“The grand old man of the Pacific,” “the dean of American shipping,” and “self-made shipping magnate” are a few of the phrases often used in reference to Captain Robert Dollar. (Museum of History and Industry)
Robert Dollar was born at Falkirk in Scotland in 1844. At the age of 13, in 1857, he emigrated to Canada with his family and soon began working in a lumber camp as a cook’s helper.
Dollar used his time at the lumber camp to learn French and to learn how to keep the camp’s accounts. By the age of 22 he was placed in charge of the lumber camp, and in 1872 he was able to purchase his own lumber camp.
Though his first venture was a failure, Dollar persevered and achieved great success in the lumber business, first in Canada, then in Michigan, and finally in northern California. There, in 1888 at San Rafael, Robert Dollar settled with his wife Margaret Proudfoot, whom he had married in 1874.
From his base in San Rafael, Dollar began buying lumber tracts and camps up the coast to Oregon and as far north as British Columbia. In 1895 Dollar purchased a steam schooner to transport his lumber down the Pacific coast to San Francisco. And so began his second career as a shipping magnate. (Takao Club)
But 1888 had actually been the momentous year for Robert Dollar, Scottish emigrant and owner-operator of a redwood lumber mill at Usual in northern California. Disturbed with the exorbitant tariffs charged by marine carrier that transported his forest yield, this shrewd lumberman decided that the answer lay in owning his own vessel.
Fitting action to thought, Dollar purchased the 218 gross ton steam schooner Newsboy April 19. 1895. The Newsboy paid for itself in less than one year, appealing to the Scotch in a man who was to become one of America’s “Fifty Greatest Business Men.”
“If one tupenny could be so profitable,” he reflected, “why not buy more vessels?” Dollar again dovetailed idea with deed, to start what became the famous Dollar Steamship Lines.
Launching of the Grace Dollar, on May 7, 1898, marked Robert Dollar’s entry into the world of trans-Pacific ships and one year later the canny businessman followed the Grace with the 199 foot Robert Dollar.
Ship followed ship, vessels of wood then steel, each larger and more modern than their predecessors. Within a decade Captain Dollar had the nucleous or a substantial fleet of ocean going sailing vessels and steamers, most carrying family names and all operating under the Robert Dollar Company’s house flag. (Saga, Scott)
At its height in the 1920s, the Dollar Steamship Company was the largest and most successful United States shipping firm, and its signature white dollar sign mounted on red-banded stacks was known around the world.
In the early 1920s, Dollar began a successful strategy of buying shares in his competitors in order to achieve controlling interests. His influence and accomplishments continued to grow.
In 1920 he established a round-the-world cargo service, and in 1924 he established the first round-the-world passenger service to publish scheduled departure and arrival times. (Peaceful Sea)
In 1925 the Dollar Steamship Company took over its chief competitor, Pacific Mail, which gave it a near-monopolistic share of U.S. Pacific coast shipping.
The late 1920s would turn out to be the peak of Dollar’s shipping fortunes. The Merchant Marine Act of 1928 established generous subsidies for carrying mail. The Act, however, had strict performance requirements and Dollar would need new ships.
The company began an ambitious plan of building six luxurious ocean liners. Before the first ships rolled off the line, the onset of the Great Depression sent the global economy into chaos. Only two of the ships would be completed, the President Hoover and the President Coolidge, which famously set out on their respective maiden voyages at less than half capacity. (Peaceful Sea)
The Wall Street Crash of 1929 affected the Dollar Steamship Line (renamed that same year), and though the ships were luxurious and state-of-the-art rivaling the best hotels of the era, the ships only carried half their capacity.
On May 16, 1932, Robert Dollar died at the age of 88, and though his son Robert Stanley Dollar took over their shipping business, the company began a steady decline. (Calisphere)
The US Maritime Commission’s mounted pressure on the Dollar Steamship Lines to turn over controlling stock in the company to the Commission upon threat of enforced bankruptcy.
The Maritime Commission accused the old captain’s heirs of using the holding companies to set up a “milking system” to pay themselves fat salaries while the line was drained of its assets. In addition, the line owed the Government $7,500,000, and $2,000,000 to other creditors. Its net current liabilities exceeded assets in 1938 by $46,367.
With the rocks of bankruptcy dead ahead, Stanley Dollar turned 93% of the voting common stock over to the Maritime Commission and bowed out. No cash consideration was involved, but in return, Dollar was absolved of personal liability for the line’s debts.
The Government changed the company’s name to American President Lines, Ltd., ran the line as a US-supervised private corporation, and pulled it off the rocks within a year.
After pouring in $4,500,000 to slick up the ships, the Government cashed in on the wartime shipping boom. By 1943 the line was able to pay off both the new financing and the $7,500,000 Dollar Line debt, most of it, says American President, out of earnings.
By war’s end the Maritime Commission had done so well that buyers became interested. In 1945 a syndicate headed by Charles U Bay, now Ambassador to Norway, bid the flattering sum of $8,600,000. But Stanley Dollar, who had been enviously watching the line’s balance sheets throughout the war, had different ideas.
Even though the Government’s profitable operation was paying $5 a share on the preferred stock, the majority of which is held by the Dollar family ($1,369,720 has been paid out, in all, under Government operation), that was not enough.
Dollar filed suit and stopped the sale. His claim: the Maritime Commission did not own the line. Dollar said that when he transferred the controlling stock to the Maritime Commission in 1938, he did not transfer title.
He had merely posted the stock as collateral for the debt that had now been paid off. Thus, APL belonged to him, Dollar argued, and the Government should hand it back.
The commission countered that Dollar had described himself in writing as “former owner” of the line and, in fact, had written off the stock as a capital loss on his income-tax return.
The commission won the first round in federal district court in Washington, which ruled that Dollar had sold his company.
So the commission confidently continued to build up the line, acquired virtually a new fleet of ships, including two 23,515-ton passenger liners, the President Cleveland and President Wilson.
Under President George Killion, onetime chain-store executive and former treasurer of the Democratic Party, the line’s operations were streamlined and costs cut. 1949’s profit after taxes: $2,517,989.
But in July 1950 the commission got another rude shock; the circuit court of appeals upheld Dollar. Later, the US Supreme Court refused to hear the case, thus, in effect, ruling that the line should be handed back to Dollar. (Time)
Dollar settled with the commission. Rather than the Dollar family taking back the company, it was sold to a group of investors led by Ralph K. Davies for $18.3 million.
