SHIPPING in WARTIME (1912-1918)

<< STEAMSHIPS PREVAIL (1901-1911) FROM WAR TO CRISIS (1919-1929) >>

From the mid-19th century, Greek steam shipping had taken part in operations to free Crete from Ottoman rule (1866-1869) and was also active during the Greco-Turkish War (1897). However, the defeat of the Greek forces prevented a widespread acknowledgement of its contribution. Several years later, the Balkan Wars of 1912-1913 would redress this omission.


From the very beginning of 1912, Eleftherios Venizelos had been working assiduously to realise his vision of restoring the status of Greece as a great country. At the same time, the Greek-flagged steamship fleet had expanded to 350 vessels. The prevailing circumstances encouraged the fleet’s further expansion and so, by September 1912, with the declaration of a war being imminent, 40 additional steamers were sailing under Greek colours. 


On 20 September 1912, several days before the outbreak of the Balkan Wars, the Greek government requisitioned all merchant ships at the port of Piraeus. A number of additional vessels were requisitioned in other ports of Greece, whilst Greek steamers in foreign ports were given orders to sail to Greece at full speed. 


However, the entire operation was marred by an unfortunate incident. No one in charge thought of notifying Greek steamships in Turkish ports. The Turks took advantage of this oversight and, in breach of international law, withheld all Greek ships a few days before the declaration of war. As a result, a number of Greek vessels did not participate in war operations and, even worse, some were placed at the service of enemy forces. Forty of these ships were confined in the port of Constantinople, where they remained inactive until the end of the war. 


Greece’s victories in the Balkan Wars resulted in the recovery of Greek territories which had been under Ottoman rule for centuries. Amongst these were the island of Chios and the adjacent island of Oinousses. Both were destined to play a key role in the course of Greek shipping during the 20th century. A large number of seafarers from these islands who had already demonstrated outstanding skills since the middle of the 19th century went on to become world-class shipowners over the next decades.


The major contribution of the merchant fleet to the successful outcome of the Balkan Wars, mainly through the rapid transportation of troops and equipment, turned two great figures of the time, premier Eleftherios Venizelos and fleet admiral Pavlos Kountouriotis, into fervent supporters of the shipping industry. 


At the same time, various shipowners, headed by Ghikas Coulouras from the island of Hydra, called for the establishment of an association to safeguard the interests of the industry. This was not an easy task, as most shipowners were commanding their own vessels and the majority of the few Greek shipping offices were based in London, Cardiff and Newcastle. As a result, nothing changed until the outbreak of World War I, in September 1914, apart from the fact that approximately 100 steamers had been added to the Greek fleet.


A disagreement between King Constantine and Prime Minister Venizelos resulted in Greece remaining neutral during the early war years. By March 1915, the Greek fleet, comprising of 500 steamships, was ranked 11th in the World, with excellent prospects for further development. 


However, at this point the scene began to change dramatically. The state was plagued by political instability and the absence of a collective body that could successfully address the unprecedented situations created by the war led to the massive sale of ships whose owners were tempted by the continuous rise in ship prices. Their decision was further strengthened by the threat of German submarines, which had begun to hit even neutral Greek vessels. Within a few months, before the government realised the enormous damage being done and prohibited the sale of steamships, the Greek register had lost over 100 ships. 


Meanwhile, the explosive increase in the hires of steamers due to the war brought huge profits to shipowners. At the same time, the significant rise in transport costs greatly increased the price of imported goods, creating for the first time an adverse climate for shipowners in Greece. This development revived the idea of setting up an association to address issues concerning the industry and led to the founding of the Union of Greek Shipowners in Piraeus on February 16, 1916, with Leonidas A. Embiricos elected as its first president. Most of its board members belonged to the core of supporters of Venizelos’s Liberal Party and some of them followed him to Thessaloniki where he formed a provisional government. 


With Greece entering the War in 1917, the centre of Greek shipping activity moved to the United Kingdom, where a substantial number of Greek offices were already operating. The entire Greek steamship fleet was chartered to the British government at significantly lower rates than those prevailing at the time. Also, restrictions were placed on the amount of insurance that would be paid back to the Greeks in the event of a war loss. The ships provided by the Greeks to the Allied Forces sailed the most dangerous routes, carrying coal from the United Kingdom to the Mediterranean and minerals from the Mediterranean to the United Kingdom, which resulted in the decimation of the Greek fleet within a short space of time, mainly by German submarine fire. By the end of the war, the Greek merchant fleet had been dramatically reduced, having recorded more losses compared to those of other Allied nations. 


Nevertheless, many Greek shipowners had achieved extraordinary profits during the war from sales, insurance claims and the operation of their steamers, especially between 1915-1916. This enabled them to re-invest in steamships once they felt that they could return competitively to the market.

However, in November 1917, a heavy retrospective tax was imposed by the Greek government on all shipping revenues dating back to 1915. This affected all profits earned through the sale and chartering of ships, as well as any insurance money paid to owners for war losses. Anxious to see the Greek fleet quickly rising to pre-war levels, Venizelos, who had been re-elected prime minister, had a special decree incorporated into this tax law. According to this decree, every owner replacing a steamship lost during the war within a period of five years after the end of the war would be exempt from this tax. This decree, whose time limit was reduced from five years to two in 1919, led many owners to the hasty decision to invest most of their profits at the wrong time. This proved catastrophic for the majority of them, as well as for the industry, as it led to the rapid deterioration of its quality standards over the next years.

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