An Abstract of the Proceedings of the Select Committee of the House of Commons, Appointed Session, 1849, to Inquire Into the Contract Packet Service

by Peninsular and Oriental Steam Navigation Company; Great Britain. Parliament. House of Commons. Select Committee to Inquire into the Contract Packet Se

APPENDIX.

No. 1.—Memorandum of Contracts with Government for the Conveyance of Her Majesty’s Mails by the Peninsular and Oriental Steam Navigation Company.

STATION.	Distance per Voyage.	Annual Distance.	Annual Sum. £	Per Mile.
1. Southampton to Vigo, Oporto, Lisbon, Cadiz, and Gibraltar; three times a month, say on the 7th, 17th, and 27th	2,400	86,400	20,500	4/8¾ nearly 4/9
2. Southampton to Malta and Alexandria, once a month, on the 20th	6,084	73,008	28,500	7/9½
3. Southampton to Malta and Alexandria (bi-monthly) on the 3rd	6,084	73,008	15,525	4/3
4. Calcutta to Madras, Point de Galle, Aden and Suez, and Point de Galle to Penang, Singapore, and Hong Kong, once a month	15,590	187,080	160,000	17/1¼
		419,496	224,525	10/8¼ nearly ½

London, 8th June, 1848.

No. 2—List of the Steam Ships belonging to the Peninsular and Oriental Steam Navigation Company.—June 10, 1848.

No.	NAME of the VESSEL.	REGISTER TONNAGE.			Horse Power.	Cost.
		Ship.	Engine Room.	Old Measurement.
		New Measurement.				£
1	Bentinck	94150/100	1,03281/100	1,70220/94	520	89,000
2	Precursor	1,1333/10	684	1,640	460	63,000
3	*Haddington	1,16684/100	48060/100	1,30313/94	450	61,500
4	Oriental	1,1035/10	684	1,30320/94	420	78,000
5	India	5011750/7500	3691750/7500	75574/94	350	10,500
6	Achilles	58679/100	40536/100	85378/94	430	26,500
7	*Pottinger	9349/10	467	1,225	450	66,000
8	*Pekin	75924/100	4239/100	1,000	400	46,000
9	Lady M. Wood	29651/100	25659/100	50320/94	260	31,500
10	Braganza	570	284	70770/94	264	21,100
11	*Canton	21835/100	170	38727/94	....	14,000
12	Hindostan	9716/10	1,0466/10	1,55239/94	520	88,000
13	*Indus	9273/10	4589/10	1,2515/94	450	62,000
14	*Ripon	1,1678/10	458	1,39439/94	450	66,000
15	*Ariel	4438/10	265	8217/94	300	38,500
16	*Erin	5326/10	265	810	280	35,000
17	*Euxine	729407/3500	4352065/3500	1,03967/94	400	43,500
18	*Sultan	72879/100	36157/100	99085/94	400	38,500
19	Tagus	497	285	70988/94	286	28,000
20	*Pacha	30253/100	24588/100	51774/94	210	16,000
21	Iberia	3019/10	2138/10	520	190	22,000
22	Jupiter	288	255	4379/94	210	15,500
23	Montrose	2834/10	322	596	260	18,500
24	*Madrid	3151/10	1636/10	4468/94	140	17,000
25	*Malta	77682/100	44064/100	1,225	450	57,500
26	Bombay	....	....	1,20943/94	400	58,000
27	Ganges	....	....	1,20943/94	400	58,000
28	Vestis	....	....	90586/94	370	47,000
				27,01770/94	9,870	1,220,500

No.	NAME of the VESSEL.	CREW.						NATIVE CREW.			Total Crew.
		Cap- tain.	Mates, Surgeons, Pursers, and Clerks.	Stewards and Servants,	Engineering Department.		Sea- men.	Ser- vants.	Fire- men.	Sea- men.
					Engin- eering.	Fire- men.
1	Bentinck	1	7	21	5	4	23	10	67	39	181
2	Precursor	1	7	25	5	9	28	8	60	28	171
3	*Haddington	1	7	27	5	9	28	10	60	30	177
4	Oriental	1	5	7	3	8	31	...	...	...	55
5	India	...	1	...	...	...	...	...	...	...	1
6	Achilles	1	5	6	4	12	23	...	...	...	51
7	*Pottinger	1	6	11	4	6	17	30	60	43	178
8	*Pekin	1	6	10	5	7	14	7	45	41	136
9	Lady M. Wood	1	5	4	4	3	9	8	26	29	89
10	Braganza	1	5	9	4	3	5	4	31	30	92
11	*Canton	1	2	3	2	6	12	...	...	...	26
12	Hindostan	1	7	28	4	24	27	...	...	...	91
13	*Indus	1	7	28	4	24	27	...	...	...	91
14	*Ripon	1	7	31	4	23	25	...	...	...	91
15	*Ariel	1	5	13	3	12	19	...	...	...	53
16	*Erin	1	5	12	3	13	8	...	...	...	52
17	*Euxine	1	6	15	4	18	22	...	...	...	66
18	*Sultan	1	6	15	4	18	22	...	...	...	66
19	Tagus	1	5	14	3	12	17	...	...	...	52
20	*Pacha	1	3	13	3	8	15	...	...	...	43
21	Iberia	1	3	12	3	9	13	...	...	...	41
22	Jupiter	1	3	11	2	9	12	...	...	...	38
23	Montrose	1	3	10	2	10	14	...	...	...	40
24	*Madrid	1	2	11	2	9	13	...	...	...	39
25	*Malta	...	...	...	...	...	...	...	...	...	...
26	Bombay	...	...	...	...	...	...	...	...	...	...
27	Ganges	...	...	...	...	...	...	...	...	...	...
28	Vestis	...	...	...	...	...	...	...	...	...	...
		23	119	340	82	256	434	77	349	240	1,920

No.	NAME of the VESSEL.	When commenced Running.	STATION.	REMARKS.
1	Bentinck	24 August, 1843	Calcutta & Suez.
2	Precursor	10 Sept. 1844	Ditto.	Purchased afloat.
3	*Haddington	4 Dec. 1846	Ditto.
4	Oriental	2 Sept. 1840	Ditto.
5	India	...	...	Reserve ship, purchased in India.
6	Achilles	....	Bombay & China	Purchased by the Company afloat; first voyage, 17th October, 1845
7	*Pottinger	20 Sept. 1846	Ditto.
8	*Pekin	28 Jan. 1847	Ditto.
9	Lady M. Wood	1 Feb. 1842	Ditto.
10	Braganza	Sept. 1846	Ditto.
11	*Canton	not comd runng.	Hong Kong & Canton.
12	Hindostan	29 Sept. 1842	Southampton and Alexandria.
13	*Indus	20 June 1847	Ditto.
14	*Ripon	20 Nov. 1846	Ditto.
15	*Ariel	26 Sept. 1846	Malta & Alexandria.
16	*Erin	3 Sept. 1846	Southampton, Constantinople, & Black Sea.
17	*Euxine	3 Jan. 1848	Ditto.
18	*Sultan	3 August 1847	Ditto.
19	Tagus	16 Nov. 1840	Southampton and Peninsula.
20	*Pacha	13 May 1843	Southampton & Italy.
21	Iberia	19 Sept. 1840	Ditto.
22	Jupiter	19 Sept. 1840	Ditto
23	Montrose	....	Southampton and Peninsula.	Purchased afloat.
24	*Madrid	5 Sept. 1840	Ditto	Ditto
25	*Malta	17 Nov. 1845	....
26	Bombay	....	....	Not yet Running.
27	Ganges	....	....	Ditto
28	Vestis	....	....	Ditto

The vessels marked * are built of iron.

No. 3.—Statement of the Debts, Assets, and Effects of the Peninsular and Oriental Steam Navigation Company, 31st March, 1848.

				£.	s.	d.	£.	s.	d.
General coal account							44,345	2	5
General purser’s account, stores afloat				22,923	2	0
General purser’s account stores ashore				28,451	19	4
General material account ship’s stores				28,474	12	3
				————			74,849	13	7
Ships, &c., at work				754,670	16	0
Ships, &c., stock				304,600	0	0
Ships, &c., building	£152,841	11	7
Advanced on account of repairs	19,273	13	7
	————			172,115	7	2
				————			1,231,385	3	2
Less received from the Portuguese government, on account of the “Royal Tar”				4,799	0	1
				————			1,225,587	3	1
Debts due by agents	£25,388	18	2
Less due to agents	4,396	16	3
				20,992	1	11
Cash, Bills, &c.				94,728	19	3
Insurance fund invested in Government securities				34,168	8	0
Freehold property, King’s Arms				16,958	15	11
Peninsular and Oriental Steam Navigation Company’s shares				18,004	2	6
Outstanding freights				3,054	7	3
O. C. Edmond				421	16	7
				————			188,328	11	5
General stock account, barges, hulks, &c.				...	...	...	4,231	10	7
Purser’s cash account				245	10	1
Mazagon Dock, working expenses				1,724	12	0
Petty cash				90	0	0
Bills receivable in suspense				57	5	1
Pacha voyage to Havre				4	0	8
Colombo agency				25	18	1
New iron steam ships				423	10	3
Transit for the Pacha of Egypt				80	0	0
Dadabhoy Rustomjee				1,078	13	1
				————			3,729	9	3
							————
							£1,542,071	10	4
Bills payable				121,475	19	5
Dividend, 8th to 13th, half-year				2,197	6	20
Dividend, 14th to 13th, half-year				2,426	6	4
London and South Western Railway Company				3,722	12	1
Southampton Dock Western Railway Company				1,944	7	0
				————			131,766	11	1
Suspense account				334	19	3
R. Franck, stamp account				6	0	0
S. R. Engledue account				13	0	0
Oil and Tallow account				199	2	11
Patent Fuel Company				76	19	0
Burton and Co.				1,515	10	0
Lord and Co.				211	18	7
Transfer fees				33	15	0
“Bredalbane,” for the Pacha of Egypt				896	5	5
W. Longridge				14	2	8
				————			3,301	12	10
Capital				304,600	0	0
Additional amount called up				668,778	16	8
				————			973,37	16	8
Repairs account	£76,075	17	6
Addition made this half-year	37,633	13	3
	————
	113,709	10	9
	39,630	6	3
	————			74,079	4	6
Insurance account	£123,639	9	4
Addition made this half-year	15,683	4	9
	————
	139,322	14	1
	2,160	7	3
	————			137,162	6	10
Depreciation account	£158,268	7	10
Addition made this half-year	16,915	0	0
	————			175,183	7	10
Profit and Loss:				————			386,424	19	2
Balance of this account remaining from last year							1,484	19	5
Balance of this account remaining from the half-year now concluded							45,714	11	2
							————
							£1,542,071	10	4

(True Copy.) (Signed) C. W. HOWELL, Secretary.

No. 4.—Disbursements and Receipts of the Peninsular and Oriental

DISBURSEMENTS. (Six Months from 1st October, 1847, to 31st March, 1848.)
				£	s.	d.	£	s.	d.
To 58,789 tons of Coals (cost)				93,568	2	4
Oil and Tallow				2,687	14	0
Victualling Crews				16,501	14	6
Charter Money for Hire of Vessels to supply the place of “Royal Tar,” (sold), and “Tiber,” (lost)				6,326	12	0
Wages to Commanders, Officers, and Crews				29,383	6	0
Fees to Commanders of the Company’s Ships				445	16	3
Port Charges, Sea Stores, and other incidental expenses in the ships				8,114	1	11
Directors’ Attendances				918	15	0
London Office; Expenses, Salaries, &c.				976	18	8
Southampton Expenses, Salaries				1,341	0	11
Malta Expenses, Salaries				461	1	4
Constantinople Agency				1,508	18	6
Calcutta Agency (exclusive of Repairs to Ships)				3,323	19	0
Bombay Agency (exclusive of Repairs to Ships)				1,382	7	8
Hong Kong Agency				835	1	7
Lisbon Agency (for two years)				1,206	19	3
21 Minor Agencies at sundry Foreign Stations				2,237	0	4
London Agency, 21/2 per cent. Commission on Freightand Passage Money, comprehending Rent ofOffices, Taxes, Stationery, Account Books, OfficeExpenses, Postages (not foreign), Custom Housebusiness, and Clerks’ Salaries, for the business ofthe management, &c. &c., pursuant to the Deed of Settlement				8,246	10	9
Advertisements during the half year				1,121	3	11
Floating Light (Suez) Expenses, year				71	15	5
Condemned Pursers’ Stores				271	15	1
Income Tax for six months				811	3	1
Damages (and goods stolen on China line £463 10s 10d)				578	1	2
Law Charges				325	16	5
Auditors’Fees (for two years)				42	0	0
Captain Guthrie’s pay (nautical examiner)				120	0	0
Stationery and Printing for Foreign Agencies, &c.				323	10	1
Donations; viz.—Mrs. M’Leod	£305	0	0
Donations; viz.—Lieutenant Waghorn	300	0	0
Donations; viz.—Captain Bingham	100	0	0
Donations; viz.—Sundries	39	0	0
	————			744	0	0
Subscriptions (see particulars at foot[8])				163	16	8
Foreign Postages, Travelling Expenses, Charts, Newspapers,vand Petty Expenses				908	0	2
Gratuities to Officers				105	0	0
Telegraph Charges				35	19	0
Foreign Postages, Travelling Expenses, Charts, Newspapers,and Petty Expenses				908	0	2
Repair Account for the half year				37,633	13	3
Insurance (on vessels at work) ditto				15,683	4	9
				————			238,404	19	0
Balance carried down							62,629	11	2
							£301,034	10	2
							————
To Depreciation for the half-year				16,915	0	0
Dividend for the about				40,000	0	0
Balance carried down				5,714	11
							£62,629	11	2
							————

Steam Navigation Company.—Fifteenth Half Year, ending March 31, 1848.

RECEIPTS. (Six Months, from 1st October, 1847, to 31st March, 1848)
				£	s.	d.	£	s.	d.
By Passage Money received during the half-year				151,757	4	8
Loss, Transit through Egypt	£14,767	6	6
Victualling Passengers	26,481	13	8
	——————			41,249	0	2
				——————			110,508	4	6
Freights and Parcels received during the half-year				77,764	3	3
Less, Cattle, head money	16	1	0
Proportion of Carriage on Constantinople Cargoes	2,057	14	3
Cartage and Lighterage	399	2	2
Carriage of Goods, Southampton (Railway Expenses)	2,396	16	1
	——————			4,869	13	6
				——————			72,894	9	9
Mail Contracts during the half-year							112,262	10	0
Stewards’ Fees, ditto ditto							1,677	16	8
Interest				1,059	15	11
Ditto (Dividend on Company’s Shares invested)				2,229	3	4
				——————			3,288	19	3
Profit on Exchequer Bills, for gain on sale of £20,000 invested							402	10	0
							——————
							£301,034	10	2
							——————
By Balance brought down							£62,629	11	2
							——————
31st March, 1848.
By balance brought down							£5,714	11	2
							——————

(Signed) John Pirie. Ar. Anderson.
Fran. Carleton. B. M. Willcox.

(True Copy.)

(Signed) C. W. Howell, Secretary.

Copy of a Memorandum made by Mr. Cowper on the Contract for the Calcutta Mails, after the receipt of the Report of Investigation by Captain Ellice and Mr. Bond, and sent to Lord Auckland.

“The contract for the Calcutta mails, from Southampton to Alexandria, expires on the 8th January, 1849. Two offers have been made for its renewal, one by the Peninsular and Oriental Company, for £27,500 the first year, and for sums diminishing by £500 a year for every subsequent year that the contract may remain in force. A new company, the India and Australia, offer to do the same service for £25,650; the sum now paid is £28,500.

“The Peninsular and Oriental Company accompanied their tender by an offer to pay over to the Government any earnings or profits they might receive beyond a maximum dividend of ten per cent. to the shareholders, after the customary allowances have been deducted for repairs, wear and tear, and sea risk of the vessels and property; and as a security, they offered to submit, from time to time, the accounts of all their transactions connected with the mail service, to the inspection of such competent persons as the Government may appoint.

“Captain Ellice and Mr. Bond were then requested to examine the accounts of this company before any decision was come to upon the tenders; and having had every facility afforded them, have made the accompanying report. From this it appears that the profits made upon the capital of the company, about equal ten per cent. as a total sum; but that after reserves for depreciation, repairs and insurance, and expenses of management, there has remained hitherto not more than eight per cent. for the shareholders. The question of how much of the earnings ought to be kept in reserve to meet depreciation, is so discretionary that I have no expectation that any company would ever admit that there was a surplus profit to be handed over to Government; and this report confirms my impression, that we ought not to make such an arrangement a part of the contract.

“But I think both the tenders too high, and that we ought to decline them both; and this we can do without irregularity, for they are not tenders called for absolutely, but only tenders ‘to treat.’

“If this be done, we should then make an offer on our part; and as the Peninsular and Oriental Company have performed their contract perfectly, and furnish every guarantee that can be desired for the regular execution of a future contract, I consider that we ought to make our offer to them only; and if they should refuse it, we might repeat it to the India and Australia Company.

“The mileage we pay them at present is estimated by the hydrographer at 8s. 0¹/₄d. a mile and by the company at 7s. 9¹/₂d. a mile (he measures the distance of the voyage out and back at 5,920 nautical miles, they at 6,084); but we pay the same company about 4s. 6d. a mile for the line to Lisbon and Gibraltar, and I think we are justified in offering the same payment for the Alexandria line. But in that case we must not tie them down as to size of vessels, for the lowness of the remuneration on the former line is explained by the contract not requiring the vessels to be more than 140-horse power.

“To this department the size of the vessels is a matter of indifference, we care only that it be sufficient to secure speed; and we should stipulate only for a certain rate of speed.

“If my proposition be adopted we should immediately signify to the parties that their tenders are not accepted, and make a communication to the Treasury.

“I omitted to mention, that by directions from the Treasury we fixed the duration of the contract for which we demanded tenders, at three years; and also, that a reason for offering 4s. 6d. a mile may be found in the agreement made in May, 1845, by this same company, to convey mails between Southampton and Alexandria, in vessels of 280-horse power, as far as Malta; and of 180-horse power between Malta and Alexandria, for £15,525, which gives a mileage of about 4s. 6d. This agreement was entered into for only one year, since the company complained of its lowness, and declined, on that account, to make a formal and permanent contract at that rate; but they have continued it ever since, and it has been terminated by ourselves in May last.

(Signed) “W. Cowper.”

Copy of a Memorandum by the Earl of Auckland, on the receipt of that of Mr. Cowper.

MAIL CONTRACT TO ALEXANDRIA.

“27th June, 1848.

“I think with Captain Ellice and Mr. Bond, that we should desire to conclude an arrangement with the Oriental in preference to any other company, for the present contract has been loyally kept, and the capital and means of that company give better promise of efficiency and exactness than could be looked for in any other quarter. The Indian and Australian Company is indeed supported by good names, but it has yet no paid-up capital, or body of shareholders, or organised establishment on which we could depend; and though it may be desirable to establish a rivalry and competition on the line of communication, It would not be wise to do so at the hazard of uncertainty and interruption. We have, however, advertised for tenders; and though we are not bound to take the lowest offer, we should scarcely be justified in rejecting it without a fair examination of its value. The first question, however, must be, which is the lowest offer? The Oriental Company propose to perform the service in the first instance, for £27,500; the other company for £25,650. But the Oriental are ready to lower their charge by sums of £500 in the second, £1,000 in the third, £1,500 in the fourth, and £2,000 in the fifth year, or £5,000 in the five years. This would reduce the difference between the two companies to only £850 annually, in the event of the contract winning for five years, or to £1,350 if it should be taken for three years. But the Oriental further offer to the Government a share in their profits on this line, whatever they may be beyond 10 per cent. paid to the shareholders. It is difficult to calculate to what this might amount, or to determine upon what principle it should be calculated. The dividend to the shareholders has not yet amounted to more than eight per cent., but large sums have been applied to new capital, to reserve funds, for insurance, and to other purposes. There may be profit on the Mediterranean line, and there may be loss on other lines, and an annual inquiry into all these matters might lead to endless discussions and disputes, and would be a source of frequent vexation to both parties. It is clear, however, that the company makes considerable profits, and I would prefer, to a share in them under the exercise of an inquisitorial power, a liberal compromise by a reduction of the terms which have been proposed; and I think that this reduction should be to a sum considerably lower than the £25,650 which has been tendered by the Indian and Australian Company. Mr. Cowper would reduce the sum demanded to about £15,000, taking the mileage at 4s. 6d., the price of the Lisbon, instead of 8s. 0¹/₄d., the mileage of the Mediterranean packets. I doubt whether these terms would not be too hard. The Lisbon packets are less efficient and less expensive than those of the Mediterranean, and though the profits of the latter are large at some seasons of the year, there are months when passengers to India are rare, and the receipt small.

“I am inclined to propose a middle term between the £16,000 and the £27,500, and to offer £22,000 for five years, as a fixed sum, without condition for periodical reductions, or for a share in the company’s profits; but before this is determined on, I should like to have further opinions upon the result which may be drawn from the company’s accounts.

“I have carefully looked into them, and I find it difficult to decide upon what portion of the receipts is to be regarded as net profit, and what portion of disbursement is to be referred to necessary expenditure. Looking to the accumulation of capital which has taken place in twelve years, the profit must have been large.

(Signed) “Auckland.

“Note.—I find that from May, 1845, up to this month, the Oriental Company has been running their Mediterranean packets at 4s. 6d. the mile; and I am reconciled, therefore, to the offer which it is proposed by Mr. Cowper should be made to them.”[9]

Extract from the Deed of Settlement of the Peninsular and Oriental Steam Navigation Company, dated 25 January, 1841.

“That the managing directors shall provide and furnish, free of all costs to the company, suitable offices for the business of the said company at the house No. 51, St. Mary Axe, in the city of London, or elsewhere[10] in the said city, including a suitable board-room for the meetings of the Board of Directors, and the general meetings of the company; and shall provide all necessary superintendents, clerks, agents, and servants, for conducting and performing the business and matters to be done by the said managing directors; and also will provide and pay such printing and stationery, and office expenses, as shall be connected with, or necessary for the performance of such business; but all superintendents, clerks, or other persons employed in any repairing or building establishment of the said company, and the salaries of the secretary, and of any clerks employed at outports, at foreign places, and all other expenses relating to the conduct of the affairs of the company, except such as are agreed to be transacted by the managing directors, are to be paid by the said company.

“That in consideration of the duties to be performed by the said managing directors, and the expense to be incurred by them, and of the services rendered by them[11] in the formation of the said company, and of the negotiating and procuring the contracts with her Majesty’s Government for the mail service, and of applying for and procuring the aforesaid charter of incorporation for the said company,—the said managing directors shall be allowed and paid by the said company a commission of two and a half per cent. on the gross receipts or earnings of the said company; and also a further commission of £5 per cent. upon the net profits of the business of the said company, after deducting from such net profits the amount which shall be considered necessary to set apart as a reserve fund, as after mentioned, for the purpose of repairing machinery and vessels and other of the stock of the said company; the aforesaid commission of £5 per cent. to be paid on the making up the half-yearly accounts of the company for the ascertaining and declaring the dividends to be paid to the proprietors; and that such compensation shall be paid to the managing directors in equal shares so long as there shall be more than one.[12]

“B. M. W.”

“11 August, 1848.”

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