An Abstract of the Proceedings of the Select Committee of the House of Commons, Appointed Session, 1849, to Inquire Into the Contract Packet Service

In their last Report, presented to the Proprietors at the general meeting held on the 31st of May last, the Directors stated that a Committee of the House of Commons had been appointed, “to inquire into the Contract Packet Service;” and expressed “their satisfaction that such an inquiry had been instituted, feeling, as they did, that as far as the interests of this Company were concerned, it would have a beneficial tendency, by eliciting facts connected with the origin and progress of the Company, and its employment in the Contract Mail Service, which could not fail to show the important national benefits which it has been the means of realising, and its consequent claim to public support.”

It is no doubt known to some Proprietors of the Company, that for several years past statements have been made, and circulated with untiring pertinacity, to the effect, that the Contracts made by the Government with this Company for the Mail Packet Service had been obtained through undue favouritism, or corrupt jobbing[1]--that fair competition had been denied to other parties,--and that the Company had, in consequence, obtained a much larger remuneration for the Service than ought to have been given, and were deriving enormous profits from it.

Although the Directors were aware that these misstatements had obtained some attention, even in influential quarters, they probably did not consider it was consistent with the eminent position which the Company occupies to take any legal proceedings against, or to enter into any public controversy with, the parties who had been chiefly instrumental in propagating them.

The forbearance of the Directors has led to a highly satisfactory result. The continued propagation of these misstatements at last attracted the attention of a member of the House of Commons so far as to induce that honourable gentleman to move for a Select Committee to inquire into the Contract Packet Service.

Although the Committee was moved for and appointed ostensibly to inquire into the Service generally, its principal object was, as is sufficiently obvious from its proceedings, to investigate the Contracts and transactions of the Peninsular and Oriental Company. And the earlier part of the proceedings of the Committee also show that the honourable mover and Chairman of it, actuated, no doubt, by a sense of public duty, entertained, at first, no very friendly views on the subject in reference to this Company.

The facts elicited in the course of the inquiry, and the glaring self-contradictions exhibited by the principal witness, when brought to the test of an examination before the Committee, as well as the hostile tone adopted by him towards this Company, appear, however, to have satisfied the honourable gentleman that, while induced to believe that he was prosecuting a public object, and undertaking a public duty, he had been made use of, for the mere gratification of private feeling.

And the following two first paragraphs of the Committee’s Report, which was drafted and proposed by the honourable member himself, are a sufficient refutation of the misstatements which led to the inquiry.

1. “That so far as the Committee are able to judge, from the evidence they have taken, it appears that the Mails are conveyed at a less cost by hired packets than by Her Majesty’s vessels.

2. “That some of the existing Contracts have been put up to public tender, and some arranged by private negotiation; and that a very large sum beyond what is received from postage is paid on some of the lines; but, considering that at the time these Contracts were arranged the success of these large undertakings was uncertain, your Committee see no reason to think better terms could have been obtained for the public.”

As the detached and inconsecutive form in which the evidence of the different officers of the Government departments was given to the Committee does not afford a very clear view of the history of the connexion of this Company with the Contract Packet Service--and, in particular, does not show the important public advantages which have been derived from the undertaking of these services by the Company--it is considered expedient, previously to proceeding with the abstract of the Committee’s proceedings, to give a brief consecutive statement of the circumstances under which the various branches of the Contract Packet Service were undertaken by the Company. And first,

No. I.

THE PENINSULAR MAILS.

Previous to the 4th of September, 1837, the arrangements for the Mail Packet communication with the Peninsula were as follows:--

Mails to Lisbon were conveyed by sailing Post-office Packets, which departed from Falmouth for Lisbon every week--wind and weather permitting. Their departures and arrivals were, however, extremely irregular; and it was no very infrequent occurrence for the Lisbon Mail to be three weeks’ old on its arrival at Falmouth, instead of being brought in five days, with an almost mail-coach or railway precision, as is now the case.

The communication with Cadiz and Gibraltar was only once a month by a steam packet.

The originators and original proprietors of the Peninsular Steam Company, who had, for upwards of a year previously to the time above mentioned, been running steam vessels at a considerable loss between London and the principal Peninsular ports, finding themselves in a position to effect a great improvement in the arrangements for transmitting the Mails, applied to the Government of that day on the subject, but were at first coldly received, and their suggestions disregarded. They continued, however, to prosecute their enterprise; and the celerity and regularity with which their steam packets made their passages soon began to attract the attention of the public. The merchants began to complain loudly of the inefficiency of the transmission of the Mails by sailing packets; and it was at last intimated, from an official quarter, to the Managers of the Peninsular steamers, that if they had any plan or proposals to submit for an improvement of the Peninsular Mail Service, the Government was then prepared to receive and consider the same.

In consequence of this intimation, a plan and proposal was drawn up for a weekly transmission of the Mails between Falmouth and Vigo, Oporto, Lisbon, Cadiz, and Gibraltar, by efficient steam packets, and at a cost to the public which should be less than that of the then existing inferior arrangement--namely, sailing packets to and from the Port of Lisbon, and a steam packet, once a month only, to and from Cadiz and Gibraltar.

The plan, after due examination, was considered to embrace advantages to the public far exceeding what the then existing arrangements afforded; and its adoption was consequently intimated to the authors and proposers of it; but, at the same time, they were informed that the execution of it would be put up to public competition.

Accordingly, an advertisement was soon afterwards issued, inviting tenders, from owners of steam vessels, for conveying the Mails between Falmouth and the Peninsula, in conformity with the plan submitted by the Peninsular Company; and the Contract for the Service was competed for against that Company by the proprietors of some steam vessels, who, under the designation of the British and Foreign Steam Navigation Company, had a short time previously commenced running two small steamers to the Peninsula, in opposition to the Peninsular Company’s vessels.

This British and Foreign Company, not being able to satisfy the Admiralty that they had the means of performing the proposed Service, their tender was rejected. Upon which they addressed the Admiralty, and requested that the Contract might be postponed, alleging, that if a month more were given to them, they could provide sufficient vessels. Their request was granted; and, contrary to all previous practice, after the tender of the Peninsular Company had been given in, and the amount of it, in all probability, known to their competitors, the Contract was again advertised, and a month more given for receiving tenders.

The British and Foreign Company again failed to show that they had any adequate means of performing the Service; and a private negotiation was then entered into by the Government, with the Peninsular Company, with a view to reduce the sum required by them. This sum was £30,000 per annum, being about £5,000 less than the estimated annual cost to the public of the sailing packets and steam packet previously employed in conveying the Mails. This sum was ultimately reduced to £29,600,[2] on which terms the Contract was concluded on the 22nd August, 1837, and may be considered to have formed the basis upon which one of the most extensive and successful steam enterprises yet known has been established.

These facts, it is submitted, abundantly show, that so far from any favour being shown, in regard to this Contract, to the originators of this Company, they obtained it in the face of adverse circumstances, and solely because they had, by their own enterprise, placed themselves in a position to effect an important public improvement, combined with a reduction of the public expenditure.

No. II.

Contract for an accelerated Conveyance of the India and other Mails between England and Malta, and Alexandria.

COMMENCED SEPTEMBER 1ST, 1840.

The efficiency with which the Peninsular Mail Packet Service was performed elicited from the Admiralty repeated testimonials of approbation; and, proving as it did, that that description of service could be more advantageously conducted by private enterprise, under Contract, than by Government vessels and establishments, paved the way for the subsequent extension of Contract Mail communication which took place with the West Indies, North America and the East Indies, China, &c.

Previous to the 1st of September, 1840, the arrangements for transmitting the India Mails to and from Egypt, to meet the East India Company’s steamers plying monthly between Bombay and Suez, were as follows:--

These Malls were forwarded, every fourth Saturday, by the Contract Mail steamers of the Peninsular Company to Gibraltar, and there transferred to an Admiralty steam packet, which carried them to Malta. They were there transferred to another Admiralty packet, which carried them to Alexandria. The homeward Mails were brought in a similar manner.

As the Peninsular packets had to call at Vigo, Oporto, Lisbon, and Cadiz, in their passage to and from Gibraltar, and the Government packets were of inferior power (about 140 horses) and speed, the transmission of the India Mails by this route was very tardy, occupying generally from three weeks to a month in their passage between England and Alexandria.

Imperfect as this mode of transmission was, it probably would have been continued for an indefinite period, had not some circumstances occurred to render an alteration of it imperative.

About the middle of the year 1839, the British Government effected a convention with the French Government, for transmitting letters and despatches to and from India, &c., overland, through France, viâ Marseilles, from whence a British Admiralty packet conveyed them to Malta. From thence this portion of the Mail, and the larger and heavier portion, forwarded by the Peninsular and Admiralty packets, viâ Gibraltar, were carried together to Alexandria by another Admiralty packet.