History of merchant shipping and ancient commerce, Volume 4 (of 4)

by W. S. Lindsay

CHAPTER X.

Peninsular and Oriental Steam Navigation Company—Its founders and origin—Messrs. Willcox and Anderson—Mr. James Allan—How the Peninsular mails were originally conveyed—Proposal of Peninsular Company for their conveyance—Contract concluded August 29th, 1837—Conveyance of mails to India previously to 1839—Government applies to the Peninsular Company and accepts their proposals, though reluctantly—Proposed direct line from Falmouth to Calcutta—First vessels hence, on Indian postal service to Alexandria—Original postal service from Suez to Bombay—Contract for mails between Suez and Calcutta, September 1842—Further proposals made by the East India Company and Government, but finally rejected by the East India Company—Further contracts for mail service to China and Singapore—Peninsular and Oriental Company undertake the line between Bombay and Suez, 1854—House of Commons Committee on Australian mail service, 1849—Eastern Steam Navigation Company and Peninsular and Oriental Company tender for it, but the Peninsular and Oriental succeed—The Himalaya built—New contract with Peninsular and Oriental Company, January 1853—Failure of service during the Crimean War—Proposals for an independent Australian mail service—Tender of European and Australian Company accepted—Their entire failure—Speech of Lord Overstone, March 24th, 1859—Royal Mail Company undertakes the Australian service and fails—New tenders invited—That of Peninsular and Oriental Company accepted, 1859—Consolidation of services in the Peninsular and Oriental Company—Its present condition and fleet of ships—Terms of the contract now in force—Revenue and expenditure—Coals required—Descriptions of vessels—Screw steamer Khedive—Particulars of this ship—Uniform and regulations of the company.

Peninsular and Oriental Steam Navigation Company.

The career of the Peninsular and Oriental Steam Navigation Company, the first commercial undertaking which conveyed the mails overland to the East is interesting and instructive. It is the more so, as the impression that this company owed its origin to Government grants, and that it has been entirely maintained by subsidies for the conveyance of the mails, is not supported by facts. Indeed, during the earlier portion of its career, the company, by agreeing to carry the Peninsular mails, shortly after it had been started, for a sum considerably less than the cost of maintaining the Admiralty packets then employed, with a speed, too, and regularity previously unknown, conferred an undoubted boon on the public.

Whether the company would have continued to maintain its career of prosperity without Government subsidies is a problem too speculative for me to solve; but it may well be questioned whether the grants of public money subsequently voted to it year by year, in so far as they prevented wholesome competition, and tended to damp the individual energy which brought it into existence, have been of much service towards its success. During one portion of the company’s career, when the advantages of the overland route had been fully established, it might, and I think it would, have been to its advantage to have been relieved from every incumbrance as to time and speed. Free from these, and the many other conditions required by Government, the company would probably have done better for its shareholders had it been, also, at liberty to build and sail its ships as it pleased, despatching them on such voyages and at such rates of speed as paid it best; and, in support of this opinion, I may remark that various other shipping companies with no assistance whatever from Government have yielded far larger dividends than the Peninsular and Oriental, and, further, that private shipowners, who never had a mail bag in their steamers, have realized large fortunes. With these remarks, I shall now endeavour to furnish a brief history of this important undertaking from its commencement, and to show that its rise was by slow degrees, and altogether unlike that of the Royal West India Mail Steam Packet Company, with which it has been frequently compared.

Its founders and origin.

Messrs. Willcox and Anderson.

In the year 1815, Mr. Brodie McGhee Willcox,[337] then a young man with no influence and but limited pecuniary means, opened an office in Lime Street, London, and commenced business on his own account as a shipbroker and commission agent. To assist him in his business he shortly afterwards engaged as clerk a youth from the Orkney Islands, Arthur Anderson,[338] subsequently his partner, whose only capital was a plain but sound education, good moral and Christian training, a clear head and great industry. In 1825, the firm adopted the title of Willcox and Anderson, and removed their offices to 5 St. Mary Axe, where they carried on their business till it was absorbed into that of the great company whose progress I am about to describe. Originally, it was simply a small shipping commission business, with the addition of the part-ownership of a few vessels chiefly trading with the Peninsula, with which they in time opened up, first a regular sailing, and then a steam line of communication, this service having been started solely by Mr. Willcox. At first, Messrs. Willcox and Anderson had a good deal of up-hill work, but they were plodding and industrious, and, consequently, overcame every difficulty, soon insuring that success which industry, honesty, and economy must ever command.

Mr. James Allan.

In 1834, the Dublin and London Steam Packet Company, one of the early undertakings of that description, of which Messrs. Bourne of Dublin, the well-known stage-coach contractors for the conveyance of the mails in Ireland, were the chief proprietors, chartered one of their vessels, the Royal Tar (see [illustration, p. 380]), to Don Pedro, and subsequently for the Queen Regent of Spain, through Messrs. Willcox and Anderson as brokers. Soon afterwards, M. Mendizabal, at that time Spanish Minister in London, induced Messrs. Bourne to put on a line of steamers between London and the Peninsula, for which Messrs. Willcox and Anderson were appointed agents. A small company having been thus formed to carry out this undertaking, Mr. James Allan,[339] a native of Aberdeen, then a clerk in the office of the Dublin and London Steam Packet Company, was sent to London to assist Messrs. Willcox and Anderson in the management of the ships. He afterwards became secretary, and when the company had materially extended its operations, Mr. Allan, on the death of Mr. Carleton in 1848, was appointed a managing director in conjunction with Messrs. Willcox and Anderson.

THE “ROYAL TAR.”

How the Peninsular mails were originally conveyed.

Previously to September 1837, the Peninsular mails were conveyed by sailing post-office packets which left Falmouth for Lisbon every week, “wind and weather permitting.” Their departures and arrivals, as must ever be the case with sailing-vessels, were very irregular, and it was no unfrequent occurrence for the mail from Lisbon to be three weeks old on its arrival at Falmouth. The mail communication with Cadiz and Gibraltar was, however, carried on by a Government steam-packet, and, though of course with greater regularity than the service performed by the sailing-packets, was, nevertheless, much slower than any of the steamers under the management of Messrs. Willcox and Anderson, who, feeling themselves in a position to effect considerable improvements in the transmission of the mails, submitted an offer to Government for a more regular transport of letters. But this proposal was coldly received, and their suggestions at first disregarded. Vested interests here, as in so many other cases, for a time prevented any improvement. The Peninsular Company, however, continued to prosecute their undertaking with vigour, the speed and regularity with which their steamers performed their passages soon attracting public attention. Loud complaints of the inefficiency of the transmission of the mails by sailing-packets at length arose, and, indeed, were so earnest and persistent on the part of the merchants engaged in the trade, that Government at last considered it expedient to inquire officially of the managers of the Peninsular steamers if they had any plan or proposals to submit for an improvement of the mail service, as, if they had, their views would now receive favourable consideration.

Proposal of Peninsular Company for their conveyance.

A fresh proposal was, consequently, made for a weekly mail between Falmouth, Vigo, Oporto, Lisbon, Cadiz, and Gibraltar, for which purpose efficient steam-vessels were to be supplied, to perform the service, monthly, between these ports, and at a lower rate than half the cost to the country of the steam and sailing-packets of the Admiralty.

Though Government now received the proposals of the company with favour and were prepared to act on the plan submitted for consideration, the company was informed that the service, nevertheless, must be put up to public competition. An advertisement was, accordingly, soon afterwards issued, inviting tenders from owners of steam-vessels for the conveyance of the mails between Falmouth and the Peninsula, in conformity with the plan submitted by the Peninsular Company; so that the managers of this struggling undertaking had to compete against others for the due performance of this service, though on plans drawn up by themselves at the request and with the entire approval of Government. But though another company, which had a short time previously started under the name of the British and Foreign Steam Navigation Company, tendered for the conveyance of the mails, it was soon found that they were not able to carry out the service either within the time or on the conditions required. Time was, however, allowed them to perfect their arrangements, and, a month afterwards, fresh advertisements were issued by the Admiralty for the conveyance of these mails.

Contract concluded, Aug. 29th, 1837.

The British and Foreign Steam Navigation Company, however, having again failed to show that they had adequate means for the efficient performance of this service, Government entered into private negotiations with the Peninsular Company with the view of reducing the amount required by them, and, on the 29th of August, 1837, a contract was concluded by which this company agreed to convey, monthly, the whole of the Peninsular mails for 29,600l., a sum subsequently reduced to 20,500l. per annum. The service was performed with much regularity, and it may be considered to have been the nucleus of the great company which now conveys the mails to all parts of the Eastern world. The Iberia, built by Messrs. Curling and Young, was the first steamer despatched with the Peninsular mails. She sailed in September 1837, the benefits thus conferred on those who were engaged in the trade becoming at once apparent. Another step in advance soon followed.

Conveyance of mails to India previously to 1839.

The mode in which the mails were conveyed to and from India up to September 1840, was by means of steamers plying monthly between Bombay and Suez, and thence by Government steamers from Alexandria to Gibraltar, where they met the mails brought out by the Peninsular Company from England. As the steamers of this company had to call at Vigo, Oporto, Lisbon, and Cadiz in their passages to and from Gibraltar, and as the Government packets employed between that port, Malta, and Alexandria were of inferior power and speed, the transmission of mails by this route was necessarily slow, and generally occupied from three weeks to a month between England and Alexandria.[340]

But, however imperfect this mode of transmission, it would probably have continued for many years longer had not circumstances occurred rendering an alteration imperative. In 1839, the British Government having entered into a convention with the French Government for the sending of letters to and from India through France by way of Marseilles, an Admiralty packet was stationed to ply between that port and Malta. Thence, these letters, together with the larger and heavier mails forwarded by the Peninsular and the Admiralty packets viâ Gibraltar, were conveyed from Malta to Alexandria by another of Her Majesty’s ships.

That portion of the mails forwarded through France was despatched from the post-office on the fourth of every month, while the heavier portion continued to be sent from Falmouth every fourth Saturday by the Peninsular packets. As might have been expected, this plan was soon found to work awkwardly, inasmuch as the mail sent viâ Gibraltar every four weeks was in advance of that viâ Marseilles each calendar month, and had, therefore, to await at Malta the arrival of the Marseilles packet.

Irregularities such as these, increased as they were by each successive mail, together with the fact that the British despatches then ran some risk of loss in their transit through France, led Government to consider the advisability of establishing some quicker means of conveyance, viâ Gibraltar, for the main portion of the mails.

Government applies to the Peninsular Company,

The managers of the Peninsular Company having been again applied to, submitted for the approval of Government a proposal to establish a line of superior steamers to run direct from England to Alexandria, and vice versâ, touching only at Gibraltar and Malta; the steamers to be of sufficient power to perform this voyage in not more than three days beyond the time then occupied in the conveyance of the mails viâ France, and at a cost not exceeding what was required for the maintenance of the small and inefficient Admiralty packets then similarly employed.

and accept their proposals, though reluctantly.

Their plan having met the approval of Government, public advertisements were again issued for tenders to carry it into effect, and no less than four competitors tendered for the contract at sums ranging from 34,200l. to 51,000l. per annum. As the tender of the Peninsular Company was not only the lowest, but contained, also, an offer to convey at a reduced rate all officers travelling on the public service, and bonâ fide Admiralty packages gratuitously, it was accepted by the Government.

Proposed direct line from Falmouth to Calcutta.

The tender, however, was accepted with reluctance, various people of influence having, strange to say, almost convinced Government of the desirability of subsidizing a line of steam-vessels between Falmouth and Calcutta viâ the Cape of Good Hope, which was intended not merely to supersede to a great extent the sailing-vessels then employed, but to convey the Indian mails: indeed, it will be found by reference to the public journals of the period, that a steamer of then unusual size had been constructed specially for the purpose.[341] It was, however, wisely decided that no dependence could be placed on the due performance of the service within the “thirty days” stipulated; nor am I aware that the passage by the Cape of Good Hope, has yet been performed by vessels of any description in a space of time so limited.

First vessels hence on Indian postal service to Alexandria.

The vessels offered by Messrs. Willcox and Anderson and approved by the Admiralty, were the Oriental of 1600 tons and 450 horse-power, as also the Great Liverpool of 1540 tons and 464 horse-power, which, originally intended for the Transatlantic service, was now despatched with the mails from England to Alexandria, thus combining the two mail services, and constituting the Peninsular and Oriental Steam Navigation Company.

To complete the service, the directors were requested to provide a subsidiary vessel of not less than 250 horse-power, and another of 140 horse-power, for the Malta and Corfu branches, which they did at a cost of 10,712l. per annum less than the charge to the country for the Admiralty packets previously employed.[342]

Original postal service from Suez to Bombay.

Up to this period, as we have seen, the mails between Bombay and Suez were conveyed by steamers belonging to the East India Company. It soon, however, became apparent that these vessels were as unsuited to the Indian portion of the service, as those of the Admiralty had proved to be for that between Alexandria and England. But so reluctant were the Directors of the East India Company, to allow “interlopers” into their service, that some years still elapsed before their vessels were superseded by others of greater speed, and in all other respects more adapted to the increasing wants of the public.

Contract for mails between Suez and Calcutta, September 1842.

Although the Home Government was so strongly impressed with the necessity of establishing a line of steamers between Calcutta and Suez, as well as from Bombay, it was only after considerable pressure had been brought to bear on the Court that the East India Company reluctantly consented to a contract with the Peninsular Company for this special service; and, on the 24th September, 1842, its new ship Hindostan, of 1800 tons and 520 horse-power, was sent from Southampton to open a line between Calcutta, Madras, Ceylon, and Suez.

It may be desirable to state here that this originally small concern had, two years previously, been formed into a joint stock company with a charter of incorporation from the Crown, which enabled the directors to obtain the additional capital required for the Indian services; and, as they had now received the co-operation of most of those parties who, under the designation of the East India Steam Navigation Company, had been endeavouring to effect the same objects, they proceeded with all possible speed to fulfil the conditions and carry out the objects of their charter of incorporation.

Further proposals made by the East India Company and Government,

but finally rejected by the East India Company.

Further contracts for mail service to China and Singapore.

Though the Hindostan proved vastly superior to the vessels of only 250 horse-power employed by the East India Company in the mail service between Bombay and Suez, which cost no less than 105,200l. per annum to maintain, the Court of Directors declined to listen to the further suggestions of the Home Government to transfer this branch of the postal service into the hands of any private undertaking and, indeed, retained it until 1854. In the meantime Government entered into another contract with the Peninsular and Oriental Company for a monthly service from Ceylon to Penang, Singapore, and Hong Kong. For the service between Suez, Ceylon, Madras, and Calcutta, the company received 115,000l. per annum or at the rate of 20s. per mile, and, for the latter, 45,000l. per annum or about 12s. per mile.

When it became known that the Peninsular and Oriental Company had engaged to perform a service to India and the leading ports of China at the average rate of 17s. per mile in vessels of 500 horse-power, while the service between Suez and Bombay was costing upwards of 30s. per mile in vessels of not half that power, and, at the same time, of greatly inferior speed and accommodation, the public naturally demanded that the Bombay branch of the service should be placed in the hands of persons competent to carry it out more efficiently and economically than had been done by the East India Company.

Peninsular and Oriental Company undertake the line between Bombay and Suez, 1854.

But the Court of Directors successfully resisted all such demands until the Parliamentary Committee of 1851 reported that this service—in point of economy, the comfort of the passengers, and the requirements of trade—could be performed to greater advantage by private enterprise than by the vessels of the Indian navy. It is, however, questionable if the Directors would even then have given up the service had not the Bombay mails been, soon afterwards, lost in a native sailing-craft into which they had been transferred at Aden, the East India Company having no steamer ready to convey them thence to Suez. The Peninsular and Oriental Company having been applied to, then found that, by means of the arrangements they had entered into for the performance of the other services, they could undertake this particular branch for the sum of 24,700l. per annum, or at the rate of 6s. 2d. per mile, thereby effecting a saving of about 80,000l. as compared with the expense incurred in the far less efficient service of the Indian navy.

In the meantime Government had, on the 6th January, 1848, given notice to the company to terminate their contract between Southampton and Alexandria on the 18th January of the following year, and, soon afterwards, advertised for tenders for the execution of this service. But, the other tenders being less advantageous to the public than the terms on which the Peninsular and Oriental Company was willing to continue the service, a new contract was entered into, for three years, at 24,000l. per annum or at the rate of 6s. 9d. per mile.

House of Commons Committee on Australian mail service, 1849.

Eastern Steam Navigation Company and Peninsular and Oriental Company tender for it, but the Peninsular and Oriental succeed.

Meantime also, the increasing trade with Australia created demands for greater facilities of intercourse with the mother-country and more regularity in conveyance of the mails, so that the Committee of the House of Commons, appointed in 1849 to inquire and report on the then existing system of mail communication with the East, was instructed also to consider the best mode of conveying the mails between India and our Australian colonies. In this Report, dated July 1851, these different services were divided into five distinct heads,[343] one of which, recommended the establishment of a line between Singapore and Sydney. In reply to the advertisements issued on the recommendation of the Committee, two tenders were delivered on the 26th February, 1852, one by the Peninsular and Oriental Company for the whole of the services (their contracts of 1844 and 1849 being about to expire) with the addition of a branch line between Bombay and Point de Galle, not named in the conditions, for the annual sum of 199,600l., to be reduced by 20,000l. per annum six months after the completion of the railway across the Isthmus of Suez; and the other, by the Eastern Steam Navigation Company, for a line once a month between England, Calcutta, and Hong Kong for the annual sum of 110,000l., or for 100,000l. should Trieste be substituted for Marseilles as the port of embarkation, and a further contract for the service between Singapore and Sydney on an annual subsidy of 166,000l. (which, however, was not mentioned in their tender), being 276,000l. for both services.

Although the tender of the Peninsular and Oriental Company was evidently much more favourable to the public interest than that of the Eastern Steam Navigation Company, the latter, nevertheless, petitioned Parliament to appoint another Committee to inquire into the whole subject, to which, however, the then Chancellor of the Exchequer declined to accede, at the same time furnishing (as appears from the Parliamentary debates) valid reasons for the course he considered it his duty to adopt.[344]

The Himalaya built.

Though a good deal of complaint was about this time raised against Government with regard to favours said to be conceded to the Peninsular and Oriental Company, yet they seem to have hitherto fought their way, step by step, against much opposition, and to have redeemed their character for speed, [which was somewhat overshadowed by the superior performances of the Cunard and Collins line of steamers, then in the midst of their great Transatlantic race], by the construction of the Himalaya,[345] a steamer of larger dimensions than any other then afloat, and of extraordinary speed.

Nor did the Company receive any favour at the hands of Government when, about this period, they were seriously embarrassed for the want of a sufficient supply of coal[346] at their Eastern stations, and an appeal was made for a temporary relaxation of some portion of the service. Indeed, when the Company, on that account, found it impossible to carry on a portion of the second monthly service between India and China, the Government threatened to inflict the penalty of 35,000l. for its non-performance, and would have enforced the strict fulfilment of the conditions of the contract in all its details, had other arrangements not been made to meet the emergency.

New contract with Peninsular and Oriental Company, January 1853.

On the 1st January, 1853, the company entered into a fresh contract with Government, whereby they undertook to carry mails twice each way in every month between England and Alexandria, and twice each way in every month between Suez, Calcutta, and Hong Kong. Two vessels were also to be furnished to run between Marseilles and Malta, twice each way, in each month. The company further engaged to carry mails between Singapore and Sydney, once each way each alternate month. Tables of routes were attached and formed part of the contract. There were also certain stipulations as to proper machinery; a medical officer was to be placed on board each vessel, and provision was made for carrying pivot and broadside guns.

The vessels on the main line were required to attain a speed on trial of 12 knots an hour, the others 10½ without the aid of sails, or they were not eligible for employment. The average speed of each vessel throughout the voyage was required to be not less than 10 knots an hour, excepting in the case of those between Singapore and Sydney, which were to make the passage at a rate not less than 8½ knots. If the company failed to provide vessels ready to put to sea from any of the ports, viz., Southampton, Alexandria, Suez, Calcutta, Hong Kong, Singapore, and Sydney, at the time appointed, the forfeit in each case was stipulated to be 500l., and a further sum of 500l. for every successive day up to the fourteenth day inclusive which might elapse before the vessel actually put to sea. And, if any vessel, in breach of the contract, delayed starting or put back or deviated, except from stress of weather, without the sanction of Government, the company was to forfeit 200l. and a further 200l. for every day’s delay, unless from circumstances not under its control.

The Admiralty agent had power to survey the vessels, and the Admiralty itself, to compel such alterations as might be needed so as to keep pace with the advancement of science; while there were various provisions for the conveyance of naval, military, or civil officers, baggage, and victualing, as in other contracts.

In the event of accidents occurring to any of the vessels, the mails were to be conveyed by Her Majesty’s or by the East India Company’s ships: and an abatement made from the contract service money, at the rate of 6s. 2d. per nautical mile. For a consideration, the Admiralty reserved the privilege of changing the port in the channel, with the right also of purchasing the vessels at a valuation; or of chartering them at a rate to be mutually agreed on or settled by arbitration. Any submission to be made a rule of court. In the possible case of an entire stoppage of the route through Egypt, the Admiralty were to act as the case might require; the whole postage remaining at the disposal of the Postmaster-General.

Failure of service during the Crimean War.

But these mail services were soon seriously disturbed. The urgent requirements of Government for the means of conveying troops to the Black Sea and the Baltic on the outbreak of the Crimean War, obliged the company towards the close of 1854 to discontinue the branch line to Australia, and to reduce the Bombay and China service to a monthly instead of a fortnightly line.[347]

The withdrawal of the company’s steamers from the mail service between Singapore and Sydney, which had so recently been established, again created a large amount of discontent amongst the merchants in England connected with the trade and still more with the Colonists. The company was charged with selfish motives, and though obliged to relinquish the annual subsidy of 17,475l. for the performance of their service, it was alleged that the profits of the company, by the employment of its ships in the war, much more than compensated it for the reduction of the mail revenue. Thus considerable prejudice was raised against the company, and, in the discussion of the plans for the renewal of the service after the war, it became clear that the colonists were anxious to have, if possible, a mail service of their own and altogether independent of the Peninsular and Oriental Company; hence, when the company offered to enter into a contract for the monthly conveyance of the mails between Ceylon and Sydney by steamers of an average speed of 10 knots an hour, touching at King George’s Sound and Melbourne, at an annual subsidy of 84,000l., the offer was peremptorily declined, though a greatly enhanced subsidy was subsequently paid, for the worst performed mail service that was ever undertaken.

Proposals for an independent Australian mail service.

In the meantime liberal grants of money having been voted by the legislative assemblies of the different colonies towards the maintenance of a postal communication with the mother-country, advertisements were issued by the Admiralty, in May 1856, inviting tenders for a “monthly direct and independent service” between Suez and Australia.

The conditions of tender contained many clauses of a novel character.

The ships to be employed were to be full power screw steam-vessels of not less than 2200 tons each; the tenders were to specify the maximum number of days to be consumed on the passages; and a “penalty of 100l. to be incurred when the contractors failed in providing a vessel, in accordance with agreement, ready to put to sea at the appointed hour; and also the sum of 100l. for every successive day which should elapse until such steam-vessel should actually proceed to sea; and also (from whatever cause arising) 50l. for the first day, and a sum increasing by 50l. per day for every succeeding day, that is to say, 50l. for the first day, 100l. for the second day, 150l. for the third day, and so on.”

Four tenders were lodged in reply to this advertisement, but only two, that of the Peninsular and Oriental Company, and that of a new undertaking, the European and Australian Steam Navigation Company, were considered by the Government: the former offering to perform the service, provided the new and very onerous penalty clause was omitted, for 140,000l.; and the latter accepting all the clauses, but requiring 185,000l. per annum for the work to be performed, and stating that, should their tender be accepted, it was intended to lay on an independent line of steamers between England and Alexandria, and to perform the service between Suez and Melbourne in thirty-nine days outwards and thirty-five days homewards.

Tender of European and Australian Company accepted.

As the Peninsular and Oriental Company “declined to be held responsible in penalties for failure as to the length of a voyage arising from causes beyond their control,” and submitted that such penalties were unnecessary as the vessels they offered “had already been surveyed, and tested for an average speed of ten knots an hour at sea,” the Government accepted the tender of the European and Australian Company.[348]

So very large a concession as 185,000l. per annum for the work to be performed created at the time considerable surprise, and led to a good deal of discussion in the public press as well as in Parliament. With such an enormous subsidy the directors of the new undertaking would have had no difficulty in raising the requisite amount of capital in the open market for a service apparently so tempting, but they considered the margin for profit so ample that, instead of offering their shares to the public, they raised among themselves and their friends all the money that was considered necessary, anticipating no doubt a very handsome return upon the outlay.

Their entire failure.

But the whole undertaking proved one of the most ruinous of its kind on record, the Galway steam navigation scheme not excepted. A volume might be written, and to advantage, on the mistakes committed by the directors, all of whom were business men of wealth and position, though few of them were conversant with maritime affairs, or with the difficulties they had to encounter at every stage, and with the causes which ultimately led to the loss of some of their ships. Suffice it to say that, when the company had to commence operations in March 1857, its ships were not ready, and the directors were obliged to enter into arrangements with the Royal Mail (West India) Steam Packet Company and other companies for the performance of the service; and indeed, when their own ships were ready, they either broke down or were found unfit to perform, within the specified time, the work they had undertaken.

In less than two years the whole capital of this new company was lost, but as the result has been fully described by Lord Overstone in a speech he delivered in the House of Lords on the 24th of March, 1859,[349] I prefer reproducing his statement, especially as it remains unquestioned, to offering any remarks of my own.

Speech of Lord Overstone, March 24th, 1859.

“This company,” his Lordship remarked, “originated very much through the success of some influential parties in Glasgow, who realized a large sum by chartering two screw steamers to Government during the Crimean War. These vessels were named the European and the Columbian, and the company was named the ‘European and Columbian Company.’ Soon after the close of the Russian War, Government advertised for tenders for the Australian mail service. One given in by the European and Columbian Company was preferred to a cheaper one by the Peninsular and Oriental Company, the annual subsidy for carrying the mails being 185,000l. with monthly services, the contract to endure for five years. The penalty for the non-fulfilment of the contract was heavy, increasing prodigiously with each day’s delay. In consequence of this great undertaking it was necessary to enlarge the company, and greatly to increase the number of its vessels; and, accordingly, a new company was formed on the limited principle, under the name of the ‘European and Australian Royal Mail Company (Limited)’ whom Government accepted for the contract. The nominal capital was 500,000l., but I believe not more than 420,000l. were subscribed, the balance being purposely reserved, as the promoters expected it to command a large premium. The list of proprietors is one of the best I have seen of any company, all the shareholders, eighty-four in number, being selected men, residing chiefly in Glasgow and neighbourhood, London, Liverpool, and Manchester. 400,000l. were ultimately paid up. The first meeting of the new company was held on the 3rd of September, 1856; but it was, of course, some months before their plans got developed, and time was lost in negotiation with other companies to sell their contract for a bonus, or to get some other advantage. As this was not arranged, the European and Columbian were taken over from the old company; other vessels were chartered for immediate requirements; a vessel called the Oneida, by which 60,000l. were ultimately lost, was purchased; and two other vessels contracted for at 100,000l. and 120,000l. It was soon apparent that the company had started with too small a capital, and that there was a total want of experience in the management.... After borrowing considerable sums upon the security of their vessels and otherwise, the directors found that it was necessary to make arrangements with another company to work the service, which they ultimately did with the ‘Royal Mail (West India) Company.’ An arrangement for an amalgamation of the two concerns was also very nearly completed, when the shareholders of the latter company refused to confirm the bargain made by the directors. This and the events of last autumn (1857) brought matters to a crisis, so that almost within a twelvemonth of the formation of the company, it was known that they were practically insolvent, and they have since placed themselves under the Act, and gone into voluntary liquidation. Besides the loss of 400,000l. of capital, the debts, including mortgages, appear to be about 270,000l., against which they have the steamers, subject to some disputed claims of the Royal Mail Company, in whose hands some of them are. There is some hope that the steamers may realise sufficiently to pay the debts, but, in the present state of shipping and aspect of the questions with the Royal Mail Company, this seems to be doubtful. The following appear to be the heavier items of expense and loss: Abandoning steamers, 25,000l.; placing steamers on stations, 37,000l.; loss on voyages, 70,000l.; interest, management, and depreciation, 77,000l.; loss on Oneida and expense of bringing home, 61,000l.: total 270,000l.; but there will be a further heavy loss in realising the four steamers still belonging to the company, and the plant they have at Sydney, King George’s Sound, Aden, and Point de Galle. These stand in the books at about 370,000l.”

Royal Mail Company undertakes the Australian service and fails.

When, in February 1858, the shareholders of this unfortunate undertaking were obliged to seek the protection of the Limited Liability Act under which it had been formed, the Royal Mail (West India) Company entered into arrangements with Government to carry out the service on the terms of the contract, provided it was guaranteed against loss to an extent not exceeding 6000l. per month. Differences, however, soon arose between this company and the Admiralty which resulted in a lawsuit, whereby it appeared that the West India Company had sustained a loss far in excess of 6000l. per month, and that the service had altogether cost the country close upon 260,000l. per annum during its brief existence.[350]

New tenders invited.

That of Peninsular and Oriental Company accepted, 1859.

In September 1858, Government again advertised for tenders “for the monthly conveyance of the mails between Great Britain and the Australian Colonies, with a branch between Marseilles and Malta.” Two offers were made, one by the Royal Mail (West India) Company for 250,000l. per annum, and the other by the Peninsular and Oriental Company for 180,000l. The latter was accepted, and the new service commenced in February 1859.

Consolidation of services in the Peninsular and Oriental Company.

It may be desirable here to explain that this company had previously undertaken a monthly service between Mauritius and Aden for a subsidy of 24,000l. per annum, and, an arrangement having been made that the route for the Australian mails should be viâ Mauritius, the performance of the mail service to both places was included in the 180,000l. But that route was soon afterwards abandoned, and a fresh agreement entered into between Government and the Peninsular and Oriental Company for a monthly line between Galle and Sydney, which, in conjunction with the Calcutta, Suez, and China lines, brought the Australian Colonies into direct communication not only with England, but also with India and China, and in fact with all the chief ports of the Indian seas. The subsidy for this service was 134,672l. per annum, the contract remaining in force until February 1866.

When fresh tenders were invited, the Peninsular and Oriental Company, having in this instance no competitor (though tenders were publicly invited), became again the contractors, agreeing to perform a monthly service for 120,000l. or a semi-monthly service for 170,000l. per annum, with boats which should attain a speed of 12 knots per hour on a measured mile, as a guarantee for an average speed of 10 knots per hour from port to port.

As there was a good deal of controversy about this time as to the average rate of speed of the vessels belonging to the principal mail companies, the table in the footnote[351] of the passages of steamers, for some years just previously to that period, belonging to the largest subsidized lines may be interesting and instructive.

Its present condition and fleet of ships.

From the thirty-fourth annual report of the Peninsular and Oriental Company, ending 30th of September, 1874, we learn that the paid-up capital amounted to 2,700,000l. and 800,000l. of debenture stock, also that it was the intention of the directors to call up in the course of the following year 10l. per share of their new stock, thus increasing the paid-up capital to 2,900,000l. apart from the debenture stock, so that the whole capital of the company would be 4,300,000l., of which 600,000l. would remain unpaid. This large amount of capital is distributed over more than 2000 shareholders, resident in almost every part of the world, and of whom more than one-third are ladies. Of this capital 3,757,000l. consists of stock in ships; 221,000l. of freehold and leasehold property in England, and docks and premises at Calcutta, Bombay, Singapore, Hong Kong, and other stations; and 413,000l. in stock of coals and naval and victualing stores. Its fleet consists of fifty sea-going steamers, measuring 122,000 tons, and of 22,000 horse-power.[352] Of these steamers thirty-four are employed in the Mediterranean, Adriatic, India, and China services; four in the Australian service between Ceylon, Melbourne, and Sydney; five in the China and Japan local services; two are used solely as cargo vessels; and five are either under repair or alterations, being reserved to supply the place of others in case of accidents. The company also possess twelve steam-tugs of from 31 tons and 15 horse-power to 271 tons and 120 horse-power, stationed for its use in Egypt, Aden, Bombay, Hong Kong, Shanghai, and Yokohama; and three cargo and coalhulks of 4417 tons, while it gives also permanent employment to 12,600 persons, exclusive of coal labourers and coolies on shore.

If my readers will cast their eyes on the map they will, by noting the ports at which these steamers call, form some idea of the extent and value of the services performed by this company. From England, crossing the Bay of Biscay along the shores of the Peninsula, to Gibraltar—the extreme limit of the original undertaking—its steamers now traverse the Mediterranean to Egypt, with a branch from Venice and Brindisi, and through the Canal to Suez, whence the most important line of steamers leave weekly for Bombay, with a further line from Bombay to Galle, and another direct from Suez to Galle, at which station the different lines diverge, one proceeding to Madras and Calcutta; another stretching far away across the Indian Ocean to King George’s Sound, Melbourne, and Sydney; and a third crossing the Bay of Bengal and through the Straits of Malacca, calling at Singapore, and traversing the China seas to Hong Kong, and, thence, to Swatow, Amoy, Foo-chow-foo, and Shanghai, stretching onwards to Yokohama, where the steamers of this line meet those of the Western world.

Terms of the contract now in force.

The principal conditions of the company’s present mail contract, as compared with that of 1870, are as follows:—The company is now required to despatch steamers weekly to convey the mails from and to Southampton and the various ports in the East by way of the Suez Canal; the Brindisi, or accelerated mail, to be conveyed as heretofore to and from Alexandria and by railway across Egypt; the company to have the option of substituting either Liverpool or Plymouth for Southampton as their mail port; the arrival of the outward mails at Eastern ports to be accelerated by twenty-four hours, and the penalties for late deliveries at terminal points to be quadrupled and made absolute, except in case of shipwreck or damage to machinery. The subsidy payable for the performance of these and other services is to be reduced from 450,000l., the sum agreed by the contract of 1870, to 430,000l. per annum, such sum to include the whole of the mail services rendered by the company.[353]

It is not my province to inquire whether these services could not be performed for a smaller grant of public money than that now paid. Opinions differ widely on such matters, and, as the steamers now traversing every sea increase in numbers, the feeling becomes more general, that a considerable saving might be effected in the conveyance of all the ocean mails. But the vast establishment this company is obliged to maintain, and the all-important and onerous duties it has to perform, at stations far apart and many thousand miles distant from headquarters, involves an outlay so great and embraces a risk so hazardous, that such a company may, on the other hand, well consider if the grant it receives, however large, is more than an equivalent for the services performed, especially, too, when we consider the stringent conditions of its contract.

Revenue and expenditure.

From whatever cause it may have arisen, the fact is apparent, that though the annual gross receipts of the company are enormous, its expenditure[354] is so great that less balance is left for the shareholders than is usually divided among those of undertakings of a similar character, which receive no assistance from Government, but are free to employ their ships in whatever branch of commerce they can be most profitably engaged.

Coals required.

Coal, as may be supposed, is one of the company’s heaviest items of expenditure, and one, also, that has greatly increased during the last few years; but when the price was comparatively moderate, the accounts of this company, from 1856 to 1865 inclusive, showed an expenditure for coal alone of no less than 5,250,000l. sterling, or, on the average, 525,000l. per annum: moreover, a large stock must be constantly kept[356] to meet the demands of the steamers employed on their various lines of communication; to maintain this stock, the company employ 170 sailing-ships annually, a trade which, in itself, would have been considered of no mean importance in the days of our forefathers.

Description of vessels.

It has not been the least interesting portion of my labours, to describe the different modes of commercial intercourse with India from the dawn of history, and, from the scanty fragments of very ancient records, to attempt to afford information, however imperfect, of the ships of the first traders by sea to the far East, their dimensions, the routes they followed, the length of their voyages, and something about their crews and internal economy. I have also traced their progress, as best I could, through the period of the Roman Empire to the Middle Ages, when the vessels of the proud Italian republics, in connection with the Muhammedans, retained for centuries in their hands that rich and ever envied commerce, thence onward to the period when the Portuguese and the Dutch were masters of the Indian seas, and, still further, to our own days, when a company of traders ruled alike the land and ocean of these vast and much prized territories; and I have, at the same time, given minute details of the ships and maritime services of this once all-powerful company.

Screw steamer Khedive.

I now supply the following illustration of one of the most modern vessels, belonging to the Peninsular and Oriental Company, engaged in that trade (she was built for the new line of commerce through the Suez Canal, by Messrs. Caird and Company, of Greenock, by whom her engines were also constructed); so that my readers may see the progress made in the mode of conducting maritime intercourse with India from the earliest period to our own time.

The Khedive is built of iron and propelled by the screw, combining all the qualities which modern science can suggest to secure with safety the greatest speed and capacity with the smallest current expenses.[357]

THE PENINSULAR AND ORIENTAL COMPANY’S STEAMER “KHEDIVE.”

It would weary my readers were I to furnish a specification of the hull and outfit of the Khedive, more especially as somewhat similar specifications are to be found in numerous treatises on modern shipbuilding, with which I do not profess to deal, and as it would, in itself, occupy forty or fifty pages of this volume. It may be sufficient to state, in the concluding words of the contract, “that the whole of the materials and workmanship are to be of the best quality, and the vessel, with the exception of bed and sofa mattresses, curtains, plate, cutlery, glass, china, linen, and bedding, to be entirely fitted and ready for sea at the cost of the contractors;” the contract price for the ship thus fitted complete for sea, including her machinery, was 110,000l., or a little more than 33l. per ton builders’ measurement.

Of course the price of all ships, as previously stated, depends on their class, power, and equipment, so that the cost of one vessel ready for sea may be very different from that of another ship. For instance, sailing-ships, when new, range from 8l. to 22l. per ton, and steamers from 15l. to as high as 40l. or even 45l. per ton if the engines be very powerful, highly finished, and mounted, and if the passenger accommodation be of an unusually superior and extravagant description.

In comparing this ship with the illustrations I have given of vessels of even comparatively modern times, my readers will be struck with the difference. Instead of the great hull towering high out of the water, with poops and top-gallant forecastles resembling the towers or castles on shore from which they derive their name, we have the long, low, yacht-looking craft offering the least possible resistance to the winds and waves against which she has to contend, yet affording more safety, as experience has shown, and far more comfort, with vastly increased capacity, in proportion to her register, for cargo and passengers, than the ships of any nation of any previous age.

Particulars of this ship.

In other respects it would be useless to attempt a comparison. We have nothing in ancient times to compare with the steam-ship, unless it be the row-galley, and to propel a vessel of the size and weight of the Khedive at the rate of four miles an hour through the smoothest water would require at least 2000 rowers. I may however state, for the information of my readers, that the Khedive will perform the voyage from Southampton to Bombay in thirty days (an abstract from her log will be found, [Appendix No. 22, pp. 637-8]), or in one-third of the time which Dr. Vincent, when he wrote at the commencement of this century on the commerce of the East, considered extraordinarily short between Bombay and England; indeed, is short, too, for a sailing-vessel of even our own times. A list of her crew, arranged according to their different departments, is furnished herewith.[358]

Uniform and regulations of the company.

Following the example of the old East India Company, the directors of the Peninsular and Oriental Company, as well as of many other similar undertakings, require their officers to wear uniform. They also issue regulations for the guidance of the engineers and for the general management of their ships (especially with reference to safety and economy). These regulations are similar in many respects to those of other companies, though not so complete as those of the Cunard, nor, we fear, from various accidents which have occurred, so rigidly enforced. Upon this all-important point—the safety of the ship—it would be impossible to impress too strongly upon shipowners the duty they owe to the public, since, by the vigorous enforcement of such regulations, numerous valuable lives might be saved and many terrible calamities prevented. To uniforms I have no objection, but such matters are of very secondary consideration to the safety of the vessel, and while holding the opinion that polite and well-dressed officers are an acquisition, especially to a passenger ship, their acts of courtesy must never be permitted to interfere in the slightest degree with their paramount duties as seamen, which require them, considering the varied and increasing dangers to which steam navigation is exposed, to be ever on the alert.

I have ventured to offer these few concluding remarks because some of the losses of the vessels of the Peninsular and Oriental Company, which occurred in fine weather and in smooth water, might have been avoided. The directors have, however, since then issued (March 14th, 1874) to the commanders of their ships more stringent instructions, and have intimated that any neglect of duty, especially as regards “lookouts,” will be “severely visited.”[359]