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have a little Pollyanna in here-much of this is not going to be so very pleasant—had been ever since the station opened a bitter libeler and slanderer of the American society, thereupon sent out a story that it had discontinued their programs because of our demands.
Mr. WEFALD. Was that where it got its happiness and joy?”
Mr. Mills. I consider that to have been a part of its general spirit of loving the whole world. No station was closed,
any station be closed because of our demands.
Mr. Bloom. Then that statement sent out by Mr. Klugh is untrue?
Mr. Mills. Unequivocally. But there was an effort here made to put the public under the fear that this little group of song writers was going to deprive it of the entertainment that these publicspirited, philanthropic, generous broadcasters are giving them free.
And in that connection it is to be borne in mind always that this same beloved public purchased in the good year 1925 in excess of $450,000,000 worth of radio products and paid an unknown but inconceivably huge sum in profits to those who advertise by radio.
But let us admit the philanthropy, because now we are going into a lot of philanthropic statements here.
They go on and say: That there may be no mistake, we wish to say that broadcasters are in favor of paying for the use of copyright music.
Parenthetically, may I say that two years ago and a year ago they were here urging you to confiscate coyprighted music for their unrestricted use without any compensation whatever, and this represents a remarkable and direct about face. But a wise man changes his mind often and a fool never, and at the conclusion of this hearing I have no doubt their minds will be changed and there will be no effort to change the copyright bill to favor their class alone.
But we see no reason why this payment should be made exclusively to these publishers and writers who belong to a single organization.
Now, you know, just between us boys, what a lot of applesauce that is. No one prevents them from paying any copyright owner. I am sure no copyright owner will reject their check. I am very confident that they will all receive it, acknowledge it, and express their thanks for it. But the only reason they pay any of them is because they are made to pay.
The broadcasters say here:
We realize that there is much musical genius in the United States which needs encouragement, and therefore we are desirous of paying every copyright owner whether a member of the association or not.
It is always interesting to compare statements seriously made to a serious body, and I find back here in April of 1924 they sent out this circular broadcast to all of the so-called 6,500 independent they coined the word “independent”-authors and composers of whom they had a record in the United States.
They proposed then:
Inclosed herewith please find information for song writers which we wish you would glance over, as it explains our plan for helping writers to achieve success. When a number has been accepted by us for release
“Us" being the music bureau of the National Association of Broadcastersthe copyright owner furnishes us with 100 dance orchestrations
Those cost about 16 cents a piece at the printer's— and the same amount of professional or song copies which we distribute to our members, who in turn place them in the hands of the artists who broadcast at their stations. The copyright owner also signs contracts allowing us a fair percentage of mechanical royalties.
They were going to encourage the budding genius of the country by mulcting them of a few hundred copies of their works and collecting from them about 25 per cent of any of the royalties they might be fortunate enough to get from any mechanical reproducer that might reproduce the work. It is to be admitted that they realize that there is much musical genius in the United States which needs encouragement, and doubtless they wish to encourage it.
The statement is repeated in here, and the reason I drive this home is because it is going to make very clear the point that I am urging in a minute, that the American society with its monopolistic control can and actually has taxed broadcasting stations out of existence. All these little remarks made in reference to the previous statement of the same nature are to be repeated here and they are going to ask Congress finally to give them relief by passing a new law. They say they are entirely satisfied to leave the amount to be paid to any constituted authority. What nonsense:
There is no intention to secure an unfair rate, but there is a definite intention to have some permanent and equitable arrangement established whereby all copyright owners will be paid for the use of their work.
Notice the skillful instructions here to the announcer to pause for 10 seconds for the people to get pencils.
Ask the people if they are all ready.
Here are the names of the parties to whom you must write. You must write to these parties to keep from being deprived of these programs we are going to send you. Urge your Congressman to pass the blll.
But in the whole thing, in connection with the entire effort, there was no reading of the bill; there was no discussion of the actual terms of the bill; there was no information to the public as to what the bill does provide or does not provide, and there was no information as to what they think or we think it does. The public was threatened with loss of a service and urged to ask Congressmen to pass a bill as to the terms and provisions of which the public was absolutely ignorant.
Now, gentlemen, what happens when a propaganda and publicity medium that reaches 27,000,000 people, under the absolute control and dominion of a small group, in a position itself to use the facilities and to deny their use to others, may use those facilities for the purpose of molding public opinion against an individual or group having no chance to defend through the same medium?
I want to tell you this: Without boring you I am going to show you that it is a reasonable picture, that within the next two or three years, unless this development is curbed and proper harness put on it, it is going to be within the power of this group, which will grow smaller and closer knit in the natural course of events, to absolutely decide who shall constitute the personnel of the Government of this country, and what, as the Government, they shall do. It is a rapidly developing situation, because by inference here is the American society characterized as a monopolistic control that puts broadcasting stations out of business, taxing them out of business, that word being repugnant since the Boston Tea Party to most of us, and in no sense are they taxed. It is not a tax. The sole power to tax is vested in the Government. It is a license fee. But by innuendo, insinuation, and misinformation we are pictured to the public as this monopolistic monster which is going to put out of business stations which so philanthropically supply this free entertainment.
So we asked the broadcasting station WEAF to afford us access to the facilities of its own and interconnected stations to answer this propaganda. Permission to do so was denied. We offered to pay the regular tariff charged advertisers for the use of the facilities of the station to answer these remarks, and we were denied.
Representative WEFALD. You mean to say you were denied ? Mr. MILLS. I mean to say wer were denied at the same rate that other advertisers paid for those facilities.
Representative Bloom. Did they give you any explanation?
Mr. Mills. I was out of the city at the time. Our general manager made the application. I shall be glad to have him go on the stand and give you details about that proposition. Mr. Buck touched on the subject, and I believe he also repeated the proposals so we might be sure and have them as a matter of undisputed proof, and he will be glad to testify again as to the exact circumstances.
Representative Bloom. Mr. Chairman, I wish to state at this point that I ask leave to insert into the record a copy of the telegram that I sent to Mr. Klugh as soon as I started to receive these letters asking
The CHAIRMAN. Have you the telegram here?
Representative Bloom. Not with me. I asked Mr. Klugh if he would be willing to debate this subject with me over the radio so as to give the listeners-in an opportunity of finding out what this bill is supposed to do and to answer his statement made over the radio to the people, and I have never received a reply to that telegram. It was à Gover nment message.
Representative WEFALD. You offered to pay, did you?
The CHAIRMAN. I am interested in finding out whether or not there had been any formal application on the part of this association to have the privileges of the broadcasting stations and for the ordinary rates for the service and that had been refused. I am interested in knowing what the facts are about that.
Representative Bloom. I would be very glad to have inserted in the record a copy of the telegram that I sent to Mr. Klugh asking for the opportunity to debate this subject.
The CHAIRMAN. That does not exactly meet the inquiry I hava made. That is your personal application to him for an opportunity to debate. What I wanted to know is whether or not this society,
through its representatives, had made application for the service at the rate usually charged to other people for their purposes.
Mr. Mills. Other executives will answer that question. I was not personally present in the city, but I would like to know if we should be entitled to the use of those facilities at the same rate as those who attack us through using them.
The CHAIRMAN. I have nothing to say about it except I would like to know the facts as to whether or not that application was made and refused.
Mr. Klugh. Mr. Chairman, an important challenge has been made here, and Mr. Harkness, who has control and charge of this station, is right here, and I would like the permission of this committee to have Mr. Harkness answer this challenge at this particular moment.
Mr. Mills. I have no objection to being interrupted, but I would prefer not to yield at this time.
Later on, to be specific, under date of March 30, the broadcasters sent out another circular inclosing a rewrite of the copyright matter and urging that it be broadcast. Therein they repeat:
The demands of this society have been such that two large broadcasters already have been forced to close, and more may follows.
And they again assert their desire to pay all copyright owners, in this speech that they are making to the public. And they go further and make the statement, without any authority whatever, that our relationship to the mechanical companies in respect to the compulsory license clause, and the royalty rate fixed by law since 1909, has been satisfactory from every angle.
Now, as to the copyright owners with whom we have contact it has not been satisfactory from any angle. But the public, hearing one side of the story, is led to believe that we object to a condition to govern by broadcasting the use of our music analogous and similar to one which we have found perfectly satisfactory in connection with use by the manufacturer of reproducing devices.
There follows the usual pause to get your pencil and paper ready and then it gives a list of the Congressmen to whom the listeners are to write.
In the meantime, with this half dozen or s) talks made, there has been no presentation to the public of the contents of the bill. It has not been read to them; it has not been mailed to them; there has been no discussion of it pro or con, just a lot of lɔose, general and vague statements not supported by the facts. That is the basis for the propaganda that has been piling up here on you gentlemen.
I doubt if any of you realize or could realize what a thrilling time we had here two weeks ago Monday, but in order that you may do so I desire to read a circular by the Broadcaster's Association, dated, Washington, D. C., April 6, and headed “From the front" and addressed “To all broadcasting stations.
Representative WEFALD. The "front" is here?
Mr. MILLS. Right here. Now, just follow with me what happened here two weeks ago Monday when they came out of the trenches • and went over the top.”
The circular reads: If you have been tuned in on the air the last few nights, you have sensed the smoke of battle coming from Washington, as this association is opposing the
American Society of Composers, Authors, and Publishers in the Dill-Vestal copyright hearings.
The opening of the preliminary barrage was marked by our executive chairman going on the air over the A. T. & T. chain of 14 stations the night of March 28. Many letters and telegrams expressing the listeners' opinions on this controversy have come into Washington since that time.
The first shock wave in this battle went over the top yesterday morning, April 5, when Mr. Klugh began a presentation of the broadcasters' position in this matter before the joint committees of the Senate and House on copyrights. It was truly a scene of battle. Arrayed on one side of the room was a galaxy of legal and theatrical talent brought down from New York and elsewhere by the American Society, and the administrative triumvirate, composed of Messrs. Mills, Rosenthal, and Hein, and accompanied by their president, Gene Buck. They were flanked on both sides by music publishers.
On the other side of the room sat broadcasters from all over the country and our general counsel, Judge Charles H. Tuttle. The room was crowded, in spite of the prohibition hearings which are in the same building.
On Mr. Klugh's opening presentation, Congressman Sol Bloom, representative from the roaring forties of New York City, at once launched a counterattack of irrelevant and heckling, questions, which apparently aggravated several members of the committee,
but did not upset Mr. Klugh. John Shepard, 3d, of Boston, our treasurer, from station WNAC, showed the committee how the unreasonable demands for the renewal of his license meant an increase to him of 7,000 per cent over last year. He was followed by Powel Crosley, jr., of Cincinnati, our vice president, who gave a brief history of his experiences with the American Society in the courts, ending when the Supreme Court of the United States refused to review the case.
Due to the dilatory tactics of Mr. Bloom, who evidently is the direct representative of the society on the committee, 12 o'clock came by the time this preliminary testimony has been recorded, and due to the Brookhart case now on the floor of the Senate, the hearings were adjourned to this morning.
On Tuesday Judge Tuttle opened at once, giving a most masterly presentation of the copyright problem threatening all of us,
and explained in detail the justification for modernizing the mechanical reproducing clause of the present law to specifically cover radio broadcasting. Within a very few moments, it was evident that he had developed a very favorable frame of mind on the part of many members of the committee. The atmosphere became tense when he charged that a monopoly in the music the public wants to hear exists. When Senator Butler, chairman of the Senate committee, who was presiding, asked if the judge believed a monopoly in restraint of trade existed, and the judge answered “Yes,” every one in the room, including the committee, shifted in his seat, and the newspaper men began going out of the room on the run to reach the wires as soon as possible. This tenseness continued as the judge read into the record statement after statement made by American society officials, which were sufficient to incriminate them before anybody.
He showed that by the very organization of the society, under their by-laws and articles of association, the monopoly was complete from the origin of the composition through the cycle of publication and marketing of public performing rights for profit. It was damaging evidence, and the opponents of these bills will have cause to remember this day for some time to come.
Again, Judge Tuttle became a master of appeal when he showed that because this monopoly deals in no tangible commodity, it can not be attacked in New York State, where it lives, nor under the Federal laws, because it does not deal in interstate commerce. The only solution lies in adequate legislation, and it is believed that the members of the committee are of a favorable mind to give relief by such, if they can but determine the best type of law to cover the situation.
Judge Tuttle bore upon the reasons behind the mechanical reproduction laws in the present act, which was made law in 1909, to prevent a similar monopoly coming into existence at that time. He had just gotten into this matter nicely when again it was necessary to adjourn in favor of the Brookhart case.
It looks as though the hearings will last all of this week. We will undoubtedly finish our presentation in favor of the measures to-morrow morning, and then the scenery will shift. With the apparent line-up of our opponents, we are in for a long siege of their testimony. The tactics of their general counsel, Nathan. Burkan, are pretty well established, and it will be necessary for us to watch closely the proceedings and go in again to clear statements which will undoubtedly be made.