Most of us are familiar with the names of the great communication companies of the United States. Few of us have had the opportunity to consider their organization or their connection with our commerce, international relations, and the conduct of War. It is the purpose of this article to provide a brief study of our commercial communication systems as they relate to national defense and to the protection of national policies and commerce which, by our fundamental naval policy, the Navy is bound to support.
Let us sketch the broad outlines of our larger companies. Towering over all others stands the enormous American Telephone and Telegraph Company and its associated companies. It exercises a virtual monopoly over wire telephony within the United States, operating in the neighborhood of fifteen million telephones. These companies own an immense wire system covering the United States and operate radiotelephone stations which, through contact with similar stations abroad, connect the telephone system of the United States with the telephone systems of nearly every country in the world. The American Telephone and Telegraph Company is a purely American company, although it owns about 30 per cent of the capital stock of the Bell Telephone Company of Canada and has a partial interest in the Cuban American Telephone Company.
The Western Union Telegraph Company is engaged in wire and cable telegraphy. It operates about 23,000 telegraph offices in the United States and conducts cable service to the West Indies, Europe, and, in conjunction with a British company, South America. It is primarily an American company.
The International Telephone and Telegraph Company operates through its subsidiary, the Postal Telegraph Company, a domestic wire telegraph service competing with the Western Union wire telegraph system. Another of its subsidiaries, the Mackay Radio Telegraph Company, operates a domestic radiotelegraph system, a marine radio service on both coasts of the United States, and over-seas radio circuits to Europe, the West Indies, South America, and Asia. Through another subsidiary, the Commercial Pacific Cable Company, it operates a transpacific cable from San Francisco via Honolulu, Midway, and Guam, to Manila. Fifty per cent of the ownership in this cable is British, 25 per cent Danish, and 25 per cent American. This is the only transpacific cable from the United States. Through other subsidiaries, All American Cables and the Commercial Cable Company, I. T. & T. operates an extensive cable network between the Atlantic coast and Central and South America and the West Indies, and six transatlantic cables to Europe. It owns 31 manufacturing companies in Norway, Belgium, China, France, Argentina, England, Czechoslovakia, Austria, Poland, and the United States. It controls 19 radiotelegraph and telephone companies in Brazil, Argentina, Chile, Spain, Cuba, Peru, Mexico, Uruguay, Puerto Rico, China, and Rumania. The International Telephone and Telegraph Company is primarily international in organization, scope, and aspirations, but the principal ownership and management are still in American hands.
The Radio Corporation of America is engaged in radiotelegraph and radiotelephone communications, and in radio broadcasting. One of its subsidiaries, R. C. A. Communications, Inc., operates the domestic end of about 50 radiotelegraph circuits to the West Indies, South America, Europe, Africa, China, and the South Seas. It is also building a domestic radiotelegraph system. Of its other subsidiaries, the Radio Marine Corporation of America operates marine coastal radiotelegraph stations on both coasts of the United States, while the National Broadcasting Company operates one of our great chain radio broadcast systems and two manufacturing companies in the United States manufacture its radio material. The Radio Corporation of America is American owned, operated, and directed.
There are several smaller radiotelegraph companies which should be mentioned, among them being the Globe Wireless Company, Ltd., the Tropical Radiotelegraph Company, and two agencies for radio transmission of press, namely, the American Radio News Corporation and the Press Wireless Company. Globe Wireless is a subsidiary of the Robert Dollar Steamship Company and operates almost entirely in the Pacific area. The Tropical Radio and Telegraph Company is a subsidiary of the United Fruit Company and operates mostly in the Caribbean. American Radio News Corporation is owned by the Hearst Newspaper Syndicate. It owns a chain of stations in the large cities of the United States, has a circuit to Cuba, and has been licensed to operate stations in South America and Mexico. Press Wireless is owned by the New York Times, Chicago Tribune, Gannet Newspaper Syndicate, and others. It has circuits to South and Central America, Europe, and Asia.
This brief outline shows an interesting picture of a number of great communication agencies not working in accordance with any national plan. Each one of them, under certain conditions, is capable of serving the needs of national defense, but under the present system of unrestricted competition and the absence of any policy relative to the nationalization and development of American communications, it is believed that much remains to be done before our commercial systems attain the position which they should occupy in the scheme of national defense.
What are the potentialities of commercial communications in peace and iu war? Why should the Navy interest itself in purely commercial enterprise as a means of helping to decide the issue of a major conflict? Some may consider that the Navy will have done its part when it has so organized its own communication system that it is capable of functioning efficiently under the load which will be imposed upon it at the outbreak of war, but this view hardly appears to be tenable for four reasons. (1) The Navy has, as its communication policy, “To co-operate with American commercial communication activities so as to enhance their military value in time of national emergency and to safeguard the communication interests of the United States.” (2) Neither the Army communications net nor the Naval Communication Service have sufficient facilities to render unnecessary the use of commercial systems in time of war. In fact, not only the Army and Navy, but the civil departments of the government as well, will be forced to rely to a great extent upon these systems during the course of hostilities. (3) Training and indoctrination of officials and personnel of these companies must be completed before the commercial systems can function efficiently in harmony with the organizations of the defense forces. This will require a considerable period of time and should not be delayed until hostilities are imminent. And, (4), dependent as the Navy is upon radio for the proper exercise of command, it must protect and foster the development of radio material in the laboratories of commercial concerns, for its own welfare.
We all know that modern warfare between powerful nations is not now merely a conflict between their armed forces. It has come to be a struggle between their entire populations. Not a soul in either country may live through a major war without taking some part, or being affected by it in some way. To many it may mean either a change of employment or an increase in the hours of labor. To some the effects of food shortage or necessary changes in diet may represent the sum total of the horrors of war. To others it may afford opportunity to spread dissent and opposition to constituted authority, and to the comparatively few, active participation in armed conflict with the enemy. It is the sum of the reactions of all the separate individuals to the aims and events of the war as they affect him or his, which determines the will of the people to carry on. As modern warfare affects the entire populace, in order to prosecute the war successfully, the great body of public opinion must be in support of it. No war can long continue without such support, as events of the World War amply proved.
The press and the radio broadcast are the most powerful and universally used methods of informing the people and developing public opinion, for not only do they interpret the progress of events to the average citizen, but they are the means of reflecting and crystallizing his reaction to them. Both of these agencies, however, must rely on communication via cable, wire, and radio to furnish them the news which they in turn transmit to the people. It is therefore evident that elimination of foreign influence from our communication channels in time of war is essential.
Furthermore, in time of peace the press news from foreign nations, passing over our international communication circuits, influences the public attitude in America toward those nations, and likewise press news from the United States destined for consumption abroad is a most powerful factor in shaping the opinion of foreign nations as to our institutions, aspirations, and national character. Our cables and international radio circuits provide the channels for this news and it is here that suppression of news items, or the coloring of articles so as to present the views of other nations in their most favorable aspect, cleverly and persistently engaged in, may finally result in the loss of popular support for essential policies of the United States, or the formation of opposition to them abroad.
It has been said that transportation and communications are the two handmaidens of commerce. In this day either one without the other is incapable of supporting our world-wide maritime commerce. We know that to depend on foreign bottoms for our carrying trade would in the end be fatal to our commerce in time of peace and would constitute a grave handicap in time of war. It is plain that the same applies to our communication lines which serve our shipping, for upon these lines of communication the masters are dependent for orders from the home office, which in turn must rely upon communications for market information, tariff changes, orders for merchandise, selling arrangements, and a multitude of other details upon which the life of the business depends. It is a simple matter for a communication company, controlled or operated by individuals who are not in sympathy with the interests of the United States, to withhold messages containing bids until foreign concerns have had the opportunity to act, to garble price quotations, delay transmission of orders, or disclose contents of messages to competitors; in short, such a company has the means of placing American commerce under severe disadvantages. In this day of ruthless commercial competition between nations our commerce should be able to rely entirely on United States lines of communication, and to that end they should be wholly owned and operated by citizens of the United States.
Considering our commercial communications systems from the point of view of national defense, we find that the Navy is vitally concerned with their integrity and prosperity. Especially is this true of radio, for it is the sole means of communication with our naval and air forces and with allied and neutral vessels in time of war. It is the nerve system by which the movements of the fleet and the merchant marine may be controlled in time of war or impending hostilities. While the radio communication system operated by the Navy in peace is sufficient for peace-time needs, it would be inadequate in time of war and would have to be augmented by the facilities of commercial radio companies. These additional facilities, together with those normally operated by the Navy, must be able to pass from a peace to a war status instantaneously. For efficient operation in war there must be training and indoctrination in peace. Such training and indoctrination will involve the disclosure of certain confidential material to the officials of the companies concerned. It has been stated that nearly a year elapsed after our entry into the World War before those commercial communication stations which were incorporated within the Naval Communication Service were capable of co-operating with it to the maximum, and the period immediately following the outbreak of hostilities is generally a time when communication facilities are strained to the utmost. Moreover, such training and indoctrination cannot be undertaken if there is any doubt as to the patriotism or loyalty of any of the officers, directors, or personnel of the company concerned.
Radio experts all agree that the art of radio is still in its infancy. Developments already well established indicate that apart from its place in the communication field proper, radio has almost infinite possibilities in such fields as distant control of offensive or defensive weapons and instruments of war. Developments of this nature are bound to progress along with development and research in the radio communication field. Such developments must be carefully guarded from the knowledge of possible enemies and this cannot be expected if the companies engaged in this work are composed of other than loyal Americans. Neither can it be expected of international companies, who are more or less compelled by the very type of their organization to exchange personnel in laboratories and operating stations, in order to keep all parts of their system in constant touch with latest developments in material and operation.
Technical supremacy in radio material alone will be of great assistance to the naval commander in time of war, for it may be the means of furnishing him with information of the enemy while preserving his own security; of affording him opportunities to exercise the initiative or to surprise his opponent, and of increasing the mobility of the units under his command. Without the most modern radio equipment our fleet will be almost certain to sacrifice these factors, and if developments taking place in our laboratories are made known to foreigners it is likely that their military and naval forces will use them to perfect the organization of their own forces to the relative disadvantage of our own fighting efficiency.
It is, therefore, not too much to require that secrets of the laboratory or undeveloped ideas and inventions which have not been applied be not disclosed to foreign companies or to foreign subsidiaries of in been thoroughly investigated as to their effect upon the national defense. They must not heedlessly be turned over to some foreign organization for exploitation. Another phase of internationalism in the communication systems of the United States must be considered. It relates to the position of international companies which control links both in the United States and in a belligerent country, the United States being neutral. The Secretary of the Navy in a letter to the Chairman of the Senate Interstate Commerce Committee, dated March 22,1932, covered the probable developments of this situation to a great extent when he wrote,
Nationally owned companies within this country Would be expected to scrupulously guard against committing an unneutral act, whereas an international company would not only lack the same incentive, but might even find it advantageous to Perform unneutral service. Such stations might easily be employed in espionage work and in the dissemination of subversive propaganda.
Many messages of a confidential nature pass over the communication circuits of the world between the diplomatic representatives of the various powers. Many of them are of grave importance, affecting our relations with other powers and the Prosperity of our country. If the contents of these messages are not kept secret, international complications may result, or the plans of our State Department involving the peace and welfare of the nation may be frustrated. For this reason it is best that dispatches of this nature be not forced to travel over any other circuits than those owned and operated by citizens of the United States and the nation with Which she is dealing. To permit the communication system of a third nation to handle them or to forward them over the circuits of an international communications company is to court trouble and possibly disaster.
Another aspect of the situation is the subject of mergers, concerning which hearings were recently held before the Federal Communications Commission. At first Stance the Navy would appear to have but academic interest in it, but such is not the case. At the commencement of rapid communications, Great Britain was the leading world power. She realized the necessity for support of her world-wide commerce and saw that adequate communications would become a preponderant factor in its development, so she set about building a world-wide cable net to support her commerce in all parts of the world, and she built well. At the present time she owns about 170,000 nautical miles of cable, practically as much as all the other nations of the world together. Her nearest competitor is the United States, with 95,436 miles.
The dominating influence of Great Britain in cable communication is apparent. She can, in this field, influence the rates, services, and policies of nearly all the cable companies of the world, and on the advisory board of the holding company which controls her cables sit officials of the British government to control its policies. Our American cable companies have long been intimately connected, of necessity, with the British cable system, and for many years have been forced to shape their policies to meet those of the British cable companies. To what extent Great Britain actually dominates our cable companies is unknown, but under these circumstances it would appear unwise to permit the radio communication companies of the United States to fall under the control of wire and cable companies, as radiotelegraphy seems to afford the United States the best means of competing with Great Britain’s cable net.
Reports seem to show that the British merger of cables and radio, completed in 1929, has not been a success. Indeed, the report of the chairman of Marconi Wireless (the British radio company which was merged with her cables), submitted to the stockholders in 1930, indicated that radio had been forced to bear the brunt of the depression for the benefit of the cable interests. If any conclusion may be drawn from the results of this amalgamation, it would be that any merger which places radio under the domination of cable and wire executives is a mistake. Cable and wire companies will be forced to protect their huge investments in material, which advances in radio tend to render obsolescent, and to do so, traffic over radio circuits must be diverted to the cables. This would dry up the sources of funds for research and experimentation in the field of radio and undoubtedly would cause us to lose much of the technical superiority there which we now possess.
Competition encourages invention and makes material or operational improvement a necessity if the competitors are to survive. It is recognized that competition has been one of the controlling factors in the rise of the United States to world power, and conversely, that the lack of it constitutes one of the greatest obstacles to be overcome before the Soviet Union can attain a condition of material prosperity. Competition is responsible in great measure for the progress which has been made in radiotelegraphy in the United States, and for the leading position which our radio companies now occupy in international communications. In view, therefore, of the Navy’s utter dependence on radio for adequate communication and the proper exercise of command, it would seem that its attitude should be one of active encouragement to the entry of radio into all fields of communication (including domestic telegraphy) in active competition with other types.
The Joint Board of the Army and Navy has recently made a study of American commercial communication systems in their relation to national defense. Its conclusions were that these systems are of vital importance to the security of the nation and that their freedom from foreign influence is essential. It recommended certain general principles by which the Army and Navy should be governed in all questions involving commercial communications which affect the national defense. These principles have since been approved by both the Secretary of War and the Secretary of the Navy and were presented to the Federal Communications Commission, which is now charged with the regulation of our cable, wire, and radio communication systems.
In its report the Joint Board recommended the exclusion of foreign owners and operators from our communication systems. It stated that the directors of all United States communication companies, including holding companies, should be United States citizens; that not more than one-fifth of the capital stock in such companies should be owned by foreigners and that such stock should be non-voting. It recommended that the status quo be preserved in the cable situation but that no mergers should be permitted which would increase foreign participation or influence in American communication systems. It favored the development of each type of communications to the limit of its capabilities and asserted the necessity for operation of communications in certain strategic areas by the Army and Navy. It pointed out the necessity for quickly placing commercial communication systems under government control at the outbreak of hostilities; and the desirability in time of peace, of training and enrollment in the reserve of operating personnel of commercial companies in order to facilitate this transition. It stated that no merger should be approved by the Army and Navy until those services had had an opportunity to study its effect upon national defense. It recommended that military and naval personnel who are technical experts in communications be made available to civil agencies of the government- The Joint Board recommended that,
To safeguard the interests of national defense in all communication matters and to assure that the above principles are carried out, the Secretaries of War and of the Navy should have representatives present, in full discussions of proposals before any Federal body set up for the Purpose of regulating communications, to present those features which may affect the national defense. In all cases, due consideration should be given to the requirements of national defense as stated by the Secretaries of War and of the Navy, and in case a decision is made by such Federal regulatory body adverse to such requirements as stated by one or both Secretaries of War and of the Navy, final decision in the matter should rest with the President.
From the content of these recommendations it would appear that considerations similar to those which have been outlined in this article may have been the cause of their adoption. At present it may be said that the United States lags far behind the other powers of the world in looking after the security of her lines of rapid communications. In fact, there is now no federal policy governing either their security or development. It would therefore appear that the recommendations of the Joint Board might well be used as the basis of any national communications policy which may be adopted by the federal government. The necessity for such a policy is not abstract. It is of foremost importance, not only to the Navy, but to the welfare and defense of the nation.
It cannot be too often repeated, or too much insisted upon, that the success or failure of a slate policy is dependent upon the amount of armed force behind it. For upon the amount of armed force behind it depends the greater or lesser amount of resistance, of friction, which that policy will meet with on the part of other nations. The prestige of a nation depends upon the general belief in its strength. The less its prestige, the more it will be checked and foiled by its rivals, till at last perhaps it is goaded into a war which would have been prevented if its prestige, or armed force had been greater. On the other hand, the greater its prestige, its armed force, the more reasonable and inclined to a fair compromise are its rivals found. So that the greater the prestige, the armed force of our nation is, the more likely is it that all our negotiations will be settled by peaceful compromise, and the longer we shall enjoy peace.—Murray.