Communication

What the Mackay Companies (Postal Telegraph, Commercial Cable, Radio Communications, etc.) would do about the bigger and better transpacific cable projected by the Western Union Telegraph Co. (TIME, Aug. 15, 22) developed last week.

Mackay Companies, through its subsidiary Radio Communication Co. Inc., bought the land and marine radio telegraph system of the

Federal Telegraph Co.* Stations are in California, Oregon and Washington; messages go from point to point on land, from land to ships. Federal Telegraph's profit on the transaction was $1,000,000, said President Ellery W. Stone of Federal Brandes, Inc., a related corporation, last week. Radio Communication further made a 20-year contract with Federal Telegraph to buy solely from Federal Telegraph all the radio, wired radio, picture transmission, long distance telephone repeater and facsimile telegraph equipment which the Mackay Companies might need in the doing of its business. On such equipment Federal Telegraph is to make a 25% profit and also a royalty on the pieces of apparatus used by the Mackay Companies. Further, the Mackay Companies obligated itself, through its Radio Communication, to pay half the cost of Federal Telegraph's research laboratories. The arrangement is quite like that kept by Western Electric Co. and the American Telephone & Telegraph Co. Federal Telegraph had assets, Dec. 31, 1925, of $5,715,383 and net operating profits for that year of $117,061. The acquisition of Federal Telegraph's Pacific Coast radio system seems to put the Mackay Companies in command of transpacific communications, and may put to naught Western Union's contemplated permalloy cable. Mackay Companies, through Commercial Pacific Cable Co., owns the only present transpacific cable. This cable operates between the U. S., Hawaii, the Philippines and China. Mackay Companies, further, covers the U. S. with Postal Telegraph, although to a less thorough extent than does Western Union. /- It has arrangements for transmission of telegrams with Canadian Pacific Telegraphs which cover Canada; for its transatlantic cable it has traffic arrangement with Radio Corporation of America (which on the Pacific Coast co- operates with Western Union). Also, it has radio and cable con- nections with South America. The Mackay Companies intends its purchase of Federal Telegraph's radio system as a complement to its transpacific cable. Commented Vice President George V. McLaughlin of the Mackay Companies last week: "Radio would tide the cable company over those periods of interruption in cable transmission which occasionally arise through damage to the cables. The radio would serve to relieve the cables of the deferred and cheaper classes of service, thereby leaving the cables freer for the transmission of messages requiring greater speed and accuracy and maximum business safeguards."

* A California corporation, not to be confused with Federal Telegraph Co., a Delaware corporation, which Radio Corporation of America owns. The Delaware Federal Telegraph has valuable communi- cation rights in China. /-Western Union has 22,000 main offices, Postal Telegraph 3,000 main offices.