BACK REFLECTION
At the close of his remarks, he presented this motion: ‘That a committee of the shareholders be appointed to assist and advise the directors as to the best means for carrying out such measures as may be deemed necessary to improve the position of the company, either by amalgamation with the Anglo-American Telegraph Company, or by raising the necessary capital to redeem the existing charge of £125,000 per annum on the revenue of the Atlantic Telegraph Company, and to aid the board in consideration of other important matters.’
The motion was adopted unanimously and, on 10 January 1868, a prospectus was published in the Daily News for an issue of preferential capital in the amount of £1,300,000: ‘For the purpose of regaining possession of the Cables at present worked by the Anglo-American Telegraph Company’ These extracts from the prospectus provide more details: ‘The negotiations recently conducted by the Board, conjointly with the Committee of Shareholders appointed at the Extraordinary Meeting of December 2, with the object of effecting—in union with the Anglo-American Telegraph Company’s Board—a general amalgamation of all interests, thereby simplifying the management and securing economy and efficiency, have been unsuccessful. ‘These negotiations have, however, still further impressed the Board and the Committee with the great importance of united management, and they have therefore unanimously decided upon the immediate issue of a new preferential capital at 10 per cent. per annum, to enable the Atlantic Telegraph Company to recover possession and
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management of their two submarine cables.’ ‘This will relieve the shareholders from a charge of £125,000 now payable in each year to the Anglo-American Company before the Atlantic Stock becomes entitled to interest of any kind. No allotment will be made, and all moneys received on applications will be returned, if the Board are unsuccessful in raising the amount necessary to extinguish the rights and privileges of the Anglo-American Telegraph Company.’
The closing date for applications was 28 January 1868, but in the interim, further negotiations with Anglo-American again failed to result in an agreement. This left the Atlantic Telegraph Co in a difficult position, and on 15 February, this news was published in the New York Journal of the Telegraph: ‘It appears that the scheme to buy out the Anglo-American Company has not been successful. At a meeting held in London, January 24, Mr. Wortley, chairman of an extraordinary meeting of the Atlantic Telegraph Company, complained of the Anglo-American Company as having obstructed the project and endangered its success. A new meeting was called for further consultation, on some day during the present month.’ Four days later Anglo-American’s Chairman, Charles Stewart, collapsed and died in the company offices in Old Broad Street, and the shareholders elected John Pender to replace him. At that time Pender was still Chairman of Telcon, but in order to take up the role he stood down in favour of Daniel Gooch while still retaining his equity stake in Telcon. Later that year Pender would start building his cable to India, known
as the Red Sea Line (Issue 111 March 2020) that would become the foundation of the Eastern Telegraph Company. On 16 March 1868, another extraordinary meeting was held to again consider the raising of £1,300,000 of new capital. However, there had been dissent among the ranks of the company’s shareholders, and Stuart-Wortley had to advise the meeting that some shareholders had taken the extreme measure of having an Act of Parliament passed that would prohibit the Atlantic Telegraph Co from making an offering to raise capital without a 75% affirmative vote. He also reported that these shareholders had subdivided their holdings, creating such a large number of small votes that it would be impossible for the board to reach the threshold. While there is no documentary evidence to prove it, this sounds very similar to a tactic that Pender later used in his fight for control of the Direct United States Cable Co in 1877. Given this, the Chairman told the meeting that he believed the only course now open to them was to accept counterproposals made by Anglo-American for the joint working of the two companies. As Stuart-Wortley’s physical condition continued to worsen, A Scrap Screen (Alice Buchan’s 1979 family memoirs), records the decision to give up Upper Sheen House and move his family back to Central London, in April that year, as follows: ‘…as the two girls were growing up, and the boys had to be educated, something in the way of a London home for them had to be contrived. The house they chose, No. 16 St James Place,…’
