Mr. KASTENMEIER. You are embracing a compromise?

Mr. ANELLO. I guess that is true. As a matter of fact, it is my understanding that almost 95 percent of the copyrighted works fall in the public domain-I am speaking of songs now-at the end of the 28-year period. So we are speaking of about 5 percent. Our interest is primarily music, obviously. If that is the case, then I don't see the great necessity for extending the term much beyond what is presently in existence.

While I would agree with Mr. Schulman that a man probably should be entitled to the fruits of his labor for his life, not many of us would write music much before our 20th or 21st birthday, and 76 years would carry us a pretty long way in life. I oftentimes at meetings make the statement that I am a little tired of hearing how poor Stephen Foster died and his children were left without any money whatsoever. This has been reiterated time and time again. While I don't want to deprive any songwriter of his just rights, I do believe that 76 years is ample.

Mr. KASTENMEIER. Do you feel that there is a public interest or at least a user interest in having works fall in the public domain at a period as early as possible consistent with the protection of the holder? Mr. ANELLO. I think there are two public interest rights here, Mr. Chairman, the user right and the copyright owner right. Might I say that this bill is a copyright owner bill. It is not a user's bill, by any stretch of the imagination. It does very little, in my opinion, for the user. But that is the way the ball bounces.

Mr. KASTENMEIER. On the CATV question, I think it is unfortunate we did not have your testimony at the time we had the testimony of several others; because it would be easier to relate it to the other positions. You discussed the point of whether or not a performance is separate and apart from another broadcasting station in the case of CATV. In the case of a network where a program originates in New York, would not each station, in the same sense as that, perform a separate performance?

Mr. ANELLO. Sure, and they pay for it.

Mr. KASTENMEIER. They pay for it?

Mr. ANELLO. Yes, sir. The station pays on the amount of gross. So the network pays performance rights, but so does the station.

Mr. KASTENMEIER. Based on that particular performance, or based on some other type of performance?

Mr. ANELLO. Performance rights by broadcasters are based on gross receipts, a certain percentage of the gross receipts less certain reductions. If a play is sent out over the network, true, the broadcaster does not pay performance for that particular play. But because of the fact that he has sold advertising based upon his programing, he is in effect paying a performance right for that play, since it occupies 1 or 2 hours of his broadcast day. And during those 1 or 2 hours he does receive revenue.

Mr. KASTEN MEIER. Do any members of your association, the National Association of Broadcasters, also own or have interest in CATV?

Mr. ANELLO. Yes, sir: a number of broadcasters, and they are increasing daily.

Mr. KASTENMEIER. Do arrangements for licensing exist between broadcasters and CATV where there is this relationship?

Mr. ANELLO. It is not necessarily dependent upon this relationship. There are arrangements between broadcasters and CATV's located in the same community with respect to duplication of programing, how far that duplication should extend. This, of course, now is unnecessary if the CATV is microwave fed because the Commission has put into effect rules as of June 1 which require the CATV to give a certain amount of protection to broadcasting stations. On nonmicrowave fed, that is, direct off-the-air pickup, this is a subject presently under discussion, and the Commission is asking for comments which will be due sometime next month.

But there are agreements not relating to payment, but solely to the question of duplication; and they are not necessarily between broadcaster-owned CATV systems, but all types.

Mr. KASTENMEIER. Nowithstanding the state of the law, are there cases where the CATV voluntarily enters in an arrangement to pay a broadcaster or broadcasters for performances?

Mr. ANELLO. I know of none. I know of none whatsoever. There are a few CATV systems that originate moving pictures on separate channels above and beyond what they pick up off the air, for which I understand they pay the owner of the rights for the motion picture. But I know of no CATV system that pays the broadcaster for the right to retransmit his signal.

Mr. KASTENMEIER. Thank you.

Mr. St. Onge.

Mr. ST. ONGE. I will simply congratulate Mr. Anello. He has made a good presentation for his client.

Mr. ANELLO. I am from New London, Mr. St. Onge.

Mr. ST. ONGE. I did not know he was a constituent.

Mr. KASTENMEIER. Mr. Hutchinson.

Mr. HUTCHINSON. I have no questions. Thank you very kindly. Mr. KASTEN MEIER. Thank you, Mr. Anello, for your fine presentation.

(A letter from and the prepared statement of the Graphic Arts Industries Association follow :)

HERBERT FUCHS,

[Telegram]

OTTAWA, ONTARIO, CANADA, August 17, 1965.

Counsel, Judiciary Subcommittee on Copyright,

House Office Building, Washington, D.C.:

Reference invitation to testify tomorrow, August 18, on behalf of Graphic Arts Industries Association representing all employer groups in Canadian printing industry.

52-380-66-pt. 3--23

Realizing you have many witnesses to hear and not wishing to suggest how your country should legislate we would stress that our written submission of April 23 explains the problem as it affects us, but please advise subcommittee chairman and members and please place on the record that we do wish to emphasize the following points:

We reiterate Canadian unhappiness because your copyright law maintains unique nontariff trade barrier to Canadian printed matter as well as restricting both press freedom and fair trade.

Taking into account Canada's unique position as destination for bulk of American printed exports most of which (notably periodicals, books, newspapers) enter free of any duty or tax and without any manufacturing restrictions or conditions, we trust that you will act so as to relieve the extraordinary disadvantage of Canada and of Canadian printing industry.

Since Canadian industry is close to you in terms of production costs with our costs usually equaling and frequently exceeding yours, it is hoped that you will proceed in the manner proposed by the Book Manufacturers Institute to relieve the unfair and unreciprocated disadvantages to any country whose production cost approximates your own.

We refer specifically to pages 20 and 21 of the prepared statement of Harry F. Howard and pages 7, 8, 9, and 10 of prepared statement of James H. French. Generally we favor removal of restrictions upon free flow of printed matter between our countries, so therefore we trust that considerations of justice and fair play will persuade you to accord parity of Canada.

All good wishes and many thanks.

DAVID MACLELLAN,

General Manager, Graphic Arts Industries Association.

GRAPHIC ARTS INDUSTRIES ASSOCIATION,
Ottawa, Canada, April 23, 1965.

THE CHAIRMAN AND MEMBERS,
JUDICIARY SUBCOMMITTEE ON COPYRIGHT,
U.S. House of Representatives
Washington, D.C.

GENTLEMEN: The Canadian printing industry welcomes and appreciates the opportunity to place before you a statement concerning the adverse effects upon our industry and thus upon our country of the existing U.S. Copyright Act and the proposed revision of this law.

The Graphic Arts Industries Association is the national body representing all local and regional groups of employing printers in Canada, including some 540 firms engaged in printing, engraving, typesetting, and binding, which account for the bulk of commercial graphic arts manufacturing in this country.

For reasons which are set forth in this submission, Canada almost certainly is more painfully injured than any other country by the unique manufacturing clause of the U.S. Copyright Act. We shall continue to suffer if the draft legislation now being considered were to be implemented.

The annual meeting of our members, held last October in Ottawa, unanimously resolved that the manufacturing clause in the present act, and the draft legislation before Congress at that time, were unfair and detrimental to the Canadian printing industry, and asked "that our government be requested to protest to the appropriate U.S. authorities in order to endeavor to have the act changed to permit printing of works in Canada for shipment to the U.S. without prejudice to copyright."

In January of this year, the government of Canada did convey a note to the Department of State, expressing the official concern of our country.

Now that you are about to hold hearings in order that interested parties may present their views, we would earnestly solicit your sympathetic and active interest in alleviating the harm done to Canada, as well as to American interests in Canada, by legislation which inhibits our economy, freedom of trade, and freedom of the press.

At this writing, our vice president and treasurer, Mr. D. M. Alloway, who is intimately acquainted with the effects of the existing act upon Canadian commercial printing and book manufacturing, is available to appear before you to amplify this statement. He will be happy to answer any questions you may have.

May we place upon the record (1) some general propositions as seen from our point of view, and (2) a picture of the extraordinary imbalance in printed exports and imports flowing between the United States and Canada.

(1) GENERAL PROPOSITIONS FROM OUR POINT OF VIEW

For more than 40 years, the U.S. Copyright Act, through its manufacturing clause, has inhibited publishing and printing in Canada by imposing a virtual customs embargo upon bulk shipments from Canada to the United States. Through lack of official understanding, mainly because our own industry was small, weak, and scattered at the time, the Canadian Secretary of State consented by means of a certificate signed in 1923 to the restrictive U.S. legislation. There is nobody active in the industry today who can satisfactorily explain Canadian negligence at that time, except for the weakness and lack of organization then prevailing in the industry. However, the damaging consequences have gravely crippled the industry ever since. Now that you are reviewing the existing and proposed legislation, we trust that the inequities for Canada may be removed.

Briefly, the manufacturing clauses in the present act and in the proposed law require that works of American authorship for sale in the U.S. domestic market shall be wholly manufactured in the United States. This requirement applies not only to books, but to pamphlets, periodicals, company sales literature, and other printed matter.

At the same time, the Canadian Copyright Act-which is due for revisionhas given full protection to authors of all nations, wherever their works may be printed.

From our standpoint, there have been-in particular-two very objectionable features of the U.S. Copyright Act. They are:

(1) Prohibition of importation into the United States of printed books, periodicals, etc., involving U.S. authorship, under pain of the author losing his copyright protection in the United States.

Authors or publishers hoping to sell successfully in the United States naturally do not wish to risk this penalty. Thus, to be sure of being able to sell in quantity in the United States, an author and/or publisher feels compelled to choose an American printer.

As a damaging corollary, since the normal situation is to print in English, this compulsion makes it more economic by far to print copies needed for Canadian sales in the United States too. Obviously it is much cheaper to lengthen a U.S. press run than it is to originate a separate printing in Canada, especially when typesetting is included-typesetting being such a major part of the total cost.

(2) The U.S. Copyright Act requires that printing in the United States shall involve total manufacturing—thus reaching beyond the actual printing to claim such related operations as the setting of type, engraving, or other platemaking, binding, etc.

No other free nation imposes similar conditions upon the world of printing, publishing, and authorship.

In effect, the manufacturing clause is a nontariff trade barrier. Moreover, it infringes freedom of the press-limiting both the rights of authors and the rights of publishers. The maintenance of this unilateral and unique barrier would perpetuate an extremely serious inequity toward Canada, the No. 1 export market of the U.S. printing and publishing industries. Whereas Canada affords free entry to newspapers and periodicals, and free entry to most books (fiction being subject to a duty of only 10 percent), and whereas Canada imposes no copyright restrictions whatever upon printed matter other than normal safeguards against piracy and plagiarism, we face the embargo-like provisions of the U.S. Copyright Act.

While Canadians are excluded from volume sales to American customers, American printers and publishers enjoy the freedom to make volume sales in both countries regardless of the nationality of authors and without any unusual copyright restraints.

An American company may sell in Canada a million copies of a book written by a Canadian, or a million encyclopedias, or a million comic books, or a million magazines; but we cannot print an American book for quantity sale in the United States, or an advertising piece for an American manufacturer. Indeed, a Canadian magazine theoretically could not export to the United States copies containing a major article or a novel by an American author, while American publishers remain free to draw upon the works of authors of all nations, and to export their publications to any other nation; and they do export primarily to Canada

The absence of a language barrier deprives Canada of the natural protection which Latin American countries possess against U.S. competition with domestic printing and publishing; and Canada has not resorted to manufacturing restrictions such as those in the U.S. Copyright Act, and has refrained from other artificial devices to shut out competition in her home market.

(2) THE ECONOMIC IMBALANCE BETWEEN THE UNITED STATES AND CANADA With respect to all commodities of every description, Canada is the No. 1 U.S. export market-buying in 1963 nearly 60 percent as much from the United States as did all of Western Europe, and 32 percent more than did all of the Latin American republics. Year after year, Canada buys much more from the United States than the United States does from Canada; and printed matter is a much - larger part of our imports from the United States than the published official statistics indicate.

During the year 1964, Canadian Customs recorded printed imports from the United States of approximately $115 million, of which $45,567,000 was accounted for by books. It is important to remember that the Canadian statistics now exclude shipments valued under $200, and that there is no statistical record whatever of the vast shipments of periodicals, newspapers, books, catalogs, direct mail advertising, printed packages, and other matter posted to individual addresses or accompanying other kinds of goods. In our judgment the true volume of U.S. printed exports to Canada is nearer $300 million for the 12-month period. A tabulation of Canada's printed imports during 1959-63 (a) from all countries, and (b) from the United States, is attached to this letter.

By contrast, U.S. imports from Canada in 1964 were only $7,669,084 (Canadian statistics). The flow of periodicals, newspapers, and books through postal channels from Canada to the United States (not included in statistics) is trifling when compared with the flow in the opposite direction. For example, scores of U.S. periodicals ship hundreds of thousands of copies of every edition to Canada, and hundreds of other U.S. periodicals ship in terms of thousands and of tens of thousands of copies. The leading Canadian magazine, according to its latest circulation audit report, sends only 10,226 copies to the United States.

On a per capita basis, the comparison of printed imports by our two countries suggests that the United States has much less reason to worry about external competition. The physical volume of U.S. printed imports from all other countries during the first 9 months of 1964 (through U.S. Customs channels, according to U.S. statistics) was less than $48 million. Projected for the year, this would indicate total imports of scarcely $64 million, or approximately 33 cents per capita.

And it may be compared with Canadian printed imports from all countries (through Canadian Customs channels) of approximately $135 million, or about $7.10 per capita-i.e., 21.5 times as much per capita as the printed imports of the United States.

When you take into account the immense flood of unrecorded imports of printed matter by Canada from the United States, you may well imagine that a more valid comparison would be in the order of 40-50 times greater imports per capita by Canada than by the United States.

We are in much more pressing need of protection than our friend in the U.S. printing and publishing industries; but we are arguing not so much for