(Text continued from page 3)

The financial losses suffered by pool members, led AUSN and Howard Smith deciding to leave Associated Ship Owners, which in turn would eventually lead AUSN to abandon coastal trading altogether.

Macdonald, Hamilton still received income from its status as Owners Managing Agents and the other areas of business in which they were involved which on paper appears considerable. McBain gives a good indication of the distribution of companies in which MH had an interest, and how this changed from about 1960 onwards.(23) He had also produced, at the author’s request, (on 1st August 2005) a complete breakdown of the Firm’s interests both pre and, when re-formed, post 1960. In 1958 Inchcape (third Earl) came to Australia visiting Melbourne and Sydney as part of a fact-finding tour of his Australian shipping empire. He had decided that he needed to re-arrange the family group of companies into one major group under the auspices of what later became the P&O Group. This was to include Orient Line by the acquisition of the remaining 46% shares of that company,(24) which completed P&O’s ownership. Though this company had been part of P&O since 1919, it had continued to run under its own house flag and livery, it also had its own offices in Sydney and Melbourne and conducted its affairs completely separately from P&O (Macdonald, Hamilton).

23. McBain <bruclyn@bigpond.com> e-mail to Ian Byard <ianbyard@yalumba.co.uk>15th Feb.2006
24. Peter Newall, Orient Line, A Fleet History,(Longton, 2004) 3225.Peter Lucas <Lucaspeterjudy@aol.com>e-mail to Ian Byard <ianbyard@yalumba.co.uk>14th November 2004
26. McBain <brucelyn@bigpond.com> e-mail to Ian Byard <ianbyard@yalumba.co.uk> 4th July 2006
27. Ibid
28. Ibid
29. McBain <bruclyn@bigpond.com> e-mail to Ian Byard <ianbyard@yalumba.co.uk> 31st August 2005.
30. N.L. McKellar, From Derby Round to Burketown, 621

The conclusion to my thesis contained, in part, the following:

“As you will see a very diverse but basically financially unsuccessful company. Certainly the Inchcape crown lay in South East Asia, India and Middle East; Australia was a disappointment.”(1) So said the last Accountant of Macdonald, Hamilton & Co. (MH), Bruce McBain, when sending the author details of the ‘old’ partnership and the ‘new’ limited company’s seemingly extensive portfolio of interests.

The reasons for the demise of the company, can be seen from the foregoing pages of this dissertation and which will be touched upon shortly in this conclusion. However referring to Bruce McBain’s comment, this requires some explanation. Having studied the First Lord Inchcape’s career to some extent, there is no doubt that the Inchcape family’s disappointment over Australia generally, and of MH in particular, is because there was an attempt to model the ‘Partnership’ of Macdonald, Hamilton & Company on that of Mackinnon Mackenzie and Co. of Calcutta which was highly successful and very lucrative. That this idea, as an enterprise, failed is due, in the author’s opinion, to the totally different nature of Australia and India. India had a large and generally thriving population whereas Australia had a population of mainly nomadic people with no infrastructure at all. The comparison between the two countries could not provide more opposites. As a merchant company there was immense wealth to be had from India, and exploitation was the ‘name of the game,’ led by expatriate Scotsmen who were to be found everywhere in the Empire. Australia, on the other hand, had no such wealth. People who moved there were pioneers, similar to those who went to America. The sort of wealth that Inchcape amassed through his involvement in India was simply not available in Australia.

With Macdonald, Hamilton and Co’s ancestor companies having increased their respective sizes and financial situations, and with the success of the Australasian United Steam Navigation Company (AUSN), which in 1887 had sixty-one ships operating on the Australian coast,(2) the prospects for the new partnership when formed in 1915 looked very promising indeed. There is no doubt that Lord Inchcape intended his new creation to be as successful as the Indian agency of Mackinnon Mackenzie and Company, to be run along similar lines, and operate as AUSN’s Managing Agents. However Glen Lewis states that the appointment of MH as managing agents for AUSN was ultimately to that company’s disadvantage. (3)

The dearth of passengers led the Deputy Chairman of the Australasian Steamship Owners Federation to make a statement in 1921 which sought to re-assure the public that interstate shipping had “ample passenger accommodation”.(4) However by 1927, of the thirty-one vessels that were operating on the coast in 1914, only seven remained.(5) By the outbreak of the Second World War eleven vessels were on the coast, which was reduced to six after the cessation of hostilities. (6) In the case of AUSN, because of Inchcape’s decision to purchase the Eastern and Australian Line using funds from AUSN, this left the latter company financially weak and unable to meet the five-fold increase in construction costs which further discouraged any replacement of the ageing vessels managed by Macdonald, Hamilton.

The partnership’s final coup-de-gras came as a result of the visit to Australia by Lord Inchcape (third Earl) in 1958. Upon his return to England he set in motion the events which led to the partnership of Macdonald, Hamilton and Company being dissolved on 30th June 1960, and re-formed the following day, 1st July 1960 as Macdonald Hamilton & Co. Pty. Ltd. A press release was issued in January the following year which was reproduced by the Melbourne Herald Newspaper under the heading “Big Deal by Inchcape, Macdonald Hamilton ” it is re-produced in part as follows:

Inchcape and Co. Ltd of London has bought the whole of the issued
capital of Macdonald Hamilton and Company Pty. Ltd., from the
Inchcape family interests. Inchcape and Co. Ltd. was formed three
years ago to take up the Inchcape family interests in various
countries except Australia. At that time, the British public was offered
an opportunity to take up shares in the new company. This purchase
of Macdonald Hamilton is the second step in the Inchcape group’s
plans for Australian expansion. The first was the takeover of the
Australasian United Steam Navigation Company Limited, mainly
maritime and general engineers of Sydney and Brisbane, some
months ago. (7)

As a partnership, the old Macdonald, Hamilton and Company therefore became history. There appeared to have been some adverse comment about the demise of MH and AUSN because Mr. Brodie, Managing Director in Sydney, had written to Inchcape advising that he would keep Inchcape informed if there should be further comment. (8) Greer, one of the London directors, in a letter to Inchcape had commented the previous year that he thought Brodie’s loyalty to the Inchcape family was stronger and different to that of N.D. Pixley (Senior Partner).(9) Greer also commented that Macdonald and Pixley should not be judged too harshly for being of the old school that thought of AUSN and Macdonald, Hamilton as being one and the same. (10) This was a strange comment to make when it is considered that the first Lord Inchcape’s sole purpose in setting up the partnership was to run AUSN, and that both would inevitably be regarded as one and the same.

As McBain points out “in a sense the agency was unbroken but P&O rather than Inchcape owned and operated it. The Orient Line branch was absorbed, the AUSN managing agency divested, as were the family interests, (importantly the name and the OSK agency) to a new company owned by the Inchcape family and taking the MH name. MH number 2 disappeared in the late 90’s”. (11)

Author’s Note: A Personal Perspective

While on a research visit to Melbourne in May and June 2006, during a personal conversation, Bruce McBain
re-iterated a comment he made in February 2006:

It’s interesting to reflect how 40 years after the AUSN demise none
of the companies survive. Howard Smith (by 1980’s effectively a
hardware store) and MH’s hardware business are now absorbed in
Bunnings a chain of Hardware Mega Stores. Adsteam who purchased
the MH Tug fleets is a joint venturer with P&O having effectively
acquired the P&O agency business. The other ASO companies and
ANL have disappeared and Patricks, a thorn to AUSN, remain P&O
Ports major competitor in Australia. It’s also interesting that MH
was 25% owner of a car carrying business which effectively deprived
AUSN’s Coramba of a profitable activity, and Sir John Williams with
greater financial resources from government, effectively took over
the trade until ANL also was privatised and acquired by the French
company. The unions and the ASO chartering system certainly helped
kill it [ the coastal trade] off but it’s interesting that McKellar also
identified MH’s increasing dependence on P&O and that their
interests often conflicted with AUSN, and the E&A investment which,
whilst eventually giving a significant capital gain to AUSN, had been
a drag when AUSN should have been investing in its own fleet.

For most of the rank and file staff, including this author, the partnership of Macdonald, Hamilton and Company provided a good and happy workplace. Junior members of staff were issued with a small booklet outlining the company’s history and role as Owners Managing Agents for P&O, BI, AUSN and E&A lines. There appeared to be plenty of work for all staff in the Melbourne office, which was undoubtedly reflected in the other offices as well. The partnership’s name was synonymous with the overseas and interstate shipping companies it managed in Australia. Owners vessels were always arriving, unloading, loading and departing on a regular basis, the vessels being large passenger liners and many smaller cargo liners. These ships called at ports in Asia, North America and Canada, Africa, Middle East, the Mediterranean and North European ports, a truly global coverage.

The visit of the 3rd Earl Inchcape to Australia was, it appeared, just a visit except to the partners who were aware of the reason. The announcement, in 1958, that the partnership was being dissolved and replaced by a proprietary limited company bearing the same name, and that Orient Line was to be amalgamated into P&O meant little or nothing at the time. Work was still proceeding, wages paid and it was business as usual. As shown in Chapter 7 employees were advised in early 1960 that there was to be a separation of staff. Agency staff of P&O, BI and E&A left 311 Collins Street and moved to 356 Collins Street becoming members of the new P&O-Orient Lines of Australia. The author was one of those who moved. The remaining staff of the ‘new and second’ Macdonald Hamilton and Company Pty. Ltd., no longer therefore had any connection with the P&O Group, as it later became, though it still had control of what remained of the Australasian United Steam Navigation Company (AUSN).

The change from an almost family run concern, where there was undoubted loyalty between the staff and management, to that of a suddenly much larger concern initially brought friction between P&O and Orient staffs. The partners became directors and the cosy atmosphere of the partnership ultimately gave way to a much harder form of management. The agency, set up to manage and run the Australian network, was itself taken over by the very company (P&O) that it had managed for so many years, and so it faded into history.

The author remained with P&O-Orient Lines until mid-January 1962

History of
Macdonald, Hamilton and Co.
(Introduction)