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Ludwig, Daniel Keith

Ludwig, Daniel Keith

(b. 24 June 1897 in South Haven, Michigan; d. 27 August 1992 in New York City), shipping tycoon who developed new methods of financing and constructing ships and amassed the world’s largest fleet of tankers.

Ludwig was the only child of Daniel F. Ludwig, a ship captain, and Flora Ludwig. Ludwig was obsessed with privacy and shunned the press, so details about his early life are limited and based almost entirely on a single interview he gave in 1957. He claimed he began business activities at the age of nine by purchasing a sunken boat, which he salvaged, repaired, and chartered at a profit. Ludwig dropped out of public school in the eighth grade, and after his parents separated a year later in 1912, he moved with his father to Port Arthur, Texas. He worked at a ship chandler’s firm and studied marine engineering at night school. Returning to Michigan a year or two later, he worked at the Morse Fairbanks marine engine company for three years.

Ludwig quit Morse Fairbanks in 1916 to go into business for himself. With a loan cosigned by his father, he bought a derelict excursion boat, sold its boiler and machinery, and converted it into a barge. He purchased other small barges and tugboats and began chartered operations, hauling molasses from New York to Canada for A. L. Kaplan. Ludwig later concentrated on hauling lumber products with his tugboats.

After the end of World War I, Ludwig sold some of his tugboats, purchased a surplus tanker from the War Shipping Board, and began hauling fuel oil for a refinery in Massachusetts. His purchase of a second, larger tanker required additional capital, so he took on a partner, who subsequently took over control of the business and left Ludwig with only a few tugboats.

Ludwig formed the American Tanker Corporation in 1925 with capital supplied by owners of a chain of gasoline stations in Massachusetts. The firm purchased other surplus tankers from the War Shipping Board to supply gasoline stations and other customers. Ludwig suffered extensive back injuries in 1926, when an explosion occurred on one of the gasoline tankers. He swam extensively, the only sport or hobby he participated in, to relieve the chronic back pain he experienced for the rest of his life. Although six feet tall, Ludwig’s back injuries caused him to stoop and walk with a slight limp. Otherwise, he kept himself in excellent health, avoiding smoking and drinking. He kept trim and lean by eating sparingly, with a taste for buttermilk and bananas.

Ludwig married Gladys Madeline Jones, a chorus girl, on 29 February 1928. They had one daughter in 1936, but Ludwig denied paternity and obtained a divorce in April 1937. That same year Ludwig married Gertrude Virginia (“Ginger”), who had two children from a previous marriage.

During the 1930s Ludwig concentrated on oil tankers, using a converted coal ship to haul oil on a charter basis from one port to another. When the economy began to revive in the late 1930s, he prospered by focusing on oil shipping. Ludwig set up operations as National Bulk Carriers in 1936 and innovated the ship financing process. He purchased ships by borrowing from banks, using charter leases as well as the physical ship as collateral. He financed conversions of dry bulk ships, which hauled grain and ore and whose trade had fallen during the economic autarky of the 1930s, into oil tankers, which met growing demands for domestic and foreign oil. He also acquired shipbuilding facilities in Virginia.

During World War II, Ludwig’s major shipbuilding operations were taken over by the U.S. Navy. He kept control of one small facility that produced tankers requisitioned by the government, but which were returned to him at the end of the war. Ludwig pioneered in several new techniques, principally welding rather than riveting hulls and sideways rather than traditional bow-first launches.

Ludwig owned one of the world’s largest tanker fleets at the end of the war, and foreseeing a growing postwar demand for oil, he built ever-larger tankers. He negotiated with the Japanese and Japan’s occupation government to build a new shipyard in Kure that, benefiting from low rents, low labor costs, and minimal government restrictions, constructed giant tankers at half the cost of those made in shipyards in the United States. The absence of union rules and government regulations allowed experimentation in new building methods, and Ludwig adapted an assembly-line, high-efficiency method of production. His efforts helped Japan become one of the world’s largest shipbuilders during the third quarter of the twentieth century.

Ludwig also took advantage of postwar legislation that allowed registration of ships under foreign “flags of convenience,” such as Liberia and Panama, to further reduce sailors’ pay, labor union membership, and governmental regulations. One of his business subordinates, Steve Bol-lenbach, described Ludwig as “the meanest man I’ve ever worked for.”

As the demand for oil skyrocketed during the 1960s and 1970s, so did the demand for oil tankers and Ludwig’s fortunes. He used his excess cash to diversify into real estate, public utilities, and banking, obtaining control of businesses in more than two dozen countries. Most striking and most unprofitable, he invested $1 billion in a pulp and paper development project during the late 1970s. With the cooperation of Brazilian officials and bankers then seeking foreign investment, Ludwig purchased 4 million acres of rain forest, a tract approximately the size of Connecticut, along the Jari River in Brazil’s Amazon basin. Ludwig razed the virgin rain forest and planted masses of melina (gmelina arborea), a fast-growing evergreen tree imported from Southeast Asia. Ludwig told an interviewer, ‘I always wanted to plant trees like rows of corn.’ Although melina grew rapidly in its native land and in the laboratory tests set up by Ludwig’s scientists, it failed to adapt to the Brazilian environment. Ludwig lost over a billion dollars on the project before bailing out in 1981. Time magazine commented: “Not many men have lost a billion dollars and managed to remain billionaires. Daniel Ludwig … did just that.”

Ludwig refrained from any other major business ventures after the Jari debacle, concentrating his efforts during the 1980s on promoting cancer research. In 1971 he founded the Ludwig Institute for Cancer Research in Zurich, Switzerland, and it eventually established research centers in ten countries. Johns Hopkins University awarded Ludwig an honorary doctorate in 1980. He spent his final years, like the rest of his life, in relative anonymity. He employed a public relations firm to keep his name out of the press and once attacked a photographer who attempted to photograph him on his daily walk to his New York City office.

Ludwig died of heart failure at the age of ninety-five. The bulk of his estate was willed to various medical schools and cancer research institutes. Ludwig had taken particular care to ensure that the daughter of his first wife would obtain no inheritance. He had had samples of his blood tested and placed in cold storage in 1982 and again in 1988 in anticipation of the inevitable probate litigation.

Ludwig became one of the richest men in the world by transporting oil at a time when the American economy shifted its energy base from coal to petroleum. He was also an early proponent of globalization and multiplied his fortune by taking advantage of low-cost labor and minimal government regulations at Japanese shipyards and foreign-registry of his ships. He was less successful in his personal life, and one of his lawyers described him as “a billionaire with trailer-park problems.”

Ludwig is the subject of a biography by Jerry Shields, The Invisible Billionaire, Daniel Ludwig (1986), which supersedes the chapters dealing with him in Kenneth Lamott, The Moneymakers (1969); and Jacqueline Thompson, The Very Rich Book (1981). Modesto da Silveira, Ludwig, imperador do Jari (1981), has not been translated into English. For his role in shipping and oil see George Rosie, The Ludwig Initiative: A Cautionary Tale of North Sea Oil (1978); Charles Coombs, Tankers, Giants of the Sea (1979); Tomohei Chida and Peter N. Davies, The Japanese Shipping and Shipbuilding Industries: A History of Their Modern Growth (1990); and Rene De La Pedraja, The Rise and Decline of U.S. Merchant Shipping in the Twentieth Century (1992). The Amazon River basin project is described in Loren Mclntyre, “Jari,” National Geographic 157 (May 1980); and Clayton E. Posey et al., Plantation Forestry in the Amazon: The Jari Experience (1997). His relationship with his disowned daughter is mentioned in Ruth G. Davis, ‘Bad Blood,’ New York 28 (9 Oct. 1995). Obituaries are in the New York Times (29 Aug. 1992) and the Washington Post (29 Aug. 1992). Vivienne King wrote and produced a documentary film, Mr. Ludwig’s Tropical Dreamland (1979).

Stephen G. Marshall

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