set up by section 116. I shall speak about that in a moment. Then, continuing with the quotation:

(c) If the present exemption is repealed, should there not be a provision in the bill exempting the owner or lessee of the place in which jukeboxes are operated without admission charge when such owner or lessee has no control over the selection and placing of records in the machine?

The question of whether the jukebox exemption should or should not be repealed was answered by the committee in this way, that it should be repealed. Then the committee addressed itself to those four subdivisions. It reviewed-and I am on page 9 of my statement, Mr. Chairman-it reviewed in detail each of the four questions under item 1. It answered each of these questions in the negative. Then it addressed itself to the question, What would be a reasonable royalty for the jukebox operator to pay?

We heard a great deal about the poor jukebox operator, but I should like to point out to the committee an article in Billboard for November 27, 1965. Billboard is a great amusement magazine, the one that is relied on in these circles almost with the fervor of religion. It quotes a jukebox operator in New York, or a distributor, John Bilotta, as follows:

John Bilotta, a New York distributor, is attempting to help operators establish a 60-40 split

That means 60 percent to the operator and 40 percent to the owner of the establishment where the jukebox is located

after $30 a week front money has been taken by the operator.

We have heard a lot about $8 and $10 a week, but this talks about $30 for the operator before the owner of the establishment gets anything.

I would like, if I may, to have that article, the entire article, inserted in the record. I have copies here for the members of the committee. Senator BURDICK. It will be received for inclusion following your statement.

(The document referred to was made part of the record and will be found as an appendix to Mr. Finkelstein's statement.)

Mr. FINKELSTEIN. Returning to the subcommittee report of 1958, this committee noted a resolution passed by the National Licensed Beverage Association which suggested these rates, and I think that what the amount ought to be is pertinent however the committee decides that might be arrived at: $15 per year per machine designed to play 50 to 100 compositions; $20 per year per machine designed to play 100 or more compositions; $25 per machine per year for those with 160 plays; $30 for those with 200 plays and over. That is an association of the people in whose places so many of these jukeboxes appear, the tavernowners.

The committee reached the conclusion that this would produce an average of $19.70 per box. This is the way the committee calculated the figure. That would be an average figure.

Now, of course, arriving at an average is not the only way to determine what a rate might be. It might be on a sliding scale. ASCAP would be willing to negotiate with the jukebox operators on a sliding scale or a single rate for all boxes, or a rate that was keyed to the number of boxes each operator has so that the small jukebox opera

tor would pay far less than the large jukebox operator for each of his boxes.

In the 1958 report the committee suggested rates ranging from $15 to $25 per box per year, and that would cover all three performing rights organizations. That committee had a separate rate as its suggestion to those box operators, for those boxes that had less than 50 selections, another for those with 80 to 120 and another rate for those with 200.

Now, analyzing these figures, the committee said:

From the foregoing, it would appear that the highest royalty payment would be 6.8 cents per day on jukeboxes carrying as many as 200 selections. This would mean that in any given 24-hour period, one play on a dime machine would slightly more than pay the royalty. The same would be true of a nickel played in a jukebox carrying not more than 50 selections.

In those days, they were only paying a nickel per play, whereas the rate is almost universally a dime or three for a quarter, or they may have as many as 10 for a half dollar, but you must put in a half dollar. And if several half dollars are put in at once, the machine plays those 10 numbers, or whatever it might be, six or whatever the number is for a half dollar, plays only once for all the coins that may be deposited at a given time. You would not hear the same selections played six times, if six half dollars were deposited simultaneously. The committee at that time indicated:

This royalty scale is workable and represents a reasonable and fair framework within which negotiations could be had between the authors and composers are their representatives and the jukebox industry.

Now, Mr. Chairman, I am not going to take the time to read the many excerpts that I have in this report from the Senate committee report in 1958. I have them here because these are findings not by anyone that had a fixation on one side or another, but findings that were made by an impartial group and findings that correspond very closely to what the House subcommittee concluded in 1966 and 1967 as to what a fair rate per box would be. Their conclusion was that it would be $19.20.

I am going to cut this down as much as I can, Mr. Chairman, so that I will not take up too much time of the committee.

I should like to say that ASCAP and its members endorse fully the conclusions of both the House and the Senate subcommittees.

At the hearings last week, the jukebox operators indicated that somehow the writers of ASCAP were dominated by the publishers, that the publishers should not get any part of the jukebox royalties, and in my statement I have a description of the kind of members you have in ASCAP. I shall not burden the committee with that at this time.

Now if the committee feels it appropriate, I would like to say something about how the amounts that ASCAP is paid are distributed among the members, because much was said about that in the last hearing. Would the committee like to have me go into that? If so, I should like very much to do it at this time.

Senator BURDICK. I think that the best way to handle this, since something has been said from both sides, is that the staff will send a letter to both sides on these economic questions. You can supply your

answers.

You are not limited at this time; any way you wish to proceed this morning, you may present your case. But this is in answer to your question as to the way we prefer to do it.

Mr. FINKELSTEIN. Then I will just point out, Mr. Chairman, that the society's distribution formula is regulated under the consent decree that I mentioned. The amounts that the society receives are distributed on the basis of a survey of performances that was worked out by an outside agency in conjunction with the Bureau of the Census and the Department of Justice. There is an appointee of the Federal court who reviews the surveys and reviews the distribution, reports periodically to the court, to the Department of Justice, and to the ASCAP membership. This was all worked out in 1960, after there were some complaints about the system in ASCAP at that time. At that time, all members were required to average their performances over a period of time, and some members felt that they should be able to get each year what their performances earned that year and basically the changes that were made in 1960 provided that each member shall have the right to have his performances paid for on the basis of the year in which those performances occurred without having them averaged over a period of time.

That, of course, Mr. Chairman, as I pointed out, is subject to the supervision of the Federal court. The general scheme is that the royalties are divided 50 percent to the writer and 50 percent to the publisher. No publisher can get any part of writer's royalties.

Now, I have suggested at page 19, Mr. Chairman, that if there is a further inquiry about the facts relating to the income of the jukebox operators or the income of the ASCAP and how it is distributed, that kind of thing, I have suggested some questions that might be addressed to the jukebox people.

Mr. Chairman, turning from the subject of the jukeboxes to other aspects of the bill, I should like to point out that the members of ASCAP strongly support a term of copyright which commences on creation of the work and continues for the life of the author and 50 years after his death. There was some statement made last week about the difficulties of trying to comply with the renewal provisions of the present law. I think that one of the great steps forward is to have copyright protection on the creation of a work without any formalistic requirements, and that is accomplished by S. 597. We believe the provisions of section 7 about fair use are very sound advances.

Now, Mr. Hudson, appearing for NET, made some suggestions about public television or educational television. I am happy to report to this committee that ASCAP has offered its repertory, and this is a matter of agreement, to NET, for the use of all its music on all the NET programs for $20,000 a year, and ASCAP members are forgoing any right of separate payment for their recordings. I say ASCAP members are. That is a matter for the individual member to decide, and most of them have indicated they will do that in the interest of advancing educational and public television. ASCAP itself will contribute far more to the advancement of public television financially than it receives for these payments. Of course, $20,000 is a relatively minimal sum.

I notice that Mr. Hudson also favors the system of having the court fix the rates rather than have as complicated a formula as the statute.

Mr. Chairman, this committee in 1958 decided that it was impossible to write any formula for, any statutory formula for payment for performing rights. I think that the jukebox people demonstrated that. Of course, we did not write section 116. This is something that should be subject to negotiation just like everything else in the copyright law, and that is the American system of doing things. That is what this committee recommended in 1958.

Now, I should like to conclude, Mr. Chairman, by urging that this committee report the bill for copyright revision to the Senate in the near future. We hope that it can reach the President's desk during the current session. This is vital legislation. Our copyright laws should be brought in line with the technology and changes which have occurred over the past 60 years. In doing so, the public interest will be served by encouraging those who possess the rare talent of creating music and thus enriching the lives of all Americans.

Mr. Chairman, I thank you. I am sorry I had to take so much time, but this is a complicated subject, and if there are any questions, I

should like to answer them.

(The complete statement of Mr. Finkelstein follows:)

STATEMENT OF HERMAN FINKELSTEIN

Mr. Chairman and members of the subcommittee, may name is Herman Finkelstein. I reside at 440 East 56th Street in New York City.

I am a member of the New York and Connecticut bars and appear as General Counsel for the American Society of Composers, Authors and Publishers (ASCAP).

The ASCAP membership consists of 8,765 composers and authors of musical works, and 2,889 publishers scattered throughout the United States.

You have heard much discussion here about clearing houses-for computers, for educational uses and for public television. Organized in 1914, ASCAP is the oldest music clearing house in America. It is an unincorporated, non-profit association owned and operated by its members, all of whom are writers and publishers of musical works. Its founders included such outstanding American composers as Victor Herbert, John Philip Sousa, Irving Berlin and others, and their publishers. Their lawyer was then a young man in his early thirties-my predecessor, Nathan Burkan, with whom I was associated for many years before his death in 1936.

More than a half century ago writers and publishers of musical works were faced with the same kind of problems as are the literary authors and publishers of the present day-an exploding technology bringing about new uses of their works on a wholesale basis with no ready means of detecting infringements or arranging licenses. ASCAP was organized under Victor Herbert's leadership, to meet the requirements of a new era.

From 1897, when performing rights in musical works were first recognized by statute, to 1917, when the United States Supreme Court upheld the right of Victor Herbert and John Philip Sousa to be paid when their works were sung and played in restaurants*, commercial users took the position that they were doing the songwriters a favor by publicizing their works. They also said that if they were to pay for music, there would be no limit to the payments demanded; that ASCAP represented only a small portion of copyright owners; that the others were either willing to let their works be used without payment, or could not be found in time to negotiate appropriate licenses, or were waiting to pounce on the unsuspecting user.

The clearing house approach to licensing had to prove itself to the writers and publishers, to the users, to the Department of Justice, which must review such activities, and to the public at large. After much pioneering and litigation

Herbert v. Shanley Co., 242 U.S. 591 (1917).

on many fronts, the right of composers, authors and publishers to be paid for commercial uses of their works and to offer licenses on a collective basis, has been established. Their methods of licensing and of distributing the royalties collected must accord with principles laid down by a Federal consent decree, and practically everyone who is fair minded and impartial applauds the inqenuity, foresight and leadership of those who conceived the ASCAP plan and guided its course over the years.

But for performance royalties, there would be little encouragement today for the great number of men and women who have the talent to write our nation's music and those who are willing to invest their time and money in the highly speculative business of publishing the works created by these gifted composers and authors. There are, of course, all kinds of musical works, as there are all kinds of people of varying tastes and moods. Music today is everywhere. It brings joy and comfort as well as excitement. It is even used in mental therapy. It is one of our great national assets. You have heard about the writers and publishers of hymns from Mr. James Thomas, President of the company founded by Homer Rodeheaver who tied two eras together by his association with both Billy Sunday and Billy Graham.

Of course there is the popular music which appeals to people of all ages and all countries-the songs of Irving Berlin, Richard Rodgers, Johnny Mercer, Alan Jay Lerner, and Frederick Loewe, Henry Mancini, Harry Warren, Meredith Willson, Cy Coleman, and the late Oscar Hammerstein, Cole Porter, George Gershwin, Jerome Kern, Lorenz Hart and many others. I shall leave with the Committee copies of the ASCAP membership list and the ASCAP Biographical Dictionary for further details about the identity and works of these writers. At this time, I should like to point out that the sums paid for the widespread commercial use of these works make it possible to provide funds to enable writers of serious works, such as Samuel Barber, Paul Creston, Virgil Thomson, and others, to devote their entire time to the composition of classical musical works. You have heard about this directly from one of the nation's greatest songwriters, an ASCAP member since 1933, Johnny Mercer, whose songs typify America wherever people have access to radio, television, phonograph records or live performers. I shall point out later in some detail the plan under which Mr. Mercer has agreed that a substantial part of his royalties goes to those who are in need of financial encouragement.

The main income for most writers today comes from the performance of their works, largely in media unknown in 1909. When the 1909 Copyright Law was enacted, sheet music was the main source of income for music writers and publishers; but with the advent of automated music and its rapid growth, there were few demands for printed copies and the income from that source greatly diminished. At the same time, the number of writers and publishers of musical works has increased in leaps and bounds. This is a healthy development and shows that the law of supply and demand works in music as it does in other fields.

Mr. Harold E. Wigren, speaking for the Ad Hoc Committee (of Educational Institutions and Organizations) referred to the situation that was created by the invention of printing, and he told you that his Committee was concerned with using the new technology of our day to enable teachers to make knowledge available in the public interest. We agree that all such facilities should be available to teachers and others.

Mr. Chairman, the question to be decided here is not whether the public interest demands that new forms of disseminating the products of authorship (and which may replace the old methods) shall be available, but rather, whether their use of copyrighted works shall be exempt from the usual requirement that author be compensated for the use of his works. In determining what is in the public interest, Congress is specifically empowered to promote the intellectual life of the nation by securing to authors, exclusive rights in their writings for limited periods of time. The public interest determines what those exclusive rights shall be and how long they shall endure. Returning to Mr. Wigren's reference to the printing press, it was that very invention that gave rise to copyright laws. It was not until the invention of movable type and the proliferation of printing presses that there was a large enough demand for new works to warrant development of a class of professional authors. The early