Samuel Cunard, founder of the British and North American Royal Mail Steam Packet Co., (subsequently known as The Cunard Steam Ship Co. Ltd) was born in Halifax, Nova Scotia, on 21 November 1787. As this book is concerned primarily with the business activities of the Company in various stages of development, it is not proposed to enter into an examination of the genealogical controversy surrounding the origins of the Cunard family1 It is sufficient to know, as a starting point for this history, that Samuel was the son of Abraham Cunard who, after the War of American Independence, had emigrated to Halifax where he had established himself in his trade as a master carpenter. In this capacity, Abraham had found employment in the dockyard at Halifax and from this relatively humble beginning had laid the foundation of a prosperous business and the background to future enterprise.
The successful operation of The British and North American Royal Mail Steam Packet Company during the first forty years of its history was governed by a diverse range of economic, financial and political influences. These influences, in turn, helped in shaping policies relating to the building of new ships, in maintaining mail contracts and services; in entering new trades and in ordering the conduct of business within the framework of a strict code of discipline. The continuous endeavours of the managing partners to meet and overcome successive problems arising from the expansion of steamship services, created lines of policy which, in course of time, came to be regarded as traditional in the conduct of the Company’s affairs. What service was achieved in the first formative years has to be set against a background of both opposition and of the growing technical competence of other steamship companies. Even with government backing (or, perhaps, despite such backing) Cunard could not afford to be complacent. In commercial matters there is much evidence for the belief that the managers were equal in all respects to their rivals; but in technological development they were inhibited by varying degrees of conservatism and by the need to conform to official directive.
The British and North American Royal Mail Steam Packet Co., having survived the first threat of serious competition and having widened the scope of its operations through its associated company by opening up trade with the Mediterranean, now turned to the problem of increasing returns from the North Atlantic trade. It was a fact well understood by most Liverpool shipowners that the evolution of the steamship could not have taken place without the increase in demand for cargo and passenger accommodation. It was a prime reason why, in 1860, the Cunard partners decided to enter the steerage business. By that date it had become obvious that the profits accruing from the Government Contract to carry mail and that from high-class cabin traffic and freight, could not sustain expansion; that in fact, despite the hazards of competition, a more lucrative form of enterprise would henceforth lie in the carriage of emigrant traffic across the Atlantic.
The nature of the trans-Atlantic passenger trade was such that it became extremely difficult to regulate unrestricted competition. This was because conditions affecting the levels of traffic were subject to rapid and unexpected fluctuations, so that when agreement between competing lines had been negotiated, the regulation imposed quickly became out of date. The result was that Conferences proved to be fragile instruments and were generally unsuitable except for short periods when it was absolutely necessary to mitigate the effects of intense rate wars.
We must now return to the early 1880s. John Burns had become Chairman of the recently incorporated Company and the keynote of new activity was sounded by him in his speech at the Ordinary General Meeting on 27 April 1881. ‘The steam navigation of this country’, he declared, ‘like almost every branch of industry, is carried on under circumstances of keen competition and, for any company to succeed, it must be possessed of the best boats with which to do its work efficiently … coupled with which there has to be the strictest observance of economy in details.’1 Against the background of such an objective it was proposed to apply the Company’s reserves to the building of large powerful ships while at the same time reducing liabilities and working costs. By such a policy it was hoped that more than adequate facilities would be provided for meeting likely changes in the pattern of trade. In retrospect this was a bold decision, designed as it was to offset prospective loss and increase competitive strength in those branches of the trade likely to be subjected to fluctuating conditions.
Dislocation of normal commercial activities due to the outbreak of the First World War was both serious and protracted for Cunard. The 1903 agreement gave the Government the right to take over most of Cunard’s ships in time of war for use as armed cruisers, troop transports, hospital or prison ships. The directors were therefore faced with the dilemma of fulfilling their obligations under this agreement and of maintaining some semblance of service for the carriage of passengers, freight and mails. For this reason a significant decision was taken by the Board on the outbreak of war — to retain Lusitania in the Company’s employment and use her for normal commercial work.1
The events between 1925 and 1934, leading ultimately to the merger of The Cunard Steam Ship Co. Ltd and White Star Line (Oceanic Steam Navigation Co. Ltd), are extremely complicated and difficult to follow. This arises from the fact that there were three areas of controversy each impinging on the other, involving at times separate and at other times joint, matters for negotiation. Firstly there was the growing involvement of the White Star Line with the mounting financial difficulties of the Royal Mail group of which this company had become a part, difficulties which were undoubtedly aggravated by the adverse trading conditions at the beginning of the 1930s. Secondly, there was the promotion of policy by The Cunard Steam Ship Co. to inaugurate a weekly two-ship express service acrosss the Atlantic, a policy which could be implemented only by putting into service ships of great size and power. Finally there was, at a somewhat later stage in the proceedings, participation of government departments and the provision of government finance as instruments in the salvation of White Star and in the building of the new large Cunarders.
As we have seen, the various North Atlantic Conference Agreements between shipping companies in the nineteenth century were either bilateral or multilateral as circumstances dictated. The first Atlantic Conference so designated was formed in 1908 between most of the British, American and Continental lines engaged in the passenger trade. Agreements were reached on first and second class minimum passenger rates and conditions. At the same time a pooling arrangement was established for third class traffic. This conference, which had its headquarters in Jena, was dissolved on the outbreak of the First World War but was reconstituted in skeleton form during the war by a few of the members and had its office in Paris.
From 1935 the status of The Cunard Steam Ship Co. was mainly that of a holding company. It continued the operation and control of the Liverpool—Havre cargo trade as well as that between the United Kingdom and the Mediterranean. Sources of information about the Cunard organisation as a whole, therefore, henceforth become twofold, the annual reports being concerned first with the working of The Cunard Steam Ship Co. Ltd and secondly with that of Cunard White Star Ltd. As a consequence two sets of accounts were presented annually to the shareholders. One can thus distinguish between the fortunes of the Mediterranean services and the difficulty of maintaining profitable traffic across the North Atlantic. This dichotomy is given greater significance when one attempts to compare working capacities in the years of peace from 1935to1939 with those during the years of war from 5939 to 1945.
In purely historical terms this volume should end with the death of Sir Percy Bates in 1946. There was obviously a line of division between his administration of the Company’s affairs and that pursued by his successors. There was also the need to make the Company an efficient instrument in the rapidly changing environment of a post-war world; for Cunard, as never before, had to re-establish normal peacetime operations under abnormal conditions and subject to influences beyond traditional forms of control. History, however, cannot be put into a chronological strait jacket. Even at the peak of Cunard’s achievements during the war, the processes of change were such that the future course of the Company’s history was in one sense a matter of predetermination. In the last twenty years of the Company’s history as a parent firm, the relative decline in economic strength was beset by uncontrollable external pressures and overshadowed by the struggle to make passenger ships profitable in operation. For the first time in its history the Company was in a position of having to fight a losing battle in an endeavour to meet and overcome forces alien to the good management of shipping and its widespread interests. It is not easy to obtain a perspective of these events, partly because the magnitude of source material does not lend itself easily to concise terms of analysis and partly because the nearness of events involves personalities. It is
