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The Reasons Behind the Cunard White Star Line Merger

The reluctant pairing of the two greatest British shipping companies was facilitated by fraud, scandal and the great depression. The Cunard White Star Line merger was necessary yet difficult and spurred on by the great British public.

Read all about how the effects of the great depression were the start of the end of the line for both Cunard and White Star.

Royal Mail Steam Packet Co.

In the late 1920s, Cunard had stiff competition from a shipping company called the Royal Mail Steam Packet Co.

The company had secured the British government’s mail contract worth nearly a quarter of a million pound and also delivered a luxurious passenger experience that directly competed with White Star and Cunard.Lord Kylsant - Cunard White Star Line

In 1902, Lord Kylsant was made the chairman of the Royal Mail Steam Packet Co. and decided the best way to move the company forward was to invest in other companies which included White Star Line and Harland and Wolff shipyards.

By 1930 it emerged that Lord Kylsant and his accountant John Moreland had been falsifying the financial records of RMSPC and had amassed a debt to the government of around £10 million and had a trading deficit of around £300,000. Today these sums would equal over £1 billion!

Both men were charged with fraud and Kylsant was sentenced to 12 months in prison for his crimes.

 

White Star Line faced a total collapse as investigation into their own financial situation unveiled their struggles all thanks to Kylsant.

What came next was quite literally the end of the line for White Star.

The effects of the great depression

By 1932 America had already limited the number of immigrants allowed into the country twice to ease the effects of the great depression.

White Star Line, being one of the major players in immigration passage, struggled to run a profit and eventually the once great shipping line was running at a loss.

Despite this White Star sailed along subsidised by healthy investments from the Irish Government who were primarily concerned with protecting the jobs of the thousands of Irish men working at Harland and Wolff.

Harland and Wolff Workers - Cunard White Star Line
source: Titanic Belfast

During this challenging time both, Cunard and White Star were constructing what were destined to be two British superliners.

White Star’s Oceanic III, was to be a 60,000-ton luxury liner and Cunard’s ship the unnamed ‘534’ was coming in at 80,000 tons. Both ships were destined to be the finest vessels afloat once completed and each one was to be the others direct competition as well as that of Bremen and Europa’s German superliners.

By 1931 work ceased on ship ‘534’ as the effects of great depression spread across the world. Cunard’s ship builders, John Brown’s, laid off thousands of workers and the superliners hull lay untouched in lot ‘534’ in Clydebank.

Queen Mary hull - Cunard White Star Line
source: Saz

Soon after work also stopped on White Star’s superliner and sadly the whole order was eventually cancelled, and the world would never see Oceanic III.

Both of the greatest British shipping companies were slowly collapsing, their bread and butter of immigration traffic deteriorating and demand for transatlantic passage was quickly following suit.

The British public expressed their concerns, that two British icons were suffering as a result of the depression and urged their government to step in and take action to protect the future of Britains maritime assets.

A request was made for the British government to fund the completion of Cunard’s luxury superliner turning the laid-up hull in lot ‘534’ into the luxurious cruise liner it was intended to be.

A proposal was laid out by the government.

New Year New deal

Noticing the potential of their investment the British government were keen to protect Britain’s position in the shipping industry.

This was a chance to protect Britain’s maritime involvement by injecting a healthy sum of £9.5 million Cunard and White Star with the proviso that the two firms merged.

Two companies that had spent so long trying out do each other, who literally shared one city and almost shared a street, were being asked to join together to save the future of British shipping.

White Star immediately opposed the suggestion and went so far as to get an injunction to halt such a merger.

However, due to the long list of recent financial woes, including the Kylsnat scandal and the drop-in immigration traffic to the US, White Star had no choice but to accept the offer.

By December 30th, 1933 White Star Line agreed to the terms of the government proposal and together Cunard and White Star became Cunard White Star Line.

The cash injection of £9.5 million was delivered and a portion, £3 million, went towards the completion of ship ‘534’ which, when launched on 26th September 1934, was officially named the Queen Mary.

The rest of the funds were to be used for future ship building that would eventually bolster the dwindling UK economy.

Over the course of the new merger Cunard White Star Line began what was almost an exorcism of anything relating to White Star.

The White Star fleet was broken up and sold on for scrap in Japan and Scotland with some whole vessels being sold to lesser shipping lines.

Next to go were the extravagant White Star offices that were purpose built for the original founding company the Oceanic Steam Navigation Co. in 1897.

Cunard White Star Line began operating from the Cunard Building and the White Star offices were abandoned after nearly four decades of service.

What the merger meant for UK economy

After the launch of Queen Mary, Cunard White Star Line were once again respected competition on the sea, Queen Elizabeth came not long after and was followed by the second coming of the Mauretania.

During the Second World War Cunard White Star’s ships were responsible for carrying over two million servicemen and were said to have shortened the war by a year by none other than Winston Churchill.

Troops on board Queen Mary - Cunard White Star Line
source: warfare history network

By 1947 Cunard was in such an advantageous position that they bought out the last of White Star’s interest and renamed the company the Cunard Line. Transatlantic travel had picked up again by 1950 and the two Queens were responsible for a huge portion of income to the UK from the US.

In the 1960s the government proposed the construction of a new superliner and after deliberation between the Cunard stockholders a third Queen would join the Cunard fleet; Queen Elizabeth 2.

The end of the line

Transatlantic flights started in 1958 offering passengers a quicker passage across the seas and demand for cruise liners lessened.

Throughout the late sixties one by one of Cunard’s luxury liners were retired, and the last remnant of the White Star Line, the Nomadic, was sold in 1968 and transformed into a floating restaurant meaning nothing of the White Star Line or the merged Cunard White Star Line existed past 1969.

Cunard White Star Line - Three Queens
source: UL

Cunard continues to serve passengers cruising the Atlantic with their stunning liners the Three Queens, the Cunard Line has undergone many transformations, takeovers, mergers and acquisitions over the decades.

One thing that always remains is that Cunard is a symbol of stability, reliability and luxury and their 1950s motto “getting there is half the fun” is as true today as it was nearly 70 years ago.

Liverpool’s maritime heritage is a major attraction to the city and at Signature Living, we want to preserve this rich history for future generations to come.

30 James Street – Home of the Titanic educates guests and the public about White Star Line’s past from within what was once the offices and the most well-known symbol of the company that never took to sea.

Now our involvement in the Cunard building will bring forward even more of the interesting stories and facts associated with Liverpool’s maritime past for future generations to discover and enjoy.

Stay up to date with Cunard House’s events and developments here and get involved with Cunard’s past present and future with Signature Living.

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