These agencies were financially controlled by Reuters-Havas-Wolff, but they could not have been independent even if there were no financial control. In the first place, the cables were British and aside from direct restrictions imposed by Great Britain on users of the cable, manipulation of rates could determine the profit or bankruptcy of a stubborn agency. On top of that, Havas and the smaller agencies were not only news but also advertising agencies, monopolistic ones. Newspapers, in Europe and Asia alike, got Reuters-Havas news service free—in effect, and they had to use it if they wanted the advertising by which they lived.
This dominating position gave the European agencies a haughty and clumsy attitude toward transmission of news. They could delay or garble the most important events. It also gave them no incentive to technical advance. Havas was still using the stylus instead of the typewriter in the 1920’s. So long as and wherever Britain and France remained the ruling powers, the agencies could get away with it. But wherever and whenever some other power could challenge Anglo-French rule, a challenge to the news agencies would follow. South America was the “where” and World War I was the “when.”
Conquest of South America
Havas was boss of South America according to the cartel contract. As soon as World War I started, therefore, Havas decided exactly what South Americans could be permitted to learn about the war. It goes without saying that only the Allied side was to be reported. But such was the inflexibility of the official agencies, that Havas was unwilling to transmit even the German war communique when asked to do so by leading South American papers. It could not unbend that much to head off the obvious danger of losing South America to some American rival agency.
This was A.P.’s great opportunity, but the agency was fearful of losing the advantages of cartel membership if it made a bid for South America. Manager Melville Stone considered that the cartel might oust A.P. and admit the newer United Press to membership. Accordingly, he left unanswered a request by La Nacion of Buenos Aires, one of the world’s leading newspapers, for A.P. service.
New pressures, however, were at work. Within A.P., Kent Cooper, then only Traffic Manager, learned for the first time of the cartel and of A.P.’s humiliatingly inferior position in it. He began what he likes to call his “great crusade,” by which he means a thirty-year fight to substitute American for British news domination of the world. From outside the agency came insistent demands by the government for aid in advancing national policy. The State Department made a crude subsidy offer with the aim of bribing the South American press. Stone later wrote:
The State Department asked me to employ the editors of almost every leading paper in South America on handsome salaries as correspondents of A.P. ... whether they sent us news or not ... and the government would recoup us for anything we paid.... They want something more than a mere news report.... They want some sort of illuminating service from the United States to indicate that this country is not money-grabbing or territory-grabbing.
Incidentally, a similar proposal was made for the Far East. A.P. rejected the proposals. Moreover, “government propaganda” was one important reason. Moreover, “government propaganda” organizations were regarded as inadequate and unstable instruments for conquering news control. A.P. felt the government interest, for one thing, was not likely to survive the war. Even more important was the fact that the American news industry has always heavily exploited its alleged “independence of direct government ties” as proof of its non-partisan character.
But far from refusing all forms of subsidy, the news industry fought for and obtained aid in the form of “practical rates for news transmission; rates attractive enough to encourage the export of news from the U.S.” The government had for some years encouraged the laying of new American-owned cables. Now, at the “behest of the State Department,” the American-owned cable company gave lower rates to American clients than to Havas, for news to South America. American news went to South America after all, therefore, on behalf of the State Department.
A.P.’s conservatism might well have cost it the chance to seize South America. But United Press, unhampered by cartel obligations, started operations there. That shook A.P.’s complacency. Cooper insisted that the cartel give A.P. full freedom to operate in South America. Stone said: “Go ahead and advocate as much liberty as possible, but don’t do anything to bring a break between the A.P. and our European news agency allies.” There was, however, no serious resistance. Reuters told Havas to agree or else. Havas yielded.