A White Star is born
Could anyone compete against the established and popular Cunard Line?
A young British businessman - Thomas Henry Ismay - was getting ready to
challenge the great giant shipping company with a few giant projects of
his own.
For the princely sum of £1000, Ismay rescued from bankruptcy the ailing
White Star Line which had plied the Australian trade routes. He made it
(1869) part of the Oceanic Steam Navigation Co. Ltd., based in Liverpool.
But Cunard was already established in the market place, subsidised by the
British government to the tune of some £2 million. How on earth (or
on water) could Ismay and his new White Star enterprise hope to compete?
Joseph Bruce Ismay
Ismay's big ideas needed even bigger financing if Cunard
was to be challenged. Enter Gustav Schwabe, a Liverpool financier.
Ismay had immediate plans for a big ship, which he would name after his
company: the 'Oceanic'. But Schwabe too had his own ideas, as to who should
build it.
Schwabe not only supported Ismay but also, to support a nephew of his, resolved
to connect the fortunes of the two men. The nephew was Gustav Wolff- the
Wolff of Harland &Wolff (H&W) Belfast shipyards, in the north of
Ireland.
So it was arranged that Ismay's contract for the 'Oceanic' (1870), came
to the Ulster shipyard of Harland and Wolff.
H&W set standards in quality of accommodation and in naval construction
never seen before. Oceanic's immediate success began a close business connection
that grew between the two companies into a formidable partnership.
Practically all of White Star's vessels (before the Great War) were constructed
by H&W; 'unoficially', they agreed not to build ships for White Star's
competitors, while White Star agreed not to award contracts to any other
shipyard.
The business and social connections between them were so intimate that while
under a White Star contract, H&W were often free to build a vessel to
their own specifications without the interference of cost limitations. When
the project was completed, H&W would add a fixed percentage to the total
cost; such addition was their fee.
Enter- American millionaire, J. Pierpont Morgan. At the beginning of the
new century, Morgan noticed the potential for profit from mass emigration
from Europe to America.
Morgan began to purchase passenger lines to form a Trust known as the International
Mercantile Marine Company (IMM). The huge consortium's aim was to obtain
control of all the major shipping companies operating on the North Atlantic
and eventually gain a rate-fixing monopoly.
After assimilating a number of other important passenger lines, Morgan bid
successfully for the White Star, which became part of IMM (December 1902),
ending British control. There were eight American and five British directors;
including William J. Pirrie, Chairman of H&W. And what happened Ismay?
Managing director/company chairman, no less!
Big, big money from IMM and White Star's link with H&W provided just
the right conditions for more and even bigger ideas... and they couldn't
come any bigger than the trio of sister liners now envisaged: Olympic, Titanic
and Gigantic.