That was often a problem on sets of this era, no AVC, so some had a local/distance switch on them to introduce more resistance or by some other way attenuate the signal coming in.
Edit: also, I recall that a good ground is essential on a radio of this type: the volume control can't "short to ground" at the bottom if there is no ground connection. Also, do you have this file? good info on how to stop the squealing, etc. and it says the set doesn't like a long antenna.
http://www.fyrbotlz.com/files/Radiola_18.pdf
And another (you probably already have)
http://www.nostalgiaair.org/referenc...adiola18-2.htm