Mr. BLOOM. But you might get it from Paderewski on the first attempt? Mr. SMITH. Never. Mr. BLOOM. But you might. Mr. SMITH. I can not conceive of it. Mr. BLOOM. But if you did get it on the first playing of that composition, then you would not have that tremendous expense. And, by the way, do you not pay Paderewski royalties on a roll? Mr. SMITH. Yes. Mr. BLOOM. What royalties does Paderewski get? Mr. SMITH. I do not know the intimate details. Mr. BLOOM. Who does know the royalties that are paid to the big pianists of the_different companies? Mr. SMITH. I do not suppose anybody does except the pianists that have the contracts. Mr. PAYNE. May I make a suggestion? I represent one of the particular interests desiring to be heard a little later, and I wonder if we could not have those questions that were directed to the Victor Talking Machine Co. shown as having been asked when I do make my statement? Mr. BLOOм. I have you in mind. Mr. SMITH. I want to bring out one point that is right on what we are now discussing, and that relates to the factors in success of mechanical reproduction of music. We have had a lot of talk about the composer. Now, we admit that the composition is a very important and a vital factor, but there are very many other vital factors that must be considered in connection with the success of the mechanical reproduction of music. Now, successful mechanical reproduction of music would have been impossible without the many inventions which have culminated in the phonographs and the player and reproducing pianos which we have to-day. Improvements have been the result of untold hours of painstaking study and the investment of huge sums of money in research laboratories and their maintenance. What has been said of the development of the phonograph and the mechanically played piano may be said with even greater force of the phonograph record and the music roll. Music itself would never have been of much value or appeal if it had depended upon the crude records and rolls of early days. Invention, science, and capital, however, have developed records and rolls which now reproduce music marvelously and exquisitely and which have created a demand for music from practically the entire population of the world, instead of from only a comparatively few musically cultured people. As a matter of fact, even with the present high state of development of the phonograph record, much artistic creative ability must be expended on a copyrighted musical composition by the manufacturer before it is adapted to mehcanical reproduction. All of the recording laboratories are compelled to maintain large and expensive staffs of the most highly trained and able musicians available. Compositions must be entirely rearranged and adapted to a definite time limit set by the dimension restrictions of records and rolls, and this must be done without detracting from its artistic merits and appeal. Special arrangements must be made using peculiar combinations of musical instruments to obtain the same effect on the reproducing mechanism as normal orchestration has upon the human ear. All of that work and there is a tremendous amount of that artistic talent in the recording laboratory-has to be expended upon these records, and it all gets paid. You can see that there are many factors that have to be considered besides the interests of the composers; and we assert again that first and foremost comes the public, and a strong second is the music industry and the great number of investors who have invested in the music industry, relying upon the present state of the laws. There are many people working in there and a great amount of artistic talent also is represented by the phonograph companies. Now, it is interesting to note the prosperity of the music publishing industry since 1909. The growth of mechanical reproduction of music has been the greatest boon the music publishing industry has ever had. Every publisher knows that in his heart. Mr. BLOOM. How many publishers went into bankruptcy since 1909? Mr. SMITH. A great many of them; I do not know. Mr. SMITH '(interposing). How many would have gone into bankruptcy if there had not been any mechanical royalties? Mr. BLOOM. Now, Paderewski and all those great pianists play principally noncopyrighted music, do they not? Mr. SMITH. Principally, yes. I do not know. Mr. BLOOM. I am not asking you any trick questions. Mr. SMITH. I do not want to say yes. Mr. BLOOM. It is a fact that they play noncopyrighted music. Mr. SMITH. A great deal. Mr. BLOOM. I understood you to say that you represented the music publishers of your society? Mr. SMITH. Usually. Although there are some music publishers who agree with us, we do not pretend to represent them on this question. Mr. BLOOM. Now, you will agree with me that the cost of making a song popular costs a vast amount of money, much in excess of any $15,000 or $20,000 that you people have mentioned here. Now, you do not use for your rolls and the disk people do not use for their disks a song unless it is in demand? You only take those which they have spent their money on to make popular-isn't that a fact? Mr. SMITH. I do not think so, because we know the publishers are very anxious to put them on the rolls in order to make them popular. Mr. BLOOм. Then the records will make the song popular? Mr. SMITH. They are the greatest popularizers before the American public to-day. Mr. BLOOM. Will you mention one song that has been made popular by the record anything? Mention one song that was made popular. Mr. SMITH. "Duna." Mr. BLOOM. Well, all right. However, I never heard of it. Mr. SMITH. I suggest, if you want that information, that you secure it when the representatives of the individual companies appear. Mr. BLOOM. Who published it and who wrote it? Mr. SMITH. I do not know. The Victor Co. could tell you. I do not pretend to know the inside details. 30335-25†-PT 2- -7 Mr. BLOOM. Mention one that was published by a publisher, or mention one that was written by an author of some standing. Mr. SMITH. Now, you are trying to get me into details that I frankly admit I do not know about. Mr. BLOOM. What I am trying to do is to get on the record the fact that the cost of making a song popular is far in excess of any sum that any mechanical instrument manufacturer spends. Mr. SMITH. In answer to that question, I can only say this, that it is the understanding of the people whom I represent that that is not so, and that the recording of songs is a very important factor in making them popular, so much so that publishers, when they have a slow-selling number, are very anxious to have it played over the rolls. However, if you wish these details Mr. BLOOM (interposing). Do you know of a single publisher that has ever mentioned the fact that he is in opposition to the bill? Mr. SMITH. I believe Waterson, Berlin & Snyder. There are a lot of them that do not care one way or the other about it. Mr. BLOOM. Who, for example, outside of Waterson, Berlin & Snyder? Mr. SMITH. I do not want to put on the record the name of a concern, but I do know this, that in conferences with publishers, a good many of them have expressed the desire Mr. BLOOM. Mention one, won't you? Mr. SMITH. No; I do not see any reason to, because I do not remember the details of the firms. Now, I said that the growth of mechanical reproduction of music has been the greatest boon the music publishing industry has ever had. This is particularly true of so-called popular publishing. Whereas originally the music publisher depended solely on the meager profits from the sale of sheet music, they are now of little importance as compared to his royalties which are all profit. Incidentally, I might say that we think that this is not due to any decrease in the demand for sheet music, in spite of the frequently heard protests of publishers that they should get more money from mechanical royalties because mechanical reproduction is harming the sale of sheet music and, according to the latest census figures we could get, the sheet music sales have increased something like three-fold during the time the present law has been in effect. Now, I think the committee will be interested to know what the mechanical royalties paid have been during that time. Of course, we have no way of knowing what publishers who are not members of our association have received in the way of mechanical royalties. Mr. BLOOM. What is the increase in the manufacture of pianos? Mr. SMITH. Practically no increase. Mr. BLOOM. I want to get at some facts. Mr. SMITH. I will be glad to give the facts. There has been no great increase in pianos. Now, the royalty payments of our members, people whom we represent, but not all of them, but such members as gave us their royalty figures, are as follows. I will give you just the thousands and not go into the hundreds, but I will file this so that the committee will have it in the record: Making a grand total under this law from these people only, of $16,746,019.61. Mr. PERKINS. Take, for instance, the last figures. Among how many people was that $2,000,000 distributed? Mr. SMITH. I will come to that later. About 300 or 400 people in all, but probably more than half to a group of about six. Mr. BLOOM. You mean to say that this $16,746,019.61 is from the 2-cent royalties? Mr. SMITH. Surely; with the exception of a slight amount on the "word" rolls, which is not great. Mr. BLOOM. There is not included in that the royalty that you pay to the pianists or anyone else? Mr. SMITH. No, sir. Mr. BLOOM. What is the volume of business that that $16,000,000 represents in your sales? Mr. SMITH. Sales of records? Mr. BLOOM. I want the volume of business. Mr. SMITH. I gave it in the first part of my statement, $50,000,000 a year. 15 years Of $750,000,000 Mr. BLOOM. What would the sum total of that be? Mr. SMITH. I have not added it up. There are $750,000,000. You are talking about gross sales? Mr. BLOOм. Yes; that is what you are getting. worth of business, you paid $15,000,000 in royalties? Mr. SMITH. No; I take that back; $50,000,000 is up near the peak. During the first years it was way down. Mr. PERKINS. In one year it was $50,000,000 worth of business and they paid $2,000,000 on this 2-cent proposition, so it would be about 4 per cent. Mr. BLOOM. That represents how many authors, if you know? Mr. SMITH. No; I do not know, but I should say between 300 and 400 copyright owners at the present time, and I will give you some figures as to the percentage of this which goes to a few in a few minutes. Now, the question has been introduced here of payments to other people and payments to the artistic side of music. You have got to consider the artistic side of music, but the composer is by no meanslet me put it this way, that the copyright owner is not the only one who contributes from the artistic standpoint, and we have some figures from four of our companies which show that the artists and musicians who are employed regularly by the recording companies, the artists who make recordings, and the musicians who adapt and arrange the music, and the members of the many bands and orchestras who perform at the recording laboratories, are liberally paid by the music industry. In these four companies they collected over $6,000,000 in a single year. Mr. BLOOM. Let me get that straight. That $6,000,000 was paid in a year? Mr. SMITH. That is what the artistic side of music collected from four mechanical companies in one year. That is not the mechanical royalties alone; that is everybody who represents the artistic side. That is what you might call the contribution of the mechanical companies to the art of music. Mr. BLOOM. How much in royalties did you pay to the singers in that case? Mr. SMITH. I do not know what part the singers got, but there are a great many things in addition to the singers. Mr. BLOOм. Approximately? What I am trying to get at, Mr. Chairman, is what these figures represent as regards an author. The singer, the pianist, or the violinist we are not interested in, but I would like to know what the author received as the royalty for his composition. Mr. WEFALD. I should think you would be interested in that by way of comparison. Mr. BLOOM. If he gives me the amount that the author received, I do not need anything else. I can deduct that from the $6,000.000. Mr. SMITH. I did not gather those figures. I did not know just what the committee would want, and I got the figures that I thought the committee would want. I presume the individual companies. could give you that information. The elimination of compulsory mechanical license would be a severe blow to the phonograph, player-piano, and music-roll business. They are dependent for their success upon access to all existing musical compositions. This fact has been recognized in most of the other leading music-producing countries. Since the establishment of the principle of compulsory mechanical license by the United States it has been adopted in England, Canada, Australia, New Zealand, India, Newfoundland, Italy, and Germany. Its proposed elimination in this bill is directly contrary to the tendency in other countries. We think it is a step back. If compulsory mechanical license is eliminated from our copyright laws, the inevitable result will be a decrease in our exports of phonograph records and music rolls, because they are subject to a double royalty, namely, the royalty required in this country and that required in the foreign country. This export trade already suffers a heavy royalty burden which would be increased materially by this bill, due to the unlimited increase of the royalty rates in this country. In order to meet competition abroad our manufacturers will be compelled to establish foreign branch factories, especially in those countries having compulsory mechanical license. This will mean an exportation of American capital and the creation of competing plants abroad employing foreign labor. Mr. BLOOM. Does the Victor Co. export their records from this country to England? Mr. SMITH. I believe the Victor Co. has a plant in England. Mr. SMITH. They have a pressing plant in England. Mr. BLOOM. Does that company export any to Canada? |