Post 6. Zenith’s Second War, second installment

     At the close of the first installment, we left Phil Curtis and Frank Crotty in that "fleabag" room  sorting through the “wallpaper’ that RCA had produced to obfuscate Zenith’s  search for the RCA documents needed to prove its case.  But now the affair turned a corner in favor of Zenith.
     Zenith reported the matter to Judge Igoe, who quickly ordered RCA to produce all the documents.
     Europe was another consideration.  The patent pools of European co-conspirators were counterparts to the RCA patent pool in the United States.  It was thought that English, French, Dutch, German and Scandinavian patent pools had files on the overall conspiracy.  Zenith requested that letters rogatory [i] be issued to the appropriate courts in the countries cited so that Zenith could pursue its pretrial discoveries in Europe; in short, to enable Zenith to examine the participants and the documents relating to the patent pools of the conspirators.
     Judge Igoe issued the order to the High Court of Justice in London and the appropriate courts in the countries cited.  To proceed before the High Court in London, Zenith attorneys had to hire a British solicitor and a British barrister to present its case.  Wright, McConnell, and Curtis arrived in London to find that before they even started, their efforts had been violently opposed in the High Court by RCA patent cartel and the English companies who were members of the cartel.
     “When the judges assembled in their wigs and robes and were seated, we could look up at them, it seemed, as if we were in an orchestra pit staring up at a stage high above us where a collection of impressively robed and white-wigged, seemingly supernatural jurists sat in divine judgment on our cause.”
     Curtis Describes the High Court Proceedings
     Zenith’s British barrister briefly presented its case, and the impressive and eminent barrister for the opposition, Sir Hartley Shawcross, rose and presented the RCA-GE case.  He declared that British companies were being attached by a “Chicago company” and their “Chicago lawyers,” and declared that the pretrial discovery process was entirely foreign to the British system of justice.  Curtis noted that Capone wasn’t mentioned, but it wasn’t necessary to make his point, and observed:
     “As I looked up at the judges, their faces wrinkled by years of judicial service, they appeared to be pained and horrified by the revelations of our opponent’s barrister.  With saddened eyes, the judges seemed to be staring down at us as if we were Chicago gangsters boldly intent on attacking the cream of Britain’s peerage in the very capitol of the Empire.  Tom McConnell facetiously whispered to Wright and me, ‘We’ll be lucky if we escape from here without being put in a dungeon at the Tower in chains’.”
     But if recourse to British justice had failed, RCA executives in London were still subject to the authority of the Chicago court under Judge Igoe.  RCA’s European representative, Cornelius Mayer, was summoned for examination conducted by Tom McConnell.  The result was 244 pages of “arrogant, evasive testimony’; in other words, RCA’s minion was stonewalling.  McConnell suspended the deposition until Mayer’s files could be examined.
     But Mayer had transferred his records from RCA offices in London to a newly formed subsidiary in Switzerland where RCA thought that, under Swiss law as in British law, the records would be immune from examination.  The flagrant attempt to hid the Mayer files was brought before Judge Igoe, who ruled that the files must be returned to London forthwith.  After a clumsy attempt by RCA to withhold the files and to conceal those harmful to RCA’s case, Zenith attorneys were able to examine them.  What the found was evidence of a patent pool in gross violation of U.S. antitrust laws.
     Mayer was again examined.  This time he was faced with the actual documents which clearly showed RCA’s involvement in the attempt to bar Zenith from the European market.  Further evidence was obtained that showed the cartel had blocked Zenith’s efforts to export to Norway, Denmark and Sweden as well as the entire European continent. [Tom McConnell’s examination of Mayer is set forth in Appendix III of the Curtis book, and it is where “Bulldog” McConnell really showed his teeth.]
     Alarmed by Zenith’s progress in discovery, RCA tried to get Judge Igoe removed from the case on the basis that he had displayed “personal bias and prejudice” toward the defendants.  The obvious intent was to get another judge who would rule in favor of RCA – in short, another Judge Leahy.  Judge Igoe refused, and the federal appeals court supported the refusal.  So desperate was the RCA cartel to avoid the antitrust charges that it even appealed to the Supreme Court, which denied the appeal.
     [Note:  RCA’s attempt to replace a judge that is providing unfavorable rulings is a classic tactic in court practice. Zenith’s case was saved when Judge Igoe refused to step down.  But Zenith was not so fortunate in the Second War, as we shall see.]
Zenith wins!
     The Zenith case against RCA and the cartel was scheduled for trial in September of 1957.  RCA however avoided trial by agreeing to settle out of court, paying Zenith $10 million in damages; also, Zenith was awarded a worldwide, five-year, royalty-free license under all the patents in the cartel’s pool
     However, Zenith  intended to hold RCA’s feet to the fire by insisting that the courts address the antitrust issue.  A New York federal grand jury indicted RCA for criminal violation of the Sherman Antitrust Act.  Slippery as ever, RCA avoided a criminal trial by not contesting the case.  A fine of $100,000 was imposed – the tiniest slap on the wrist considering the hundreds of millions of dollars the RCA cartel had reaped in the 30 years it had imposed its criminal cartel, and the American companies it had destroyed. The fine  should have been more like $10 million or even a $100 million.
     In closing, Curtis noted that “we were grateful that the government did not fight us on behalf of the conspirators.”  That statement proved to be a self-fulfilling prophecy for--as incredible as it may seem--the U.S. government did just that in the second war, a war in which Zenith and hundreds and thousands of American workers were the tragic losers.

---

[i] A letter rogatory, “or letter of request,”  is a formal request from a court to a foreign court for some type of judicial assistance. (Wikipedia)

    

    So the First War ended in a triumph for Zenith. But that triumph was short-lived, for a more formidable cartel had been formed--the RCA-Japanese cartel.  The story of the Second War will be told in three forthcoming Posts comprising three installments.

 
McDonald's daughter, Marianne, wrote that if you mentioned David Sarnoff's name to her father, you would get instant anger.  And it is said that the name "Zenith" was was never allowed  in the offices of RCA.
   
                                                                   * * * * *
A Tribute!  To Michael Lambert Igoe was a federal judge to the United States District Court for the Northern District of Illinois. He served as a federal judge from 1939 to 1965.   He ensured that Zenith got justice in its suit against RCA (You can learn more about Judge Igoe in Wikipedia.)  


Two  Notes:  
1. Previous Posts of this blog, which are Post 1 through Post 5, can be found and opened by clicking in a location to the right of the first paragraphs at the front of the blog, where the Posts are listed.
2. I haven't been able to get photos and other images into the blog, but am working on it. (Google blog is fighting me, and winning. So off the computer goes to the Geek Squad.) 
 
Two questions:   If I may venture to ask:  How many of you wonderful readers knew the story of the Zenith's two wars?  How many of you have read the Curtis book?  
    Commenting as an author:  If it turns out that only a few of you knew about the Curtis book and its contents, it is an incentive for The Author to write a "popular" edition of the book, for it is a story that should be told for its implications both then and now--especially now in view of the fact that the U.S. government  seems to get ever more powerful, and hence more dangerous to our liberties. What it did to Zenith with regard to the Second War  is  inexcusable and the crime should be revealed to posterity by means of a special  book written for that purpose. 
   Comments? 

 

POST 5

In the previous Post 4 of the Zenith book blog, you were promised a disclosure of the First Zenith War against the RCA-Sarnoff  cartel and its flagrant violation of the Sherman Anti-Trust Act. But before we begin, some ground rules and facts must be must be established.

Basis for this Zenith Book Blog
The description of the two wars fought by Zenith  is essentially a summary of the writings of Phillip Curtis in his book The Fall of the U.S. Electronics Industry.  The Author of this blog humbly  acknowledges  his shortcomings in summarizing the brilliant work of  Curtis, and his temerity in doing so.  And it is with the kind permission of the heirs of Philip Curtis, who own the copyright to the book, that The Author  does so.



Brief Summary of the Curtis Book

Pages 1-18.  The origins and need for anti-trust laws.
Pages 23-232. The disclosure of the indictment that comprises  the 200 pages that are summarized in this blog.
Pages 236-337. Exhibits and Appendices that show what Curtis referenced in his exposition.

 

Availability.  The book is out of print and is being remaindered by Amazon.com for a cost of $144 per copy.  The Author received his copy from Mrs. Curtis many years ago.

Dedication by Curtis.  Dedicated to the thousands of American workers who lost their jobs as a result of the predatory attack of a foreign cartel described here—a protected attack made possible by heavily lobbied federal law enforcement failures.  

 
Book Status. The Curtis book was issued before Zenith filed for bankruptcy.  Had it been available earlier and released to the public, it may have swayed public opinion in favor of Zenith and the now-dead Consumer Electronics Industry, and against the invidious foreign cartel. The fact that the obvious federal support occurred during the administration of  President Carter is not surprising, but that the final chapters occurred during the Reagan administration is surprising and dismaying. A possible explanation is provided by The Author at the close of the summary. 

Statement by the Author of the Blog.  The Author has tried  to efface himself as much as possible in the blog as the subject, opinions, and content  relating to the two wars are mainly attributable to  Philip J. Curtis.  Curtis laid out the case for Zenith as only a brilliant lawyer could, with statements and assertions back with meticulous evidence “chapter and verse.”  It is a stunning indictment!       Despite the fluid and skilled writing of Curtis, it is challenging reading for the non-lawyer (of which The Author is one). But the Author’s years summarizing and explaining complex engineering documents, and his experience as a patent agent and the writing of applications and patent briefs, have emboldened him to attempt a summary of the Curtis book—in short, to “popularize” the book. It is hoped that a simplified edition of the Curtis book will be published.  Surely the message of Curtis concerning the egregious and unlawful actions of two administrations of the federal government and its agents should not go unrecorded and unacknowledged by posterity.
(Which leads to the question:  Is the chicanery still  going on? You bet!)

Criticisms of the result will be gratefully received and acknowledged.

 So, “unto the breech, dear friends,” in the First Zenith War!

                               Zenith Declares War on the RCA Patent Cartel

 

   World War II had ended, and Zenith was converting from wartime products to consumer products.  Zenith was faced with the RCA package license which required a payment of a 7.5 percent of the sale price of not just the electronic circuits, but the whole product, including the cabinet, which in the top- line sets were expensive.  So the tribute payable to RCA for a $450 radio was $33.75.  The extortionate nature of this assessment is pointed up by the fact that a profit on such a radio was normally 10 percent, or $45.00.  Further, the RCA license required that the licensee grant back to RCA any patents it developed. This outrageous levy had the effect of making the licensee a subsidiary of RCA.

 

   The penalty for refusing the license was to be tied up in court in prolonged and devastating litigation.  Few independent radio manufacturers could afford this, so they had no option but to go out of business.  Once there were 500 small, independent radio manufacturers in the 1920’s.  All were wiped out by the RCA’s predatory licensing.

 

   This scheme had gone on for 30 years until it was challenged by Zenith.  Zenith refused to be a licensee.  Rather than waiting for a legal attack by RCA, Zenith filed an action in the Delaware federal court for a judgment against RCA and the other pool participants:  AT&T, Western Electric, General Electric, and Westinghouse.  (Little Zenith picking a fight with this mob – a David-and-Goliath confrontation, if there ever was one!)  The suit was based on a declaration that all the patents in the RCA patent license were unenforceable because they were pooled by an unlawful conspiracy with the intent to monopolize the American electronics industry.  Further, Zenith was barred from doing business in Canada and in foreign countries by the far-reaching tentacles of the monopoly.

 

   Such a monopoly was a clear violation of the Sherman Antitrust Act, which came into being to break up the monopolies in the last century:  the Steel Trust, the Sugar Trust, the Railroad Trust, and the notorious Rockefeller Oil Trust, all of which mutually agreed among their co-conspirators to fix prices, divide up world domestic and foreign markets amongst themselves, and to use their combined power to crush competitors.

 

   The Sherman Act is beautifully simple.  It  states that “every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several States, or with foreign nations, shall be guilty of a misdemeanor …”.  (To put some needed teeth into the law, anoffense against the act was later upgraded from the mild “misdemeanor” to “criminal”).  It was on this basis that Zenith filed suit against the RCA patent cartel in the Delaware federal trial court, Chief Judge Leahy presiding.

 

Zenith loses the first round, The RCA conspirators counter-attacked by alleging infringement of 40 patents in the RCA pool consisting of 24 patents by RCA, 10 by Western Electric, and 6 by General Electric.  The began a “legal war of attrition” against Zenith which entailed the filing of numerous motions and pretrial “discoveries” designed to make it too expensive for Zenith to carry on.  And basically, it was designed to obscure Zenith’s original antitrust claim.

 

  Then came what was looked upon as Zenith’s “death sentence”.  It was imposed at the defendants behest by Judge Leahy of the Delaware federal trial court.  Before Zenith’s antitrust claim could even be considered, said the judge, the aforedescribed forty patents that Zenith had supposedly infringed must each be tried in court.  Also, any newly issued patents could be asserted against Zenith, and each in turn must be tried.  The cost of the full-scale trials would be enormous, and most pertinent, RCA could continue for years to impose it’s criminal conspiracy on the industry and reap the benefits thereof.

 

   In a master-stroke, RCA’s lawyers thus persuaded a sympathetic judge to impose on Zenith this course of legal obfuscation and delay.  Zenith had failed miserably in its first attempt to break RCA’s monopoly.  Maybe it would be better to apply for a license, and pay the royalties.

 

I attack!

   Not so, said Commander McDonald.  Perhaps, as a Naval officer, he was inspired by Marshall Petain.  During the First World War, when his forces were driven in on all fronts, Petain said:  “The situation is excellent.  I attack.”

 

   To lead his attack team, McDonald enlisted Joe Wright, who later became president of Zenith.

Joseph S. Wright came to Zenith from the Federal Trade Commission (FTC) in Washington, D.C., where he was in charge of ensuring compliance with the Commission’s order to cease and desist from unfair competition.  Wright in turn brought in Philip J. Curtis, who had worked with Joe Wright in his antitrust section of the FTC.  Curtis characterized Wright as “the government’s bulldog, and Zenith needed a man with bite.”

 

  And bite he did.  He got together with Curtis and Zenith’s long-time counsel Irving Herriot to decide strategy.  They had two chances.  The first was to petition the Delaware Third Circuit Court of Appeals to force Judge Leahy to put Zenith’s antitrust claim ahead of the trial of 40-plus patents.  This was considered a hundred-to-one chance, and so it eventually proved.

 

   The second strategy was to springboard Zenith’s antitrust claim on a patent infringement suit against Zenith that RCA had filed in Chicago.  Phil Curtis had dug up evidence that the RCA patent cartel was behind the barring of Zenith from the lucrative Canadian market and other foreign markets in clear violation of the Sherman Antitrust Act.  This evidence made it possible to show that the Chicago case was different from the Delaware case, and that the antitrust issues could be tried separately in Chicago.

 

   Another bulldog was brought on board, this one in the form of Thomas C. O’Connell, described by Curtis as “a fearless, brilliant trial lawyer.”  And so he proved.  Cross-claims were filed on the antitrust issue against the RCA cartel, including GE and Western Electric.

 

   The case was under the jurisdiction of Chicago’s Judge Michael Igoe, who allowed Zenith’s case to proceed independently of the Delaware trial and Judge Leahy’s ruinous decision.  It was a great victory for Zenith; however, Zenith had absolutely no evidence admissible in court that a conspiracy actually existed.  But Zenith now had the court behind it, and therefore the power to examine files, as questions and examine witnesses under oath, a legal procedure known as “pretrial discovery.”  Failure of RCA to produce the documents would be considered contempt of court and an obstruction of justice.

 

   Not that this much bothered RCA and its raft of attorneys.  It took Zenith’s attorneys no less than three years to discover that evidence, but find it they did.  RCA’s counsel drew upon every possible expedient including what Curtis called “sandbagging” and “the wallpaper treatment.”  The wallpaper strategy was to “swamp them (Zenith) with plenty of nothing until they gave up in exhaustion and despair.”  Documents detailing communications relative to the conspiracy, and between RCA’s executive officers were withheld, and attempts made to actually hide them!

 

   An example of the RCA’s tactic in making it as difficult as possible to examine its files is shown what might be called the “fleabag’ incident.  Rather than offering space at RCA’s luxurious New York City headquarters for Zenith’s examination of the files, the files were piled into the worst possible room of a New York hotel that RCA could find.  Phil Curtis’s description is vivid:  “The hotel itself was a third avenue fleabag . . . that had not been cleaned or decorated for human habitation for many, many years.  There was a small window covered with years of New York grime and jammed shut so that we could not open it.  Hanging from the center of the ceiling on a black, twisted cord was the original light fixture.  This ‘document” room’ had the sepulchral stench of many decades of living and, possibly, dying.  The ‘air conditioning’ was a contradiction of terms.  Counsel for RCA must have thoroughly searched New York City and could find none worse for our accommodation.”  Along with Zenith patent attorney Frank Crotty, Curtis spent many miserable weeks sorting through this “wallpaper.”  It was obvious that RCA was deliberately withholding  from Zenith the documents needed to proceed with its case.

                                                               

End of First Installment of the two installments that describe Zenith’s first war and victory against the RCA cartel.  The next post, Post 6, will complete the story of the first war, and tell of Zenith's triumph.

 

Now for something completely different!

 

                                                            THE BIG BANG

Like most early Zenith factories, Plant 7, located near the intersection of Costner and North Avenues in Chicago, was an antique as buildings go. It was there that Zenith packed in the assemblers who put together radios and television sets by hand-wiring.  Most workers were women who lived close by on the West Side of Chicago.  And a more dedicated work-force could not be found. For example,  if they found a scrap of hook-up wire on the floor, it would be picked up and wired into a chassis. No waste there. 

   Emulating Henry Ford, in its early days, Zenith strove to manufacture  of its products in-house, buying as little as possible from outside vendors.   Chassis for radios, and the metal  structure for speakers were all punched  out by a formidable array of giant presses whose chunking could be felt through-out the neighborhood.  Not that anyone minded, for it was the sound of prosperity to those who lived close by and worked at the Plant.

   Plant 7 also assembled artillery and rocket  fuze components such as safety and arming mechanisms and installed their explosive components—government contract work brought in by Bill Van Slyck. Some of the components consisted of blasting “caps” that initiated the major explosion of an artillery shell or rocket. The assembly lines consisted essentially of glass shields intended to prevent installer injury.  The assemblers’ hands were inserted into thick gloves that extended into the shields to protect  the hands in case the cap exploded, and the installer’s hands were grounded by wrist straps.  It must have been an exciting place to work as the caps often exploded. There was also dump out in back of the plant to store the explosives. 

   But those explosives were not what caused the Big Bang.  And it was a BIG Bang.

   Facing the plant  on the North Avenue side was the factory  of Helene Curtis, a maker of cosmetics and other beauty supplies sold under the Curtis name—a seemingly innocuous neighbor. 

   The day was over-cast. Both factories were humming  busily. The Zenith workers heard a loud  “whump and swoosh” (as someone described it!) from the direction of the Curtis factory. Everyone on the north side of the Zenith factory did the natural thing—they rushed to the windows to see what all the noise was about.  There they were  witness to the second explosion—the big  explosion that  blew the window glass into their faces--an explosion strong enough to blow out the window sash as well. 

   The “whump and swoosh” was caused by fluid leaking from a highly inflammable solvent leaking from a tank, and the big bang was from the explosion of the tank itself.   

   There was blood everywhere; blood, said one victim, was  running  down the stairs. One person died. Others lived but others bore the scars for the rest of their lives.  Ed Schoeder, the Zenith Secretary who was the first on the scene, described the chaos as resembling a battle field.  It was obviously not "just another day" at work.

                                                             The author Apologizes

• In Post 4, Bob Adler’s remote control was termed a “gizmo”. (Sorry, Bob!)   It was far more than that, for  it was a landmark  application  of ultrasonic technology  in a consumer product,  one that prefigured Adler’s touch screen.   And it saved Zenith’s reputation when Zenith was unable to mass-produced Gene Polley’s visible light control system, described in the previous post. Zenith’s competitor, Admiral Corporation thought so much Adler’s remote control that  it copied the control for use with Admiral  television sets.  Zenith sued Admiral for patent infringement, and won. (Hi, Nick!) It was an easy win because Admiral made a “Chinese” copy, one identical to Adler’s invention in all respects. The moral is, if you are going to infringe a patent, don’t make it identical in structure.  (And, apologies also to the Chinese for using the term Chinese  copy.)
• An apology to Phil Curtis and heirs for not showing a photo of him. I never took one, and no one else seems to have one.   Perhaps a reader can supply it.
• Memory often falters after so many years, and there will be errors in what is set down. If you  spot an error, please let the Author  of the Zenith Story be aware of it  in Comments section  at the close of the blog. Also, you can enter your correction in the Zenith Book Facebook in the “What’s on your mind” section. Here is the address of the Zenith Book Facebook:

                https://www.facebook.com/pages/Zenith-Book/298032167011629.

Of course you will have to sign into Facebook and use a password, but we all know how to do that, don’t we? Piece of cake.  (Whoa!  The link directly to the Facebook page seems to be broken. So just copy the address  and paste it into your browser address bar.)

Help! Help!  Comments Wanted. 
At the end of this blog, you will see a box that says “Comments.”  Click on the word and a box will appear for receiving your comments. After you enter your comments, the word “Publish” will appear. Also, the word “Preview,” which gives you a chance to change your mind, or to correct any evil grammar and spelling.

And in the next Post, Post 6, we'll see Zenith score a well-deserved win. Not only will Zenith win, but so will the entire Consumer Electronics Industry and the American people. 

 

POST 4

                                               ZENITH DECLARES WAR!

--war on two formidable cartels.  Zenith won the first war, but lost the second.

THE FIRST WAR.  Zenith launched a legal attack on the RCA (Radio Corporation of America) patent cartel that was extorting exorbitant royalties from the American radio industry. The cartel was operating in criminal violation of the Sherman Anti-trust Act. Zenith fought this war single-handed, and won it for the benefit not only of Zenith, but also for the entire American consumer electronics industry.

But it was a short-lived victory, for another and more formidable competitor was in the offing, this one inexplicably supported by the government of the United States. This was the war against another cartel which RCA also instigated--a RCA-Japanese cartel.  Zenith lost this war.  Zenith was not the only loser for hundreds of thousands of American manufacturing and related  jobs were lost when  production was transferred out of this continent. In the end, the entire American radio and television industry was wiped out. Zenith was the last of the American companies to go under. It was declared bankrupt in 1998.

The story of Zenith's initial victory and eventual defeat is told brilliantly in a book by Philip J. Curtis, a Zenith attorney, who was the Zenith "point man" is the two battles. His book is titled  The Fall of the U.S. Consumer  Electronics Industry . . .  An American Trade Tragedy. (The publisher is unreachable and has apparently gone out of  business.) The book is being "remaindered" by Amazon. com at a price of $114. In his Foreword to his book,
Curtis writes: "Dedicated to the thousands of American workers who lost their jobs as a result of the predatory attack of a foreign cartel described here—an attack made possible by heavily lobbied law enforcement failures.”

Curtis casts as the villain in both wars (to quote) ". . . the brilliant and ruthless David Sarnoff who seized control  of the RCA patent pool . . . and who controlled the lucrative industry for over 40 years by means of a scurrilous patent-packaging licensing scheme."

Curtis did not mince words.


And so it can be assumed that he (Sarnoff)  is  the reason why you cannot buy an American-made radio or television set, nor any of the hundreds of other revolutionary electronic devices such as iPhones and iPods. Now they are all manufactured overseas--not here; not in America.  The American worker has lost all the manufacturing work on those devices.

The story of the first war will begin in Post 5  of this weblog, and carried on in installments in subsequent posts.  And thereafter, and in further posts, the story of the  second war  will be told , the war that Zenith lost.  Until then, let's look into some of the aspects of  Zenith that made it the great company that it (sadly) was.

PARTY TIME!
It was traditional for Zenith to throw a big party every year for the benefit of the "Zenith Pioneers"--those who had been employees for 20 years. Here follows a page from the booklet designed for the 1993 /Zenith Pioneer banquet.                                         

The booklet lists 1,250 active Pioneers, 682 retired Pioneers, and 330 in Memorial.

Let the Party Begin!  

Everyone checked  in at a long table near the door. Zenaida Rodriguez and Patty Czerkies signed you in  and you wrote your name on a stick-on tag.  The tag was needed during the greeting period, a stage where everyone wandered about to meet old friends—in case you forget the name, you sidled up to them, shook their hand, and surreptitiously read their name tag.

 Everything was free--the drinks, the dinner, and orchestra, and other amenities.  The two bars opened at 5 p.m. sharp, and long lines formed immediately. It was best to order two drinks at a time, for you were likely to go dry before you got through the lines again.  The bar closed at seven  sharp, which provided two hours to get well-oiled if that was one's inclination. 

 Promptly at Seven o’clock,  the president of the Zenith Pioneers called time and requested (several times!)  that people “please be seated . . .be seated, please.” If you had wanted to sit at a table with friends, you signed up for the privilege weeks in advance.

Then there would be a brief speech which included a tribute paid to those who had passed on during the past year. It was followed by  a prayer, often said by Bill Signer, who had worked for Ray Hunt before he retired. Bill had married a widow with four children and had become a  lay preacher.

 The food was good and plentiful:  mushroom barley soup, roast beef with gravy, Lyonnaise potatoes,  Polish sausage with kraut, roast barbeque chicken , pierogi, dessert, and milk, tea or coffee.  The food was served cottage-style, with serving plates passed back and forth and refilled immediately.  Carafes  of white and dark wine were stationed at each table, also refilled immediately .

 After dinner, cruising around the tables began again--another tradition. Then at 9:30, the band struck up, with  dancing to the Hokey-Pokey and  other Golden oldies.  At midnight, the band played Auld Lang Syne, and  packed up its instruments.  The parking lot became alive with cars starting up, and last cries of farewell were called out.  The party was over for the year.

 It was all quite warm and wonderful

 The yearly celebration went on for many more years.  But all parties must come to an end. Through the years, Zenith had borne the expense, but when Zenith began to run out of money, a charge was assessed:  first $15, then $30. Attendance fell off, and as bankruptcy approached, the party was over.    Pryzbylo's saw Zenith no more, nor did America.

* * * * 

Gene Polley  (1913-2009 ) Certain employees seem to typify a company: Gene Polley was one of those. He started with Zenith in 1935 and worked there for 47 years, retiring in 1982.  He was granted 18 patents, three from the “Flashmatic”  invention, a system for controlling a television set remotely, and for which he  won a Emmy Award from the National Academy of Television Arts and Sciences. He had built up a small fortune of $50,000 primarily growing  from  purchase of stock initiated by a grant of $1,000 from McDonald for his invention of the Flashmatic.  And he rode his $50,000 down to near-nothing when Zenith went bankrupt.  Like so many Zenith employees, his faith in, and love for Zenith never faltered.

Gene Polley at his retirement dinner. George Hrbek (right) director, video systems engineering, said "Polley is more than a company man . . .In a larger sense, he and others like him are the Company." 
Polley was interviewed  in his  80^th  year, and after he had retired from Zenith

Q. How did you get started with Zenith?

“I knew Walt 'Sports' Herman, who was a well-known sportsman and  a great friend  of McDonald. Herman got me an interview with Zenith in 1935, right in the middle of the great depression. I went in with a letter from Herman, and  guess who interviewed me? –Hugh Robertson! He asked me if I knew anything about radio and I said I built radio sets at home. ‘What kind of a job would you like?’ he asked.  I said 'any kind of a job.' He said 'how about a job in the factory?' So he gave me a job in the factory as a stock boy. I was only 20 years old.”

[Side note from RC:  Hugh Robertson was President and Chairman of the Board of Zenith,    Earlier, he was  the Zenith treasurer, and  he did what all good Scotsmen do:  He saved Zenith’s money, and it eventually amounted to about $650 million. He loved what Zenith was doing, and would say happily: “Isn’t it wonderful that we can supply jobs for all these people.”  At Christmas time, he would visit various  Zenith plants and wish everyone a Merry Christmas.  It happened to me shortly after I had started with  Zenith: he appeared at the door of Zenith’s Plant 5, shook my hand, and wished me a Merry Christmas. I had no idea who he was, other than he was  kind gentleman who seemed to appear from nowhere.]

Polley’s Memories of McDonald

“McDonald  lived on the near north side and he used to drive every morning to our first plant on Iron Street. That was a dreary old hole! It was in back of the stockyards, and when the wind was right, it –boy! But they had a good cafeteria there. The apple dumplings were out of this world!

“As he drove by, the traffic cops all saluted McDonald because at Christmas time, he gave them all gifts “ (Note: This was before stoplights became numerous, so traffic police directed traffic at intersections of main streets.)

 “McDonald  had an old Ford remodeled and restyled so that it had two hoods--a double hood!  We built an FM radio for him with a special antenna that looked like the thing they had on steamships nowadays—that was on his Cadillac.  We also built him a special FM radio for his car because  he listened to classical music on the Zenith radio station he set up—Radio Station WEFM. The 'EFM' part was of course the initials of his name. He used to call the guy who ran the station to criticize the selections.

“He also had ideas to help the police department because they were all his friends. He asked me to make disappearing squad lights for them, and I did. And he got a patent on it! Probably the only patent he ever got. The lights  would rise out of the trunk.”

Polley’s major contribution to Zenith was his invention of the Flashmatic, the very first remote control for the television set.  It consisted of a hand-held flashlight shaped like a gun which the viewer used to selectively activate photocells located at each corner of the set, which in turn activated a motor-driven switch to change  channels. In addition to changing channels, it turned the set on and off, and most important, it muted the set. 

The Flashmatic  was also given the name Lazybones, probably by an ad agency. Polley tells how it came about, and what became of it. It was the first  of the remote devices device that soon became so beloved by couch potatoes. 

“We always delivered a TV set with all the advance developments to the Commander every Christmas. The electrical group was getting his set ready for delivery to his home and they came to me and said ‘could you put a LazyBones unit on it.‘ About a month later, the Commander calls and says “put it into production.”  He loved the Flashmatic, especially because it was like shooting a gun so he could ‘shoot off’ shows he didn’t like, and it could mute the set during advertisements, which he hated. McDonald recognized the value of new products immediately. He had a flair for that. 

 “Then we found we had a big problem: The guy that had given us the samples of the photocells did not know how to make them in quantity. Instead of an order for 10 or 15 of them, he got an order for 20,000. He went crazy! But without the photocells, what could we do? We had a hot item with publicity all over the country such as articles in the paper about the ray gun that “shoots off shows.” As a result of all of this, my invention became known as ‘Polley’s Folly.”  (Below is shown a copy of the award to Polley from McDonald.)                                    

[Note:  That $1,000 in 1958  is nearly $29,000  in today's money.]

“Bob  Adler was head of the research group then, and he was assigned to rescue the Flashmatic  project. Adler came up with this ultrasonic way of doing it. He had worked on ultrasonics doing the war.”

[Note:  I tried to get up an image of Adler's Space Command television remote control system, but it wouldn't come.  I am in continual combat with this blog, and in fact, every computer system.  But you probably recall what it looks like--a gizmo with four big buttons which you pressed to operate the set.)  The push-buttons clicked on tuned rods which emitted a supersonic signal which was tuned to other rods in the TV set, which in turn caused an associated channel to respond.  It was sensitive to interference from a set of jingled keys, for example, which would cause the channels to turn over.  Polley’s system was also sensitive to interference:  it could be lights from a passing automobile outside the house. Now, the signal medium is neither sound waves nor visible light, but invisible infrared light sent in coded pulses between the remote control handset to the television set. It is relatively immune to interference.}

Zenith Gets Into Television

“The only sets in the early days  were put together by skilled individuals,” Polley continued,  “with  parts they had access to,  and they could build their own TV sets, like the first radio amateurs did.  It was after the war that Zenith got into the TV business. The programs were so bad, all home-made programs at that time. McDonald was worried about how the better television  programs would be supported. He came up with a system for scrambling the picture, with a de-scrambling signal coming over the phone line. Called it Phonevision; I worked on it for a while. This was a fore-runner of cable TV. But ATandT wouldn’t go along with it. Now ATandT has most of the cable stuff in the country.” [Note: Google blog does not like the symbol "&;"--the "ampersand", so the "and" symbol has to be written out ATandT. Gad!] 

McDonald’s Profit-sharing System

“McDonald instituted a bonus system; I remember one year, after I had worked there a year and a half, we got a ten percent raise and a ten percent bonus. He realized that it was the ‘people in the plant’ that were doing this for him, and he rewarded them.”

Q.  How much was that as a percentage of what you earned?

“It was 15% of your salary at one time, when we had a good year. Six percent, if not.”

(Note:  When John Nevin took over, he learned that a factory worker had retired with $100,000. ($787,776 in today’s money. ) He apparently considered that to be excessive and  reduced the profit-sharing plan to a range of 4% to 8%, with the return  depending on the Zenith’s profitability. It never exceeded 4% from that time on.

Gene Polley died of natural causes at the age of 96.  He was an avid and skilled golfer. Ten years before, at the age of 86, he “shot his age” with a score of 86. Always the achiever,  and forever “a Zenith man.”

Farewell, Gene and all the Pioneers and other employees who are now “In Memorial.”  

* * * * *

The Mizpah.   Being naval-centered, the Commander had a yacht on Lake Michigan. He named it the Mizpah.  It had traveled as far as the Galapagos Islands.  The Mizpah was used for McDonald’s honeymoon with his bride, Marianne. They cruised about Lake Michigan, and there is an inlet far up the Wisconsin Lake Shore named Marianne Harbor. When a celebrity came to town--whether movie star, politician, or other “name”— they were invited onto the Mizpah and were overwhelmed with hospitality--free food, drinks, and whatever.  Actors such as John and Lionel Barrymore came aboard, as did the Wright Brothers. 

 Brian Marohnic, who later became Zenith’s National Service Manager, was the radio operator. He was kept busy sending and receiving messages for the guests.  He recalled the voyages on Lake Michigan and being as liquid as the lake itself, but of a different composition.

The Mizpah served as a training vessel for the Coast Guard during the Second World War. Eventually it became outdated and was sunk in the ocean to serve as a reef for fish propagation.  

Like all men, the commander loved a pretty face and a pretty body.  The following story may be apocryphal, but it is worth the telling. McDonald  invited a group of chorus girls for a cruise on the lake , and when they were far out in the Lake, suggested that they all go for a swim. 

“Oh, no," they protested. "We have no suits.”  “No problem," said the commander, " I just happen to have some.” With happy cries, they donned the suits and went for a swim. They quickly learned that  the suits were made of a substance  that dissolved upon contact with water. 

When they clambered back aboard, the Commander was of course at the rail to welcome them. 

* * * * *

Now let’s prepare for the next Post, Post 5, where start of the story of Zenith’s First War will begin.  First, a review of the Sherman Anti-Trust Act, a law which was the basis for Zenith’s winning the  First War.  (Unfortunately, a corrupt interpretation of the law by the Supreme Court  is also  the basis for Zenith losing the Second War.) It is a simple law and easy to remember:

Sherman Anti-Trust Act. Federal legislation passed in 1890 prohibiting "monopolies or attempts to monopolize," and "contracts, combinations, or conspiracies in restraint of trade" in interstate and foreign commerce. The major purpose of the Sherman Antitrust Act is to prohibit monopolies and sustain competition so as to protect companies from each other, and to protect consumers from unfair business practices. The act was supplemented by the Clayton antitrust act in 1914. Violations were at first considered to be misdemeanors, but later, criminal offenses. The act is enforced by the Federal Trade Commission (FTC), and the Antitrust Division of the U.S. Attorney General's office. (Source: Answers.com)

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HELP! HELP!  Comments needed!   If you can add a memory of Zenith, correct a mistake, or just complain, please do so!  Let’s make this an interchange of memories and facts about Zenith, a great company that is no more.  (We’ll soon find out why.)

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--Goodbye until next time. Ralph Clarke,   April 21, 2014, for Post 4. (And please excuse any errors in spelling, grammar, etc.)