other words, represent an invasion of the obligation of contracts. So this bill is limited to future musical compositions.

In the second place, following the thought expressed in the resolution of Committee No. 9, to which I have referred, it founds itself on the fact that the owner of the copyright has made his decision to have the piece broadcast. If he decides not to have the piece broadcast, then under no circumstances can it be broadcast.

Now, I pause there to call attention to the fact that in these various restrictions and limitations the bill follows somewhat closely the provisions in the existing law with reference to the reproduction of music by what is called mechanical means.

That carries me back to where I left off with subdivision (e), because subdivision (e) contains this proviso:

And provided further, and as a condition of extending the copyright control to such mechanical reproductions, that whenever the owner of a musical copyright has used or permitted or knowingly acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work--

I pause to say that it, like this bill, leaves the decision in the måtter to the copyright owner. The proviso continues:

any other person may make similar use of the copyrighted work upon the payment to the copyright proprietor of a royalty of 2 cents on each such part manufactured, to be paid by the manufacturer thereof.

And then follows various propositions by which notification is to be given to the copyright proprietor, whereby also provision is made for a payment by the user within a certain stipulated time, and certain other provisions for security and for penalties in the event of violation of the arrangement suggested in the law.

Now, proceeding with the bill, I desire to briefly call the attention of the committee to certain features of it which seem to me to be outstanding features; for instance, that

wherever the owner of a musical copyright had used or permitted or knowingly acquiesced in the broadcasting of the copyrighted musical work, by radio or other means of electrical transmission

Representative BLOOM. Pardon me. Will you give me the lines from which you are reading?

Mr. TUTTLE. I was reading from line 12, on page 2. [Continuing reading:]

any other person may make similar use of the copyrighted musical work upon the payment to the copyright proprietor of a royalty for each broadcasting by a radio station of not more than 500 watts and cents.

Then follows the scale. The scale, of course, differs from the scale provided in the existing subdivision (e) in case of the reproduction by the then known mechanical means, which were confined in this bill to what we know as records and as piano-player rolls at that time. Senator BROUSSARD. Referring back to the reading of the present copyright law, is the maximum price fixed there?

Mr. TUTTLE. Yes, sir; 2 cents.

There are also provisions in the bill following the analogy of the proviso in the existing law which I have just read by which notification is to be given, by which payment is to be made within a certain time, and by which the relationship thereby created is regulated. I am not going to discuss those particular features of the bill. They

are simply ancilliary and whatever the committee feels is appropriate in that connection will, of course, be the decision of the committee. It may be that in some respects those provisions are too drastic. We think they are. On the other hand, the committee may think that they are not drastic enough.

Representative BLOOM. Are you going to take up the bill? I wanted to ask you some questions, but I did not want to interrupt until you got through with the bill.

The CHAIRMAN. Would it not be well to have Judge Tuttle complete his statement first?

Representative BLOOM. Well, I thought he was going off on something else and I wanted to ask him some questions.

Senator DILL. Let him finish the bill first.

The CHAIRMAN. It is perfectly agreeable, so far as the place of the cross-examination is concerned, if you desire to make it now for the record, but it seems to me that Judge Tuttle could go along in a very much better way by pursuing his argument.

Representative BLOOM. I am perfectly satisfied to do that. I had some questions to ask him with respect to the bill itself.

Mr. TUTTLE. Let me state, Mr. Chairman, that at no time am I going off the bill until I cease my remarks.

I suppose that this is the first time, certainly it is the first time. known to me, where parties have come before a committee of Congress, or where a bill has been presented to a committee of Congress, with the amount left blank. The reason for that is that we are here in the position of persons who wish to tender to an impartial body representing the public a blank check. We are going to state our problem to you and that problem will illustrate why we are presenting in effect the blank check which this bill presents.

We are anxious to face the situation that confronts us and constitutes the foundation of our problem, as we conceive it is, that our business, which is now done in every part of the country and which is an important business and is of important interest to the public, must, if it is to be done at all, be done on a basis of what we characterize as equality and stability and fairness.

Those are the elements which we are seeking to obtain, and again I say that if the committee feels that this bill is not the best way to obtain them, although we think it is, in view of the study we have given the matter, then we would welcome any suggestion from the committee or from the American Society which will afford to us these three elements, because without them, and if we are to live on what otherwise is merely an annual ration, laid down for us and cabined and confined by an association which, as I expect to show, controls our raw material absolutely, then in that event we are in effect doing business with a halter around our neck with the other end of the rope held by this association and annually we will be dragged up on our toes, and the rope will be let go only when an agreement is reached for the ensuing year, a year only on such basis as one can transact and negotiate under those conditions.

I have stated that this bill furnishes, in our judgment, one solution for our problem, and in order that you may understand what the bill is really aiming at I would like to state some of the elements now in our problem, and they are first about radio itself.

It may be trite to make certain observations about radio, but at the same time I think it is a starting point and I can not put what I have to say on the subject of radio better than the chairman of the administrative committee of the American society itself, Mr. Mills, who sits here at the table, said at a previous hearing, which appears on page 74 of the minutes. Mr. Mills, in addressing the committee, said:

We think that radio is the greatest contribution that science has ever made to man; that it will bring about a universal language; that it will make wars impossible; that it will make the farmer happy; and that in general it will render the greatest service to human kind of anything that has ever been conceived.

There are certain features about what Mr. Mills has thus eloquently put concerning radio which perhaps deserve a word of comment. In the first place, its uniqueness. It is unique in a number of respects. In the first place, it is universal. These waves are released, and once released nobody can control them and anybody can utilize them. It takes but the farmer's boy to go to the village store and collect, for a small cost, a couple of dollars, the apparatus which makes a crystal set, and he can utilize them. Or the rich man who can afford to go out and buy the most expensive set, a superheterodyne, and bring that in and place it on his own library table and utilize them.

Again, it is unique in this respect, that there has as yet been discovered no practical way by which a toll can be placed on the listener. Thereby there is a difference between our situation and the theater or the lecture hall or the hotel. They can place a toll on the person who comes to listen. We can not.

It is unique also in that it is the greatest popularizing medium known. It is the greatest distributor of information known. A piece of music or any other work that is put on the radio instantly reaches an untold but very vast audience. It depends, of course, upon the power of the station.

It is unique also in this, that whereas every other industry that I know of, with possibly two or three exceptions, utilizes its own property as the fundamental basis upon which it works. Radio does not. I am going to dwell on this for a moment, because I think it is of some importance in considering this matter of radio, which I say is one element in our problem.

It is unusual for an industry to come before Congress and say, "Here is a blank check; fill it up." It is also unusual for an industry to come before Congress and say, "Regulate us." I know of no other industry that has as yet done that; but I hold in my hand a bill which has already passed the House of Representatives and which has been advocated by the broadcasting association because it not only regulates but it asserts an ownership by the sovereign people of the United States of the thing with which we deal, and asserts consequently that we are entitled to deal with it only on the basis of a license.

This bill, which bears the name of the chairman of Committee No. 9, whose resolution I have read, opens with this declarationRepresentative BLOOM. What bill is that?

Mr. TUTTLE. This bill is H. R. 9108. I understand that there has been some slight revision and that the number now is 9971. It is known as the White radio bill. I am speaking of the White bill.

It opens with this important declaration which instantly fixes attention upon the uniqueness of radio:

That it is hereby declared and reaffirmed that the ether within the limits of the United States, its Territories and possessions, is the inalienable possession of the people thereof, and that the authority to regulate its use in interstate and foreign commerce is conferred upon the Congress of the United States by the Federal Constitution.

I do not intend, of course, to discuss the elements of this bill, but I do want to call attention to just one or two clauses of it as significant of the uniqueness of our situation.

In the first place, provision is made as a corollary to the proposition that we are dealing with something that does not belong to us; that we must act under a system of license; and provision is made for the issuance of a license by the Secretary of Commerce and that license runs down in its operation through a great many processes performed by the broadcasting station. And I think it important to note here that the license when issued is to be for a period not longer than five years. Consequently, the element of stability is allowed for in this bill within the discretion of the Secretary of Commerce.

Furthermore, it provides that that license once issued may be renewed for a period of not more than five years ad infinitum.

Senator DILL. Without any vested rights, however.

Mr. TUTTLE. Without any vested rights. The whole thing is on a license basis. I assume that if the license is once issued it is revocable only on the conditions stated in the bill, which conditions are violations of law or improper conduct.

In the first place, there is a regulation here against monopoly. This bill says:

The Secretary of Commerce is hereby directed to refuse a station license and/or the permit hereinafter required for the construction of a station to any person, firm, company, or corporation, or any subsidiary thereof which has been found guilty by any Federal court of unlawfully monopolizing or attempting to unlawfully monopolize after this act takes effect radio communication, directly or indirectly, through the control of the manufacture or sale of radio apparatus, through exclusive traffic arrangements, or by any other means.

Then there is one other feature to which I wish briefly to advert, and that is that for fear that the policing arrangement may not be adequately invested in one governmental bureau, the policing is to be done here apparently by the Secretary of Commerce and by the Interstate Commerce Commission or even any other Federal body in the exercise of authority conferred upon it by law. It says that certain things may happen where any of these bodies find that the licensee has failed to provide reasonable facilities for the transmission of radio communications or has made any unjust and unreasonable charge or has made or prescribed any unjust or unreasonable classification, regulation, or praetice with respect to the transmission of radio communication or service.

Now, the next feature to which I wish to call attention as an element in our problem as a bearing on this bill is the association for which I am speaking, the National Association of Broadcasters. That association is, I think, I sum it up with fair accuracy, when I say merely a clearing house. It has a board of directors, but the board of directors have no power to bind the members of the association individually to any arrangement or contracts. The association owns no property to speak of, except enough to pay its current

expenses. It represents no pooling or combination whatever of radio rights or broadcasting rights. It is a mere meeting place. It holds its conventions once a year to discuss problems which are common to the various members.

Above all, let me say that it has not and through its board of directors is not able to enter into what might be called a blanket contract. Such agreements as have been made in the past by the American society have been made, so far as I know, in each instance with the individual broadcaster and have resulted, consequently, in a private trade with him.

The next element that I want to refer to in our problem as having a bearing on this bill is the music itself. I mean the kind of music that we are dealing with here and considering here, and I am going to say that, in the first place, music performs a distinct service by the broadcaster and the broadcasting station. Also I am going to say that I conceive that, on the other hand, the fact of broadcasting performs a distinct service by music of this kind.

In that connection it has already been stated to your committee that between 80 and 90 per cent of the ordinary broadcasting programs is music, and the people expect about that proportion from the ordinary broadcasting station. I say "the ordinary broadcasting station." Let me say that our National Association of Broadcasters comprise about 200 different stations and membership and they are of all characters. There is the educational broadcasting station, there is the religious broadcasting station, and there is the newspaper broadcasting station. The newspapers feel that it advances their good will to have broadcasting stations. There is also the department store broadcasting station, and there are as one progresses the commercial broadcasting stations.

I am informed that not one of those broadcasting stations, if you balance the income against the outgo, has shown any profit or balance in favor of income down to the present time. I am not referring now to the educational or religious broadcasting stations, because they feel that there is an enlightened self-interest in being in it. The newspaper does feel that there is an intangible good will. How much that may be or how sound that judgment, of course, depends only on experience.

But I do want to emphasize the point that so far as I know, and I believe I am credibly informed, not a single one of our members at the present time is making a direct profit on its business, and of that 200 members I believe there are something like 8 or 12 that are engaged also in the manufacture of radio parts of some kind. In other words, there is no necessary connection between the manufacturer of radio parts by the broadcasting station and the fact that broadcasting is being done by that station.

Now, I was saying that there was this mutual service performed. In that connection let me first consider the matter of how music is popularized. We are dealing here with a society and with a class of music which may be called popular music and, to a certain extent also classical music, and I say that such music lives, moves and has its being in publicity. I think that statement would receive almost unanimous consent. In any event, I want to read now a statement by Mr. Mills, who is chairman of the administrative committee of the American society, made at a conference held in New York be