But these mail services were soon seriously disturbed. The urgent requirements of Government for the means of conveying troops to the Black Sea and the Baltic on the outbreak of the Crimean War, obliged the company towards the close of 1854 to discontinue the branch line to Australia, and to reduce the Bombay and China service to a monthly instead of a fortnightly line.[347]
The withdrawal of the company’s steamers from the mail service between Singapore and Sydney, which had so recently been established, again created a large amount of discontent amongst the merchants in England connected with the trade and still more with the Colonists. The company was charged with selfish motives, and though obliged to relinquish the annual subsidy of 17,475l. for the performance of their service, it was alleged that the profits of the company, by the employment of its ships in the war, much more than compensated it for the reduction of the mail revenue. Thus considerable prejudice was raised against the company, and, in the discussion of the plans for the renewal of the service after the war, it became clear that the colonists were anxious to have, if possible, a mail service of their own and altogether independent of the Peninsular and Oriental Company; hence, when the company offered to enter into a contract for the monthly conveyance of the mails between Ceylon and Sydney by steamers of an average speed of 10 knots an hour, touching at King George’s Sound and Melbourne, at an annual subsidy of 84,000l., the offer was peremptorily declined, though a greatly enhanced subsidy was subsequently paid, for the worst performed mail service that was ever undertaken.
Proposals for an independent Australian mail service.
In the meantime liberal grants of money having been voted by the legislative assemblies of the different colonies towards the maintenance of a postal communication with the mother-country, advertisements were issued by the Admiralty, in May 1856, inviting tenders for a “monthly direct and independent service” between Suez and Australia.
The conditions of tender contained many clauses of a novel character.
The ships to be employed were to be full power screw steam-vessels of not less than 2200 tons each; the tenders were to specify the maximum number of days to be consumed on the passages; and a “penalty of 100l. to be incurred when the contractors failed in providing a vessel, in accordance with agreement, ready to put to sea at the appointed hour; and also the sum of 100l. for every successive day which should elapse until such steam-vessel should actually proceed to sea; and also (from whatever cause arising) 50l. for the first day, and a sum increasing by 50l. per day for every succeeding day, that is to say, 50l. for the first day, 100l. for the second day, 150l. for the third day, and so on.”
Four tenders were lodged in reply to this advertisement, but only two, that of the Peninsular and Oriental Company, and that of a new undertaking, the European and Australian Steam Navigation Company, were considered by the Government: the former offering to perform the service, provided the new and very onerous penalty clause was omitted, for 140,000l.; and the latter accepting all the clauses, but requiring 185,000l. per annum for the work to be performed, and stating that, should their tender be accepted, it was intended to lay on an independent line of steamers between England and Alexandria, and to perform the service between Suez and Melbourne in thirty-nine days outwards and thirty-five days homewards.
Tender of European and Australian Company accepted.
As the Peninsular and Oriental Company “declined to be held responsible in penalties for failure as to the length of a voyage arising from causes beyond their control,” and submitted that such penalties were unnecessary as the vessels they offered “had already been surveyed, and tested for an average speed of ten knots an hour at sea,” the Government accepted the tender of the European and Australian Company.[348]
So very large a concession as 185,000l. per annum for the work to be performed created at the time considerable surprise, and led to a good deal of discussion in the public press as well as in Parliament. With such an enormous subsidy the directors of the new undertaking would have had no difficulty in raising the requisite amount of capital in the open market for a service apparently so tempting, but they considered the margin for profit so ample that, instead of offering their shares to the public, they raised among themselves and their friends all the money that was considered necessary, anticipating no doubt a very handsome return upon the outlay.