In the last years of the 19th century, Cape Horn sailing ships were being built larger and better than ever before. Iron, and then steel, had supplanted wood in hull construction. A typical four-masted barque, built in the 1890s, was more than twice the size of a typical ship built thirty years earlier, and could carry more than twice the cargo. Improvements had been made in rigging design, and in safety (specifically the introduction of the "Liverpool house", a structure located amidships that made it considerably more difficult for heavy seas to wash a sailor overboard). The ships of the 1890s could sail nearly as fast as the clipper ships of the 1850s, and could carry more cargo and operate in a far more economical fashion.

However, the advances in sailing-ship design were matched by advances in motorship and steamship design. Powered ships could be built much larger than sailing ships, and since they were not dependent on favorable winds and currents, could make much faster passages in most trades.

Most of the large Cape Horn sailing ships were built in four countries-- Great Britain, Germany, France, and America. The Scandinavian countries, especially Finland, accumulated large fleets of second-hand sailing ships. After 1902, sailing-ship construction ceased almost completely. In that year, several famous ships were built-- in Germany, the Laeisz Line's massive five-masted ship Preussen, the school-ship Herzogin Cecilie; in Britain, several large four-masted barques including the Daylight and the Arrow, later the German Parma; and in America, the seven-masted schooner Thomas W. Lawson. After 1902, only the Laeisz Line continued to build ships-- several more four-masted barques, the last in 1926.

World War One was both a blessing and a curse for the sailing ship. There was tremendous demand for freight, and so ships that could go out were kept profitably employed. However, most German-owned ships were interned in Allied ports or claimed as war prizes, and many Allied ships were stuck in French and British ports, unable to go out due to the threat of submarines.

After the war ended, a shipping depression set in. The last French ship sailed not long after the war, and the British and American fleets were only remnants. The last British ship was the four-masted barque Garthpool, which was wrecked in the North Atlantic in 1929. The last American was the full-rigger Tusitala, and the stock market crash of 1929 finished her.

The Cape Horn sailing ship lived on, primarily in the hands of two owners, the Aaland Finn Gustaf Erikson, and the German Laeisz Line. Erikson's ships sailed in the Australian grain trade, and the Laeisz ships in the Chilean nitrate trade, though they also took whatever cargoes they could find. Gustaf Erikson built up a sizable fleet of ships, mostly German and British discards. The Erikson ships survived because of their one huge advantage over the powered ship-- lower overhead costs.

Grain cargoes from Australia were loaded very slowly, and only the sailing ship could afford to anchor there for as long as it took to load. The same economics applied to cargoes of guano from the South Pacific islands. Erikson paid low wages and sailed his ships uninsured. One cargo of Australian grain could buy back the ship's purchase cost, and a second cargo would put her in the black.

Though a few ships sailed after World War Two, it essentially dealt a death-blow to sail-powered shipping. Gustaf Erikson lost three ships-- two to submarines, one to a floating mine. The barque Penang was lost with all hands, and fourteen of the crew of the four-master Olivebank lost their lives.

Erikson attempted to re-assemble his fleet after World War Two, but unfortunately died in 1947. The four-masters Passat and Pamir were the last Erikson ships to sail, both in 1949. They were sold to a German owner, who outfitted them with auxiliary engines, and used them as school-ships. This lasted until 1957, when the Pamir foundered in a North Atlantic hurricane, drowning 75 of her crew. The last working square-rigger, the Peruvian four-master Omega, sank the following year. She ended her days making short runs between Callao and the guano islands. And when she was gone, there were no more, except museum ships.

(A somewhat comprehensive list of museum ships can be found at Preserved Cape Horn Sailing Ships.)