The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-22
HUGE MERGER
OF TELEGRAPH
FIRMS LOOMS
AmaIgamation, Supervised
by Government, Is Up
to Congress.
downright. 1894. by United Pressl


nation of the most powerful tele-
graph communication systems in
the world into single, American
owned and government supervised
monopoly was forecast today in New
York and Washington.
Such a merger, involving the
Western Union Telegraph Company,
the Radio Corporation of America,
and the international Telephone
and Telegraph Company and its
subsidiaries, appeared to depend
solely upon the attitude of the
United States government.
If congress, which has been i'm
portuned to permit the merger, is
willing to pass legislation waving
the old-fashioned Sherman anti
trust law, the management Of the
giant corporations involved are
willing-some of them grudingly-
to join hands.
The amalagamatlon proposal,
which has been discussed for more
than five years, has met obstacles,
now from some of the companies
involved and again from the gov
ernment, since 1928. Decreasing
revenues, the increasing Importance
of wireless in foreign communica-
tions, and figures showing an an
nual waste of at least $4,000, 900,
have convinced most authorities that
the merger must come.
Service Is World Wide
These concerns, plus their subSi-
diaries, own, control and operate
land wires, cables and radio stations
providing communication through
out the United States and into Eng
land, France, Germany, Spain, Italy,
middle Europe, the Orient, and Cen
trail and South America.
Their lines overlap, duplicate,
parallel and produce a species of
competition in the foreign field that
is in stark contrast to the compact
monopolies of the larger foreign ma
tions. But their consolidation would
involve principles of American in
dustrial and political philosophy,
particularly the ingrained distruSt of
trusts and monopolies inherited by
the people from the regime of Theo-
dore Roosevelt.
Americans are the largest users
of communications in the world,
and the 25,OOO,OOO business they
do by cable should afford a profit
annually of from 100000 $780,
900 if consolidated. Today, with the
direct competition between w. u,
RCA and 1. T. & T. for business
originating in Europe and the
Orient-busineSs under the control
for the most part of foreign gov
ernmentS-these companies bid
against each other for the traffic
and the "payoff" goes to the foreign
nations. And rates remain high.
u. S. Prestige Suffers
THE prestige of the United
States" it is said in communication
circles. suffers every day by the
competition between the American
companies"
This competition now has be-
come marked in the domestic field.
Both RCA and I. T. & T. are es-
tabliShing stations in the United
States which will compete with
Western Union in their own field,
and reducing rates meanwhile.
Radio transmission as against land
lines is the threat against the
older company.
Radio also is a decided threat to
cables, for the day is coming when
the cable will be nothing but IAN
obsolete necessity" in the minds of
engineers. The necessity will con-
siSts of the need for a backStop, or
auxiliary, to radio communication.
Meanwhile, in the United States
proper, the two principal competings
telegraph companies, Postal (owned
by I. T g. IT, and Western Union,
have separate plants, one capable of
taking care of IS per cent of the
present business of the nation, the
other capable of taking care of 80
per cent of it.
s21,OOO,OOO in Waste
One company employees $4,000
men and women, the other 5000.
The duplication of rental in New
York city alone is approximately
S1.000,000. The reported annual
waste through parallel service is
$4,000, 900, of which the telegraph
magnateS say S15,000,000 could be
saved-or used to expand the serv-
ice
The labor element involved in
such a merger looks askance at the
proposal and believes that thou
sands of employees would be thrown
out Of work. The companies say they
have other plans, and make these
promises:
l. Of the total number of en-
ployes. $4,000 are messenger boys.
Under normal conditions, with the
tremendous percentage of turnover
in this class of employment, the ex-
cess labor in this class would be
eliminated in one year through
graduation"
2. The next largest affected class
would be branch managers and
operators. The companies should
be able to promise that these men
and women would be employed in
the expansion of the consolidated
system into territories not now
served by the network.
3. Rates could be reduced on an
average 10 per cent throughout the
nation. with q profit to the merged
companies.