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Mr. KASTENMEIER. Our third witness this morning is the International Allied Printing Trades Association, represented by Mr. (. R. Strackbein, legislative representative, and Mr. James Sampson, president of the board of governors.

Gentlemen ?

STATEMENT OF 0. R. STRACKBEIN, LEGISLATIVE REPRESENTATIVE, INTERNATIONAL ALLIED PRINTING TRADES ASSOCIATION; ACCOMPANIED BY JAMES H. SAMPSON, PRESIDENT OF THE BOARD OF GOVERNORS

Mr. STRACKBEIX. Mr. Chairman, my name is 0. R. Strackbein. I am legislative representative of the International Allied Printing Trades Association.

After listening to Mr. Frase, I began to wonder what we were here for. This matter is boiled down to such insignificance that I wondered what all the shooting is about, you might say.

Now, as the previous witnesses said, what we are concerned about is not so much what is happening now but what would happen if the manufacturing clause were eliminated.

I appear on behalf of the International Allied Printing Trades Association, with special reference to that part of H.R. 4347 that has to do with the manufacturing clause and fair use.

This association is composed of five of the printing trades unions affiliated with the American Federation of Labor and Congress of Industrial Organizations. Their combined membership is upward of 300,000.

The printing trades unions were in support of the manufacturing clause in 1909 and have steadfastly urged its retention since that time. We did not oppose the entry of 1,500 copies as a means of testing the market when this was suggested and adopted in 1919.

Our principal concern today is with section 601 which, of course, is the manufacturing clause, and its interpretation if it is not rewritten to remove what the Register of Copyrights has described as "uncertainties" of the existing law.

One interpretation would permit typesetting to be done abroad, while reproduction proofs could then be used for the remainder of the production processes performed in this country. The bill of 1964 (H.R. 11947) was written in a manner to eliminate the “uncertainties” with respect to reproduction proofs. This emendation was eliminated in the present bill (H.R. 4347).

The reason advanced seems to be that one or more member nations of GATT (the General Agreement on Tariffs and Trade) objected on the grounds that if the clarifying provision of H.R. 11947 were retained, it would represent a more restrictive condition imposed on imports than the present law permits. This would be a violation of the general agreement and therefore should not be made a part of the copyright amendments.

If this is the correct version for modifying the bill, a very serious question is raised. If it is not the correct explanation, it would be helpful to know what brought about the change. If pressure from GATT did produce the change, it would represent an interference by a foreign organization in the internal legislative affairs of this country. It is true that the United States is a member of GATT, but not on the motion of Congress. The General Agreement on Tariffs and Trade is an executive agreement, not a treaty. It has never been submitted to Congress for approval either as an executive agreement or as a treaty.

Yet, if this international organization is in a position to threaten the Library of Congress, that is, the Register of Copyrights, which is the source of the present bill, it will have done precisely what has been urged against U.S. membership in the organization on the unratified basis on which this membership rests.

It is the constitutional function of Congress to regulate the foreign commerce of the United States. It must be clear that the President cannot properly enter into an executive agreement with other countries that provides for binding the United States to do or not to do something that lies wholly within the discretion of Congress. Had the executive power this right, it could soon divest the Congress of much of its constitutional authority.

The manufacturing clause has persistently been called a protective device. As such, it represents a means of regulating our foreign commerce; and this is the function of Congress. It is a function that cannot be abdicated without a constitutional amendment. No one Congress can bind any future Congress (otherwise elections would be useless) and yet that is precisely what would be involved in the interpretation holding that when in 1934 and subsequently the Congress authorized the President to enter into trade agreements it thereby authorized him to make an agreement that would prevent newly elected Congresses from exercising their constitutional responsibility in this field.

GATT has no judicial power to hold up or modify our legislative proposals and should not presume to do so. If they cite the general agreement, it must be obvious that the agreement is out of order if it contains a provision that would be contravened by Congress if any act that it passes pursuant to its constitutional power would conflict with the agreement.

The President cannot as a matter of law excise the Congress from performance of its function by entering into an international agreement that would tie the hands of Congress or that would place the Congress in the position of violating an international agreement should it legislate contrary to the agreement.

Thus, it would be preposterous for the Library of Congress to modify legislation on the representation of a member of GATT to the effect that proposed legislation would violate its provisions. Even assuming, contrary to fact, that GATT had a voice in our legislation or were justified in expressing a caution, the question of infraction of the agreement by congressional adoption of a clarifying amendment to the manufacturing clause would still remain.

The manufacturing clause is not a trade restriction as such. It represents a condition precedent to the privilege of enjoying a monopoly in a specific field. The practice of laying down conditions as the price of a privilege or franchise is certainly nothing new.

The clarification of an existing law to assure the closing of a loophole is, in any case, not exacting a more onerous condition than the existing one. Were the loophole not closed, the condition would, in fact, be weakened.

When new manufacturing processes are developed, they do not change the principles governing the use of whatever process is employed. When a new product is developed, it does not automatically go on the free list. There may be a question of classification, and it may go on the free list if it is judged to be closely enough related to a product that is already on the free list; but, also, it may not. A new process is, in any event, not a new product. It only represents a new way of producing something.

If the existing law was designed to assure that books enjoying a copyright in this country be produced under the labor standards prevailing in this country, the process of manufacture is really immaterial. If, however, a spelling-out process has been engaged in as under the existing Copyright Act, any new process should be assimilated to the existing ones; but if this is disputed, the question should be resolved by a new spelling out.

That labor standards are the principal concern is supported by the position of the International Allied Printing Trades Association with respect to a provision that would waive the manufacturing clause if the labor standards of the country of book manufacture should come close to the standards in this country. This position is to allow such a waiver under certain prescribed findings and conditions.

Let those who would seek the benefits of a loophole make a clean breast of it and propose elimination of the manufacturing clause altogether. That was done here this morning. They seek the lower labor costs that prevail in other countries. We all like to buy cheap and sell dear. We all smile on a bargain, but it is high wages and the high consumer purchasing power to which high wages give rise that sustains our economy, and, incidentally, buys the books of the publishers. If we wish to erode these standards, let us at least know what we are about. We will as surely erode our economy and the market upon which it relies if such an attitude is made universal.

I shall not give a comparative listing of wage rates here and in the countries from which books are principally imported. I understand that such statistics will be presented by a later witness. Suffice it to say that the wage gap is a broad one and that it is not diminishing in any meaningful sense so far as relative competitive standing is concerned. The original grounds for the manufacturing clause still remain.

There are those who say that reliance should be placed on the tariff for protection of our labor standards in book manufacturing. However, the tariffs have been reduced to a very low level, and I know of no publisher who has appeared on the scene either opposing further reduction or urging an increase in the tariff. The rate is now so low that it could be eliminated on important elements of the imports under the Trade Expansion Act of 1962.

Also, the Florence Convention proposes free importation of books and printed matter. Legislation to implement the convention has been introduced. Therefore, the sincerity of those who say “look to the tariff" would seem to be impugned unless they oppose the down leveling of what is left of the tariff and urge a turnabout.

There is also reference to the fact that American book exports exceed book imports. May I say that a very heavy proportion of the book exports, of course, go to Canada and that should the recommendation of this association be followed, the manufacturing clause in some relatively near future time would not apply to Canada because their wages do approach the level of those prevailing in this country.

As I say, there is also reference to the fact that the American book exports exceed book imports. The same thing could be said about American steel a few years ago, about American automobiles, petroleum, textiles, shoes, and other products. The situation can swing very rapidly once the sluices are opened. The products just mentioned have swung about to a net import position. Books, as such, bear no mark that would make them an exception.

The trend of foreign investment has been sharply upward in recent years. The publishing industry already has important investments abroad and printing is cheaper there. With full assurance of virtually free access to the American market, this trend would swell, or at least we can say it would be expected to swell.

Imports would point upward and, without the manufacturing clause, the employees in the industry would have small powers of defense. They would live and bargain under the threat of capital emigration and they would have little with which to counter the rising trend.

There is another loophole. That is the right of fair use. Nothing should be done to encourage an abuse of this right. We agree with the authors who have copyright protection that the value of this protection could be materially diluted if fair use were liberalized. The copyright has a laudable purpose and it should not be infringed by an extension of fair-use privileges to the point of material injury to the copyright beneficiaries.

We do not oppose a small increase in the 1,500 copies that are permitted entry under the 1949 amendment without copyright infringement, but the increase should be held to a defensible level, such as 2,000 copies, and not used as an escape from the purpose of the manufacturing clause.

That completes my statement, Mr. Chairman.
I appreciate the opportunity of appearing before you.
Mr. KASTENMEIER. Thank you, Mr. Strackbein.
I take it Mr. Sampson is not here with you?

Mr. STRACKBEIN. Yes; he is here. I understood that you had only called my name.

Mr. KASTENMEIER. Well, he was mentioned, and we are happy to have him here with you.

Mr. STRACKBEIN. He has a short statement.

Mr. KASTENMEIER. Can you tell me what the nature of your organization is? It is apparently a trade organizaion, not a labor union.

Mr. STRACKBEIN. It really is a council composed of five of the printing trades unions and has a board of governors, and Mr. Sampson is the president of the board of governors.

It includes the International Typographical Union, the photoengravers, the bookbinders, and so on.

Mr. KASTENMEIER. Does it involve all the trade unions that would be concerned with book manufacturing?

Mr. STRACKBEIN. The lithographers are not included.

Mr. KASTEN MEIER. I take it you are not satisfied with chapter 6 as it now appears in H.R. 4347, either?

Mr. STRACKBEIN. We feel because of the uncertainty expressed by the Register of Copyrights that that should be cleared up. There is no reason why, if there is a loophole, that it should not be closed, and that the language express what was undoubtedly the original intent of Congress in passing this legislation and continuing it upon the books up until this time.

Mr. KASTENMEIER. Granted, Mr. Strackbein, that you said there would be a later witness that would furnish statistics relating to wage rates and the like; notwithstanding that, you did hear Mr. Frase refer to the situation competitively, as far as wage rates are concerned, of Yugoslavia-despite the fact that the wage differential is considerable with the American printing industry and trade, they could not compete successfully?

Mr. STRACKBEIN. That is not a wholly unusual situation even in the other fields of manufacture. That depends on the state of the art in the particular country, I would say. Of course, Yugoslavia is not the only country in Europe. There are perhaps other countries much farther advanced than Yugoslavia.

Using that as an example, I would not think, would be fully justified as an argument.

Yugoslavia, after all, is a good deal farther away than some of the northern European countries and why that should be picked on as an example, I don't know, except apparently they have had some real experience in calculating the costs and so forthi, perhaps in some test of this very question.

Mr. KASTENMEIER. Finally, do I understand that you do, however, approve of the provision in H.R. 4347 relating to fair use and would not want that embroidered upon?

Mr. STRACKBEIN. Correct. I think this would be a bad loophole as far as authors are concerned. It is all very well to make a number of copies of a copyrighted book, but that certainly can be abused and the value of the copyright could be destroyed.

Mr. KASTENMEIER. Thank you very much, Mr. Strackbein, for your testimony.

Please come forward, Mr. Sampson.
Mr. SAMPSON. Mr. Chairman, could I make one statement?

I think you asked Mr. Strackbein if all of the people—all of the unions—who were members of the International Printing Trades Association would be the only ones interested. Do I quote you correctly?

Mr. KASTENMEIER. The thrust of my question was to ask whether they were the only ones directly connected with the printing industry who would be interested.

Mr. Sampson. Could I say this: in our last appearance, it was brought out-it was not in my statement, and I don't know if it is in Mr. Van Arkel's—that there are some 250,000 other people, for instance, in the ink manufacture, paper products, paper manufacture,

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