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The International Mercantile Marine Company

After slowing in the depression years of the mid-1890s the formation of giant monopolistic trust companies in the United States accelerated again when prosperity returned in 1897. There are known to have been several discussions in the 1890s about creating shipping trusts, but it was not until shortly after he created U.S. Steel, the first billion dollar corporation, that J.P. Morgan assembled a colossal shipping trust. The story of the International Mercantile Marine Company, a mammoth and "ill-conceived venture," begins in many ways with the Atlantic Transport Line.

In the summer of 1899 Bernard N. Baker was negotiating with John R. Ellerman, chairman of Frederick Leyland & Co. Ltd. of Liverpool, operators of the largest cargo fleet trading to the United States, over the sale of the Atlantic Transport Line. By the spring of 1900 Ellerman was close to a deal with Baker and on March 22, 1900 he wrote to Cunard's chairman about his proposed merger stating that he had definitely acquired the Atlantic Transport Line. The deal however was called off when a more attractive suitor for the Atlantic Transport Line appeared on the horizon. Clement Acton Griscom, director of the International Navigation Company, owner of the Red Star and American Lines and the principal American ship operator and shipping trust proponent offerred Baker an alternative merger with American interests.

Clement Acton GriscomJ. P. Morgan
Clement A. Griscom (Lower Merion Historical Society) and J. P. Morgan

The time seemed right for creating a shipping trust and Griscom had access to capital through J. P. Morgan. Griscom, Morgan, and Baker talked for six months until December 1900, when Baker agreed to the first step — merging the Atlantic Transport Line into the International Navigation Company. The next step was to buy additional British-flagged tonnage, and the first target was the Leyland Line. Ellerman drove a hard bargain, forcing Morgan to pay £14.10s in cash for each £10 ordinary share for the Leyland Line. The second target was the prestigious and profitable White Star Line. A half-hearted attempt to acquire the Cunard Line was made, and the trust signed a profit-sharing partnership with two key German lines in February 1902. Public opinion and governments in Europe were alarmed by these apparently hostile developments. The threat posed by the American trust worried British authorities so much that generous subsidies were offered to the Cunard Line to build and run two super-liners, Mauretania and Lusitania, with which Britannia could continue to rule the Atlantic. (These famous ships in turn goaded the trust into ordering Titanic and her sisters for the White Star Line.)

Lord PirrieBruce Ismay
Lord Pirrie and Bruce Ismay

J.P. Morgan & Co. announced the details of the trust's organization on October 1, 1902. Named the International Mercantile Marine Company, it was not a new company, but a reorganization and renaming of the InternationaNavigation Company. The capital stock was increased from $15 million to $60 million preferred and $60 million common stock. Technically a holding company under which "subsidiary lines will be permitted full liberty in managing their own affairs" it was as Winthrop L. Marvin wrote in 1902, "the greatest shipping enterprise which the world has ever known in the work of American capital."

Morgan was not entitled, as an individual American, to be registered under British law as owner or part owner of the British vessels acquired by the combine. But, by a clever evasion of British navigation laws, the International Mercantile Marine Company was able to own shares in the British registered companies, which in turn were registered at the Custom-house as the owners of the vessels. By a "curious anomaly" of British law the Companies Acts were so framed as to permit any foreigner or body of foreigners to evade the provisions of the Merchant Shipping Act and violate its principles. As with other ventures led by Morgan the goal was to absorb as many lines as possible to enable economies of scale and other efficiencies, stifle competition, and control rates. In addition, it would provide the obvious means of shipping to European markets the products of Morgan's U.S. steel and other American goods carried over Morgan's railroads. The trust secured more than 100 ships, representing one fifth of transatlantic tonnage and a third of the North Atlantic passenger service.


No. of Ships


Leyland Line



White Star



International Navigation
(Red Star, American)



Atlantic Transport






The table above displays the relative sizes of the fleets merged into the trust and that below records the number of passengers carried in 1902 by its lines, by its German partners, and by other lines. The Atlantic Transport Line, unlike the others listed, was not engaged in the mass emigrant trade and remained essentially a freight line. The people it carried were all first class passengers.


German Partners

Other Lines







Atlantic Transport


N. German-Lloyd




Red Star





White Star



Bernard N. Baker joined the trust's Board of Directors, but never took an active role and resigned a year later, having effectively retired from the shipping business. Baker stood down as president of the Atlantic Transport Line at the time of the merger. Baker was succeeded as president by Philip Albright Small Franklin, who had joined the company as an office boy in the Baltimore headquarters in 1889, and through well-merited promotions rose rapidly to become General Manager in 1892.

Philip Albright Small Franklin Bernard N. Baker, Photo: Ian Newson
Left: Philip Albright Small Franklin illustrated by The Washington Times at the Titanic inquiry in April 1912. Right: Bernard N. Baker (Ian Newson)

Six or eight months after the trust was formed, Franklin, who was described by Time in 1926 as "the ablest shipping executive on the Atlantic seaboard," was appointed a vice president of the combine. Griscom was replaced as president of the combine in 1904. The new President was J. Bruce Isma of the White Star Line. Ismay immediately moved the International Mercantile Marine Company's headquarters from Philadelphia to New York. When Ismay himself resigned in 1916 (belatedly following his controversial escape from the Titanic) he was replaced by Baker's former right hand man, P.A.S. Franklin.

The International Mercantile Marine Company headquaters building at No.1 Broadway, at the tip of Manhattan overlooking Battery Park and New York harbor, before its reconstruction in 1920 (Kinghorn)The International Mercantile Marine Company headquaters building at No.1 Broadway, at the tip of Manhattan overlooking Battery Park and New York harbor, after its reconstruction in 1920 (Kinghorn)
The International Mercantile Marine Company headquaters building at No.1 Broadway, at the tip of Manhattan
overlooking Battery Park and New York harbor, before and after its reconstruction in 1920 (Kinghorn)

The IMM monogram transfer printed onto ceramics made for use on board later IMM ships (From the collection of Richard C. Faber, New York City)

The International Mercantile Marine Company rationalized and coordinated the ship building programs, routes, and sailing schedules of its constituent companies and freely transferred ships from one line to another as needs dictated. It produced joint publications and whenever possible marketed the various lines together.

Ad for the IMM for the White Star, Red Star, and Atlantic Transport Lines, 1930Ad for the IMM for the White Star, Red Star, and Atlantic Transport Lines, 1930
Two stylish Art Deco magazine advertisements placed by the IMM for the White Star, Red Star, and Atlantic Transport Lines in 1930 (Kinghorn)

But the International Mercantile Marine Company was never successful. It had overpaid for the shares it acquired and underestimated the hostility it would face in Europe. The anticipated U.S. government subsidies for domestic ship construction and mail carriage did not materialize and the trade boom in which the company was conceived had turned into a depression by the time it was set up. Far from dominating Atlantic trade, it never secured more than 40 percent of the business on that route and for years none of its constituent companies was profitable. The International Mercantile Marine Company actually went bankrupt in April 1915 and was for a while placed in the hands of a receiver (P.A.S. Franklin). In a year or so according to Frank Bowen, "the company was forging ahead and, thanks to Mr. Franklin's positive genius in handling difficult situations, making the best of its opportunities." But it never paid common stock dividends, and although it paid dividends on preferred stock from 1917 to May of 1923, it paid none subsequently and accumulated a deficit of some $27,000,000 during the 1930s.

International Mercantile Marine Company share certificate of 1915 International Mercantile Marine Company share certificates of 1926
International Mercantile Marine Company common stock share certificates of 1915 and 1926 vintage (Kinghorn, eBay)

According to Bernard N. Baker's obituary in the Baltimore Sun, joining the International Mercantile Marine Company proved to be "the biggest mistake" of his career. He lost part of his fortune in the debacle and also lost some of his drive. Before the merger Atlantic Transport Line stock was selling at $275 and the line was paying 10% dividends. At the time of the merger the holder of each 100 Atlantic Transport Line shares was given 300 shares in International Mercantile Marine Company preferred stock and 100 shares of common stock. At April 1903 prices this represented $117 for each Atlantic Transport Line stock, or less than $4 million for entire property — which had been taken into the combine with a value of $12 million a year earlier. And the value of International Mercantile Marine Company shares continued to fall and no dividends were ever paid in Baker's lifetime.

By the later 1920s the U.S. Government was at last begining to offer financial support to American operators of American built and flagged ships and the International Mercantile Marine Company's foreign-flagged fleet was doomed. By the time the Merchant Marine Act was passed in 1936 and made ship building subsidies and low interest loans available to American operators the International Mercantile Marine Company was desperate to loose its remaining foreign tonnage, and accepted huge losses in the process. The first step in the disposal of foreign assetts was the sale in January 1927 of the White Star Line to the Royal Steam Packet Co. for $35 million — $15 million less than had been paid for it in 1902. Profitable foreign-flagged units were sold off and by April of 1930 the International Mercantile Marine Company was reduced to 46 steamers, together representing half of the combine's tonnage in 1902 (the number of International Mercantile Marine Company ships had dropped to 19 by the end of 1933 and to 11 by the end of 1935). Meanwhile, the Red Star and Atlantic Transport Lines were systematically scaled down and liquidated. What was left of the International Mercantile Marine Company fleet after the recession that followed the Wall Street Crash was merged in 1931 with the Roosevelt Line, which took 51 percent of the stock and with it control of the combine. Upon this merger P.A.S. Franklin stepped down from the presidency in favor of his son John, a co-founder of the Roosevelt Line. When the Roosevelt International Mercantile Marine Company, as it was known for a while, finally dissolved in the 1940s the remaining American pieces were amalgamated into the United States Lines.

Sources: The White Star Line and The International Mercantile Marine Company, William B Saphire, The Titanic Historical Society; The American Peril: Challenge to Britain on the North Atlantic 1901-4, Vivian Vale, Manchester University Press, 1984; The New York Times, July 19, 1898, January 7, 1931; "The Fight for Atlantic Commerce", Winthrope L. Marvin, Munsey's Magazine, March, 1903; Some Financial Aspects of the International Mercantile Marine Company, Earl A. Saliers, The Journal of Political Economy, November 1915; The Red Star Line and the International Mercantile Marine Company, Vernon E.W. Finch, Antwerp, 1988; The International Mercantile Marine Company-An Ill-Conceived Trust , M. J. Fields, The Journal of Business of the University of Chicago, July 1932



For more information ...

Kinghorn "The Atlantic Transport Line 1881 - 1931" McFarland, 2011

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