off it for all practical purposes. If this copyright law protection is now removed, we are, gentlemen, at sea and in considerable trouble. Thank you very much for your patience.

Mr. KASTEN MEIER. Thank you, Mr. Cantor.

As of the moment, according to my recollection of statistics presented by Mr. Frase yesterday, the printing industries are doing quite well, are they not, in dollar volume and profits?

Mr. CANTOR. The printing industries, Mr. Chairman? I am not quite sure you wish me to comment on the figures for the printing industry as a whole. In the typographic segment of the printing industry, it is a question of whether you want to look at the hole or the doughnut. The figures for recent years indicate that we have an average profit in our industry of 4.2 percent. That is before taxes. Some people may consider that doing well. Some people may not. The fact of the matter is that our wage rates in the typographic segment are the highest of all. I think the record should show, for example, that in New York we pay $148.25 a week as a basic day scale plus close to $25 a week in fringe costs-plus a labor-short market which imposes overtime and overscale so that in my company, for example, the average employee in the factory probably makes $200 and more a week.

This is the question that we are constantly up against, this pressure of these rising costs. Come November, we have another increase ahead of us.

Mr. KASTENMEIER. There does not seem much likelihood that foreign countries are going to be able to catch up with us at that rate.

Mr. CANTOR. No, I doubt very much if they will be able to by any meaningful measure.

Mr. KASTEN MEIER. On page 3, and you made some point of this in your oral testimony, you felt, and I assume you speak of section 601 (c), that the ambiguous and awkward language on the point of lithographing should be clarified by Congress. Do you have any language specifically in mind?

Mr. CANTOR. Yes, we do, sir. We did not want to presume, not being lawyers or experts, we did not presume to draft language for you. We had it in one draft of our statement and took it out on the basis it would be a presumption. If we may, we will be happy to submit such language. We think that the whole clause should be simplified and rewritten and simply say that the manufacturing clause requires typesetting, printing, binding and all other physical processes to be done in this country regardless of the method of printing, which is a purely technical accident.

Mr. KASTEN MEIER. If you want to spell that out in detail the committee will welcome receiving a letter.

Mr. CANTOR. Thank you for the opportunity.

Mr. KASTEN MEIER. I assume as well you will want to make your statement, printed statement, a part of the record.

Mr. CANTOR. If I may. The reason we took advantage of this opportunity to present a verbal statement-we did not know what the publishers were going to say yesterday. What I was trying to get across today, aside from our previous prepared statement, was largely our reactions to Mr. Frase's comments.

(Mr. Cantor's prepared statement follows:)

STATEMENT OF ELI CANTOR, THE COMPOSING ROOM, INC., NEW YORK, N.Y., FOR INTERNATIONAL TYPOGRAPHIC COMPOSITION ASSOCIATION, INC., AND ADVERTISING TYPOGRAPHERS ASSOCIATION OF AMERICA, INC.

The following is the statement of Eli Cantor, senior vice president, the Composing Room, Inc., typographers of New York City, on behalf of the International Typographic Composition Association, Inc., and the Advertising Typographers Association of America, Inc., and representing the views of these two associations on H.R. 4347.

The ITCA and the ATA favor a general revision of the U.S. copyright law, and commend the U.S. Copyright Office, members of the committee and all who have worked toward this objective. For reasons to be stated, it is the position of the ITCA and the ATA that a "manufacturing clause" should be retained, and it should clearly encompass typesetting regardless of the printing process used.

INTRODUCTION

The International Typographic Composition Association and the Advertising Typographers Association of America represent some 500 typographic firms located primarily in the United States.

The typographer, or typographic plant, is a specialty firm in the printing and lithographic industries engaged primarily or solely in the setting of type, i.e., the production of the original image of printing.

Very few of these firms are involved in actual printing or binding operations. At one time, all type was set by the commercial printer in his composing room. Today, large numbers of printers buy all of their typography from typographic specialists who now serve business and industrial firms, publishers, authors, advertising agencies, art studios, and all buyers of printing.

It is estimated that the total value of typesetting is about $1 billion per year in the United States, excluding newspaper composition. It is this phase of printing and this segment of the industry which has been most affected by recent trends toward greater imports of printing and the performance of certain steps in the printing operation in other countries.

POSITION

The points we wish to present concerning section 601 are as follows:

1. First, we feel that a manufacturing clause is essential to any revised U.S. copyright law. The economics and technical developments that make such a clause necessary are discussed below. They clearly establish the need for protection of all segments of the U.S. printing industries.

We feel that a general requirement of domestic manufacture of U.S. copyrighted works, with several exceptions, is the appropriate means of affording such protection. We do not feel that such a requirement is at all unfairly restrictive in light of the exceptions in section 601. That is, the clause would not apply to (a) predominantly dramatic works, (b) books in a foreign language, or (c) books contributed to in any substantial portion by a foreign author. To state it differently, the publisher for an American author who has written a book in English would not be permitted to go abroad to have such a book produced by industry and employees of another country and return to the United States and obtain unqualified copyright protection. Surely, this is a just and fair condition of copyright.

2. We subscribe in general to section 601 of H.R. 4347, the language proposed by the Register of Copyrights. The language is much more limited and less restrictive than the present law. We have, however, wanted to compromise as much as possible and go as far as possible to reach agreement with those holding differing views on the law. Furthermore, our concern has been primarily directed toward the dangers of domestically created works being sent abroad for typesetting or printing and returned to this country for distribution under copyright protection. Our desire is not to withhold U.S. copyright from works of authors of other countries. In general, therefore, we are in agreement with the revised language of this section of the bill.

3. We believe the language of the present law clearly requires that all works falling within those printed materials subject to the manufacturing clause be produced from type set in this country, regardless of whether they were printed from the letterpress, lithographic, or any other process.

However, we feel that "the ambiguous and awkward language" on this point referred to by the Register of Copyrights should be clarified by Congress to spell out the inclusion of typesetting as a requirement under the manufacturing clause regardless of the printing process used.

4. An increase in the number of copies that may be brought into this country as an exception to the manufacturing requirement from 1,500 to 2,000 is reasonable. We see no reason, however, why this maximum should be further increased. 5. We believe that the author of a printed work is the most important party in interest under the copyright law and very much favor the revision of the manufacturing clause to the extent it protects his rights even in those instances where failure to meet manufacturing requirements is alleged.

6. We do not believe that privileges under "fair use" should be further extended. 7. We would agree to an exemption from the requirements of the manufacturing clause for printed matter which is to be copyrighted and which was produced in a country, such as Canada, where the wage and price structures are more in line with those of the United States.

8. The copyright application forms should require an affidavit that typesetting has been performed in the United States, and criminal penalties of the act should be extended and applied to anyone who willfully and intentionally has typesetting for a copyrighted work performed abroad in violation of section 601. The manufacturing clause is of particular importance to the U.S. typographic industry today for two main reasons: (a) The substantial replacement of type form by the reproduction proofs and film composition and (b) the extreme disparity between the economics of the United States and most foreign printing industries.

TECHNOLOGICAL DEVELOPMENTS HAVE FACILITATED IMPORTATION

To understand and appreciate how technological developments in themselves have fostered a competitive advantage for foreign producers it is necessary to look at the evolution that has taken place in typesetting methods.

Letterpress and the hot-metal process.-Until about 25 or 30 years ago, the large majority of all printing was done by the letterpress process. Printing was accomplished by using metal type or raised, or relief, plates. The type or plate was locked up, placed on the press, inked, and an impression printed onto the sheets of paper to provide books, magazines, and other printed matter. At that time the typographer set the type on Monotype or Linotype machines from molten lead. Thus, the expression "hot metal." As we all know, lead is one of the heavier metals. The type for every page to be printed was very weighty, therefore, and the type for a complete book or other lengthy job would run into the thousands of pounds. There is the problem of damage to the type. also. Shipping of large amounts of type was not feasible and, thus, there was relatively little importation of typography. Imports, instead, consisted of the completely printed book.

Thus, the very nature of the typesetting process at that time held down the number of books and other graphic arts matter printed overseas.

Lithography and the reproduction proof.-During recent years, offset lithography has become a predominant process in the printing industry. The fact is that the plates which provide the printing image are made from film images of the type. The typical lithographic plate does not have a raised surface, only an image photographed onto the plate. More recently, new plastic and light metal letterpress plates have been developed which use the photographic process, and letterpress no longer requires printing from type or heavy plates. In each instance a film of the typographic image is all that is necessary to make the plate.

The typographic industry adjusted to this development by supplying reproduction proofs to lithographers, printers, and other customers. That is, the typographer still set his type by the hot metal process but he pulled a precision proof of the type onto a lightweight, high-quality paper, under the most exacting procedures, and sent this, rather than the type, to the lithographer or printer. They, in turn, photographed the reproduction proof and thereby obtained the film for making their plates.

At one time metal type was 99 percent of the product of the typographer. Today reproduction proofs account for 70 percent of the product, and metal type is less than 20 percent of that product.

The reproduction proof obviously has been a boon to foreign firms wishing to produce for the US market, for it eliminated the problems of weight, awkwardness, and damage in shipment which were associated with metal type It is now simple for American buyers of printing to purchase typography abroad and for foreign printers to sell their services in the United States, for they are now dealing with lightweight paper-easy to handle, easy to duplicate, inexpen sive to transport, and less vulnerable to damage.

The advent of the jet engine and fast, overseas airplane service has completed the process of bringing foreign typographers to our doorsteps.

As will be shown below, American producers of typography are at a severe cost disadvantage, as compared with foreign producers of type, and the latter have the necessary technology to compete with us directly and hurtfully. In such a situation, the U.S. typographers' greatest advantage has been the ability to sell service, always an essential element of the industry. But this U.S. advantage is now gone or at least mitigated. Reproduction proofs can now be flown to the United States from any country in a matter of hours-by commercial carrier or through the mails. The time differences and the 6-day week often permit faster service than can be rendered in the United States.

Film and phototypesetting.-The latest development in typographic technology is one which can create revolutionary, dynamic, healthy changes for the typo graphic industry. The process of phototypesetting is a relatively new one, but is full of promise and potential. As indicated above, lithographic and similar plates today are made from film negatives or positives of type images. Much research has been aimed at obtaining the film image directly from the typesetting process, cutting out the metal process completely. Right from the typesetting machine the image is received on film.

Other typesetting developments.-There are other innovations which will bring improvements to the industry but which, like the repro proof and phototypesetting, make typesetting more susceptible to overseas competition. Generally referred to as automation, they will make use of the computer and computer concepts utilizing lightweight paper and magnetic tapes which can be readily prepared anywhere in the world and flown to the United States.

ECONOMIC ADVANTAGE OF FOREIGN INDUSTRIES

Foreign industries have bid and priced themselves far below us. This has been possible primarily due to the great disparity in wages,

In New York City, the typographer must pay his typesetters under the contract with Local No. 6 of the International Typographical Union a weekly wage on day shifts of $153.25 for a 35-hour week. This contract expires this fall.

In Chicago, the rate is $149 for 364 hours. In Detroit, the rate is $146 for 371⁄2 hours. And, in Los Angeles the rate is $147.55 for a 35-hour week. In most of the larger U.S. cities, the rate is at least in excess of $125 per week. And, all of these contracts specify extensive fringe benefits of as much as $25 per week.

The reduced workweek in a service industry such as ours compels extensive overtime at rates of 11⁄2 and double the regular rate. The fact is, too, that the tight labor market has resulted in most employees receiving substantially above the union scale. Thus, the wage rates actually understate the real wage levels by a significant amount.

While we do not have directly comparable rates for typesetters abroad, we call to your attention the wage scales for other countries cited in earlier testimony of the International Typographical Union from the 1964 yearbook of the International Labor Organization:

The current U.S. average for all printing employees-March 1965-would be $3.03. Increases have, without doubt, taken place in the European countries

too, and comparisons are of all workers and not solely typesetters. It can be seen, nevertheless, that European scales are 50 percent, 60 percent, and more, below those in this country.

The 1963-64 composite financial statement for the typographic industry indicates 71.2 percent of all income of 109 typographic firms went to defray payroll costs; 56.5 percent covered factory labor cost alone.

With wages such a substantial cost factor in our industry, the overseas wage advantage could be disastrous to the U.S. industry if the requirement of domestic manufacture for copyrighted books were removed. There is no possibility of further absorbing the differential for, as the 1963-64 composite report shows, profit average in the industry is now down to 4.2 percent, before Federal income taxes.

IN CONCLUSION

The typographic industry is very concerned over the amount of typesetting that has come into this country as a component of printed matter as well as the extent to which printed matter itself has been imported.

In terms of economics, our industry is at a competitive disadvantage with industries abroad. In addition to this economic disadvantage, our domestic firms face foreign industries which have attained a high degree of competitive ability through technological progress. These two factors would not concern us so strongly, but for the changes that have taken place in typographic processes. With the substitution of reproduction proofs and film composition for metal type, typography can be imported with much greater ease and at negligible shipping or postal expense. In the coming years computer tapes will also be a factor.

For these reasons, we urge the enactment of H.R. 4347 and the inclusion in the bill of proposed section 601, together with the amendments we have requested. Mr. KASTENMEIER. Mr. St. Onge.

Mr. ST. ONGE. Thank you, Mr. Chairman.

I think the witness is to be congratulated for a very articulate and capable presentation of the point of view of the industry or the segment of the printing industry that he represents. While he may not be an attorney, certainly he has done a tremendously good job in my opinion.

Mr. CANTOR. Thank you, sir.

Mr. ST. ONGE. Now, sir, as a practical matter, why should I give you a contract at $7.50 a page when it is presently available at $2.50 in Japan or a dollar in Korea?

Mr. CANTOR. There is a question of weighing the small advantages that still do remain to us. For example, Japanese proofreading is notoriously erratic when it comes to English. A buyer may be willing to put up with some of that if he can get a $10 page for $2. He may be willing to compromise somewhere along the line. There are these practical considerations that do strike some kind of balance.

Mr. ST. ONGE. One further question. This camera that you referred to that is manufactured in England, you say there are only a handful in this country. What do they cost?

Mr. CANTOR. I am glad you asked that question because it opens up one area of tremendous difficulty for us. An installation of the kind we did in our particular shop, for example, and I would rather talk about what I know rather than guess, cost us about $150,000 to put in, and we were told by the few companies who had been in the field it would cost us a quarter of a million dollars over 5 years before we got the operating bugs straightened out so that we could go ahead and use