International Navigation Company

The International Navigation Company (INC) was a Philadelphia-based holding company owning 26 ships totaling 181,000 tons and carried more passengers than either Cunard or White Star, when the company was reorganized as International Mercantile Marine in 1902.^[1] The General Assembly of the Commonwealth of Pennsylvania approved a charter for the INC on May 5, 1871. The company was commonly known as the Red Star Line due to the red star on its white house flag. The principal American organizer and general agent of INC was the shipbroking firm of Peter Wright & Sons, one of the oldest, most respected, and most financially prosperous of the Philadelphia import-export houses. ^[2] Principal financial backing was provided by the Pennsylvania Railroad Company. Although the financial interests were headquartered in the United States, the backers did not believe that a transatlantic steamship line could be run successfully under an American flag. Ships were to be built in foreign yards, operated under foreign flags, and manned with foreign crews. ^[3]

Peter Wright & Sons provided invaluable commercial expertise and foreign contacts. The firm operated a large fleet of ships, with many transporting petroleum from the recently discovered fields of western Pennsylvania, carried in barrels and cases, to European markets. Peter Wright & Sons also had established friendships and business ties with two prominent Belgian shipowners, Jules-Bernard von Der Becke and William Edouard Marsily. During the 1860s, the von Der Becke firm became an important importer of petroleum products from Pennsylvania to Antwerp in American and Belgian ships.^[4] Clement Action Griscom, who rose rapidly from clerk to partner at Peter Wright & Sons, was a leader in the firm's shipping affairs and the chief force behind the creation of both INN and the chief negotiator with Belgian's King Leopold, von Der Becke, and Marsily to establish a subsidiary company in Antwerp beginning on September 19, 1872, under the title "Societe Anonyme de Navigation Belge-Americaine" (Red Star Line). The agreement established the Red Star Line as the exclusive carrier of mail service out of Antwerp to Philadelphia and New York. This subsidiary would provide most of the company's profits for the next 30 years.^[5] The shipping line's home port was Antwerp and it sailed under the Belgian flag, thereby avoiding the obligation of employing far more expensive American personnel.^[6]

In January, 1874, the board of directors of the American Line, a Philadelphia-based passenger and cargo service to Liverpool that was also backed by the Pennsylvania Railroad and was facing possible bankruptcy, passed management of the steamship line to Peter Wright & Sons. Clement Griscom was charged by the firm to manage the American Line as well as the Red Star Line. The former company, known as the American “Keystone” Line was unprofitable because of the substantially higher costs associated with operating American-flagged vessels. In 1884, the assets of the American Line were acquired by International Navigation. Two years later, INC also acquired the assets of the financially troubled Inman Line, operator of a British flagged Liverpool-New York mail service. With PRR's backing, Griscom ordered two record breakers to restore Inman's fortunes. However, the British Government objected to Inman's ownership change and revoked Imman's mail contract. Griscom successfully lobbied Congress to reflag the two new express liners and qualify for an American mail subsidy. In 1893, Inman was merged the American Line and the company built two additional express liners in the US to create a premium weekly service, now routed to Southampton.^[5]

Griscom believed that the major lines should be merged to control capacity and avoid rate wars. In 1899, he became acquainted with J. P. Morgan, an investment banker who was responsible for many of the large mergers during the period. With financing from Morgan's syndicate, in 1902 Griscom and Morgan expanded International Navigation by acquiring the Atlantic Transport Line, the Leyland Line, the White Star Line, the Dominion Line and half of Holland America. International Navigation was renamed International Mercantile Marine (IMM).^[5]

However, Griscom and Morgan paid too high a price for the companies they acquired and IMM struggled under the debt payments. Management was reorganized to focus on White Star, the most profitable subsidiary.^[5] In 1915, IMM was forced into bankruptcy when the war disrupted cash flow,^[7] but later was able to profit from the wartime demand for shipping.^[8] In the 1920s and 1930s, IMM gradually sold off its foreign subsidiaries.^[5] In 1931, it acquired the United States Lines,^[9] and merged all operations under that name in 1943.^[5] The company failed in 1986 and was liquidated when it over expanded in the cargo container business.^[10]