A Young Man Named Sarnoff

In the summer of 1920, I was assigned with an associate to audit the newly formed Radio Corporation of America.

I shall never forget that experience, because RCA was then a pretty small enterprise, and it seemed as though—and its budget for 1921 reflected that—its business for all time might be transoceanic communication, into which we had been brought via the Alexanderson alternator (they were then being installed in a number of stations). The business of transoceanic communication—then made really practical for the first time—seemed to be the real potential business for RCA.

Mr. David Sarnoff at that time was commercial manager. He decidedly gave the impression of tremendous energy. And of course, as a young man, just a little younger I guess than he, I was fascinated with the story of his life, with his coming here as a boy from Russia, the principal support of his mother and one or more other children.

I’m not sure at that precise moment that I could have predicted for him the things which he has achieved, but it was a privilege under those circumstances to have become acquainted with such a promising young man, and one who even up to then had acquired quite a reputation for himself, I suppose beginning with the time when, as a wireless operator, he took the famous SOS message; or was it then CQD? He was on the Wanamaker station the night the Titanic sank.

I was complimented by Mr. Sarnoff one day, when he asked me whether I wouldn’t like to have a job with RCA. At that time I was getting more and more enthusiastic about General Electric and therefore I thought I had better stay put—which I did and which of course I don’t regret, although I fancy a career in RCA might have been just as exciting.

After that I went on with my auditing activity and, in the latter part of 1921, helped Mr. Martin P. Rice, manager of the then Publication Bureau, to review the organization and the expenses of his group toward the end of reducing them because of the so-called depression of 1921.

Mr. Rice had vision. At the moment, as I soon learned, he was very deep in the business of trying to get a broadcasting station into operation for General Electric. No doubt that story has been told many times, and perhaps there is a little fiction in it, but at all events, he started up WGY very much on his own, out of an appropriation of $10,000 that had been given previously to establish a sort of experimental radiotelegraph communication system between the Erie Works and Schenectady. Nothing ever came of the latter proposal. He knew however about the availability of the money and somehow was able to get it as a “down payment” on the transmitter which became WGY.

In the early stages, my role was to worry about the cost. About once a month I made a trip down to the radio department to quibble, they thought—I thought it was a very constructive venture on my part—to quibble about the bills we were getting for this equipment; and not necessarily the original equipment, because I guess I didn’t have the imagination to know that there was no such thing as original equipment then—it was original about every hour on the hour. Well, as one trained in accounting, that intrigued me a good deal.

Westinghouse had already gone on the air. And it is in the sales and publicity departments of our two companies where the competitive situation is most evident. And as our advertising and publicity man, Mr. Rice couldn’t bear the thought of their doing something important that we weren’t likewise doing. We were then starting to manufacture radio receiving sets and tubes. That was a costly development program. Also, there would be no point in making sets unless there were transmitters in the land. And that naturally became a further obligation of the manufacturers of sets, to assure programs for the set owners. Meantime RCA had begun to promote the sale of sets and tubes.

And so it went on, and in the next two years, ’23 and ’24, General Electric stations were built in San Francisco, KGO and Denver, KOA—the three of them being operated by Mr. Rice, as manager of broadcasting for General Electric.

There was at that point no idea of hooking existing stations together. The idea was to provide coverage for the country via these 50-kilowatt transmitters, much as television stations were created recently, with no idea of a network at the beginning, although in the light of radio experience, quite obviously that would shortly follow.

Jumping now to 1926—the first meeting was held to discuss the setting up of a network, or a broadcasting company, with national coverage. Mr. Rice asked me to go with him to the first meeting in the RCA offices in New York. I have a fairly good recollection of that.

Mr. Sarnoff was there; representatives of the Westinghouse Company were there, and others; and we had a long discussion of the costs involved and other problems. This of course was before NBC was organized and before WEAF had been acquired by RCA. There were no representatives of the telephone company because one of the main problems to be contemplated was what would the wire costs be for such a hookup. They were estimated variously at this amount and that amount. I remember, two and a half million dollars was talked about; and maybe it got as high as five million dollars, which caused most of those present to gasp a little.

That day, there were many misgivings as to whether this was a practical venture. I think Mr. Sarnoff had decided it was.