That from and immediately after the passage of this act it shall
be the duty of the Secretary of the Navy to accept, on the part of
the Government of the United States, the proposals of E.K. Collins
and his associates, of the city of New York, submitted to the
Postmaster-General, and dated at Washington, March 6, 1846, for
the transportation of the United States mail between New York and
Liverpool, and to contract with the said E.K. Collins and his
associates for the faithful fulfillment of the stipulations therein
contained, and in accordance with the provisions of this act.
And under this proposition and enactment the original contract was
made.
According to the terms of that contract the parties were to receive from
the United States for twenty round trips each year the sum of $19,250
the trip, or $385,000 per annum; and they were to construct and provide
five ships of a stipulated size and quality for the performance of this
or other service for the Government.
Of the ships contracted for, only four have been furnished--the
_Atlantic, Pacific, Arctic_, and _Baltic_--and the present bill proposes
to dispense entirely with the original condition of a fifth ship, by
only requiring the construction of one, which would but supply the
place of the _Arctic_, recently lost by peril of the sea. Certain minor
conditions involving expense to the contractors, among which was one
for the accommodation and subsistence of a certain number of passed
midshipmen on each vessel, had previously been dispensed with on the
part of the United States.
By act of Congress of July 21, 1852, the amount of compensation to
the contractors was increased from $19,250 to $33,000 a trip and the
number of trips from twenty to twenty-six each year, making the whole
compensation $858,000 per annum. During the period of time from the
commencement of the service of these contractors, on the 27th of April,
1850, to the end of the last fiscal year, June 30, 1854, the sum paid
to them by the United States amounted to $2,620,906, without reckoning
public money advanced on loan to aid them in the construction of the
ships; while the whole amount of postages derived to the Department has
been only $734,056, showing an excess of expenditure above receipts of
$1,886,440 to the charge of the Government. In the meantime, in addition
to the payments from the Treasury, the parties have been in the
enjoyment of large receipts from the transportation of passengers and
merchandise, the profits of which are in addition to the amount allowed
by the United States.
It does not appear that the liberal conditions heretofore enjoyed by
the parties were less than a proper compensation for the service to be
performed, including whatever there may have been of hazard in a new
undertaking, nor that any hardship can be justly alleged calling for
relief on the part of the Government.
On the other hand, the construction of five ships of great speed,
and sufficiently strong for war purposes, and the services of passed
midshipmen on board of them, so as thus to augment the contingent force
and the actual efficiency of the Navy, were among the inducements of the
Government to enter into the contract.
The act of July 21, 1852, provides "that it shall be in the power of
Congress at any time after the 31st day of December, 1854, to terminate
the arrangement for the additional allowance herein provided for upon
giving six months' notice;" and it will be seen that, with the exception
of the six additional trips required by the act of July 21, 1852, there
has been no departure from the original engagement but to relieve
the contractors from obligation, and yet by the act last named the
compensation was increased from $385,000 to $858,000, with no other
protection to the public interests provided than the right which
Congress reserved to itself to terminate the contract, so far as this
increased compensation was concerned, after six months' notice. This
last provision, certainly a primary consideration for the more generous
action of the Government, the present bill proposes to repeal, so as to
leave Congress no power to terminate the new arrangement.
To this repeal the objections are, in my mind, insuperable, because in
terms it deprives the United States of all future discretion as to the
increased service and compensation, whatever changes may occur in the
art of navigation, its expenses, or the policy and political condition
of the country. The gravity of this objection is enhanced by other
considerations. While the contractors are to be paid a compensation
nearly double the rate of the original contract, they are exempted from
several of its conditions, which has the effect of adding still more to
that rate; while the further advantage is conceded to them of placing
their new privileges beyond the control even of Congress.
It will be regarded as a less serious objection than that already
stated, but one which should not be overlooked, that the privileges
bestowed upon the contractors are without corresponding advantages to
the Government, which receives no sufficient pecuniary or other return
for the immense outlay involved, which could obtain the same service of
other parties at less cost, and which, if the bill becomes a law, will
pay them a large amount of public money without adequate consideration;
that is, will in effect confer a gratuity whilst nominally making
provision for the transportation of the mails of the United States.
To provide for making a donation of such magnitude and to give to the
arrangement the character of permanence which this bill proposes would
be to deprive commercial enterprise of the benefits of free competition
and to establish a monopoly in violation of the soundest principles of
public policy and of doubtful compatibility with the Constitution.
I am, of course, not unmindful of the fact that the bill comprises
various other appropriations which are more or less important to the
public interests, for which reason my objections to it are communicated
at the first meeting of the House following its presentation to me, in
the hope that by amendment to bills now pending or otherwise suitable
provision for all the objects in question may be made before the
adjournment of Congress.