Chapter XIV.

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THE GRAND JUNCTION CANAL
A HIGHWAY LAID WITH WATER.


PART V. ― POSTSCRIPT


THE GRAND UNION CANAL COMPANY


“I cannot repeat too often that transport today is an indivisible commodity and that there is little hope for the survival of canals unless the canal industry provides not merely a transport track, but a transport service that is equal to the service provided by the other forms of transport.  Such a service can be provided by the canal industry, but only through the constant exercise of commercial initiative and enterprise.”

Chairman’s address to the General Meeting, May 1945



 
INTRODUCTION


On 1st January 1929 the Grand Junction Canal Company ceased to exist.

In several ways the 18 years following the formation of the Grand Union Canal Company are the most interesting in the waterway’s history, for until then it had led a fairly mundane existence.  Under new ownership the waterway entered a period of significant change and although much of it failed to achieve its aims, those aspects that did succeed leave a tantalising picture of what might have been had not the cold hands of the State stifled the business.
 

R. F. de Salis.

Apart from its unsuccessful venture into canal carrying, the Grand Junction Canal Company had throughout its life operated along the lines of a turnpike trust, deriving its revenue mainly from the passive collection of tolls and from rental income (which by end of its life formed a substantial part of its revenue).  But this moribund style of management was to change abruptly.  On 1st January 1929 the amalgamation of the Grand Junction Canal Company, the Regent’s Canal and Dock Company and the Warwick canals to form the Grand Union Canal Company took effect.  There followed a radical change in management outlook, first as the new board extended and modernised its main line in a forlorn attempt to resuscitate long-distance canal carrying; then, following a radical management shakeup, as their successors set about building a sustainable business by diversifying into related areas of transport activity.  But WWII. intervened before these strategies could take real effect and the Company was again to experience ― as de Salis had described the Grand Junction Canal Company’s experience during WWI. ― being “very unfairly treated” under the regime of wartime government control.

The War years did see one important, albeit short-lived, development.  The Grand Union Canal Act 1943 repealed many of the clauses in the archaic canal Acts inherited by the new Company from its constituents.  It also extended the Company’s borrowing powers, enabling it to diversify its business ― and here it took full advantage ― and, overall, gave to it the attributes of a modern business enterprise.  In the immediate post-war years the benefits of diversification were beginning to show when, on 1st January 1948 the Company’s assets were acquired by the State together with those of many other transport undertakings to form the British Transport Commission.


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THE NEW COMPANY

 

Wilfrid H. Curtis.
First Chairman of the Grand Union Canal Company.

On 1st January 1929, two Acts of Parliament [1] took effect under which the Regent’s Canal and Dock Company acquired, via a merger, the canal assets of the Grand Junction Canal Company and at the same time purchased the three Warwick canals, which form the shortest route from Braunston to Birmingham.  The company so created, the Grand Union Canal Company, [2] took its name from the former Leicester Line canal, which has since been known as the ‘old’ Grand Union Canal.

The negotiations that led to this amalgamation came to public attention in May 1927, but they had commenced some years previously.  Recognising that the two companies had much commonality of purpose, de Salis approached W. H. Curtis, a Grand Junction Canal Company director and Chairman of the Regent’s Canal and Dock Company, with a proposal that they examine the possibility of a merger, a tactic that would avoid one company having to raise the large cash sum necessary to buy the other. [3] Informal discussions then progressed, the companies’ auditors and solicitors became involved and negotiations eventually reached fruition early in 1928, soon to be followed by extraordinary general meetings at which the terms of the amalgamation were approved by the respective shareholders.  Because the companies had been created under the archaic ‘joint stock company’ system, each having been formed by a private Act of Parliament, further Acts were necessary to sanction both the merger and the purchase of the similarly constituted Warwick canals.  The new company took the form of a ‘limited liability company’, [4] its board comprising six directors ― three each from the Grand Junction Canal Company and the Regent’s Canal and Dock Company ― under the chairmanship of W. H. Curtis. [5]



The terms of the grouping were, that:

  •     the holder of each £100 share in the Grand Junction Canal Company received Grand Union Canal Company stock to the nominal value of £67 6s ― a later capital adjustment (£40,906 2s 6d) increased this to £70 18s 6d; [6]

  •     the three Warwick canals were bought outright by the Regent’s Canal and Dock Company, which paid £62,258 15s. 0d. for the Warwick & Birmingham Canal and £8,641 for the Warwick & Napton Canal [7] (the Birmingham & Warwick Junction Canal being owned jointly by the other two);

  •     the Grand Union Canal Company became responsible for the upkeep of the section of the Oxford Canal between Braunston Junction and Napton Junction;

  •     a new limited liability company, ‘The Grand Junction Company’, [8] was formed to acquire that part of the Grand Junction Canal Company’s property portfolio at Paddington, which was not included in the merger, together with certain Grand Junction Canal Company pension obligations, and to carry on the business of an estates and financial company.  The Grand Junction Canal Company’s existing 4% debenture stock (£150,000) and 6% preference shares (£93,700) were to be serviced by the Grand Junction Company, which received rental income from its property portfolio and the interest on 5½% Grand Union Canal Company debenture stock to the value of £285,709.

To some extent the formation of the Grand Union Canal Company implemented a recommendation of the 1906 Royal Commission, that canal company mergers were desirable to achieve control over longer routes (which railway mergers had achieved many years earlier), both in terms of setting ‘through tolls’ and standardising waterway dimensions; failure to achieve each had greatly hindered the development of inland waterway transport in the UK.  The formation of the new Company gave its Board control over the entire route from London (Brentford and Regent’s Dock) to Birmingham. [9]

In 1931, the Company also obtained control over the entire route from London to the River Trent with the purchase of the Leicester Navigation (Leicester to Loughborough) and the Loughborough Navigation (Loughborough to the River Trent); the purchase of the Erewash Canal further extended Company’s domain from the Trent to Langley Mill on the border of Derbyshire and Nottinghamshire.  At an extraordinary general meeting convened to seek shareholder approval for this scheme, Curtis described his vision for the extended waterway:


“. . . . the linking up of these undertakings with the Grand Union would provide a fine barge canal from London to the Trent, and Nottinghamshire, when certain larger locks had been built at Foxton and Watford.  As this last improvement was a very costly one, amounting to £150,000, they [the Company] had made an application to the Government under the Development (Loans Guarantees and Grants) Act, 1929, to carry them over while the work was being executed and until the traffic began to move.”

The Times, 29th May, 1931


Acquisition of the north Leicestershire canals required an enabling Act [10] which, when it came into force on 1st January 1932, added a further 40 miles of canal to the 240 miles existing.  In announcing the takeover, The Times report went on to say that dredging would commence “without delay”, which suggests that the newly-acquired waterway was in poor shape.

The Board then returned to a scheme last tried in the 1890s, of widening the locks at Foxton and Watford to take larger craft, their view being that this would increase the canal trade between the Nottinghamshire and Derbyshire coalfields, the Leicestershire granite quarries (chippings for road construction) and markets in the Home Counties.  It would also provide better access to the ironworks of the Erewash Valley and to the electrical engineering works around Loughborough.  How the restriction on the passage of wide craft in the confines of the Blisworth Tunnel was to be dealt with appears to have been glossed over.  But the Board had been unduly optimistic in extending their waterway before the Government had agreed to provide the financial assistance necessary to fund the cost of rebuilding the Watford and Foxton locks, which they declined to do.  Without government help, the scheme was unaffordable, for by then the cost of modernising the London to Birmingham route had left the Company’s finances over-stretched.  Thus, Curtis’s vision of a barge canal from London to the Trent evaporated and the narrow staircase locks at Watford and Foxton continued to restrict the through route to narrow boats and impose a bottleneck on the passage of trade.
 

56 YEARS IN THE SAME OFFICE!
Undated clip from the Evening News.


When on Tuesday two of London’s best-known canal companies, the Grand Junction Canal and the Regent’s Canal, cease to exist as separate bodies and become the Grand Union Canal, it may be the beginning of a new era in English canal history, but it will be the end of a very interesting personal record.

Mr. J. W. Bliss, whose office as general manager to the Grand Junction Canal will come to an end, has been for 51½ years the same room at the foot of Surry-street, Strand.  Not many men in London could beat that record. “During the whole of that time,” said Mr. Bliss to the Evening News today, “I have only been absent from work four days owing to an attack of lumbago.

“I came from Northamptonshire when I was 16.  I had had a fine open-air life, riding almost as soon as I could walk, and hunting with the Pytchley as often as I could.  Perhaps it was partly to this that I owe my good health. I started off as a junior clerk with a salary of £50 a year, and worked up, step-by-step, till I became clerk to the company in 1905 and general manager in 1916.

“My life has been a pleasure all the way through, and it will be a bit of a wrench to give up the old work, the old routine, and the old office.  One thing I am most pleased with is that we have never had any labour troubles among our staff of 300 or so.  Even during the general strike our relations continued friendly, and everyone remained at work.

“It has been part of my duty to make each year a tour of our whole system, a hundred miles or so.  I made the tour latterly in a motor boat, and I suppose I have done it for the last thirty years.  The result is that I have got intimately the whole system and many of the men who work on it.  When the new company takes over I shall be an advisory director, and well as being manager of the Grand Junction Canal estates at Paddington, and it will be a great pleasure if I am invited to make the annual tour of the system again.”

Mr. Bliss believes that the outlook for the canals of the country has never since the introduction of railways been so bright as it is now.  Road transport, he says, which in some places is a competitor, is in others an ally.  “The outlook is brighter,” he declared, “because, with common management over a group of canals through journeys are made more easy and it is possible to have a higher standard of maintenance. Time is the essence of the matter in transport competition and the common management of canals between London and Birmingham will probably lead to a reduction in the time spent on the journey. The replacing of the horse by the motor has also been a big factor in the improved outlook.”

Mr. Bliss has a high opinion of the people who work on the canal boats and barges. “They are good-hearted people,” he said.  “I have known a case where, when the parents on one boat died their children were adopted by the man and wife on another boat.”


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MODERNISING THE MAINLINE


The Grand Union Canal Company got off to an unfavourable start.  The winter of 1928-29 was severe, resulting in six inches of ice in places; this was followed by a period of drought.  Other than reducing that year’s dividend and providing the Board with a recognition that better ice-clearing methods were needed, other items for them to address included dredging and the need for more protection against bank erosion caused by turbulence from the growing number of motor boats then entering use.  It was therefore proposed to invest £50,000 to £60,000 on further concrete walling and piling, which would achieve the additional benefit of increasing the bottom width of the waterway, thereby reducing drag and speeding up traffic.  But this modest engineering programme was soon to be overshadowed by another, which would have far-reaching consequences for the Company’s fortunes.

In 1929, Herbert Morrison, then Minister of Transport, announced that the Labour government favoured canal development as a means of helping industry, and that the ‘Development (Loan, Guarantees, and Grants) Bill’ then passing through Parliament might provide financial assistance to help develop waterways serving important industrial areas.

Long-distance traffic on the Canal had been declining for many years, a state of affairs that in 1920 had caused de Salis to state that “we shall hope to carry out desirable improvements on the paying portion of our canal, but on the non-paying portion we shall merely carry out our obligations. . .” the paying portion of the canal being that to the south of Berkhamsted.  Despite this pronouncement, the new Board must have seen sufficient potential in the face of existing rail and growing road competition to revive their long-distance traffic sufficiently to justify the heavy investment needed to upgrade the entire London to Birmingham route, and they set about planning a programme of improvements the likes of which had not been seen since the waterway was built.  Their aim was to transform the Company into a transport business that, for deadweight cargoes at least, could compete with road and rail transport on equal terms.  They believed that this could be achieved by upgrading the waterway to handle bigger and faster craft and by offering modern cargo-handling, storage and distribution facilities at its principal wharfs.  When complete, it was envisaged that the London to Birmingham service would be operated by pairs of wide boats (12ft 6ins beam) loaded to 137 tons compared with 55 tons for a pair of narrow boats, and that they would complete the journey in 48 hours compared with the 60 hours existing.  Furthermore, the use of craft of sufficient size to navigate the Thames would avoid the cost and delay involved in transhipping cargo at Brentford between Thames barges and lighters, and narrow boats.

In response to the Government’s grants scheme, the Company submitted a three-year development programme designed to transform the existing London to Birmingham waterway into a barge canal throughout.  It included bridge widening; concrete walling, piling and dredging; and widening the narrow locks on the former Warwick canals to accommodate craft of 12ft 6ins (and ultimately14ft) beam.  The programme’s estimated cost was £881,000, but the answers to some questions about it are not evident.  Based on past experience of using wide boats north of Berkhamsted, [11] the intended service improvement would have required the section of the main line from Berkhamsted to Braunston to be dredged and widened; there is also the question of the passage of wide boats in the confines of the tunnels; and the Board’s ultimate aim of using river barges (14ft beam) on the Birmingham route would have required further extensive bridge widening.

In November 1930, a notice appeared in the London Gazette informing the public of the Company’s intention to introduce a Bill into Parliament seeking powers to undertake the proposed engineering work.  This was to include, inter alia, obtaining land by compulsory purchase; building new locks and flights of locks between Napton and Birmingham; fixing tolls; obtaining a running agreement over the Braunston to Napton Junction section of the Oxford Canal; and raising additional capital and loans to finance the scheme.

The public announcement was followed by an extraordinary general meeting at which Curtis described the aim of the plan.  He informed the meeting that, despite significant industrial growth, traffic between London and Birmingham had remained practically static at around 100,000 tons p.a. during the previous 20 years.  The situation required “enterprise” and that by opening up the route to larger and faster craft the Company would acquire more business.  But Curtis’s belief departs from another important point stated by de Salis a decade earlier.  When addressing the decline in the Grand Junction Canal Company’s long distance business, de Salis had explained to his shareholders that an increased share of the London to Birmingham trade could only be gained at the expense of the railways.  As he understood the position:


“We divide our traffic roughly into two classes: — Through, or traffic between London, Braunston (for Birmingham), Leicester and Northampton; and Local (all other traffic).  Generally, the through traffic is in competition with rail; the local traffic is not . . . . . Three men are needed to move 50 tons, say, from London to Birmingham on canal, and the same number can move 500 tons by rail.  This is a factor which has come to stay, and I do not think we can look for anything but a dwindling long-distance traffic.”

Chairman’s address to the GJCC General Assembly, December 1920


The modernisation plan obtained Parliamentary approval in the Grand Union Canal Act 1931, which authorised the Company to finance the work by the issue of redeemable (in 1953) debenture stock up to the value of £500,000.  The stock, designated the ‘Grand Union Canal Development Loan No. 1’, carried a 4% coupon and by way of government assistance the Company was awarded a grant of the interest on £500,000 for 10 years at 5% p.a., and 2½% p.a. for a further five years.  A further £400,000 of 6% preference stock was issued at the same time.

At the Company’s general meeting in March 1932, Curtis was able to report that work on the scheme was making substantial progress.  Extensive dredging had been carried out with the aim of deepening to 5ft 6ins the section of canal from Brentford and throughout the Long Level to permit the passage of 100 ton capacity barges, much concrete walling and piling had been carried out, and a tender had been accepted for widening the Warwick canals’ locks to accommodate wide boats:


“When the works contemplated by the new capital schemes are finished, the Company will be in possession of a waterway linking the chief midland towns and coalfields to the metropolis, providing a means of transport at a cost which will be much less than by any other method.  When one realizes the importance of low transport cost to the export trades it is not surprising to learn that the facilities that the Company will have to offer to the Midland manufacturers are likely to be taken advantage of to a very large extent. . . . . With our costs so low new traffic is bound to come to us and when trade gets over its troubles [i.e. the Great Depression] we can confidently expect increased business.”

Chairman’s address to the General Meeting, March 1932

 

A section of the Canal before modernisation . . . .

By the following year, modernisation of the Warwick canals was proceeding.  A £350,000 contract employing nearly 1,000 men ― about three quarters from the local dole queues ― had been placed with L. J. Speight Ltd, a firm of civil engineering contractors working under the supervision of the eminent civil engineer, Sir Robert Elliott-Cooper.  Construction work was planned carefully to permit it to proceed without the need to suspend canal traffic:


“. . . . for miles the canal banks have been transformed from rough jagged boundaries to concrete walls presenting all the symmetry of an up-to-date swimming bath. . . . many parts of the canal are being improved by men directly employed by the Company; indeed, activity is general almost throughout the length of the waterway.”

The Times, 20th June, 1933

 

. . . . and afterwards.

Work on the Warwick canals included converting the existing 52 narrow locks into weirs, replacing them with 51 wide locks (on the Knowle flight, six locks were replaced by five) of a modern design:


“The reconstruction gave the opportunity for several new features.  Adjustment of the water level in the lock chamber was hastened by the construction of large sluices of a spiral type with bevel gearing specially designed; and the sluice culverts were carried along the side walls and provided with three lateral openings through which the water finds an exit.  These large sluiceways ensure the rapid filling or emptying of the lock, and the average time for craft passing through does not exceed four minutes for the complete operation.”

Transport and the Public, J. A. Dunnage (1935)

 

New locks under construction at Knowle, Warwickshire in 1932.
The old narrow locks are on the left of the picture.


Extensive dredging deepened the Braunston to Birmingham section to 5ft 6ins, while walling increased the waterway’s bottom width to 27ft, a profile that had been derived from experiments undertaken by the Company, from which it was learned that:


“. . . . for a 14 feet horse-drawn barge, where the ratio of canal area to boat immersed area was increased by passing from an undredged to a dredged section by 56.6 per cent, the speed was increased by 66.8 per cent; for a 7 foot motor-driven boat passing similarly into a dredged section where the area ratio was increased by 77.7 per cent the speed was increased by 59 per cent or from 2.73 to 4.62 m.p.h.  The results of these tests was that the standard to be aimed at was, for 14 feet beam craft, a minimum bottom width of canal of 32 feet by 5 feet 6 inches minimum depth, and for 12 feet 6 inches craft a minimum bottom width of canal of 27 feet.”

Transport and the Public, J. A. Dunnage (1935)


By October 1934, most of this re-engineering had been completed and the Duke of Kent was invited to open the new locks between Napton and Birmingham.  He boarded the new wide boat Progress at Hatton Station canal bridge from where he travelled to perform the opening ceremony.

Progress was to be the precursor of a fleet of larger craft that were to form an important element of the Board’s long distance carrying strategy.  Her specification was a significant departure from the wide boats then in operation on the Canal:


“The motor vessel ‘Progress’ is a new type of canal wide boat and was built at Messrs. Bushell Bros. Dock Yard, at Tring.  It will be the first motor canal boat of its size to go and load in the Thames ex-ship and carry goods to Birmingham, thus saving transhipment.  Up to the present barges large enough to load ex-ship have only been able to travel as far as Berkhamsted and are horse drawn.

The motor vessel ‘Progress’ has an overall length of 75 feet, a beam of 12 feet 6 inches, and a depth of 5 feet, and will be capable of carrying 68 tons.  It is fitted with a British-Junkers 30-B.H.P. three-cylinder unit engine and runs at 1,200 r.p.m.  It carries seven river lamps, a bell, fog horn and has wheel steering and living accommodation.”

Unidentified press cutting in the collection of Miss Catherine Bushell




Progress moored on the Wendover Arm following construction and fitting out for the Royal ceremony at Bushell Brothers’ boatyard.

Progress, conveying the Duke of Kent at the opening ceremony at Hatton Locks, October 1934.


But wide boat carrying was not to be ― by 1937 the development money had run out, leaving sections of the main line south of Braunston unable to accommodate them.  Thus Progress became the sole example of a class of canal craft that might have been.  The Board’s wide boat strategy was laid quietly to one side and the Company’s long distance carrying fleet continued to comprise narrow boats, a position that continued until the trade finally petered out with the closure of Boxmoor Wharf in 1981:


“The narrow locks on the Warwick section of the main line were rebuilt before the last war and a pair of narrow boats can now be locked through to Birmingham in one operation.  The Grand Union Canal Company spent about £1 million on this scheme and on dredging and bank protection, but failed to secure sufficient money to complete their programme within the time allowed by the Grants Committee.  The London-Birmingham route beyond Berkhamsted continued to be operated by narrow boats.  It is inadvisable to use narrow boats on the Thames, and goods destined for destinations beyond Berkhamsted are discharged into lighters and transhipped at Regent’s Canal Dock or Brentford.”

Canals and Inland Waterways: Report of the Board of Survey (Rusholme Report), BTC, 1955

 

The GUCCC butty Tiverton (No. 376) at Tysley Wharf.
The cranes had just been supplied by Stother & Pitt.

Although the Company continued to invest in improvements to its warehousing facilities at Brentford and Birmingham (Sampson Road and Tyseley), by 1937 it had become apparent that modernisation was failing to produce the desired returns, nor did it seem likely to.  In explaining to shareholders why their Ordinary dividend had been passed over for the third successive year, Curtis had this to say:


“What, then, are the reasons for passing an Ordinary dividend for three years in succession?  The main reason is that the revenue from tonnage carried has not left sufficient margin after paying the prior charges incurred in performing our part of the arrangement entered into with the Treasury, which was a condition for receiving from them the grant of interest.  These prior charges amount in all to nearly £30,000.  This slow expansion of the tonnage revenue has been largely due to the fierce competition by rail and road.

The railways entered into an agreement with the Canal Association, of which we are ourselves members, which purported to benefit both parties.  So far as we are concerned it resulted in the loss of a very large tonnage in one particular trade where the railways were fighting coastwise shipping.  The cut rate might have stopped coastwise shipping, but it certainly killed our trade.  We have protested that this sort of thing was not provided for, and we are letting the Canal Association know that we are of this opinion.  The railway attitude is that they will not give a canal such as ours a place in the sun.”

Chairman’s address to the General Meeting, April 1937

 

Col. E. J. Woolley MC

Thus de Salis’s policy of concentrating on short-haul freight carried to canal-side locations ― thereby avoiding railway competition (road transport having become an additional competitor) ― appears to have been vindicated.  Indeed, when the British Transport Commission reviewed the operation of their canals in 1954, they reached the same conclusion, that only the section of the Canal south of Berkhamsted was worthy of further investment, and that the remainder was “to be retained”. [12]
 

The GUCC warehouse at Sampson Road c.1938.

Perhaps failure to meet its strategic objectives led to the Board being restructured, with two directors resigning to make way for “younger men”.  Three new directors ― John Miller, E. J. Woolley and J. M. Whittington ― were appointed, and formed a committee tasked with making economies and reorganising the Company.  At the 1937 General Meeting, Curtis was reappointed to the Board for a further term, but shortly afterwards a brief press statement announced his resignation, E. J. Woolley being appointed to succeed him.  At the following year’s General Meeting there is no mention of Curtis receiving a vote of thanks for his years of service to the Company, and to the Regent’s Canal and Dock Company before it.  Speaking at the Company’s final General Meeting over a decade later, the presiding Chairman, John Miller, on looking back as his directorship, referred to a reconstruction of the Board towards the end of 1936 “when the Company was undoubtedly in a very precarious condition”.  It is of course a matter of conjecture, but circumstances suggest that Curtis’s resignation was encouraged.

Modernisation continued under the chairmanship of E. J. Woolley.  September 1938 saw the opening of the Company’s new warehousing facility at Sampson Road, Birmingham.  Built at a cost of over £34,000, it offered 30,000 square feet of floor space.  Boats could enter its internal wharfs to be worked by the latest electrically operated gantry cranes capable of moving goods to any part of the building.  The press described the depot as being “in every sense an inland dock”.  In addition, warehousing at Brentford was extended, that at Leicester and Northampton improved, new cranes were purchased for use at Tysley and at the Regent’s Dock, and motor vehicles were acquired to improve the collection and delivery of goods in the Birmingham area:


“In keeping with the Company’s policy of bringing the whole of their system into line with modern conditions, and making it capable virtually of handling an almost unlimited quantity of traffic, was their decision to provide new terminal facilities, or improve those already in existence at every point where present or prospective trade justified such a step.  Thus, they have spent a large amount of money in modernising the Regent’s Canal Dock and in providing large warehouses in Birmingham, Brentford and other places which have been important centres of canal activity . . . . It is now scarcely necessary to recall that shortly after carrying the ambitious amalgamation scheme into effect, the Company, in part with the aid of the Government, and for the rest out of their own resources, spent over £1,000,000 in improving the waterway along its main route between London and Birmingham.”

Grand Union Canal Company advertising material c. 1938


By 1942, the Board was already beginning to take a view on the post-war position of the Company.  The indications at that time suggest that they recognised that the future lay in providing a broader-based transport service ― warehousing, shipping and road haulage ― to replace their core activity of long-distance canal carrying, which would eventually and inevitably disappear.


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COMMERCIAL EXPANSION


Besides extending the network to gain end-to-end control of their main routes, the Board also acquired or created a number of subsidiary companies, their aim being to transform the Company into an integrated transport business that could compete favourably with its competitors.  The Board’s business strategy was summed up by John Miller (by then Company Chairman) towards the end of the WWII.:


“Stockholders will recall that payment of the dividend on the Preference stock was last made in respect of the year 1936.  In the course of that year and of the next year considerable changes were made in the Board, and the whole organisation of the Company was drastically altered.  It is clear that the Company was not earning its Preference dividend and that the serious decline in revenue since the amalgamation in 1929 would continue at a progressive pace, unless drastic steps were taken to arrest the decline and open up new fields of revenue, by broadening the basis of the Company’s business, expanding its activities, and transforming it from a mere passive toll-taking owner of a canal track and dock into a comprehensive transport organisation.

It is to this end that we have laboured since 1936.  That is why we acquired our own shipping company and our own stevedoring company at the Regent’s Canal Dock, that is why we have acquired a road haulage subsidiary and formed our own road transport department, why we organised a modern warehousing department, why we acquired new warehouses, improved existing warehouses, and installed at all our terminals and depots and at the Dock new and improved handling installations and equipment.  Quick results were not to be expected, but before the outbreak of war there were signs that we had already turned the corner.

The effect of the war was to interrupt the commercial progress of the Company.  The continental and most of the other overseas traffic which we had been building up was soon lost, and the Government control of railways tended to divert traffic from the canal.  Moreover there was a continuous rise in wages and other costs effecting maintenance and operation of the canal which has only recently reached what I hope is its peak.”

Chairman’s address to the General Meeting, December 1944

 

Broadening the business base began modestly.  In 1930, the Company entered into canal transport with the acquisition of a small carrying fleet, Associated Canal Carriers Ltd. [13] This was followed by further acquisitions; in 1934, of the Erewash Canal Carrying Company, another small company that operated mainly along the Loughborough and Erewash lines, and in 1936, of Thomas Clayton (Paddington) Ltd, a firm that specialised in rubbish disposal and which was to become a reliable earner for the Company.  For many years Claytons had contracted with the Borough of Paddington to dispose of some 40,000 tons p.a. of household rubbish, and in 1939 they obtained a similar contract from the Borough of St. Marylebone.

In parallel with their entry into canal carrying, the Board made a determined effort to develop the leisure side of their business.  The “picturesque reservoirs” at Ruislip and Aldenham offered potential for bathing, boating, and fishing and, overall, a source of income that would help compensate for the increased cost (which could be considerable) of pumping canal reservoirs during long dry summers.  In 1933, the Company commenced the development of a lido at Ruislip Reservoir, spending some £12,000 on what Curtis described as “a lido quite on the lines of summer seaside resorts” from which he expected “a good return”.  The Lido, which was opened by the Earl of Howe in 1936, centred on an art-deco style building fronted by a swimming area flanked on either side by piers in a horseshoe shape.  The main building contained a cafeteria while those on either side housed the turnstile and ticket area, and changing rooms.  The Lido was successful in its heyday, offering swimming, boating, a children’s playground, a beach and later a miniature railway. [14]

During 1937, the Company expanded its freight handling capabilities by acquiring interests in a stevedoring and wharfage company ― which became the Grand Union (Stevedoring and Wharfage) Company Limited ― and in a short-sea shipping business.  This firm, Grand Union (Shipping) Ltd., operated the Regent’s Line, which using a small coastal steamer, the Marsworth, opened a twice-weekly service between the Regent’s Canal Dock and Antwerp.  The following year the Marsworth was joined by the Blisworth and the service extended to Rotterdam.  At the other end of the line the Company acquired an interest in a Belgian shipping agency registered in Antwerp, Grand Union Belge de Transports Societe Anonyme, to handle its Continental business.  This firm owned its own barge fleet and was able to provide quotations for and handle through traffic from UK towns served by the Canal to the principal European cities:


“We are thus able to carry goods from Birmingham to Basle and other Continental towns in our own craft by the all-water route.  This achievement, I believe, is unique in the history of British transport . . . . You may wonder where the money has come from to pay for the new companies and other heavy expenditure we have had to incur.  We have, however, been able to sell a considerable amount of land which was of no use for canal purposes and produced no revenue.  You will, I am sure, agree that we have pursued the right policy in converting it into something which will produce revenue.  As opportunity offers we intend to sell more such land.”

Chairman’s address to the General Meeting, March 1938

 

In addition to running its own shipping operation, Grand Union (Shipping) also acquired the UK agencies for several Continental transport businesses including the Dutch ‘Oranje Line’.  Using four ships, this company opened up a fortnightly service between the Regent’s Canal Dock, Canada and the USA during the open season ― which extended from the end of March to about the middle of October ― and landed fruit from Spain and Palestine during the winter months.

By March 1939, the Company’s progress into shipping and the development of their terminal facilities appears to have been sufficiently encouraging to lead the Chairman to report to that year’s General Meeting that during the year 1,690 ships had passed through the Dock and that shipping “is producing business both for the Stevedoring and Wharfage Company, the canal, our Birmingham warehouse, and the Dock”.  Meanwhile, the Company was publicising its Regent’s Dock facilities:


“There is a regular service of steamers between the Dock and Bergen, Stavanger, Stockholm, Copenhagen, Danzig, Hamburg, Bremen, Delfzijl, Amsterdam, Rotterdam, Antwerp, Ghent, etc.  During the season, considerable quantities of timber are discharged overside from steamers into canal craft for delivery to the numerous wharves situated at various points on the canal. [15] Cargoes of all descriptions can be conveniently discharged overside into canal boats for conveyance to the many towns served by the Grand Union route to the Midlands.

There is a 250ft coal jetty in the Dock equipped with two powerful grabs, each capable of lifting six tons and these enable steamers coming from the coalfields of the N.E. coast to discharge their cargoes within about ten hours of arrival.  Unloading can be carried out either by day or night, and it is quite usual for a ship to enter the Dock on one tide, discharge its cargo, and leave for the return journey on the next tide. Large quantities of coal are discharged at this jetty and then conveyed to the gas and electricity stations situated on the canal side in the London area.”

Grand Union Canal Company publicity material ca. 1938


However, established shipping interests were unwilling to accept further competition and commenced an action against the Company for ultra vires [16] claiming that it had no lawful authority to run a shipping business.  The action lingered on until powers obtained under the Grand Union Canal Act 1943 ― the Chamber of Shipping contesting the Bill’s passage through both houses ― enabled the Company to extend its business lawfully into related areas.  The Board quickly took advantage of these powers to create new sources of revenue which, they believed, would lay the foundations for a sustainable post-war future.  In December 1943 they acquired a road transport subsidiary, Cartwright & Paddock, to operate in the Birmingham area, and formed four new subsidiary companies:

  •     Grand Union Transport Limited, to take over and expand the Company’s road transport activities;

  •     Grand Union Warehousing Company Limited, ditto warehousing activities;

  •     Grand Union Estates Limited, ditto the Company’s estates; and

  •     Grandion, ditto sports and recreational activities and interests.

With the commencement of hostilities in 1939, the Government quickly moved shipping away from the Thames to west-coast ports that were more distant from enemy action.  As a result, earnings declined to the extent that the Company was unable to pay its Preference share dividend and had difficulty meeting debenture interest.  But warehousing continued to turn in good results, with the new warehouse at Brentford, opened in January 1940, quickly being filled to capacity.  By the end of 1943, the Chairman was able to report that the Company’s wharfage and warehousing business was profitable and continuing to expand and that it “was showing considerable promise for the future”.  The prolonged period of drought that occurred during 1944 reduced the canal’s earnings, but overall the year compared favourably with 1943 due mainly to warehousing, wharfage, shipping and the rubbish removal (Thomas Clayton) subsidiaries turning in good results.

By the end of the war it was becoming evident that the Company’s post-war future would centre increasingly on its developing subsidiary businesses, with a gradual move away from its former core canal business, which was reporting an increasing loss.  As the post war years were to prove, narrow boat carrying was now in terminal decline:


“All the Company’s subsidiaries in actual operation ― other than our two carrying companies ― have achieved satisfactory results; they have all made profits in the period under review, and the aggregate present value of their assets exceeds the original capital investment by this Company.  Grand Union (Stevedoring and Wharfage) Company, Limited, in particular, despite the decline in traffic at the dock arising out of war conditions, has greatly improved results during the financial period of 19 months ending on December 31 last.

I should like to make special mention of Grand Union (Shipping) Limited.  This important subsidiary, whose pathway was cleared by our 1943 Act, has an established position in the short-sea continental trades.  So that it may give in post-war years that service which its clients expect, orders have been placed for two new Diesel-engined ships, each 1,100 tons deadweight, to be built to the most modern specification.”

Chairman’s address to the General Meeting, May 1945


But on 1st January 1948, the Company was sucked into the black hole of the British Transport Commission.  Cartwright & Paddock went eventually to the Road Haulage Executive and the rest of the Company to the Docks and Inland Waterways Executive.  The profitable shipping subsidiary was quickly sold off to be followed in 1951 by Ruislip Reservoir and Lido.


――――♦――――

 
CANAL CARRYING


Shortly before the amalgamation, the Regent’s Canal and Dock Company placed an order for a pair of steel narrow boats.  Built by the Steel Barrel Company of Uxbridge, the George (motor) and the Mary (butty) were of a new design, with deeper holds that gave a higher freeboard than usual, a feature intended to enable the pair to navigate safely on the Thames.  They could also load to 70 tons compared to 55 tons for a standard pair. [17] On trial it was found that the hold was too deep for convenient manual cargo handling, and when loaded to capacity the drag created when passing over shallow stretches of the waterway slowed progress dramatically.  Despite these drawbacks the pair were taken over by Associated Canal Carriers who found them sufficiently successful to justify an order for a further six pairs; these formed the ‘Royalty class’.  Rapid expansion of the carrying fleet then followed, with two further narrow boat designs [18] being constructed by various builders:


“Our subsidiary company, Associated Canal Carriers, Limited [renamed the Grand Union Carrying Company Ltd. in 1934], is teaching us many things that can be used to our benefit.  For instance, if we are to secure the increased traffic we are hoping for this can only be done ― as far as our long-distance traffic is concerned ― by the building of 100 or more pairs of boats of the improved type now undergoing trial.  When you come to realise that each half a dozen pairs of boats put on the water, and each getting normal freights, according to the present average, give us, say £1,200 to £1,400 a year in tolls, you will see how urgent it is that some carrying company should initiate a programme of boat construction.  As six pairs of boats cost only £7,500, this capital outlay, if required to be financed by the Grand Union Canal Company, would show an excellent return.”

Chairman’s address to the General Meeting, March 1932


The reason for the Company’s heavy investment in canal carrying stemmed from a belief that there existed good potential for reviving the long-distance carrying trade based on a modernised infrastructure, and under those conditions the business would be there, providing that the Company was able to carry it.  As Curtis put it:


“With regard to the future, I cannot feel anything but very optimistic.  We have been deluged with inquiries from all directions, but, owing to a shortage of canal boats for long distance traffic, we have had to turn down trade.”

Chairman’s address to the General Meeting, March 1935


By September, 1936, the new carrying fleet stood at 186 pairs.  But Curtis’s over-optimism had again prevailed, for at the following year’s General Meeting he was hinting at over-capacity; “Their craft [the Carrying Company’s] have not been fully occupied all the time for the reason that it is not an economic proposition to man boats for which there is not good loading”.  In other words, new boats were lying idle, a wasting asset attracting capital costs.
 

John Miller, last GUCC Chairman.

In 1936, John Miller joined the Board and was appointed Managing Director of the Carrying Company, which he set about reorganising while drumming up new business.  But despite his endeavours, its earnings remained insufficient to cover the interest and depreciation charges on its new fleet.  In respect of the 1937 financial year, the directors were obliged to place £11,000 ― substantially the whole of the parent company’s net revenue ― into reserve against the losses sustained by carrying.  Despite having moved an additional 25,564 tons of cargo in the year, the Carrying Company was facing fierce competition from road haulage as well as from rail, both of which were engaged in their own pricing war, as was rail with coastal shipping.  The result was that reduced rail freight rates (up to 65% on grain) were attracting business away from the canal.  And yet a further problem to have a telling effect on canal carrying was a shortage of boat crews:


“. . . . a considerable portion of the fleet is not earning anything.  We are seriously handicapped by the difficulty in finding captains and mates, and it is becoming increasingly difficult to obtain them.  The problem of manning the boats is one of the most serious with which we are having to grapple.  In 1937 we had to refuse 40,000 tons of traffic ― a particularly galling experience, because we had 50 pairs of boats waiting for crews.”

Chairman’s address to the General Meeting, March 1938


Shortage of boat crews ― a problem encountered during WWI., which was to hinder canal carrying for the remainder of its days ― does not appear to have entered into the Board’s calculations when planning to increase the size of their carrying fleet.  The fact was that boatmen were by now exchanging their demanding itinerant canal life for land-based employment that paid regular wages and provided a more comfortable home, with schooling and welfare services for their families close to hand.  When the Ministry of War Transport took control of the principal canals in 1942, the position had deteriorated to the extent that it was even referred to in a wartime propaganda booklet:


“In a generation the population of boatmen has become very small.  Think of the life on the boats.  The hours are long ― a 12-hour day is inevitable ― the men may frequently have to load and unload their own boats at wharves without cranes, for which they receive extra pay.  To hump 50 tons of coal onto the wharf after a 12-hour day is not an attractive prospect.  Living conditions are primitive.

Wages are on the low side.  It is true that during these long hours a man may not be working hard; he may merely be standing at the tiller.  But the life is lonely; the industry has been largely recruited from those born and bred on the boats; and the younger generation saw that if they wanted the amenities, the higher wages, the entertainments of modern life, and better opportunities for education for themselves and their children, the best thing they could do was to leave the water.

The earnings on a pair of boats average £7 a week.  This looks well, if the whole of that £7 a week is going into one family; but not all boats by any means are one-family boats.  Usually each pair of boats has a captain, a mate and a boy, which means that the captain gets £3.10.0 per week, the mate £2.10.0 and the boy £1.”

Transport Goes to War: Ministry of Information, 1942


The Company’s publicity material for canal carrying from 1938 (see Appendix) gives no hint of their Carrying Company’s manning difficulties, which resulted in overall losses for that year amounting to £26,863. [19] Although there had been an increase of 28,111 tons booked, this extra business had to be sub-contracted to independent carriers due to shortage of boat crews, only about a half of the fleet being available:


“ . . . . we have felt acutely the shortage of boatmen, and at the present time we are still obliged to employ outside carriers to move cargoes for us.  There is no doubt that the old canal boatman is a dying race, and in addition is somewhat of a nomad, changing his employment from time to time.  I have no doubt that the crisis period caused a number to move away from areas they expected to be most affected, and many of them have not yet returned.”

Chairman’s address to the General Meeting, March 1939


In addition to the manning problem, freight carriage in general was by now being affected adversely by the political situation on the Continent.  Hitler’s annexation of Austria damaged business confidence, resulting in reduced imports of timber and steel, both of which were staple canal cargoes from the Thames.  The opening of the London Power Company’s new power station at Battersea and the growth of the National Grid, gradually caused the small municipal power stations along the Regent’s Canal to reduce output and to close, and with them went a useful source of revenue delivering their coal.  In 1929, the Company carried 190,374 tons of power station coal, earning revenue of £12,429; over the following decade, this gradually diminished to 11,925 tons in 1938, earning £993, a decline that was also felt in a loss of dues at Regent’s Dock.

Following the outbreak of war, the Carrying Company was engaged by the Government to move foodstuffs from London to the provinces, but they were again hit by crew shortages.  During 1939, 45,915 tons of goods had to be sub-contracted to other carriers while a large proportion of the Carrying Company’s fleet lay idle.  A further problem to emerge following the commencement of hostilities was that the volume of cargo arriving by sea at Regent’s Dock quickly fell away. [20] Trade with Germany (on average four steamers a week) ceased, while much traffic was diverted from the Thames to west coast ports.  Much of the coastal coal delivered into Regent’s Dock ― from where it was shipped by canal to factories and gas works in the West London area ― was transferred to rail, and the extensive Scandinavian timber trade also diminished.  The result was a loss of dock dues and stevedoring charges, and also in tolls due to reduced shipments along the Canal.  By now the Carrying Company had accumulated losses of £134,000, largely attributable to depreciation and debenture interest.

Other than the fall in sea-borne trade into Regent’s Dock, other wartime events were to have a damaging impact on the Company’s carrying activities.  Because in peacetime the railways had over capacity, at the outbreak of hostilities the Government was confident that the railways could handle the nation’s war-time transport needs supported by road transport and coastal shipping.  No importance was attached to the contribution that could be made by the independent canals, [21] which were by now regarded as an anachronism:


“The canals are the poor relation of the railways and the roads ― a member of the transport family fallen on evil days, who nevertheless appears to scratch some sort of living together in a mysterious way.”

Transport Goes to War: Ministry of Information, 1942


The independent canals were thus left outside government control.  Their boatmen ― already in short supply ― together with other canal and boatyard workers were recruited into the armed forces, or departed for better-paid work in munitions factories.   The Government had learned nothing from the previous conflict; indeed, the situation became a re-run of that which the canals had experienced during WWI.

By the beginning of 1942, it was evident that the railways could not accommodate the hugely increased level of war-time traffic.  In response to the crisis, Frank Pick, former Chief Executive of the London Passenger Transport Board and a distinguished transport administrator, was commissioned to review the situation.  Among his recommendations to the Ministry of War Transport was that the Government should assume tighter control over transport, including inland waterways.  Thus, on 1st July 1942, the Minister of War Transport (Lord Leathers) took control of the principal canals and canal carrying companies.

As in WWI., the business relationship between the Company and the Ministry of War Transport was not to be a happy one.  Although matters of everyday management did not present a problem ― these remained in the Company’s hands, subject to the Minister’s overriding directions ― the financial arrangements did.  From the date when government control was imposed, all companies so affected lost the carrying subsidy that had until then been in force, and payment for government work ― which needed to take account of any losses incurred in meeting the Minister’s directions ― became the subject of negotiation between each canal company and the Ministry.  The offer accepted by the canal industry in general was that during the period of control, companies would receive a sum equivalent to their average earnings during the period 1st January 1936 to 31st December 1938, but any earnings exceeding this figure while under government control had to be surrendered to the Ministry.  In other words, the controlled companies were made an offer of an assured sum ― no more, no less ― which they could accept or, if they so wished, decline and take a chance on their wartime earnings exceeding what the Ministry had offered.

The Board believed that this formula, when applied to them, was impractical because it failed to take account of the changes that the Company had been undergoing during the baseline period, and its acceptance would result in certain loss.  Having failed to persuade the Ministry to improve their offer, the Company decided to take their chance on outperforming it.

Added to the unresolved problem of carrying charges, the Company had not been permitted to increase its tolls.  In 1940, it had been permitted an increase of up to 50% ― the average implemented was 33% ― but this should judged against the previous authorised increase, which dated from 1894; indeed, some rates had remained below the statutory figures.  As happens during prolonged periods of conflict, inflation increased and with it the cost of canal maintenance, which, as the war progressed, began to exceed the Company’s toll receipts, about a quarter of which came from the Carrying Company’s activities.  As the Chairman (John Miller) explained to the 1945 General Meeting, “this company’s receipts from tolls are at present insufficient to pay the cost of even a moderate programme of repairs and renewals”:
 

Year

Tonnage
Receipts
(Tolls, &c.)

Maintenance
and Traffic
Expenses

Net revenue from Ware-housing and terminal services

Gross
Revenue
Balance

1938

125,748

103,613

   (91)

 68,285

1939

120,991

  97,058

11,269

 79,524

1940

113,466

  98,413

21,727

 79,808

1941

143,953

108,003

42,505

125,142

1942

138,618

*132,579

60,948

*114,060

1943

162,925

172,725

75,764

107,312

1944

148,001

175,708

76,293

 98,007

* Before making a special provision of £25,000 for dredging Regent’s Canal Dock.

Chairman’s address to the General Meeting, May 1945


Revenue from warehousing and wharfage together with that earned by the other subsidiaries was by now cross-subsidising the Canal; as the Chairman went on to explain, “I have no doubt that our position would be precarious indeed if we had not adopted a policy of commercial expansion”.

Although the period of government control probably slowed the decline in canal transport, as it had during WWI., by 1946 the national network was carrying less (10 million tons) than in 1938 (13 million tons), a year in which carrying had been depressed by the political situation in Europe.  At the peak of war-time activity in 1944, the canals carried slightly less than 5% of the nation’s total traffic. [22]
 
The final years of the Carrying Company saw it suffer the damaging impact of the old enemy of canal transport to which it, to a greater extent than its road and rail competitors, was vulnerable ― the weather.  Throughout its life, the mainline had been subject to the vagaries of ice, drought and flooding (sometimes resulting in burst banks).  The years 1933 and 1934 saw the worst drought for more than a generation.  In June, 1934, the South Leicester section had to be closed and its water used as a reserve for the main line, but between July and December the low water level led to a restriction being placed on the draught of boats, resulting in lost revenue.  At the 1935 General Meeting, the Chairman explained that the Board’s decision not to pay a dividend on the capital stock for the previous year was due to the increased cost of pumping, which had added £20,000 to the annual maintenance bill (£171,000):


“The whole of the year under review has been overshadowed by the anxieties caused by the abnormal drought.  Canals generally have had no such experience of deficiency in rainfall for two years consecutively, and as their records go back over 100 years, we must realise that we are not likely to be again faced with such a condition of affairs.”

Chairman’s address to the General Meeting, March 1935


But Curtis was, as usual, over-optimistic, for prolonged drought did indeed recur.

Freezing could be even more damaging to trade.  The winter of 1939-40 was the coldest for 45 years, and for six weeks the canal was frozen over between Birmingham and London.  And inclement weather was to continue during the Canal’s final years:


“Exceptionally dry weather, dating back to the latter part of 1942, culminated in 1944 in one of the most serious droughts, from the Company’s point of view, in its history.  There were grave fears that the main line of the canal from London to Birmingham might have to be closed.  But we have for several years been modernizing and increasing our pumping plant and we had the foresight to close our South Leicester Section as far back as December 1943, in order to preserve a supply of water for the more important Braunston Summit.  For these reasons and through the splendid work of our engineer, Mr. C. A. Wilson, and his staff, we were able to keep the main line open.  For a considerable period, however, the draught of boats had to be restricted and there was an inevitable decrease in tolls and a substantial increase in the cost of pumping.”

Chairman’s address to the General Meeting, May 1945


The winter of 1946-47 experienced the longest spell of continuous frost for 106 years, and canal carrying suffered as a result:


“The year 1947 was full of major problems.  Costs and general expenses rose and increased revenue was hard to obtain.  The severity of the winter, when our main waterway was frozen over for four weeks and we were further inconvenienced by subsequent floods, caused great expense and loss of revenue.”

Chairman’s address to the (final) General Meeting, October 1949


But the weather soon ceased to be of consequence to the Company’s profit and loss account.  On 1st January 1948 its carrying subsidiaries were taken into State ownership and, as commercial entities, they ceased to exist.  Ironically, the under-employed carrying fleet ― 126 motors and 130 butties, of which about 70 pairs were in commercial use ― was soon to be increased, for having incurred a trading loss during the first six months of 1948, the large private canal carrier, Fellows, Morton & Clayton Ltd., went into voluntary liquidation and their assets were acquired by the British Transport Commission.  As from 1st January 1949, their South-eastern Division’s already bloated carrying fleet received a further boost of 100 pairs of FMC boats.  Thus, State-owned canal carrying on the Grand Union Canal began life with what was probably the largest fleet of canal boats ever assembled under a single management.


――――♦――――

 
DID AMALGAMATION PROVE SUCCESSFUL?


Over the years various government-sponsored committees of inquiry had reached the conclusion that canal carrying could only operate successfully through of programme of mergers, such as those that had led to much of the success of the railway companies.  Canal company mergers had the potential to eradicate the chaotic charging structure and make possible the removal of that blight of canal operation, the lack of standard measurements in their construction (again achieved by the railways early on).  The question therefore arises as to the extent to which the formation of the Grand Union Canal Company resulted in any material benefit along these lines.  Here, the indications are that canal carrying had had its day and that no amount of modernisation of the Grand Union network would have led to a different  outcome.  That said, there are clear indications that the Company would have survived, but as an integrated transport operation that relied less and less on its canal operations.  What would have become of the waterway under these circumstances is a matter of conjecture ― nationalisation did at least have the effect of preserving it.

The Atlee Government’s nationalisation programme could not have been foreseen in 1929.  Had it ranked among the risks then facing the Company, it is likely that the investment programmes of the 1930s would not have received shareholder endorsement.  The new Board undoubtedly based their business strategy on a vision of an unfettered future.  That said, some of the assumptions underlying their investment appraisal calculations appear questionable, not least the sufficiency of the capital required to complete the modernisation plan and the extent of the financial return necessary to make it pay ― a matter of costs and benefits.  And regardless of whether there was reasonable expectation of sufficient cargo to fill the boats, the existing shortage of boat crews alone brings into question the decision to invest in a large carrying fleet on which capital charges had to be paid.  Following the top management shakeup in 1936, it is easier to understand the new Board’s strategy to diversify further, for by then it must have been apparent that the long-distance carrying trade could not compete favourably with road and rail.

During the Company’s 18-year life, canal transportation continued its long-established decline, being superseded increasingly by road transport as well as by rail.  This aspect of the Company’s business reflects the national trend, where tonnage fell from 22 million tons in 1919, to 15.5 million tons by 1927, to 13 million tons by 1938, to 10 million tons in 1946.  There then followed a slight recovery to 11.3 million tons in 1949, after which canal carrying gradually died.  The narrow canals suffered the most, and for most of its length the Grand Union was a narrow canal for commercial purposes.

The Company’s published tonnage figures, where they exist, provide one indication of commercial activity, but only that, for the data gives no hint of freight rates and ton-miles.  But with that caveat, and assuming that the data was gathered in a consistent manner, it demonstrates a downward trend.  Tons carried were, for 1931 1,870,718; 1932, 1,638,443; 1933, 1,685,487; and for 1934, 1,726, 344.  There is then a gap in the publically available figures until 1938-39, a period undoubtedly affected by the adverse political situation in Europe, by which time tonnage had declined to around 1.2 million tons.  Thus, although it may well have slowed the rate of falling canal revenue, the cost of modernising and extending the waterway does not appear to have delivered any material benefit.  By the end of the WWII., in the words of the Chairman, net toll receipts were “insufficient to pay the cost of even a moderate programme of repairs and renewals”.

Another indicator of commercial success ― albeit including other activities ― is the rate of dividend paid on the Company’s stock.  For the first complete year of trading (1929-30), the capital stock fell to 1⅜% compared with the 4% usually paid by the Grand Junction and the 2% by the Regent’s Canal.  There then followed a downwards drift to ⅞% in 1933 after which the dividend was suspended until 1945, when distribution resumed at 1%.  Dividend increased to 2% in the following year and ― despite experiencing a dreadful winter during 1947-48, when the waterway was frozen over for thirteen weeks ― to 2.8% for the Company’s final year of trading, the Government having blocked an attempt by the Board to pay 5.8%.  The 6% Preference shareholders fared rather better.  Their dividend was suspended between 1937 and 1941, to be restored in full in 1944, when 3% was also paid retrospectively for 1942 and 1943.  Regarding share price, we have been unable to establish the market value of the capital stock at nationalisation, but by the end of the war a £100 share was trading at around £22; judging from the Chairman’s address to the closing meeting in 1949, share price remained below par at nationalisation.  The indications are that the Company was a poor investment from both the Capital and Preference shareholders’ points of view.

Although the Company’s performance should be judged in the context of the ‘Great Depression’ and of WWII., the Board’s unrealistic assessment of the potential for reviving long distance canal transport and the costs which that would entail must have been the dominant factor in its declining income.  There was insufficient capital to bring about the necessary transformation; to turn the London to Birmingham and the River Trent routes into barge canals on which much larger loads could be carried by pairs of wide boats of the Progress class and to use such craft to eradicate the transhipment costs and delays that resulted from narrow boats being unable to load directly from ships in the Thames and the London Docks.  Lock widening on the Warwick canals did improve traffic flow, but for most of their length the main routes remained ‘narrow’ so far as through traffic was concerned ― the job was left half done:


“The Grand Union Canal throughout its length presents special features . . . . As far as the length from Uxbridge to Birmingham is concerned, the question has often been debated whether it is or is not a ‘narrow’ canal.  The facts are these.  The canal was constructed for use by wide boats as far as Braunston.  A substantial scheme on converting the waterways as a whole into a wide canal was put in hand by the former owners between the wars and all the locks can accommodate craft 14ft x 70ft. [23] But the scheme was never completed and substantial amounts of ancillary supporting work (estimated several years ago to cost several million pounds) would be necessary to enable wide craft to use the waterway in a fully effective way (to pass each other practically wherever they happened to meet, for instance).  From the point of view of commercial carrying, therefore, the Grand Union system must be treated as within the group of narrow canals . . . .”

The Facts About the Waterways, British Waterways Board, London, 1965


The heavy investment in extending and modernising the waterway having failed to earn a sufficient return left the Company’s small carrying and toll margins highly vulnerable to such ailments as shortage of boat crews and the vagaries of the weather.  But had the capital been available to achieve the full extent of modernisation ― including widening the Watford and Foxton locks ― would canal traffic have increased sufficiently to repay the higher capital costs and provide a reasonable return?  The growth of road transport coupled with the lowering of freight rates as the canal’s competitors (road, rail and coastal shipping) fought each other for market share, suggest that even if a significant increase in trade had been won it would have been at unattractive rates and unlikely to have delivered material benefit.  During the 1930s, some waterways did gain traffic and remained commercially viable into the post-war years.  But these were waterways ― such as the Aire & Calder, the Sheffield & South Yorkshire, and the Trent systems ― that had been improved considerably (widened, deepened, straightened) to enable them to handle craft of well over 100 tons capacity.  They were also the carriers of heavy local trades in coal and bulk liquids.

But on other side of the business there were encouraging signs of progress.  By the end of WWII., through its subsidiaries the Company had evolved into an integrated and sustainable transport operation with interests in stevedoring, warehousing, shipping, road haulage, property and even leisure.  Here the future looked reasonably bright.  Had the Company not succumbed to nationalisation, one is left to wonder how the business might have developed; whether it would have moved increasingly into shipping, warehousing and road haulage; whether its leisure subsidiary might have recognised the waterway’s potential for leisure cruising long before the State; and how the change to containerisation and the closure of the Port of London would have been dealt with.  At the Company’s final General Meeting in October 1949, John Miller had this to say:


“I hope that as this is our final meeting, you will permit me to refer to the achievements of your Board, which you will remember was reconstructed towards the end of the year 1936, when the Company was undoubtedly in a very precarious condition, and it may be admitted that the policy introduced of broadening the business and the introduction of a better all-round transport service to our clients met with the success which we had hoped. . . .

It is regrettable that the nationalisation of transport had to be, for I had reasonable hope that before long our capital stock would have reached par value, which would have afforded your Board great satisfaction. . . .

There is no satisfactory substitute for private enterprise in the business of transport, whether by sea, land or air, and this simple fact will be discovered as time goes on . . . .”


. . . . and such proved to be the case.


――――♦――――

 
APPENDIX

 (Grand Union Canal Company publicity material c. 1938)

 THE GRAND UNION CANAL CARRYING COMPANY LIMITED . . . .

. . . . owns the largest fleet of mechanically-propelled canal craft in the country, consisting of 185 pairs of Diesel-engined canal boats of a type evolved after six years’ experiment in design.  The high-speed Diesel engines give a loaded speed of six knots, and whereas the old type of canal craft carried 55 tons on the pair, the new boats will carry 72 tons on a draught of 4 ft. 3 ins. with ample freeboard.  The new craft afford a cubic capacity of about 2,800 cubic feet below gunwales, with ample space for the carriage of general cargo which is well protected from the weather by tarpaulins.  The cabins are fitted with electric light, and for travelling by night each boat has a headlight whose beam greatly facilitates the negotiation of the locks.  On an average, the trip from London to Birmingham takes between three and four days.  The increased freeboard enables craft safely to navigate the tidal estuaries.

GENERAL CARGO

The Company is particularly well equipped for the handling of General Merchandise.  Unlike the old type of craft, the Company’s boats are mobile and well fitted for travelling by night, and afford a storage space which is unequalled by other forms of transport.

GRAIN

The Company has a rapidly increasing traffic in grain, which is loaded alongside the steamer in the London Docks for delivery, both in bulk and in sacks, to various mills and warehouses alongside the canal.  Until recently, this traffic was carried almost exclusively in sacks, but the new boats have made it possible to carry grain in bulk, thus ensuring considerable economies.  The expense of bagging, sack hire, and the return of empty sacks is in this way entirely avoided.

STRAWBOARDS

There is a service for the transport of strawboards, both in bundles and in reels, from direct alongside import steamer in the REGENTS CANAL DOCK to the NORTHAMPTON, COVENTRY, BIRMINGHAM, and NUNEATON districts.  The strawboards are warehoused, sorted, and re-delivered according to customers’ requirements.

TIMBER

All classes of timber are handled by the Grand Union Canal Carrying Company, and, if required, rates per standard will be quoted on softwoods, from London to any point in the Midlands.  Timber is received overside in the Surrey Commercial and other docks, or arrangements can be made for steamer to discharge in the Canal Company’s Regents Canal Dock at Limehouse, where cargoes can be received directly overside by the Grand Union Canal Carrying Company’s craft.  Thus traffic can be carried direct from the ship to the Midlands without the extra cost and delay which would be incurred by trans-shipment from lighters.  Considerable economies can be effected in this way, and rates can be quoted to include the discharge of the vessel and dock dues.  Almost unlimited storage space is available in Leicester, Birmingham, Nottingham, Coventry and other important towns covered by the system.  Timber is sheeted immediately boats are loaded, ensuring that it is carried through to its destination in a perfectly dry condition.

CEMENT

The Company has a large trade in the carriage of cement in bags.  This traffic, which is particularly well suited to carriage by water, is loaded and discharged under cover by means of the most up-to-date handling plant, and is stored in special warehouses for re-delivery by road in small lots.

COAL & ROADSTONE

The Company is in a position to offer a regular and reliable service for the carriage of coal and roadstone, and, if required, their subsequent distribution by road in any district served by the system.  The Company’s Midland Office is in daily touch with the collieries and quarries in connection with the placing and the loading of boats, and these can invariably be supplied at short notice.

SAND

Low rates are quoted for the carriage of SAND from the various Pits alongside the canal, including those at LEIGHTON BUZZARD, where nearly sixty varieties of sand can be obtained.

IRON & STEEL

The Company operates a regular service for the carriage of iron and steel in approximately 1,000 ton lots from direct ex steamer in the REGENTS CANAL DOCK to be delivered in Birmingham and South Staffordshire.  The boats are placed direct alongside and on completion of the steamer’s discharge, which is effected within 1½ days, they pass from the dock on to the canal for the Birmingham terminal.  Here the cargo is distributed in the quantities required by a fleet of up-to-date road vehicles.  These facilities form part of a through route from the Continent to the Midlands.



[Chapter XV.]


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FOOTNOTES

 
1.


Regent’s Canal and Dock Company (Grand Junction Canal Purchase) Act 1928; Regent’s Canal and Dock Company (Warwick Canals Purchase) Act 1928.  The Regent’s Company also owned the short (approx. 1-mile) Hertford Union Canal, which it acquired in 1857.

 
2.


Announced in The London Gazette, 20th November, 1928.  The GJCC’s property assets comprised 27 acres at Paddington, part freehold and part leasehold, which for 1926 yielded a net rental of £21,628.  The ‘Grand Junction Company’ took over these assets, outside of the canals merger, and continued in business as a separate enterprise until 1978, when it went into voluntary liquidation (Reported in The London Gazette, 7th March, 1978).

 
3.


Reported in The Times, 17th August, 1927.

 
4.


However, many of the outdated clauses under which its constituents operated remained in force until repealed by the Grand Union Canal Act 1943, when the GUCC was also given powers to diversify into related business activities.

 
5.


De Salis was offered a directorship, but he felt that at 75 years of age it was time to retire.  He had served for 40 years on the board of the company, 15 in the capacity of Chairman.  To mark the occasion his portrait was painted.

 
6.


The merger agreement provided for any capital expenditure on the GJC, from 1st Jan 1926, to be refunded to the “proprietors” of the GJCC at the appointed date, subject to accounting adjustments.

 
7.


Appears in the Regent’s Canal and Dock Company (Warwick Canals Purchase) Act 1928 (memoranda of agreement).  The Act also required the Regent’s Canal Company to pay William Salt, Clerk and Engineer to the Warwick canals, a pension of £200 p.a.; also, reasonable travelling expenses for his continuing advice for that section.

 
8.


Grand Junction Company Act, 1929; reported in The London Gazette, 30th July, 1929.

 
9.


Apart from 5½ mile section of the Oxford Canal between Braunston and Napton Junction over which the GUCC acquired running rights.

 
10.


Grand Union Canal (Leicester Canals Purchase &c.) Act, 1931: an Act to provide for the transfer to the Grand Union Canal Company of the undertakings of the Company of Proprietors of the Leicester Navigation, the Company of Proprietors of the Navigation from the River Trent to the Town of Loughborough, and the Company of Proprietors of the Erewash Canal in the counties of Derby and Nottingham to authorise the Grand Union Canal Company to execute works and for other purposes.

 
11.


The waterway south of Berkhamsted was at this time capable of accepting wide boats loaded to 85 tons.

 
12.


Canals and Inland Waterways: Report of the Board of Survey (Rusholme Report pp 68-69), BTC, 1955.

 
13.


In 1934, renamed the Grand Union Carrying Company Ltd.

 
14.


In 1951, the Lido was taken over by Ruislip and Northwood Urban District Council (later Hillingdon Council) as a public recreation area.  The main building was demolished in 1994, and at the time of writing the miniature railway is all that remains of the leisure development.

 
15.


At this time, between London and Berkhamsted, there were over 60 timber merchants along the Canal.

 
16.


The legal limitations on the capacities, powers, and liabilities of corporations and, more especially, of joint stock companies, in which form the canal companies had originally been set up.

 
17.


Because the planned depth on the modernised London to Birmingham and Leicester routes of 5ft 6ins throughout was never achieved, the Royalty-class boat could not be loaded to their limit for these trades.

 
18.


The ‘Star’ and the ‘Town’ class.

 
19.


The 2010 estimated equivalent value of £26,863 in 1938 was £1.34 million, based on the increase in the Retail Price Index, and £3.9 million based on the increase in average earnings.

 
20.


During the last four months of 1939, cargo arriving at Regent’s Dock fell by 131,800 tons.

 
21.


At the commencement of hostilities the railway-owned canals came under the control of the Railway Executive Committee, as they had in WWI.

 
22.


Approximate figures: Railways, 65%; roads 20%; coastal shipping, 10%; canals 5% ― The Transport Revolution from 1770, Philip S. Bagwell (pp 303-4).

 
23.


But not those at Watford and Foxton on the Leicester Line, which are of 7ft width.


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