If this letter does not express approval of the policy and progress of the society with respect to radio broadcasting, then I am at a loss to understand by what other means, expressions, or actions the plaintiff could express its approval. At a meeting of the board of directors held on November 27, 1923, it was reported that the society issued 25 licenses to broadcasting stations and that their infringements had been detected at various stations. The broadcasters, like the hotel men and the motion-picture men, were organized into an association under the name of "The National Association of Broadcasters." The president of this association was one E. F. McDonald, jr., who operated station WJAZ, Chicago, and was the president of the Zenith Radio Corporation, and the general manager of Chicago Radio Laboratory. The Zenith Radio Corporation is a manufacturer and dealer of radio receiving sets. The association on August 14, 1925, sent a communication to music publishers, reading as follows: "To publishers of dance, jazz, blue, and popular music: "The members of this association maintain that they will not pay for licenses from any copyright owner or recognize the right to collect any tax until the law plainly states that such payment may be legally collected." The radio broadcasters took the position that performances given in their studios were not public performances for profit. Printed communications as well as word-of-mouth declarations were issued expressing the intention to broadcast performances of copyrighted music works, whether or not the proprietors of such works be members of the society. The challenge of the broadcasters was accepted and a suit was brought in behalf of the member, M. Witmark & Sons v. Bamberger, in the United States District Court of New Jersey to restrain a department store dealing in radio products from broadcasting plaintiff's copyrighted music. Judge Lynch in that case held that radio broadcasting was a public performance for profit (291 Fed. 776). In a communication dated August 13, 1923, the National Association of Broadcasters, by Paul B. Klugh, its executive chairman, issued a circular letter reading, among other things, as follows: 66 AMERICAN SOCIETY WINS AGAINST WOR "(Being the broadcasting station operated by Bamberger) "This decision justifies the position taken by this association from its inception: "1. That our efforts be directed toward a revision of the copyright act rather than any contest in the courts under the present ambiguous law. "2. That because of the proven value of broadcasting in creating sales of sheet music, phonograph records, and piano-player rolls (now admitted by Judge Lynch in his decision) it is unreasonable for any musical copyright owner to demand payment for use. "3. That the American Society of Composers, Authors, and Publishers controls but a small percentage of the copyrights recorded in Washington, and therefore are in no position to make any concerted demand. "4. That our bureau of music release furnishes weekly (for use by members only) good, new, copyrighted, popular music without the payment of any fee or tax. "With our rapidly growing membership and the strength which comes from numbers, the future of the broadcasting art becomes clearer." The National Association of Broadcasters thereupon launched a very vigorous campaign of attack against the society. Mr. McDonald and Mr. Paul B. Klugh, its exécutive chairman, called a number of conferences in which were invited motion-picture theater proprietors, hotel, dance hall, ball room, and other places of public amusement proprietors, as well as broadcasters and various trade associations to join with them, for the purpose of taking united action to prevent the society from continuing its activities; to defend actions brought by the society on behalf of its members to suppress infringements; to effectuate a dissolution of the society; introduce and press legislation to repeal the musical performing rights provision of the copyright act, and to otherwise hinder and obstruct the society from protecting the rights of property of its members. It was not a question with the broadcasters as to the reasonableness of a license fee or royalty for the privilege of performing copyrighted music. They refused to recognize the right of a copyright proprietor to control the performance of his works fr broadcasting purposes. Assessments were levied upon the various members of the National Association of Broadcasters, and sums of money were subscribed by and collected from broadcasters, motion-picture theater owners, hotels, restaurants, cabarets, and dance-hall proprietors, as well as from trade associations, to carry on and to wage a warfare, legislative and legal, against the society. On March 7, 1924, the Illinois Motion Picture Theatre Owners and the Chicago Exhibitors Association, meeting in executive session, unanimously voted to associate with the National Association of Broadcasters in its fight against the society. The Chicago organization voted to subscribe at least $10 a house toward the fund necessary for fighting the society. There are attached hereto articles published in the Exhibitors' Herald of March 22, 1924. (Exhibit G) in which it is stated that the executive secretary of the Motion Picture Theatre Owners of Wisconsin and George P. Aarons, secretary of the Motion Picture Theatre Owners of America, forecast that the exhibitors "will celebrate July 4, 1924, tax-free." It also stated in said articles that the Chicago association will raise at least $2,000 with which to fight the society. The Association of Broadcasters' plan of battle developed three points of attack on the society: First, the refusal to recognize the right of any copyright proprietor to control the performing rights of his works for broadcasting purposes; second, to secure a change in the copyright law which would deprive the copyright proprietor of all control over the performing rights of his works, and thus end the activities of the society; and third, to disintegrate the society by inducing its members to resign therefrom and to effect its dissolution. In order to furnish such broadcasting stations as did not care to assume the rôle of infringers with suitable instrumental and vocal numbers, the broadcasters' association developed a working plan which provided that radio stations with a plentiful supply of music in respect to which no license fee was claimed, and the broadcasters' association planned to extend the service of this bureau to picture theaters and to other purveyors of entertainment. It was reported that Mr. E. F. McDonald openly boasted that the bureau had received 3,000 musical scores which were free of royalty. Mr. McDonald further stated that in order to give motion-picture theaters the advantage of the music privileges of the broadcasters' association a class B associate membership had been formed and motion-picture men were invited to become members. He also is said to have stated that funds collected under this class B membership will be used only by the association of broadcasters for the expense of maintaining and operating the music release bureau and for the purpose of conducting a nation-wide campaign for the amendment of the present copyright law. It has been rumored that the National Broadcasters' Association has raised a fund in excess of $50,000 for the purpose of carrying on its legislative and legal activities against the society and its members; and for the repeal of the musical performing right provisions of the copyright act. Prior to the 5th of February, 1924, the plaintiff, nor its president, Mr. Waterson, nor Mr. Walter Douglas, its general manager, and its representative upon the society's board of directors, never expressed any disagreement or dissatisfaction or complaint with or against the society's program and policy with respect to radio broadcasting, or any other of its activities or operations. On the contrary, from the time the plaintiff rejoined the society until the 5th of February, 1924, it had expressly approved and ratified every action taken by the society with respect to its various operations and activities, as well as its program and policies. Like a thunderbolt out of a clear sky, without any previous protest or warning of any kind, there was publicly broadcast from station WDAP, located in Chicago and operated by a member of the National Association of Broadcasters, a letter written by the plaintiff to the National Association of Broadcasters, reading as follows: WATERSON, BERLIN & SNYDER CO., New York City, N. Y. NATIONAL ASSOCIATION OF BROADCASTING, (Attention Mr. Paul B. Klugh, executive chairman.) GENTLEMEN: We are members of the American Society of Composers, Authors, and Publishers. We are not in sympathy with their program, in so far as it has for its purpose the collection of money in any form from broadcasting stations, hotels, or moving-picture theaters for the privilege of playing our copyrighted music. It is our intention at the earliest feasible time to resign from this organization, so that our copyrighted music may be performed publicly without payment for any license or any fee or tax of any nature whatsoever. We want to go on record as opposed to an organization which has for its purpose the collecting of money from agencies which we believe to be of distinct value to us in advertising our products. To this end, in so far as we have the authority to do so, we hereby give permission to publicly perform our copyrighted music without any further authority from us, and we will refuse, if we can legally do so, to prosecute or to join in the prosecution of anyone publicly performing our copyrighted music. Very truly yours, H. WATERSON, President, For WATERSON, BERLIN & SNYDER CO. The statement that the plaintiff was not in sympathy with the society's program in so far as it had for its purpose the collection of money in any form from broadcasting stations, hotels, or moving-picture theaters for the privilege of playing plaintiff's copyrighted music is belied by the history of the plaintiff's own actions and activities and its participation in the affairs of the society almost continuously since its very beginning. From the collection of royalties by the society, the plaintiff itself received and accepted the following sums: 1921_ 1922_ 1923 $3.337.05 4, 096. 34 4, 911. 19 In 1924 there accrued to it for the first quarter, and there was tendered to it, as its share of the collections, the sum of $1,300. Mr. Ted Snyder, whose name honors the plaintiff's corporate title, received approximately $2,572.96. Its staff writers and the writers of the compositions comprising a substantial part of its catalogue, received upward of $75,000. Mr. Ted Snyder and the plaintiff's staff writers, as well as the other writers represented by its catalogue, are still members of the society, and have not tendered their resignations and they are still in receipt of royalties as and when they are distributed by the society. Mr. Henry Waterson, as I have been informed and verily believe, after his attempted resignation from the society, was approached by several of his staff writers and requested to state his attitude toward his staff continuing in the membership of the society, and he expressed himself as satisfied with their continuance. Mr. Waterson in his affidavit has scrupulously avoided setting forth before the court the real facts and circumstances which impelled him to tender his resignation to the society, the arrangement that he had made with Mr. Klugh, Mr. McDonald and the National Broadcasters Association, the correspondence that passed between him and the National Broadcasters Association and their representatives, prior to his writing of the communication of the 5th of February, 1924, to the broadcasters, and the special inducements that had been made to him to pursue the course that he did to repudiate his agreement with the society and to assume the rôle of a contract jumper. In his letter of resignation, Exhibit A attached to his affidavit, he does not complain of the lack of sympathy with the society in its operations and activities. The ground that he offers for his company's resignation was that a majority of the large publishers are resorting to subterfuge in order to have their numbers broadcasted for nonlicensed broadcasting stations." 66 At no time did Mr. Waterson or his company or Mr. Douglas make any complaint to the society because of these alleged practices. Adequate machinery is provided by the articles of association for protecting an aggrieved member. Mr. Waterson never revealed that he had a grievance, and the fact is that he had none, and the letter was simply a pretext and an attempted justification for his betrayal.. The defendant society replied to the plaintiff's letter of resignation, Exhibit A attached to Mr. Waterson's affidavit, by a communication reading as follows: Mr. HENRY WATERSON, President Waterson, Berlin & Snyder Co., New York, N. Y. FEBRUARY 8, 1924. DEAR SIR: Before the receipt by us of your communication bearing date the 6th of February, 1924, the announcement was broadcasted that Waterson, Berlin & Snyder Co. had resigned from the society, and simultaneously therewith compositions published by such company were broadcasted by several unlicensed broadcasting stations, accompanied by a statement that such broadcasting was under direct license from your company. There was also announced in the public prints the fact of the resignation of your company from the society and the issuance by you or your company of a general license to all broadcasting stations to broadcast musical compositions published under your copyrights. You seem to be laboring under the impression that your company's resignation, or attempted resignation, from the society gives your company the right to exploit the so-called "small rights' of its copyrights without the leave or license of this society. We wish to emphatically place ourselves on record that the society proposes to hold each and every member to its or his contract, entered into in good faith on or about the 1st day of February, 1921, under which each member assigned to the society for a period ending January 1, 1924, the exclusive rights of public performance for profit of the works copyrighted by such member during such period. You personally, on behalf of Waterson, Berlin & Snyder Co., executed to the society an assignment bearing date the 1st day of February, 1921, under which your company transferred the exclusive right of public performance for profit of musical works then belonging to your company, or which might be acquired by your company until the 1st day of January, 1926, irrevocably vesting in the society the right in your company's name or in the society's name or otherwise, and under your company's copyrights, to bring and prosecute all actions to restrain the infringement of such rights, and to recover damages for the infringement or violation of such rights so assigned to the society, and your company irrevocably appointed the society its attorney-infact, in your company's name or otherwise, to bring and prosecute all such actions. Upon the strength of and in reliance upon the execution of such assignment every other member of the society delivered a similar assignment. The society proposes to the utmost to compel your company, as well as every other member, to strictly fulfill the obligation assumed by each member. The assignment of performing rights for profit still being in full force and effect, neither you nor your company has any right to grant any licenses to broadcasting stations to broadcast numbers published under your company's copyrights. Such rights vest absolutely and exclusively in the society until January 1, 1926, and the society proposes, in your company's name and under your company's copyrights, and in pursuance of and in accordance with the express terms of the assignment, to bring suits against every infringer. The society deeply regrets and deplores that publishers are resorting to subterfuge in order to have their numbers broadcast over unlicensed broadcasting stations, as you claim in your letter, and upon complaint from you the society would have investigated the same and would have at once exerted itself to prevent such abuses. We assure you that the statement in your letter will be investigated, and if found to be correct every effort will be made to prevent the evil practice you complain of. But the existence of such grievance does not justify you in violating your contract with the society and jeopardizing the rights of each writing member of your staff. By virtue of your contract with the society, many thousands of dollars have been paid over to your company and the authors and composers of the work published by your company. The society requests you to reconsider your action and to please designate a time and place when our president, Mr. Gene Buck, can see you personally and discuss this matter at length. Very truly yours, AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS, By GENE BUCK, President. The plaintiff immediately thereafter communicated with Mr. Sidney Cohen, president of the Motion Picture Theater Owners of America, and gave that organization and its twelve hundred-odd members the privilege of playing the compositions in its catalog free of any royalties or license fees whatsoever. The plaintiff caused to be announced in trade papers circulating among motionpicture theater exhibitors, broadcasters, hotel, cabaret, and restaurant owners the fact that its catalogue was free for use in connection with any place of public entertainment, without any restriction or limitation whatsoever. The plaintiff gave the widest publicity and advertising to the fact that it no longer was a member of the defendant society, and that its publications were free for public rendition and performance for profit without any restriction or limitation whatsoever. And from the date of the plaintiff's resignation to this day the plaintiff's compositions published by it have been and are being played and broadcasted in almost every nonlicensed institution, under and by virtue of the permission and authority issued by the plaintiff. After the plaintiff's letter of resignation, to frustrate and circumvent the assignment made by it to the society, it organized two corporations, to wit: The Jack Nelson (Inc.) and Henry Waterson, jr. (Inc.), and under the names of these two corporations published musical compositions which it permitted to be broadcasted and performed publicly for profit, without any limitation or restriction whatsoever. The plaintiff, in furtherance of its scheme to defeat the society of the rights secured to it under the plaintiff's assignment, published under its own imprint and under the imprint of the Jack Nelson (Inc.) and Henry Waterson, jr. (Inc.) compositions with assumed or fictitious names for the authors thereof, in order to conceal the identity of the real authors, who were and still are members of the society and who, under their assignments to the society, had no right to permit the free broadcasting or playing of their copyrighted compositions. On the 26th of June, 1924, Mr. J. Russell Robinson, a member of the society, whose assignment the society holds, inquired of me why he did not receive his check for the first quarter of 1924. I informed him that a number of the writer members of the society had filed complaints against him charging him with writing songs under fictitious names and permitting them to be published by a fictitious corporation operated by the plaintiff. I asked him if these statements were true and he replied that they were. He said that he was in the employ of the plaintiff and was subject to its orders; that he had no alternative except to comply with the directions of the plaintiff or lose his job; that he was a strong believer in the society, but under the circumstances had no alternative. I told him that such action was derogatory to the welfare of the society and a violation of the articles of the association, and of his contract with the society. I told him that if he would write a letter to the society stating that Mr. Henry Waterson instructed him to write under a fictitious name, the society would cheerfully pay him royalty for the first quarter of 1924 and continue to do so thereafter. As the society's sole source of income is the royalty derived from licenses issued for the use of the combined catalogs of American, English, French, Italian, German, and Austrian composers, the withdrawal of a member's catalog to that extent lessens the society's income. His right to share in the royalties is dependent solely upon his contribution to the society's repertoire or catalog, and if he withdraws from such catalog, he makes no contribution to entitle him to royalties. The claim made by the plaintiff that the society aims to restrict competition or to restrain trade or is a combination in violation of the Sherman Act, is absurd and nothing but a pretense to give color of excuse for its contract jumping. There are many composers and musical authors outside of the society. There are hundreds of thousands of noncopyrighted works, as well as works upon which copyrights have expired. The Motion Picture Exhibitors League and its successor, the Motion Picture Theatre Owners of America, |