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Showdown in South America: James Scrymser, John Pender, and United States–British Cable Competition

Published online by Cambridge University Press:  13 December 2011

John A. Britton
Affiliation:
JOHN A. BRITTON is Gasque Professor of History at Francis Marion University in Florence, South Carolina.
Jorma Ahvenainen
Affiliation:
Jorma Ahvenainen recently retired as professor of history at the University of Jyväskylä in Finland.

Abstract

The British dominated the world's submarine cable business over the second half of the nineteenth century, but they encountered significant challenges in the 1880s and 1890s—especially from James Scrymser, an upstart entrepreneur from New York. Scrymser exploited a strategic gap in the cable system in the Western Hemisphere and became locked in a confrontation along the west coast of South America with John Pender, the leading British cable magnate. Scrymser gained the upper hand in Chile by outmaneuvering Pender and used this victory to expand his operations with the telegraph network that linked South America, North America, and Europe.

Type
Articles
Copyright
Copyright © The President and Fellows of Harvard College 2004

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References

1 West Coast of America Company, Report of the Proceedings of the Extraordinary General Meeting, 1 Sept. 1890, 4–5, Cable and Wireless Archive, Porthcurno, England. For brief notices about this conference, see London Times, 12 June 1890,12; and New York Times, 15 May 1890, 3; 17 May 1890, 1; and 21 May 1890, 1.

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4 Smith, Illusions of Conflict, 117–54; and Pletcher, Diplomacy of Trade, 237–55.

5 Curtis to Flint, 21 Apr. 1892. See also Flint to Curtis, 20 Apr. 1892 and Flint to James G. Blaine, 20 Apr. 1892. All in the papers of James G. Blaine, Manuscripts Division, Library of Congress.

6 Flint to Curtis, 20 Apr. 1892, Blaine Papers. See Barry-King, Hugh, Girdle Round the Earth: The Story of Cable and Wireless (London, 1979), 5860Google Scholar, for more information on the training of telegraphers in Britain.

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8 Pletcher, Diplomacy of Trade, 180–215.

9 Clayton, Grace, 141–203.

10 Ibid.; see also Flint to Curtis, 20 Apr. 1892, Blaine papers. For information on Flint, see Topik, Steven, Trade and Gunboats: The United States and Brazil in the Age of Empire (Stanford, 1996).Google Scholar

11 James Scrymser, Personal Reminiscences of James Scrymser in Times of Peace and War (privately published, 1915), 68–75.

12 Ibid., 75–8.

13 The Scrymser portrait was published in All America Cables: A Half Century of Service to the Three Americas (New York, 1928), 6.Google Scholar

14 Scrymser, Reminiscences, 77–8.

15 Joseph Smith, in Illusions of Conflict, and Stuart Anderson, in Race and Rapprochement, emphasize the long-term diplomatic and cultural harmony between the United States and Great Britain, but Grenville, John A. S. and Young, George B., in Politics, Strategy, and American Diplomacy: Studies in Foreign Policy, 1873–1917 (New Haven, 1966)Google Scholar, and David Pletcher in Diplomacy of Trade, find evidence of significant discord.

16 Barty-King, Girdle, 3–5, 7,11, 21, 79.

17 Headrick, Invisible Weapon, 38. On the formation of the West Coast of America Company, see WCA, “Report of the Directors,” 16 May 1877, Cable and Wireless Archive; Le Journal Telegraphique, 1882, 87–9; Peruvian Government Decree no. 352, 10 Apr. 1877 in El Peruano, 10 Apr. 1877; and WCA, “Report of the Directors,” 31 Dec. 1876, 30 June 1877, and 31 Dec. 1877. For an account of the origins and early years of the WCA, see Ahvenainen, Jorma, “The European Cable Companies and South America before the First World War” (manuscript), 7989.Google Scholar The West India and Panama Telegraph company and the Cuba Sub-marine Telegraph Company were also British owned and operated, but not by Pender. They were smaller than Western and Brazilian and Brazilian Submarine, but nevertheless formed important links between Cuba and other parts of the Caribbean with the United States and Europe. See Ahvenainen, Caribbean Telegraphs, 9–93.

18 London Times, 7 Feb. 1877,1–2; 18 June 1880, 2–3; and Ahvenainen, Caribbean Tele-graphs, 37–41.

19 Vázquez, Josefina Zoraida and Meyer, Lorenzo, The United States and Mexico (Chicago, 1985), 7984Google Scholar; Daniel Cosio Villegas, ed., Historia moderna de México, vol. 6: El Porfiriato: la vida política exterior, segunda parte (Mexico City, 1963), 3250Google Scholar; and Garner, Paul, Porfirio Díaz: Profile in Power (London, 2001), 1898.Google Scholar

20 New York Times, 25 Mar. 1881, 8. Scrymser apparently had to persevere in his un-friendly negotiations with Western Union executives, who doubted the commercial potential in telegraph traffic with Mexico. Scrymser, Reminiscences, 75–7.

21 Daniel Cosio Villegas, ed., Historia moderna de México, vol. 2: La República restaurada: la vida económica (Mexico City, 1973), 559–72Google Scholar, and vol. 7: El Porfiriato: La vida económica (Mexico City, 1974), 9731185Google Scholar; “The Telegraph Service of Mexico,” Electrical World (12 Dec. 1885): 242–5; Pena, E. Cárdenas de la, El telégrafo (Mexico City, 1987), 39 54Google Scholar; Coerver, Don, The Porfirian Interregnum: The Presidency of Manuel González of Mexico, 1880–1884 (Fort Worth, 1979), 187241Google Scholar; and Coatsworth, John, Growth against Development: The Economic Impact of Railroads in Porfirian Mexico (DeKalb, Ill., 1981).Google Scholar

22 New York Times, 5 Apr. 1880, 8, 11 May 1881, 5, 10 Oct. 1882, 5; All-America Cables, 23; Peruvian Government Decreto Supremo, 15 Dec. 1879, later modified by Peruvian Government Decreto Supremo, 20 Nov. 1880, as discussed in a handwritten “translation” of a portion of a book entitled “A History of Cable Communication in Peru from 1869 to 1882” in Cable and Wireless Archive. This translation is probably of the book by Soldan, Mariano Felipe Paz, La telegrafia electrica en el Peru (Lima, 1886Google Scholar). A copy of the contract as authorized by the Government of Colombia, 25 Aug. 1879, and transfer of the concession approved by (Colombian) Presidential Decree 876 can be found in Dispatches of the U.S. Ministers to the Secretary of State, U.S. National Archives T726/5 (Microfilm T726, Panama, roll no. 5). See also Berthold, Victor, History of the Telephone and Telegraph in Colombia, South America (New York, 1921), 33–4.Google Scholar On the history of government concessions to international submarine cable companies, see Jorma Ahvenainen, Caribbean Telegraphs and also his Far Eastern Telegraphs.

23 Serymser, Reminiscences, 77–8.

24 New York Times, 1 Oct. 1882, 2. See also New York Times, 11 May 1881, 5; 21 Dec. 1881, 8; and 14 June 1882, 3.

25 Ibid., 10 Oct. 1882, 5.

26 Ibid., 21 Sept. 1883, 5.

27 Ibid., 4 June 1884, 2; and Scrymser, Reminiscences, 77–8. The corporate records of Scrymser's Mexican Telegraph Company and the Central and South America Telegraph Company apparently did not survive to find their way into an archive. The large Western Union collection in the Lemelson Center of the National Museum of American History at the Smithsonian Institution contains no significant documentation on these companies. See Ahvenainen, Caribbean Telegraphs, 5–6.

28 Bayard to Hall, 16 Mar. 1885, U.S. Department of State, Papers Relating to the Foreign Relations of the United States [hereafter FRUS], 1885 (Washington, D.C., 1886), 87.Google Scholar

29 Hagan, Kenneth J., American Gunboat Diplomacy and the Old Navy, 1877–1889 (Westport, Conn., 1973), 171Google Scholar; Karnes, Thomas L., The Failure of Union: Central America, 1824–1960 (Chapel Hill, 1961), 148–74Google Scholar; Burgess, Paul, Justo Rufino Barrios: A Biography (Quetzaltenango, Guatemala, 1946), 226–33Google Scholar; Buchenau, Jurgen, In the Shadow of the Giant: The Making of Mexico's Central American Policy (Tuscaloosa, Tenn., 1996), 34–9Google Scholar; and McCreery, David, Development and the State in Reforma Guatemala (Athens, Ohio, 1983Google Scholar). In addition to the involvement of the United States, Mexico and El Salvador participated in the diplomatic and military resolution of this crisis and made extensive use of Scrymser's CSA and Mexican cables. See FRUS, 1885, 72–107, and Buchenau, Shadow, 34–9. Later problems in Central America usually involved complaints of U.S. businessmen and diplomats concerning delays in the transmission of messages. Most of these delays resulted from problems with government-owned landlines before they connected with Scrymser's cables. See Samuel Kimberly, charge d'Affairs, U.S. Legation in Central America, to Blaine, 26 Jan. and 4 Feb. 1891; J. Peterson, U.S. consul in Tegucigalpa, Honduras to Kimberly, 12 Feb. 1891; and Blaine to Pacheco, 20 and 28 Feb. 1891; all in FRUS, 1891, 54–60.

30 West Coast of America Telegraph Company (or WCA), “Minute Books,” 29 Mar. and 26 Apr. 1882, Cable and Wireless Archive.

31 WCA, “Minute Books,” 19 July 1883, and WCA Agreements, “Agreement for Joint Working (with CSA),” 27 July 1883, Cable and Wireless Archive.

32 WCA, “Report of the Directors,” 30 June and 31 Dec. 1877, and a list of shareholders dated 23 Jan. 1878. For the concessions, see Peruvian Decree no. 352, 10 Apr. 1877, in El Peruano, 10 Apr. 1877, and Peruvian Decreto Supremo, 28 Sept. 1878; Chilean Decree, 8 Nov. 1877, Boletín de las Leyes y Decretos del Gobierno. See also London Times, 11 June 1879, 10, and Barty-King, Girdle, 68–9.

33 WCA, “Minute Books,” 29 Mar., 17 and 26 Apr., 4 Oct., 22 Nov., and 20 Dec. 1882, Cable and Wireless Archive.

34 WCA, “Minute Books,” 7 Nov. and 5 Dec. 1883; and 10 Jan. and 23 June 1884, Cable and Wireless Archive.

35 WCA, “Minute Books,” 11 June 1885 and 12 May 1886, Cable and Wireless Archive.

36 As quoted in Electrical World (15 Mar. 1884): 85.

37 WCA, “Minute Books,” 11 June 1885, Cable and Wireless Archive; and Electrician and Electrical Engineer (July 1885): 280. See also Healy, David, James G. Blaine and Latin America (Columbia, Mo., 2001), 205–20Google Scholar; Barros, Mario, Historia diplomatica de Chile (Barcelona, 1970); 451–83Google Scholar; Larrai, José Miguel Yrarrázaval, El Presidente Balmaceda, vol. 2 (Santiago, 1940)Google Scholar; Blakemore, Harold, British Nitrates and Chilean Politics, 1886–1896: Balmaceda and North (London, 1974).Google Scholar

38 Government of Chile, Decreto de 28 Febrero, 1887, Decreto de 29 Febrero, 1888, and Decreto de 28 Enero, 1895, Boletín de las Leyes y Decretos del Gobierno; London Times, 15 May 1890, 12, and 16 May 1891, 13; and WCA, “Minute Books,” 17 and 24 Jan. 1890, Cable and Wireless Archive. Balmaceda's problems with domestic political opposition have caused disagreement among historians. For example, see Yrarrázaval Larrain, Balmaceda, vol. 2, Necochea, Hernán Ramírez, Balmaceday la contrarrevolución de 1891 (Santiago, 1972Google Scholar), and Lagarrigue, Fernando Pinto, Balmaceda y los gobiernos seudo-parlamentarios (Santiago, 1991Google Scholar). Historian Jorm a Ahvenainen is preparing a study of the diplomacy of submarine cable concessions in South America, including the CSA arrangements with the Balmaceda administration and with the subsequent Congressionalist administration. For Ahvenainen's preliminary assessment of the CSA in Chile, see his Caribbean Telegraphs, 50–5.

39 WCA later assumed that Gondrillas was working in “the interest of CSA. See WCA “Report,” 14 May 1890, 4. For Broughton's observations on the CSA cable and its impact, see WCA, “Minute Books,” 18 June 1890. See also 29 Jan., 13 Feb., 26 Feb., 23 and 30 April, and 4 June 1890, all in Cable and Wireless Archive. Despite his expressions of being in a distraught state of mind, Broughton had conducted a survey for a new land line from Valparaíso to Buenos Aires in early 1889. However, he concluded that such a construction project would take several years and considerable expense to complete. WCA, “Minute Books,” 6 and 20 Mar. 1889, Cable and Wireless Archive. Alfred Marshall's comment is in WCA “Report of the Proceedings at the Extraordinary General Meeting.”

40 WCA, “Minute Books,” 2 July 1890 and WCA, “Annual Report,” 1 Sept. 1890, 4, Cable and Wireless Archive.

41 The WCA attempt to purchase the Transandino in 1890 alsofailed. See WCA, “Minute Books,” 22 Apr. and 28 Oct. 1890, and WCA “Annual Report,” 1 Sept. 1890, 4–5, both in Cable and Wireless Archive.

42 It was not unusual for U.S. companies to deal with both antagonists in the Chilean civil war. W. R. Grace and Charles Flint did so, as reported in the New York Times, 29 Sept. 1891, 1. For insights into Scrymser's strategy, see Scrymser to William Wharton (Acting Secretary of State), 2 June 1891 in FRUS, 1891 (Washington, D.C., 1892), 139–40.Google Scholar Transandino's willingness to sell was related to the open discussions by both WCA and CSA of the construction of their own lines across the Andes to Argentina. Another important factor was probably related to the destruction of telegraph lines in Chile during the Balmaceda-Congressionalista civil war. Faced with expensive repairs, limited revenue in the short run, and the arrival of foreign competition, the Transandino accepted the higher offer from Central and South America. On the condition of the telegraph system in Chile in 1891–92, see Ministerio del Interior (Chile), “Telegrafos” and “Memoria del Director General de Telegrafos,” both in Memoria del Ministerio del Interior pesentada del Congreso National… 1890 (Santiago, 1890), xiii–xx and 1726Google Scholar; Ministerio del Interior, “Telegrafos,” Memoria… 1892, vol. 1, xx xxvi; and “Informe sobre el Estado del Servicio de Telégrafos,” Memoria… 189s, vol. 2, 42 50; “Memoria del Director General de Telégrafos Correspondiente a 1890” and “Memoria del Director General de Télegrafos Correspondiente a 1891,” both in Memoria… 1892, vol. 2, 53–93; and Berthold, Victor, History of the Telephone and Telégraph in Chile (New York, 1924), 20–1.Google Scholar

43 London Times, 7 May 1891, 11.

44 Western and Brazilian, “Annual Report,” 12 Nov. 1891, 2–3, Cable and Wireless Archive. See also London Times, 11 May 1891, 11; 13 Nov. 1891, 8; 4 May 1892, 11; 5 May 1892, 12; 13 May 1892, 12; 20 Oct. 1892, 11; and 11 Nov. 1892, 11.

45 London Times, 17 Nov. 1894, 11. See also London Times, 19 Oct. 1893, 4; 9 Nov. 1893, 4; 17 Nov. 1893, 4; 18 May 1894, 9; and 29 Oct. 1894,13.

46 See Brítton, John A., “Cables, Commerce, and Conflict: International Communications in the Americas, 1867–1898” (manuscript), ch. 3.Google Scholar

47 Chilean concessions became official on 16 Nov. 1891. See Diario Oficial de Chile, 19 Nov. 1891. Argentine concession granted on 28 Dec. 1891. See Registro National de la Republica Argentina no. 20399. See also London Times, 20 June 1892, 12; 24 Apr. 1893, 11; 4 May 1893, 13–14; 30 May 1894, 11. John Pender headed the “Transandine Committee” to oversee the formation of the Pacific and European Telegraph Company for the WCA and its east coast affiliates, Brazilian Submarine and Western and Brazilian. These three companies owned all the shares of the new company. See “Transandine Committee,” 8 Dec. 1891 and 26 Jan. 1892, Cable and Wireless Archive.

48 London Times, 30 May 1895, 13. For a discussion of the decline of WCA, see Ahvenainen, “The European Cable Companies,” 184–6. By the last years of the century, Brazilian Submarine and Western and Brazilian operated WCA as a virtual subsidiary.

49 The Grace Contract restored Peru's access to European investment capital while Grace and other investors established the Peruvian corporation of London to repair and operate Peru's railroads and to engage in mining and other commercial ventures in Peru. See Clayton, Grace, 141–75.

50 In terms of initial capitalization, British railways in Latin America were valued at £55,110,000 in 1885, while the five main British cable companies were capitalized at only £4,544,000 in the same year. In another interesting contrast, the initial capitalization of CSA in 1882 amounted to $5,000,000, while the Guatemalan Railway Company was valued at $40,000,000 upon its organization in 1904. See Miller, Rory, Britain and Latin America in the Nineteenth and Twentieth Centuries (London, 1993), 120–4 and 155–7Google Scholar; “Annual Report of the CSA Telegraph Company for 1891”; the relevant annual reports for the five British cable companies in the Cable and Wireless Archive; and Dosal, Paul J., Doing Business with Dictators: A Political History of United Fruit Company in Guatemala, 1899–1949 (Wilmington, Del., 1993), 45.Google Scholar Scrymser's Reminiscences dwells on the role of his firms in the development of this communications system, as does the public relations book, A Half Century of Service to the Three Americas, published by the CSA-Mexican Telegraph successor, Ail-American Cables, in 1928. About that time, All-American Cables became a part of the International Telephone and Telegraph Company. See Sobel, Robert, ITT: The Management of Opportunity (New York, 1982Google Scholar), and Sampson, Anthony, The Sovereign State of ITT (Greenwich, Conn., 1974).Google Scholar

51 Headrick, Daniel, The Tools of Empire: Technology and European Imperialism in the Nineteenth Century (New York, 1981Google Scholar), and The Tentacles of Progress: Technology Transfer in the Age of Imperialism (New York, 1988)Google Scholar; Miller, , Britain and Latin America; and several essays in Porter, Andrew, ed., The Oxford History of the Britishempire: The Nineteenth Century (New York, 1999Google Scholar), including Martin Lynn, “British Policy, Trade, and Informal Empire in the Mid-Nineteenth Century,” 101–21; Alan Knìght, “Britain and Latin America,” 122–45; and Robert Kubicek, “Britishexpansion, Empire, and Technological Change,” 247–69. Among many valuable studies on informal imperialism, see the articles in Topik, Steven and Wells, Allen, eds., The Second Conquest of Latin America: Coffee, Henequen, and Oil during the Export Boom, 1850–1930 (Austin, 1998Google Scholar). Chileans had an extensive discussion of imperialism. Examples include Francisco Encina, Nuestra inferioridad economica: sus causas, sus consecuencias (Santiago, 1912)Google Scholar; Martner, Daniel, Estudio de politico comercial chileana e historia national, 2 vols. (Santiago, 1923)Google Scholar; and Alvarez, Alejandro, La codification del derecho international en America (Santiago, 1923Google Scholar) and The Monroe Doctrine: Its Importance in the International Life of the States of the New World (New York, 1924).Google Scholar On imperialism in Chilean history, see Necochea, Hernan Ramirez, Historia del imperialismo en Chile (Santiago, 1970Google Scholar); Cardenas, Alejandro Soto, Influencia Britanica en el salitre: orden, naturaleza y decadentia (Santiago, 1998Google Scholar); Pike, Fredrick, Chile and the United States, 1880–1962 (Notre Dame, Ind., 1963Google Scholar); Sater, William F., Chile and the United States: Empires in Conflict (Athens, Ga., 1990Google Scholar); Blakemore, British Nitrates; and O'Brien, Thomas F., The Nitrate Industry and Chile's Crucial Transition, 1870–1891 (New York, 1982).Google Scholar

The economic expansion of the United States in Latin America in the last decades of the nineteenth century has a large historiography. Some stimulating points of departure on business, technology, and culture include: Fifer, United States Perceptions of Latin America; Field, James A. Jr, “American Imperialism: The Worst Chapter in almost Any Book,” American Historical Review 83 (June 1978): 644–83CrossRefGoogle Scholar; Crapol, Edward, “Coming to Terms with empire: The Historiography of Late Nineteenth Century American Foreign Relations,” Diplomatic History 16 (Summer 1992): 573–97CrossRefGoogle Scholar; Langley, Lester, America and the Americas: The United States and the Western Hemisphere (Athens, Ga., 1989), 82103Google Scholar; Sotomayor, Teresa Maya, “Estados Unidos y el panamericanismo: el caso de la I conferencia internacional americana (1889–1890),” Historia Mexicana 45 (Apr.-June 1996): 759–81Google Scholar; Fry, Joseph A., “From Open Door to World Systems: Economic Interpretations of Late Nineteenth Century American Foreign Relations,” Pacific Historical Review 65 (May 1996): 277302CrossRefGoogle Scholar; Schoultz, Lars, Beneath the United States: A History of U.S. Policy toward Latin America (Chapel Hill, 1998), 59151Google Scholar; and LaFeber, Walter, “Technology and U.S. Foreign Relations,” Diplomatic History 24 (Winter 2000): 119.CrossRefGoogle Scholar

52 Herbert Laws Webb, “With a Cable Expedition,” Scribner's Magazine, Oct. 1890, 415.

53 Herbert Laws Webb, “A New Chilean Submarine Cable,” Electrical World (22 June 1889): 356; “A Boom in Cables,” Electrical World (29 June 1889): 374; and “Puck's Girdle Round the Earth,” Electrical World (1 Mar. 1890): 166–8.

54 Daniel Headrick, Invisible Weapon, 28–49.

55 South American Journal [SAJ], 1 Mar. 1890, 280–1. See also SAJ, 10 Oct. 1891,432–3, and David Pletcher, Diplomacy of Trade, 237–55.

56 SAJ, 23 Jan. 1892, 110–11. On the general pattern of U.S. economic expansion and diplomatic activism in Latin America in these years, see the works mentioned in footnote 51, and Pletcher, Diplomacy of Trade; Smith, Illusions of Conflict; and Clayton, Grace.

57 SAJ, 27 Sept. 1890, 372. On the formation of Telcon, see Barty-King, Girdle, 21.