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It has been ascertained that for colonial service alone, exclusive of Australia, no less than 111,000 tons per annum have to be placed at distances requiring a period of six months between contract and delivery.

Under these circumstances, the Directors have felt it to be their duty to their Lordships, to their shareholders, and to the public, to make this statement, and to request that their Lordships may be pleased to direct an immediate inquiry to be instituted in the matter, so that their Lordships may in time be thus better prepared to deal with the question with that measure of justice between the public service and the contractor with which they have always met cases of emergency and unforeseen difficulty.

(Signed)

C. W. HOWELL,

Secretary

The Secretary to the Admiralty to the Peninsular and Oriental

Company. GENTLEMEN,

Admiralty, February 4, 1853. Having laid before my Lords Commissioners of the Admiralty your letter of the 2nd instant, on the subject of the difficulty of obtaining supplies of coals for carrying on the mail service under your contract, I am commanded to acquaint you that, under these circumstances, my Lords would wish to be informed if prepared to surrender your contract, in order to its again being thrown open for public competition ; and that my Lords wish

! for an early reply.

I am, &c., (Signed) W. A. B. HAMILTON.

you are

Mr. Howell to the Secretary of the Admiralty.
Peninsular and Oriental Steam Navigation Company,

Offices, 122, Leadenhall Street,
SIR,

London, February 9, 1853. Referring to my letter of the 2nd instant, in which I had the honour to state, for the information of the Lords Commissioners of the Admiralty, that a special meeting of the Board of Directors had been summoned for this day, to take into consideration their Lordships' letter of the 4th instant, I am now instructed respectfully to request that the directors may be informed whether they are correct in the inference to which they have been led by the tenor of that communication, that their Lordships do not feel disposed to institute an inquiry with a view of ascertaining whether it be a fact that sufficient available tonnage does not now exist in this country, or is likely to be within reach for many months, for the conveyance of fuel to the Company's depôts in the Eastern Seas, seeing that the quantity of tonnage requisite for the transport of coal to the extent necessary for the performance of the semi-monthly service, including the Australian line, is not less than 10,000 tons per month.

It is upon the existence or non-existence of the means of transport, the Directors take leave to submit, that the whole question hinges; they have without hesitation paid latterly 100 per cent. more in the price of coals than the same supply would have cost at the rates which ruled when their tender for the double mail service was accepted in March last, and it was not until price ceased to form part of the question that the Directors applied to their Lordships, with a request that they would be pleased to take cognizance of the existing state of things. The Directors would respectfully repeat their conviction that twenty sail of vessels of 500 tons each, or for any other burden equal to 10,000 tons per month, cannot now be obtained; and they beg to solicit their Lordships' perusal of the letters from well-known contractors, enclosed herewith, confirming their opinion.

It is within the knowledge of the Directors, that all available and suitable tonnage has been swept away from the ports of Holland, and that large Dutch ships are now loading at Liverpool for Australia; it is also a fact that even a Spanish ship having arrived at Liverpool, her consignee received the very next day a lucrative offer for freight for the British colonies.

As soon as the impending scarcity of shipping became apparent, not only did the Directors yield to the higher prices required by the contractors, but they sought for other means of keeping up a supply, and purchased at a cost of 15,0001. a screwcollier, with the intention of employing her in the conveyance of fuel from the coal-producing districts of the Eastern Archipelago to their depôts in the China Seas; this vessel, which is capable of carrying 700 tons of coals, is being completed with all despatch.

Under all the circumstances of the case, the Directors would now respectfully suggest that as the Company have at present in store, and on the way to their Eastern depôts, sufficient fuel

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for twelve months' consumption, or nearly so, for carrying on a monthly communication, as shown by the enclosed tables marked A and B, the execution of the new arrangements for the semimonthly communication be postponed for that period, and that in the interim the mail service be carried on monthly under the yet existing contract of 1844, the Company continuing to perform at a mileage rate, to be agreed upon, the service between Marseilles and Malta, and between Singapore and Australia, upon which they have already entered.

In carrying out this proposition, the Company must still seriously suffer, inasmuch as they have already built, and have under construction, nine steam-ships intended for the performance of the double service, involving an outlay of 650,0001. ; which amount of capital must remain not only unproductive, but undergoing depreciation pending the commencement of the operations for the execution of which it was expended.

I have, &c., (Signed)

C. W. HOWELL, Secretary.

Messrs. W. S. Lindsay and Co., to the Peninsular and Oriental

Company. GENTLEMEN,

8, Austin Friars, Jan. 27, 1853. We have your instructions with respect to the Hong-Kong contract held by us.

Knowing, however, your very great anxiety with relation to hese contracts, we think it our duty to advise you exactly how we stand as contractors with you.

We have, as you are aware, as large a command of tonnage as any firm in this country.

Notwithstanding this, however, we are utterly precluded from fulfilling our engagements for Hong-Kong, as, from your own knowledge of the extraordinary position of the shipping trade, you cannot but be aware.

With regard to Singapore, the prospect of obtaining tonnage is, if possible, even worse; and we really do not see how we can find ships for the balance of our contract for that port

It is not a question of rate. There are no ships. They are either fixed for Australia, or fixed there for want of crews to bring them away.

The difficulty is absolute, and quite independent of any question of rate. Viewing this, we feel bound to tell you

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candidly, that unless a change take place we must break down in our contract with you.

We will leave no stone unturned to perform our part, but we cannot do impossibilities; and, under the extraordinary circumstances of the case, we anxiously await your advice as to how we should act in order to protect your

interests.

We are, &c. (Signed) W. S. LINDSAY & Co.

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Messrs. H. & C. Toulmin to Mr. Howell. SIR,

31, Great St. Helen's, Feb. 1, 1853. In reference to our contracts for the delivery of coals at Ceylon, Calcutta, and Bombay, we are sorry to inform you that it will be quite impossible for us to fulfil them, from the fact that vessels are not to be bad for this employment. We have been for some time endeavouring to procure tonnage, we may almost

say,

without reference to the rate of freight, but cannot succeed.

We attribute the cause on the one hand to the detention of vessels in Australia, and on the other to the great demand that exists for the few vessels available, the owners of which will not take a freight of coals so long as they can get other employment.

We shall continue to do our best; at the same time we do not think there will be a change in this state of things for some time to come, and we therefore trust you will deal leniently with us, since the inability to comply with the terms of the contract arises from circumstances over which we have no control.

We
are,

&c.
(Signed) H. & C. TOULMIN.

Messrs. Phillips, Shaw, and Lowther, to the Peninsular and

Oriental Company.

2, Royal Exchange Buildings, GENTLEMEN,

February 2, 1853. With reference to your inquiry as to the rate at which we would undertake to supply you with coal at Singapore and other ports in India, we beg to say that at the present time we could not undertake any contracts for so doing.

We were on the 24th ultimo requested by you to furnish tenders for the supply of 4,000 tons of coal to Singapore, to leave this country during the months of February and March. Our

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principal filled in, sealed, and was on the point of forwarding to you, the accompanying tender for such supply at the rate of 70s. per ton, deeming at the time that it would be a safe and profitable transaction. Fortunately, just as the tender was about to leave this office, one of his partners came in and expressed his conviction that we should be unable to obtain tonnage at even that high rate, which opinion has by subsequent experience been fully justified, and we now congratulate ourselves on not having handed

it to you.

We hand it to you still sealed, together with your letter, in the margin of which you will find the rate marked by the writer for our guidance, had you accepted the tender.

We beg to add that we could not now accept much higher terms for the required supply.

We remain, &c., (Signed) PHILLIPS, SHAW, & LOWTHER.

In the Competitive Examination for the War Department, the following notes were given as the subject of a composition :

OUTLINES OF AN ESSAY.

Sur les changements produits par la Machine à Vapeur dans les Manufactures et le Commerce, dans la manière de voyager par terre et par mer, dans celle de faire la guerre par mer, et sur l'influence qu'elle aura sur la civilisation et le bien-être de la société.

P. S. Bing, Printer, Parliamentary Depôt, 12, Bridge Street, Westminster.

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