Hearings Before the Committee on the Merchant Marine and Fisheries on H.R. 19350: A Bill to Regulate Radio Communication, pages 383, 386-393:


Washington, January 26, 1917.    

    The committee met at 10 o'clock a. m., Hon. Joshua W. Alexander (chairman) presiding.


    The CHAIRMAN. Give the committee your name and business connections.
    Mr. BALCH. John A. Balch. I am treasurer of the Mutual Telephone Co. of Hawaii and superintendent of the wireless department of that company.
    The CHAIRMAN. Is that an incorporated company?
    Mr. BALCH. An incorporated company, operating under the laws of Hawaii.
    The CHAIRMAN. Who are the officers of the company?
    Mr. BALCH. E. F. Bishop is the president; Mr. C. H. Atherton is the first vice president; J. R. Gait, second vice president; J. A. Balch, treasurer; John Waterhouse, secretary. These men, together with R. A. Cooke and George Rodiek, constitute the board of directors.
    The CHAIRMAN. Are they all residents of Honolulu or the Hawaiian Islands?
    Mr. BALCH. All residents of Honolulu and citizens of the Territory of Hawaii.
    The CHAIRMAN. Is the stock of that company held there?
    Mr. BALCH. It is practically all held in the Hawaiian Islands.
    The CHAIRMAN. You may proceed in your own way, Mr. Balch.
    Mr. BALCH. I think it would be necessary, in order to appreciate the importance of radio communication on the islands, to give a brief history of the early development in both cable and radiotelegraphy.
    The first attempt at connecting up the various islands composing the Territory of Hawaii with a suitable means of rapid communication occurred in the year 1889, when a local Hawaiian company was organized under the then "Kingdom of Hawaii," and a cable laid between the island of Oahu, on which Honolulu is situated, and the island of Molokai, it being the intention of the company to extend the same as soon as practicable so as to include the islands of Maui and Hawaii within its scope. Unfortunately, however, both for the company and the public the Kaiwa or Molokai Channel, separating Oahu from Molokai proved both too deep, too rough, and too rocky; and shortly after the first message was flashed from Molokai to Honolulu, the cable parted and communication was interrupted. During the following year the cable was fished, spliced, and relaid after considerable expense and delay; but it was soon ascertained that either the same was not suitable or had been so poorly spliced that its conductivity had been ruined.
    Communication, therefore, being impossible, the company failed and the whole project, including the cable, was abandoned as being impracticable.
    Before passing from the subject of cable installation, however, it might be well to submit a few brief facts bearing on the difficulties of either submarine telephony or telegraphy between the islands of the group and how this fact, in turn, drew the attention of Marconi to the Hawaiian fields with wireless as a solution, as early as the year 1899. Hawaiian stations
    Of the Hawaiian group, eight are inhabited. Of the five principal islands Hawaii is the largest area, 4,015 square miles. The islands extend in a general northwest and southeast direction, and the channels separating them are of various widths and depths of water, as follows: Kaieie Waho Channel, between Kauai and Oahu--shortest distance, 72.16 statute miles; its deepest known depth is 11,232 feet. Kaiwi Channel, separating Oahu and Molokai--shortest distance, 26.89 statute miles; its deepest known depth is 2,214 feet. Pailolo Channel, separating Molokai from Maui--shortest distance, 9.09 miles; its deepest known depth is 840 feet. Alenuihaha Channel, separating Maui from Hawaii--shortest distance, 28.79 statute miles; its deepest known depth is 7,560 feet. To add to the difficulties of bridging these long distances and tremendous depths of water is the fact that all the islands are surrounded by coral reefs and high surf, thereby necessitating the use of heavily armored cables in all landings from sea to shore.


    Ten years after the successful attempt of interisland cable telegraphy, F. J. Cross, an electrical engineer of Honolulu, became convinced that a solution of the difficulties and excessive expense in bridging the channels of the Territory by cable had been found in the then practically untried inventions of Signor Marconi. With this in mind, he journeyed to New York City in September, 1899, to meet Mr. Marconi, who was then engaged in demonstrating his invention by reporting the results of the international yacht races off New York Harbor. Before going, however, he had communicated with Marconi, in London, and had drawn to his attention the urgent need of Hawaiian interisland communication. On reaching San Francisco he received a cable from Marconi, then in New York, not to come on, as he could not sell the right for Hawaii, unless he (Cross) would buy the entire patent rights for the whole United States. Cross persisted, nevertheless, and on the 31st day of October, 1899, signed a contract with Marconi for complete installations to connect the five larger islands--Kauai, Oahu, Molokai, Maui, and Hawaii. The contract called for men to arrive in Hawaii not later than February, 1900, to effect the installations; but, owing to bubonic plague having broken out in Honolulu, the Marconi people did not send their men out until April, 1900, at which time three experts arrived and proceeded to erect masts and install stations at places designated by them. The first station was erected at Kaimuki, now a suburb of Honolulu, and the second at Keomuka, island of Lanai.
    On the completion of these stations an attempt was made to communicate between the two; but without success. Another station was then installed at Laau Point, island of Molokai, which was located about half way between the first two stations. Communication was again attempted between the stations now supposed to be in order, but still without result. Then, simultaneously, two stations were erected and equipped, one at Millers Hill, Makena, island of Maui, and one at Mahukona, island of Hawaii; but no communication could be established.
    Cross then cabled the Marconi Co.: "Four stations now erected, but a complete failure. Advise." To this cablegram a reply was received, reading, "Marconi wireless must work. Mr. Gray, the most competent, will sail for Hawaii immediately." At this time there was no cable communication between Hawaii and the mainland, the commercial Pacific cable not having been laid, so that both of the above cablegrams were mailed between San Francisco and Hawaii. Expert Gray arrived during November, 1900, and at once proceeded to experiment with a kite on the beach at Waialae (near Maikiki, Honolulu), in an endeavor to work the Molokai station. This being successful, the station at Kaimuki was shifted to a point on the sand beach at Waialae, where suitable salt water ground connections could be obtained.
    At this point, owing to the failure of the first installations, the stockholders of the Interisland Telegraph Co., to whom Cross had sold his contract with Marconi, became nervous and lost confidence in the system ever becoming a success, as did the whole population generally. And in consequence of their timidity, together with the fact that the annexation boom, with which Honolulu had been inflated, suddenly burst, and as only the first assessment of 15 per cent had been paid in cash on their stock, four-fifths of the stockholders positively refused to pay more, thus crippling the undertaking financially, as the company was already in debt and the changes insisted on by Gray were costing money. After shifting the station on Maui, a half-hearted sort of communication was established between Oahu and Hawaii, by relaying through the intermediate stations of Molokai, Lanai, and Maui. Here the Marconi Co., through Mr. Gray, demanded the last payment on account as per contract; but as said contract called for a satisfactory system, which they did not have, coupled with the fact that no money was in the treasury of the local company, it was found impossible to accede to his request. The history of the organization from that time on is separate from the Marconi Co. It was resumed again by a working contract with the Marconi Co. of America in 1912.
    Mr. RODENBERG. I would like to make an observation right there. I was on the island of Hawaii, at Hilo, in the spring of 1901, when they got over the first message by wireless. I remember the excitement there, and I remember the message very well. The message was "Paul Newman died last night." That came by wireless in the spring of 1901. In the spring of 1901 they made the connection and got across the first communication from Honolulu to Hilo.
    Mr. BALCH. I expected to bring that out later. On the 1st day of March, 1901, the line of stations opened for business, and while on some days they succeeded in transmitting messages promptly, on others, owing to defects incidental to the then long distances traversed and pioneer working, nothing was received or transmitted. Naturally such an intermittent service soon caused the people who used it, or, rather, who attempted to use it, to put no dependence in it whatever. After a few months' use the coherers (the form of detector then used) played out; and, owing to the disagreement with the Marconi Co., they were unable to purchase renewals, thus necessitating the closing of the system, until after some months of experimenting a new supply of coherer tubes were manufactured by Cross, from which signals could be recorded.
    At this period the business men of Honolulu came to the rescue of the company with an offer to guarantee about $1,000 per month in business, and under this arrangement the service was continued in operation for about 15 months, or until the territorial legislature of the year 1903, realizing the importance to the Territory of interisland communication, granted a subsidy of $1,000 per month for 24 months, on condition that the company would connect up the island of Kauai, which had as yet not been done, reduce its rates, and build a telegraph line between its Hawaii station and the city of Hilo. In the first attempt to connect up the island of Kauai a station was erected at Nawiliwili, Kauai, and another at Kaena, the most western point on the island of Oahu. Every effort was made to get these two stations in communication, but without avail, so, therefore, in order to simplify the entire system and to give better service with fewer stations, the station at Kaena Point was shifted to Barbers Point, where communication was immediately opened up with Kauai, although the distance was increased over the first attempt about 20 miles. The reason for the failure to connect Kaena Point with Nawiliwili was attributed by Cross to the high lands just back of the Kaena Point station. The Waianae mountains came down in very close proximity to the masts of the station, and he attributed the fact that while the station at Kaena Point could send to Nawiliwili and messages from Nawiliwili could not be received at Kaena to the effects of these mountains wafting the signals over his masts, and insisted on the station being moved to Barbers Point. That was in 1904. Some years afterwards, when I took charge of the system, I happened to overhaul an old coherer set used at Kaena Point and I found there a piece of iron, or a screw, that had gotten behind the wooden case and gone through a certain little condenser. This was the cause of the failure. It was concealed underneath and had not been found.
    From Barbers Point, also, they were in communication with the stations on Molokai Point and Lanai. This arrangement relieved the stations at Waialae and Molokai, so the former was moved to Lahaina, Maui, where communication was at once established with it direct from Barbers Point, Oahu. In attempting to work direct from Lahaina, Maui, to the Hawaii station at Mahukona it was ascertained this was impossible owing to the interposition of the high mountains at Makena Point, Maui.
    The station at Laau Point, Molokai, was then shifted to Puako, Hawaii, as this site offered a direct water communication without screening of the land between the island of Oahu and the Barbers Point station on Oahu, as well as the Lahaina station on Maui; and on its completion communication was immediately established with Barbers Point by relay with Lahaina, a distance of over 172 miles, which, considering the date, January, 1904, was excellent daylight working. In fact, at that time it was almost the record. After moving the station from the island of Lanai to Kamalo, Molokai, the line of stations then consisted as follows: Nawiliwili, Kauai; Barbers Point, Oahu; Kamalo, Molokai; Lahaina, Maui; and Puako, Hawaii, and remained in these sites until comparatively recent years.
    The legislature of the year 1905, declining to resubsidize the company, it therefore failed and went into bankruptcy and was sold on the steps of the capitol building at Honolulu on January 9, 1906, to satisfy the claims of its many creditors. The system was bid in by F. J. Cross and associates and reincorporated under the name of the Wireless Telegraph Co., and on June 1, 1907, C. J. Hutchins, J. A. Balch and associates became the purchasers for the sum of $50,000 in cash of the controlling stock interests from Cross, and proceeded to thoroughly rehabilitate the system, which was then in a badly run down and dilapidated condition.
    On reviewing the early history of radio in Hawaii one wonders at the numerous times stations were removed to different locations and the reasons therefor; and when the difficulties of these removals are considered--the landing in small boats in the surf in isolated localities, in one instance over 30 miles from the nearest steamer landing and inhabitants--that was on the end of the island of Molokai. They had to land all their masts through the surf; even the water was carried by ship from Honolulu, and also landed through the surf, and special steamers had often to be chartered in order to make the trip. On many of the other islands the conditions were even worse than at Laau Point. As I say, when the difficulties of these removals are considered, the huge expense in dragging the heavy wooden ship masts over the coral reefs and erecting same, together with building and the thousand and one details that had to be attended to in each instance, one can not help wondering at the perseverance and faith of these early experimenters in Hawaii, who carried out to a successful conclusion a series of experiments in a science that was at that time practically unknown throughout the United States. On looking back from the present status of the art and reviewing these early operations one is art, of course, to forget how these men were groping in the dark and that their great bugbear--mountain screening--was principally caused by improper and old-fashioned receiving instruments and lack of sufficient transmitting power.
    I might say that at that time, working as they did, they had the old Marconi coherer system for receiving, and they were working a 10-inch coil direct connected to the ground and aerial for transmitting. These coils in most instances were furnished power by dry batteries, and it sometimes took a barrel or so in parallel to furnish enough power to produce a spark of sufficient size to carry across the channels. It is rather difficult to ascertain just how much was spent in these efforts, which were finally crowned by success. But from figures submitted by Cross and others I believe the amount was not far from $125,000 in all. The years between 1907 and 1912, on my taking charge of the system, the total monthly income was approximately $1,600, out of which the running expenses of $1,000 had to be deducted, leaving $600 monthly to meet depreciation and the building of the first high-powered ship station, it being then apparent that in a short time many ships would be equipped. And as the United Wireless Telegraph Co. was not only equipping these vessels, but was selling its stock certificates throughout the Territory, it was also realized that if the local company was to keep its field of operation it should build as powerful ship to shore stations as was possible. During the early part of the year 1908 the company engaged the services of A. A. Isbell, an expert radio engineer, who after a careful search for a suitable site for the station decided on Kahuku Point, Oahu, a location which offered a free water communication, east, north, and west, and was as well a low-lying, sandy promontory, extending out from the high mountain ranges of Oahu.
    In May, 1908, this station was started and was completed and placed in operation on October 15, 1908. It was a full 10-kilowatt equipment and was at that time one of the strongest, if not the strongest, station on the Pacific. For some weeks prior to the completing of the transmitting equipment of the new plant, Mr. Isbell, on listening in at nights, had heard with unusual clearness the United Wireless station located on Telegraph Hill, San Francisco. So that on the completion of the station, on the evening of October 15, it was not a great surprise for those connected with the company to immediately open up a night communication with the San Francisco station--a distance of 2,100 miles. This was the first direct radio communication that had ever been established between Hawaii and the mainland, and was a record of long distance working at that period.
    The CHAIRMAN. That was in October, 1908?
    Mr. BALCH. October 15, 1908. During the following year the Barbers Point station was abandoned and its equipment moved to Kahuku, a change that was greatly appreciated by the operators, as the Barbers Point site was an inaccessible location 5 miles from the railroad and with no fresh water other than what could be caught during occasional rainstorms. It is surprising, when we think back, how those operators at that period managed to exist at some of those stations. Most of the water they had to drink was brackish and in many instances they did not have enough to cook with. And yet those men stayed at their stations and worked along until the final success of the system. Many of them are still employees of the company.


    During the early part of the year 1909 C. J. Hutchins, president of the Wireless Co., had secured from the Automatic Electric Co., of Chicago, the sales rights to their automatic telephone system for the Territory of Hawaii, and had interested Honolulu capital in the proposition of establishing in Honolulu an automatic telephone plant in opposition to the locally owned Bell system which at that time was furnishing a very indifferent service to its 1,800 subscribers. It was soon ascertained, however, that however much the Honolulu business community desired a better telephone service, they preferred the service as it was to a dual system of companies. But this agitation soon led into negotiations that ended in the purchase of the controlling interest of the stock of the Mutual Telephone Co. at its par value. The Mutual Telephone Co. was at that time capitalized for $150,000--15,000 shares at $10 per share, all fully paid and nonassessable. Its capitalization was raised to $250,000 by the issuance of 10,000 new shares of stock, and the purchase of the Wireless Telegraph Co. effected by giving two shares of Mutual stock for one share of Wireless stock, the Wireless Co. being then capitalized at $50,000--5,000 shares at $10 per share.
    After the amalgamation of these two companies a bond issue was floated for $250,000 and the proceeds thereof expended in rehabilitating both the telephone and wireless systems. A careful inventory was made of the value of the old system that was incorporated into the new, and the difference in value between the original capitalization and that part of the plant that was still serviceable (amounting to over $102,000) was written off to profit and loss during the years 1910, 1911, and 1912. In taking over the Mutual and establishing the automatic, we practically had to junk the entire system. We junked a total of $102,000 of the entire system which had an original capitalization of $150,000. Instead of doing as many companies would have done and making a capital asset of that, we wrote it off to profit and loss and thus off the books of the company.
    Mr. GOODWIN. What is the total investment up to date?
    Mr. BALCH. At present it is $615,570 in stock and a bond issue of about $360,000. I will give the figures exactly later on.
    After the present radio act of August 13, 1912, was passed, a thorough renovation of the entire wireless system was made in order to comply with the provisions of that act.
    On Kauai an entire new station was erected at Lihue, and the old station dismantled, and at Lahaina (Maui), Kaunakakai (Molokai), and Kawaihae (Hawaii) new apparatus was installed, all operators licensed, and a demand made of the Department of Commerce for station licenses in conformity with the new regulations. During this year an agreement was entered into with the Marconi Wireless Telegraph Co. of America by which the Mutual Wireless was able to secure the protection of the Marconi patents. This agreement is still in effect and runs for the period of 25 years from the 20th day of September, 1912.
    During the year 1913 the Marconi Wireless Co. started the erection of their trans-Pacific radio station at Kahuku within a distance of 1½ miles of the Mutual station. And as this large station would undoubtedly have interfered with the receipt and transmission of messages by the smaller stations, the Marconi Wireless Co. very honorably moved said station to Wahiawa, Oahu, a distance of 15 miles, the site of its present location. The agreement of the Marconi Co. to undertake this removal was carried out in full by said company at an expense of approximately $10,000. That shows how honorably the Marconi Co. has treated the Mutual Telephone Co. In looking around it found the only suitable site for its large 850-kilowatt plant was on Kahuku Point, and realizing that, it simply moved our station and paid for the expense of moving it in order to avoid interference.


    During August, 1913, all of the stations of the company were inspected by Mr. L. R. Krumm, then chief radio inspector in the employ of the Department of Commerce; and while the inspection was satisfactory and the stations found to thoroughly pass the requirements of the law, licenses were refused--for what reason I do not know--by the Department of Commerce. And it was not until the latter part of the year 1916 that provisional licenses were received, the delay being explained by the Department of Commerce to the fact that, owing to a shortage of funds, it was impossible to send a new radio inspector to Hawaii.