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the 2-cent postage-stamp business. And now the publishers royalties are the largest source of their revenue. You understand that; they admit that; they do not deny it. Here is Mr. Mills, and if he wants to get up and say I am wrong; that the publishers do not admit that, he can do it.
Mr. BLOOM. At that rate, the artist would get one-fifth of a cent a roll, on the average.
Mr. BEATTYS. What is that?
Mr. BLOOM. If they get one-tenth, that would be one-fifth of a cent on a roll, would it not?
Mr. BEATTYS. Oh, no; no; no; excuse me, I do not make myself clear. That out of the royalties on the rolls which amounted to several hundreds of thousands of dollars in 2 cent stamps, all the artists that played these songs that resulted in this business, got one-tenth of what the publisher got.
Mr. BLOOM. That is one-fifth of a cent, is it not-one-fifth of a cent if he got 2 cents?
Mr. BEATTYS. Supposing we paid $300,000.
Mr. BLOOM. That is the only way you can figure it.
Mr. BEATTYS. Supposing we paid $300,000 in five years to the music publisher, the artists only got $30,000.
Mr. BLOOM. What did you get altogether on the rolls you sold? Mr. BEATTYS. Oh, good land, what has that to do with it?
Mr. BLOOM. To find out what you made out of it.
Mr. BEATTYS. We lost money, I will say this, what is the good of the automatic piano if you do not have a roll, and the man who does not sell rolls-do you want us to go out of business?
Mr. BLOOM. You might say the same thing about the big manu facturer, that his things all go in a box and the fellow lost money on the box.
Mr. BEATTYS. No, you do not have to have nails in the box; I have seen wooden boxes, I have seen them automatically put together. That is not a fair illustration. You do not have to have anything in the box except the bottom, and that is a part of the box; but if you have a piano that works by rolls you have to have the rolls.
Mr. BLOOM. How about your player piano; that is a deadhead too, is it not; you do not make anything on your player piano?
Mr. BEATTYS. Oh, no
Mr. BLOOM. Why don't you say something about that? You have got to have that, that is part of your business, and although you may lose $500,000 on one thing you may have made $50,000,000 on another.
Mr. BEATTYS. All right, we are fortunate then.
Mr. BLOOM. I am willing for you to make ten times as much. Mr. BEATTYS. That does not alter what I say, that the artist gets less than the music composer. That is what I am pointing out. Do not get away from that one point I was going to make, that if the mechanical license provision is eliminated I know what the publishers will do, and I am going to tell you. I will tell you how I know it, because I know what they have done with the words. Now this is very important-the words. Now I might say this: There has grown up in late years a peculiar kind of roll called a word roll. Some years ago we did not print the words on the roll. Now it has
come to such a pass that the public makes such demands on us that we find we have to sell about seventy-five per cent of our music rolls as word rolls. Now these have got to be popular, some of them, and they are copyrighted, the words, so they say "the two cents does not include the words." I would like to fight that out in court with them, but, of course, that is neither here nor there-and some time I may. But I do not think we will need to. After we get the present law that we wanted, what did they do? They kept increasing the price, and increasing the price, and increasing the price, until now they have got us up to twelve and one-half cents a rollfor words, only. We get some cheaper so that the average of our music roll for words is ten cents-and two cents for the music. Now, if you take off this license fee and allow them to do the same thing with the music that we know they are doing with the copyrighted words, you will put us out of business; because we cannot pay twentyfive cents a roll when we sell a pile of those for forty-odd cents. You can not do it.
Now, if you ask me why we want that license provision, what we will do with it, with your permission I will tell you what I know they have done with the copyrighted words, where there was no license. They have got up to twelve and one-half cents. Mr. Mills says we deal individually with each music publisher. All right, we might, but it is a strange thing that every one charges the same; every one demands that we must take so many rolls with those words on; if we want any popular hit, we have to take some dead ones to help them out, and all those sort of things. Those are the things that hurt, and they seem to be, all of them, in a sort of unison on what the conditions are.
The CHAIRMAN. Mr. Beattys, right there, coming back to the question I asked you a moment ago, the first year suppose the license provision was stricken out of the law for mechanical reproduction, do you give it as your honest judgment that the producers of music would put such a price for these mechanical reproductions that no, company could afford to purchase them?
Mr. BEATTYS. Well, I would not say that, Mr. Chairman; I would not go quite so far as that, because that would be to kill the goose that laid the golden eggs.
The CHAIRMAN. It would be killing the goose that laid the golden eggs.
Mr. BEATTYS. I would say this
The CHAIRMAN. Let me follow that right here. A moment ago you intimated that you believed the producer ought to have the right to bargain and sell his product-his production-and that the main reason you were opposed to eliminating this mechanical clause from the bill was that it would give some company an opportunity to form a monoply and to put all the other companies out of business. Now suppose we were to enact this sort of a statute, permitting the producer of a piece of music to bargain and sell with your company, for instance, the right to reproduce by mechanical rolls, etc., and then include a provision that would give to every other manufacturer of mechanical rolls a right to use that piece of music at the same price that the Aeolian Co. paid for it when it bargained and bought it. Then you would not have any monoply, would you,
and you would carry into effect the very fundamental proposition that the producer ought to have the right to bargain and sell his product. Is not that a fair proposition?
Mr. BEATTYS. I think it is pretty fair. I would say this, that would certainly be a very great advance over nothing; but I can see, perhaps, just some dangers like this: You say that they would pay the same price that we have. Now, if you would guard in some way the fact that there would not be, like the Interstate Commerce Commission and the railroads, would not be any rebates and a change of rates so that one would really get the roll at a greater price than the other, I think that is necessary. That is a danger, Mr. Chairman.
The CHAIRMAN. I did not get that; will you say it again, please? Mr. BEATTYS. I said you would have to guard it just like the Interstate Commerce Commission and the railroads (that there would be great danger of some sort of a rebate) so that they would sell at the same rate, but, at the same time, give one music roll concern some advantage by a rebate, or some other monkey business; because you know, Mr. Chairman, if they would sell to us for 5 cents and sell to some one else for 20 cents, that some one else paying 20 cents would go out of business.
The CHAIRMAN. Yes; I see that.
Mr. BEATTYS. Now you said about killing the goose that laid the golden eggs. I want to say this: I think the music publishers would be willing to go to the Victor Co., to the Aeolian Co., or the American Piano Co., the big companies and get all the money and force them, because they know they have to have these music rolls,-force them to pay all the traffic would bear. I think they think it would not put them under, perhaps, but there are plenty of small concerns that would go out of business absolutely, I take it. I am not speaking for the small music roll, but I tell you I think this Committee ought to consider the music roll side of it, because the public demands rolls from all piano makers and if they got into the hands of two or three concerns the public would be very seriously damaged.
The CHAIRMAN. That is true, and I am sure the committee would have in mind the protection of the weaker companies, as well as the stronger companies; but I can not see where there is any fundamental objection to the proposition I stated a moment ago and I would like to have you state your position on that proposition.
Mr. BEATTYS. I will tell you, you know that appeals to me. That appeals to me. Perhaps we could work it around so that it could be sufficiently guarded at the point I spoke about.
The CHAIRMAN. Oh, yes, it would have to be safeguarded, and that is a thing we would want to do, of course.
Mr. BEATTYS. That would not be half bad.
The CHAIRMAN. But it would save the principle, it seems to me, that underlies this whole proposition, and get away from this old time price fixing.
Mr. BLOOM. There would not be any price fixing in anything. It would provide that only responsible companies would be allowed to make these rolls and mechanical instruments, and then, if anyone did make them, the authors and composers would not lose this money they are losing to-day.
The CHAIRMAN. From a lot of fly-by-night concerns.
Mr. BLOOM. You are placed at a disadvantage.
Mr. BEATTYS. I do not stand up for the fly-by-night concerns.
Mr. BEATTYS. I would like to see some way worked out in this bill to protect the music composer from the fly-by-nights. They do not help us.
Mr. BLOOM. If a provision was made like the chairman said, they ought to get a process developed so that it could be sold at a price that could be sold to anyone, provided they had some standing in the community and some financial responsibility.
Mr. BEATTYS. That is right, Mr. Bloom; I think you are right, but I want to say this-I must say this because I feel with all the uncertainties in that kind of a provision, I think they might work it out, but I feel that the price, the rate fixing, rather, the rate, should be uniform and fixed; because I could not think of just any way to keep them from not going so high that it not only would hurt us seriously, but put out of business the others. That is the way I feel. I would say it should be a uniform fixed rate; but if you can get around that in the way the chairman suggests, to protect everybody, I am the last one in the world to oppose it, so far as I am concerned. The CHAIRMAN. You know I have this feeling-I may be wrong about it; I may trust too much to human nature, but I have this feeling-perhaps there is nobody who is interested in this business who does not want to try to get on a fair and equitable basis as affecting everybody concerned, the public and the people who are interested in these various concerns, and it seems to me a provision along this line could be worked out and solve this whole proposition. Mr. BEATTYS. Yes, sir. Of course you know, Mr. Chairman, I would not want, without careful consideration, to give unqualified support to that kind of thing, right here on my feet you know, in a minute; but I would be very glad to give thought and consideration so far as our company is concerned to that proposition, and I would like to see something along that line worked out. Now you know the publishers came here in 1909 and they asked protection. Now they got it, with limitations-with limitations. They had their exclusive rights, but they had this license provision. Now they are here again and they are asking the same rights and they have them in this bill, but they say to you: "Take away this limitation which the Sixtieth Congress gave and destroy theirs; give us our rights, but destroy theirs." I say that is not just; that is not fair to us. Seventeen years later they are here asking those rights without the protection which the Sixtieth Congress said we needed against them. They want rights and then they show no change. That is the secret of the whole thing. We are not the appellants there. They show no change of conditions, and they show no reasons now why they should have it, rather than in 1909.
Now, I am not going to talk any more about this thing. I simply say that I have heard a good deal about it being time the United States took its place among the civilized nations of the world in copyright matters. I have heard some talk like that. Now, all right; if you want that principle applied, then you had better put in here a mechanical license in this bill, because the trend of movement throughout the entire civilized world is to have that kind of
a mechanical license in copyright bills. Canada, Great Britain, Australia, New Zealand, and India, and countries I could mention have this kind of provisions in their copyright law; and if you want to take your position with other civilized governments, why put that in. That is a good argument for our license.
Mr. BLOOM. Do you say they have a compulsory licensing clause in their laws?
Mr. BEATTYS. Yes, sir.
Mr. BLOOM. With the price fixing?
Mr. BEATTYS. Oh, yes, sir; England fixes prices. England does not say so much, but it says a certain percentage. Oh, yes, Great Britain does that.
Mr. BLOOM. Such a percentage of the list price?
Mr. BEATTYS. Yes, sir, that is right.
Mr. BLOOM. Then they can make the list price whatever they wanted; instead of making the list price 50 cents, they could make it a dollar.
Mr. BEATTYS. Oh, yes; but they would not do it.
Mr. BLOOM. But they could.
Mr. BEATTYS. Yes. I deplore that with the utmost sincerity. I think this license clause is absolutely essential for the continued maintenance of our industry and I ask you gentlemen not to reverse the finding of the Sixtieth Congress which was wise, in my judgment. Able men carefully considered it. and I ask you to follow it. I beg your pardon for taking up so much time.
Mr. BLOOM. I just want to ask you one question about the Constitution-"to promote the progress of science and the useful arts by securing, for limited times, to authors and inventors the exclusive rights of their respective writings and discoveries." Now do you mean to say their constitutional right does not give them a monopoly, an exclusive right of their copyrights and inventions?
Mr. BEATTYS. Are you talking now about that statement I made that we only ask our constitutional rights and stand on our constitutional rights?
Mr. BLOOM. Yes.
Mr. BEATTY. I will tell you, Mr. Bloom-you just read it, but it says this, does it not, that Congress "may."
Mr. BLOOM. No; it does not say that.
Mr. BEATTYS. "Has the power"?
Mr. BLOOM. No; it does not say that; that is the trouble.
Mr. BEATTYS. It says, "has the power," does it not?
Mr. BLOOM. No; it does not say that.
Mr. BEATTYS. Is empowered to promote the progress of science and the useful arts?
Mr. BLOOM. It does not say about power or anything else.
Mr. BLOOM. Read it: that is the Constitution.
Mr. BEATTYS. But they quote here the clause: "To promote the progress of the sciences and the useful arts"; but if you will go back here somewhere-I will find it for you in a minute-it says the Congress shall have power to-1, 2, 3, 4, 5-to promote the progress of the sciences. They shall have power, Mr. Bloom. All right.