It was hoped that this would create a company which could compete against French and German competition and would be strong enough to develop Britain's external air services while minimizing government subsidies for duplicated services. With this in view, a £1m subsidy over ten years was offered to encourage the merger. Agreement was made between the President of the Air Council and the British, Foreign and Colonial Corporation on 3 December 1923 for the company, under the title of the 'Imperial Air Transport Company' to acquire existing air transport services in the UK. The agreement set out the government subsidies for the new company: £137,000 in the first year diminishing to £32,000 in the tenth year as well as minimum mileages to be achieved and penalties if these weren't met.