existence, the Company lost two valuable steamers, which more than counterbalanced the bonus it had obtained from Government. Trade, however, increased so rapidly and profitably, that in the following year (1843) the Company had recouped its losses, and had a surplus of receipts over expenditure amounting to £94,210, and in 1844 to £147,749. In 1850 the Government made a fresh contract with the Royal Mail Steam Packet Co. for a further term of ten years from the 1st January, 1852, the subsidy being raised to £270,000 per annum, but the Company were required to undertake the additional expense of a monthly service to the Brazils, which increased the mileage to be performed annually from 389,448 to 547,296 miles, and at the same time reduced the mileage from 12s. 3d. to 9s. 10d. per mile. The Company was also required to increase the speed of its steamers on the West Indian line from 8 knots to 10 knots per hour, and to add five new steamers to its fleet, each of 2,250 tons burden and 800 horse power. This second contract was altered in 1857, and its period of currency extended two years, one condition introduced being of an extraordinary nature. It had reference to an amalgamation with the European and Australian Mail Company, for the conveyance of the mails via Egypt, to and from Australia. This arrangement proved a great failure, owing to the complete collapse of the latter Company. A second condition required the acceleration of the mails between England and Rio de Janeiro. The Company was also required to provide three new steamers of 3,000 tons burden and 800 horse-power for the Atlantic West India service, and a fourth of smaller dimensions to ply between Rio and the River Plate. [Illustration: CLYDE. Royal Mail Steampacket Co.] In 1864 the second contract expired, and fresh arrangements were made, reducing the annual subsidy to £172,914. At the same time it was stipulated that the speed of the steamers in the West India Transatlantic service should be increased to 10½ knots per hour. The postal contract was again renewed in 1874; but in consequence of adverse articles and letters which had appeared in the public press, and because several members of Parliament had insisted that the service should be thrown open to public competition, the Directors of the Royal Mail Steam-Packet Co. found themselves compelled either to abandon the service altogether, or to accept a much smaller subsidy than they had hitherto received for carrying the mails. They adopted the latter alternative, and undertook the conveyance of the West India mails for an annual payment of £84,750—being about one-third of the amount of the first subsidy. The company in addition received the sum of £2,000 per annum to cover the cost of the steamers calling at Plymouth to land the mails instead of carrying them on to Southampton, the final port of destination. [Illustration: NILE. Royal Mail Steampacket Co.]