For a more detailed account on Nortraship's history, please see this Wikipedia article (exernal link), written by Ulf Larsen.

At the outbreak of war in Norway on April 9-1940, more than 1000 ships sailed in foreign waters. These ships were owned and operated by about 500 shipowners or shipping companies with a staff of over 6000 trained people. Practically all the offices were located in Norwegian ports, so the entire administrative apparatus stopped functioning immediately after the invasion on Apr. 9. The King and government had escaped from the capital, and after the initial chaos had calmed down, a small hotel at Stuguflåten in Romsdal served as headquarters for the government (the King and government later escaped to London). Director of Shipping, Øivind Lorentzen was also there, to put himself at the disposal of the government. The Shipping Directorate was one of 4 under the Ministry of Supplies, established after the invasion, and at Stuguflåten a provisional decree requisitioning the entire merchant fleet (that is, ships under the Norwegian flag over 500 gt that were not already in Norwegian or allied service) was formulated and confirmed by a royal mandate on April 22 (later replaced by a new provisional decree of May 18, more details further down on this page). The next evening, Øivind Lorentzen, Arne Sunde (Minister of Shipping) and Benjamin Vogt (chief secretary) left Åndalsnes aboard a British cruiser, with a document authorizing Lorentzen to command the merchant fleet. They arrived to find that excellent preparatory work had already been done in England by a committee of Norwegians under the leadership of Erik A. Colban, Norway's Minister to England, and Mr. Hysing Olsen (representing The Norwegian Shipowner's Association), in spite of the fact that all contact with Norway had instantly been cut off by the invasion.

NOTE: There's been some controversy through the years with regard to "who did what" in the establishing of Nortraship. Benjamin Vogt, the Chief Secretary who came to England with Lorentzen and Sunde, came out with a book in 1967, in which he endeavours to put the facts straight. It appears he feels that far too much credit was given to Colban and Hysing Olsen in this matter, and indicates that had it been left up to them, the entire fleet would have ended up in the hands of the British. He also criticizes the government for their lack of insight and unwillingness to take the proper actions while in England (in his opinion). According to this book, hard feelings and disagreements caused quite a lot of tension and bickering between the various parties and individuals involved. In particular he does not seem to be the greatest admirer of Colban and Hysing Olsen, a feeling which appears to be mutual. It is perhaps understandable that those two experienced some disappointment and embarrassment at the sudden change of events, when Lorentzen and his followers arrived on the scene and litterally took over their already established leadership, moving them to the back seat so to speak.

Back to the events of April 1940:
After the invasion, the Germans took control of the Norwegian radio in Oslo and ordered all Norwegian ships abroad to proceed to a neutral port, preferably Italian or Spanish, or to try to get home to Norway, but under no circumstances should they go to British ports. At that time the British were interested in taking control of the Norwegian fleet, and fearing it would end up in the hands of the Germans, a counter-message was immediately broadcast by BBC on April 10, and for a week thereafter, urging Norwegian ships to ignore any and all orders from Oslo Radio, adding they could safely go to an allied port, where the British Navy would give them all possible protection, and where they would "receive welcome and compensation for their services". Erik Colban was put under pressure to broadcast a similar message on behalf of the Norwegian government, but for various reasons, lack of contact with, and instructions from, the government being one of them, he was reluctant to do so.

Mr. Hysing Olsen, The Norwegian Shipowner's Association's representative in London, had been in Amsterdam at the time of the German invasion and was on his way to Oslo when he heard the news. He immediately returned to London, to become the shipowners' "central advisor", being one of the very few Norwegian shipowners who was abroad at the time. On arrival he was advised by Erik Colban of the British desire to take control of the fleet, and the work to keep it under the Norwegian flag now started in earnest. Ministry of Shipping was contacted and agreements were reached to the satisfaction of both sides, the insurance problem being the most important issue. By the evening of Apr. 12 an insurance plan for Norwegian ships in neutral ports was ready, and telegrams sent out from the Foreign Office to British consulates all over the world, asking them to inform captains of Norwegian ships that Gt. Britain would fully cover the usual sea and war insurances, on the condition that they proceed to the nearest allied (meaning British or French) port, without stopping at a neutral port en route. The next day the Admiralty sent out the following message to all Norwegian ships at sea: "Your ship is held covered by the British Government against War and Marine risks on the values and conditions under which she is at present insured....As regards cargo the shipowner is similarly covered for his liability to the cargo owners". The telegram stated that the agreement had been reached with Mr. Hysing Olsen representing Norwegian shipowners. Not one ship obeyed the order from Oslo Radio. As of Apr. 14-15-1940, 30 ships were held back in French ports, 122 in British, 115 in British controlled overseas ports, comprising 26.1% of the fleet abroad.

On Apr. 19 offices were rented at 144 Leadenhall St. in London, a whole floor of about 500 square meters, practically fully furnished and with the option of renting another 2 floors. The location was ideal, right across from the main entrance to Lloyd's and next to the War Risks Insurance Office. The name "The Norwegian Shipping and Trade Mission" was adopted, shortened to the telegraph and cable address Nortraship (Norway, Normission, Norsetrade and Norseship had also been suggested). Phone lines were installed, the recruiting of office help was initiated (some were Norwegians already there, others later began pouring in across the North Sea, some of whom had risked their lives to get across by various inventive means). Consequently, as mentioned, by the time Øivind Lorentzen and his 2 appointed helpers arrived London on Apr. 25, Nortraship was already established; the office at Leadenhall St. had opened just 4 hours previously. (Later, due to the increasing air attacks on London in Aug.-1940 another office was opened near Sunningdale, southwest of London, and part of the staff was moved there. This property was originally a Catholic convent called The Sacred Hearts Convent, which under Italian leadership had educated missionaries for service in Africa).

Because of the lack of the proper documents nobody knew exactly how many ships were sailing in foreign waters at the time, nor where they were located in the world, or where they were headed. In addition there was the whaling fleet. Norwegian diplomatic and consular representatives all over the world immediately informed the ships of the government's requisition of the fleet. Norwegian consuls were told to include the following statement on the ships' documents: "This is to certify that this ship, the.. (name and port of registry), has been requisitioned by the Royal Norwegian Government and is held by the Master on behalf of the Royal Norwegian Government". At the same time the captains were instructed to wire Nortraship "I acknowledge that I hold the vessel ..... on behalf of the Royal Norwegian Government" (referred to as the "loyalty declaration"). Inevitable confusion still existed; requests for money and sailing orders poured in. Naturally, the usual agents hesitated to extend credit to the ships, and the individual consulates did not have sufficient funds to cover the needs. Also, it's understandable that charterers were at first reluctant to pay charter to the brand new Nortraship, from fear they would be faced with claims from the shipowners themselves later on. So the first and foremost task was to see to it that enough funds were procured for the continued operation of the fleet, because for every day the ships lay idle huge amounts of money were lost. Arne Sunde was able to procure a loan from Hambro's Bank, the Director Olaf Hambro being an old friend of his, whereupon an agreement for a payment plan was reached between Norwegian Ministry of Shipping, The British Treasury and the Bank of England. Subsequently an official declaration was issued saying that charterers could safely pay any money due Nortraship, with the result that money started coming in from everywhere, and within 6 weeks Øivind Lorentzen and Arne Sunde could sign a check which covered the premiums for the first term of war insurance.

Other problems were dealt with in the same remarkable manner. There was the problem of disposal or storing of cargoes bound for Norway. The north of Norway was still not occupied (the home forces were still fighting in that area) and some of these cargoes were desperately needed and could be sent directly there, but others would be of no value there, or were perishable. The whaling fleet was an enormous problem, with its valuable cargoes of oil, which under normal circumstances would have gone to Norway, but now had to be sold elsewhere. The insurance issue was also an obstacle, as the insurances in Great Britain had automatically been cancelled with the German occupation of Norway. But the insurance companies agreed to insure millions of tons of Norwegian shipping, without even knowing where on earth these ships were, Lloyds covering one half, other companies the other; the whole transaction was negotiated in just over an hour!

The fleet that initially came under the leadership of Nortraship consisted of 881 ships of 500 gt or more. Added to those were 26 ships of over 500 gt trapped in Sweden and 1 in Finland. Less than 1/8 of the total Norwegian tonnage (ships 500 gt or more) came under German control, that is 273 ships, which were in Norwegian, Danish and German ports after the invasion. Additionally, through a new decree of May 18-1940, which inluded all ships registered in Norway, regardless of tonnage,100 smaller ships, mostly whale catchers were included. Most of those were later taken over by the Royal Norwegian Navy and served as minesweepers and patrol vessels in the Norwegian, British and Dutch Navy.

Before long Nortraship became the largest shipping company in the world. In the summer of 1940 there was fear of a German invasion of Gt. Britain and this, in addition to the considerable amount of tonnage present in American waters resulted in the establishment of another main office in New York at the end of June 1940, in spite of strong British opposition. Øivind Lorentzen became the manager of the New York office, while also continuing as Nortraship's head manager. Hysing Olsen took over in London, which still retained the financial management of the company. In Aug. that year the New York office opened a sub division in Montreal (established by Benjamin Vogt, who according to himself had been "pushed out" of the London office). By the end of the war Nortraship had around 1100 employees. The higher positions were almost exlusively held by Norwegians, while many others were English or American. More than 50 sub offices existed around the world in several cities in Gt. Britain, USA and Canada, as well as in Bombay, Calcutta, Cape Town, Reykjavik, Santos, Suez and Port-of-Spain. The income from the merchant marine was the major source of income for the Norwegian government in exile in London, and helped pay for the Army and Navy, the Royal Norwegian Air Corps in Canada and in England, for the Royal House and for the Government and all its employees, covering about 90% of its expenses. At the end of the war Nortraship had 4.5 billion kroner to its name, most of it in foreign currency, 1/3 of which was shipwreck compensations, the rest earned from trading (I believe the rate was about 5 kroner to 1 dollar at the time). After the shipowners had received their share (see Arne Sunde's statement below) 818 million kroner was left and this entire amount went to the Norwegian State.

Arne Sunde said during the war: "Nortraship is an institution under the State, and for the duration of the war the ships are sailing on behalf of the government. The individual ship is being operated for a single purpose; namely to make it contribute to the war effort as efficiently as possible without any regard to the special interest of individual shipowners. As far as possible we have tried to maintain existing Norwegian lines. After the war, if the ships still exist, they will be returned to their owners. In accordance with the Norwegian Constitution, shipowners will receive compensation for lost ships, as well as for depreciation of material. This compensation will be determinbed by the legal authorities after the return of the government to Norway". (Norway's gold was also smuggled out and placed in American banks, see M/S Bomma for a detailed account of this exploit).

Nortraship's "Secret Fund"
I'll have to say, when I first came across the above statement by Arne Sunde (in "Tusen norske skip", or "Norway's New Saga of the Sea"), my initial reaction was, but what about the sailors? They did not receive any restitution, nor compensation for a very long time, if what little they finally received can even be called compensation. Nortraship had what is commonly referred to as their "secret fund", essentially made up of part of the sailors' salaries. Simply put, the Norwegians had higher salaries than their British counterparts, due to receiving a higher "war hazard pay" (300% of the base salary in especially dangerous waters), but the British exerted pressure to make this hazard pay equivalent to that of British sailors. After negotiations with Nortraship in London in the summer of 1940 the British agreed to pay the difference into a special account, thereby on the face of it reducing the salary of the Norwegians, while the British compensation, estimated to 1 shilling pr. ton dw. per month was paid to Nortraship and deposited into a separate account. As far as I can gather, the sailors accepted this, with the understanding they would get their money back after the war, but this did not materialize, and a bitter fight ensued. At the end of the war this fund consisted of over 43 million kroner. Granted, during the war portions of the fund had been spent to cover later adjustments to the hazard rates, and on social improvements for the sailors on board the ships, but after the war, as mentioned, a bitter battle took place over the remaining amount. The merchant mariners felt that each and every sailor was entitled to a share of that money, feeling it was THEIR hard earned money to begin with. The Norwegian Seamen's Association went against its own members, with the support of Norwegian authorities. Those managing the fund, who were accused of having "communist interests", subpoenaed the State and the Department of Shipping for ownership of the fund. The merchant mariners lost their case in the Supreme Court in 1954. Later on they got some sort of compensation when they were awarded 155 million kroner in 1969, distributed to the mariners or their surviving next of kin "ex gratia". This meant that each sailor was paid 180 kroner per month of active service. I'm not sure what the dollar rate was at that time, but probably around 7 kr to a dollar.

Sources:
Handelsflåten i krig 1939-1945, Book 1, Norrtraship, Profitt og patriotisme - Atle Thowsen, 1992.
Nortraships flåte, book 1 - Jon R. Hegland, 1976.
Tusen Norske Skip - Lise Lindbæk, 1943.
NorgesLexi http://norgeslexi.com/krigslex/krigslex.html (Norsk Krigsleksikon).

Some background History - Norway:

The Campaign in Norway
Weserübung - the German Invasion of Norway
Includes British counter attacks and German naval losses.
The invasion of Norway - Lists all the units taking part, and also has a page on German coastal Defences in Norway in WW II.
Norway 1940
The Norwegian Army in Exile

Find Nortraship Archives - Go to "Webkataloger", then "Hovedkatalogen for Arkivverket". "Gå til søkesiden", choose 'Riksarkivet' out from 'Velg arkivinstitusjon' and hit 'start standardsøk'. Type Nortraship for 'Navn', and 1940 and 1945 in fields for 'tidsrom', then 'start søk'. That should bring you to a list of links to a description of Nortraship archives. Part of list is in English, but description of where the misc. info can be found is in Norwegian. Unfortunately, the English search button does not bring the same results.
Nortraship's Houseflag

For more links to information on WW II in Norway, go to "WW II - General History/Norway" on my
Merchant Marines/Ships/Navies Links page.

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