Coal and Capital

Despite its quick launch and early success, the PSNC did not always enjoy smooth sailing. As David J. Clarke explains, Wheelwright encountered two problems while launching his steamship company. First, his initial report mentioned access to coal in Chile, through deposits near Talcahuano. While Wheelwright had declared coal to be an appropriate fuel for steam navigation, one of his associates, the British diplomat the Hon. Peter Campbell Scarlett, disagreed, arguing that "a sort of coal is used in the Bay of Talcahuano, the quality and usefulness of which is much disputed" (235). The PNSC's Board of Directors downplayed the issue, believing that coal could easily be imported from England or Australia. The next few years would prove them wrong.  

Harbour of Tacahuano, 1838.jpg

View of the Harbor of Tacahuano, 1838

The second issue Wheelwright encountered arose in regard to the amount of capital required to launch the company. The prospectus stated that an initial amount of £250,000 would be ideal, although "less than one-half this amount will be sufficient to carry into full effect the operations of the company” (Clarke 235). David Clarke interprets this disclaimer as suggesting that, although the Board of Directors had touted trade routes with Australia as one of their company's advantages, they did not actually intend to launch these routes immediately. Instead, they dangled the promise of reliable trade between Australia and the Pacific coast of South America to capture the attention of the British government and thus gain a Royal Charter. As maritime historian John Kennedy stated in 1903, "it was not the intention of the company to trade elsewhere than along the Pacific Coast, and for this purpose a capital of a quarter of a million pounds was thought to be sufficient" (Clarke 236). In other words, the PSNC promised far more than they intended to deliver. In order to expand their routes to meet their initial pledges, the company eventually merged with other shipping lines.

References:

A View of the Harbor of Tacahuano from National Library of Chile (Santiago, Chile), 1838. Retrieved from http://www.memoriachilena.gob.cl/602/w3-article-70528.html. Public Domain - Chile.