This investigation was made to enable the Government to proceed intelligently with the many contracts which were to expire in 1850; and its immediate consequence was, not only the renewal of all the old contracts with the same parties at the same or larger pay, but the establishment of several new services.
The British system had operated to the very highest satisfaction of the public and the Government for twenty years, until 1853, as it has done ever since; but at that time it was put to a second and very severe test. It had been suggested, probably by the Lords of the Admiralty, who had to pay the bills from the Naval fund, that the packet system was too costly, and should be remodelled, and perhaps reduced. Complaint was thus made to the Chancellor of the Exchequer, who, in a Treasury Minute, dated March 1, 1853, says:
"Important as it is to secure rapid and certain communication with the remote dependencies of this country, and with other distant states, for national purposes, it is doubtless, under all common circumstances, from commercial considerations that such facility of correspondence derives its highest value."
"Her Majesty's Government conceive the time to have arrived when the entire charge of the packet service should be deliberately examined and reviewed, with joint reference to the questions—how far the purposes with which the present system was begun have been accomplished—how far the total amount of service rendered to the State is adequate to the total annual expense—how far there may be cause for a more than commonly jealous and scrupulous consideration of such further schemes of extension of the system as particular interests or parties may press, or even such as public objects may recommend from time to time; lastly, how far, on account of the early period at which certain of the contracts are terminable, or on account of requisitions put in by the contractors themselves for the modification of the terms, or for any other reason, it may be prudent to entertain the question of any revision of those terms, or of laying down any prospective rules with regard to them; such only, of course, as may comport with the equitable as well as the legal rights of the parties, and may avoid any disappointment to the just expectations of those classes who may have felt a peculiar interest in the establishment and extension of these great lines of communication."
After remarking that some of the vessels of some few Companies were unfit for purposes of war, the "Minute of the Treasury," in instructing the Committee, further says:
"At the same time, it is not to be conceived that, on account of this failure in a portion of the design, the country has cause to regret having paid a larger price than was intended to be paid simply for the establishment of these noble chains of communication, which well nigh embrace the world. The organization of a complete postal system upon the ocean, with absolute fixity of departures, and a general approach to certainty in arrivals, was a great problem, of high interest and benefit, not to England only, but to all civilized countries; and this problem may now be said to have been solved by England, for the advantage of mankind at large. It was to all appearance altogether beyond the reach of merely commercial enterprise; and if the price paid has been high, the object has been worthy, and the success for all essential purposes complete."
As a consequence of this "Minute," the Lords Commissioners of Her Majesty's Treasury appointed a Committee, consisting of Viscount Canning, Post Master General of Great Britain, as President; Hon. Wm. Cowper, on behalf of the Board of Admiralty; Sir Stafford H. Northcote, Bart.; and Mr. R. Madox Bromley, Secretary to the Board of Audit. The Committee organized, examined the Evidence and Report of the Committee of 1849, also the three large volumes of Evidence and Report taken by the Committee in 1851 on "Steam Communication with India and Australia," and the many elaborate documents of this class published by the Admiralty. After discussing thoroughly all of the political, financial, commercial, ethical, and social questions connected with rapid steam mail communication, they made an elaborate and detailed examination of all the contracts existing with the Government, and of the affairs of the various companies, with a view to deciding whether the ocean mail service should be abridged, or continued, or extended. They reported to both Houses of Parliament, July 8th, 1853. The conclusion of the Committee was, not only that the present service was demanded by every interest of the country and should be sustained, but that it should be judiciously extended, so as to meet all of the wants of the British public of whatever class. As elsewhere remarked, the new line established last year to Australia and India, at a cost of $925,000 per annum, for seven years, was a legitimate result of that test and that report, made in the most searching manner by the very ablest men of the kingdom; and this, notwithstanding the reports purposely circulated in this country every few years that Great Britain intends abandoning her steam mail system. She will abandon that system, as her practice plainly indicates, only when her people shall have discovered some means of making and preserving wealth without effort, enterprise, commerce, or manufactures. (See [page 99], Mr. Atherton's Reply.) The Report says:
"Before the application of steam to the propulsion of ships, the contracts were often made for short periods, the Government being able to find, among the vessels already employed in trade, some of speed sufficient for the purpose; but when it became requisite to dispatch the mails by steam, the ordinary supply of trading vessels would no longer suffice, and the Government had to call into existence a new class of packets.
"The postal service between England and the adjacent shores of Ireland, France, and Belgium, was at first performed by steam packets belonging to the Crown; but for the longer voyages it was thought better to induce commercial companies to build steamers; and with that view the contracts were at first made for periods which, unless previously terminated by failure to fulfill their engagements, would secure to the company the full benefit of their original outlay, by continuing the employment of their vessels until they might be expected to require extensive repairs, or to become unfit for continued service. In 1837 steam communication was created with Portugal and Gibraltar; in 1840 with Egypt, with the West-Indies, and with North-America.
"When the public interest requires the establishment of a postal line on which the ordinary traffic would not be remunerative for steamers, the subsidy to be allowed in the contract may be ascertained either by the test of public competition, or by calculating the amount which, on an estimate of the probable receipts and expenditure, will cover the deficiency of receipts, or by comparing it with the cost of war vessels if employed for the same purpose."