The Golden Age of Radio
Beginning in 1926 and continuing for more than four decades, Western Electric sold its products directly to Bell System companies and U.S. government agencies and to all other customers in the United States through Graybar. Western used other distributors outside the United States. Western was known for the high quality and technical leadership of its telephone and electrical equipment. Any non-Bell, non-government customer in the United States wanting to purchase Western Electric equipment had to do so through Graybar, a wonderful position for Graybar to be in.
Of all the markets served by Western Electric—and thus by Graybar—in the 1920s, none was more dynamic than radio. The first commercial radio station, KDKA in Pittsburgh, began broadcasting in 1920, setting off a radio mania that saw industry sales of receiving sets double every two years during the decade. By 1931 more homes had radios than telephones. Western was the dominant U.S. manufacturer of radio transmitters through its participation in the “radio trust,” which controlled nearly all the radio patents in the United States. RCA was the dominant manufacturer of receiving sets. Other trust members included AT&T, General Electric, Westinghouse Electric and United Fruit. (United Fruit took part because it had developed radio technology to communicate with its banana boats.) Although the trust was controversial, it had the tacit support—initially, at least— of the federal government, which believed the development of radio broadcasting would be crippled by lawsuits unless a private-sector cartel owned all the patents and assigned manufacturing rights to specific companies.
Because of its relationship with Western Electric, Graybar was in the unique position of being the dominant distributor of transmitting equipment with virtually no competition from 1926 until 1932. The company sold Western transmitters to more than 100 stations, including WMAQ in Chicago, WLBW in Oil City, Pennsylvania, and KOL in Seattle. In 1932, after federal regulators forced the trust to disband, firms such as Westinghouse Electric and Collins Radio Company began making equipment in competition with Western. Nonetheless, Western—with its manufacturing excellence and access to the research and engineering resources of Bell Laboratories—continued as a leader and introduced many technical advances such as the high-efficiency Doherty amplifier, which used less electricity to broadcast stronger signals.
Graybar’s 24-year run as the premier distributor of radio transmitters continued until 1950, when Western withdrew from the business to satisfy regulators’ demands that it divest its non-telephone operations. Graybar began distributing transmitters made by other companies, but it never again had the same large market share as it did when it sold Western Electric broadcasting equipment in the 1920s, 1930s and 1940s.