authors and the provision covering enforcement, but these will be discussed by our other witness, Mr. French.

Thank you again for the opportunity to give you our views on this matter of vital importance to book manufacturers.

BOOK MANUFACTURERS' INSTITUTE, INC.

EXHIBIT A.-Ratio of factory production labor to sales for the fiscal year ended Dec. 31, 1963, or closest thereto

EXHIBIT B.-Comparative hourly earnings, United States and selected foreign countries, book printing, and allied industries [Earnings amounts in U.S. dollars]

EXHIBIT C.-Average hourly wage rates or earnings in printing and publishing industries, selected European countries, October 1963

Source: April 1965, study by U.S. Department of Labor, utilizing rates and earnings reported in “Statis tical Supplement to the International Labour Review," July 1964, International Labour Office (ILO), Geneva.

EXHIBIT D.-U.S. exports and imports of books by value, 1958–64

1 The values of imports of nondutiable books for the years 1958 and 1959 include the values of unknown quantities of imports of books, maps, music, engravings, and other printed matter printed more than 20 years. Accordingly, these figures slightly overstate the values of imports for the years 1958 and 1959.

2 These totals include the value of imports of prayer books valued at $138,931 which were dutied and statistically reported as "India and bible paper.'

Source: U.S. Department of Commerce, Bureau of the Census.

Mr. KASTEN MEIER. Thank you, Mr. Howard. I have just one question before we proceed to Mr. French. That is only for the purpose of illumination here at the end of your testimony.

On page 24 you were reading, and I was reading from your prepared statement. Four lines from the bottom you read, "But we reluctantly would not object to a legislative interpretation in the committee's report exempting such reproduction proofs." But then you added a qualifying clause not in your statement.

Mr. HOWARD. That is correct. I think that in essence we feel that a great number of publishers are relying on the interpretation that.

they put on the manufacturing clause to use repro proofs in the case of scholarly works, and technical and scientific works, which must be done abroad in many cases, would not be published because the cost factor is so great in composition of short-run works that it might not be possible to publish them were the composition done here.

We have no particular urge to interfere with that. However, while we do wish to prevent damage to publishers who are performing a real service to the technical and scientific community, we do not want the practice to increase to the point where all composition would go abroad. We would like to see some middle ground. Perhaps Mr. French can draw up some language that might be incorporated as an addendum and submit it to you along with the exhibits which we said we would submit later.

Mr. KASTEN MEIER. Mr. French, I understand you will want to summarize some specific recommendations for amendments to H.R. 4347 and give the committee some specific language in this connection.

STATEMENT OF JAMES H. FRENCH, COUNSEL, BOOK

MANUFACTURERS' INSTITUTE

Mr. FRENCH. Yes, Mr. Chairman.

With respect to the comment just made by Mr. Howard, I certainly will be glad to prepare and submit some specific language on that subject. So far, we have been unable to come up with it.

Mr. POFF. Don't you anticipate you will have a little difficulty with the definition of scholarly works

Mr. FRENCH. Exactly.

Mr. POFF. And the related problem of selecting the person who is going to decide from that language which specific work falls within the definitions and which does not?

Mr. FRENCH. Those are the precise problems that we have been faced with.

Mr. POFF. I am sorry for interrupting you; go ahead.

Mr. FRENCH. What Mr. Howard was saying in effect, though, is that, while we would have no objection to those particular works being allowed to have the composition set abroad, where there are monotype, particularly expensive type, complex type, we certainly would not want to see just ordinary composition being set abroad, of which there are examples even today.

Now, my prepared statement constitutes simply a recitation of some recommended language which the BMI would like to ask the committee's consideration of, and our reasons for them. I, of course, will submit it for the record.

Just to summarize very briefly what they are, we have basically five problem areas. The first one would be subsection (b)(1) of section 601, which relates to exemption for foreign authors. Now we have three amendments actually, which are incorporated in a single proposal, to make to that subsection.

The first one would require that the substantial part of a work which could be written by a foreign author and receive exemption would have to be a substantial part of the main body of the text; because if it is not, a foreign author could be employed to write a foreword, a

preface, an introduction, anything, and it would be exempt. We think this would provide fertile ground for wholesale evasion.

The second area in that regard is a problem we have with works made for hire. Section 201, I believe it is, of the bill would provide that in the case of works made for hire, the employer would be for all purposes under this title the author. Where an exemption is written as it is in subsection 601 (b) for foreign authors, we fear that it would invite bogus contracts for hire of known valuable properties to allow a foreign employer, whether it be a foreign corporation, a foreign subsidiary of a U.S. corporation, of a U.S. publisher or foreign publisher, we feel that it would simply invite evasions. So we have recommended that in the case of works made for hire the employee, the person actually preparing the work, be considered the author for the purpose of this exemption subsection.

There is one other thing in this area, that is, in the case of collective works and composition. In those cases there are bona fide joint publishing ventures engaged in by American publishers and foreign publishers in which both American and foreign authors contribute to them, encyclopedic works and works of similar nature. In those cases, we think the exemption should be provided, and our amendment would so provide.

The third amendment to subsection (b) which we would suggest is that the writing of all foreign persons be exempt. As the provision is now written, it would not exempt foreign nationals temporarily domiciled in the United States. There are quite a few who are attached to universities as teaching fellows, and so forth, who may well write and want to publish while they are in this country. Our proposal would exempt all foreign persons regardless of whether they are domiciled here temporarily or not.

Now our second major area is the 3,500-copy exemption which Mr. Howard has covered. I won't go into it. We would recommend that it be kept at 1,500 or at the most increased to 2,000.

Our third major area deals with the so-called enforcement subsection of section 601, which would be subsection (d). I believe that is on page 33 of the bill. Now in that subsection we have problems with three areas. One is criminal infringement. As the bill is now written, a so-called infringer who is really the enforcer under this statutory scheme is provided a defense against a civil infringement suit if the work was manufactured in violation of the manufacturing clause. However, he is given no such protection against criminal infringement proceedings which could well be initiated against him and which would render the value of this enforcement subsection just completely nugatory. It would remove all enforcement. So we suggested an amendment which would include a protection there against criminal infringement where the manufacturing clause has been violated.

Second, we have suggested a small amendment, which would make clear that, where subsection (d) requires that the so-called infringing copies be manufactured in the United States, this test of manufacture in the United States be the same test as would apply in the first instance to the authorized copies under subsection (c) of the manufacturing clause. So we have simply tied that back into subsection

(c) so that you would not have a different test applied to the authorized copies than to any unauthorized copies.

Now our third area, and this is a serious one with us, very serious, is the area of burden of proof. As drafted, subsection (d) would require the so-called infringer who is given a defense, to prove that the copies were manufactured or imported in violation of the manufacturing provision. Now these are matters which are peculiarly within the knowledge of the copyright owner and his publisher. It would be extremely difficult for anybody, you or I or Mr. Howard, or anybody, to know whether the manufacturing clause had or had not been violated. For that reason, we feel that a requirement of disclosure is absolutely essential if there is to be compliance at all with the manufacturing provision. So with that in mind, we have recommended an amendment to section 408 of the bill, which is the section detailing the items of information to be supplied on registration application forms. Our amendment would insert an additional clause there among the 10 already there, which would require, in the case a published work consisting preponderantly of nondramatic literary material that is in the English language, that is, works which are covered by the manufacturing provision, a statement of the names and addresses of the firms or persons performing the manufacturing of the copies required by subsection (c) of section 601 of this title to be performed in the United States, and specifying the work performed by each such firm or person.

Now our amendment would state that in the case of a registration application being filed for a work which has not been published, of course such information would not then be submitted and it would not be necessary to come along at some subsequent date when it is published and submit the information. However, in order to cover the situation where registration has been obtained in an unpublished work, we would have a requirement in section 601 under subsection (d) which would state that where the information required by section 408 has not been submitted it should be included in the complaint of the copyright owner under subsection (d). This, we believe, is absolutely essential if there is to be any compliance whatsoever with this provision.

Now our next proposal, and again Mr. Howard has covered this pretty fully, is what we like to refer to as the "parity proposal," which has been endorsed in principle, although not in terms of the specific language we are offering, by a number of the other witnesses here, both today and yesterday. We believe that this would have immediate application to Canada and subsequently to any other foreign country, when the cost of production of books comparable to the books in use in the United States, or comparable to the U.S. cost of producing those books, is not significantly less. We strongly urge the adoption of this proposal. There is very little difference between Canada and the United States in terms of book-production cost. Canada is truly unique. It is the dominant buyer of U.S. books, buying about 50 percent of all exports. They serve a smaller national market than we do, so have certain disadvantages. We have no objection to competing with Canadian book manufacturers or with any book manufacturer who does not have substandard wage rates to pay. So we strongly urge consideration of this proposal.