The law of 1845 (March 3) authorized the postmaster-general to contract
with American ship-owners exclusively for this service to be performed
in American vessels, steamships preferred, and by American citizens, for
a period of from four to ten years, with the proviso that Congress by
joint resolve might at any time terminate a contract. The subsidy was
embodied in the rates of postage thus fixed: upon all letters and
packets not exceeding a half-ounce in weight, between any ports of the
United States and any foreign ports not less than three thousand miles
distant, twenty-four cents, with the inland postage added; upon letters
and packets over one half-ounce in weight, and not exceeding one ounce,
forty-eight cents, and for every additional half-ounce or fraction of an
ounce, fifteen cents; to any of the West India Islands, or islands in
the Gulf of Mexico, ten cents, twenty cents, and five cents,
respectively; upon each newspaper, pamphlet, and price-current to any of
the ports and places above enumerated, three cents: inland postage to be
added in all cases. The postmaster-general was to give the preference to
such bidder as should propose to carry the mails in a steamship rather
than a sailing-ship. Contractors were to turn their ships over to the
Government upon demand for conversion into ships of war, the Government
to pay therefor the fair full value, as ascertained by appraisers. The
postmaster-general was further authorized to make ten-years' contracts
for mail carriage from place to place in the United States in steamboats
by sea, or on the Gulf of Mexico, or on the Mississippi River up to New
Orleans, on the same conditions regarding the transfer of the ships to
the Government when required for use as war ships.[FV]

The next year, 1846, in the annual post-office appropriations act (June
19), provision was made for the application of twenty-five thousand
dollars toward the establishment of a line of mail steamers between the
United States and Bremen; and early in 1847 (February 3) a contract was