To the House of Representatives:
I return herewith to the House of Representatives, in which it originated, the bill entitled "An act making appropriations for the transportation of the United States mail, by ocean steamers and otherwise, during the fiscal years ending the 30th of June, 1855, and the 30th of June, 1856," with a brief statement of the reasons which prevent its receiving my approval. The bill provides, among other things, that--
The following sums be, and the same are hereby, appropriated, to be paid out of any money in the Treasury not otherwise appropriated, for the year ending the 30th of June, 1856:
For transportation of the mails from New York to Liverpool and back, $858,000; and that the proviso contained in the first section of the act entitled "An act to supply deficiencies in the appropriations for the service of the fiscal year ending the 30th of June, 1852," approved the 21st of July, 1852, be, and the same is hereby, repealed: Provided, That Edward K. Collins and his associates shall proceed with all due diligence to build another steamship, in accordance with the terms of their contract, and have the same ready for the mail service in two years from and after the passage of this act; and if the said steamship is not ready within the time above mentioned, by reason of any neglect or want of diligence on their part, then the said Edward K. Collins and his associates shall carry the United States mails between New York and Liverpool from the expiration of the said two years, every fortnight, free of any charge to the Government, until the new steamship shall have commenced the said mail service.
The original contract was predicated upon the proposition of E. K. Collins of March 6, 1846, made with abundant means of knowledge as to the advantages and disadvantages of the terms which he then submitted for the acceptance of the Government. The proposition was in the following terms:
WASHINGTON, March 6, 1846.
E. K. Collins and his associates propose to carry the United States mail between New York and Liverpool twice each month during eight months of the year and once a month during the other four months for the sum of $385,000 per annum, payable quarterly. For this purpose they will agree to build five steamships of not less than 2,000 tons measurement and of 1,000 horsepower each, which vessels shall be built for great speed and sufficiently strong for war purposes.
Four of said vessels to be ready for service in eighteen months from the signing of the contract. The fifth vessel to be built as early as possibly practicable, and when not employed in the mail service to be subject to the orders of the Government for carrying dispatches, for which service a fair compensation is to be paid. Contract to be for the term of ten years. It is also proposed to secure to the United States the privilege of purchasing said steamships whenever they may be required for public purposes, at a fair valuation, to be ascertained by appraisers appointed by the United States and by the owners.
EDWARD K. COLLINS.
The act of March 3, 1847, provides--
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 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.