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.
_Inspection of the Company’s Affairs by the Government._
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.
_Report by_ CAPTAIN ELLICE _and_ W. H. BOND, _on the Peninsular and
Oriental Steam Packet Company_.
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., (Signed) A. ELLICE.
&c., &c., &c.
* * * * *
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.