Story: Mills, James

Page 1: Biography

Mills, James

1847–1936

Businessman, ship owner, politician

This biography, written by Gavin McLean, was first published in the Dictionary of New Zealand Biography in 1993, and updated in July, 2014.

James Mills was born at Wellington, New Zealand, on 30 July 1847, the third son of Catherine Miller and her husband, William Mills, a carpenter. Two years later William became landing waiter at Port Chalmers and in 1853 he was appointed collector of customs at Dunedin. James Mills, or 'Little Jimmy' as he was known in his youth, attended Mrs Johnston's school, J. G. S. Grant's Dunedin Academy and Alexander Livingstone's high school. His was a well-off and devoutly religious family which prized learning.

After leaving school Mills worked about a year for Macandrew and Company before transferring to Johnny Jones's employ in 1862. He started as a shop assistant at the Waikouaiti store, moving up to clerical duties at Jones's Cherry Farm estate a few years later. So good was his figure work that in 1866 Jones transferred him to Dunedin to manage the affairs of first the Universal Bond (a warehouse) and then in 1868 the Harbour Steam Company.

On the death of Jones in 1869 Mills became the leading trustee of his vast estate. Just months earlier Mills had bought a few shares in most of the Harbour Company fleet. This gave him crucial leverage between 1869 and 1871; he delayed disposing of the steamers (a requirement of the will) until he could increase his shareholding sufficiently to control the company. By 1871 he had sold most of the old Harbour Company ships and replaced them with vessels in which he held a larger stake. He had enough money left over to run extra ships on the side. His marriage to Annabella Langlands, daughter of influential settler William Langlands, at Dunedin on 7 November that year, enhanced his social position. His elevation was confirmed in 1872 when he became a founding member of the exclusive Dunedin Club.

Mills saw the potential of the long-distance coastal trade. When shortages of local capital thwarted an attempt in 1874 to float a £100,000 steam ship company, he sailed to Britain to secure backing. He arrived in 1875 and through a chance encounter was introduced to Scottish shipbuilder and investor Peter Denny. Mills sold Denny the idea of taking over the Dunedin–Onehunga passenger and cargo service with two modern compound-engined steamers, the Hawea and Taupo.

Denny's backing enabled the Union Steam Ship Company of New Zealand to become established and buy out the opposition in the coastal and trans-Tasman trades. Between 1875 and 1904 Denny's Dumbarton yard turned out superior and sometimes technically innovative ships for the Union Company (as it was known), enabling it to dominate these trades and the trans-Pacific and Pacific islands routes.

In the mid 1880s Mills further extended his influence. He bought up the shipping services from Westport and Greymouth and then used his monopoly to force the mine owners to sell coal on his terms. Thereafter the Union Company manipulated the price of coal to run rivals out of business.

Mills was a member of the Otago Harbour Board, and sat on the boards of the Westport Coal Company, National Insurance Company and the Trustees, Executors and Agency Company. He also invested in the gold boom during the 1890s. But it was the highly successful Union Steam Ship Company which absorbed most of his energy.

Mills's greatest strength lay in his methodical approach to management. He believed the dictum that power should remain in the hands of the manager, and by the early twentieth century had created an administrative system with tiers of professional managers supervising a decentralised workforce. This large managerial hierarchy gave the Union Company a permanence impossible in traditional firms, where the death, retirement or bankruptcy of a few key shareholders or directors could threaten continuation of the business.

Mills believed that monopoly and oligopoly, rather than market forces, were the best guarantees of survival. He relied on secret deals with rivals to eliminate competition. This attitude carried over into labour relations. The Union Company played a key role in the waterfront disputes of 1890 and 1913, and took vengeance on many strikers in 1890–92 through coercive use of blacklists and the company's compulsory welfare scheme, the Mutual Benefit Society. However, Mills did see that trade unions could occasionally be useful to his purposes. In July 1890 he wrote to George McLean, the company's chairman of directors: 'We may ere long see some way of getting these Trade Organisations to help us take it out of the public.'

Mills was member for Waikouaiti on the Otago Provincial Council from November to December 1870 and from June 1873 to June 1875. He became MHR for Port Chalmers in April 1887 but stepped down in November 1893. A poor orator, he seldom spoke in the House; his most memorable speech contained an offer to run the railways for the government for a guaranteed return of four per cent. Aware of the importance of maintaining good relations with the government of the day, he dissuaded company executives from becoming involved in party politics. Nevertheless, he was a secret member of the Liberal and Labour Federation of New Zealand, and wielded great influence with Joseph Ward. His assistance did not go unrewarded: in 1907 he was knighted and he attended the colonial merchant shipping conference in London as the New Zealand ship owners' representative. In 1909 he was appointed a KCMG.

After divorcing his first wife in December 1886, James Mills had married Sadie Gertrude Fosbery at Dunedin on 20 March 1888. Thereafter family matters became increasingly important. Mills had three daughters from his first marriage and was to have two sons and a daughter from his second marriage; the eldest son died in infancy. In 1906, having sold Mount Lodge, his imposing Dunedin home, and Pentland Hills, his South Canterbury estate, he left for London where his two youngest children could be guaranteed a good education. He had by this time made his fortune, and although New Zealand-born went 'Home' to enjoy it. Golf, skiing, travel and automobiles occupied much of his time.

By 1914 the Union Steam Ship Company, or the 'Southern Octopus' as some labelled it, was the largest shipping line in the southern hemisphere. It had a fleet of 75 ships, was larger than the four biggest Australian shipping lines combined, and was New Zealand's largest private-sector employer. A myriad of secret deals gave it control of all except one of the other coastal lines, shares in several Australian shipping companies, and the capacity to manipulate the coal industry on both sides of the Tasman. If anything, it was too big and too successful. In 1912–13 senior management became worried by Australasian criticism of the company's size as well as anti-monopolistic rhetoric in debating chambers on both sides of the Tasman, and seriously considered splitting the Union Company into six separate units.

Mills himself was chairman of the Union Steam Ship Company until his death and was managing director until 1913. In later years he exercised little control, until worries about the suitability of his successors, the stability of politics in New Zealand and the Union Company's ability to survive alongside the growing shipping combines led him to sell to the British giant P & O (Peninsular and Oriental Steam Navigation Company), in 1917. About that time he embarked on his last shipping venture, the Mills Steamship Company. It operated several large steam trawlers until the late 1920s.

James Mills died at Bournemouth, Hampshire, England, on 23 January 1936. His second wife predeceased him in 1924; he was survived by a daughter from each marriage and a son from the second marriage.

How to cite this page:

Gavin McLean. 'Mills, James', Dictionary of New Zealand Biography, first published in 1993, updated July, 2014. Te Ara - the Encyclopedia of New Zealand, https://teara.govt.nz/en/biographies/2m48/mills-james (accessed 16 November 2018)