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Wall Street History
https://www.gofundme.com/s3h2w8
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08/10/2001
Radio, Part I
The story of radio mirrors that of the Internet in many ways. In
his recent book, "Message of the Markets," Ron Insana writes:
"Wall Street''s fascination with the Internet echoes its fascination
with radio, both in terms of the speed with which the new
technology was recognized and in terms of the speculative frenzy
with which investors bought and sold shares."
Over the next few weeks we''re going to take a look at radio,
including the early days, its use, as well as RCA and its role in
market history.
But first, there are a few key figures to note in the invention and
establishment of commercial radio. There is Heinrich Hertz, a
German physicist, who discovered the usage of radio waves.
[The unit of frequency, the Hertz, is named for him.] And then
the actual inventor of radio, Italian physicist Guglielmo Marconi.
By 1897, Marconi had demonstrated the use of radio telegraphy,
and he was the first to then use this knowledge to establish radio
communication between France and England in 1899. By 1906
(though possibly as early as 1901), the first successful wireless
transmission from a 40,000-watt transmitter in New York City to
Ireland had taken place and in 1909 the first wireless message
from New York to Chicago was sent. [Marconi would receive
the Nobel Prize in Physics that year.] But this was far from a
classic radio broadcast. However, by 1913, Marconi was able to
transmit through a radio station in Brussels, where concerts could
be heard. Marconi''s pioneering efforts were paid the ultimate
tribute by the BBC when upon his death in 1937, the station went
silent for two minutes. He is generally regarded as one of the
makers of 20th century history.
As early as 1911 in America, instructions for building a radio
receiver were listed in the Boy Scouts Handbook, and throughout
America, people from all walks of life toyed with their
homemade devices, but we were still a long ways from getting
beyond "Is anyone out there?" Actual broadcast radio would
have to wait until 1920.
While almost every history book you read notes that the first
such event took place in Pittsburgh, in August of 1920 WWJ in
Detroit began transmitting news bulletins from the Detroit Daily
News. But most still view November 2, 1920 as the key date,
when Pittsburgh''s KDKA began regular programming with the
broadcast of the Harding - Cox presidential election returns.
Actually, there were no call letters on November 2, these would
evolve over time, but this first broadcast took place atop a tall
structure known as the ''K Building'' of the Westinghouse
Company. A separate shack was set up on this edifice, which
was otherwise used for the purposes of testing elevators. This
would become the first licensed station.
Albert Sindlinger, who would go on to a long career in
communications, was a 13-year-old boy with a love for radio at
the time of the first broadcast. The summer of ''20 his father had
taken him to meet Senator Warren G. Harding (and other
political figures), who was running for president. Later, through
his father''s connections, he managed to be at the K Building for
the first broadcast. Here is his description of that event.
"That night, a broadcaster was being read election returns from
the Pittsburgh Post Gazette which he would then broadcast over
the airwaves to the 100 or so people who had equipment to hear
it. [Ed. This audience was wireless amateurs with homemade
receivers.] But this was Prohibition time and so the man doing
the talking was also busy sipping out of a flask he had in his
pocket. Before long, he was too drunk to continue and decided
to go out and get some fresh air. As he did, he handed the mike
to me and for the next 45 minutes, I read the 1920 presidential
election returns to the nation." [A slight stretch, but historic
nonetheless.]
Well, little Albert was now swept up with radio and in January
1921, now 14, he built his own 100-watt station and applied with
the government for a broadcast license. In March he received a
letter:
"One of my first official duties as Secretary of Commerce is to
award you this license. Aren''t you that young fellow I met back
on the railroad platform in Marion, Ohio, with that vacuum tube?
What''s a 14-year-old kid going to do with a broadcast station?
Signed, Herbert Hoover."
At first radio was used to link local communities and institutions.
As historian Paul Johnson puts it, as the medium exploded the
"mass radio audience brought about the Americanization of
immigrant communities." Everyone began to go online,
including the Nushawg Poultry Farm in New Lebanon, Ohio and
the Detroit police, operating under the call letters "KOP."
After November 1920, events like the radio broadcast of the July
1921 Dempsey - Carpentier heavyweight title bout from Jersey
City helped spark the craze. WJZ became the first official
station in the New York area in October ''21, with the first
programming featuring World Series bulletins. And then on
November 11th of that year, President Harding presided over the
burial of the unknown soldier at Arlington, including an address
by the president, all broadcast over the new airwaves.
In 1922, radio really took off. At the beginning of the year there
were 28 stations, by the end, 570. Hundreds of companies were
now making the sets, under names like the Grebe, the Aeriola,
and the Radiola. Sales of the receivers, which were $10 million
in 1921, exploded to over $400 million by 1929.
Early on, all stations operated on just two frequencies, prompting
a traffic jam. And then another issue came up. Just who the
heck was going to pay to broadcast everything? Sound familiar?
This was expensive stuff, after all. The Western Electric
Company, broadcasting out of New York City, began to ask
those requesting transmitters, why not rent the facilities of
WEAF? And then on September 7, 1922, a realty company
became the first sponsor.
At first, Commerce Secretary Herbert Hoover, who was
enamored of the technology and in charge of licensing, thought
advertising would ruin radio. And many of the broadcast
organizations contended advertising would contaminate the air.
But by 1926, the new National Broadcasting Company (NBC)
was playing promotional announcements in the middle of its
regular programming and audiences didn''t seem to care. This
was the time, after all, when print advertising was coming to the
fore and most folks seemed amused and entertained by the new
commercials. Plus it was the revenue from advertising which
paid for the entertainers and programs like "The Maxwell House
Hour" and "The General Motors Family Party."
Most of the wavelengths came to be controlled by three networks
- the Columbia (which evolved into Columbia Broadcasting
System), the National (National Broadcasting Company) and the
Mutual (later the American Broadcasting Corporation). [NBC
was the first to begin linking stations into a network in 1926.]
In 1927, Congress established a Federal Radio Commission to
license stations, assign wave-lengths, and supervise policies.
Then in 1934 the commission was abolished and replaced by the
Federal Communications Commission.
Next week, the impact of radio on the 1920s bull market.
Sources:
"The Century" Peter Jennings and Todd Brewster
"Growth of the American Republic" Morison, Commager,
Leuchtenburg
"It Was a Very Good Year" Martin Fridson
"America: A Narrative History" Tindall & Shi
"The Great Bull Market" Robert Sobel
"The New York Times Century of Business" Norris and
Bockelmann
"Twentieth Century" J.M. Roberts
"Message of the Markets" Ron Insana
Brian Trumbore
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