The American Palestine Line was a steamship company, formed in 1924 in the U.S., for the purpose of providing direct passenger service from New York to Palestine. It was reportedly the first steamship company owned and operated by Jewish people. The company negotiated to purchase three ocean liners from the United States Shipping Board, but it was only able to purchase one, , a former North German Lloyd steamer that operated as Princess Alice before being seized by the United States during World War I. After refurbishing the liner, the company inaugurated service between New York and Palestine in March 1925, when President Arthur sailed on her maiden voyage. A crowd of 15,000 witnessed ceremonies that included songs, prayers, and speeches in English and Yiddish. The company claimed that President Arthur was the first ocean liner to fly the Zionist flag at sea and the first ocean liner ever to have female officers.
The line had labor difficulties and financial difficulties throughout its existence. On President Arthurs first trip in 1925, rumors of a mutiny were reported in The New York Times, and several crew members got into an altercation with members of the Blackshirts, the Italian fascist paramilitary group, when the liner made an intermediary stop in Naples. On her second voyage, the ship's master-at-arms was killed by a fellow crew member. Financial difficulties included unpaid bills and resultant court actions as well as accusations of fraud against company officers that were leveled in the press. In late 1925 the company was placed in the hands of a receiver; President Arthur—after a two-alarm fire in her forward cargo hold—ended up back in the hands of the United States Shipping Board (USSB), and the company's office furniture and fixtures were sold at auction in early 1926.
Background
The newly formed American Palestine Line, reportedly the first ever steamship company owned and operated by Jews, began working to institute direct passenger service from New York to Palestine. To that end, the company began negotiations with the United States Shipping Board (USSB) to purchase three former German ocean liners, sister ships and and the smaller . On October 9, 1924, the American Palestine Line's president—Jacob S. Strahl, a New York Supreme Court justice—announced the purchase of President Arthur from the USSB, with plans to begin the Palestine service the following March. Strahl also publicly announced American Palestine's intent to acquire President Fillmore at the same time; plans for that acquisition and that of Mount Clay, however, never materialized.
The ship
SS President Arthur was formerly Kiautschou, a launched in September 1900 for the Hamburg America Line's Far East passenger and mail service. When Hamburg America withdrew from the service, the liner was traded to North German Lloyd, and regularly used—under the new name of Princess Alice—on both North Atlantic and Far East passenger routes. The liner was interned in the U.S.-controlled Philippines at the outset of World War I and was seized upon the American entry to the conflict. The ship was used as a transport ship for both the U.S. Navy and U.S. Army under the name Princess Matoika. After some post-war use as a passenger liner and yet another name change—this one in honor of the 21st U.S. President, Chester A. Arthur—she was taken out of service when changes in U.S. laws severely curtailed the number of immigrants that could enter the country in the early 1920s. At the time of the purchase by American Palestine, the ship had been laid up in Baltimore since late 1923.
News reports the following month fixed the purchase price of President Arthur at $60,000 cash, plus assurances that the liner would be reconditioned within six months. Announced plans for reconditioning included reducing passenger capacity to 675 and increasing the cargo capacity to . Also on tap were swimming pools, a game room, a gymnasium, a lecture hall, a social hall, and a moving picture theater. The line had originally planned to change the name of the liner to White Palace, but that was never brought about.
After undergoing reconditioning at Morse Dry Dock & Repair in Brooklyn, President Arthur was taken out for a shakedown cruise on March 7, 1925. Steaming off the New Jersey coast, President Arthur, expected by American Palestine officials to top out at , reached a reported maximum cruising speed of , which company officials claimed would reduce her travel time to Palestine by two or three days. At the end of the shakedown, the liner was docked at the foot of West Houston Street in preparation for her maiden voyage five days later.