The Washington herald., 1920-09-20
7eutons Tried to Rule Canal
By Controlling htercoastal
US. Shipping, Declares Vile

flcient lines Even the knowledge
that there was tremendously
profitable freight business to be
done by transporting citrus fruits
from the Los Angeles region by
water to the Atlantic scaboard
failed to induce shippers to con-
slider the canal scheme. Then the
Hamburg American Line-rICh. pow =
erful, Worldwide and bathed in the
full glory Of imperial German favor
came along Rallin and his col
laborators from Hamburg conferred
with Baker in New York on OCto-
bcr 81. 1912 They made advances
I" finance the Panama service "un-
der almost any circumstances"
Offered TO Put Up All Money.
They told me Baker said, I'VE
will put up all the money. we
know it is 4 profitable business,
DO you think the government would
have any objection? We will build
the ships in the United States. We
have every dollar ready right now
to do this, and are ready to go
ahead with it at once. We have
watched your efforts and We know
the business is there. We know
the opportunity exists. We are
anxious to extend our business and
are willing to do it under the Amer
lean flag. Not only that, but we
are willing to run the risk Of con-
unuing to do the business no mat
ter what regulations or restrictions
not now on the Federal statute
books may later be passed."
Baker was left gasping by these
declarations. They were incom-
prehensible. His astonishment only
goaded Balm on to fresh persua-
sivencss.
Agreed to Everything.
Yes Ballin went on. Baker de-
clared. I'VE will put $4,000 1000 in
your hands now-today, If you want
it I told him had a hobby bout
the improperly of stock bonuses
and all that sort of thing. I said
would demand that the Hamburg
American people should accept re-
strictions along those lines. Ballin
asscnted eagerly. We agree with
YOU he said. That is the way We
do business in Germany. We will
NOT allow stock bonuses or pre-
ferrcd-stock distributions. or any
thing of that sort. We have no
founders shares. such as they have
in England. and that,is the princi-
pie we are trying to carry out. We
believe every banker is entitled to
a fair compensation l found that
Ballin was very enthusiastic about
the particular point I had raised. -
On Bakers advice Ballin n6w
consulted the Hamburg America,
Lines legal representative in New
York.
Advised Against Plan.
They discouraged him from at
tempting TO prosecute the Panama
deal; told him the American people
would not understand it; that the
German company was at that mo-
ment being used by the United
States Attorney General for viola
ton of Federal laws; and, finally,
that a law passed in august, 1872
prohibited any ships controlled or
chartered by any company convicted
OF violating the Sherman antitrust
laws from traversing the Panama
Canal
Even in spite of this adverse
opinion, Eallin expressed his will
ingness and determination to un-
dertake the project that had
brought him to the United States,
Baker saw nc use in his doing so.
but accepted Ballin's invitation to
Talk IT over" during the Kaiserin
Auguste Fictoria's voyage.
Proposed Fffty-Fifty plan.
Baker finally suggested that Bal
I'm might overcome difficulties and
prejudice by not taking UP all the
capital of the proposed $4,000. 900
canal company. The Baltimorean
proposed that the Hamburg-Amer-
ican should subscribe only $500
ooo land offer the eTremainder to the
American public. Once again Bal
lin proclaimed his readiness to
oblige. He said: All right. Wen
do 1t. will you agree to furnish
sb5oo,o0O? II you will, and we can
be assured by you that everything
VIII be satisfactory, we are pre-
pared To go ahead en- that basis"
Ballin wanted Baker to hurry
back to the United States and work
out the ''fifty-fcty' proposition. A
couple of weeks later. on December
.. 1912: Baker conferred with Ral-
I'm apd other Hamburg American n
directors in Berlin.
They reaffirmed their proposals.
They repeated that IL the Ameri-