Extract from Mr. T. C. Croker of the Admiralty’s
evidence.
1115. Has the contract been well performed?—I can speak from
a knowledge of nine years to the manner in which that contract
has been performed, and it has been performed most admirably,
and has given general satisfaction; in fact, the only fault which
has been found with the manner in which it has been performed
is, that it has been done too well.
1116. Will you explain what you mean by being done too
well?—The vessels arrived sooner than it was calculated they
should have done, which was made matter of public complaint.
1176. At our last meeting we had brought your examination
down to the period at which the alteration took place in the arrangements
between the Peninsular Company and the Government?—Yes.
1177. The Committee then understood from you that up to that
period the contract had been carried on, as far as you were aware,
in a satisfactory manner?—Highly so; here are the testimonials
of the Admiralty as to the satisfactory manner in which the
contract was carried on.
1606. With reference to the Indian part of it, is it within your
knowledge how far that contract has been performed?—It has
been well performed.
1607. Throughout?—Yes.
Mr. Croker further examined—
1152. Would not the Admiralty agent on board those packets
be cognizant of any breach of contract which had occurred?—Certainly.
1153. Do not they make reports to the Admiralty through the
officers conducting the packet service at Southampton?—Certainly.
1154. Would not any breach of contract come immediately
to the knowledge of the Admiralty, through the report of the
Admiralty agent?—Certainly.
1155. Therefore the absence of any such report is direct proof
that the contract has not been broken, provided the Admiralty
agent does his duty?—Certainly.
1974. At your last examination you carried down a statement of
any complaints, or in the absence of any complaints, to a certain
date, with respect to the performance of the contracts of which
we were then inquiring, of the vessels of the Oriental Company;
have you furnished yourself since with any further particulars
upon that subject?—This is a précis of the correspondence
respecting complaints of the manner in which the contract mail
service in the Indian and China Seas has been performed.
1975. At what date does that précis commence?—The 23rd of
August, 1846.
1976. Does that précis come down to the present time?—It
does.
1977. Who is responsible for that being a correct statement of
what has taken place?—Mr. Worth, the head of the packet
department.
1978. Have you sufficiently examined that précis to be able to
give to the Committee a statement of the number of complaints
which are contained in it?—I should say there were three or four
complaints; I have read it through.
1979. Were any of those complaints on examination found to be
just?—I think the last complaint is at present undergoing
investigation.
1980. What is the date of the last complaint?—October, 1848.
1981. Will you state the general grounds of the complaints; were
the complaints of the state of accommodation and the conduct of
the officers on board, or of the time that the vessels occupied
upon the voyage, whether beyond the limited time or not?—The
first complaint states that “Lady Mary Wood” was much
out of repair.
1982. What is the date of that?—The 23rd of August, 1846.
1983. From whom is that complaint?—Captain Ellice, the
superintendent of the packet service at Southampton.
1984. He is a Government officer?—Yes; the complaint was
that in consequence she exceeded the contract time by nineteen
hours.
1985. By nineteen hours on the whole voyage, or between
England and Suez?—The statement is, that in her last voyage
from Hong Kong to Ceylon she exceeded the contract time by
nineteen hours.
1986. How is it that the Government agent at Southampton
makes a report of the state of a vessel in the Indian Seas; did he
transmit a complaint from somebody else?—He transmitted a
letter from the Admiralty agent on board.
1987. What was the result of that complaint?—“The contractor
was acquainted that the Board of Admiralty had been
informed that the ‘Lady Mary Wood’ was getting exceedingly
out of repair, and requested to be informed when a vessel, such as
is required by the contract, will be substituted for her. The contractors
stated in reply that the information furnished to the
Admiralty was exaggerated; this vessel had no defects but what
could be made good on her return to Hong Kong, defects mostly
caused by the severity of the passage from that port to Point de
Galle; and they inclosed a copy of the carpenter’s report, and
extract of the commander’s letter. They further stated, that (as
the Admiralty is, no doubt, aware) in consequence of the recent
demand in engineering and shipwright work, the builders have
not possibly been able to fulfil their contracts in point of time;
and the result is, that of six steam ships of 450-horse power
building for them, not one is yet completed, though contracted
to be delivered within the last year. They fully expect to be
able to despatch one of those vessels in substitution of the
‘Lady Mary Wood,’ in November next, and a second of the
same class and power about three months after, in substitution
of the ‘Braganza.’”
1988. What is the date of that letter?—The 28th of August.
1989. What is the date of the complaint?—The 23rd of
August.
1990. What is the date of the complaint transmitted?—That
does not appear from the précis. The Admiralty agent employed
on the voyage from Hong Kong to Ceylon writes this complaint,
which reaches Captain Ellice about the 23rd August, 1846.
1991. What would be the ordinary length of communication
between Ceylon and Southampton?—That is arranged by the
contract; as I have had very little to do with the contracts in the
Indian Seas, I am not prepared to say.
1992. Is it not about five months?6—Yes.
1993. Taking it at five months preceding this date of the complaint,
they say that another vessel will be ready by November of
the same year?—Yes.
1994. What was the result of the complaint as to the want of
punctuality in the time?—The contractors were acquainted, on
the 23rd of August, with this complaint, and what I have read
is their explanation.
1995. The explanation which you have read is with reference to
the non-repair of the vessel, it is not with reference to the time
at all. Is there any letter from the Admiralty, either admitting
the excuse to be satisfactory or otherwise?—The Admiralty
seem to have admitted the excuse, for they minute the letter,
acknowledging the receipt of it.
1996. Did the Admiralty officer on board the ship report anything
respecting the improper state of the ship before leaving
Hong Kong?—He stated that the “Lady Mary Wood” was
much out of repair in her last voyage from Hong Kong to Ceylon.
1997. It was after his arrival in Ceylon that he made that
report?—Yes.
1998. But he does not appear to have made any statement of
that sort previous to the commencement of the voyage from Hong
Kong?—There is nothing in the précis to show that he did.
1999. What is the next complaint?—“On the 28th of September
of the same year, Captain Ellice sent a copy of a letter from
the Admiralty agent on board the ‘Lady Mary Wood,’ reporting
that vessel having grounded on a bank of sand or mud off the
town of Penang, and reporting the deficiency of night-signals on
board her; and he states that the vessel was got off on the
following day, in a fit state to proceed with the mails, and, it was
supposed, would proceed with the mails to China.”
2000. What is the next complaint?—The next complaint is
transmitted by Captain Ellice, who sends a report of the survey
on the “Braganza,” held at Hong Kong; he sent this on the
21st of June, 1847.
2001. What is the result of the survey?—“A copy was sent to
the contractors, and the contractors stated, in reply, that they had
transmitted orders, some time ago, to their agent at Bombay, to
have this vessel docked on the first opportunity, and had reason
to believe that this had been done. They also stated that their
new steamships ‘Pekin,’ of 1,200 tons and 430-horse power,
and ‘Pottinger,’ of 1,400 tons and 450-horse power, are now
stationed on the line between Point de Galle and China, in performance
of the mail contract service.”
2002. What is the next complaint?—“On the 2nd of October,
Captain Ellice transmitted an extract of a letter from the
Admiralty agent on board the ‘Pekin,’ reporting the unfitness
of that vessel for the mail service.” This forms a part of
Lieutenant Waghorn’s complaint, and is already before the
Committee.
2003. What was the result of that; was the complaint decided
to be well-founded or not?—I think not.
2004. Was Lieutenant Waghorn a passenger on board that
vessel?—I put in his letter on the last occasion.
2005. Will you proceed to the next complaint?—“On the 2nd
of June, 1848, the Postmaster-general transmitted an extract of a
letter from the post-office agent at Suez, stating that the ‘Haddington’
was detained at that port, waiting for the arrival of
cargo, until one o’clock A.M. on the 11th ultimo, although the
mails were put on board at ten minutes past five o’clock on the
previous morning; and, further, that some of the packages
forming the cargo were of an unnecessarily cumbersome size.”
2006. What was the result of that?—The contractors were
called upon to state whether they can account for this delay; and
in reply they state that they are not aware of this delay, but will
call upon the agent at Suez for explanation; that the mails being
transmitted by land from Alexandria to Suez, there is seldom
any variation in the time of their transit, whilst the passengers
and baggage, at the period of low Nile (May and June), are
frequently retarded in getting the steamers round the bends of
the river; and they apprehend that the Admiralty must have
been misinformed as to the size of the packages, the weight of
which are, by their regulation, limited to under 100 lbs., four of
such packages forming a camel load for the desert passage.
2007. Is there any thing further upon that complaint, because
the Company seem to doubt the fact?—Nothing further appears
upon the subject of the complaint.
2008. Is there any subsequent report from the Company?—No
subsequent report from the Company appears to have been
received.
2009. Is there any subsequent complaint?—“On the 3rd of
October, 1848, another complaint is made: The Indian and
Australian Mail Steam Packet Company complain that the
Peninsular and Oriental Steam Packet Company do not employ
steam vessels of the size required by the contract, between Suez
and Calcutta, and between Ceylon and Hong Kong, and offer to
do the service at less expense.”
2010. What is the result of that?—“They were acquainted that
they had omitted to state in what particulars they considered the
contract with this Company is now infringed, that the Admiralty
were not aware that any requirements of that contract are not
now observed, excepting that the ‘Haddington,’ temporarily
employed in the place of another vessel, is 442-horse power
instead of 500-horse power.”
2011. Have you any other complaint?—There is no other complaint,
but there is another communication from the Indian and
Australian Steam Packet Company. They “enter into further
explanation and remarks, and hope the contract with the
Peninsular and Oriental Steam Packet Companies may be forthwith
dissolved.” That is marked as “read.”
2012. With reference to the complaint to which your attention
was called the last time you were examined, from Admiral Collier,
what is the result of that?—I have here a paper endorsed,
“Complaint of irregularities in the performance of the East
India and China contract, in the case of the ‘Achilles.’”
2013. Is that the complaint referred to by Admiral Collier?—It
is.
2014. Was there a letter or memorial of the merchants of Hong
Kong transmitted by Admiral Collier to the Admiralty?—There
was.
2015. What was the subject of that memorial or letter?—The
merchants represented to Sir Francis Collier the serious inconvenience
which they, “and, in particular, the Canton community,
have suffered, and continue to suffer, by the frequent late arrival
of the steamers conveying her Majesty’s mails. The delay seems
to have arisen from the steamers being generally unable to keep
the time contracted for by the Admiralty, for the performance of
the several distances, as will be seen, we believe, by the reports
sent home by the Admiralty agents, appointed to the several
steamers. The time slowed is very ample, rendering it seldom
necessary to exceed a speed of eight miles per hour; and had the
steamers been the superior class of vessels contracted for by the
Admiralty, and ‘keeping pace with the advanced state of
science,’ no difficulty in performing the passages within the
specified time ought ever to be experienced. An improvement
has lately taken place in the class of boats, by the arrival of
other steamers; but the system adopted, and particularly, of
late, of overloading them, and to such an extent as to render it
necessary to carry a large quantity of coal on deck, tends to perpetrate
the evil, and to create even greater detention than before,
while it greatly endangers the lives of her Majesty’s subjects,
and the safety of her Majesty’s mails. It is our opinion, that
on several occasions it may solely be attributed to unforeseen
and fortunate circumstances that the steamers have been enabled
to reach their destination. Considering the large sum given by
her Majesty’s Government for the purpose of carrying the
mails, and also that thereby the Peninsular and Oriental Company
are enabled to have a monopoly of the traffic on this side
of Egypt, we think the mercantile community have reason to
expect that, at all events, the contract shall be faithfully adhered
to, and that the steamers shall not be allowed to carry beyond a
certain and safe amount of cargo;” and they request Sir Francis
Collier to call the attention of the Lords of the Admiralty to the
subject.
2016. Was that transmitted by Admiral Collier?—It was transmitted
to the Admiralty by Admiral Collier.
2017. What was Sir Francis Collier’s remark or observation
when he transmitted that memorial?—Sir Francis Collier’s letter
does not appear to be in this correspondence, but I presume it
can be produced.
2018. What was done in consequence of the transmission of that
memorial?—“A letter appears to have been written on the 11th
of April, 1849, by the Secretary of the Admiralty to the
Peninsular and Oriental Steam Navigation Company, enclosing a
copy of the memorial which had been received from Sir Francis
Collier, and the Company were acquainted that the Board of
Admiralty trusted that they had already taken steps to prevent
the recurrence of the delays complained of.”
2019. Will you read any previous letter on the same subject
which was laid before the Admiralty by the Peninsular and
Oriental Steam Packet Company?—“Admiralty, 6th March,
1849.” (This is from the Secretary of the Admiralty to the
Peninsular and Oriental Steam Packet Company.) “Gentlemen,
it having been represented to my Lords Commissioners of the
Admiralty that the contract steam packet, ‘Achilles,’ was
delayed in her voyage from Point de Galle to Hong Kong, in
November last, she having sailed from the former place on the
29th of that month, and not arriving at Hong Kong until the
23rd of December; thus being 175 hours beyond the time
allowed by the contract; I am commanded by my Lords Commissioners
of the Admiralty to call your attention to the circumstance,
and to acquaint you that it appears that the place
intended for coals on board the ‘Achilles’ was occupied by
opium chests, and the coals placed on deck, and the vessel
overloaded; and that my Lords are informed that her arrival at
Hong Kong, 175 hours after she was due, was owing to the
excess of cargo, and to the negligent and lazy manner in which
the vessel was coaled at Singapore.”
2020. What was the result of that letter?—The secretary of the
Company answered it on the 10th of March, 1849—“I have the
honour to acknowledge the receipt of your letter, dated 6th
instant, calling the attention of the Directors of the Company to
a representation which has been made to the Lords Commissioners
of the Admiralty, that the Company’s contract steamer,
‘Achilles,’ was considerably delayed upon her voyage from
Point de Galle to Hong Kong, in November last, and that such
delay was owing to the excess of cargo, and to negligence in the
coaling at Singapore. In reply, I am instructed to express the
great regret with which the Directors have received this communication,
and to acquaint you, for the information of their
Lordships, that a rumour having already reached them that
some representations of the kind had been addressed to their
Lordships, the Directors, by the mail of the 24th of February,
wrote to the Company’s superintendent at Bombay, calling upon
him for full and immediate explanation of the circumstances.
Until the receipt of his report it will be impossible for the
Directors to say how far the allegations in question are well
founded; but, in the meantime, they are anxious to state that
their standing instructions to all the agents and officers of the
Company are, that the punctual performance of the mail service
is to be ever regarded by them as paramount to every other
consideration, and that any departure from that principle will
be visited by the Directors with the utmost severity. The
Directors take this opportunity of acquainting you, for the information
of their Lordships, that having found by experience that
no commercial house, however high its respectability, can represent
the Company so efficiently at foreign stations as an officer of
their own, they, by the last steamer, despatched Captain Sparkes,
lately the Company’s superintendent at Southampton, to relieve
the firm at present acting as the Company’s agents at Singapore,
in the superintendence of the Company’s affairs at that port,
and they feel every confidence that he will actively and zealously
discharge his duties at that station. The Directors also think it
right to state, that from such information as they are at present
in possession of, they have reason to consider that the representation
which has been made to their Lordships is exaggerated,
both as regards the extent of the delay of the ‘Achilles,’ and
the alleged causes thereof.”
2021. This letter is of the date of the 10th of March, 1849; what
is the date of the memorial of the merchants of Canton?—The
29th of December, 1848.
2022. Was there any corresponding complaint or representation
from the Admiralty officer on board the vessel to the Lords of
the Admiralty?—I cannot state.
2023. Was not the first letter which you read in consequence of
the official representations made to the Admiralty, through their
officer, as to the delay of the “Achilles,” previous to the reception
of the memorial from Hong Kong?—I have no doubt
it was.
2024. The Company say, in the letter of the 10th of March, that
they can give no answer to the complaint made of misfeasance in
the contract between Ceylon and China, til they shall receive a
report from their agent at Bombay?—They state that they
wrote to their superintendent at Bombay, calling upon him for
an immediate explanation of the circumstances.
2025. Do you know that the service is now performed from
Ceylon to China by a vessel that starts from Bombay, and picks
up the mail there?—I believe it is so.
2026. What was the result of those communications; did the
Admiralty come to any decision upon them?—On the 12th of
March, the Admiralty acquainted the Company that they
“were gratified to learn that they had despatched an officer of
their own to act as superintendent at Singapore, and who
may be able to prevent the recurrence of the delay complained
of.”
2027. Nothing was done by the Admiralty but to express their
satisfaction that the Company had sent out an agent to
Singapore, as an answer to that complaint of the Company
overloading their vessels, and being out of time?—The Admiralty
subsequently sent forward the letter I have read from the merchants,
stating, “that their Lordships trust you have already
taken steps to prevent the recurrence of the delays complained
of.” The Admiralty appear to have done nothing more; the
matter is still in the course of investigation; it is not yet
closed; the explanation has not yet been received from the
Company.7
2028. Have you any other complaints?—No.
Examination of Mr. Andrew Henderson—
2138. Am I to understand that you make two complaints:
first, that there was no opportunity for tendering; and, secondly,
that the price was too high?—Yes.
2139. Were you during the period, from the beginning, in
1844, to the time at which the contract was finally signed, in
constant communication with the Admiralty?—I used to go
to the Contract Packet Office, which was the only place I could
go to; I could get no answer to my letter.
2140. Did it come before the Board?—It appears not; Mr.
Sidney Herbert told me that he had never heard of it.
2141. On the 8th of August Mr. Sidney Herbert told you it
was open to you to send in any contract that you wished?—Yes.
2142. Did you send in a contract, offering to do the service
with efficient vessels for £60,000?—No; I gave this proof that
it could be done; but I made no tender for it, because I had no
vessel for it.
2143. Your opinion was, that £60,000 was an adequate price,
and that the public in general, and you in particular, ought to
have an opportunity of making a tender; did you tender to do the
service at that price?—In reply to that question I may state, that
early in December the representative of the “Precursor,” Sir
George Larpent, and myself, waited upon the President of the
Board of Control, and asked him to take care that our interests
should be considered, and we received an assurance that they
should be considered; and in the scheme for the mails it is
particularly stated that those two vessels were ready, and it was
suggested that they should take alternately the mails with the
other two vessels.
2144. I ask you whether you did or did not offer to do the
service for £60,000?—I can hardly say whether you can call it
an offer, but I submitted a scheme by which it was shown that it
could be done for £60,000; contracts were not advertised for,
and therefore we were not in a position to send in contracts.
2145. You placed in the hands of Mr. Crofton Croker a lithographic
statement, from which you considered the inference might
be drawn that £60,000 would be sufficient for that service?—Yes.
2146. Was that statement anonymous, or was it guaranteed by
any name?—It was guaranteed by my own name; and the same
thing was stated in the plan submitted to Government; and that
plan has, every bit of it, been carried out since.
2147. My only object is to come to an accurate understanding
of the facts; I understand your grievance to be, that the more
expensive tender, from the Peninsular and Oriental Steam Packet
Company, was accepted by the Admiralty, when a cheaper
contract might have been had from other parties, and that, in
your judgment, £60,000 a year would have been ample for that
service; is that so?—My complaint is, that the proposal of the
Peninsular and Oriental Steam Packet Company to undertake
the Bombay mails was not accepted, but that they were allowed
to adopt all my plans, and I was refused all participation in it.
It could not be called a contract, it was not the time for a
contract; contracts were never asked for; but there was clear
evidence given that, if we were allowed to take it, it could be
done for £60,000.
2148. You complain that an unfair advantage was allowed to
be taken of you, by the Peninsular and Oriental Steam Packet
Company?—Certainly; I complain that they were allowed to
take advantage of my plans and to adopt them, and that I was
not allowed to compete for the contract.
2149. In your plan, you said it could be done for £60,000?—Yes.
2150. Your general plan has been adopted by the Peninsular and
Oriental Steam Packet Company?—Yes; my plan was distinctly
opposed to theirs. Their plan was this: the vessels which were
bound to go every month to Bengal, they purposed that those
vessels should go to Bombay, and that once in every two months
those vessels should go to Calcutta. That was, in point of fact,
reducing the present communication, from a separate mail to
Bombay and Calcutta, to one mail to Bombay.
2151. Your complaint was, that you were excluded from the
opportunity of competing for the contract?—Yes; and that my
plans were adopted.
2152. You have put it on record, that on the 6th of August
the Chancellor of the Exchequer stated to you, that he had given
no authority for the conclusion of the contract?—Yes, he said
that he had nothing to do with it.
2153. On the 8th of August, two days afterwards, you have
put it on record that the Secretary to the Admiralty told you
that it was quite open to you to send in any tender you pleased?—Yes.
2154. And it was therefore open to the public in general, and
to you in particular, to put in a tender thereupon?—I sent in a
distinct tender for the China mail.
2155. But we were speaking of the service for which you say
£60,000 was ample; viz. the Suez and Calcutta service. Confining
yourself at present to that, you were told by the Chancellor
of the Exchequer, on the 6th of August, that the contract was
not concluded, and you were told by the Secretary of the
Admiralty, on the 8th of August, that it was open to you, in
particular, to send in any tender for the conveyance of the mail
from Suez to Calcutta?—I was engaged in the other one at the
time.
2156. Then is there any grievance at all as regards your being
deprived of the mail from Suez to Calcutta?—Certainly, a very
great grievance.
2157. Be as good as to explain what that grievance is?—The
grievance is, that the “India” and the “Precursor” were not
allowed to participate in the advantage.
2158. Then, whether the sum paid for the service was £60,000
or £170,000, your grievance is, that the “India” and the
“Precursor” did not come in for a share of it?—That is one point;
but, on public grounds, I maintain that the sum given was a great
deal too large, and that that sum was not given to merchants
and shipowners in India, but to a London company.
2159. To whomever it was given, £60,000 would have been
the sum for which shipowners would have been ready to do
the service?—Yes.
2160. You had a knowledge of the fact, at the time the tender
was open to you, that it could be done for £60,000?—I had not
money enough to do it.
2161. Were you not in communication with all the principal
shipowners who signed the petition?—Yes.
2162. Did you get up the petition which was presented on the
8th of August?—I did.
2163. Are those parties whose names were signed to it parties
who had capital to compete for a good contract, if it was to be
had?—Certainly.
2164. Did they, or any of them, send in a tender to the Board
of Admiralty to do this service for £60,000?—No; they stated
their belief that it was of no use to send in a tender, as it would
not be attended to; that the contract would be sure to be given
to the Peninsular and Oriental Company, whatever they chose
to ask.
2165. Did you tell Mr. Green, and all the other parties who
signed the petition, that Mr. Sidney Herbert had told you that it
was open to you to send in a tender?—My impression is that it
was known to them, but Mr. Green said, “No, let them alone;
they are too strong for us.”
2166. Then it was known to Mr. Green, and all the other
parties who petitioned, that they had an opportunity to make a
tender?—The expression they used was, that it was taken out of
their hands, and that it was of no use their doing it; but I do
not know that I saw Mr. Green after that time.
2167. Do you mean to represent that the principal shipowners
having information that the Secretary of the Admiralty had stated
that the contract was open, were nevertheless of opinion, that if
they offered to do the service for £60,000, the Board of Admiralty
would still give the contract to a party who required a much
larger sum?—I hardly know how to answer that question. I
cannot say that I saw Mr. Green after the petition, but his
impression was that it was of no use to compete with that
powerful Company.
2168. Do you mean to represent to the Committee your opinion
that while the Board of Admiralty told you that you might
compete if you pleased, they had in point of fact made up their
minds to give the contract to the Peninsular and Oriental Steam
Packet Company at a much higher price?—That was our firm
belief, that they had made up their minds to give it to them.
This I know as a fact, that when the matter was handed over
from the East India Company, and the East India Company
had nothing to do with it, the Peninsular and Oriental Company
asked £170,000, and they had it all their own way; but the
East India Company said that they would not pay more than a
certain amount annually; they were to pay a certain proportion,
but they said, “We will do nothing of the kind; you may do as
you like: we will have nothing to do with it beyond paying
a certain amount.”
2169. Did it occur to you that if so scandalous a spirit of jobbing
as you describe had actuated the Board of Admiralty, you might
have put them completely in the wrong by offering a contract
from parties competent to perform the service for £60,000,
which you laid down as the proper sum?—I can answer the
question in this way: it is all very well to say, “Why did you
not send in a contract?” but it is a contract that required a large
capital and great arrangements. It is impossible to make all
those great arrangements in two days; the Peninsular Company,
by obtaining under false pretences £20,000 for the Calcutta
mail, had put all other parties out; and if you say, “Will you
make a contract in a couple of days now for £60,000?” it is impossible;
it requires a large fleet and great capital. Mr. Green
has a large fleet, but they are employed in other parts; and his
expression was, “It is of no use competing with the Peninsular
Company, for they are too powerful for us; their influence is so
great.”
2170. You mean to represent that all the shipowners in London
acquiesced in the opinion that public money to a large amount
was going to be given from favouritism to the Peninsular and
Oriental Steam Packet Company; but that it was of no use, on
account of the secret influence which the Peninsular and Oriental
Steam Packet Company had got at the Admiralty, to contend with
them?—That was my own individual belief, and the petitioners,
I think, agreed in that.
2171. Did you lend a large share in the drawing up of this
petition?—I did.
2172. Is it your composition?—I do not know that it is.
2173. In the petition you object not to one contract in particular,
but to the system of contracts altogether?—We object not to the
whole system of contracts, but to the system under which it has
been carried on; in the first place, there are put into the contracts
conditions which are never acted upon; that I consider extremely
wrong; it keeps all honest men away.
2174. The stringent conditions put into the contracts keep all
honest men away?—That is going too far; I mean to say that you
are asked to agree to very strict conditions, which a man cannot
honestly say, “I agree to.” If the condition says that if I am
half an hour behind time I shall forfeit £500, a man naturally
asks himself, “Shall I enter into the contract? for if those clauses
are inserted, I am a ruined man, and therefore I cannot guarantee
that.”
2175. If you and your friends had tendered this service for
£60,000, you would have required more reasonable conditions?—I
should have no objection to being bound to all reasonable conditions.
The late contract for the mail to the Brazils is as it
ought to be; there is no kind of trap of so many hours; the
condition is simply this, the ships are to be efficient vessels.
2176. No honest man, in your opinion, would have undertaken
such a contract as that which the Peninsular and Oriental Company
undertook, for £60,000?—What I mean is this, that no honest
man would undertake a thing which he was not competent to
perform; for instance, he would not undertake that the passage
shall be a certain number of hours; and putting in those strict
conditions would prevent an honest man from taking part in it.
2177. I understood you to say, that no honest man would undertake,
and therefore I presume you would not have recommended
anybody to undertake, so strict a condition as that of which we
are speaking?—I am afraid you are putting a wrong construction
upon what I said; I say, no honest man would undertake a condition
which he could not honestly say he could perform. If I
bound myself to go in a certain number of hours between certain
points, an honest man would say, if that was a great speed, “I
cannot bind myself to accomplish that.”
2178. That would prevent an honest man from complying with
the conditions imposed upon the Peninsular and Oriental Steam
Packet Company?—That is putting it in the other way; I am
certain that I would have taken the contract, because I know that
Government would not exact the penalty.
2179. You would have taken it, though an honest man would not
have taken it?—I am afraid you are misinterpreting me; you
use the words “honest man” in a different sense from that in
which I use them. I mean to say that an honest man could not
honestly undertake to do a thing which was almost impracticable;
but, as I know the Government would not have exacted the
penalty, I would have taken the contract if I had had an opportunity;
but I had no opportunity.
2180. You would have taken the contract?—Yes, anybody would
take the contract for £170,000 a year; nobody would have
refused it.
2181. You were under the impression that the Peninsular and
Oriental Company were so strong that nobody could compete
with them?—Yes, and that is the impression now.
2182. That was your impression at the time you lent your aid
to the drawing up of that petition?—Yes, it was.
2183. It was the impression, you believe, of the parties who
signed the petition?—Yes.
2184. Is that, in point of fact, one of the allegations of the
petition?—I do not know.
2185. Are not the allegations of the petition totally of a different
effect; are they not against contracts in general?—Certainly not
against contracts in general; they are against contracts being
given without fair competition; they are not against contracts
generally, for contracts must be had somehow, but they should
be fair and open.
2186. The prayer of the petition is “that public money granted
for the purposes of steam navigation shall be applied, not for the
exclusive advantage of any companies or individuals, but so that
all engaged in shipping may fairly participate therein, or equally
compete; therefore affording to your petitioners the opportunity
of showing to your Honourable House the truth (if doubted) as
to facts and principles of all the statements of this their humble
petition.” If you were under the impression that the Admiralty
were actuated by so corrupt a spirit that it was not of any use for
solvent parties to send in tenders, will you explain to the Committee
why it was that you left that out, as one of the allegations
of the petition which you drew up at the time?—I do not understand
the question.
2187. Your grievance was, that you were shut out from fair
competition by a corrupt predetermination at the Admiralty to
exclude you, and to give the contract, at all hazards, to the other
Company?—In answer to that, I state the fact that I was not
allowed to compete with them in any way.
2188. You have told me that you did not send in a tender to the
Admiralty, and that you prepared a petition which you presented
to Parliament; that petition contains no allegation of such a
corrupt predetermination on the part of the Admiralty; having,
therefore, such a feeling in your mind at the time, you neither
put it to the test by sending in a tender to the Admiralty, nor
did you venture to state that in the petition to the House of
Commons?—The petition will speak for itself; it is there.
2189. There is no such allegation in the petition. What information
has come to your knowledge, since you petitioned Parliament,
which justifies you now in making such an improbable statement
here, viz., that there was that corrupt predetermination at the
Board of Admiralty?—I did not use the word “corrupt.”
2190. Have you learnt anything since you presented the petition,
which justifies you in making a charge now, which you would not
have been equally justified in making then: it appears that the
petition presented on the 8th August, 1844, contains no such
charge of favouritism against the Board of Admiralty; what
information have you received since that time, which you think
justifies you in making the charge now?—I think it is self*-evident
that there most have been favouritism, or the public
would have been admitted, and also from the way in which the
contract has been carried out. The Peninsular Company have
several times broken their contract, and no penalties have been
exacted. There was one distinct case of favouritism, which was
this: one of the reasons assigned to me why the China contract
was given to them was, that the Peninsular and Oriental Company
had offered to do it with vessels of 400-horse power for £45,000
a year; apparently at the same price as our tender. but ours was
to be reduced the third year, and theirs was to continue at the
same rate; but their condition was, that they were to find vessels,
from the 1st July, 1846, of 400-horse power, and they failed to
do so; and in consequence of their not providing those vessels,
the vessels were overworked, and the mails were delayed; but yet
the penalty has not been exacted, and that arises from favouritism.
2191. Is your impression that it is one part of the duty
of the Admiralty to take care that the parties tendering are
in the possession of efficient vessels, and are men of sufficient
property and respectability to afford a security that the contract
will be performed?—My opinion is, that a contract of that kind
is a matter which ought not to be left to the Admiralty; it is a
matter more concerning the Board of Trade than the Admiralty;
and it is all a mistake for one department of the Board of Admiralty
to have the management of it.
2192. Be so good as to inform me whether you think the Government,
in making a contract, are bound to foresee, as far as
may be possible, whether the parties will really be able to fulfil it.
You have stated that the Peninsular and Oriental Company have
repeatedly broken or not performed their contract. Do the
Committee understand you to mean that it is one part of the
duty of Government to take precautions beforehand, that the
parties who make a contract shall be capable to perform the contract?—It
is their duty, but I believe in that instance they
neglected it.
2193. Do you think that if they had selected the owners of the
steamer “India,” they would have selected people more competent
to perform the contract?—To perform the China line; and I
may state as the reason, that we gave them a distinct account of
the number of ships at work there; the expense of the ships, and
also a description of the seas; and the very letter which I wrote
to them, as to the necessity of having a peculiar kind of vessel for
the China seas, has turned out perfectly true; and the protest, of
which we heard at the last meeting of the Committee, was in consequence
of that. The letter sent in to the Admiralty stated that
the Calcutta Company were in a better position to do that local
service than the Peninsular and Oriental Company, who have so
many interests to look after.
2194. The reason you did not compete with the Peninsular and
Oriental Company between Suez and Calcutta, was the impression
that you had that there was a determination at the Board of
Admiralty to favour them. Did you make any attempt to compete
with them between Ceylon and Hong Kong?—As to Suez
and Calcutta contract, it is like asking a man who has his hands
tied behind his back, to swim; as to Ceylon and Hong Kong
contract, the answer is plain enough on record, that we sent a
tender and got no answer.
2195. Am I right in understanding you to say, that you abstained
from competing with regard to the service between Suez
and Calcutta, because you thought the Peninsular and Oriental
Company too strong for you?—That was one reason expressed
by many persons; but if you ask my reason for not competing,
it was this: when I proposed to tender, the “Precursor” party were
in possession of the “Precursor,” but in the interim the Peninsular
and Oriental Company very advantageously obtained possession
of the “Precursor,” and we had no large vessels, and it was of no
use tendering without them.
2196. The reasons for not tendering for the contract between
Suez and Calcutta were two-fold; first, because there was
favouritism at the Admiralty, and secondly, you had not the
means of making the tender?—If the tenders were reasonable, I
ought to have had the means, because we ought to have been
allowed to build vessels; when they had bought the “Precursor,”
we were not in so good a position as we had been in before.
2197. If it was an object with the Government to make the
contract immediately, you would not be in a condition to make a
tender?—There was no necessity for a new contract; there was
no necessity for any change then, but it was got up by the
Peninsular and Oriental Company, by political agitation.
2198. I understand you to say, that if there was to be a contract
immediately, you were not in a condition to tender for it, as far
as regards Suez and Calcutta?—I was in a position to tender for
it, if reasonable tenders had been allowed.
2199. By reasonable tenders you mean that the Government,
instead of taking for the service ships that were then ready to do
it, should have waited eighteen months, in order that you might
be put in the same position?—There was no necessity to wait, as
the ships were bound to carry the mails, whether there was a new
contract or not.
2200. Your opinion is, that there was no necessity for a new
contract?—No, not for five years.
2201. In your opinion there ought to have been no contract at
all?—Not for the Bengal and Suez line, for five years.
2202. What ships were bound to carry the mails?—The three
ships which were bound to do the service were bound to maintain
a monthly communication.
2203. By what engagement?—By an engagement with the East
India Company they were bound to make a monthly communication
for £20,000 a year.
2204. Was there any such arrangement with the East India
Company?—Yes. I had ascertained that there was that arrangement
by correspondence, which is the usual way with great
companies.
2205. Did you ever read the correspondence which passed?—No;
I know that certain deputations went; when I came home
from India, I found among the papers of the East Indian Steam
Company a document proving the terms upon which they were
to undertake it.
2206. Was it not an offer of the East India Company to give
£20,000 a year upon certain conditions?—Certainly not; there
was no offer of the East India Company.
2207. Your impression of the correspondence that you saw was,
that it was a distinct engagement on the part of the East India
Company to give that sum, and a distinct engagement on the
part of the Peninsular and Oriental Steam Packet Company, at
all hazards, to perform the service?—Yes; but I should go
farther than that, in explanation.
2208. Your impression is, that it was an engagement binding
upon both parties; that the East India Company were bound to
pay that sum, and that the other parties were bound to perform the
service, whether they liked it or not?—My answer to that is, that
this £20,000 a year originated in an amalgamation, or at least a
pretended amalgamation, between the East Indian Steam Company
and the Peninsular and Oriental Steam Packet Company,
in 1841. But inasmuch as on 14th October, 1839, the East India
Company had replied to the East Indian Steam Company in
London, and again in Calcutta, on the 27th of May, 1840, to the
inhabitants of Calcutta generally, “that to any well-devised
measures, by which the established means of communication
might be extended, the Court would be ready to afford due
encouragement; but in the present state of circumstances they
are unwilling now to enter into any arrangement affecting the
measures in progress regarding the communication between Suez
and Bombay;” that letter and publication was considered as an
engagement on the part of the East India Company to support
the extension of a line between Calcutta and Suez. The consequence
of that was, that the “Precursor” built for, and the “India”
was employed upon that line, under the supposition that they
would, when they had adopted this measure, be remunerated.
A junction was proposed between the small section of the London
shareholders of the East Indian Steam Company and the Peninsular
and Oriental Company; and what I say is, that they communicated,
either by deputation or by letter, with the East India
Company, and proposed that they should give them a grant of
£20,000 a year, holding forth that the three parties were to be
united. This was a long time in abeyance, but some time in
July, as it appears to me, the proposal of the Peninsular and
Oriental Company was accepted by the East India Company;
but at the time it was accepted, it was accepted upon the recorded
opinion that the interests of the “India” and the “Precursor”
party were likely to be amalgamated with those of the Peninsular
and Oriental Company who had made the offer, and that upon
certain terms which are there stated; they were granted the
20,000 a year provided they made four voyages the first year, six
voyages the second year, and maintained a monthly communication
the third, fourth, and fifth year, with vessels of 500-horse
power, between Calcutta and Suez.
2209. Am I to understand you to state that the proposal or contract
to which you referred the other day, that the steamers should
be 500-horse power, originated with the East India Company?—No,
it originated with the Peninsular and Oriental Steam Packet
Company.
2210. Then that excluded the “India?”—Yes; the conditions
are already in evidence, in answer to question 1819.
2211. What was the date of that condition which required vessels
of 1,600 tons and 500-horse power?—It was a proposal made
originally by the Peninsular and Oriental Company, early in the
year. I believe it was accepted about the middle of July, 1841;
but I was not in this country at the time.
2212. From that time to the present, the “India” was excluded
from the benefit of the arrangement?—She was excluded in
this way——
2213. Was she of the requisite horse power?—I was going to
state how it was proved that she was not.
2214. That arrangement was made in the year 1841?—Yes; the
arrangement was made by the Court of Directors in July 1841.
2215. Then the “India” was from that time excluded from the
benefit of the arrangement?—Under the clause requiring 500-horse
power, the “India” was excluded; but the Peninsular and
Oriental Company proposed to purchase her, and after a good
deal of squabbling they offered us £23,000——
2216. We do not want to go into that matter; but I understood
you to say that by the original conditions imposed by the East
India Company, in 1841, the steamer “India” was excluded from
the benefit of the arrangement?—She was excluded, but the
Peninsular and Oriental Company asked them to accept her.
2217. In your former examination, in answer to question 1835,
you stated, “The 500-horse power was put in purposely to exclude
all but the Peninsular Company’s vessels.” Will you state upon
what grounds you attribute to the Admiralty, in 1844, a condition
which appears to have been in force against you, by the orders of
the East India Company, as early as 1841?—I had intended to
commence the examination by referring to my statement with
respect to that very case. It is so put here that I really cannot
understand it myself, and I must request to be allowed to make
the explanation of horse power; if you will allow me to make the
explanation of what I mean by horse power, I shall be able to
make my answers intelligible.
2218. Are you a person of experience in nautical matters?—I
profess to know all that a man who has devoted his life to the
subject can know of the building and working of ships.
2219. And not only sailing ships, but steam vessels?—Yes.
2220. Are there two meanings to the term “horse power!”—No;
“horse power” has no meaning at all; if you will allow
me to give an explanation I can state what it is.
2221. Before you give your explanation, allow me to ask this
question, whether you mean to say that the term “horse power”
has no meaning?—It has no meaning as to the capacity of ships
for carrying the mails; that I assert.
2222. Then when the East India Company, in 1841, put in a
clause that no vessel employed in carrying the mails should be less
than 500-horse power, they put in a clause which had no meaning
at all?—The East India Company never put in the clause at
all; it was put in by the Peninsular and Oriental Company, with
the very object of excluding us.
2223. Whoever put it in, it had no meaning?—No, it has not,
to my knowledge.
2224. Then, having no meaning, it had no operation or effect?—It
had the effect of excluding any other vessels but their own,
so long as it was allowed to remain.
2225. How did it have that effect?—The Peninsular and
Oriental Company having vessels of 500-horse power, which no
others had got, they of course obtained the contract.
2226. You came here, on the previous day, charging the Admiralty
with having, in 1844, made a certain condition for the purpose
of excluding you, and you have now stated that that condition
was in force under the arrangement made by the East India Company
as early as 1841. Will you have the goodness to explain to
the Committee how it is that you attribute that to the Admiralty
in 1844, which appears to have originated with the East India
Company in 1841?—I was mistaken if I said it originated with
the East India Company; it originated with the Peninsular and
Oriental Steam Packet Company. The horse power of a vessel
gives no means of knowing what the efficiency of the vessel is.
There is a good deal of the evidence of the former day which is of
no use, unless you allow me to explain what horse power is.
Those answers, as they stand, I cannot understand myself.
2227. Do you mean to say, that unless you are to be allowed to
show that the ordinary words “horse power,” when introduced
into a contract, render that contract unintelligible, you cannot
explain your case?—I never said that. May I be allowed to
state what I do mean; it takes a little time and a little trouble
to explain the meaning of “horse power.” The putting in the
“horse power” had no reference to the efficiency of the steam
vessels.
2228. Whatever the horse power meant in 1841, it meant in
1844?—Yes; but you are mistaken in supposing that I attribute
it to the East India Company putting in that condition; I
attributed it to the Peninsular and Oriental Company.
2229. We have here a contract made in 1844, by the Admiralty
on one side, and the Peninsular and Oriental Company on the
other; and you charge the Admiralty with having introduced a
certain condition for the purpose of excluding you, and of favouring
the Peninsular and Oriental Company?—No; I said that
the Peninsular and Oriental Company introduced the condition as
to the 400-horse power.
2230. How did they introduce it?—Because they proposed it.
2231. Do you find fault with a competitor for having proposed
vessels of a higher horse power than yourself?—I do; because
they did it to keep all other Companies out.
2232. What would you have had the Admiralty do?—I would
have had the Admiralty go and ascertain what the vessels were,
and not go upon the nominal horse power.
2233. You complain of the Admiralty going upon the individual
horse power?—-I do; it is a wrong system.
2234. Why do you complain of the Admiralty having done that
in 1844, which we find was part of the existing arrangement between
the East India Company and the Peninsular and Oriental
Company in 1841?—The question of horse power began with
the Peninsular and Oriental Company in 1840.
2235. And I to understand from you, that in your opinion the
Admiralty should have laid down no general condition about horse
power, but should have inquired into the capabilities of each
particular ship; is that your view?—Certainly, that is one view;
But as you said, just now, I had stated that the Peninsular and
Oriental Company had originated that condition about horse
power; that is the hinge upon which all the mischief has
turned; and I will now, if I may be allowed, explain how it
occurred.
2236. The hinge upon which all the mischief has turned, has
been that condition about horse power?—Yes.
2237. Whatever imputations you have made against the Admiralty
of favouritism, have turned upon improperly requiring a
compliance with that condition?—I do not say that; I say the two
things are quite distinct; but if you will allow me to state how it
did occur, I can explain it; I have a statement here to show how
it originated, and another statement to show what “horse power”
really means. I beg to state that the question of horse power
originated in 1840, and it was the proposal of the Peninsular
and Oriental Company; it originated with them, and not with the
Admiralty or the East India Company.
2254. Do you impute corrupt conduct to the Admiralty, in
reference to the ship “India?”—Certainly not; I think the
Committee are labouring under a mistake in that respect.
2255. If, in any part of your former examination, you have
been understood to impute either to the Board of Admiralty, or to
any other Government department, any favouritism towards the
Peninsular and Oriental Company, to the exclusion of their competitors,
you have been misunderstood?—As far as the facts are
on record, I could get no answer to my tender; I imputed
certainly not a corrupt motive, but I said that all along I believed
they were under a mistake, induced by this nominal “horse
power.”
2256. In answer to question 2216, you stated that in 1841 the
steamer “India” was excluded, by the conditions imposed by the
East India Company, but that the Peninsular and Oriental
Company wished them to accept her?—Yes, that is so.
2257. It was, therefore, the East India Company, and not
the Peninsular and Oriental Company, who insisted upon the
higher amount of horse power?—The two things are quite
distinct.
2258. Do you adhere to your answer to question 2216?—So far
it is correct that she was excluded, but the Peninsular Company,
after they had bought her, urged the East India Company to
accept her, and said she was an efficient vessel; they had abused
her before, but they then said she was efficient.
2259. Are you now speaking of 1841?—Yes.
2260. Whose property was the steamer “India” in the year
1841?—She was the property of the Comprehensive party, who
sent her out; at the time this negotiation was going on she was in
Calcutta; I do not know what particular month this alludes to.
2261. It does not signify where she was?—It occurred in this
way: we will say it was in June; two months would alter the matter
altogether; there was a negotiation; the Peninsular and Oriental
Company told the representative of the “India” in this country,
Mr. Mackillop, that they would amalgamate with him; but the
moment they got the engagement signed, they abused the “India”
as much as they could; but when they found they could get her
for little or nothing, then they said they would take her for
£23,000, and they said “We will take her if the East India
Company will pay £20,000 for her hire.” And then they write
to the East India Company, and they say, notwithstanding the
condition about the 500-horse power, that she was an efficient
vessel.
2262. That was the opinion of the Peninsular and Oriental
Company?—Yes; after she was theirs.
2263. But at that time it was not the opinion of the East India
Company, and they refused it?—Yes. If you will allow me to
explain, I will show that there is a wide difference between the
mail contract and the engagement made with the Peninsular
Company.
2264. In your opinion the Admiralty, making the mail contract
on behalf of the public, were bound to accept a vessel that was not
good enough for the East India Company?—I never said so; but
perhaps you will allow me to put in an explanation of the horse
power; I have taken great pains in preparing it.
2265. This vessel, whatever be her merits, was rejected by the
East India Company in 1841, though tendered by the Peninsular
and Oriental Company at that time?—She was rejected in a
different way——
2266. She was rejected, whatever the mode of rejection?—The
mistake is this: you fancy me to have said that the nominal
horse power was fixed by the East India Company or by the
Government; now that is a mistake; neither the one nor the
other fixed it.
2267. Can you answer the question whether the vessel was or
was not rejected by the East India Company?—She was rejected
because the Peninsular Company had proposed the condition with
regard to 500-horse power.
2268. Was the steamer “India” tendered to the East India
Company at the suit of the Peninsular and Oriental Company in the
year 1841, and rejected by the East India Company?—I was not
in this country at the time, but it must be in the records of the
Company.
2269. Do you believe that your answer to question 2216 was a
true answer?—Yes, it was a true answer.
2270. And your case now against the Admiralty is, that they
rejected in 1844 the same ship which the East India Company
had rejected in 1841?—I cannot see that they have any reference
to each other.
2271. Do you complain of the steamer “India” being rejected
by the Admiralty in 1844?—Yes.
2272. She having been rejected by the East India Company in
1841?—It was not for the same service, but for a very different
service; but she was, in fact, employed upon the line.
2273. I understood you to complain, that in the year 1844, the
Board of Admiralty laid down a certain condition with regard to
the horse power of the vessels to be employed in conveying the
mails between Suez and Calcutta, which condition excluded the
steamer “India?”—Yes.
2274. I understood you also to say, that that very same condition
as to the horse power had been previously laid down by
the East India Company, and that in the year 1841 the steamer
“India” was pressed upon the East India Company by the Peninsular
and Oriental Company, who had expected to buy her as
a good bargain; and that the East India Company, being so
pressed, refused to accept her?—I can now explain it.
2275. Is all that true?—Partly so, but not in the way you
put it.
2276. But are the facts true; yes or no. I have collected the
facts from your previous answers, and am putting them to you
again; if any one of them be inaccurate, point out the one which
is inaccurate?—You ask whether she was rejected in 1841; she
was. But allow me to give the reasons.
2277. Was she rejected for the service between Suez and
Calcutta in the year 1841?—She was refused to be received
under a certain engagement.
2278. Did the East India Company, in the year 1841, refuse to
accept the “India” steamer for the line between Suez and Calcutta?—Yes,
but that had no reference to her capacity as a mail
steamer.
2279. Be so good, then, as to explain the difference between the
two cases?—The difference was this: in 1841 it was the voluntary
proposition of the Peninsular and Oriental Company to undertake
the communication between Suez and Calcutta, with vessels of
520-horse power; it was not for a mail contract, a mail contract
not being necessary; and they put in the 520-horse power with
the intention, I believe, of shutting out the “India” and other
vessels. It was for a passenger line, not for a mail line, because
the same mails were carried by Government vessels to Bombay,
and therefore there was no necessity for a mail line, or for her
service as a mail packet; but it had been an object of great consideration,
both by the Government at home and the inhabitants
of India, to have a passenger communication with Calcutta the
same to which the remuneration had been promised. The “India”
was on the spot, about to establish that, and the “Precursor”
was being prepared to extend it; the Peninsular and Oriental
Company came in with an engagement to do, for, apparently, a
very small sum, what those vessels were then about doing; that
was for the purpose of maintaining the passenger communication
between Calcutta and Suez. They offered to do this with vessels of
520-horse power as a passenger line, which was, of course, a good
deal better than doing it with vessels of 300-horse power, because
the object was the accommodation of passengers, and, no doubt,
a vessel of 520-horse power must have a great deal more accommodation
for passengers than one of 300-horse power; and therefore,
in asking the East India Company to accept a vessel of 300-horse
power, instead of a vessel of 520-horse power, they were simply
asking them to take a very considerable sum off their engagement.
That was a very different thing from carrying the mails, which
the “India” might have done; and, in fact, the experience of one
year has proved that she was capable of doing it.
2280. You having stated your view of the reasons which influenced
the East India Company, whether you are right in your
view of those reasons or not, the fact was, that the steamer
“India,” being pressed upon the East India Company by the
Peninsular and Oriental Company, was rejected; is that so?—I
understood that she was rejected, because it was not——
2281. Whatever were the reasons, was the fact so?—Yes.
2282. And your opinion was, that the Admiralty ought to have
made in 1844 a different set of conditions, which would have
included the steamer “India?”—I think the Admiralty, having
the plans and specifications of the ship “India” before them,
ought to have judged from them as to the sufficiency of the
vessel, and not from the nominal horse power.
2283. Do you think that if a public department, instead of
laying down specific rules to which all parties must conform who
make engagements with regard to the specifications of particular
vessels, that would be a better mode of excluding favouritism
than the mode which is now pursued?—Most assuredly it would
be a proper mode.
2284. Am I right in understanding that the “India” was, afterwards,
employed upon this very line by the Peninsular Company?—Yes,
and they got £15,000 a year by her. They bought her for less
than £15,000, and they patched her up for £1,000, and then got
her surveyed in 1845, and she remained for two or three years in
the contract ready to be employed, after being so patched up.
2285. Was she there as a reserve vessel?—Yes.
2286. Was there any difference in the specification of horse
power for a reserve vessel, in comparison with the vessels which
were to carry the mails regularly?—Yes, there was a difference,
and she was admitted upon that.
2287. What was the amount of horse power required by the
contract for a reserve vessel?—I suppose it must have been less
than 300-horse power.
2288. Have you seen the contract?—Yes, but I do not recollect
whether it was 300 or 250-horse power.
2289. Is it not customary that the reserve vessel is of less
tonnage than the vessels which are regularly performing the
voyages with the mails?—Yes, it is so, and we intended her to
be so originally.
2290. When you tendered the “India,” did you propose her
as a reserve vessel, or as one of the regular vessels to carry the
mails?—We proposed her for the China line.
2291. You never proposed her for this line at all?—We could
not.
2292. With reference to the Ceylon and Hong Kong contract,
in the year 1844, did you tender the steamer “India” for the
Ceylon and Hong Kong contract?—-Yes.
2293. Your intention being that the mails should be carried as
far as Point de Galle by the Peninsular and Oriental Company,
and taken up at that point by you, and carried in your ships to
Hong Kong?—Yes.
2294. How many vessels would that service have required?—It
would have required three vessels.
2295. How many vessels were you in possession of, at that
time?—We had one vessel.
2296. Where did you intend to get other vessels from?—We
offered to hire them in India, where we had four or five at our
disposal.
2297. You said the other day that it was not possible for you
to guarantee any particular vessels in the Indian Seas as being
obtainable by you for that purpose?—We stated in the tender
that we would hire such vessels as we could procure, but we could
not do that, because no time was allowed.
2298. You said the other day that the “India,” being a paddle
ship, and over-built, was not particularly well qualified to deal
with the typhoons in the China seas?—She was not the vessel
that I would have chosen.
2299. You also told us that you had in your eye, as one of
the other vessels of the contract, a steamer which had gone to
China in the year 1830?—Yes.
2300. Will you be so good as to state what, according to your
intention, was to have been the third ship by which the contract
was to be performed?—The tender states that two vessels were
to be built within a year for that purpose.
2301. But, speaking of time present, you intended to employ
the “India,” and to take the chance of a steamer which went
out to China in the year 1830, and to take the risk of your being
able to pick up a third vessel; was that your intention?—Yes;
but a company, of which I was a large proprietor, had five ships
in India besides the “India.”
2302. Was that company, of which you were a large proprietor,
able to guarantee that there would be other vessels to perform
the contract?—Certainly. I made this tender quite certain that
they would be very glad to employ their vessels there.
2303. Why, then, did you say, in answer to question 1931, that
you could not guarantee any vessels?—If we had not time to
offer it to them, and get an answer from them, I cannot say
that they might not turn round and refuse to let us have the
vessels.
2304. Did you expect the Admiralty, in the absence of any
guarantee, to form a contract with you to take the “India,” which
in your judgment was bad of her kind, as one ship, and to take a
steamer which went to China in the year 1830, and which you
thought you probably could get as a second ship, and the chance
of some third ship then in the Indian seas; upon that basis, did
you expect the Admiralty to form a contract with you; was that
so?—What I expect is stated in my former evidence.
2305. The “India” lay for a long time for sale in the London
docks, did she not, in 1839?—I think, for three or four months,
she lay there for sale.
2306. Was she not put up for sale at Lloyd’s?—Yes, I believe
she was.
2307. Who were the owners of the “India” when she sailed
for India?—An old gentleman from Norfolk, a Mr. Banyan, was
the registered owner.
2308. He was not the real owner?—Yes, he was a real owner;
she belonged to a company got up by Captain Ross, and he represented
them.
2309. When she went to India, was she not mortgaged?—Yes,
she was.
2310. To what amount?—She was under two mortgages, I understood,
but what the other mortgage was I do not remember.
There was $20,000 advanced to the builders, as stated in answer
to question 1814; but she was not under mortgage when I
tendered her for contract mail service. The real owners were
some forty residents and natives in India, and seven firms and
individuals in England, who purchased her from the mortgagees,
and established the India Steam Company of Calcutta
in 1841.
2311. You have stated that the “India” has been running on
the line between Calcutta and Suez?—I never said that she was
running on the line; she was employed on the line; she was
receiving a certain portion of the money paid for the contract. I
suppose about £15,000 a year would be her proportion.
2312. Are you aware that she never left her moorings?—Yes.
2313. The Peninsular and Oriental Company bought her, did
they not?—Yes; after a desperately hard bargain.
2314. Are you aware that she was full of dry rot at the time they
bought her?—Yes, but I am aware that they deducted £1,300
from the £15,000 which they engaged to pay, in consequence of
that; and I am also aware that they told me it would require
£15,000 to repair her when they offered £23,000 for her; and
I sent in the same drawings that I had sent in to the Admiralty,
and offered to do it for £8,000, upon which they said, we will
give you £15,000.
2315. Are you aware that the “India” has been broken up?—I
never heard it till now.
2316. You stated that the Peninsular Company sent out to the
China line two old vessels?—Yes, they were used in the Peninsular
lines.
2317. What were their names?—The “Lady Mary Wood” was
one, and the “Braganza” was the other.
2318. Are you not aware that in 1844 the “Lady Mary Wood”
was only two years old?—Yes, I know it perfectly.
2319. Would you call her an old vessel?—Yes, she had been a
good deal used there; the best proof of her age is, that she was
inefficient before she could be relieved.
2320. How do you know that?—I have heard so.
2321. Are you aware that the “Braganza” was within a few
months of the same age as the “India?”—I do not know that;
I know that she had some repairs before she went there; such
repairs as I should have given the “India.”
2322. You said that you expected to hire in India a vessel called
the “Fire Queen?”—I never said a word about the “Fire Queen;”
the “Fire Queen” we had nothing to do with; the vessels which
I mentioned are mentioned here.
2323. It is in the answer to question 2135: “In Bengal,
the ‘Forbes,’ ‘India,’ ‘Dwarkanauth Tagore,’ ‘Henderson,’
and ‘Gordon;’ at Singapore, ‘The Royal Sovereign,’ ‘Express,’
and ‘Windsor Castle;’ on her passage out to India, the
‘Fire Queen,’ built for a Calcutta Company?”—If you look you
will see that those are mentioned as the ships that are in India,
I did not say that I had them; that is a quotation from a letter
to Mr. Sidney Herbert, stating that there are those vessels there.
2324. But the India Steam Company possessed no other vessel
than the “India,” did they?—No.
2325. In one of your answers you stated first, that “no honest
man,” which you afterwards qualified by saying, “no man intending
to act honestly, would sign a contract with such stringent
clauses and penalties for over-times on arrivals?”—I did not say,
“no honest man” would sign it. I said that you would not like
to undertake such things, if you could not honestly undertake to
do them.
2326. Did you allude to the penalties for non-arrival in proper
time?—Yes.
2327. I suppose you have read these contracts attentively?—Yes.
2328. And know them by heart, probably?—No, I do not
think I know them by heart.
2329. Has it escaped you that there is this clause in the contract:
“The contractors are not to be liable to any penalties under
this contract for any matters arising from circumstances over
which they and their servants had not and could not have had
any control, and which shall be so proved to the satisfaction of
the said Commissioners?”—I do not recollect that particularly;
there was some such clause.
2330. Did you ever see that clause before?—I see that if a
vessel should have a very foul wind and could not get on, that
clause would perhaps meet that case. But there are a great
many causes from which an engine might break down, which
would not be provided for by that clause.
2331. You particularly specified stringent clauses, and alluded
to the penalties for arrival after time; you said that the clauses
were so stringent that no honest man, or no man intending
honestly, would sign the contract, because there were penalties
for arriving over time?—I was speaking then with reference to
the tenders, which I got in 1840. This is the contract I was
speaking of. I saw that the first condition was, that they were
to be properly built and efficient vessels of 400-horse power; and
then there are a number of clauses which I have marked here;
the result of them is, first, that the contract was to provide for
the passages being performed in a certain number of hours, under
a penalty of £500 for twelve hours’ delay.
2332. With such a clause as that you would be afraid to make
such a contract?—It exactly amounts to what I say; it is of no
use to put such a condition into a contract, except to keep people
away.
2333. In answer to a question put to you by the Chairman
(1816), which was, “Whatever the nature of the arrangement
between the India Company and the Peninsular Company was,
the result is that they received £20,000 a year for five years,
from the spring of 1841, for doing certain services; is that so?”
you answer, “Yes.” Is that answer correct, that for five years
they received £20,000 a year?—That is a mistake; they were
to receive that.
2334. For how many years did they receive that £20,000 under
the letter of the East India Company?—For two years.
2335. You have been speaking about screw vessels; did you
ever command one?—No.
It will have been observed, from the evidence of Mr.
Croker of the Admiralty (see page 27), that in consequence
of the Directors offering to the Government the
permission to investigate the accounts and books of the
Company, the Admiralty appointed Capt. A. Ellice, R.N.,
the comptroller of steam machinery, and previously superintendent
of the packet service at Southampton, together
with Mr. W. H. Bond, an experienced accountant, connected
with the civil department of the naval service, to
make that Investigation. The following is their Report,
which, although it was considered by the Admiralty as a
confidential one, and therefore not to be published without
the consent of the Company, the Directors had no
hesitation in permitting to be produced to the Committee,
and which has, accordingly, been published in the
Appendix to the Committee’s Report.
Sir,
Admiralty, 17 June, 1848.
In obedience to their Lordships’ instructions of the 30th
ultimo, I have inquired into the matters therein mentioned
respecting the Peninsular and Oriental Contract Steam Packet
Company, having called to my assistance, for this purpose, Mr.
W. H. Bond, purser of her Majesty’s navy; and I have now
the honour of enclosing the Report thereon for their Lordships’
information.
H. G. Ward, Esq.,
&c., &c., &c.
(Signed) A. Ellice.
This Report being founded on certain documents which were
confidentially placed in my hands, I consider that this Report
should be confidential also.
(Signed) A. E.
Admiralty, 16 June, 1848.
In compliance with the instructions of the Lords Commissioners
of the Admiralty, contained in their minute of the 30th
ultimo, “To ascertain whether the profit of the voyages between
Southampton, Malta, and Alexandria, have been such as
would provide a dividend of 10 per cent. per annum on the
capital, after the ordinary deductions of wear and tear, and sea
risk of vessels,—if the directors had not thought fit to invest a
portion of their profits in the extension of the stock, by the
purchase of additional vessels:”
“Also to endeavour to institute a comparison between the
expenses of carrying on the mail services by the company, and
those which are incurred by her Majesty’s naval service in
similar duties:”—Application was made to the directors of the
Peninsular and Oriental Company to furnish a copy of the
balance-sheet for the last half year, ending the 1st March, 1848,
together with such other documents as would serve to explain
the various items contained in it. These being furnished, the
readiest access was afforded to the ledger and other books of
the company, for their verification.
As these accounts are kept so as to include all the operations
of the company, without distinguishing the profits on the different
branches, it became necessary, in order to carry out the
spirit of their Lordship’s instructions, to inquire into the state
of the company’s affairs generally; and to conduct this inquiry
in such a way as to arrive at a satisfactory conclusion on the
following points:—
1. Whether the postal duties performed by the Peninsular
and Oriental Steam Company are proportionate to the amount
paid for those duties.
2. Whether such duties can, with advantage, be transferred
from the contract steam vessels to those of her Majesty’s navy.
3. The propriety of throwing these duties open to public
competition.
4. The expediency of accepting the Peninsular and Oriental
Company’s proposal for a modification of the terms of the
contract.
Upon these important points the most careful and mature
consideration has been bestowed; all the documents have been
closely examined and compared with the books of the company,
and the following are the results which are submitted for their
Lordships’ information:—
First. That the amount paid to the Peninsular and Oriental
Company for the duties it has performed has not hitherto been
more than it was justly entitled to receive, on the principle
that the shareholders are entitled to a fair commercial profit on
the capital invested in the undertaking, and admitting that the
affairs of the company have been managed, as they appear to
have been, with economy and efficiency. The dividend hitherto
made has never reached the amount of 10 per cent. per annum,
and the additions made to their shipping and other capital are
from reserves to meet contingencies. The principles on which
these reserves have been laid aside, instead of being divided as
profits, will be hereafter explained in this report.
Second. That the present inadequate means of ascertaining
the expense of her Majesty’s steam vessels, especially in the
Indian and China seas, renders it difficult to determine the
comparative pecuniary results which would follow the transfer
of the duties. Considering, however, the difficulty of adapting
her Majesty’s vessels to commercial purposes, accommodation
of passengers and freight of merchandise, and the superior
convenience and advantages of mercantile companies in these
respects, the success or expediency of such a change is exceedingly
doubtful, except on a necessity, arising from exorbitant
demands for carrying the mails by contract.
Third. Considering that the postal duties have been well and
satisfactorily performed; that the company has never been fined
for any breach of contract; that it has never asked for any
increase of remuneration, or decrease of the duties to be performed,
as has been the case in other instances of contract with
companies; considering, also, the energetic manner in which
this company has persevered in extending steam communication
through new and untried channels, and that it has formed
extensive establishments on the faith of the continued support
of the Government, and that it still contemplates an extension
of its communications with the farthest southern and eastern
point of the British possessions; establishing for these proposes
a steam navy of considerable magnitude, at the command of the
public, on any emergency,—it appears to be entitled to as much
consideration as is compatible with an economical administration
of the duties of the Post-office.
Fourth. That for reasons hereafter suggested, the contract
may now with great propriety be brought under conditions
more favourable to the Government; and that this may be
done either by a fixed reduction for a permanent term, or on a
scale varying with the profits of the company.
In either case it will appear essential that any new arrangement
to be made should rather be of a permanent than
of a temporary character, both to ensure confidence to the
company in the conduct and extension of their concerns,
and efficiency in the discharge of the service entrusted to
them.
The reasons for adopting these results, which are submitted
with great deference to their Lordships’ consideration, are
founded upon facts contained in the following statement:—
First: As regards the duties performed, and payments made.
The annexed table, No. 1, shows the routes, distances, and
amounts of the existing contracts. Of these, the third route
has been recently transferred to Government vessels. From
this return it appears that hitherto the company has been paid
the sum of £224,525, which, however, has been reduced by this
transfer to £209,000.
For the performance of these duties, and the other business
of the company, the establishment of vessels detailed in the
annexed table, No. 2, is in efficient operation, with the exception
of the “Ariel,” recently stranded in the vicinity of Leghorn.
The original project fixed the capital at £1,000,000, but
the amount paid up was, and remains, at the sum of
£973,378 16s. 8d. In addition to this capital, reserved
amounts have been credited, arising from undivided profits,
under the heads of “Repair,” “Insurance,” and “Depreciation”
funds, amounting to £306,424 19s. 2d., as will be seen by the
annexed statement, No. 3.
The balance-sheet of the company, No. 4, shows the last
half-yearly expenditure to amount to £238,404 19s.; and the
receipts, including the amount paid by the Government for the
conveyance of mails, £301,034 10s. 2d.
Some idea of the extent of this establishment may be formed
from the following items of expenditure:—
For the half-year ending the 31st March last, the company
disbursed for the shipping department alone—
|
£ |
s. |
d. |
| Coal |
93,568 |
2 |
4 |
| Oil and tallow |
2,687 |
14 |
0 |
| Victualling seamen |
16,501 |
14 |
6 |
| Wages to seamen |
29,383 |
6 |
0 |
| Incidental expenses |
8,114 |
1 |
11 |
| Chartering hired vessels |
6,326 |
12 |
0 |
|
———————— |
|
£158,581 |
10 |
9 |
|
———————— |
The receipts under the following heads, for the same periods,
amounted to—
|
£ |
s. |
d. |
| Passage-money, after deducting the charge for
maintenance |
110,508 |
4 |
6 |
| Stewards’ fees |
1,677 |
16 |
8 |
| Freight and parcels |
72,894 |
9 |
9 |
| Conveyance of mails |
112,262 |
10 |
0 |
|
———————— |
|
£297,343 |
0 |
11 |
|
———————— |
The company has not thought it prudent to pay a larger
dividend than 8 per cent. per annum to the shareholders.
In addition to the dividend, the before-mentioned reserved
funds have accrued from the annual profits, viz.:—
| Depreciation |
£175,183 |
| Insurance |
137,162 |
| Repairing |
74,079 |
|
———— |
|
£386,424 |
|
———— |
Beyond 2½ per cent. on the freight and passage-money, paid to
the directors under the head of management; and 5 per cent.
on the profit balance on closing the account, paid on the same
account.
These charges of 2½ per cent. on the freight and passage-money,
and 5 per cent. on the balance, include, beyond all
other expenses of management, allowance to the managing
directors, for conducting the affairs of the company, to the net
amount of from £15,000 to 16,000 per annum.
This remuneration is paid to them under the deed of settlement,
and has probably secured to the shareholders an efficiency
and economy in the general arrangements which have contributed
greatly to the success of the concern; at the same
time it may be doubted whether, in estimating the profits of
the company, the amount paid to the directors may not be considered
(beyond the usual compensation for such services) as
part of the general profits, rather than as a charge of management.
The principles on which the reserved funds have been laid
aside appear fair and reasonable.
The insurance is at a rate of 5 per cent. on the first cost of
the vessels employed, after deducting the amount already
carried to depreciation account; out of which amount the premiums
for insurance at Lloyd’s are paid on such assurances as
are effected there, the balance being added to the insurance
fund. The portion of the insurance actually effected is at
rather a higher rate than the 5 per cent. It would not be fair,
therefore, to include any portion of this reserved fund in an
estimate of the company’s profits as shipowners or mail contractors.
It belongs fairly to them in their character of insurers,
as, if they had insured the full value of their property, it
would have been paid to underwriters.
The depreciation fund is calculated at a rate of 5 per cent.
per annum on the first cost of the vessels, after deducting the
amount previously carried to the same account.
The repair fund is at the rate of 10 per cent. per annum,
calculated on the same amount as the preceding; and it will be
seen that the sum thus reserved for the last six months was
£37,633 13s. 3d., which did not provide for the actual expenditure
of £39,630 6s. 3d.
So far, therefore, as the affairs of the company have hitherto
proceeded, the amount paid to them under the contract would
not appear to have exceeded a reasonable remuneration for the
services performed, on the principles before stated.
Second: The comparative advantages which might result
from the employment of her Majesty’s vessels, instead of contract
vessels, for the performance of those duties, appears to be
a question of somewhat difficult solution.
The present mode of keeping the accounts of the navy, and
the commixture of expenditure for the steam and other departments
in the dockyards and public offices, must render it exceedingly
difficult to ascertain the cost of any separate branch
of service.
Supposing, however, that the financial comparison could be
made, yet there are many other important elements in the consideration
of the subject.
For the rapid and secure performance of the public mail duty,
no branch of the mercantile marine is so well prepared as her
Majesty’s naval department. But by the employment of her
Majesty’s vessels, light merchandise could not be conveyed;
the habits and comforts of the passengers could never be so well
provided for as by persons paid for such duties; and as regards
the troublesome details of carrying passengers, freight, and
merchandise, the war steamer must be less adapted than the
merchant vessel.
It must be recollected, also, that a sufficient number of
vessels must be fitted up, equipped, provisioned, stored, and
specially and exclusively adapted to and employed upon this
service; and that fresh arrangements, depôts, and agencies
along the lines of route would be required; the preparation for
such services would therefore be necessarily attended with an
expense which years of any probable saving could scarcely
defray.
Third: The question then arises whether, in the continued
employment of the Peninsular and Oriental Steam Company’s
vessels, considering the actual condition and the established
profits and credit of the company, owing in some measure to
the existing contract, some modification of the terms, for the
advantage of the public, may not be fairly expected.
With a view to the consideration of this question, the following
facts are submitted.
The general transactions of the last half-year, the best period
for judging clearly the present operation of the company, furnish
the following points:
|
£ |
s. |
d. |
| The gross profits, after deducting 2½ per cent. for
management, and 5 per cent. for repairs, and 2½ per
cent. for insurance, amount to |
62,629 |
11 |
2 |
| From which is deducted 2½ per cent, for depreciation |
16,915 |
0 |
0 |
|
——————— |
|
£45,714 |
11 |
2 |
|
——————— |
The dividend to the shareholders, at the rate of 4 per cent.
for six months, or 8 per cent. per annum, on the original
capital of £973,378, amounted to £38,933, leaving a surplus
balance of about £6,781, to be carried to the next account.
If even the amount paid to the directors from the 2½ per
cent. (deducted for charges of management, being for a half
year, £8,248 10s. 9d.), were added to the surplus balance of
£6,781, and a dividend paid to the proprietors at the rate of
10 per cent., the scale suggested by their lordships, a residue
would only be left of about £5,296; from which residue the
expenses of management, and ordinary salaries for managing
directors, would have to be defrayed.
Their lordships will thus have before them the means of considering
what modification of the terms of the contract the
present and prospective state of the profits of the company
would appear to justify; or whether it would be expedient to
adopt such modification to the varying profits of the company
in the terms proposed by it; viz., that when the financial
position of the company, with respect to such mail services,
shall be such as, after making the customary allowances for the
repairs, &c., a maximum dividend of 10 per cent. can be realised
to the shareholders, any surplus over and above such maximum
dividend shall be placed to the credit of the Government.
(Signed) A. Ellice,
Wm. H. Bond.
