The very first investments in new technologies, from railways to steamships, are hardly certain bets. Even if the technologies themselves do take off, the first to invest in these projects are not always rewarded for their risk-taking. Rigid airships were risky investments in their early days. Pouring large volumes of capital into vehicles inflated with flammable gases when even the first principles of aviation were still undeveloped was a prospect few were willing to gamble with. Still, Ferdinand von Zeppelin did manage to raise enough capital to bring his vision of rigid airships for civilian and military use to fruition.
Count Ferdinand von Zeppelin
The family of Ferdinand von Zeppelin came from the town of Zepelin in Mecklenburg. His ancestors, including his father, were government officials in distant Württemberg. Ferdinand himself was born in 1838 near Lake Constance. He graduated from a Stuttgart secondary school specializing in sciences and after graduating from a military academy, Zeppelin spent just a year in the army before enrolling in the University of Tübingen.
In the 1860s, Zeppelin became a military observer during the American Civil War. In America, he was given access to areas controlled by Union armies by President Lincoln himself whom he had gotten the opportunity to meet. As it happens, Zeppelin even carried a letter of introduction to Robert E. Lee given to him by Lee’s sister in case he was captured by a Confederate army during the war. It was in America, and later in France in the immediate aftermath of the Franco-Prussian War, that he developed an appreciation for the balloon as a potential vehicle for military surveillance, communication, and scientific discovery. After military promotions in the 1870s and 1880s, he was ordered to retire in 1890; he would have more time now for his work in aeronautics.
Airships
Count Ferdinand von Zeppelin soon hired an engineer, Theodor Kober, to explore the feasibility and design of an airship, one rigid and dirigible, that is to say able to be steered and propelled as one wished, and one kept afloat with gases lighter than air. An 1891 estimate of the cost of building such a vehicle, produced by a member of the Prussian Aeronautical Department, was 250,000 marks. Without such money in hand, Zeppelin and Kober still went to work choosing the materials and manufacturers; this project would draw on several areas of German technical ability. Aluminum was settled on in 1891 as the preferred metal for the frame. Materials were listed and a request for pricing was put out in 1893 to Carl Berg in Eveking, Westphalia, then a leading producer of aluminum. Besides the airship itself, a facility for assembling it needed to be built; there was no such existing hangar available at the time.
Other critical inputs into Zeppelin’s airship were motors, propellers, gas bags, and the hydrogen gas that would lift the ship itself. Daimler was identified as a possible manufacturer of the motors in 1891. Daimler co-founder Wilhelm Maybach also dedicated some of his own time to Zeppelin’s airship project. Chemical manufacturer Griesheim-Elektron would produce the hydrogen gas. By 1895, the estimated cost of construction had grown to 800,000 marks and only now would the work of finding this money start in earnest.
Early Private Support
Count Zeppelin appealed to friends, industrialists, and bankers for donations late in 1895. He raised 100,000 marks. This was insufficient so the project was on hold. In the meantime, Zeppelin welcomed some positive publicity garnered over the next couple of years for his airship idea.
In 1898, Count Zeppelin formed the Gesellschaft zur Förderung der Luftschiffahrt, or Society for the Promotion of Aviation. Sixty-five shareholders invested money in the company; some were found by the Association of German Engineers and these put up 369,000 marks. Zeppelin put up 431,000 marks himself and the aluminum industrialist Carl Berg invested 60,000 marks in the form of construction materials. The goal of the company was to create a facility for building an airship and testing a design.
The Bodensee (Lake Constance), near where Zeppelin was raised, was chosen as the location of the company’s facility which was built in 1898. On this lake, the first rigid airship flight took place on July 2, 1900. Two more tests of the airship LZ 1 were conducted in October. Unfortunately, some of the company’s facilities were damaged by storms and winter weather and the company was out of funds for further development. Shareholders refused to invest more and the firm was dissolved. Some 130,000 marks was raised from the liquidation of its assets but this money went towards paying off some of the company’s creditors.
Count Zeppelin tried to raise new funds, approximately 365,000 marks, to build a new airship with an improved design, together with some extra money for insurance and other expenses. Zeppelin received approval to run a lottery to raise money for a second airship, one with a system of triangular framing and new aluminum alloys that reduced weight and increased stability. A fresh 130,000 marks was raised from lotteries; this was combined with limited state support worth about 88,000 marks, donations of 51,000 marks, and Zeppelin’s own contribution of 130,000 marks which, when all taken together, secured the required money. As it happens, Bernhard von Bülow, Germany’s chancellor at the time, donated 12,500 marks himself; while not eagerly embraced by the state just yet, it was not entirely ignored either.
At this point, the city of Friedrichshafen on Lake Constance donated land for a new facility. It was there that LZ 2 was built with two eighty-five horsepower engines; more than twice as powerful as those on LZ 1. It was completed in 1905 but on its first flight, LZ 2 crashed on land where it was then partially destroyed by a storm. The pieces were dismantled and saved, to be used for Zeppelin’s third airship, but this was clearly turning out to be an expensive undertaking complete with many stories of failure.
State Support
Count Zeppelin had tried to obtain government support for his project from the start. Unfortunately, generous state assistance was not forthcoming. A commission was set up in 1894 to look into the matter and while it did not reject the feasibility of an airship, neither did it prioritize allocating money to Zeppelin’s program. Even after the first flight in 1900, the state was disinterested. As was mentioned, the government did support the building of LZ 2 in 1904. However, the holy grail remained unsecured; the government was unwilling to purchase an airship unless it could stay in their air for twenty-four hours. Until that was achieved, it would be difficult, if not impossible, to create a profitable company building airships.
That said, 100,000 marks in state support was given to the construction of LZ 3 in 1906. This airship added horizontal stabilizers at the stern of the ship in order to increase stability still further. LZ 3’s first take-off was a success and received tremendous acclaim. Still, it was just a two-hour flight.
Nevertheless, it was enough for Zeppelin’s project to live into a new year. On December 19, 1906, 500,000 marks for the airship project was included in a supplemental state budget and this received parliamentary approval in March 1907. The commission headed by General Karl von Einem, which had recommended this grant, still had only a lukewarm perception of the prospects for Zeppelin’s airships. Still, Germany was judged to be falling behind France in the area of aeronautics and wanted to catch up. That year, LZ 3 was modified and achieved a four-hour flight on September 24, 1907 and an eight-hour flight six days later. The government granted Zeppelin a further 2.15 million marks in October.
Whatever its successes and the incremental improvements, LZ 3 was judged to be too small to possibly accomplish a twenty-four-hour flight. So, Count Zeppelin put this money towards yet another new airship, LZ 4, which had a volume of 15,000 cubic meters, about 30% larger than the earlier three airships, which had all been around the same size. LZ 4 would be propelled by two 104 hp motors, about 25% more powerful than those on LZ 2. On August 4, 1908, this newly completed airship commenced its twenty-four-hour flight to satisfy the requirement for a government order. It was a success and perhaps the most important success for Zeppelin’s airships. As it happens, the very next day, LZ 4 was lost to a storm after coming loose from its moorings, though no one was seriously hurt and the technical requirement for a government order was met.
The flight was a huge financial boon to Zeppelin. Donations poured in from the public which had followed the long flight across Germany; 6.25 million marks in donations were received. A new company, Luftschiffbau Zeppelin was formed and the old LZ 3, still intact, was modified so that it satisfied the government’s requirements for purchase in 1908. A new ship, LZ 5, was built and sold to the government for military use in 1909.
DELAG
By the beginning of the second decade of the century, various competing forms of airships, including non-rigid and semi-rigid designs, were being tested. Among the competitors to Zeppelin’s airships were airplanes, which were also being developed; by 1913, there would be seventeen airplane makers active in Germany alone.
It was at the start of this period of growing competition that Luftschiffbau Zeppelin was in search of a buyer for its next airship, LZ 6. Despite the excitement around the airships, there was no large flood of military orders, at least not before the coming war. In the meantime, Count Zeppelin was looking for other uses of his airships; even Arctic exploration was considered. More practical perhaps was an airline. Still, this was a novel concept. In any case, Deutsche Luftschiffahrts-Aktiengesellschaft (DELAG), or German Airship Travel Corporation, was formed in 1909. It was the first airline in the world.
In a lecture given in Berlin, Count Zeppelin had proposed a passenger route between Berlin and Copenhagen back in the start of 1908. At that time, he suggested it could be started with just one million marks and would generate a 10% return on investment. Such a budget would have been frugal and DELAG set its sights higher; it was capitalized with three million marks of which 400,000 came from Luftschiffbau Zeppelin. This money was to be invested in a hanger costing 700,000 marks, two airships for 1.1 million together, and gas related infrastructure of 300,000 marks.
Rigid airships were only barely a proven technology and yet already one could take the risk of entrusting one to take them to where they needed to travel for a large but not impossible cost. That said, it wouldn’t be straightforward in these early days. LZ 7 was launched on June 19, 1910 and after just seven trips across nine days, it was destroyed in a rough landing on June 28. The airship was insured though and parts were salvaged which would go towards LZ 8, which itself would last just two months before bring destroyed by wind. LZ 6 would be lost later in 1910 when it accidentally caught fire whilst in its hanger in Baden-Baden. In this case, the company recouped 320,000 marks from insurers and so DELAG survived.
These flights would carry about twenty passengers each. A flight from Hamburg to Schleswig-Holstein was priced at two hundred marks. This was a rather considerable cost compared to even a first-class rail journey but despite the prices it could charge, DELAG could not afford to keep losing airships at this rate. Fortunately, the next four DELAG zeppelins, LZ 10, LZ 11, LZ 13, and LZ 17 would all last at least one year, or compared to the lifespans of the earlier ships, an eternity. Remarkably perhaps, the loss of LZ 7, LZ 8, and LZ 9, as well as those lost in the process of developing the airship were all disasters without a single death or injury.
The record would not last as many fatal accidents would occur with popularization of the rigid airship in the next decade. Many were lost in military service. Indeed, Luftschiffbau Zeppelin would be kept busy with military orders immediately before and during the First World War, until passenger service returned once more after the fighting ended.
Lesson
Ferdinand von Zeppelin spent years raising money and publicity for his project. Many invested or donated to his airship ventures. Amazingly, he did not run out of time or luck. It would have been possible that during these years airplanes would have taken over as the surest vehicle for air travel and crowded out interest in airships. Yet, the airship did see the light of day. However, while rigid airships would have their successes, those who invested in his first firm, Gesellschaft zur Förderung der Luftschiffahrt, saw no profit on their investment. To succeed financially, risky investments like these need to be right in timing as well as in science and technology to pay off.
More from the Tontine Coffee-House
Read about the financing of other great projects, like the first steamships, a transcontinental railroad and Canada and America, and the Panama Canal. Consider subscribing to this blog’s newsletter or checking out book recommendations, which include many of the sources often referenced in my posts.
Further Reading
1. Belafi, Michael. The Zeppelin. Pen and Sword, 2015.
2. Chant, Chris. Zeppelin: The History of German Airships 1900–1937. Amber Books Ltd, 2023.
3. De Syon, Guillaume. Zeppelin!: Germany and the Airship, 1900–1939. JHU Press, 2002.
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