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Philipps, Owen Cosby, Baron Kylsantlocked

(1863–1937)
  • Michael S. Moss

Philipps, Owen Cosby, Baron Kylsant (1863–1937), shipowner, was born at the vicarage, Warminster, Wiltshire, on 25 March 1863, the third son of the vicar, the Revd Sir James Erasmus Philipps, twelfth baronet (1824–1912), and his wife, Mary Margaret Best (d. 1913). After an unremarkable education at Newton College at Newton Abbot in Devon, Philipps chose to serve a six-year apprenticeship with Dent & Co., ship managers and brokers of Newcastle upon Tyne. After completing his time in 1886, he joined the Glasgow firm of ship managers and brokers, Allen C. Gow & Co., and quickly became honorary secretary of the Glasgow and West of Scotland Liberal Association. Two years later he started his own firm, Philipps & Co. in Glasgow and in 1889, with funds raised from Liberal friends in the west of Scotland, purchased his first ship, King Alfred, in partnership with his brother John. Early in 1892 the shipping enterprise was extended with support from John's newly acquired interests in investment trusts. Philipps left Glasgow in 1894 to live with his brother in London, partly to allow him to pursue his ambition of joining John in parliament. However he failed to be elected in 1895 when he stood for Montgomery Boroughs, or in 1898, when he contested Darlington. Meanwhile a subsidiary company, the Scottish Steamship Company, was established in 1896, and the following year the brothers formed the London Maritime Investment Company as a vehicle for raising funds for further shipping investments. They purchased in 1898 the London and Thames Haven Petroleum Wharf, of which Philipps became chairman.

At the beginning of the century the brothers began searching for new tonnage, taking over the Northern Transport Company, with its three ships but failing to win control of the Tyne Steam Shipping Company. Early in 1901 they began to buy shares in the Royal Mail Steam Packet Company, one of Britain's oldest passenger steamship companies, which was in financial difficulties. By the spring of 1903 Philipps, who had no experience of passenger or mail steamship operation, was chairman of the company. He immediately received an offer from William J. Pirrie of Harland and Wolff of Belfast to build modern tonnage at cost price in return for all repair work and subsequent contracts, beginning a relationship which was to last until Pirrie's death in 1924. On 16 September 1902 Philipps married Mai Alice Magdalene Morris of Coomb, Llangynog, Carmarthenshire, who had inherited 5000 acres and some £125,000 from her father, Thomas, a banker; they raised three daughters. In 1906 he achieved his ambition of being elected a Liberal MP for the Pembroke and Haverfordwest District. His new-found wealth and status gave Philipps the confidence to promote Royal Mail's interests aggressively, both when introducing the new tonnage and in enlarging the company's capital. By 1908 he had won the respect of the shipping community in turning Royal Mail round. His achievements were publicly recognized with the award of a knighthood in 1909.

Philipps still had ambitions to extend his shipping interests. The opportunity came in 1909 on the death of Sir Alfred Jones, the architect of the Elder Dempster group of shipping companies. Lord Pirrie, now Philipps's close confidant and a large shareholder in the group, invited him to participate in a joint bid. When this succeeded in January 1910, Philipps immediately went on to acquire the Pacific Steam Navigation Company. Outwardly Philipps and Pirrie were unlikely partners. Philipps was as tall and arrogant as Pirrie was small and homely; but they had much in common. They had both been brought up with strong Christian values, which gave them a deep sense of their own mission in life. Pirrie, as a Presbyterian, and Philipps as an Anglo-Catholic, had both been led by their faith to adopt Liberal politics. They both had a love of grand designs and giant enterprises. However they rarely met socially as Lady Pirrie disliked Philipps intensely.

Other acquisitions soon followed; the Glen Line and Lamport and Holt (together with its subsidiary Liverpool Brazil and River Plate Steam Navigation Company) in 1911, the Union Castle Line in 1912, and the Nelson Line in 1913. These massive additions to the fleet were financed by large debenture issues. This reliance on fixed-interest securities attracted criticism from the City and other shipowners. Although the shipping lines retained their separate identities, increasingly Philipps and Pirrie began to treat all the associated companies as an integrated Royal Mail Group, held together by a complex web of cross-shareholdings.

During the First World War much of the group's tonnage was requisitioned for service as troopships, hospital ships, colliers, and armed merchant cruisers and altogether an estimated 100 ships were lost. The war also provided opportunity for the purchase of more shipping companies—Moss Steamship Company and Robert MacAndrew in 1916 and Coast Lines and Argentine Steam Navigation Company in 1917. At the same time Harland and Wolff became integrated with the group as new shipbuilding businesses and a major Scottish steelworks were acquired. By now Philipps was the nominated business heir of the childless Pirrie. The Easter Rising of 1916 had forced Pirrie to abandon his home rule principles and return to the Unionist camp. Only months earlier Philipps joined the Conservative Party, and his election as MP for Chester confirmed the rift with his brother John Wynford Philipps. This had been caused by his attendance at a garden party at Picton Castle given by his cousin Sir Henry Erasmus Philipps in an effort to patch up a long standing bitter family feud. He held his seat at Chester until 1922.

Although Philipps failed to win control of the White Star Line or General Steam Navigation Company in 1919, other smaller acquisitions were made. At the same time, with Lord Inchcape, he purchased all the wartime standard ships left in government hands. Directly controls over share transactions were relaxed in 1919, Philipps and Pirrie began to raise huge sums in new capital, largely to pay for replacement liner tonnage. They also took advantage, on a massive scale, of funds guaranteed by government under the Trade Facilities and Northern Ireland Loans Guarantee Acts. As the recession began to bite in the early 1920s the group was increasingly in difficulties. The problems were disguised from outside observers by the ingenious use of a cross-shareholding structure and elaborate window dressing of the accounts. Worst effected because of the cancellation of orders was Harland and Wolff, which did not technically become part of the group until after Pirrie's death in 1924. On taking over as chairman of Harland and Wolff in 1924, Philipps, who the previous year had been raised to the peerage as Baron Kylsant, was horrified to discover the extent of the company's financial difficulties and Pirrie's own virtual bankruptcy. However, Kylsant had little room for manoeuvre; all he could do was to attempt to control costs with the help of John Craig of Colvilles, the Scottish steelmakers, and hope for better times ahead.

The group's deteriorating financial position did not prevent Kylsant from acquiring the White Star Line for the enormous price of £7 million early in 1927. His motive was chiefly to secure premier liner contracts for the Belfast yard. From then on the group slid inexorably out of control. Its problems were not helped by the rift in relations between Kylsant and his brother St Davids. By the winter of 1929 the Treasury, acting in collaboration with all the principal clearing and merchant banks and advised by the Bank of England, was actively seeking to impose a reconstruction scheme on what was by far the largest group of enterprises in the United Kingdom. When it emerged that the group had total liabilities of almost £20 million, Kylsant was forced by Lord Plender and Sir William McLintock to relinquish control in May. After an extended holiday in South Africa, Kylsant was arrested and tried for issuing a false prospectus and publishing false accounts. He and the group's auditor, Harold Morland, were acquitted of the second charge; but he was found guilty on the first charge and sentenced to one year's imprisonment in Wormwood Scrubs. During his sentence he worked in the prison library. Many, including McLintock, believed he had been harshly treated. McLintock at once set about assisting the family in reorganizing their own finances so that they could afford to live comfortably. When Kylsant returned to Coomb his car was drawn by forty estate workers through an arch of welcome. He made a brief return to public life in 1933 and died at Coomb on 5 June 1937; he was buried in Llangynog churchyard on 10 June. The barony became extinct on his death.

Philipps's obituary in The Times concluded 'it was largely because he attempted too much that his later years were clouded'. This was a fair assessment of the career of a complex man motivated more by Christian Liberal principles than by a desire to make profits. For all the brilliance of his lifestyle he had remained churchwarden of St John's, Clerkenwell, in an unfashionable part of London, for most of his career. He had also attached considerable importance to his role as vice-chairman of the finance committee of the Welsh Church Representative Body, ensuring that the dis-established church in Wales had sufficient funds. Despite the scale and extent of his business involvements, he remained a shadowy, aloof figure, troubled by a speech impediment that encouraged shyness.

Sources

  • E. Green and M. Moss, A business of national importance: the Royal Mail shipping group, 1902–1937 (1982)
  • P. N. Davies, ‘Philipps, Owen Cosby’, DBB
  • P. N. Davies, ‘Business success and the role of chance: the extraordinary Philipps brothers’, Business History, 23 (1981), 208–32
  • P. N. Davies and A. M. Bourn, ‘Lord Kylsant and the Royal Mail’, Business History, 14 (1972), 103–23
  • b. cert.
  • m. cert.
  • d. cert.

Archives

  • priv. coll., papers
  • Bodl. Oxf., corresp. with Lewis Harcourt
  • U. Newcastle, Robinson L., corresp. with Walter Runciman

Likenesses

  • photographs, Harland and Wolff plc, Queen's Island, Belfast

Wealth at Death

£62,567 7s. 5d.: probate, 14 Dec 1937, CGPLA Eng. & Wales

£53,569 14s. 6d.: further grant, 23 March 1938, CGPLA Eng. & Wales