The History of the British Post Office

by Joseph Clarence Hemmeon

The Admiralty had exceedingly bad luck with the Falmouth boats for the first seven years. During that time seven of them were lost; four were wrecked, one was supposed to have been burned, one was smashed to pieces by icebergs, and one was captured by pirates off Rio Janeiro.[547]

In 1837, the charge of all the packets and the powers and authorities then existing in the Postmaster-General under any contract for the conveyance of mails were transferred to the Admiralty by act of Parliament.[548] The Post Office was still to retain the discretionary power of regulating the time of departure of the packets and of receiving the reports of the agents when the mail was delayed.[549] In the same year, but by a later act, the Postmaster-General was authorized to contract for the conveyance of letters by private ships between any places whatever, but such ships must be British. The rates were to be the same as the packet rates, but the owners, charterers, and consignees of vessels inward bound were allowed to receive letters free to the weight of six ounces, or twenty ounces in the case of vessels coming from Ceylon, the East Indies, and the Cape of Good Hope.[550] For every letter retained by the captain or any other person there was a penalty of £10. The captain was also liable to a penalty for refusing to take the letter bags, even when no contract had been signed.[551]

The control of the packets by the Admiralty after 1837 failed to produce the results anticipated. The power of authorizing contracts for the conveyance of the mails by water was actually vested in the Lords of the Treasury upon consultation with the Postmaster-General, the Colonial Secretary, and the Lords of the Admiralty with reference to the postal, colonial, or nautical questions involved, but as a matter of fact these officials did not always work in harmony. The mails continued to be carried by private vessels or war vessels not under contract, by packets belonging to the Crown, and by vessels under contract. Before the use of steam vessels the Government was able as a rule to make contracts for a short period and at comparatively little cost. Between England and the neighbouring countries (Ireland, France, and Belgium), government steam packets were employed. For the longer voyages it was considered advisable to induce commercial companies to build steam vessels by offering large subsidies for long periods. In 1853, a Parliamentary Committee reported in condemnation of the further use of government-owned packets on account of their expense and also of the payments to the owners of contract vessels in excess of the actual cost of mail carriage. They pointed out, however, that exceptions might very well be made when for political or social reasons it seemed necessary to carry mails to places where commercial vessels did not go, or went very irregularly, or where high speed was desirable.[552] This report, in so far as it condemned the use of government-owned packets and the excessive subsidies paid to contractors, repeated the findings of an earlier committee published in 1849, which had in addition advised that the rule should be observed of calling for tenders in the most public way possible.[553] In 1852, the only service performed by the government packets was that between Dover, Calais, and Ostend. On the French service the night mails between Dover and Calais were conveyed by British packets and the day mails by French. Between Dover and Ostend there was a daily service, thrice a week by British, four times by Belgian packets. Of the six boats employed by the Admiralty, four were kept fully manned and two were spare steamers. The receipts did not equal the gross expenses.[554] Again in 1860, the year in which the control of the packets was transferred to the Post Office, we find a third Parliamentary committee repeating the recommendations of its predecessors so far as the subsidy question was concerned. Nothing was said about the government steamers, for in the meantime the principle of packet ownership had been abandoned.[555]

A general review of the packet services existing at the middle of the nineteenth century affords a very good example of the relative importance of these different systems of communication and of the principles on which the payment of subsidies was based. The inland packet service of the United Kingdom included, among others, the lines between Holyhead and Kingstown, Liverpool and the Isle of Man, Aberdeen and Lerwick, Southampton and the Channel Isles. This formed a necessary part of the inland postal service, and no attempt was made to meet expenses by levying a sea-transit postage. In the case of the Isle of Man the postage collected covered the cost of the packets and of the land establishment of the Post Office in the island. The expenses of the Shetland packets by themselves exceeded the postage collected, and the Orkney postal expenses were also greater than the revenue.

The second class consisted of the packets plying between England and the colonies or between the colonies themselves, and included the lines to India, Australia, the Cape, the West Indies, and British North America. This class was and is by far the most important. Three-fourths of the whole annual subsidies paid by the Government for the packet service were paid to three great companies, the Peninsular and Oriental, the Royal Mail, and the Cunard Company. The first of these connected England with India and the Orient, the second with the West Indian colonies, and the third with the North American Provinces. The great cost involved in subsidizing these companies was excused on the ground of absolute necessity for a regular and rapid mail service between the mother country and her colonies. Of the lines furnishing communications with foreign countries, several were connected with and subsidiary to the colonial service, as the continuation of the Cunard line to the United States. The service to China was the most remunerative part of the system undertaken by the Peninsular and Oriental boats, and the same may be said of the foreign service of the Royal Mail Company. From a commercial point of view the Continental packets were perhaps the most important of all.[556]

The first contract with an individual steamship company was made in 1840 with the famous Cunard Company providing for the conveyance of mails between Great Britain, the United States, and Canada. In accordance with the recommendations of various committees, attempts were made later to place the Atlantic packet service upon a firmer financial basis so far as the loss to the Post Office was concerned. In 1868, the contract with the Cunard Company, which had been renewed at various times under somewhat different conditions, came to an end. The Conservative Government which was just going out arranged for two services a week with the Cunard Company for £70,000, and one a week with the Inman Company for £35,000. There was considerable opposition to the agreement among the Liberal majority of the new Parliament, but it could not of course be repudiated. This contract came to an end in 1876, and a circular was addressed to the various steamship companies informing them that the government would hereafter send the American mails by the most efficient ships, payment to be made at the rate of 2s. 4d. a pound for letters and 2d. a pound for other mail matter, those being the rates fixed by the Postal Union Treaty and adopted by the American Government. The Inman and White Star Companies refused at first to have anything to do with the new system of payment, but eventually they fell into line. The system was in operation for a year at a cost of £28,000 in place of the old charge of £105,000. The Cunard, Inman, and White Star Companies then demanded double the previous rates on the ground that they were conducting the service at a loss, and an agreement with the Government was concluded for the payment of 4s. a pound for letters and 4d. for newspapers, etc. At the same time the old monopolistic conditions were virtually reëstablished, for rival steamship lines were excluded from the agreement.[557]

In 1886, the agreement with the Cunard, Inman, and White Star Lines came to an end. The Cunard and White Star Companies then made an offer precluding the use of the fast boats of other lines, but this was declined. Eventually an agreement was reached at a reduced cost, which gave the Post Office the right to send letters so directed by any other ships than those of the White Star or Cunard Companies. The amounts to be paid were measured by the actual weight of mail matter carried.[558] The payments to the Peninsular and Oriental Company were based at first entirely upon mileage covered, and reductions were made if the packets fell below a minimum speed agreed upon. This method was later changed to a payment based upon the amount of mail carried, and the subsidy was substantially reduced.[559]

A general review of the packet service in 1907 shows us that most of the contracts for the home packets are terminable on six months' notice, a few only on twelve months' notice. The Holyhead and Kingstown service is exceptional, not being terminable until 1917, or on twelve months' notice after 31st March, 1916. This is by far the most important of any of the home systems and costs £100,000, to be reduced to £80,000 in 1917. The contract for the conveyance of mails between Dover and Calais is terminable on twelve months' notice and cost £25,000 for the postal year 1906-07. The payments for the use of the other boats between the United Kingdom and Europe are comparatively small, amounting in 1906-07 to £3780 only, and all these contracts are terminable on six months' notice. The contracts for the conveyance of the mails to the two Americas are as a rule terminable on six or twelve months' notice, but an exception has been made in the case of the Cunard Company with whom and under peculiar circumstances a twenty years' agreement was made in 1902. In 1906-07 the cost of the conveyance of the mails between the United Kingdom and North and South America was £198,488. The African contracts are all terminable on three, six, or twelve months' notice, and amounted in 1906-07 to £32,988. The carriage of the mails to India, Australasia, and China for the year ending 31st March, 1907, cost £402,162, but this has since been diminished by a reduction in the subsidies to the Peninsular and Oriental Company and the Canadian Pacific Railway Company.[560]

The total expenditure for packet boats increased enormously after 1840, and this increase in cost kept down the net revenue of the Post Office for many years after the introduction of penny postage. In 1830, the packet expenses amounted only to £108,305, in 1846, to £723,604, and in 1860, to £869,952. They reached the maximum point of £1,056,798 in 1869, and from that time until 1890, when they were £665,375, there has been on the whole a gradual diminution. During the year ending 31st March, 1892, they reached the sum of £701,081, for the postal year 1900-01 they were £764,804, and during the year 1905-06 they had diminished to £687,109.[561]