usual imports of books of foreign publishers. This can be seen clearly by an examination of the import figures from individual countries. For example, the largest volume of British imports by far from a single country is from the United States-about $10 million or over 40 percent of the total-which clearly represents imports of books by American publishers, not any manufacture of books in this country for British publishers. The import figures from individual countries, especially some on the continent of Europe, suggest that perhaps $3 to $5 million of this British book import figure may represent printing done abroad for British publishers-or 1 to 2 percent of the total output of the British book publishing industry, at the prices received by publishers. While in London in the spring of 1964 I took occasion to inquire of some leading British book manufacturers on what their expectations would be of doing work for American publishers if the manufacturing clause should be repealed, as the Register of Copyrights had recommended in his 1961 report to the Congress. I found that the subject was a matter of complete economic indifference to them. They did not regard the United States as a vast new potential market for the complete manufacture of books by American authors for American publishers over and above the monotype setting some of them were doing on small editions of scientific and technical works. They pointed out that after both the United States and Great Britain had adhered to the Universal Copyright Convention, books by British authors continued to be brought out in American-manufactured editions as they had been before. They also pointed out that although they and British publishers had complete freedom to have printing done in Europe and elsewhere, very little was in fact done abroad because lower wage rates did not translate into lower costs for acceptable work. A TEST IN YUGOSLAVIA The inability of foreign printers to compete economically with our American book manufacturers despite great disparities in wage rates was demonstrated to me rather dramatically about 2 years ago in Yugoslavia. I was there for an intensive 2-week study of the book industry with a delegation of American publishers. On the urging of our hosts we secured bids on several jobs from one of the best Yugoslav printing plants and compared the prices with those in the United States. Our conclusion, as set forth in the report which we published in 1963 ("The Book Industry in Yugoslavia"), was as follows: "Manufacturing of books or components thereof for American publishers by Yugoslav printers is not likely to attain any significant volume. Yugoslav printing wage rates are low, both in comparison with the United States and with Western European countries; but the cost of the finished product is not. Even for a nearby country like West Germany, the amount of contract book manufacturing done in Yugoslavia is quite small. For U.S. publishers Yugoslav book manufacturing is and will remain more costly than manufacture in the United States and is also subject to delays in delivery by ocean freight." THE INTEREST OF FOREIGN PUBLISHERS Since book publishers of other countries have urged us to get rid of the manufacturing clause, the nature of their interest deserves to be explained. At the 17th congress of the International Publishers Association, which met in Washington in early June of this year, a unanimous resolution was passed opposing a manufacturing requirement in copyright laws. This concern of foreign publishers (and authors) is not based on direct economic interest: the needs of foreign authors and publishers for U.S. copyright protection and the export of their books to the United States was taken care of, except in rare situations, by U.S. accession to the Universal Copyright Convention over 10 years ago. It is opposition in principle, and because of the bad example it gives to developing countries which are now in the process of formulating their copyright laws. When publishers in other countries look at our gigantic, technically advanced and rapidly growing printing and publishing industries-by far the largest in the worldand our large export balance in published materials, they find it hard to understand why we feel it necessary to maintain this device for the "protection"of our domestic industry. A FORECAST OF THE EFFECTS OF COMPLETE REPEAL We have seen how it was possible by statistical and analytical methods to predict accurately in 1954 that the removal of the manufacturing requirement in the copyright law for foreign-authored books in English as required by the Universal Copyright Convention would have no adverse effect on the U.S. book manufacturing industry. It was then forecast that the employment of at most 200 printing production workers out of a total of some 470,000 such workers in the entire complex of printing industries might be touched. This proved to be too conservative employment of production workers in the specialized book manufacturing industry actually increased in the period 1958-63 by an average of over 1,000 workers per year. Can we now by similar analytic methods estimate what effect repeal of the manufacturing clause might have on U.S. printing businesses? I believe we can. It would be possible to make an analysis similar to that of 1954, considering each specific type of book in terms of its characteristics such as size of edition, whether quick delivery is important, the type of composition required, etc.—and thus arrive at an estimate of the practicality of foreign manufacture in each case. The structure of the book industry and its relationship to the much larger printing and publishing industry is set forth in appendix tables 5 and 6. These indicate clearly what a minute fraction of the multibillion dollar U.S. printing and publishing industries is affected by the manufacturing clause at the present time. There is, however, an alternative method of analysis available in the present situation which is much more direct and precise. This method is based upon the fact, well known in the book industry, that for American publishers foreign book manufacturing costs are significantly lower only for foreign language or complicated-that is, monotype-typesetting, of books having a very limited sale. Foreign language works are already free of the manufacturing requirement. Printing and binding abroad offers no economically significant cost advantages in all but a very few special situations such as co-editions with European publishers, nor does straight linotype composition. As noted earlier, the benefits of lower monotype composition costs abroad on complicated matter are already being obtained by the practice of doing the typesetting abroad and printing here by offset from reproduction proofs. The binding is then, of course, also done here. Hundreds of titles have been produced by this method in recent years for American publishers. Although the facts are well known in the book industry, they had never been reduced to statistical form. A special questionnaire was therefore sent out to all members of the council and the institute requesting data on foreign and domestic composition, printing, and binding expenditures for the calendar year 1963. Usable returns were received from 83 firms-which published about 36 percent of all the new and revised titles produced in 1963. Returns were received covering all types of books including general adult books, juvenile books, textbooks, scientific and technical books, university press books, and encyclopedias-hardbound and paperbound. The sample was thus a large one and generally representative. The results obtained are summarized in table 2 which follows: TABLE 2.-Comparison of foreign and domestic composition, printing, and binding costs for 83 American publishing firms in 1963 (of which only 20 firms had any foreign composition done, either in English or foreign languages) Quantity Percent Total number of new and revised titles for 83 firms.. Titles manufactured completely in United States.. Foreign language and foreign-authored titles (not covered by the manufacturing clause). Titles by American authors composed abroad. 215 2.3 Total cost of composition, printing and binding for 83 firms... Total foreign composition cost on 215 American-authored titles composed abroad. On which monotype composition was used. Foreign composition cost of 138 titles in foreign languages or by foreign authors. Total new and revised titles published in United States in 1963 by all publishers.. Total cost of book and pamphlet manufacture in 1963.. 25, 784 $598, 000, 000 As the table shows, the vast bulk of American titles are completely manufactured in the United States-composition as well as printing and binding. Of the 83 firms, 63 did not have any foreign composition, printing or binding done at all. Only 215 American titles were composed abroad-2.3 percent of the total titles. The cost of foreign composition was only $900,749 or only six-tenths of 1 percent of the total composition, printing, and binding bill of the 83 firms, which amounted to $141 million. Monotype composition accounted for 96 percent of the foreign composition of American titles. The current practice of having difficult and complicated monotype composition done abroad but doing the printing and binding here provides just about all the cost advantages to American publishers which would be obtained from complete repeal of the manufacturing clause in more than 9 out of 10 cases. This practice would undoubtedly be continued if the manufacturing clause were eliminated because of the great convenience, flexibility, and economies of using American book manufacturers. With the offset plates in the hands of a domestic supplier, the American publisher can quickly and easily secure additional printings here to match sales demand and thus keep expensive inventory at a minimum. Having the printing done abroad is slow-and very risky. Ocean shipping takes time, and the delay can be disastrous if one of the not infrequent shipping strikes holds up delivery of urgently needed supplies for weeks or months. Besides, American printing is at least as good in quality and the binding is superior. In view of these facts, repeal of the manufacturing clause will not greatly change the present practice in the vast majority of cases. It will provide a useful flexibility in certain situations, and retain copyright protection where it is now sacrificed. A few more books may be set or manufactured abroad, but very few. By and large these are books which would not be done at all if they had to be manufactured completely here because the prices would have to be set at an uneconomic level. The American printing industry is not losing anything on these books—indeed it is gaining the printing and binding of them when the composition is done abroad. Thus it can be said with confidence that the less than 1 percent of the expenditure for manufacture of American publishers which is now going for foreign composition would not increase materially with total repeal. The expenditures of American publishers for book manufacturing services-which represent the sales of the book manufacturing firms-have been growing at a rate of over 6 percent per year in the 1958-63 period, or an annual increment of over $35 million. This rate of increase is expected to continue for the indefinite future, tied as it is to population growth, educational enrollments, library expenditures, and the whole combination of factors which has made book publishing one of our strongest growth industries over the past two decades. In terms of annual increments of this size, the amount of foreign book composition and book printing and binding which might be done abroad with complete repeal of the manufacturing clause is so small as to be hardly measurable statistically. As a final gauge of the lack of significance of the manufacturing clause as a protective device, let us consider the volume of imports and exports of other types of printed matter not so protected, in relation to the volume of domestic production. If the manufacturing clause provides protection to American book manufacturing from the danger of low-cost foreign competition, we would naturally expect to find that American printing not so protected would show imports exceeding exports and a high ratio of imports to domestic production. Table 3, which follows, gives the relevant figures for the year 1963. |