It is pleasing in this connection to trace the almost mysterious progress of our Pacific territory during the past eight years, and the agencies producing it. Among these agencies none have been so effectual as the Pacific Mail Steamship Company. That Company was compelled to form an establishment of the most effective character four to five thousand miles away from home, and as it was at the time, thirteen thousand miles distant. The country was wholly new, so much so that it was, in most parts of the field which it had to occupy, extremely difficult to procure ordinary food for their operatives. Their ships had to make a voyage more than half of that around the world before they arrived at their point of service; and they found themselves without a home when there. The steamer "California," which left New-York on the 6th October, 1848, was the first to bear the American flag to the Pacific ocean, and the first to salute with a new life the solitudes of that rich and untrodden territory. She was soon followed by the "Panama" and "Oregon," and in due course of time by the "Tennessee," the "Golden Gate," the "Columbia," the "John L. Stephens," the "Sonora," the "Republic," the "Northerner," the "Fremont," the "Tobago," the "St. Louis," and the "Golden Age." From a small beginning that Company now has the finest steam fleet in the United States, although the difficulties in forming it were probably much greater than any of our other companies had to contend with.
These steamers found nothing ready to receive them in the Pacific. The Company was compelled to construct large workshops and foundries for their repair, and now have at Benicia a large and excellent establishment where they can easily construct a marine engine. They had also to build their own Dry Dock; for that of the Government at Mare Island was not ready until 1854. Theirs has ever been most useful to the United States, as it furnished the only accommodations of that class in the Pacific. They had also to make shore establishments at Panama, San Francisco, and Astoria, which, with coal dépôts, etc., were extremely costly, owing to materials having to be transported so far, and labor at the time being so high. The price of labor in California at all times depends on the profits which can be made by digging gold, and the prices paid for this species of labor have ever been enormous. Beyond this most unusual price of labor along the Pacific seaboard, the coals which they have used, whether from the Eastern States or from England, have been invariably shipped around Cape Horn, and have never cost less than twenty dollars per ton. For a large portion of the time the Company had to pay thirty dollars per ton for coal, and in one instance fifty dollars. Coal, like all other provisions of the steamers, has generally been purchased from those who sent it out on speculation, and took all the advantages of the peculiar market. Twelve dollars per ton is a low price for freight to California or Panama. In addition to this, the cost price of the coal, the handling, the wastage, and the insurance, will amount to about eight dollars per ton, making it never less than twenty dollars delivered. I have frequently seen coals sell even in Rio de Janeiro, which is but about one third of the distance from us, at eighteen to twenty-four dollars per ton. The nine steamers running consume about 35,000 tons of coal annually. If the vessels transporting it be of 1,000 tons each, it will employ something near thirty-five of these vessels at profitable rates, in this one item of their business alone. Such expenditures are not necessary to any other steam company in the world. The British lines in the Indian Ocean and the China Seas are supplied with domestic coal which comes at very reasonable prices, and is shipped but a short distance.
Yet this Company performs this distant and difficult service with great regularity and at a low price. They have never lost a trip, a mail-bag, or a passenger by marine disaster during the eight years that they have been running in the Pacific. This results from the fact of the Company having thirteen steamers. If all of the steamers now in commission were sunk, they could supply their place from their reserve fleet and have no hiatus in their service. Such a spare fleet is an enormous expense; but it is positively indispensable to regular and highly efficient service. It is singular that under these circumstances they can perform the service at $1.70 cents per mile. It is a notorious fact that these steamers could not have supported themselves in 1854-55 without the aid which they obtained from the Government for the services which they performed. They never have transported much freight, as it would not bear the transhipment at Panamá. The small quantity which they had was during the first years after the discovery of gold, and then only. They have never at any time brought any eastward. The Panamá Railroad was a splendid consummation of which the world had dreamed for years, and toward whose completion this Company was highly instrumental. Yet it did not enable the steamers to transport freight, and it never will.
These steamers run the 3,300 miles between Panamá and San Francisco by a time-table. They arrive at either end within a very few hours of thirteen and a half days, including all of the stoppages, which are also made at specified hours. Thus the average speed of the steamers is about 254 miles per day. They touch at Acapulco and Mazanilla, and supply San Diego, Monterey, San Pedro, Santa Barbara, San Luis, and Obispo, ports of California, from Panamá by a branch line. This is an extra service, and is not taken into account in calculating the mileage paid the Company.
The steamers have carried probably 175,000 passengers to California, and have brought back about $200,000,000 in gold. They have also by their semi-monthly line from San Francisco to Oregon assisted in populating that rich and beautiful agricultural district, and making it available for useful purposes as a part of the United States. They have converted the wilderness of California into a smiling garden, and will ere long produce the same effect on Oregon. With that coast comparatively unprotected, and with the small standing army sustained in this country, they become very important as a ready means of concentrating on the Pacific coast a large army in a few days. They also afford a ready transit for the changing crews of our national vessels, which, when once around the Horn, may remain there several years; having to change their crews only.
The large property of this Company in the Pacific can be made available for no other purpose than that for which it was created. Any company to be thoroughly effective there, must create its own stock, and support works on the same general plan as those created by the British East-India Company. Their success in building up this large establishment on the Pacific was simply an accident; and that accident the discovery of gold. But for this the Company would have failed in two years, or gone back pleading to Congress for relief. But the gold crisis saved it, and the enterprise was very remunerative for the first few years; but since 1853 the profits have been limited, while for one or two years the Company have sustained actual loss. They calculated too largely on the prospective business with California, and have too large a sum invested to make much for the future. And yet, with a smaller investment they could not perform the service, except in that dangerous, cheap, indecent way, of innumerable wants and deprivations, which the American people have begun to despise. They have had some few disasters, but none of those of a fatal character in the Pacific. The "Winfield Scott" was lost in entering the harbor of Acapulco; the "Tennessee" in entering that of San Francisco in a dense fog. The "San Francisco" was lost, as will be remembered, on this side, near our coast, as she sailed with troops for the Pacific. The Nicaragua Transit Company fared much worse with their steamers in the Pacific. They lost the "North America," the "Independence," the "S. S. Lewis," the "Pioneer," and the "Yankee Blade." Mr. Wm. Brown also lost his steamer "America," which he was running between San Francisco and Oregon. She was burned.
Their dividends for four years have been but twelve per cent. And should they be at any time thrown out of the service, more than half of their property would be irretrievably lost. This percentage of dividend would be large enough but for such possibilities as these, which may soon reduce it to a deficit and a loss. Thus it is that steam stock should declare three times the dividend of other stocks, to be eventually equal to them. And hence it is that, with the clear record of this Company before the Government, and with an investment of between three and four millions of dollars, being at the same time free from debt, the stock of the Company is selling at thirty-three per cent. below par. This is a good exemplification of my views in the preceding Sections regarding the costs, and hazards, and low values of ocean steam stocks generally. Nor are the stocks of this Company kept from the public. They are advertised and sold at public auction at these reduced rates every day in the year in this city; and no one of the five hundred and four stockholders, among whom these interests are diffused, seems anxious to put "his all" in the enterprise. And yet there are some people who call such companies a monopoly. If a monopoly, why do they not come forward, buy the stocks, keep them in their own hands, and profit by them; especially as a monopoly must be doubly good when it can be bought for two thirds the cash originally paid for it!
I have noticed this Company thus fully, because its extent of stock, and large field of operation, make it a fit illustration of the views which I have advanced throughout this work. I have no desire to depreciate the stock, or in any other way injure the Company, as my own enterprise gives me quite enough to do.
Many of the views advanced with regard to the Pacific Mail Company will apply to the United States Mail Steamship Company. That Company, at the outset, built very fine steamers, and ran them incessantly, until they were unfit for duty. They have constantly supplied their place, and have at all times, by building and by chartering at the highest prices, kept up a large and costly fleet for their ramified service. The service contemplated in their original contract, at $1.883/4 cents per mile, is but about two thirds of that actually performed. The contract required them to run 3,200 miles semi-monthly, but they actually perform semi-monthly 5,200. (See Mr. King's Letter, [Paper G].) The actual service has required nearly twice the number of steamers necessary to do that for which they contracted, although a part of it is in the coasting trade. Consequently the steamers have been rapidly worn out, from too heavy duty, and the stock of the Company has never paid as well as it should. The Company have, morever, suffered severely from disaster. The "Crescent City" was lost on the Bahama Banks, in 1855; all hands saved. The "Cherokee" was burned when in active service, in 1853; and the "George Law," or "Central America," but recently foundered at sea in a terrible gale. They were all good ships; but like those other excellent ships, the "Arctic" and "Pacific," they could not defy the powers of pure accident. In the same gale the "Empire City" was dismantled, having all of her upper works swept off, while the "Illinois" was injured by being on the Colorado Reef. They have both been undergoing most costly repairs for several weeks. While writing this, the "Philadelphia" is also in the shop. She recently broke her shaft and her cross-tail, and had to put into Charleston. All of these repairs cost an immense sum of money, and are calculated, with the severe losses which the Company has sustained, to dishearten the most hopeful and enterprising. Yet, since these disasters, and the completion of the "Moses Taylor," the Company are about laying the keel of another fine ship. This is another verification of my statement that the mail companies are in nearly every instance compelled to build new steamers in the very last years of their contracted service. The new "Adriatic" attests the same fact on the part of the Collins Company. (See [pages 141] and [142].)
The Company have had at various times the "Falcon," "Ohio," "Georgia," "Crescent City," "El Dorado," "Cherokee," "Empire City," "Illinois," and "Philadelphia," and now have the three last-named ships, the "Granáda," the "Star of the West," and the new steamer "Moses Taylor." The benefits conferred by the Company's lines on the trade of the country generally, and especially on our southern seaboard and Gulf connections, have been almost incalculable. They found all of these ports in the undisputed possession of the British, whose steamers furnished the only mail and locomotive facilities of the times. By their superior speed and accommodations the "Georgia" and the "Ohio" soon drove those enterprising steamers from our coast, and confined them to the foreign countries of the Gulf and the Carribean Sea, where they yet rule triumphant in news, transport, and commerce. Our southern harbors are no longer filled with British cruisers, while in their stead we have built up a noble war marine, inured thousands of Americans to the ocean steam service, and made one most effective movement in the direction of successful defenses. (See Letter of Hon. Edwin Croswell, [Paper E], page 200.)