection of a magnificent summer evening when we, a party of - about eighty people, left the passenger reception halls by our - saloon-steamer _Blankensee_ on our way to Brunshausen where we - intended to go on board one of our new boats which was ready for - her trial trip. Kuskop, who was wearing his yachting cap and was - armed with a pair of huge binoculars, had taken up a position on - deck. He stood out very conspicuously, and a port labourer who was - working on board an English steamer as soon as he saw him, raised - the cry of _'Fremdenblatt_.' This cry was immediately taken up by - the people on the quay-sides, on the river-vessels, on the - ferry-boats, on the barges, and all other vessels in the - neighbourhood, and developed into quite an ovation which was as - spontaneous as it was popular. The worthy Kuskop appeared to be - visibly gaining in importance; he had taken off his cap, and the - tears trickled down his kindly face. - - "He well deserved this popularity. For years and years he - unfailingly saw to it that the Hamburg steamers, at whatever port - of the globe they arrived, found a _Fremdenblatt_ waiting for them, - thus providing a valuable and much appreciated 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 _Fremdenblatt_ 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 - whereabouts, I was agreeably surprised to find on arriving at - Vancouver all the old copies of the _Fremdenblatt_ that had failed - to reach me, carefully piled up in one of the sleeping compartments - of the saloon carriage which had been placed at my disposal for the - railway journey from the Pacific to the Atlantic seaboard. - - "At that time I personally experienced the pleasant sensation--of - which our captains and the other officers had often spoken to - me--which one feels on reading the back copies of old newspapers, - calling up, as it does, vivid recollections 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 - beginning to end, thus passing in a delightful way the time taken - by travelling the long distance from Vancouver to Montreal. The - idea, which was afterwards made use of by Oskar Blumenthal in a - witty article, occurred to me to edit a paper which would publish - the news of the day a week after it had been reported, and even - then only as much of it as had proved to be true. Such a newspaper - would save us a great deal of unnecessary worry, as the contents of - this 'Periodical for the Dissemination of Truthful News' would be - sifted to a 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 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 detectives - 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 unfounded allegation of having committed - theft. Kuskop, feeling somewhat sceptical on hearing this - intelligence, but not believing himself justified in depriving the - readers of the _Fremdenblatt_ of such a highly interesting item of - news, thought he would be extra careful this time, and so did not - mention the captain by name, but merely referred to him as 'a Mr. - K----, captain of a Hamburg steamer.' This happened in the good old - times when there were still real winters in Hamburg, and when the - Elbe was sometimes ice-bound for months. The Hamburg steamers were - then compelled to take up winter quarters at Glückstadt--of all - places--and Kuskop used to establish a 'branch office' at that town - on such occasions. As bad luck would have it, he was fated one day - to meet Captain Kier there, who, with some of his friends, was - dining at his hotel. A huge tureen of soup with an enormous ladle - stood on the table in front of the captain, who was just about to - serve the soup when Kuskop entered the room. Without a moment's - hesitation the captain seized the ladle, the tureen, and everything - he could lay his hands on, and hurled them at him. He was, as the - latter afterwards 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 only two 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 of that it is certain - that he will long be remembered; for it is not to him that the - following quotation can be applied: 'May each one of us--whether he - works with his hands or with his brain to earn a living - wage--always bear in mind that all that is best in him is gradually - lost in the process of toil, and that, after he has departed this - life, nobody will remember that he ever existed.' - - "Our friend Kuskop never lost his good qualities in the process of - toil, and he was always a friend and a helpmate to all decent - people. I am sure in saying this I have the support 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 soothing tones of his melodious voice, and the firm and friendly -grip of his hand, made one forget that he was not a handsome man, -although his powerfully developed forehead and his head which, in later -years, was almost bald, were of classic perfection. - -Albert Ballin would never have gained the commanding position he held if -the keenness of his intellect and the force of his character had not -been supplemented by that pleasing amiability which distinguishes all -really good men. To him was given a large measure of that noble courtesy -which springs from the heart. He who could be hard and unyielding where -the business interests entrusted to his care were at stake, was full of -generosity and sympathy towards the members of his family circle and his -friends. Nothing delighted him more than the happiness of others. Those -whom he cared for he treated with a tender regard which was deeply -touching. He loved to give presents, and did so with the most delicate -tact. He never expected any thanks; it was sufficient for him to see the -happy face of the recipient. And if he ever met with ingratitude or -spitefulness, he ignored it and dismissed it from his mind. - -Personally generous to the limit of extravagance, he never spent a penny -of the funds of his company without being convinced that it would be to -its benefit. He left nothing undone when he thought he could realize a -profit to the company, or cut down expenses. Money, to him, was only a -means to an end; and the earnings of the company were in the first place -intended to be spent on increasing its scope and prosperity wherever -possible. Those who know what remuneration the heads of other concerns -receive may well be surprised to see how little Ballin made for himself -out of his position, but they would do him a great injustice if they -thought he ought to have made more out of it. He even spent the greater -part of his income for purposes of representation in the interests of -his company. His amiable charm of manner and his brilliant -conversational gifts did much towards making the entertainments he -provided the successes they invariably were; and even if so much -representation, especially that in connexion with Kiel Week, became -somewhat of a burden to him, his company reaped rich benefit from his -munificence. - -But to appreciate to the full the charm of his personality one must have -been his guest at his beautiful home in Hamburg or at his beloved -country seat near Hamfelde, and have listened to his conversation while -sitting round the fire of an evening, or been his companion on his long -walks and rambles through the neighbouring Forest of Hahnheide. His -conversation was always animated, his witty remarks were always to the -point, and he was unsurpassed as a raconteur. He was excellent as a -speaker at committee meetings, and he always hit upon the right words -suitable for a political toast. The skill with which he wielded the pen -is proved by numerous newspaper articles, memoranda, and descriptions of -his travels, but above all by his voluminous correspondence. He was -probably one of the most versatile letter-writers, and yet so -conscientious in this as to be almost pedantic. In his early years he -had also tried his hand at poetry. His beautiful home, which was adorned -with pictures and sculptures by eminent masters, was a source of great -pleasure to him. He was very fond of music and congenial company, and he -knew how to appreciate the pleasures of a full and daintily arranged -table. - -When I intimated to one of Ballin's old friends that I intended to write -his Life, he told me that this would not be an easy task, and that he -hoped I would not forget to depict Ballin as the amiable _charmeur_ to -which side of his character so many of his successes were due, and which -was the secret of much of his great popularity. The number of people -who claimed to be his friends, both before and after his death, but -especially when they were trying to get some advantage out of the -company, was surprisingly large. They were, in fact, so numerous that -such a claim, when put forward, was generally--and rightly--looked upon -with a great deal of suspicion. Very often, when such self-styled -friends were announced to him, Ballin would reply: "I do not know the -man," or "I do not remember him, but I may have met him." Ballin may -justly be described as a man of world-wide fame, and whenever he went -abroad the papers eagerly followed his movements. In New York especially -it required all his cunning and resourcefulness to escape from the -reporters desiring to interview him. - -Owing to his prominent position before the public he received an -abundance of honours during his life. The many distinctions and presents -which the Kaiser bestowed on him were a source of gratitude and delight -to him, and he valued them because they were a symbol of the personal -ties that linked him to the Kaiser; but the foreign decorations, of -which he also received a great many, were of so little interest to him -that he did not even trouble to have those of them replaced which once -were stolen from him. It was a great disappointment to him, however, not -to be able to recover the Japanese ornamental swords which were taken on -the same occasion, and which he had always carefully treasured because -of their high artistic value. They were a present from the Marquis Ito, -whom Ballin had once helped to obtain an audience of the Kaiser--an -audience which, he hoped, would lead to the establishment on a permanent -footing of Germany's relations with the Empire of the Mikado. It would -appear, indeed, that, if the leaders of Germany's political destiny had -shown some more circumspection, the same friendly relations might have -been brought about between Germany and Japan as were entered into later -on between Great Britain and the latter country. Personal souvenirs, -like those just mentioned, were prized so highly by Ballin that no -persuasion would induce him to part with them, and even Professor -Brinckmann, the Director of the Hamburg Museum for Arts and Crafts, who -was one of the leading authorities on the subject of Japanese applied -art, and who tried hard to secure possession of them for his museum, met -with a flat refusal. - -Every year Ballin spent at least six months, and often more, away from -Hamburg, and during such absences the work he had to accomplish was not -less, but rather more than that which he did when in Hamburg. -Conferences followed upon each other in quick succession at all times of -the day, and the time that was left was filled up by visits. Often the -amount of work was so great that he had to get through a whole series of -difficult problems in a single day. The number of visits he had arranged -was always considerably augmented by numerous others not allowed for in -his arrangements for the day; because wherever he went the news of his -arrival spread immediately. He could never even think of travelling -incognito. It is literally true that he was known to every hotel porter -all over the world. He was in the habit of extending his hospitality -twice a day to a larger or smaller number of business friends when he -was travelling. At first his love of congenial society had prompted him -to do this, but in after years he continued it because he wanted to -secure some benefit for his company even in his hours of relaxation. -Still, he was often quite glad when, late at night, he had come to the -close of his day's work, and when he could let the happenings of the day -pass before his mind's eye in the quiet solitude of his room, or, as he -liked to express it, "to draw the balance of the day's account." - -Even before 1900 the never-tiring energy of his mind and the excessive -strain on his nervous system brought about a practically permanent -insomnia which never left him either in Hamburg or on his travels. Only -when he was on the sea, or was staying at his country house, did he -obtain any relief; and at such times he could dispense with the drugs to -the use of which he had become a victim more and more regularly and -extensively as time went on. The fact that this habit did not entirely -ruin his nervous system proves that he was possessed of an iron -constitution, which only gave way under the huge strain caused by the -war. When he saw that his life's work had been broken to fragments, and -when he felt that he had not enough strength left for a second attempt -of such magnitude, even his immense nerve force collapsed under the -blow. - -The anxieties caused by the war--a war which he knew would be -lost--weighed more and more heavily on his mind the longer it lasted. -Outwardly he bore himself bravely and steadfastly, but his mind was full -of dark forebodings, especially when he was by himself. If he had not -had the unvarying sympathy of the faithful partner of his life, with -whom he shared thirty-five years of mutual happiness, and if he had not -always derived fresh consolation from his beloved adopted daughter and -from his grandchildren, he would indeed many a time have felt very -lonely. In spite of his apprehensions as to the result of the war, he -yet remained faithful to the task of his life, and he hoped against -hope. His ardent love of his work was constantly struggling with his -reason, which foretold him the ruin of the Empire and in consequence -that of German shipping. - -This fact explains some apparent contradictions in his views and -actions. What was the general public to think of a man who was watching -the progress of the war with the greatest pessimism, whilst at the same -time bringing all his influence to bear on the passing of a law which -was to make possible the reconstruction of Germany's merchant fleet, -knowing that such reconstruction could only be achieved if the Empire -which was to set aside the funds were to remain intact. In this matter, -as in others, it was the intuition of the born business-man which guided -him, or perhaps a sort of instinct which made him discover new ways when -the old ones had failed. These forces of his mind had nothing in common -with logical reasoning, and they prevented him from drawing the -practical inference from the sentiment so often expressed by us during -the war: "If the Empire falls to pieces, we shall all be ruined; and if -the Empire becomes bankrupt, we shall be insolvent too." Events have -shown that this sentiment was not justified by facts. Empires and -individuals may perish; but the nations, and their trade and commerce -which are the outcome of their economic needs and of their geographical -position, will outlast them. - -Neither is it likely that the life-work of those men who have left their -mark on their epoch will ever be in vain. There are two great -achievements which, it appears, will always stand out like two pillars -in the wreck of destruction that has fallen upon Germany, viz. -Bismarck's work of political unification, and--a necessary preliminary -of it--the powerful economic foundations laid with incessant toil by the -great industrial leaders of whom Germany had so many during the era of -her prosperity. - -Albert Ballin was one of the most gifted among their number, and the -world-wide fame of his achievements has outlived his death. When, after -five years of isolation from the rest of the world, Germany appeared -once more amongst the nations, she did so with the knowledge that the -foundations of the proud structure which Ballin had built up were still -unshaken, and this knowledge has proved one of her greatest assets when -she entered upon the task of reconstruction. - -If German shipping is to flourish again, and if German steamers are now -ploughing the oceans once more, credit is due to Albert Ballin. His work -it is from which new life is emanating, and it is to be hoped that his -spirit will continue to animate German shipping both now and in the -future. - -[Illustration: Extract Annotated by William II] - - - - -INDEX - - -Aden, 85 - -Adler Line, 7 - -Aehrenthal, Count, 141 - -Agadir incident, 162 - -Agents, emigration, work of, 8 - -Alsace-Lorraine, problem of, 272 - -_America_, 12 - -_Amerika_, 25, 106, 129 - -Andersen, Mr., and the Danish Royal Family, 99 - -Anglo-American Alliance, Ballin's opinion of, 256 - -Anglo-German rapprochement, 134 - shipping agreement, 18 - understanding, 164, 165 - advantage of, 136 - Ballin as negotiator, 136 - failure of, 133 - -Anglo-Russian agreement, 137 - -Antwerp, 81, 82 - -_Aquitania_, 113 - -Asquith, Mr. H. H., 262 - on Lord Haldane's mission, 177 - speech on Navy, 154 - -Atlantic Conference, 111 - -Atlantic Transport-Leyland Co., enlargement of, 45 - -_Auguste Victoria_, 25, 27, 72, 75, 193, 196 - -_Australia_, 12 - -Austria, need of compromise with Italy, 242 - -Austria-Hungary, strained relations between, 251 - -Austro-German _Zollverein_, 251 - - -Baden-Powell, General, and the German menace, 138 - -Bagdad Railway, 189 - -Baker, B. N., American shipping magnate, 42 - comes to Europe, 44 - -Baker, B. N., discusses terms of community of interest agreement, 42 - -Balkan States, and Germany, 251 - -Ballin, Albert, adopts Lord Pirrie's advice, 44 - advises peace overtures, 245 - after the war problems, 255 - agreement with Harland and Wolff, 122 - American appreciation of, 308 - an English journalist on, 293 - ancestry of, 2 - and Admiral v. Tirpitz, 237 - and Adolph Woermann, 107 - and Anglo-German rapprochement, 134 - and Carl Laeisz, 294 - and Count Tisza, 252 - and Count Waldersee, 194 - and Government subsidies, 60 - and Hamburg-Amerika Linie, 69 - and Hugo Stinnes, 280 - and Mr. Gerard, 246 - and labour questions, 297 - and politics, 131 - and North German Lloyd, 116 - and Princess Marie of Denmark, 99 - and Reichstag, 279 - and submarine warfare, 252, 254 - and the Russo-Japanese War, 104 - and Union Line, 19 - and working classes, 297 - and world war, 132 - anxiety as to Roumania, 244 - article in _Frankfurter Zeitung_ on blockade, 234 - as Anglo-German negotiator, 136 - as arbitrator, 79 - as general representative of Carr Line, 12 - as head of Packetfahrt passenger department, 18, 21 - at Constitutional Club, 140 - at Neues Palais, 204 - at the German front, 266 - attempts at mediation during war, 233 - boldness of, 289 - business principle of, 132 - capacity for work of, 300 - chairman of Pool Conference, 36 - complains of German official high-handedness, 232 - conducts London emigration discussions, 1898, 38 - death of, 286 - defends himself, 235 - dines with Danish Royal Family, 100 - disagrees with use of submarines, 229 - discusses Morgan Trust with William II, 53 - early biographical details of, 6 - education of, 3, 4 - establishes German-Japanese Bank, 204 - estimates British naval staying-power, 253 - Far East investigations, 84 - favours peace by compromise, 236 - forcing the British Lines, 36 - friendliness of William II toward, 206 - further reports on Morgan Trust negotiations, 49-50 - grave warning in 1918, 279 - Hamfelde, his country home, 310 - handling of labour troubles, 298-9 - his father's death, 5 - his life-work, 115 - his 1901 trip epitomized, 95 - his observation of details, 123 - his view on evading war, July 27, 1914, 216 - ideal in forming Pool, 66 - impressions of Paris after Morocco affair, 181 - in London discussing Austrian ultimatum, 215 - in Vienna, 1916, 249 - -Ballin, Albert, intense patriotism of, 291 - international services of, vii - interview with Bethmann-Hollweg, 152 - interview with Grey, Haldane, and Churchill, 215 - last diary entry, 286 - last meeting with William II, 209, 280 - letter from William II, 175 - letter to Kiderlen-Wächter, 163 - letters to General v. Falkenhayn, 244 - made Packetfahrt Director, 27 - meets Sir Ernest Cassel, 138 - mental versatility of, 2 - mission to Vienna, 1915, 242 - negotiations with Booth Line on Brazilian trade, 83 - notes of conversations with William II, 203 - official thanks to, 141 - on Agadir incident, 163 - on _Blücher_, 60 - on death of Edward VII, 160 - on engineering problems, 121 - on foreign exchange, 274 - on _Hohenzollern_, 202 - on London in election time, 158 - on naval armaments, 147 - on neutrals, 245 - on peace problems, 239 - on sale of confiscated fleet, 230 - on Sandjak Railway, 142 - on security of William II, 241 - on Serbian situation, 214 - on war's failures, 258 _et seq._ - opinion of German Chancellor, 259 - opinion of war's duration, 237 - personal characteristics of, 287 - pioneer in steerage business, 11 - policy of, 79 - political views, 291 - premier position at twenty-nine, 19 - present from Marquis Ito, 311 - prodigious memory of, 4 - report on British attitude to Germany, 161 - report on development of German shipping, 47 - reticence of, 3 - reviews war position in 1916, 258 - ridicules submarine warfare, 268-9 - stimulating influences of his life, 2 - strain of war on health, 313 - sturdy honesty of, 309 - suggested as negotiator of peace, 286 - suggests Pool, 24 - talks with Prince Bülow, 271 - talks with William II on submarine war, 248 - threatens British traffic, 22 - trip round the world, 83 - value of wonderful memory, 35 - views on character of William II, 285 - visits London in 1914, 184 - war problems of foreign policy, 241 - William II discusses politics with, 203 - William II writes to, on Navy Bill, 183 - William II's personal interest in, 198 - wire from Leopold de Rothschild, 163 - with Prince Henry of Prussia on the _Hohenzollern_, 57 - with William II at Front, 266 - with William II in Italy, 204 - with William II on _Kaiser Wilhelm II_, 55 - work in _Reichseinkauf_, 224 - writes frank letter on war to William II, 1916, 252 _et seq._ - writes on Morgan Trust, 46 - writes to William II, April, 1917, 264 - -Bauer, Lieut.-Col., 280 - -Beck, Edward, 27 - -Berg, Herr von, 282 - -_Berliner Tageblatt_ on Anglo-Russian naval agreement, 213 - -Bernstorff, Count, 264 - -Bethmann-Hollweg, von, 151, 152, 156, 262, 270, 277 - attacked respecting Agadir, 162 - on British delegation, 166-7 - telegram to Mexico, 271 - -_Bismarck_, launch of, 202 - -Bismarck, Prince, 114 - -Blockade, German, futility of, 267 - -Blohm and Voss, 113 - -_Blücher_, Ballin on trial trip, 60 - -Boer War, European move to stop, 143 - lesson of, 139 - -Bohlen, Krupp v., 282 - -Bolten, August, 10 - -British argument against German naval expansion, 133 - Cabinet and German naval expansion, 182 - confiscation of German merchant fleet, 229 - convoys, how they outwitted the Germans, 267 - emigration, comparison with German, 15 - excitement over Morgan Trust, 60 - feeling in Russo-Japanese war, at German attitude, 104 - Ludendorff's promise to crush, 266 - Navy, Ballin on, 239 - opinion on shipping deals, 67 - rivalry with Germany, 133 - shipbuilding, developments in, and Hamburg-Amerika Linie, 128, 208 - shipbuilding, German move against, 17 - shipping companies, Pierpont Morgan and, 55 - shipping lines, and emigration, 7-14; - agreement with, 23; - join the Continental Pool, 23; - offered to German companies, 67 - supremacy, Ballin on, 241 - -Bülow, Prince, 141, 247, 270 - - -Canadian Pacific Railway, 62, 111 - -Cargo and steerage shipping, 13 - -Carr, Edward, 12 - -Carr Line, the, 12 _et seq._ - and Packetfahrt, 12 - -Cassel, Sir Ernest, 134 - and Winston Churchill, 165 - meets Ballin, 138 - on Anglo-German understanding, 165 - on naval problem, 179 - on Sandjak Railway, 142 - report of interview with, on Navy, 171 - work for reduction of naval armaments, 134 _et seq._ - -Cholera, epidemic at Hamburg, 36, 72 - -Christiansand, port of, 21 - -Churchill, Mr. Winston, 166 - at Kiel, 1914, 192 - complains of Germany, 180 - Sir Ernest Cassel on, 165 - speech on Navy, 175 - suggests a naval holiday, 186 - -Colombo, 86 - -_Columbia_, 77, 201 - -Community of interest agreement (_see_ "Pool" and "Morgan Trust") - -Congo, Franco-German agreement, 162 - -Coolies, Chinese, 89 - -Cunard Line, and Austrian Government, 65 - and Hungarian Government, 63 - effect on Pool, 65 - introduces turbines, 111 - new liners, 113 - opposition to cabin Pool, 61 - refuses to join Pool, 37 - -Cuxhaven, development of, 69 - regatta at, 205 - - -_Daily Telegraph_, sent to William II, 270 - the William II interview, 144 - -Dardanelles, the, operations in, 245 - de Freitas and Co., A. C., 79 - de Freitas Line, purchase of, 80 - -Denmark, emigration from, 13 - Royal Family of, their interest in shipping, 99 - -_Deutschland_, 25, 78, 130 - -Diesel engine, application to steamship, 102 - -Dreadnoughts, 200 - - -Eastern Asiatic Co., 98 - -Edward VII, 134 - and Morgan Trust, 61 - -Edward VII, chances of Anglo-German war, during reign of, 139 - death of, 158 - policy of, 135 - the Kiel week, 206 - visit to Wilhelmshöhe, 136 - visits Berlin, 145 - visits Kaiser at Friedrichshof, 142 - -Elbe, enlargement of harbour facilities on the, 69, 70, 79 - -Ellerman, Mr., of Leyland Line, 45 - -Emden, rise of, 83 - -Emigrants, early accommodation of, 7, 8, 14 - -Emigration, anti-British action, 17 - Ballin's work for, 9 - beginnings of pooling, 12 - British and German, 15 - British rates, 22 - business, how controlled, 8 - comparisons of Carr Line and Packetfahrt, 15 - cost of, 12 - Danish, 13 - Hungarian, 63 - in the 'seventies, 8 - medical control established, 74 - on pre-paid basis, 9 _et seq._ - rate war begins, 14 - statistics of, 103 - stopped by Hamburg cholera epidemic, 36 - -Emigration Law, German, 23 - -Erzberger, Herr, 244 - -Esher, Lord, and the Admiralty, 138 - -Europe, concerted inquiry to Germany, 140 - situation in September, 1916, 262 - - -Falkenhayn, General v., Ballin and, 244 - -Finland, 278 - -Forced draught, first vessels under, 26 - -Foreign exchange, Ballin on, 273 - -Francis Joseph, Emperor, 250 - and Count Tisza, 250 - -Frederick the Great on experience, viii - -Frisch, Geheimrat, 223 - -Furness, Sir Christopher, and Morgan Trust, 61 - -_Fürst Bismarck_, 193 - -Fürstenkonzern, 110 - - -George V, King, Ballin's letter respecting, 160 - -George, Mr. Lloyd, speech on Agadir incident, 162 - visits Germany, 143 - -Gerard, Mr., and Ballin, 246 - -German-British shipping agreement, 18 - -German emigration fleet, in 1882, 10 - -German Government, note to British Government, 170 - -German Naval Bill, 137 - -German Navy, the 1908 affair, 138 - -Germany, and Belgian Relief Committee, 231 - and the Merchant Service Bill, 228 - bad feeling among neutrals to, 245 - Ballin cries "everything is being gambled away," 257 - Ballin discusses after-the-war problems, 255 - big naval programme, 143 - British agitation against, 137 - confiscation of merchant fleet, 229 - control of trade and industries, 274 - failure of political leaders, 264 - favourable shipping situation of, 80 - feeling towards British, 143 - food problem, September, 1918, 284 - habit of premature actions, 273 - ignorance of British character, 260 - internal condition in August, 1914, 223 _et seq._ - lack of effective administration during war, 233 - mental attitude of, 134 - plans to approach President Wilson, 283 - -Germany, state in 1916 "like living in a madhouse," 257 - useless sacrifices of, 229 - war condition of, 257 - war-hopes in ruins, 269 - -Germany's industrial growth, 7 - -_Gigantic_, 113 - -Goschen, Sir Ernest, 153 - -Gothenburg, port of, 21 - -Grey, Sir Edward, 262 - on Lord Haldane's mission, 177 - on naval armaments, 157 - on the Navy, 138 - -Great War (_see_ World War) - -Grumme, Capt. v., joins Hamburg-Amerika Linie, 199 - with William II at Morgan Trust discussion, 53. - - -Hague Conference, 137 - -Hahn, Dr. Diederich, Chairman Agrarian League, 59 - -Haldane, Lord, 171 - and British neutrality, 190 - Cabinet's attitude toward, 184 - explains to Ballin, 191 - German opinion respecting, 187 - success of his mission, 177 - visits Berlin, 134, 167 - William II's discussions with, 174 _et seq._ - -Hamburg, absorption into Prussia, 296 - birthplace of Ballin, 1 - cholera epidemic in, 36, 72 - dock strike, 299 - in the nineteenth century, 1-6 - -Hamburg-Amerika Linie, and Great Britain, 207 - and Persia, 107 - and Russo-Japanese war, 105 - buys foodstuffs for isolated Germany, 223 - far-reaching alterations, 98 - fate of ships when war broke out, 220 - financial stability of, 116 - fleet of, 116 - instructions to ships on eve of war, 220 - new premises, 202 - sixtieth anniversary, 117 - William II and, 195 - -Hamburg-Amerika Linie (_see also_ Packetfahrt) - -Hamburg-Amerikanische Packetfahrt-Actien-Gesellschaft, 7 - -Hamburg Regattas, William II at, 201 - -Hamburg-South American S.S. Co., 79 - -Hammann, Geheimrat, 138, 141 - -_Hammonia_, 24 - -Hansa Line, 69 - taken over by Hamburg-Amerika Linie, 70 - -Hansemann, v., director Disconto-Gesellschaft, 55 - -Hansen, President, Chief of Arbitration Court Pool, 35 - -Harbou, Major v., 282 - -Harland and Wolff, 112, 121 - -Henckell-Donnersmarck, Prince, Kaiser's interest in, 47 - -Hintze, Herr v., 283 - -_Hohenzollern_, 194 - -Holland-America Line, 7 - -Holland, Queen of, offers mediation, 283 - -Holtzendorff, Admiral v., 246 - -Hongkong, 88 - -Huldermann, Bernhard, and Count Witte on averting war, 217 - and Navy Bill, 170 - - -Immco Lines, Pool name for Morgan Trust, 65 - -Immigrants, Scandinavian trade, 36 - -_Imperator_, 31, 113, 125, 126 - -International Mercantile Marine Company (_see_ Morgan Trust) - -Inverclyde, Lord, and Morgan Trust, 64 - -Italia Company, the, started, 79 - -Italy, agreement with, necessary to success of war, 241 - Germany's failure in, 242 - - -Jagow, Herr v., 213, 214 - -Jewish ancestry of Ballin, 2 - -Jones, Sir A., and the Morgan Trust, 6 - -Jonquières, Herr v., 231 - -_Kaiser Wilhelm der Grösse_, 77 - -_Kaiser Wilhelm II_, 205 - -_Kaiserin_, 113 - -_Kaiserin Auguste Victoria_, 25, 106, 129 - -Kaiserin, the, and the war, 211 - opposition to private life, 285 - -Kiautschou, 97 - -Kiel Canal, widening the, 200 - Edward VII at, 206 - Week, origin of, 201 - -Kirchheim, Chief Inspector Emil F., viii - -Köhlhrand, agreement the, 295 - -Kühlmann, Herr v., 189 - -Kunhardt, M., 27 - -Kuskop, Karl, 303 - - -Laeisz, Carl, 293 - -Laeisz, F., 293 - -Laird's, orders to, 26 - -Law, German Emigration, of 1887, 23 - -Leuthold, Prof., 199 - -Leyland Line, acquired by Pierpont Morgan, 48 - -Liberal Cabinet, and naval armaments, 149 - -Liberal Government, and Anglo-German understanding, 136 - -Lichnowsky, Prince, 188 - view on Haldane's "neutrality" conversation, 191 - -Liners, developments in, 125 _et seq._ - -Lohmann, Mr., 10 - Director-General of Lloyd Line, 32 - -Ludendorff, and the Crown Prince, 280 - and "to her knees" promise, 266 - -_Lusitania_, 62, 113 - - -Marie, Princess, of Denmark, 99 - -Marine engineering, Ballin's enterprise in, 122 - development of, 119 - Packetfahrt types, 125 - progress in, 127 - -Marschall, Bieberstein v., 188 - -_Mauretania_, 62, 113 - -Mediterranean Conference, 111 - -_Meteor_, 197 - -Metternich, Count, at St. James's, 212 - on Anglo-German understanding, 187 - predicts Great War, 188 - sees Sir Edward Grey, 178 - -Morgan, Pierpont, guest of William II at Kiel, 61 - -Morgan, Trust, the, 40 _et seq._ - agreement reached, 52 - announced to British Press, 59 - effect of freight slump, 61 - final discussions in New York, 55 _et seq._ - financial aspect, 45 - inception of, 45 - International Mercantile Marine Co., formal name of, 65 - King Edward VII and, 61 - outline of draft agreement, 51 - Pierpont Morgan at London Conference, 49 - Pierpont Morgan's operations attract public attention, 46 - telegram from William II, 56 - terms of agreement, 58 - William II discusses, 53 - -Morris and Co., 1 _et seq._ - -Mutius, Herr v., 247 - - -Nanking, 92 - -Naumann, Dr., and "Berlin to Bagdad," 276 - -_Nautikus_, naval propaganda in, 200 - -Naval armaments, a cause of unrest, 133 - Ballin's report on, 146 _et seq._ - big navy propaganda, 133 - Reichstag and reduction of, 145 - -Naval Bill of 1912, 155 - Ballin writes to Sir Ernest Cassel on, 168 - British alarm at, 166 - -Naval holiday, Mr. Churchill suggests a, 186 - -Navy, a bigger British, 171 - -Navy League, German, 137 - -_New York_, 49 - -New York, emigration to, in the 'eighties, 7 _et seq._ - steerage passengers to, statistics, 29 - -_Normannia_, 77 - -North Atlantic Steamship Lines Association, history of, 32 - -_North German Gazette_, 157 - -North German Lloyd, 7, 98, 106, 111 - competes with Packetfahrt, 10 - jubilee of, 117 - - -Oertzen, Herr v., 91 - -_Olympic_, 113 - - -Packetfahrt, the, a founder of, 10 - agreement with Philadelphia Shipping Co. and Pennsylvania Railroad Co., 77 - and Ballin, 289 - and Carr Line, 12 - and emigrants, 10 - and Harland and Wolff, 121 - and Russian coal, 104 - and the Russo-Japanese War, 103 - Ballin made director of, 27 - celebration of jubilee, 74 - 1886 Pool, 21 - extension of South American business, 80 - improved appointments and accommodation on vessels, 26 - increase of capital, 26 - letter from chairman of Cunard Company, 75 - more new vessels built, 25, 74 - New York branch established, 27 - passenger department created, 19 - service to Mexico, 83 - statistics (1886), 19 - (_see also_ Hamburg-Amerika Linie) - -_Panther_, William II and, 210 - -Paris Economic Conference, 276 - -Passenger traffic, improvements in, 41 - -Peace negotiations, Ballin and, 286 - -Peters, Heinrich, central offices of, 34 - secretary of Pool, 31 - -_Philadelphia_, 49 - -Pirrie, Lord, 121 - advises Ballin, 44 - discusses Morgan Trust, 63 - -Pleasure cruises, inception of, 70 _et seq._ - -Pool accommodation discussions (1898), 38 - actuarial basis of, 34 - agreement on (1891), 24 - agreement with Allan Line, 74 - agreement with Italian Lines, 74 - agreement with Lloyd Line, 74 - Ballin's opinions upon, 115 - British Lines refuse (1892), 33 - cardinal principles of, 30 - Cunard Line refuses to join, 37 - details of the, 28 - Heinrich Peters, secretary of, 31 - its most dramatic episode, 67 - more internal troubles, 115 - negotiations for a greater, 35 - North Atlantic Steamship Lines Association, formal name of, 33 - proposed by Ballin, 1886, 24 - special, for Mediterranean business, 34 - terms definitely made, 33 - the General, 111 - the transatlantic, 110 - tonnage and passenger statistics, 29 - U.S.A. Railway pool compared, 28 - world war's effect upon, 111 - -Port Said, 85 - -_Pretoria_, 201 - -Princes' Trust, 110 - -_Prinzessin Victoria Luise_, 130 - -Prussia, Prince Henry of, 57 - - -Rate war, the, 14, 110 - -Red Star Line, 7 - -_Reichseinkauf_, the, formation of, 223 - -Reuchlin, Mr., of Holland-American Line, 32 - -Richardson, Spence and Co., 9 - -Riga, fall of, 272 - -Roumania, anxiety regarding food from, 251 - neutrality of, 244 - supplies grain during war to Germany, 227 - -Rupprecht of Bavaria, Prince, 137 - -Russia, army of, 139 - -Russian East Asiatic S.S. Co., 101 - -Russian Press, outburst against Sandjak Railway, 141 - -Russian Volunteer Fleet, 111 - -Russo-Japanese War, 102 - coaling problems for Russian fleet, 105 - ships for, 25 - - -_St. Louis_, 49 - -_St. Paul_, 49 - -Sandjak Railway, 141 - -Scandia Line, 21 - -Scandinavian emigration, 21 - -Schön, Herr v., 141 - -Schratt, Frau Kathi, 250 - pro-English sympathies of, 252 - -Schwander, Dr., 272 - -Shanghai, 90 - -Shaughnessy, Lord, 62 - -Shipping agreement on rates, 17 - agreements, enormous range of, 111 - British tonnage in 1901, 49 - crisis of 1907, 111 - Imperial Government's interest in, 55 - some tonnage comparisons, 49 - statistics (1881-1885), 29 - transatlantic business, trend of, 67 - -Ships, speed of, in 1882, 10 - -Singapore, 87 - -Skoda, Baron, 251 - -Sloman and Co., R. M., 18 - -South African War, 79 - -South America, development of, 82 - -Southampton, Packetfahrt service transferred to, 73 - -Spanish-American War, ships for, 25 - -Steinhöft, Hamburg, 1 - -Stettin, Vulkan Yard, 78, 113 - orders to, 26 - -Stinnes, Hugo, 280 - -Storm, Director A., viii - -Strasser, Mr., of the Red Star Line, 32 - -Stürgkh, Count, 243 - Francis Joseph and, 250 - -Submarine warfare, 248, 252, 258 - amazing achievements, 268 - unrestricted, beginning of, 263 - -Thingvalla Line, 21 - -_Times, The_, on German neutrality, 104 - -Tirpitz, Admiral v., 151, 152, 199 - and Ballin, 237 - threatens resignation, 246 - -Tisza, Count, 243 - and Count Stürgkh, 250 - -_Titanic_, 113 - -Tokio, 93 - -Trans-Andine Railway, completion of, 82 - -Tsingtau, 92, 97 - -Tweedmouth, Lord, and the Kaiser, 137 - - -Ukraine, the, 278 - -U.S.A., application of Monroe doctrine in, 82 - cholera and isolation in, 73 - devastating effects of entry into war, 255 - economic depression of the 'eighties, 9 - enters the war, 269 - German fears of intervention, 252 - immigration from Scandinavia, 21 - Railway Pool, 29 - railways and shipping co-operation, 44 - - -_Vaterland_, 113 - -Versailles treaty, German view of, 208 - -Vienna, conditions in, 249 - -Vulkan Yard, Stettin, 26, 78, 113 - - -Waldersee, General Count Georg, and Ballin, 194 - on rationing Germany, 221 - -_Westminster Gazette_ (article in facsimile at end), 163, 235 - -White Star Line, and Pierpont Morgan, 55 - new liners, 113 - -Wiegand, Dr. Heinrich, 119 - and Morgan Trust, 54 - -Wilding, Mr., Ballin's friendship for, 9 - -William II, and "a place in the sun," 202 - and British Navy, British feeling aroused, 137 - and _Daily Telegraph_ interview, 143 - and Nicholas, suggested talk to avert war, 220 - and President Wilson's note, 285 - and the _Bismarck_, 114 - at Hamburg, 193 - Ballin explains situation in September, 1918, 209 - Ballin reports to, on navy problem, 138 - Ballin tells him the ugly truth in 1917, 267 - blind to situation, September, 1918, 283 - "brimful of optimism," 272 - comments on _Westminster Gazette_ article, 163 - designs excursion steamer, 196 - discusses Morgan Trust with Ballin, 53 - discusses Morocco question, 205 - facsimile comments on _Westminster Gazette_ article (_see_ end of book) - interest in German shipbuilding, 196 - interest in Morgan Trust, 197 - intervenes in shipping struggle, 106 - isolation of, 255 - last meeting with Ballin, 280 - letter on British Navy, 137 - maritime interests of, 201 - monarchical discussions, Ballin and, 285 - on balance of power, 165 - on Germany's Austro-Hungarian policy, 189 - on the Churchill speech, 183 - outspoken letter in 1916 from Ballin, 252 _et seq._ - personal interest in Ballin, 198 - persuaded to retire into private life, 285 - sees Edward VII at Friedrichshof, 142 - supports Ballin's mission of inquiry - to U.S.A., 54 - telegram to Morgan Trust, 56 - venerated in Austria, 251 - visits Windsor, 136 - wants apology from Great Britain, 183 - writes to Ballin on Haldane interview, 175 - -Wilson, President, 263 - -Witt, Mr. Johannes, 27 - -Witte, Count, on situation July, 1914, 217 - -Woermann, Adolph, 107 - character sketch of, 108 - -World war, the, 213 - Ballin attempts mediation, 233 - Ballin describes 1917 situation to William II, 265 - Ballin favours a compromise, 236 - Ballin on neutrals, 245 - Ballin on the blockade, 234 - Ballin on the crisis, 215 - Bismarck's prophecy regarding, 133 - British censorship in, 225 - coal problems during, 102 - Count Witte on situation, July 24th, 1914, 217 - defection of German conscripts, 281 - effect on Pool, 111 - -World war, the, entry of U.S.A., effect of, 253 _et seq._ - food problems of Germany, 222 - forced upon William II, 285 - foreign policy and food during, 241 - German mistakes in, 258-9 - Germany stunned by _débâcle_, 236 - grain from Roumania, 227 - indemnities, 261 - Mexico telegram, 271 - outbreak of, 132 - peace overtures, 245 - position in 1916, 258 - provisioning Germany, 221 - shipping profits during, 65 - submarine warfare in, 229 - the British blockade, 224 - Tyrol, failure in the, 259 - Verdun and Italian campaigns, political and military failures, 258 - -World's shipping collapse, cause of, 229 - - -Yang-Tse-Kiang, the, 91, 96 - - -Zentral-Einkaufs-Gesellschaft, 226 _et seq._ - - PRINTED IN ENGLAND BY CASSELL & COMPANY, LIMITED, LONDON, E. C. 4. - - -FOOTNOTES: - -[1] Gross registered tonnage. - -[2] Then British Ambassador in Berlin. - -[3] This refers to the political events in Berlin immediately prior to -the outbreak of war. - -[4] The head of the Press Department of the Foreign Office. - -[5] 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. - -[6] Director of the Hamburg branch of the firm of Hugo Stinnes. - - * * * * * - -Typographical errors corrected by the etext transcriber: - -aded to their fleets=> added to their fleets {pg 48} - -in the era on the machine-gun=> in the era of the machine-gun {pg 266} - -aready explained=> already explained {pg 270} - - - - - - -End of the Project Gutenberg EBook of Albert Ballin, by Bernhard Huldermann - -*** END OF THIS PROJECT GUTENBERG EBOOK ALBERT BALLIN *** - -***** This file should be named 44135-8.txt or 44135-8.zip ***** -This and all associated files of various formats will be found in: - http://www.gutenberg.org/4/4/1/3/44135/ - -Produced by Chuck Greif and the Online Distributed -Proofreading Team at http://www.pgdp.net (This file was -produced from images generously made available by The -Internet Archive) - - -Updated editions will replace the previous one--the old editions -will be renamed. - -Creating the works from public domain print editions means that no -one owns a United States copyright in these works, so the Foundation -(and you!) can copy and distribute it in the United States without -permission and without paying copyright royalties. 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