The Cunard steamship company was founded in 1840, by Samuel Cunard with the express intention of tendering for the lucrative transatlantic mail Contracts. These were attractive by virtue of the subsidies granted by the British Admiralty, who were responsible for the mails.However it was not all in favour of the steamship owner as the Admiralty benefited too. Some of the clauses included stiff penalties for missed sailings and delays but were more than worth it and what is more, the amounts paid to companies were review-able. The Admiralty also benefited as the ships were a training ground for naval personnel. Two other stipulations were also imposed,they were that a Royal Naval Officer sailed with the ship to "safeguard the mails" and that the ships themselves were able to mount heavy guns should a national emergency arise.Thus on the May 4th 1839, much to the dismay of rival tenders who pointed out that Samuel Cunard did not yet own any ships, the contracts were signed and so was born the special relationship between the British Government and Cunard.July 4th 1840 at 14.00 hours saw Cunard's first ship sail. The 1.156 ton paddle steamer Britannia, left Liverpool for Halifax, Nova Scotia.As Cunard prospered his fleet grew and so did his subsidies. However, the Admiralty would stipulate that in the event of war they could requisition his fleet. When the Crimean war broke out the Admiralty called on Cunard for his fleet. Cunard supplied eleven of his sixteen ships to the Admiralty during this war for the purpose of troop transport. The war over, Cunard returned to commercial routes.Sir Samuel Cunard died on the 28th April, 1865. The Cunard company continued to grow along with the subsidies from the Admiralty culminating in an agreement in 1903 that would tie the two together. That agreement would leave Cunard at the mercy of the British Admiralty in all aspects of their ship building programme and their fleet placed at the disposal of the Admiralty in time of war. For Cunard that meant an increase in subsidies and a government loan at favourable rates over 20 years to build two new ships. They were to be the LUSITANIA and the MAURETANIA. The public copy of the agreement is open to inspection in the Cunard archives at Liverpool university. After the agreement was signed and approved Cunard was effectively under the control of the British Government by way of the Admiralty.They are kept in the Sydney Jones library. Cunard also prepared a memo for the company which outlined their obligations in the agreement, (said to be as prolix as they were onerous!) excerpts of which are here reproduced. Cunard Building, Liverpoolimage linkCUNARD OBLIGATIONSClause 31) To build with all dispatch two steamships of large size capable of maintaining a minimum average speed of from 24 to 25 knots an hour #in moderate weather.2.a) To submit to the Admiralty before the building is started, the plans and specifications of the proposed steamers.b) To modify such plans and specifications if requested by the Admiralty within one month.c) To construct each such steamship to the satisfaction of an inspector to be agreed upon between Admiralty and the company and to be employed at the joint expense of the Admiralty and the company.Clause 4To hold, at all times during the term of the agreement all the company's vessels at the disposal of the government for hire or purchase.Clause 5)Not to alter the memorandum or articles of association as revised in accordance of the agreement) without the consent of His Majesty's Government. To observe the provision of the under noted.Articles of Association:-No.2) Providing the company is to be and remain under British control and that - No foreigner is to hold office as a Director. No foreigner to be employed as a principal officer of the company. No share to be held by or in trust for a foreigner or foreign corporation.No.3) To carry on the company business to the best advantage.No.4) Not to unduly raise freights or chargesNo.5) Not to give undue preference as against British subjects in the fixing of freights or charges.No.6) To submit to the Admiralty the plans of any new vessels built to attain the speed of 17 knots or upwards and to modify such plans if so required by the Admiralty within one month.No.7) To afford every facility to Admiralty for placing fittings on board in the event of any of the vessels being taken up for use as armed cruisers. To provide storage for fittings, not more than 15,000 cubic feet and 1000 feet of floor space and to keep and maintain the fittings in clean order.No.8)Not to let out on charter except to the Indian Government any vessel of 17 knots or upwards.No.9)a, To secure that on all the company's steamers the masters, officers and engineers in charge of a watch on board shall always be British subjects and that three fourths of the crew are British subjects.b, That on the Campania, Lucania and "Umbria" as long as neither of the 2 fastest steamers have started on it's first voyage, all certified officers other than engineers and not less than half of the crew shall belong to the R.N.R. or the Royal Naval Fleet Reserve under a penalty of £12 per head. To furnish each year to the Admiralty a return showing the number of R.N.R. or Royal Naval Fleet Reserve Officers, Engineers and men borne in each vessel.To use the Company's best endeavours to secure the employment of the largest possible proportion of members of the Royal Naval Reserveor Royal Naval Fleet Reserve.No10) To keep the company's vessels in a thoroughly seaworthy condition and good repair. To keep the two fastest steamers in such condition as to be capable of maintaining an average minimum ocean speed of 24.5 knots an hour in moderate conditions. To permit His Majesty's Government at all reasonable times to inspect all the company's steamers in order to see that they are kept in such condition.N0.11)To adduce to His Majesty's Government within three months after the expiration of every year calculated from the date the vessel starts on her first voyage such reasonable proof from the running of the vessel as His Majesty's Government may require that each vessel has been capable of maintaining a minimum average ocean speed of 14.5 knots per hour in moderate weather.No.12) To permit the Admiralty to make at their own cost and reasonable provision for the fittings of pillars.N0.13) To register and keep registered all the company's vessels under the British Flag and not to do anything to endanger the British Registry or the right to fly the British Flag.N0.14) To sell no vessel of the speed of 17 knots or upwards without the previous consent in writing of His Majesty's Government, but such consent not to be unreasonably withheld under certain conditions, also not to sell any vessels (whether or not of the speed of 17 knots or more) which has during the previous 12 months been ordinarily employed as a mail ship subject to certain conditionsN0.15) To sell no vessel of the speed of 17 knots or upwards without giving seven days notice in writing to His Majesty's Government and allowing His Majesty's Government the option of purchase.Clause 7To adduce to the satisfaction of the Admiralty reasonable proofs from trials that the two fast steamers will be capable of maintaining a minimum average ocean speed of 24.5 knots in moderate weather, failing which the company will be liable to a reduction of the subsidy.Clause 10a, To secure the loan advanced by His Majesty's Government by a charge upon the whole of the company's ships.b, To secure the charge by a Trust Deed and by mortgages on the steamers particularised in the first schedule of the agreement and the two fast steamers.c, The loan to be advanced to the company by instalments on the inspector referred to in clause 3 certifying that the provisions of that clause have been complied with up to the date of the certificate.d, The loan to carry interest as to one half from the date on which the first of the two fast steamers sails on her first voyage and as to the other half from the date on which the second fast steamer sails on her first voyage.e, The interest payable by the company on so much of the loan as may be due to be at the rate of 2.75 per cent per annum.f, The loan to be repaid by annual instalments equal to one twentieth of the total amount of the advance. The issue to two nominees of His Majesty's Government as soon as the Articles of Association have been altered as provided for one twenty pound share with certain privileges.Clause 13To convey the mail from Liverpool via Queenstown or from Queenstown to New York once in every week.Clause 14To sail from Liverpool a mail ship every Saturday as soon as possible after the advertised hour and to put to sea and proceed direct to Queenstown and remain there until the mails are embarked and thence proceed without unnecessary delay direct to New York.Clause 151, To employ as mail ships in all cases vessels of adequate capacity, power and speed.2, To employ as mail ships the fastest of the steamships for the time being belonging to or chartered by the company.3, To employ in the event of the fastest of the company's steamers being disabled, hired by the Government or temporarily withdrawn for annual overhaul, the steamships ranking next in rate of speed,and to arrange for the annual overhaul of the fastest steamers to detract in the least possible degree from the rapidity of the mail service.Clause 16To provide on each of the mail ships a separate room or rooms for the mail and to keep the parcel mails in a place of safety.Clause 17To provide mail sorting accommodation on board the ships on certain terms if required by the Postmaster General.Clause 18The Master of each ship to furnish to the Postmaster General the usual abstracts of his logs and certificates showing the due delivery of mails.Clause 19Not to convey any letter other than mails.Clause 20To convey all parcel mails from New York to Queenstown and Liverpool and all mails from the United Kingdom to the United States of America which the Postmaster General or his officers may require to be conveyed.Clause 21To contribute one third towards the cost of special service for conveyance of mails between London and Dublin.Clause 22To observe quarantine and Public Health arrangements.Clause 23Not to attempt to exercise any lien upon the mails for or in respect of a general average contribution.Clause 24Not to convey in any steamships conveying mails any article which in the opinion of the Postmaster General is likely to endanger the mails.Clause 25To be responsible for the loss or damage of any parcel or any registered postal packet provided the aggregate amount shall not exceed £500 in any one voyage.Clause 30Not to assign, under lien or dispose of part 2 of the agreement without the consent of the Postmaster General.Clause 35To subject any difference or dispute in connection with the agreement to arbitration.Clause 38To execute and do all acts and things necessary for the carrying out this agreement as soon as the special resolutions have been passed by the company's shareholders.TRUST DEEDClause 3To issue to His Majesty's Government on it's nominees stock for an amount equal at par to the amount of equal instalment of the loan to be made under the agreement.Clause 7To mortgage or cause to be mortgaged to the trustees the steamships referred to in the schedule of the trust deed and the new fast steamers.Clause 8To charge in favour of the trustees the specifically mortgaged premises with payment of the stocks and the interest thereon.Clause 9To charge with payment to the trustees of the stock and interest thereon the assets and undertakings of the company for the time being other than the specifically mortgaged premises.Clause 20To establish a sinking fund for the redemption of the stock and at the expiration of each year from the date on which the second of the two fast steamers sails on the first voyage and on the same day in each succeeding year, pay to the trustees a sum equal to a twentieth of the amount of the stock issued.Clause 21To invest all monies which under the trust ought to be invested in the names or under the legal control of the trustees in certain stocks or funds or banks.Clause 221) To conduct the business of the company during the continuance of the security in a proper and efficient manner and to the greatest possible advantage.2) To keep the usual and proper accounts as provided in the company's Articles of Association.3) To perform all obligations under the agreement with His Majesty's Government.4) To keep the company's vessels in good seaworthy order and condition so as to comply with the requirements of the Board of Trade.5) To permit the trustees and such persons as they shall from time to time appoint in writing to view the state and condition of all vessels and to inspect the company's books and accounts.6) To keep all vessels in process of construction adequately insured and also all vessels for the time being forming point of the fleet insured in the aggregate to the extent of one half of the amount for the time being due to the stock. 7) To furnish to the trustees in every year a full and complete list of certificates by the secretary of the company and all the marines policies for the time being in forceClause 24To pay to each of the trustees in each and every year during the continuance of their security for their services the sum of £210.SECOND SCHEDULEClause 2Provide that whenever the sinking fund established under the trustees amounts to £100,000 it shall be applied in redeeming at par an equivalent amount of stock.Clause 3Any stock not previously redeemed to be redeemed at par the expiration of 20 years.Clause 5Stock to carry interest at the rate of £2.15.0 per cent per annum payable on the 1st July and 1st January in each year.Clause 6Every holder of stock to be entitled to a certificate under the seal of the company.Clause 22A register of the stock to be kept by the company.