Austro-Hungarian merchant ships in the United States during the First World War

Introduction

The fact that, alongside a merchant fleet, Austria-Hungary also had its own navy has remained a secret to many outside the field more than 100 years after the dissolution of the Habsburg monarchy. The First World War caught some of the Habsburg merchant ships at sea and in enemy or neutral ports. The aim of this article is to answer the question of what happened to these ships and their crews when they found themselves under the jurisdiction of the United States. What impact did changes in American foreign policy, especially its declaration of war on Germany and later Austria-Hungary, have on their fate? What was the official Austro-Hungarian policy on this matter and Austria-Hungary’s approach to the individual shipping companies? The transportation of goods and persons between both countries had been intensive before the war. Between 1911 and 1913, almost 600,000 Austrian and Hungarian citizens had left for the United States. The import of goods from the United States to Austria-Hungary in 1913 reached a value of 400 million Austro-Hungarian crowns. ¹ This article not only takes note of the various provisions the American authorities implemented, but also determines the strategies that the owners of the shipping companies employed in the face of these provisions. Their interests were clearly not in line with those of the Austro-Hungarian government.

Historians have so far not given much thought to the relationship between early twentieth-century Austria-Hungary and the United States. ² Even Arthur S. Link paid only marginal attention to this in his classic biography of Woodrow Wilson. ³ As most studies have focused on the efforts of exiled politicians to facilitate the collapse of the monarchy, this is especially true of the official relationship between the both countries. ⁴ This is surprising if we consider that Austria-Hungary was regarded as a great power up until its dissolution in 1918. While the official diplomatic relations between Vienna and Washington have not been adequately analysed, this is even more true of relevant aspects of military history. The question of the internment of Austro-Hungarian merchant ships in the United States during the First World War is one such aspect. Only Gregor Gatscher-Riedl has examined this topic, in his book on the history of the Austro-Americana company, but his claims require more scholarly scrutiny. ⁵ Because of the lack of scholarly literature on this topic, this article relies mainly on unpublished and published sources found in the National Archives at College Park, Maryland, and further documents stored in the Haus-, Hof- und Staatsarchiv in Vienna.

The United States declares war on Austria-Hungary

The relationship between Austria-Hungary and the United States deteriorated over the course of the First World War. It would be a mistake to blame this development solely on the relations between the United States and Germany. President Woodrow Wilson painted a dark image of central and south-eastern Europe suffering under German rule in his Washington speech to commemorate Flag Day on 14 June 1917. He felt that Austria-Hungary was a mere instrument of Berlin's policy, directed at ruling all of Europe: ‘The so-called Central Powers [Germany and Austria-Hungary] are in fact but a single power’. ⁶ In reality, however, the president was not at all convinced of this fact. Instead of tossing Austria-Hungary overboard, he maintained diplomatic contact until the spring of 1918. His aim was to persuade the Danubian monarchy to leave its German ally and exit the war. ⁷

The differences in the way the Wilson administration approached the Central Powers were not only apparent in confidential talks behind closed doors. They were also expressed in Washington's unwillingness to declare war on Austria-Hungary in April 1917 when it declared war on Germany. The president's speech at the joint session of both chambers of Congress on 2 April 1917, which saw the United States enter the war with Germany, was also a pivotal moment in Habsburg–United States relations. The president stressed that Austria-Hungary was not participating in the wartime activities against American citizens and explained that it was therefore unnecessary to declare war. ⁸ Wilson was pointing to the fact that the Habsburg monarchy did not participate in submarine warfare in the Atlantic and was therefore not threatening the lives of American citizens, ⁹ and attempted to stay on course to sign a separate peace treaty with Vienna. ¹⁰

The Austro-Hungarian authorities were not sure how to approach the United States. Vienna wished to avoid the deterioration of mutual relations but also had to consider the wishes of Germany. Berlin pressured Vienna into joining submarine warfare in January 1917. ¹¹ The new emperor, Karl I, was inexperienced and happy to following the advice of his Minister of Foreign Affairs, Count Ottokar Czernin. ¹² Czernin agreed with the emperor that good relations with Washington needed to be maintained, but was not prepared to jeopardize relations with Germany. He assured Berlin in February 1917 that should the United States declare war on Germany, Vienna would sever all diplomatic ties with the United States. ¹³ This became a reality on 8 April 1917. ¹⁴ Wilson believed that Germany had forced Emperor Karl and Czernin to take this step. ¹⁵ The gradual perception of the monarchy as an appendage of a much stronger Germany caused severe damage to its reputation across the Atlantic. Secretary of State Robert Lansing warned the president in April 1917 that Berlin could be using Austria-Hungary to present unacceptable peace conditions to the Entente, which it did not wish to make in its own name. ¹⁶

In spite of the supposed dependency of the monarchy on Germany, the United States displayed a certain level of flexibility towards Austria-Hungary, even after diplomatic relations were severed. Lansing assured the ‘designated’ ambassador, Count Adam Tarnowski, that he did not believe in the division of the monarchy. ¹⁷ The emperor's speech to the Austrian Imperial Council on 31 May 1917, expressing the country's willingness to negotiate a peace that was tied to a promise to rule according to the constitution, was well received in Washington. ¹⁸ The Department of State even considered the option of formalizing these promises in a personal message from the president to Vienna. ¹⁹

The opposite view, however, gradually became more widespread in the Department of State. The head of the Near East division, Albert H. Putney, prepared a memorandum at Lansing's request, in which he recommended a significant decrease in the size of the monarchy. ²⁰ Putney's opinions slowly gained ground. In the summer of 1917, Washington's decision-makers still entertained the idea of a separate peace with Austria-Hungary. According to news from Bern, Emperor Karl agreed with the proposal of peace, even though he was facing strong German pressure to continue the war. ²¹ The conviction of Vienna's dependency on Berlin was strengthened by Pope Benedict XV's appeal for peace, which was delivered to the warring sides in mid August 1917. ²² There was, however, a general consensus in Washington that, in an effort to save the predominantly Roman Catholic Austria-Hungary, the pope – in the words of Lansing – ‘ha[d] become in this matter the agent of Germany’. ²³

The successful offensive of the Central Powers, which broke through the Italian front near the town of Caporetto on 24 October 1917, played a decisive role in Washington's change of heart. The Italian government put pressure on the United States to declare war on Austria-Hungary as soon as possible. ²⁴ The senator for Virginia, Claude A. Swanson, approached the Department of State in support of this request in mid November. ²⁵ William J. Stone, chief of the Foreign Affairs Committee, also asked Lansing to declare war on Austria-Hungary at the beginning of December. ²⁶ When Wilson began his State of the Union Address in front of both chambers of Congress on 4 December 1917, most of those present were expecting that he would only recommend that they approve immediate aid to Italy, which was being heavily tested on the war front. His request for approval of a declaration of war on Austria-Hungary caught many by surprise. The senators and congressmen present jumped from their seats and applauded the president. ²⁷ Wilson's speech was met with near unanimous agreement. The New York Times welcomed the war with Austria-Hungary. It understood the declaration of war in much the same way as the president did – as a conflict with the Habsburg elites. The newspaper highlighted the nationality problems within the monarchy and recommended that Vienna comply with the legitimate complaints of its nations. ‘There is no such being as an Austrian and only a minority of the dwellers of what is known as Hungary are Hungarians’, it claimed. ²⁸ Congress approved Wilson's request three days later – 74 senators and 365 members of the House of Representatives voted in the affirmative, leading to an official declaration of war on Austria-Hungary on 11 December. ²⁹ Still, the president was willing to distinguish it from Germany. ³⁰ The administration had not yet decided on a plan for the monarchy after the war, and the White House still believed in a separate peace. From his papers, it is evident that Lansing believed that the monarchy was heading for collapse, and he began to chart its potential post-war fate. ³¹

Austro-Hungarian ships in United States ports during the period of neutrality, 1914–1917

The war between the United States and Austria-Hungary had a severe impact on the assets belonging to citizens and institutions in enemy territory. Politicians and diplomats paid most attention to the issue of Austro-Hungarian ships, which had been forced to stay in United States ports at the start of the war in 1914. The number of ships was modest: there were a mere 14 merchant vessels and ocean liners with a displacement of 67,840 gross register tonnage (GRT). ³² The ships were docked in New York, Boston, Pensacola and New Orleans, while a fifteenth ship was left in Havana, Cuba. ³³ Part of the fleet was owned by the Vereinigte Österreichische Schiffahrtgesellschaft, formerly known as Austro-Americana und Fratelli Cosulich, with a main office in Trieste. The remainder belonged to other shipping companies that were all represented by Austro-Americana. ³⁴

Austro-Americana's high number of ships in North American ports was mainly due to the fact that, before the war, it had shared markets with its most important competitor, Österreichischer Lloyd, also based in Trieste. Austro-Americana had been founded in 1894, and in 1903 it had merged with the larger and more dynamic family-owned Fratelli Cosulich. Officially named the Vereinigte Österreichische Schiffahrtgesellschaft, the familiar Austro-Americana name continued to be commonly used. Until the outbreak of the First World War, Austro-Americana had a monopoly on regular passenger and cargo transportation between Trieste and New York and a few other ports on the American East Coast. Between 1909 and 1913, the company made 32 to 38 voyages annually to New York, and provided connections with major South and Central American ports, notably Buenos Aires, Montevideo and the Antilles. By contrast, Österreichischer Lloyd set up regular long-distance transportation lines to Asia, especially India, China and Japan. If Wilson's administration was interested in Lloyd ships during the war, it was essentially only in those that were stranded in Chinese ports. Lloyd had started shipping as early as 1837, and was not only older but, with 62 ships in 1914, also a much larger company than the Vereinigte Österreichische Schiffahrtgesellschaft. In view of the aforementioned agreement, however, it played only a marginal role in the negotiations between the Austro-Hungarian and American negotiators on the fate of the ships. The same was the case with the Seeschiffahrts-Aktiengesellschaft Adria ship company based in Rijeka, which was located in the Hungarian part of the Austro-Hungarian Adriatic coast. This company was founded in the 1880s and owned more than 30 ships before the war, but it established regular shipping routes mainly in the Mediterranean area, also providing connections with Great Britain. Long-distance cross-Atlantic voyages were few and far between, meaning that it was no real competition for Austro-Americana, and very few of its ships were moored in United States ports. ³⁵

The outbreak of war had caused heavy losses for Austro-Americana, which it tried to cover by selling ships abroad. The sale of goods and transportation of passengers came to a sudden halt. The significance of the ships in United States ports after 1914 must be viewed in light of the fact that, prior to the war, the company had 31 ships at its disposal, including the largest Austro-Hungarian ship – the passenger liner Kaiser Franz Joseph I, with a displacement of 13,000 GRT. Almost a quarter of its fleet found itself in the United States without a purpose. ³⁶ The fate of Austro-Hungarian ships was tied to that of German ships to a certain extent. Austro-Americana was in fact co-owned by Germany's most prominent shipping enterprises – the Hamburg America Line and Norddeutscher Lloyd – prior to the war. They each put half of a total of 7.5 million Reichmarks into Austro-Americana, then comprising about 30 per cent of the share capital. ³⁷ The Austro-Hungarian authorities attempted to limit this share in the last few months before the war, with some degree of success. ³⁸

Austro-Americana made its first attempt to sell the ships moored in the United States in the summer of 1915. Just like the large German shipping companies, which had many more vessels stuck in the United States, ³⁹ the Austrian shipping companies wanted to limit the costs for maintaining moored vessels as much as possible. ⁴⁰ The Austrian Ministry of Finance supported this request but the Navy Section of the War Ministry stood in opposition. ⁴¹ It is once again possible to draw a parallel with Germany, where the navy was concerned that the sale of the ships would be in direct opposition to its key goal, which was to disrupt the supply chain to the Entente powers. ⁴² The United States authorities were also dealing with the matter already in 1915. The Austro-Hungarian commercial attaché in Stockholm delivered an incomplete list of Austro-Hungarian ships anchored in neutral ports to the local American Consul General in February 1915. ⁴³

In Washington, the Austro-Hungarian ships were discussed at the highest level. Secretary of State William J. Bryan approached President Wilson with regard to the matter in May 1915. He told Wilson that he had received a request for the approval to purchase four ships. The main issue was how the countries of the Entente would view this transaction. Bryan realized that they would not agree to the sale officially, but was hoping that they would tolerate it. He felt that the main problem would be the transfer of money to the account of a country at war. He therefore suggested that the money be deposited with a reliable third party until the end of the war. ⁴⁴ The president requested approval for an intervention in London and Paris in the interests of the potential buyer. ⁴⁵ Wilson wrongly assumed – as he did in other matters – that the purchase of ships of warring states was a right of the American citizens and there was no need to discuss the matter with the Entente. He supported Bryan's request all the same.

As Salvatore R. Mercogliano has recently argued, President Wilson had an interest in obtaining Austro-Hungarian and German ships that were stuck in United States ports in order to use them as the foundation for a much larger American commercial fleet. According to Mercogliano, the president ‘hoped that a renewed American fleet would supplant Britain's in the Western Hemisphere and thereby promote his idealism through “an arm of commerce”’. ⁴⁶ This goal, however, was not in line with the plans of Great Britain: the negotiations as to the fate of the Austro-Hungarian ships were met with obstruction from London. Regardless of the Entente's position, the sale was impossible in the short term because of the disapproval of the Viennese authorities. The United States Ambassador in Austria-Hungary, Frederick C. Penfield, declared at the beginning of September that it was necessary to have approval for the sale of the ships from the Austrian Ministry of Trade. ⁴⁷ This approval was not issued until the end of 1915.

As becomes apparent from a statement made by the Navy Section of the War Ministry in February 1916, Austro-Americana, already crippled by debt because of the war, pointed to the fact that its ships in the United States had a value of about 26 million crowns – that is, approximately 5 million pre-war dollars. The company's representative, Augusto Cosulich, pointed out that if the United States entered the war, it would confiscate the ships. He also promised that if the sale went ahead, the contracts would contain a clause stipulating that the ships operate along coastal waters only and not transport wartime materials. The Navy Section rejected these arguments and retained its original negative position. It claimed that even if the Americans maintained the conditions of the agreements, they could release other ships for transport across the Atlantic. The Austrian Ministry of Trade also rejected the transaction. It believed that the ships would be needed after the end of the war and thought it was not a good idea to sell them. ⁴⁸

The debate lasted until the summer of 1916. The Navy Section of the War Ministry reiterated to the Austrian Ministry of Finance – which had tended to favour the transaction – that it was still against the sale. Not even appeals made by Minster Karl Leth made any difference. The admirals believed that the sale of the ships to the Americans would help the enemy and, rather than agreeing to the sale, they would prefer to damage the ships and make them inoperable. ⁴⁹ Negotiations with the Americans could not begin. The Department of State also viewed the sale with suspicion at this time and refused to issue official approval of the transaction, stating that it was not needed. ⁵⁰ Lansing was probably worried that if the Entente confiscated the ships, the United States government might have to provide the buyer with compensation for damages.

Impact of the declaration of war on the ships and their crews

Once unrestricted submarine warfare began in February 1917 as a result of the impending entry of the United States into the European war, the careful policies of Washington and Vienna took a different turn. The State Solicitor's Office was still warning that the purchased ships may be confiscated by the Entente on 9 March, but this did not make any difference. ⁵¹ The entry of the United States into the war naturally eliminated this risk. The Department of Justice therefore prepared a memorandum on the ‘proposed plan on how to proceed with the German and Austrian merchant ships’ in United States ports. It is not clear who its author was, but the Ministry of Justice reiterated that the aim was to prevent the Central Powers from becoming suspicious that the ships could be confiscated. On the contrary, the Americans were attempting to reach an amicable agreement. ⁵² They were perhaps concerned that the crews could damage the ships and, until war between the United States and Austria-Hungary broke out, it was not possible to confiscate the ships without reimbursement. The idea that the United States would be interested in ships anchored in other neutral countries was also considered. To proceed unscrupulously would most likely render their purchase impossible.

Negotiations between Austro-Americana and the New York firm Phelps Brothers & Co. began in March. Phelps Brothers & Co. had experience with establishing a connection between Trieste and New York from the period before the First World War. It was originally a family-owned business that was involved in trade between the United States and the Mediterranean. In 1877, Charles Haring Phelps had established his own shipping business in Liverpool. Under the name of Mediterranean and New York Steam Ship Co., it had provided first freight and later passenger services between the Mediterranean, Great Britain and the United States. It was not successful, however, and in 1904 it merged with Austro-Americana. From then on, Phelps Brothers & Co. was the general agent of the Vereinigte Österreichische Schiffahrtgesellschaft for the United States. Austro-Americana ships docked in Brooklyn, New York, at the Bush Terminal piers, which Phelps Brothers & Co. had helped to build and which originally had been used by the Phelps-owned Mediterranean company. ⁵³ Austro-Americana authorized Phelps to sell seven ships to neutral buyers on 20 March 1917. ⁵⁴ The Austro-Hungarian Foreign Ministry sent a telegram to the New York Austro-Americana agent on 2 April 1917, in which it gave its consent to the sale of the ships under the condition that they operate only in United States waters. ⁵⁵

Several parties showed an interest in buying the ships. Lansing's representative – Counselor of the Department of State, Frank Lyon Polk – had already been approached on this matter in mid March 1917. ⁵⁶ His subordinate, Third Deputy of the State Secretary Breckinridge Long, actually started working on the matter at the beginning of April as well. As is apparent from official documents, he was not informed of the process, which Lansing and Polk started concurrently. Long's efforts failed. ⁵⁷ Phelps was supposed to oversee the sale as he became the official agent of the United States Shipping Board, which was founded in September 1916 in order to increase the capacities of American merchant ships. It should come as no surprise that, once unrestricted submarine warfare was announced, this office, along with the Department of State, showed interest in all available tonnage, including Austro-Hungarian tonnage.

As the Americans later found out, Count Czernin issued approval for the sale of the first seven ships without agreement from the Germans, which caused tension in the mutual relationship. ⁵⁸ Henry York-Steiner, the Austro-Americana advisor in Switzerland, therefore pressured for the sale to be executed as quickly as possible, afraid that the Foreign Ministry could withdraw its consent. ⁵⁹ According to the Navy Section of the War Ministry, the ships, with a total displacement of 34,300 GRT, were to be sold on 7 April 1917. ⁶⁰ Formally, it was a fait accompli, but the sale was not completed until several weeks later. Once war with Germany was declared, the United States authorities decided to have them seized, but the sale was not affected. ⁶¹ Meanwhile, Lansing sent two telegrams to the departing chargé d’affaires in Vienna in which he expressed his approval of the sale. ⁶² The designated Austro-Hungarian Ambassador in Washington, Tarnowski, was also promoting the sale. He falsely claimed that it had been his doing that the corresponding negotiations had begun, and claimed that the option was only on the table until his departure from the United States. Interests of the German ally were not supposed to prevent the execution of the intended sale. ⁶³ The transaction was completed on 5 May 1917, where the owners of the ships themselves, Anderson T. Herd and George A. Carden, sold them to the Maritime Agency for at least 4.6 million US dollars. ⁶⁴

The Americans made the second sale in the same way as the first. It took place on 19 July 1917. Phelps once again executed the sale on behalf of the Maritime Agency with the help of dummy buyers. With the exception of one, the Americans therefore obtained all the remaining Austro-Hungarian ships in their ports and ended up buying two more in Argentina. Overall, they bought eight ships for 7,840,000 US dollars. ⁶⁵ Immediately after the transaction, it became apparent that the transfer of money to the accounts of Austro-Americana would not be a simple matter. Difficulties had begun with the payments for the first seven ships, which were to go through the Netherlands. The money could not be sent without agreement from the British, who basically oversaw the activities of the local banks there. ⁶⁶ Archived documentation shows that about half of the payments were sent to Amsterdam and then a quarter each to Zürich and Stockholm. ⁶⁷ Austro-Americana informed the Austro-Hungarian Foreign Ministry about the payment on 30 July 1917. ⁶⁸ The British were not satisfied, however, and requested that money be paid via London and Spain next time. They also recommended that the French government be informed, as it had a significant influence over Spanish banks. ⁶⁹ Mistrust of the governments of the Entente with regard to the transaction, then, led to serious complications.

In mid August, Phelps asked for approval of the payment according to a scheme that was used in the first sale, but he did not receive a positive response. Polk even asked the co-owner of the Haight, Sandeman and Smith company, which represented the Austrian Line shipping company and was in contact with Phelps, the Maritime Agency and the Department of State, whether it was advisable to allow a repeated transfer of money to Austro-Hungarian owners. Charles S. Haight pointed out to Polk that another 21 ships at least were anchored in Spanish ports. If Vienna did not receive the money, it would not agree to additional sales, this time outside of United States jurisdiction. ⁷⁰

Since the ship’s tonnage was insufficient, the Maritime Agency decided to confiscate – with the approval of the Department of State – the largest and at that time only unsold Austro-Hungarian ship in the United States, the passenger liner Martha Washington, with a displacement of 8,300 GRT. It was, however, more a matter of internment of the ship and not its confiscation as such. The Maritime Agency planned on compensating the owner for damages. ⁷¹ Phelps then sent Austro-Americana a letter with a request to set up the conditions for operations. The company replied immediately that the ship could not make transports across the Atlantic, and it required a monthly charter fee and guarantees in case of damage. ⁷² However, the Maritime Agency considered it more advantageous to buy the entire ship and offered the considerable sum of 2,250,000 US dollars for it. ⁷³ Just at this time, Wilson declared war on Austria-Hungary; negotiations did continue but yielded no results. The Maritime Agency considered its confiscation in January 1918. ⁷⁴ Wilson hesitated all the same because the purchase of Austro-Hungarian ships in other neutral ports was still being discussed. The ships in Spain did not end up being purchased and so the passenger liner was finally confiscated on 11 May 1918. ⁷⁵

Various United States government institutions negotiated the transfer of money for the second wave of sales of Austro-Hungarian ships. A meeting took place in Polk's office in mid November 1917 between representatives from the Ministry of Finance, Agency for Wartime Trade and Maritime Agency. The participants decided to release funds, which were to be paid via the Netherlands and Switzerland. Because of the level of control of the local banks there, further delays were imminent for the Allies. The Maritime Agency, which continued with the negotiations to purchase other Austro-Hungarian ships through Phelps, was very interested in the quick provision of the payments and asked the Department of State to discuss the matter with the French and the British. ⁷⁶ The French Ambassador, Jean Jules Jusserand, informed Polk on 30 December 1917 that Paris agreed with the transfer. The French further agreed to the Americans’ proposal to buy Austro-Hungarian ships in Spanish ports. ⁷⁷

The payment for eight ships purchased in July 1917 did take place. By the end of 1917, the monarchy had received a total of 12,118,256 US dollars – including the first wave of payments. Approximately 2,800,000 US dollars, however, could not be transferred until the autumn of 1918, and the money remained in the United States in the accounts of Phelps’s firm. ⁷⁸ Austria-Hungary relinquished its claim that the ships not run between the United States and Europe, for which it received subsequent compensation (800,000 US dollars) at the beginning of the summer of 1918. ⁷⁹ The war that broke out between the United States and Austria-Hungary did not stop the sale of these ships. The subsequent steps by President Wilson, aimed at the gradual disintegration of Austria-Hungary, did not have an impact on the negotiations either. While he only argued for autonomy for the nations of the Habsburg monarchy in his ‘Fourteen Points’ at the beginning of 1918, he was opting for a more radical solution in the spring. In spite of this shift in policy, negotiations took place in Switzerland about additional sales in the winter of 1918. ⁸⁰

Haight was entrusted with leading the talks at the end of January 1918, following an agreement between the Department of State and the Maritime Agency. ⁸¹ Austro-Americana was represented by its executive director, Oscar Cosulich. The proxy director of the Hamburg America Line, Albert Ballin, also took part in some of the negotiations. Austro-Hungarian and German ships in Spanish, Argentinian and Chilean ports were to be discussed. The negotiations were not going well. The Central Powers were not under any threat of their ships being confiscated in these countries (especially in Spain). Cosulich told Haight that Vienna agreed to the sale but the War Ministry was against it. ⁸² As a result, Cosulich gave a vague promise that a maximum of five ships in Spanish ports could be sold to dummy Swiss buyers. The Germans then required a guarantee that the sale of ships in Brazil and Chile would not in any way help the enemy. ⁸³ Ballin finally rejected the entire deal. ⁸⁴

The Americans also had an interest in German and Austro-Hungarian ships in South American ports – in Chile alone this meant 200,000 GRT – and Lansing asked the president to agree to Haight making a trip to Germany. ⁸⁵ The governments of the Entente were also informed of the matter. ⁸⁶ Haight did not leave, however, most likely because of the offensive that had already begun, and the Central Powers were no longer willing to make unnecessary concessions.

Austro-Hungarian ships stuck in ports outside of United States jurisdiction did end up being sold to the United States. Four ocean liners anchored in Brazil were sold between 1917 and 1918. Brazil took a hard-line approach to the Central Powers and declared war on Germany on 26 October 1917. The transaction was complicated by the war between the United States and Austria-Hungary, but it did not stop the deal. The first two ships were sold to dummy Brazilian buyers in November and December 1917 for a total of 3.5 million US dollars. ⁸⁷ Payment was delayed by the declaration of war, but the money was deposited in the account of the Austro-Americana representative in Buenos Aires, Antonio Cosulich, by April 1918. ⁸⁸ In the course of the negotiations with Haight in Switzerland, Oscar Cosulich expressed his wish for the Americans to organize the transfer of at least part of this sum to Europe. Perhaps because of the unsatisfactory outcome of the meeting, however, the Department of State was not willing to cooperate this time and the money remained in Argentina. ⁸⁹

The transfer of the two remaining ships, which belonged to the Seeschiffahrts-Aktiengesellschaft Adria company operating out of Rijeka, was impacted by the war to a much larger degree. Czernin did agree to their sale on 1 December 1917 but the Austro-Hungarian legation in Rio de Janeiro refused to hand them over once war had been declared. ⁹⁰ Burián did not approve the sale until 28 April 1918. ⁹¹ The Americans transferred a total of 1,600,000 US dollars of the purchase price to the Netherlands in June 1918. ⁹² Apart from the four ships in Brazilian ports, the Americans were also successful in China. They purchased three ships from the Österreichischer Lloyd company, which the Chinese had confiscated in Shanghai. It is evident that Washington was willing to negotiate with the monarchy almost all the way up until the end of the war. The last payments were still coming through for several months after the Sixtus Affair. ⁹³ A strange situation thus arose. Austria-Hungary sold ships that were in short supply to the enemy and charged dollars for them, which it would be desperate for once the war had ended. ⁹⁴ Be that as it may, the collapse of the monarchy in the autumn of 1918 turned these plans to dust.

Conclusion

Austro-Hungarian ships that were stranded in the United States at the start of the First World War could not, by their number and tonnage, influence the outcome of the war in any way. Their fate nevertheless became a topic of consideration at the highest level in Austria-Hungary and the United States. While bilateral relations gradually deteriorated, there remained an open corridor for common-interest negotiations up until almost the end of the war.

German submarine warfare resulted in a severe shortage of shipping space on the Entente side, and Austro-Hungarian ships thus became a high-demand commodity. This was already the case in 1915 when the relevant negotiations began. This article confirms the hypothesis that it was the owners especially that were most interested in deciding the fate of these ships – in other words, their sale to American buyers. Just as in the case of German owners, the reason was an attempt to eliminate the costs of keeping ships in foreign ports.

The responsible authorities of both countries, on the other hand, viewed the sales with much less enthusiasm up until the moment the United States entered the war in 1917. Their stance was greatly influenced by the developments of the First World War. The Department of State, which was afraid that the purchased ships could be confiscated by the Entente countries regardless of their new American ownership, was responsible for obstructing the transactions in the United States up to 1917. The Navy Section of the Austro-Hungarian War Ministry vetoed the transactions for a long time because it feared that their purchase would free up other ship tonnage for the delivery of wartime materials to the Entente states.

The authorities of both countries did not retract their concerns until the United States entered the war. The Department of State no longer had to worry about the confiscation of the ships. On the contrary, it was clear to Vienna that the United States would sooner or later include the ships in its own merchant fleet, regardless of the interests of the previous owner. It was therefore more advantageous to sell them than to risk their confiscation. The negotiations continued even after the declaration of war on Austria-Hungary was made. The reason was the desire to obtain the ships of both countries that were stuck in neutral ports, especially in Latin America. This effort was so great that negotiations were still ongoing in the first half of 1918.