Richard, the reason that AM radio now has such limited audio response is due to the proliferation of radio stations. I'm not sure when the Federal Communications Commission (FCC - the governmental agency that authorizes and regulates radio service in the USA) standardized the station frequency allocations, but they set them such that they could be as close together as 10kHz spacing in the RF band. I believe in europe that this spacing is even closer, at 9kHz. In order for a radio to effectively separate radios stations that may be as close together on the dial as 10kHz, the intermediate frequency (IF) amplifier in superheterodyne receivers (the most typical circuit these days) needs to have a very narrow bandwidth. It's difficult to explain in simple terms (the RF sidebands around the carrier frequency are limited by this narrow response), but this also causes the audio bandwidth recovered from the demodulated carrier signal to have restricted bandwidth as well. Nearly all the AM radio receivers built in the last several decades have defaulted to using narrow-band IF tuning with no option to increase it by the user. This causes all AM radio reception on those receivers to have audio bandwidth limited to less than about 5kHz or so.
But back in the 1930s, there were several VERY strong AM radio transmissions available in the country, mostly situated in large cities such as New York. And there weren't any significantly powerful stations located close to them on the radio dial. So receivers could be tuned to wider IF bandwidth (on those sets which provided for this adjustment such as the E.H. Scotts) which reduced the receiver's ability to reject the adjacent radio stations (but this wasn't a problem with the few and weak adjacent signals) but which allowed much better recovered audio to be heard from the receiver. In fact, E.H. Scott himself was known to conduct long-distance listening sessions wherein he would use one of his hifi AM radios to listen to and demonstrate live operatic concerts broadcast from strong stations in New York which could be picked up in many locations all across the country with hifi audio quality. Today, the radio bands are just too full of RF signals to be able to get good wideband performance from broadcast AM signals, even if the broadcast was not limited in response by the station itself, which is now done to increase "penetrating power" - i.e., "punch-thru" at the expense of fidelity.
Commercial FM broadcasting in the USA began in the old 42 - 48 MHz band around 1940, but few people owned radios that could receive these broadcasts. Scott, Philco, Zenith, and others did make some of these sets. Interstingly, RCA did NOT make any of these sets. The reason is that David Sarnoff, the head of RCA didn't want to pay royalties to Armstrong for the FM patent rights (Sarnoff and Armstrong had a continuing feud over this for many years). Also, Sarnoff wanted to promote television service and the improved audio (which was FM, by the way

) that came with it over FM radio service. The commercial FM band was changed to the current 88 - 108 MHz band after WWII (to free up space for TV transmissions), but the service didn't really gain popularity in the USA until sometime in the 1960s. During this early period, music selection on FM was limited to classical repertoire, jazz, and "elevator music". Not too many listeners were interested. During the late 1960s after the introduction of stereo FM multiplex, popular and rock music was started to be broadcast on FM which brought in a whole new listenership, and the demise of AM as a music transmission medium was begun. These days in the USA, AM radio has very little music to be heard aside from some country stations. It's now mostly sports and political blustering.
Collecting moss, radios and phonos in the mountains of WNC.