In 1865 the Pacific Mail Steamship Company had obtained a $500,000 annual subsidy from the U.S. Congress to operate a steam packet between the United States, China and Japan.

Under the terms of the statute, the new subsidy was contingent upon the company increasing its packet to a monthly service beginning on October 1, 1873 and continuing for a period of ten years.

The statute also stipulated that the company must utilize iron ships of at least 4,000 tons for the service, built in the United States and suitable for conversion into naval auxiliaries in the event of war.

[4] With the incentive of the new half million dollar subsidy, Pacific Mail decided to upgrade its entire fleet of aging wooden side-wheelers with new iron vessels.

During construction however, rumors abounded that a newly established British company, China Transpacific, was building even larger ships in England for service on the same route.

[7] When Pacific Mail proved unable to initiate its new packet service on the date stipulated in the June 1872 statute, Congress was obliged to decide whether or not to cancel the subsidy.

Owed a million dollars by Pacific Mail, Roach was now in financial difficulty himself as nervous creditors began calling for immediate settlement of their debts.

For her maiden voyage around Cape Horn to her operating port of San Francisco, she was heavily loaded with railroad iron fore and aft, while her coal was stored amidships.

As the coal was consumed on the voyage, the increasingly uneven weight caused the vessel's hull to "hog" or strain excessively, loosening approximately 5,000 rivets, while some propeller blades were also lost.

[11] On her next voyage, which was also her first transpacific crossing, the problems recurred, and when she arrived in Hong Kong, Roach suffered the embarrassment of having his celebrated new vessel declared unseaworthy by the British authorities.

Roach was forced to dispatch a team of workmen to effect on-the-spot repairs, and he now found himself denigrated in the American press as a builder of inferior ships.

The damage sustained on these two initial voyages was determined to be caused by improper loading of the ship combined with weakness of the wooden decks, which were subsequently replaced with iron.

[16] Cargoes exported to Asia by the vessel were mostly foodstuffs, but also included hardware items such as sewing machines, stoves, clocks, trunks, furniture, firearms, leather goods, candles etc.

For her voyage on May 15, 1875, for example, City of Peking carried 23,476 quarter sacks of flour, 2,193 packages of shrimp, plus meal, abalone, bread, codfish, salmon and mineral water in addition to a range of hardware items.

[18] The Chinese and Japanese immigrants brought to the United States on the City of Peking came via the port of San Francisco, where they were obliged to undergo a period of quarantine before entering the country.

[20] Another accident involving City of Peking occurred in Hong Kong on November 29, 1886, when the vessel rammed a French passenger ship, the Saghalien, causing severe damage.

After she was almost a week late in arriving, concern increased to the point that the steamship San Juan was dispatched to Honolulu with relief supplies, intending to trace the route of the missing vessel.

[23] On her next voyage however, loaded with 3,000 barrels of beer intended for the Philippines' occupation troops, City of Peking suffered a mechanical breakdown off Lime Point, and for the only time was unable to complete a scheduled transpacific crossing.