After the war of 1812 , the United States and Great Britain resumed commercial trade.
On  both sides of the Atlantic, businessmen competed for their share of  this increasingly lucrative business. Faster ships made more money, even if it meant going full  speed into bad weather and poor visibility. Many ships vanished, forever listed as overdue, and presumed lost to bad  weather and icebergs.
On the Eastern side, the  driving force was Samuel Cunard. In the 1840's he came to dominate the  Atlantic market, with the line that to this day bears his name. The British government backed  him financially, so the ships could, in the event of conflict, be  requisitioned by the navy (which they often were).
On the Western  side, a number of American lines tried, with  varying degrees of success. The U.S. government was less inclined to  become involved in these matters, and so capital was harder to raise  for building ships.
As sail gave way to steam, this  changed. The Americans were concerned that  Cunard's steamers could be  converted to warships. Faced with both real economic and feared military  competition, the government began backing various companies to try and win trade back from Cunard.
The man to  lead this was Edward Collins. With government subsidies he built 4 large  steamships (Arctic, Pacific, Baltic, and Atlantic), bigger, faster, and  more luxurious than Cunard's ships, to challenge his rival. The plan was to run a tight schedule across the Atlantic.
The  Collins Line ships, with their combination of sails and paddle wheels,  were some of the fastest in the world at the time. They showed the  Atlantic could be crossed in the remarkable time of 10 days, and in a  few cases, 9.
Backed by their respective  governments, Collins' and Cunard's lines competed intensely to dominate  the 3000 miles of north Atlantic. Until 12:15 p.m. on this day.
As  the Arctic steamed west, through a heavy Newfoundland fog, she collided  with a small French ship, the S.S. Vesta. The Vesta, although much  smaller, had a hull reinforced with iron.
In the first few  minutes after the collision, many of the Vesta's crew assumed their  damage was fatal, and abandoned ship (against orders) to try and reach  the larger Arctic. They were wrong. The crew  of the Vesta worked miracles and overcame the damage.
Captain  James Luce of the Arctic was a veteran of the sea. Believing his own damage to be minimal, he turned the Arctic  around to aid the Vesta, and launched 2 lifeboats to help evacuate it's  passengers to the Arctic.
These orders were quickly canceled when  one of the lifeboats reported the  severity of the damage to him. The ship 
was  badly damaged. Like the Titanic 58 years later, he had the legally  required number of lifeboats. And they weren't nearly enough to hold  everyone on board.
Cape Race was 4 hours away. With his duty to  his own ship clear, Luce abandoned the Vesta, heading for land. His hope  was to beach the ship before she could sink.
The wreck of the  Arctic over the next few hours quickly turned into a nightmarish  struggle for survival, very different from the civility seen in the  Titanic. Captain Luce accepted that he and his 11 year old son (who was  traveling with him) were going to die, and did his best to save  passengers. He was betrayed by his crew and most of his officers.
His  crew disobeyed orders, commandeered the lifeboats, and fled. A trusted  officer and handpicked team of seamen were placed in a lifeboat so that  passengers could be lowered down to them. As soon as they reached the  water they rowed away, with plenty of space in their boat.
Without  lifeboats, Luce and his few remaining crew did their best. They tore  the wooden deck to pieces, frantically trying to build rafts. Doors were  torn from hinges to be used for flotation. All furniture made of wood  was assembled on deck in hopes of saving more lives.
Of 408 who  sailed, there were 86 survivors (64 crew, and 22 passengers). Not a  single woman or child lived. They're remembered by a monument in  Brooklyn's Green-Wood Cemetery.
Captain Luce, surprisingly,  survived. He and his son went down with the ship, but were ejected from  the vortex as it sank. As they swam away, a large wooden paddle wheel cover broke loose from below the sea. It launched into  the air like a rocket, then came down, killing his son. And yet, at the  same time, it became a makeshift lifeboat for Luce and a handful of  swimmers. They were picked up after a few days by a passing  ship.
The loss was a disaster, both personally and financially,  for the Collins Line. Besides Luce's son, the deaths included Collins'  wife and 2 of their children.
Although mostly forgotten today,  the disaster dominated headlines on both sides of the  Atlantic for a month, until replaced by the Crimean War. It had the same  effect then as the Titanic would in 1912. Safety specialists  recommended specific East-West shipping lanes. Slower speeds and loud  whistles in fog. Lifeboats for everyone. The majority of the  recommendations were ignored until the aftermath of the Titanic.
2 years later, in 1856, the Arctic's sister, the S.S. Pacific, vanished en route from Liverpool to New York.
It  was another blow for the Collins line. There  was an economic recession, and the U.S. government was now willing to  let Cunard have the Atlantic. Collins' subsidies were cut,  and in 1858 his line folded. The surviving ships were auctioned off.
The wreck of the Arctic hasn't been found (to my knowledge no one has looked).
The  Pacific was thought to have been lost to storms or icebergs in the  north Atlantic. To the surprise of everyone, she was accidentally found  in 1991 in the Irish Sea, only 60 miles from where she left Liverpool.  Why she sank remains a mystery.
Cunard survives to this day, though is now owned by Carnival Lines.
Government  subsidies for shipping, with the ships to be used in time of war,  continued into this century in all the major powers.
The last American attempt to share the Atlantic trade lies, mostly forgotten, in Philadelphia. She is the liner 
S.S. United States,  built with subsidies after World War II. The government paid for her  huge size and (even to this day) remarkable speed, with the plan of  using her as a fast troop transport in future conflicts. Her  commercial career, like all liners, was doomed by the passenger jet.  Multiple attempts continue to be made today to save her from the  scrapyard.