AM stereo, of the C-QUAM variety is really quite simple, the transmitter uses a three step process to generate the C-QUAM modulated RF signal from the left and right audio signals. First a QUAM, Quadrature Amplitude Modulated signal is generated. The left and right channels are matrixed to form a L+R monophonic sum signal, and a L-R stereo difference signal. The L+R signal modulates a double sideband full carrier AM signal, and the L-R signal is used to modulate a quadrature carrier, 90 degrees out of phase with the L+R carrier, the quadrature carrier suppressed. These two quadrature signals are then added to form a QUAM signal with a carrier. The QUAM signal could be transmitted in that form, if it weren't for the fact that the FCC mandated that the AM stereo signal had to be fully compatible with the envelope detectors used in the majority of monophonic AM radios. If there is any stereo difference, or L-R component, it will distort the envelope of the QUAM signal, resulting in distortion in monophonic radios using envelope detectors. To get around this problem the QUAM signal is processed by two further steps, to create the C-QUAM, Compatible QUadrature Amplitude Modulation signal. First the QUAM signal is passed through a limiter which removes the envelope information, leaving only the phase information. The second step in generating the C-QUAM signal, from the QUAM signal, is the Amplitude Modulation of the limiter output with the L+R, or monophonic audio signal from the audio matrix. This process gives the C-QUAM signal a normal AM envelope containing the L+R or monophonic audio, for compatibility with existing monophonic AM radios using envelope detectors, while the L-R stereo difference signal is encoded in the carrier phase.

A normal QUAM receiver, would use a phase lock loop, and a VCO to generate a carrier, and a quadrature carrier, to synchronously demodulate the L+R and L-R audio signals. This scheme doesn't work with C-QUAM, because the QUAM envelope was modified in creating the C-QUAM signal. One way to restore the C-QUAM signal to the original QUAM form, so it can be processed by normal synchronous demodulators, is to correct the envelope with a "Cosine Corrector". The Vector math of this is too complicated to get into here, but it is basically an open loop process that depends on highly precise analog functions to generate the cosine of the C-QUAM signal phase, and then divide the C-QUAM signal by the cosine function, to regenerate the original QUAM signal. This process is described in the paper referenced below.

The method actually used in most analog C-QUAM receiver chips makes use of a high gain feedback loop which forces the output of the L+R synchronous demodulator to be equal to the output of a precision envelope detector, this is done as follows. First, since the envelope of the C-QUAM signal is a faithful copy of the L+R sum signal, an envelope detector is used to recover the L+R sum signal, or monophonic audio. The L+R sum signal from the envelope detector is then compared, in an error amplifier, with the L+R audio signal coming out of the QUAM synchronous demodulator. This error signal is then used to control a variable gain amplifier, or analog multiplier in the input to the QUAM synchronous quadrature demodulators, in such a way that the envelope is forced back to the normal QAUM form. The L-R output from the second synchronous quadrature demodulator, is then distortion free, and can be matrixed with the L+R signal from the envelope detector, to recreate the left and right audio signals at the output of the receiver.

To identify C-QUAM AM Stereo Broadcasts, 25 Hz tone is added the L-R stereo difference signal which modulates the quadrature carrier. The 25 Hz tone modulates the quadrature carrier with 5% modulation. Unlike the 19 kHz pilot tone used in FM Stereo, this 25 Hz tone does not play any part in the demodulation of the AM Stereo signal, it's only purpose is to identify AM Stereo Broadcasts, so the receiver can automatically switch into stereo mode, and light an "AM Stereo" light.

The Magnavox system -

This is the original system selected by the FCC. It uses a very simple method for transmission, which is why it was probably chosen at first. The left minus right stereo information is transmitted by low level phase modulation of the carrier along with the conventional left plus right mono amplitude modulation. In the receiver, an envelope detector recovers the AM while a PM detector demodulates the left minus right stereo information. The PM detector is preceded by several excellent stages of limiting to remove all the AM components. Gain tracking is used between the AM and PM detectors to keep the signals in proper proportion to each other. The outputs of the detectors are fed through an audio matrix, recovering left/right stereo. A 5 Hz pilot tone, transmitted along with the left minus right information, is used to identify a station transmitting in stereo.
 

The Kahn system -

Kahn Communications of Freeport, Long Island was one of the early AM stereo pioneers. Kahn also used left minus right phase modulation in his system but by adding the proper phase shifts to the audio it is possible to generate an independent sideband signal with right on the upper sideband and left on the lower. The left plus right signal is phase shifted -45 degrees while the left minus right is shifted +45 degrees (a total of 90 degrees). The AM and PM sidebands interact producing an independent sideband signal much like a phasing type sideband rig. Two receivers off tuned to either side of the signal will produce stereo with some degree of separation. A radio tuned to the center of the signal will hear mono. Detecting the AM and PM signals, undoing the phase shifts and feeding the signals through an audio matrix is another way to recover the stereo audio.
 

The Motorola system (CQUAM) -

The Motorola Compatible Quadrature AM system (CQUAM) is the system in use today for AM stereo. This system transmits stereo by using 2 phases of the RF carrier 90 degrees apart. Each phase of the carrier is fed to a balanced modulator. The balanced modulator that is in phase with the original RF signal receives left plus right mono audio. The balanced modulator that is 90 degrees out of phase receives the left minus right stereo information. The balanced modulator outputs are summed together with the original in phase carrier and then passed through a limiter so only the phase information is retained. This signal is then modulated by the conventional means in the transmitter, producing a quadrature AM signal that is compatible with mono AM radios. Stereo identification is provided by a 25 Hz pilot tone transmitted in with the left minus right information. This system may be decoded using a chip like the Motorola MC13020P.