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Royal Mail Steam Packet Company Kylsant Empire Part 1

From SN Guides

Rescue and renaissance of RMSP



Many of the famous British shipping companies were founded in the nineteenth century by individual entrepreneurs. The descendents of these founding businessmen were frequently keen to realise the value of the family holdings; to secure their inheritance in safer and more diversified investments. As a result there was a major consolidation of the shipping industry in the early years of the twentieth century. The most remarkable example of this trend was the way Owen Cosby Philipps took control of the near moribund Royal Mail Steam Packet Company in 1903 and went on to build it into the largest shipping and shipbuilding company in Britain. In the process Philipps received a knighthood, then was made Lord Kylsant, before his empire collapsed in 1931 and he ended his life in disgrace.

Part 1 of this history covers the period up to the outbreak of the First World War. The Philipps/Kylsant story is continued in subsequent Parts.



Corporate Structures


To understand how Philipps was able to create the huge Royal Mail group it is necessary to appreciate that public company governance at the time was far removed from the tightly regulated and audited regimes that exist today. There is also a need to understand the way that ships were owned and operated.

From the Middle Ages to the present day, under British Law and in the legislation of most European countries, the ownership of every ship is divided into 64 shares. There may be any permutation from a single owner of all 64 shares, to 64 owners each with one share. During most of the nineteenth century the public had limited investment opportunities, but participating in ship ownership was an attractive possibility. This was a high risk, high return investment, particularly in the age of sail, but the risk could be spread by taking a few shares in a number of ships. This policy led to the use of ship managers, who received a fee to operate the ship on behalf of the shareholders, who in turn divided the profit or loss remaining after deducting the manager’s fee for each voyage.

The managers of ships could be individuals or a partnership and it was common for them to personally subscribe to some of the shares in the ships they managed. Where several ships were controlled by the same manager it was usual for the operation to be known as a particular shipping “Line”. This was little more than a brand name and had no legal or financial significance.

This system of ship owning was inadequate where there was also a need to finance a substantial shore-based infrastructure. Up until the mid-nineteenth century the only practical way to way to obtain public subscriptions for these larger ventures was through a company established by Royal Charter. There were relatively few companies formed in this way as the granting of a Royal Charter was time consuming and expensive. The Companies Act of 1862 provided the framework needed to easily create the joint-stock, limited liability, companies needed to finance the Industrial Revolution. This type of company was gradually adopted as a means of financing shipping ventures, but the existing concept of separating management and investors was often retained, either through the continued use of outside managers, or through the mechanism of management shares, which had sufficiently superior voting rights to control the company. In any event very little financial information was provided to the shareholders. Until the early twentieth century profits were often undisclosed and the value of the shares was almost entirely related to the dividends paid. Investors had little way of knowing if their dividends were paid from current profits or from reserves accumulated in previous years.

The initial lack of accountability to shareholders was of great assistance to Philipps in his early years. As the control of company accounts was developed the increasing disclosure requirements were a major contribution to his eventual downfall.



Owen Cosby Philipps


Owen Cosby Philipps (OCP) was born on 25 March 1863. He was the son of a leading Anglo-Catholic clergyman, the Reverend Sir James Erasmus Philipps, 12th Baronet, of Picton Castle. It was a family that produced some remarkably high achievers. OCP’s elder brother John Wynford Philipps (JWP) became a leading London financier and was later granted the title of Viscount St David. A younger brother became Major General Sir Ivor Philipps and upon retirement from the Army joined the boards of a number of leading companies, including Schweppes, where he was chairman. Another younger brother, Laurence Richard Philipps became the 1st Baron Milford. It is possible that sibling rivalry was one of the factors that led OCP to pursue a programme of continuous and reckless expansion of his shipping empire.

At 6ft 7in, OCP was remarkably tall – the UK average male at the time was 5ft 7in tall. In all his photographs he is very elegantly dressed. OCP was also somewhat reticent as he suffered from a speech impediment. The combination of these characteristics gave an impression of arrogance and aloofness and helped to produce a large number of enemies.

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Photo 1: Lord Kylsant in a 1920s photo-portrait. No usable photo has been found of him as Owen Cosby Philips, before his elevation to the Peerage in 1923



King Line


OCP began work in a shipbroking firm – matching ships with cargoes. In 1889, at the age of 26 he formed the King Alfred Steam Ship Co to own a tramp ship of the same name. The business was managed by Philipps, Philipps & Co, which was a partnership with his elder brother. In 1893, the King Alfred Steam Ship Co name was changed to King Line Ltd and two single ship subsidiary companies were set up to buy two second-hand ships. JWP was chairman of the Buenos Aires & Pacific Railway Company and carrying coal out to Argentina for the railway and grain on the return voyage provided King Line with steady business.

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Photo 2: King Cadwallon – King Line. Built by Rodger’s, Port Glasgow in 1900 as Edderton for McLaren & McLaren, Glasgow and bought by King Line in 1904. She was wrecked (as shown) on Lewis Rock, St Martin’s Island, Scilly Islands on 22.07.06

The use of several nominal subsidiaries became the standard ship owning pattern for King Line. In the early years King Line frequently bought and sold existing ships, but the overall size of the fleet grew until it reached 10 tramp steamers by the outbreak of WW1. The company sold 2 ships and lost 6 during the war. After the war the fleet was rebuilt, mainly using war-standard ships. Philipps seems to have disposed of his interest in King Line about 1930 and in 1923 the management of the firm was taken over by Dodd, Thompson & Co, led by Vernon Thompson, who was later to become chairman of Union-Castle.

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Photo 3: King Alfred – King Line. Laid down at Doxford’s, Pallion, Sunderland as War Azalea and completed as King Alfred in 1919



Royal Mail Steam Packet Company


The Royal Mail Steam Packet Company was established by Royal Charter in 1839 and an Admiralty contract to deliver mail to the Caribbean was awarded in 1840, with the first departure from Falmouth taking place on 3 January 1842. The mail network was expanded and the company also operated services within the West Indies and up the coast to New York and Halifax, Nova Scotia. From 1850 it provided services to South America, including a service to Colon to link to the West Coast service operated by Pacific Steam Navigation Company.

The peak of Royal Mail’s nineteenth century fortunes was reached in 1884, but thereafter it suffered a progressive decline. It had a dismal safety record, with 21 ships lost in the period up to 1899. In 1895 it owned 27 seagoing ships that averaged 13 years old and had cost £1,198,768. Astonishingly only £50,000 depreciation was provided in the balance sheet for this obsolete fleet. By 1901 the West Indies colonists had become very dissatisfied with the RMSP service and the British Government awarded an additional mail contract from Bristol to the West Indies to the rival Imperial Direct Line.

By 1902 Royal Mail’s finances were at a very low ebb and the company’s share price was at rock bottom. The two Philipps brothers began buying shares in the company. At the turn of the century the American railroad owner J Pierpont Morgan decided to acquire as many as possible of the major transatlantic shipping lines through his International Mercantile Marine Company (IMMC) in an attempt to control the pricing of transatlantic travel to the USA. At this time William James Pirrie (later Lord Pirrie) was in control of Harland & Wolff. In return for an exclusive ship building and repairing contract, the shipyard made a substantial investment in the Morgan company and Pirie became the main negotiator for IMMC. It was through Pirrie that IMMC acquired in 1902 The Oceanic Steam Navigation Co Ltd, the company that was invariably known as the White Star Line. This caused a public outcry in Britain and the Philipps brothers took this opportunity to launch a rabble rousing campaign to “save Royal Mail from foreign ownership”. There was very little evidence that a foreign company had any serious interest in Royal Mail, but shareholder sentiment swept both brothers onto Royal Mail’s board on 7 January 1903, with OCP becoming chairman of the company on 25 March 1903.

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Photo 4: J P Morgan

The Philipps brothers had spotted that when Royal Mail had been founded 63 years previously, only £60 had been called-up on each £100 share. Under company law, shareholders’ liabilities are limited to the nominal value of the shares, but if the shares are not fully-paid the shareholders have an absolute liability to meet the unpaid balance. OCP simply called upon the shareholders to pay the outstanding balance, thereby ensuring that Royal Mail was transformed into a healthy, cash rich company. The Philipps brothers also took the opportunity to modernise the constitution of the company, including providing the powers needed to acquire other companies.

Upon acquisition of the company the fleet consisted of: -

Ships operating the mail service from Southampton to Brazil and Argentina:

Danube 1894 5,946 tons
Nile 1893 5,855 tons
Clyde 1890 5,645 tons
Thames 1890 5,645 tons
Magdalena 1889 5,362 tons



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Photo 5: Nile – RMSP. The Nile and her sister, the Danube, were finest liners that RMSP operated on their South American service

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Photo 6: Danube – RMSP South American mail service

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Photo 7: Magdalena – RMSP South American mail service. An all white paint scheme for RMSP mail ships was introduced in 1900. It was found to be very difficult to maintain, especially after coaling ship and the black hull scheme was reinstated in 1902

Ships operating a mail service to the West Indies:

Tagus 1899 5,545 tons
Trent 1899 5,573 tons
Severn 1898 3,760 tons
Atrato 1889 5,366 tons
Orinoco 1886 4,434 tons



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Photo 8: Orinoco – RMSP West Indies mail service

West Indies inter-island passenger steamers:

Esk 1882 2,145 tons
Eden 1882 2,145 tons
Solent 1878 1,908 tons


The company also owned 13 cargo ships.

In a typically audacious move Pirrie approached the Philipps brothers and persuaded them to accept an apparently favourable arrangement for the construction of the ships needed to replace Royal Mail’s obsolete passenger liners. This was despite Pirrie being regarded by many as a traitor, because of his involvement with IMMC and the fact that the brothers had seized control of Royal Mail on the basis of the national hostility towards IMMC. Pirrie seems to have been encouraged by the similarities between Morgan and the Philipps brothers. Both Morgan and JWP were railroad men and all three men lacked passenger shipping experience. The arrangements established by Pirrie were undoubtedly vital to Harland & Wolff, but in the longer term neither of the shipping groups survived their association with the shipbuilder.



Harland & Wolff


The central character in the formation of Harland & Wolff was Gustav Christian Schwabe who moved from Germany to Liverpool as a young man and became a prominent Liverpool financier. Schwabe married Helen Dugdale, the daughter of a very wealthy Lancashire family. One of Helen’s cousins – Mary Dugdale was married to a member of the Harland family – an uncle of the shipbuilder, Edward James Harland. To add to the family connections, Gustav’s sister, Fanny Schwabe, married Moritz Wolff of Hamburg and had a son – Gustav Wilhelm Wolff who was born in 1834.


Edward James Harland was born in May 1831 and was apprenticed to the engineers, Robert Stephenson & Co in Newcastle, during which time he became fascinated by shipbuilding. He also became friendly with Schwabe and Gustav Wolff who was staying in Schwabe’s Liverpool house whilst studying engineering. In 1854 Harland accepted the job as shipyard manager in the Belfast yard of Robert Hickson & Co, but found to his dismay that the company had serious problems, with an incompetent, overpaid workforce and very nervous bankers. Harland eventually succeeded in turning the business around by resorting to the drastic action of sacking the entire workforce and replacing them with skilled shipbuilders from the Clyde and the Tyne, who trained those local men who were prepared to return.


In 1856 Wolff joined Hickson’s, firstly as a junior manager, then from 1857 as Harland’s personal assistant. In 1858 Harland purchased the shipyard for £5,000, with advice and financial assistance from Schwabe. He moved to a larger site on Queen’s Island in Belfast and built a new shipyard, with Wolff as chief draughtsman before the two friends joined together to form Harland & Wolff Ltd in 1861. Schwabe was also a junior partner in the Liverpool shipping business of John Bibby. He overcame the difficulty of finding an initial customer for Harland & Wolff by persuading Bibby to order a steamer from the new shipyard. This contract was so successful that Bibby took 18 of the first 21 ships to be built by Harland & Wolff. Frederick Leyland was also a Bibby junior partner and he placed new orders with Harland & Wolff after 1863 when he became an independent shipowner.


Thomas Henry Ismay was a founding director of the transatlantic National Line in 1863 and a sailing ship owner in his own right. In 1869 he had dinner with Schwabe, during which he disclosed his ambition to establish a fleet of the finest transatlantic steamers. During a game of billiards after dinner, Schwabe offered to finance Ismay’s ships, provided they were designed and built by the fledgling Harland & Wolff. As a result the Oceanic Steam Navigation Co Ltd was founded on 6 September 1869. The company was invariably known as the White Star Line, because of the design of its house-flag. Four express steamers were ordered from H&W. As Schwabe was an investor in both companies the contract was placed on the basis of cost plus 4% for overheads and profit. It was a major step for both companies, as H&W had not previously built a passenger liner. These ships were so far ahead of the liners being operated by Cunard and Inman that these rival companies were obliged to order new tonnage. White Star responded by ordering bigger and better vessels from Harland & Wolff and a competitive construction race was pursued by the three lines to the great benefit of the shipyards.


In 1875 the original H&W partnership was expanded to include the yard manager, Walter H Wilson and the chief draughtsman, William J Pirrie. Both Harland and Wolff were content to step down and Wilson quickly assumed control of production, while Pirrie became responsible for commercial and financial matters. Pirrie possessed great financial acumen and considerable personal charm that made him a formidable salesman. He quickly realised that although Harland & Wolff had developed the technical skills needed to produce ships of the highest quality, its costs of construction were appreciably higher than shipyards of similar competence located on the Clyde and the Tyne. The survival of Harland & Wolff became dependent upon the conclusion of cost-plus contracts similar to the arrangements established with Oceanic. These contracts formed the basis for other secret agreements with trusted shipowners, collectively known as “the Commission Club”. The remainder of Pirrie’s life was devoted to expanding and maintaining this secret club.

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Photo 9:The four partners in Harland & Wolff during the 10 years from 1875. From left to right they are Gustav W Wolff; Walter H Wilson; William J Pirrie and Edward J Harland

The turn of the century was a very precarious period for Harland & Wolff. Schwabe died in 1897 and Ismay the following year. Morgan’s moves to create IMMC threatened to remove important members of the commission club, who’s continued cost-plus orders were essential for the shipyard’s survival. To this day very little is known about the details of the formation of IMMC, but by 1901 Pirrie was Morgan’s authorised negotiator and the main contractual arrangements were signed on 4 February 1902. The major wholly owned companies were American, Atlantic Transport, Dominion, Leyland, Red Star and White Star. Hamburg Amerika and Norddeutscher Lloyd (both with substantial Schwabe investment) were independent partners and Holland America was jointly controlled. The final and essential participant for the success of the venture was Cunard, but it refused to join the party. Pirrie felt that Cunard would be obliged to join the scheme in order to survive. He totally failed to foresee the outraged reaction of the British public to the scheme. There were wild fears that the British merchant marine was being taken over by American/international finance/Imperial German/Jewish interests. Lord Inverclyde of Cunard was able to exploit the public reaction to make the British Government finance two new express liners – Lusitania and Mauretania. The absence of Cunard in turn led to the failure of the planned public issue of IMMC shares, with most of the stock being left in the hands of the syndicate. Harland & Wolff was left holding investments of over £1,000,000 in IMMC, which seriously endangered the cash viability of the shipyard.


Thankfully the creation of IMMC produced a wave of business for Harland & Wolff on a cost plus basis, which encouraged a variety of banks to provide credit facilities to the shipyard. Pirrie was well aware that this was a temporary reprieve. While Hamburg Amerika initially placed contracts in Belfast, Norddeutscher Lloyd refused because of its obligation to support German industry and clearly Hamburg Amerika would be obliged to follow suit. In addition IMMC was rationalising its fleet, resulting in an order pause. Pirrie needed new commission club buyers, and Royal Mail was a very welcome prize.



Royal Mail’s Renaissance


The first Royal Mail passenger liner to be built on commission club terms was the Aragon of 1905. Pirrie took a direct interest in her design and construction to ensure that Philipps became a Harland & Wolff devotee. She introduced a new and far higher standard of accommodation to both Royal Mail service and to the South American trade. Philipps was delighted with the new ship and a series of orders followed. The ships were not sisters, but a progressive development of Aragon.


The basic specification of Aragon was: 9,588 grt; 513ft 4in length bp; two quadruple expansion steam engines – 875 NHP – 16 kts; 306 First, 66 Second and 632 Third Class Passengers.
Aragon was followed by:


Amazon 1906 10,036 grt
Araguaya 1906 10,537 grt
Avon 1907 11,073 grt
Asturias 1908 12,002 grt



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Photo 10:Aragon - RMSP South American mail service. Aragon was the first RMSP passenger liner to be built by Harland & Wolff. She was the also the first twin-screw liner to be built for RMSP and had almost twice the tonnage of its existing liners

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Photo 11:Araguaya - RMSP South American mail service. Uniquely in this series of RMSP liners, Araguaya was built by Workman, Clark

Philipps and Pirrie


By 1910 Philipps and Pirrie had become very close business confidants. They both had been brought up with strong Christian values that gave each of them a deep sense of their mission in life and had implanted in them a feeling of duty to work long and hard. Pirrie as a Presbyterian and Philipps as an Anglo-Catholic had both been led by their faith to adopt liberal politics.

Pirrie was Lord Mayor of Belfast from 1896 to 1897 and became an Irish Privy Councillor in 1897 and as a result of his financial support for the Liberal Party was created Baron Pirrie in 1906. Philipps was the Liberal MP for Pembroke between 1906 and 1910 and received a knighthood in 1909. Both men had deeply loyal wives and both maintained grand houses in London. While Philipps was a great social success in London, the Pirries failed to gain admission into the society circle. This led Lady Pirrie to develop an intense dislike for Philipps, which was to lead to considerable dispute at the time of Pirrie’s death in 1924.



Orient Line Fiasco


After testing the market in 1874 Anderson, Anderson & Co and F Green & Co joined forces to launch a passenger service to Australia. Fortuitously Pacific Steam Navigation Company had over expanded during the period 1869/74. As a result PSNC had 11 passenger ships laid-up in Liverpool. In 1877 the two partners entered into a profit sharing agreement with PSNC, with a purchase option, covering 4 passenger ships that had been built in 1871. The new service was a success and in 1878 Orient Steam Navigation Co was formed to buy the PSNC ships. The major shareholders in Orient were the Andersons, Green and PSNC.

P&O was also operating an Australia service, but only as a branch connection from their Indian service. This enabled Orient to operate their monthly direct service profitably, despite the lack of a mail subsidy. P&O responded towards the end of 1879 by announcing the introduction of a fortnightly service. Orient had just taken delivery of their first new ship “Orient” (the largest passenger ship in service in the world at that time) and it was decided to match P&O by transferring a further 4 PSNC ships, with the result that the Orient fortnightly service was operational before the P&O service.

In 1883 Orient received its first New South Wales Mail Contract. This required all sailings to be via Suez.

In 1888 a new joint Orient – P&O Mail Contract was awarded, which called for complete co-operation between the two companies. The joint Mail Contract was renewed in 1898.

This harmonious arrangement was shattered in 1906 when RMSP bought PSNC’s interests in Orient. RMSP sought to control Orient and when this was resisted, served notice to withdraw its 4 ships from the joint service in 1909. RMSP thought that Orient would not survive and submitted a bid in its own name for the 1908 Mail Contract renewal. RMSP was utterly defeated. The Mail Contract was again renewed jointly with Orient and P&O, enabling Orient to finance the construction of 6 splendid 12,000 grt liners and RMSP was left with four liners that were of little value to its operations. These were: -

  • Ortona (1899) – Converted into RMSP cruise ship and renamed Arcadian.
  • Oruba (1889) – placed on RMSP South American service.
  • Orotava (1889) – placed on RMSP West Indies service.
  • Oroya (1886) – Scrapped


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Photo 12:Ortona – RMSP. This ship was built for the PSNC share of the Orient Line mail service to Australia.



Shire Line of Steamers


While the struggle to enter the Australian passenger trade was raging, Philipps also began more cautious moves to diversify into the Far East cargo trade. This was in some turmoil because additional shipowners had been attracted into the trade during the Russo-Japanese War, which created a tonnage oversupply when the war ended in 1905. One of the resultant consolidations was the 1906 Jenkins-Brocklebank link-up in the Shire Line. David Jenkins & Co Ltd was established in 1896 to regularise the operation of the long established Jenkins Shire Line. Although the history of Thos & Jno Brocklebank goes back to the early 1700s the company was a newcomer to the Far East. The basis of the joint-venture was that Brocklebank and Jenkins both placed five ships in the Shire Line pool. Each company manned and managed its own ships and shared the financial result of their trading.

One year later, Royal Mail bought the Jenkins business and the Shire Line of Steamers Ltd was formed, with the ships repainted in Royal Mail colours. In 1911 Royal Mail bought the Brocklebank share of the company but the Brocklebank ships were quickly replaced. Some of the replacement ships were transfers from Royal Mail. These and the new-built ships were a considerable improvement on the existing ships engaged in the service. Some had provision for the carriage of steerage class passengers.
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Photo 13:Cardiganshire – Owned by RMSP but operated on the Glen & Shire Far Eastern service. When this Workman, Clark built ship was delivered in 1913 she was the largest and fastest ship on the route



The Sir Alfred Jones Shipping Group


As 1909 drew to a close, the finances of Harland & Wolff had largely recovered from the cash problems created by its involvement in IMMC. For the first time in 10 years Harland & Wolff had discharged its overdrafts. Then on 13 December 1909 Pirrie’s great friend Sir Alfred Jones died. Jones had established a major shipping empire, under the overall title of Elder, Dempster & Co. Despite the size of the business, it was still a private partnership, controlled by Jones, with personal participation from Pirrie. There was no obvious successor to Jones and only one of his executors (a banker) was still alive. Pirrie, in partnership with Owen Philipps immediately stepped in to resolve the situation.

On 31 March 1910, they formed Elder, Dempster & Co Ltd, with a capital of £1,910,000. The odd £10,000 consisted of management shares held exclusively by Philipps and Pirrie and as Philipps held the majority, he controlled the new company. Astonishingly they persuaded the Jones family to sell their business for only £500,000, made up of £200,000 cash, £200,000 in debenture loan stock and £100,000 in preference shares. As a consequence, the new company started life with considerable cash reserves. It also took over a fleet of 109 ships: -

  • African Steam Ship Co – 24 ships
  • British & African S N Co – 36 ships
  • Elder, Dempster Line Ltd – 26 ships
  • Imperial Direct West India Mail Service Ltd – 5 ships
  • Cie. Maritime Belge du Congo – 3 ships


With the exception of Imperial Direct, all of these firms were engaged in the provision of services from Britain and Europe to West Africa and South West Africa. The individual companies had originally operated services from different terminal ports, but by 1910 they were providing a unified service as Elder Dempster and the separate companies existed for financial, rather than operational, reasons. Ships were frequently transferred between companies, but it is believed that at the time of acquisition the passenger ships in the fleet were owned as follows: -

Africa Steamship Co:

Karina 1905 4,222 tons
Zungeru 1904 4,075 tons
Tarquah 1902 3,859 tons
Nigeria 1901 3,755 tons
Fantee 1899 3,649 tons
Dakar 1898 4,081 tons
Mandingo 1899 4,091 tons
Aro 1898 3,805 tons
Coomassie 1890 2,625 tons


British & African S N Co:

Onitsha 1910 3,921 tons
Mendi 1905 4,230 tons
Zaria 1904 3,243 tons
Burutu 1902 3,863 tons
Akabo 1902 3,806 tons
Bornu 1899 3,232 tons
Sokoto 1899 3,080 tons
Olenda 1898 3,171 tons
Axim 1894 2,793 tons
Bakana 1894 2,793 tons
Batanga 1893 2,808 tons
Sathurst 1893 2,808 tons
Accra 1893 2,808 tons
Bony 1891 2,702 tons


Elder Dempster & Co:

Gando 1907 3,809 tons
Salanga 1907 3,879 tons


Elder Line Ltd:

Akassa 1910 3,919 tons
Jamaica 1908 1,138 tons
Falaba 1906 4,806 tons
Sobo 1898 3,652 tons


Imperial Direct

Port Kingston 1904 7,586 tons
Port Antonio 1901 4,458 tons
Port Maria 1901 2,910 tons
Port Royal 1900 4,455 tons
Port Henderson 1883 5,026 tons


Cie. Maritime Belge du Congo

Leopoldville 1910 6,365 tons
Bruxellesville 1909 5,771 tons
Albertville 1906 4,792 tons


Elder Dempster completely dominated the West African trade, owning coastal steamers, tugs, barges and shore-based service companies.

Imperial Direct was formed in 1901 to provide a mail and passenger service from Bristol to Jamaica. The mail contract was not renewed in 1910. As it was almost impossible to operate any passenger liner service without a mail subsidy, the company was wound-up. The ships listed above were sold. A new company – Imperial Direct Line Ltd – was formed as a financial owner of ships engaged in the African trade.

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Photo 14:Elmina – African S S Co. Elmina was one of the unusual, flush deck passenger liners built pre-war for Elder Dempster

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Photo 15:Akabo – British & African S N Co. Delivered by Sir Raylton Dixon & Co Ltd, Middlesbrough as the last of the five vessel Jebba class

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Photo 16:Falaba – Elder Line. Another of the pre-war flush deck passenger liners built for Elder Dempster.

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Photo 17:Onitsha - British & African S N Co. Note the surf boats carried on the poop, which were used to access coastal settlements in West Africa

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Photo 18:Abinsi – Elder Line. This ship was built in 1910 as Leopoldville for Cie. Maritime Belge du Congo. In 1914 she was transferred to the British flag, under Elder Line management and renamed Abinsi



Pacific Steam Navigation Company


In the early years of the twentieth century, Royal Mail began to face increasingly tough competition from European shipping companies. Unlike British routes to many other parts of the world, there was not an Imperial connection to support Royal Mail’s services to South America. To make the most of the British support in the region, Philipps embarked on a programme to acquire the major British shipping companies operating to the South America starting with Pacific Steam Navigation Company (PSNC), which was taken over by Royal Mail in 1910 at a price of £1,500,000. PSNC was established by Royal Charter in 1840. Its major activities were an express coastal passenger and mail service from Valparaiso to Panama (connecting to a Royal Mail service to UK) and a longer ocean service from Liverpool to Callao (terminated at Valparaiso from 1904) via the Straits of Magellan. Both services faced intermittent difficulties because of South American political disputes. In addition the completion of the Argentina – Chile railway and the construction of the Panama Canal both threatened a major upheaval in the operations of PSNC. Upon acquisition of the company the fleet consisted of: -


Passenger liners operating from Liverpool to Spain – Portugal – Brazil – Argentina – Straits of Magellan – Chile:


Orcoma 1908 11,546 tons
Ortega 1906 7,970 tons
Oriana 1906 8,086 tons
Oronsa 1906 7,989 tons
Orita 1903 9,266 tons
Oravia 1897 5,321 tons
Oropesa 1895 5,303 tons
Orissa 1895 5,317 tons



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Photo 19: Orcoma – PSNC. Delivered in 1908, by Wm Beardmore& Co, Glasgow as the largest and fastest vessel on the service to the West Coast of South America via the Straits of Magellan

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Photo 20: Orita – PSNC. Built in 1903, by Harland and Wolff, for the service to the West Coast of South America via the Straits of Magellan

Passenger and mail service from Valparaiso to Callao – Guayaquil – Panama and Passenger service from Valparaiso to South Chilean ports:

Quillota 1907 3,674 tons
Quilpue 1907 3,669 tons
Panama 1902 5,981 tons
Victoria 1902 5,967 tons
Mexico 1902 5,549 tons
California 1902 5,547 tons
Guatemala 1899 3,227 tons
Chile 1896 3,225 tons
Peru 1896 3,225 tons
Manavi 1888 1,089 tons
Quito 1885 1,041 tons
Ecuador 1881 1,768 tons



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Photo 21: Panama –PSNC. One of the high quality fleet of PSNC steamers that provided a coastal mail and passenger service along the Pacific coast of South America

The company also owned 16 cargo ships of 3,000 to 4,000 tons engaged on the trade from Liverpool to Spain, Portugal, Brazil, Argentina, the Straits of Magellan, Chile and Peru. Many carried Spanish and Portuguese emigrants as steerage passengers.


From 1910, the large PSNC fleet progressively reduced in size.



Union-Castle


In 1911, Pirrie encouraged Philipps to initiate his biggest expansion to date, again for the benefit of Harland & Wolff. Union-Castle Mail Steamship Co Ltd (U-C) was created in 1900, as a result of the merger of Union Mail Steamship Co Ltd and the Castle Mail Packet Co Ltd. These two companies had for the previous 25 years dominated the trade from UK to South Africa. The merged company was under the control of Sir Donald Currie of Castle M P Co. The ships retained their existing names, but all subsequent deliveries received Castle names.

Union was a member of the H&W Commission Club with Gustav Wolff as one of Union’s directors. Castle had no previous connection with the Belfast shipbuilders. Currie immediately withdrew the merged company from the club, but he continued to place some contracts with the yard on a competitive basis and Gustav Wolff remained a director of U-C. Sir Donald Currie died in 1909 leaving a vacuum in the U-C management, which Wolff sought to exploit through Philipps. In December 1911 the £10 shares in U-C were standing at about £12 on the stock market, when Philipps made a lavish offer of £32.50 per share for the company, plus £700,000 for the resignation of Donald Currie & Co as managers. These proposals were of course accepted and the takeover was completed in April 1912. The purchase was made jointly by Royal Mail and Elder Dempster. It provided the group with an additional 44 vessels totaling 319,514 grt. One of the new U-C directors was Lord Pirrie and U-C immediately rejoined the H&W Commission Club. Later in 1912 U-C entered into a new 10 year South African mail contract, whereby the company undertook to build 6 mail steamers of 15,000 tons each. None were delivered prior to the outbreak of war.


Upon acquisition of the company the fleet consisted of: -


Mail Steamers operating from Southampton to Madeira – Cape Town – Port Elizabeth – Durban:

Edinburgh Castle 1910 13,326 tons
Balmoral Castle 1910 13,361 tons
Kenilworth Castle 1904 12,975 tons
Armadale Castle 1903 12,973 tons
Walmer Castle 1902 12,546 tons
Saxon 1900 12,385 tons
Kildonan Castle 1899 9,662 tons
Kinfauns Castle 1899 9,664 tons
Briton 1897 10,248 tons



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Photo 22: Balmoral Castle – Union-Castle. Built by Fairfield’s in 1910 for the South African mail service

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Photo 23: Kinfauns Castle – Union-Castle. Built by Fairfield’s in 1899 for the South African mail service

Intermediate Steamers, largely operating from London to East Africa via Suez, but some were also engaged on a route from Southampton to East Africa via Cape Town:


Gloucester Castle 1911 7,999 tons
Guildford Castle 1911 7,995 tons
Galway Castle 1911 7,998 tons
Grantully Castle 1910 7,617 tons
Garth Castle 1910 7,612 tons
Durham Castle 1904 8,217 tons
Dunluce Castle 1904 8,114 tons
Dover castle 1904 8,271 tons
Carisbrook Castle 1898 7,626 tons
Braemar Castle 1898 6,266 tons
Avondale Castle 1897 5,531 tons
Dunvegan Castle 1896 5,958 tons
Tintagel Castle 1896 5,531 tons
Galeka 1899 6,772 tons
German 1898 6,763 tons
Goorka 1897 6,287 tons
Gascon 1897 6,287 tons
Gaika 1897 6,287 tons
Guelph 1894 4,917 tons
Goth 1893 4,738 tons



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Photo 24: Gloucester Castle – Union-Castle. Built by Fairfield’s in 1911 for the South African intermediate service

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Photo 25: Dunvegan Castle – Union-Castle. Built by Fairfield’s in 1896 for the South African mail service, but from 1894 was used for cruising and from 1910 was placed on the intermediate service.

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Photo 26: Galician – Union-Castle. Delivered in 1900; the final ship in a series of 10 intermediate ships built by Harland & Wolff for Union Line


The Extra Steamers were bought for an anticipated surge in emigrants after the Boer War, which did not in fact materialise. They were employed on a service from London to Walvis Bay, Cape Town and East Africa:


Comrie Castle 1903 5,167 tons
Cluny Castle 1903 5,147 tons
Cawdor Castle 1902 6,235 tons
Berwick Castle 1902 5,883 tons
Alnwick Castle 1901 5,893 tons



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Photo 27: Cluny Castle – Union-Castle. An extra service steamer built by Barclay, Curle in 1903


The company also owned 6 cargo ships of 3,000 to 5,000 tons largely engaged on the trade from South Africa to New York. Small feeder cargo ships were employed in Europe and on the South African Coast.


The 1890 built former mail ship Dunottar Castle was chartered to Sir Henry Lunn Ltd for use in that company’s cruise activities.

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Photo 28: Dunottar Castle – Union Castle. This was the company’s first two-funnel liner when she was built by Fairfield’s in 1890



Lamport & Holt


William James Lamport and George Holt entered into partnership as shipbrokers, charterers and traders in 1845. George Holt was the elder brother of Alfred Holt, who also worked for the partnership before becoming the founder of the famed Blue Funnel Line. In 1863 the partners began steamship services to South America and in 1865 formed the Liverpool, Brazil & River Plate Steam Navigation Co Ltd. The formal name was ignored by the public and the service was invariably known as Lamport & Holt Line. The company was so successful that it was awarded valuable mail contracts to Brazil and Argentina by both the British and Belgian governments.
In 1911 the managing partnership was converted into a limited company – Lamport & Holt Ltd. Behind the scenes Philipps was negotiating with the families to take over the new management company. Agreement was reached on the basis of cash payment, plus shares in Royal Mail and Elder Dempster. At this time three Lamport & Holt passenger liners were under construction for the company’s River Plate – New York service. These ships were: -


Vestris 1912 10,494 tons
Vauban 1912 10,660 tons
Vandyck 1911 9,872 tons



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Photo 29: Vauban – Lamport & Holt. Built by Workman, Clark in 1912 for the Lamport & Holt New York – River Plate service

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Photo 30: Vandyck – Lamport & Holt. Built by Workman, Clark in 1911 for the Lamport & Holt New York – River Plate service

The existing ships on the New York – South America service were: -

Vasari 1908 8,401 tons
Verdi 1907 6,578 tons
Veronese 1906 7,877 tons
Byron 1901 3,909 tons
Tennyson 1900 3,901 tons


The company’s Liverpool – South America service was operated by 19 cargo ships, many of these were live cattle carriers. In addition a subsidiary Societe de Navigation Belge Sud-Americaine provided a service from Antwerp to South America.




Further RMSP Liner Deliveries


In 1912 RMSP took delivery of Arlanza – the first of a quartet of larger and grander liners for the South American mail service. They were triple-screw steamers, with the classic H&W machinery specification of triple expansion engines driving the wing shafts, exhausting to a low-pressure turbine driving the centre shaft.


The basic specification of Arlanza was: 15,044 grt; 570ft length bp; two triple expansion 4 cylinder steam engines, plus one low-pressure steam turbine – 14,000 IHP – 17 kts; 400 First, 230 Second and 760 Third Class Passengers.


The other ships in the class were: -

Andes 1913 15,620 GRT
Alcantara 1914 15,831 GRT Built at Govan but completed at Belfast
Almazora 1915 16,034 GRT Completed as an Armed Merchant Cruiser



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Photo 31: Andes – RMSP. Seen at Southampton after completing her maiden voyage on the PSNC service from Liverpool to Valparaiso, before joining her regular RMSP Southampton – River Plate mail service



Glen Line


The Glasgow Gow and McGregor families had been in business as brokers and shipowners serving the Far East trade since 1860, marketing their service as Glen Line. It was only in 1910 that the shipowning side of the business was incorporated as Glen Line Limited, with McGregor Gow & Company as its managers. In 1912 Philipps used Elder Dempster to acquire all the shares in Glen line Limited. The operation of company’s fleet was integrated into the parallel Shire Line service to the Far East, but the companies remained separate and independent, although their managers were merged as McGregor, Gow, Norris and Joyner Ltd.

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Photo 32: Glenlogan – Glen Line. 1896; 5,723 tons; ex Houlder Brothers Denton Grange



Nelson Line


James Nelson began his career as a butcher in County Meath, Ireland and from this trade expanded his business into cattle breeding in 1880. He began to export cattle to Liverpool, before opening an English chain of retail branches that was so successful that his Irish exports were insufficient to cope with the demand. This resulted in his son Hugh being sent to Argentina to found a new source of supply, leading in turn to the establishment of a shipping line to transport refrigerated meat to Liverpool and later to London for the expanding chain of retail outlets.

The shipping company quickly grew and passenger vessels were introduced in 1901 and the passenger service considerably expanded in 1910/11, by taking delivery of ten 7,000 ton passenger liners. Nelson Line had become the foremost rival to Royal Mail Line. The Royal Mail’s First Class fare from Southampton to Buenos Aires was £47, but only £34 with Nelson, with a more spacious cabin, but less grandiose public rooms. In 1913 Royal Mail bought the Nelson business and continued to operate the company as a provider of cheap reliable transportation to underpin the Royal Mail express service. The fleet at the time of acquisition consisted of: -


Highland Warrior 1911 7,485 tons
Highland Piper 1911 7,490 tons
Highland Loch 1911 7,493 tons
Highland Brae 1910 7,365 tons
Highland Scot 1910 7,343 tons
Highland Glen 1910 7,343 tons
Highland Corrie 1910 7,344 tons
Highland Pride 1910 7,469 tons
Highland Laddie 1910 7,117 tons
Highland Rover 1910 7,244 tons



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Photo 33: Highland Pride – Nelson Line. Built in 1910 by Russell & Co, Port Glasgow. Of the 10 ships in the class only Highland Pride and Highland Rover had a partially enclosed promenade deck in the lower superstructure.


The Nelson Line passenger ships were supported by 8 cargo liners.



RMSP Meat Transports Ltd


The Nelson meat shipping service from the River Plate was re-enforced in 1914 by the formation of the Royal Mail subsidiary RMSP Meat Transports Ltd.

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Photo 34: Navasota – RMSP Meat Transports. Swan Hunter & Wigham Richardson 1917; 8,803 tons



Philipps’ Financial Policies


In the twelve years from his appointment as chairman of Royal Mail to the outbreak of the First World War Philipps had transformed the company from a dying, outdated shipping backwater to the flagship of a dynamic leading British shipping group. This breakneck expansion was based upon very dangerous internal financial policies.


The Philipps shipping empire was not organised like a modern group, with a parent company and a hierarchy of subsidiaries. Instead there was a network of cross-shareholdings between the companies, which became more complex with each year. Philipps controlled the empire through his ownership of management shares and his personal shareholdings in the relatively small management companies. Only Philipps understood the entire financial picture.


Each of the companies in the group was required to make an annual payment into the centre equal to 5% of the company’s capital employed. Most of this money was used to buy companies to expand the group. This was fine during periods when shipping was thriving, but the payment was required every year regardless of the company’s financial performance. In bad years companies were required to make the annual payment from reserves. If a company exhausted its reserves, it was expected to use bank borrowings to maintain its annual payment.


Royal Mail Group also adopted a policy of issuing debenture loan stock to its existing shareholders to raise cash for new building and capital expenditure. The policy avoided increasing the number of shareholders, but it also concentrated power in Philipps and a small group of directors by enabling them to raise and use money as they saw fit, without the discipline of needing to explain the board’s actions to the entire body of shareholders and to obtain their approval.


The consequences of these financial policies are related in the following Parts of this history.



Bibliography


A complete Bibliography for all Parts of this Article is given at the end of Part 7


Photographs


Many of the photographs used to illustrate this article are from the very large Allen Collection hosted by Benjidog at: -
http://www.benjidog.co.uk/allen

Most of the remaining photographs are from the Ships Nostalgia Galleries, which are available for use in the Directory. Special thanks are extended to Marconi Sahib for his SN postings from the Dickinson collection and Linerrich for providing photographs from his private collection. Both SN Members kindly provided photographs specifically to support this article. The individual photographs used in Part 1 have been provided as follows: -

  1. Photo in the Public Domain on several internet sites
  2. Ships Nostalgia – Marconi Sahib
  3. Benjidog – Allen Collection
  4. Wikipedia
  5. Linerrich
  6. Linerrich
  7. Linerrich
  8. Benjidog – Allen Collection
  9. Harland & Wolff
  10. Ships Nostalgia – Linerrich
  11. Ships Nostalgia – Brent Chambers
  12. Linerrich
  13. Benjidog – Allen Collection
  14. Benjidog – Allen Collection
  15. Benjidog – Allen Collection
  16. Ships Nostalgia – Eldersuk
  17. Benjidog – Allen Collection
  18. Benjidog – Allen Collection
  19. Benjidog – Allen Collection
  20. Benjidog – Allen Collection
  21. Ships Nostalgia – Marconi Sahib
  22. Ships Nostalgia – Marconi Sahib
  23. Ships Nostalgia – Dick Sloan
  24. Ships Nostalgia – Linerrich
  25. Benjidog – Allen Collection
  26. Ships Nostalgia – Marconi Sahib
  27. Linerrich
  28. Linerrich
  29. Linerrich
  30. Ships Nostalgia – Linerrich
  31. Ships Nostalgia - Bobby
  32. Ships Nostalgia – Marconi Sahib
  33. Linerrich
  34. Benjidog – Allen Collection


Article written and compiled by Fred Henderson

Royal Mail Steam Packet Company Kylsant Empire
Intro Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7


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