Ship ownership – early legislation

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  • #2341
    Anonymous
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    In his article Charles Wye Williams, Boilers and Fuel, MM 93:4 (2007): 450-68, Paul Quinn refers to the Irish Anonymous Persons Act of 1782 and its ‘serious advantages as a system of management over the normal arrangement of ships being individually owned by 1/64th shares, all owners having a say in the day-to-day management, which was the common practice in Great Britain’ (452).

    Can anyone recommend any articles or books that describe this in more detail, and in particular why it took so long to adopt similar legislation in England, Scotland and Wales? Thanks in advance.

    #2342
    H. D
    Participant

    This is some very interesting information and I would also like to discover more. I am curious about the link with anonymous persons and why it should be a better system. Under the 64th system, owners had a form of limited liability long before any Acts on this in Britain, as they were only liable for the costs of the vessel. See David Starkey ‘Ownership Structures in the British Shipping Industry‘, International Journal of Maritime History, VIII (1996), 71-95, pp.78-79. Additionally the appointment of a managing owner solved the problem of dealing with multiple owners.

    The only article I am aware of that covers ship registration in this period is Rupert Jarvis, ‘Ship Registry-1786‘, Maritime History, 4 (1974), 12-30. He discusses registration in Great Britain only. I have asked the Mariner’s Mirror Editor if it is possible to contact Paul Quinn to get this followed up.

    #2343
    Anonymous
    Guest

    I did not anticipate the interest shown in this subject, and skipped over it to save word count, not even stating my source. How wrong I was.

    The best reference I can give on the Anonymous Persons Act is an article by Freda Harcourt, Charles Wye Williams and Irish Steam Shipping, Journal of Transport History, Third Series, Vol. 13, No. 2, September 1992.
    Williams was, however, not the only one to exploit the act, many shipping companies registering in Dublin and operating under the act. There is no specific documentation on these, just the fact that they issued prospectuses without any fuss and had boards of directors and Annual General Meetings.

    One was the St Georges Steam Packet Company, originally registered in Cork and managed by the prominent Dublin Quaker Francis Robinson Pim with William Laird as his major shareholder. This company existed before Williams set up his first company, and the two were initially in cut-throat competition, but very quickly settled into a cartel arrangement with Williams, Pim taking up the second job of Williams’ company secretary until forced to resign by Liverpool anti-monopoly interests.

    Another such company was Junius Smith’s and Macgregor Laird’s British and American Steam Navigation Company, which was the first to set out to provide a service direct to New York (their British Queen was not ready in time, and they famously hired the St Georges Steam Packet Company’s Sirius to beat Brunel’s Great Western and to ensure meeting their booking commitments).

    The Peninsular Steam Company, registered in Cork, was set up to run to the Iberian peninsular, but cannily had a London office from which business was conducted. Before long they were operating to Egypt, and, after the opening of the Suez canal, became the Peninsular and Orient Steam Packet Company, commonly known as P&O, transferring to London. D.B. McNiell’s two volume work Irish Steam Passenger Services, 1971, lists literally dozens of others who formed companies in Ireland under the act.

    I have not studied the political reasons why such an act took so long to be passed in Britain, so it would be unwise of me to comment on that aspect of the matter.

    #2344
    Anonymous
    Guest

    It is true that the sort of arrangement Helen Doe mentions conferred some management advantages on the more enlightened British ship owners, but it fell a long way short of the advantages offered by the Irish Anonymous Persons Act.

    Owners were still liable for any expenses that were not covered by profits, and their liability for uninsured cargoes, etc, was unlimited. Not so under the Irish act. A shareholder bought his shares and had no further liability. The management of the company also had liability only to the shareholders. Should a company fail, its assets were sold and any remaining capital after satisfying creditors was returned to the shareholders. Williams exploited this by not insuring his ships and cargoes, successfully undertaking to meet any losses out of profits. Such losses were minimal under his regime, his large and powerful ships proving very safe.

    The manager had much more freedom to act, only his board needing to know what was going on. He could buy and sell ships, alter routes etc, as he saw fit, and could only be removed if his shareholders voted him out at their annual general meeting. Also, the £50,000 was more generous than it seems. It would buy at least three large and sturdy steamships in about 1840, and leave enough over to run them for a considerable time. This enabled true lines of vessels to be established on routes. Inevitably, the more successful companies soon needed to employ larger capital sums, and they then sought British limited liability by individual Act of Parliament.

    The speed with which many British companies sought parliamentary approval for limited liability on formation (not just in shipping) shows that the value of the privilege was fully known and appreciated.

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