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

by W. S. Lindsay

Heavy loss during the first year of their operations.

But this subsidy, large as it doubtless was for the service to be performed, was not sufficient to cover the heavy outlay the company had considered necessary in the construction and equipment of their fleet. Perhaps, too, part of this outlay arose from the fact that, though Mr. McQueen, the projector of the company, was a gentleman who had had considerable experience in the promotion of large undertakings, his knowledge of maritime affairs was limited, while he was not sufficiently conversant with those details, the practical knowledge of which is so essential to the success of all shipping operations. The directors, as a body, were not competent, from previous experience, to manage such an undertaking; while the choice also of commanders, selected from the Royal Navy, with little or no experience of steam, and none whatever of the numerous requirements of a merchant-ship, was unfortunate, and may have in some measure tended to produce a balance sheet which, though embracing to its credit the large permanent subsidy, showed at the close of the first year’s operations a loss of no less than 79,790l. 16s. 8d. to the company!

It may, however, be remarked that the projectors of this undertaking had entered on an entirely new field, and that merchants who had been accustomed to dispatch their produce in sailing-vessels were unprepared to pay the enhanced rates required for steam-ships, while the passenger and goods trade in itself was not then nearly sufficient for a remunerative return on the large capital subscribed.

Capital of the Company.

Liberal concessions by Government.

Originally, the company was authorized to issue fifteen thousand shares of 100l. on which calls of 50l. per share had been made up to the time of the first meeting of shareholders, with power to borrow 260,000l. But as another call of 10l. per share, sanctioned at this meeting, was found insufficient for the requirements of the Company, the directors appealed to Government for further assistance. By the original arrangements, the annual mileage traversed by the company’s ships would have been 684,816 miles. Government, however, in reply to their appeal, generously consented to reduce the distances to be performed to 392,976 miles, and to allow the annual subsidy of 240,000l. to remain undisturbed. By these important and liberal modifications the annual expenditure of the company which, according to their own calculations, would have been 360,000l. per annum, was reduced to 235,000l.

It was further conceded that if, at any time, and from causes, in the opinion of Government, of a public and national character, such as war, the insurance on steam-vessels should rise above six guineas per cent. per annum, or on coals above two guineas per cent. on the outward passage, the company was to receive an additional sum to be settled by arbitration, but which was not to exceed 10,000l. per annum.

Complaints of the public.

In process of time, and notably after the necessity of greater economy in the public finances had been admitted, great discontent was expressed through the press with regard to these very liberal concessions,[273] which was materially aggravated by a statement, the accuracy of which I have no means of testing, that the amount paid for the West India mail service exceeded the sum received for postage by 183,938l., and that, though the Brazil branch left a margin of 3478l. in favour of the Post-office, the direct loss to the public amounted to no less than 180,460l. per annum.[274]

To most of these complaints the company was altogether indifferent, believing them to have their origin in disappointment and jealousy; but there was no answer to the well-founded remonstrances of the colonists that the service was, after all, performed with great irregularity. Indeed, it is beyond cavil that during their earlier operations, the vessels did not arrive at the time named in the tables of routes attached to the contract, that, for instance, the duplicate correspondence from Chagres, sent round by way of New York in American vessels, and thence by the Cunard or American steamers to Liverpool, often arrived in England sooner than the original letters brought directly by the Royal Mail vessels; and, further, that much confusion was constantly caused by the non-arrival of the outward mails till days after the dispatch of the homeward ones. Unnecessary delays also took place in coaling at St. Thomas and in the receiving and transferring freight there and elsewhere. There was also, it was alleged, a want of sufficient steamers for the intercolonial service, while the occasional negligence and incompetency of the commanders of the vessels led to a needless loss of time between port and port; complaints were likewise made of insufficiency of accommodation for passengers on some of the intercolonial steamers, and, also, that a pernicious system of gambling was permitted in the vessels of the main line. Some of these complaints, as frequently happens under similar circumstances, were frivolous and unwarrantable, but too many of them were unanswerable; indeed the bitter attacks on the company might naturally have been expected considering the numerous favours supposed to have been conferred on it, and, above all, the notorious fact, that the contract for the conveyance of the mails was never exposed to public competition.