While Britain was deeply involved in World War I, the U.S. greatly extended the American communications network. Monopoly in communications was deliberately fostered to “advance the national interests.” This process, begun during World War I and continued through World War II, is described in the previously-cited Report on Freedom of the Press.[B] As this study is financed by a Time magazine grant and has semi-governmental, semi-official news industry standing, it is not critical of imperialist expansion. All the more weight must be attached to its admission that State and industry are one in communications and news-export.
These new government-fostered monopolies now played an important part in the forward march of American news. Though A.P. had refused to do a propaganda-job under government control, it was not at all reluctant to let the government pay for A.P.’s expansion. This is what happened:
The Far East was the scene of the first open clash with Reuters. Reuters’ absolute domination of world news produced some peculiar effects on American-Oriental information exchange. West Coast publishers, led by Hearst, were frantic about the situation. Cooper’s first ally within A.P. was V. J. McClatchy, California publisher who reflected the violent anti-British, anti-Japanese policies of Hearst. McClatchy, in turn, won the support of Adolph Ochs, publisher of the most powerful newspaper in America—the New York Times. A.P. was now consciously but cautiously working toward an ultimate showdown with Reuters.
McClatchy went to Washington in 1919 to seek Congressional aid. When he told Congress about the news aspects of American imperialism’s secret struggle in the Orient, the legislators were indignant. Reuters, it was demonstrated, mangled all American news printed in Japan, China and the Far East as a whole. Even news between the U.S. and the Philippine Islands had to go by way of London for British profit and British editorial slant.
Japan was the key news country in the Far East. Until 1914, the country had no news agency of its own. Reuters not only controlled the import and export of news but had the direct internal monopoly as well. Japan had to pay Reuters what amounted to an annual subsidy, after 1914, to get out of Japan and let the Japanese form a news agency, Kokusai, which got all its non-Japanese news from Reuters. The American news report for Far East distribution was now circulated by Kokusai; Reuters-Havas Far East news to the U. S. was transmitted via Kokusai. It amounted to an Anglo-Japanese alliance against the U. S. The garbling of news that resulted was beyond imagination; British bias strained through Japanese culture and policy!
Congress ordered the U. S. Navy to put its radio circuits at the disposal of the agencies. The order specified rates that were, in effect, a subsidy to permit the agencies to compete with Reuters. Again, it was U.P. that moved first. A new Japanese agency, Nippon Dempo, was set up and it used the U.P. “report.” Later, Nippon Shimbun Rengo was formed to replace Kokusai. Rengo constantly sought A.P. service, but the cartel would not consent. On the whole, British control of Far Eastern news remained unimpaired.
This was the situation in 1925 when Kent Cooper became General Manager of A.P. In 1927, Cooper went to Europe to negotiate a new “treaty” with Reuters, Havas and Wolff. He wanted A.P.’s gains since 1893—the rights acquired in South America, for instance—put in writing. He especially wanted the cartel to admit A.P. to Japan on the plea that other American agencies were there and were serving the home market with non-cartel news.
As Cooper put it, he wanted a new contract primarily in the interest of plain-speaking. He said: “It seemed to me that if the A.P. wanted to be in on a division of the world as between the other three agencies the contract should specify what territories were allotted to each.” The new contract did exactly that. Without the shadow of double-talk, it stated: “Reuters shall have the exclusive exploitation of the following territories....” The British and Dutch Empires and most of the Far East were included in these territories. Havas had “exclusive exploitation” of Italy, Spain, Portugal and the Balkans as well as the French Empire. Associated Press had “exclusive exploitation” of North America and shared South America with Havas.
Now that is plain enough even for me, a disillusioned newspaperman weary of piffle about “freedom of the press.” That is straight business talk as among “legitimate” monopolists. It is, in short, a cartel agreement for the division of the world market in news. But there is a sequel to the story. When Cooper returned from Europe with his new contract, A.P. Board members were horrified by the word “exploitation.” Cooper explains their squeamishness by saying that “the word has taken on a stigma in the United States which it does not have in Europe.” An evasive word was substituted and the contract was approved. “Exploitation” disappeared but the cartel reality remained.[C]
With respect to Japan, the head of Reuters, Sir Roderick Jones, made a verbal agreement to permit A.P. dealings with Rengo. He could not put it in writing, he said, because it would be a loss of face to Reuters (that is, to the British Empire). Neither side had any intention of yielding to the other, in practice. Power would tell, they knew, and force would decide the issue.