Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-29
MONOPOLY SOUGHT
/ IN RADIO CONTROL
Britain's Position, With Joint
Ownership, Cited as Need
for U. S. Merger.
By MARTIN CODEL.


cable-radio merger was voted frank ex-
preston has been given before a con-
gressional committee to a belief that
has been growing perceptibly among
certain American communication in
terests. 1t holds that the position of
the United States in world radio can
best be maintained by a monopoly
Indicating how battle lines are being
drawn to wrest ION this country its
supremacy in international radio COM
inunications, Col Manton Davis state
ment before the House committee prob
ing radio explained that Great Britain S
worldwide wireless and cable system
will be placed in superior position to
the separated American cable and radio
units in trading for traffic volume and
fixing rates.
The vice president and general at
torney for the Radio Corporation of
America disavowed any purpose of ac-
lively seeking repeal Of the section Of
the radio act which precludes wire and
radio mergers in this country. However,
he did insist, answering the questions
put by Representative Davis of Tennes-
see. that competition between American
international communications groups
will benefit no Americans, but for
eigners only"
Col. Davis testimony opened a sub
tect that Is likely to be one of the i'm
portant issues before the Hoover ad-
miniStration. The principle of the COM
petition between wire and wireless serv-
ices is written into the present law.
Must the American Government COM
promise with the principle in order to
meet an exigency created by the action
OF a foreign government? Will the
cartel movement" in foreign radio be
the reason for similar movement in
this country?
A virtual monopoly now exists in in
ternational radio, the communications
phase being considered entirely apart
from all other phases. The Radio Cor
poration of America is the only Ameri-
can company operating transoceanic ra-
do circuits by arrangements with gov
eminent and private radio administra-
ton in 80 foreign countries. The Mac
kay systems propose and have been
given wave lengths to enter the field
but have not yet begun active opera
tons.
Owen D. Young wS represented at
the House hearing as stating that in
ternational competition must be between
the radio and cables and as favoring "a
Government monopoly rather than COM
petition among radio companies"
It Is no secret that cable and radio
groups would like to merge their inter-
national facilities to meet the British
merger. A fusion of Radio Corporation
OF America and Western Union has long
been in the air. The law has always
appeared as barrier, although the
Mackay interests appear to be going
forward with their plans to operate
transoceanic radio along with their Ca
bles In the face of the radio act.
Meanwhile, although facing the same
menace in the international field, the
radio and cable interests have been
waging. a spirited competition between
themselves. This has become so acute
in some instances that it has been i'm
possible for the Radio Corporation of
America to reach a traffic agreement
with the Western Union and the Postal
for an inland pickup of radio mes
sages destined overseas. AS a. conse-
Quence 1t proposes to set up its own
telegraph system within the country,
utilizing radio here, too,
II domestic radio-telegraphy becomes
o fact. there is little or no likelihood
that ii will be established as a monop-
oily either joined to the wire system or
sufficient unto itself. The domestic
problem Is related to- the international
one, but the principle iof competition in
inland services Is something that Con-
gress will certainly not compromise at
this stage OF American economic de-
velopmert.
The sensational gyrations of Radio
Corporation Of America stock that re-
Gently amazed the speculative markets
occurred in the face of the fact that no
dividends have ever been paid by that
company, except on its preferred stock.
AL earnings have been going into the
various paths Of expansion the company
has taken. the most recent of which
was the merger with Victor.
The attention of the House committee
conducting the hearings on radio was
called to this fact at about the same
time that the Radio Corporation of
America was announcing in New York
that its 1928 surplus profits amounted
to $1S,983.394 on a gross income of
S100,530,7 100. This compared with 1927
earnings of $7,o29,622 on gross of
$65 ,032,074
COL Manton Davis, vice resident
and general attorney of the Radio Cor
poration of America, told the House
committee that the company has $4,000
shareholders, but that the influential
voices IN the control of its policies are
the General Electric and Westinghouse
companies. The American Telephone
d Telegraph Co. and United Fruit Co.
have not held Radio CORPORATION of
America stock for several years, he said.
Along with other companies, however,
they contribute their radio patents un-
der license arrangement to the Radio
Corporation of America.
Some of the large owners of the COM
pany's stock are not known, because
brokerage houses are holding the stock
intact for customers, according to Col.
Davis. General Electric holdings as of
August, 1928, were said to constitute
248,l08 shares of common and 27.O80
shares of preferred. Westinghouse has
27,760 shares of common and $4,000
shares Of preferred.
These figures were brought out in
the course of the House hearings, which
are covering all phases of radio, but
which recently have stressed the COM
munlcations angle The chief inquirer
into the set-up of the Radio Corporation
OF America is Representative Davis
(DemocraD of Tennessee. It has been
indicated that nembeCs of the commit
tee viii seek a continuance of the in
quiry into the organize Jon of radio and
allied interests in the United States.
General agreement seems to prevail
that the bill extending the life of the
Radio Commission should be reported
favorably. 1t is expected that it will be
taken to the House the latter part of
this week by Chairman White of Maine.
NNIk