Contents
When Owen Cosby Philipps was appointed chairman of Royal Mail Steam Packet Co in 1903 it was moribund. By the outbreak of the First World War, he had transformed the company into the flagship of a dynamic leading British shipping group. Most of this expansion was undertaken in collaboration with his friend and close business associate, William James Pirrie of Harland & Wolff (H&W). The story of this breakneck expansion is told in Parts 1 and 2 of this history, culminating in Philipps joining Pirrie to take financial control of H&W in 1918. Part 3 relates the post-war history of their joint endeavour. H&W had such a major impact upon the finances and activities of the Royal Mail group that the shipbuilder's activities dominate Part 3 of this history.
The two friends, who were in control of a massive shipping and shipbuilding enterprise, were well aware of the problems facing them. Sir Owen Philipps was concerned to re-establish the Royal Mail group operations on routes that had been abandoned during the war. In some cases the services had been taken over by American and neutral shipping companies. His companies needed to refit their surviving fleets and most needed to replace tonnage lost during the war. Lord Pirrie knew that despite his massive Clyde-based wartime expansion of H&W, his facilities were incapable of meeting the immediate demand from companies in the Commission Club. Despite the precarious nature of H&W's finances he felt obliged to complete the construction of the big East Yard that had been started in Belfast at the behest of the Government and to further expand his Clydeside facilities.
The Commission Club[edit]
The formation of H&W was assisted by the Liverpool financier Gustav Christian Schwabe and his subsequent involvement in Ismay's White Star Line and other new shipping companies was usually on the basis of work being placed with H&W on cost plus contracts, through secret arrangements known as the "Commission Club".
Pirrie succeeded in bringing other shipping lines to H&W on the same basis. Unfortunately cost-plus contracts do not provide any incentive for the shipyard management to save cost. As a result, by the early years of the 20th Century the H&W Belfast almost invariably lost money on fixed price contracts, obtained in open competition with other yards. Pirrie succeeded in expanding the Club to include RMSP group, the transatlantic IMMC group, P&O, Andrew Weir and Bibby.
It was a feature of the Commission Club that the members should place all their work with H&W. This provision helped Pirrie to disguise how uncompetitive H&W's prices were. It meant however, that Pirrie was obliged to expand the H&W facilities to meet the tonnage requirements of the Club members. This was a major problem for H&W in the immediate post-war scramble for replacement ships.
Standard Ship Designs[edit]
During the First World War the British Government was slow to appreciate that the German U-Boat campaign posed a critical threat to Britain's survival. In the early years of the war most British shipyards were required to concentrate on naval production, despite the mounting merchant ship losses. It was 1917 before the Government decided to construct a large number of standard cargo ships. Work on all existing merchant contracts was suspended and new contracts from private owners prohibited for the duration of hostilities.
In contrast to many UK shipbuilders, Pirrie (who had been appointed Controller General of Merchant Shipbuilding) was an enthusiastic backer of the standard ship programme and H&W quickly established itself as the most prolific producer of these vessels. At the Armistice every berth in the H&W group was occupied by standard ships. Unlike most shipbuilders Pirrie continued the entire programme of ships allocated to H&W, modifying the designs to suit peacetime requirements. Although the concept had been criticised during the war by both shipowners and shipbuilders, it was found that in service the ships proved to be good, serviceable cargo vessels. The construction of standard ships greatly increased shipyard productivity and Pirrie was determined to preserve these gains in the peacetime programme. Pirrie's enthusiasm for standard ships probably influenced Philipps and Lord Inchcape (the chairman of P&O) to take over the 137 standard ships under construction in UK yards in January 1919. Out of that total 36 vessels were building in H&W group shipyards.
Photo 1: New Texas - Elder Dempster. An N-Type standard ship built by Harland & Wolff, Belfast: 6,568 tons; 11 knots
Photo 2: Siris - RMSP. A B-Type standard ship built by Caird's, Greenock. 5,242 tons; 10 knots
Bullard King[edit]
In 1850 Samuel Bullard and Daniel King became partners to operate sailing ships. The firm prospered and in 1879 it bought its first steamer, to initiate their Natal Direct Line. Their ships did not call at Cape Town, but made directly from London to Durban, thus providing a faster service. In 1919 the partnership was converted into Bullard, King & Co Ltd and sold to Union-Castle, who continued to operate the Company as an independent entity. A number of inter-company vessel transfers were made, including the Extra Service ships Comrie Castle and Cluny Castle ( Part1 - Photo 27) transferred in 1924.
Photo 3: Umvoti - Bullard King. Union-Castle extra steamer Comrie Castle transferred in 1924
Photo 4: Umlazi - Bullard King. Built in Canada in 1918 as War Earl, acquired 1920
South American service problems[edit]
Pre-war, the South American services were a primary focus of the Royal Mail group, but re-establishing these operations after the Armistice presented the group with great difficulties. The opening of the Panama Canal in August 1914 changed the commercial balance of the region at a time when the British and European liner services were disrupted by hostilities and American shipping companies moved in to fill the vacuum and divert trade to the industrial North East of the USA.
Pacific Steam Navigation Co was the group company most effected by these developments. Its service via the Straits of Magellan was now obsolete and its important West Coast local and feeder services were challenged by the ocean liners sailing direct, via Panama. To add to its difficulties first Chile, then Peru passed legislation banning foreign flag vessels from operating between ports within their countries and PSNC abandoned its coastal routes in 1923, selling most of its express steamers to local owners.
PSNC tried to establish new services from the West Coast to New York, but was unable to compete with the Americans. As a consequence a number of PSNC vessels were chartered to other operators or transferred within the group, with RMSP being the main recipient. Royal Mail was also experiencing difficulties and in 1920 it discontinued the passenger service from UK to the West Indies that it had originally opened when the company was first established.
Despite this surplus of South American tonnage RMSP bought the 1903 built Aberdeen Line vessels Miltiades and Marathon in 1920/21, renaming them Orcana and Oruba. These ships had been lengthened in 1912 and a dummy funnel added to each ship. In 1922 they were transferred to PSNC and placed on a Round South America service. The ships proved to be too expensive to operate and the service was abandoned after two voyages. Both ships were laid-up in Liverpool and then Dartmouth and scrapped in1924.
Photo 5: Oruba - RMSP
Royal Mail transatlantic service[edit]
The South American developments left RMSP with surplus passenger tonnage at a time when there appeared to be an opportunity for the company to establish itself on the North Atlantic. The large German passenger fleet had been handed to the Allies as war reparations, the fleets of the other principal North Atlantic lines had been depleted during the war, shipbuilding costs had greatly increased and there was a considerable passenger demand from families seeking to be reunited in the aftermath of war. In 1920 RMSP announced that it would start a transatlantic service the following year.The ex-PSNC liner Orbita took the first sailing from Hamburg on 30 April 1921, sailing to New York via Southampton and Cherbourg. Unfortunately RMSP could hardly have chosen a worse time to start the service. The United States Immigration Act came into force in June 1921, restricted annual transatlantic immigration to 3% of the US population recorded in the 1910 census, segregated original nationality by nationality. This caused a drastic reduction in the number of westbound, third class passengers.
Nevertheless, RMSP continued the service, with Orduna and Oropesa initially joining the route and many other units from both the RMSP and Lamport & Holt fleets sailing from time to time on the service. The operation was marketed as "The Comfort Route" and the ships soon gained public esteem through the excellent accommodation, good food and service, provided at reasonable fares. The Company's best year was 1923, when 14,795 westbound passengers were carried on 33 voyages. As this represented an average load factor of less than 45% of capacity, the service could not be considered a financial success.
The German fleets made a very rapid recovery, leading RMSP to terminate the majority of its sailings at Southampton in 1925 and discontinue the Hamburg calls entirely in 1926. The RMSP transatlantic service came to an end in 1927 upon the acquisition of White Star.
Photo 6: Orbita - PSNC. Completed as a troopship in 1915, refurbished and delivered to PSNC by Harland & Wolff, Belfast in 1919 and employed on its Liverpool to Pacific coast of South America before being chartered to RMSP in 1921 for its transatlantic service. Sold to RMSP in 1923. 15,678 grt; 14 kts
Photo 7:: Oropesa - PSNC. Delivered to PSNC for its Liverpool to Pacific coast of South America service but was then chartered to RMSP for its transatlantic service 1921 - 1923, before resuming sailings on the PSNC South American route
The return to peacetime work at Harland & Wolff[edit]
The refurbishment work needed to enable passenger ships to resume passenger service after their wartime duties provided welcome employment for the H&W outfit trades, while the war standard cargo ships were being completed in the shipyards. One remarkable conversion was Elder Dempster group's Aba. She was a large motor ship that had been ordered by the Imperial Russian Government from Barclay, Curle. When the October Revolution occurred, she was taken over by the British Shipping Controller and on completion in 1918 she was allocated to Glen Line as their Glenapp. In 1920 she was bought by British & African SN (Part of Elder Dempster) and converted into the first ever diesel powered large passenger ship.
Photo 8: Aba - British & African S N. 7,937 tons; 255 First Class; 140 Second and Third Class Passengers
A number of passenger liners that were under construction during the war were completed as very large cargo ships. The PSNC liner Orca was one example. She returned to H&W in 1921 and was finally completed as a passenger vessel in 1922.
Photo 9: Orca - PSNC. Upon completion her conversion into a passenger ship in 1922, Orca was placed on the RMSP transatlantic service and was transferred to RMSP ownership in 1923
As the war programme was cleared from the shipyards, work resumed on suspended Commission Club contracts. The Union-Castle mail service liner Arundel Castle was laid down in Belfast as Amroth Castle in 1915, but work had to be suspended because of shortages of materials. She was launched as Arundel Castle in 1919 and completed in 1921. H&W designed her external appearance as a rather bizarre miniature Titanic. Although only 19,000 tons she was supplied with four thin cigarette-like funnels producing a somewhat ungainly looking vessel, in marked contrast to the elegant pre-war Union-Castle designs. The internal layout of her public rooms, dining arrangements and cabins was much more satisfactory however and established the plan for all subsequent Union-Castle liners until the late 1950s. As part of the agreement to allow RMSP to become the major shareholder in H&W, the Company sub-contracted the sister ship, Windsor Castle, to John Brown at Clydebank. Her construction was also delayed by the war and she was only finally delivered in 1922.
Photo 10: Arundel Castle - Union Castle
Harland & Wolff's labour and political troubles[edit]
The war effort required an end to the continual work demarcation disputes between the various trade unions and the recruitment of labour from outside the trade union membership. H&W management resisted the Ministry's efforts to enforce greater flexibility of employment of the existing workforce and the introduction of non-union workers, preferring to work in harmony with the unions throughout the war.
This harmony was severely strained after the war. Throughout 1918 there had been calls from the entire trade movement for a shorter working week. H&W offered to restore the pre-war 47 hour week, but this was rejected by the unions, who demanded a 44 hour week. The entire H&W workforce went on strike on 25 January 1919. Other Belfast unions joined the demand and the city was soon without trams, electricity, gas and food supplies were threatened. Pirrie was branded as an enemy of the proletariat, but thankfully the strike committee informed Pirrie that they were becoming alarmed at the growing militancy of some of the strikers. He demanded a restoration of public services and repeated the offer of a 47 hour week. Under threat of military intervention the unions conceded and work resumed on 20 February 1919. The demand for a shorter working week involved the men being paid the same weekly wage for fewer hours, thereby increasing the rate per hour. They expected to actually work the same number of hours as previously, but to be paid more hours carrying an overtime premium, to be based on the new enhanced hourly rate. The dispute rumbled on in many industries, including the shipping industry. Pirrie sought to overcome part of the additional cost by authorising the purchase of a large number of labour saving machines for Belfast.
Philipps and Pirrie had both been loyal supporters of the Liberal Party but neither man had anything in common with the growing number of Liberals who supported nationalisation and state intervention in industry. Philipps became the Unionist MP for Chester in 1916 and held the seat until 1922. In 1923 he was elevated to the peerage as Baron Kylsant, of Carmarthen and Amroth. This change of political allegiance created a permanent rift between Philipps and his brother Lord St Davids. Pirrie could not afford a similar disagreement with Philipps.
Although trade union conflict caused considerable problems for H&W, these were far less than the threat presented by the post war political turmoil in Ireland. Pirrie had originally been a supporter of Home Rule for Ireland but in the face of British political blunders; increasing Irish division and violence he also changed his allegiance to the Unionist Party. In 1920 the British Government enacted legislation that partitioned Ireland and in 1921 the Northern Irish Parliament was established, with Pirrie as one of its senators. He was made Viscount Pirrie in the same year, for his wartime work and for his services in helping to establish the Northern Irish Parliament.
Photo 11: Viscount and Lady Pirrie on their way to the opening of the Northern Ireland Parliament in 1921. He is clearly relishing dressing up in the uniform of an Irish Privy Councillor.
The Southern Irish were deeply divided over acceptance of the Anglo-Irish Treaty with a large faction, including the Irish Republican Army, seeking to establish a parliament in Dublin governing the whole island. The IRA sought to establish arms caches in the Northern Ireland to support an attempted annexation of Ulster. The Belfast Protestant Association in turn sought to expel all Catholic workers from the city's factories. Rioting and disturbances ensued, but thankfully for Belfast civil war broke out between the IRA and the Irish National Army, which caused the IRA to concentrate its forces and arms in the South. Sectarian strife continued in Belfast, but at a lower intensity and over the following year H&W persuaded the trade unions to allow the majority of its Catholic employees to return to work. These massive problems were a major incentive for Pirrie to expand and develop the H&W facilities on the Clyde as an alternative base.
Harland & Wolff expansion on mainland Britain[edit]
At the July 1919 H&W shareholders annual meeting, Pirrie announced that the company had orders for 72 vessels totalling almost 500,000 tons. By the end of the year another 16 orders had been placed, 12 for members of the Royal Mail group and 4 for IMMC. P&O also joined the Commission Club. Pirrie felt that he needed a greater addition to building capacity than H&W would obtain by completing the Belfast East Yard. He authorised a plan to rebuild the Caird & Co's Greenock facility. The work involved filling in the West Harbour and creating six building berths, two of which were over 750 feet long. The workforce was expected to increase from 2,000 to 9,000. Across the Clyde in Dumbarton he instigated a major reconstruction and expansion of the Archibald MacMillan & Son shipyard that was owned by Lamport & Holt, a Royal Mail group member.
While this work was being implemented, Pirrie sought to meet his obligations to the Commission Club members by reserving four berths in John Brown's yard at Clydebank for five years for the Royal Mail group. He also reserved a berth at the Dumbarton yard of William Denny & Brothers to build P&O ships.Pirrie was determined that many of the H&W built ships would be diesel powered by machinery built in the Finnieston works. At the time this H&W facility was managed Frederick Rebbeck, who would become chairman of H&W in 1930. Pirrie ordered Rebbeck to enlarge Finnieston to enable 36 engines to be constructed annually to power 18 ships. This high output volume required a continuous supply of big, high quality steel castings. To provide these components Pirrie and Rebbeck built the UK's largest foundry in Helen Street, Govan. The rationalisation of engine building at Finnieston enabled H&W to sell Caird's engine works at Greenock to their neighbours, Scotts' Shipbuilding & Engineering Co.
In 1914, Pirrie had joined forces with Andrew Weir (the founder of Bank Line), the Earl Grey and Thomas Royden of Cunard, to acquire an option on the controlling interest in the Union Oil Company of California. The four men formed the British Union Oil Company, with the idea of floating the company on the London Stock Exchange, to raise the funds needed to purchase the Californian company's shares. Unfortunately the outbreak of war forced the promoters to abandon their plan, resulting in them incurring substantial personal losses. In 1919 the four men resurrected the idea of establishing an oil company. Pirrie entered into an agreement with the Irish-American oil tycoon, E L Doheny, who had massive interests in the Mexican oil fields through the Mexican Petroleum Company. The four partners successfully launched the British Mexican Oil Company after reaching an agreement with Doheny whereby he undertook to supply all of the oil that they required for 25 years at a fixed price. Under these arrangements, Andrew Weir - now Baron Inverforth - took responsibility for the British company's management and it was agreed that all tankers and barges would be ordered from H&W on a commission basis.
Photo 12: Andrew Weir - Lord Inverforth
Photo 13: Inverurie - British Mexican Petroleum Co. The ship is an N-Type cargo ship completed as a tanker with cylindrical tanks in the holds. 6,907 tons; 1922
The colossal volume of business on H&W's books re-awakened Pirrie's concern to guarantee the supply of material and components to the shipyards and he resumed discussions with John Craig, the managing director of the west-of-Scotland steelmakers, David Colville & Sons. In May 1919 it was agreed that H&W would acquire a minority interest in Colville's in exchange for 300,000 H&W ÂŁ1 preference shares. This transaction was a prelude to the joint cash and shares purchase of Colville's by H&W and the Royal Mail group in March 1920 for ÂŁ5,250,000. The new acquisition could produce over 800,000 tons of steel, 80,000 tons of iron and 9,000,000 tons of coal per year. John Craig was retained as the managing director of Colville's and he was also appointed to the H&W board.
When the new Belfast east yard launched its first ship in November 1919 Pirrie became anxious about the ability of the Finnieston Engine Works to produce sufficient diesel engines. He finally accepted Rebbeck's view that the works' realistic output was 24 engines per year and not Pirrie's target of 36 engines. To overcome the anticipated shortfall, H&W bought the Scotstoun factory of the Coventry Ordnance Works in early 1920. This well equipped factory was built in 1910 to manufacture gun mountings for the Fairfield and Clydebank shipyards. Following a series of mergers the factory was now owned by the newly formed English Electric Company and was largely surplus to their requirements. Pirrie acquired it for ÂŁ475,000 and agreed to continue to meet any future Clyde shipyard requirements for naval gun mountings. Very little expenditure would be needed to convert the facility to diesel engine production.
Pirrie also expanded the H&W mainland shiprepair facilities in Liverpool and Southampton and during 1920 began negotiations to establish a presence in London. Lord Devonport, the chairman of the Port of London Authority and a friend of Pirrie's, offered to place all of its repair work with H&W on a commission basis if the Company opened a works in London. Pirrie bought an option on a site at Tilbury, but no further progress was made at this time, because he at last accepted that H&W's expansion was constrained by a of lack of finance.
Resumption of Harland & Wolff's financial difficulties[edit]
The H&W accounts were designed to conceal more than reveal the finances of the Company, nevertheless they do show that in 1918 it had overdrafts totalling ÂŁ885,000 and owed a further ÂŁ962,000 for loans received. During the period 1919 to 1921 H&W invested about ÂŁ6,100,000 in new facilities and equipment and spent a further ÂŁ4,800,000 on outside investments (mainly Colville's) resulting in total cash expenditure of ÂŁ10,900,000.
In the same period the cash earned by the business was only about ÂŁ1,900,000, leaving Pirrie with the problem of raising ÂŁ9,000,000. Some ÂŁ5,700,000 was obtained by selling additional ordinary and (non-voting) preference shares - mainly to the Royal mail group. An additional ÂŁ3,000,000 loans were raised and bank overdrafts increased by ÂŁ600,000.
Furthermore H&W again needed to finance work in progress as a result of its shipbuilding contracts being for civilian clients, rather than the Government. These were largely financed by a resumption of the use of discounted bills of exchange. (See Part 1) The Company's contingent liability under this heading climbed from nil in 1918 to an astonishing ÂŁ9,175,000 in 1921. Once again the Company's finances were seriously overstretched.
The collapse of the post war shipping boom[edit]
In June 1920, H&W completed the conversion of Olympic from its wartime troopship role, back to its transatlantic splendour. To Pirrie's great disappointment, at the ceremonial dinner to mark the occasion, the president of IMMC announced that the deteriorating world trading conditions dictated that White Star could not proceed with the planned construction of a liner to replace her sister Britannic, which had been lost during the war.
Photo 14: Olympic in Thompson Dry Dock, Belfast - Oceanic Steam Navigation Co
At the H&W annual shareholders meeting the following month Pirrie announced that all of the Company's shipyards were fully occupied and that it had 90 vessels on order. He did not mention that there were no inquiries for further contracts. The post war shipping boom had come to a sudden end. Freight rates and the price of second-hand tonnage collapsed so dramatically that the H&W Commission Club arrangements were unable to provide their normal insulation from such problems. In the next few months H&W clients delayed the commencement of work on 10 liners and 2 were cancelled outright. Pirrie was forced to move from breakneck expansion to retrenchment. He ordered closure of building berths in Belfast, Govan and Greenock. Overtime was cut, war bonuses withdrawn, wages cut, staff and workforce laid off.
The ownership of Harland & Wolff in 1921[edit]
In 1921 H&W had in issue 3,000 ordinary shares of ÂŁ1,000 each. The shareholders were: -
- 1 Pirrie's disastrous over-expansion of Harland & Wolff using RMSP funds
- 2 The Commission Club
- 3 Standard Ship Designs
- 4 Bullard King
- 5 South American service problems
- 6 Royal Mail transatlantic service
- 7 The return to peacetime work at Harland & Wolff
- 8 Harland & Wolff's labour and political troubles
- 9 Harland & Wolff expansion on mainland Britain
- 10 Resumption of Harland & Wolff's financial difficulties
- 11 The collapse of the post war shipping boom
- 12 The ownership of Harland & Wolff in 1921
- 13 German war reparations
- 14 The Trade Facilities Act and the Northern Ireland Loans Guarantee Act
- 15 Adda - The First New-Built Diesel Powered Large Passenger Liner
- 16 Harland & Wolff Contractual Difficulties
- 17 The Death of Viscount Pirrie
- 18 Kylsant obliged to take control of Harland & Wolff
- 19 Bibliography
- 20 Photographs
When Owen Cosby Philipps was appointed chairman of Royal Mail Steam Packet Co in 1903 it was moribund. By the outbreak of the First World War, he had transformed the company into the flagship of a dynamic leading British shipping group. Most of this expansion was undertaken in collaboration with his friend and close business associate, William James Pirrie of Harland & Wolff (H&W). The story of this breakneck expansion is told in Parts 1 and 2 of this history, culminating in Philipps joining Pirrie to take financial control of H&W in 1918. Part 3 relates the post-war history of their joint endeavour. H&W had such a major impact upon the finances and activities of the Royal Mail group that the shipbuilder's activities dominate Part 3 of this history.
The two friends, who were in control of a massive shipping and shipbuilding enterprise, were well aware of the problems facing them. Sir Owen Philipps was concerned to re-establish the Royal Mail group operations on routes that had been abandoned during the war. In some cases the services had been taken over by American and neutral shipping companies. His companies needed to refit their surviving fleets and most needed to replace tonnage lost during the war. Lord Pirrie knew that despite his massive Clyde-based wartime expansion of H&W, his facilities were incapable of meeting the immediate demand from companies in the Commission Club. Despite the precarious nature of H&W's finances he felt obliged to complete the construction of the big East Yard that had been started in Belfast at the behest of the Government and to further expand his Clydeside facilities.
The Commission Club[edit]
The formation of H&W was assisted by the Liverpool financier Gustav Christian Schwabe and his subsequent involvement in Ismay's White Star Line and other new shipping companies was usually on the basis of work being placed with H&W on cost plus contracts, through secret arrangements known as the "Commission Club".
Pirrie succeeded in bringing other shipping lines to H&W on the same basis. Unfortunately cost-plus contracts do not provide any incentive for the shipyard management to save cost. As a result, by the early years of the 20th Century the H&W Belfast almost invariably lost money on fixed price contracts, obtained in open competition with other yards. Pirrie succeeded in expanding the Club to include RMSP group, the transatlantic IMMC group, P&O, Andrew Weir and Bibby.
It was a feature of the Commission Club that the members should place all their work with H&W. This provision helped Pirrie to disguise how uncompetitive H&W's prices were. It meant however, that Pirrie was obliged to expand the H&W facilities to meet the tonnage requirements of the Club members. This was a major problem for H&W in the immediate post-war scramble for replacement ships.
Standard Ship Designs[edit]
During the First World War the British Government was slow to appreciate that the German U-Boat campaign posed a critical threat to Britain's survival. In the early years of the war most British shipyards were required to concentrate on naval production, despite the mounting merchant ship losses. It was 1917 before the Government decided to construct a large number of standard cargo ships. Work on all existing merchant contracts was suspended and new contracts from private owners prohibited for the duration of hostilities.
In contrast to many UK shipbuilders, Pirrie (who had been appointed Controller General of Merchant Shipbuilding) was an enthusiastic backer of the standard ship programme and H&W quickly established itself as the most prolific producer of these vessels. At the Armistice every berth in the H&W group was occupied by standard ships. Unlike most shipbuilders Pirrie continued the entire programme of ships allocated to H&W, modifying the designs to suit peacetime requirements. Although the concept had been criticised during the war by both shipowners and shipbuilders, it was found that in service the ships proved to be good, serviceable cargo vessels. The construction of standard ships greatly increased shipyard productivity and Pirrie was determined to preserve these gains in the peacetime programme. Pirrie's enthusiasm for standard ships probably influenced Philipps and Lord Inchcape (the chairman of P&O) to take over the 137 standard ships under construction in UK yards in January 1919. Out of that total 36 vessels were building in H&W group shipyards.
Photo 1: New Texas - Elder Dempster. An N-Type standard ship built by Harland & Wolff, Belfast: 6,568 tons; 11 knots
Photo 2: Siris - RMSP. A B-Type standard ship built by Caird's, Greenock. 5,242 tons; 10 knots
Bullard King[edit]
In 1850 Samuel Bullard and Daniel King became partners to operate sailing ships. The firm prospered and in 1879 it bought its first steamer, to initiate their Natal Direct Line. Their ships did not call at Cape Town, but made directly from London to Durban, thus providing a faster service. In 1919 the partnership was converted into Bullard, King & Co Ltd and sold to Union-Castle, who continued to operate the Company as an independent entity. A number of inter-company vessel transfers were made, including the Extra Service ships Comrie Castle and Cluny Castle ( Part1 - Photo 27) transferred in 1924.
Photo 3: Umvoti - Bullard King. Union-Castle extra steamer Comrie Castle transferred in 1924
Photo 4: Umlazi - Bullard King. Built in Canada in 1918 as War Earl, acquired 1920
South American service problems[edit]
Pre-war, the South American services were a primary focus of the Royal Mail group, but re-establishing these operations after the Armistice presented the group with great difficulties. The opening of the Panama Canal in August 1914 changed the commercial balance of the region at a time when the British and European liner services were disrupted by hostilities and American shipping companies moved in to fill the vacuum and divert trade to the industrial North East of the USA.
Pacific Steam Navigation Co was the group company most effected by these developments. Its service via the Straits of Magellan was now obsolete and its important West Coast local and feeder services were challenged by the ocean liners sailing direct, via Panama. To add to its difficulties first Chile, then Peru passed legislation banning foreign flag vessels from operating between ports within their countries and PSNC abandoned its coastal routes in 1923, selling most of its express steamers to local owners.
PSNC tried to establish new services from the West Coast to New York, but was unable to compete with the Americans. As a consequence a number of PSNC vessels were chartered to other operators or transferred within the group, with RMSP being the main recipient. Royal Mail was also experiencing difficulties and in 1920 it discontinued the passenger service from UK to the West Indies that it had originally opened when the company was first established.
Despite this surplus of South American tonnage RMSP bought the 1903 built Aberdeen Line vessels Miltiades and Marathon in 1920/21, renaming them Orcana and Oruba. These ships had been lengthened in 1912 and a dummy funnel added to each ship. In 1922 they were transferred to PSNC and placed on a Round South America service. The ships proved to be too expensive to operate and the service was abandoned after two voyages. Both ships were laid-up in Liverpool and then Dartmouth and scrapped in1924.
Photo 5: Oruba - RMSP
Royal Mail transatlantic service[edit]
The South American developments left RMSP with surplus passenger tonnage at a time when there appeared to be an opportunity for the company to establish itself on the North Atlantic. The large German passenger fleet had been handed to the Allies as war reparations, the fleets of the other principal North Atlantic lines had been depleted during the war, shipbuilding costs had greatly increased and there was a considerable passenger demand from families seeking to be reunited in the aftermath of war. In 1920 RMSP announced that it would start a transatlantic service the following year.The ex-PSNC liner Orbita took the first sailing from Hamburg on 30 April 1921, sailing to New York via Southampton and Cherbourg. Unfortunately RMSP could hardly have chosen a worse time to start the service. The United States Immigration Act came into force in June 1921, restricted annual transatlantic immigration to 3% of the US population recorded in the 1910 census, segregated original nationality by nationality. This caused a drastic reduction in the number of westbound, third class passengers.
Nevertheless, RMSP continued the service, with Orduna and Oropesa initially joining the route and many other units from both the RMSP and Lamport & Holt fleets sailing from time to time on the service. The operation was marketed as "The Comfort Route" and the ships soon gained public esteem through the excellent accommodation, good food and service, provided at reasonable fares. The Company's best year was 1923, when 14,795 westbound passengers were carried on 33 voyages. As this represented an average load factor of less than 45% of capacity, the service could not be considered a financial success.
The German fleets made a very rapid recovery, leading RMSP to terminate the majority of its sailings at Southampton in 1925 and discontinue the Hamburg calls entirely in 1926. The RMSP transatlantic service came to an end in 1927 upon the acquisition of White Star.
Photo 6: Orbita - PSNC. Completed as a troopship in 1915, refurbished and delivered to PSNC by Harland & Wolff, Belfast in 1919 and employed on its Liverpool to Pacific coast of South America before being chartered to RMSP in 1921 for its transatlantic service. Sold to RMSP in 1923. 15,678 grt; 14 kts
Photo 7:: Oropesa - PSNC. Delivered to PSNC for its Liverpool to Pacific coast of South America service but was then chartered to RMSP for its transatlantic service 1921 - 1923, before resuming sailings on the PSNC South American route
The return to peacetime work at Harland & Wolff[edit]
The refurbishment work needed to enable passenger ships to resume passenger service after their wartime duties provided welcome employment for the H&W outfit trades, while the war standard cargo ships were being completed in the shipyards. One remarkable conversion was Elder Dempster group's Aba. She was a large motor ship that had been ordered by the Imperial Russian Government from Barclay, Curle. When the October Revolution occurred, she was taken over by the British Shipping Controller and on completion in 1918 she was allocated to Glen Line as their Glenapp. In 1920 she was bought by British & African SN (Part of Elder Dempster) and converted into the first ever diesel powered large passenger ship.
Photo 8: Aba - British & African S N. 7,937 tons; 255 First Class; 140 Second and Third Class Passengers
A number of passenger liners that were under construction during the war were completed as very large cargo ships. The PSNC liner Orca was one example. She returned to H&W in 1921 and was finally completed as a passenger vessel in 1922.
Photo 9: Orca - PSNC. Upon completion her conversion into a passenger ship in 1922, Orca was placed on the RMSP transatlantic service and was transferred to RMSP ownership in 1923
As the war programme was cleared from the shipyards, work resumed on suspended Commission Club contracts. The Union-Castle mail service liner Arundel Castle was laid down in Belfast as Amroth Castle in 1915, but work had to be suspended because of shortages of materials. She was launched as Arundel Castle in 1919 and completed in 1921. H&W designed her external appearance as a rather bizarre miniature Titanic. Although only 19,000 tons she was supplied with four thin cigarette-like funnels producing a somewhat ungainly looking vessel, in marked contrast to the elegant pre-war Union-Castle designs. The internal layout of her public rooms, dining arrangements and cabins was much more satisfactory however and established the plan for all subsequent Union-Castle liners until the late 1950s. As part of the agreement to allow RMSP to become the major shareholder in H&W, the Company sub-contracted the sister ship, Windsor Castle, to John Brown at Clydebank. Her construction was also delayed by the war and she was only finally delivered in 1922.
Photo 10: Arundel Castle - Union Castle
Harland & Wolff's labour and political troubles[edit]
The war effort required an end to the continual work demarcation disputes between the various trade unions and the recruitment of labour from outside the trade union membership. H&W management resisted the Ministry's efforts to enforce greater flexibility of employment of the existing workforce and the introduction of non-union workers, preferring to work in harmony with the unions throughout the war.
This harmony was severely strained after the war. Throughout 1918 there had been calls from the entire trade movement for a shorter working week. H&W offered to restore the pre-war 47 hour week, but this was rejected by the unions, who demanded a 44 hour week. The entire H&W workforce went on strike on 25 January 1919. Other Belfast unions joined the demand and the city was soon without trams, electricity, gas and food supplies were threatened. Pirrie was branded as an enemy of the proletariat, but thankfully the strike committee informed Pirrie that they were becoming alarmed at the growing militancy of some of the strikers. He demanded a restoration of public services and repeated the offer of a 47 hour week. Under threat of military intervention the unions conceded and work resumed on 20 February 1919. The demand for a shorter working week involved the men being paid the same weekly wage for fewer hours, thereby increasing the rate per hour. They expected to actually work the same number of hours as previously, but to be paid more hours carrying an overtime premium, to be based on the new enhanced hourly rate. The dispute rumbled on in many industries, including the shipping industry. Pirrie sought to overcome part of the additional cost by authorising the purchase of a large number of labour saving machines for Belfast.
Philipps and Pirrie had both been loyal supporters of the Liberal Party but neither man had anything in common with the growing number of Liberals who supported nationalisation and state intervention in industry. Philipps became the Unionist MP for Chester in 1916 and held the seat until 1922. In 1923 he was elevated to the peerage as Baron Kylsant, of Carmarthen and Amroth. This change of political allegiance created a permanent rift between Philipps and his brother Lord St Davids. Pirrie could not afford a similar disagreement with Philipps.
Although trade union conflict caused considerable problems for H&W, these were far less than the threat presented by the post war political turmoil in Ireland. Pirrie had originally been a supporter of Home Rule for Ireland but in the face of British political blunders; increasing Irish division and violence he also changed his allegiance to the Unionist Party. In 1920 the British Government enacted legislation that partitioned Ireland and in 1921 the Northern Irish Parliament was established, with Pirrie as one of its senators. He was made Viscount Pirrie in the same year, for his wartime work and for his services in helping to establish the Northern Irish Parliament.
Photo 11: Viscount and Lady Pirrie on their way to the opening of the Northern Ireland Parliament in 1921. He is clearly relishing dressing up in the uniform of an Irish Privy Councillor.
The Southern Irish were deeply divided over acceptance of the Anglo-Irish Treaty with a large faction, including the Irish Republican Army, seeking to establish a parliament in Dublin governing the whole island. The IRA sought to establish arms caches in the Northern Ireland to support an attempted annexation of Ulster. The Belfast Protestant Association in turn sought to expel all Catholic workers from the city's factories. Rioting and disturbances ensued, but thankfully for Belfast civil war broke out between the IRA and the Irish National Army, which caused the IRA to concentrate its forces and arms in the South. Sectarian strife continued in Belfast, but at a lower intensity and over the following year H&W persuaded the trade unions to allow the majority of its Catholic employees to return to work. These massive problems were a major incentive for Pirrie to expand and develop the H&W facilities on the Clyde as an alternative base.
Harland & Wolff expansion on mainland Britain[edit]
At the July 1919 H&W shareholders annual meeting, Pirrie announced that the company had orders for 72 vessels totalling almost 500,000 tons. By the end of the year another 16 orders had been placed, 12 for members of the Royal Mail group and 4 for IMMC. P&O also joined the Commission Club. Pirrie felt that he needed a greater addition to building capacity than H&W would obtain by completing the Belfast East Yard. He authorised a plan to rebuild the Caird & Co's Greenock facility. The work involved filling in the West Harbour and creating six building berths, two of which were over 750 feet long. The workforce was expected to increase from 2,000 to 9,000. Across the Clyde in Dumbarton he instigated a major reconstruction and expansion of the Archibald MacMillan & Son shipyard that was owned by Lamport & Holt, a Royal Mail group member.
While this work was being implemented, Pirrie sought to meet his obligations to the Commission Club members by reserving four berths in John Brown's yard at Clydebank for five years for the Royal Mail group. He also reserved a berth at the Dumbarton yard of William Denny & Brothers to build P&O ships.Pirrie was determined that many of the H&W built ships would be diesel powered by machinery built in the Finnieston works. At the time this H&W facility was managed Frederick Rebbeck, who would become chairman of H&W in 1930. Pirrie ordered Rebbeck to enlarge Finnieston to enable 36 engines to be constructed annually to power 18 ships. This high output volume required a continuous supply of big, high quality steel castings. To provide these components Pirrie and Rebbeck built the UK's largest foundry in Helen Street, Govan. The rationalisation of engine building at Finnieston enabled H&W to sell Caird's engine works at Greenock to their neighbours, Scotts' Shipbuilding & Engineering Co.
In 1914, Pirrie had joined forces with Andrew Weir (the founder of Bank Line), the Earl Grey and Thomas Royden of Cunard, to acquire an option on the controlling interest in the Union Oil Company of California. The four men formed the British Union Oil Company, with the idea of floating the company on the London Stock Exchange, to raise the funds needed to purchase the Californian company's shares. Unfortunately the outbreak of war forced the promoters to abandon their plan, resulting in them incurring substantial personal losses. In 1919 the four men resurrected the idea of establishing an oil company. Pirrie entered into an agreement with the Irish-American oil tycoon, E L Doheny, who had massive interests in the Mexican oil fields through the Mexican Petroleum Company. The four partners successfully launched the British Mexican Oil Company after reaching an agreement with Doheny whereby he undertook to supply all of the oil that they required for 25 years at a fixed price. Under these arrangements, Andrew Weir - now Baron Inverforth - took responsibility for the British company's management and it was agreed that all tankers and barges would be ordered from H&W on a commission basis.
Photo 12: Andrew Weir - Lord Inverforth
Photo 13: Inverurie - British Mexican Petroleum Co. The ship is an N-Type cargo ship completed as a tanker with cylindrical tanks in the holds. 6,907 tons; 1922
The colossal volume of business on H&W's books re-awakened Pirrie's concern to guarantee the supply of material and components to the shipyards and he resumed discussions with John Craig, the managing director of the west-of-Scotland steelmakers, David Colville & Sons. In May 1919 it was agreed that H&W would acquire a minority interest in Colville's in exchange for 300,000 H&W ÂŁ1 preference shares. This transaction was a prelude to the joint cash and shares purchase of Colville's by H&W and the Royal Mail group in March 1920 for ÂŁ5,250,000. The new acquisition could produce over 800,000 tons of steel, 80,000 tons of iron and 9,000,000 tons of coal per year. John Craig was retained as the managing director of Colville's and he was also appointed to the H&W board.
When the new Belfast east yard launched its first ship in November 1919 Pirrie became anxious about the ability of the Finnieston Engine Works to produce sufficient diesel engines. He finally accepted Rebbeck's view that the works' realistic output was 24 engines per year and not Pirrie's target of 36 engines. To overcome the anticipated shortfall, H&W bought the Scotstoun factory of the Coventry Ordnance Works in early 1920. This well equipped factory was built in 1910 to manufacture gun mountings for the Fairfield and Clydebank shipyards. Following a series of mergers the factory was now owned by the newly formed English Electric Company and was largely surplus to their requirements. Pirrie acquired it for ÂŁ475,000 and agreed to continue to meet any future Clyde shipyard requirements for naval gun mountings. Very little expenditure would be needed to convert the facility to diesel engine production.
Pirrie also expanded the H&W mainland shiprepair facilities in Liverpool and Southampton and during 1920 began negotiations to establish a presence in London. Lord Devonport, the chairman of the Port of London Authority and a friend of Pirrie's, offered to place all of its repair work with H&W on a commission basis if the Company opened a works in London. Pirrie bought an option on a site at Tilbury, but no further progress was made at this time, because he at last accepted that H&W's expansion was constrained by a of lack of finance.
Resumption of Harland & Wolff's financial difficulties[edit]
The H&W accounts were designed to conceal more than reveal the finances of the Company, nevertheless they do show that in 1918 it had overdrafts totalling ÂŁ885,000 and owed a further ÂŁ962,000 for loans received. During the period 1919 to 1921 H&W invested about ÂŁ6,100,000 in new facilities and equipment and spent a further ÂŁ4,800,000 on outside investments (mainly Colville's) resulting in total cash expenditure of ÂŁ10,900,000.
In the same period the cash earned by the business was only about ÂŁ1,900,000, leaving Pirrie with the problem of raising ÂŁ9,000,000. Some ÂŁ5,700,000 was obtained by selling additional ordinary and (non-voting) preference shares - mainly to the Royal mail group. An additional ÂŁ3,000,000 loans were raised and bank overdrafts increased by ÂŁ600,000.
Furthermore H&W again needed to finance work in progress as a result of its shipbuilding contracts being for civilian clients, rather than the Government. These were largely financed by a resumption of the use of discounted bills of exchange. (See Part 1) The Company's contingent liability under this heading climbed from nil in 1918 to an astonishing ÂŁ9,175,000 in 1921. Once again the Company's finances were seriously overstretched.
The collapse of the post war shipping boom[edit]
In June 1920, H&W completed the conversion of Olympic from its wartime troopship role, back to its transatlantic splendour. To Pirrie's great disappointment, at the ceremonial dinner to mark the occasion, the president of IMMC announced that the deteriorating world trading conditions dictated that White Star could not proceed with the planned construction of a liner to replace her sister Britannic, which had been lost during the war.
Photo 14: Olympic in Thompson Dry Dock, Belfast - Oceanic Steam Navigation Co
At the H&W annual shareholders meeting the following month Pirrie announced that all of the Company's shipyards were fully occupied and that it had 90 vessels on order. He did not mention that there were no inquiries for further contracts. The post war shipping boom had come to a sudden end. Freight rates and the price of second-hand tonnage collapsed so dramatically that the H&W Commission Club arrangements were unable to provide their normal insulation from such problems. In the next few months H&W clients delayed the commencement of work on 10 liners and 2 were cancelled outright. Pirrie was forced to move from breakneck expansion to retrenchment. He ordered closure of building berths in Belfast, Govan and Greenock. Overtime was cut, war bonuses withdrawn, wages cut, staff and workforce laid off.
The ownership of Harland & Wolff in 1921[edit]
In 1921 H&W had in issue 3,000 ordinary shares of ÂŁ1,000 each. The shareholders were: -
British & African S N Co | 175 |