of the copyright law are detected, claim is asserted against the exhibitor in an effort to stop such violations and bring such offending exhibitor to justice. As the attorney and executive secretary of the New York Film Board of Trade, I represent the distributors in the metropolitan territory in such cases. Moneys received in settlement or upon judgment are deposited in the New York Film Board of Trade trust account, held in trust for the distributors whose copyrights have been infringed.

After the cost of investigation has been deducted, the sums remaining are distributed among the distributors whose copyrights have been infringed. The cost of investigation does not include any fee for myself as attorney. My compensation in all such copyright violations is included with that for other professional services which I perform and for which I am compensated by an annual retainer. Consequently, whether there are many or few suits instituted for copyright violations and whether there are recoveries or not upon them has no effect directly or indirectly upon the compensation received by me for such representation.

The sole purpose of my activities with reference to the improper use of motion picture film, is to prevent copyright violations and to recover wherever possible, at least the cost of investigation. It is extremely difficult to prevent these illegitimate practices. Experience shows that violators, even after detection, repeat their violations several times. This is indication of the fact that the damages recoverable under the present law are an insufficient deterrent to the further commissions of the violations.

I have read the statement made by Mr. Sidney Samuelson before the congressional committee. The statement of Mr. Samuelson on page 53 of the record "that that sum and the others were entered into the account of the New York Film Board of Trade and the owner of the copyright does not get the benefit" is absolutely false. Moneys collected for copyright violations are held solely for the benefit of the owners of the copyright, even to the extent that no attorney's fees for direct representation is charged.

II. THE STATEMENTS FILED BY MR. SAMUELSON WITH REFERENCE TO THE RIVOLI THEATER, BELMAR, N. J., THE PLAZA THEATER, LINDEN, N. J., AND THE AMERICAN AND CAMEO THEATERS IN NEWARK, N. J., ARE INCOMPLETE, INACCURATE, AND A MISREPRESENTATION TO THE CONGRESSIONAL COMMITTEE

(A) Rivoli Theater, Belmar, N. J.-A reading of the record reveals that Mr. Samuelson desired to submit the statement with reference to the above theater in confidence. Its inaccuracy required just such secrecy. According to the statement filed with the committee, the exhibitor admits exhibiting one photoplay upon a day not booked or bought for and not paying for it on the theory as contained in his statement that "* * in an emergency of this

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kind there would most likely have been no charge for the additional day inasmuch as we played the picture without advance advertising." According to the statement, the exhibitor made a settlement "After several conferences with attorneys for copyright interests What has been omitted to be said is that in this case action for damages for copyright infringement was instituted in the United States District Court of New Jersey by the service of a bill of complaint upon the exhibitor in July, 1930. The statement also omits the fact that the exhibitor appeared by attorneys and filed an answer to the bill of complaint. Pursuant to the equity rules, interrogatories were then propounded to the defendants. They failed to make answer and notice was served upon them of an application for an order to compel the defendants to answer such interrogatories. The case was marked ready for trial for the November term and rather than face a fair hearing of the controvery before the Federal court, the defendants' representatives repeatedly came to my office to request settlement and finally effected it on the basis of only $500. A reconstructed investigation of the number of violations committed by them revealed 84 violations in addition to the instance admitted in the statement filed with the congressional committee. This case is a splendid example in justification of the present damage provisions of the copyright law. The detected instance of a violation is only a small indication of the number of violations which have not been detected. For $500 the defendants obtained a general release for all previous infringements known and unknown to the distributors. Actually in this case as well as in others, the damages if proportioned in accordance with the actual number of violations may be even less than the contract price of the photoplays involved.

In the instant case the corresponding attorney in New Jersey received a fee of $75 and the United States marshal's fee for the service of the bill of complaint upon the defendants was $35. Thus there remained as settlement moneys to be distributed to the copyright owners only $390.

It is important to note the following inaccuracy of the statement filed with reference to this case: The exhibitor states that the photoplay Sunnyside Up was booked for February 3 and 4 and that because of poor business on the preceding photoplay he exhibited Sunnyside Up February 2, 3, and 4. The actual fact is that Sunnyside Up was booked by the exhibitor for February 2 and 3 and was exhibited an extra day on February 4. In other words, the photoplay was not exhibited an extra day preceding its booking, but rather an extra day succeeding its booking. The importance of this fact is that it indicates a deliberate intent to violate the copyright law. The defendant was not caught short with a bad photoplay and filled in another, but found a profitable photoplay on his hand and decided to exhibit it an extra day without making any payment therefor. His explanation that "there would most likely have been no charge for the additional day" is obviously strained. The exhibitor knows that there are charges in accordance with the number of days for which photoplays are exhibited. If he thought there would be no extra charge, why didn't he call the distributor or send a telegram or even notify it after his exhibition? Why was it left to investigation and detection to uncover the use for an extra day, and why in an answer filed in the Federal Court did the exhibitor deny the use of the photoplay for an extra day?

Most significant of all is the fact that the statement filed attempts to create the impression that by some strange coercion settlement was effected. It deliberately omits to state to the committee that suit was filed in our Federal court and that the defendant had full opportunity of proving his innocence had he been innocent. Is suit to protect the copyrights of the owners thereof, coercion upon the defendant? The exhibitor and Mr. Samuelson owed to the congressional committee a full and honest statement of the incidents about which they were making complaint. Had they made such complete statement, the incident complained of would have justified the present provisions of the copyright law.

(B) Plaza Theater, Linden, N. J.—Mr. Samuelson in his testimony and the statement filed by him, fails to inform the congressional committee that in this case suit has been instituted in the United States district court for the district of New Jersey on behalf of Educational Film Exchanges, Metro-Goldwyn-Mayer Distributing Corporation, and Tiffany Productions (Inc.) for infringements of the copyright law. He further fails to inform the committee that answers have been filed by the exhibitor in this case and that the matter is now pending for trial. In view of the fact that this case will come to trial, I deem it proper not to discuss the facts and to content myself with the statement to the congressional committee that the explanations given by the exhibitor in the statement filed are false.

It is significant that an attempted settlement was made of this case by the exhibitors who were represented by their attorney Mr. Norman Samuelson, a brother of Mr. Sidney Samuelson, who testified before the congressional committee. Mr. Norman Samuelson is also attorney for the exhibitors associations of New Jersey represented by Mr. Sidney Samuelson. Mr. Norman Samuelson investigated the facts himself and came to the conclusion that the exhibitors were liable. The sole question was one of the fair amount in settlement. A settlement in the amount of $1,250 was agreed upon. The parties and their attorney met in my office and a settlement agreement was actually drawn and approved by Mr. Norman Samuelson, as well as by his clients. This settlement agreement provided for the payment of $1,250 over a period of time. The only reason it was not signed was that I insisted upon the personal signature of Mr. Irving Dollinger and Mr. Aaron Dollinger, while they were only willing to sign the corporate signature of the Savoy Holding Corporation under which they operated. Upon their refusal personally to guarantee the settlement, I, on behalf of the distributors, refused to accept $1,250 and suit was instituted.

All of these facts were omitted from the statement filed with the congressional committee. The exhibitor did confess his violations in his very statement. For he said: "Of course, I must confess that I took it upon myself to set the 3-day booking without his (the salesman's) notice." This confession applies to 22 violations.

(C) American and Cameo Theaters, Newark, N. J.-In this case it is not denied that the exhibitor exhibited photoplays on an extra day for which he did not pay. His claim is that the distributor knew about it. He points to the

words upon the confirmation of bookings, "Reserving an extra day." An investigation revealed that the exhibitor on numerous occasions gave notice that he desired to reserve photoplays for an extra day and then preceding the first play date would come to the distributor's office and arrange for a price for the third day. If he could not agree upon the price or did not desire the third day, the photoplay would be shipped for two days. If he agreed upon a price for the third day, the photoplay was then booked for three days. In the instant case the exhibitor did not agree upon a price for the third day and the photoplay was not booked for the third day. Nevertheless, it was exhibited a third day and not paid for. The fact that the exhibitor on past occasions agreed on a price for the extra day and paid for the extra day is conclusive proof of his guilt in the instant case.

III. THE PROVISIONS OF THE PRESENT COPYRIGHT LAW ACT AS SOME DETERRENT TO DISHONEST EXHIBITORS AND DO NOT AFFECT THE LARGE BODY OF HONEST EXHIBITORS

The statements filed by Mr. Samuelson do not claim that any threats were made or improper tactics adopted in negotiating settlements with exhibitors. The only statement to this effect is made by Mr. Samuelson himself who has no personal knowledge of any negotiations. Exhibitors who have come to my office to settle matters have been treated with courtesy. As a practicing attorney I have full appreciation of the ethical proprieties involved in the discussion of settlement between lawyer and prospective defendant. The imaginary conversations Mr. Samuelson testified to which took place between myself and exhibitors are entirely false.

Sworn to before me this 16th day of March, 1932.

LOUIS NIZER.

HENRY R. DANZIGER,
Notary Public.

The CHAIRMAN. Is Mr. Alexander Moore of Pittsburgh present? (No response.) Is Mr. C. C. Herman-Dr. C. C. Hermanpresent?

(No response.) Is Mr. George Aarons, representing the Motion Picture Theater Owners of eastern Pennsylvania, present? We will now hear from Mr. Aarons.

STATEMENT OF GEORGE P. AARONS

Mr. AARONS. I represent the Motion Picture Theater Owners of eastern Pennsylvania, southern New Jersey, and Delaware, Mr. Chairman and genetlemen of the committee. Much has been already said here to-day, and the subject has been reviewed at such length that there is little I can add. However, I would like to leave with the committee this thought for its consideration, as I believe the purpose of this committee is to examine witnesses, to get their testimony, and from such examination and testimony to draft such an amendment to the present copyright law as will meet the issue and do justice to all concerned.

It seems to me that the solution of the one question of the alleged violation of the copyright law in the hold-over situation, which in the film industry means playing a picture for three days when they contract for but a two days' playing, lies in first reducing the penalty and then giving the courts more discretion as to the fine.

The CHAIRMAN. What is the minimum fine to-day?-$250 to $5,000, I believe, is the range.

Mr. AARONS. My objection to the copyright law in that it does not apply to the hold-over situation is this: We have 10 decisions on that subject in the lower courts; 8 of which have established that

the holding-over is a violation of the copyright law, and 2 hold that it is a violation of contract.

Mr. HESS. One.

Mr. AARONS. I thank you for the correction. The legislation in its enactment should be very specific, so as to forbid the offense and to relieve us of finding the Supreme Court has to render a split decision. The chairman of this committee has repeatedly referred to the decision of Mr. Justice Holmes, saying the holder of the copyright has the right to collect a fee from those using his picture or publication for profit. But even in the Shanley case there was a split court and since then there has been no decision of the United States Supreme Court on the copyright law as it applied in the motion-picture theater without a license having been obtained. The CHAIRMAN. What was the exact vote?

one.

Mr. AARONS. If my memory is correct, there was a majority of While a number of cases throughout the country were brought on the basis of the Shanley case as touching theaters, they did not reach the Supreme Court, for in each case the exhibitor was a man of limited means and did not have the opportunity of spending the money necessary to have a review by the highest court. So that in the last analysis it becomes a function of the legislative branch of our country in considering this question, to give us a copyright law which will protect the holder of the copyright, protecting him in all justice and at the same time expounding the law so that there might be no misconception or split decisions rendered by the courts. Now, I wish to call the attention of this committee to a case which appeared in the district court of the State of Pennsylvania, city of Philadelphia, where an alleged violator was brought into court under criminal proceedings on a charge that he had held over and had "bicycled."

The CHAIRMAN. What does that use of the word "bicycled" mean there?

Mr. AARONS. Bicycled" means this: If I am an owner and get some pictures and contract to have them shown at Theater A, for example, and I show them at Theater B, or permit a print to be exhibited elsewhere than where contracted for, that is what in the trade is called "bicycling." bicycling." The term may have come from the earlier times of the movies, when the physical operator, not having an automobile, would, when he wanted to furnish another party with the film, jump on his bicycle and run it over to the other party. That is probably where the term came from. Twenty years ago such a thing was common.

In the case I had in mind the testimony of the defendant was to the effect that he had the permission of the booker. Such testimony was not refuted and on his application to the district attorney the bill was submitted with instructions to render a verdict for acquittal. So there you have nothing.

There are other cases where the court has imposed a fine. Mr. Hess three years ago called my attention to that when I raised the question of the right of the copyright bureau to step in.

Mr. DIES. Let me ask you this: When an exhibitor holds over a picture they consider that as an infringement?

Mr. AARONS. The one who considers that as an infringement is the exchange-the distributor.