Mr. KASTENMEIER. Without objection, your statement will be made part of the record.

(The statement follows:)

PREPARED STATEMENT OF ED LORENZ ON BEHALF OF BENSON PUBLISHING Co. (NASHVILLE, TENN.); BIGLOW-MAIN-EXCELL (CHICAGO, ILL.); NORMAN CLAYTON CO. (WINONA LAKE, IND.); H. W. GRAY Co. (NEW YORK, N.Y.); HALL MACK Co. (WINONA LAKE, IND.); HEART WARMING RECORDS (NASHVILLE, TENN.); HOPE PUBLISHING CO. (CHICAGO, ILL.); LEXICON MUSIC, INC. (HOLLYWOOD, CALIF.); LORENZ PUBLISHING CO. (DAYTON, OHIO); RODEHEAVER PUBLISHING Co. (WINONA LAKE, IND.); SACRED MUSIC PRESS (DAYTON, OHIO); TABERNACLE PUBLISHING Co. (CHICAGO, ILL.); AND WORD RECORD PUBLICATIONS (HOLLYWOOD, CALIF.)

Gentlemen, my name is Ed Lorenz. I am managing general partner of Lorenz Publishing Co., of 501 East Third Street, Dayton, Ohio. In addition to appearing for my own company, I have been specifically asked by the other firms listed above to speak for them today. Combined, these firms, located in all sections of the United States, publish about 75 percent of the music used in the Protestant churches of our country. Most of us belong to the Church Music Publishers Association. Some also belong to the Music Publishers Association. Since I know much more of the details of my own publishing enterprise, Lorenz Publishing Co., I will speak about it. Everything that is presented as a problem of Lorenz is the same problem for all the others.

Lorenz Publishing Co., is a modern American publisher. We have large investments in office machinery and equipment, and a complete facility for printing in a high-speed operation. We pride ourselves in keeping up to date in our methods, using electronic data and computer processing. We pay wages in the Dayton, Ohio, labor market in competition with the Frigidaire Division of General Motors, the Air Force, and the National Cash Register Co.

But for all of this expense and investment our largest asset and greatest investment is in our copyrights, due to the amount of money needed to obtain and popularize these copyrights. In order to meet the demands and desires for music in the churches, other quantities of cash and know-how are invested.

The America that you and I know and love is set up and operating on a basis of the chance to receive a fair return on both labor and investment. This is true whether our moneys are invested in automobile production, electric utilities, or music publishing.

In automobile production and electric utilities the workers always share to some extent with the fortunes or famines of the companies for which they labor. This is especially true in the case of music publishing. The composers and authors that labor with us in the production of copyrights are truly partners in our fortunes and famines-our ups and downs. Each creator shares with us on a royalty basis. Each of these talented people are saying to us: "You take this, the product of my talent and labor. You add to it your know-how to produce it into a salable, useful number. You use your capital investment to print this. You promote it to make people aware of its existence. You distribute it to make it available to those people who can use it. You sell it to those people at a price they can afford; and yet enough for both you and me to get our daily living."

These Christian composers and authors are fine people. They are dedicated to their tasks. In this field you must be dedicated in order to get the necessary inspiration to do the job satisfactorily. These copyrights which we share are truly the product of their talent and labor plus our capital and know-how.

For most publishers in the music publishing industry, the licensing of performance rights produces a large percentage of the expected income. In some cases the licensing income makes the difference between a satisfactory return from the investment, or a financial loss for the company operations. This is not true of Lorenz Publishing Co. and the other firms for which I speak. Lorenz holds membership in ASCAP. We are among the first 10 publishing firms in ASCAP measured by the quantity of printed music sold. Yet the income from performance rights derived through our ASCAP membership puts us near the bottom of the list in receipts. The return from our membership hardly pays for the time spent in maintaining an active role in the society. The same is true of our authors and composers, who also belong to ASCAP.

52-380-66-pt. 1-19

Our works are widely broadcast. It is true that many of those broadcasts are on noncommercial stations. Those are that stations, however, that a substantial part of the public must turn to for spiritual solace, guidance and comfort. It is important that composers and authors be encouraged to write the kind of music that these programs require. It is important that publishers have an economic incentive to make these works available to as large a public as possible.

Edu

The present copyright law stands in the way of that desirable goal. cational and religious broadcasting stations pay the electric utility for the electricity they use. They pay the engineer in their station for the time he spends at the controls. They pay for their transmitters and other equipment. Ministers are paid, however inadequate their compensation often is when compared to their contribution to our national welfare. There is no reluctance to pay for hymn books and textbooks. In the days when religious services were mainly confined to the parishioners attending a particular church, the authors and publishers of religious music could count on a substantial return from sales of printed works. Religious music was even featured in the home, where the family gathered around the organ or piano. Every home had a substantial supply of sheet music or folios-a market which is no longer available.

If we and our composers and authors are to have any incentive to concentrate on the writing and publishing of religious music, we should be able to enjoy a property right-in the form of a copyright-which will enable us to be compensated whenever our works are broadcast. We should not be required to donate the use of our investment in copyrights to whomever wishes to use it. Our composers and authors have no control over the product of their talent and labors. Yet at the same time the broadcasters gladly and willingly pay others who supply their material needs.

To some extent, this situation is remedied in the proposed new copyright law. Congress should make it the clear law, in unmistakable language, that the authors, composers and publishers of sacred music shall not be discriminated against by denying them the fruits of their labors and the return from their investment. At the same time as the free use of our products is enjoyed by those demanding such a right, these same people will be paying for the light, heat, power, travel, and labor that is expended in using our property.

Gentlemen, you must leave no loopholes in this new copyright law by which sinall portions of people can claim the right to use the fruits of the labors and talents of the authors and composers of sacred music without paying them for their work. You must plug the loophole by which these same people ignore the need of the publisher of sacred music to receive a fair and just return from his labor, know-how, and investment. Although the portion of people claiming this right is small, it is the only group who will use our copyrights. This income, small as it is, is necessary to our operations and the composers' and authors' livelihood.

I will leave it up to the lawyers present to apply these thoughts to the proposed law, its sections and its exact wording. I ask you, gentlemen, please do not allow the law of the land to discriminate against the publishers, authors, and composers of sacred music.

Mr. LORENZ. Gentlemen, my name is Ed Lorenz. I am the managing general partner of Lorenz Publishing Co., of 501 East Third Street, Dayton, Ohio.

In addition to appearing for my own company, I have been specifically asked by the other firms listed in my prepared statement to speak for them today. Combined, these firms, located in all sections of the United States, publish about 75 percent of the music used in the Protestant churches of our country. Most of us belong to the Church Music Publishers Association. Some also belong to the Music Publishers Association.

Since I know much more of the details of my own publishing enterprise, Lorenz Publishing Co., I will speak about it. Everything that

is presented as a problem of Lorenz is the same problem for all the others.

Lorenz Publishing Co. is a modern American publisher. We have large investments in office machinery and equipment, and a complete facility for printing in a high-speed operation. We pride ourselves in keeping up to date in our methods, using electronic data and computer processing. We pay wages in the Dayton, Ohio, labor market in competition with the Frigidaire Division of General Motors, the Air Force, and the National Cash Register Co. But for all of this expense and investment our largest asset and greatest investment is in our copyrights, due to the amount of money needed to obtain and popularize these copyrights. In order to meet the demands and desires for music in the churches, other quantities of cash and know-how are invested.

The America that you and I know and love is set up and operating on a basis of the chance to receive a fair return on both labor and investment. This is true whether our moneys are invested in automobile production, electric utilities, or music publishing.

In automobile production and electric utilities the workers always share to some extent with the fortunes or famines of the companies for which they labor. This is especially true in the case of music publishing. The composers and authors that labor with us in the production of copyrights are truly partners in our fortunes and famines our ups and downs. Each creator shares with us on a royalty basis. Each of these talented people is saying to us: "You take this, the product of my talent and labor. You add to it your know-how to produce it into a salable, useful number. You use your capital investment to print this. You promote it to make people aware of its existence. You distribute it to make it available to those people who can use it. You sell it to those people at a price they can afford; and yet enough for both you and me to get our daily living."

These Christian composers and authors are fine people. They are dedicated to their tasks. In this field you must be dedicated in order to get the necessary inspiration to do the job satisfactorily. These copyrights which we share are truly the product of their talent and labor plus our capital and know-how.

For most publishers in the music publishing industry, the licensing of performance rights produces a large percentage of the expected income. In some cases the licensing income makes the difference between a satisfactory return from the investment, or a financial loss for the company operations.

This is not true of Lorenz Publishing Co. and the other firms for which I speak. Lorenz holds membership in ASCAP. We are among the first 10 publishing firms in ASCAP measured by the quantity of printed music sold. Yet the income from performance rights derived through our ASCAP membership puts us near the bottom of the list in receipts. The return from our membership hardly pays for the time spent in maintaining an active role in the society. The same is true of our authors and composers, who also belong to ASCAP.

Our works are widely broadcast. It is true that many of those broadcasts are on noncommercial stations. Those are the stations, however, that a substantial part of the public must turn to for spiritual solace, guidance, and comfort. It is important that composers and authors be encouraged to write the kind of music that these programs require. It is important that publishers have an economic incentive to make these works available to as large a public as possible.

The present copyright law stands in the way of that desirable goal. Educational and religious broadcasting stations pay the electric utility for the electricity they use. They pay the engineer in their station for the time he spends at the controls. They pay for their transmitters and other equipment. Ministers are paid, however inadequate their compensation often is when compared to their contribution to our national welfare. There is no reluctance to pay for hymn books and textbooks.

In the days when religious services were mainly confined to the parishioners attending a particular church, the authors and publishers of religious music could count on a substantial return from sales of printed works. Religious music was even featured in the home, where the family gathered around the organ or piano. Every home had a substantial supply of sheet music or folios-a market which is no longer available.

If we and our composers and authors are to have any incentive to concentrate on the writing and publishing of religious music, we should be able to enjoy a property right-in the form of a copyrightwhich will enable us to be compensated whenever our works are broadcast. We should not be required to donate the use of our investment in copyrights to whomever wishes to use it. Our composers and authors have no control over the product of their talent and labors. Yet at the same time the broadcasters gladly and willingly pay others who supply their material needs.

To some extent, this situation is remedied in the proposed new copyright law. Congress should make it, the law, clear, in unmistakable language, that the authors, composers, and publishers of sacred music shall not be discriminated against by denying them the fruits of their labors and the return from their investment. At the same time as the free use of our products is enjoyed by those demanding such a right, these same people will be paying for the light, heat, power, travel, and labor that is expended in using our property.

Gentlemen, you must leave no loopholes in this new copyright law by which small portions of people can claim the right to use the fruits of the labors and talents of the authors and composers of sacred music without paying them for their work. You must plug the loophole by which these same people ignore the need of the publisher of sacred music to receive a fair and just return from his labor, know-how, and investment. Although the portion of people claiming this right is small, it is the only group who will use our copyrights. This income, small as it is, is necessary to our operations and the composers' and authors' livelihood.

I will leave it up to the lawyers present to apply these thoughts to the proposed law, its sections and its exact wording. I ask you, gentle

men, please do not allow the law of the land to discriminate against the publishers, authors, and composers of sacred music.

Thank you.

Mr. KASTENMEIER. Thank you, Mr. Lorenz.

Mr. Wattenberg, I assume that you would concur in, say, Mr. Finkelstein's statement in connection with the so-called jukebox exemption and the necessity for the language now in the revised copyright bill.

Mr. WATTENBERG. Yes, sir, I would.

Mr. KASTENMEIER. As far as the industry itself is concerned, traditionally I assume that the publishers would be the publishers of sheet music historically. Is that precisely what they do today?

Mr. WATTENBERG. The music publishing business has changed tremendously over the years. Before the days of radio and television, the large part of the income was from publishing what you call sheet music. But that has declined to the point where it is phasing out. Sheet music is attacked on two sides. First, the popular music today, so-called rock and roll, is not printable. Secondly, we have what is known as a racket in this country called the fakebook. The fakebook is a compilation of a thousand unauthorized reproductions of copyrighted music.

This is made possible by Xerox and the innumerable number of duplicating machines. My office has been working now for the last 4 years trying to track down the perpetrators. It is a criminal offense under the law. Unfortunately the sentences are suspended so that the violators go right back to doing what they have been doing and, as a result, you can buy this book of a thousand songs for anywhere from $10 to $25.

Nobody is paid, the Government gets no taxes, it is completely illegal. I don't know what the answer is. We have brought over 150 civil actions to stop it, but it continues. Crime does pay.

Mr. KASTENMEIER. Mr. Wattenberg, then really what does the music publishing industry do today? Do they become the assignees of the composers' various works and act as agents for them in a sense? Apparently in a sense the production of sheet music has declined somewhat. What I am trying to learn is: what does the industry do today?

Mr. WATTENBERG. The music publisher today does acquire by assignment or license the same rights as it did before, but the market has changed. So, they concentrate on editions for school use and for licensing phonograph record companies and performances. But the sheet music for piano is just about dead and extinct.

Mr. KASTEN MEIER. You do the licensing directly rather than have the society ASCAP do it?

Mr. WATTENBERG. No; the publisher usually licenses through a performing rights society such as ASCAP, BMI, or SESAC. The mechanical rights they license either directly or through an organization

which does that.

Mr. KASTEN MEIER. Thank you both, gentlemen.

Mr. WATTENBERG. Thank you, Mr. Chairman.

Mr. KASTEN MEIER. Next, Mr. Julian Abeles, representing the Music Publishers Protective Association.