SECTION X.

[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 £583,793, or $2,918,965, per annum until 1850,[G]now costs £1,062,797, 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 viewto 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 anyimmediateanddirectremuneration 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 oursoutherncoast, 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."

"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 oursoutherncoast, 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 theContract 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."

"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. (Seepage 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."

"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."

"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."

"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 £822,390, the sums received for postage upon these lines can not be estimated at more than £443,782."

The Report further says, as to the mode by which postalcommunication 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, seepages 146and147.)

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 £325,000 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 £240,000 a year, and brings in no more than £56,002, (as is the case with the West-Indian packets,) or one for which £25,000 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 areto 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 readilycontrollingthem. 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 tocontrolits 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 worthto 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 asine qua non, on which there is no difference of opinion among Americans who love their country.

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 ofsuch 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 hisviews 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 atthe 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 dépôts, 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 thisspecies 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 Panamá. 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 Panamá 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 Panamá 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 Panamá 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, andwith 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 precedingSectionsregarding 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!

I have noticed this Company thus fully, because its extent of stock, and large field of operation, make it a fit illustration of the views which I have advanced throughout this work. I have no desire to depreciate the stock, or in any other way injure the Company, as my own enterprise gives me quite enough to do.

Many of the views advanced with regard to the Pacific Mail Company will apply to the United States Mail Steamship Company. That Company, at the outset, built very fine steamers, and ran them incessantly, until they were unfit for duty. They have constantly supplied their place, and have at all times, by building and by chartering at the highest prices, kept up a large and costly fleet for their ramified service. The service contemplated in their original contract, at $1.883/4cents per mile, is but about two thirds of that actually performed. The contract required them to run 3,200 miles semi-monthly, but they actually perform semi-monthly 5,200. (See Mr. King's Letter,Paper G.) The actual service has required nearly twice the number of steamers necessary to do that for which they contracted, although a part of it is in the coasting trade. Consequently the steamers have been rapidly worn out, from too heavy duty, and the stock of the Company has never paid as well as it should. The Company have, morever, suffered severely from disaster. The "Crescent City" was lost on the Bahama Banks, in 1855; all hands saved. The "Cherokee" was burned when in active service, in 1853; and the "George Law," or "Central America," but recently foundered at sea in a terrible gale. They were all good ships; but like those other excellent ships, the "Arctic" and "Pacific," they could not defy the powers of pure accident. In the same gale the "Empire City" was dismantled, having all of her upper works swept off, while the "Illinois" was injured by being on the Colorado Reef. They have both been undergoing most costly repairs for several weeks. While writing this, the "Philadelphia" is also in the shop. She recently broke her shaft and her cross-tail, and had to put into Charleston. All of these repairs cost an immense sum of money, and are calculated, with the severe losses which the Company has sustained, to dishearten the most hopeful and enterprising. Yet, sincethese disasters, and the completion of the "Moses Taylor," the Company are about laying the keel of another fine ship. This is another verification of my statement that the mail companies are in nearly every instance compelled to build new steamers in the very last years of their contracted service. The new "Adriatic" attests the same fact on the part of the Collins Company. (Seepages 141and142.)

The Company have had at various times the "Falcon," "Ohio," "Georgia," "Crescent City," "El Dorado," "Cherokee," "Empire City," "Illinois," and "Philadelphia," and now have the three last-named ships, the "Granáda," the "Star of the West," and the new steamer "Moses Taylor." The benefits conferred by the Company's lines on the trade of the country generally, and especially on our southern seaboard and Gulf connections, have been almost incalculable. They found all of these ports in the undisputed possession of the British, whose steamers furnished the only mail and locomotive facilities of the times. By their superior speed and accommodations the "Georgia" and the "Ohio" soon drove those enterprising steamers from our coast, and confined them to the foreign countries of the Gulf and the Carribean Sea, where they yet rule triumphant in news, transport, and commerce. Our southern harbors are no longer filled with British cruisers, while in their stead we have built up a noble war marine, inured thousands of Americans to the ocean steam service, and made one most effective movement in the direction of successful defenses. (See Letter of Hon. Edwin Croswell,Paper E, page 200.)

Of the Collins Company it is hardly necessary that I should speak. They have received much the largest subsidy from the Government; but they have had a most difficult task to perform. Their ships have never been surpassed in any country, whether as to the excellent styleof their prime construction, their large size, or their very unusual speed. They have literally been engaged in a continual race across the ocean for seven years, determined at whatever cost and hazard to far excel those of the Cunard line. And this they have done most signally in all points of accommodation and speed. They have gained one and a half days the advantage over the Cunard line on their average voyages for the seven years. And this was no small achievement. By reference toSection IV.it will be seen how great is the cost of attaining and maintaining such speed with a steamer. The Collins ships, being so much larger than the Cunarders, the four present an aggregate tonnage nearly equal to the eight by which they run their weekly line. It is, moreover, not proportionally so expensive to maintain seven or eight ships on a line as four. The prime cost and repairs are by no means so great when engines are duplicated, or two sets built from the same patterns. Again, the general outlay in docks, shore establishment, offices, company paraphernalia, advertising, and innumerable items, is as great for a small as for a large fleet of steamers. The Collins line has to contend against all this. It also found the Cunard line long and well established, and inwrought into the public favor. It had the business, and most important of all, it monopolized the only freights passing between the two countries; those from England to America, which British shippers gave of course to British ships. They have had also to pay much larger prices for construction, repairs, wages, etc., than the Cunard Company; and not having so large a service and so large a fleet, they have not had so many reserve ships to fall back upon; but have been compelled frequently to send their ships off but half repaired, which of itself entailed immensely heavy expenses in ultimate repairs. There is very much to be said in favor of this Company, which has endeavored to build thefinest ships in the world, and navigate them the most rapidly. If they have prominently failed in any thing it is in building larger ships, running them faster, and being far more enterprising with them than was required of the Company by the contract with the Government. Their disasters have been saddening and severe; and yet they have resulted from nothing which could have been controlled by human foresight. There is a great error in supposing that there are more marine disasters among American than among British ships. Such is not the case, as a careful examination of the lists will show.

Of the mail line belonging to Mr. Vanderbilt, between New-York and Bremen,viaSouthampton, it is impossible now to say any thing. The steamers "North Star" and "Ariel," the one of 1,86760/95tons, and the other of 1,29528/95tons, have but recently commenced the service, on the gross mail receipts. Whether Mr. Vanderbilt desires to make the service permanent or not, I am not advised.

The service of the Charleston and Havana line has been performed with great regularity; and although the return from it in the form of postages has been small, yet it has been of essential service to the South, in opening communications toward the Gulf, and in establishing much needed travelling facilities between Charleston, Savannah, and Key West.

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