The Showdown
They differed in their estimates of power distribution. The relationship of forces had vastly changed since 1893. The United States had been slow to enter world competition because it was busy with internal development. But the delay actually improved its chances, for when it finally laid down a claim for world position, it did so on the basis of an incomparable home market. In the commodity-news industry this was strikingly clear. At a meeting of the A.P. Board of Directors, Chicago Tribune publisher McCormick once offered some estimates in this connection. The estimates were so impressive that Cooper got him to repeat his statement for the benefit of any directors who had missed the import. Said McCormick:
We are pretty much the most important country in the world and much the richest country in the world, and in comparing America with other foreign countries the press stands probably higher in America than any other institution. I think it is a pretty good guess that American newspapers print and supply two-thirds of all the world’s news, and I think that the revenue of all the American newspapers is probably three-fourths of all the revenue of the newspapers of the world.
It was on the strength of this tremendously favorable competitive position that A.P. laid down the gauntlet to Reuters in 1932. It demanded “free competition.” Meaning that Japan, for instance, must be free to switch from Reuters to A.P. service. All American monopolies tend to demand “free competition” because they are now in a position to strangle their isolated competitors. Nourished by a huge home market built up with plenty of government aid, they no longer need direct subsidy and want to establish a no-subsidy rule for younger and weaker national news industries. The newspaper industry is in an even stronger position than chemicals, steel and other monopolies. In no other country has news-publishing grown into a business of comparable size and power. In no other country does the newspaper business stand so near the top in the list of Big Businesses.
A.P. understood this very well. Reuters misunderstood it badly. For years it held out stoutly against A.P.’s right—verbally admitted but never put in writing—to operate in Japan. Jones was confident that A.P. would never risk a break with Reuters; he counted on the threat that Reuters would take U.P. into the cartel if A.P. walked out. Cooper deliberately led Jones into a trap, pretending eagerness to maintain the alliance but needling him at all points.
“While I wondered how long it would be before this bubble of Reuters world domination would burst, I was willing for Sir Roderick to blow his own bubble so big that it would burst through his own exertion but I would not puncture it myself,” Cooper gloats.
It burst in 1934. Carrying his pretense of humility and loyalty to the uttermost limits, Cooper travelled from Japan to London to explain to Sir Roderick that A.P.’s activities in Japan were within the meaning of the contract. Pretending to mollify Jones, he encouraged him to think that his own actions were due to weakness either of A.P. or of his position within A.P. Accordingly, Jones refused to sanction the A.P.-Rengo deal. He announced that the cartel agreement must be renewed on the old terms or Reuters would allow it to lapse.
Reuters had fallen into a trap. Not only A.P., but the American news monopoly as a whole was determined to humble the British. United Press joined A.P. in an agreement establishing between themselves the principle of “non-exclusive access to foreign news at its source.” This meant that U.P. would not agree to replace A.P. in the European cartel. So A.P. blandly notified Reuters that it “agreed” to let the “alliance” lapse.
This announcement exploded with bomb-force in London. Sir Roderick’s house of cards collapsed. Reuters was through as the news dictator of the world and A.P. was king. Within a few hours Reuters, recognizing what it had long failed to see, offered to capitulate. Jones hurried to New York, begging for an audience. He was forced to humiliate himself enough to satisfy Cooper who had been waiting years for that triumph. Then the “alliance” was renewed—on A.P.’s terms.