STATEMENT OF MR. G. W. CASE, JR., NEW YORK CITY

Mr. CASE. Mr. Chairman and gentlemen of the committee, I represent the Brunswick-Balke-Collander Co., who have been manufacturers of cabinetmaking devices since 1845. That is three score years and ten that the Good Book says people shall live. They manufacture billiard tables, pool tables, bowling alleys, bar fixtures, automobile refrigerators, talking machines, and talking-machine records. One of the great things that our now famous friend Mr. Volstead did was to force the Brunswick-Balke Co. into the phonograph business, because the company's farseeing executives when they saw this prohibition coming, looked around to find out how they could keep in their employ the hundreds-I may say thousands of cabinetmakers they had employed in their factory for many, many years, and like good Americans they saw the opportunity of this phonograph business.

They had been manufacturing cabinets in a small way for other companies, and they thought if other companies could sell what they manufactured, why the probabilities were that they might be able to sell them themselves, so in 1915, if my memory serves me correctly, they went into the cabinet-manufacturing business, and in 1919 or 1920 they commenced to market their records.

Now, I have been, I hope, an attentive and an appreciative listener, not only to the arguments propounded by the proponents of this bill, but to the many illuminating and educating questions, and I say "many" advisedly, that have been put to the witnesses by this committee, and if I were not interested in this situation, the idea that I would have gotten was that the chief proponents of this measure were the poor downtrodden authors, collarless, holes in the seats of their trousers, because this avaricious phonograph industry was taking away their property rights for a mere pittance of 2 cents. I listened to our astute friends, Mr. Burkan and Mr. Mills, describe the hardships of these authors, and I saw the tears, great in quantity but crocodilian in quality.

Now, I am going to borrow your suggestion, if I may, and stick to my text. I am only going to speak upon this bill from two angles, first, the omission of the compulsory license provision, and second, the provision, I think it is number 12, to perform the work publicly, if it be a musical composition. Now, I am not going to attempt to discuss the law or the theory of this bill with you. That has been more ably handled by my predecessor than I could think of doing, but I am going to cite a few actual experiences which I have had during my connection with this industry, so that you gentlemen in the largeness of your intelligence can see how the present act affected not only the phonograph interests but the public, and perhaps then get into your mind that these provisions, the lack of one provision and the scope of another, are dangerous.

Now, the arguments, as I take them, have been that these grasping phonograph companies step up to the poor author and for this miserable two cents, divest him of his property. Now, that is not the fact. This poor author is just as much the owner of that property as I am of that scarfpin. It is his. He does not come to the phonograph company. The phonograph company never sees the author. I dare say with all the contracts that we have got for permission to use musical compositions there is not one with an author.

He goes to these gentlemen that are masquerading here as the authors' adherents and sells his composition for what he can get out of it. If that author came to the phonograph company direct and sold his composition, that is, this one right to reproduce it mechanically, do you think these publishers would be interested in that after that? No. What the publishers are interested in is the royalties they collect from phonograph companies and those royalties are the biggest part of these publishers' incomes to-day.

Now, if the copyright had dealt directly with the phonograph companies he would have gotten more than this 2 cents that they are harping on. Here are five companies represented. If the author gave permission to five companies he would get 10 cents for his composition, and we are not all the phonograph companies in the business. There are many more. When they say for 2 cents we are grabbing the property rights of this author, it is not the fact. Mr. BLOOM. You do not take the composition before it becomes popular, do you?

Mr. CASE. We frequently do, I am sorry to say, because the publishers overwhelm our laboratories with numerous compositions which they issue, and they assure you that they will make it popular, but as soon as they agree to get us to put it on the record they drop it. Mr. BLOOM. If the author of "Yes, we have no bananas" came to you first you would not have taken that at all?

Mr. CASE. I do not know. I do not pass on those things.

Mr. BLOOM. It is a fact that no one, no record manufacturer, will make a record or roll unless the composition is popular and in demand? Mr. CASE. They frequently do.

Mr. BLOOM. The greater percentage of them do not.

Mr. WEFALD. Would not the passage of this bill result in the fact that you would be dealing directly with the authors?

Mr. CASE. I do not know if it would or not. I would be glad to deal directly with the author, and will make him a better proposition than he now makes with the publisher. It is not an inconsiderable income for an author that has a contract with five at 2 cents or 10 cents, so he gets 20 cents every time one is turned out.

Mr. WEFALD. You are not quite sure as to that? You would not say for sure. You are not quite sure that would be the effect of the passage of the bill?

Mr. CASE. I do not know if the author would come to us. Up to date we do not deal with authors. We have to deal with these publishers.

Mr. WEFALD. You maintain that it is the publishers' interests in the passage of this bill and not the authors'?

Mr. CASE. Yes, sir.

Mr. WEFALD. You would rather deal with the authors?

Mr. CASE. I do not say I would rather deal with them. We would be glad to deal with them, and would give them more money than publishers give them.

Mr. BLOOM. Do you not believe that both the authors and the publishers are interested in this bill?

Mr. CASE. Yes, sir.

Mr. BLOOM. Then the author is interested?

Mr. CASE. Not to the extent of the publishers.

Mr. BLOOM. Does not the publisher divide 50-50 with the author?

Mr. CASE. Very seldom, in my opinion.

Mr. BLOOM. Have you ever seen a royalty contract with a publisher?

Mr. CASE. Between whom? The publishers are very loathe to disclose those contracts to anybody, especially to the phonograph companies.

Mr. BLOOM. If it were a fact that the authors got 50 per cent of what the publishers get, then what difference does it make?

Mr. CASE. If it were a fact it would make very little difference, if it were a fact.

We frequently get in our business complaints from authors and they say, "Dear Brunswick, I sold my rights to So-and-so. He has not kept his promises to me. I understand you make records of this selection and pay large royalties. Will you please hold up these royalties and not pay them to the publisher until he pays me?" What can we do? We say, "We feel very sorry for you, but we have looked up the copyright on those selections and find that the person that files a claim with so and so, the publisher, and we have a contract with that publisher. We can not for the sake of getting that publisher to play fair with you put ourselves in the position of not paying the publisher so he will sue us. We are very, very sorry for you." That happens every week in my experience.

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Mr. BLOOM. Will you give the committee the name of one publisher?

Mr. CASE. I can go to my files and gives you the names of many. Mr. HAMMER. I do not think that will throw any light on it. Mr. CASE. I am giving you gentlemen a little information. Mr. HAMMER. I think that is a confidential communication. I think that the gentlemen has a right to illustrate his statement by saying that authors have written that to him. If they question the statement and it is denied, I think he can give them private information, but I do not think we ought to allow an author to be placed in a position so that it would make it difficult for him to deal with the publisher.

Mr. BLOOM. I merely asked the question and the gentleman is willing to give the name for the record. If he does not want to give the name

Mr. CASE. I do not think I ought to give the name.
Mr. BLOOM. You said you would.

Mr. CASE. I will give you the name privately; yes.
Mr. BLOOM. I would like to have it.

Mr. HAMMER. I think the gentleman has a right to illustrate his argument by making that statement, and if it is denied, and if it is alleged that he is making a false representation, then I think that he would, as an honorable man, be willing to show it to honorable men who would not disclose it.

Mr. CASE. Now it is conceded, I take it, that the biggest part of the income of these publishers comes from the mechanical royalties. Now let me tell you how it operates. There are some good publishers. Our laboratory to-day is overrun with publishers' representatives. They sit out on the front steps like a pack agent and say, “Please take this." Some we take and some we do not take.

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The ones

we do not take they bargain, and if Brunswick wanted to do that thing we could get right from these publishers to-day the right to use many musical compositions for much less than a two cent royalty. Up to date we have been paying two cents. Some of the companies I am told are bargaining to-day. Now my friend Mr. Bergen, shaking with indignation, held up a piece of paper here and charged the Victor Co. and the Brunswick Co. with bad faith, one record from the Victor, six from the Brunswick. He mentioned in that statement the great firm of Ricordi. Mr. Maxwell is the head of that firm and he is quite some author himself. He wrote to me the other day about

Mr. CASE. Mr. Maxwell is the man that accused the Brunswick. Mr. CASE. Mr. Marshall, who made this change against Brunswick and Victor Co., wrote to me the other day and said," You are using musical compositions of ours and have not paid your royalties. We would like to know why not, and demand that we pay the royalties.' And I wrote back and said, "The reason we did not pay you any royalties on this selection was this: in the first place this particular musical selection we are using was copyrighted in 1912 by a man by the name of Jono, who we have found is in the ladies' dressmaking business in East 34th Street in New York, and I find that you copyrighted a rearrangement of this same selection a year later, and therefore I see one reason why you are not entitled to the royalties, because we did not use your copyrighted composition." I had received from Mr. Jono a short time before this another letter saying, "We see that you are using our selection, and you have never paid us any royalties. All the other companies pay us royalties. Why don't you?"

I wrote back and said, "Well, we have used it, but have not paid you because the copyright records show this record was copyrighted by an Italian in 1912; when you copyrighted this composition there was no reciprocal license arrangement between Italy and The United States, under which an Italian was entitled to collect mechanical royalties in America unless he happened to be living in America at the time he filed his copyright."

The CHAIRMAN. Do you not think that you ought to have paid the Italian a royalty, whether you were compelled to under the law or not, as a matter of fairness?

Mr. CASE. If Brunswick paid royalties to all the people that make demands on them for royalties, Brunswick would be in that class of bankrupt phonograph comparies of which we have heard so much The CHAIRMAN. They do not pay any royalties on anything unless they have to?

Mr. CASE. That is the answer. Mr. Maxwell continued his correspondence and said, "For your information I want to tell you that you are in error about the situation, that Mr. Salvatore Cordeli, at the time he copyrighted this musical selection, was actually residing in the United States," and I said, "If you will give me some proof of that I will be glad to pay you royalties, which amounts to $40 or $50." Now he gives me an affidavit, not from Mr. Cordeli, you understand, but from Mr. Jono. It is Mr. Jono swearing that Mr. Cordeli lived out in the country, and did at the time this musical composition was copyrighted.

I do not have to argue with you gentleman that the man to get that affidavit from was Mr. Cordeli, not Mr. Jono.

Now these publishers, gentlemen, have been carried away with the idea that phonograph companies are the proper people to keep funds in the bank. I have sent checks-this is a bad thing for my clients to hear to the owners of musical copyrights under the impression that they were entitled to them, and I am sorry to say they were not, and when I called their attention to this mistake on my part, one of the people wrote me back and said, "Yes, we got this check. We knew we were not entitled to it, but we thought a great company like the Brunswick wanted to pay us out of the goodness of your hearts." They never sent it back when they got it, and they do not deserve it.

There has been some question about phonograph bankrupts. I am giving you my opinion. The phonograph bankrupts, in my humble opinion, in addition to present business situation, are due to the large percentage that these copyright royalties have in the cost of the manufacture of a record. A record to-day casts approximately, we will say, 10 cents. That includes the copyright royalty rate, and that record there is a 4-cent copyright record rate, and on the 16 cents the poor author gets 4 cents or 25 cents.

Mr. BLOOM. Is it not 2 cents?

Mr. CASE. There is a record on each side.

Mr. BLOOM. They are two separate authors.

Mr. CASE. Not necessarily.

Mr. BLOOм. Then it is two different compositions.

Mr. CASE. Yes; but it amounts up to 25 cents there.
The CHAIRMAN. You mean there is a song on each side?

Mr. CASE. Yes, sir; a double record.

The CHAIRMAN. Has not the radio got something to do with the slump in your line?

Mr. CASE. All the people say it has. I am not a business man. I am a lawyer.

The CHAIRMAN. You lay it all to the authors, do you?

Mr. WEFALD. They do not buy so many lectures, because they hear so many lectures on economy on the radio.

Mr. CASE. They hear it over the radio without paying anything. Mr. WEFALD. They get so many lectures on economy they quit buying phonograph records.

Mr. CASE. They say, "Why shall we spend money for records when we can hear it for nothing over the radio?"

On the remaining points I will bore you with, that is this provision to perform the said work, if it be a musical composition-I say that is a dangerous provision, and I want to point out one instance that I know of that shows you to what extent these musical publishers went under the limited right given under the present act.

The present act says to perform the copyrighted work published for profit, if it be a musical composition. Here the "published for profit" is left out. My good friend, Mr. Mills, and his able sleuths of the Musical Publishers' Protective Association did this: In far-off Texas there were two railroads crossing, and at that junction was a little house where a little woman lived with two children. These trains used to meet there about noontime. The train hands got off, sat on the fence, ate sandwiches out of tin boxes, and it occurred to her that