Inman line 1854

Collins Atlantic 1851

Collins lost Arctic '54, Pacific '57

Vanderbilt ad

White Star Line 1893

Hamburg Amerika Line 1900

Inman march 1872

Blue Funnel Line 1937

Congress gave this money to Collins in 1847, but he built four enormous ships (not five smaller ships as he had promised), each with elegant saloons, ladies' drawing rooms, and wedding berths. He covered the ships with plush carpet and brought aboard olive-wood furniture, marble tables, exotic mirrors, painted glass windows, and French chefs. Collins stressed luxury, not economy, and his ships used almost twice the coal of the Cunard Line. He often beat the Cunarders across the ocean by one day, but his costs were high and his eco nomic benefits were nil. With annual government aid, Collins had no incentive to reduce his costs from year to year. He preferred to compete in the world of politics for more Federal aid than in the world of business against price-cutting rivals. In 1852 he went to Washington and lavishly entertained President Fillmore, his cabinet, and influential Congressmen. Collins artfully lobbied Congress for an increase to $858,000 a year.

It took Cornelius Vanderbilt, a New York shipping genius, to challenge this system. In 1855, Vanderbilt offered to deliver the mail for less than half of what Collins was getting. Congress balked - it was pledged to Collins - so Vanderbilt decided to challenge Collins even without a subsidy. "The share of prosperity which has fallen to my lot," said Vanderbilt, "is the direct result of unfettered trade, and unrestrained competition. It is my wish that those who are to come after me shall have the same field open before them." Vanderbilt's strategy against Collins was to cut the standard first-class fare to $80. He also introduced a cheaper third-class fare in the steerage. The steerage must have been uncomfortable - people were practically stacked on top of each other - but for $75, and sometimes less, he did get newcomers to travel.

Vanderbilt also had little or no insurance on his fleet: he built his ships well, hired excellent captains, and saved money on repairs and insurance. Finally, Vanderbilt hired local "runners" who buttonholed all kinds of people to travel on his ships. These second- and third-class passengers were important because all steamship operators had fixed costs for each voyage. They had to pay a set amount for coal, crew, maintenance, food, and docking fees. In such a situation, Vanderbilt needed volume business and sometimes carried over 500 passengers per ship. All this was too much for Collins. When he tried to counter with more speed, he crashed two of his four ships, killing almost 500 passengers. In desperation he spent one million dollars of government money building a gigantic replacement, but he built it so poorly that it could make only two trips and had to be sold at more than a $900,000 loss.

Finally, Congress was outraged. Senator Robert M. T. Hunter of Virginia said: "The Whole system was wrong . . . it ought to have been left, like any other trade, to competition." Senator John B. Thompson of Kentucky concurred: "Give neither this line, nor any other line, a subsidy. . . . Let the Collins Line die. . . . I want a tabula rasa - the whole thing wiped out, and a new beginning." Congress voted for this "new beginning" in 1858: they revoked Collins' aid and left him to compete with Vanderbilt on an equal basis. The results: Collins quickly went bankrupt, and Vanderbilt became the leading American steamship operator.

And there was yet another twist. When Vanderbilt competed against the English, his major competition did not come from the Cunarders. The new unsubsidized William Inman Line was doing to Cunard in England what Vanderbilt had done to Collins in America. The subsidized Cunard had cautiously stuck with traditional technology, while William Inman had gone on to use screw propellers and iron hulls instead of paddle wheels and wood. Inman's strategy worked; and from 1858 to the Civil War, two market entrepreneurs, Vanderbilt and Inman, led America and England in cheap mail and passenger service. The mail subsidies, then, ended up retarding progress: Cunard and Collins both used their monopolies to stifle innovation and delay technological changes in steamship construction.

There was competition from other nations as well. Between 1856 and 1862, three new steamship lines were founded: Germany's Hamburg-Amerika Line and North German Lloyd, and France's Compagnie Generale Transatlantique. The White Star Line was weakened by trying to compete in the fierce Atlantic passenger route and by internal corporate machinations. It attempted to merge with other steamship companies, but failed. The company never recovered, and its floating assets were liquidated. What remained, including the name, was purchased by 31-year-old Thomas Henry Ismay. His goal was to succeed in the transatlantic route where the old line had failed, using new, better appointed, and faster liners.

Ismay received the capitalization he needed from Gustav Schwabe in Liverpool. Schwabe agreed to finance the brash young entrepreneur on the stipulation that the new line would order its ships from the Belfast, Ireland, shipyard of Harland & Wolff. The reason? Schwabe's nephew was Gustav Wolff, a junior partner in Harland & Wolff. This stipulation turned out to be a salvation for Harland & Wolff, which had been suffering from a decline in shipbuilding orders. With the creation of Ismay's Oceanic Steam Navigation Company in 1869, plans were immediately set to build five 420-foot steamers. Those ships were the Oceanic, Atlantic, Baltic, Republic, and Adriatic, all delivered between 1871 and 1872. Thereafter, Ismay's company kept the workers at the Harland & Wolff shipyards busy building cargo ships, passenger ships, livestock carriers, even several sailing ships-among the last built by the Belfast shipyard.

Alfred Holt became one of the premier shipbuilders in Liverpool and with his brother Philip, founded the Blue Funnel Line in 1865, seeking not only profit but the values of Unitarian moral economy, to minimize waste, avoid extravagance and competition and speed, and seek to build strong, reliable, safe, and simple ships of superior design. "The Agamemnon sailed from Liverpool on 19th April, 1866 and became not only the first of Ocean Steamship's Blue Funnel vessels to sail for China but also the first steamship to forge a link between Britain and the Far East. Powered with a single screw the three sister ships, Agememnon, Ajax and Achilles had a service speed of 10 knots. They were 310ft in length with a beam of 39ft and had a registered tonnage of 2280 tons. The fore and main masts were barque-rigged to make full use of the trade winds and monsoon winds around the Cape of Good Hope. Their performance was impressive and a homeward run of 12,530 miles was completed in 57 days and 18 hours and the daily coal consumption never exceeded 20 tons per day. The holds could carry up to 2800 tons of cargo which usually included tea loaded at Foochow." (Alfred Holt website)

Aggressive competition among the British, German, and French shipbuilding and steamship companies had a tremendous ripple effect throughout the British Isles and Europe. Many companies were contracted to supply everything not built by the shipyards themselves, from the massive steam-driven engines to the marine chronometers placed on the ship's bridge to ensure precise timekeeping during the voyage. By itself, Harland & Wolff employed nearly 7,000 workers, performing such varied tasks as riveting the ship's hull plates to making intricate wood carving for the increasingly luxurious interiors.

Sources:

• Folsom, Jr., Burton. Entrepreneurs and the State, The Freeman, vol. 38, April, 1988
• Young, Anthony. Across the Sea of Commerce, The Freeman, vol. 50, January, 2000.
• Alfred Holt and Blue Funnel Line