The Canadian government, also, advanced its claims for consideration. Galt wrote to the colonial secretary on November 11, 1858, and the London agent of the Canadian line on January 18, 1859, submitted an application to the treasury. He pointed out that the effects of this subsidized line would be disastrous to the prospects of his company, and expressed the trust of his principals "that before interfering to crush a provincial company of such magnitude, your lordships will at least afford the company we represent an opportunity of being heard."
This appeal was so far successful, that it obtained for the company the honour of an interview at the treasury. They were promised that their representations would be considered; but no further notice was taken of their application.
On the same day on which the Canadian company's letter was dated, viz., January 18, the Lever company submitted an offer for the conveyance of the mails from Galway to Portland, Boston and New York, calling at Newfoundland for £3000 a voyage. The treasury, following the practice laid down for their guidance, asked the postmaster general for his opinion on the proposal.
The postmaster general reported adversely, observing that it was not expedient to enter into any contract for the service, which would bind the government to a heavy annual payment. He was also of the opinion that the vast mercantile traffic between the two countries afforded abundant opportunities to secure additional service that might be desired on favourable terms.
Here then were three strong reasons to call for the government staying their hands from entering into a contract with Lever: the remonstrance of Inman, coupled with the intimation from the treasury that in the event of their deciding to establish the service, they would put it to public tender; the expostulation of Galt on November 11, 1858, and the appeal of the Canadian company for an opportunity to be heard on January 18; and the unfavourable report of the selected adviser of the treasury.
Yet, in the face of all these circumstances, the treasury on February 22, authorized a contract to be made for a fortnightly service to Galway and New York, and Galway and Boston, alternately, at the rate of £3000 a voyage. The parliamentary committee in seeking an explanation for this extraordinary course, examined Lord Derby, the chancellor of the exchequer, as to the reasons which moved him to authorize this service.
Derby stated that he was influenced mainly by the consideration of the social and commercial advantages which this service would confer on Ireland, and of the preference due to the Lever Company on account of its enterprize, in first establishing a line of steamers from Galway.
Derby stated, however, that when he authorized the service he had not before him some materials, nor had he in view some considerations, which, the committee believed, should have been held essential elements in the determination of the question. He had no knowledge of the correspondence which had passed between the home government and that of Canada, and between the treasury and Inman.
Consequently then, in the words of the committee of the house of commons, Derby's decision was given "in ignorance of the strong feeling in Canada as to the injury done to their interests by the system of subsidizing what they deemed rival lines; of the assurance given in 1856, on which the Canadian government relied, as a pledge that they would have an opportunity of being heard before that system was renewed or extended; and of the surprise and dissatisfaction already occasioned by the renewal, without hearing them, of the Cunard contract; and in ignorance, also, of the implied pledge given to Mr. Inman, that the new service would be thrown open to public competition.
"It was likewise given," the committee added, "without any consideration of the question, whether, assuming the interests of Ireland warranted the establishment of the service from Galway, that object might not have been secured by an arrangement which would, at the same time, have provided for the wants, and satisfied the just claims of Canada."