The step the committee feared might be forced upon them was not taken. On the contrary, the postal system was extended liberally in every direction in which it seemed to be required, in adherence to the principle which guided the postmaster general in advocating the inland service.
In 1858, the colony, having decided on the desirability of direct communication with the mother country, sent to England two delegates—Little, the attorney general and Lawrence O'Brien—to confer with the government and leading shipowners on the subject of a steam service from a British port to St. John's. When the delegates made their first report, they had not succeeded in their objects, but they were encouraged by the recognition accorded to the scheme by the British government and by the promise of a subsidy of £3000 a year to any satisfactory service the government of Newfoundland might arrange for.
It was not long before plans were submitted for their consideration. In the same year, the North Atlantic Royal Mail Steam Navigation Company laid before Little a proposition for a regular service between Liverpool, St. John's and a port in the United States. The company were prepared to undertake a contract for trips of a frequency of not less than one every four weeks, with additional trips during April, July and August, for £10,000 a year. A contract was made on this basis, the understanding being that the British government would contribute £3000 of this amount. But the British government, being satisfied from earlier experiences with the personnel of this company that they could not be depended upon to fulfil their arrangement, declined to sanction the contract, and the arrangement fell through.
In intimating to the Newfoundland government their refusal to endorse the contract, the British government expressed their willingness to assist in procuring a competent contractor; and in October of the same year, an agreement was made with the Atlantic Royal Mail Steam Navigation Company, known more generally as the Lever or Galway Company, for a service of virtually the same frequency as that provided for in the earlier contract, between Galway, St. John's and a United States port. The rate of compensation was to be £13,000 a year, of which the British government was to contribute £4500 a year.
Though for political reasons, this company enjoyed an unusual degree of favour on the part of the British government, it failed entirely to satisfy the conditions of the contract, and after a short period of futile effort, it ceased altogether. It was not until 1872 that an arrangement with the Allan line provided the first direct communication with Great Britain.
In 1860, on the death of Solomon, John Delaney, who had made the postal service his special care while a member of the assembly, was appointed postmaster general. His first measure was to provide for St. John's what he described as a penny delivery service. After consultation with the chief post office inspector in Canada, he submitted his scheme to the legislature. He proposed to divide the city into two sections, to each of which he proposed to appoint a letter carrier to deliver the letters from door to door, not gratuitously as at present, but for a compensation of a penny for each letter delivered. The plan was put into operation on September 1, 1863, but it had little success at the time.
Steps were also taken in 1863 to improve the accommodation to the outports by substituting a steam vessel for the sailing boats, by which the exchange of mails was effected. In November 1860, a contract was made with Aaron DeGraw, of New York, for a service north and south from St. John's. The steamer "Victoria" was to run twice in each month to Twillingate on the north, and to La Poile on the south-west coast, calling at all the post offices en route. The consideration was £3750 a year.
The contract provided for the service for five years. But a few months after it went into operation, the contractor represented that he was unable to continue, unless the terms were modified. He asked that the trips on the northern section might be reduced from fortnightly to monthly during the winter, and that he might omit certain of the ports of call; or, if the legislature were unwilling to lower their requirements, that he might have his compensation increased by £1500 a year.
The application of DeGraw was not entertained by the legislature, and the contractor dropped his service shortly after. Recourse was had to the sailing vessels until 1863, when a more satisfactory arrangement was concluded with Robert Grieve on June 2, 1863. The contract stipulated for fortnightly trips in each direction, and the compensation was fixed at £4500. The "Ariel" was the steamer employed by Grieve for the service.
The coastal service, thus satisfactorily established from St. John's down the east and along the south coasts as far as La Poile, was extended to Port aux Basques on the south-west corner of the island by a sailing vessel. This completed the postal communications on the southern shore of the island.