THE BLUE FUNNEL LEGEND Also by Malcolm Falkus

'ALWAYS UNDER PRESSURE: A History of North Thames Gas since 1949 BRITAIN TRANSFORMED: An Economic and Social History of Britain, 1700-1914 HISTORICAL ATLAS OF GREAT BRITAIN (editor with John Gillingham) READINGS IN THE HISTORY OF ECONOMIC GROWTH 'THE INDUSTRIALISATION OF RUSSIA, 1700-1914 "Also published by Palgrave Macmillan The Blue Funnel Legend

A History of the Ocean Steam Ship Company, 1865-1973

Malcolm Falkus Professor of Economic History University of New England, New South , Australia © Nestor Custodians Limited 1990 Softcover reprint of the hardcover 1st edition 1990 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WClE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

First published 1990

Published by MACMILLAN ACADEMIC AND PROFESSIONAL LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world

Typeset by Footnote Graphics, Warminster, Wilts

Rell/inted 1993 by Anion)' ROllle Ltd Chillllel/ham, Wiltshire

British Library Cataloguing in Publication Data Falkus, Malcolm, 1940- A history of the Ocean Steam Ship Company, 1865-1973 1. Great Britain, Shipping services. Ocean Steam Ship Company, history I. Title 3875'06541 ISBN 978-1-349-11478-8 ISBN 978-1-349-11476-4 (eBook) DOI 10.1007/978-1-349-11476-4 Contents

List of Tables vi List of Plates viii Foreword by Nicholas Barber xi Preface xiii Map of Trade Routes 1866 and 1965 xviii

1 Introduction: Ocean to Ocean 1 2 A Unique Style of Management 9 3 Sailings and Services 26 4 Representatives Abroad 54 5 Eastward Ho! The Beginnings of Ocean Steam Ship 83 6 Combined Efforts: Holts and the Conference System 117 7 The New Century: Profits and Perils 136 8 After the War: An Uncertain World 171 9 The 1930s: Collapse and Revival 202 10 The Company at War 235 11 Picking up the Pieces 250 12 Into the 1960s: Calm before the Storm 282 13 Organising a Group 333 14 Blue Funnel Contained: New Ships and New Enterprises 356

Epilogue 375 Notes 378 Sources and Bibliography 381

Appendix I Ocean Managers and Directors, 1865-1973 383 Appendix II List of 'Co-owners', 1886 384 Appendix III List of 'Correspondents', February 1902 385 Appendix IV The Phemius Epic, 1932 389 Appendix V Letter to Midshipmen on Appointment, 1953 396 Index (General, Places, Persons, Ships) 399

v List of Tables

3.1 Far-East-Europe Trade, Conference allocations 33 3.2 Homeward Straits rates (per ton) 26 February 1907 36 3.3 Pilgrim traffic from the Straits, 1905-14 38 3.4 Passenger fares, Australian service, 1914, Nestor and Ulysses 48 4.1 Principal Blue Funnel agents, 1923 54 4.2 Straits , fleet and tonnage, 1914-32 81 5.1 British exports to China and , 1854-70 88 5.2 Earnings on early voyages, 1866-7 100 5.3 Blue Funnel fleet and financial results, 1881-1900 110 5.4 New ships built, 1892-1900 113 6.1 Far East trades, homeward freight rates, 1874 and 1879 123 6.2 Far Eastern Conference: west-coast loadings 130 6.3 1911 Lancashire and Yorkshire Agreement, pool shares, 1911 and 1936 130 6.4 Blue Funnel Far Eastern homeward pool allocation, 1938 131 7.1 Voyages and earnings, 1901-13 140 7.2 Net voyage earnings, 1909-13 141 7.3 Blue Funnel fleet, 1913-18 158 7.4 Holt dividend payments, 1913-18 160 7.5 Net steamer earnings, 1914-17 160 7.6 Ocean Steam Ship war losses, 1914-18 168 8.1 Blue Funnel: net steamer earnings, 1919-39 178 8.2 Net voyage earnings, 1920 184 8.3 Steamers and motorships in the Blue Funnel fleet, May 1934 191 8.4 Post-war steamers and motorships, 1919-34 191 8.5 Development of diesel engines 193 8.6 Net voyage earnings, 1924 194 8.7 China's foreign trade, 1920-8 197 9.1 Book value of fleet, 1932-9 206 9.2 Selected voyage costs, inter-war years 212 9.3 Alfred Holt and Co., dividends paid, 1924-39 212 9.4 Net earnings, 'China' trade, 1927-39 213 9.5 Net earnings per voyage, 1929-36 215 9.6 Java voyages, 1929-31 215 9.7 Index of Australian Conference freight rates, greasy wool, 1922-37 218 9.8 West Australian trade, 1922-39, net earnings 219

vi List of Tables vii

9.9 China: British tonnage entered and cleared, 1909-34 219 9.10 British share of UK-Far-East trade, 1937 220 9.11 Average first-class single fares, 1913-38 222 9.12 Straits Steamship profits, 1932-9 225 10.1 Holt war losses, 1939-45 239 10.2 Ocean accounts, 1939-45 243 11.1 Age and size of Blue Funnel fleet, 1934-45 260 11.2 Cost of Blue Funnel ships, 1930-47 262 11.3 Far East weekly service, 1939 and 1950 264 11.4 New ships delivered, 1947-59 264 11.5 Blue Funnel fleet, 1947-50 (gross tonnage, end of year) 266 11.6 Blue Funnel fleet, size and age, 1934-61 267 11.7 Cost of certain vessels, 1947-60 272 12.1 Ocean managers, main areas of responsibility, June 1963 285 12.2 UK-Far East trades, 1939-53 295 12.3 Consolidated gross trading profit, Ocean Group, 1947-61 298 12.4 Merchant shipping tonnage (non-tanker) 1939-69 303 12.5 Depreciation and amount transferred to reserves, 1957-64 305 12.6 Index of various cost increases, 1938-68 306 12.7 Composition of voyage costs, 1947-66 307 12.8 Index of Blue Funnel freight rates, 1938-68 307 12.9 Return on capital employed, 1963-7 308 12.10 Changes in manning levels, Blue Funnel ships, 1960-7 311 12.11 Blue Funnellosses since 1871 313 12.12 Ocean Steam Ship Co., net trading and investment income, 1954-64 319 12.13 Ocean Steam Ship Co., variation in stock prices, 1956-66 320 12.14 New building programme, 1947-60 321 12.15 Priam and Glenalmond vessels: promised and actual deliveries, Vickers-Armstrong 324 12.16 Time taken between keel-laying and delivery, Priam class 330 13.1 Ocean Group turnover, 1970 345 13.2 Group operating profits, 1969-71 347 14.1 Wm Cory & Son operations, 1970-1 372 List of Plates

1 Agamemnon I, 1865 facing foreword 2 Philip Henry Holt (1931-1914), Manager, 1866-97 2 3 Alfred Holt (1829-1911), Manager, 1866-1904 3 4 Sir Richard Durning Holt, Manager, 1895-1941 17 5 Sailing notice for the West Australian trade, 1892 45 6 Nestor, built 1913 49 7 J. S. Swire (1825-98) 61 8 At Hazelwood (the Butterfield & Swire Manager's mansion) first week in April 1920 68 9 New Ocean Buildings, , 1920s 80 10 Nestor, I, 1868-94 102 11 Idomeneus, I, 1899 112 12 Telamon, I, 1885 115 13 The launch of Menelaus 115 14 Lawrence Durning Holt, Manager, 1908-53 146 15 Sir Charles Sydney Jones, Manager, 1901-30 152 16 William Clibbett Stapledon, Manager, 1901-30 153 17 Bellerophon, c.1910 (built 1906), one of the famous 'goal-posters' 154 18 Nurses on board the Charon, First World War 169 19 Illustration by James Mann 172 20 Hon. Leonard Harrison Cripps, Manager, 1920-44 179 21 Sir John Richard Hobhouse, Manager, 1920-57 180 22 Roland Hobhouse Thornton, Manager, 1929-53 181 23 Launch of Diomed, June 1917 182 24 Yokohama after the earthquake, 1923 188 25 Sarpedon at landing stage, 1923 189 26 Cargo for the Centaur arriving by camel 211 27 Advertisement for the Java trade from the Java Gazette, 1933 214 28 Maron embarking troops, Kowloon Bay, 1937 221 29 Typical advertising poster in the inter-war years 223 30 British troops being evacuated from Dunkirk, 1940 237 31 HM Australian hospital ship, Centaur, sunk by Japanese submarine, 14 May 1943 247 32 India Buildings after blitz, May 1941 248 33 A Victory ship, Memnon (renamed Glaucus, 1957) 250 34 Menestheus at Kure, Japan 253 35 Charles Douglas Storrs, Manager, 1944-60 259 36 Passenger lounge, Peleus class, 1949 263 37 Discharging cargo from the Gorgon at Singapore in the 1950s 265 38 Blue Funnel ships at Singapore, May 1953 265

viii List of Plates ix

39 Seamen's Mess, 'A' class 266 40 Sarpedon at Holt's Wharf, 1962 267 41 William Hugh Dickie, Manager, 1944-54 268 42 Launch of Calchas, 27 August 1946 270 43 Holt's Wharf, Kowloon, August 1945 276 44 Sir John Norris Nicholson, Manager and Director, 1944-76; Chairman, 1957-71 288 45 India Buildings after rebuilding, 1950s 293 46 Gunung Djati, dining room, 1959 297 47 Gunung Djati in 1960 298 48 Vittoria Dock Berth, 1967 309 49 The Pyrrhus fire, 1964 315 50 After the hurricane: Phemius at anchor at Kingston, Jamaica 316 51 Centaur III, 1964 326 52 List of sailings, Bangkok Exhibition, 1966 331 53 Sir John Lindsay Alexander, Manager and Director, 1955-86; Chairman, 1971-80 336 54 George Palmer Holt, Manager and Director, 1949-71 337 55 Sir Ronald Oliver Carless Swayne, Manager and Director, 1955-82 338 56 Ocean Buildings, Singapore, c.1970 346 1 Agamemnon I, 1865 Foreword

Founded 125 years ago, the Blue Funnel Line grew into the world's finest cargo liner company. That it achieved this pinnacle of consistent success was thanks to its people, both afloat and ashore. Their story and the story of the Far East trades which Blue Funnel primarily served provide a record of commercial success and human achievement which should not be lost. Following the founding of Ocean's joint venture company Overseas Containers Limited in 1965, Blue Funnel's trades were progressively passed over to OCL. In 1986 we decided to withdraw from our OCL investment. This was the moment to commission a historian to tell the Blue Funnel story before individuals' memories grew too faint. In Malcolm Falkus we found just the author we had hoped for - a scholar who could write, a historian with a strong feeling for the Far East and its mercantile history. The book is not a history of Ocean as such but of the Blue Funnel Line and it deliberately stops in 1973, once the core of Blue Funnel's Far East trades had been passed to OCL. Since 1973 Ocean has changed enormously, especially in the last five years. It is no longer a shipping company and no longer managed from Liverpool. Yet funda­ mentally Ocean remains close to its Blue Funnel inheritance. Its customers are still to be found in the freight and marine markets. Its activities still span the globe. Above all it has remained a thriving services business with its people still dedicated to providing quality services to the highest professional standards, still pursuing the goal of excellence set by the Company's founder, Alfred Holt. Let me quote from a recent letter to the company newspaper from Sir John Nicholson, the remarkable man who was Chairman of Ocean when I joined the Company in the 1960s: We should remind ourselves that Alfred Holt was an adventurous innovator of wide vision who inspired the search for perfection which has underpinned all our technical and commercial achievements through over 100 years and which now lies behind the exciting developments of recent months. I fancy that he would have preferred Ocean's chosen way ahead to the fate of other cargo liner companies. This book tells a story which is fascinating to read. At the same time it provides a fitting tribute to all those from Ocean's Blue Funnel past who for over a century, in peace and war, made the Company one of Britain's great enterprises. NICHOLAS BARBER April 1990 ChiejExecutive, Ocean Group pic

xi Preface

'We have always eschewed a conventional popular history.' (Sir John Nicholson)

When in 1947 a future Chairman, Lindsay (later Sir Lindsay) Alexander, was invited to join Alfred Holt and Co. he had heard neither of Holts nor of the Blue Funnel Line. My situation, when asked to write the company's history, was marginally better. Largely through Francis Hyde's scholarly book Blue Funnel published in 1957, covering the years before the First World War, I knew that company and line had a distinguished place in British shipping history and that Blue Funnel was considered among the aristrocrats of British cargo lines. Beyond that, though, I knew scarcely more than Sir Lindsay. Certainly I had no idea of the colourful history which accompanied Blue Funnel's progress through two world wars, through the great slump of the 1930s, and through the age of containerisation. Nor was I aware of the unique management system, of the cluster of singular and talented individuals who comprised the firm's senior management in Liverpool, or of the many notable contributions to Liverpool which both collectively and individually was an indelible legacy of the Holt Managers. I hope this book gives some flavour of the character of a remarkable British company as it faced in turn progress and opportunity and then wars, depression, and the challenge of the container revolution. A shipping enterprise is a kaleidoscope, touching on a bewildering variety of subjects and objects: the ships themselves, the seafarers, the cargoes carried to and from often exotic and evocative places, the ports, the agents, the head office and other home staff - the list could go on and on. In this book my focus has been above all upon how the company was managed, how it grew and changed, how it sustained its great reputation, how it succeeded as a commercial concern, and how it faced a changing economic environment. The view, as it were, is from Liverpool rather than from on board a ship. I should add, perhaps, that not being a maritime historian and being unversed in subjects such as marine engineering, I have not attempted to give a detailed history of ship design or marine technology. I have had the fullest possible help from Ocean Transport and Trading (now Ocean Group), successors of Ocean Steam Ship, who have allowed me complete access to the company's archives. The company has in no way sought to influence what I have written, and I remain entirely responsible for the content and judgements contained here. A few points need just a little discussion. First, in view of the book by

xiii xiv Preface

Professor Hyde already mentioned, perhaps it should be explained why this is not simply a 'Volume 2', taking the story beyond 1914. The answer is twofold. Since so many aspects of Blue Funnel's history are rooted in the pre-1914 era it would be difficult to write a history without constant reference to this earlier period. The twentieth century cannot be understood without the nineteenth. Also, Professor Hyde's book is different in emphasis and style from the present one, and some themes he stressed have received only muted treatment here, while others have been given greater emphasis. Another point concerns the plan of the book. I have chosen to mix themes and chronology which, while it leads to some overlap, allows me to bring out what seems to me to be the triple-pillared structure upon which the entire enterprise rested: management, agencies, and the conference system. Thus some of these topics are dealt with, as is the overall structure of Blue Funnel's routes and· services, before the detailed early history of the company is surveyed in Chapter 5. Again, conferences are discussed before taking up the chronological threads once more in Chapter 7. My reason for organising the material in this way is simply that a straightforward chronological account would make it difficult to do justice to some of the larger themes. Two points of presentation. First, throughout the book I have kept prices and costs in their original values and currencies, for to give modern equivalents would probably spawn as much confusion as it solved. However, in order to give some perspective on changing values of money in Britain over the years covered in this book, a few points may briefly be made. From the 1860s until the Second World War a striking feature of price changes was their relatively long-term stability (apart from cyclical upturns and downturns, as in the depression of the early 1930s, and during the First World War and its immediate after­ math). Thus, average price levels in 1913 were little different from those reigning in the 1860s. By the end of the post-war boom in 1920, prices were some three times higher than in 1913, but after a sharp collapse, prices in the inter-war years averaged around 50 per cent more than their 1913 levels. By 1945 prices had reached about double their 1913 level. Then there was a slow rise until the mid-1960s, followed by much more rapid inflation, especially after 1970, with prices trebling between 1966 and 1976. Very roughly, £1 in 1865 was still worth £1 in 1913, but only about 66 new pence in 1939, 32 pence in 1945, 22 pence in 1966, 7 pence in 1976, and less than 3 pence in 1989. The second point of presentation is that detailed footnote references to material drawn from archival sources have been omitted. This is not simply to make the text more readable, but because the bulk of archival material comes from the Ocean archives deposited at the Liverpool Maritime Museum, and there are early plans to reclassify the Ocean Preface xv collection there. It should be stressed, therefore, that unless otherwise stated, all the quotations from individual Managers in the text come from written material available in the archives and not from verbal comment in interviews with me. Finally, and unfortunately, we must grasp the nettle of names. What do we call the company and what do we call the ships? The commonly used company name Alfred Holt and Co. has a rather insubstantial claim to existence, 'the company that never was' as Roland Thornton termed it. Until around 1903 the Company traded under the name of, simply, Alfred Holt. Then informally the name began to be used as a way in which Managers other than Alfred Holt himself might sign Company letters (Alfred Holt retired in 1904). Although the name was registered in 1917, no company of that name was ever incorporated, and the name was quietly dropped in 1967. The Ocean Steam Ship Company is another title which can appropriately be used, with one slight proviso. For various reasons the company assigned the Blue Funnel ships to three 'companies' (there never was an official 'Blue Funnel Line' until after the First World War, and the name was not registered until the 1960s), Ocean Steam Ship, China Mutual, and the Dutch-registered NSMO. China Mutual and NSMO ranked as 'investments' in the Ocean Steam Ship accounts, although all the ships were in effect part of one Blue Funnel fleet. However, sometimes there may be ambiguity. For example to say 'Ocean Steam Ship's vessels made 11 Java voyages in 1921' is technically wrong, since some of these ships belonged to the China Mutual and NSMO fleets. But here I have used 'Holts', and 'Ocean', and 'Blue Funnel' freely, believing that any slight looseness of expression is more than compensated by convenience. The ships' names are another problem. Not content with using sometimes rather tongue-twisting names from among Greek legendary heroes, Philoctetes, Talthybius and the like, the same names were given repeatedly. Strictly, we should distinguish such ships by a chronological number, for example 'Pyrrhus III caught fire in 1964', but this seems cumbersome and once again in this book I have chosen simplicity at the expense of a slight loss of precision. , It is with genuine pleasure that I acknowledge the help I have received from many individuals in the preparation of this book. Nicholas Barber has been a source of encouragement and support throughout, and gave many helpful comments on an earlier draft of the book. Mr Ken Wright's help and advice has also been invaluable. Others, past and present staff of Ocean and their agents, have helped in various ways: discussing their own recollections of Blue Funnel history, lending me books and docu­ ments, checking drafts of the manuscript and answering particular queries. Here I must thank particularly Sir Lindsay Alexander, Mr Harry Chrimes, Mr George Holt, Sir John Nicholson and Sir Ronald Swayne. xvi Preface

I am also most grateful for the help and advice I have received from Mr Joop Dietrich, Mr Christopher Gawler, Mr Theo Gleichman, Mr John Greenwood, Mr Julian Holt, Mr Philippe Hughes, Mr Charles Medcalf, Mr A. N. Stimson, Mr Harold Smyth, Sir Adrian Swire, Sir John Swire, Mr John Utley, and Mr Hugh Wylie. I would like to acknowledge, too, the help I received from Sally Furlong in facilitating my research in Liverpool, and guiding me to various sources in India Buildings. The Archivist, Mr David Ryan, and staff at the Liverpool Maritime Museum have assisted greatly throughout. I am grateful, too, to John Swire & Sons for giving me access to their archives held at the London School of Oriental and African Studies, and for allowing me to use material still in the firm's London headquarters. Charlotte Havilland, archivist at John Swire & Sons, has been most helpful and has located several rare illustrations which are included in this book. I acknowledge, too the generosity of the Philip Holt Trust who have helped to finance the research and publication of the book. I am indebted to Tim Farmiloe and others at Macmillan who have made the process of publication a real pleasure. Finally I would like to say a heartfelt thank you to Fay Hardingham and Jeanettee Tan at the University of New England who so cheerfully and expertly translated my handwriting into a presentable typescript, and also to Gerda van Houtert for additional secretarial help.

MALCOLM FALKUS xviii

1986 trade routes ( .. . .. ) Agamemnon Voyage 1 Sailed from liverpool for China Days From Shanghai 19th April 1866 2 Foochow Arrived London from China 26th 15 Hong Kong October 1866 26 Singapore Length of voyage 190 days 30 Penang Distance steamed 28,400 miles 46 Mauritius 86 London Days From liverpool 39 Mauritius 54 Penang 59 Singapore 68 Hong Kong xix

1986 trade routes ( ..... ) Patroclus Voyage 45 Sailed from Birkenhead for Japan 44 Kobe via Rotterdam October 1964 48 Nagoya Arrived Dublin from Japan 15th 49 Yokohama January 1965 Length of voyage 90 days Days From Yokohama Distance steamed 24,600 miles 1 Shimizu Days From Birkenhead 2 Kobe 2 Rotterdam 9 Hong Kong 14 Port Said 15 Singapore 15 Suez 18 Port Swettenham 19 Aden 27 Aden 28 Singapore 31 Suez 34 Manila 32 Port Said 38 Hong Kong 39 Dublin