A Startup Story: The White Star Line and the DNA of the “Titanic”

The Titanic was a powerful and inspiring metaphor for us to draw on for our book, as an epic failure that resulted from many decisions over time. We thought it interesting and relevant to share some pieces of the story here in the blog. And here is a link to 25 popular myths about the sinking of the ship: https://www.thetravel.com/25-things-about-the-titanic-we-thought-were-true-but-are-actually-false/

The iceberg that is believed to have caused the sinking of the Titanic is actually the punctuation mark on a much broader array of choices and actions that resulted in the calamity—a perfect visual representation of the visible parts above the water versus the hidden aspects that lie underneath (our Hidden Debts). To understand the sinking of the Titanic, it is helpful to understand the history of the White Star Line, the organization that owned, designed, built, and operated the ship. 

The most likely suspect for the Titanic Iceberg:

A picture of the iceberg believed to have sunk the  Titanic,  source: Wiki Commons

A picture of the iceberg believed to have sunk the Titanic, source: Wiki Commons

White Star came to be a leading force in moving people to promised lands from the mid-1800s to the early 1900s. Founded in 1845 in Liverpool, England, it originally provided passage on clipper ships to the gold rush of the late 1840s…in Australia (yes, there was a gold rush in Australia—in fact, in terms of relative impact, one much larger than the U.S. event of the same period!). The booming economy and search for treasure “down under” had created quite the demand for passage to Oz, and White Star was happy to fulfill it.

After launch, White Star suffered not one but two major ship losses prior to the Titanic. The first loss occurred in 1854 when its clipper ship, RMS Tayleur, ran aground on the island of Lambay, Ireland, on its maiden voyage to Australia.[1]The iron in the ship’s hull apparently confounded both the compass and the crew, who believed they were sailing south through the Irish Sea. Meanwhile, they were actually headed straight west toward Ireland.

The ship sank due to a combination of navigational and sailing errors. It did not help that the crew comprised less than 50% seaman, and ten of the crewmembers did not speak English. Over half of the 652 passengers died. Technology and human error combined to cut short a journey that had hardly begun--and that became known as the “First Titanic.”[2]

In 1873, White Star suffered another catastrophic loss. With eighteen successful voyages under her belt, the RMS Atlantic set out for New York on March 20 of 1873. Because the Atlantic needed coal, it added Halifax, Nova Scotia to its itinerary. In part due to stormy weather—but also because of a series of crew errors, including not having the appropriate lookouts, being twelve miles off course, and not seeing a lighthouse—the ship ran aground. Over half the crew and passengers were lost due to improper loading of lifeboats and the treacherous conditions of the rocky shore. For a second time, conditions and poor decision-making led to fatalities and significant loss for White Star Line.

The White Star organization also suffered financial hardships that nearly sank the organization. In 1867, the Royal Bank of Liverpool, which had funded White Star’s strong growth, failed. This left White Star lacking capital and in dire financial straits. Following the company’s bankruptcy, Thomas Ismay acquired White Star Line’s assets in 1868. Ismay was a man with a family history with boats and sailing and a passion for iron ships. He decided to expand the focus on steamships and serve the increasingly popular route to the United States. Another promised land beckoned, and the change in ownership led to a change in focus and strategy.

Ismay engaged with investor Gustav Christian Schwabe as part of the company’s restructuring. In exchange for funding White Star’s growth, Schwabe mandated a change in shipbuilders. He wanted White Star to use a company called Harland and Wolff. It was no coincidence that Schwabe’s nephew, Gustav Wolff, co-founded Harland and Wolff. The Titanic was one of the ships from the new builders.

White Star and its primary competitor, Cunard, engaged in their own “space race” of the 19th century to have the fastest ships. However, improvements in speed became harder and harder to maintain, particularly with larger boats. The race cost money, but transport rates were falling due to increasing competition. This combination landed White Star in financial straits once again around the turn of the century. J. P. Morgan’s newly formed International Mercantile Marine Co. purchased White Star Line in 1902—a second bailout, resulting in yet another change in strategy.

In 1907, Thomas Ismay’s son, J. Bruce Ismay, was Chairman of White Star. He met with Lord William Pirrie, Director of both White Star and Harland and Wolff, to concoct a new strategy for White Star over drinks and dinner: SIZE. If winning with speed would be too costly, perhaps a change to size and luxury would be more sustainable. This met the approval of new owner J.P. Morgan. The Titanic and its sister ships, the RMS Olympic and HMHS Britannic, reflected this change in focus from speed to size. It turned out to be a pivot of disastrous proportions.

As you can see, the Titanic and White Star Line faced a number of organizational and personnel changes, challenges, and issues. Transitions in ownership, demands of investors, new shipbuilders, and crew capabilities all preceded the creation of the Titanic. All played a role in the designing, building, and operating of the doomed Titanic. Understanding the organization and its history as well as the people involved can indeed yield significant clues into the hidden debts that sailed with the Titanic on her maiden voyage.

[1]Bourke, Edward J. Bound for Australia: The Loss of the Emigrant Ship Tayleurat Lambay on the Coast of Ireland. Dublin: Edward J. Bourke, 2003.

[2]Starkey, H. F. Iron Clipper “Tayleur”: The White Star Line’s “First Titanic.”Merseyside: Avid Publications, 1999.