The Evil Dream
In the 1860s, British industry was entering the most expansive and prosperous era it has ever known or is ever likely to know. In particular, shipbuilding and transatlantic traffic were growing in volume year by year. It is impossible to understand the genesis of the Titanic without looking at the men who conceived the idea of a giant ship; and impossible to understand them, and the reasons why they ever imagined such an extraordinary vessel, without some notion of the tortuous and ruthlessly competitive international shipping business—British, German, American—of which they were part.
The man behind the Titanic, as it happens, was Canadian. He was born in Quebec in 1847 as William James Pirrie, the son of A. J. Pirrie, an Ulsterman of Scottish descent. His mother was also from Ulster, a member of the Montgomery family. After the father died, mother and son returned to Ireland, where the boy was apprenticed at the age of fifteen to the shipbuilding and engineering firm of Harland & Wolff. Pirrie was a partner in Harland & Wolff by the time he was twenty-seven. During the next half century, largely thanks to his leadership, it became the greatest shipyard in the world and the birthplace of the Titanic.
People these days are inclined to think that the Titanic was a freak, a huge ship of unique size and luxury. This misunderstanding underrates the scale of the enterprise. Pirrie’s idea, conceived in 1907, was that his firm, in partnership with the White Star Line, would build not one but three monster transatlantic liners. They would sweep the opposition off the seas. The first would be named the Olympic; the second the Titanic; and the third—the Britannic.
All three were built. The Olympic had an illustrious career, carrying more troops than any other vessel in World War I. The Britannic was sunk by a German mine in 1916 while serving as a hospital ship. Nowadays, nobody outside the passionate fraternity of lovers of old ships remembers this useful pair. But the Titanic became, as she has remained, the best known of all ships to the man in the street, her name springing to mind more readily than the Golden Hind, the USS Arizona, or HMS Victory.
It is odd that Pirrie, the bold prime mover, has disappeared so completely from the story. Had he sailed in the Titanic on her maiden voyage, as he fully intended, he would have been better known. He would either have drowned, in which case he would have been as closely associated with the ship as her skipper, Captain Smith, and her richest passenger, Colonel J. J. Astor; or he would have escaped, in which case he would have been as universally reviled as the chairman of White Star who got away in one of the last lifeboats, J. Bruce Ismay. As it was, his doctor forbade Pirrie to take the trip because of prostate trouble; he did not testify in the much-publicized official inquiries that followed though by June his health was much improved; and after their reports came out it was too late for anyone to ask him awkward questions. His role receded into the past. His hair turned white during his illness, but he remained the great shipbuilder. Indeed the business done by his world-beating yards actually boomed, because they reconstructed many ships after the disaster to make them conform to the new rules officially imposed as a result of the defects exposed in their prize product. In World War I, Lord Pirrie was in charge of all British merchant shipbuilding. He was made a baron in 1909 and became a viscount in 1921. He died at sea in 1924 from pneumonia in the Panama Canal, returning with his wife from a voyage on Harland & Wolff business to South America.
To find the source of Pirrie’s grand ideas and confidence, we need to look back at the atmosphere of those early years. Belfast had a long shipbuilding tradition, but it was only around the time Pirrie became an apprentice that Harland & Wolff started on its rapid rise to world dominance. The founding father was a restless engineering genius from Yorkshire, Edward Harland, who in 1858 bought a small boatbuilding business on Queen’s Island, which is still part of the Harland & Wolff site today. Harland was no traditionalist. His main reforms, according to his successors in Belfast, were two: he replaced wooden upper decks with iron decks, thus in effect turning the hull into a box girder of immensely greater strength; and he changed the shape of the hulls by giving them a flat bottom and square bilges, thus increasing their capacity. He also did away with the relics of sailing-ship days, bowsprits and figureheads, although his steamships were still carrying sails until nearly the end of the century.
The stroke of luck in Harland’s career was to catch the eye, early on, of Hamburg Jews. One of them, a financier named Gustavus Schwabe, came to Liverpool and put money into a rising local shipping firm, the Bibby Line, and gave repair and building contracts to Harland. Schwabe’s nephew, an engineer like Harland, became Harland’s partner. His name was Gustav Wolff. In Harland & Wolff’s present-day order book, which lists in numerical order the 1,700 ships they have built in their hundred-and-fifty-year history, numbers one, two, and three are Bibby Line ships.
Harland and Wolff joined forces just before Pirrie arrived in their yards as an apprentice. With every year that passed, their business expanded. In 1864 the gross tonnage of the ships they built was 30,000 tons. In 1884 the figure was 104,000. Pirrie’s career was contemporaneous with the development of steel shipbuilding, and he himself was in the forefront of all the important advances in naval architecture and marine engineering. He took over as chairman when Harland died in 1894; so he was thirty years under Harland, and thirty years on his own as chairman.
He was more than chairman: he was a dictator. Physically, he was small and ferociously energetic. He craved public recognition. He stood out from his rivals because he was not only a master-technocrat but a master-businessman. The members of his board were ciphers. He secured the orders for ships himself, built them to his own designs with little more than a general specification from the clients, and charged them the building costs plus a 4 percent commission for Harland & Wolff—a highly satisfactory way of doing business. (It was when the firm built the Canberra for P&O on a fixed-price contract that it lost millions and nearly went broke.) Apart from Pirrie, nobody knew or was even allowed to discuss his firm’s finances; one of the ship architects who inadvertently became involved in financial talks with a shipowner “stood down,” supposedly due to bad health. When Pirrie was away from Belfast, meetings were chaired by his wife.
Though forgotten now, Pirrie was lauded in his own day, when engineers were national figures. The celebrated journalist W. T. Stead, who was drowned in the Titanic, praised Pirrie’s “foresight, optimism, incessant industry and selection of able lieutenants (a sure sign of superior ability)” and proclaimed that he had developed “the greatest business of the kind that has existed in the world since men first began to go down to the seas in ships.” The verdict of the Dictionary of National Biography is that he was “the creator of the big ship.”
How did this happen The starting point may be said to have been the alliance between Harland & Wolff and White Star.
The important new figure who enters the story here is the formidable T. H. Ismay. His father had been a boatbuilder in a small way in Maryport, Cumberland. In 1869—not long after Pirrie joined Harland & Wolff—T. H. Ismay bought, with Schwabe’s financial backing, the flag of White Star, a company that had made a name on the Australian run, shipping optimistic emigrants to the goldfields.
White Star’s history, as it happened, contained an odd prelude to the Titanic. In 1863 the company took delivery of a fine ship called the Royal Standard, advertised as the latest word in seagoing comfort: “Her saloons are spacious and handsomely furnished, with everything requisite for the voyage, including bedding, linen, piano, library, etc.” She was launched in the summer of 1863 and on April 4, 1864, fourteen days out of Melbourne and homeward bound, she struck an iceberg. “Destruction seemed inevitable,” said her master. She was making ten knots under sail when she struck; the iceberg towered 600 feet above her, he said. The main and mizzen masts snapped, the starboard lifeboat was smashed, and her starboard quarter was stove in, even though her hull was of iron. For half an hour the ship rubbed along the flank of the iceberg, reckoned by the master to be a quarter of a mile long, before she could break away; thirty-five days later she limped into Rio.
The Australian run was profitable, but it was small beer, as Schwabe and Ismay saw, by comparison with the glittering new opportunities offered by the Atlantic. The whole secret of the growth of the shipping companies and the size of the ships they built is to be found in the extraordinary expansion, unparalleled in history, of the population of the United States. During the half century between 1840, when Samuel Cunard’s Britannia inaugurated the first transatlantic steamship service, and 1890, trade between the United States and Britain rose sevenfold, in cotton, tobacco, and wheat, with Liverpool as its focus. At the same time, the population of the United States quadrupled. Cunard was not slow to realize that its business could not expand by relying on mail, cargo, and first-class passengers alone; so it also started to carry steerage passengers, cashing in on the flood of immigrants from Britain as well as continental Europe. Bigger ships and longer passenger lists were the keys to profit; but the expanding market also attracted competitors. Ismay’s White Star, financed by Schwabe and building all its ships at Harland & Wolff yards, was challenging Cunard on the Atlantic routes by the early 1870s; and by the 1880s the great German shipowners joined the battle as well.
Then came the Americans and J. P. Morgan. The impact of American capital on the shipping business had been long delayed, partly because of the American Civil War, and partly because the new breed of industrialists and financiers had been fully occupied opening up the continent with oil, steel, and railways. But when it came it was devastating. It started when a company that later became part of the Morgan combine acquired Inman Lines of Liverpool, which gave the Americans access to British shipbuilding technology. At White Star, correctly identifying the threat, T. H. Ismay attempted to assemble a consortium of British shipowners to save the ailing company, but the other shipowners would not listen to him. The issues and arguments were much the same as those of 1986, when the British Cabinet split over whether Westland Helicopters should be sold to the American giant, Sikorsky. Ismay’s warnings, like those of the Minister of Defence, Michael Heseltine, went unheeded.
It was one of the few failures of Ismay’s career and one that he always regretted. Shortly before he died in 1899, leaving more than a million pounds, an interviewer asked him about his principles of business success. He named two. First, he said, don’t be too greedy; always let someone else make a bit. Second, never let a weak man go out of your trade if it means letting a strong one in. He instanced the shipowners’ refusal to save Inman. “And now,” he said, “we have an American railway company come into the trade, with millions at its back, running under a well-known British flag, and setting us all to work building whether we want it or not.”
Morgan’s aim was to establish in the Atlantic the same sort of business that he was used to at home: a monopoly. With Pirrie’s help, he forced through an amalgamation with the big German lines, North German Lloyd and Hamburg-Amerika. He then launched the most vicious fare war in shipping history, offering third-class transatlantic passages for as little as £2. His principal target was Cunard. Having driven the company into financial trouble by his price cutting, he then tried to buy it and was only repulsed when the British government, alarmed by the idea of a great British asset passing into foreign hands, came to the rescue with substantial and favorable subsidies. The condition of the subsidies was openly nationalistic. “Under no circumstances shall the management of the company be in the hands of, or the shares of the company held by, other than British subjects.”
Pirrie had quickly seen the Morgan threat. The source of much of his business, White Star, was as vulnerable as Cunard, with profits reduced by the fare war causing a shortage of capital for new ships. Schwabe had died in 1890, Ismay in 1899. Ismay’s son, J. Bruce Ismay, was relatively inexperienced. Pirrie saw that unless drastic action was taken White Star would drop further and further out of the battle and build fewer and fewer ships in Pirrie’s shipyards. His solution was unattractive but practical. Instead of opposing Morgan’s ambitions, he supported them. Three years after Ismay senior died, Morgan, with Pirrie as an intermediary, swallowed White Star. The head of Cunard, Lord Inverclyde, acquired considerable prestige from the skillful way he exploited Morgan’s bid in order to extract favorable loans from the government, while yielding none of his company’s independence. But at the very time that Inverclyde was concluding these advantageous arrangements, J. Bruce Ismay was being forced to sell—not least by the pressure of his father’s old ally, Pirrie.
The transaction was a financier’s cat’s cradle. It had been the International Navigation Company of Philadelphia, with the Pennsylvania Railroad Company, that had acquired Inman Lines. In 1902 the International Navigation Company changed its name to the International Mercantile Marine Company. This company, with Pirrie on the British board, acquired practically all the shares in the Oceanic Steam Navigation Company, which had always owned the ships of the White Star Line, of which Ismay, Imrie & Co. were managers. Morgan then registered the Oceanic Company shares in the name of the International Navigation Company of Liverpool, a subsidiary of the International Mercantile Marine Company, which in its turn transferred the shares to two trust companies in the United States as security for certain bonds.
Given the intricate nature of Morgan’s combine, it is not surprising that the absoluteness of his control of White Star was not fully appreciated. The Titanic was generally regarded as a British ship. Even Lord Mersey, with his Liverpool background, was taken aback in the Board of Trade inquiry into the Titanic’s sinking when he learned that the White Star Company’s seagoing rules, under which the Titanic, like all other White Star vessels, had been operating, had been drawn up in the United States. Morgan had seen how his bid for Cunard had alarmed the British. With White Star, the appearance of control stayed firmly in Britain. All White Star ships were to be officered by British subjects and to fly the British flag.
Excerpted from Titanic by Michael Davie. Copyright © 2012 by Michael Davie. Excerpted by permission of Vintage, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.