[AR]
When advertisements for tenders were next issued, it was found that the
Cunard and Inman companies had formed a "community of interests," with
an agreement not to underbid each other. They asked a ten years'
contract on the basis of fifty thousand pounds fixed subsidy for a
weekly service. Instead, they were awarded seven years' contracts: the
Cunard for a semi-weekly service, seventy thousand pounds subsidy; the
Inman, for a weekly service, thirty-five thousand pounds subsidy.[AR] At
the same time contracts were made with the North German Lloyd and the
Hamburg-American lines for a weekly service for the sea-postage.
The Cunard and Inman grants were sharply criticised, and a Parliamentary
committee was appointed to investigate them. The committee's report
sustained the critics. It observed that "the payments to be made when
compared with those made by the American Post Office for the homeward
mails are widely different, inasmuch as the American Post Office has
hitherto paid only for actual services rendered at about half the rate
of the British Post Office when paying by the quantity of letters
carried." The committee recommended that these contracts be disapproved,
and that the system of fixed subsidies be abolished.
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