The circumstance alluded to was this:--The Directors of the East India Company, seeing that the extension of steam communication with India was at last in the hands of parties likely to place it on a practical basis, and desirous to encourage it on public grounds, voluntarily proposed to the Peninsular and Oriental Company to give them a premium of £20,000 per annum, and to continue the same for five years, on certain conditions, which, if the Company should at any time neglect or decline to fulfil, it was at the option of the East India Company to withdraw the premium or grant. The conditions were:-- 1st. That the communication with India beyond the Isthmus of Suez should be opened, and carried on by vessels of not less than 520-horse power, and 1600 tons burthen. 2nd. That a communication between Suez and Calcutta should be established the first year of the grant. 3rd. That not less than six voyages between Suez and Calcutta should be performed, in order to entitle the Peninsular and Oriental Steam Company to the second year’s grant. 4th. That a monthly communication between those places should be established, to entitle the Steam Company to the third and subsequent years’ grants. 5th. And that in case a contract should be entered into with the Steam Company for the conveyance of Mails, the grant should cease, and merge into such sum as might be paid for that service. * * * * * Such were the principal conditions of an arrangement which was attempted to be construed into a Contract, binding the Peninsular and Oriental Company to maintain a Monthly Mail Packet Service between Suez and India, with vessels of 520-horse power, for five years, for £20,000 per annum. It is, however, obvious that so far from such being the true construction, it was perfectly optional to the Peninsular and Oriental Company to discontinue the arrangement, and relinquish their claim to the grant, whenever its continuance might be incompatible with their interests. The Company having constructed another vessel of 520-horse power and 1800 tons, the “Bentinck,” and purchased a third new vessel, of similar power and tonnage, the “Precursor,” considered that the time had arrived when they might improve the postal communication with India, upon the same principle as that upon which they had improved the Peninsular and Mediterranean Services, namely, by combining an important public improvement with a reduction of the public expenditure.