Senator STANLEY. What proportion of those who can not hear ordinary sounds are deafened and what proportion are deaf? Of those inflicted with the inability to hear, what proportion are deafened?

Mr. KLUGH. What proportion are deafened and what proportion are deaf?

Senator STANLEY. Yes.

Mr. KLUGH. I do not know, but there are many more, obviously, who are deafened than who are deaf. There is a distinction.

Senator STANLEY. According to your distinction, the deafened are those who lose their hearing from some accident or deterioration of parts of the ear.

on.

Mr. KLUGH. As I understand, the distinction that they make is that a deaf person is one who has no membrane to receive anything A deafened person, perhaps, can not hear anything that would come from a human being, but still there is a fragment of the membrane or a part of it which when these vibrations are set up by radio will function and give him something that he could not get otherwise. I refer also to the religious institutions. There are 27 broadcasting stations maintained by religious organizations or churches. That is, the entire station is maintained by those people.

In addition to that, there are many, many stations that broadcast Sunday services of churches. So that it brings these Sunday services, and, in fact, religion, into the homes of the people who otherwise perhaps would not be able to hear a Sunday sermon and could not attend church, or in some cases would not.

There are 99 educational institutions maintaining broadcasting stations. I have asked some of them why they do it. They consist of universities and colleges and technical schools and even high schools. I have asked them, "Why do you maintain a station?" Well, in some cases they have technical courses and they consider the erection and the maintenance of the station a part of the instructions given to those students who are following that particular course, but as far as the actual maintenance of that station at an expense and constantly doing it and putting out programs, it seems that they are in very much the same position as the large number of individuals.

There are 92 individuals who maintain broadcasting stations. They are largely in the position of those individuals whose position seems to be to use a broadcasting station as a fad or as a desire to give entertainment, and I do not know whether it generates good will for them individually or personally, but they do it.

For instance, Colonel Green at Round Hills, Mass., maintains a very elaborate station at his own expense, and he gives entertainments and carries culture and enjoyment and diversion to hundreds of thousands of people. That station is, I would say, purely philanthropic. There is also Mr. Harry B. Joy, at Detroit. You identify him as the man who is connected with the Packard Automobile Co., and he is still interested in it. He has a station. Well, it is a diversion for him.

Mr. McDonald has already referred to the well-known criminal attorney, Mr. Erbstein, of Chicago, who maintains a station, and, from all we have been able to find out, he has no method of advertising himself, because his name is never mentioned; but he does go to this expense and he does give this entertainment to countless thousands of people.

The newspapers are broadcasters. There are 45 newspapers that maintain broadcasting stations. In addition to that, there are a great many newspapers having a partial interst in or an arrangement with broadcasting stations whereby they collaborate in presenting programs for the public.

It is difficult to say why a newspaper maintains a station. Obviously, it enlarges its sphere of influence, I might say. Obviously, it creates good will. But, after all, it is a public sevice very much akin to their activities in connection, we will say, with a fund for ice or a fresh-air fund. If a newspaper establishes a fresh-air fund for poor children to send them to the country in the summer, it does not do it certainly for any purpose of profit, but it treats it as a sort of public service, and I suppose indirectly it believes it is establishing good will and increasing its sphere of influence by taking part in a public service of that kind. I think it looks upon broadcasting in very much that light.

Senator BRANDEGEE. Do the composers of music, as you understand it, claim that you must buy of them the right to send out their music by radio even if you are not doing it for the purpose of making any profit?

Mr. KLUGH. I will not answer on behalf of the copyright owners as to what is their intention, nor as to what theory they base their demands upon, but the result is

Senator BRANDEGEE. But they do demand compensation where you use copyrighted music in broadcasting, do they?

Mr. KLUGH. Yes, sir, with the exception, they have stated, of educational institutions. They have stated that they do not propose to require them to pay.

Senator BRANDEGEE. I assume that there is no question about the great enjoyment of the people from broadcasting by radio. All sorts of interesting and instructing things go out over the radio. What have you to say about the question of whether an author or a composer ought to have the right to demand compensation from anybody who exhibits his copyrighted article to the public? I assume that is the real point in this case. I assume the committee wants to find out what it shall recommend as a public policy in this matter. Now, what have you to say about that?

Mr. KLUGH. Mr. Tuttle, our counsel, who will follow me, has that entirely in preparation, and I think will answer that question completely.

Senator BRANDEGEE. All right.

Mr. KLUGH. I may conclude by simply bearing upon the service, the public service, that broadcasting renders, and I would like to read you a statement recently made by Senator Capper, which, I think, puts the thing in concrete form and is illustrative of the points that I have been making here. Senator Capper says:

My interest in radio is due largely to it importance to the farmers of my State. Nothing that I know of has done more to banish the isolation of the average farmer's family. Radio furnishes not only an almost endless variety of entertainment, but it also promptly brings to the farmer information regarding crops and weather that is now indispensable. It is a tremendously valuable factor to the country at large because it makes farm life more tolerable and interesting, and for that reason will tend to keep the farm population on the farms.

Now, with your permission, I will retire so we do not repeat, and Mr. Tuttle of our counsel will carry on from this point.

STATEMENT OF MR. CHARLES H. TUTTLE, OF NEW YORK CITY, REPRESENTING THE NATIONAL ASSOCIATION OF

BROADCASTERS

Mr. TUTTLE. Mr. Chairman, I think I can be most useful if I confine myself largely to what might be deemed the legal aspects of this matter and the legal aspects to the opposition of the bill as they have already been expressed.

I think the introduction to what I have to say has been furnished by Senator Dill when he spoke of this bill as presenting a new and vital issue. At the time when this copyright law was passed, as he said, radio was absolutely unknown. The science which has developed as a great humanitarian and educational institution was absolutely unknown; it was unknown when the American Society of Composers, Authors, and Publishers was formed, back in 1917 or earlier; and this is the first time this question has come before Congress for a formulation of the issue of a public policy which this bill presents. It is a grave issue, because it is not too much to say that involved in this issue and in the attitude of the society toward broadcasting is the very life of broadcasting, at least as now conducted.

If the position which the opponents of this bill take is to be upheld by Congress as a matter of public policy, then it means that either broadcasting as at present conducted must stop, or else some means must be found to commercialize it wholesale. Not only is it new, but it is a vital matter, because, without going over the ground that has already been covered, the committee can see for itself the unprecedented interest and solicitude that the public has on this score; and that is for a number of reasons, some of which have been mentioned, and one of which, perhaps, merits just a word, and that is that this form of public education and entertainment, carrying with it that recreation of mind which has a therapeutic value, permits of selection. One can select one's form of receiving information. you desire entertainment, music, singing, you can have that. If you desire religious worship, if you desire the higher class of music, if you desire instruction by lecture, you can have that without leaving the room, without doing anything but a mere motion of the hand and without paying a nickel. There is no greater human blessing that has come into the body politic than this broadcasting idea as at present conducted.

If

Not only is that so, but, as has been mentioned here, involved in this bill is the ability of broadcasting to provide excellent programs. I am going to show you in a moment the composition of this society. But, if I may anticipate with my conclusion first, if the attitude is maintained here that is being urged by this society, the excellence of the program will be necessarily vitally cut, because, as I will show you from the words of the leader of this society, they have at the present time 100 per cent monopoly on popular music; a membership of 326 persons controlled by a self-perpetuating board of directors of 24.

Now, when I say that to you I say that not only is the ability to maintain broadcasting at stake, because of the expense that will be involved in order to meet these demands, but, in addition to that, it will be impossible to furnish programs that contain that feature.

Senator STANLEY. Is that monopoly due to the rights under the copyright law, or to some combination outside of the law among these composers?

Mr. TUTTLE. Solely, sir, to the combination, and, as I shall show you in a moment, in defiance of the intention of Congress, which, as the report of the committee introducing the copyright law of 1909 shows, thought they had put into that bill provisions which would prevent, to use their own words, the formation of a gigantic music

trust.

Senator SHIPSTEAD. Is this a blanket demand to stop all broadcasting stations from using any music that is copyrighted under the copyright law?

Mr. TUTTLE. It bears that description. Let me describe it in detail.

Senator STANLEY. Perhaps I did not make myself clear. Do you claim that this monopoly of popular music is an incident to the copyright law as now written; that under the law they have certain rights, not natural rights, but rights conferred by the act; or is the monopoly due to some combination in restraint, say, of the Sherman act or in contravention of it?

Mr. TUTTLE. Let me answer you in this way, sir: It has been suggested here by some of the inquiries that the rights of the copyright holders are considered. Of course, they are. But so far as this music is concerned the author, the composer, is not the copyright holder. He has been required to transfer, and I will read to you the by-laws of the society to that effect-he has been obliged to transfer not only the legal but the equitable or beneficial interest in the copyright; in other words, the entire copyright, to this society; and he does not draw the royalties therefrom; the society draws whatever royalties therefrom are obtainable. Then there is a graded system of classifications, whereby there are preferred and less preferred and still less preferred distributees from what might be called a pool of all these copyrights, and the pool of all moneys therefrom, so that a person who never wrote a piece of music in five years would still be drawing not royalties but a distribution from this common interest; and, sir, to answer your question, the way it is done is to tender to the

Senator STANLEY (interposing). You mean that the composers have pooled their interests in the form of this association?

Mr. TUTTLE. Yes, sir.

Senator STANLEY. And draw not from a particular piece of music but from the arrangement made for the sale of all music?

Mr. TUTTLE. Your question was a little in advance of what I had in mind, but I am happy to stop right here and read you the provisions of the by-laws of this society. I think I have here the very latest they have, the printer's proof of their by-laws. It says:

The membership of this society shall be divided into three classes, as follows: Class A, music publishers. Class B, composers, authors. Class C, probationary membership.

That probationary membership is to last for a year unless the board of directors otherwise provide. And then it says this:

Upon the transfer of a probationary member to class A or B, such member shall execute and deliver to the society as assignment in the form submitted by the society, under which assignment the exclusive right of public performance for profit

In other words, exclusive right under subdivision E of section 1 of the present copyright law—

in the United States and Canada, United Kingdom of Great Britain and Ireland, and Italy and Cuba, of the music of each and every musical work (the right to publicly perform for profit of which shall belong to or shall thereafter during five years from January 1, 1921, be acquired by any such member), shall vest in and belong absolutely to the society, subject to these articles of association. Such exclusive performing rights of any and all such musical works shall immediately upon the same being written or composed or control thereof being secured, vest in and be the absolute property of the society, subject to these articles. The CHAIRMAN. Subject to what?

Mr. TUTTLE. Subject to these articles of the by-laws. Now, I will proceed. As to the board of directors, I do not suppose there is another corporation-this is an unincorporated association-but I do not suppose there is another association in the commercial world that has anything like this provision for self-perpetuation of its inside governing body. I read from the by-laws as follows:

The government of the society shall be vested in and its affairs shall be managed by a board of 24 directors. They shall be elected at each annual meeting of the board of directors by a two-thirds vote of the entire board and shall continue until their successors are elected.

Now, the powers given to that board of directors, in other words, to these 24 men who control this music world, as a result is most unprecedented. Without burdening you with the details of reading this, they can do anything that they desire. They are the autocrats. They can put people out, they can take people in. They are authorized to levy fines and punishments in star chamber proceedings. The proceedings before the board of directors are confidential. And this is more important still, they are authorized-I do not know whether it is legal or not-but they are authorized to delegate their entire powers as a board of directors to a committee, a committee composed of three men, Mills, Hein, and Rosenthal.

I have here a form of communication emanating from them, in which you will see that under the heading of "Board of directors," they put down as their administrative committee the names of these three men. And these three men may do these things that I have referred to. Then, in order that the opportunity for a complete monopoly of this situation may not be broken by some outsider running a successful song which they want to acquire, they have in their by-laws this:

Power to purchase or otherwise acquire for the society any property, rights, and privileges which the society is authorized to authorize, at such prices and on such terms and conditions and for such considerations as it thinks fit.

Now, I need not read the causes for the removal of members. There is this clause, however, that is significant:

The board of directors may, by a two-thirds vote of its members present, require that any member of the society shall submit to the board of directors or any standing or special committee for examination such portion of his books or papers as are material and relevant to any matter under investigation by said board of directors or by any standing or special committee.

This is extremely significant:

This administrative committee that I have referred to is vested with power to advise in addition to those matters that are delegated to it concerning its interests and the management of its business and generally perform such duties and exercise such powers as may be prescribed or delegated by the board of directors.