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COPYRIGHT LAW REVISION

WEDNESDAY, AUGUST 11, 1965

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE No. 3 OF THE
COMMITTEE ON THE JUDICIARY,

Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding.

Also present: Herbert Fuchs, counsel; and Allan Cors, associate counsel.

Mr. KASTENMEIER. The hearing will come to order, please.

The Chair has two announcements: first, the Chair notes that the Senate Subcommittee on the Judiciary yesterday reported to the Senate House Joint Resolution 431 extending copyright protection in certain cases. This measure was introduced by Chairman Willis and processed by our subcommittee.

The Chair also wishes to announce that the gentleman from Virginia, Mr. Poff, is absent because he is attending a meeting at the White House, and other members of the subcommittee are absent at this moment because they are similarly in attendance at a meeting at the White House but we expect them momentarily.

Today and tomorrow, the subcommittee will hear testimony on chapter 6 of H.R. 4347, and companion measures, which deals with the so-called manufacturing clause of the copyright law.

Our first witness is Mr. Robert W. Frase, director of the Joint Washington Office of the American Book Publishers Council and the American Textbook Publishers Institute.

Mr. Frase is accompanied by Mr. Chester Kerr, director of the Yale University Press; Mr. Raymond C. Harwood, director, Harper & Row; and Mr. J. Stetson Barnes, vice president, John Wiley & Sons.

Gentlemen, you are all welcome before the subcommittee.

Mr. Frase, will you come forward and identify yourself and your associates ?

STATEMENT OF ROBERT W. FRASE, DIRECTOR OF THE JOINT WASH

INGTON OFFICE OF THE AMERICAN BOOK PUBLISHERS COUNCIL AND THE AMERICAN TEXTBOOK PUBLISHERS INSTITUTE; ACCOMPANIED BY CHESTER KERR, DIRECTOR, YALE UNIVERSITY PRESS; RAYMOND C. HARWOOD, DIRECTOR, HARPER & ROW; AND J. STETSON BARNES, VICE PRESIDENT, JOHN WILEY & SONS

Mr. FRASE. Mr. Kerr is not only director of the Yale University Press but also president of the Association of American University Presses.

Mr. Harwood, next on my right, is the president of Harper and Row and also president of the American Book Publishers Council; and Mr. Barnes is representing Mr. W. Bradford Wiley, president of John Wiley & Sons, who is this year president of the American Textbook Publishers Institute. Mr. Barnes is also an expert on book manufacturing

You have before you a tabbed copy of my testimony, I propose to read only certain key sections which I will identity as I proceed. I will summarize other sections and in other cases speak from these charts over here which are a graphic representation of the numbered tables in the text of this statement.

Mr. KASTENMEIER. Without objection, the Chair will receive your entire text and make it part of the record.

(The statement follows:)

THE MANUFACTURING CLAUSE—THE ECONOMIC CASE FOR REPEAL

Testimony of Robert W. Frase on behalf of the American Book Publishers Coun

cil and the American Textbook Publishers Institute My name is Robert W. Frase and I am director of the Joint Washington Office of the American Book Publishers Council and the American Textbook Publishers Institute. I am testifying today on behalf of these two organizations, the members of which publish more than 95 percent of the total volume of all books produced in the United States. Members include not only commercial firms but many of the university presses and the publishing departments of re ligious denominations.

My statement is concerned solely with the manufacturing clause and related import restrictions which, reduced to essentials, now require American (but not foreign) authors to have their books manufactured in this country to secure full-term U.S. copyright. We believe that this trade protection device, first adopted over 70 years ago, no longer serves any useful purpose for the printing industry and is a handicap to American science, technology, and scholarship. We join with other organizations in urging complete repeal of these manufacturing provisions, rather than the modifications proposed in chapter 6 of H.R. 4347. Other groups advocating repeal include: the American Council on Education, the American Council of Learned Societies, the American Guild of Authors & Composers, the American Library Association, the American Society of Composers, Authors & Publishers, the American Society of Magazine Photographers, the Association of American University Presses, the Authors League of America, the Composers & Ly cists Guild of America, the Joint Libraries Committee on Copyright, the Magazine Publishers Association, the Music Publishers Association of the United States, the Music Publishers Protective Association, and the Society of Magazine Writers.

As the staff economist of the Council, I have given special attention to the economics of the manufacturing clause over a period of more than 10 years. In 1954 I presented an analysis to this subcommittee and the similar Senate subcommittee on the economic effects of the partial repeal of the manufacturing clause required if the United States was to adhere to the Universal Copyright Convention. I predicted then that the elimination of the clause for works produced by citizens of other countries adhering to the UCC, which was subsequently adopted by the Congress, would produce positive economic benefits to American authors, publishers. book manufacturers, members of the printing trades unions, and the American public at large. This turned out to be the case despite the contrary predictions of the opponents of the Universal Copyright Convention. In the 9 years from the U.S. Census of Manufactures of 1954 to the same census in 1963 the dollar volume of U.S. book sales more than doubled. from $665 million to $1,502 million. In the same period the favorable balance of U.S. book exports over imports increased in about the same ratio, from $17 million to $40 million. These are the official Government figures, which are acknowledged to underestimate exports seriously because small shipments are not counted.

Following some introductory remarks concerning the history of the manufacturing clause and the nature of the Register's proposal for further modification contained in H.R. 4347, I shall present the economic case, supported by statistical evidence, for the complete and final repeal of the clause.

ORIGIN OF THE MANUFACTURING CLAUSE The manufacturing clause is a device, unique to this country, to require domestic printing of books as a condition of securing copyright. It emerged from our special historical situation in the 19th century. The principal European countries began to grant copyright protection to foreigners as well as to their own citizens well over 100 years ago. Denmark was the first in 1828, followed by Prussia in 1836, England in 1837, France in 1852, and Belgium in 1854. This practice was generalized in the Berne Convention, a multilateral treaty for reciprocal recognition of copyrights which came into effect on December 5, 1887.

The United States did not join the Berne Convention. Nor did we grant foreign authors any copyright protection until 1891, and then only if their books (and photographs, lithographs, and chromos) were remanufactured in the ['nited States—the so-called manufacturing requirement or manufacturing clause. Why did this happen only in the United States? The reasons are to be found in two special circumstances. First there was our tradition of not granting property rights to foreigners— in many States only American citizens could own real property. Second and more important, the American book publishing industry was developed in its formative years on the basis of piracy of British works.

In the absence of copyright protection the pirated works of world-famous British authors, starting in a major way with the novels of Sir Walter Scott in the 1820's, formed the basic raw material on which the American book publishing and printing industries were built up. This situation of a large and growing former colony being able to appropriate the literature of its previous homeland, without even the necessity of translation, did not exist elsewhere. The relationship between France and Belgium was the only one at all similar. In that case the Belgians were pirating French language works on a large scale, but after France took the lead in 1852 in granting copyright protection to the literary works of all foreigners, Belgium quickly conceded and adopted the same policy in 1834.

In the United States agitation for granting copyright protection to foreign authors began almost as early as it did in Europe. In 1837 Henry Clay submitted to the Senate a petition from 56 leading British authors. A special committee appointed to consider the petition reported a bill to give U.S. copyright protection to British citizens, provided that their works were reprinted and published in the United States. That was the earliest appearance of the manufacturing clause. The Clay bill was supported by a group of Americans including James Fenimore Cooper and William Cullen Bryant, organized by George Palmer Putnam, a publisher, into "The American International Copyright Association." This and subsequent Clay bills were not acted upon favorably, even though the subject was given nationwide publicity during the course of Charles Dickens' first American tour in the early months of 1842.

American authors were pressing for international copyright protection on two grounds. It would give them some revenue and control over their works, which were beginning to be pirated in England. More importantly it would help them make a living in the United States. As long as the works of famous British authors could be obtained without permission or payment of royalties by American publisher-printers such as the Harper Brothers in New York and Matthew Carey in Philadelphia, unknown American authors could not expect to get paid for their literary productions or even to get them published for nothing. The efforts of th authors were supported by some publishers such as Putnam, American playwrights and composers were in the same situation, or perhaps worse because British and European plays and music dominated the American scene even more than was true with fiction and poetry.

The opposition to these early Clay bills in the late 1830's and early 1840's was primarily from most of the printer-publisher-booksellers of New York, Philadelphia, and Boston, and the industries associated with them such as the papermakers. Even the requirement of American reprinting under the manufacturing clause of the Clay bills was not enough to gain the support of the pirate publishers and their allies. They were satisfied with business as it was; they saw no reason to change because of arguments of morality or to encourage a native American literature. The fact that the subject was first brought up by British authors undoubtedly did not help the cause politically—the public and Members of Congress were not disposed to support a measure which seemed on the surface to be primarily of financial benefit to British authors.

A number of other petitions and bills were brought up in the Congress in subsequent years, both before and after the Civil War. However, it was not until the "cheap book” rage of the 1870's and 1880's that the American publisher-printerbooksellers began to change their minds about the merits of international copy. right protection. There had grown up over the years a practice of “trade courtesy" among the established book publishers and printers such as the Harpers and Carey. The American publisher who first brought out a pirated work of a British author was considered by his competitors to have established a right to that work and they would not ordinarily "print it on" (pirate it from) him. This was a practice to which there were many exceptions, but it seemed to work out fairly well until the mid-1870's when newcomers entered the field who paid no attention to trade courtesy. The first of these was Donnelly Lloyd & Co., of Chicago, which started in 1875 the "Lakeside Library" of very cheap editions of unprotected British works. This was followed by other "libraries" or series such as the famous “Seaside Library" of Munro, in which the individual titles sold for 10 cents. In the year 1885 alone it was estimated that some 1,500 titles were published in these cheap editions. Not only did the cheap books destroy the market of the established book publishers and printers, but they also aroused the opposition of the growing printing trades unions, because non-union labor, including women, was being used in the production of these cheap books.

The tide really turned in 1878 when the Harper Brothers, perhaps the leading opponents of international copyright over several decades, on their own initiative proposed to Secretary of State Evarts a treaty between the United States and Great Britain for the reciprocal protection of copyrighted works, provided that the British works were remanufactured in this country. It should be noted that the manufacturing clause proposed by the Harper Brothers included only printing. The Harpers were experienced printers, and they did not propose complete "featherbedding"—they were perfectly willing to import the plates from the British edition and not require that the typesetting be done over again in this country.

From this point on the issue was essentially settled, although a great deal of hard work was still required before the Simmonds bill was finally passed, first by the House and then by the Senate in the last minutes of the 51st Congress, on March 4, 1891. It should be noted that this bill was in the end supported by almost all groups directly concerned : the authors, the publishers, the book manufacturers, the printing trades unions, and representatives of book users such as the National Education Association and the American Library Association. The support of the printing trades unions was not without its price. The manufacturing clause enacted in 1891 was not of the limited type that the Harpers had advocated, requiring only printing in this country from imported plates, but the resetting of the type in the United States as well. The law also contained a provision prohibiting the importation of foreign editions of works copyrighted in the United States, so that the original foreign editions would not come into the country over the then-existing 25 percent ad valorem tariff on books.

As originally enacted in the 1891 statute, the requirements of the manufacturing clause were so rigid that they did not provide much benefit to foreign authors, except for the best-known British writers. In order to secure U.S. copyright the work was required to be printed and published in the United States not later than the date of publication in any other country. It was possible for publishers of well-known British writers with an assured sale in the United States to make advance arrangements with U.S. publishers to meet these requirements and have the United States and British editions come out simul. taneously. Such arrangements were not practical for the works of continental European writers, which required considerable time for translation into English, or for lesser known British authors whose works could not attract an American publisher prior to the testing of public reaction to the British edition. Thus the vast bulk of foreign literary works undoubtedly continued to fall into the public domain in the United States following the passage of the 1891 law.

Nevertheless the Simmonds bill was a success on several counts. The “cheap books" craze died down after the free supply of fiction by popular British au

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