cargo vessels. The steamers had an average dead-weight carrying capacity of between 7,000 and 8,000 tons, and 10 of them were taken from Messrs. Burrell's Strath line. For the larger vessels the price worked out at about £19 a ton. This was, perhaps, from four to five times greater than the pre-war price, but as events occurred, the purchase proved a profitable one, financially, for Australia. One effect was that the vessels were removed from the United Kingdom Register and were no longer subject to excess profit taxation. This action of Mr. Hughes hardly commended itself to any of the shipping authorities in the United Kingdom, but he had shown unmistakably that full recognition had to be given to the Australian viewpoint. In the autumn of that year the President of the Board of Trade announced that a large purchase had been made of Australian wheat on behalf of the Imperial Government, and that a number of steamers had been requisitioned to proceed to load the wheat in Australia. As the supply of available shipping became steadily less, it proved impracticable to transport all the wheat bought, and immense quantities were stored in Australia until after the conclusion of the war.
The purchase of the 15 cargo vessels represented the foundation of a Commonwealth Government line. Being free from taxation and with freights ruling high, large profits were earned, which made the venture temporarily, at any rate, profitable to the Australian people. A number of German steamers seized in Australia were added to the fleet and, later, ships were built both in Australia and the United Kingdom. In 1919 Mr. W. M. Hughes, on a visit to the United Kingdom, placed contracts for five large steamers with leading builders. These were designed for carrying a large amount of refrigerated cargo, and some hundreds of third-class passengers. Limited accommodation was to be provided for a few passengers in the saloon. The first of these steamers, the “Moreton Bay,” of 14,500 tons gross, was launched from Messrs. Vickers's shipyard at Barrow on April 23 1921. It was then asserted that the four other vessels would be in the water during the ensuing few months, and that all the vessels would be in service before the end of 1921. Between the time of the placing of the contracts in 1919 and the time of launching, the cost of ship construction had risen very seriously. All work was done on the “time and lime” principle, by which the owners paid for the cost of materials, the cost of labour, an allowance for overhead charges, and a sum, either as a fixed amount or as a percentage on the outlay, as profit to the builders. The ships were thus understood to have cost considerably more than had been expected, and with freights falling, the problem of making the vessels pay their way was enhanced. A wooden ship programme carried out for Australia in the United States was hardly successful financially. The building of wooden vessels, of which large numbers were constructed for the American mercantile marine, could only be regarded as an emergency measure. The inauguration of the Commonwealth line aroused much criticism from shipping managers, who cordially disliked the idea of a State enterprise. They maintained, and could do so justifiably, that a State enterprise could be carried on without the same consideration for profit and loss as a public company, if, for instance, a Government chose to carry merchandise at below cost price.
The Canadian Merchant Marine.—Canada instituted a line of Government steamers. It found itself after the Armistice with a great fleet of vessels which had been built in the period of emergency. Instead of offering them to the shipping industry, it decided to operate them on account of the nation. A corporation was formed, entitled the Canadian Government Merchant Marine, Ltd., in close conjunction with the Canadian National railways. The policy of the management was to institute new services and to work in cooperation with the existing lines, rather than to compete with them. New services were established to and from the United Kingdom and many parts of the world. In 1920 an agreement was entered into with Messrs. Alfred Holt & Co. for a joint trans-Pacific service to and from Vancouver, and with the British India Co. for a service between Montreal and Indian ports, via the Suez Canal. In the United Kingdom the Cunard Co. acted as managers for the line. The usual practice in making these arrangements with the shipping companies was for the Canadian National railways to represent the steamship companies in Canada, and for the agents of the shipping companies abroad to act similarly for the railways. This policy of working in conjunction with the shipping companies disarmed criticism, which was very strong in the case of the Australian scheme.
Amalgamation and Fusion Schemes.—Numerous amalgamations and fusion schemes took place between 1910 and 1921. Sir Owen Philipps, who at the beginning of 1910 was chairman of the Royal Mail Steam Packet Co., was particularly active in the policy of fusion. In that year the capital was acquired of the Pacific Steam Navigation Co., which was mainly interested in the trade with the E. and W. coasts of S. America. In the same year a fusion agreement was entered into with Elder, Dempster & Co., Ltd., which owed its development largely to the genius of the late Sir Alfred Jones. In 1911, the capital was acquired of Lamport & Holt, Ltd., largely concerned in the trade between the United Kingdom and also the United States and S. America, and in the same year an agreement was entered into with the Glen Line, Ltd., which is concerned in Far Eastern trade. Incidentally, the Glen Line is notable among British ownerships for its policy of building motor-ships, which is known to have been very successful. In 1912 the capital of the Union-Castle Co. was acquired by the Royal Mail Co. and the Elder Dempster Co. This, perhaps, was the most important of the fusion agreements which Sir Owen Philipps effected. The Union-Castle Co., a consolidation of the old Union and Castle companies in the S. African trade, had been feeling the loss of a great chief in the death of Sir Donald Currie, to whose extraordinary powers the line owed very much. In 1913 control was secured of the Nelson Lines, Ltd., which was and is engaged in the carriage of meat to the United Kingdom from Argentina, together with participation in the passenger trade. In 1917 an interest was acquired in MacAndrews & Co., Ltd., concerned in trade with the Peninsula; in the Coast Lines, Ltd., a consolidation of coasting companies trading round the United Kingdom; and in the Moss Line, Ltd. In 1919 an interest was secured in the old-established ownership of David MacIver & Co., Ltd., in Messrs. Bullard, King & Co., Ltd., and in Messrs. J. & P. Hutchinson, Ltd. While Sir Owen Philipps thus had enormous interests in British shipping, Lord Inchcape was also to the forefront in effecting fusion schemes.
At the end of 1914, Sir Thomas Sutherland retired from the positions of chairman and managing director of the P. & O. Company. For 42 years he had occupied the office of managing director and for 34 years that of chairman. The expansion of the P. & O. Co. will always be associated with his name. His last important act was to effect an amalgamation with the British India Co., of which Lord Inchcape was managing director. On the retirement of Sir Thomas Sutherland, Lord Inchcape became chairman and managing director of the P. & O. Company.
In June 1916, the P. & O. Co. acquired an interest in the New Zealand Shipping Co., which, in turn, controlled the Federal Line trading with Australia. Exactly a year later, in June 1917, a representative interest was secured in the Union Steamship Co. of New Zealand, which not only provided various coasting services in New Zealand, but also maintained services with Australia, British Columbia, and India. In the autumn of 1917 shares were secured in the Hain & Mercantile Steamship Co., and also in the Nourse Line, each of which possessed a considerable amount of cargo tonnage. The fleets of these three companies, together, included 107 steamers of 370,000 tons gross.
Other notable fusions of the war period included the acquisition of a controlling interest in the Prince Line, Ltd., which had been associated with the name of its founder Mr. James Knott. This acquisition, which was effected in Aug. 1916, involved the addition of 37 steamers, mainly cargo vessels, to those controlled by Messrs. Furness, Withy.
In Oct. 1916, Sir John Ellerman, chief of the Ellerman Lines, acquired all the shares of Messrs. Thomas Wilson, Sons & Co., Ltd., the Wilson fleet including nearly 80 vessels of about 200,000 tons. Its services were based on Hull. At almost the same time an agreement was concluded between the Anchor Line (Henderson Bros., Ltd.) and the Donaldson Line, Ltd., for a fusion, under the title of the Anchor-Donaldson Line, with Sir Alfred Booth, chairman of the Cunard Co., as chief of the new formation. The agreement meant that the Cunard Co. secured control of the Donaldson Line, for it already had a controlling interest in the Anchor Line.
Shipowners' Associations.—Important work was done by the Liverpool Steamship Owners' Association, especially through the war period. It acted on the principles upon which it was founded in 1848. These were, broadly, that the growth and prosperity of the British mercantile marine is dependent on the enterprise, skill and ability of the individuals directly concerned, and that neither State control nor State aid can prove an effective substitute for these qualities. The Association has not sought to interfere with the individual freedom of its members. It has, however, consistently opposed
