Manual of Ship Subsidies | Page 5

service on
practically the same basis as the Cunard associates, and that afterwards

the Great Western had proposed to do it at half the subsidy to the
Cunarders, the investigating committee sustained the Admiralty's
action.[AA]
The Great Western Company overcame the advantage of the Cunarders
in the latter's high mail subsidy by increased enterprise and superior
management; and prospered. In 1843 they launched the Great Britain,
the largest and finest steamship up to that period built for overseas
service.[AB] She was, moreover, distinguished as the first liner to be
built of iron instead of wood, and to be propelled by the screw instead
of the paddle-wheel. In the latter innovation, however, she was not the
pioneer. Again the Americans were first in the application of the
auxiliary screw to ocean navigation,[AC] as they had been first in
despatching a steamer across the Atlantic.
The initial transatlantic subsidy to the Cunard Company was followed
up in 1840 and 1841 with contracts for steam mail-carriage to the West
Indies and South American ports.[AD] The first (1840) went to the
Royal Mail Steam Packet Company, for the West Indian service, the
mail subsidy fixed at two hundred and forty thousand pounds a
year;[AE] the second (1841), to the Pacific Steam Navigation Company.
The latter enterprise was promoted by an American,[AF] after he had
failed to obtain support in his own country[AG] for a project to
establish an American steamship line to ports along the west coast of
South America, a field in which American sailing ships had long been
preëminent.[AH]
Up to 1847 the British lines monopolized the transatlantic service.
Then the situation became enlivened by the advent of competing
American steamships subsidized by the United States Government,
with high-paying mail contracts. The first of these was the New York,
Havre, and Bremen line starting in 1847; the next, the celebrated
Collins Line between New York and Liverpool, underway in 1850. The
competing vessels were American-built, wooden side-wheelers; those
of the Collins Line superior in equipment and in passenger
accommodations, and faster sailers, than the British craft.[AI] To meet
this competition the Cunard Company increased their fleet while the

Admiralty increased the subsidy. Four new steamers were first added,
in 1848, to run directly between Liverpool and New York, and the
postal subsidy was raised to one hundred and forty-five thousand
pounds a year for forty-four voyages--three thousand nine hundred and
twenty-five pounds a voyage.[AJ] The competition began sharply with
the regular running of the Collins liners, in 1850. Meanwhile during
this year and the next additional contracts were given the Cunard
Company for carrying the mails between Halifax, New York, and
Bermuda, on the North American side, in small steamers, fitted with
space for mounting an 18-pounder pivot-gun, subsidy ten thousand six
hundred pounds a year; and for a monthly mail conveyance between
Bermuda and St. Thomas, subsidy four thousand one hundred pounds a
year.[AK] These services united the West Indies with the United States
and Canada.[AK]
In 1851 John Inman entered the trade with his "Inman Line" of
transatlantic screw steamers, which were to carry general cargo and
emigrant passengers, then a steadily increasing business, and to be
independent in all respects of either the Admiralty or the
Post-Office.[AL] The unsubsidized line prospered. The next year (1852)
the Cunard Company increased their liners' horsepower, and the
Admiralty again increased their subsidy. The contract, now made to run
for ten years, provided a subsidy of one hundred and seventy-three
thousand three hundred and forty pounds per fifty-two round trips a
year. The Americans were pressing them closer. Now freight rates were
cut, and the British premier is quoted as advising the Cunard Company
to run without freight if necessary to "beat off the American line."[AM]
The increasing subsidies occasioned a Parliamentary investigation. The
committee, evidently impressed by the gravity of the American
competition, reported that "the cost of the North American service was
not excessive," but they advised that all contracts thereafter "be let at
public bidding."[AN] This recommendation was not heeded. In 1857,
upon the plea that the Americans were about to build larger and more
powerful liners, the Cunard Company asked a five years' extension of
the contract of 1852. The extension was promptly granted. At the same
time they were awarded an additional subsidy of three thousand pounds
for a monthly mail service between New York and Nassau in the

Bahamas.[AO] The next year (1858) after suffering crushing disasters
in the loss of two of their steamers, and the withdrawal of their subsidy,
the Collins Company failed, and their line was abandoned.[AP] So this
competition ended.
Meanwhile complaints of the Admiralty's partiality in the allotment of
the contracts had been renewed more vigorously, with wider criticism
of grants for mail carriage largely in excess of the postage received;
and in 1859-60 another