They are not exempted, so there would seem to be a question of why they should be indeed dealing with music operators or other industries.

I think that is a point that ought to be cleared up for the committee. I don't know whether you have additional information on that, but I think the other side might care to reply to that in due course. Mr. MILLER. Thank you, Mr. Chairman.

The additional question that the committee, of course, has to consider is whether or not there is a sufficient financial incentive in today's market to promote the arts by writing music.

I think that could be argued back and forth for many, many years, but I would like to point out that, according to published sources, there are over a million songs in the ASCAP repertory, and BMI has 700,000 to 800,000, and SESAC has from 150,000 to 300,000.

One conclusion that can be drawn from this-plus the fact that there is a constantly increasing source of income to the authors and composers as witnessed by the fact that both BMI's annual income and ASCAP's annual income have increased over the past years-is that there must have been enough incentive to create a substantial, a tremendous outpouring of music.

That does not mean, of course, that we should cut off that financial incentive, or anything like that, but I think this committee is going to have to look to the authors and the composers to sustain their burden of proof as to whether or not additional money is needed to fulfill the constitutional requirement that this committee act to promote the arts and sciences.

The really basic fact, here, gentlemen, is that when there is a suggestion that performing rights be extended to the jukebox operators, some of whom testified here today, you are talking about ASCAP with its statutory monopoly, you are talking about BMI with its statutory monopoly, you are talking about SESAC with its statutory monopoly, sitting down at the bargaining table with a man whose income on an average the jukebox operator's average income is less than $5,000 a year, as is shown by the Price Waterhouse survey in 1959. That is excluding the 5-percent return for profit.

You are asking an individual who owns 60 to 70 machines, who has an annual income of $4,000 or less, to sit down across the table from a man who is represented by a company that has a $40 million gross, and ask the two of them to reach a fair bargain.

I suggest to the committee that the economics of the situation make it an impossibility, particularly when you bear in mind that ASCAP is exercising the statutory monopoly at the time of the bargaining.

To prove this point, there has been suggested that there be a $30 performing rights fee levied per jukebox. For a man owning 70 jukeboxes, that is $2,100 a year. He would have to pay it to ASCAP.

He would not dare just go to one society. He would have to go to all three. The simple reason is that, if he did not have a right from every author and composer, he would be in a situation where he might have a record that was not covered by the performing legislation.

If it was played 10 times, he is liable for each performance for a statutory minimum fee of $250. That is $2,500-plus a reasonable attorney's fee.

You are asking a small businessman with a low income, who is just trying to stand on his own feet and make his own business go, to subject himself to that type of a potential statutory penalty.

If you take the jukebox operator at $30 a box, and he has 70 boxes, if he pays that fee to ASCAP, to BMI, and to SÉSAC, he is paying, in effect, $6,300-more than the average net income shown by the Price Waterhouse survey in 1959.

If you increase that to $60 a box, as was suggested by counsel for ASCAP as a reasonable fee-or, as Mr. Kaye said, he would be very lovable if there were bargaining between BMI and the small businessman operator-with an owner owning 70 boxes, he would be paying ASCAP, BMI, and SESAC a royalty of $4,200 a year, to each of them, total $12,600, from this one small businessman, for the performing rights.

And this does not count the substantial mechanical royalty that he will have been paying for the records that he purchases.

If we had $60 a box levy from ASCAP, that would be $26 million. Their annual gross income would jump from $40 to $66 million in 1 year, the $26 million coming from this industry composed of small businessmen.

BMI has a gross of $18 million. If they got the same figure of $60 a box, they would increase their gross from $18 to $44 million. In other words, they would double their annual take at the $60 fee, which they have suggested as probably being reasonable.

It is the mere suggestion of that type of a figure which I think indicates what is the basic issue before this committee, and that is-is it fair to permit a situation to arise where these small business operators are forced into a position where they either go out of business or have to deal with a giant company and have really no chance to arrive at any fair and equitable bargain?

That is all I have, Mr. Chairman.

Mr. KASTENMEIER. Thank you, Mr. Miller.

Incidentally, so far as you know, do Wurlitzer, Rock-Ola, and Rowe A/C have under consideration what Seeburg does in terms of producing programs for record users?

Mr. MILLER. Mr. Chairman, the answer is "No."

Mr. KASTENMEIER. Performance societies?

Mr. MILLER. No; my clients do not think it would be feasible.

Mr. KASTENMEIER. At least they will not be an added element to this already very complex problem in that connection?

Mr. MILLER. That is correct.

Mr. KASTENMEIER. You stated you did not feel that this was an exemption. However, I think it could easily be read as an exemption.

Subsection (e) of the present law, section 1, reads:

To perform the copyrighted work publicly for profit ・・・ and for the purpose of public performance for profit

Then it reads at the very end:

The reproduction or rendition of a musical composition by or upon a coinoperated machines shall not be deemed a public performance for profit unless a fee is charged for admission to the place where such reproduction or rendition

occurs.

It seems to me that one could conclude that exempts the situation described.

Mr. MILLER. I will not quibble on the semantics, but I would like to make the point that Congress in 1909 did not extend the right to cover the jukebox operator.

The argument always seems to be, well, they considered it and they exempted them out of something which did not exist before.

As a practical matter, they did not carry the right into that particular operation.

Mr. KASTEN MEIER. Mr. St. Onge!

Mr. ST. ONGE. No questions.

Mr. KASTEN MEIER. Mr. Tenzer?

Mr. TENZER. I have no questions.

Mr. KASTENMEIER. Thank you very much.

Mr. MILLER. Mr. Chairman, I do have some exhibits which I would like to submit to committee counsel later, which show the existence of jukeboxes in 1909.

Mr. KASTENMEIER. Please submit those to the counsel, and counsel will offer them to the committee for inclusion in the record at the proper time.

(Subsequently the following material was received from Mr. Miller.)

MILLER & EVANS, Washington, D.C., July 8, 1965.

Hon. ROBERT W. KASTEN MEIER, Committee on the Judiciary, House of Representatives, Washington, D.C. DEAR CONGRESSMAN KASTEN MEIER: At the recent hearings on the copyright revision bill, the contention was made that there were no jukeboxes in 1909, and that the only music machines on the market used ear tubes as distinguished from speakers. Consequently, the argument runs, Congress did not realize what it was doing when it failed to extend performing rights to jukeboxes when the copyright law was revised in 1909.

Enclosed are photostats of the U.S. census reports for 1909 and certain publications which can be found in the Library of Congress demonstrating conclusively the existence of speaker coin-operated jukeboxes well prior to 1909.

If, as counsel for the Wurlitzer Co., Rock-Ola Manufacturing Co., and Rowe A/C, I can supply any information on this issue or any other issue which was raised concerning coin-operated phonographs. I would be happy to be of service. Sincerely yours,

HERBERT J. MILLER, Jr.

52-380 0-66—pt. 1—41

THE PHONOGRAPH-1900
By S. R. Bottone

CHAPTER V.

THE EDISON CONCERT PHONOGRAPH.

R. EDISON has perfected the Phonograph.

Beginning

MR. with the early tin foil machine, Mr. Edison has de

veloped the Phonograph step by step, until to-day the Phonograph stands on the pinnacle of perfection. It perfectly reproduces human voice; just as loud-just as clear-just as .sweet. It duplicates instrumental music with pure-toned brilliancy and satisfying intensity. Used with Edison Concert Records, its reproductions are free from all mechanical noises; only the music or voice is heard. It is strong and vibrant enough to fill the largest concert hall. It is smooth and broad enough for the parlor. It is made with the careful precision that characterizes all Genuine Edison Phonographs. It is made to reflect credit and to uphold the fame of the name of the man who stands behind it.

The Edison Concert Phonograph is actuated by powerful triple springs. It plays six to eight concert records with a single winding. It is finished in black and gilt enamel, with nickel parts. It has a polished oak body box and carrying cover. Size, 12 x 17 x 17 inches. Weighs 51 pounds. Size of mandrel, 4% inches diameter by 5 inches long. Every Edison Concert Phono

graph includes, free of charge, an automatic reproducer, a recorder, a sapphire shaving knife, oak body box and cover, a

24-inch brass horn and stand, winding crank, speaking tube, oil can and chip brush.

The Edison Concert Phonograph is built on the same body as the Edison Spring Motor Phonograph described in the previous chapter. The Phonograph top is also exactly the same, except that the parts are larger, to admit the swing of the five-inch record.

General Instructions for Operating this Machine

are the same as in the preceding chapter. The following is the only point that it is necessary to emphasize especially: in closing swing arm of the Edison Concert Phonograph, see that the pin on swing arm enters hole on straight edge casting. Press the arm firmly with thumb, at the same time locking the lock bolt with first two fingers of same hand.