In 1914 the Orduna (1) was
launched and immediately chartered to Cunard for deployment
on their Liverpool to New York service. The management of
Cunard were obviously pleased with her as several of their
ships built in the late 1920's reflected her design. On the
15th August 1915 the Panama Canal opened with a profound effect
on PSNC's trade. The balance of commercial activity in the
western side of the Atlantic changed inasmuch that the industrial
North East of the USA was as close to Valparaiso via the canal
as was Rio Janeiro. The sensible route to Valparaiso from
Liverpool was through the Panama Canal and PSNC's investment
in developing the service via the Straits of Magellan at the
tip of South America became obsolete. At the same time the
Americans, not being involved in the war in Europe, increased
commercial activity at a time when PSNC was unable to compete.
The farsightedness of the directors in joining PSNC with Royal
Mail in 1910 was the company's salvation.
After the Panama was opened two ships, the Acajutla and the
Salvador, were purchased from the Salvador Railway Company
to operate a feeder service to Panama. In the same year the
Panama (3) was requisitioned as a hospital ship. During the
First World War eight ships were lost and in 1918 the Orca
was completed as a cargo carrier, operated by PSNC, but after
she returned to her builder for refitting as a passenger ship
she emerged in the Royal Mail livery. The Ballena and the
Bogota (3), wartime standard ships, joined the fleet in 1919
as war loss replacements together with three smaller vessels
the Arana, the Almagro and the Alvarado. In 1920 the former
German ship Alda was allocated to PSNC and renamed Magellan
(3) but the Panama (3) was retained by the Admiralty as a
permanent hospital ship and never returned to company ownership.
Also in 1920 the first post
war custom built ship for PSNC, the La Paz, joined the fleet
and Thomas Rome retired as Chairman being replaced by Sir
Owen Philipps, (later Lord Kylsant). The company opened services
between New York - Valparaiso and New York - Cartagena - Callao
but with concerted American competition the new routes were
not successful.
In 1921two further post war buildings joined the fleet and
plans to gradually dispose of the older ships was instituted.
Contributing factors to the company's plans were the effect
on the opening of the Panama canal on the Straits of Magellan
route and the fact that Valparaiso had become the terminal
port rather than the first port of call. The Corcovado (2)
was scrapped and the Orduna (2), the Orbita (1) and the Orpesa
(2) were transferred to Royal Mail for their new North Atlantic
service.
On 4th January 1922 the ninth extension to the company's Royal
Charter was granted but this time in perpetuity for as long
as 'the company shall think fit'. The only condition imposed
was that the company's name and its Liverpool head office
should remain. Later in 1922 the company received a symbolic
'kick in the teeth' when Chile passed its 'Cabotaje' Law.
Cabotage is a term which refers to routes operated totally
within a nation's coastline and which are therefore outside
the International regulations. Special advantages are given
to local shipowners; advantages which are denied to foreign
flagged vessels. PSNC were badly hit by the new law which
denied them the services that the company was originally formed
to provide. The coastal cargo and passenger services had always
been the mainstay of the business especially when competition
from European shipowners increased and the opening of the
Panama canal dramatically changed the emphasis of trade to
Chile and Peru.
PSNC's South American based
coastal passenger services came to an end in 1923 when the
Inca (2), the Chile (2), the Peru (3), the Guatemala, the
Victoria and the Quillota were all sold. Some of them were
sold to local operators and continued to operate the coastal
routes for some time. The company, however, continued to provide
a service in the area with their passenger liners, having
transited the Panama Canal, calling at the ports. In 1924
the Oroya (3) joined the passenger fleet and three ex-Glen
Line motorships were acquired being renamed Lagarto, Loreto
and Loriga. In the same year the European, South Pacific and
Magellan Conference, which had lapsed during WW1, was reintroduced
in order to stabilise freight and passenger rates. Between
1925 and 1929 the disposal programme continued with seven
ships being sold.
In 1931, although the effect
of the depression was beginning to be felt, the company built
their largest ship at that time, the Reina del Pacifico. Operating
on the Valparaiso route she reduced the passage time by 18
days to 60 and, to support her, the Oropesa (2) was refurbished
and had her speed increased to match but, because of the economic
situation, spent a lot of time between 1931 - 1934 laid up.
The depression hit PSNC hard. Ships were laid up and the Board
advocated the disposal of the surplus tonnage.
While all this was going on Royal Mail themselves were in
serious trouble as the shipping empire of Lord Kylsant collapsed.
Kylsant himself spent a term in prison for making false statements
in a financial prospectus aimed at raising additional capital
for the group. Fortunately for PSNC a special Act of Parliament
was enacted enabling the company to continue operating under
the control of its creditors which included Martins Bank.
A number of creditors were appointed to the Board and continued
in that capacity until the company was safely out of trouble.
During 1932 and 1933 the fleet slim down continued during
which time eight ships were either sold or scrapped. In 1934
the New York services were discontinued and a further three
ships were sold for continued service elsewhere. Passenger
trade to Cuba was seriously affected as a consequence of the
Spanish Civil War in 1936 and in the following year the Falkland
Islands Company cancelled its contract with PSNC and began
operating its own supply vessels.
In 1938 financial stability
had been restored and Royal Mail acquired the shares of PSNC
once again. The two companies continued as separate entities
but the directors of both served on one Board. By 1939 the
fleet had been reduced to fourteen ships and plans were made
to replace the older vessels but the Second World War commenced
before a single keel was laid. During the entire period of
the war PSNC were fortunate in only losing two ships and in
1943 saw the delivery of the first two replacement ships,
the Samanco and the Sarmiento (2). Also in 1943 the company
acquired a shareholding in British South American Airways
but had to relinquish the investment when the British Government
formed the British Overseas Airways Corporation.
After the war, in 1946, the
Santander and the Salaverry joined the fleet but the feeder
ships Acajutla and Salvador were sold when the transit service
through the Panama canal ceased. During the post war years
the company continued with its programme of replacement and
renewal
In 1952 the design of the house
flag was amended when the Royal Crown replaced the St. Edwards
Crown, reverting back to the original design.
