going to come a time, and the sooner it comes the better off you will be, when you will have to regulate the broadcasting operation. You want to bear in mind that this is the most powerful agency for propaganda and publicity that has ever been conceived, and I want to call your attention to the fact that this wonderful instrumentality is in the hands of three groups now, and soon will be in the hands of two. Mr. WEFALD. Name the groups for the record. Mr. MILLS. I will be very glad to. On the one hand is this blood brotherhood of corporations that owns, controls, and dominates every form of electrical transmission and use of electricity, namely, the General Electric Co., the Westinghouse Electric & Manufacturing Co., the Western Electric Co., the Western Union Telegraph Co., the Radio Corporation of America, and the American Telephone & Telegraph Co. That is one group. And that group to-day is a defendant here before the Federal Trade Commission, charged with being in an unlawful conspiracy in restraint of trade, or something of that sort. The second group into which the control of broadcasting is rapidly coming is that group which by interconnection is serving a number of stations, the American Telephone & Telegraph Co., with some 15 or 16 stations in principal cities east of the Mississippi River. There is nothing unlawful there. I don't want to paint a horrible picture of something terrible being done, but here is what happens: Stretched across the country in the hands of one organization are strategically located stations susceptible of being operated with superpower controlled by three concerns, this trinity, the General Electric Co., Westinghouse Electric Co., and Radio Corporation of America; and the stations operated by these two groups are heard all over the United States, as they say themselves, by a radio audience estimated at 27,000,000 people. Then there is a third group composed of the independent broadcasters and independently owned stations. Mr. HAMMER. Name some of the group of independents. Mr. MILLS. I will leave a list for the record. Mr. MCLEOD. What do you mean by "independents"? Mr. MILLS. Stations that have no connection with or are not hooked up with the American Telephone & Telegraph Co., that do not receive any service from the stations operated by the General or Westinghouse Electric or Radio Corporation. Mr. HAMMER. Have they an organization? Mr. MILLS. Yes, sir; called the American Broadcasters. They have not been heard here. Mr. MCLEOD. Could they not affiliate with the others? Mr. MILLS. No; it would not be practicable to do that, because the hook-up station must have a long-distance land line. The longdistance lines are controlled by two outfits, the American Telephone & Telegraph Co. and the Western Union Telegraph Co. Mr. MCLEOD. Is there also such a thing as a relay machine? Mr. MILLS. No, sir. Mr. MCLEOD. Nobody who wants to broadcast through the air can do it without using the telegraph and telephone company? Mr. MILLS. On the contrary, a broadcast from the Savoy Hotel in London was picked up by the Radio Corporation on Long Island and rebroadcasted and heard with great success throughout the East, and there was no wire connection between them at all. Mr. MCLEOD. That is a new idea? That is the latest development, is it? Mr. MILLS. Yes, sir. That is not yet a practical development, I believe. As an experiment it works very well when atmospheric conditions are right. Mr. WEFALD. Do you believe they collected their $50,000? Mr. MILLS. An endeavor was made to collect it. I do not know how many contributed. A few sent in everything the broadcasters asked, but I do not know the total of the amount received. Mr. WEFALD. Were the independents invited to join? Mr. MILLS. I imagine so. I imagine they invited every broadcaster to contribute. Don't forget that if another large group of broadcasters wants to hook themselves up with broadcasting from such sources and interconnected stations, they have to go to the American Telephone & Telegraph Co. or the Western Union to get the line service, or invest millions of dollars in so-called land lines. Don't deceive yourselves but that the electrical activity of the world, not the United States, but the world, is in the hands of this group. You will find the General Electric Co. functioning in all the foreign countries, under separate and distinct corporate title, in the language of those respective countries, and doing business there and the best business that is done there. I am proud of them as American merchants that they are clever enough to do that. Mr. WEFALD. I think in connection with this bill it would be interesting if you would describe how the radio corporations are being regulated by the Government, as long as they come here and want regulation. Mr. MILLS. Under the present law the broadcasters derive the right to install, maintain, and operate their broadcasting stations, as the result of an application favorably acted upon by the Department of Commerce, which issues to the applicant, if the application be approved, a license authorizing operation during certain hours on a certain wave band. I think the way to regulate radio is to take the knowledge you have and sit down in executive session and write a bill and pass it. I think the longer you listen to professional experts on this question the more confused you will be and the less you will know about it, as every one of them has an ax to grind. And if you find you have made an error in your bill, and I don't think you will, then you can put in an amendment or two and make it workable. But you can not put in the hands of any one man or in the hands of any group of men this agency that is going to reach more than 27,000,000 people and with the power to deny one man while it grants to another the use of the facilities of this extraordinary agency. The Government could be destroyed by it. There is nothing new to be added to what has been said, only repetitions, only waste of time. When circulars like this go out to concerns that control an agency that reaches such a tremendous number of the public, it is time to think seriously about it. This circular is headed "Gossip." It must have been written by somebody greatly interested in that sort of thing. Mr. MCLEOD. Does the other side agree with what you have said? Mr. MILLS. I could not answer for them. Probably they will have a lot to say about it. It is their problem. (Heading of circular referred to:) Gossip for members only; unofficial; not for publication. (Informal discussion.) (Whereupon, at 12.10 p. m., a recess was taken until 2 p. m.) AFTER RECESS The hearings were resumed at the expiration of the recess, 2 o'clock p. m., Representative Perkins presiding. Representative PERKINS. The committee will please come to order. Unless there is some objection, Mr. Mills will please continue. STATEMENT OF E. C. MILLS, CHAIRMAN OF THE ADMINISTRATIVE COMMITTEE OF THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS AND CHAIRMAN OF THE MUSIC PUBLISHER PROTECTIVE ASSOCIATION Continued Mr. MILLS. Mr. Chairman and gentlemen of the joint committee, at the conclusion of my remarks before the recess I had drawn your your attention to a circular letter sent out by the regional director of the Pacific coast for the National Association of Broadcasters assessing a quota against various establishments which operated broadcasting stations, including several churches for a fund of $50,000 to be raised with which to pass this bill which you are now considering. We wonder just why they should need $50,000. They have access to broadcasting stations, and the control of them for propaganda purposes, that reach 27,000,000 people. They have a pretty effective hook-up with some 600 newspapers, one of the representatives of which spoke before you here last week and announced the indorsement of those papers of the so-called Dill bill. How much of the $50,000 we wonder was used perhaps for the purpose of getting professional letter writers to write letters to Congressmen and urge the enactment of this bill. I can not see what they needed $50,000 for. The presentation was made last week by reading from the printed records of the previous hearings. Nothing new was said, except when with grandiloquent gesture they stated they had written a blank check payable to the American Society of Composers, Authors, and Publishers and signed by themselves, in which they expected you to write the amount which was to be paid to the composers for the use of their work in broadcasting performances: Now, the composers and authors are notoriously poor business men, but their experiences with those who use their works and pay them royalties have taught them the wisdom of scrutinizing carefully all documents of that sort which they receive, and this check was not only not certified, but it was drawn on the "Bank of Bunk" and did 93693-26-17 not mean anything. Furthermore, the signatures on the check were insufficient. It is true it was signed by the American Telephone & Telegraph Co.; the world's largest and most wealthy individual corporation, and by a concern appearing here as the National Association of Broadcasters, the identity of which beyond the names that happen to be printed on its letterhead has not been disclosed. It was not also signed by such important broadcasters as the Radio Corporation of America, the Westinghouse Electric & Manufacturing Co., the General Electric Co., nor by the members of that organization of smaller broadcasters who are just as anxious to be successful in their business as are the larger ones who have banded themselves together as the National Broadcasters Association. So we look with distrust upon this blank check. Supporting the broadcasters here in their urgency upon you to enact this so-called Dill bill is a tremendous propaganda. All of you have received a huge volume of letters. Now, there is nothing new about that. During the hearings in 1924 there were 167,000 telegrams sent to the members of Congress urging them to pass the then so-called Dill bill, which was a bill to confiscate without any payment or reward whatever to the composer and author, his copyrighted work. But when it became apparent to the committee upon or disclosure of the fact that a special rate had been granted for the transmission of those telegrams from the Pacific coast, that the Western Union Telegraph Co., one of this blood brotherhood, had mimeographed forms and supplied them to all and sundry and urged them to send the telegrams and were thereby able to point out to the committee that through its activity of beseeching you to pass a law there had been a net spot cash business to one of this blood brotherhood in the neighborhood of $90,000 created by the sending of that propaganda in there, it ceased to have as much weight as at first that enormous stack of telegrams seemed to have. Now, we have this strenuous urgency upon their part addressed to the public that it shall ask you gentlemen to enact this so-called Dill bill, and let us examine this for a moment, just on the chance that some of you are not familiar enough with the details of this whole thing to realize that nothing could be further from the vox populi than the support from the citizenry that has been accorded this bill. The Broadcasters Association-and I read to you this morning from their circular sent out headed "Gossip for members only; unofficial, with no guaranty of accuracy and not for publication," under date of March 25 sent out a circular headed in large letters "Extra" and addressed to all broadcasting stations, members and nonmembers of their organization. I will file the entire letter for the record and will read but an excerpt from it. I read as follows: Attached hereto is the most important announcement on the copyright situation you have ever received. You are asked to put this on the air the first evening following its receipt, and repeat it at least on two other evenings during the week of March 28 to April 3, inclusive. Read it carefully and instruct your station announcer to make the best possible presentation. You may substitute "a single organization" or "this society" in place of the specific mention of the American society if you so desire. Parenthetically, they begin now to teach the broadcasters how to avoid any responsibility for libel or slander, how to be clever with the stuff that they put out on the air referring to whatever subject they are discussing. I quote again: The listening public does not know what the copyright situation is, and the members of the joint committees sitting in hearings on the Dill and Vestal copyright bills, amending the mechanical reproduction clause of the act of 1909, want to know what the listening public has to say about it. I assume that you gentlemen perhaps have delegated to the broadcasters the authority to find out for you what the public thinks about this bill. I quote again: These hearings are scheduled April 5 and 6. If every station cooperates, we can have many letters and telegrams in Washington by Monday, April 5. Do your part. A final appeal will be sent to you. * * Inclosed with this letter is a document entitled "Air release; copyright situation; put on the air immediately.' Mr. Klugh read most of this into the record, but I want to refer particularly to parts of it. I quote as follows: Already two large broadcasters have been forced to close down because of their demands, and more will follow. That statement was made here yesterday and Mr. Tuttle was questioned about the statement. I think, relying upon the fact that perhaps you gentlemen are not thoroughly familiar with radio, he specifically avoided and dodged a direct answer to the question, Who are the operators of these stations and are they licensed stations?" And the record will show that he did. Now, the truth is that no broadcasting station has closed or discontinued operations because of the activities or demands of the American society at any time or anywhere. What happened was this: A broadcasting station, KHJ, which boasts that the initials stand for the phrase "Kindness, happiness, and joy," operating in the city of Los Angeles, by the Los Angeles Times, a famous union-busting outfit which has been an antagonist out there of organized labor since time immemorial, was receiving from the Biltmore and Ambassador Hotels in that city the privilege of placing a microphone among their orchestras in their ballrooms where they were playing, and station KHJ, "Kindness, happiness, and joy," was broadcasting the music from these two hotels, thus filling in part of the program time. The Musicians' Union in Los Angeles had a meeting and decided that inasmuch as Station KHJ, sponsor of the open shop in Los Angeles, and the bitter enemy of all forms and types and styles of organized labor, was enjoying the very great advantage of the music broadcast by the union orchestras from these two hotels, the Union musicians should charge twice as much for their services any time a microphone was placed among the orchestra and the music being played be thus broadcast either by this or any other station. The Ambassador and Biltmore Hotels thereupon were faced with the necessity of doubling their musicians' salaries for the hours during which broadcasting was done, and they conceived the operation upon that basis to be too expensive and notified the Los Angeles Times that they would no longer continue to make that music available for the use of the station. The Los Angeles Times, the only station in this matter, KHJ, "Kindness, happiness and joy"-let us |