WEDNESDAY, SEPTEMBER 30, 1942.

FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF JAMES LAWRENCE FLY, CHAIRMAN

SALARIES AND EXPENSES, 1943 (NATIONAL DEFENSE)

The CHAIRMAN. Mr. Fly, we have an estimate before us in House Document No. 850 for $608,000 for salaries and expenses, national defense, Federal Communications Commission:

Salaries and expenses, national defense: For an additional amount for salaries and expenses, national defense, Federal Communications Commission, fiscal year 1943, including the objects specified under this head in the Independent Offices Appropriation Act, 1943, and in addition thereto salary of the Director of the Foreign Broadcast Intelligence Service at not to exceed $9,000 per annum; allowances for living quarters (not exceeding $1,700 to any one person) to employees with official headquarters in a foreign country in accordance with the Act of June 26, 1930 (5 U. S. C. 118a), and Standardized Regulations, approved by the President, under the authority of said Act; $608,000: Provided, That the limitation upon the amount which may be expended for travel expenses under this head is hereby increased to $222,000.

NATURE OF PROJECTS IN ESTIMATE

I see that you have six projects listed here on page 1, which seem to comprehend your entire justification and, they will be included in the hearings at this point.

(The matter above referred to is as follows:)

1. Investigation into the personnel of international and domestic foreign language broadcast stations in order to head off any possible enemy activity or half-hearted cooperation in this vital field.

* *

2. Continuation of the survey of telegraph service, including the speed, accuracy, and general adequacy of handling essential wartime traffic, the manner and method of conducting operations and the extent to which such operating methods are suitable and adequate to wartime needs; all matters pertaining to technical developments and improvements in such service; and the cause or causes for any inadequacies in service that may be found to exist.

3. Surveys of foreign language program service for the Commission's regulatory purposes, and as a service to the Office of War Information, and to insure that the licensees carry out their responsibility to operate effectively in the public interest.

4. Study of labor supply in the communications industry including pay rolls, wage rates, earnings, employment, productivity, labor turn-over, etc.

5. Work in the field of Inter-American communications.

6. Expansion of coverage, monitoring, and reporting of foreign broadcasts to meet urgent requests from other war agencies.

The CHAIRMAN (continuing). These projects seem to be divided into two groups. The first five items call for personnel in the Law Department, and travel, and the last one relates to the Foreign Broadcasting Intelligence Service.

Mr. FLY. That is right.

LAW DEPARTMENT PERSONNEL AND TRAVEL EXPENSES

The CHAIRMAN. Suppose you give us a statement on each item individually, one at a time.

Mr. FLY. All right, sir. First, as to the Law Department: The present appropriation for personnel amounts to $332,200 ($249,743,

regular; $82,457, National Defense) for 95 positions. The additional amount requested is $117,000 for 62 positions, plus $38,880 for travel expenses, a total of $155,880. This expansion of the staff is urgently needed to carry on 5 specific lines of work which are of the utmost importance to the war effort. Although the Commission has been able to accomplish something in these fields by using, whenever possible, personnel assigned primarily to other work, these projects are of such direct importance to the war effort it is now essential that the necessary additional personnel to carry them out effectively be made available.

First, in response to a request from the Director of the Office of War Information, the Commission plans to undertake a large scale and intensive investigation into the personnel of international broadcast stations and domestic foreign-language broadcast stations. It is essential in the furtherance of this country's anti-Axis propaganda efforts that a thorough inquiry be made into the personnel of these stations in order to head off any possible enemy activity or halfhearted cooperation in this vital field. In the case of the domestic foreign-language broadcasting, for example, startling reports have been circulating since the outbreak of the war. They range from a published accusation that an announcer was tipping off enemy submarines as to the time of departure of American convoys by the use of such devices as the dedication of songs to the crews of certain vessels, to a private report that a foreign-language announcer was actually using an open code by the juggling of prices of advertised products or by systematic grammatical mistakes. The importance of a complete check on the personnel of international broadcast stations also seems clear. I regret to state that neither of these jobs has been done with any degree of thoroughness. The assistance of the Federal Bureau of Investigation has been sought for the conduct of these investigations, but the Commission has been informed that, because of the already heavy burden upon the Bureau's personnel, it will be unable to assume these additional tasks.

The second project for which funds are requested is in the telegraph field. Pursuant to its order No. 103, which the Commission issued at the request of the Board of War Communications, we already have under way an intensive Nation-wide investigation of telegraph service. We find that the speed in transmitting essential telegraph messages has deteriorated substantially. Remedial measures are already being given study and all indications are that a continuation and intensification of the present surveys will be required for the duration in order to insure that the telegraph industry is geared to the needs of the war effort. For these first two projects, $92,960 is requested on an annual basis.

In addition to the investigation into the personnel of foreign-language broadcast stations, which I have mentioned, the Commission feels compelled to expand its activities in the foreign-language broadcast field for its own regulatory purpose and as a service to the Office of War Information. Foreign-language broadcasting, since the outbreak of the war, has assumed vital importance to civilian morale and national security. Supervision of this field has, however, remained on a sporadic and a more or less hit-or-miss basis. The time is overdue for an organized and scientific approach to the program service prob

lem to provide a rational basis for guiding the monitoring and analysis work of the Commission which is of vital interest to various war agencies.

The planned activity in this field will make available for the first time complete data on all foreign-language-program service in terms of communities, types of stations, types of programs, the languages in which programs are broadcast, relations of time brokers to programs in various areas, coverage, the tendency to eliminate or expand foreign-language service, the degree of delegation of control of stations, adequacy of service to the needs of the area, extent of monitoring by licensees, and so forth. For this work $16,240 is asked on a 12month basis.

The Commission has been urgently requested by the War Manpower Commission to institute a systematic study of labor supply in the communications industry, and its staff is working with the Board of War Communications to prepare critcal occupational data for presentation to the Selective Service System and the War Manpower Commission. This is the fourth project which I desire to bring before the committee this morning. The War Manpower Commission has indicated very clearly that the vital problems of labor economics in the communications industry are the responsibility of the Federal Communications Commission and that the Commission should undertake continuous and scientific studies of these problems such as pay rolls, wage rates, earnings, labor supply, employment, productivity, labor turn-over, and so forth. Some time ago I stated to the Senate Interstate Commerce Committee that these questions would receive more intensive consideration by the Commission as soon as an adequate staff could be provided. For the satisfactory performance of this work $38,460 annually is required.

I should like to supplement that slightly by stating I have made inquiry amongst the labor agencies, and particularly the Labor Department, and I find that the essential data, information as to labor in this field, is just simply not present; it is not available. And if the material is to be collected, why, it must be done by the Commission, and I think the Government, perhaps the Commission, has been derelict in times past in not doing that. Still it happens that now it is a work that must be done, because of the peculiarly stringent conditions that exist in the problem of employment in the communications industry. That is critical amongst all of the branches of the communications industry.

Mr. WOODRUM. What type of personnel are you speaking of now when you say "employment in the communications industry"-skilled, technical personnel?

Mr. FLY. In the main, sir, of course, the situation with respect to the ordinary laboring type of employment is about the same as it would be in any roughly comparable industry; but the most of the people, say, aside from the clerical personnel, or perhaps including the clerical personnel, are specialized, and a great part of them are technically skilled people who are adapted to the comunications industry.

Take the people who work in the telegraph industry, where the problem is very critical right now: A great many of those range from slightly and semiskilled up to the fully skilled type of employee.

The situation is very critical in the telegraph field, in the radio communications field, in the broadcasting field, and in all phases where you do have important technical work to do.

(After discussion off the record :)

The CHAIRMAN. Now, suppose you proceed with your statement, Mr. Fly.

Mr. FLY. I was saying that in all of the important facets of this industry, where we do have the requirements for technical employees, this problem is acute, and the War Manpower Commission has been actively considering the problem with us and has requested that we equip ourselves to help them do the job.

The CHAIRMAN. Now, tell us about the fifth project.

Mr. FLY. The last project for which funds are requested for the staff concerns a critical situation which has arisen in the field of international communications. The task faced is twofold. If it is consistent with the view of the committee, I should like to keep the remainder of this statement off the record.

The CHAIRMAN. Yes.

(After discussion off the record:)

The CHAIRMAN. Now tell us about the sixth project.

Mr. FLY. For travel connected with all of the work I have described, we are asking for $38,880. The total of our requests for personnel on an 8-month basis is $117,000.

Second, as to the Foreign Broadcast Intelligence Service. Its 1943 appropriation for personnel (all national defense) amounts to $1,271,818 for 417 positions. The present request is for $255,289 for 148 additional employees, plus $197,742 for other expenses a total of $453,031.

The Foreign Broadcast Intelligence Service has received urgent requests from war agencies to expand its service (1) at its Pacific coast offices at Portland, Oreg., and San Francisco, Calif.; (2) at its station at Kingsville, Tex.; (3) at its station in London, England; and (4) because of the larger volume of material to be handled in response to these requests, a small expansion of the headquarters staff in Washington. The Foreign Broadcast Intelligence Service is a war agency, operating exclusively as a service to the Federal agencies and officials shaping foreign and military policy, carrying on military operations and economic warfare, aiding in the disseminating of news and information to America and to other people, and countering enemy propaganda. Its specific function is that of listening to broadcasts emanating from foreign countries throughout the world. As you gentlemen know, that is somewhat of an oversimplification of the functions of that agency. It operates on a 24-hour-a-day, 7-day-aweek schedule, and provides minute-by-minute reporting of the for eign broadcast news intelligence and answers to requests for special information, as well as providing a continuous, detailed analysis of foreign radio propaganda.

(1) On the Pacific coast the Foreign Broadcast Intelligence Service listens to the radio broadcasts emanating from Japan, from Japanesecontrolled station in occupied countries, and from China and Russia. In the case of Japanese and Japanese-controlled programs, it is the chief source of news and intelligence from these important areas not only military items, but also otherwise unobtainable economic and

political data. All other regular channels of rapid news communication (diplomatic staffs, press representatives, and neutral cable press services) are cut off. There is at present a staff of 50 engaged in this work (taking an appropriation of $109,860 annually).

The Board of Economic Warfare has urgently requested that the F. B. I. S. increase its coverage from 17 percent to as nearly 100 percent as possible of the broadcasts from Tokyo and the occupied countries, including parts of occupied China, the Philippines, and Chungking. Similar urgent requests for a very much larger coverage of these broadcasts have been made by United States Military Intelligence (G-2), the Office of Strategic Services, and the British Ministry of Information which now receives from F. B. I. S. a daily cable summary of the Japanese broadcasts. It should be noted that in addition to these specific requests, the additional news intelligence and information available from expanding the personnel on the coast will also be available to the other war agencies which rely completely on the F. B. I. S. for the news and information coming from recorded broadcasts.

To give this more adequate service, a staff of 66 additional employees for the Portland and San Francisco offices is necessary, requiring $172,035 on an annual basis. The 8-month figure for personnel is $114,535, which plus $64,175 for communications and other costs, amounts to the $178,710 requested for this project.

(2) The Coordinator of Inter-American Affairs likewise has requested a very substantial increase of coverage of the broadcasts to and from Latin America. The present station of the F. B. I. S. in Kingsville, Tex., now operates with a very small staff of 9 ($23,020 appropriation annually), and with the ability to cover only a small daily sample of the broadcasts coming from South America. The Coordinator's Office has requested that the F. B. I. S. listen to 18 hours of the 24, and that it include the monitoring of at least 1 station in each of the 20 Latin-American republics each day. This additional news and propaganda intelligence will be available to all Government agencies, but it will be especially used by C. I. A. A., which is fostering an extensive radio broadcast program to the Americas, including hourby-hour news broadcasts and an important daily news round-up for Latin-American audiences. To make these broadcasts effective, it is necessary to include the news coming from the various Latin-American countries themselves. To provide this service to C. I. A. A., to the State Department and other interested agencies served by the F. B. I. S., 52 additional personnel for an annual cost of $120,360 will be required. This is $80,240 on an 8-month basis. The total requested is $126,800, the difference of $46,560 being for communications and other

costs.

(3) The British Broadcasting Corporation has recently made available at its listening post in the country near London, all of the broadcast summaries and recordings made at that central point of the major European domestic and foreign broadcasts. This makes it possible, without engaging in the expensive operation of monitoring and translation, for the various war agencies in London and our agencies in this country, through F. B. I. S., to obtain this material in larger quantity than was heretofore possible. This requires an expansion of the number of words sent by radio and cable each day from London to