American Corporations and Media Power, 1890–1940

Introduction

American corporations have never been reticent to use available media to reach their goals. In the years between 1890 and 1940, there are impressive examples of how U.S. corporate interests utilized various media to realize additional profit and power — sometimes employing unorthodox and unethical methods. This paper delves into instances of corporate use of media and points to the dynamics that allowed those associations to flourish.

Corporate Radio in Latin America

"Today's critics of media conglomerates fail to grasp the reality that corporate power, in league with the state, [has] made a mockery of prospects for a democratic global media system… [and it is vital to recognize that] the U.S. radio industry subsequently followed a similar pattern of monopolization in the 1920s…" (Peterson, 2004, p. 86).

Author James Schwoch points to the fact that the American radio industry had a profound impact on Latin American activities between 1900 and 1939, and he uses several examples to support his assertion. For example, U.S. Rubber — whose point man was E. C. Benedict, a board member and "experienced Wall Street finance capitalist" — had a strong interest in developing more effective strategies for managing "wild rubber forests" in the Amazon basin (Schwoch, 1990, p. 16). U.S. Rubber had established purchasing agencies for "raw rubber" from the Amazon states of Pará and Manaus, driven by the company's desire for greater control over the region's rubber supply.

The annual report for U.S. Rubber in 1903 stated: "We have…laid the foundation in another direction for acquiring and handling generally our very large requirements of crude rubber." The report went on to explain that "special advantages" the company was developing would offer U.S. Rubber access to rubber "never before possessed by this company, and not enjoyed by any other consumer of rubber" (Schwoch, p. 16).

The advantage Benedict alluded to was the establishment of "Amazon Wireless," a radio and broadcast system intended to play a major role in U.S. Rubber's pursuit of power, money, and rubber from the Amazon region. The Amazon Wireless deal was arranged with Brazil through the efforts of two Americans, Richard Mardock and Charles Archer, who began experimenting in the Amazon in 1901. Using new radio technology developed by iconic electronics innovator Reginald Fessenden, Mardock convinced the Brazilian government that he possessed the technology to bring wireless communication to Brazil. A deal was signed on September 29, 1902, granting fifteen years of operation to Amazon Wireless in Brazil.

Fessenden had built upon already existing electromagnetic theory and pursued it to its ultimate end: he was the first to transmit voice over radio waves; the first to send two-way wireless telegraphy messages across the Atlantic Ocean; the first to send wireless telephony (voice) across the Atlantic Ocean; and the first to produce a wireless broadcast of voice and music (Belrose, 1994, p. 1). He did not pursue these innovations to help U.S. corporations earn more profit, but they nonetheless proved to be a significant corporate advantage.

While U.S. Rubber did not achieve great profit gains in the Amazon jungle through the Amazon Wireless project — the Brazilian government withdrew from cooperation with U.S. Rubber, taking over the project, and the Fessenden system experienced serious technical difficulties operating deep in the Amazon jungle — other U.S. corporations met with success in Latin America, including the United Fruit Company (UFC). The UFC used radio equipment purchased from Lee DeForest and established "a [radio] system between Port Limon, Costa Rica, and Bocas del Toro in Panama" (Schwoch, p. 21). One reason UFC succeeded where U.S. Rubber failed — besides the difficulties U.S. Rubber experienced in maintaining consistent transmissions in rainforest environments — is that the UFC project involved the company managing banana plantations rather than depending on "wild harvesting" in remote areas, as U.S. Rubber had been forced to do (Schwoch, p. 22). Eventually UFC built steamships and used wireless transmissions aboard those vessels for constant communication with corporate regional offices.

Upton Sinclair, who "railed against the corporate takeover of America," traveled to Colorado during the coal miners' strike of 1927–28. He recounted calling the Denver Post, which had, he said, "published some perfectly fantastic falsehoods about me, made up out of whole cloth. I called [an editor] and protested. He cursed me and said, 'We say what we…' — and I won't repeat his language — 'we are gonna say what we please about you and we don't care a blankety-blank-blank what you think about us or what you say about us'" (Gordonskene, 2010).

The Rise of Corporate Public Relations

The emergence of public relations departments within corporations marked the true beginning of an era in which companies used media to promote their goals and increase their profits. PR departments were designed to shape public opinion favorably, and they carried out that mission by informing — and using — the media. In the book Effective Public Relations and Media Strategy, author Reddi explains that the very first in-house publicity department was established by Westinghouse Corporation in 1889 (Reddi, 2010, p. 54). Up until the late nineteenth century, Reddi asserts, corporations "had the notion that they were not accountable to the customers and the people," and were therefore reluctant to "share information with the media" (p. 54).

Ivy Ledbetter Lee was among the pioneers of public relations bureaus — indeed, he is considered the "Father of American Public Relations," according to Reddi. He declared that the old attitude of "Public be damned" had given way in the early twentieth century to "Public be informed" (Reddi, p. 55). Both AT&T and the Ford Motor Company developed media relations components very early in the twentieth century. Henry Ford distributed a press release picked up by newspapers across the country: "Everyone should own a car and… it should be affordable to people" (Reddi, p. 55). Lee's "Declaration of Principles" was instrumental in persuading corporations to engage strategically with the media. Reddi presents an extract from Lee's principles:

"This is not a secret Press Bureau. All our work is done in the open. We aim to supply news. This is not an advertising agency. Our matter is accurate. Further, details on any subject needed will be supplied [to media] promptly, and any editor will be assisted most carefully in verifying directly any statement of fact…" (Reddi, p. 55).

From roughly the late nineteenth century forward, corporations were shrewd enough to create media relations departments to supply promotional narratives and factual data to the press, and the practice proved to be a financial and reputational benefit for companies large and small.

Conclusion

On the minimum wage, Ford stated: "The $1.00 minimum wage, even with the large crews which we carry [in shipping cars overseas], leaves us a substantial profit, and all talk that this is a blow to the American merchant marine or other shippers is bunk" (Time, p. 2). Ford also asserted: "The English language is the world's tool of industry, colonization and the bringing of prosperity to every kind and degree of man. It is the world's language" (Time, p. 3). Such statements, disseminated through major media outlets, illustrate how corporate public relations worked in practice — using the press to shape public perception of business leaders and their enterprises.

The history of U.S. corporations' use of media for the purposes of promotion, marketing, and profit reveals a persistent drive for power and influence. Today, corporations use media in even more powerful ways, which should come as no surprise since corporate PR professionals have learned well from their predecessors. In addition, there are far more tools at PR professionals' disposal in a digitally empowered global world of highly competitive businesses vying for profit and power.