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Union Steam Ship Company

Publication Date: 

The Southern Octopus

by Gavin McLean

As 2000 drew to a close one of the world's historic shipping companies was in the final stages of itself becoming history. In its 125 very eventful years the Union Steam Ship Company of New Zealand sent its ships to just about every port in the country and to many overseas. Until the 1960s, you might have seen up to half a dozen colliers at a time lining the quays at Greymouth and Westport, their no-nonsense funnels and derricks throwing up a great red and buff-coloured forest of steel. On the other side of the island you would have wandered along the wharf at Oamaru to see the Waipiata, the Kanna or the Katui discharging factory goods from Auckland and Wellington and loading flour and lime for the return trip. Until the 'fifties' Aucklanders or Wellingtonians would have been on the look out for the trans-Tasman stalwarts Maunganui or Monowai, bringing mail, foreign papers, passengers and gossip. In earlier decades their Bluff and Dunedin counterparts would have followed the movements of the Union liners on the old 19th century 'horseshoe run'. They said that the capital's residents set their watches by the ferries that ran like clockwork between Wellington and Lyttelton. At Auckland, the company's Pacific Island freighters brought a touch of the exotic with their cargoes of tropical fruit and sugar. In 1999, however, that all came to an end. Union sold its last large ships, leaving just a seagoing tug and barge to briefly carry its flag across the threshold of the millennium.

There were many Union Companies, for it meant different things to so many people. It is no exaggeration to say that the company touched the lives of nearly every New Zealander. Until commercial aviation became affordable, everyone had to travel with the Red Funnel Line or its Anchor Line subsidiary in order to cross Cook Strait. Sports teams and school parties saved up and took express train/steamer trips from southern towns for visits to the capital. Students came and went between the islands, rubbing shoulders with commercial travellers, business folk and holidaymakers. We crossed the Tasman and the Pacific to North America in its ships and we often booked passage 'Home' to Britain in its offices. Most manufacturers and retailers sent and received their goods and raw material aboard its ships or those of its subsidiaries and associates.

                                                              The Union Company amoral coat of arms.

                                                    The Union Company amoral coat of arms.

Many of us had a far more immediate connection with the company. For about half of its existence the Union Company was the largest private employer in the country. Thousands of New Zealanders earned their livelihood with the company. Some masters, Arthur Davey, Coll McDonald or G.B. Morgan became minor legends. Many more, the officers, seafarers or the firemen and the trimmers that had to be plucked from wharf side pubs just ahead of sailing time, did not. Many more worked ashore, in the company's grimy, sweaty marine repair workshops down at Port Chalmers, at the Patent Slip and the laundry in Wellington or in the scores of booking offices and shipping agency offices. In its time, Union ran a hotel in Fiji, owned offices and wharves in Australia, a printing works and coal business in New Zealand and a chain of branch offices that stretched throughout the South Pacific. It also ran airlines.

With fingers in so many pies, the company and its ships frequently played bit parts in other people's dramas. The Union Company was at the thick of the three biggest waterfront disputes in our history, 1890, 1913 and 1951. Union liners took our troops away to both world wars and even to Korea, where the old Wahine sank en route. In the early days of radio, Union Company ships tested frequencies, passed on distress messages and even kept the infant West Coast radio stations supplied with new records fresh from Australia. In January 1908 the company's freighter Koonya earned a footnote in Antarctic history by towing Shackleton's Nimrod from Lyttelton and became the first steel-hulled ship to cross the Antarctic Circle. In 1985 the crane ship Ngahere carried New Zealand famine aid to Ethiopia in 'Operation Hope'. In 1998, just a year before the company bowed out of the Tasman for good, its big quarter ramp ship Union Rotorua served as a temporary floating electricity plant, helping out Aucklanders after multiple cable failures had blacked out much of the centre of the city.

The Union Company's ships have also carved their names in blood, iron and steel along our coastlines. In 1888 the British round-the-world traveller 'Wanderer' wrote that most of its steamers ran at night, spending the greater part of the day in port, 'whence the New Zealand saying that the Union steamers ship cargo every day, and go rock-hunting at night'. And find them they did in the days before accurate charts, proper lighthouses and safe harbours. The New Zealand coast has always been dangerous and the company's ships, whose short routes compelled them to enter and leave ports frequently, were not immune from its hazards. Three of the first five ships in the company's fleet, for example, left their bones on the coast within a short time. Dozens of the company's freighters sank here or overseas. Their wrecks are scattered around New Zealand, Australia and the South Pacific, but nowhere more thickly than in Tasmania and the dangerous bar harbours of Greymouth and Westport. Little wonder that the Company's 2500 ton colliers of the late 1940s were so soundly built that later owners squeezed another two decades' service from them after the company sold them in the early 1970s. Only the maritime community usually remembers freighter wrecks but the loss of a passenger ship is different. Some of the wrecks of Union Line ships have etched themselves permanently into the national memory. The worst non-naval disaster in New Zealand waters, the Union Company's Tararua, was headed from Port Chalmers to Melbourne via Bluff in April 1881 when it went aground in the dark off Waipapa Point. One hundred and thirty one men, women and children died within sight of the shore, evoking scenes of Victorian melodrama. Thirteen years later one hundred and twenty one people drowned when the Wairarapa slammed into Great Barrier Island at night. In 1909 the old Penguin hit rocks in Cook Strait, claiming over 70 lives. The company lost two other big steamers early in the 20th century, the Waikare in the Fiordland Sounds in 1910 and Manuka off the South Otago coast in 1929, both fortunately without loss of life. Many of its ships went down during the two world wars, sometimes with severe loss of life. Perhaps the most lasting image, though, will be of the majestic new Wellington-Lyttelton ferry Wahine, foundering inside Wellington Harbour on 10 April 1968 with the loss of 51 lives. It was the first big passenger ship to sink here in the television era and those grainy, grey images of disaster transmitted around the world, simply stunned us.

The Union Company began in 1875 at Dunedin, a city that still impresses a leading historian as 'a miraculous mirror, reflecting Victorian and Edwardian Britain from as far away as it is possible to get'. The southern city was then at the peak of its commercial pre-eminence. With the exception of a typhoid epidemic, the gold rushes of the 1860s had been good to Dunedin, kicking fresh life into what had been a struggling, factionalised semi-theocratic Free Church of Scotland colony. For a brief moment Port Chalmers was the third busiest in the entire Pacific. Up at the head of the harbour, amidst the spires and slate roofs of the boom city, Dunedin's merchants grew fat on servicing the 'new chums' struggling their way inland in search of gold. Few of these hapless folk found much 'colour', but that was not the point. Those migrants were consumers and the city, briefly New Zealand's most populous, serviced their needs to build a commercial and industrial infrastructure that kept Dunedin pre-eminent in these fields for decades to come.

Enter James Mills, born in 1847 at Wellington, the son of a civil servant, was young and bright, so much so that he caught the attention of pioneering Otago entrepreneur, Johnny Jones. Before long 'Little Jimmy' was running a Jones-led shipping line, the Harbour Steam Company. He also became a trustee for his employer, a fortunate move, since Jones died suddenly in 1869, throwing the future of the Harbour venture in doubt. Mills used his trusteeship to personal advantage, keeping the Harbour Company fleet in service while he and his friends built up their own capital in order to buy the ships. In 1873 he tried and failed to set up a Union Steam Ship Company. Success came two years later. Like most colonial investors, he succeeded through a combination of talent, drive and access to British capital. Mills carried to Britain letters of introduction.

Most important, however, was his meeting with Dumbarton shipbuilder and investor, Peter Denny. Denny made a habit of investing in shipping lines around the world and liked both Mills and his plans. He offered to build Mills two new ships on favourable terms and to interest friends in investing in the company. This was a major coup. Dennys had an enviable reputation for the quality of its fast, short-sea steamers. For the next three decades Dennys would build just about every one of the Union Company's ships.

With Denny and his friends supplying the technology and much of the capital, Mills, supported by his fellow directors, who included members of the Cargill and Ritchie families, leapfrogged ahead of his colonial rivals to clean up the coastal trades. In 1876, just months after Mills got back to Dunedin, Denny negotiated a Union Company takeover of the country's biggest coastal competitor, the Wellington-based New Zealand Steam Shipping Company. Just as importantly,

Mills kept the British lines out of local waters by buying the Albion Line's little coaster Taiaroa. The Union Company went on to acquire many other small ventures, most notably the West Coast coal companies collier fleets in the mid 1880s. After 1900 it mopped up virtually all the rest, taking secret controlling interests in the Anchor Shipping and Foundry Company, Canterbury Steam Shipping, Richardson & Company and the Holm Shipping Company, amongst others.

Mills and his partners also had eyes on the vital trade between New Zealand and  Australia. In 1877 Rotorua made the first inter-colonial voyage for the company and in 1878 Union took over the principal trans-Tasman shipping line, McKeckan, Blackwood & Company of Melbourne. Between 1879 and 1882 Dennys delivered seven new passenger-cargo ships for this route, all between 1700 and 2000 tons Rotomahana, Te Anau, Manapouri, Wairarapa, Huauroto, Tarawera and Waihora. These magnificent new ships gave it a dominance that it never relinquished. In 1890 the company took over the Tasmanian Steam Navigation Company, giving it a near monopoly between Tasmania and the Australian mainland.

These three trades, the New Zealand coastal, the trans-Tasman and the Bass Strait were the company's anchors throughout its long existence. But it also ventured into other waters. The Union Company operated many Pacific Island services and from 1890 it began building new ships especially for these routes. It ran across the Pacific, operating first the prestigious San Francisco and Vancouver Royal Mail liner services and then in later decades a trans-Pacific cargo services using wartime built victory ships. It also dabbled in South East Asian services running to India, Ceylon and Indonesia and in 1912 bought the 'Irish Counties' cargo service to Britain.

Despite the wrecks, the Union Company made its money by offering safe, high quality services to its customers. Mills (who was knighted in 1907, the first New Zealand-born person so honoured) built his empire on safety and certainty. He had known that the railways would soon kill the short distance work of the Harbour Company and therefore opted for big new ships for long-distance routes. The first new ships built by Denny for the Union Company in 1875 were the Taupo and the Hawea. Many modern New Zealand factory trawlers exceed their 720 tons gross, but in 1875 they turned heads. They were about the same size as sailing ships that were bringing migrants all the way out from Britain. And they had the latest-style, economical compound steam engines. Little wonder that people flocked aboard them during their triumphal first sailings or that business leaders toasted the company's fortunes in the steamers' luxuriously panelled saloons.

People took the ships very seriously then. Coach fares were steep in late Victorian New Zealand and the roads appalling, so it is not surprising that 'Wanderer' advised that 'very many persons prefer the sea routes. The Union Steam Ship Company of New Zealand possesses a very numerous fleet, and the larger steamers are not much inferior to ocean liners in size and accommodation', he wrote approvingly. Ships such as the Hawea and the Taupo, the legendary trans-Tasman flier Rotomahana of 1879 (the first ship in the world built of mild steel and the first with bilge keels) and the high-speed coastal mini liner Takapuna of 1883 were all state-of-the-art vessels. But not everyone sang the company's praises. Its very size made it a prime target with travellers. In 1897 the great American writer Mark Twain sailed from Lyttelton aboard the Flora, which he condemned as 'about the equivalent of a cattle scow'.

In 'More Tramps Abroad', Twain savaged the Union Company. 'They give no notice of their projected depredation', he lamented, 'you innocently buy tickets for the advertised passenger boat, and then you get down to Lyttelton at midnight to find that they have substituted the scow. They have plenty of good boats but no competition – and that is the trouble'. That night Twain was one of 200 unhappy  passengers aboard a ship licensed to carry 125. 'All the cabins were full, all the cattle-stalls in the main stable were full, every inch of floor and table and in the swill-room was packed with sleeping men and remained so until the place was required for breakfast, the chairs and benches on the hurricane deck were occupied, and still there were people who had to walk about all night!' Twain found a berth, but in a calico partitioned space 'as dark as the soul of the Union Company, and [that] smelt like dog kennel'.

In fairness, it should be noted that Twain described his next Union ship, the Mahinapua, 'a wee little bridal-parlour of a boat ... clean and comfortable; good service; good beds, good table and no crowding'. That was probably the verdict of most of the company's passengers between 1875 and the end of passenger services a century later. Nevertheless, the fancy menus, the lengthy descriptions of the first class saloons of new ships straight from the builders' yards should not blind us to the fact that many people travelled second or third  class. Often they did this aboard elderly ships, vessels that the travelling   public would have wished the Union Company to dispose of long ago.

The Company could be very cautious. Take the early history of one of its premier routes, the famous Wellington-Lyttelton ferry service. From 1895 the elderly Penguin was running exclusively between the two ports. The service became daily in 1900 and ran all year from 1905. And, despite complaints from VIPs, such as the MPs who often used the ships, they got no better. Then in 1907 Dennys delivered the first purpose-built Lyttelton ferry, the Maori. A slightly larger Wahine followed in 1913. These ships were big (about 4,000 tons) and fast  (over 20 knots), making them strategic assets during both world wars.  Wahine served off Gallipoli and later was a minelayer. The newspaper Truth grumbled about the 'U Shan't Sleep Co' and fares were always too high for some people, but the country took to the Lyttelton ferry service, or 'the steamer express' as the company pompously styled it. For sixty years the names Maori, Wahine, Rangatira and Hinemoa were part of household vocabulary.

Union Company ships served the cruise market introducing cruises to the West Coast of the South Island in 1877 and later to other New Zealand beauty spots. In winter cruises were made to the Pacific Islands..

Make no mistake, Mills and his fellow directors built an antipodean empire, the 'southern octopus' as its detractors called it. Although most of the Union Company ships were smaller than the Atlantic liners, the fleet was huge in numbers and Union was a significant line by world standards. It was bigger than the five largest Australian lines and was the biggest line 'south of the line'. Although the company bought many second-hand ships and acquired sometimes-dubious tubs through takeovers, its new buildings were of very high quality. It was not afraid to innovate. In 1881 the Manapouri, one of the 'magnificent seven' first-generation trans-Tasman liners, was the world's first seagoing ship.

She was fitted throughout with incandescent electric light—this at a time when New Zealand streets were lit by gas or not at all.  In 1904 Union's Bass Strait ferry Loongana was the world's first large seagoing steam turbine-powered merchant ship. In 1924 the big 17,491-ton Vancouver liner Aorangi was briefly the world's largest motor passenger liner.

But long before then, Mills had lost confidence in New Zealand. He moved to Britain to enjoy his political and economic wealth. Like America, New Zealand had an anti-trust, anti big business chorus that had the ear of government. Towards the end of the Edwardian era the company explored splitting up its business units in order to escape the charge of monopolism. In 1914 the company was exploring the possibilities of a tie-up with the New Zealand Shipping Company when war intervened. Rumours about Britain's inability to compete with the United States and Japan unsettled many British businesses. In 1917 Mills pushed the sale of the Union Company to British shipping giant, P&O. He lived well and made old bones, dying at Bournemouth in 1936 although still chairman of the Union Company.

The P&O takeover brought short-term security at the price of virility. P&O kept its promise to leave the operational management with the Wellington board (the company moved its head office from Dunedin at the start of 1922) and management. An unfortunate consequence of the takeover, however, was to lock Union firmly into its Australasian and Pacific Basin routes. While Union could, and did expand its services on its traditional routes, that is not where the greatest growth lay. Union had long been seeking to break into the country's main bluewater trade, the United Kingdom route. In 1912 it had secured such a toehold, by buying the New Zealand Shipping Company's 'Irish County' service.

The Limerick, Roscommon, Tyrone and Westmeath, were elderly, and the rights were to the less valuable West of England service, but it was a stake in the 'Home' trade. In 1915 Union added two large new ships, the 9,450-ton Leitrim and the 12,269-ton Antrim. It would acquire a couple more after the war, but P&O saw no need to encourage Union to diversify into a trade already served by its New Zealand Shipping and Federal subsidiaries. Under P&O, 'the Southern Octopus' had become 'the Southern Eunuch'.

P&O also milked the Union Company. Earlier in the century Union had used New Zealand's weak company legislation to artificially deflate profits and to build up hefty secret reserves by depreciating its assets at a very high rate. Little wonder, therefore, that P&O chuckled over the bargain that it had got in 1917, paying £2.9 million in cash and stock for assets really worth £11.6 million. Those secret reserves grew even fatter after the war as Union, P&O's most profitable cash cow, salted away more and more money. Those bulging reserves proved too tempting to P&O. Between 1921 and 1936 the big company extracted £8 million in a massive act of clandestine pillaging kept secret from preference shareholders, company customers and the New Zealand government, all of whom might have preferred higher dividends or cheaper freights. Nevertheless, the raid kept P&O afloat during the mid 1930s as it struggled to restore profitability to its other routes.

Only a few insiders knew what was going on. Everyone else saw only a stream of new ships entering service, for the company's profits allowed it to rebuild at the same time as it squirreled away its reserves. At first the Union Company topped up its depleted fleet with ex-German ships and with war-built standard vessels. From the mid 'twenties, it added new purpose-built ships to its fleet. The new colliers serving the unglamorous but profitable West Coast coal trades sported a solid, engines-aft look, Kaponga, Kartigi and Kiwitea of 1925, followed by the bigger Kaimiro and Karepo in 1929. So, too, did the 2,800-ton Waipiata, for three decades the mainstay of the East Coast South Island- Auckland run and the 3,067 Waimarino of 1930. These ships burned coal, but a hint of things to come came in 1935 with the company's first new coastal motor-ship, the 1,044-ton Karu. It had not quite finished with coal burners, but the introduction next year of the 2,361-ton Kauri to the Tasman pointed the way ahead.

Overshadowing them all was the Awatea. This splendid liner had been inspired by fear of American intentions in the Pacific. It was designed to serve either the Trans-Tasman or the trans-Pacific trades and was one of the fastest liners in the world. At over 13,000 tons, the ship's sleek twin-funnelled profile suggested the lines of an art deco greyhound. On its arrival in its homeport of Wellington in 1936, the company threw a major reception, headed by the governor-general, Lord Galway. Everyone admired the ship. The Awatea performed well in the remaining years of peace. Its end came off North Africa in November 1942 when serving as a troopship. Italian bombers struck and Awatea's speed and anti-aircraft guns provided insufficient protection and the ship went down in flames.

The Company emerged from the Second World War in better shape than many European lines, with healthy reserves and a promising looking future. In hindsight it can be seen that it was soon to suffer an even more serious loss than the wartime sinkings — the nationalisation of its air services. In 1913 when the company wound up the original business and incorporated a new one of the same name, aviation services had been added to its articles. Nothing was done at first but in the 1930s new Union Company managing-director, Norrie Falla, took the company into air transport. Union Airways of New-Zealand was formed in 1935 and by 1940 the company also owned shares in Cook Strait Airways, Australian National Airways and Tasman Empire Airways Ltd (TEAL). That year 'Per Mare-Per Caelum' (by sea, by skyways) replaced the old company motto 'En Avant' (forward). Seven years later, the New Zealand government closed off this promising (although still not yet profitable) field of endeavour when it nationalised Union Airways, along with the company's stake in TEAL.

Click on the following link to see a newsreel item when the AORANGI resumed service after the war.

In the meantime the company concentrated on plugging the gaps caused by wartime losses. The Awatea was not replaced and although the liner Monowai was expensively refitted for peacetime service, passengers were switching from ships to aircraft. In 1953 the Aorangi was withdrawn from the Vancouver run. Seven years later the Monowai carried the last Union Company passengers across the Tasman. The company would order a couple more new passenger ships, the Maori in 1953 for the Wellington-Lyttelton run and the Tofua for the Islands run. But the bulk of the ships were freighters, the solidly-built, conservative-looking products of the Scottish yards of Henry Robb and A. Stephen and Sons Ltd, with their tall, thin funnels and their stick-like masts and derricks. They came in two basic size ranges, the 2,000 -2,500 ton colliers and coasters and the 3,500 and 3,800-tonners for the Tasman services. There were plenty of them. Unkindly nicknamed the 'slow greens', they could be found lurking about the edges of most Australasian port photographs taken from the late 1940s until the mid 1970s.

From the 1960s the company introduced new ships with deck cranes and then roll-on, roll-off ships (RO-ROs). These ships used unique 'Seafreighter' collapsible containers that would not be compatible with standard ISO containers, and expensive shore terminals. Nevertheless, they were a taste of things to come and enabled the company to drop freight rates on the Tasman. Perhaps more damning was the company's failure to see the potential of the road/rail ferries that the New Zealand Railways wanted for the Wellington-Picton run. Union managed the first ones for a few years, but the expanding Railways fleet eventually decimated the coastal fleets of Union and its subsidiaries. Public enterprise had triumphed over private.

By the end of the 1960s the Union Company was at a crossroads. Most of its 70 ships were obsolescent before their time. Union's owner, P&O, was facing massive costs for re-equipping services to Australasia and the Far East with container ships, so the group decided to sell the Union Company and put the investment into the long-distance trades. In 1971, after considerable scrutiny by politicians on both sides of the Tasman, the company was sold to a new consortium of Australasian investors, the Australian half being owned by Thomas Nationwide Transport (TNT). The new owners broke with tradition, prefixing their ships with the name Union. They also introduced a stylised red 'U' logo that vied for ugliness with the pulsating cartoon tongue of a contemporary TV pop show, 'The Grunt Machine'. The old repair yards, the Wellington laundry and other operations were closed. But at sea a stream of chartered RO-ROs and small bulk carriers swept aside the 'slow greens', most of the crane ships and even the earliest RO-ROs. About 25 conventional vessels left the fleet in 1974-76 alone. Chartering was more common than owning, but in 1976/77 the company introduced the mainstays of its 'trans-Tasman bridge', the BT class quarter-ramp RO-RO ships Union Rotorua and Union Rotoiti. They were massive-24,000 tons- and ugly but they put in many years of profitable service.

The BTs' innovative marine gas turbines guzzled gas, though, and the unforeseen oil price shocks of the 1970s forced Union to re-engine Union Rotoiti with conventional diesels. Less fortunate were the even more revolutionary 1976 Bass Strait gas turbine RO-ROs Seaway Prince and Seaway Princess. Laid up in 1983, they were scrapped in 1986 after just seven years trading.

The Union Company made its profits on the Tasman at a price. When it switched the big freighter Union Aotearoa from the South East Asian run to meet a Tasman peak, it turned its back on a trade that was poised to become very important to New Zealand. It also switched its New Zealand coastal RO-ROs to the Tasman, and in 1976 the company also withdrew the costly new Wellington-Lyttelton ferry Rangatira from its historic glamour trade. This now left Union with few strings to its bow.

The Tasman still generated good profits for some time to come, but as more rivals entered the run, growth faltered. When conservative governments wrecked its economics by throwing the Tasman open to international cross-traders in the mid 1990s, it had nowhere to go. The Company's last years were marked by a dizzying ballet of corporate paper shuffling and acronyms. By the mid 1980s Brierley Investments Limited (BIL) had all of the New Zealand-owned Union shares. In 1996 Brierley acquired TNT's half share. By then the government's 'open coast' policy let international cross-traders into even the New Zealand coastal trade. In 1997 BIL sold Union's remaining Bass Strait business and in 1998 the core trans-Tasman business. The old bulk carrier Union Auckland had gone for scrap in 1997. Next year it scrapped the Union Rotorua, saviour of Auckland power consumers earlier that year. In 1999 the company's last big ships, the Union Rotorua, Union Rotoma and the tanker Taiko were sold as BIL added the Union Shipping Group to its assets sale programme. The company's stevedoring and travel agency assets had gone some years earlier.

And so ended the Union Company's involvement in the Tasman trade. But not quite, for the company had made a belated return to its origins. In 1998, it formed a wholly-owned subsidiary, Union Shipping Bulk, to barge coal from Westport to Port Kembla, Australia. It was unglamorous work, but in 2000 the tug Karamea and the large barge Union Bulk I made what look almost certain to be the last Union voyages. Fittingly, they did it from an old Union Company stamping ground, Westport. Just as ironically, they did it hauling coal, the industrial revolution-era fuel that had once put the steam in the Union Steam Ship Company. The wheel had turned full circle just as the company rang 'finished with engines'.

In compiling notes about Union Ships in the Photo Gallery Ian Farquhar's book UNION FLEET was used extensively.