Lapas attēli

Representative BLOOM. You were much concerned about keeping the small broadcaster in business. If I should compose a song, and I put a price of 5 cents which it should be broadcasted for, the large broadcasting stations WEAF and WJZ could afford to pay the 5 cents, but the little fellow whom you want to keep in business could not afford it and he would have to go out of business. Suppose I put a price of 5 cents, as fixed by this bill, and I find out afterwards I am willing to let it go out at 4 cents, could I do it?

Mr. TUTTLE. Not under the terms of this bill.

Representative BLOOM. If the price is fixed, WJZ and WEAF and the big stations could afford to pay the price, but Senator Dill's stations, out in his State, could not afford to pay it, because he does not get the returns for it.

Mr. TUTTLE. Why do you think the big stations would go around buying up all the high-priced music?

Representative BLOOM. If he wanted to, he could not sell it for a less figure than was printed on the sheet of music.

Mr. TUTTLE. He would take care of putting on a proper figure, and we know the result would be, in a short time, there would be more or less of a standardized figure, as there is on sheet music.

Representative BLOOM. I beg your pardon, there is not a standard price on sheet music.

Mr. TUTTLE. On popular sheet music?

Representative BLOOM. They get a discount; they sell it at any price they can sell it for; if they sell it to Woolworth, they sell it so that they can sell it at 10 cents.

Senator DILL. But they have to sell it to everybody at the same price.

Representative LANHAM. Mr. Tuttle, may I ask a question?
Mr. TUTTLE. Yes.

Representative LANHAM. Why would not the regular laws of bargain and trade and supply and demand solve this controversy, and why will they not apply here, that when the society reaches a point that it charges more for its music than it is worth, you people will not take it, and why would not that operate on them to make the price an equitable price, and one at which you can both operate profitably?

Mr. TUTTLE. I am glad you asked that question. Of course, you are not assuming that our association is so knit together that we are saying among ourselves: "Now, we will not play any piece of music that comes from the society"; we do not have that power among ourselves.

Representative LANHAM. No; each individual broadcaster may have it.

Mr. TUTTLE. Each individual broadcaster deals with one organization. Now, let us suppose this; let us suppose, to take any staple commodity, like bread, if it was all put in a big pool, and under the control, we will say, of some self-perpetuating body, and then the public were asked to buy, each for himself, you would see at once that whereas you would have in play certain economic forces, you would not have what you have characterized as the ordinary economic operation. In other words, the public would be paying for two

things-they would be paying for the bread, and in addition to that they would pay for the support of the monopoly.

Representative LANHAM. Does not that reduce it to this under that theory: The price the society would get for its compensation would be the price that the poorest broadcasting station could afford to pay, if you were going to give all broadcasting stations the same rate with reference to their music, would you not automatically reduce the price so that the maximum price they could charge would be the price that the poorest broadcasting station could afford to pay?

Mr. TUTTLE. No; not necessarily, and even if it were so it would be an evil, because the poorest broadcasting station would be called upon to pay what? It would be called upon to pay what the combination could exact, not on the basis of the ordinary laws of supply and demand, but on the basis of what the combination would enact, which held in its hands all the necessary raw material. So, whereas it might be that the combination would not want to put the price up beyond what the smallest broadcasting station could possibly stand for, if taken by the throat, still the smallest broadcasting station would be deprived of the ordinary economic law of supply and demand.

Representative LANHAM. Take the matter of clothes. I suppose all women have the innate desire

Mr. TUTTLE (interposing). Do you wish to ask this question of me? Representative LANHAM. Yes; they have the desire, but they can not all go down, and certainly the public has an interest in the matter of clothes. They can not all go down and buy clothes that cost the same; they are limited by the family purse. Now, with reference to broadcasting, should there be any limitation on a station's capacity by reason of its financial ability to pay, or is the assumption to be that every station shall have access to this music at exactly the same price? And if you do that, do you not put this society in a place where its maximum charge would be that which the station least able to pay could afford?

Mr. TUTTLE. Under this bill you have a sliding scale; all stations do not pay the same price. That is palpable on the face of the bill. All stations in the same class pay the same price, and I do not care you differ with the unit on which the classification is made. The unit there is power. I assumed that would give us a reasonable unit, because it reflects in some way the size, geographically, of the audience.


Representative LANHAM. I was thinking with reference to this matter of price fixing if there was not some way in which the normal operation of business and trade and commerce and the law and principles that apply could not be depended upon eventually to settle this question, which, of course, is more or less of a normal one.

Mr. TUTTLE. Let me say it this way, Congressman. How has the Congress settled that question, invariably, where there has been a monopoly? Now, there are two classes of monopoly, one that the law recognizes, and one it condemns. It solves the problem in the case of the monopolies which it condemns by dissolving them; that is what the Sherman law and the Clayton law are for. It dissolves them. Why? So as to restore the ordinary operation of the economic laws of supply and demand. What does Congress do where

the monopolies are not condemned, because they are necessary, or fostered by the Government. It regulates the rates. You can not suggest any monopoly except this one which does not fall under one or the other of those classifications, but the peculiarity of this particular combination is you can not touch it on either principle under the existing law.

Representative LANHAM. This is a combination of men to whom the constitution itself gives a monopoly.

Mr. TUTTLE. Certainly, but I have read to you the authorities, and you were told that Congress never intended to give copyright holders the right to so combine, or to give copyright holders a monopoly of the entire industry. I read you Judge Hamm's decision and you will remember the laugh when I read the bath-tub case. It has been held over and over again that the copyright holder has his monopoly in his particular piece, but that does not mean he can create a monopoly of the entire industry. There is no such grant, and the Supreme Court said over and over again that the law directed against monopoly extends to and is to be read into the copyright law. Now, you have put your finger right on it. How to restore, that is the big question, that is what we are talking about, how to restore the operation of the ordinary laws that apply where there is not a monopoly, and you gentlemen will have to choose, if you are to give us any relief at all, between the two ways by which from the foundation of this Government that problem has been solved, either by dissolving the monopoly or by regulating it. In some ways it is nothing new. Monopolies have been regulated from the point of view of their rates, when Congress did not see fit to dissolve them, from time immemorial, and we are asking that that same thing be done here, if you think that that is the proper solution.

Now, I read the record from the royalties of the phonographs, going back to the effect on music of radio. Now, there is one test I would like to suggest as possible and feasible on the question of whether radio broadcasting does hurt music, and it seems to me it would be an adequate test, and I invite the society to enable us to put that test into practice. If anybody feels that this invades the information which is private, they have just to say so. I am not urging it to be done, I am only suggesting it, being interested in this as a means for answering that question once and for all. Does radio broadcasting hurt the sale of sheet music? Now, it can be answered in one way, I will just name six of the largest music publishers in the country that are members of the society-the Sam Fox Publishing Co., Irving Berlin, Leo Feist, Shapiro, Berstein & Co., Remick & Co., Schirmer, and Harms.

Now, my suggestion is we be informed what was the sale of sheet music by those companies for a respective period of five years, going back to the time when radio was certainly in its infancy. If it appears that the sales of sheet music has fallen off, why, then, there may be some argument; but, on the other hand, if it appears that the sales of sheet music has gone up, by the barometer of the books, then, indeed, perhaps there will not be so much in the argument. Representative HAMMER. Mr. Sousa testified before a House committee about two years ago that the sale of his music was very greatly decreased, and one of the causes he attributed it to was prohibition.

Mr. TUTTLE. Well, I think there is a wave of sentiment over the country now to relieve broadcasting in music, and perhaps that thought of yours will be a contribution to remove the obstacle of prohibition. Take out prohibition and the monopoly and everything is lovely.


Now, I talked about the suggestion which the music people have suggested of taxing the listener-in. What has been our effort as a solution? Now, our efforts for a solution are, of course, effected by what we are, and, Mr. Chairman, I am going to offer at this point, for inclusion in the record, inasmuch as you have taken into the record the by-laws and articles of the association of the society, I am going to offer to the constitution and by-laws of the National Association of Broadcasters. They cover four mimeographed pages.

Representative HAMMER. Will you kindly advise me the names of the stockholders or members of the organization?

Mr. TUTTLE. We will furnish you a list; I do not have the list here, but we will furnish it.

Representative HAMMER. They furnished a complete list.

Mr. TUTTLE. Yes; that will be entirely satisfactory.

(The paper referred to is here made part of the record as follows:)



The name of this association shall be the National Association of Broadcasters.


The purposes of this association are: To foster and promote the development of the art of radio broadcasting and the interests of those engaged in any business, profession, or industry relating or pertaining to radio broadcasting; to reform abuses relative thereto; to secure freedom to its members from unjust and unlawful exactions; to procure uniformity, equity, and certainty in customs and usages of trade and commerce relating thereto; to settle differences between the members and to promote a more enlarged and friendly intercourse between members; to secure cooperative action in advancing the common welfare of its members and proper consideration and concentration of opinion upon questions relating thereto; to advocate the enactment of just and equitable laws pertaining to or affecting radio; to support every movement to advance the radio art and to encourage and aid in the development of musical and literary genius, with especial reference to radio broadcasting.


SECTION 1. Any radio station engaged in broadcasting, or any individual, copartnership, or corporation associated with radio broadcasting may become a member of this association upon favorable action by the membership committee.

SEC. 2. There shall be two classes of members, as follows:

(a) Active members, who shall each pay $250 dues per year.

(b) Associate members, who shall each pay $10 dues per year.

SEC. 3. The annual dues of each member shall become due and payable each year upon the date of the original payment of dues.


SECTION 1. There shall be an annual meeting of the members of this association to be held at such time and place as the members may decide by a majority vote at the annual meeting preceding, or in the event of their failure to decide, then by the board of directors.

SEC. 2. A special meeting of members may be called by the president; or, in his inability, by the vice president; or such special meeting shall be called at the written request of any seven regular members of the association. SEC. 3. At any meeting of this association a representation of one-sixth of the members in good standing shall be a quorum for the transaction of business SEC. 4. At all meetings of the members the following order of business shall be observed so far as is consistent with the purpose of the meeting, viz: 1. Roll call.

2. Reading unapproved minutes and action thereon.

3. Report of the president.

4. Report of the secretary.

5. Report of the treasurer.

6. Report of the executive chairman.

7. Report of standing committee.

8. Report of special committees.

9. Election of officers and directors. 10. Unfinished business.

11. New business.


SECTION 1. There shall be a board of directors of 21 members, who shall have power to transact such business of the association as may come before it and make a general report at the annual meeting. Each director shall be the authorized representative of a member in good standing.

SEC. 2. Seven members of the board of directors shall be elected for a period of three years, at each annual meeting of the association.

SEC. 3. The board of directors shall have general charge and management of the business of the association and shall have power to fill vacancies in any office or in the board.

SEC. 4. The presence of at least four directors at any meeting shall be necessary to constitute a quorum.


SECTION 1. The officers of the association, shall be elected at the annual meeting of members and shall hold office for one year, or until their successors are chosen and qualified. There shall be a president, two vice presidents, a secretary, a treasurer, and an executive chairman. In

SEC. 2. The president shall preside at all meetings of the association. his absence a vice president shall preside. The president shall appoint all regular and special committees.

SEC. 3. The secretary shall supervise the keeping of all records of the association, excepting those relating to finances.

SEC. 4. The treasurer shall supervise the keeping of all records and books of the association relating to finances.

SEC. 5. The exécutive chairman shall, under the direction of the president, have charge of carrying out the policies of the association. He shall, under authority of the president, issue written notices of all meetings of the association to members. He shall have general management of the affairs of the association by the authority and under the direction of the board of directors. He shall be the custodian of all books, documents, and records, under the direction of the secretary. He shall receive, deposit in the name of the association, and disburse the funds of the association, under the direction of the treasurer, and shall keep suitable books of account. He shall appoint, have supervision over and may dismiss all employees of the association.


SECTION 1. There shall be a membership committee appointed by the president of not more than five members, who shall have authority to admit or reject applicants for membership.

SEC. 2. There shall be a finance committee appointed by the president of not more than five members, who shall advise ways and means for the financial conduct of the association and obtain a proper audit of the books and accounts of the association at least once in each year.

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