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becomes a law, of course, our business is put under regulation, and it is put under regulation on what basis? On the basis that, as I read you, gentlemen, the White bill itself starts out with the proposition that the ether with which we deal is the subject of exclusive ownership by the people of the United States, and that consequently Congress has the power to regulate its use.
Representative HAMMER. If there is any such thing as ether? Mr. TUTTLE. Yes; whatever it is, it certainly is there, and by any other name it is equally effective, and Congress has the authority to regulate its use in interstate and foreign commerce, and that is conferred by the Federal Constitution. The Government therefore has a right to approach the subject of regulation on the basis that it owns the medium which is being dealt with. That is a consideration that must not be lost sight of, and that is a consideration which is applicable not only to us, but also to those who through us desire to use this medium.
It also brings this thought to the fore, that over this entire map the Government itself is in the position somewhat of a super proprietor at least it is in the position of one who has a duty to protect the public because the Government is just the representative of the public. The public owns the ether and the public interest therefore in what comes out of the ether and what it gets out of the ether is the primary consideration. So that, we start with this proposition, that the public interest is based upon public ownership, to start with. Then, we have another basis for public interest in this matter. We are dealing with a peculiar class of property. We are not dealing with bread, as I referred to a moment ago, which is a private creation and private ownership solely, but we are dealing with a property right which has been created and exists solely in statute. Somebody said the other day when I was leaving that this was all conferred by the Constitution, this property, and I would not be much concerned if it were, but for the sake of accuracy, it must be remembered that it is not. All that the Constitution provides is:
Congress shall have the power to promote the progress of science and useful arts by securing for limited time to authors and inventors the exclusive right to their respective writings and discoveries.
All that that says is you might create by statute in the public interest certain classes of property, and then, without repeating, I have read to your committee already what the author of the present copyright law said, it was not in the interest of the private composer, but it was in the interest of the public, that to a limited extent they would give, as the language is described, bonuses to authors and inventors. So you are dealing with a class of property which is merely in itself an expression of the public interest, and therefore is necessarily subject to proper regulation.
Your committee will recall how gradually this idea of public regulation in connection with property dedicated to a public use has grown. We all remember the Munn decision, which was the outstanding decision, which, starting with the idea of the stage coach being dedicated to the public interest, and the attempt to make it applicable to all classes of property of which it may be said they were dedicated to the public interest. If it were possible to classify
all of the property dedicated to the public interest, it would seem to me that copyright would head the list. It came out of the public interest. It was created by public interest, and there it remains. Now, under those circumstances, regulation to prevent abuses of what has thus been created is not necessarily an axiomatic corollary. If you can regulate grain elevators and industries of that kind simply because they have been dedicated to the public interest, what is the astonishment in regulating an interest which is created by statute alone and has no basis other than that?
See how far the matter of regulation has been carried when even rent laws have been upheld. Now, I know full well that they have been upheld on the theory of emergency
Representative HAMMER (interposing). Only.
Mr. TUTTLE. Yes; only on that theory, I know that, but see how far that has been carried. I suppose there was nothing more indicative of private ownership than a man's house. The ancient Anglo-Saxon regarded his house as his castle, and it was the last thing you would imagine could be put under the basis of regulation. Representative BLOOM. That is only a limited regulation.
Mr. TUTTLE. I concede it was only for emergency, but I am indicating the extent to which this thought which has come out of the Munn decision has been carried, as I said, if the rent laws had come up before the Munn decision, I doubt if there would have been such a decision.
Representative HAMMER. There was an effort to put it in public use, and one of the decisions stated that they tried to make it a public use, but it was largely on the emergency.
Mr. TUTTLE. Yes, sir; the Supreme Court said they did not regard it as necessary to decide how far housing might be considered a public use. They placed themselves on the other ground. But what I am dwelling on is this: What was the origin of the emergency? What created the emergency on which the court based itself? It was the fact that there was a disturbance of the ordinary laws of supply and demand.
Representative BLOOM. Was that not merely a regulation?
Representative VESTAL. Judge Tuttle, may I remind you it is 10 minutes of 12?
Mr. TUTTLE. I will stop before 12.
Representative VESTAL. Can you conclude in the next five minutes? Mr. TUTTLE. Yes, sir, I can do that. So that the result was that the court recognized the fact that there had come about what, in effect, was a restraint of trade, or, if you wish to call it a monopoly, which, because of peculiar conditions, got beyond the control of the ordinary laws of supply and demand for the time being, and they said under those circumstances Congress or the legislature may regulate in the interest of fairness, even the matter of what you could charge for the rent of your dwelling house.
Finally, there is the situation that every monopoly draws to itself, necessarily, public interest. The moment that you create, in any form, shape, or manner, a monopoly of what is desirable or necessary for the use of the public, there, at that moment you dedicate that creation to public regulation.
You have, as I have said before, these two questions of monopoly, those that may be deemed necessary or lawful, because the public interest requires a monopoly, and those that, on the other hand, are condemned. In either event you have regulation as an historic practice on the part of this Congress.
A necessary monopoly, for example, will be the telephone company. It would be unbearable if you would have to have five or six telephones on your desk to communicate with people. You only have to have one, and because there is such a monopoly Congress regulates it. On the other hand, if you have a monopoly which is not of a necessary character, like I said about the monopoly in bread, Congress can either order its dissolution by law, or it could proceed to regulate it.
Representative WEFALD. Or take it over.
Mr. TUTTLE. Yes; or take it over, which is a third alternative which had not occurred to me. There is nothing unusual here. We have a monopoly. They have said so to us; they have said so in their letters; of course, they will not come in here and say that. Representative BLOOM. They leave that to you.
Mr. TUTTLE. They leave it to me to quote their expression, but if Mr. Mills can get away from what he has told us, he is really more able than I thought he is, and I thought he was the ablest man I know. So under the circumstances we have right upon the face of it a monopoly, and we say, therefore, that it is effected with a public interest and falls within the portals. Now, gentlemen, this word in closing. We leave our problem with you. I think we have a right to obtain some kind of solution. We welcome any suggestion. We are not wedded to this bill. If this committee wants to appoint an advisory subcommittee that will sit down with these gentlemen and with us and work out a solution, we will sit in and we will go at it. either with the purpose of regulation, or for some definite kind of contract, which will afford the three elements we are after, of stability, equality, and fairness. All we want is somebody who will see that we are treated fairly in the matter, so that at the end of each year we are not hauled up, with a noose around our neck, up to the top of the toes, with the big toe almost off the ground, and say, "These are the rates for next year," for you can not bargain when you are in that position, and that is the situation we are in.
Representative VESTAL. I have always subscribed to the principle that the producer should have the right to bargain and sell his product. I wonder if you subscribe to the same principle.
Mr. TUTTLE. I do subscribe to the same principle, but I will say that he has not the right to defeat the other fellow's right to free bargaining and selling by going into a monopolistic combination. Representative VESTAL. Now, gentlemen, Senator Butler has said to me that it would be impossible, practically, for the committee to meet to-morrow, on Saturday, or on Monday.
Senator DILL. I could not be here Monday and it may run into Tuesday.
Representative VESTAL. Yes; Senator Dill has told me.
Representative VESTAL. As I understand, this concludes the case of the proponents of the bill?
Mr. TUTTLE. Yes, sir.
Representative VESTAL. Would it be satisfactory to the opponents of the bill to take up the hearing a week from Monday?
Mr. Buck. Mr. Chairman, that would be perfectly satisfactory with us.
Representative VESTAL. I believe it would satisfy the members of the Senate committee better, from what Senator Butler has told me and Senator Dill.
Mr. BUCK. We prefer that.
Representative VESTAL. And if that is satisfactory, then we will continue these hearings at 9.30 o'clock on Monday morning a week from next Monday.
Representative HAMMER. Mr. Chairman, I suggest when you begin hearings again you go on with them and have night hearings, if necesary.
Representative VESTAL. That will be satisfactory with me, if it will be with the other members of the committee, so we can go ahead and get the hearings over as quickly as possible, and with that understanding the committee will adjourn to meet next Monday a week, at 9.30, to hear the opponents of the bill.
Mr. BUCK. That is perfectly satisfactory.
(Whereupon, at 12 o'clock noon, the committee adjourned to meet Monday, April 19, 1926, at 9.30 o'clock a. m.)