Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-01
ENGLAND EFFECTS
W|RE-RAD|O FUSION
Details of Communications
Merger and Bearing on U. S.
Outlined by Shoup.
BY MARTIN CODEL.

E11AAAOGAIEI1AAs ApIn 1.-A|StItlAa
Of the much-discussed merger Of Grea:
Britain's formerly competing state and
private cable and radio facilities into a
$3.50, 100000 private holding and operat-
ing company are sketched by G. Stanley
Shoup. chief Of the communications
section Of the United States Depart
ment of Commerce, in the special radio
supplement Of the Annals Of the Amer
lean Academy of Political and Soc:a
Science, newly issued from the acaG
emy's headquarters here. The BritisI
merger Is effective as Of April !, 1925
according to Mr.. Shoup.
The British development Is exceed
ingly important to American foreign
commerce and to the international
strategic position Of the United States
1t has been the basis of much specula
ton concerning how United States IN
terestS-powerful technically and with
fast-eXpanding world radio system
but handicapped. by legal prohibitions
Of radio and cable combines-Shall meet
the international situation that Is de-
veloping.
MIR. Shoup thus sums up the salient
features of the fusion recently voted by
the British Parliament as the result
Of the destructive competition that
beam" or directional radio was CIV
ing the empires vast cable systems:
THE communications company will
acquire the two imperial cables across
the Atlantic, now operated by the Brit
ish post Office at a deficr>t the cables
Of the Pacific Gable Board connecting
Canada with New Zealand and Aus
tralia. a route which, when linked with
the two Atlantic cables mentioned and
the Canadian land lines, provides an
all-BritiSh system, no part Of which
passes through foreign territory; the
West Indian cable and wireless system,
operated by the Pacific Gable Board,
and the lease for Is years Of the profit
able beam radio circuits of the post
office at an annual rental Of f250,000,
in addition to other monetary consid-
erationS.
Net Revenue Fixed.
"A standard net revenue Of e., 865, 900.
exclusive of non-telegraphic investment
revenue. will be fixed to the purposes
OF the communications company. Half
OF any excess revenue will 60 to the
communications company and the other
half will be devoted to reduction of
rates. The board of directors of the
merger company. the communications
company and the cable and Marconi
companies will be the same, two of
whom shall be approved by the gov
eminent.
Provision is made for an advisory
committee, composed OF representatives
Of the governments which were parties
to the wireless and cable conference.
This committee shall be consulted by
the communications company about all
questions OF policy, including any al
teration in rates.
1T is agreed that British control
must be guaranteed. that the govern
mentS may assume control Of the cable
and wireless systems during national
emergencies, and that the army and
navy are entitled 10 construct and
operate cable and wireless stations for
their own needs but not for commercial
purposes
Thus the British are passing out Of
the period of struggle between state
owned cables and State-owned wireless
and between private beam" wireless
and private cables to a regulated mo-
nopoly, which, according TO Mr. Shoup,
Msures the maintenance Of both cable
and radio communication, and, most
important Of all from the standpoint
OF international communications elimi-
mates competition within the empire,
provides unified system for Compel
ing with foreign companies and con-
celVably may reduce rates.
Issue Forced in Britain.
Cheaper operation Of radio and the
constantly increasing efficiency OF di-
regional radio transmission forced the
issue in Great Britain. Wireless has
not Jeopardized American cable traffic
appreciably, but it certainly has Gre
ated problem as to the maintenance
of American leadership in international
communications. Similar combines in
Germany and France, which also have
well developed and expanding radio
systems, are looked for by Mr.. Shoup
The Government expert says that
there has probably been tendency
toward exaggeration regarding an i'm
pending communication war" but he
points out the need Of cooperation and
possible consolidation in this country
His statements are especially worth
noting in view of the sentiment in Wall
Street, where the communication situa-
ton has attracted much interest and
where the belief seems to prevail that
the prohibitive American statues on
like mergers can be circumvented or
changed to permit the Radio Corpora
ton of America to fuse its world wide
radio facilities with the vast cable and
wire systems Of the International Tele-
phone & Telegraph Co. and its afi1li-
ated companies.
Many believe" he says, chat Con-
gresS may remove certain features of
the present radio law and enact legis-
lation permitting the merging OF our
wire and radio companies into one
great consolidation. in which the public
would be protected by probably both
representation and regula-
ton, particularly in the matter of
rates.
There are those who believe that
existing cable and radio companies in
the United States should all be con-
Solidated into one organization under
Government regulation, on the theory
that If there are several companies in
this country with which foreign COM
munications company has to deal 1t
will thus be In q position to play COM
peting American companies against
each other
(Copyright, 1929, by North American News
paper Alliance.)
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