I had a personal discussion with some of the leading British book manufacturers a year ago last spring when I was in London on this subject, because at that time we had before us the Register's recommendation for complete repeal of the manufacturing clause, and I wanted to see what they felt might be in it for them by way of additional business. Though they wanted to hold on to what some of them did have in monotype setting for reproduction proofs, they were completely indifferent to the matter beyond that; they had no idea whatsoever they would get any volume of manufacturing books for American publishers.

Another brief test was made when I was in Yugoslavia in 1963. They have a fairly progressive printing industry with new machinery coming in from East Germany, West Germany, and Italy. The wage rates may be a fifth of ours, and they were very anxious to get some printing work from European countries, of which they have gotten very little even though they are very close. At their insistence, we let them make some bids on some jobs and they just weren't anywhere in the realm of feasibility on the total delivery cost, as we pointed out as follows in our report when we got back:

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.

Now let me say a word about the interest of foreign publishers in the complete repeal of the manufacturing clause. They are interested; a resolution to that effect was passed unanimously at the 17th Triennial Congress of the International Publishers Association which met in Washington about 2 months ago. This opposition to the clause by foreign publishers and authors was solely on the basis of principle, because in all except a very few cases, such as foreign authors temporarily living here, the rights of foreign authors and publishers for U.S. copyright are protected by our mutual membership in the Universal Copyright Convention.

Now let me move to table 2, which is on page 28 and is represented by this chart in graphic form.

Now, it has been well known in the book industry that the costs of foreign manufacture are only significantly lower for composition of complicated material, that is, monotype composition of books having a limited sale, which I have already described. But, although this was already well known, there were no statistics on it so we endeavored to collect some, and these represent statistics we collected from 83 members of the American Book Publishers Council and the American Textbook Publishers Institute for the calendar year 1963.

We sent out questionnaires to all members but these are the replies we got in usable form. The sample is a large one, a total of about 9,300 titles in 1963. That is over a third of the total new and revised titles published in the United States in 1963 by all publishers.

The amount of composition, printing, and binding costs involved was about $141 million. That compares with the census figures of

1963 of receipts by manufacturers for book and pamphlet manufacturing of 1963 of $598 million, so that in one case the sampling in terms of titles is over a third and in terms of receipts is about a quarter-or even more if you eliminate pamphlet manufacturing which doesn't really concern us here.

Now, of these 83 firms, only 20 had any foreign composition done at all and of the total number of titles in the samples for 1963, 8,992, or 96.2 percent, were completely manufactured in the United States. One hundred and thirty-eight titles were either composed and printed abroad or just composed abroad but they were foreign-language and foreign-author titles. Those titles are not covered by the manufacturing clause in its present form and only 215 titles, or 2.3 percent of the total number of titles, were titles by American authors which were composed abroad and then the reproduction proofs sent back here for lithographic production.

Now, in the second side of the chart here we have the dollar figures involved. The cost of composition, printing, and binding for all of the firms represented here is about $141 million, which is represented by this big bar plus these two small ones, but the foreign composition cost for these 215 titles by American authors done abroad and brought back here for printing was only $900,000, and of that $900,000, which is represented by this small bar here, the monotype composition was $868,000 and the other, presumably linotype, was $31,000.

So, of the foreign composition, these 215 titles, 96 percent of it was monotype composition which indicates, as I said earlier, only for monotype composition of complicated matter is there any advantage in having composing done abroad.

So, the net result we have here will give you some statistical measure of the comparative volume of foreign and domestic composition, printing, and binding. This foreign composition is six-tenths of 1 percent of the total printing and binding bill for these companies, and I think the sample, if anything, overrepresents the number of companies that do any foreign composition abroad.

I would think the total number of titles, since I know what companies are involved here, is probably not over 300 titles a year out of 25,000 or more titles that are produced a year in this country.

Now, let me refer out of order to two appendix tables, Nos. 5 and 6, which are represented by these next two charts. This is just to give you another idea of what a small matter this manufacturing clause is, related first to both book publishing, and more so to all printing and publishing.

Here is the comparative size of the printing and publishing industries in 1958 and 1963, shown not in terms of dollar output, but production workers, that is, roughly, blue collar workers or people in the printing trades unions.

You will see in both years the big items are commercial printing, newspaper publishing, bookbinding which is all sorts of catalogs, advertising material, and so on-printing trades service industries, specialized business forms, greeting cards, periodicals and book printing.

The only place the manufacturing clause has any impact at all is in a small segment of the printing trades service industries and in the book printing area.

Mr. KASTEN MEIER. May I interrupt?

The colors on the bar of your chart-what do they represent?

Mr. FRASE. Book printing is at the top, 29,000 employees, and a small component of this printing trades service industries, this one of

31.000.

Now, the next chart shifts over to the components of the book publishing industry by type of book produced, and here again you will find that of the book industry, which represents only a small faction of all printing and publishing, you are only dealing with a very small segment of that and certain kinds of books.

This is in millions of dollars, the receipts of publishers as shown by the census of 1958 and 1963. You can see what a growth industry this is. But, taking these one by one, practically all of these categories are those in which doing any work abroad would be completely impractical, mostly because of time factors, long printing runs, and so on. This is certainly true of book clubs, specialized editions and very long runs which are put in cartons right there on a split-second schedule at the manufacturer's plant.

On paperbound books, adult and juveniles, our costs are far lower. On textbooks and work books, the same is true; our costs are lower and they are large editions, and there is absolutely no way of doing any foreign composition or manufacturing in any fashion.

On Bibles and religious books, the King James version of the Bible is in the public domain and we produce most of our Bibles in this country rather than import and the repeal of the manufacturing clause will have little effect.

Encyclopedias and subscription books: these are shipped out in cartons from the manufacturing plant through the mails to the ultimate customer who bought it from the door-to-door salesman. Here again, any foreign work is not in the realm of possibility.

General trade books, we have seen by the analysis of earlier figures, is usually straight composition, linotype, nothing complicated about it, and edition sizes are usually such that if they would be done here, it is only when the edition size gets down to under 3,000 copies that copies might be imported rather than done here.

That brings us down to the kind of book we were talking about. earlier where a monotype setting is desirable; that is a segment of this portion of the business-scientific, technical, and professional books-but it is only a very small segment of that portion.

Now we will move on to another discussion built around table 3. Mr. KASTEN METER. May I interrupt to say that, despite the interest and germaneness of your testimony, I hope you will be able to summarize soon because we do have other witnesses.

Mr. FRASE. I realize that and I have only two more tables which I will summarize.

This is a graphic illustration of table 3 and is designed to do two things. One, to indicate again what a small thing we are talking about here in terms of the total domestic production of the printing and publishing industry. Also, this chart illustrates that for other kinds of printing, where there is no manufacturing clause, the vast bulk of the work is done in this country: and also that we have a favorable import-export balance in those other fields of printing as well.

In newspapers, both the imports and exports are very small.

For periodicals, the export surplus is very great. The manufacturing clause does apply to periodicals but it has no economic relevance because these are long printing runs; and, because of the time factor involved, it would be completely impractical to have this kind of work done abroad anyway. The notable thing is that in the commercial printing field, where you would think the time factor would not be so important, there again we have a very great export surplus. The narrowest margin between imports and exports is in the book field. That is not because these two items, imports and exports, are competitive, but they consist of different kinds of books. We import, for one thing, millions of copies of books for our college and university libraries which American publishers are just not producing and which are necessary for scholarly purposes.

This chart again shows in the whole field of printing the domestic production is many, many times the level of international trade, so importing is clearly not something that can be done very effectively in the printing field, regardless of whether there is any protection by a manufacturing clause or not.

Now the last chart corresponds to table 4 and is an illustration of the relative size of American book imports and exports going back to the 1930's when we were still a book-importing country. After the war, our book export business really began to develop and is now at least four times what it was in 1948. In fact, our exports are even higher because these export figures are the official ones under which shipments valued under $100 are not counted, so this export bar really should be about 50 percent higher, but these are the official figures.

As you can see, both imports and exports have been increasing each year and we have a very substantial export balance in books.

Let me conclude with one brief paragraph on page 35.

I shall not attempt to recapitulate a long and detailed statement, or even try to summarize the principal steps in the analysis.

Let me only repeat our conclusion, taken after long and serious study, that the repeal of the manufacturing clause and related import restrictions is now required, rather than the further tinkering represented by chapter 6 of H.R. 4347. Repeal will be a net gain to the United States, and to all the interests in this country particularly concerned, including literary and scholarly authors, scientists, educational institutions, publishers, and the American book manufacturing industry and its employees.

Like publishers in other countries, we are dependent upon our domestic printing industry for 99 percent and more of our book manufacturing requirements, and we want and need a healthy, growing, and technically advanced American industry.

We believe, and have endeavored to demonstrate the factual grounds for our belief, that the crutch of the manufacturing clause is obsolete and should be discarded now, once and for all.

That concludes my testimony.

I think my colleagues here would like to say a few words.
Mr. Barnes, would you start?

Mr. BARNES. All right. Briefly.

First of all, I would like to speak from a very practical standpoint of a production man in a publishing house. One of our biggest jobs besides new books and new editions, is servicing a back list; that is, maintaining in print a stock of our older titles where the demand justifies it. In my own company, we have 2,500 titles in print. We have enough problems with inventory controls as it is and it becomes ridiculous to think we would ever want to have books printed and bound elsewhere than here in this country where we have control of it. Moreover, from a practical point of view, no other country has the paper we have available for use here. I am sure we have the best printing and binding equipment and I believe, and I know, we are presently able to print books and bind them as inexpensively as any place in the world.

I also believe it true that the present state of the art in the book manufacturing group would not be able to handle all the monotype composition that would be needed if the manufacturing clause becomes a total thing in the new bill.

This would mean that a longer period of training for employees would be necessary and I think today the apprenticeship is 5 years. As it is, almost every technical book we publish is out of date when we publish it and it is not a pleasant thing to think there would be long delays of publication of technical books in the future while we wait for our technology to catch up with us.

I brought two typical books with me. One is a series in medicinal chemistry. This happens to be volume 4. In this particular book, by having it done abroad we have saved about $2,000 just in composition. The book was printed and bound here. A rule-of-thumb in publishing is that $1 in manufacturing cost probably means $4 or $5 in selling price, so this means we saved the people that use this book probably $4 a copy over what it presently sells for.

The other book I have is a book in physics, "Introduction to Theoretical Physics." In this case, our saving was even larger and I would expect had we not been able to do the composition abroad it would have added another $5 to what is already about a $9 or $10 price.

Mr. FRASE. Mr. Harwood?

Mr. HARWOOD. Thank you for giving me the opportunity to add a postscript to the very eloquent report of Mr. Frase, with which we agree completely.

To add to my credentials, I am a trustee of Princeton University Press and a director of Grosset & Dunlap and Bantam Books. I do not represent them. I am not authorized to represent them, but I merely state that to indicate I have had exposure to a good many kinds of publishing.

I have not prepared a written statement, but I strongly endorse what Mr. Frase said supported by what Mr. Barnes said.

In Mr. Frase's written statement, I winced a little about the reference to the Harper copyright practice in its early history. Mr. Frase delicately avoided that section of his report but it is written. However, I think the justification is found in the conditions of the times, as he indicated, and that is past.

I oppose the manufacturing clause in principle and practice. I think it is a protectionist feature which, if it were ever necessary, and

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