Ocean Steam Navigation and the Ocean Post

by Thomas Rainey

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

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

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

It has been suggested that the Government could secure the transit of the mails on the receipts, taking both ocean and inland postage; and indeed a temporary arrangement was made with two of our contending companies running to Europe, to transport them on these terms; but such arrangements are temporary only, and can not be made the basis of regular action. They would operate most unequally on different lines. While on the European lines they would pay probably one half the sum of subsidy required, on many other, and especially on new and untried lines, they would not at first pay probably one tenth. And granting that on a given line, the receipts during fifteen years would amount to as much as the whole subsidy required for that time; yet no company could live on them, as for the first few years the receipts from the mail would be very small, while the general income of the line from passengers and freight would also be smaller than at any other time. Moreover, almost every steam company has to borrow money largely during its first years, in anticipation of the larger income from increased trade during the last years of its existence. Thus, while the system of the receipts would operate most unequally, the same aggregate sum given in the form of a regular annual subsidy operates as an assurance for the company and keeps it alive. But the postal receipts are not adequate to the support of any ocean line. In the report before cited, the Committee say, at page 5, that the sum of subsidy then paid was £822,390 per annum, whereas the postal receipts were only £443,782, or but a fraction over one half. There is probably no regular service in the world where the postal receipts would pay for the transport, especially where competition existed.

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

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

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

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

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

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