several years, built up an efficient organization for the gathering of agricultural data for dissemination among farmers. It has the necessary contacts with agricultural colleges, organizations, and journals. It recognizes their interests in questions which it causes to be debated before its microphone. It has a connection with the Chicago Journal, a daily newspaper, which provides news flashes and other information necessary for a proper news service. In addition, it has provided a high order of entertainment, not inferior in any respect, in our judgment, to that given by WENR, again, however, with emphasis on the needs and desires of the agricultural population. It is the right of this portion of the population which we believe we are upholding when we vote to deny the claims of station WENR. A service which has been built up over a period of several years of hard work, with the resulting perfection of organization and experience, can not be duplicated over night by a new station just entering the field. It certainly would not be just to allow a newcomer to reap the fruits of the successful efforts of an older station. E. O. SYKES, STATEMENT OF GROUNDS FOR DECISION BY COMMISSIONERS CALDWELL AND LAFOUNT We believe that WENR's application should be granted to the extent of assigning it one-half time on the channel of 870 kilocycles, so that WENR and WLS will be on a equal division of time. We believe that WCBD's application should be denied. While from the point of view of priority alone WLS has claims superior to those of WENR, we regard those claims as overcome by the overwhelming weight of the evidence showing both a superior service and a greater capacity for service by WENR. In our opinion, therefore, the claims of WLS resting on priority should give at least to the extent of permitting WENR to have one-half time. With regard to the service heretofore and now bing rendered by WENR, the evidence shows, we believe, that it is of the very highest standard and substantially better than that given by WLS. With the possible exception of one other Chicago station (not a party to this controversy) it employes the largest and best staff of musicians. The success of its service on domestic problems to the housewife during the daytime was amply demonstrated. Its record of participation in events of civic importance, discussions of questions of public interest, educational matter, and agricultural service (of which we shall have more to say below) is excellent. It is true, of course, that a commission sitting in Washington is in a poor position to compare the programs of two stations when all it has before it is the testimony of a few witnesses and a collection of itemized programs. Names of artists without evidence of their standing and titles of musical numbers without a description of their rendering are not particularly helpful. For this reason we must go back to such evidence and attempt to discover more significant indications of the character of the service. One such indication will be found, we believe, in the amount of money paid out by a station for its programs over a given period. This will not be conclusive but it is very persuasive evidence. Another such indication will be found, we believe, in the popularity of a station with the listening public, although, as was pointed out in the general statement of principles by the commission, there are manifest infirmities in the kinds of evidence usually adduced by stations on this score. Judged by either test WENR's service makes a better showing on the evidence than that of WLS. We believe that WENR is clearly shown to be the more popular station of the two. The evidence, in our opinion, also demonstrates that in the future WENR will continue to give better service than WLS. In the first place the unquestioned financial responsibility of the interests controlling the station is an assurance of this, whereas, since Sears, Roebuck and Company apparently plan eventually to relinquish any control over the station, we are not convinced that WLS will have the same backing. We feel compelled to consider this important, not only because section 10 of the radio act of 1927 calls on us to investigate the financial ability of licensees, but also because it is common knowledge that insofar as direct returns go nearly every large popular broadcasting station is operated at a heavy loss. The operation of such station, therefore, should, so far as possible, logically be in the hands of concerns able and willing to be satisfied with an indirect return in the nature of good will. Another consideration which is entitled to great weight, in our opinion, is the fact that WENR's 50,000-watt transmitter will give better service in the Chicago area and some degree of service over a larger area than WLS's 5,000-watt transmitter. According to standards which seem to find acceptance among engineers as approximately accurate, the service areas of stations of such power during average conditions on winter evenings (subject, of course, to natural phenomena such a fading and other factors), are as follows: From the point of view of the listening public, the difference is an important although not necessarily a controlling one. It seems to us that the public ought to have the advantage of as much use of a fine transmitter as can be given it with due regard for the rights of others. There is another element, closely related to the foregoing, which should be mentioned. A 50,000-watt transmitter can not be operated economically on so small an allotment as two-sevenths time. In fact, economical use of any transmitter requires full-time operation, since the overhead expense is substantially as great where less time is used. The technical and operating staff must be practically as large, and most regularly employed musicians must be paid for practically full time. These considerations are not as important in the smaller stations, many of whom do not have regular full-time staffs and prefer to divide time, but where the operation of a station costs annually, $300,000 or $400,000 (as in the case of WENR) it is the listening public which suffers from a time division. We do not need to argue the irrefutable business principle that the smaller the overhead in proportion to the return (whether direct or indirect) the more money can be safely devoted to the service given. Again, we point out, it is not the broadcaster's case we are arguing but the case of the listener. For the latter's sake, we believe, all large stations should be permitted to operate on a basis which will enable them to give the largest possible amount of service. We recognize, of course, that in the overcrowded condition in the broadcast band this has not always been possible. We come now to consideration of the contention on which WLS seems largely to rest its case, its agricultural service. We are frankly very sceptical as to the existence of any very substantial basis for its claim, and are inclined to think that its merit in this regard has been somewhat exaggerated. WLS does not assert that it devotes any very large proportion of its hours to purely agricultural programs; we do not believe that if it did it would have many listeners, even among the farmers. It has devoted some of its hours to such programs and we do not doubt their general excellence or their value to listeners. That such programs differ substantially in either quantity or character from those rendered by other Chicago stations during the daytime we are not convinced. WENR has also given agricultural programs, although, until it was permitted use of its new transmitter, it naturally could not reach any considerable audience outside of Chicago. Because of the nature of the concerns controlling WENR the station has an exceedingly great interest in furnishing service to rural acreas, and its owners intend, if permitted, to do so. With a 50,000-watt transmitter WENR will give better service and service over a wider area to farmers than will WLS, and in favoring an increase of time to WENR we are chiefly influenced by the thought that this will bring more and better service to the farmer in the Middle West. The subject leads us to an observation directed at an assumption which is frequently made in arguments before the commission and which we believe is erroneous. This assumption is that for some reason the farmer enjoys music and entertainment that is different from that enjoyed by the city dweller. In our opinion, good music and entertainment are universal in their appeal and have slight reference to the occupations and the places of residence of listeners; this is demonstrated by the popularity of chain programs which proceed largely from New York and Chicago. In all walks of life there are people who prefer classical or semi-classical music; there are others who prefer the lighter forms of music. We believe that the many shades of opinion are reflected in cross-sections of the country's agricultural population and of its urban population in about the same proportion. We oppose assigning an excellent station such as WENR to 1,480 kilocycles where, because of the peculiarities of the high frequencies in the broadcastband and certain considerations of interference, the transmitter can not be operated successfully (according to the evidence) with more than 5,000 watts. The equities urged by our associates in favor of WCBD are not without force, but it is, in our opinion, inconsistent with principles on which we are all agreed, to give such a station any privileges at the expense of a general public service station. H. A. LAFOUNT, Commissioner. O. H. CALDWELL, Commissioner. X COMMISSION ON COMMUNICATIONS SATURDAY, MAY 11, 1929 UNITED STATES SENATE, COMMITTEE ON INTERSTATE COMMERCE, Washington, D. C. The committee met, pursuant to adjournment on yesterday, at 10.30 a. m., in room 412, Senate Office Building, Senator James Couzens, presiding. Present: Senators Couzens (chairman), Watson, Glenn, Brookhart, Pittman, and Dill. The CHAIRMAN. The committee will be in order, I think we might as well proceed. STATEMENT OF LOUIS G. CALDWELL, ESQ., CHICAGO, ILL.Resumed Mr. CALDWELL. Upon reading over my testimony of yesterday and noting again the arguments that were presented by members of the committee, I am inclined to withdraw my suggestion that the terms for commissioners should be any longer than provided under this act. I think the considerations they urged should prevail over mine. I would not want to be misunderstood in what I said as to emergency applications. I agree thoroughly with Senator Dill that not only each application for license should have all the information called for by section 8 of Senate bill No. 6, but also that each renewal application should have all the same information. There is a continuing necessity for it. Senator DILL. That section gives very broad powers, in that it enables the commissioners to get complete information. I think that is correct. Mr. CALDWELL. What I did have in mind was a situation arising out of a practice that was in existence at the time I arrived at the commission, to telegraph authority to stations to do this or that for a period of time. Of course, that practice was not in accordance with the law. I quickly discovered, however, that there are cases where safety to life and property at sea are involved and it is necessary to act quickly. Some sort of emergency authorization for a limited period of time seems necessary. Senator DILL. And that emergency safety clause should be put in. Mr. CALDWELL. As an interesting example of what police signals in cities are doing just now, I cite a matter which came to my attention just yesterday. In Chicago a broadcasting station has an arrangement with the local police department whereby it broadcasts directions to police automobile squads to proceed to points from which crimes are reported. It seems that such directions were broadcast about a particular burglary that was in the process of being committed, and the burglar was still in the house. He heard the direction, from a loud speaker somewhere in the house, left a note saying, "Thanks for the warning" and promptly left. The CHAIRMAN. That was also sent to me by the police department in Detroit. It was only indicative of the fact that they needed a different wave length, and perhaps not such a long distance. Mr. CALDWELL. In connection with the advertising practices which were under discussion yesterday, I call attention to the fact that the National Association of Broadcasters is already working on and has accomplished something toward a code of ethics. I do not know how far that will go. But the broadcasters themselves have thus achieved some substantial advances. I think it is significant that they have, themselves, realized the evils that are prevalent, and are endeavoring to impose obligations upon themselves. In section 10 of Senate bill 6 there are prohibitions against the issuance of licenses to certain classes of persons who are aliens or who are controlled by aliens. I have the feeling that in some respects this section is too broad. The important defect, however, is with respect to ship licenses. There are many vessels, owned by American corporations, which must be registered as American vessels under our navigation requirements, which can not be licenses under this section. The statutory requirements as to registry do not require that an American corporation have less than 20 per cent alien stock ownership. Therefore, certain American corporations, owning ships which have more than 20 per cent alien ownership are in a dilemma. Under the navigation statutes they must have and maintain radio stations on each ship and yet they can not have licenses under this act or under the present radio law. Another defect that is present in the navigation statutes is the use of the word "steamer" in specifying what vessels must be equipped with radio stations. That will probably be interpreted not to include vessels propelled by power generated by gas engines, etc. Senator DILL. What is your suggestion as to how this should be amended to cover the situation you have raised there? Mr. CALDWELL. I have drafted, although I have not with me, a suggestion which I submitted to Congressman White during the House committee hearings this winter. In substance, however, I made two suggestions: 1. That the matter be left to the discretion of the commission in such a way that the alien control should not be permitted to be sufficient in amount to be inimical to the interests of the United States. Senator DILL. And apply that to ships? Mr. CALDWELL. The other suggestion was to have an exception to the section applying solely to ships and other mobile stations. Senator DILL. Do you think it is objectionable to have it apply to other than ships? Mr. CALDWELL. It probably is necessary to have it extend to other kinds of mobile stations such as aircraft stations and perhaps also stations on railroad rolling stock. There are other cases where, I think, it works an unnecessary hardship, ana is undesirable. I have |