Insolvencies tripled between 1919 and 1921. W. R. Grace and Co. Of New York felt the pressure and decided to divest its Jamaican branch. Dir. John Grace realized that Grace Limited in Jamaica was not Itself a failing concern but that it was being divested in order to relieve the pressure from the parent company in New York. He decided to keep it. Fred W. Kennedy, who recommended that James Moss-Solomon, then with United Fruit Company, be Invited to Join the new firm as Accountant, backed his decision. Like Kennedy, Moss-Solomon was of Jamaican stock.
Thus on February 14, 1922, SST. Valentine's Day and Fred William Kennedy's Mother's Birthday, a new firm, Grace, Kennedy ; Company Limited was launched on the successes of its predecessor. The Memorandum of Association gave the Company room to carry on a general mercantile and commercial business and any other business, manufacturing or otherwise, as Its Directors deemed desirable To enhance the value of or to render profitable any of the company's property or rights' It was a widely permissive document. Subject to alteration or addition as the Directors might deem expedient.
The Capital of the Company was ?25,000 divided into 250 shares of OHIO each, with power from time to time to increase the capital. The first Directors Meeting of Grace, Kennedy ; Company Limited was held on February 15, 1922, at the offices of Cargill, Cargill and Dunn, solicitors, 4 Duke Street, Kingston. Those present were Dir. John Grace, Governing Director; Fred William Kennedy, appointed a Director. The meeting appointed the colonial Bank as the Company's bankers; G. F. Wallace, secretary; James Moss- Solomon, accountant; and Cargill, Cargill and Dunn, solicitors, instructed to retain H. M.
Radcliff as counsel. The Company's cheeses were to be honored on the signature of the Governing Director alone, or together with that of Fred William Kennedy; and an agreement was to be concluded between the Company and Mr.. Walter Fletcher for the management of the former Montage Bay branch of Grace, Limited, which had also been acquired by Grace, Kennedy ; Company Limited. The former Grace. Limited branch in SST. Ann.'s Bay had been closed and was not purchased by Grace, Kennedy & Company Limited. In July 1922, G. F. Wallace resigned as Secretary and R. P. Galloway as appointed in his place.
In August 1922, Messes. Wood and Carmen were appointed as the Company's auditors and Cleveland R. Grace was appointed as Director. The first Annual General Meeting of shareholders was held on March 5, and Walter Fletcher. R. P. Galloway attended as Secretary. The Governing Director announced that The past year's business had turned out as anticipated', and presented the Balance Sheet to December 3, 1922. It was moved by Walter Fletcher, seconded by Cleveland Grace, and unanimously agreed, that a dividend be paid on shares on April 15, 1923. Early Adventures 1922 to 1939
An early and important concern of the new Company was office accommodation and warehousing facilities. The Grace building at 64 Harbor Street contained room to spare, but warfare was inadequate. In March 1923, At A Directors' Meeting. Dir. Grace raised the matter. He proposed that the Company should enter into a Joint agreement with the Jamaica Fruit and Shipping Company for the lease from Grace, New York, of 64 Harbor Street, only part of which was, in fact occupied and leased by Grace, Kennedy; and for building a wharf and improving the premises. The cost of building and improvements would be equally shared, each party putting up EH.
OHO. He proposed that Grace, Kennedy should raise this amount by the distribution of 20 shares pro rata to existing shareholders, which would yield EH,OHO, and by borrowing EH,OHO on the security of the real estate of the Company's branch in Montage Bay. The three other Directors endorsed all these proposals, and the Joint lease agreement was signed in June 1923. By March 1924, the wharf had been completed Within estimated costs' and was in operation. It was then decided to add an oil-store and a tramway to service the wharf, which promised to be a profitable venture. It was, not, however, all good news.
Following the decides ion to borrow, the Company had issued El ,500 in debenture shares on security of the Montage Bay property, but in 1923 that branch had lost EH,500 in bad debts. The performance had not improved in 1924 and at the end of March 1925: ћ With unanimous agreement of the shareholders, the Montage Bay business and property.... At book values (stock, debts, real estate and plant) less 5%. Notices had been issued to debenture holders that debentures would be redeemed with a bonus of EH. Ass plus interest at 6% per annum to the date of redemption, set at May 7, 1925.
Nor, indeed had the wharf fully met expectations. It seemed a little early to be sure, but importations during 1924 had been lees than expected. Thus, the tramlines had been laid but, because of new regulations governing construction and the high costs that would be involved, there was still no oil- store. One of Grace, Kennedy's early interests was in solar salt obtainable from Pigeon Island. The main problem was transportation, and in 1928, a year of good business and few bad debts, the Company purchased a share in a schooner, the Admiral Beauty, and had the vessel fitted with a motor engine.
It had promised to be a direct money-maker and also to put the firm in 'a satisfactory position in the importation of salt' but, in fact, the Admiral Beauty showed a small loss on operation during that year, and in December 1931, whatever had happened between the times, 'the loss of the Admiral Beauty' was reported at a meeting of the Directors. The news was disturbing. Only a month earlier an agreement had been reached by which the Jamaican and Turks Island Government would provide a subsidy towards the cost of the vessel; and a contract had been 1932-33. One result was that the Company 'had to absorb losses on Pigeon Island' in 1932.
In 1935 Grace, Kennedy acquired Standard Soaps, a small manufacturing business; but that was soon resold to Jamaica Coconut Producers, thus becoming the origin of what subsequently became Seeped Limited. Another brief and unsuccessful venture was made in association with James Gore, an outstanding Jamaican entrepreneur of the time. With him, Grace, Kennedy moved into the manufacture of cigarettes. A Directory of Kingston business concerns recorded the new development in a nice example of asses public relations style: Messes. Grace, Kennedy ; Co. , Ltd. , has recently added to its many activities a wallpapered cigarette factory.
One of the machines there turns out every minute hundred of cigarettes ready for smoking. Another noteworthy machine, said to be the only one of its kind in Jamaica, is an ingenious one that packs the cigarettes with amazing celerity and accuracy. The tobacco used of r the Company's cigarettes is Virginia blended with Jamaican tobacco; and the cigarettes under the names of 'Missing Ball', 'Plus Fours', and 'Turf Club', are all very popular. That was no doubt the hopeful expectation of these remarkably named brands; but, alas, they could not compete with rival goods from
England such as Players, Gold Flake and Three Castles, or the locally produced Four Aces, Royal Blend, and the mentholated Zephyr. The business failed. Those were minor setbacks. In the asses Grace, Kennedy and Co. , Ltd. Were representatives of thirty-two overseas manufacturers. They imported a wide variety of goods, including steel safes, liquors, rice, silks, salted and pickled fish, tonics and flour. And the most important of these were the salted and pickled fish and meats, together with rice and flour. The wharf was highly profitable and trade was good.
In 1928 the Company, monthly with the Jamaica Fruit and Shipping Company, had purchased adjoining premises belonging to Lingo Pros. And extended the Grace Wharf by 1 50 Ft. Grace, Kennedy's share of the cost was met partly out of surplus and partly by the issue of the preferred shares. In 1929, the extended wharf accommodation had been 'full of business', merchandise warehouses had to be given over to the use of the wharf, and the Directors decided in 1930 to exercise our option to acquire the freehold wharf premises'. By January 1931, and again Jointly with the Jamaica Fruit and Shipping Company, the purchase of the wharf From Grace Ltd. Of New York, had been employed. The half-cost had been El 2,500. The agreement between the purchasers was that if either party wished to sell out its half- share it should be offered to the other at the actual cost less depreciation. Altogether, it was a bargain. Undoes Lumber Wharf and the old Grace Wharf, together with their extensions and improvements, now formed Grace Wharf, which was valued as follows: * Lands only - 21,000 * Offices, 64 Harbor Street - E 6,500 * 4 Concrete Warehouses - El 1,600 * The Newly Built Pier - El 1,900 * Extensions to 64 Harbor Street - E 2,000 * Total EYE,OHO, or EYE,500 to each party.
Early Financial Results 1922 to 1939 The Company was, however, not doing badly. Losses in Montage Bay in 1923 had 1924, the Directors declared dividends of 8%. Business, which was poor for all merchant firms in 1925, showed improvement in the following year and wharf- earnings began to reflect the up-turn. So did share prices. In October 1926 James Moss-Solomon became a shareholder, purchasing five shares from Cleveland Grace for IEEE; and in April 1927 further transfers were made from Dir. John Grace to four others at El 15 per share.
Two of these purchasers, Sidney Cargill and Harold Dunn, were at the same time appointed as Directors of the Company. At a meeting on the following day, April 12, the Directors agreed on an interim dividend of 15% to be paid on all shares on the 20th. It was also agreed that Dir. John Grace and Fred Kennedy be re-appointed as Joint managers of Grace, Kennedy and Company: As from 1 Feb. 1927 for the same period and on the same terms as in their last agreement dated April 13th, 1922. In January 1928, the Directors remarked on the very profitable business of 1927.
A further EH,587 was to be added to the General Reserve fund which, in March 1924, had been declared to be equal to 50% of paid- up capital; a sum of IEEE was to be rendered from the General Reserve to Bad Debts; the 15% interim dividend had been paid in April 1927, and now a further dividend of 8% was declared. Managerial Changes - 1922 to 1939 The managerial team of Dir. John Grace and Fred William Kennedy with the support of James Moss-Solomon, the Accountant, and R. P. Galloway, the Secretary had brought about the substantial growth of the Company.
However, before the opening of the much enlarged, much improved and now locally owned Grace Wharf, both Galloway and Kennedy had died. The Gleaner of March 6, 1930, reported: For the past month Mr.. Kennedy was not feeling well and was suffering from strain of overwork, for he never spared himself in the furtherance of his business. On Tuesday evening he fell victim too heart attack and, as stated above, passed away about midnight. Frederick William Kennedy had died suddenly at the age of fifty-six at his residence, Squeaky, on South Camp Road.
The names of those attending his funeral proclaimed not only the affection of family and friends but also his eminence in the commercial life of the island. The pallbearers were his eldest son, Luis Fred Kennedy, James Moss-Solomon, Dir. John J. Grace, Captain S. D. List, Mr.. S. R. Cargill and Mr.. V. E. Anton. Luis Fred Kennedy had graduated from university in the United States in 1928 and had then come to Join the firm. In 1930, the year of his father's death, a younger son, Joss© Kennedy, graduated from SST.
George's College and was articled to Anton and Hart, solicitors, in Kingston. He too would later Join Grace, Kennedy. A top managerial rearrangement followed Frederick W. Kennedy's death. Dir. John Grace remained as Governing Director and Luis Fred Kennedy was appointed a Director. At another Extraordinary General Meeting of shareholders in April, the Articles of Association ere amended. Henceforward, the Governing Director would vacate office on written request signed by the holders of at least 55% of issued ordinary shares and 55% of issued preference shares.
Should the Governing Directorship become vacant by death, resignation, or on such written request, an appointee supported by similar percentages of votes might fill the office. If within three months of a vacancy, no such appointment had been made the Directors would have the right to appoint a mid-1930, James Moss-Solomon took on the duties of Secretary until the end of 1935 hen he resigned the post and in January 1936 was appointed a Director. F. N. Tacos succeeded as Secretary. From about that time, Dir. John Grace began to move towards resignation. Fred William Kennedy had been authorized in 1929 by Dir.
Grace to sign cheeses and other papers without his countersignature. Then, in 1934, he authorized Assistant Managers Luis Fred Kennedy and James Moss-Solomon to sign individually on behalf of the Company. Further, for 1933 and after, both Kennedy and Moss-Solomon were to receive an annual bonus equal to half of the bonus payable to Dir. Grace under his existing contract with the Company. Under that contract he received an annual salary of IEEE and a contingent bonus of IEEE. In January 1932 he had told his fellow Directors: I am open to re-engagement on the same terms for a period of say, three years....
We've had to have careful handling of the business in the past two years of depression and the same will be for the next three.... That care I hope to be able to give. The contract referred, of course, to his managerial status, not to his place as Chairman of the Board and Governing Director. Business, in fact, turned out to be very good in 1933 and 1934, and at the end of 1935 Grace, Kennedy amp; Co. , Ltd. Opened accounts with the Canadian Bank of Commerce in Kingston and with the Grace National Bank in New York. Internal and External Grace Leadership Styles The annual Awards Banquet of H.
Macaulay Retort (Insurance) Ltd. Was held in middies and Carlton Alexander was the main speaker. His remarks were reported in the Grace News: Mr.. Alexander said that Grace, Kennedy had always believed in keeping a low profile, but the decision had recently been taken by the Board that Grace should now speak about its own achievements. The Company, he said, was now going to tell the public hat we are doing and achieving and he hoped that the story would be well received. Indeed, only eight months before, it had been suggested in a newspaper article that most people's impression of Grace, Kennedy ; Co. Ltd was of 'A confusing mass, with the emphasis of food'. But whatever the measure of ignorance or uncertainty about the activities of the Company, there would have been very few of those attentive to the public media who remained unaware of the importance of Carlton Alexander. Private and public circumstances had altered much since the days of Dir. John J. Grace. Dir. Grace had come to Jamaica to carry on and then to acquire, with Fred William Kennedy, the small local branch of the international Grace, Ltd. A non- Jamaican, he chose to remain here for many years.
Gradually, he relinquished active management of Grace, Kennedy ; Co. , Ltd. And then, in the asses, determined to sell out and depart. He was in some degree moved to this by the social and political pave Is, which began in the late asses. In the asses, Norman Washington Manley pressed for political independence and social reconstruction: if you look a little below the surface you will find that the emphasis on political necromancy has been designed largely to conceal from people the fact that there can be no democracy without an economic democracy - a democracy in the actuality of socialism.
For its is that alone that accepts the right of the common man to equality of opportunity in all spheres of life. The advocacy of 'socialism' - however defined - and the anti-imperialist stance of the left- wing members of the PAN stirred anxiety in the minds of established, well-to-do owners of landed property or business. Dir. Grace may well have considered that by leaving Jamaica he would lose little beyond the enjoyment of a declining local comfort ND security. His deeper and more important commitments lay elsewhere. For his successor, Luis Fred Kennedy, the circumstances were very different.
A Jamaican, now the majority shareholder and Governing Director of a growing business founded by his father in association with Dir. Grace, his commitments were here. His main concerns, beyond his family, his Church, and his old school, SST. George's College, were for the protection and expansion of Grace, Kennedy & Co. , Ltd. Again to quote Carlton Alexander, Luis Fred Kennedy was: a bold and fearless leader with imagination, courage, dexterity, commitment, and n abounding loyalty to business practices and to the free enterprise system.
He was, in short, the complete businessman. His antagonisms were directed against those persons or agencies seemingly obstructive to his business. He challenged, from time to time, all kinds at all levels: Alexander Basement, the Food Controller, the Trade Controller, his colleagues in the Chamber of Commerce, the Governor, the Port Authority, and, with equal vigor, his rivals in business. Hard working and competitive, he disliked intensely any sort of controls inhibiting commerce; but, to continue in Mr.. Alexander words, he was a 'private person'.
He might find himself, temporarily, in the limelight, but he was not drawn to it either by predilection or any perceived responsibility to be there. By the asses, Luis Fred Kennedy and James Moss-Solomon had yielded the front-line position to Carlton Alexander, their long-time proto©g©. There is a story that an employee in the Grace, Kennedy & Co. , Ltd. Head office in the twilight years of Luis Fred Kennedy's regime one-day asked a colleague. Who is that old man who comes in late every morning and goes off before us? He must fancy he is Mr.. Kennedy. ' To which the colleague replied, 'Are you serious? That is Mr.. Kennedy'.
The asses were hard years for Jamaica. Our wide open economy, heavily dependent on imports of manufactured goods of all kinds and certain basic foodstuffs, felt the effects of international economic instability in 1973. Bank of Jamaica officials spoke of greater strains and pressures than at any time in recent years'. In the same year, following the Arab-Israeli war, oil prices escalated enormously and remained high even after production recovered. The recently elected PAN Government had quickly introduced large and expensive programmer intended to improve conditions and reduce the gap between the economic 'haves' and have-notes'.
The cost of those programmer became increasingly onerous as more and more revenue had to be spent on goods and service from abroad. Moreover, though many of the new programmer were splendid in conception, they suffered from lack of proper managerial control and accountability. Despite the strengthening of foreign exchange controls and the institution of import quotas, licenses and prohibitions in the seventies, the balance of payments continued to deteriorate. Emphasis was given all on a population long accustomed to exhortations to produce for export so that Jamaica might continue to import necessities.
As scarcities and hardships increased, so did political party rivalry, exacerbated by the deliberate shift in the foreign policy of the PAN. The whole course of Jamaican life since the nineteenth century had been influenced by increasingly close relationships with North America, and, in particular, with the United States. The rapid development of transport and the communications media had brought American goods, American music, and American lifestyles into the awareness of Jamaican, both urban and rural.