Broadcasting (Jan - June 1940)

High Court Rules On Net Aflaiiates Actiou Deemed to Hold They Are Not Agents of Nets VACATING the action of the Supreme Court of Washington State, the U. S. Supreme Court May 27 remanded to that tribunal a case involving the status of network affiliates as authorized agents of the networks themselves. The ruling was interpreted as meaning the highest tribunal holds that affiliates are not authorized agents by virtue of the affiliation contract itself. The court simply held that the "cause has become moot and judgment of the Supreme Court of Washington is vacated and the cause is remanded for such proceedings as by that court may be deemed appropriate without costs to either party in this court." The Waldo Hospital Assn. in Seattle had brought suit against KIRO, Seattle outlet of CBS, and the network as its agent, because of alleged slander grovwng out of a program originated by KMOX, CBS-owned station in St. Louis, citing a purported fictitious hospital called "Waldo Sanatarium" in a program sponsored by Purina Mills. The Seattle organization sued both the network and the affiliate and the State Supreme Court sustained the contention of the Waldo Hospital. CBS, in spite of the adjudication, sought the Supreme Court review on the jurisdictional ground alone, contending that it could not be sued intrastate since it does business in interstate commerce. It challenged the contention that affiliates serve as agents of the network. The Supreme Court action was hailed by CBS counsel as a "complete victory". Second Station Granted Atlantic City by FCC ATLANTIC CITY was assured a second local station May 24 when the FCC adopted as final its proposed findings of fact [Broadcasting, April 15] and entered an order granting the application of Neptune Broadcasting Co. for a new station there to operate with 100 watts night and 250 day on 1420 kc. In its proposed findings the FCC had rejected the objections of the recently authorized WBAB, owned by the Atlantic City Press Union, which was based largely on economic grounds, and had also rejected objections of other stations based on alleged interference. The order gives the resort city two local outlets to replace the old WPG, former city-owned station, which had been sold to Arde Bulova and merged with his WOV, New York, with which it had shared 1100 kc. WOV now operates fulltime with 5,000 watts on 1100 kc. The Neptune company consists of 11 stockholders, each owning 10 shares and all identified with local businesses. President is P. Mortimer Lewis, theatre man, and vice-president is Richard Endicott, manager of the Atlantic City Steel Pier. BANNERS of identification for the new five-station Kansas State Network, which started operation March 16 when it tied into MBS, recently were given their first public showing by this pulchritudinous quintet from WHB, Kansas City. The girls are (1 to r) Gwen Shugrue, Ruth Zielke, LaVeta Anderson, Virginia Woodard and Rose Wolfe, representing KTSW, Emporia; KVGB, Great Bend; WHB; KSAL, Salina; KFBI, Wichita. House Deletes WPA Funds for Radio, Threatening Federal Lse of Medium PRESIDENT Roosevelt's "fireside chat" on preparedness May 26 was his 14th since he originated them March 12, 1933. It was almost a year ago, June 24, 1938, that he delivered his 13th. By LEWIE V. GILPIN CLOSING the door on the use of emergency relief funds for Government broadcasting activities, the House on May 23 passed the 194041 relief appropriation bill, carrying a provision specifically prohibiting any use of WPA funds for radio broadcasting. The prohibition strikes at the heart of the extensive broadcast activities carried on by the WPA organization itself, as well as the radio division of the Office of Education, both in Washington headquarters and the field. It also outlaws use of WPA funds for Government motion picture operations. Although it was expected a strong fight for eliminating the provision would be put up in the Senate by Administration forces, no word on disposition of the question by the Senate Appropriations Committee, which held subcommittee hearings on the bill May 27 and 28, was available as Broadcasting went to press. Previous Rejection The gathering Congressional sentiment against using relief moneys for Government radio projects took definite shape earlier this year when the House refused a proposal to set up radio services of the Office of Education on a permanent civil service basis [Broadcasting, April 1]. During House appropriations subcommittee hearings on the Federal Security Agency supply bill Feb. 20, operation of the Office of Education's radio department substantially as an emergency project with relief funds brought blunt comment from members on such use of emergency appropriations. However, it was not indicated then any such far-reaching ban as the present amendment was in sight. The prohibition, unless deleted or modified by the Senate, which should consider the WPA appropriation bill shortly, will knock the props from under all Government radio activities except those provided for specifically in the appropriations of individual Government agencies — such as the Department of Agriculture, Federal Housing Authority, Social Security Administration, Labor Department, Rural Electrification Administration, Interior Department. Particularly it would eliminate the radio work carried on independently by the WPA, as well as the radio division of the Office of Education, which last year used $285,278 in emergency funds. The ban aff'ects about 170 persons in radio division work, and about 50 in the film service. Under the second Government reorganization plan of May 9, 1989, the Office of Government Reports in the Federal Security Agency succeeded the former National Emergency Council organization, and the functions of the film service and radio division of the NEC were transferred to the Office of Education, remaining under supervision of Pare Lorentz and Robert I. Berger. Under the revised setup, established program and production activities of the radio division remained in charge of William D. Boutwell, as director of radio publications and exhibits of the Office of Education. Mr. Berger continued to function as nominal head of the transferred NEC division, under the immediate supervision of Lowell Mellett, OGR director. His chief duties have been to act as Government radio coordinator and advisor. Although broadcasting, publication and motion picture activities of various agencies and departments of the Government have brought recurrent criticism from Administration opponents, centering largely around "propaganda" charges, funds for this work have generally been made available in the agencies' lump appropriations, either through specific provision for radio activity or in general "public information." The general prohibition is emphasized by a further specific provision naming the former NEC radio division and U. S. Film Service transferred to the Office of Education. The general proviso reads: "None of the funds made available shall be used (a) for the operation of any theatre project, (b) for the operation of any project sponsored solely for the Work Projects Administration, or (c) for radio broadcasting or for the acquisition, rental, or distribution of motion picture films." The second provides: "Except as authorized in this joint resolution, no allocation of funds shall be made to any other Federal agency from the appropriation in this joint resolution for any Federal agency. No such allocation shall be made for the exercise of the functions of the Radio Division or the U. S. Film Service transferred to the Office of Education." Fly Sees Radio As War Weapon Terms It An Early Step in Process of Subjugation SEIZURE of the radio has been an early step in the process of subjugation abroad, FCC Chairman James Lawrence Fly observed May 26 in supporting broadcasting by the American plan. Principal speaker at the dedication of a new radio studio of the University of North Carolina at Chapel Hill, Mr. Fly declared that "public education and an intelligent, well-informed public opinion are basic in our way of living and in our process of Government." In sharp contrast, under other systems "mental and spiritual subjugation have preceded the subjugation of peoples and the eventual alignment with machines which rule by force," he said. The address was carried over MBS from WRAL, Raleigh, and also by CBS stations WBIG, Greensboro, and WBT, Charlotte Public Trust He observed that rule by force has not been accomplished internal ly where there existed a free educa tional system and the unfettered means for the reception of information. Radio is not an instrumentali ty for foisting upon the public the particular sponsored religious or political philosophy of any individual or group of individuals, Mr Fly said. Describing the radio spectrum as "public domain", he declared a radio frequency is not sub ject to ownership and therefore any occupancy of the air waves is charged with public trust, Mr. Fly praised the "great work" of broadcasters in the presentation of war news and commentaries Pointing out that the reporting has been balanced, Mr. Fly said that editorial attitudes are seldom displayed by broadcasters. These services, he declared, "lead toward the goal of a well-informed public — the best informed public in the world." Apropos television, Mr. Fly said reception and experimentation are advancing "and in a few years this combination of sight and sound may be expected in your homes." Half of Sets to Be FM By 1945, Says CaldweU THE VIEW that within five years more than 50% of the receiving sets in the United States will be capable of tuning in FM is re ported as a radio industry estimate by the dealer trade journal, Radio & Television Today, edited by 0. H. Caldwell, former Federal radio commissioner. This publication forecast 1,000,000 FM receiver sales this year and 24,400,000 units with in the next five years. The retail price of receivers, it was stated, will depend upon the number built, with mass production lowering costs to perhaps close to the price of today's high-quality AM receivers. Manufacturers are gearing themselves primarily to produce combination FM and AM sets, which are expected to be popular since most FM programs wil! probably emanate from existingbroadcasting studios whose owners are far and away in the lead among the applicants seeking FM transmitters. Page 28 • June 1, 1940 BROADCASTING • Broadcast Advertising