The affidavits are eloquently silent as to what price the members of the Radio Broadcasting Association would be willing to pay for the privilege of giving public performances for profit of the plaintiff's catalog. I challenge the plaintiff to submit to the court a bona fide offer involving the payment of money made to it by any user of music during the entire period of its membership in the society for any number or group of numbers, or, in fact, for its entire catalog.

In the history of the society no corporation, firm, or individual has ever applied for a license to publicly perform the works contained in an individual catalog or copyrighted by any one owner. Should such an application be received, the society would grant it. The compulsion which the plaintiff imagines is put upon the licensees of the society to purchase and use the entire repertory of the society, never was put upon them, and never will be. As a matter of fact, before the execution of the assignment of performing rights which the plaintiff seeks to declare illegal by this suit, no member of the society dealt independently with any users of copyrighted music with respect to the performing rights. The plaintiff, while it continued in the membership of the society never dealt independently. Dealing independently would have meant no revenue for the society and an end to its existence; because dealing independently simply meant a return to the conditions prevailing before 1914.

Dealing independently is defined by Mr. McDonald at the hearing before the subcommittee of the Committee on Patents of the United States Senate (Senate bill 2000, April 9, 17, 18, 1924) at page 152, as follows:

"But this is not all. Coincident with this development of broadcasting will arise the very natural and unavoidable situation where the Society of Composers and Authors, although considerably dwarfed in size and basking in the reflection glory of the preeminence enjoyed before broadcasting came into its own, will be paying the broadcasting association for the use of music and literature controlled by the broadcasters' association, all the good and desirable music and writing of that time. For it will be a mark of distinction for the artist and the author to be recognized by the broadcasters' association. The future of the Society of Composers and Authors, I regret to state can not be painted in brilliant hues."

Not only, as appears from this declaration, is the National Association of Broadcasters unwilling to pay for the privilege of using copyrighted music, but their hope and expectation is to force copyright owners to pay for the privilege of having their numbers broadcasted. So it is obvious that all this talk of dealing independently is idle chatter.

But assuming that the National Broadcasters' Association would abandon its policy of nonrecognition of a musical author's right to control of his copyrighted work, and would be willing to pay for the privilege of broadcasting the numbers of its several members on an independent basis, is Mr. McDonald or Mr. Klugh willing to state what sum he would recommend to the several members to pay for such rights?

Mr. Victor Herbert was a very prolific writer in his lifetime. Is it conceivable that his estate would permit the indiscriminate playing of Mr. Herbert's numbers at motion-picture theaters for less than 10 cents per seat per year, or in hotels of the first magnitude for less than $180 per year, and by broadcasting stations for less than $1,000 a year? (Mr. Herbert in his lifetime received a royalty of 3 per cent of the gross receipts of each and every performance of his operas in legitimate theaters.)

If the users of performing rights of musical works were left to deal independently with the several members of the affiliated foreign societies, the sum total paid would be enormous, and the basis for the prices, I imagine, would be that laid down in section 25 of the act, rather than the very modest license fee which the society exacts for the privilege of paying indiscriminately and as often as desired its repertory.

The plaintiff constantly makes mention and reiterates that since the plaintiff's resignation the society has continued to vend the plaintiff's music for public performance for the society's profit. It does not vend the plaintiff's music, and at no time before or since the plaintiff's resignation has it received any call for the performing rights of the plaintiff's numbers. It has not vended the performing rights of plaintiff's numbers separately and apart from its general repertory. It has not granted to anyone specifically the right to play the plaintiff's numbers. Under its license issued by it the society

grants the right to give public performances for profit of all the numbers in the society's repertory, the plaintiff's included.

The statement that the use by the society of the plaintiff's name in bringing so-called infringement actions was causing its music to be shunned is startling. One of the first leading cases against a motion-picture theatre was brought in the name of the plaintiff. (Waterson, Berlin & Snyder Co. v. Tolefson, 253 Fed. 859.) The decision in this case was widely heralded, and it is inconceivable that the plaintiff's music should have been shunned and yet that it never took occasion to lay its grievance before the board of directors.

Mr. Waterson expressed great concern that the ill-will thus created would find expression in efforts to have Congress amend the copyright law by making it less stringent. Mr. Waterson has become apprehensive only since this suit has started. His own lawyer, armed with ammunition, with documents, and with papers furnished him by Mr. Waterson, made the principal argument before the Senate and House Committee on Patents. Mr. Waterson's affidavit is lacking in candor and frankness. Although I have invited him in my answering affidavit to do so, he has scrupulously avoided detailing in the replying affidavit the confidential communications which passed between him, Mr. Klugh, and Mr. McDonald and other members of the broadcasting stations, as well as Mr. Cohen, the president of the Motion Picture Theatre Owners of America. As a matter of fact, the threats to introduce bills to repeal the performing rights were made by the motion-picture men in 1915 and these threats were carried into execution by the introduction in the House of a bill, June 21, 1921 (H. R. 7301), by Congressman Lampert.

Also, Mr. Klugh, in his circular letter of August, 1923, before any offense was given to him by the society, upon the handing down of the decision in Witmark v. Bamberger (291 Fed. 776) urged, as part of the program of the National Broadcasters Association, "that our efforts be directed toward a revision of the copyright act rather than any contest in the courts under the present ambiguous law."

Notwithstanding Mr. Waterson's protestations, I charge that he was in league with the National Association of Broadcasters and with the Motion Picture Theater Owners of America to secure the repeal of the copyright act. Mr. Waterson's letter to Paul S. Klugh, under date of February 5, 1924, in which he expresses a lack of sympathy with the society's program for the collection of royalties from public performances for profit, is the strongest argument that Mr. Waterson could make for the repeal of the law.

The filing of the bill of complaint in this suit a day before the meeting of the Senate Committee on Patents to consider the bill to repeal the performing rights provisions of the act, was not a happy or fortuitous circumstance. How did a United States Senator come to put that suggestion to Mr. Tuttle? Is it not probable that information was personally conveyed to the press and to the Senator who was the introducer of the bill?

Mr. Waterson naively states that the plaintiff had no dealings with the National Association of Broadcasters when it resigned from the society, and Mr. Waterson did not know that Mr. Tuttle had been retained by the National Association of Broadcasters until four days before the complaint was filed. The court could be better informed upon this matter by Mr. Waterson detailing all the conversations he had with Mr. Klugh and Mr. McDonald, and producing all the correspondence that he had with these parties with reference to the copyright bill, and the preparation for the presentation of the bill, and the arguments before the Senate and House committee, and his proposed resignation from the society. Mr. Waterson protests that whatever information he had given Mr. Tuttle was given in aid of this suit, and that neither he nor any officers or employees of the plaintiff appeared before Congress in aid of the bills. It is extremely unfair to lay the blame upon Mr. Tuttle, because if it is true, as plaintiff claims, that "its self-interest is to support and sustain the present copyright law," then surely Mr. Tuttle would not under those circumstances appear before a congressional committee and urge it to repeal the law upon information furnished by plaintiff.

The plaintiff states that it is not challenging the right of the owner of a copyrighted song or of music to receive compensation for the use of such song or music in a public performance for profit. It has seen fit, however, to incorporate in its replying affidavits a letter under date of February 15, 1921, signed by the Oliver Ditson Co., addressed to Mr. Mills, and which letter Mr. Tuttle read to the Senate and House Committee on Patents, and which evi

dently was turned over by Mr. Waterson to Mr. Tuttle for that purpose. The letter is set forth in Mr. Douglas's affidavit and the condemnation therein contained is elaborated upon by Mr. Douglas at great length.

The transformation in Mr. Douglas's viewpoint has been miraculous. The plaintiff states that the result of the execution of the assignments similar to Exhibit A by the several members of the society has rendered competition between members in the sale or use of the public performing rights in their copyrighted songs and music absolutely impossible. As already pointed out there is no competition, and never was, and there can be no competition between the several members of the society with respect to performing rights because of the inherent nature and properties of the literary material which is the subject of control by the society. The society has made possible a source of revenue a sort of unearned increment-from these performing rights, aptly called in France the "petit droit."

It must be borne in mind that the society has no control under the assignment over the dramatic or stage rights. Its right of control is limited strictly to nondramatic renditions in a particular class of amusement resorts and broadcasting stations. The society catalogue is international in scope, representing musical works of every name, variety, nature, and description and of every genre and school of writing. It is puerile to argue that the society has stifled competition between its members, when there was not, is not, and can not by any possibility or stretch of the imagination be competition between them, when there is no market for a member's product unless as part and parcel of this international repertory.

As to the statement that by force of this combination "all users of music for the purpose of public entertainment were necessarily prevented from purchasing music for such purpose from any member of the society, and were forced and coerced into purchasing it from the society as a combination and at a price which was not only capable of being enhanced, but was enhanced, through the attempted 90 per cent monopoly by the society of all recognized published popular music "-this is in all respects false and untrue. Places of public entertainment never purchase, never were unwilling to purchase, and are unwilling now to purchase from any members of the society any rights to publicly perform its songs, groups of songs, or even its catalogue. The price was not enhanced, because there was no price for these rights before the society was organized.

More than 7,000 motion-picture theaters have for years presented their musical programs successfully without taking out the license of the society, or using the music of its members; the broadcasters also are continuing to conduct their stations without using the music of the members of the society, as also are the much larger and more prominent stations operated by the Westinghouse Electric & Manufacturing Co., as well as those of the Radio Corporation of America--nine of the most powerful stations in the country; and their programs every afternoon and evening are filled to satiety with all classes of musical works; and they say to us that they do not need our music. The facts constitute the answer; the theories of plaintiff do not.

"The effect of broadcasting upon the music industry is discussed. To what point? If, for the sake of argument, broadcasting has doubled and trebled the business in music, what of it?

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Broadcasting, in its popular aspects, could not exist without music. If music owes anything to broadcasting for advertising service rendered, broadcasting indeed is debtor to music for its very existence, and its continued ability to sell to the public of the United States receiving apparatus to a value in excess of $300,000,000 per year.

"The plaintiff states that but for that combination the various authors, composers, and publishers will be in competition with each other in the sale of their music for the purpose of public performance. With no society, there would be not only no performing royalties, but Mr. Klugh and his organization would force and coerce such copyright proprietors as desired to have their numbers broadcasted to part with their valuable rights in such compositions to the National Association of Broadcasters, upon such terms and conditions as they dared exact. But for the society, the member thereof would again be despoiled and robbed of their property rights and left to the tender mercies of organized piracy represented by powerful trade association.

"The best answer to plaintiff's sneer that the society is no longer necessary, is the present attitude of the motion-picture exhibitors as expressed by their

trade organization, the Motion Picture Theater Owners of America, and the various trade organizations of users of music.

"This is demonstrated by the fact that, notwithstanding the decision of Judge Thompson in the United States District Court for the Eastern District of Pennsylvania, rendered in July, 1924, in Berlin v. Evans and 35 other cases. the Motion Picture Theater Owners of America have publicly announced that the cases will be appealed by that association's counsel, because under their interpretation and construction of the copyright laws they have no application to motion picture theater owners. The broadcasters association has repeatedly announced that it refuses to recognize the rights of copyright owners to receive pay for the performing rights. The New York State Hotel Association, in its trade publication called the Monthly Messenger of the New York State Hotel Association, volume IV, No. 5 (July, 1924, number), has an article reading as follows:

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66 HOPE OF COPYRIGHT MUSIC RELIEF IS THROUGH ORGANIZED EFFORT.

'Among the various bills upon which Congress took no final action at its recent session were the various proposed measures to amend the copyright law in reference to the exaction of royalties for the use of copyrighted music in hotels and restaurants and by broadcasting stations.

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'During the hearings held on these bills, both in the House and in the Senate, it was quite apparent that there was a lack of coordination on the part of the various interests seeking relief. Furthermore, many interests affected by the royalty exactions did not appear at all. The public has the greatest interest in this issue, because so long as additional royalties are exacted, the public will have to pay their cost.

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'Nothing in the way of real relief can be accomplished except by thorough organization, which means a getting together of the various industries interested and organizing in an effective way so that everybody may know just what the program is and the extent to which each interest may be called upon to cooperate. Therefore, hotelkeepers and others should get together without delay and present a united front when Congress reconvenes in December.

"All the pending bills retain their places on the calendars for the December session."

*

*

*

In Witmark-Pastime (289 Fed. 470) an appeal has been taken, and is now pending in the third circuit, by the Motion Picture Theater Owners of America, and the following errors, among others, are assigned as ground for reversal: "That the court erred in holding and deciding that the defendant was guilty. of an infringement; whereas the court should have held that there had been no public performance of the musical composition in question for profit, because there is no charge made for listening to the playing of the music which is purely incidental and not a part of the motion picture exhibited by the defendant; that the court erred in not holding and deciding that the playing of such a small part of the music in question did not constitute a violation of the copyright law, but that the part of the composition played in connection with the showing of motion pictures without the singing of any words was merely a vehicle to put the picture across, and was in no sense a performance of the music within the meaning of the copyright act; * *

* *

Obviously, the necessity for the society's existence, in view of the concerted attempt to secure a repeal of the law and the refusal to recognize its applicability to motion-picture theaters and radio broadcasting stations, is greater than ever.

In view of the persistent and obstinate and determined effort on the part of users of copyrighted music to ignore the right of copyright proprietors, it is trifling to talk about competition between the members and the members dealing independently with users of music, and that if the law of supply and demand were allowed full play the price of music for such purpose would be substantially lower and thereby reduce the cost of such entertainment to the public. How much lower could the price be for the mass of music that the society's repertory affords and the great number of members entitled to participate in the divisions of royalties? Since the organization of the society in 1914 a great many new members controlling large, substantial catalogues, and a number of foreign societies became affiliated with the society. There has been no change in the license fees charged to licensees and with the

increase in membership the ratable share of each member has been considerably reduced. Does Mr. Waterson honestly and really believe that if the society were to go out of business to-morrow the cost of entertainment would be one penny less to the public than it is to-day? The society never made any argument that the course pursued is necessary to protect the society against the low scale of prices which would otherwise obtain. The society does not fear the scale of prices. The price is as low as it ever can be, whether or not the society persists, provided the users are willing to pay equitable and fair compensation to writers of music. What it fears is that disintegration would subject its members again to the exploitation and the spoliation upon the part of the users of music and open wide the flood gates of piracy, all to the unjust enrichment of the users of music.

The fee charged by the society for the combined works of its members is fixed by the board of directors, with the knowledge of all members thereof; the fee is fixed for all the compositions in its repertory, and each of the members receives his individual price in compensation for the use thereof under the licenses of the society, in the royalty payment to him, according to his classification as fixed by his own chosen representatives. No merchandise is sold or dealt in by the society, and it is not, by the widest stretch of the imagination, engaged in interstate or any other sort of commerce. Nor, is competition restricted or eliminated; there is, and can be no competition in the marketing of a copyrighted musical composition or the rights thereunder.

In the form of an affidavit, Mr. Waterson, a distinguished music publisher, has endeavored to construe the Federal antitrust acts, and he discusses very glibly the laws of economics and what constitutes and does not constitute trade or commerce. This society does not directly or indirectly restrain the free and natural flow of trade and commerce. The society does not engage in any commerce.

I deny that it is the natural self-interest of any music publisher or any of the members of the society to have their songs or music popularized by being played to a large number of persons. Before the society adopted the resolution to restrict broadcasting, the question as to the value of broadcasting as an advertising medium was given large weight and consideration and was the subject of much discussion. It was the consensus of opinion and it is still the consensus of opinion of a majority of the members that broadcasting is absolutely injurious and destructive to the success of a song. The members do not esteem as so highly valuable the publicity and advertising opportunities furnished by broadcasting. Many are opposed to it and do not want it under any circumstances.

I do not know what the plaintiff means by boycotting stations which refuse to accept the dictation of the combination.

Plaintiff in his frequent references in the affidavit, at pages 11 and 12, to "boycotting stations" and the "boycott of any such unlicensed user is misrepresenting. There is no boycott, has been no boycott, will be no boycott, in any sense of the term. There has been, and will be, in so far as it lies within my power to bring it about, a refusal upon the part of all copyright owners with whom I have any influence to permit the free and unrestricted use of their copyrighted works for purpose of profit by broadcasting stations.

Have we termed it a "boycott" that the broadcasters' association has pledged its members not to take out the license of the society?

The society does not boycott any stations. It invokes the law to inhibit piracy. Its members have agreed that broadcasting stations operating publicly for profit and deriving extraordinary profits from the operations of their stations are largely dependent for the success upon the mental creations of American writers, and that in equity, justice. and good conscience they ought to pay a small sum for the privilege of using the works of American composers. The average license fee paid by the average broadcasting station is about $500 per year, and it seems childish to devote pages and pages of affidavits on this matter. Is it boycotting to say to a station, "You must respect the law; you must not pirate." And is it boycotting to say to a member of the society who has transferred his rights to the society for valuable consideration that he must fulfull the terms of his assignment? The society does not put all its members into an agreement to refuse to do business except with those who are moved or coerced into accepting the principle which the combination itself represents. It is a sheer waste of rhetoric to talk in this fashion. Since the