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The British Broadcasting Company Ltd (BBC) was a British commercial company formed on 18 October 1922 by British and American electrical companies doing business in the United Kingdom (and anxious to build sales of their products by ensuring that there were radio broadcasts to which their radio-buying customers could listen) and licensed by the British General Post Office. Its original office was located on the second floor of Magnet House, the GEC buildings in London and consisted of a room and a small antechamber. On 14 December 1922, John Reith was hired to become the Managing Director of the company at that address. The company later moved its offices to the premises of the Marconi Company. The BBC as a commercial broadcasting company did not sell air time but it did carry a number of sponsored programmes paid for by British newspapers. On 31 December 1926, the company was dissolved and its assets were transferred to the non-commercial and Crown Chartered British Broadcasting Corporation (BBC).
Post Office stations
In Britain prior to 1922, the General Post Office (GPO) retained exclusive rights given to it by the government, to manage and control all means of mass communication with the exception of the printed word for which authority had devolved to another governmental entity[which?]. The laws which evolved into the Wireless Telegraphy Act 1947, upon which all modern British communication laws are built in one way or another, concern four essential activities:
the establishment of a station for purposes of broadcasting,
the use of a station for purposes of broadcasting,
the installing of a transmitter or receiver, and the use of a transmitter or receiver.
All four of these activities require a government licence which was originally granted by the General Post Office.
"Electrical" post offices
The invention of the electrical telegraph came under the control of the Telegraph Act 1869 which was based upon a law that forbade the encoding of electrical cables with messages without a licence. The messages were viewed as electrical forms of a letter. This invention was followed by the wireless telegraph which was then placed under the Wireless Telegraphy Act 1904.
Advent of wireless broadcasting
In the USA, the development of the telegraph, wireless telegraph, telephone and wireless telephony proceeded according to the dictates of entrepreneurial commercial interests concerned only with supply and demand for profit. Beginning in August 1920, commercial broadcasting stations programming to the general public had begun broadcasting in the United States, licensed by the Department of Commerce and offering several hours of programming, usually at night. Two of the first stations were WWJ in Detroit (then known as 8MK)  and KDKA in Pittsburgh (which has claimed to be the first station specifically licensed for commercial broadcasting; however commercial licences were actually not awarded until September 1921). These pioneering stations continue in daily 24-hour operation today under the ownership and management of CBS.
In the United Kingdom, all broadcasts were licensed by the GPO, who were reluctant to license any fully commercial stations and only 'experimental' stations were allowed on air.
First test broadcasts
Beginning in 1920, a number of licences were issued to British and American subsidiary companies in Britain for the purpose of conducting experimental transmissions under terms of a licence issued by the General Post Office in accordance with the Wireless Telegraphy Act 1904. On 15 June 1920, Marconi's Wireless Telegraph Company, Limited, in Chelmsford, Essex, was licensed to conduct an experimental broadcast from the New Street Works factory, featuring Dame Nellie Melba. The signal was received throughout Europe and as far as Newfoundland, Canada. Further transmissions were also made.
On 23 November 1920, the General Post Office halted all further transmissions due to complaints of alleged interference with military communications. As the number of wireless receiving sets increased during the early 1920s, the General Post Office came under extreme pressure from hobby listeners to allow the experimental wireless broadcasts to resume.
Test transmissions resume
On 14 February 1922, which was two years after ceasing their original transmissions, the Marconi Company was issued a licence for experimental transmissions under the call sign 2MT. Peter Eckersley was given charge of providing both the broadcast entertainment and the engineering. The station operated out of a hut in a field at Writtle near Chelmsford.
On 11 May 1922, the Marconi Company was issued another licence for experimental broadcasts from a station identified as 2LO which was located at Marconi House in the Strand, London. The programme consisted of a boxing commentary of the fight between Kid Lewis and Georges Carpentier. Further tests were also advertised as demonstrations of "Wireless Telegraphy and Telephony" which were "subject to permission from the Postmaster General". These demonstrations were performed by the "Demonstration Department (of) Marconi's London Wireless Station 2LO".
On 16 May 1922 the Metropolitan Vickers Company Ltd ("Metrovick") commenced test broadcasting from its own station in Manchester, identified as 2ZY.
A committee is appointed
On 23 May a committee of representatives was appointed from the "Big Six" companies - Marconi, Metropolitan-Vickers, Radio Communication Company, British Thomson-Houston, General Electric and Western Electric. The Post Office also pressed for the inclusion of a representative from the smaller firms manufacturing radio equipment in the UK - Frank Phillips of Burndept. George Campbell was one of the members on the committee.
Incorporation and shares
On 18 October 1922 the British Broadcasting Company Ltd was incorporated under the Companies Acts 1908 to 1917 with a share capital of £60,006, with cumulative ordinary shares valued at £1 each. No further capital could be issued without the Postmaster-General's consent:
The shares were equally held by six companies:
Marconi's Wireless Telegraph Company
Metropolitan Vickers Electrical Company
Radio Communication Company
The British Thomson-Houston Company
The General Electric Company
Western Electric Company
The shareholders gave the BBC the benefit of their respective patents, and only radio sets supplied by BBC companies were permitted to be licensed to receive programmes. The ability of the shareholders to profit from the BBC was limited as part of the agreement with the Postmaster General:
The holders of the Cumulative Ordinary Shares are entitled to receive out of the profits of the Company a fixed Cumulative Dividend at the rate of 7½% per annum on the capital for the time being paid up thereon but are not entitled to any further or other participation in profits.
Archibald McKinstry, The Red Lodge, Southill Avenue, Harrow on the Hill. (Joint Managing Director of Metropolitan-Vickers Electrical Export Company);
Major Basil Binyon, "Hawtthorndene", Hayes, Kent. (Managing Director of Radio Communication Company);
John Gray, "Beaulieu", Park Farm Road, Bromley, Kent. (Chairman of the Hotpoint Electric Appliance Company) (BTH);
Sir William Noble, Magnet House, Kingsway, London WC2. (Director of The General Electric Company);
Henry Mark Pease, 18 Kensington Court Mansions, London W8. (Managing Director of Western Electric Company)
The initial remit of the British Broadcasting Company was to establish a nationwide network of radio transmitters many of which had originally been owned by member companies, from which the BBC was to provide a national broadcasting service.
The British Broadcasting Company was formed using a blueprint that the US Navy and the General Electric Company had attempted to institute in the USA. Early in World War I, all of the ship-to-shore and transatlantic radio stations controlled by a US subsidiary company of Marconi's Wireless Telegraph Company, Limited in Chelmsford, England, were seized and handed to the US Navy for the duration of the War. After the War, the US Congress forced the US Navy to divest itself of the stations and they turned to the General Electric Company which in 1919 formed a subsidiary called the Radio Corporation of America. With the US Navy on its board, RCA then absorbed the former Marconi stations. In 1926 RCA created the National Broadcasting Company, the first network in the United States. Peaking in the 1930s, there were attempts to bring all radio communications in America back under single monopoly control by using the patent laws. This move failed.
The British Thomson-Houston Company Ltd was a controlled UK subsidiary of the General Electric Company in the USA. The Hotpoint Electric Appliance Company Ltd was formed by British Thomson-Houston (BTH) in 1921.
The only other company later added to the original shareholders of the British Broadcasting Company Ltd was Burndept Limited. It represented the interests of over twenty small electrical manufacturers in the UK.
The British Broadcasting Company did not sell air time for commercials but its licence did allow for it to carry sponsored programming, and eight such sponsored broadcasts were aired in 1925. However, the main source of its income was from the sale of radio receiving sets and transmitters manufactured by its shareholding member companies as well as from a portion of the government (GPO) licence fee that had to be purchased by BBC listeners.
1922-1926 BBC Timeline
18 October: The British Broadcasting Company Ltd is formed but not registered.
6 April: 2LO's transmitter power is increased with the move from Marconi House to the roof of Selfridges department store in Oxford Street.
17 July: First published edition of The Radio Supplement.
27 July: The 5XX experimental long wave station is moved from Chelmsford to Daventry where it commences regular broadcasting on 1600 metres.
31 December: BBC staff numbers reach 658.
4 January: John Reith begins to impose his dress code on the BBC's radio announcers, who must wear dinner jackets in the evening, as a mark of respect towards performers obliged to dress formally.
16 January: Catholic priest and broadcaster Fr Ronald Knox broadcasts Broadcasting from the Barricades, a satirical news report of a fictional riot. A significant part of the public believes the programme to be genuine, and Knox's satire provokes a minor panic similar to that caused by Orson Welles's The War of the Worlds broadcast twelve years later.
5 March: The Crawford Parliamentary Committee publishes its broadcasting report, which calls for the takeover of the British Broadcasting Company Ltd by a government-owned non-commercial British Broadcasting Commission.
18 June: The BBC's Radio Supplement publication is replaced by its new periodical, World Radio.
22 July: Final return of shareholders filed. Substantiated claim. (Clark 2010)
14 November: The International Broadcasting Union publishes its Geneva Plan, which reduces the number of BBC wavelengths. This forces the company to move towards a restructuring of its services which will see most of its local radio stations replaced by regional stations.
16 December: Over 100 staff and directors of the British Broadcasting Company Ltd attend a dinner party given for Prime Minister Stanley Baldwin.
20 December: Publication of the Crown charter and licence agreements creating the British Broadcasting Corporation.
31 December: The General Post Offices has issued 2¼ million receiving licences. The contracts of 773 British Broadcasting Company staff are terminated and, with the dissolution of the company, shareholders are paid at par value. All assets, plant and copyrights held by the British Broadcasting Company are transferred to the Postmaster General.
1 January: The British Broadcasting Corporation is established, and all assets received by the Postmaster General from the British Broadcasting Company are transferred. John Reith takes office as the first Director General, and all staff previously employed by the Company are engaged under new contracts to the Corporation.
Mass Media Moments in the United Kingdom, the USSR and the USA, by Gilder PhD., Eric. - "Lucian Blaga" University of Sibiu Press, Romania. 2003. ISBN973-651-596-6 This book contains historical background relating to the British Broadcasting Company Ltd, its founding companies; their transatlantic connections; General Post Office licensing system; commercial competitors from Europe prior to World War II and offshore during the 1960s.
The BBC - The First Fifty Years, by Briggs, Asa. Oxford University Press, Oxford. 1985. ISBN0-19-212971-6 The first two lengthy chapters of this book cover in detail the BBC's history prior to the creation of the British Broadcasting Corporation in 1927.
Radio: The Great Years, by Parker, Derek. - David & Charles, Newton Abbot. 1977. ISBN0-7153-7430-3 Contains a full page readable reproduction of the first edition of the Radio Times, 28 September 1923. The lead article is by Arthur R. Burrows, Director of Programmes for the British Broadcasting Company Ltd. His headline asks: "What's in the air?" Its stations are listed as serving "London, Cardiff, Birmingham, Newcastle, Manchester, Glasgow." An article by Peter Eckersley promises to inform readers about "Simultaneous Broadcasting."
The First Fifty Years - (BBC Handbook 1973), by Curran, Charles. - British Broadcasting Corporation, London. 1972.
British Broadcasting, A Study in Monopoly, by Coase, R. H. - Harvard University Press, Cambridge, MA. 1950.
The Power Behind the Microphone, by Eckersley, Peter P. - Jonathan Cape, London. 1941. Peter Eckersley was hired as Chief Engineer by the British Broadcasting Company Ltd.
Broadcast Over Britain, by Reith, John. - London. 1924.
The History of Broadcasting in the United Kingdom: Volume I - The Birth of Broadcasting, by Briggs, Asa. - Oxford University Press. 1961. Sponsorship of programmes by the British Broadcasting Company: See page 189 for details of eight sponsored concerts during 1925 by the Evening Standard, News of the World, Daily Herald, Weekly Dispatch, Answers and Titbits. The sponsorship consisted of these publications advertising in print the fact that their concerts were being broadcast by the BBC which at that time could not afford to produce its own concert programmes that would match the standard of those produced by the newspaper sponsors.
Shareholders of the British Broadcasting Company, by Clark, Lorne. - BVWS Books, 2010. ISBN0-9547043-6-3