Construction
City of Tokio and City of Peking were ordered by the Pacific Mail Steamship Company in order to take advantage of a new $500,000 congressional subsidy for the company's steam packet service to the Far East. After contracting with the shipyard of John Roach and Sons for construction, Pacific Mail ran into financial difficulties after two company directors squandered the company's cash reserves in a stock speculation scheme and then fled the country with the balance.
Pacific Mail's woes were exacerbated after the stock speculator Jay Gould, in a clandestine attempt to acquire the company's stock cheaply, persuaded the U.S. Congress to rescind its $500,000 annual subsidy. Pacific Mail's inability to meet its financial obligations threatened in turn the survival of the shipbuilder John Roach and Sons, which had already invested more than a million dollars in constructing the two ships, but Roach was able to hold off his own creditors. Roach eventually renegotiated the Pacific Mail contract, reducing the latter's monthly obligations from $75,000 to $35,000, and the two vessels were launched in 1874.
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