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10/15/43
which all licenaees must retain under the Communications Act', the Commission asserted. 'Only under such flexibility is the fullest utilization of radio in the public Interest made possible. • "
A check for $7,000,000 was given to David Sarnoff by Mr. Noble Thursday to be added to the million dollar down payment on July 30th, In the purchase, Mr. Noble with himself as President, formed the American Broadcasting System, Inc., which will own the 1000 shares of stock of the network company.
The sale of the Blue Network for $8,000,000 and WMCA for $1,255,000 are two of the largest sales ever to come before the FCC. It was necessary for Mr. Noble to sell WMCA to keep from becoming tne owner of more than one station in the city in violation of the Commission' s rules.
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FCC INVESTIGATION RESUIffiS AFTER BIG BLOW-UP
The first open session which House Committee has held since the de~throning of Representative Eugene Cox, of Georgia, was held Thursday with Representative Clarence Lea (D), of California, the new Chairman presiding. The Committee was told that Federal funds had been used, a law to the contrary notwithstanding, to employ refugee aliens. Moreover, the testimony showed, the same aliens gave advice to the FCC which resulted in forcing some American citi¬ zens off the radio waves and their replacement by arrivals in this country.
The story told the Committee in three volumes of written testimony taken by investigators concerned the formation of "Short Wave Research, Inc. ", in New York City, in 1941, for the employment of refugee aliens.
Because Congress at that time had forbidden Federal employ¬ ment of aliens, the corporation evaded this restriction, according to Committee Counsel Eugene L, Garey, by negotiating a contract with James P, Warburg, of the Office of Co-ordinator of Information, and later with the Office of War Information.
Approximately $535,000 in salaries was paid the alien employees of the corporation for translations and radio scripts until Congress, in 1942, lifted the restriction on alien employment in the Government. More than 400 aliens were then shifted from Short Wave Research to the OWI pay roll at salaries ranging from $2,000 to $4,600 a year.
There remained $29,118 as a balance with the corporation, the evidence showed, and this money collected from the Government was distributed by the corporation to charitable agencies, instead of being returned to the U, S. Treasury.
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