Great Lakes Towing Company records

Following construction of the first state lock in the St. Mary's River during 1855, the means for transporting large bulk cargoes between Lake Superior and the lower Great Lakes were presented to transport companies throughout the region. In order to maximize the profit for each vessel passage, companies built increasingly large bulk cargo carries. The towing business was one area of the shipping industry that lagged behind the growth in vessel numbers and size. Towing companies throughout the period from 1855 to 1900 operated with vessels that rapidly became too small to adequately maneuver the large freighters in the Great Lakes harbors. Intense competition for trade placed many of the smaller towing companies in financial jeopardy and the crews in physical danger when inadequately powered steam tugs attempted to tow the growing cargo fleets in the port areas. Damage claims against inept towing services grew and many commercial fleet owners found their vessels part of a growing backlog of boats awaiting a tug in order to dock.

The Great Lakes Towing company was founded in Jersey City, NJ on July 7, 1899 to address these towing service difficulties. The first organizational meeting was held in Jersey City to elect W.J. Coleman Carpenter as president, Frederick W. Kein as vice-president and August Von den Steiner as secretary-treasurer. An initial intent of the elected officers was to reduce the number of competing tug services in the Great Lakes ports. The goal of Great Lakes Towing officials was to create a service for transport companies giving prompt, safe and economical towing assistance. In order to quickly begin to run a multiple port service, Great Lakes Towing bought the fleets of existing companies and reduced the number of competitors in the process.

Once the fleet was ready for service, the company began operations in 1900 with headquarters at Cleveland, OH. The first several years of the twentieth century witnessed further consolidations in the towing industry. Great Lakes Towing bought more companies and leased operating rights to other businesses. Salvage equipment was purchased permitting expansion of services. The Licensed Tugmen's Protective Association strike of 1902 led to a $150,000 revenue loss. Subsequent restructuring improved administrative activities with creation of an Eastern and Western Area supervisory staff. Ports from Buffalo to Port Huron were in the Eastern area. The rest of the ports were in the Western area. Local operating managers served in mot ports. Tug captains filled this role in ports with five or fewer tugs.

The first decade of operations saw steady growth in the Great Lakes Towing Company. Lawsuits and strikes hindered development at times, but progress was made toward becoming the dominant towing company on the Great Lakes. In 1913, the first serious impediment to the company's growth appeared.

The United States government filed an anti-trust suit against Great Lakes Towing in September 1913. The series of consolidations prevalent in the growth of the company were viewed as monopolistic violations of the 1890 Sherman Act. Great Lakes Towing had required companies purchasing surplus vessels from them not to engage in towing services for a specified time period after the sale. The same provision was in contracts for sales by other companies of vessels to Great Lakes Towing. The investment in new tugs was protected by contractual limits on their competitors' ability to operate. The perceived need to reduce the competition among towing companies led Great Lakes Towing to resolve all conflicts in its favor.

Long term contracts offered to shipping companies gave Great Lakes Towing exclusive operating rights to tow vessels of individual fleets in exchange for volume rate discount fees. Small companies who could not offer such rates went out of business. The court verdict found that Great Lakes Towing acted illegally as a combination in restraint of trade. Preferential rate contracts were disallowed. Standard rate schedules were required to be made available in printed form. The defense was able to avoid the dissolution of the company and the court agreed that a return to the chaos of the towing industry of the 1890's was ill advised. The new operating arrangement did not seriously affect profits from the World War I years to 1930. Old lawsuit claims were paid. Such distractions had been an impediment to investing in needed corporate restructuring plans. Daily operations and profits improved. Steady, if unspectacular, growth followed.

In 1931 the general economic calamity of the Great Depression began to adversely affect the Great Lakes Towing Company. Smaller, lighter, less expensive tugs came into service. Increased safety awareness programs were implemented to reduce damage claims against the company. Crew wages were cut when possible. Yet, by 1935, no net income was realized from towing operations.

A combination of sales of surplus tugs and profits from the salvage division kept the Great Lakes Towing Company in business through the worst of the Depression. Net profits increased gradually to $218,207 in 1940. The World War II years marked a generally modest rise in revenue for Great Lakes Towing. War related business produced increased income. The profits were offset at times by government control over fee structures. Pay increases often were no accompanied by rate increases. Profits were hurt by such conditions. At the end of the war, price controls ended.

New management thinking accompanied the return to private control of the Great Lakes Towing Company in 1947. Long established policies of placing the needs of large freight companies ahead of the company interests came to an end. Early officers of the company had strong connections to companies in the shipping industry. Great Lakes Towing Company interests were subordinated to those of clients. Fees were kept artificially low.

New administrators after 1947 ran the company as an independent element in the shipping trade. Profits rose accordingly. Lawrence C. Turner served as company president during the shift in policy. Profits rose from a net loss in 1946 of $141,096 to a net gain in 1948 of $220,276.

During Turner's tenure the revamping of the fleet that had deteriorated in the 1930s and 1940s was achieved. Captain Raymond Z. Damas became chief operations manager in order to build the tug fleet to a level where service was offered with promptness, efficiency, economy, and safety.

Turner was also actively involved in promoting Great Lakes ports to foreign fleet owners. In anticipation of the opening of the St. Lawrence Seaway, Turner's 1955 European meetings encouraged significant new business growth for Great Lakes ports and his towing company.

Tuner's service included guiding the company through administrative staff reductions in the regional offices caused by decreased revenue from fewer salvage jobs. Increased use of bow thrusters on freighters also presented Turner with a loss in revenue. Bow thrusters reduced the need for tug assistance when vessels were docking.

The 1960s witnessed efforts to retain a share of declining towing service market. Reductions in shipments for the iron and steel industry restricted towing opportunities. No dividends were issued for common stock after the 1967 season. Efforts were made to enter the overlake market to tap new revenue sources. The largest tug of its day, the FRANCES A. SMALL, was purchased in 1968 for the over lake towing jobs.

In 1972 the American Ship Building Company purchased the Great Lakes Towing Company. Ironically, Great Lakes Towing was now a subsidiary of a company that was soon sued for anti-trust law violations. Great Lakes Towing was sold as part of an agreement in 1973 to settle the case. Trans-Commercial Industries became the new owner in 1973. Upgrading the tug fleet and improved maintenance of the shipyard in Cleveland were priorities of the new owner. Staff positions were cut due to continued declines in steel industry traffic in the late 1970s.

The Trans-Investment Company assumed ownership in 1978. The immediate challenge was to compete successfully against smaller companies were not bound by provisions of the 1915 ruling in the anti-trust case. These smaller companies were in a position to give volume discounts to customers in the overlake and short haul barge markets. Great Lakes Towing was still prohibited from taking such action.

In 1981 relief was sought in court from the provisions of the 1915 decree. Small companies were able to read the published rate of schedule of Great Lake Towing and then underbid them when seeking towing contracts. Numerous suits were forced on Great Lakes Towing by small competitors claiming the larger company was acting to restrain trade. A great deal of staff time and money went into proving that the company still honored the 1915 agreement.

The U.S. Department of Justice sided with Great Lakes Towing. Conditions were found to be so different in 1981 from 1914 that new operating rules were needed to remove unfair restrictions on Great Lakes Towing. Twenty viable competitors were noted as providing an open field for bidding on contracts. None of the 20 had to publish rate schedules in the manner that Great Lakes Towing did. The 1981 ruling allowed Great Lakes Towing to compete on the same level as other towing companies.

Ronald C. Rasmus became president in 1983 and launched an intensive marketing campaign to raise new revenue. New union contracts were signed with considerable labor cooperation as a result of the 1980s. Great Lakes Towing could now charge rates competitively along with its rivals. Volume discount contracts were permitted also.

The Great Lakes Towing Company remains a prominent company in Great Lakes towing services. In 1993 forty tugs provided service for ten harbors from Buffalo, NY to Duluth, MN. Great Lakes Towing nears the beginning of a new century of operations. Its fleet no longer numbers about 200 vessels, but it does remain a leader in Great Lakes commerce. Adaptability remains a prime factor in this company's success in the towing business.