Early work on frequency modulation is described wherein the propagation characteristics of frequency modulation were determined for frequencies between 9000 and 18,000 kilocycles. Oscilloscopic wave form and aural program observations, taken on a circuit between California and New York, showed that frequency modulation is much more distorted by the effects of multipath transmission than is amplitude modulation. The distortion is greatest at the lower modulation frequencies and higher depths of modulation where the side frequencies are most numerous. Oscilloscopic observations of the Lissajou figures formed by placing the outputs of receivers connected to spaced antennas on opposite oscilloscope plates showed that the diversity characteristics of frequency modulation are similar to those of amplitude modulation. That is, the detected outputs of the receivers tend to remain in phase for the lower modulation frequencies and become more phase random as the modulation frequency is increased. However, this tendency is almost obliterated on the lower modulation frequencies of frequency modulation by the presence of unequal harmonic distortion in the two receiver outputs. Theory is given analyzing the distortion encountered in a two-path transmission medium under various path amplitude and phase relation conditions. The theory explains phenomena observed in the tests and points out the extreme distortion that can be encountered.