This Company was organized in 1881. Its original promoters expected by
the use of compound steel and copper wire of large size and the use of
the Leggo-automatic and Gray-harmonic apparatus to transmit a large
volume of business by the use of so few wires and at such a speed that
a uniform and low rate would produce a revenue sufficient to justify a
capitalization largely in excess of the cost of the plant.
The name postal was chosen upon the theory that the new plan of
construction and method of transmission would bring the property into
extensive use in competition with or perhaps as an auxiliary of the
Post-Office department.
How far the purpose of the founders was speculative need not now be
considered. Probably some of them were sincere in their beliefs, but
they were ignorant of the telegraph business, and the fallacy of their
plan was soon demonstrated.
In order to help a friend, who had become largely involved in the
bonds of the Company, Mr. John W. Mackay found himself in control of
the property in 1884. He had in the meantime been induced to interest
himself in the organization of a new cable service between Great
Britain, France and the United States, of which, through the failure
of some of those who were to join in the enterprise, he also came into
control. Having “put his hand to the plow,” so to speak, although the
business was wholly new to him, he was not the man to turn back, and
the more he examined the merit of the business itself, the better
satisfied he became that, if it could be properly conducted in its
details and the complicated and chaotic condition of the numerous
comparatively small, but ruinously competing land line companies could
be brought into right form and order, a successful and in every way
creditable business worthy of the employment of his ample resources
could be built up.
When the Western Union Company, early in 1881, under the leadership of
Mr. Jay Gould, acquired control of the Atlantic & Pacific, the American
Union and the combined Canadian telegraphs, and formed an alliance with
the cable companies, it then seemed as if competition in the telegraph
business had come to an end, and many of its ablest men were of that
opinion, but by the end of 1884 more extensive and more injurious
competition had been built up in the United States than had ever
existed before, and the possibility of bringing order out of such chaos
seemed remote, but Mr. Mackay was not discouraged.
Early in 1884 he secured the services of Mr. George G. Ward, who had
been brought up in the business of the telegraph in England, and
had been in the service of the cable companies almost from their
inception, and was Superintendent of the Direct United States Cable
Company from 1875 to 1883. Under his direction the first of the
Commercial Cable Company’s cables was completed in December, 1884.
Early in that month Mr. Albert B. Chandler entered Mr. Mackay’s
personal service, having been assured of his purpose to permanently
establish a telegraph system upon sound and just principles respecting
which they were in full accord.
Mr. Chandler had served in almost every capacity known to the telegraph
business, from operator in 1858 to President in 1879, and had won the
confidence of proprietors of telegraph property, of their officials and
employees, and the public as a practical, energetic and conservative
manager. Under his guidance as receiver, the mortgage which had been
placed upon the property of the Postal Telegraph Company under complete
misapprehension of its earning power, was foreclosed.
The Postal Telegraph Cable Company, of which he became President and
General Manager early in 1886, was organized. Extremely complicated
and vexatious litigation, chiefly a legacy from the smaller companies,
was gradually removed, and when, near the close of 1887, the various
fragmentary companies had been acquired by either the Western Union
or the Postal Companies, competition, based upon the cutting of
rates, rebates and other wasteful practices which could only end in
destruction, was promptly terminated by the competing companies.
Since then the telegraph business has been carried on in the United
States in a more business-like and progressive manner than ever before.
There is so little friction between the two companies apparent to the
public, that it is sometimes charged, or at least suspected, they
are in actual alliance, but such is not the case. Competition for
patronage was never so sharp as now, but it is based upon excellence of
facilities and service and treatment of patrons, and not upon any form
of buying patronage with money, which has proven the ruin of so many
companies whose chief purpose seemed to be to do the most harm in the
shortest time, in order to sell or lease their property for more than
it was fairly worth.
Probably no two men ever had more complete control of large interests
not their own during their formative period than has been the case
of Mr. Chandler and Mr. Ward in their respective positions, and to
Mr. Mackay’s implicit confidence in them may be attributed much of
the success that has been attained by the Commercial Cable and Postal
Telegraph Companies, which are now practically one property.
Most of the principal officers of these companies have been brought
to their present positions by these gentlemen, and the business is
conducted with singular harmony and efficiency.
Mr. Mackay, who was from its inception President of the Commercial
Cable Company, assumed also the Presidency of the Postal Company early
in 1901 at the earnest request of Mr. Chandler, who desired to be
relieved, partly by reason of somewhat impaired health, and partly
because of his preference to spend much of his time in his Vermont
home. Upon his retirement from active charge, he was made Chairman
of the Board of Directors, and in this capacity renders a variety of
services and exercises as a useful influence. He is still, as he has
been for many years, a Vice-President of the Commercial Cable Company,
of which Mr. Ward continues as first Vice-President and General Manager.
Mr. Clarence H. Mackay has succeeded his father as President of the
Commercial Cable and Postal Telegraph Companies, and entered with great
pride and energy into the project of laying a cable to Hawaii and the
Philippine Islands as projected by his father.
These very important links in the circuit round the globe adds further
power and opportunity to the Postal Company, whose activity seems now
to have fairly begun, and being laid upon sound foundations of finance,
construction and methods of business is evidently destined to continue
an increasing success.
The following figures show the pole and wire mileage, number of
offices operated or reached, and number of messages handled in 1903 by
the Postal Telegraph Cable Company, its subsidiary companies and direct
connections in North America:
Pole mileage 48,801
Wire ” 276,244
Points reached 19,977[A]
Messages handled 21,600,577
Number of new offices added in 1903 3,729
[A] 1,782 of these are reached by no other company.
The properties in the United States owned and controlled by the Postal
Company represent an investment in lines and equipment aggregating
about $25,000,000.
In order to perpetuate the name of his father, the virtual founder
of the Commercial Cable and Postal Telegraph Companies, Mr. Clarence
H. Mackay, President of the United Companies, recently addressed a
circular letter to the stockholders inviting the deposit of their
stock for exchange for shares in a trusteeship created under the
Massachusetts laws with the name of “The Mackay Companies.”
The capitalization of the Commercial Cable Company, which also owns the
Postal Telegraph and Cable Company, is $15,000,000, upon which 8 per
cent. dividends are paid.
“The Mackay Companies” has authorized for exchange for this stock
$30,000,000 par value of its own 4 per cent. cumulative preferred
shares and a like amount of common shares, so that each stockholder in
the Cable Company will receive for his holdings 200 per cent. in the
common shares of the new concern.
The Trustees are Clarence H. Mackay, John I. Waterbury, President of
the Manhattan Trust Company of New York; T. Jefferson Coolidge, jun.,
President of the Old Colony Trust Company of Boston, both directors of
the Commercial Cable Company, and Mr. W. Cook, Counsel to the Company.
The plan is practically consummated.
Mr. Mackay said in reply to an enquiry that this action on his part was
the outcome of his desire to put on a permanent basis the properties
created by his father, and to provide for all contingencies that might
arise from death or changes in commercial conditions. He will continue
to devote his entire time to the active management of the Company.
The Commercial Cable Company owns and operates four transatlantic
cable lines and its connecting lines between Nova Scotia and New York,
and Ireland and France, in all some fourteen thousand miles of cable,
with also the cable from San Francisco to Honolulu and thence to the
Philippines.
The Mackay system has an exclusive connection with the Canadian Pacific
telegraphs and with the all red cable line to Australia and New
Zealand.