The only effectual means of accomplishing the foreign mail service in this country is by liberally subsidizing private companies for a long term of years, such as will induce them to provide first-class ships, run them rapidly, and fit them for the most comfortable conveyance of passengers. Lord Canning in his Report to both houses of Parliament on the contract packet system in 1853, says, after showing that the naval vessels have been abandoned for the mail service: "There is no peculiarity in this branch of business which renders it an exception to the general rule, that work is done more cheaply by contract than by Government agency." But when the idea of performing the mail service by naval vessels was wholly abandoned in 1837, another question of equal importance arose, as to how far the mail steam packets might be made efficient as vessels of war in times of emergency. As a consequence of the discussion nearly all of the mail contracts made from that day until this by Great Britain contained stipulations requiring the vessels to be capable of carrying an armament, in addition to the requirements of speed and punctuality. The same thing was done in this country in 1846-7; and one of the principal means of carrying the Collins bill through Congress was the self-deception of making the steamers equivalent to vessels of war. It was a plea to which statesmen and enterprising business men resorted, and was used as a means of securing those commercial facilities which constitutional quibblers would not vote for directly, but which they would afford if allowed the subterfuge of "defenses" as a means of protecting them against a certain set of constituencies who foolishly opposed the extension of commerce. Many of these would not grant one dollar for the aid of that commerce on which the revenues of the country and their own real prosperity and wealth depended; but they were willing to suffer long and bleed freely at the old and just, though unrenewable war-cry: "The British and the Hessians." Our case was rather different from that of Great Britain which had a large steam navy while we had neither naval nor commercial steamers. There was, consequently, and there yet is, more propriety in demanding a capacity for the naval service in our vessels than in the case of Great Britain.

In obedience to this very proper spirit we produced some of the noblest vessels that ever floated. Stronger vessels than the Collins, Aspinwall, and Pacific Mail Steamers were never built in any country. And although we have fortunately not been compelled to test their capacity in naval transport or in action, yet there is no doubt that they would do honorable and efficient service in both, and by no means sully the glory of the American colors. The establishment of these and the Havre and Bremen lines, certainly gave an impulse to shipbuilding and the manufacture of steam machinery in this country which could have been given in no other way, and which in a few short years has demonstrated that we are behind no people on earth in capacity for these noble and difficult arts. And although we are yet but in our infancy in experience, as compared, especially with Great Britain, yet the increasing demand for mail facilities, the necessity for a large war marine, and the rapidly increasing coast steam service, all indicate that we shall require a large amount of this class of work and a mechanical skill to which our ingenious countrymen have thus proven themselves entirely adequate. And although it is certainly indispensable that we shall ever be provided adequately against all the exigencies of foreign war, yet it is to be trusted that bold and fearless statesmen will support and extend our steam mail service on the tenable grounds of its necessity to commerce and our citizens at large, and that its productive services will not be obscured by or subordinated to the subterfuges and deceits of the war marine feature. Let us have steam mail facilities on high and independent grounds, and for their benefits per se. The system is abundantly tenable on this ground alone; on this only ground that it will probably ever practically occupy. Let us also have our war marine, efficiently separate, as it should be. Let both systems be perfect, both independent, both mutually conducive to the prosperity and the defense of the country. But there is no doubt that these vessels would do excellent service in a conflict. They could swarm any particular coast with troops in a few days. They could easily run away from dangerous vessels, or pursue and overtake others when necessary. They are alway needed for transport, while the time will probably never again come when mail steamers will not be even more necessary during war than in times of peace. But this is not all. They fit and train a large number of marine engineers who are ever ready at a day's warning to enter efficiently on the naval service. This is a point of greater importance than is generally supposed. Engineers, however skilled in the shops, are wholly unfit for the service at sea until they have had months of experience, and become accustomed to sea-sickness. When one of our first American mail steamers sailed for Europe, no practised marine engineer could be found to work her engines. They took a first-class engineer and corps of assistants from one of the North River packets; but as soon as the ship got to sea, and heavy weather came on, all the engineers and firemen were taken deadly sick, and for three days it was constantly expected that the ship would be lost.

It is abundantly evident from all of the testimony, that most of the mail packets are capable of carrying a handsome armament. Mr. Atherton says to me in his letter: "Many of our ocean steamers are fit for naval service of every description; and they are generally fit for all transport service." The Report of Lord Canning, the British Post Master General, to which I have referred, was made in 1853, in obedience to a Treasury Minute issued by the Chancellor of the Exchequer, who directed the Post Master General to form a committee, and report to both houses, on the propriety of continuing and extending the mail steam packet system; as there had been suggestions that the sum expended for the mail service was large. These gentlemen after a lengthy investigation of several months, the examination of a great number of witnesses, and the record of their testimony in shorthand, made their report, accompanied by the evidence in a large volume. At page 5 of the report, in speaking of the requirements for naval efficiency, they say:

"In arranging the terms of these contracts, the Government seized the opportunity of requiring that the vessels should be constructed in a manner that would render them as serviceable for national defense in war as steam-packets belonging to the Crown would have been if employed in their stead. A provision to this effect was first inserted in the contract with the Royal Mail Company in 1840; and in most of the existing contracts stipulations are to be found requiring that the vessel should be of a construction and strength fit to carry such an armament as the Admiralty may think proper. In several cases they must be built of wood and not of iron; and there are some contracts which confer on the Admiralty the right of taking the ships at a valuation when it may be thought desirable to do so.

"Generally speaking, these stipulations have been fulfilled, as appears from a return which has been laid before us by the Surveyor of the Navy, showing the number, tonnage, and power of the vessels constructed by the various companies under contract with the Admiralty for the conveyance of the mails, distinguishing those built of wood from those built of iron, and stating whether the companies have in any cases violated the terms of the contracts, and if so, whether any authority has been given by the Board of Admiralty for the deviation. It results from this return that out of 98 vessels which had been surveyed by the Government officers, one only (the 'Australian') has been reported as incapable of carrying guns if required, and two iron vessels (the 'Levantine' and the 'Petrel') have been accepted instead of wooden vessels, on Mr. Cunard's Halifax and Bermuda line. Two other vessels—one belonging to the Australian Royal Mail Company, and the other to Mr. Macgregor Laird's West Coast of Africa line—had also been accepted (temporarily) by Admiralty authority, although of less tonnage and power than the contracts prescribed.

"The Surveyor's report upon most of these vessels, as regards their fitness for war purposes, is in the following terms: 'Not fitted for armament, but capable of carrying guns when so fitted.' This report accords with the opinion expressed by the Committee of Naval and Artillery officers upon the vessels which have come under their notice. It appears, however, from the statements of that Committee, that although the packets they have examined are for the most part of sufficient strength to carry and fire a certain number of guns, the expense of the alterations which would be necessary before they could be got ready for service would be very considerable, and that even when such alterations had been made, the efficiency of the vessels would be very small in proportion to their size, and that they could not encounter hostile vessels of equal tonnage without endangering the honor of the British flag.

"With reference to future contracts, we are decidedly of opinion that no expense should be incurred for the sake of imposing conditions for giving a military character to the postal vessels. We believe the imposition of such conditions to be a measure of false economy. Should a war suddenly break out, the immediate demand for mail steamers would probably be greater than ever, and it might be exceedingly inconvenient to withdraw them at such a time from their legitimate use for the purpose of arming them for battle. Moreover, the high charge for the packet service has been borne with the greater readiness, because it has been supposed by some to include a provision of large but unknown amount, for the defense of the country; while on the other hand the Naval Estimates have sometimes been complained of as excessive, on the ground that the force provided for was in addition to the large reserve of postal war steamers. We accordingly recommend that for the future the contracts for the conveyance of the mails should be wholly free from stipulations of the nature we have been describing, though it may be desirable in some cases to retain the power in the Government to take possession of the vessels in the event of national emergency."

Again, in the resume, after considering each of the British lines separately, the committee say:

"An erroneous impression appears to have prevailed among the public as to the efficiency of our postal steamers for direct purposes of warfare. We do not believe that those who are charged with the direction of the military affairs of the country have ever regarded them as likely to be of any great service in an engagement; but their advantages as an auxiliary force will be very considerable. They will be available, in the event of the breaking out of hostilities, for the rapid conveyance of dispatches, of specie, and, to a certain extent, of troops and stores. Their speed will be such as probably to secure them from the risk of capture, and will render them highly valuable for procuring intelligence of hostile movements. They may also be expected to furnish the Queen's ships with men trained to steam-navigation, and possessing an amount of local knowledge which can not fail to be valuable in several ways."

We have arrived at about the same conclusions in this country as those presented by the British Post Master General to Parliament in 1853, on this subject. And yet, with our small navy we may at any time need all of our steam packets for actual service, and the Government should always have the right to demand them for transport service. We have abundant evidence that our mail packets are well fitted for carrying an armament, and being highly efficient in war duty. The testimony of Commodore M. C. Perry, Mr. Cunningham, and others, as published in the Special Report of the Secretary of the Navy, 1852, is conclusive on this point. They found that they were built with extraordinary strength and of good materials.

Many expedients have been proposed for the transmission of our foreign mails. It is said that the late Post Master General entertained the purpose of paying some of the foreign screw lines to carry the mails, if Congress would permit it; but however all parties disapprove of the contracted policy proposed by that gentleman, I can not believe that he entertained any purpose so unpatriotic, and so subversive of American shipping interests. It is true, however, that, as he frequently said, he would prefer returning to the old packet system, and carrying the mails by sail, if private enterprise could not carry them across the ocean without a subsidy. But it is a consoling reflection that these singular views of that worthy gentleman never anywhere took root in Congress. Certainly there is no reason why this great, and rich, and proud nation should resort, like some little seventh rate power, to expedients in the carriage of our ocean mails. We are not so poor as to have to live by practices; not so degraded as to be willing to catch at any little thing that may pass along for resources. We have a teeming prosperity, an abundant wealth, unending resources, and a people everywhere clamorous for liberal expenditures for adequate mails. Why shall we degrade ourselves by depending upon others for our mail facilities? It alway humbles and mortifies me to see one human being lick the hand of another; one who acknowledges himself a stupid drone that must needs have a master to direct and protect him. And so with our nation when she stoops to subserviency and begging, for even so much as the postal charities of other enterprising and commanding nations.

It has been suggested that the Government could secure the transit of the mails on the receipts, taking both ocean and inland postage; and indeed a temporary arrangement was made with two of our contending companies running to Europe, to transport them on these terms; but such arrangements are temporary only, and can not be made the basis of regular action. They would operate most unequally on different lines. While on the European lines they would pay probably one half the sum of subsidy required, on many other, and especially on new and untried lines, they would not at first pay probably one tenth. And granting that on a given line, the receipts during fifteen years would amount to as much as the whole subsidy required for that time; yet no company could live on them, as for the first few years the receipts from the mail would be very small, while the general income of the line from passengers and freight would also be smaller than at any other time. Moreover, almost every steam company has to borrow money largely during its first years, in anticipation of the larger income from increased trade during the last years of its existence. Thus, while the system of the receipts would operate most unequally, the same aggregate sum given in the form of a regular annual subsidy operates as an assurance for the company and keeps it alive. But the postal receipts are not adequate to the support of any ocean line. In the report before cited, the Committee say, at page 5, that the sum of subsidy then paid was L822,390 per annum, whereas the postal receipts were only L443,782, or but a fraction over one half. There is probably no regular service in the world where the postal receipts would pay for the transport, especially where competition existed.

In making our contracts common-sense must dictate the lines necessary, and the general treasury should pay for them. There is no good reason why the sums of subsidy to be paid for mail transportation should be chargeable on the Post Office Department. Nor is it really of much consequence where the account is settled, as the general treasury must after all meet the bills. It may create some misapprehension as to the services on which the sums annually voted are bestowed. But the service, whether sea or inland, is alike incapable of sustaining itself, and is alike beneficial to every citizen of the Republic. And as this service so greatly benefits commerce, it is well that it should be paid from the general revenues of the country; from the duties which it creates. At any rate, almost every Post Master General will feel better disposed to subsidize ocean mail steamers adequately if the bills are payable by the treasury department, and not chargeable upon his own.

It would be well in all new contracts that the law of Congress authorizing them should require strength of vessel, a fair dynamic efficiency of performance, water-tight bulkheads for the safety both of the vessel, and passengers and mails, and all those other safeguards compatible with speed and mail efficiency. But the most essential point is the mode of making the contracts. We have pursued two system in this country, that of the lowest bidder, and that of Congressional contracts. Some have supposed that as the land mails are submitted to the lowest bidder, so those of the ocean ought to be also. But the cases are very unlike. The land service is a familiar thing, which every farmer understands, because running a wagon is one of the first things in life that he learns. Every body is familiar with the land service, and every body has more or less experimented in it, or in something very similar to it. But it is far otherwise with that of the ocean. Steamshipping is a comparatively new, a very difficult, and a very little understood science. But few who know its difficulties will undertake its hazards. Steam power and its expenses are by no means understood by the people; and the first mistake made by those unacquainted with it is in supposing it much cheaper than it really is. This mistake leads to fatal consequences in bidding for the ocean service, as most of those unacquainted with the business would engage to perform a given service for less than the actual price that it would cost them, and certainly for much less than practical, experienced men would. And herein consists one of the evils of the lowest bidder system, that inexperienced persons taking such contracts either perform them inefficiently, or appeal constantly to Congress for relief, or for increase of their pay. Such cases are exceedingly numerous. Post Master General Campbell said that the lowest bidder system was "a nuisance." Senator Mallory declared in a debate about the close of the last Congress, that it was a system which never wrought efficiently, which never gave final satisfaction, and which generally brought in a set of adventurers. The department and members of Congress had experienced the annoyance and inefficiency of the system in the contract for carrying the mails between Key West and New-Orleans through the Gulf. It was several times given to the lowest bidder, and as often fell through; being finally awarded by private arrangement to other parties, at more than double the prices of the lowest bidders.

In the elaborate Report made in 1852 to the Senate by Gen. Rusk, as Chairman of the Committee on the Post Office and Post Roads, of which Messrs. Soule, Hamlin, Upham, and Morton were members, in speaking on this subject the Committee said:

"Contracts to carry the ocean mail should, like all other contracts made by the Government, be the subjects of a fair competition, and granted with reference to the public good, due regard being had to the excellence of the proposals made, under all the circumstances of the cases which may present themselves. Your committee are aware that it has been too much the practice to regard the lowest as the cheapest bid; but experience has taught them that lowness of price and cheapness in the end, are not convertible terms, as the daily applications, from low bidders, to Congress for indemnity against losses incurred in the public service, will amply demonstrate. For examples of the kind the committee would respectfully refer to the numerous applications for remuneration, in connection with the public printing, which have for years past occupied the time and attention of Congress, and threaten to continue to do so to a most alarming extent, involving, in the end, an accumulation of expense infinitely beyond the cost that would have attended the performance of the work, at a fair and liberal compensation. This may be, by some, called economy, but it is the very worst sort of economy. It excludes the honest workman, who knows the real value of the service to be performed, and is unwilling to undertake to do his duty well, at the expense of himself and family; while it lets in the needy and greedy speculator who, having nothing to lose in point of character or money, will readily undertake what he can not perform, and become dependent upon the magnanimity of Congress for remuneration for his losses, real or fictitious. An honest and fair liberality should characterize the dealings between the Government and individuals, just as much as those between private citizens; and, when contracts are made, they should be entered into in the spirit of good faith, and with a full knowledge of the risks to be run, and the expenses to be incurred."

It is claimed on the other hand that in contracts made by Congress the two Committees have every opportunity of testing the value of the service to be performed, of ascertaining the sum of subsidy really necessary to its support, of giving to every applicant a fair and impartial hearing, and of presenting to Congress any case of doubt and difficulty, or of contested right. When the committees take any line into consideration it is in effect inviting competition and proposals from every one else than the projector who supposes that he has better claims to it, or can perform the service at cheaper rates. Such proceedings are always open and advertised to the world for months and sometimes for years. And there are many persons who will come forward and make a low bid for a service after some one else has brought it to the attention of the Government and labored it through Congress, who would not turn their fingers over, or risk a dollar in bringing it before the nation, and securing for it a due consideration. These are the adventurers who never produce any thing themselves by a legitimate and honest effort, but who alway stand back to take the chances of wresting from some enterprising, more far-seeing, and more industrious person the fruits of the toil perhaps of years. There are many enterprises in which the public have taken no interest because ignorant of the facts. Some enterprising individual goes zealously to work, travels thousands and tens of thousands of miles, ascertains all of the facts bearing upon the question, determines its feasibility or its impracticability, spends years of time and toil, and many thousands of dollars of money, indoctrinates the people of his country with the new and interesting facts, travels, writes, labors day and night for years, finally secures the attention of the Government and Congress, and asks a fair and reasonable compensation for the necessary service which he proposes performing for the public. He has contended with every species of opposition, overcome unwonted embarrassments, foiled the machinations of selfish, interested parties who would through all time mislead the public if they could but continue a monopoly of trade, and finally succeeded in getting a bill through Congress for the establishment of the long-sought line.

This done, he supposes that he is of course to be rewarded for the effort, the toil, and the expenditure of years, and that he will have an opportunity of indemnifying himself for his losses and sacrifices. He hears many beautiful apostrophes to the principles of equal justice and right which are said to characterize the legislation of his country, and control the action of the Government; but he is not prepared to hear that some adventurer has carried off his prize simply because by chance or by concert he has made his bid one thousand or ten thousand dollars lower than the prime projector. He becomes disheartened; finds that the country neither appreciates nor desires honorable effort and enterprise; that it will not reward the citizen in his self-sacrificing attempts to benefit the country and himself together; and that it will look on with careless indifference while his almost vested, his equitably vested rights, are neglected or stricken down. This is certainly one of the practical and demoralizing effects of the lowest bidder system, which respects no rights, however sacred, simply because based upon a dogma which is technically true. The system of the lowest bidder is technically correct, but practically wrong. It can not be carried out in practice without abandoning equity and honest rights under the plea of technicalities and the action of chances. It is in reality but a species of gambling, a miserable lottery, in which those who are most honest and truthful are invariably sacrificed. It is proper, then that Congress should not only establish the postal routes, but also determine either specifically or proximately the compensation to be paid; or leave this entirely to the discretion and the largest liberty of action of the Post Master General. Responsibility must attach somewhere if justice is obtained. With the lowest bidder system it rests and operates nowhere; and the most important operations of the Government are taken out of the hands of a wise public functionary and the intelligent legislators of the country, and put into a great wheel of fortune, where the proper person has, probably, but one chance in a hundred. This although true in every case of contract, is eminently so in cases of untried lines, where the experiment is to be made, and where it is generally necessary that an individual shall have spent years in bringing it to light.

I come to the conclusion, therefore, that the Government can discharge the clear and unquestionable duty of affording liberal mail facilities to the people, only by establishing all of the lines which the commerce and convenience of the country and the Government require; by maintaining them as a fixed policy of the country from generation to generation; by encouraging enterprising companies to continue well-performed services, and enterprising citizens to open new avenues of trade and wealth; and by paying for the same from the general treasury of the people, and from the revenues which these postal facilities, more than any other series of influences, conspire to produce and to conserve. (See Report of Lord Canning, Section IX.: also Report of Gen. Rusk, Paper E: also remarks of Hon. Edwin Croswell, Paper E.)



SECTION IX.

THE BRITISH SYSTEM, AND ITS RESULTS.

STEAM MAIL SYSTEM INAUGURATED AS THE PROMOTER OF WEALTH, POWER, AND CIVILIZATION: THE EFFECT OF THE SYSTEM ON COMMERCE: THE LONG PERIOD DESIGNATED FOR THE EXPERIMENT: NEW LINES, WHEN, HOW, AND WHY ESTABLISHED: THE WORKINGS OF THE SYSTEM: FIRST CONTRACT MADE IN 1833, LIVERPOOL AND ISLE OF MAN: WITH ROTTERDAM IN 1834: FALMOUTH AND GIBRALTAR, 1837; ABERDEEN, SHETLAND, AND ORKNEYS, 1840: THE "SAVANNAH," THE FIRST OCEAN STEAMER: THE SIRIUS AND GREAT WESTERN: CUNARD CONTRACT MADE IN 1839: EXTRA PAY "WITHIN CERTAIN LIMITS:" MALTA, ALEXANDRIA, SUEZ, EAST-INDIES, AND CHINA IN 1840: THE PENINSULAR AND ORIENTAL COMPANY: WEST-INDIA SERVICE ESTABLISHED IN 1840: POINTS TOUCHED AT: PROVISIONAL EXTRA PAY: PANAMA AND VALPARAISO LINE ESTABLISHED IN 1845: HOLYHEAD AND KINGSTON IN 1848: ALSO THE CHANNEL ISLANDS: WEST COAST OF AFRICA AND CAPE OF GOOD HOPE IN 1852: CALCUTTA VIA THE CAPE IN 1852, AND ABANDONED: PLYMOUTH, SYDNEY, AND NEW SOUTH WALES ALSO IN 1852, AND ABANDONED: INVESTIGATION OF 1851 AND 1853, AND NEW AUSTRALIAN CONTRACT IN 1856: HALIFAX, NEWFOUNDLAND, BERMUDA, AND ST. THOMAS IN 1850: NEW-YORK AND BERMUDA SOON DISCONTINUED: COMPARISON OF BRITISH AND AMERICAN SUBSIDIES, RATES PER MILE, TOTAL DISTANCES, AND POSTAL INCOME: THE BRITISH GOVERNMENT PAYS HIGHER SUBSIDIES THAN THE AMERICAN: WORKINGS AND INCREASE OF THE BRITISH SERVICE: GEN. RUSK'S VIEWS: SPEECH OF HON. T. B. KING: COMMITTEE OF INVESTIGATION, 1849: NEW INVESTIGATION ORDERED IN 1853, AND INSTRUCTIONS: LORD CANNING'S REPORT AND ITS RECOMMENDATIONS: GREAT BRITAIN WILL NOT ABANDON HER MAIL SYSTEM: THE NEW AUSTRALIAN LINE: TESTIMONY OF ATHERTON AND MURRAY: MANY EXTRACTS FROM THE REPORT: STEAM INDISPENSABLE: NOT SELF-SUPPORTING: THE MAIL RECEIPTS WILL NOT PAY FOR IT: RESULT OF THE WHOLE SYSTEM: ANOTHER NEW SERVICE TO INDIA AND CHINA: SHALL WE RUN THE POSTAL AND COMMERCIAL RACE WITH GREAT BRITAIN? CANADA AND THE INDIES.

It is admitted that it is the clear and unquestionable duty of the Government to establish ample foreign mail facilities for the nation, and that the only means of accomplishing this is by guaranteeing a liberal allowance for a long term of years for the transport of the mails, and paying for the same from the general treasury of the country. We will, therefore, now examine the British ocean steam mail system, and shall see that the practice of that great nation fully corroborates and sustains the views which have been advanced in the preceding chapters.

The steamship policy of that nation has not been treated as a matter of slight or secondary importance. British statesmen from the earliest days of the development of marine steam power saw the influence which it was likely to exert in the revolutions of commerce and the control of the nations of the world, and determined, with the sagacious foresight and the firm, fixed purpose for which they are distinguished, that it should be at once inaugurated as the great instrument of individual wealth and national power. They properly conceived that the nation which used this transforming agent most freely in commerce, defenses and diplomacy would unquestionably exert a high controlling influence over the nations of the earth, and make every land tributary to its wealth and power. The end justifies the effort, and the few temporary sacrifices and insignificant expenditures which have been made. The British nation launched at once into an extended foreign mail system which has been twenty years maturing and untouched, and which, on a small annual expenditure, has given it the profitable control of every trade and every market on the face of the globe. It was wisely conceded that a long period would be necessary to make the great experiment of marine steam mails, and that term was granted in the outset. When the first term of twelve years had ended, the contracts were renewed for another term of twelve years, in every instance with the companies first authorized, and the sums of subsidy were in every case increased. Not only thus. New lines were established all along the course of these experiments, in a quiet executive way, without agitation, without lobbying, without corruption, just as the Post Master General would put some short and necessary land route into operation. The last of these lines established was that in 1856, between Southampton and Australia for seven years, at an annual subsidy of L185,000, or $925,000. And this line was established, not because there was no postal communication; for the Government already had a semi-monthly line to China, India, and Australia, and another around Africa; but because the increased demands of British trade, and convenience to the British public, made it necessary.

During all of this time the system has operated with unbroken regularity. Established on a great general principle, as well as the highest possible expediency, it has been regarded as a fixed policy of the Government and the people, and has been suffered to do its excellent work quietly and undisturbed. The legislation introducing it was not an accident. It was not a spasm of generosity to the people; but it was a fixed purpose of the British public; the wise and only adequate means adapted to accomplish an important, an indispensable end. The first contract for carrying the mails in steamers, was made by the Post Master General in 1833, with the "Mona Isle Steam Company," to run semi-weekly between Liverpool and the Isle of Man at L850 per annum. This Company has run the line ever since, a period of twenty-four years, and at the same price per annum. After this, a contract was made in 1834 with the "General Steam Navigation Company," for the semi-weekly conveyance of the mails between London and Rotterdam, and London and Hamburg, at L17,000 per year. The contract was not annulled until 1853, nineteen years, when it was found best to send the mail by a new route; that is, to Ostend, and over the railways of Belgium. The first contract for a long voyage was made with Richard Bourne, in 1837, to convey the mails weekly from Falmouth to Vigo, O Porto, Lisbon, Cadiz, and Gibraltar, for L29,600 per annum. The contract was transferred in 1843 to the "Peninsular and Oriental Company," Southampton was substituted for Falmouth, the weekly trips were changed to three per month, and the subsidy was reduced accordingly, or to L20,500 per annum. The service has been performed on these terms ever since. The Aberdeen and Shetland contract was made in 1840, at L900 per year, after a failure to run on L600, by a previous arrangement. It now continues as then made.

It is known that the first passage across the Atlantic was made in the American steamer "Savannah," which left Savannah, Georgia, on the 25th May, 1819, and at the end of twenty-two days arrived in Liverpool, steaming only fourteen days of the time. The Savannah was only 350 tons tonnage, and had an engine of ninety horses' power. Captain Moses Rogers was her commander. The "Sirius" arrived in New-York on the 23d of April, 1838. The steamer "Great Western" next followed, in the same year. And although this was only nineteen years ago, it is instructive to notice the observations which the London Times made at that day. That journal said, March 31, 1838:

"There is really no mistake in this long-talked of project of navigating the Atlantic ocean by steam. There is no doubt of the intention to make the attempt, and to give the experiment, as such, a fair trial. The Sirius is actually getting under way for America."

On the 4th of July, 1839, the British Government entered into a contract with Samuel Cunard of Halifax for a semi-monthly mail line between Liverpool, and Halifax, and Boston, at the sum of L60,000 or $300,000 per annum. That contract inaugurated a new era in our American commerce with the old world, and gave an impulse to those international interests and those commercial amities which have bound Great Britain and the United States in the bonds of enduring friendship and mutual, neighborly dependence. Boston soon proved inadequate to the support of the entire line, and half of the steamers were sent to New-York; and thus they continue to run to this day. It is a singular fact that since that contract was made, eighteen years ago, there has never been one transatlantic steamer except those of Mr. Cunard running to or from that port. This contract was renewed with Mr. Cunard in 1850, when weekly trips were required for the greater portion of the year, and the subsidy was advanced, not in the ratio of the service, which was only doubled, but as three to one, from L60,000 to L173,340, or from $300,000 to $866,700. The experience of twelve years had demonstrated both the necessity of continuing the line, and of increasing the subsidy which the Government paid, to such a sum as would secure good steamers, regularity of trips, and efficiency of service. The Company now has nine steamers, with 18,406 tons aggregate tonnage, and 6,418 horses' power. The contract, which is to continue for twelve years, until 1862, was so altered in 1852 as to provide for a weekly service as well in winter as in summer; and it will continue in force from 1862 until twelve months after notice may be given for the discontinuance of the line. The compensation for the same is at the rate of 11s 4-1/2d per mile. Lord Canning's Report to Parliament in 1853, before noticed, in particularizing on this line, said:

"An additional allowance, within certain limits, is to be made to the contractors in the event of an increase in the rate of insurance on steam vessels, or in the freight or insurance of coals, as compared with the rates payable at the date of the contract, if proved to the satisfaction of the Lords Commissioners of the Admiralty."

Thus, instead of abandoning this line after an experiment of twelve years, and finding that it could never be self-supporting, the British Government wisely determined to let their policy produce its full fruits, and continued it for another similar term of years, with three times the former subsidy, for only twice the old service. (See Collins and Cunard Lines, Sec. X.)

A contract was made in 1840 for steam to Malta, Corfu, and Alexandria, and the service was extended in 1845 to Suez, Bombay, Ceylon, Calcutta, Hong Kong, and Shanghae. It was renewed again in 1853, terminable in 1862, or after twelve months' notice, with a service between Sydney and Singapore, with the "Peninsular and Oriental Company;" and the subsidy for the whole service was increased from L199,600 or $998,000 per annum, to $1,224,000 per annum. The Company have thirty-nine vessels of 48,835 tons, and 12,850 horses' power, and run 796,637 annually, at 6s 1-3/4d per mile. The steamers run the whole service of 796,637 miles annually, at this low rate because much of the service is confined to the Mediterranean, as for example, their line from Southampton to Vigo, O Porto, Lisbon, Cadiz, and Gibraltar; and also that between Marseilles and Malta. This is but like the coasting trade at the utmost, and is not ocean navigation proper. Before the contract was renewed the same company got for the service between Hong Kong and Ceylon, 12s 7d per mile, and for that between Suez and Calcutta, L1, 0s 1-1/2d per mile.

The contract with the "West-India Royal Mail Packet Company" was made in 1840 for a semi-monthly service to the West-Indies, Central America, and Mexico, at L240,000, and for 547,296 nautical miles per annum. The contract was renewed on the same terms in 1846, and again in 1850, when the Brazil service was added, and the subsidy increased to L270,000 or $1,350,000 per annum, for twelve years, or until 1862, and one year after notice shall have been given. The length of the routes now run by the Company is 37,000 nautical miles, with thirty-four stopping places. The West-India service of 393,432 miles, is performed at the rate of 10s 10-1/2d per mile, under special contract; no advertisement ever having been made for tenders. The Brazilian portion of the service embraces 153,864 miles annually. Pay per mile for the whole Royal Mail service is 9s 10d per mile. This Company has twenty steamers, of 29,454 tons, and 9,308 horses' power. On the Brazil portion of the service the touches are at Lisbon, Madeira, Teneriffe, St. Vincent, Pernambuco, Bahia, Rio de Janiero, Monte Video, and Buenos Ayres. On the West-India division, St. Thomas is the central depot, after touching at the Azores. Ten branch lines radiate from St. Thomas to Antigua, Barbados, Blewfields, Carriacou, Carthagena, Aspinwall, (which they call Colon,) Demarara, Dominica, Grenada, Greytown, Gaudaloupe, Havanna, Honduras, Jacmel, Jamaica, Martinique, Porto Rico, St. Kitt's, St. Lucia, St. Vincent, Santa Martha, Tampico, Tobago, Trinidad, and Vera Cruz. Lord Canning says:

"It is stipulated that if at any time, from causes recognized by the Lords of the Treasury as being of a 'distinctly public and national character,' the insurance on steam vessels shall rise above 6l 6s per cent., the freight of coals above 1l 2s 6d per ton, and the insurance on coals above 2l 2s per cent., the Company shall receive an additional sum, to be settled by arbitration, but not to exceed 75,000l a year in the whole."

The special contract for the West Coast of South-America, with the "Pacific Steam Navigation Company," for three round trips per month between Panama and Valparaiso, touching at Buenaventura, Guayaquil, Payta, Lambayeque, Huanchaco, Santa, Pisco, Islay, Arica, Iquique, Cobija, Copiapo, Huasco, and Coquimbo, was made in 1845, at L20,000, or $100,000 per annum, for five years. It was renewed in 1850 for ten years; and hence, expires in 1860, if notice may be given to that effect; the trips being only semi-monthly, and the subsidy increased to L25,000 per annum. The Company has seven steamers, of 5,719 tons, and 2,396 horses' power. (See List of British Mail Lines, Paper B, page 193.)

The contract for running fast packets between Holyhead and Kingston, in Ireland, was made in 1848 with the "City of Dublin Steam Packet Company," for L25,000 per annum, and is terminable at twelve months' notice after 1860. The line is run twice every day. The service to the Channel islands, from Southampton to Jersey and Guernsey, was established in 1848, at L4,000 per annum, for three trips per week. That of the West Coast of Africa was established in 1852, at L21,250 per annum. Leaving Plymouth, the steamers touch at Madeira, Teneriffe, Goree, Bathurst, Sierra Leone, Monrovia, Cape Coast Castle, Accra, Whydah, Badagry, Lagos, Bonny, Old Calabar, Cameroon, and Fernando Po. This contract was made with the "African Steamship Company," for a monthly service, and terminates in 1862 if twelve months' notice be given. There must be three steamers of 700 tons each, and the pay is, for 149,880 miles annually, at 2s 6d per mile. The contract with the "General Screw Steamshipping Company," for service semi-monthly from Plymouth to the Cape of Good Hope and Calcutta, touching on the return voyage at St. Vincent, Ascension, Cape of Good Hope, Mauritius, Point de Galle, Madras, and St. Helena, for L50,000 per year, to be reduced after two years to L40,000 annually, and that to the Cape of Good Hope and Port Natal, touching at Mossel and Algoa bays, Buffalo, and Port Francis, for L3,000 per annum, with the same Company, were both made in 1852; but the service was found impracticable on the terms, and was abandoned. That from Plymouth every two months to Sydney and New South Wales, with the "Australian Royal Mail Steam Navigation Co.," for L26,000 per annum, and touching at St. Vincent, Simon's Bay, or Table Bay, Cape of Good Hope, King George Sound, Port Philip, and St. Helena, was made also in 1852; but was likewise soon abandoned, as the subsidy in each case was too small.

About this time the Chancellor of the Exchequer requested a thorough investigation into the foreign steam packet system. This was made in the most searching manner in 1853; and such was the effect that it was determined not only to sustain all of the existing lines in all of their integrity, but to extend the system and afford additional facilities to British commerce and the British people. Accordingly, a new contract was made last year, 1856, with the "European and Australian Mail Steam Packet Company" for a monthly service between Southampton, Marseilles, Malta, Alexandria, Suez, and Sydney, at an annual subsidy of L185,000, or $925,000. The Company has seven steamers of 13,410 tons, and 3,290 horses' power. They run 336,000 miles per annum, and receive 11s per mile from the Government. It must be borne in mind, too, that when this line was established there were already two lines to the East-Indies and China, and one to Australia. This makes two to Australia, and three to the East generally.

There is also a contract, made in 1850 with Mr. Cunard, for running monthly between Halifax and Newfoundland, and Halifax, Bermuda, and New-York, as well as between New-York and Bermuda and St. Thomas. New-York was soon dropped from the list, doubtless because the British steamers yielded us more advantage than was gained by the mother country or the Provinces, and the line is now continued, at the original compensation, L14,700, or $73,500, between Halifax and Newfoundland, and Halifax, Bermuda, and St. Thomas, connecting with the Cunard steamers. The steamers are small coasters, and run at the rate of 3s per mile. Hence, they make 98,000 miles per annum.

The ocean mail steamers of Great Britain run 2,532,231 miles per year, at a total cost to the Admiralty of L1,062,797, or $5,333,985. The ocean mail steamers of the United States run 735,732 miles per year, at a total charge on the Post Office Department of $1,329,733. The British steamers run three and a half times as many miles as ours do, and receive for it a sum more than four times as large. The average price paid to their principal companies, as the West-India Royal Mail, the Cunard, the Australian, and the Peninsular and Oriental, including its Mediterranean coasting service, is 9s 7d, or $2.39 per mile; while the average price paid by us, or for the Collins, Havre, Bremen, Aspinwall, and Panama, San Francisco and Oregon, is $1.80-3/4 per mile. The highest sum paid per mile by the British Government is 11s 4-1/4d, or $2.83-1/2, to the Cunard Company, $2.75 to the Australian, and $2.46 to the West-India; and the lowest, 6s 1-3/4d, or $1.53-1/2 to the Peninsular and Oriental, much of whose service is coasting. This is saying nothing of the Pacific and the African coasting lines. The highest sum which we pay is to the Collins line, $3.10-1/2 per mile; and the lowest to the Havre, $1.00-1/2 per mile; while the sums paid to all of the other companies range but little above the last figures. The lowest rate per mile paid to any of the lines under the contract, was to the Pacific Mail, $1.70. It must not be forgotten that the low rates per mile of the Havre and Bremen result from those lines taking the postages, since their contracts expired; a sum by no means adjusted to the service done. They had ships that they could not let lie idle. Under their regular contracts the pay per mile of the Bremen line was $2.08, and of the Havre $1.76-1/2. While the British Government pays to four of her principal transmarine services an average of $2.39 per mile, we pay to five of ours an average of $1.80-3/4 only, or but about two thirds as much as she does. While our total annual expenditure for foreign mails is $1,329,733, a sum by $20,267 less than that paid to the single service of the West-India Royal Mail Company, that of Great Britain is $5,333,985. And, while our total income from transmarine postages is $1,035,740, a sum but little short of that paid in subsidy, taking the present Bremen and Havre services at the estimates of last year for sea and inland postages combined, the income from the whole transmarine service of Great Britain, including ocean and inland postage, was, when the last report was made in 1853, L591,573, or $2,957,865; but little above half the sum paid in subsidy, and including the French, Belgian, and Dutch routes, where the postal yield was much greater than from the ocean lines. The estimates which I present below have been made with great care from distances and subsidies furnished me by the reliable First Assistant Post Master General, Hon. Horatio King, from the last report of the late Post Master General, and from the report of the British Post Master General, Lord Canning, before noticed. Every item is consequently authentic.

AMERICAN.

- Gross Total Line. Trips. Distances. Subsidy. Postage. Miles Pay per Mile. - Collins, 20 3,100 $385,000 $415,867 124,000 $3.10-1/2 Bremen, 13 3,700 128,987 128,937 96,000 1.34 Havre, 13 3,270 88,484 88,484 85,020 1.00-1/2 Aspinwall, 24 3,200 290,000 139,610 153,600 1.88-3/4 Pacific, 24 4,200 348,250 183,238 201,600 1.70 Havana, 24 669 60,000 6,288 32,112 1.86-1/2 Vera Cruz, 24 900 29,062 5,960 43,200 .67 ======== ======== ======= ================== $1,329,733 $1,035,740 725,732 $1.80-3/4 Average. -

Total average per mile, $1.80-3/4. Average of five principal lines, $1.80-3/4.

BRITISH.

KEY: A: Cunard, B: Royal Mail, C: Pen. and Oriental, D: Australian, E: Bermuda and St. Thomas, F: Panama and Valparaiso, G: West Coast Africa, H: Channel Islands, I: Holyhead and Kingston, J: Liv. and Isle of Man, K: Shetland and Orkneys,

- - Gross Total Line. Trips. Distances. Subsidy. Postage. Miles Pay per Mile. - - A 52 3,100 L173,340 L143,667.10s 304,000 11s 4-1/2d $2.38-1/2 B 24 11,402 270,000 106,905.00 547,296 9s10 $2.46 C 24 [F] 244,000 178,186.11 796,637 6s 1-3/4 $1.53-1/2 D 12 14,000 185,000 33,281.12 336,000 11s00 $2.75 E 24 2,042 14,700 98,000 3s00 $0.75 F 24 2,718 25,000 5,715.00 130,434 3s10 $0.96 G 12 6,245 23,250 3,196.02 149,880 2s 6 $0.62-1/2 French Belgian, and Dutch Postage. H 156 132 {74,430.08 41,184 I 730 64 {36,158.09 93,440 J 112 70 {10,032.15 14,560 K 52 200 20,800 ========== ============ ========= ==================== L1,062,797 L591,573.07s 2,532,231 9s 7d $2.39 - -

Total Average per Mile, $2.10-1/3. Average of four principal lines, $2.39.

[F] The Peninsular and Oriental Company run twice per month between Southampton and Alexandria, and between Suez and Calcutta and Hong Kong; twice per month between Marseilles and Malta; between Singapore and Sydney every two months; and three times per month between Southampton and Gibraltar, touching at Vigo, O Porto, Lisbon, and Cadiz.

It would hardly be expected that the lines of this country should run at cheaper rates than those of Great Britain, as the prime cost of ships and their repairs, fuel, wages, insurance, etc., are much cheaper there, and as they have more paying freights, in their manufactured goods. It only explains to us, what has alway seemed a mystery; that while the regular companies in England were making money, nearly all of those in the United States not only had not made money, but were embarrassed more or less, and were selling their stocks at sixty to eighty cents on the dollar.

It is pleasing and instructive to examine the steam mail service of Great Britain, and see the gradual, unfaltering progress that she has made from year to year, since 1833; increasing the mail facilities and the sums paid for them by constant accretion based on system, rather than by any spasmodic legislation, or the ruling caprices of the moment. These improvements have not come all in a mass, or in any one year. Neither have they been abandoned at times of financial embarrassment, or commercial depression. At such periods they have been as regularly fostered as in the times of the most flush prosperity; and have ever been properly considered one of the prime agents and necessities for restoring commerce to its normal condition and a safe equilibrium. The transmarine service, which cost but L583,793, or $2,918,965, per annum until 1850,[G] now costs L1,062,797, or $5,333,985; within a fraction of double the sum. While the increase has not been slow, it has been steady and systematic, just as it was necessary to meet the wants of British commerce throughout the world. The language of the Hon. Senator Rusk on this subject, in his Report made to the Senate, Sep. 18th, 1850, found in Senate Ex. Doc. No. 50, 1st Session of 32d Congress, in Special Rep. Secretary of the Navy, 1852, is forcible and worthy of remembrance. He says:

[G] See Second Report, Steam Communication with India, 1851. Appendix, page 419.

"The importance of the steam mail service, when considered with reference to the convenience which it affords to the social intercourse of the country, is as nothing when compared with its vast bearing upon the commerce of the world. Wherever facilities of rapid travel exist, trade will be found with its attendant wealth. Of the truth of this proposition, no country, perhaps, affords a more forcible illustration than Great Britain, as none has ever availed itself, to so great an extent, of the benefits of easy and rapid intercommunication between the various portions of her almost boundless empire. The commercial history of England has shown that mail facilities have uniformly gone hand in hand with the extension of trade; and wherever British subjects are found forming communities, there do we find the hand of the government busy in supplying the means of easy and safe communication with the mother country. With a view to this, we have beheld England increasing her steam marine at an enormous expense, and sustaining packet lines connecting with every quarter of the globe, even in cases where any immediate and direct remuneration was out of the question. The great object in view was, to draw together the portions of an empire upon which the sun never sets, and the martial airs of which encircle the globe, and to make British subjects who dwell in Europe, Asia, Africa, America, and even Oceanica, all feel alike that they are Britons."

The Hon. Thomas Butler King, formerly Chairman of the Naval Committee, in a speech in the House, 19th July, 1848, said on this subject:

"In the year 1840 a contract was made by the Admiralty with the Royal Mail Steam Packet Company, at two hundred and forty thousand pounds sterling, or one million two hundred thousand dollars per annum, for fourteen steamers to carry the mails from Southampton to the West-Indies, the ports of Mexico in the Gulf, and to New-Orleans, Mobile, Savannah, and Charleston. These ships are of the largest class, and are to conform in all respects, concerning size and adaptation to the purposes of war, to the conditions prescribed in the Cunard contracts. They are to make twenty-four voyages or forty-eight trips a year, leaving and returning to Southampton semi-monthly.

"Another contract has recently been entered into, as I am informed, for two ships to run between Bermuda and New-York. The West-India line, in consequence of some disasters during the first years of its service, was relieved from touching at the ports of the United States; but in the spring of last year it was required to resume its communication with New-Orleans, and is at any time liable to be required to touch at the other ports on our coast which I have named. Thus it will be perceived that this system of mail steam-packet service is so arranged as not only to communicate with Canada and the West-Indies, the ports on the Spanish Main and the Gulf coast of Mexico, but also to touch at every important port in the United States, from Boston to New-Orleans.

"These three lines employ twenty-five steamers of the largest and most efficient description, where familiarity with our seaports and the whole extent of our coast would render them the most formidable enemies in time of war. It is scarcely possible to imagine a system more skillfully devised to bring down upon us, at any given point, and at any unexpected moment, the whole force of British power. More especially is this true with respect to our southern coast, where the great number of accessible and unprotected harbors, both on the Atlantic and the Gulf, would render such incursions comparatively safe to them, and terrible to us. And when we reflect that the design of this system is, that it shall draw the means of its support from our own commerce and intercourse, we should surely have been wanting in the duty we owed to ourselves and to our country, if we had failed to adopt measures towards the establishment of such an American system of Atlantic steam navigation as would compete successfully with it."

Previous to the renewal of the several foreign mail contracts, in 1850, the Treasury ordered, 26th April, 1849, the formation of a Committee in these words: "Ordered, that a Select Committee be appointed to inquire into the CONTRACT PACKET SERVICE." That Committee was composed of Sir James Hogg, Mr. Cardwell, Sir Wm. Clay, Mr. Cowper, Mr. Alderman Thompson, Mr. Fitz Roy, Mr. Hastie, Mr. Mangles, Mr. Thomas Baring, Mr. Bankes, Mr. William Brown, Mr. Childers, Mr. Wilcox, Mr. Crogan, and Mr. Henley. Mr. Elliot was added in the place of Mr. Baring. The Committee sat seventeen days, and examined fifteen witnesses under oath, many of these being commanders in the Navy, Secretaries, Presidents, and engineers of the Companies, and other eminent men in steam. Mr. Cunard was among the witnesses. After taking evidence and papers extending over about seven hundred and eighty-three octavo pages, they said in their report, after recommending that great care should be exercised in making all future contracts:

"1. That so far as the Committee are able to judge, from the evidence they have taken, it appears that the mails are conveyed at a less cost by Hired Packets than by Her Majesty's Vessels.

"2. That some of the existing Contracts have been put up to public tender, and some arranged by private negotiation; and that a very large sum beyond what is received from postage is paid on some of the lines; but considering that at the time these contracts were arranged the success of these large undertakings was uncertain, Your Committee see no reason to think that better terms could have been obtained for the public."

This investigation was made to enable the Government to proceed intelligently with the many contracts which were to expire in 1850; and its immediate consequence was, not only the renewal of all the old contracts with the same parties at the same or larger pay, but the establishment of several new services.

The British system had operated to the very highest satisfaction of the public and the Government for twenty years, until 1853, as it has done ever since; but at that time it was put to a second and very severe test. It had been suggested, probably by the Lords of the Admiralty, who had to pay the bills from the Naval fund, that the packet system was too costly, and should be remodelled, and perhaps reduced. Complaint was thus made to the Chancellor of the Exchequer, who, in a Treasury Minute, dated March 1, 1853, says:

"Important as it is to secure rapid and certain communication with the remote dependencies of this country, and with other distant states, for national purposes, it is doubtless, under all common circumstances, from commercial considerations that such facility of correspondence derives its highest value."

"Her Majesty's Government conceive the time to have arrived when the entire charge of the packet service should be deliberately examined and reviewed, with joint reference to the questions—how far the purposes with which the present system was begun have been accomplished—how far the total amount of service rendered to the State is adequate to the total annual expense—how far there may be cause for a more than commonly jealous and scrupulous consideration of such further schemes of extension of the system as particular interests or parties may press, or even such as public objects may recommend from time to time; lastly, how far, on account of the early period at which certain of the contracts are terminable, or on account of requisitions put in by the contractors themselves for the modification of the terms, or for any other reason, it may be prudent to entertain the question of any revision of those terms, or of laying down any prospective rules with regard to them; such only, of course, as may comport with the equitable as well as the legal rights of the parties, and may avoid any disappointment to the just expectations of those classes who may have felt a peculiar interest in the establishment and extension of these great lines of communication."

After remarking that some of the vessels of some few Companies were unfit for purposes of war, the "Minute of the Treasury," in instructing the Committee, further says:

"At the same time, it is not to be conceived that, on account of this failure in a portion of the design, the country has cause to regret having paid a larger price than was intended to be paid simply for the establishment of these noble chains of communication, which well nigh embrace the world. The organization of a complete postal system upon the ocean, with absolute fixity of departures, and a general approach to certainty in arrivals, was a great problem, of high interest and benefit, not to England only, but to all civilized countries; and this problem may now be said to have been solved by England, for the advantage of mankind at large. It was to all appearance altogether beyond the reach of merely commercial enterprise; and if the price paid has been high, the object has been worthy, and the success for all essential purposes complete."

As a consequence of this "Minute," the Lords Commissioners of Her Majesty's Treasury appointed a Committee, consisting of Viscount Canning, Post Master General of Great Britain, as President; Hon. Wm. Cowper, on behalf of the Board of Admiralty; Sir Stafford H. Northcote, Bart.; and Mr. R. Madox Bromley, Secretary to the Board of Audit. The Committee organized, examined the Evidence and Report of the Committee of 1849, also the three large volumes of Evidence and Report taken by the Committee in 1851 on "Steam Communication with India and Australia," and the many elaborate documents of this class published by the Admiralty. After discussing thoroughly all of the political, financial, commercial, ethical, and social questions connected with rapid steam mail communication, they made an elaborate and detailed examination of all the contracts existing with the Government, and of the affairs of the various companies, with a view to deciding whether the ocean mail service should be abridged, or continued, or extended. They reported to both Houses of Parliament, July 8th, 1853. The conclusion of the Committee was, not only that the present service was demanded by every interest of the country and should be sustained, but that it should be judiciously extended, so as to meet all of the wants of the British public of whatever class. As elsewhere remarked, the new line established last year to Australia and India, at a cost of $925,000 per annum, for seven years, was a legitimate result of that test and that report, made in the most searching manner by the very ablest men of the kingdom; and this, notwithstanding the reports purposely circulated in this country every few years that Great Britain intends abandoning her steam mail system. She will abandon that system, as her practice plainly indicates, only when her people shall have discovered some means of making and preserving wealth without effort, enterprise, commerce, or manufactures. (See page 99, Mr. Atherton's Reply.) The Report says:

"Before the application of steam to the propulsion of ships, the contracts were often made for short periods, the Government being able to find, among the vessels already employed in trade, some of speed sufficient for the purpose; but when it became requisite to dispatch the mails by steam, the ordinary supply of trading vessels would no longer suffice, and the Government had to call into existence a new class of packets.

"The postal service between England and the adjacent shores of Ireland, France, and Belgium, was at first performed by steam packets belonging to the Crown; but for the longer voyages it was thought better to induce commercial companies to build steamers; and with that view the contracts were at first made for periods which, unless previously terminated by failure to fulfill their engagements, would secure to the company the full benefit of their original outlay, by continuing the employment of their vessels until they might be expected to require extensive repairs, or to become unfit for continued service. In 1837 steam communication was created with Portugal and Gibraltar; in 1840 with Egypt, with the West-Indies, and with North-America.

"When the public interest requires the establishment of a postal line on which the ordinary traffic would not be remunerative for steamers, the subsidy to be allowed in the contract may be ascertained either by the test of public competition, or by calculating the amount which, on an estimate of the probable receipts and expenditure, will cover the deficiency of receipts, or by comparing it with the cost of war vessels if employed for the same purpose."

"The objects which appear to have led to the formation of these contracts, and to the large expenditure involved, were—to afford a rapid, frequent, and punctual communication with those distant ports which feed the main arteries of British commerce, and with the most important of our foreign possessions; to foster maritime enterprise; and to encourage the production of a superior class of vessels which would promote the convenience and wealth of the country in time of peace, and assist in defending its shores against hostile aggression.

"These expectations have not been disappointed. The ocean has been traversed with a precision and regularity hitherto deemed impossible—commerce and civilization have been extended—the colonies have been brought more closely into connection with the Home Government—and steamships have been constructed of a size and power that, without Government aid, could hardly, at least for many years, have been produced.

"It is not easy to estimate the pecuniary value of these results, but there is no reason to suppose that they could have been attained at that time at less cost."

After noticing the objects of the postal contracts, the Report says, in speaking of their results:

"To show what the system is capable of accomplishing, it will be sufficient that we should call attention to the two great lines of communication which have been opened, the one between this country and India, the other between this country and America. The mails are dispatched twice a month in the one case, and once a week in the other, and are conveyed to their destination with a regularity and rapidity which leaves nothing to be desired. The time occupied in the voyage to and fro between England and Bombay, which, before the establishment of the Overland Route, averaged about 224 days, is now no more than 87 days; and the time occupied in the voyage to and fro between England and the United States, which before 1840 varied from 45 to 105 days, is now reduced to an average period of 24 days. Nor is the service simply rapid, it is also regular; and the mercantile community can reckon with the utmost certainty on the punctual departure of the mails at the appointed times, and can also calculate with great precision the times of their arrival.

"The same results have not been so conspicuous on some other postal lines; but, taking the service as a whole, it has undoubtedly been brought to a high state of excellence, and its value to the country, both politically and commercially, is very considerable."

In speaking further of the objects of the Government postal service, after inquiring whether the foreign mail service should be extended any further, it says:

"The object of the Government in undertaking the transmarine postal service, whether by packets or by the system of ship letters, is to provide frequent, rapid, and regular communication between this country and other states, and between different parts of the British Empire. The reasons for desiring such communication are partly commercial and partly political. In cases where the interests concerned are chiefly those of commerce, it is generally more important that the postal service should be regular, than that it should be extremely rapid, though of course rapidity of communication, where it can be obtained without sacrificing other objects, is of great advantage. It would clearly be the interest of persons engaged in an important trade, provided there were no legal impediment in the way, to establish a regular postal communication in connection with it, even without aid from the state. This, however, would not extend to many cases in which there are political reasons for maintaining such services, while the commercial interests involved are of less magnitude. Nor is it probable that private communications would be nearly so rapid as those directed by the Government; for a high rate of speed can only be obtained at a great expense, which will generally be found to be disproportionate to the benefits directly received from it, unless under peculiar circumstances of passenger traffic. Lastly, it is to be considered that there are several services which, if they were not carried on by the British Government, would probably be undertaken by the Governments of foreign states, and that it is not likely that private individuals or associations would in such cases enter into competition with them.

"From these considerations we infer that, even upon the lines in the maintenance of which the greatest commercial interests are involved, private enterprise can not be depended upon for providing a complete substitute for Government agency; while it is clear that in others, where regular communications are desired solely or chiefly for political purposes, such agency is absolutely indispensable. It is, however, obvious, that to establish a Government system in some cases, and to leave others wholly to private persons, would cause much inconvenience. The conclusion therefore follows, that it is right that the Government should have the management of the whole of the transmarine postal communication, as it also has that of the communication within the country.

"In undertaking this duty, the Government will in the first place have regard to the national interests, whether political, social, or commercial, involved in the establishment and maintenance of each particular line. Care must, however, be taken, in cases where the communication is desired chiefly for commercial purposes, to guard against an undue expenditure of public money for the benefit of private merchants. The extension of commerce is undoubtedly a national advantage, and it is quite reasonable that Parliamentary grants should occasionally be employed for the sake of affording fresh openings for it, by establishing new lines of communication, or introducing new methods of conveyance, the expense of which, after the first outlay has been incurred, may be expected to be borne by the parties availing themselves of the facilities offered them. But this having once been done, and sufficient time having been allowed for the experiment, the further continuance of the service, unless required for political reasons of adequate importance, should be made to depend upon the extent to which the parties chiefly interested avail themselves of it, and upon its tendency to become self-supporting."

Noticing the greater or less sums at which private companies may be induced to undertake short line postal service, and stating that the line is both benefited and injured by the necessity of punctual sailing hours, the Report states the reason why subsidies are required, thus:

"The vessels now under contract with the Government are, however, for the most part, required to maintain high rates of speed. The contractors are also subject to a variety of conditions, designed partly to secure the efficiency of the postal service, and partly to render their vessels available for other national purposes wholly unconnected with that service. In return, they are in the receipt of subsidies largely in excess of the amount of revenue derived from the mails they carry, and those subsidies are guaranteed to them for terms of years varying from four to twelve, most of which have at the present time not less than seven or eight years to run. An Estimate printed in the Appendix, will show that while the amount of the subsidies to foreign and colonial lines, as contracted for in the past year, was no less than L822,390, the sums received for postage upon these lines can not be estimated at more than L443,782."

The Report further says, as to the mode by which postal communication can be procured, "where frequent and rapid communication already exists, it is only necessary for the Government to secure from time to time the services of vessels already engaged in private traffic." But as there are no such cases in the transmarine routes, and as private enterprise supplies the demand of steam lines only on the short routes, like the inter-island service of Great Britain, or that to the Continent, or the service of the Sound, the North River, short coast routes, etc., in the United States, the Report goes on to say:

"There still remain, however, some cases in which there exists no private communication sufficient to render such a mode of proceeding practicable. Where this is so, and where a communication has to be created, it will be necessary that contracts of longer duration should be made, for it is unreasonable to expect that any person or association of persons should incur the expense and risk of building vessels, forming costly establishments, and opening a new line of communication at a heavy outlay of capital, without some security that they will be allowed to continue the service long enough to reap some benefit from their undertaking. It must be borne in mind, that the expensive vessels built for the conveyance of the mails at a high rate of speed are not in demand for the purposes of ordinary traffic, and can not therefore be withdrawn and applied to another service at short notice. It is, then, fair, that on the first opening of a new line, contracts should be made for such a length of time as may encourage the building of ships for the purpose, by affording a prospect of their employment for a considerable number of years. But we see no sufficient reason for continually renewing such contracts for periods equally long, after the object has once been attained."

(For the views of the Committee on the adaptation of the mail packets to naval service, see pages 146 and 147.)

The Committee in summing up, presents the result of the investigation and the fruits of the service in the following impressive light:

"The value of the services thus rendered to the State can not, we think, be measured by a mere reference to the amount of the postal revenue, or even by the commercial advantages accruing from it. It is undoubtedly startling, at first sight, to perceive that the immediate pecuniary result of the Packet System is a loss to the Revenue of about L325,000 a year; but, although this circumstance shows the necessity for a careful revision of the service, and although we believe that much may be done to make that service self-supporting, we do not consider that the money thus expended is to be regarded, even from a fiscal point of view, as a national loss."

It has never been a favorite idea with British statesmen that the packet service should be self-sustaining; nor have they had any evidence to believe that steam companies could live on the postal receipts. It is evident from the following that the packet system is sustained without any reference whatever to the postal income, and for commercial, political, and social purposes alone; only using the income so far as it goes as a part of the contributions by the people to the general treasury. It says:

"Your Lordships have seen from our Report that in framing these contracts various objects have entered into the consideration of the Government, the cost of which ought not in our opinion to be charged upon the revenues of the General Post Office. A simple comparison of the receipts and expenditure upon some of the lines is in itself sufficient to prove this. If the Post Office is to be considered as a department producing revenue, it is not to be supposed that a line of vessels which costs the State L240,000 a year, and brings in no more than L56,002, (as is the case with the West-Indian packets,) or one for which L25,000 is annually paid, and which returns little more than one fifth of that sum, (as the Pacific line,) can be maintained as a part of its machinery; and, in fact, the contracts for many of the services have been made without reference to any estimate or opinion on the part of the Post Master General of their probable value as postal lines."

It thus becomes abundantly evident from the Reports of Parliamentary Committees, from the "Acts of Parliament," and from the practice of the Admiralty and Post Office Departments, as well as from the unvarying experiences of twenty-four years, that the steam mail packet system of Great Britain was primarily adopted, and ever since sustained as the choicest means of giving to that nation the irresistible control of the world. Watching this system from the germ to its present maturity, we have seen the overshadowing tree reach higher and higher, and the circle of each year's growth expand more and more, until the outer ring now embraces the whole civilized and savage world. An additional evidence of this arrives this very day. The Atlantic brings intelligence (New-York papers, Nov. 22d) that Great Britain has just completed another mail contract, by which the Peninsular and Oriental Company are to run a third semi-monthly service to India and China; so that the Government and people of Great Britain shall have a weekly communication with those regions, while we have none except through them, although we are many thousand miles nearer to those countries.

It has been said that we should not attempt to run the postal and commercial race with Great Britain. Why not? Because she has many colonies, and must needs keep up communication with them. And why have steam instead of sail to them? Because steam is the means of more readily controlling them. Grant it; and for the very same reason we wish steam with all the world; not that we may control the world, for this is costly and unremunerative, as Great Britain finds; but to conform it, and especially to control its commerce. Great Britain has possessions in the West-Indies; but they are of the most insignificant importance when compared with the trade of the many islands and countries near them, which she does not possess, and with the Central American, Californian, Mexican, Peruvian, Chilian, New-Granadian, Venezuelan, and Spanish markets, which she controls and uses. So with India and the Mauritius. It is a matter of sore satisfaction that she is compelled to govern them as a means of reaching their rich trade, which, however rich, is far less important than that of China for which she so strives. So also with Canada. She was told some years since that, if she wished to secede from the Kingdom, because the Government would not assist in building a certain railroad, she might go, and carry peace, also, with her. The Government would scout the idea of running the Cunard line to Canada alone, and would not touch even at Halifax, except that the ships are compelled to go in sight of the place; as the "great circle" on which they sail nearly cuts the city. Great Britain runs that line because her trade with the United States requires it. That trade is worth to her every year twenty of her Canadas, as that of the West-Indies is worth a dozen of all the possessions which she has there. As to running the race of commerce with her, it is simply a sine qua non, on which there is no difference of opinion among Americans who love their country.



SECTION X.

THE MAIL LINES OF THE UNITED STATES.

THE MAIL LINES OF THE UNITED STATES: THE HAVRE AND BREMEN, THE PIONEERS: THE BREMEN SERVICE RECENTLY GIVEN TO MR. VANDERBILT: BOTH LINES RUN ON THE GROSS RECEIPTS: THE CALIFORNIA LINES: WONDROUS DEVELOPMENT OF OUR PACIFIC POSSESSIONS: THE PACIFIC MAIL STEAMSHIP COMPANY: ITS HISTORY, SERVICES, LARGE MATERIEL, AND USEFULNESS: THE UNITED STATES MAIL STEAMSHIP COMPANY: ITS RAMIFIED AND LARGE EXTRA SERVICE: EFFECT UPON THE COMMERCE OF THE GULF: ITS HEAVY LOSSES, AND NEW SHIPS: STEAMSHIP STOCKS GENERALLY AVOIDED: CONSTANTLY FAR BELOW PAR: THE COLLINS LINE: A COMPARISON WITH THE CUNARD: ITS SOURCES OF HEAVY OUTLAY, AND ITS ENTERPRISE: THE AMERICAN MARINE DISASTERS COULD NOT HAVE BEEN PREVENTED BY HUMAN FORESIGHT: THE VANDERBILT BREMEN LINE.

It is not my intention to notice the various lines in detail, or in any wise become their apologist, eulogist, or prosecutor. As a general thing they have discharged their obligations to the Government and the people in the most creditable manner; in a much better manner than could have been expected of them, considering the novelty of such enterprises in this country and our total want of experience either in steamship building or ocean steam navigation. It is a cause of great gratulation and satisfaction that springing into the great arena of the mail and passenger strife at a single bound, our steamers at once took the lead in the race, and have ever since distanced those of the whole world in speed, comfort, general accommodations, and cheap transit. This may be asserted as a rule without a single exception. The Collins steamers and the steamer "Vanderbilt" have beaten the Cunarders by nearly a day and a half on the average voyages; the Havre and Bremen steamers make just the same time as the Cunarders; and the California steamers of both lines have signally beaten those of all the English lines in the West-Indies, the Mediterranean, and the Pacific and Indian oceans. Indeed the triumphs of our steamers generally and specially have been so decided in every valuable point that we have great reason to be proud of the attainments to which the legislation of 1846 and '47 led. We have nothing to record to the credit of our legislation since that period.

The Havre and Bremen services were the first established in the United States; and as the pioneers in our mail steamshipping they have both proven themselves valuable to the country. The Bremen line went into the hands of Mr. Vanderbilt during the present year, on the expiration of the old contract; the "Ocean Steam Navigation Company" being unwilling to attempt the performance of the service on the small mail pay of the gross ocean and inland postages, even with their old ships. Mr. Vanderbilt having three ships wholly out of employment, determined to try the service. How far it will prove remunerative we shall not be able to determine until the steamers shall have run through one or two winters as well as summers.

The Havre service was continued in the old hands. Mr. Livingston had two fine new ships, which had been running but little over one year, and which, adapted specially to the mail, passenger, and transport trade of France, could not easily be withdrawn from the business for which they were built; while it would have been quite impossible to find for them employment in any other trade. He, consequently, made a temporary arrangement with the Department for one year, agreeing to transport the mails, as during the old contract, for the gross ocean and inland postages. With this small remuneration the Havre line gets a smaller pay than any other running; but one dollar per mile. The Company have deserved well of the Government for their untiring efforts to perform their contract; one of the greatest sacrifices being the necessity of building two costly new steamers just as their contract was about to expire. They suffered most severely from disaster. Both of their fine and fast steamers, the "Franklin" and the "Humboldt," were lost; and they were compelled to supply their places by chartering at exorbitantly high prices, until they built the two excellent vessels now running, the "Arago" and "Fulton." These two steamers run probably more cheaply than any ever built in any country; otherwise, being as large as they are, about twenty-six hundred tons each, they could by no means live on the small mail pay now given them. It may be that both these and the Vanderbilt Bremen steamers are losing money; although the latter vessels are much smaller, and have the advantage of an immense emigrant trade. I have no means of knowing the position of affairs in either company.

But no loss to the Havre Company has ever been so great as that of its late President, Mr. Mortimer Livingston. An honorable and just man in his dealings, both with individuals and the Government, he eschewed every attempt by which some sought to pervert and deprave the legislation of the country, and presented all of his views in steamshipping on high, honorable, and tenable grounds. He pursued the profession in an enlarged spirit of enterprise, and was not unmindful of his duties to his country, while he endeavored to establish legitimate trade and preserve a profitable private business which had been well founded long before the introduction of ocean steam. He was a worthy and most honorable gentleman, and is a loss to the whole public.

Prominent among the steamship enterprises of the country stand the two lines which connect the Atlantic and Gulf seaboard with our large and rich possessions in the Pacific, California, and Oregon. Established at a time when California was held by military government, and when Oregon was a wild untamed wilderness, these lines became the means of developing the richest portion of the American continent, and binding the far distant western world in close connection with the old confederacy, notwithstanding the mighty Cordilleras and Rocky Mountains which rose like forbidding barriers between them. Important as these possessions were, naturally and geographically, they acquired a new interest about the time that the Pacific and the Aspinwall Steamship Companies were established. The contracts which were made with these companies would certainly have ruined them but for the discovery of gold in California. This opened a new and brilliant field of effort, and the opportunities offered by these companies soon determined tens of thousands of our hardy and enterprising countrymen to enter and develop it.

It is pleasing in this connection to trace the almost mysterious progress of our Pacific territory during the past eight years, and the agencies producing it. Among these agencies none have been so effectual as the Pacific Mail Steamship Company. That Company was compelled to form an establishment of the most effective character four to five thousand miles away from home, and as it was at the time, thirteen thousand miles distant. The country was wholly new, so much so that it was, in most parts of the field which it had to occupy, extremely difficult to procure ordinary food for their operatives. Their ships had to make a voyage more than half of that around the world before they arrived at their point of service; and they found themselves without a home when there. The steamer "California," which left New-York on the 6th October, 1848, was the first to bear the American flag to the Pacific ocean, and the first to salute with a new life the solitudes of that rich and untrodden territory. She was soon followed by the "Panama" and "Oregon," and in due course of time by the "Tennessee," the "Golden Gate," the "Columbia," the "John L. Stephens," the "Sonora," the "Republic," the "Northerner," the "Fremont," the "Tobago," the "St. Louis," and the "Golden Age." From a small beginning that Company now has the finest steam fleet in the United States, although the difficulties in forming it were probably much greater than any of our other companies had to contend with.

These steamers found nothing ready to receive them in the Pacific. The Company was compelled to construct large workshops and foundries for their repair, and now have at Benicia a large and excellent establishment where they can easily construct a marine engine. They had also to build their own Dry Dock; for that of the Government at Mare Island was not ready until 1854. Theirs has ever been most useful to the United States, as it furnished the only accommodations of that class in the Pacific. They had also to make shore establishments at Panama, San Francisco, and Astoria, which, with coal depots, etc., were extremely costly, owing to materials having to be transported so far, and labor at the time being so high. The price of labor in California at all times depends on the profits which can be made by digging gold, and the prices paid for this species of labor have ever been enormous. Beyond this most unusual price of labor along the Pacific seaboard, the coals which they have used, whether from the Eastern States or from England, have been invariably shipped around Cape Horn, and have never cost less than twenty dollars per ton. For a large portion of the time the Company had to pay thirty dollars per ton for coal, and in one instance fifty dollars. Coal, like all other provisions of the steamers, has generally been purchased from those who sent it out on speculation, and took all the advantages of the peculiar market. Twelve dollars per ton is a low price for freight to California or Panama. In addition to this, the cost price of the coal, the handling, the wastage, and the insurance, will amount to about eight dollars per ton, making it never less than twenty dollars delivered. I have frequently seen coals sell even in Rio de Janeiro, which is but about one third of the distance from us, at eighteen to twenty-four dollars per ton. The nine steamers running consume about 35,000 tons of coal annually. If the vessels transporting it be of 1,000 tons each, it will employ something near thirty-five of these vessels at profitable rates, in this one item of their business alone. Such expenditures are not necessary to any other steam company in the world. The British lines in the Indian Ocean and the China Seas are supplied with domestic coal which comes at very reasonable prices, and is shipped but a short distance.

Yet this Company performs this distant and difficult service with great regularity and at a low price. They have never lost a trip, a mail-bag, or a passenger by marine disaster during the eight years that they have been running in the Pacific. This results from the fact of the Company having thirteen steamers. If all of the steamers now in commission were sunk, they could supply their place from their reserve fleet and have no hiatus in their service. Such a spare fleet is an enormous expense; but it is positively indispensable to regular and highly efficient service. It is singular that under these circumstances they can perform the service at $1.70 cents per mile. It is a notorious fact that these steamers could not have supported themselves in 1854-55 without the aid which they obtained from the Government for the services which they performed. They never have transported much freight, as it would not bear the transhipment at Panama. The small quantity which they had was during the first years after the discovery of gold, and then only. They have never at any time brought any eastward. The Panama Railroad was a splendid consummation of which the world had dreamed for years, and toward whose completion this Company was highly instrumental. Yet it did not enable the steamers to transport freight, and it never will.

These steamers run the 3,300 miles between Panama and San Francisco by a time-table. They arrive at either end within a very few hours of thirteen and a half days, including all of the stoppages, which are also made at specified hours. Thus the average speed of the steamers is about 254 miles per day. They touch at Acapulco and Mazanilla, and supply San Diego, Monterey, San Pedro, Santa Barbara, San Luis, and Obispo, ports of California, from Panama by a branch line. This is an extra service, and is not taken into account in calculating the mileage paid the Company.

The steamers have carried probably 175,000 passengers to California, and have brought back about $200,000,000 in gold. They have also by their semi-monthly line from San Francisco to Oregon assisted in populating that rich and beautiful agricultural district, and making it available for useful purposes as a part of the United States. They have converted the wilderness of California into a smiling garden, and will ere long produce the same effect on Oregon. With that coast comparatively unprotected, and with the small standing army sustained in this country, they become very important as a ready means of concentrating on the Pacific coast a large army in a few days. They also afford a ready transit for the changing crews of our national vessels, which, when once around the Horn, may remain there several years; having to change their crews only.

The large property of this Company in the Pacific can be made available for no other purpose than that for which it was created. Any company to be thoroughly effective there, must create its own stock, and support works on the same general plan as those created by the British East-India Company. Their success in building up this large establishment on the Pacific was simply an accident; and that accident the discovery of gold. But for this the Company would have failed in two years, or gone back pleading to Congress for relief. But the gold crisis saved it, and the enterprise was very remunerative for the first few years; but since 1853 the profits have been limited, while for one or two years the Company have sustained actual loss. They calculated too largely on the prospective business with California, and have too large a sum invested to make much for the future. And yet, with a smaller investment they could not perform the service, except in that dangerous, cheap, indecent way, of innumerable wants and deprivations, which the American people have begun to despise. They have had some few disasters, but none of those of a fatal character in the Pacific. The "Winfield Scott" was lost in entering the harbor of Acapulco; the "Tennessee" in entering that of San Francisco in a dense fog. The "San Francisco" was lost, as will be remembered, on this side, near our coast, as she sailed with troops for the Pacific. The Nicaragua Transit Company fared much worse with their steamers in the Pacific. They lost the "North America," the "Independence," the "S. S. Lewis," the "Pioneer," and the "Yankee Blade." Mr. Wm. Brown also lost his steamer "America," which he was running between San Francisco and Oregon. She was burned.

Their dividends for four years have been but twelve per cent. And should they be at any time thrown out of the service, more than half of their property would be irretrievably lost. This percentage of dividend would be large enough but for such possibilities as these, which may soon reduce it to a deficit and a loss. Thus it is that steam stock should declare three times the dividend of other stocks, to be eventually equal to them. And hence it is that, with the clear record of this Company before the Government, and with an investment of between three and four millions of dollars, being at the same time free from debt, the stock of the Company is selling at thirty-three per cent. below par. This is a good exemplification of my views in the preceding Sections regarding the costs, and hazards, and low values of ocean steam stocks generally. Nor are the stocks of this Company kept from the public. They are advertised and sold at public auction at these reduced rates every day in the year in this city; and no one of the five hundred and four stockholders, among whom these interests are diffused, seems anxious to put "his all" in the enterprise. And yet there are some people who call such companies a monopoly. If a monopoly, why do they not come forward, buy the stocks, keep them in their own hands, and profit by them; especially as a monopoly must be doubly good when it can be bought for two thirds the cash originally paid for it!