The calculated risk – starting a business

When A.P. Møller established a second shipping company in 1912, he took on the entire risk himself. Had the markets turned, he would have been in dire straits…

A.P. Møller was born in 1876 and 19 years later he started an international career working in various shipping and trading houses, first in England, then Germany and from 1899 also in St. Petersburg, Russia.

A.P. Møller returned to Denmark in 1904 where he joined C.K. Hansen, a leading Danish shipowner. A.P. Møller was to be the head of the chartering department, but his contract allowed him to own and operate a few vessels privately. That was the start of today’s A.P. Moller - Maersk.

In 1912, A.P. Møller decided to become self-employed and he established a second shipping company – the Shipping Company of 1912. The ambition was to create a base for faster growth compared to the Shipping Company Svendborg (est. 1904), and years later A.P. Møller himself described the start:

"The start of the company was the purchase of two rather antiquated ships, built in 1899, from C.K. Hansen for DKK 150,000 each. A provincial bank demonstrated their confidence in me by giving the company a loan of DKK 275,000 against a mortgage on the ships and my personal guarantee. The share capital was set at DKK 50,000, of which I personally subscribed DKK 40,000, and against these shares I borrowed a further DKK 25,000. People who go only by the rule book, of which there are many these days, me included, would no doubt think such a start reckless, even indeed the work of a madman; yet there was method in my madness…"

A.P. Møller

The original statutes of the company highlight the risks that the entrepreneur was willing to take:

As the managing owner, A.P. Møller was entitled to “sell and mortgage the company’s ships, raise loans against bills of exchange or other security, and purchase new ships for the company when such are considered beneficial, for all of which, however, he is to be answerable to the general meeting”.

It was a risk, but well calculated as the company came off to a flying start.