(2 of 3)
When Congress passed the Federal Radio Act in 1927 it suspected the existence of an "air trust." Therefore in Section 13 of that law it directed the Federal Radio Commission to void all licenses of broadcasting and communications companies "finally adjudged guilty by a Federal court of unlawfully monopolizing or attempting to monopolize radio communications through the control of radio apparatus." RCA with some 4,000 patents dominated the radio manufacturing field, compelled rival firms making sets under a patent-license-and-royalty system to install only RCA vacuum tubes in their products. So complete was its grip on the industry that five independent radio manufacturers, backed by RPA, went into the Federal court at Wilmington, Del. and asked Judge Hugh Martin Morris to pass on the legality of RCA's tube contract with competitors. Judge Morris ruled that the contract was a violation of the Clayton Anti-Trust Law as it tended to create a monopoly. RCA appealed to the U. S. Supreme Court which in April refused to set aside what amounted to a monopoly conviction as specified by the Federal Radio Act.
In line with this judgment the Federal Radio Commission summoned RCA and its subsidiaries to show cause why the extreme penalty of the law should not be invoked and its licenses canceled July 15. At last RPA had RCA on the defense before a— government body empowered to sweep RCA's vast business into the junk pile at one stroke.
Before the Commission appeared President Merlin Hall Aylesworth to plead for the life of his National Broadcasting Co.'s seven stations (WRC, Washington; WEAF and WJZ, New York; KGO, San Francisco; KOA, Denver; WTAM, Cleveland; WENR, Chicago). His company had, he said, $17,000,000 in unfulfilled broadcasting contracts on hand. It had earned its first "small profit" last year on $20,000,000 gross business. It had leased 27 new studios in Manhattan's Radio City. A revocation of its licenses would ruin its business. Questioned by caustic Representative Frank R. Reid of Illinois, an intervener in the case, about the Delaware case, Mr. Aylesworth said: "I know very little about it. I wouldn't know a vacuum tube from an inner tube. I'm a broadcaster." Observed Representative Reid: "You're a slicker, too." Retorted Broadcaster Aylesworth: "Well, it's something to be called a slicker by a Congressman."
Officials of RCA Communications contended that if the Commission withdrew its 113 point-to-point licenses, they would be gobbled up by foreign countries "like Russia and Mexico" and the U. S. would be virtually forced out of the international wireless field. Jeopardy to life at sea was depicted by Radiomarine officials if that company should lose its 1,122 ship-shore licenses because of its parent company's law violation. RCA-Victor declared it would have to cease television experimentation if the Commission ruled against it. Summing up for RCA, Louis Titus, chief attorney, declared an "unspeakable disaster" would follow the Commission's refusal to renew RCA licenses. His prime legal argument was that Congress meant to put off the air as unfit only those who criminally violated the Sherman Act, not those who merely broke the civil provisions of the Clayton Act.
To put RCA out of business has for the last four years been the sole mission in the life of