The International Navigation Company (INC) was a Philadelphia-based holding company owning 26 ships totaling 181,000 tons and carried more passengers than either Cunard or White Star, when the company was reorganized as International Mercantile Marine in 1902.[1] The General Assembly of the Commonwealth of Pennsylvania approved a charter for the INC on May 5, 1871. The company was commonly known as the Red Star Line due to the red star on its white house flag. The principal American organizer and general agent of INC was the shipbroking firm of Peter Wright & Sons, one of the oldest, most respected, and most financially prosperous of the Philadelphia import-export houses. [2] Principal financial backing was provided by the Pennsylvania Railroad Company. Although the financial interests were headquartered in the United States, the backers did not believe that a transatlantic steamship line could be run successfully under an American flag. Ships were to be built in foreign yards, operated under foreign flags, and manned with foreign crews. [3]
Peter Wright & Sons provided invaluable commercial expertise and foreign contacts. The firm operated a large fleet of ships, with many transporting petroleum from the recently discovered fields of western Pennsylvania, carried in barrels and cases, to European markets. Peter Wright & Sons also had established friendships and business ties with two prominent Belgian shipowners, Jules-Bernard von Der Becke and William Edouard Marsily. During the 1860s, the von Der Becke firm became an important importer of petroleum products from Pennsylvania to Antwerp in American and Belgian ships.[4] Clement Action Griscom, who rose rapidly from clerk to partner at Peter Wright & Sons, was a leader in the firm's shipping affairs and the chief force behind the creation of both INN and the chief negotiator with Belgian's King Leopold, von Der Becke, and Marsily to establish a subsidiary company in Antwerp beginning on September 19, 1872, under the title "Societe Anonyme de Navigation Belge-Americaine" (Red Star Line). The agreement established the Red Star Line as the exclusive carrier of mail service out of Antwerp to Philadelphia and New York. This subsidiary would provide most of the company's profits for the next 30 years.[5] The shipping line's home port was Antwerp and it sailed under the Belgian flag, thereby avoiding the obligation of employing far more expensive American personnel.[6]
In January, 1874, the board of directors of the American Line, a Philadelphia-based passenger and cargo service to Liverpool that was also backed by the Pennsylvania Railroad and was facing possible bankruptcy, passed management of the steamship line to Peter Wright & Sons. Clement Griscom was charged by the firm to manage the American Line as well as the Red Star Line. The former company, known as the American “Keystone” Line was unprofitable because of the substantially higher costs associated with operating American-flagged vessels. In 1884, the assets of the American Line were acquired by International Navigation. Two years later, INC also acquired the assets of the financially troubled Inman Line, operator of a British flagged Liverpool-New York mail service. With PRR's backing, Griscom ordered two record breakers to restore Inman's fortunes. However, the British Government objected to Inman's ownership change and revoked Imman's mail contract. Griscom successfully lobbied Congress to reflag the two new express liners and qualify for an American mail subsidy. In 1893, Inman was merged the American Line and the company built two additional express liners in the US to create a premium weekly service, now routed to Southampton.[5]
Griscom believed that the major lines should be merged to control capacity and avoid rate wars. In 1899, he became acquainted with J. P. Morgan, an investment banker who was responsible for many of the large mergers during the period. With financing from Morgan's syndicate, in 1902 Griscom and Morgan expanded International Navigation by acquiring the Atlantic Transport Line, the Leyland Line, the White Star Line, the Dominion Line and half of Holland America. International Navigation was renamed International Mercantile Marine (IMM).[5]
However, Griscom and Morgan paid too high a price for the companies they acquired and IMM struggled under the debt payments. Management was reorganized to focus on White Star, the most profitable subsidiary.[5] In 1915, IMM was forced into bankruptcy when the war disrupted cash flow,[7] but later was able to profit from the wartime demand for shipping.[8] In the 1920s and 1930s, IMM gradually sold off its foreign subsidiaries.[5] In 1931, it acquired the United States Lines,[9] and merged all operations under that name in 1943.[5] The company failed in 1986 and was liquidated when it over expanded in the cargo container business.[10]
1871–84
Clement A. Griscom (1841 - 1912): Longtime President of International Navigation
In 1858, the Inman Line abandoned Philadelphia as its American terminus and switched its operations to New York. Various interests in Philadelphia, including the Pennsylvania Railroad, recognized the need to reestablish steamship service directly to Europe. In 1870, PRR backed the creation of two shipping companies, the US-flagged American Steamship Company and the foreign flagged International Navigation Company. Chartered on May 5, 1871, International Navigation was created by the Philadelphia ship brokerage of Peter Wright & Sons. A $1 million bond issue was guaranteed by PRR and the initial $1.5 million stock offering was largely purchased by a small group of Peter Wright partners and PRR executives. The new firm's affairs were turned over to a 30-year-old Peter Wright partner, Clement A. Griscom,[11] who was also a close associate of Edgar Thompson, President of PRR.[12]
International Navigation's original plan was to operate UK flagged steamers on the Liverpool–Philadelphia route and to coordinate sailings with the American Steamship Company, operating as the American “Keystone” Line. Since Peter Wright & Sons was also involved in the early transport of oil from the Pennsylvania petroleum fields, Griscom had the support of the Standard Oil Company for his new steamship line. INC ordered its first steamer as a combined passenger ship/tanker, but she probably only carried oil on one voyage after it was realized that the fire hazard with tankers was too great to also carry passengers on the same ship.[5]
In 1872, Griscom and Thompson concluded that International Navigation should seek a terminus on the continent. According to his son, Griscom marked all of the principal manufacturing towns in England, Belgium, France and Germany and determined that the center was Antwerp Belgium. Griscom immediately left for Europe and met with Antwerp officials about the necessary improvements to modernize the old port into the terminus for a steamship line. When he was told that Leopold II must also approve, Griscom left for Brussels where he received the King's strong support including a postal subsidy and port improvements. On September 27, 1872, the Red Star Line was chartered in Belgium as the “Societe Anonyme de Navigation Belge-Americaine”. In addition to Griscom, the board included Thomas Scott, who in two years would become President of the Pennsylvania Railroad.[12]
Red Star's Antwerp–Philadelphia Service started in January 1873. Red Star took delivery of three new steamers built in England and supplemented its fleet with chartered tonnage.[5] Red Star was in better position to survive the depression of 1873 than the US-flagged American “Keystone” Line because operating as a US carrier resulted in about 30% higher costs. At the end of 1873, Griscom took over management of the American Keystone Line. In 1874, Red Star also started an Antwerp-New York service under a mail contract from the Belgian Government.[12]
Red Star thrived and by 1881 carried over 40,000 passengers. At the same time, the American Keystone Line was not profitable because of its higher cost structure. When the hoped for subsidy never came from Congress, PRR decided to reorganize American Steamship. In 1884, PRR offered to purchase 14,500 new shares in International Navigation for $725,000 to finance INC's purchase of American Steamship's four vessels as well as its name and good will. The money never actually left PRR's account because it was used to repay the railroad for the American Steamship bonds it guaranteed. When the transaction was completed, the American Keystone Line became INC's second operating subsidiary.[12]
1884–93
International Navigation's Liverpool agent was Richardson and Spence, who was also the agent for the Inman Line, one of the big three British flagged companies on the Liverpool–New York route. INC became a major creditor of Inman when that company suffered financial difficulties in the early 1880s. In 1886, with the backing of the Pennsylvania Railroad, Griscom offered £205,000 for Inman's five liners and name. Under the deal, Griscom was able to deduct the debt owed INC from the purchase price. With no real alternative, Inman's directors accepted the offer.[13]
Griscom's first record breaker, City of New York
Griscom realized that the renamed Inman and International Line required a new express steamer to compete against its rivals, the Cunard Line and White Star.[13] He sailed for Europe with a commitment of $2 million from the Pennsylvania Railroad to finance the new ship. Scottish shipbuilders were suffering a depression at the time and offered to build two liners at the bargain price of $1,850,000 apiece. The PRR agreed and Griscom ordered what were to become the two largest and fastest ships on the Atlantic, the 20 knot City of New York and City of Paris. He also ordered a large new liner for Red Star, the Friesland.[12]
The intent was to continue Inman as a British-flagged company. However, considerable opposition developed over Inman's change in ownership, and the British Government transferred Inman's mail contract to the Guion Line. Under the Postal Aid Act of 1891, the US Government offered to pay $12,500 per round-trip voyage to any American-flagged carrier offering 20-knot steamship service to the UK. However, this amount was not sufficient to attract firms to acquire the liners required under the act, and Griscom's two new 20-knot Atlantic speedsters could not qualify, because they were built in the UK. Therefore, Griscom and the Pennsylvania Railroad lobbied Congress to allow the reflagging of Inman's two record-breakers. Griscom also offered to build a second pair of 20-knot liners in a US yard so that Inman would have the four ships required for a weekly service. In May 1892, Congress enacted the necessary legislation. Five months later, the post office department agreed to contract with INC for a weekly New York–Southampton mail service. On February 22, 1893, President Benjamin Harrison personally raised the American flag on the newly renamed New York, and the Inman and International Line was officially merged into the American Line.[12]
1893–1902
The American Line's St. Louis
To strengthen the company's finances, International Navigation was reorganized in June 1893. The original Pennsylvania chartered company was replaced by a new corporate entity, the International Navigation Corporation of New Jersey with capitalization of $15 million. In July, International Navigation Limited was formed in the UK to hold title to the remaining British flagged vessels. The company was also refinanced with a $6 million bond issue to enable Griscom to order the two new 20 knot express liners required under the US mail contract and additional new vessels for Red Star. About half of these bonds were purchased by representatives of Standard Oil.[12] When St Louis and St Paul were delivered, the American Line had the only weekly 20 knot service on the Atlantic.[5]
The timing for the company's expansion could not have been worse. The major shipping companies including the American Line entered into an agreement to control sailing frequency and prices. However, the agreement broke down in the fall of 1893 over a dispute between the German and British lines over Scandinavian business, resulting in a fare war. This situation was compounded by the depression of 1894 and several weaker firms including the Guion Line collapsed.[12]
By 1896, economic conditions improved, and the major lines reached a new agreement, negotiated at International Navigation's headquarters in London. The Spanish–American War (1898) and the Boer War (1899-1902) created a shortage of shipping on the Atlantic, and the major lines launched building programs to increase their fleets. Most of the American Line's ships were requisitioned by the government for war service. Griscom also ordered new vessels and after the war refinanced the company. In 1899, J.P. Morgan underwrote $20 million in 5% bonds. $12 million was used to retire existing 6% bonds and $6 million was earmarked for expansion.[12] By 1902, International Navigation's fleet consisted of 26 ships totaling 181,000 tons and carried more passengers than either Cunard or White Star.[1]
While International Navigation's Belgian and British subsidiaries were consistently profitable, the American Line only paid its first dividend in 1900. The mail contract of $750,000 per year was not sufficient to offset the higher costs of operating US-flagged vessels. Griscom was a close associate of Ohio Senator Marcus Hanna, who stayed at Griscom's house outside Philadelphia during the 1900 Republican convention. Hanna was the power broker behind President William McKinley, and when the Republicans were reelected, Hanna pushed a new mail subsidy bill. The legislation cleared the Senate in 1902, but stalled in the House of Representatives. Congress was opposed to subsidizing rich financiers even though this meant that relatively fewer Americans were employed as merchant ship builders and sailors.[12]
As early as the 1880s, Griscom believed that the major shipping lines should be combined into a trust to control capacity and pricing. As a result of the 1899 refinancing, he became acquainted with J. P. Morgan, the investment banker who was successful in putting together large trusts. Morgan was then in the process of building U.S. Steel, the first billion-dollar corporation. Morgan profited from the investment fees associated with creating or refinancing companies, but not actually operating the new enterprises. The timing appeared right for a large shipping merger. In 1902, another price war broke out when the Boer War ended and new vessels entered service.[12]
Backed by financing from Morgan's syndicate, Morgan and Griscom acquired the Atlantic Transport Line, the Leyland Line, the White Star Line, the Dominion Line, and half of Holland America. When combined with International Navigation, the new company owned 118 ships totaling 810,000 tons. This represented 20% of the total shipping on the Atlantic and a third of the passenger business. They also entered into revenue sharing arrangements with Hamburg America and North German Lloyd. On October 1, 1902, Morgan and Griscom announced that International Navigation was to be reorganized as the International Mercantile Marine Corporation of New Jersey and that the firm had an initial capitalization of $120 million plus the proceeds of a $50 million bond offering.[14] The old International Navigation was valued at $14.2 million including $2.5 million in cash and stock paid as commissions to Griscom and his close associates.[12]
By the end of 1903, the value of the IMM preferred stock dropped from $85 to $18 and the bonds were not selling. Morgan was unable to sell much of the stock and bonds issued to finance IMM and was forced to remain active in IMM's management. Instead of the $10 million profit he expected, he lost money on the transaction. The problem was that IMM paid too much for the companies it acquired and struggled under the debt payments. The hoped for subsidy from Congress did not materialize and the company was impacted by the economic depression that lasted through the middle of the decade. Further, the anticipated economies of scale from the merger did not materialize. In 1904, management was reorganized and IMM focused on White Star, the most profitable subsidiary.[14] However, by 1915 the company was forced into bankruptcy court when IMM was unable to make debt service payments because the war disrupted cash flow from foreign subsidiaries.[7] IMM survived and by 1917 profited from the demand for shipping during W.W.I.[8]
During the 1920s and 30s, IMM sold its foreign flagged subsidiaries to focus on US operations. In 1930, the Roosevelt Steamship Company purchased 51% of IMM.[15] The next year, Roosevelt IMM became the manager of the government owned United States Lines when the line's purchaser defaulted on the payments.[9] In 1934, Roosevelt IMM acquired a majority of the US Line stock for $1.1 million.[16] All US Line, Roosevelt Line and IMM operations were merged in 1943 and the combined operation used the US Line name. The US Line emerged from the war as one of the largest international shippers and in the 1950s was the second largest transatlantic passenger carrier after Cunard.[5] Passenger sailings were terminated in 1969 when the US government withdrew the operating subsidy for the United States. The US Lines failed in 1986 when it over expanded in the container cargo business and its operations were liquidated.[10] The shell of United States Lines emerged from bankruptcy in 1990 and eventually entered into the hotel business and is now known as Janus Hotels & Resorts.
↑ .Flayhart III, William Henry (2000). The American Line 1871 -1902. W.W. Norton & Company.
↑ Flayhart III, William Henry (2000). The American Line 1871 -1902. W.W. Norton & Company.
↑ Flayhart III, William Henry (2000). The American Line 1871 -1902. W.W. Norton & Company.
1 2 3 4 5 6 7 8 9 10 Gibbs, Charles Robert Vernon (1957). Passenger Liners of the Western Ocean: A Record of Atlantic Steam and Motor Passenger Vessels from 1838 to the Present Day. John De Graff.
↑ Caestecker, Frank et al.(2008). Red Star Line: People on the Move. BAI, Schoten.
1 2 "Great Ship Combine in Receiver's Hands". New York Times. April 4, 1915.
1 2 "Steamship Earnings Grow". New York Times. July 25, 1917.
1 2 "Lays Plans for U.S. Lines". New York Times. December 6, 1930.
1 2 Feder, Barnaby (July 6, 1988). "McLean Industries Files Its Reorganization Plan". New York Times.
↑ "Griscom, Founder of Ship Trust, Dead". New York Times. November 11, 1912.
1 2 3 4 5 6 7 8 9 10 11 12 Flayhart, William Henry (2000). The American Line (1871 - 1902). New York: W. W. Norton.
1 2 Kludas, Arnold (1999). Record breakers of the North Atlantic, Blue Riband Liners 1838-1953. London: Chatham.
Cunard Line is a British shipping and cruise line based at Carnival House at Southampton, England, operated by Carnival UK and owned by Carnival Corporation & plc. Since 2011, Cunard and its four ships have been registered in Hamilton, Bermuda.
The Blue Riband is an unofficial accolade given to the passenger liner crossing the Atlantic Ocean in regular service with the record highest average speed. The term was borrowed from horse racing and was not widely used until after 1910. The record is based on average speed rather than passage time because ships follow different routes. Also, eastbound and westbound speed records are reckoned separately, as the more difficult westbound record voyage, against the Gulf Stream and the prevailing weather systems, typically results in lower average speeds.
The White Star Line was a British shipping line. Founded out of the remains of a defunct packet company, it gradually rose up to become one of the most prominent shipping companies in the world, providing passenger and cargo services between the British Empire and the United States. While many other shipping lines focused primarily on speed, White Star branded their services by focusing more on providing comfortable passages for both upper class travellers and immigrants.
The International Mercantile Marine Company, originally the International Navigation Company, was a trust formed in the early twentieth century as an attempt by J.P. Morgan to monopolize the shipping trade.
The Red Star Line was a shipping line founded in 1871 as a joint venture between the International Navigation Company of Philadelphia, which also ran the American Line, and the Société Anonyme de Navigation Belgo-Américaine of Antwerp, Belgium. The company's main ports of call were Antwerp in Belgium, Liverpool and Southampton in the United Kingdom and New York City and Philadelphia in the United States.
The American Line was a shipping company founded in 1871 and based in Philadelphia, Pennsylvania. It began as part of the Pennsylvania Railroad, although the railroad got out of the shipping business soon after founding the company. In 1902, it became part of the International Navigation Co., with the American Line generally handling traffic between the United States ports of Philadelphia and New York City and the British ports of Liverpool and Southampton. Sister company Red Star Line handled traffic between America and the European continent, primarily through Antwerp, Belgium. The company's most prominent president was Clement Griscom, who led the company from 1888 to 1902 and worked as a company executive for its entire existence. During its existence, the company was the largest American shipping company, rivalled only by the smaller, Baltimore-based Atlantic Transport Lines, although this distinction is a marginal one, as all American oceanic shipping concerns were dwarfed by British companies such as the White Star Line or Cunard Line and German ones such as HAPAG.
Clement Acton Griscom was an American shipping magnate and financier.
City of New York was a British built passenger liner that was designed to be the largest and fastest liner on the Atlantic. When she entered service with the Inman Line in August 1888, she was the first twin screw express liner in the world, and while she did not achieve the westbound Blue Riband, she ultimately held the eastbound record from August 1892 to May 1893 at a speed of 20.11 knots. City of New York and her sister City of Paris are considered especially beautiful ships, and throughout their careers were rivals to White Star Line's Teutonic and Majestic. In February 1893, the Inman Line was merged into the American Line and, by act of Congress, the renamed New York was transferred to the US flag. Beginning in the mid-1890s, New York and Paris were paired with St Louis and St Paul to form one of the premier Atlantic services. New York continued with the American Line until 1920 and was broken for scrap in 1923. She served in the United States Navy as USS Harvard during the Spanish–American War, and Plattsburg in World War I. She is also remembered for nearly colliding with RMS Titanic as the latter ship departed on her maiden voyage in 1912.
City of Paris, was a British-built passenger liner of the Inman Line that held the Blue Riband as the fastest ship on the north Atlantic route from 1889 to 1891 and again from 1892 to 1893. A sister ship of the City of New York and a rival of the White Star Line Teutonic and Majestic, she proved to be the quickest of the pre-Campania twin-screw express liners. In 1893, she was renamed Paris and transferred to US registry when the Inman Line was merged into the American Line. She and her sister were paired with the new American built St Louis and St Paul to form one of the premier Atlantic services. Paris served the US Navy as the auxiliary cruiser USS Yale during the Spanish–American War and is remembered for slipping into the harbor at San Juan, Puerto Rico, under the Spanish guns of Morro Castle. After Paris returned to commercial service, she was seriously damaged in 1899 when she grounded on The Manacles off the British coast. Rebuilt and renamed Philadelphia, she sailed for the American Line until requisitioned again during World War I as the transport Harrisburg. After the war, she continued with the American Line until 1920 and was scrapped in 1923.
The Inman Line was one of the three largest 19th-century British passenger shipping companies on the North Atlantic, along with the White Star Line and Cunard Line. Founded in 1850, it was absorbed in 1893 into American Line. The firm's formal name for much of its history was the Liverpool, Philadelphia and New York Steamship Company, but it was also variously known as the Liverpool and Philadelphia Steamship Company, as Inman Steamship Company, Limited, and, in the last few years before absorption, as the Inman and International Steamship Company.
SS Zeeland was a British and Belgian ocean liner of the International Mercantile Marine Co. (IMM). She was a sister ship to Vaderland and a near sister ship to Kroonland and Finland of the same company. Although her name was Dutch, it was changed during World War I to the less German-sounding SS Northland. She served for a time as a British troop ship under the name HMT Northland. Reverting to Zeeland after the war, the ship was renamed SS Minnesota late in her career. Zeeland sailed primarily for IMM's Red Star Line for most of her early career, but also sailed under charter for the White Star Line, the International Navigation Company, the American Line, and the Atlantic Transport Line, all IMM subsidiary lines. The pursers safe survived the scrapyard at Inverkeithing and after residing in a wardrobe for 80 years is currently on display in a local private home.
The Pennsylvania class was a class of four cargo-passenger liners built by the Philadelphian shipbuilder William Cramp & Sons in 1872–73. Intended for the newly established American Line, the four ships—Pennsylvania, Ohio, Indiana and Illinois—were at the time the largest iron ships yet built in the United States, and were launched with considerable fanfare. Upon entering service in 1874, they became the first American-built steamships to challenge British dominance of the transatlantic trade since the American Civil War.
SS Pennsylvania was an iron passenger-cargo steamship built by William Cramp & Sons in 1872. The first of a series of four Pennsylvania-class vessels and the lead ship in her class, Pennsylvania and her three sister ships—Ohio, Indiana and Illinois—were the largest iron ships ever built in the United States at the time of their construction, and amongst the first to be fitted with compound steam engines. They were also the first ships to challenge British dominance of the transatlantic trade since the American Civil War.
SS Ohio was an iron passenger-cargo steamship built by William Cramp & Sons in 1872. The second of a series of four Pennsylvania-class vessels, Ohio and her three sister ships—Pennsylvania, Indiana and Illinois—were the largest iron ships ever built in the United States at the time of their construction, and amongst the first to be fitted with compound steam engines. They were also the first ships to challenge British dominance of the transatlantic trade since the American Civil War.
SS Indiana was an iron passenger-cargo steamship built by William Cramp & Sons in 1873. The third of a series of four Pennsylvania-class vessels, Indiana and her three sister ships – Pennsylvania, Ohio and Illinois – were the largest iron ships ever built in the United States at the time of their construction, and among the first to be fitted with compound steam engines. They were also the first ships to challenge British dominance of the transatlantic trade since the American Civil War.
Panama Pacific Line was a subsidiary of International Mercantile Marine (IMM) established to carry passengers and freight between the US East and West Coasts via the Panama Canal.
SS Merion was an ocean liner built in 1902 for the American Line, a subsidiary line of the International Mercantile Marine (IMM). She also sailed for the Red Star Line and the Dominion Line—both subsidiary lines of IMM—during her passenger career. After the outbreak of World War I she was bought by the British Admiralty and converted to serve as a decoy resembling the Royal Navy battlecruiser HMS Tiger. In May 1915, while posing as Tiger in the Aegean Sea, Merion was sunk by the German submarine SM UB-8.
SS Haverford was an American transatlantic liner commissioned in 1901 for the American Line on the route from Southampton to New York, then quickly on the route from Liverpool to Boston and Philadelphia. During her early years, this ship, mainly designed to transport migrants and goods, was the victim of several incidents. Her company was integrated into the International Mercantile Marine Co. (IMM) in 1902 and she was used by other companies within the trust, the Dominion Line and the Red Star Line.
SS Rhynland was a passenger ship owned by the Red Star Line. She was built in 1879 by Barrow Shipbuilding Company. The ship was sold to Italy in 1906, renamed Rhyna, and was subsequently scrapped.
SS Pennland was a transatlantic ocean liner that was launched as Pittsburgh in Ireland in 1920 and renamed Pennland in 1926. She had a succession of UK, German and Dutch owners and operators. In 1940 she was converted into a troopship.
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