!

Such a station has already been built. It has been legally constructed, and it seems illogical that the commission not be permitted to license it immediately because a permit has not been secured before the construction of the station was begun.

Senator DILL. There was a fear that the applications would be pressing upon the commission, but it actually amounts now to whether a man would want to know that he would have a license to operate. I think that part should be stricken out.

The CHAIRMAN. I agree it should be stricken out.

Mr. CALDWELL. In section 27 on page 33, I want to mention a matter for a possible later recommendation simply, as a possibility of a future need for an amendment.

This section provides that nothing in this act shall be understood or construed to give this commission the power of censorship.

I believe that was intended to mean, and does mean, the power of censorship over the dissemination of questions of public interest, and does not refer to program service or matters of advertising, and all that sort of thing. That construction is being regularly followed by the commission and, so far, has not been seriously challenged by anyone. If the time should come when a different construction were given the provision by the courts, that it takes away from the commission the power of considering program service and advertising, then I think some change should be made.

I have just been through a very complete study of the historical evolution of the meaning of censorship and freedom of speech in a case concerning the validity of a law in Minnesota. I am convinced that the construction giving this commission the power I mention is the correct one, restricting it only from exercising any power to discipline stations in any manner, for views on questions of public interest or importance.

Senator GLENN. In other words, you think this does not need amendment?

Mr. CALDWELL. I think now it is all right if properly construed by the courts, but I think that there is a possibility that there might be trouble later if, contrary to my expectation, a different construction is placed upon it.

Senator GLENN. In other words, it might be cleared up?

Mr. CALDWELL. I am not sure that it is important enough as a potential danger.

Senator GLENN. I think it is an important situation.

Mr. CALDWELL. I mean, until a later time, if and when the necessity arises. Perhaps it would be better to have the question thoroughly decided as it stands.

Senator GLENN. It is sure to come, I think.

Mr. CALDWELL. In Section 29 there is a definition of radio communication. This definition is not quite the same as that which is contained in the international treaty. The language of the international treaty is not any more restricted than this, and I suggest considering the making of the language of the two identical.

Senator DILL. Has this question come to you? Much of the transmission of telephone messages is done through a radio-frequency, and by means of that more than one use of a wire can be made. Would that come under this as a radio communication?

Mr. CALDWELL. I should think not, Senator.

Senator DILL. Because it is without the aid of wires, you think? Mr. CALDWELL. Yes. An analogous question was presented to me when I was with the commission, and it seems to me that the emphasis on "without the aid of wires" practically eliminated that sort of thing from the commission's jurisdiction. You probably know that in copyright cases, which are a problem of the broadcasters right now, there are suits pending to prevent hotels, we will say, from putting receiving sets in rooms or in restaurants and thus giving the people the programs that come in from broadcasting stations without taking out licenses under the copyrights. So far, I believe, the authors, composers, and publishers have been beaten in one case in a lower

court.

That is entirely separate matter, but it was in connection with such a case that the question I mentioned arose.

Section 30 is a penal section which is taken over intact from the present act in section 32, and covers violations of the commission's regulations.

Strangely, however, section 33 of the radio act, which provides a penalty for violation of the act, has been omitted. So far as I have discovered, there is no penal provision in Senate bill 6 covering radio communication without a license.

Senator DILL. Is there not a saving clause at the end of the bill, covering the entire subject? I do not know, myself.

Mr. CALDWELL. I think it was simply an oversight.

Senator DILL. I thought probably it was dropped because of that probability and was put in somewhere else.

I feel very certain that

Mr. CALDWELL. I have not seen it, if it is. I feel it is not, Senator.

Senator DILL. I thought probably that was what had happened. Mr. CALDWELL. In addition, as to both these penal clauses there is going to be occasion, I think, for further defining what constitutes a single offense in radio communication. A station that goes on the air without a license, if it goes on from day to day and week to week or perhaps months, while a prosecution is pending, has committed probably only one offense; and I suggest for your attention that that be made into separate offenses, day by day.

Senator GLENN. That is comparable to the prize fight film situation, where they can violate the law and transport the film across interstate lines and pay one penalty and reap a profit? I suppose that is the situation?

Mr. CALDWELL. I think so.

The importance of that came out in the Chicago cases, particularly in the case of the American Bond & Mortgage Co., which threatened to go on the air without a license and with a high-powered station. It was for that reason among others that we chose to institute a suit for injunction against it, although there is no specific authority for that in the act. We did that on the theory that we were seeking to clear a channel of interstate commerce of obstruction. We felt we had good authority in a decision of the United States Supreme Court in the first Chicago sanitary district case, in which I happened to have been a special assistant to the Attorney General. That theory has so far worked out successfully.

Senator GLENN. What do you think about the penalties provided? Are they sufficient?

Mr. CALDWELL. I think that the penalties provided for radio violations are sufficient. I am not competent to pass on any of the interstate-commerce provisions. I never had any interstate-commerce practice and do not know what is needed or called for.

I understand that the general counsel of the commission has looked into the necessity for amendments connected with the wire communications part of this bill and he may have some suggestions. Senator DILL. Who is that?

Mr. CALDWELL. The present general counsel of the commission has, I think, at the suggestion of the chairman, made some study of that. Senator DILL. I was waiting to hear whether you were going to say anything with regard to that.

Mr. CALDWELL. I have been before the Interstate Commerce Commission twice on minor matters involving coal, and I do not know anything about its practice; and I know nothing about the wire communication business or its problems.

The CHAIRMAN. The chairman asked the general counsel for the commission at some time to make a report.

Senator DILL. I had hoped that you might call General Squier, as he is probably the best authority on wired radio.

Mr. CALDWELL. Section 5 of the present radio act, which was not incorporated into this act, covers appeals from the Secretary of Commerce to the commission during the period after the Secretary of Commerce should take over the powers of the commission, if he did so. If that should ever happen, there are a lot of things that should be changed in that section. I shall not bother you with them now; it does not read consistently with other parts of the radio act. In addition to that, if that situation should ever arise, it seems to me that the salaries of the commissioners should not be $30 a day, but just the same as they are now, so that there will not be an inclination to go into businesses of their own and only give their spare time to this work.

Senator DILL. Do you think it would cause a very bad upsetting of the situation if, for instance, on December 31 there should be legislation pending here that the Secretary of Commerce should just issue an order referring all radio matters to the commission, as it now has them? Could it be pretty well handled in that way? Mr. CALDWELL. So far as I know; yes, Senator. It did happen once before.

Senator DILL. My understanding would be that if he could refer the whole matter to them

Mr. CALDWELL. I think he could. It did happen once before, in the short interim between March 15, 1928, and March 28, 1928, when a bill extending their powers was pending.

I should say in that connection that on February 26 I made what I thought was a perfectly innocuous speech over a broadcasting station on the legal aspects of radio. On March 1 I heard it commented on in the Senate for seven hours, although it took me about 28 minutes to deliver, as an argument for not continuing the commission. I do not want to leave the record uncertain as to my attitude on the question as to whether the provisions of the radio act of 1927, as amended, should be allowed to take its course or whether the powers of the commission should be permanently extended. I am for the

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latter if the commission is put on a permanent and not a year-to-year basis.

There are some miscellaneous questions having to do in part with amendments that I want to touch upon. I have just said that I feel that the licensing authority should be the commission, and in saying that I assume that it will be, as it is already on the way to being properly organized with the proper bureaus and rules and regulations and all that. There is no reason why it should not work, and I think it will work. I think that the licensing and regulating authority over radio should be unified; that the commission should have all the present powers of the Department of Commerce, including those of inspection, the work of supervisors, reports, designation of call letters, licensing of operators, and all that sort of thing. The present system of having that power divided is, I think, unfortunate.

Senator DILL. The fact is that they have moved the head of the radio division of the Department of Commerce over where he works in conjunction and cooperation with the commission continuously, does he not?

Mr. CALDWELL. It is practically run as one office, now, although the reason it works as well as it does is because of the very generous cooperation on the part of that department and not any necessity or duty on their part of doing so. Nothing that I have said is intended to reflect in any way upon the manner in which Mr. Terrell or his department have cooperated, because they are doing a very fine job. I think the commission should as soon as possible be on a permanent basis and not from year to year, because the present system is handicapping it terrifically in setting up policies looking toward the future and in building up a stable organization, and in getting the engineers, lawyers, and experts that they need. The present year-to-year uncertainty as to where the permanent, unified licensing authority is to reside is a very bad thing for radio.

On the matter of license fees I want to state that in our committee of the American Bar Association we have an exactly even division of opinion on the question. The two that are opposed to license fees have, I think, the broadcasting situation uppermost in their minds and the fact that the public is not paying anything for broadcasting service. I do not think they are as familiar with the problem on other channels.

I personally think that the license fees are a perfectly logical thing, although I do not think you should be too optimistic in expecting all the expense to be paid by them. I think the total will come somewhat short of that, if you keep within reasonable fees. I think you will have to adopt only nominal fees in regard to certain services, like

amateurs.

I am encouraged in that position by the knowledge that the broadcasters themselves, so far as I know, have shown themselves to be either neutral or in favor of the system of fees, on condition, I think, that they get a little better deal on the length of the period of their licenses.

There has been some suggestion in hearings that I have attended this past winter of a national law with regard to slander. It happens to be a branch of law that I have spent more time on than any other, in our newspaper work. I am convinced that it will not work in the

radio law. There are too many questions of local State laws to make it workable in a national radio law.

Senator DILL. Have you ever tried to figure out just how those different laws of slander work out?

Mr. CALDWELL. I have given up before I started. I am convinced it can not be done; and I am convinced that there are almost unanswerable questions as to venue, service of process, and all that sort of thing that would arise.

My next suggestion has to do with something that was touched upon this morning in questions asked me. It bears upon bills, such as the bill that was introduced last winter requiring the commission to set aside 50 cleared channels, and the bill placing a limit upon the power of broadcasting stations. It is my feeling that such questions ought to be left to the commission. That is what you have a commission for. If they do not achieve the proper results, then it is a matter of changing appointments or changing something else rather than abandoning the principle of leaving such details to experienced

men.

Senator DILL. The Davis amendment was really of a similar nature. Mr. CALDWELL. It certainly was. I feel that that type of law rather clashes with the fundamental purpose of having a commission. I want now to touch briefly on questions that I should be just as happy to leave alone, because they border on a field of controversy that I know you will see a great deal of before these hearings are over and as to which I have maintained and want to maintain a thoroughly neutral attitude except where, as it seems to me, real matters of public as distinguished from private interest are involved. I have friends on both sides of the controversy, and I respect their sincerity and ability.

I want to speak on these monopoly sections which, in the radio act of 1927, are sections 13, 15, and 17, and in this present act are 11, 13, and 15. I do not want to offer conclusions; I simply want to suggest certain issues that appeal to me as having a public importance so that you may have them in mind as you question other witnesses and ask for information from them.

In the first place I want to recall again to you the situation arising from immutable scientific facts and principles, that there is, and will probably continue to be, a very limited number of channels available for long distance communication. The number may be somewhat increased but the problem will remain the same. You should realze, then, that if you insist on the principle of competition in foreign communication-I am not talking now about continental communication you may cut in half or greatly reduce the number of countries with which this country can communicate. If the total number of channels we can have is 60, which will serve to communicate with 30 countries, and if you insist on competition everywhere that will mean communication perhaps with only 15 instead of 30. Perhaps the competitor is more beneficial than communicating with more countries; I do not presume to say. I ask only that you realize the full implications of competition in foreign wireless communication before you finally adopt it as a principle.

On the other hand, if the principle of competition is not recognized, there is all the more reason for a rigid governmental control