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Representative ВLOOм. Do the different broadcasters all charge the same?

Mr. SHEPARD. No.

Representative ВLOOM. Some charge more than others?

Mr. SHEPARD. Yes. We can make our own rates, but the advertiser does not have to purchase from us. If our rate is higher than he wants to pay he does not have to purchase from us.

Representative BLOOM. What is the benefit of the music, copyright and noncopyright music; that is, in the public domain to-day? Mr. SHEPARD. I do not know, sir.

Representative BLOOM. If I were to tell you that it is about 80 per cent and that you have the right now to use that free of charge

Mr. SHEPARD. But I am talking about the music that the public wants to hear.

Representative BLOOM. But your largest programs are made up of operatic and classical music and music which to-day is for the public domain, and that is over 80 per cent.

Mr. SHEPARD. No; the majority of our programs are not for the public domain.

Representative LANHAM. Do you pay the artists who broadcast these songs?

Mr. SHEPARD. If the program is sponsored by another party, yes; otherwise, the station itself does not, with the single exception of one orchestra which is under contract.

Representative LANHAM. If a singer of note should sing a solo over your broadcasting station would he have to pay your station anything?

Mr. SHEPARD. No, sir; not unless he was under a sponsored pro

gram.

Representative PERKINS. What do you mean by a "sponsored program"?

Mr. SHEPARD. A program that somebody has put on under our auspices.

Representative PERKINS. For which they pay?

Mr. SHEPARD. Yes, sir.

Representative LANHAM. They pay you as the broadcaster?
Mr. SHEPARD. That is correct.

Mr. FARSOM, of Baltimore. The gentleman just stated that the association has arranged to charge approximately $100 per day. Is that correct?

Mr. SHEPARD. The proposed rate which they have made to me figures out at about that amount on the present plan that we are broadcasting; that is, figured actually from our programs of the last month.

Mr. FARSOM. Have you been basing your calculations on your broadcasting on that rate?

Mr. SHEPARD. On our charges?

Mr. FARSOM. Yes.

Mr. SHEPARD. Not particularly; no. We have not changed them, as I said.

Mr. FARSOM. Then, as a matter of fact, this association, Mr. Bloom, can charge $100 a day. Is that right? Representative BLOOM. I do not know.

The CHAIRMAN. If you have any questions to ask the witness we would be pleased to have you proceed with them.

Mr. FARSOM. I thought I was doing that.

The CHAIRMAN. Proceed.

Mr. FARSOM. I asked if that statement was correct, that they had to charge $100 per day.

Mr. SHEPARD. I do not know.

Mr. FARSOM. Will any one of the gentlemen answer that question? Representative BLOOM. Mr. Chairman

The CHAIRMAN. We would like to extend the courtesy of permitting people who are interested in this hearing to ask the witnesses questions unless it is objectionable to the committee, but not to ask for information and not to make a statement until the proper time arrives.

Representative LANHAM. What is your name, sir?

Mr. FARSOM. My name is J. Farsom.

Representative LANHAM. Whom do you represent?

Mr. FARSOM. I represent my own band in Baltimore, the United Railways in Baltimore, and several other musical organizations. The CHAIRMAN. What was the question that you desired to ask the witness?

Mr. FARSOM. It was stated here that the rates were likely to be raised to $100 per day, and I did not know whether I heard correctly. If that is a fact, I would like to have it verified.

Mr. SHEPARD. That is the way I figure it on the proposed contract as applied to our particular station and the number of hours that we operate on various types of programs.

Representative BLOOM. I have just received information which I think will answer the question. The highest price asked of any broadcasting station throughout the United States is $50 a week up to the present time.

Senator SHIPSTEAD. By whom?

Representative BLOOM. If you want to clear that up

The CHAIRMAN. Let us clear that up a little later. I think we will get along very much better if we proceed with the witness in an orderly way and without interrogatories. I think at this stage of the hearings we should confine the proceedings to the witness who is on the stand. If the committee desire to ask any questions, well and good, and the questions which others in the room may desire to ask may be admitted if the committee desires to proceed in that way.

Mr. SHEPARD. I would like to make a statement in answer to Mr. Bloom's last remark. The society does not know, because it does not know what my program consists of, what the price it has asked would amount to. The figures that I have given you are provable from the programs of last month and can be checked up and provided for the committee. My statement is absolutely correct.

Representative BLOOM. But according to your figures and what amount of business you are going to do in the future?

Mr. SHEPARD. No, sir; based on what we did last month. Representative BLOOM. But there is no charge that you know of to-day which runs more than $50 a week, is there?

Mr. SHEPARD. The charge that they ask of me; yes.

Representative PERKINS. How much do they ask you per hour? Mr. SHEPARD. $20 per hour. It is $20 per hour only if we use from outside control points, from a hotel, restaurant, theater, or if

we put on a program in our own studio in which any other firm is mentioned; that is, if anybody is mentioned other than the artists themselves. For the other programs where nobody else is mentioned or they do not come from outside we pay a blanket fee of $1,000 a year; at least, that is the fee that is asked. This $20 an hour is in addition to that and does not apply to every hour we operate. Representative PERKINS. If it costs you $100 a day, and their rate is $20 an hour, it seems to me you would be using their music 5 hours a day.

Mr. SHEPARD. I am using things that come under their plan 5 hours a day. Some days it is as many as 634 hours and some days as little as 3 hours, but that is the way it averages.

Representative ESTERLY. Have you a copy of this proposed contract with you?

Mr. SHEPARd. No.

Representative ESTERLY. Would it not be a good idea, Mr. Chairman, to insert such a contract in the record so we would know upon what such a charge is based?

The CHAIRMAN. Well, no such contract has been offered yet.

Representative BLOOM. He has figured this according to the amount of business he is doing to-day. The cost would run up to that amount, would it not?

Mr. SHEPARD. Yes.

Representative ESTERLY. I think the committee should have some idea of what this so-called contract is. There seems to be a lot of different rates per hour.

Representative BLOOM. I will say to the gentlemen that this information will be furnished at the time that the opponents of the bill come forward.

Mr. SHEPARD. May I say with reference to this basic rate, that if we do not accept that they can withdraw any further extension of the license and we will have to stop playing music immediately or accept those terms.

Representative MCMILLAN. As I understand it, you pay $1,000 a year and in addition to that $20 an hour?

Mr. SHEPARD. That is what is asked, not what we are paying. Representative MCMILLAN. Your station is a 500-watt station? Mr. SHEPARD. Correct.

Representative MCMILLAN. Is a similar charge made to all other 500-watt stations of the Society of Authors, Publishers, and Composers?

Mr. SHEPARD. That is what they are asking us.

Representative MCMILLAN. That is what you are striving to have done?

Mr. SHEPARD. Yes, sir.

Representative MCMILLAN. There may be a thousand-watt station that is getting privileges for a cheaper rate than you are paying? Mr. SHEPARD. That is correct, and there are.

Representative MCMILLAN. Then it is the purpose of this bill to have a uniform rate provided for certain classifications of stations, whether they pay $500 or $1,000 or $2,000?

Mr SHEPARD. Yes, sir.

Representative BLOOM. Irrespective of whether they are industrial or commercial or educational or anything else?

Mr. SHEPARD. That is my private opinion. They do not have to pay that. That would be the maximum that they pay.

Representative BLOOM. But if a station is broadcasting merely educational things and should put on a classical program, do you think they should pay the same as you do when you are getting $100 or $200 an hour for it?

answer that question, It seems to me that is that station. I do not If exceptions are made

Mr. SHEPARD. That is another matter. Representative BLOOM. Yes; I should think it is. Mr. SHEPARD. I do not see how I can because I do not run that kind of a station. between the man that controls the music and care what exceptions are made in the bill. for educational institutions I would have no objection to that. Representative MCMILLAN. And in the absence of any rate the society may arbitrarily prescribe a rate for you and a much higher rate for some one else?

Mr. SHEPARD. That is correct.

Representative PERKINS. Do you not think we should take into consideration the number of listeners-in who are reached?

Mr. SHEPARD. Any basis which is equitable. I am not arguing for all stations under like conditions.

Representative BLOOM. What is the sum total of business that you did last year in dollars and cents?

Mr. SHEPARD. I have not the figures, but they are surprisingly small.

Representative BLOOM. About how much for just broadcasting? Mr. SHEPARD. They do not cover expenses.

Representative BLOOM. How do you make your profits, then? Mr. SHEPARD. We do not make any. It is an intangible profit in good will.

The CHAIRMAN. Would it not be a little better if we proceeded with the discussion of the bill, Mr. Bloom?

Representative BLOOM. Yes.

Senator SMITH. Mr. Chairman, has there been any program mapped out here for certain witnesses to be heard pro and con? Have witnesses been subpoenaed here to testify for the bill and witnesses to testify against the bill? Has such a program been worked out? The CHAIRMAN. There have been no subpoenas issued. Representative BLOOM. All sides are here.

The CHAIRMAN. Mr. Klugh, if I may make the suggestion, I think it might be a good plan at this stage of the hearing to have some one produced who could discuss the terms of the bill. I only throw that out as a suggestion. I think it would be well for us to get some comprehensive idea of what this bill is intended to do. We have more or less information ourselves about the boradcasting busi ness. After a discussion of the bill, if we desire and if you desire to put on anybody you can explain to a greater extent the practical features of the business, but, speaking for myself, I would like to know something about this bill and to have it discussed, and for that purpose I would suggest, if it appeals to you, that you have your counsel deal with the provisions of the bill as applied to the industry. Following that if we want to supply any facts with reference to the practical features relating to the industry we can make inquiry.

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Representative PERKINS. May I make a suggestion, Mr. Chair

man?

The CHAIRMAN. Certainly.

Representative PERKINS. I would suggest that when a witness appears to make a statement he be permitted to complete his statement and that questions be withheld until the statement is completed. The CHAIRMAN. I think that would be a better plan.

Mr. KLUGH. That plan would be entirely satisfactory, Mr. Chairman. However, we have two actual owners of stations here who find it necessary to leave town quite early to-day. Our idea was to have these actual owners make their statements, which will require only two or three minutes, in order to give you a picture of the matter.

The CHAIRMAN. If that can be confined to two or three minutes there will be no objection, but I do not like to use a great deal of time covering these private and largely personal matters relating to the conduct of a station when we have a principle here involved in this bill which we would like to understand. If those witnesses will take only two or three minutes that will be satisfactory.

Representative BLOOM. That will not preclude any cross-examination on any statement that they make, Mr. Chairman?

The CHAIRMAN. Not at all.

Mr. KLUGH. I would like to call Mr. Crosley, of Cincinnati. Mr. Crosley represents the Crosley Radio Corporation, Station WLW, of Cincinnati.

Senator DILL. Before that is done I think we should have an understanding now that only members of the committee shall question witnesses. Otherwise, you will have everybody in the room questioning witnesses.

The CHAIRMAN. I think that is a very much better program for the committee to pursue, and, unless there are objections, we will proceed in that way.

STATEMENT OF POWEL CROSLEY, JR., REPRESENTING THE CROSLEY RADIO CORPORATION, STATION WLW, CINCINNATI

Mr. CROSLEY. I want to say, first, Mr. Chairman, that our primary interest in operating a broadcasting station is not for direct profit. We wish to operate our station in order to render a service. It is true that we sell a small amount of time, but the revenue derived from the sale of that time is put into paid programs; in other words, programs where the talent is paid. At no time has the revenue from the station equaled the cost of preparation of the program.

My first experience in this matter was several years ago when, according to my understanding, it was difficult to make a contract with the Society of Authors, Composers, and Publishers representing 80 per cent of the owners of copyright that would be permanent; that would be on a basis that we knew what we would have to pay for any length of time.

We have been operating broadcasting stations for approximately five years. We have been operating on a continuous license for 90 days which has been renewed from time to time, and we expect so long as we are able to render service that that will be continued in the service. That is at least our belief.

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