New-York tribune., 1876-12-23
PROPOSED CABLE MONOPOLY.


GRAPH AND TRUST COMPANY-A SCHEME 10
RECOVER LOSSES PROM BAD INVESTMENT.
There arc rumors of a project in England
for the aation VI the Direct United states Cable
Coil,inny and tho Anglo American Cable Company
TRIBlSR reporter yesterday madc inquiries OF i"rehoe
Ophant the representative Of the former company IN
America n reference to the correctness OF the report
and tie effect such anal gamaOn, II eceei "ouId ha'e
upon his company and upon the public. He said;
The Direct Cable Company VA organized about -FOUR
ve,rs AGO. and has been working with Que cable about
year IL started for the express purpose Of compel
ing with other lines aud its memorandum oi association
contains clause prohibiting 1t from amalgamahg win
or participating in the profits Of the existing cable coh
panes There IA now only ether company. the
uerlcan which absorbed the French Company
There Is an Engis company the Globe Telegraph anI
Trust Company, which buys stock Ia hil telegraph COM
panes averaging IL aud exchanging itso scrpio' the
stock OF any particular telegraph company, with guar
autco to pay the regular interest The Globe bouSh'
very largely Of both the Anglo-Amcr!can and the
Eastern Telegraph stocks, at time when they were
both at par it stands TO lose from 100000 to
esOOOOO By depreciation. /; has 81 100000 Of the
American stock aud finding, three or four months
an that the only hope OF recovering s Losses was to
cxtngush competition, the officers bought, as they
claim, a controlling interest Ia the Direct Companys
stock und arc now making EFFORT TO force the two
companies into a joint purse arrangement While ths
may enable the Globe Company tho losses sus
Timed by its bad investments, IL would bc disastrous
policy the shareholders who have no special interests
to protect The amalgdmnti1n Of the French hhe win
the AngOAmcrican WAS injurious To the shniehOdeS Oh
the former ana the result Of the proposed mo'enel 10
the shareholders Of the Direct Cable Company would bo
similar"
Mr. Oluhnnt was asked II In his opinion the scheme
would succeed He answered that he did not think So
because consolidation would involve the liquidation ot
the Direct Company account OF tho provision II It's
charter Liquidation" ho said, would be a form OF
cyading iis legal obligations Amalganation would IN
yolYe the breaking Of all s pledges which nave given
to the telegraph companies with which 1t has contracts
in this country and feel bound in honor to do all can
10 oppose it,"
Reporter-Arc you aware Of any movement looking to
the organization Of another ocean cable eOmpanyi
Mr., ,Oiirhant- RumOrs OF the formation OF such com
pany have reached me, and not surprised that the
laying Of another cable Is contemplated There could DO
no better investment at present than IN another cable
across the Atlantic whether the Direct Company be alb
sorbcd or not Subscriptions Of S3,OOOOOO would suffice
10 lay it, and with acapta OF One-nnh that OF the eX-
istng companies would take 20 per cent OF all the
business.
Mr. Pender chairman Of the Globe Telegraph and
Trust Company issued circular proposing the joint
purse arrangement mentioned above 10 which director
OF the Direct Cable Company has issued circular reply
which points out the disadvantages 10 both companies
and 10 the public which would result from such an ar
rangemcnt The following contains the chle1 points Oh
the argument adverse to nmagamation:
The clause in tho charter Of the Direct Cable Company
prohibiting amalgamatOn IL OF vital necessity TO pro
ec It's interests and TO secure reasonable tarn for tho
public II there had been such restriction In the char
ter the French Cable Company, both II and the Anglo
American wOuld have been better off, for there would
have been occasion for the creation OF third COM
pany and there would not have been the unnecessary
multiplication of cables, by which shareholders have
been robbed OF their proper dividends and high charges
| 10 the public have become necessity. An
amaIgnmatOn between the two existing compa-
nIes would be a blunder from which the Globe would
ultimately receive injury for after the public had sur
| fcred from the monopoly for q time, new company
would be started 10 bring down the rates Such com-
pany, with two cables could reckon nearly half the
business notwithstanding the possession OF six cables by
| the AnglO-hmercan, The company would then be
m excellent financial condition account OF its
pAratively small capital Tho other combined compa-
nies would be q oOrrespOndingly bad condition Two
cables OF xceent quality Of those Of the Direct
| Cable Company would be capable of doing all the
| business now required between tho two con-
| tnents, which Ia good why
| steps should be taken likely TO lead 70 tho
establishment OF other lines The only from which
the Direct Company has sun red has been the breaking
OF its cable three tines t has not suffered from compet
ton, is earnings will come to S750000 for the
year. and have been at the rate OF S950000
year for the last three months nearly ~ per cent OF
the total earnings OF both transatlantic companies,
though the AngioAmerican has iye cabes and the Di
rect only one