Breathless Behns

On Feb. 23, 1927, President Calvin Coolidge signed a bill known officially as H. R. No. 632, known unofficially as the White Act. Of its many sections, the 17th was destined to cause the most trouble. For it provided that U. S. radio companies and U. S. cable (telegraph, telephone) companies should never unite, if their union might "substantially lessen competition ... or restrain commerce . . . or unlawfully create a monopoly.*

Last week, in Paris, Morgan-Partner Thomas W. Lamont agreed with Chairman Owen D. Young of the Radio Corp. of America that it would be pleasant for all concerned if the International Telephone & Telegraph Corp. should take over Radio's newborn (TIME, April 1) subsidiary, R.C.A. Communications, Inc. So formal and so important was this friendly agreement that it at once was called an ACCORD. A price was mentioned, around $100,000,000. Vice President David Sarnoff of Radio and Nelson Dean Jay of Morgan's Paris house talked details. U. S. directors of both companies hastily met and approved.

Thus were tentatively linked a great wired system (I.T.&T. controls Postal Telegraph and Cable Corp., All-America Cables, Inc., Commercial Cable Co.) and the communication system of the greatest U. S. wireless company, with a trans-Atlantic service, a ship-to-shore service and much advertised plans to create a point-to-point system within the U. S.

Competition. So complete, so thoughtfully lucid is the White Act, that its meaning could not be twisted to meet the desires of the most ingenious mergophile. If the union of I.T.&T. with R.C.A. Communications will "substantially lessen competition," the Lamont-Young deal will be held a violation of the law, will doubtless be haled before the courts. As Negotiators Lamont and Young are famed not only as financiers, but also as highly ethical businessmen and citizens, they could scarcely plan to flout the law. The only possible alternative, therefore, is the proposition that radio and telegraph do not, in fact, compete.

If Chairman Young asserts such doctrine publicly, he will deeply shock radio-bugs who insist that because radio is the most recent of communication devices, it is also for all purposes the best. But it is probably true that wherever wires can be conveniently laid and wherever traffic is heavy, wires are better than wireless. In a world system, telegraph wires act as collecting and distributing agencies for the long-distance leaps of cable and radio. Some such far-seeing plan may have been in the minds of Negotiators Lamont and Young, last week, when they proposed to join R.C.A. Communications to I.T.&T.'s vast network of cable, telegraph and telephone. And on the basis of such a plan, the two corporations may appeal (may indeed, have already appealed) to Washington for approval of their deal.

The most timorous mergophobe need not fear that the deal will create a world communications monopoly. Still the active, eager competitor of I.T.&T.'s wire systems is the mighty Western Union. Looming is a battle with Britain's merged cable-wireless companies. And for good measure, last week, Sweden's Kreuger & Toll (holding and financing company for the Swedish match trust) threatened to invade the foreign telephone field, in direct competition with I.T.&T.

I.T.&T. Last week, when Paris correspondents feverishly cabled their great scoop, every well-informed businessman knew about the giant I.T.&T. whose stock had gone up more than 100 points in one year. A year ago, before the Brothers Behn acquired the Mackay telegraph and cable systems (TIME, April 2, 1928), many an executive would have been put to it to explain: 1) What was the International Telephone & Telegraph Corp.; and 2 ) Who were Sosthenes and Hernand Behn.

For I.T.&T.'s nine-year career has been both breathless and bewildering. In 1921. it was a Morgan-weaned youngster with the Cuban and Porto Rican telephone systems in its pocket. In 1924, it branched suddenly and surprisingly into Spain, began modernizing a hopelessly antiquated telephone system. Four years later it had added a vast manufacturing unit (International Standard Electric Corp.); two cable companies (All-American Cables, Inc., Commercial Cable Co.); a telegraph company (Postal Telegraph and Cable Corp.); a radio company (Mackay Radio and Telegraph Co.). It had invaded five states (Argentina, Brazil, Chile, Mexico, Uruguay) of Latin America. Last week, unnoticed in the merger excitement, it picked up the U. S. & Haiti Cable Co., opening a new line between New York and the West Indies.

Credit for I.T.&T.'s spectacular rise is given, and properly, to the Brothers Sosthenes and Hernand Behn. French and Danish by ancestry, they were born in the West Indies near the birthplace of Alexander Hamilton. In the last 15 years, they have won enviable war records, become friends and allies of kings, made great fortunes in the company which they dominate, Sosthenes as president, Hernand as executive vice-president.

This has been done with a modesty, in a silence, which many a journalist chooses to confuse with mystery. The Brothers Behn are never interviewed, rarely photographed. Nothing less than a royal occasion persuaded Brother Sosthenes, in 1924, to pose with the nobles, the diplomats and churchmen of Spain. The occasion was, of course, the opening of the new Spanish telephone system, and royalty was present in the person of His Most Catholic Majesty, King Alphonso XIII.

Even this triumphal moment, I.T.&T.'s first taste of pomp, failed to draw Brother Sosthenes from his silence. As always, he met eager interviewers with his invariable statement: "It is not I, but the company. . . ."

*An absolute Government monopoly is the "B.B.C." (British Broadcasting Corporation), so absolute, in fact, that it haughtily refused to announce the names of "popular pieces" played by London orchestras, on the ground that unscrupulous conductors have sometimes taken money to push new compositions.

Britain's leading theatrical weekly, The Stage, flayed B.B.C., last week, for a new and super-autocratic ruling, that the names of actors and actresses in plays put on the air will no longer be announced. Amazing B.B.C. explanation: Hundreds of listeners have complained that when they hear Actor John Doe in the role of Hamlet, having last seen him perhaps as Sherlock Holmes, their visual memory of a detective in a checked overcoat greatly impairs their ability to obtain over the radio an auditory image of a gloomy Dane addressing the skull of "Poor Yorick." If the actor's name is not announced, the British listener can concentrate satisfactorily, enjoys the auditory image.