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