Episode 1: Wireless Telegraphy and The Birth of American Media

Radio historians tell us that wireless telegraphy, the forerunner of radio, television, and the internet, was the first globally accessible communications medium. Most popular accounts, however, don’t mention that wireless was first regulated by the federal government in the early 1900’s because of its importance to America’s growing military presence in Asia, Latin America, and the Caribbean.

To insure the success of American foreign policy, which depended on long distance communications, the government also approved a monopoly on the manufacture of radio parts and equipment, and the ownership of domestic radio networks, by a handful of American corporations. The events leading to these decisions provide an instructive and unsettling lesson in how overlapping social, economic and political interests not only transformed America into an international power, but also positioned these companies as global players to control new communications technologies that developed later in the twentieth century and remain prominent to this day.

Government Regulation of Wireless

Wireless telegraphy evolved slowly through the 19th century based on the efforts of inventors scattered throughout Europe and the United States. A line of innovations, in fact, can be traced from British inventors Michael Faraday and James Maxwell, the American Amos Dolbear, the German scientist Heinrich Hertz, to the work of the young Italian Gugliemo Marconi. It was Marconi who is credited with conducting the first successful demonstration of wireless telegraphy outside London in 1894. His efforts to publicize the invention through an association with James Gordon Bennett Jr., publisher of the New York Herald, attracted the interest of the American Navy, which was willing to test the device for communication with its ships patrolling near the Philippines, Hawaii, and the waters off Cuba.

The clash between Marconi and the U.S. Navy was an historic turning point. Marconi was suspected of being an agent of the British government for an early contract to maintain transmitters for the Admiralty in its colonial outposts, and did not help matters by often stating his intention one day to monopolize all wireless communications. By 1895, the Navy under Secretary Theodore Roosevelt, an admirer of Alfred Thayer Mahan, a prominent advocate of American sea power, promoted a renewed policy of manifest destiny on a global scale. While still learning about Marconi’s wireless, the Navy had been reluctant to consider a “foreign” firm for long-range experiments, but relented when it realized that few alternatives existed. When Marconi abandoned the American tests early to assist the British during the Boer rebellion, the Navy’s nationalist sentiments solidified. This bias was supported by the inventor’s demand that his equipment be leased rather than sold outright, which was attributed to Marconi’s desire to control the dispersion of wireless technology worldwide.

The Navy’s adoption of wireless, however, took many years to evolve. Despite the experiments of some officers working independently as early as the 1880’s, bureaucratic inertia and turf battles within the Navy Department delayed wireless use until after the outbreak of the Russo-Japanese War in 1904. This conflict first demonstrated the use of wireless in combat, and also highlighted the interference of wireless signals by non-combatants, which, it was argued, could affect the outcome of future wars. The Navy in fact blamed amateur radio enthusiasts early on for much of its problems with interference, noting that:

"Amateurs with their home-constructed equipment began increasing by the scores, and the interferences created by them in large metropolitan areas began to pose additional problems and complications."

American government agencies, including the Navy, had unknowingly contributed to the problem. In the chaotic atmosphere of early wireless development, there were many reports of amateur, commercial, and government wireless operators transmitting without controls. In late 1903, for example, the Department of Agriculture was already operating 50 transmitters, in addition to the Navy’s own 20 wireless stations. In 1904 the Navy built 20 more transmitters. None of the wireless stations coordinated their broadcasts, and in many cases government installations were built on the same property, increasing the likelihood that interference would cancel each other out.

Despite their involvement, government agencies continued to scapegoat amateur radio operators. Some amateurs were said to have contacted passing ships at will, at times spending evenings talking to naval vessels coming close to shore. In other cases, amateurs were accused of impersonating officers who issued bogus orders to naval vessels, leading historian Erik Barnouw to write: “…so many official messages (were) … blotted out that naval authorities became increasingly testy, then indignant, about amateur interference.”

By 1904 the issue of amateur interference took on strategic importance as political tensions heightened among the European powers and American foreign policy solidified. Signal interference and a rash of ship disasters, including the well publicized sinking of the Titanic in 1912, begged the question in the press: What if America was at war? Would the inability to communicate with a far-flung army and navy pose a threat to national security? Representing the Navy, Admiral George Dewey, the hero of the Spanish-American War, wrote pointedly:

"The principal defect of wireless telegraphy, the liability of interference, renders central control indispensable to the integrity and effectiveness of any wireless-telegraph station. Without control over the placing of other stations, any wireless-telegraphy station may be rendered absolutely useless either by accident or design."

The fate of wireless technology soon became a national priority. Lobbied by Dewey and the Naval establishment to bring “order” to the chaos, now blamed on amateur and commercial wireless stations, by then President Theodore Roosevelt, convened the “Interdepartmental Board of Wireless Telegraphy” in June 1904. The board was charged to consider the control of wireless radio by the government, and to find a solution to the bickering between agencies over use of the technology. It was no coincidence that naval officers dominated the “Roosevelt Board”.

In a report submitted less than one month later, the board recommended that all government wireless radio operations be centralized under Navy command, and that all commercial stations not be allowed to interfere with military operations. The effect on commercial and amateur stations was immediate. Since virtually all private installations were located near large bodies of water or major harbors, the Navy was given final authority to close down any private wireless station that interfered with its own. When Roosevelt endorsed the report on July 29, 1904 and immediately made the proposals law, the first regulation of wireless radio officially began.

Radio under a Government Monopoly

In spite of these controls, the early years of the 20th century was a time of innovation in wireless radio. Following breakthroughs by Americans Reginal Fessenden in voice transmission in 1906 and Lee De Forest’s new receiver in1907, radio was a favorite pastime of large groups of enthusiasts across the nation. Educators were among the most dedicated users, including some from Cornell, Dartmouth, Tulane, and Villanova. The extent of amateur involvement is also indicated by the testimony of Hiram Percy Maxim, the founder of the American Radio Relay League, the first organized voice of amateur radio. Speaking in 1917 at a hearing on radio legislation, Maxim noted the existence of 8,562 licensed amateur transmitters and 125,000 hobbyists with receiving equipment in the first decades of the 20th century.

The dominant figure in these early years, however, remained Marconi. Despite the enmity of the Navy, Marconi had incorporated his company in America, and in the process amassed a fortune through persistence and a subtle business strategy. His company, American Marconi, continued to collect royalties from leasing wireless equipment worldwide, at times to American amateurs and businesses. The firm also benefited from the bankruptcies of American inventors Fessenden and De Forest, its chief competitors, by buying out their patents and taking over their clients. Marconi also succeeded in acquiring the rights to other inventions through patent litigation in the courts, a course of action only American Marconi, with its vast resources, could afford to pursue.

Marconi’s success in the United States made the company a target of continued government scrutiny, and also of domestic competitors, all of whom promoted a campaign to “Americanize” wireless technology. When initial attempts to extend government controls on radio were rejected by Congress in 1916, the Navy secretly devised a new strategy: an American company “operating under a Government-authorized monopoly”.

No action was taken at that time, but the proposal raised an intriguing alternative. By consenting to a monopoly, the government could check Marconi’s advantage and extend its control of radio to support American foreign policy. The alternative also appealed to large electronics firms, which now anticipated a growing domestic market for parts, transmitters and receivers that wireless telegraphy and radio were beginning to reveal.

The most likely candidates for this new monopoly were well-known to the Navy Department. Since Marconi’s emergence, a group of American competitors, all important government contractors that supported the new foreign policy, gained prominence. These companies included General Electric and Westinghouse, long time rivals and producers of electrical turbines, vacuum tubes, receivers, and transmitting stations; AT&T, the inheritor of the nation’s telephone service and the owner of the only nation-wide system of transmission lines; and United Fruit, a commercial grower and owner of vast tracks of Caribbean land. Each had been sympathetic to the concern of Navy officials about radio interference and the lack of government controls. As the popularity of radio increased after the end of World War I, these companies, along with other commercial groups, the press, and some well-known intellectuals, called for increased economic planning and order in the economy and over the airwaves.

As pressure mounted for more action, a defining event occurred. In 1919 American Marconi proposed reopening war-time negotiations with General Electric to purchase the rights to the Alexanderson alternator, a device that greatly increased the range of wireless voice signals. The Marconi proposal called for the acquisition of 24 transmitters and development costs totaling $4 million to GE, and the rights to add more equipment if needed. GE would retain its manufacturing patent, but could only sell to Marconi. General Electric countered with a proposal for royalties, not a sale, reversing the tactic Marconi had used with the navy in 1900.

As the negotiations became deadlocked, the Navy asked General Electric to withhold action until it could review the proposal. GE’s general counsel, Owen D. Young, updated Navy Secretary Franklin D. Roosevelt on the details of the talks. Roosevelt quickly wrote back, “Due to the various ramifications of this subject it is requested that before reaching any agreement with the Marconi Companies, you confer with representatives of the (Navy) department.”

The “ramifications” Roosevelt meant were founded on the Navy’s fear that Marconi, through the purchase of GE’s device, would finally acquire a monopoly on wireless radio communications. Writing years later, a naval historian speculated that the blunt tenor of Roosevelt’s letter to Young also indicated an oral directive had been issued within the Navy Department to safeguard American radio interests at all costs. Higher levels of government were also attentive to Marconi’s gambit. During the same period, Woodrow Wilson had expressed his desire to Navy representatives for American control of radio as a check to Britain’s transatlantic cable and its colonial ambitions.

Young’s conferences with the Navy began in early 1919 and prompted General Electric’s board of directors to cease negotiations with Marconi. This decision led to further discussions with Navy officials, who suggested to General Electric their alternative: the formation of an American company that would establish an international communications system based on GE’s Alexanderson alternator. Young conferred with the General Electric board once again, and proposed to the Navy that only a company representing a consortium of like-minded partners could buy out Marconi’s American assets, and acquire a government charter authorizing a monopoly could make the “alternative” possible. The Navy agreed, but under pressure from Congress the concept of a charter was later dropped. General Electric was still satisfied with the government’s assurances, and gave its approval.

Young informed Marconi that G.E. would not sell the alternator at any price. Marconi’s general manager in America, E.J. Nally, appealed to the Navy, but was told plainly by Captain Stanley Hooper, Head of the Navy’s radio division, that the government wanted to “eliminate foreign influence from American radio operating companies.” Hooper then revealed the successor was to be a new American company, and advised Nally to divest Marconi of British influence by selling all its assets to G.E. Nally was soon resigned to the fact that “the only apparent solution to the problem was for this company…to buy out the British interests.” Young quickly consummated the purchase of Marconi and absorbed the company’s personnel into General Electric.

General Electric was critically shortsighted, however. It failed to see the true potential of radio technology. Young acknowledged as much to E.J. Nally, telling him General Electric was not interested in operating Marconi’s transmitting stations, only expanding the market for G.E. products, which included generators and radio receivers. At the same time, G.E. wanted to “maintain harmonious relations with the Government” so that it could obtain future Navy contracts. At the same time Young realized that the Navy’s offer to G.E. not only meant the elimination of British interest in American Marconi, but also provided a significant advantage over Westinghouse, G.E.’s chief domestic rival.

In reality, GE’s new relationship to its partners meant that competition with Westinghouse and other competitors would no longer be an issue. Since the government secretly authorized a monopoly for the new company, even its unlikely failure could be blamed on bureaucratic zeal, and not reflect on any of the partners. On the other hand, the monopoly’s success could benefit them all by virtually guaranteeing profits, revealing new markets, and provide unprecedented insulation from foreign competitors. GE, Westinghouse, AT&T, and United Fruit could not imagine, however, that the airwaves they would commmand would soon to be as valuable as what was to be transmitted over them.

Never the less, with the clearing of competition, the support of the Navy, tacit approval of the President, and assurances that wireless radio would remain American, Congress created the Radio Corporation of American, better known as “RCA”, on October 17, 1919. As stipulated in the agreement, General Electric transferred its Marconi assets and personnel to the new company. Owen D. Young, the deal’s chief architect, was made chairman of RCA’s board. E.J. Nally left Marconi to become RCA’s first president, then hired his young protégé, David Sarnoff, as RCA’s new commercial manager. Sarnoff would eventually become the “domo” of American radio in the 20’s and 30’s. A new era was about to begin.

Next Time: RCA and Emergence of American Radio Networks

Copyright © 2007 R.E. Xavier