Pilkington and Wilson's initial business plan for the White Star Line included leasing and chartering as opposed to purchasing vessels. As business increased and capital was established, they would purchase vessels . The first ship purchased under the White Star Line name was the 879-ton clipper ship Iowa, of the barque class. In 1853, Henry Wilson's daughter married a man a young man named James Chambers. Chambers had proved his capabilities in the shipping business working for his father and it was just as matter of time until he became a partner in the White Star Line.
Pilkington and Wilson's first major competitor was James Baines' Black Ball Line. Although the two companies were fierce competitors that initially dealt with each other in an almost cut-throat manner, the rivalry eventually calmed down to the point of the two companies leasing ships to one another and each flew their own house flags on the leased vessels. By this point, the White Star Line became a financially sound company but the old original ships had become water soaked, over-strained, and slow.
These were clipper ships with composite hulls (iron and wood frames) and a trip from England to Australia often took up to 10 weeks to complete. Pilkington, Wilson, and Chambers quickly realized that if they were going to remain players in what was becoming a very competitive market, they were going to need newer and faster vessels.
In 1857, a 19 year old by the name of Thomas Henry Ismay, struggling to claim his stake in the business world, met up with a retired ship captain named Phillip Nelson. Nelson owned a ship, the Anne Nelson, named after his wife. The two became friends and decided to go into business together as shipbrokers. After five years the partnership broke up and Ismay founded the T.H. Ismay and Company in Liverpool. After a few quick years, T.H Ismay and company had become a recognized establishment in its own right and Ismay was becoming a wealthy man. Deciding it was time to make some outside investments, Thomas Ismay began purchasing shares in the White Star Line.
Things were going well for the White Star Line under the ownership and management of Pilkington, Wilson, and Chambers. Orders were handled promptly, schedules were running on time, the fleet was continuing to grow, and service had expanded to India. Henry Wilson involved himself in other interests but continued purchasing ships for White Star acting as ship broker and retaining a 51% ownership in WSL stock. In 1861, Pilkington decided to retire from White Star to pursue an unrelated business with his brother and Henry Wilson took on a new associate named John Cunningham; another large share holder.
In an attempt to expand it's services, White Star merged with the Black Ball and Eagle Lines to form a conglomerate called the Liverpool, Melbourne and Oriental Steam Navigation Company Limited, a venture that was financially doomed from the start. White Star Line purchased its first steamship, the Royal Standard, a move thought to be what WSL needed to pick business back up again. As it turned out, Royal Standard did not make a difference and the conglomerate was now on a rapid down hill spiral. In an attempt to save itself, the White Star Line broke away from the merger and re-routed the Royal Standard to the North Atlantic run; Liverpool to New York.
The Royal Standard, had several design flaws; the main problem was the fact that she was so poorly under powered. Her top speed was 6-8 knot's which made the vessel vulnerable to being passed by clipper ships under full sail. Things at this time began to look bleak for the shipping company and Wilson began mortgaging assets in an attempt to expand the fleet to the North Atlantic trade. The mortgages were assumed by the Royal Bank of Liverpool, but in October of 1867 the Royal Bank got into a financial bind and closed down, revealing a debt of £527,000 which the line owed. White Star Line was now facing forced bankruptcy.
With the White Star Line facing ruin, James Chambers decided it was time to get out, accusing Henry Wilson of "reckless spending" with money the company didn't have. Wilson had let the success of the company get away from him by attempting to expand the fleet too quickly.
One of White Star's immigrant vessels that had docked in India developed a leak. Upon inspection of the ship, local authorities in India condemned it pronouncing it un-seaworthy and unsafe for immigrant passage. Two other ships had been repossessed by the bank, several ships were in dire need of repair or replacement, another two ships had run aground and were abandoned.
The WSL fleet as a whole, needed replacing. The shipping world at this time was very competitive and clipper ships were becoming obsolete. They simply could not compete with the faster, non-wind dependant steamships. Samuel Cunard had proven this with his new steamship company. He had amassed a strong enterprise in the immigrant trade with his steamships and his solid government contracts to transport Royal Mail to overseas ports.
With the White Star Line on it's last legs, thirty year-old Thomas Henry Ismay saw an opportunity for the taking and quickly swooped in and purchased the White Star Line from the near penniless Henry Wilson. Almost immediately after the purchase, the White Star Line was back on it's feet. Ismay began selling the old slow clipper ships, utilizing the original practice of leasing and chartering first, then purchasing as capital was accumulated. The White Star Line would see it's most successful and prosperous days under the Ismay name.
Soon after White Star Line's purchase, (for £1000) Thomas Ismay formed the Oceanic Steam Navigation Company. OSNC began with £400,000 in capital and £1000 in shares, with Ismay holding controlling interest. One particular share holder, also a good friend of Thomas Ismay's, William Imrie Jr., had inherited a small shipping company from his father and after the two men formed a partnership, Imrie merged his company with T.H. Ismay & Company forming the Ismay, Imrie & Co. Ismay, Imrie & Co was made a subsidiary division of the Ocean Steam Navigation Company. Ismay ran the steamers under the White Star Flag. (and name) Imrie ran the sailing vessels under the name of North West Shipping Company. Two other large share holders in OSNC were Gustuv Wolff and Edward Harland. Two men that had started a shipbuilding company in Belfast that was quickly becoming quite successful. (Still in business today) Harland and Wolff were considered the "highest-priced and most painstaking"1 shipbuilders in Europe. Their craftsmen were well paid, and there was a long line of applicants from all over the world seeking employment with them.
Thomas Henry Ismay
Wilhelm Wolff Sir Edward Harland
A business partnership soon formed between the three with the intent to build faster, longer lasting iron ships and continue in the North Atlantic shipping trade market.
Under the new White Star Line ownership, Harland and Wolff received its first vessel construction orders on July 30, 1869. On August 20, 1870, what many believe to be White Star's "Greatest Triumph," the liner Oceanic was launched for final fittings and put into service in 1871.
Harland and Wolff would build the ships to their own specifications, sparing no expense, they would then tack on a fixed percentage to the building cost to constitute their fee. Further agreement stated that Harland and Wolff would never build a ship for any of White Star's competitors, and at the same time, White Star would not contract with any rival shipbuilders. The deal worked well for both parties.
Speed wasn't as much of a concern to Thomas Ismay as comfort was. A transatlantic crossing was often a one way trip in these days, a trip that didn't always reach it's destination. Passengers were apprehensive of transatlantic ships in the early years. Safety wasn't a big concern and many vessels had horrendous passenger accommodations. Most of the ships that carried livestock were simply hosed out for the return trip with immigrant traffic. This is where they earned the nickname "cattle boats."
Soon after Oceanic's completion, came the rest of the original quartet of vessels (Oceanic, Atlantic, Baltic and Republic.) built by Harland and Wolff for White Star under the new owner of Thomas Henry Ismay. These new ships would completely revolutionize commercial passenger trade. The White Star Line however, would soon experience its first dealings with disaster in 1873 when the Atlantic ran aground near Halifax resulting in multiple fatalities .
The building of Teutonic won the ship and White Star the Blue Ribband (spelled Ribband) award for setting a speed record, crossing the Atlantic. This became the incentive Ismay needed to really begin expansion of the company. All competitive eyes were beginning to take notice of the White Star Line. First class accommodations on the new ships were placed amidships (center of the ship) unlike competitive ships that had them located at the stern where engine noise and vibration were bothersome. A grand dining saloon was added, designated passenger walkways on deck called promenades, were featured. These new vessels even had had running water and electricity in the passenger cabins. Oceanic, the "Queen of the Big Four" was considered a pace setter for rival steamship companies.
Sir Edward Harland had died in 1895 and thirty-eight year old Joseph Bruce Ismay, having always worked in the family business, succeeded his father's position upon his death in 1899. A new partnership would soon take place. A partnership between Bruce Ismay and the new Harland and Wolff chairman Lord W.J. Pirrie, bringing a whole new management style to the White Star Line. By the early 1900's, the shipping company's were involved in a vicious rate war which was hurting all parties involved. American financier and multi-millionaire John Pierpont Morgan, saw this as a tremendous opportunity to expand his capital. Morgan was a railroad, coal, and steel magnate and decided to turn his interests to the Atlantic shipping trade. Morgan purchased all of White Star Line's rival shipping companies and placed them under one controlling trust with fixed shipping prices. He called this trust the International Mercantile Marine, (IMM)
(Above Left) Joseph Bruce Ismay, Managing Director, White Star Line, President, IMM
(Above Right) John Pierpont (JP) Morgan, Owner of the International Mercantile Marine (IMM)
IMM's Organizational Structure
(Above) Flag images re-created from the WWI Document Archive Service
Morgan wisely allowed his newly acquired vessels to retain both British registries and crews to avoid the higher US port taxes, as well as the Interstate Commerce Commission and potential violation of the Sherman Act. (enacted 10 years prior to the IMM formation) The Sherman Act is what buried JD Rockefeller and his Standard Oil Company for violating anti-trust and monopolization laws.
The British shipping companies considered this conglomeration a definite threat to their business and the formation of IMM inspired the Cunard line to make a quick move. Hence the birth of two of Cunard's greatest achievements, the Lusitania and the Mauritania. These two ships would be the largest and fastest ships the world had ever seen. The Lusitania quickly grabbed the famed Blue Ribband award from WSL's Teutonic, setting a new transatlantic crossing speed record. These ships played a vital role in convincing Cunard's rival White Star Line to accept Morgan's buyout proposal, especially when he offered them 10 times the shipping line's earnings for the year 1900. An additional agreement by the Morgan trust said that the White Star ships would remain reserves for the British Navy and could be requisitioned by the Admiralty in case the need arose. A smart inclusion to the deal, with England but a few years from entering the Great War. (WWI)
By the end of 1902, the deal was final. Bruce Ismay would remain as White Star Line's managing director and chairman, and Morgan later convinced him to assume the presidency of IMM. Of course, Lord Pirrie was thrilled with this deal. This meant that his company would build all of the ships for all of the individual lines that fell under the IMM trust, and, under the same agreement that had existed previously. Ismay and Pirrie decided that something was going to have to be done about the competition that was currently threatening White Star. Namely, the Cunard Line and the German lines that were also beginning to produce monster ships.
Image: Webmasters private collection
In 1907, Ismay and Pirrie came up with an idea of building two twin leviathans that would be larger than the new Cunard ships. This new class of liners would be able to move even more passengers and freight. They would feature the last word in luxury rather than focus on speed. A third ship was to later join this special group called the "Olympic Class Liners." The first ship would be named Olympic. The second ship, Titanic and the third, Gigantic. (Later renamed Britannic after the Titanic disaster.) This was the big turning point for the White Star Line that launched many years of success for the company. Unfortunately, future competition and the upcoming war years would take a heavy toll on the WSL as it did with many other companies.
And the story goes on...... in a few short years the White Star Line would take another about- face with the Titanic disaster, and when a man by the name of Lord Kylsant entered the picture.... See: White Star Line's Ending Years
1. Excerpt from Wynn Craig Wade's
The Titanic: End of a Dream, American Book- Stratford Press 1979
Return to Home