three concrete cases in mind. One is where a very popular broadcasting station is owned by an American insurance corporation; the corporation has a Canadian director who was put on the board of directors in an honorary capacity purely as a compliment to certain Canadian interests. He had nothing to do with the control of the

corporation.

Another corporation applying to the commission for a license had a vice president in England who had nothing whatever to do with any activities of the corporation connected with the radio station proposed, which was merely an experimental station.

Another corporation had a Canadian director; the concern was operating a broadcasting station, and the director in question was again in largely an honorary capacity.

The CHAIRMAN. In those cases you think we should change the law?

Mr. CALDWELL. I think so. In the two cases where there were Canadian directors, the corporations could have removed the directors, but for some reason or other they felt they could not do that. Instead they created subsidiary corporations, all the stock of which was owned by the parent corporations which still had their alien directors. The law as it stands is not hard to evade.

Senator PITMAN. Personally I can not see any objection to stock ownership in aliens. I can see that a lot of changes would be necessary as it stands.

Mr. CALDWELL. The principal thing is to be able to control the situation in time of war.

Senator PITMAN. Would not that terminate the whole thing? Mr. CALDWELL. There are other provisions of the act that amply protect us in time of war and provide for sufficient control of the situation. The President, for example, can shut down any station, or take it over, as soon as war is declared.

Senator DILL. I think there is danger in time other than during war. I think there is an attempt there to prevent alien influence in radio stations and radio broadcasting. I think that was one of the purposes for inserting that when this law was written.

Senator PITTMAN. It is possible our theory will go, but that was a means of isolation.

Senator DILL. There might be a saving clause put in there, probably.

Senator BROOKHART. We have outlawed war now, so that we do not need to be afraid of that any more.

Senator DILL. There is more danger in peace, probably. I suggest, Mr. Caldwell, that you send to the reporter the suggested amendments. I do not mean to insert at this particular place in the bill; but I would like to have in the bill the matters which you studied with great care last year.

Mr. CALDWELL. I am afraid some of those things are in my office. in Chicago, and since you have made several requests for suggestions of that character, I wonder whether it would not be all right for me to send them to you later by mail. I can send you a complete set. Senator DILL. I suggest that you send them to the Chairman. The CHAIRMAN. You may send them to me, and we will insert them.

Mr. CALDWELL. Section 12 of the bill provides for revocation of licenses by the commission on grounds therein set forth. The question has arisen as to whether it gives the commission power to suspend a license. Many cases occur where the discipline necessary is less than a revocation, and yet there should be some discipline-for instance, where a station has deviated from its wave length because of negligence; for the first time or two perhaps a suspension is sufficient punishment.

Senator DILL. Your suggestion is to give them power to suspend the license for a time?

Mr. CALDWELL. Either suspend or revoke. I think the section should not be mandatory; the commission should have the right either to suspend or revoke. Furthermore the section should not be mandatory, and I do not believe it is, as to any ground on which suspension or revocation may occur.

Further, in lines 17 and 18 on page 20 of the bill you will find provisions that are unnecessary in view of the fact that you have taken over from the Interstate Commerce Commission into this new commission the determination of the issues which are there covered. In other words, it is not necessary to have any provision for the effect to be given to findings by the Interstate Commerce Commission, because the Interstate Commerce Commission will no longer have power to make those findings.

Senator DILL. And, furthermore, this bill is intended to give this commission the power to make its investigations and its findings?

Mr. CALDWELL. Yes, sir; I suggest also that you consider changing the procedure provided in this section. This section requires the commission first to make an order of revocation and then call in the parties to hold a hearing to determine whether its order was right. The result may be unnecessary and premature publicity to a revocation, with consequent injury and damage to the station's contract arrangements and good will. It seems to me that if the station were first charged with an offense, then summoned for a hearing, and then, if warranted by the evidence, had its license revoked, it would be the better procedure.

Senator DILL. Might not your suspension work properly there? They might suspend a station pending a hearing.

Mr. CALDWELL. I think that if it were properly safeguarded by a preliminary hearing that might be done. If not so safeguarded, a provision of that kind might be abused by overzealous engineers. A station is in some respects like a newspaper that, when temporarily enjoined, loses its readers and advertising. If you put a station out of business for a time it loses its listeners and breaks its advertising

contracts.

The CHAIRMAN. In my opinion a thing of that sort should always be heard and given consideration before action is taken.

Senator DILL. Yes.

Mr. CALDWELL. In the manner of proceeding provided by this section there is some danger of injustice because of its inverted character.

Senator DILL. But, Mr. Caldwell, the provision is here that no such order of revocation shall take effect until 30 days' notice in writing thereof, stating the cause for the proposed revocation, has

been given to the parties known by the commission to be interested in such license.

Mr. CALDWELL. I understand that, Senator, but just as soon as a station license is revoked, the newspapers carry the news that station ABC has had its license revoked before any hearing. Unjust injury and damage may be done to the station simply upon publication of an order of revocation of its license. I am simply mentioning this as a cause of possible injustice to stations, rather than to suggest that any necessary element of due process has been left out.

In section 14 I want to call attention to what seem to me to be very serious defects. This section corresponds to section 16 in the present radio act; it covers appeals from decisions of the commission. In the first instance it provides that an applicant for a permit or for a station license, or for the renewal or modification of an existing station license shall have the right of appeal from the decision of the commission to the Court of Appeals of the District of Columbia. It does not provide an appeal for anyone but the defeated applicant. It is almost impossible, particularly in the broadcast band, to have a decision in favor of the applicant which does not affect someone else than the applicant. In other words, if station A is occupying a channel and the channel is applied for by station B, if the channel is taken away from station A and given to station B, station A can not appeal under this section.

Senator DILL. Could not Station A, by setting up an opposing and counter petition, come in?

Mr. CALDWELL. Up to the time of the commission's decision it has nothing to ask for. It is satisfied with its channel and appears at a hearing as sort of a party defendant. It has no legal ground of complaint unless and until a decision is made in favor of station B. As soon as the decision is made its rights are affected for the first time. I advise a form of proceeding by which a station such as station A not only has a right to be heard but may also have equal rights of appeal.

Senator DILL. Take the case you mentioned yesterday of the 175,000 affidavits he came in and made his fight as though he was being tried on the application of another station for his channel.

Mr. CALDWELL. Yes. The commission is regularly giving such a station a right to participate in the hearing although the statute does not require it.

Senator DILL. Yes.

Mr. CALDWELL. But he does not have any standing on appeal if his wave length is taken away from him and given to the applicant

station.

Senator DILL. He would have to make another application and come back again for another hearing?

Mr. CALDWELL. Yes; and I am not so sure that he could come in again on the same evidence under the present provisions of the statute.

Senator PITTMAN. Is there a provision for an intervention?
Senator DILL. There is not.

Mr. CALDWELL. There is no provision of that kind, and I do not know how he could achieve any standing on appeal. I have talked the matter over with the justices of the court of appeals with respect to one aspect. While they very carefully say that they do not want

to make a decision in advance, they suggest that the attorney for such station might apply to be heard and come in as a friend of the court. This is all right if it is the applicant station which appeals, and is the only method by which a respondent station could get a hearing in the court of appeals. Even in such a case, in event of an unfavorable decision by the court of appeals, he could not go to the Supreme Court (if there is any right in any of these cases to get a review by the Supreme Court). Also, this does not help a station such as station A in the hypothetical case I mentioned.

Senator BROOKHART. On these appeals, do the parties get a full hearing on the merits of the case on the granting or refusal of their permit or license?

Mr. CALDWELL. That is a point which is now controverted in a pending case. The commission's attorneys are taking the position. that these provisions do not give full power of review on the facts to the court of appeals. There is some basis for that contention. Otherwise, it seems to me, the provision in this section for appeals from orders of revocation to the district courts of the United States is unconstitutional.

Senator BROOKHART. In the Interstate Commerce Commission there is no power of review of the facts in the case?

Mr. CALDWELL. No; there is not. But you will see in this section there is a provision for the taking of additional evidence in the court of appeals.

Senator BROOKHART. That means then a trial de novo?

Mr. CALDWELL. I think not entirely. There must have been some evidence, and this court is simply permitted to go further into the matter on application by one of the parties. In addition to that, the court is given rather broad powers to alter or revise a decision. Senator BROOKHART. Does not that give the court about as much radio business as the commission?

Mr. CALDWELL. I think it does potentially, and with increased difficulties, because the court does not in the record in any one case, have a complete picture of the interlocking issues in the radio spectrum, and does not have the means for obtaining the necessary facts that the commission has, nor the technical and practical experience that a tribunal ought to have for passing on these technical matters. Senator BROOKHART. What do you say about limiting these matters on review by the court similar to the limitations on the Interstate Commerce Commission and the courts?

Mr. CALDWELL. I think it is proper, and it is logical. It should be done. You give those powers to a commission because you feel it is better qualified to deal with technical questions and matters requiring specialized experience than the court, then by this section you turn around and give the same powers back to a court. I suggest that the court's jurisdiction should be limited to the control of excesses and arbitrary conduct by the commission.

Senator BROOKHART. Or violation of the law.

Mr. CALDWELL. Yes.

Senator DILL. The view of the committee when this was written was that this being a new field, there was some danger of radical decisions and actions by the Radio Commission and that there ought to be a body provided where these applicants could go for relief. And, intentionally and purposely the power for them to deal with it

was made extremely broad. It may be that it has now reached the point that it should not be so broad. I mean, with reference to the matter of review it was intentionally done. As to the lack of a provision for intervention, that is an oversight. But the purpose to give the court authority of review and wide power on review, was intentional.

Mr. CALDWELL. I am completely in sympathy with the purpose of placing a curb on what might be called abuses or excesses. I do think it is proper to have a review by the courts. There are, however, peculiar difficulties in radio jurisprudence. I want to point out two or three cases in which it is either impossible or impracticable to place before the court the same record as that which the commission acted on. I shall take a case that is actually before the court, without naming parties. Stations A and B are sharing the same channel, one have five-sevenths of the time and the other twosevenths. Both apply to the commission asking that each of them be given full time on that channel, which would mean, of course, that if the application of one station were granted the other station would have to get off and either be put on another channel or cease operation.

Suppose the commission after hearing denies the applications of both of them, and one of them appeals to the court of appeals. Suppose the court should decide that the commission was wrong and should have given that station full time on that channel. Judged by the decision in the WGY case, the court of appeals thinks it has power to make decisions affecting other stations without any evidence before it as to the rights or claims of those stations or the listening public of such stations. The court simply ordered the commission to give a certain kind of license to WGY when it had before it only ex parte evidence supporting the claims of WGY. Where in the hypothetical case I have mentioned would they put the other station if the court decides that the appellant is entitled to full time and the other station must go onto another channel? They do not know the situation on the other 89 channels, and certainly do not know the rights of other stations that are on those channels that would suffer by reason of such a decision.

Senator GLENN. The court would not have that authority.

Mr. CALDWELL. It seems to me it has pretty nearly said that it had, but I do not think it should have.

Senator BROOKHART. The only issue there is whether they are entitled to the particular channel, and if they were denied a part of it, would they have the right to go back before the commission and ask for a new place?

Mr. CALDWELL. That is a partial answer, I think, Senator, that the court should send it back to the commission, but the court did not do so in the WGY case.

Senator BROOKHART. Would it have to go back to the commission, if they were ruled out before this one asked for it?

Mr. CALDWELL. They each had a part of a channel, and shared time before the decision. They are both high-powered stations, and neither station could be put on any other channel in the whole broadcast band without injuring all the stations on such other channel. Senator BROOKHART. You have those problems for the commission. Senator DILL. That is a pretty broad statement.