All sailing ships hoisted the national flag either upon the stern or on
top of the mizzenmast. Overseas sailing ships were allowed to hoist a pennant
in national colours on top of the mainmast. The rest hoisted another pennant
(german: Stander) instead with similar colours and the name of the
owner. At the beginning of the 19th century the merchant navigation increased
and the shipowners began to show own houseflags beside the private pennants.
Probably this happened after 1820.
For a long time a flag with a number was hoisted on top of the foremast
which simply showed the insurance number of the ship. The captains of the
ships coming home told their owners the numbers they had seen on their
journeys. This ended when signalflags had been invented.
Source: O.Neubecker:"Fahnen und Flaggen"; Leipzig 1939; p.92.
Klaus-Michael Schneider, 20 Mar 2007