§ THE EARL OF CLARENDON rose to ask His Majesty's Government if they will give every possible facility to Imperial and International Communications, Limited, for research and experimental work in connection with wireless telephony. The noble Earl said: My Lords, I need not, I think, detain you for any length of time in putting this Question, because I understand from my noble friend Lord Russell that the reply will be of a sympathetic order. But I want to assure him at the outset of what I have to say that there is no ulterior motive behind the Question. It is, in fact, a purely friendly one. But it is essential at this stage to secure, so far as we can, some form of positive assurance from His Majesty's Government that the International Communications Company, Limited, which I represent this afternoon in your Lordships' House, shall in no way be hampered in so far as research and experimental work are concerned. If that great merger is in any way hampered in so far as this particular part of its operations is concerned, it means 12 that we shall lose that part of the market which is connected with the sale of wireless telephonic equipment. It is not, I think, stretching the imagination too far to say that only by means of research and experimental work is the production side of the enterprise enabled to ascertain what exactly are the needs of the customers in this particular line throughout the world.
Before proceeding further, I should like to read to your Lordships a passage from a book which was written quite lately, entitled "America Conquers Britain" by a gentleman of the name of Ludwell Denny. The book is published by Alfred A. Knopf, Ltd., and I would most seriously commend it to the attention of those of your Lordships who take an interest in matters of this kind. As your Lordships are probably aware, there exists in the United States of America a very powerful organisation known as the International Telephone and Telegraph Corporation. This great enterprise started operations in the year 1920; that is to say, ten years ago. It was organised by two brothers of the name of Behn. It started with a capital of $6,000,000, and in the year 1928 its annual gross earnings amounted to a sum of $81,000,000.
Turning to Mr. Denny's publication. I would like to read this short passage to your Lordships. Mr. Denny says that this particular corporation, the International Telephone and Telegraph Corporation,
probably has done more in nine years to break the British world communications monopoly than all other companies and Governments combined in the half century of electrical communications. I.T.T. in its field has conquered most of Latin America, has invaded Europe, and now reaches out for more in every direction. Starting with purchase in 1920 of the telephone systems of Cuba and Porto Rico, it connected these with the United States by a Key West-Havana telephone cable in co-operation with A.T.T. [American Telephone and Telegraph]. Then I.T.T. jumped across the Atlantic in 1924 to acquire from the Spanish Government 80 per cent, of the stock in that country's telephone system, which it reorganised. This was followed in 1925 by purchase from Western Electric and American Telephone and Telegraph of the International Western Electric. It reorganised the latter as the International Standard Electric, with factories in London, Antwerp, Vienna, Paris, Madrid, The Hague, Budapest, Milan, Tokio, Shanghai, and other key cities abroad.
At that point the Behns came to terms with the House of Morgan. Subsequent international extension was even more rapid. The trust's European telephone holdings soon included the French Thompson-Houston interests, and were followed by municipal installation contracts in Paris and other cities. German manufacturing companies were acquired, and then the British Creed and Company. The only large European competitor remaining is the Swedish Ericsson Telephone Company, operating in Scandinavia, and parts of Poland, Italy and the Balkans.
Swinging back to this"—
hemisphere I.T.T. in 1927 acquired All America Cables (30,000 miles of sea and land lines in addition to radio connections) linking the United States, Central and South America. This was followed by acquisition of telephone lines in Chili, Southern Brazil, Montevideo and parts of Uruguay, and Mexico, and radio concessions in Peru. Much to the alarm and indignation of London, the Behn-Morgan Trust in 1928 bought out the British owners of United River Plate Telephone Company, covering Buenos Aires and four Argentine provinces, the largest single system in Latin America. Only a small minority interest is retained by the British.
Then the trust was rounded out by absorbing in 1928 the Mackay combine, including the Postal Telegraph system in the United States, the Commercial Atlantic and Pacific cables (27,000 miles) and the Mackay ship-to-shore and station radio systems. As a result gross earnings of I.T.T. in 1928 rose 118 per cent. After buying the Mackay and the All America Cable systems, I.T.T. in 1929 obtained the Venezuelan cable monopoly (formerly held by the French). It bought United States and Haiti Telegraph and Cable Company, which connects with the system covering the West Indies and with the north coast of South America systems formerly monopolised by the French-British interests. Other recent acquisitions include radio-telephone-telegraph concessions in Nicaragua, Ecuador, Peru, and Colombia. I.T.T. is now said to control about two-thirds of the 1.5 million telephones in South America.
§ That is the story I have to tell your Lordships in connection with the competition which the company I have the honour to represent has to meet from the other side of the water. Your Lordships will agree, I think, that the growth and development of that corporation is nothing short of remarkable. I have endeavoured to show your Lordships by what I have read from that book what it is exactly that the Imperial and International Communications are up against. Our request this afternoon is bound up with a desire to secure from His Majesty's Government an assurance that 14 they will use their influence, as far as possible, on behalf of the great organisation which I represent as against the American interests on the other side of the water. If the organisation which I represent fails in securing what we are out to obtain so far as we can, it simply means this. So far as we know there is no other organisation in existence which can compete in any way with that great organisation on the other side of the water, and unless we are successful the American interests will secure the entire field of operations. I beg to ask the Question which stands in my name on the Paper.
THE UNDER-SECRETARY OF STATE FOR INDIA (EARL RUSSELL)
My Lords, the noble Earl has given a very striking advertisement to this American development. I do not quite know what he suggests about it. We have to recognise, I think, that America is the richest country in the world at this time and that she has these stupendous developments with which no other country can compete. I do not know whether the noble Earl deprecated that, or whether he would deprecate the employment of American capital in the concerns, the electrical concerns though not necessarily the wireless concerns of this country. But that also has taken place. If the only object of the noble Earl was to show the serious competition which his or any other company has to meet, that, of course, I understand. I was very glad to learn from him, when I applied to him in advance, that he had no complaint to make of his treatment by the Post Office at present. The Postmaster-General was a little alarmed by this Question, and thought there might be some suggestion that proper opportunities for research and experiment had been refused.
§ THE EARL OF CLARENDON
I hope the noble Earl will forgive me interrupting him at this stage. It is quite true to say we had no complaint to make in so far as this particular question is concerned, but I think I made it clear to the noble Earl this morning over the telephone that we were not very happy, or very pleased, over the result of the Committee of Inquiry into the question of beam telephony.
I quite appreciated that the noble Earl and his company were not pleased with the result of that Inquiry, but that has nothing to do with the Question which is before your Lordships this afternoon, which deals merely with the matter of research, and the Postmaster-General was glad to learn that no complaint was made regarding facilities for research or experiment which had been afforded by the Post Office or permitted by the Post Office up to now. I can assure the noble Earl, although it is difficult to give a general reply without knowing whether there is any specific complaint, that the Postmaster-General is always anxious in principle to assist the company in research operations so far as he can do so. His position of course has been well described by the late Postmaster-General as that of the policeman of the ether, and, as the noble Earl knows quite well, he has certain obligations in that respect, to see, for example, that experiments do not cause interference to other wireless stations which are operating; but, subject to that, he is perfectly willing to do everything he can do to assist or to permit research by this company.
In order that my answer may be as full as possible I have also communicated with the Department of Scientific and Industrial Research, and I am informed by them that they undertake, through their Radio Research Board, a considerable amount of radio research work which is of general interest and devoted to the study of the more fundamental problems, such as atmospherics and the 16 theory of wave propagation—all matters of importance for long distance stations. Those investigations give rise to results which are very often of great importance, and they are made generally available to the community. They would, therefore, also of course be available to Imperial and International Communications, Limited, just as they would be available to any other company. More than that, the Department authorise me to say that they welcome co-operation in these investigations with the company, and that they would be glad to afford facilities for the research workers to exchange views on the problems. That seems to me to be a promise of very full co-operation.
I have only perhaps one word of caution to add, and that is to say that the Postmaster-General's answer is limited, and properly limited, to questions of research—real questions of research—and of the development of telephony, and must not be necessarily taken to pledge him in the future to anything in the nature of Press demonstrations or public advertisements or anything of that sort, which are quite apart from actual research. But so far as actual research is concerned the answer can be made without any qualification, and I hope that will satisfy the noble Earl.
§ THE EARL OF CLARENDON
My Lords, I should like to thank the noble Earl very much indeed for his sympathetic reply.
§ House adjourned at five minutes past five o'clock.