by Brad Matsen
DREAMS
Five
PIRRIE
Pirrie has built more ships and bigger ships than any man since the days of Noah. Not only does he build them but he owns them, directs them, controls them on all the seas of the world.
—William T. Stead, journalist
Born July 5, 1849, died April 15, 1912
From a character sketch, March 1912
William Pirrie wasn’t at all sure why, but in the summer of 1899, when he was fifty-two years old, he let his wife, Margaret, talk him into a palm reading. Cheiromancy, astrology, and séances were fairground attractions, but she had convinced him that the man who called himself Cheiro—of all things—was on the level. He had read the Prince of Wales’s palm, she said. And Mark Twain’s, Oscar Wilde’s, Sarah Bernhardt’s, William Stead’s, and those of most of London and New York society. He had predicted the Boer War, which was clearly going to ignite at any moment. And recently, to everyone’s consternation, he had forecast the death of Queen Victoria, which had not yet occurred. His readings just make you think more clearly about the future, his wife said. It would be better, Pirrie told her when he capitulated, if Cheiro told him the date of the next foundry strike so he could buy steel before it started.
On a muggy, sooty Friday in August 1899, Pirrie clattered across London in his one-horse trap to the West End, delighted as he always was to be pleasing Margaret. As the chairman of Britain’s biggest shipyard, Harland and Wolff, Pirrie was used to a little bowing and scraping, but when he reached Cheiro’s rooms, a receptionist told him to expect a long wait. Three women in day gowns, hats, and gloves were perched on a red velour settee. Two men stood against a silk-covered wall opposite them with their hands clasped at their belts. Pirrie had a mind to walk out, but he hated the idea of leaving once he had decided to do something. He nodded in the direction of the men, then settled against his own patch of the wall. A half hour dragged by as the door to an even more dimly lit chamber opened every few minutes to discharge a visibly shaken man or woman and admit another from the waiting room.
Finally, Pirrie sat at a black-lacquered table lit by a single candle across from a beefy man with dark, wavy hair who appeared to be wearing face powder and stage makeup. The man had smiled at Pirrie as he’d walked into the muggy little room, after which his face had seemed frozen except for the movement of his rouged lips.
You have the hands of a child, Cheiro said. And you began your life far from home. Pirrie watched the palmist study his reaction, gauging whether his guess was right. In fact, Pirrie had been born in Canada to parents who’d left Belfast for the New World. If he had not been born abroad, Pirrie knew, Cheiro would have detected a tic or some other sign of denial and retreated to a figurative rather than literal interpretation of the idea of far from home.
Pirrie nodded. Right you are, he said. From those three words, Cheiro knew that Pirrie was Irish, and told him so. He knew from his well-cut hacking jacket, whipcord trousers, white linen shirt, and flat black cravat that his subject was not a man adrift. Cheiro put him to work in Belfast’s most famous industry, shipbuilding, because he recognized the broad- shouldered, heavy-crowned features of his ancestry. The shipyards of Belfast were dominated by migrants from the Clyde River valley in Scotland.
Even an amateur seer would have recognized the scent of the ocean on Pirrie, a blend of confidence and humility that rose from a man who knew the terror and magnificence of the sea. Cheiro said he saw a long voyage in Pirrie’s past. Pirrie nodded, thinking of his grandfather, a celebrated mariner who had raised him after his father died young of cholera, leaving him, his older sister, and his mother alone in the fortress city of Quebec. The Pirries had endured a stormy eastbound voyage home to Belfast, which William had never forgotten.
Pirrie never believed that Cheiro was summoning his past from the lines in his hand, but he appreciated the bravura exhibition of observational power. It was not unlike what he used himself in negotiations with shipping companies, and he knew he was in the presence of a master. Pirrie felt a kindness for the palm reader and began making things even easier for him with more nods of his head to confirm his increasingly more accurate guesses. Yes, his mother had bought him a gentleman’s apprenticeship at a shipyard in Belfast when he was fifteen. Yes, he had moved up directly into management. (Cheiro had noticed that Pirrie’s hands were not only small but unblemished by calluses.) Yes, he was now a partner in the company. (Otherwise, he would be back in Belfast hard at work during the good-weather building months.)
And tomorrow? Pirrie said when Cheiro fell silent for a few seconds.
You are about to be honored in some way, the palmist said.
And . . . , Pirrie coaxed.
And you will soon find yourself in a fight for your life, Cheiro whispered. His first impressions about the tidy, compact man across the table from him had been wrong. He was no easy mark but a shrewd and powerful predator. It was not much of a reach for Cheiro to assume that a man in the notoriously volatile business of ships and shipping would be in some kind of a fight for survival in the not too distant future.
A month after his palm reading, Pirrie wrote Cheiro a letter to congratulate him and invite him to tour the shipyard if he was ever in Belfast. Pirrie had received word that the Royal University of Ireland in Dublin was awarding him an honorary law degree in recognition of his achievement in shipbuilding, and he mentioned it to Cheiro as proof that he had been right. What’s more, he had heard rumors that J. P. Morgan was about to make an attempt to take control of the North Atlantic shipping industry.
John Pierpont Morgan’s financial empire was built on United States Steel, a syndicate that included every iron ore mine, coal mine, steel mill, and foundry in America and owned more land than the states of Massachusetts, Vermont, and Rhode Island combined. According to the prevailing wisdom in maritime circles, he was leery of investing in things that depended upon the sea. In late autumn, however, a surge in shipping profits driven by the Spanish-American War began to roll in, and Morgan changed his mind about ships and shipping. With Clement Griscom, a Philadelphia railroad baron, Morgan bought a controlling interest in the only two American shipping companies serving the North Atlantic. He also bought a majority stake in Leyland, a leading British freight line. Since just those three companies couldn’t control enough traffic to set prices for passenger tickets and cargo, it was clear that Morgan wasn’t done. Nobody was sure where he would strike next.
Pirrie dug deeper and found that Morgan had the backing of the United States government for his plan to create an American shipping monopoly. After making his deal with Griscom, Morgan had gone to Washington and called in a big favor. In 1895, his banks had loaned the government millions of dollars to keep the nation out of bankruptcy. Though the nascent trust-busting movement was gaining momentum, President Teddy Roosevelt and a loyal cadre of big-business supporters beat the drum for Morgan’s navy. Congress created the American merchant marine and subsidized the operation of every ship that flew the American flag. Pirrie had no doubt that with such deep pockets, Morgan was about to make a move on one or both of England’s celebrated shipping lines, Cunard and White Star. Morgan called his new combine International Mercantile Marine.
Pirrie couldn’t help but remember Cheiro’s final prediction from two years earlier. Harland and Wolff built ships for every company Morgan controlled, as well as all White Star ships. If Morgan took his business elsewhere, it would bankrupt the company that was a second skin to Pirrie.
Pirrie had gone to work at the shipyard when he was a teenage boy. His mother, Eliza, had not remarried after her husband’s death in Canada. In the summer of 1862, she had paid Edward Harland one hundred guineas to train her son as a shipbuilder.
The fifteen-year-old Willie Pirrie rented a room in a row house a short walk from the shipyard gate and settled into the demanding routines of his apprenticeship. He worked as a messenger, painter’s assistant, and parts runner before moving into the drawing office to b
egin his climb up the ladder into management. From the drawing office, Harland moved him around through the chores of timekeeper, assistant manager, scribe, and ledgerkeeper.
Pirrie thought Harland’s, as everyone called the company, was paradise. Hard work produced fair rewards. Solving the puzzles of designing and building a ship came naturally to him, and every few weeks a ship he’d helped build splashed into the river Lagan like a round of applause. He had seen ships born from Belfast yards all his life, but a month after he went to work at Harland’s he watched his first as a shipbuilder. Pirrie hadn’t had much to do with it, just some deliveries to some of the foremen who were working on it, but at eleven o’clock on the morning of July 15, he heard the pop of the launchway arresting cables letting go. He ran out of the paint shed, where he was assigned that day, and watched a mass of steel, wood, and rivets that was no more graceful than a warehouse on land groan down the slipway and transform itself into the 240-foot steamship Catalonian, afloat and alive on the river.
Edward Harland remained aloof from the energetic apprentice, but he knew very well that the boy’s pedigree made him a good prospect for the shipbuilder’s life. Pirrie’s grandfather had dredged the sandbars of the river Lagan to help transform Belfast shipbuilding from a desperate local enterprise into an industrial powerhouse. Harland also noticed Pirrie because he showed talent not only in ship design and engineering but in finance, and he made a point of extending the boy’s time with the company bookkeeper, John Bailey. After Pirrie proved out, Harland sent him back to the drawing office as a journeyman draftsman, but Bailey left his door open to the young man, who continued to devour the complexities of shipbuilding contracts. In 1874, Harland and Wolff offered the twenty-seven-year-old Pirrie a share of the company. With money from his mother, and his own savings from five years on the job, he bought in for £13,000. Over dinner aboard the liner Adriatic a few years later, Gustav Wolff toasted what quickly became a powerful collaboration: “Edward Harland builds the ships; Mr. Pirrie makes the speeches; and I smoke the cigars.”
By 1890, Harland and Wolff had pulled most of their time and money from the shipyard, leaving Pirrie as the majority shareholder and chairman of the company. The first thing he did as the man in charge was to open the books of what was known as the Commission Club of preferred customers. With the details stored only in his head, Pirrie negotiated a schedule of costs and fixed commissions with a dozen shipping companies. He sweetened the deals by taking more stock instead of some of the cash, guaranteed that he would repair their ships for labor, materials, and a 5 percent commission, and promised to have a dry dock available for those repairs. All he asked was that they give him their business and allow him to equip the ships with furniture, fittings, rigging, and anything else he could manufacture himself, making a profit on each of those sales. Six months after expanding the Commission Club during a depression that wiped out half the shipbuilders in Great Britain, Pirrie had twenty-three steamship orders on the books, and Harland and Wolff survived until the economy recovered in the mid-1890s.
William Pirrie loved selling ships, but he loved building them even more. During the next decade, he launched more than a hundred for the members of his Commission Club and the occasional drop-in customers who simply wanted a Harland and Wolff liner and were willing to pay top price. The amount of coal required to propel a single 10,000-ton ship across the ocean was far less than the amount required to drive two 5,000-ton ships across the same distance. No one on the waterfronts of the North Atlantic failed to notice that Pirrie was leading the way in building ships of steadily increasing tonnage, which translated into more freight, livestock, grain, and passengers per voyage. In July 1901, Harland and Wolff broke the 20,000-ton barrier with the delivery of the biggest ship in the world to the White Star Line. Celtic was 680 feet long, could carry 2,859 passengers and hundreds of tons of cargo from Liverpool to New York in less than eight days, had two of the largest steam engines ever built, and was by far the most luxurious ocean liner afloat. Until its christening, Celtic’s nickname in the British press was Gigantic, and its instant commercial success convinced Pirrie and other insiders that the world would soon see 50,000-ton ships a thousand feet long. There was absolutely no question that bigger was better for crossing the ocean. In the meantime, White Star ordered three sister ships immediately, to be named Adriatic, Baltic, and Cedric.
At about the same time as Celtic inaugurated its Liverpool–to–New York service, J. P. Morgan pounced on its owner, the Oceanic Steam Navigation Company. Better known by the nickname derived from its swallow-tailed red burgee with a white star, the White Star Line had been founded in 1868 by Thomas Ismay. His first ship was the 172-foot, 580-ton iron sailing bark Broughton, built by Edward Harland. Ismay paid Harland with shares in the White Star Line, and for the rest of his life, he built all of his ships at Harland and Wolff.
Morgan learned that the late Thomas Ismay had been a canny dealmaker who probably would have seen the wisdom of joining his syndicate. His son Bruce, White Star’s largest surviving shareholder, was a socially clumsy, brooding, conservative man who wouldn’t even quote a price for his company. As Morgan’s men cast around England trying to seduce either White Star or the other great passenger line, Cunard, to give his combine a chance to succeed, the shipping industry was struggling for survival.
In October 1901, Pirrie painted a dismal picture for the Harland and Wolff directors at their board meeting. Over four million tons of ships had been launched between 1896 and 1900 because owners had followed their typical but foolhardy pattern of building new ships at the end of a boom, since that was when they had the money. To make matters worse, Pirrie said, all the ships that had been pressed into admiralty service during the recently ended Boer War were now back in commerce; and if that wasn’t enough, a depression was crippling Europe, the American corn crop had failed, and immigration to the United States had fallen off sharply. Price wars had flared up that chopped freight revenues by 30 percent and passenger ticket sales by 50 percent. Nobody was ordering new ships. Orders for dozens of ships had been canceled. Two old-line yards, Earle’s of Hull and Maudslay of London, had already failed. If something didn’t happen to stop the collapse of freight and passenger revenues, Pirrie told his board, Harland and Wolff would not be far behind them.
What Pirrie knew but did not tell his directors was that he had secretly been sending out feelers to J. P. Morgan with a plan to save Harland and Wolff. Without White Star, Morgan’s combine didn’t have a prayer of competing on the vital routes between North America and Europe, let alone controlling prices for freight and passengers. Cunard had rejected Morgan’s offer after convincing the British government to cough up enough money to prevent the American from hijacking control of the North Atlantic sea-lanes. In return, Cunard had agreed to build fast ships with fittings for guns and armor that could be turned into Royal Navy men-of-war when needed.
Stymied by Bruce Ismay’s refusal to even begin negotiations, Morgan took a last-ditch shot at White Star through its second-largest shareholder, William Pirrie. A month after delivering his gloomy forecast to his directors, Pirrie met Morgan across the matched walnut panels of a conference table in the offices of the American’s London bank. Except for a stenographer to take notes, the men were alone. Morgan spoke first.
I hate Cunard, he said, and then spent five minutes on a bitter account of being stranded with his family on a Liverpool dock on Christmas Day a few years earlier when the crew of the Cunard liner on which they had just crossed the ocean bolted for home without making sure their first-class passengers were on the boat train.
It took us two days to get to London, Morgan sputtered. How much do you want for White Star?
Pirrie stayed right with Morgan’s abrupt change of gears from small talk to negotiation. Our shares are not publicly traded, as you know, Pirrie said, thinking he was beginning what would be many parries in a fencing match. White Star is worth whatever we say it is worth.
How ab
out ten times your 1900 earnings? Morgan said. Call it $32 million—$24 million in preferred stock in the combine, $8 million in cash.
How could J. P. Morgan, the most celebrated dealmaker on earth, not know that White Star’s profit in 1900 was a record for the half-century-old company? Ten times earnings was a standard estimate of a company’s value that was used for only the most cursory analysis of its real worth. But a price based on 1900’s profit was wildly inflated, and it would make the White Star shareholders, including Harland and Wolff, rich beyond their wildest expectations. What it did to Morgan’s grand plan was another matter, Pirrie thought as he sorted methodically through the nuances of the offer. Once the deal was done, the combine, of which he and Ismay would be part owners if they accepted shares as partial payment, would have to keep up payments on the stock dividends and interest. Overpaying for White Star was bound to make a huge dent in profits for the combine.
Pirrie dragged out his silence. He studied the American, amazed that so unattractive a man could have accumulated so much power and confidence. Morgan was dressed in a perfectly cut chalk-stripe three-piece suit with a wide maroon cravat, but despite the expensive tailoring he looked rumpled. And worse, the poor man was afflicted with rhinophyma, a skin disease that had turned his nose into a dreadful, swollen purple knob. Before the meeting, Pirrie had read everything about Morgan he could get his hands on and had come across one story that he thought was terribly sad but that gave him a subtle upper hand. Morgan had gone to an afternoon social at the home of a banker and his wife, who had coached their daughter to avoid staring at Morgan’s nose when she served the tea. The girl dutifully brought in the silver service and biscuits and left the room. Her mother, breathing a sigh of relief that the moment had passed, said, “Mr. Morgan, do you take one lump or two in your nose?”
As I understand it, Pirrie finally said, you already own Griscom’s International Navigation and Atlantic Transport, Leyland, and the Dominion Line. I also understand that the British ships will continue to fly the Union Jack, and that the combine will have British as well as American directors.