Zenith

The valuable bedlam of commercial broadcasting originated in 1920 when a Pittsburgh department store plucked a Westinghouse experimenter from his garage, where he was sending out an occasional phonograph tune, set him up as historic Station KDKA. Radio makers began to multiply like summer flies. Most of them were soon swatted by the proverbial vicissitudes of their industry. Relatively few of the early breed even survived for the cream-jugs of the late 1920's. Still fewer continued to buzz right through Depression.

Last week in Chicago one of the survivors wrote a neat chapter into radio history. Zenith Radio Corp. bought the West Side plant of defunct Grigsby-Grunow Co., whose Majestic line, and common stock, were spectacular successes just before Depression. Last week Grigsby-Grunow had been two years in bankruptcy. Its West Side plant, valued at $1,500,000, was knocked down to Zenith for $410,000.

That the buyer needed more factory floor space has been plain for months. During the fiscal year through March, Zenith earnings were $1,212,000, biggest in its history. In the previous twelvemonth profits were $10,000. Orders placed at its May showing footed up to $4,187,000 compared to $1,200,000 at last year's showing. Zenith stock has risen steadily from $1.25 per share a year ago to a new high of $24 last week.

The plume for Zenith's past, staying power and present rewards belongs to resourceful President Eugene Francis McDonald Jr. Born 48 years ago in Syracuse, N. Y., he left Syracuse University to work in the Franklin Automobile plant pushing a bastard file through aluminum. Before the War he went to Chicago, there to sell Fords on the installment plan, then sternly disapproved by frugal Henry Ford. After a couple of years in the Naval Intelligence Service, Mr. McDonald drifted around Chicago looking for something to put his money in. In 1920 he heard one of KDKA's broadcasts, liked it, and when he discovered two young men with a passion for building radio sets, he put them under a ten-year contract. Their station letters, ZN, were the inspiration of the company's name.

President McDonald concentrated on short-wave sending and receiving sets. He took with him, on the MacMillan expedition of 1923, the first short-wave set ever operated in the Arctic. On big home sets Zenith's earnings grew from $121,000 in 1925 to $1,109,000 in 1929. When grief overtook the radio business in 1929, Zenith fell with saving promptness into the pattern of retrenchment. A new midget radio was developed for the low-price market, the cabinet division was closed down, and President McDonald slugged its overhead. By the time the first light of Recovery was visible, however, Zenith had accumulated a deficit of $750,000. Then President McDonald began to expand as fast as he had retrenched. In 1934 he put over the first of his two most spectacular pieces of salesmanship. One day every tire and oil company in the U. S. got a telegram from Mr. McDonald: "WATCH ABSENCE OF PEOPLE ON STREET BETWEEN ELEVEN AND ELEVEN THIRTY DURING PRESIDENTIAL TALK." They watched, read a follow-up letter suggesting that they cash in on radio magic. Since then Zenith has acquired regular distribution through 1,200 Goodrich tire dealers.

President McDonald's other stroke solved one of radio's most persistent problems: how to sell farmers who have no electric current and dislike hauling their batteries to town for recharging. Last June President McDonald heard of two Iowa farm boys near Sioux City who had worked out a miniature windmill-generator. Radioman McDonald went to see Brothers John & Gerhardt Albers, helped them form a company, contracted for their entire output. Since then Zenith has sold no less than 200,000 farm sets equipped with "Winchargers."

Not often does Zenith's president journey inland. Since 1929 he has lived winter & summer on his 185-ft. yacht Mizpah. In winter he ties up in the Chicago River near the Michigan Avenue Bridge. Tall, black-browed, weathered, he likes to cruise to Ontario's Georgian Bay with Radioman Powel Crosley Jr., agreeing beforehand not to mention radio. He likes checked suits and stiff collars, cocktails made with pistachio ice cream and gin. But what Eugene Francis McDonald likes most of all is to put on a diving helmet and sit on the floor of Georgian Bay watching the fish go by.

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