Improved prospects of the Company
On the other hand, the company had great difficulties to contend against, while its shareholders, so far from receiving any dividend on their capital, sustained during the first year of its operations a heavy loss. Moreover, though liberal concessions had been made by the Government, together with various unusual allowances, these were more than counterbalanced by the loss of two valuable ships during the second year of its operations. Yet, taking into account these and other losses, to which reference will hereafter be made, the trade increased so rapidly as to recoup the disasters of the company, and to leave, in 1843, a surplus of receipts over expenditure of 94,210l. and in 1844 of 147,749l.: the directors were therefore enabled to recommend a dividend on the half-year ending 31st December, 1844, of 30s. per share; in October, 1846, 35s.; and in April, 1848, 2l. per share.[275]
From this time the prospects of the company steadily improved, and when, in 1850, various capitalists in the United States projected the construction of a railway across the isthmus of Panama—a project which promised extensive additions to its business—the company was in a position to render this new undertaking considerable assistance by advancing, in the course of the year 1851, the sum of 25,480l. towards its completion. At that time, too, the direct and most advantageous route to the Australian colonies appeared to be across that Isthmus; indeed the Panama route was recommended by a Committee of the House of Commons who inquired into this subject in the session of 1849. But, apart from the Australian trade, that of San Francisco was then being rapidly developed by the discovery of the gold mines, by attracting (as these did) large numbers of passengers from Europe, and, thereby, laying the foundation of the present enormous traffic in grain and other produce from California, perhaps the most fertile district of the United States—the valley of the Mississippi not excepted.
from improved management.
From that period the operations of the company have from various causes yielded a very fair return to its shareholders, some of these, doubtless, being due to the rapid increase of the trade, to the knowledge the directors have gained from experience, and, not the least, to the fact that their ships are now commanded by men who have been either trained in their own service, or have acquired, while employed by other shipowners, the sort of knowledge essential for the successful management of merchant-steamers.
Contract renewed, 1850.
Its conditions.
In 1850, Government granted a renewal of the mail contract to the company for a further term of ten years from the 1st January, 1852, the conditions being, that the subsidy should be raised from 240,000l. to 270,000l. per annum, and that the company, on its part, should undertake the additional cost and expense of a monthly service to the Brazils, thus increasing the mileage to be performed from 389,448 to 547,296 miles, and, at the same time, reducing the mileage rate from 12s. 3d. to 9s. 10d. per mile. The company was also required to accelerate the speed on the West Indian line from 8 knots an hour, as originally agreed, to 10 knots an hour, and to add five new steamers to their fleet, each of 2250 tons burden and 800 horse-power. Besides an increased outlay of capital, these conditions entailed on the company a very considerable increase in the wear and tear of ships and machinery; hence their general expenditure rose in the course of the year, after these new arrangements came into force, from 264,802l. to 403,769l. per annum.
Fresh conditions, 1857.
In 1857, other changes were made in their contract. The first condition—a somewhat extraordinary one—had reference to an amalgamation with the European and Australian Mail Company for the conveyance of the mails, viâ Egypt, to and from Australia, which subsequently proved a great failure, this Company having altogether broken down; the second required an acceleration of the mails between England and Rio Janeiro from sixty-six days twenty-two hours, the time hitherto allowed for the performance of the round voyage, to fifty-five days nineteen hours. The company was, also, ordered to provide three more vessels, of 3000 tons and 800 horse-power, for the West India and Atlantic service, and a fourth of smaller dimensions to increase the speed of the mails between Rio Janeiro and the River Plate. These changes proved to be of considerable public advantage, as the time of the post between England and the isthmus of Panama was thus reduced from fifty-nine to forty-two days, while, as the homeward mails arrived three days before the departure of the outward ones, the mercantile community obtained important additional facilities for transacting their business with that part of the world.