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But that is a statutory right and don't you understand, Mr. Bloom, the Constitution itself does not give these composers the right, it is the Congress that gives the composers the rights, based upon the Constitution.

Mr. Bloom. They have it right in the Constitution. Congress can limit that right for one day or for 15 years; but the right is there in the Constitution.

Mr. BEATTYS. The right is in the Constitution for the Congress to grant the right; but you do not stand on the constitutional rights, because you get them from Congress. Congress stands on the constitutional rights to get their power to give it to you.

Mr. Bloom. Would you say that the Congress has the right, without amending the Constitution—that this Congress, without amending the Constitution-has the right to take away the rights?

Mr. BEATTYS. Not at all, Mr. Bloom.
Mr. BLOOM. No.

Mr. BEATTYS. But I would say this, that Congress need not give those rights if it sees fit not to do so.

Mr. BLOOM. I do not agree with you; it must give them for some time—for one day or more.

Mr. BEATTYS. No.

The CHAIRMAN. Do you not think, Mr. Beattys, that the Congress only has this right; it has the right to limit, but does not have the right to take away

Mr. BEATTYS. No; it has not the right to take away; it has not the right to take away. It has the power to grant, and that is all it has in this bill. Let me read what the Sixtieth Congress says:

The enactment of the copyright legislation by Congress under the terms of the Constitution, is not based upon any natural right that the author has in his writings. And the Supreme Court has held that such rights as he has are purely statutory rights. The Constitution does not establish copyrights, but provides that Congress shall have the power to grant such rights as it thinks best.

Now there is the clearest statement. The Sixtieth Congress knew what they were talking about. That is Mr. Brandegee right there; he knew what that was, and he stated it, too. They did not take away rights; neither do we in this law of 1909.

The CHAIRMAN. He is right.
Mr. BEATTYS. It is not mine.
Mr. Bloom. Well, I do not think you have a chance in the world.

The CHAIRMAN. I want you to look at that and study it and ask an attorney about it.

Mr. Bloom. No; I have had too much experience with attorneys.

Mr. Smith. Mr. Chairman, our objections to the present bill under discussion are substantially those which we voiced against H. R. 11258, the Perkins bill, on which we have a brief which we filed last year, but it is not in the hearings on this bill. May we have permission to file that brief?

The CHAIRMAN. If there is no objection.

Mr. SMITH. I would also like to say just a word with respect to one thing that came up in Mr. Beattys's testimony concerning the fact that copyright owners have lost money through fly-by-night

concerns. I merely wish to say that we are unalterably opposed to the existing situation there and will do anything possible and approve any reasonable suggestion that will protect the copyright owner in that respect. We are just as much interested as the copyright owners.

Mr. Beattys covered this subject quite thoroughly with his original argument and his answers to various questions. For that reason, and also in view of the fact that the Chairman made the interesting suggestion concerning a possible compromise which might satisfy both sides, we think we will rest our case here, with the reservation, however, that if there is no compromise that can be worked out and this committee is faced with the necessity of further considering whether or not the present principle of mechanical license shall remain in the law or go out entirely, we would like the opportunity of arguing further; because we have not put our remaining people on.

The CHAIRMAN. Well. Mr. Smith, that is perfectly agreeable to me personally that you should do that; but I believe if you will put into the record here your brief of last year and with your státement and the statement of Mr. Beattys, I think the committee understand your position thoroughly and my judgment is that no further argument on your part would be necessary. I think the committee understands your position; I know I do, and you would have just as courteous and fair consideration without any further argument. Mr. Smith. If any real new information comes in, I

suppose we would have consideration.

The CHAIRMAN. Yes.

Mr. SMITII. In closing our case here, we do not want it brought up later if there are further hearings and no progress would be made on a compromise, that we have just rested our case and are out.

Mr. BLOOM. But you are opposed to that one feature.
Mr. SMITH. That is our big item.

Mr. Bloom. You do not want to go away with the impression before anything is done, if this suggestion of the Chairman is not acted upon favorably, that you are to have the opportunity of coming before this committee again or filing any briefs or anything, because these hearings are closed.

Mr. Suth. We are not going to ask any privilege other people are not asking.

Mr. Mills. Agreeable to this spirit of compromise which has been suggested by yourself, Mr. Chairman, and hoping to bring to an end these endless hearings on copyright, and being willing to take what seems reasonable in the face of things for every one, we suggest that this would be acceptable to us, in line with the chairman's suggestion, “ That a mechanical license under the copyright law, if granted to one licensee, shall be granted to any responsible applicant at the same rate of royalty, under a proper and workable scheme insuring accurate accounting for and prompt payment of royalties, with provision for adequate penalties in the event of fraud.”

Mr. Bloom. Mr. Chairman, that is very nice, but how are you going to protect radio in that?

Mr. Mills. Radio is protected under the bill; I mean there is a protective provision in the Vestal bill.

Mr. Bloom. Then you had better enumerate or describe.
Mr. Mills. The kind of mechanical license?
Mr. BLOOM. Yes.

Mr. MILLS. This kind of mechanical license bears no reference whatever to public performance. The radio right involves only the public performing right.

Mr. Bloom. The idea is this, if you are satisfied, I am; but the only thing I am calling your attention to is if you want to insert that in the record and want to be more positive, you had better put it in.

Mr. Mills. I think we would be willing to go this far, as far as radio is concerned, to say that under equal conditions licenses granted to broadcasters would be granted for operating under the same conditions, at the same price. We do not wish any opportunity to discriminate.

Mr. BLOOM. But have you the same conditions in broadcasting?

Mr. Mills. No. I stated the conditions being equal. Now there are all of the variables, all of the many different factors that make the conditions of operating one station different from another. In fact, there are no two stations among the 536 in the United States that operate under identical conditions.

The CHAIRMAN. Do you not think we ought to keep out of that field entirely?

Mr. MILLS. I think that field is covered. The act gives the owner of the copyright the exclusive right to publicly perform and, in some cases, for profit.

Mr. SMITH. It would look to me we have tentatively, at least in a general way, gotten together on a compromise proposition. Of course, we know there is going to be difficulty in working out the details, but with the spirit shown by the other side and I think the spirit shown by our side, I think we will be able to work that out if given an opportunity.

The CHAIRMAN. I think now the attorneys for both sides ought to get together and try to work out some details and present something to the committee-see if you can not work out something placing in the safeguards and present it to us.

Mr. Mills. Mr. Chairman, it is a difficult thing to reconcile attorneys on two sides of a question. We employ attorneys and they employ attorneys. We are speaking to you now. Mr. Smith and myself are laymen; we are the practical business representatives of our respective industries in behalf of the superiors. We are not disposed to quibble at endless length over differences between tweedledee and tweedledum, or other details. What we want in behalf of our respective industries is a workable scheme, a practical scheme; also, if you please, a legal scheme, but I fear we will endlessly delay this thing if we submit it to counsel.

The CHAIRMAN. You will leave it to us!

Mr. Mills. We can leave it to you and we are confident your sense of fairness and justice will give us just what we ought to have.

STATEMENT OF MR. M. J. FLYNN ON BEHALF OF THE AMERICAN

FEDERATION OF LABOR

Mr. FLYNN. I just want to state that the statement made by Mr. Solberg this morning, in which he stated that the compulsory manufacturing clause in the copyright bill was of no value to the printing industry is very, very far from being true. We know it has been of great value to the printing industry. We know that the works of the Encyclopedia Britannica, which are printed now in America, would not be printed here but for that provision. We know the works of H. G. Wells and other English novelists woulil not be printed in America but for that provision.

I want to say, in answer to Mr. Raney, about the library provision, that an investigation of the copyright manifests at New York indicate that more than 90 per cent of the books brought into America by the American libraries are secured through American book houses. Now, there is only one other concern in New York that is not a book house that imports any number of books for American libraries, and they are importations that come over in case lots, and then are sent by parcel post and are so small as to be without any great value at all.

I just wanted those two matters corrected; that is all. I speak of those as of personal knowledge.

The CHAIRMAN. Thank you, sir.

Mr. MILLS. Although I am not delegated so to do, before you adjourn, may I, in behalf of all of us who have appeared here, thank you sincerely, honestly, and earnestly for your patience and fortitude in listening to the endless gabfest we have inflicted upon you.

Mr. PAINE. I only want to add to that that Mr. Mills has, as usual, anticipated my own thought.

(The brief submited by Mr. Smith is as follows:)

BRIEF PRESENTED BEFORE THE HOUSE COMMITTEE ON PATENTS, FEBRUARY 3, 1925,

BY THE MUSIC INDUSTRIES CHAMBER OF COMMERCE IN OPPOSITION TO A BILL (H. R. 11258) TO AMEND THE ACTS RESPECTING COPYRIGHT

The Music Industries Chamber of Commerce, after careful consideration of the provisions of H. R. 11258, “A bill to amend and consolidate the acts respecting coypright and to permit the United States to enter the International Copyright Union,” believes that it contains certain provisions which, if enacted into law, would be contrary to the interests of the American public and inimical to the music industry whose progress and prosperity is vital to the fullest development of musical art in this country and to the bringing of music to the masses of the people.

The Music Industries Chamber of Commerce is a federation representing all branches of the music industry. It is composed of 13 national trade associations, each representing those business enterprises engaged in its particular branch of the music business, including the manufacturers, wholesalers, and retail distributors of pianos, phonographs, pipe organs, band instruments, orchestral, and other small instruments, phonograph records, music rolls, musical publications, and parts and supplies thereof. In appearing before your committee, this chamber represents the interests of all its members, with the exception of the music publishers, many of whom also belong to the Music Publishers' Protective Association, whose representatives have already appeared in favor of this bill.

While copyright in musical works is of importance to everyone in the music business, it is especially important to manufacturers of phonographs, player

pianos, reproducing pianos, phonograph records, and music rolls. Thess industries comprise over 300 factories in which about $225,000,000 are invested. Their annual production is in excess of $200,000,000. They give employment to about 70,000 persons."

Manufacturers of phonograph records and music rolls are affected most vitally by changes in musical copyrights because these products are the mechanisms for reproducing copyrighted music. The phonograph record and music roll manufacturing industry has been built up in this country primarily on the basis of the copyright law as amended in 1909. The manufacture of these two products alone is a large industry, producing a product valued at about $50,000,000 annually.

Before discussing this bill in detail we respectfully call the attention of your committee to the reason for and character of copyrights. A full appreciation of the exact nature of copyrights is essential to sound consideration of the merits of any legislation which will affect our existing copyright laws.

THEORY OF COPYRIGHTS

The right of copyright is a right of monopoly.

The English-speaking peoples have always been strongly adverse to monopalies on the grounds that they are contrary to the rights and interests of the public. This theory was developed early in the English common law. The statute laws of the United States are very comprehensive and severe with respect to monopolies and acts tending to create them. On the other hand, as in the case of public utilities, the desirability of certain monopolies is recognized. The Government, however, has always used the utmost care to restrict such monopolies and to supervise them in the public interest.

The right of copyright monopoly in this country is not an inherent right of the individual but a grant made by statute. The power of Congress to create monopolies in copyright arises from Article I, paragraph 8, of the Constitution, which says: Congress shall have power

to promote the progress of science and useful arts

*." The purpose of copyright monopoly is to promote the public interest. The public interest is paramount. Congress has never been unmindful of the fact that copyright inonopoly, being a grant against the public, should be carefully limited in accordance with the established principles of the law, and should not be extended beyond the bounds of a just necessity. As Macauley said in his address in the House of Commons on the Talafourd copyright bill: “ Copyright is a monopoly and produces all the effects which the general voice of mankind attributes to a monopoly.” So Mr. Justice Matthews, in Butterworth v. United States (12 U. S. 50), after quoting the provisions of the Constitution above referred to, said with reference to the patent law : “ Legislation based on this provision regards the right of property in the inventor as the medium of the public advantage derived from his invention; so that in every grant of the limited monopoly two interests are involved, that of the public who are the granters, and that of the patentee.”

These same principles underlying copyright legislation are contained in the report from the Committee on Patents, submitting a report on Senate bill 9440 in the Sixtieth Congress, second session, March 1, 1909, which bill is now the law on copyright:

The enactment of copyright legislation by Congress under the terms of the Constitution is not based upon any natural right that the author has in his writings, for the Supreme Court has held that such rights as he has are purely statutory rights, but upon the ground that the welfare of the public will be served and progress of science and useful arts will be promoted by securing to authors for limited periods the exclusive rights to their writings. The Constitution does not establish copyrights, but provides that Congress shall have the power to grant such right if it thinks best. Not primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given. Not that any particular class of citizens, however worthy, may benefit, but because the policy is believed to be for the benefit of the great body of people, in that it will stimulate writing and invention, to give some bonus to authors and inventors'.

1 According to the latest census of manufacturers, 1919, which gives all of this information.

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