In extending the right of copyright to cover mechanical reproduction, Congress realized that it was giving to the copyright owner far greater rights than he had hitherto enjoyed in any country of the world, and did so primarily in consideration of the rights and interests of the public and not of those of the copyright owner.

FACTORS IN SUCCESS OF MECHANICAL REPRODUCTION OF MUSIC

Since its inception, the mechanical reproduction of music has grown enormously. The availability of musical compositions, as provided by the mechanical license provision of the law, has been a vital factor in this growth, but other factors have been equally as essential.

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 mechanical reproduction. All of the recording laboratories are compelled to maintain large and expensive staffs of the most highly trained and able musicians available. Čompositions 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 merit 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. This requires the services of as great musicians and as much creative ability as did the original composition of the music.

In order to bring the price of music mechanically reproduced within the limits of the public purse, the development of large scale production and intricate manufacturing processes has been necessary, also requiring much research and capital investment. Not only has it been necessary to produce these products at a low cost, but an especially elaborate system of distribution had to be devised to bring these musical compositions quickly and surely to every town and hamlet in the country, and even to the entire world, in order to satisfy the public demand, which in the case of a popular hit lasts but a very short time. Much capital expenditure has been made also in advertising and sales promotion work.

It can readily be seen that there are many factors which have contributed to the development of mechanical reproduction of music, and which are now vital to it. Sound copyright theory requires that the interests of all these factorsthe inventors, the investors, the employees, and the musicians of the mechanical reproducing industry, and especially of the music-loving public-be properly considered in connection with any proposed change in mechanical copyright.

PROSPERITY OF MUSIC PUBLISHING INDUSTRY

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. 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. Incidently, 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, for the music publishers actually sold in 1923, according to the latest census figures available, nearly three times as much sheet music as in 1909. The

royalty payments of our members, who constitute by no means all of the companies who pay mechanical royalties, have been as follows:

Advocates of the repeal of compulsory mechanical license make much of their claim that those responsible for the art of music are entitled to remuneration for the results of their brain efforts. We believe that "the laborer is worthy of his hire," but we also believe that the music industry pays the music art well for its contribution to the mechanical reproduction of music. The mechanical royalties constitute only a minor part of the financial return which the art of music collects from the industry. The artists who make recordings, the musicians who adapt and arrange the music, and the members of the many bands and orchestras who perform at the recording laboratories, all represent the artistic side of music and are well and liberally apid by the music industry. The art of music collected over $6,000,000 in a single year from only four of our members.

SUCCESS OF AMERICAN MUSIC INDUSTRY DEPENDS ON COMPULSORY MECHANICAL LICENSE

The elimination of compulsory mechanical license would be a severe blow to the phonograph, record, player piano and music roll businesses. 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.

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 means an exportation of American capital and the creation of competing plants abroad employing foreign labor.

It is interesting, and perhaps significant, that there is practically no phonograph record or music roll manufacturing business in those countries which do not have a compulsory mechanical license system. Thus France, a great industrial country known for the genius of its musical composers and the widespread love of and demand for music by its people, has no establishment of any consequence manufacturing phonograph records. On the other hand, in India, which has a compulsory mechanical license system, but where one would not expect to find much of a music industry, the manufacturing of phonograph records is important and flourishing.

HIGHER PRICES AN INEVITABLE RESULT

Another result of the elimination of compulsory mechanical license would be higher prices of phonograph records and music rolls. Of course, the amount of the increase in royalty rates can not be foretold exactly in advance. However, it may be significant that while a phonograph reproduction of a song hit now carries a rate of 2 cents for each record produced, the rate for each word music roll of the same song, not covered by the compulsory license provision, is often as high as 122 cents. Cheaper records are sold by the manufacturer for as little as 18 cents. An increase of 10 cents in the cost of production on such records

would mean at least that increase in the wholesale price, and the price to the public would be increased at least 50 per cent. Even in the highest priced records the increase would be substantial. Does Congress wish to make the public pay from 15 per cent to 50 per cent more for their phonograph records and music rolls in order to extend the monopoly of a few copyright owners?

We have recently heard complaints from the music publishers about hard times. We realize that the income of the music publishers from mechanical copyrights is much less now than it was a few years ago. We have even heard this stated to be a reason why compulsory mechanical license should be eliminated, thus enabling the publishers to charge what the traffic will bear in order to make up by higher royalty rates the amount lost through the decreased demand for records and rolls. The publishers apparently forget that the conditions which have caused a drop in the publisher's revenue from mechanical royalties, caused fewer sales by the record and roll manufacturers, greatly decreased profits, huge losses, liquidation, and bankruptcy. The record and roll manufacturers have passed through a period of business depression, readjustment, and uncertainty which has taxed their resources and abilities to the utmost. Many of them failed to survive. The survivors are in no position to have the Government grant unrestricted monopolies on a basic raw material-music.

The present precarious position of the industry, which makes mechanical reproduction of music available to the public, warrants the utmost protection from any extension of copyright monopoly.

DANGER OF GREAT MUSIC TRUST

In the many hearings held prior to the passage of the copyright act of 1909 the question of the effect of the extension of copyright control to mechanical reproduction upon the creation of a monopoly in the music business was given the utmost attention by Congress. At that time Congress believed that an unrestricted grant of the right of copyright in musical works would create such a monopoly, and hence would be contrary to public interest. The report of the committee transmitting the bill says "How to protect him (the composer) in these rights without establishing a great music monopoly was the practical question the committee had to deal with." And again:

"It was at first thought by the committee that the copyright proprietors of musical compositions should be given the exclusive right to do what they pleased with the rights it was proposed to give them to control and dispose of all rights of mechanical reproduction, but the hearings disclosed that the probable effect of this would be the establishment of a mechanical-music trust. It became evident that there would be serious danger that if the grant of right was made too broad, the progress of science and useful arts would not be promoted, but rather hindered, and that powerful and dangerous monopolies might be fostered which would be prejudicial to the public interests. This danger lies in the possibility that some one company might secure, by purchase or otherwise, a large number of copyrights of the most popular music, and by controlling these copyrights monopolize the business of manufacturing and selling music-producing machines, otherwise free to the world."

The conditions are as favorable now, if not more so, toward the monopolistic control of mechanical copyrights than was the case in 1909. To-day, the control of copyrights of the current popular music is largely vested in a little group of music publishers in New York City. Approximately 60 per cent of the mechanical royalties on popular music are collected by only six New York music publishers although the mechanical companies pay royalties to between 300 and 400 different copyright owners. The publishers have a society to which they assign complete control of all their public performing rights. The license fees paid by all of the theaters, motion-picture houses, hotels, restaurants, dance halls, and radio broadcasting stations throughout the entire country for the permission to play popular music is levied and collected by the agents of this society. What a short step it would be to pool their mechanical rights as they have their public performing rights.

The music-roll manufacturers have already learned what it means to have to depend upon this little group of publishers for most of their popular music, without the protection of compulsory mechanical license. Inadvertently, Congress failed to include "word" music rolls in the 1909 act. Therefore, the music publishers have charged what the traffic would bear. Music-roll manufacturers found practically identical restrictions imposed by all the leading popular music publishers in their mechanical contracts. The price for popular

hits was usually held to 122 cents. The manufacturer had to take six numbers each month, irrespective of the size of his business or his requirements, or he could get no contracts at all. It was difficult to get contracts for hits without also taking slow selling and undesirable numbers. These severe restrictions, imposed almost uniformly by the large publishers, contributed greatly to the liquidations and bankruptcies of roll manufacturers, as a result of which only a few survive to-day.

If compulsory mechanical license is eliminated, the practice of making exclusive contracts will inevitably develop. A mechanical company with an exclusive contract will have a complete monopoly for such compositions as are covered by the contract. This may be confined to individual compositions, or to groups of them. In either case, the small company will be unable to get the popular hits and will be forced out of business.

What is to prevent, in fact, what can hinder, one or two of the strongest mechanical companies from making exclusive contracts with the little group of popular publishers for all their mechanical rights. This would give such companies a practical monopoly of the mechanical reproduction business.

A mechanical music monopoly would be especially serious to the public. The public uses the records and rolls, in phonographs, player and reproducing pianos. Records and rolls are not interchangeable for all makes of phonographs and pianos. There are three types of records, the lateral disk, the vertical disk, and the cylinder. If the manufacturer of one type of record gets an exclusive contract, the owners of all phonographs using the other types will be prevented from the enjoyment of this particular music. The rolls for the leading reproducing pianos are not interchangeable, so that if the makers of one piano get an exclusive contract for a composition the owners of other makes can not play that music. Congress should be as careful to safeguard the public from monopoly to-day as it was in 1909.

WILL BENEFIT PUBLISHERS NOT COMPOSERS

The composer is considered in connection with the enactment of copyright legislation so that his stimulation to greater efforts may promote the art of music for the benefit of the public. However, it is difficult to see how the elimination of the compulsory mechanical license can be of sufficient benefit to composers generally to result in either more or better music. The publisher will attempt to enforce a higher royalty rate than at present, but it by no means follows that the composer will be enriched thereby. In fact, this will seldom be the case, for the owners of most such copyrighted musical works as are used by the record and roll manufacturers are the music publishers, not the composers. The amount received by the composer is usually meager indeed as compared to the huge royalties received by the publisher from the same composition, if it meets with any success in mechanical reproduction. It is reported that the actual composer of the waltz, Three O'clock in the Morning, never got a cent for his creation, while the mechanical royalties alone enriched the publisher by at least $100,000. It is not unusual for composers to get only $25, $50, or $100 for compositions which later earn large royalties for the publisher. Dardanella, probably the greatest popular musical hit of all times, was sold by the composer for $100, and paid the publisher in mechanical royalties alone considerably over $50,000.

Most popular composers sell their compositions for a flat sum, although some of them are employed at a weekly wage by music publishers. At the time the composer offers his composition to the publisher neither the publisher nor the composer, nor anyone else can tell whether it will ultimately appeal to the public. The publisher must and will buy every composition he can at the lowest possible price. Hence the fact that the music publisher, in case the composition becomes a hit, will later be able to get high mechanical royalty rate if this bill is passed, will not materially affect the price he will pay the composer. Only a few of the best known composers are in a position to force their publishers to share in any success which their compositions may have after they go out on the records and rolls.

It is quite apparent that the real beneficiaries of the elimination of compulsory mechanical license are a comparatively small number of music publishing concerns and a mere handful of composers who have attained an exceptional reputation. The great rank and file of composers will not benefit in any manner whatsoever. Under the circumstances how can the proposed extension of the monopoly of copyright to cover mechanical reproduction without restrictions

contribute materially to the promotion of "the progress of science and useful arts," which is the only reason Congress can have for creating any copyright monopoly whatsoever.

LITTLE CREATIVE GENIUS IN MUCH OF THE POPULAR MUSIC

Much of the current popular music is based upon works of the old masters. The repetition of a single theme taken from an old symphony or opera, or perhaps themes from several original sources, a change in time, a different accent, adaptation to the modern dance rythm, make a popular hit which may earn thousands of dollars in mechanical royalties.

Musical experts say that the particular theme which made Marcheta a hit can be found in the overture of the Merry Wives of Windsor by Nicolai. That appetizing and inspiring song Yes We Have No Bananas may be found almost note for note in part in the Messiah by Handel, and in part in I Dreamt that I Dwelt from the Bohemian Girl by Balfe. I'm Always Chasing Rainbows in its main theme is note for note like parts of Chopin's Fantasie-Impromtu, opus 66. These are but a few of many examples which could be cited. Such is the creative genius which the advocates of this bill say must be protected by a drastic extension of copyright monopoly in order that we may be assured of progress in the musical art.

If compulsory mechanical license is eliminated citizens of such foreign countries as Great Britian, Canada, England, Italy, Germany, Newfoundland, Australia, New Zealand, and India, will be given rights in this country which they do not enjoy in their own countries. This seems unreasonable.

The primary purpose of this bill is "to permit the United States to enter the International Copyright Union." We have heard it inferred, if not actually stated, that this is the reason for the elimination of the compulsory mechanical license. We, therefore, assert most emphatically that it is unnecessary to alter our existing copyright laws in respect to mechanical reproduction in any way whatsoever in order to permit or facilitate our entry into the International Copyright Union. There is nothing in the Berne convention providing what provisions countries subscribing to it shall make in their own copyright laws with respect to mechanical reproduction. In fact, several countries which have compulsory mechanical license provisions analogous to ours are already in the International Copyright Union.

In concluding this argument with respect to the elimination of compulsory mechanical license, we respectfully urge your committee to consider this question carefully from the standpoint of the public. The interest of the public is paramount. We maintain that public interest demands the retention of the principle of compulsory mechanical license, and we further believe that the progress of the art of music will not be promoted by its elimination.

RETROACTIVE FEATURES OF THE BILL

Prior to 1909, all music was in the public domain for the purposes of mechanical reproduction. When Congress then extended the copyright control in musical works by giving the copyright owner a restricted control of mechanical reproduction, which he had never before enjoyed, the injustice to the public of interfering with works already in the public domain was clearly recognized. Therefore, the compulsory mechanical license provisions were not made retroactive, so that all musical works copyright prior to 1909 are still in the public domain for the purpose of mechanical reproduction. Now the advocates of this bill actually propose to take from the public its rights in the same musical works which Congress refused to take in 1909.

The public has had the right to mechanical reproduction of musical works copyrighted since 1909, subject only to the restrictions of the compulsory mechanical license provision. If this provision is now eliminated and the retroactive features remain in the bill, then the public also loses valuable rights in all musical works copyrighted since 1909.

We do not believe that your committee will ever consent to such a confiscation of the rights of the public.

SMALL MANUFACTURERS WILL BE ELIMINATED

One of the greatest assets of a phonograph record or music roll manufacturer is his catalogue; that is, his library of musical compositions already recorded. It takes many years and requires a huge investment to build up a good catalogue."