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RADIO CONTROL

MONDAY, MARCH 1, 1926

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C. The committee met at 10.30 o'clock a. m., pursuant to adjournment on Saturday last, in the committee room, Capitol, Senator James E. Watson presiding.

Present: Senators Watson (chairman), Howell, Pine, and Dill.

The CHAIRMAN. The committee will be in order. I told Mr. Nicolson, who comes from the United States Shipping Board, that he might be heard first this morning for a little time. Mr. NICOLSON. Thank you, Mr. Chairman.

STATEMENT OF JOHN NICOLSON, COUNSEL TO THE COMMITTEE ON LEGISLATION, UNITED STATES SHIPPING BOARD

The CHAIRMAN. Mr. Nicolson, tell your name, and whom your represent.

Mr. NICOLSON. I am counsel to the committee on legislation, United States Shipping Board.

Mr. Chairman, on page 5 of the pending bill, commencing with line 8, ending in line 14, occur the following words [reading]:

Radio stations on board vessels of the United States Shipping Board or the United States Shipping Board Emergency Fleet Corporation or the Inland and Coastwise Waterways Service shall not be deemed to belong to or to be operated by the United States or to be Government stations within the meaning and the purpose of this act.

Mr. Chairman, similar language appeared in the White bill in the House. At our request that language was changed to read as follows:

Radio stations on board vessels of the United States Shipping Board or the United States Shipping Board Emergency Fleet Corporation or the Inland and Coastwise Waterways Service shall be subject to the provisions of this act.

Our presence here this morning is only to request the substitution of the language last read for the language appearing in the bill. The reason for the request-and the request is based on the authority of a resolution of the Shipping Board—is that the board does not wish to have any precedence created in any acts of the United States which seem to challenge the substantive fact that vessels of the United States Shipping Board shall not be deemed to belong to or be operated by the United States. True, it says that it is only for the purpose of this bill, but we think, sir, that it is an unfortunate precedent. It is unnecessary to say, Mr. Chairman, we do not wish to escape liability to all requirements of any bill that is finally passed.

The stations on any Shipping Board vessels should be, we concede, subject to the provisions of any law passed by Congress. But we ask that it be done as is now done in the White bill now reported out. Senator DILL. In other words, you are in accord with the purpose of the bill, but you want other language substituted.

Mr. NICOLSON. Quite right. I think there is still pending in the courts-if not pending, it was quite recently-it may have been adjusted-a very important piece of legislation wherein the Western Union Telegraph Co. challenged the right of the Shipping Board to enjoy Government rates in the transmission of telegrams. And you gentlemen doubtless all know of the rates which are granted to Government departments-Government rates. I think the Government enjoys almost a one-third rate. Well, an important piece of legislation of this kind would tend to support the very argument that the telegraph company is making, that vessels of the Shipping Board are not to be deemed to belong to the United States and, therefore, they are not to enjoy the Government rates on telegrams. It is only on that basis that we make the request. There is another aspect to it. That is this, we think that if this were passed in its present form other Government departments might think the Shipping Board should not be subject to the enjoyment of the privileges of the other departments.

The CHAIRMAN. Why was it put in in this way, Senator?

Senator DILL. Simply because we were talking of the President having authority in the previous parts of the bill, and this was put in in this way. I think Mr. Nicolson's wording is far preferable. I would like to have his wording substituted.

The CHAIRMAN. Very well.

Mr. NICOLSON. I thank you, Senator. That is all, except that Mr. Moore, who is at the head of the technical department of our radio service in the Shipping Board assures me that he has given this bill very careful consideration, and that he thinks it is a fine bill. The question is whether the language of the White bill should not be substituted.

Senator DILL. I think it should be.

Mr. NICOLSON. Thank you, Senator. We will hope to see that you see fit to substitute it if you report out the bill.

The CHAIRMAN. Now, I believe Mr. Baker was on the stand on Saturday.

Mr. Baker, you may resume your testimony, and permit me to admonish you to make it just as brief as you can, consistently with what you want to present.

Mr. BAKER. Yes, Senator.

STATEMENT OF NORMAN BAKER, PRESIDENT AMERICAN BROADCASTERS; OWNER AND MANAGER OF STATION K-TNT, MUSCATINE, IOWA-Resumed

Mr. BAKER. We left off on page 3, I think.

Senator DILL. I may say, Mr. Chairman, that Mr. Baker has submitted me a typewritten series of amendments that he wanted to propose, and I think it would save time for all of us if I will bring that over and submit it for the record, it will save time going over this line by line, if he prefers to do that.

Mr. BAKER. I wonder whether they are the same as this [indicating amendments].

Senator DILL. They are what you sent to me. I think it will save the time of the committee and yourself if you will go into the substance of the bill, rather than the details.

Mr. BAKER. Very well. On line 6, page 3-and I am calling these exhibits-you would add this, according to that, which I am going to call your attention to now

Senator DILL (interposing). My point is this, I will have those amendments inserted in the record as a part of your suggestions.

Mr. BAKER. This is Exhibit 1. I would add this: "and a station operating under a license as an experimental station shall not broadcast for any purpose between the hours of 10 o'clock a. m. and one o'clock a. m., when using power over 5,000 watts," I would say.

Senator HOWELL. If it were an experimental station, would you allow it to broadcast between those hours if it were a 5,000-watt station?

Mr. BAKER. An experimental station, if I understand the word correctly, is a station for experimenting. Now, the Government says we cannot experiment or adjust our apparatus or go on or off for anything, if experimenting, between the hours of 10 o'clock in the morning and 1 o'clock in the morning. Now, if a station is an experimental station it is an experimental station. I am referring to Bound Brook, WJZ-and they broadcast programs, and I understand advertise broadcasting advertising.

Senator HOWELL. Possibly I misunderstood you. You propose that no experimental station shall broadcast between the hours of 1 o'clock in the morning

Mr. BAKER (interposing). This says "shall not broadcast for any purpose between the hours of 10 o'clock a. m. and 1 o'clock a. m." If they experiment they shall go on between one in the morning and ten, and if they broadcast music, or sell advertising, they shall not go on between 10 and 1. They won't let us do it. The law says we must experiment after 1 o'clock.

Senator DILL. You mean the regulations?
Mr. BAKER. Yes; the rules and regulations.
Senator HOWELL. One o'clock at night?

Mr. BAKER. Yes; the rules and regulations.

I am against granting any license under any high-sounding name of experimental licenses, unless it is to be used for experimenting, and unless it is stated what the license is supplied for.

On page 6, line 4, that is a protection to stations, where it says. "one-fifth" I do not see why that could not be raised to one-tenth, because you are trying to keep foreign control out of the stations, so you might make it one-tenth of your capital stock. I have controlled corporations with one-fifth, and some of you gentlemen have. I believe if I hold even less it would be harder for them to control.

Now, in line 7, page 6, would be Exhibit E. [Reading:]

nor to any person, firm or corporation whose application, filed in accordance with Section 7 of this act, indicates on its face that the applicant may be guilty of conspiring to unlawfully monopolize or attempt to monopolize radio communications, directly or indirectly, by any means whatsoever.

Senator DILL. He would determine that, not to grant a license to anyone doing that.

Mr. BAKER. Yes.

Senator DILL. He would determine those things that you set out. Mr. BAKER. Well, right now under the present system any one of us could determine who, in our estimation, is trying to gain monopoly of the air.

Senator DILL. I may say to you

Mr. BAKER (interposing) That would rest with the Department of Commerce, I imagine.

Senator DILL. That was in the bill last session of Congress, and the Secretary of Commerce took the position that he did not want the responsibility of determining that, being merely an administrative officer. And we conferred with Congressman White, and we have gone over that, and I, myself, think it was quite a burden. Mr. BAKER. Some one must have burdens, I think, if they are going to regulate.

Senator DILL. Yes.

Mr. BAKER. Yes; I understand your thought.

Here is a line, line 18, on page 6, the words "is needed by the public interest.'' Who is going to decide what public interest is? Who shall decide that? Is it that the larger Class B stations, that kind of program, those stations which give sort of a home-like program, or is it against the schools or colleges that have intellectual talks at various times? There seems to be a difference of some kindamong the 40,000,000, listeners, there is a good deal of hyprocrisy. Some think that the only program is 'an operatic singer who sings in a foreign language that you can't understand. If you could see the 40,000,000 listeners in a row you would see them tune her out as fast as they tune her in. But who is to decide what the public interest is? It seems to me that is a big burden. In other words, I would not want to sit here and tell you gentlemen that all of your wives and your children could not go to the theater except what theater I told you to go to, whether to a vaudeville or to an operatic kind.

In line 14, on page 6, the Secretary of Commerce may-the language is "the Secretary of Commerce may-" I think that should be "shall".

Senator DILL. No; there is a substitution of lines there by the printer. You must take line 16 and read it after the 14th line, and then go back to the 15th line. That is a mistake of the printer. It reads:

The Secretary of Commerce may, subject to the limitations of this act, grant licenses for the operation of radio stations for the transmission of radio energy or radio communications, etc.

Mr. BAKER. Well, the word "may" should be "shall," because you are leaving more to the discretion of the Secretary, and that is what he is asking to be relieved of.

On page 8, line 5, the same argument, the word "may" should be changed to "shall."

Now, on line 8 it reads: "regulations may prescribe as to the citizenship, character, and financial, technical, and other ability".

The words "character, financial, technical, and other ability" I think should come out. Who is going to decide character? Must it be a capitalistic person? Or a member of any body so that persons can not build up stations for their own purposes? Just as soon as he can put up a station and begin to please his listeners, and if he does not put up a good program that pleases his listeners, he will soon go off. He has to have listeners, as well as a show has to have an audience.

You know there is quite a comparison there with the character. There are many capitalists that have character and money; bad characters have capital. It should come out. The same with "technical." Does it mean he should be worldly, a worldly man, or an educated man? I don't believe there should be any classification there as to who is granted a license.

Now, we come to one you have argued much. On page 9, line 3, "vested property."

Now, I am not in favor in any way, shape, or form of giving anybody a lifetime lease on the air, but I do think if a man has spent, say, $100,000 in a station, and perhaps in conducting it another $100,000, and has $200,000 in it on an investment, and he becomes sick or meets with an accident, or he may die, you would not buy that station unless you could operate it. Now, we have a 90day license, and I have used it 30 days. If I die or get sick, there is 2 months left. I believe that I should be authorized to sell that station and transfer the remaining unexpired time of my license over, and then at the end of the 90 days it is for the Government to grant or refuse. But it does seem wrong, you have a large investment and then sell that, and then he says it can't be operated.

Senator DILL. With the approval of the Secretary it may be transferred.

Mr. BAKER. If that is true, I have no objection at all.

Senator DILL. I want to ask your view on a question brought up Friday or Saturday, as to whether the law should restrict, in the sale of a station, the purchase price to the physical value of the property and thus prevent any selling value to the wave lengths?

Mr. BAKER. I do not see why. I do not see anything else you restrict. If you have an automobile, a Ford, and you can find a sucker to give you a half million dollars for it, take the half million dollars. That would be my answer.

Senator HOWELL. You might be able to get someone to give you a half million dollars for it if you had a special road on which it could operate and no one else could.

Senator HowELL. It is a different situation.

Mr. BAKER. That might be true.

Mr. BAKER. That would not be true if you had a vested right. Senator HOWELL. Do you hold there is a vested right?

Mr. BAKER. For the 90 days. If you had five years that would be worse yet.

I tell you gentlemen, our old law of 1912 has piloted us for 13 good long year, and you have never had any trouble, or turmoil, until your 5,000-watt stations came in. We got along nicely with 500-watt stations, and we got along then. Everyone boasted that he could get telegrams from every place in the Union, especially

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