Comments and suggestions to admin@lusitania.net
The Cunard steamship company was founded in 1840, by Samuel
Cunard with the express intention of tendering for the lucrative
transatlantic mail Contracts. These were attractive by virtue of the
subsidies granted by the British Admiralty, who were responsible for
the mails. However it was not all in favour of the steamship owner
as the Admiralty benefited too. Some of the clauses included stiff
penalties for missed sailings and delays but were more than worth
it and what is more, the amounts paid to companies were review-
able.
The Admiralty also benefited as the ships were a training ground for
naval personnel. Two other stipulations were also imposed,they
were that a Royal Naval Officer sailed with the ship to "safeguard
the mails" and that the ships themselves were able to mount heavy
guns should a national emergency arise.
Thus on the May 4th 1839, much to the dismay of rival tenders who
pointed out that Samuel Cunard did not yet own any ships, the
contracts were signed and so was born the special relationship
between the British Government and Cunard.
July 4th 1840 at 14.00 hours saw Cunard's first ship sail. The 1.156
ton paddle steamer Britannia, left Liverpool for Halifax, Nova
Scotia.As Cunard prospered his fleet grew and so did his subsidies.
However, the Admiralty would stipulate that in the event of war they
could requisition his fleet. When the Crimean war broke out the
Admiralty called on Cunard for his fleet.
Cunard supplied eleven of his sixteen ships to the Admiralty during
this war for the purpose of troop transport. The war over, Cunard
returned to commercial routes.
Sir Samuel Cunard died on the 28th April, 1865. The Cunard
company continued to grow along with the subsidies from the
Admiralty culminating in an agreement in 1903 that would tie the
two together.
That agreement would leave Cunard at the mercy of the British
Admiralty in all aspects of their ship building programme and their
fleet placed at the disposal of the Admiralty in time of war. For
Cunard that meant an increase in subsidies and a government loan
at favourable rates over 20 years to build two new ships.
They were to be the LUSITANIA and the MAURETANIA. The public
copy of the agreement is open to inspection in the Cunard archives
at Liverpool university. After the agreement was signed and
approved Cunard was effectively under the control of the British
Government by way of the Admiralty.They are kept in
the Sydney Jones library. Cunard also prepared a memo for the
company which outlined their obligations in the agreement, (said to
be as prolix as they were onerous!) excerpts of which are here
reproduced.
CUNARD OBLIGATIONS
Clause 3
1) To build with all dispatch two steamships of large size capable of
maintaining a minimum average speed of from 24 to 25 knots an
hour # in moderate weather.
2.a) To submit to the Admiralty before the building is started, the
plans and specifications of the proposed steamers.
b) To modify such plans and specifications if requested by the
Admiralty within one month.
c) To construct each such steamship to the satisfaction of an
inspector to be agreed upon between Admiralty and the company
and to be employed at the joint expense of the Admiralty and the
company.
Clause 4
To hold, at all times during the term of the agreement all the
company's vessels at the disposal of the government for hire or
purchase.
Clause 5)
Not to alter the memorandum or articles of association as revised in
accordance of the agreement) without the consent of His Majesty's
Government. To observe the provision of the under noted.
Articles of Association:-
No.2)
Providing the company is to be and remain under British control
and that - No foreigner is to hold office as a Director. No foreigner to
be employed as a principal officer of the company. No share to be
held by or in trust for a foreigner or foreign corporation.
No.3)
To carry on the company business to the best advantage.
No.4)
Not to unduly raise freights or charges
No.5)
Not to give undue preference as against British subjects in the
fixing of freights or charges.
No.6)
To submit to the Admiralty the plans of any new vessels built to
attain the speed of 17 knots or upwards and to modify such plans if
so required by the Admiralty within one month.
No.7)
To afford every facility to Admiralty for placing fittings on board in
the event of any of the vessels being taken up for use as armed
cruisers. To provide storage for fittings, not more than 15,000 cubic
feet and 1000 feet of floor space and to keep and maintain the
fittings in clean order.
No.8)
Not to let out on charter except to the Indian Government any
vessel of 17 knots or upwards.
No.9)
a, To secure that on all the company's steamers the masters,
officers and engineers in charge of a watch on board shall always
be British subjects and that three fourths of the crew are British
subjects.
b, That on the Campania, Lucania and "Umbria" as long as neither
of the 2 fastest steamers have started on it's first voyage, all
certified officers other than engineers and not less than half of the
crew shall belong to the R.N.R. or the Royal Naval Fleet Reserve
under a penalty of £12 per head. To furnish each
year to the Admiralty a return showing the number of R.N.R. or
Royal Naval Fleet Reserve Officers, Engineers and men borne in
each vessel.
To use the Company's best endeavours to secure the employment
of the largest possible proportion of members of the Royal Naval
Reserve or Naval Fleet Reserve.
No10)
To keep the company's vessels in a thoroughly seaworthy condition
and good repair. To keep the two fastest steamers in such condition
as to be capable
of maintaining an average minimum ocean speed of 24.5 knots an
hour in moderate conditions. To permit His Majesty's Government
at all reasonable times to inspect all the company's steamers in
order to see that they are kept in such condition.
N0.11)
To adduce to His Majesty's Government within three months after
the expiration of every year calculated from the date the vessel
starts on her first voyage such reasonable proof from the running of
the vessel as His Majesty's Government may require that each
vessel has been capable of maintaining a minimum average ocean
speed of 14.5 knots per hour in moderate weather.
No.12)
To permit the Admiralty to make at their own cost and reasonable
provision for the fittings of pillars.
N0.13)
To register and keep registered all the company's vessels under the
British Flag and not to do anything to endanger the British Registry
or the right to fly the British Flag.
N0.14)
To sell no vessel of the speed of 17 knots or upwards without the
previous consent in writing of His Majesty's Government, but such
consent not to be unreasonably withheld under certain conditions,
also not to sell any vessels (whether or not of the speed of 17 knots
or more) which has during the previous 12 months been ordinarily
employed as a mail ship subject to certain conditions
N0.15)
To sell no vessel of the speed of 17 knots or upwards without giving
seven days notice in writing to His Majesty's Government and
allowing His Majesty's Government the option of purchase.
Clause 7
To adduce to the satisfaction of the Admiralty reasonable proofs
from trials that the two fast steamers will be capable of maintaining
a minimum average ocean speed of 24.5 knots in moderate
weather, failing which the company will be liable to a reduction of
the subsidy.
Clause 10
a, To secure the loan advanced by His Majesty's Government by a
charge upon the whole of the company's ships.
b, To secure the charge by a Trust Deed and by mortgages on the
steamers particularised in the first schedule of the agreement and
the two fast steamers.
c, The loan to be advanced to the company by instalments on the
inspector referred to in clause 3 certifying that the provisions of that
clause have been complied with up to the date of the certificate.
d, The loan to carry interest as to one half from the date on which
the first of the two fast steamers sails on her first voyage and as to
the other half from the date on which the second fast steamer sails
on her first voyage.
e, The interest payable by the company on so much of the loan as
may be due to be at the rate of 2.75 per cent per annum.
f, The loan to be repaid by annual instalments equal to one
twentieth of the total amount of the advance. The issue to two
nominees of His Majesty's Government as soon as the Articles of
Association have been altered as provided for one twenty pound
share with certain privileges.
Clause 13
To convey the mail from Liverpool via Queenstown or from
Queenstown to New York once in every week.
Clause 14
To sail from Liverpool a mail ship every Saturday as soon as
possible after the advertised hour and to put to sea and proceed
direct to Queenstown and remain there until the mails are
embarked and thence proceed without unnecessary delay direct to
New York.
Clause 15
1, To employ as mail ships in all cases vessels of adequate
capacity, power and speed.
2, To employ as mail ships the fastest of the steamships for the time
being belonging to or chartered by the company.
3, To employ in the event of the fastest of the company's steamers
being disabled, hired by the Government or temporarily withdrawn
for annual overhaul, the steamships ranking next in rate of
speed,and to arrange for the annual overhaul of the fastest
steamers to detract in the least possible degree from the
rapidity of the mail service.
Clause 16
To provide on each of the mail ships a separate room or rooms for
the mail and to keep the parcel mails in a place of safety.
Clause 17
To provide mail sorting accommodation on board the ships on
certain terms if required by the Postmaster General.
Clause 18
The Master of each ship to furnish to the Postmaster General the
usual abstracts of his logs and certificates showing the due delivery
of mails.
Clause 19
Not to convey any letter other than mails.
Clause 20
To convey all parcel mails from New York to Queenstown and
Liverpool and all mails from the United Kingdom to the United
States of America which the Postmaster General or his officers may
require to be conveyed.
Clause 21
To contribute one third towards the cost of special service for
conveyance of mails between London and Dublin.
Clause 22
To observe quarantine and Public Health arrangements.
Clause 23
Not to attempt to exercise any lien upon the mails for or in respect
of a general average contribution.
Clause 24
Not to convey in any steamships conveying mails any article which
in the opinion of the Postmaster General is likely to endanger the
mails.
Clause 25
To be responsible for the loss or damage of any parcel or any
registered postal packet provided the aggregate amount shall not
exceed £500 in any one
voyage.
Clause 30
Not to assign, under lien or dispose of part 2 of the agreement
without the consent of the Postmaster General.
Clause 35
To subject any difference or dispute in connection with the
agreement to arbitration.
Clause 38
To execute and do all acts and things necessary for the carrying out
this agreement as soon as the special resolutions have been
passed by the company's shareholders.
TRUST DEED
Clause 3
To issue to His Majesty's Government on it's nominees stock for an
amount equal at par to the amount of equal instalment of the loan
to be made under the agreement.
Clause 7
To mortgage or cause to be mortgaged to the trustees the
steamships referred to in the schedule of the trust deed and the
new fast steamers.
Clause 8
To charge in favour of the trustees the specifically mortgaged
premises with payment of the stocks and the interest thereon.
Clause 9
To charge with payment to the trustees of the stock and interest
thereon the assets and undertakings of the company for the time
being other than the specifically mortgaged premises.
Clause 20
To establish a sinking fund for the redemption of the stock and at
the expiration of each year from the date on which the second of
the two fast steamers sails on the first voyage and on the same day
in each succeeding year, pay to the trustees a sum equal to a
twentieth of the amount of the stock issued.
Clause 21
To invest all monies which under the trust ought to be invested in
the names or under the legal control of the trustees in certain
stocks or funds or banks.
Clause 22
1) To conduct the business of the company during the continuance
of the security in a proper and efficient manner and to the greatest
possible advantage.
2) To keep the usual and proper accounts as provided in the
company's Articles of Association.
3) To perform all obligations under the agreement with His
Majesty's Government.
4) To keep the company's vessels in good seaworthy order and
condition so as to comply with the requirements of the Board of
Trade.
5) To permit the trustees and such persons as they shall from time
to time appoint in writing to view the state and condition of all
vessels and to inspect the
company's books and accounts.
6) To keep all vessels in process of construction adequately insured
and also all vessels for the time being forming point of the fleet
insured in the aggregate t
o the extent of one half of the amount for the time being due to the
stock.
7) To furnish to the trustees in every year a full and complete list of
certificates by the secretary of the company and all the marines
policies for the time being
in force
Clause 24
To pay to each of the trustees in each and every year during the
continuance of their security for their services the sum of £210.
SECOND SCHEDULE
Clause 2
Provide that whenever the sinking fund established under the
trustees amounts to £100,000 it shall be applied in redeeming at
par an equivalent amount of stock.
Clause 3
Any stock not previously redeemed to be redeemed at par the
expiration of 20 years.
Clause 5
Stock to carry interest at the rate of £2.15.0 per cent per annum
payable on the 1st July and 1st January in each year.
Clause 6
Every holder of stock to be entitled to a certificate under the seal of
the company.
Clause 22
A register of the stock to be kept by the company.