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Elder Dempster and the Shipping Trade of Nigeria during the First World War*

Published online by Cambridge University Press:  22 January 2009

Ayodeji Olukoju
Ayodeji Olukoju
Affiliation:
University of Lagos
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Extract

Shipping, a vital element of maritime trade, has not hitherto received adequate attention in studies on Nigerian colonial economic history. This article therefore fills a gap in the literature by studying aspects of the shipping trade during the First World War, when shipping was indispensable for maintaining economic links between Britain and her colonies. Shipping in Nigeria revolved around the practices of the Elder Dempster Shipping Company, which enjoyed an undisputed monopoly of the trade throughout the war, and the reactions of the colonial government and private shippers to them.

Scarcity of tonnage and higher freights were the chief features of shipping during the war. The allocation of shipping space, however, ranged the colonial government, the shipping company and the Combine (that is, big European) firms against non-Combine shippers. While Elder Dempster's allocation formula suited the government and the Combine firms, it was considered inequitable by other shippers. This arrangement reflected the community of interests between the colonial state and Big Business vis-à-vis smaller traders.

The interests of the government and Elder Dempster were, however, incompatible on the question of ocean freights. Thus, high freights which boosted the firm's turnover were detrimental to the economic interests of the colonial state. The company's monopoly and the non-intervention of the Imperial government enabled it to have its way. Consequently, despite losses at sea, requisition by the Imperial government and rising running costs, Elder Dempster conducted a profitable business during the war. In achieving this, it also served the Imperial interest by effectively linking Nigeria with the metropolis.

On the whole, wartime shipping conditions, particularly Elder Dempster's practical monopoly, were a departure from pre-war trends. There was a gradual return to normality in the early 1920s but the firm remained pre-eminent in the West African shipping trade.

Type
Capital and the Colonial State in Nigeria
Information
The Journal of African History , Volume 33 , Issue 2 , July 1992 , pp. 255 - 271
Copyright
Copyright © Cambridge University Press 1992

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References

1 Rathbone, Richard, ‘World War I and Africa: Introduction’, J. Afr. Hist., XXI (1978), 1.CrossRefGoogle Scholar

2 Osuntokun, Akinjide, Nigeria in the First World War (London, 1979), 21–63.Google Scholar

3 Crowder, Michael, West Africa Under Colonial Rule (London, 1973)Google Scholar, and ‘The 1914–1918 European war and West Africa’, in Ajayi, J. F. A. and Crowder, Michael (eds.), History of West Africa (2 vols.) (London, 1971–1974), ii, 484–513.Google Scholar This author appears to have been unduly preoccupied with military campaigns; the only reference to shipping is a single sentence in the latter publication.

4 McPhee, Allan, The Economic Revolution in British West Africa, (2nd ed., London, 1971), 71–3, 95–8Google Scholar, dealt with shipping before and after the war. A brief mention of the suspension of the Shipping Conference (on p. 201) is the only reference to war-time shipping in Hopkins, A. G., An Economic History of West Africa (London, 1975)Google Scholar; Hopkins', Ph.D. thesis, ‘An Economic History of Lagos, 1880–1914’ (University of London, 1964)Google Scholar, does not cover the war period.

5 Ekundare, R. Olufemi, An Economic History of Nigeria, 1860–1960 (London, 1973), 75–6, 151–3Google Scholar; Ofonagoro, W. Ibekwe, Trade and Imperialism in Southern Nigeria, 1881–1929 (New York, 1979)Google Scholar; and Falola, Toyin (ed.), Britain and Nigeria: Exploitation or Development? (London, 1987)Google Scholar, have no information on this subject.

6 Osuntokun, , Nigeria, 38–40, 43, 46–7.Google Scholar

7 Leubuscher, Charlotte, The West African Shipping Trade 1909–1959 (Leyden, 1963), 29–39.Google Scholar

8 Davies, P. N., The Trade Makers: Elder Dempster in West Africa 1852–1972 (London, 1973). 187–208Google Scholar, discusses developments during the war, particularly the firm's losses at sea.

9 Davies, P. N., ‘The impact of expatriate shipping lines on the economic development of British West Africa’, Business History, XIX (1977), 3–17.CrossRefGoogle Scholar

10 For a brief discussion of Government—business relations in Colonial Nigeria, see Olukoju, Ayodeji O., ‘Maritime trade in Lagos, 1914–1950: its nature and impact’ (Ph.D. thesis, University of Ibadan, 1991), 211–14.Google Scholar

11 For the transition to steam and its impact, see McPhee, , Revolution, 71–3Google Scholar; Hopkins, , ‘Lagos’, 318–30Google Scholar, and West Africa, 149–52; and Lynn, Martin, ‘From sail to steam: the impact of the steamship services on the British palm oil trade with West Africa, 1850–1890’, J. Afr. Hist., XXX (1989), 229–41.Google Scholar

12 This paragraph is based on Herbert Macaulay Papers, University of Ibadan Library, Box 30, File 1, manuscript titled ‘Commerce and banking in the British dominion and colony’ (n.d.), 22.

13 For an account of the activities of Lagos traders on the Niger, see Hopkins, , ‘Lagos’, 41–3.Google Scholar

14 Leubuscher, , Shipping Trade, 14Google Scholar, noted that ‘the capital required for the steamships exceeded the resources of most merchants’.

15 The discussion in this paragraph draws on Leubuscher, West African Shipping Trade, 14–15. A detailed study is in Davies, Trade Makers, chs. 1–6.

16 The operations of the Conference have been studied in Leubuscher, Shipping Trade, and Davies, Trade Makers, 107–13.

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18 National Archives, Ibadan [hereafter, NAI), CSO 1/32/21, encl. in Despatch 45 of 27 Jan. 1916: Address to the Nigerian Council, 29 Dec. 1915.

19 NAI, Nigerian Despatches to the Colonial Office 1917 (bound volume), No. 66 of 3 Jan. 1917, Lugard to Law.

20 NAI, CSO 19/5 N2889/1917, Address to the Nigerian Council, 28/29 Dec. 1917.

21 Nigerian Pioneer, 23 Aug. 1918.

22 Activities of the Combine have been examined in Osuntokun, Nigeria, 37–9, and Olukoju, ‘Maritime Trade’, 150–62.

23 NAI, CSO 19/4 N61/1916, ‘Correspondence between Lugard and Trading Firms’, Lugard to Cowan, 24 Oct. 1916.

24 NAI, CSO 20 NC 62/16, ‘The position of trade in Nigeria’, Memo. from T. F. Burrowes, Comptroller of Customs, to Governor, 10 Apr. 1916.

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26 NAI, CSO 19/3 N 3145/1915, ‘Rates of freight between Lagos and the United Kingdom’, Burrowes to Central Secretary, 2 Dec. 1915.

27 Lagos Weekly Record (hereafter LWR), 2 Oct., 1915. It was the height of naivety to have expected Elder Dempster to be ‘neutral’ given the issues at stake.

28 LWR, 8–15 July 1916.

29 NAI, CSO 19/4 N61/1916, Combine firms to Lugard, 1 Nov. 1915.

30 Ibid., Holt to W. Whitehead, Secretary, Lagos Working Agreement, 19 Apr. 1916.

31 Ibid., Burrowes to Lugard, 11 Oct. 1916.

32 The Lagos Island and Iddo wharves were the points through which produce reached the port of Lagos. The former was served by the lagoon communities such as Ikorodu, Ejinrin and Epe to the east of Lagos, while Iddo was the terminus of the railway and the outlet for produce from the Yoruba and Northern Nigerian hinterlands. A study of the structure and development of the port in the context of the dynamics of shipping and maritime trade is in Olukoju, Ayodeji, ‘The development of the port of Lagos, c. 1892–1946’, Journal of Transport History, XIII (1992), forthcoming.Google Scholar

33 NAI, CSO, 19/4 N61/1916, Manifesto to Lugard, 12 July 1916.

34 Mr Samuel Duncan was the eldest son of Mr W. T. Duncan, an important Gold Coast merchant. The elder Duncan had founded the British and African Produce Supply Company in the late nineteenth century. It was an import and export firm which operated in the Gold Coast and Nigeria. Samuel Duncan had served as cashier to Messrs H. B. W. Russell & Co. Ltd and was their agent at Ibadan. He was a well-known champion of the African traders among whom he was ‘extremely popular’. See Macmillan, Allister, The Red Book of West Africa: Historical and Descriptive Commercial and Industrial Facts, Figures and Resources (London, 1968), 109.Google Scholar

35 NAI, CSO 19/4 N61/1916, ‘Resume of discussion between Lugard and Mr Duncan’ (n.d.). All quotations in this and subsequent paragraphs are from this source and the ‘Manifesto’.

36 Ibid., Duncan to Lugard, 27 Oct. 1916. Duncan's Association seemed to have been ephemeral. The lack of a resilient pressure group was a bane of African commercial enterprise up to the 1930s.

37 Ibid., ‘Notes’ by Robert McNeill, Edinburgh, 25 Oct. 1916.

38 The careers of Thomas and Pearse are sketched in Macmillan, Red Book, 95–8, and Hopkins, , ‘Lagos’, 433–7.Google Scholar Information is lacking on the views of Thomas and Pearse on the shipping space controversy. But both men seem to have played safe, refraining from confronting the Combine firms. It is significant that they were the only African members of the European-dominated Lagos Chamber of Commerce in the inter-war years. Indeed, Thomas became its first African president in 1929.

39 Thus, Alexander Cowan of the Combine insinuated that Duncan was merely envious of Thomas and Pearse. See NAI, CSO 19/4 N61/1916, Cowan to Lugard, 31 Oct. 1916.

40 Ibid., H. T. Van Laun to Lugard, 11 Oct. 1916.

41 West Africa, 26 May 1917, 289.

42 LWR, 24–31 Aug. 1918: Chairman's speech at the AGM of Elder Dempster held on 11 June 1918.

43 NAI, CSO 1/32/26, Desp. 876 of 31 Oct. 1916, Boyle to Law.

44 Ibid., encl. Memo dated 20 Oct. 1916.

45 The B.C.G.A. was an unofficial body that promoted the planting and export of cotton from the colonies. Details of its activities are provided in Nworah, K. Dike, ‘The West African Operations of the British Cotton Growing Association’, Afr. Hist. Studies, IV (1971), 315–30CrossRefGoogle Scholar, and Wardle, W. A., ‘A history of the British Cotton Growing Association with special reference to its operations in Northern Nigeria’ (Ph.D. thesis, University of Birmingham, 1980).Google Scholar

46 The Association was particularly hard-hit by the war-time shipping scarcity. Its cotton seed valued at £100,000 was destroyed in 1916 owing to shortage of shipping. See West Africa (editorial), 4 Aug. 1917, 445, and Ibid. 455, for its chairman's plea for government assistance, given shipping difficulties experienced in 1916–17.

47 NAI, CSO 1/32/26, Memo by General Manager, Railways, 20 Oct. 1916.

48 As late as 1917, the non-Combine European firm of Crombie Steedman & Co. pleaded that ‘the method of allocating space should be reconsidered’ to ensure equity. See NAI, Nigerian Despatches to CO 1917, encl. in Desp. 914 of 13 Dec. 1917, Crombie Steedman & Co. to Sec, United Kingdom West Africa Shipowners Advisory Committee, London, 16 Nov. 1917.

49 Ehrlich, Cyril, ‘Building and caretaking: economic policy in British Tropical Africa, 1890–1960’, Econ. Hist. Rev., XXVI (1973), 651Google Scholar, for official attitude to ‘pettifogging traders’.

50 Osuntokun, Nigeria, 38, remarked that ‘in deciding to give preference to the Combine firms [Elder Dempster] was protecting its own interests’.

51 NAI, CSO 1/32/20, Desp. 1126 of 4 Dec. 1915, Lugard to Law. A picture of mutual understanding between the colonial government and Elder Dempster in the pre-war period is painted in McPhee, Revolution, 92; Leubuscher, , Shipping Trade, 19Google Scholar; and Davies, , Trade Makers, 143, 153–4.Google Scholar

52 NAI, CSO 19/3 N3145/1915, Burrowes to Central Secretary, 19 Nov. 1915.

53 Lugard's Address to the Nigerian Council, 1917, in West Africa, 24 March 1917, 138. The merchants were not unduly bothered by high freights as they could always pass them on to Africans in the form of lower produce prices and higher prices for imports.

54 Pre-war Conference freight rates from Lagos were 30s. for palm kernels and shea nuts, 40s. for palm oil and 45s. for shelled groundnuts. A primage of 10 per cent was added to these rates while a rebate of the same value was given in return. See Davies, Trade Makers, 476, table 77.

55 NAI, CSO 19/3 N3145/1915, Memo. by Burrowes, 12 Oct. 1915. The ‘special circumstances’ of the port and its trade are discussed in Olukoju, ‘Maritime trade’, and ‘Development’.

56 Nigerian Pioneer, 8 Dec. 1916, W. Nicholl, chairman of the Association of West African Merchants (A.W.A.M.) to Editor, mentioned this as one of the reasons for low produce prices.

57 NAI, CSO 1/32/20, Lugard to Law, 4 Dec. 1915.

58 The role of revenue from customs duties in the financial administration of Nigeria has been examined in Lawal, A. A., ‘A history of the financial administration of Nigeria, 1900–1945’ (Ph.D. thesis, University of Lagos, 1981)Google Scholar, and ‘Trade and finance of the Lagos colony, 1861–1906’, in Adefuye, Ade, Agiri, Babatunde and Osuntokun, Jide (eds.), History of the Peoples of Lagos State (Lagos, 1987), 65–84Google Scholar; and Olukoju, Ayodeji, ‘Rotgut and revenue: fiscal aspects of the liquor trade in southern Nigeria, 1890–1919’, Journal of Business and Social Studies, VIII, 1 (forthcoming).Google Scholar

59 NAI, CSO 1/32/20, Lugard to Law, 4 Dec. 1915.

60 NAI, CSO 19/3 N3145/1915, A. S. Cooper to Central Sec, Lagos, 29 Oct. 1915.

61 West Africa, 11 Jan. 1919, 854; and Davies, , Trade Makers, 203–8, 408–9.Google Scholar

62 Davies, , Trade Makers, 198.Google Scholar

63 Ibid. 189.

64 NAI, CSO 19/3 N3145/1915, Memo, dated 12 Oct. 1915.

65 Reasons for the absence of tramp shipping are stated in Leubuscher, Shipping Trade, 18, and Lynn, ‘Sail to steam’, 231 n. 24.

66 NAI, CSO 19/3 N3145/1915, Bonar Law to Lugard, 8 Feb. 1916.

67 The background to full requisition in May 1917 is sketched in Davies, , Trade Makers, 191–3.Google Scholar Essentially, it was a serious tonnage deficiency arising from the success of German submarine warfare that necessitated state intervention for rationalization of available tonnage.

68 NAI, CSO 19/3 N3145/1915, Burrowes to Central Sec, Lagos, 19 Nov. 1915.

69 Kirk-Greene, A. H. M., Lugard and the Amalgamation of Nigeria: A Documentary Record (London, 1968), 100.Google Scholar

70 Sir Owen Philipps, Chairman of Elder Dempster, declared at a meeting of the London Chamber of Commerce in April 1918 that his firm's freights rates before requisition were ‘very moderate’ — compared to those levied by government in 1917. See West Africa, 27 Apr. 1918, 194.

71 It was stated in 1919 that ‘the actual cost of working the ship has risen to a very considerable extent’. This must also have been the trend in the preceding two years. See NAI, CSO 21 CSO 1615, ‘Trade and Customs of Nigeria, Annual Report 1919’, 17; and NAI, CSO 19/7 N2303/1919, ‘Ocean freights’, Burrowes to Governor-General, 16 Dec. 1919.

72 Davies, , Trade Makers, 198.Google Scholar

73 Ibid. 195.

74 This paragraph is based on NAI, CSO 26 09049, vol. IV, ‘Maritime and harbour dues in Nigeria’, F. A. Clinch, Comptroller of Customs to Chief Sec. to Govt., 13 July 1926.

75 The reference is to the colonial, as distinct from the metropolitan, government.

76 NAI, CSO 19/7 N325/19, ‘Exports received at and shipped from Iddo’, Nigeria Railway Returns.

77 NAI, CSO 21 CSO 1615, ‘Report on Trade, 1919’, 21.

78 For details, see Olukoju, ‘Maritime Trade’, chs. 4 and 5. For the Great Depression in Nigeria, see Faluyi, Kehinde, ‘The impact of the Great Depression of 1929–33 on the Nigerian Economy’, Journal of Business and Social Studies, IV 2 (1981), 31–44.Google Scholar

79 Leubuscher, , Shipping Trade, 33, 40–1Google Scholar; and Davies, , Trade Makers, 209–33.Google Scholar