Line

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

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

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

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

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

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

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

“The North Atlantic Steamship