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In February, 1915, the Circuit Court of Appeals for the Second Circuit (John Church Co. v. Hilliard Hotel Co., 221 Fed. 229) decided that a public performance was not " for profit” unless a direct pecuniary charge for performance, such as an admission fee, is charged at the door; the fact that the performance was given as a means of attracting custom, or as a part of the operation of the business, was of no consequence.
This decision was followed in Herbert v. Shanley, a suit brought by the society on behalf of one of its members, Victor Herbert (222 Fed. 344), affirmed by the circuit court of appeals in 229 Fed. 340, and reversed by the Supreme Court. (Herbert v. Shanley, 242 U. S. 591.)
Representative HAMMER. Now, I agree with you. You have a splendid organization, and it is all right for you to have an organization. It may be all right. If the farmers and cotton growers, and the other combinations called cooperative marketing associations, had strong organizations like you have, they would be all right. They have got to be combined in order to keep them in. They have got to be, in a sense, strong. The only thing is that in farming we have the seasons, and the rains and the drought and the various things in nature, and there can not be a monopoly long at a time. There might be for one year, or several years on certain things. We have failures of crops, and then we have large crops, and so on. But in this you get together all the products of the human mind. The seasons and the sunshine and the rain does not affect you. But you get it all in one great, big organization there, and then
have it. But what I am worried about in my own mind is whether you ought not to be regulated, whether we ought not to regulate you somewhat in your practice. You quote the Constitution to us now. These old fathers of ours distrusted all government. They had been oppressed. They came here, and they wanted a Constitution that was strictly construed—and we have had a good deal of experience down in my country in strict construction of the Constitution-and when we had the Government of these forefathers that gave us this Constitution, remembering the trials that they had had in the Old World, when they came over here they were sticklers for the Constitution.
Now, you quoted that Constitution with those ideas, and you do not take into consideration the fact that the growth of modern civilization has been provided for in a way to amend the Constitution, and that sometimes it needs amending, and that these old ideas have been outgrown by our modern civilization. I am not saying that this bill should be enacted. I am inclined to think it should not. But I do not know where we would get to if we protect you too much. There is such a thing as protecting the human mind too much. Benjamin Franklin never asked for any protection for anything he had.
Mr. BURKAN. You must remember that this is a Government of laws and not of men. If every man could give expression to his ideas as how to regulate modern conduct, you would soon destroy the Constitution.
Representative Bloom. That is true.
Representative HAMMER. Yes; but the situation is that the Constitution must be liberally construed.
Mr. BURKAN. If you give to the Constitution the most liberal construction you will find that you have not the power to do what the broadcasters propose here. You have not the power to fix prices at which copyright owners shall license the use of their works. Under the Constitution the citizen is guaranteed the right, except in the case of war or great national emergency, with respect to strictly private property, to freely sell it at a price fixed by him according to the law of supply and demand.
Representative HAMMER. I know, but when you stand together
Mr. BURKAN. Judge Hammer, you are forgetting one thing. Every banding together of a group in a trade does not constituto a monopolistic combination. The true test of legality is whether the banding was with the intent and purpose of suppressing or even destroying competition. Therefore, the men banded together must be competitors in business.
Where competitors in business are banded together, in an “undue" and unreasonable restraint of trade, then there may be a monopoly, depending entirely upon the facts peculiar to the business to which the restraint is applied. But where the individuals comprising the band are not competitors in business, then competition can not be suppressed or destroyed—then they do not exist in violation of law.
There is no competition among the several authors, composers and publishers comprising the society. If you and your daughter want to hear played All Alone, you will not be satisfied with hearing a rendition of Remember. A song that has a certain appeal that tickles the fancy of certain of our people—that possesses a certain characteristic and distinct tune, a certain outstanding and pleasing quality-has no competition, because no other song can take its place or be a substitute for it. Each composition stands by itself, individually, and upon its own merits, and one can not take the place of the other. Each composition is sui generis.
Composers have unique, extraordinary, and exceptional talent: Each bears his own mark, and no two are alike. Their compositions differ and vary in many respects, as do the stars in the heavens. There is no resemblance between them. There is no competition between their products.
If you like Sousa marches, you will not accept as a substitute Irving Berlin's songs, and if you like Irving Berlin's lively tunes, you will not let them give you Sousa marches as substitutes.
Then, there is another phase of the question. Singly and alone, the performing rights of an individual musical composition may be negligible and of little value. But value may be created in that song by grouping or combining it with other songs to make up a program of songs. If it can be fitted to a program of other songs, then it has value.
The entire value of performing rights of songs lies in the ability to combine them with other songs adapted to make up a musical program of a pleasing, diversified and attractive character.
The law recognizes that it is difficult to place à value upon the performance of musical works, and, accordingly, Congress, in section 25 (b) fourth, of the copyright act, provides for the recovery of an arbitrary sum by way of damages and not as a penalty for each performance.
And in Brady v. Daly (175 U. S. 148), the court recognizes the difficulty of determining the amount of damages sustained by a copyright proprietor by reason of the unauthorized performance of his work, and it explains that because of that, the statute provided a minimum sum as a recovery in any case.
A single song is of no interest to a broadcasting station. Broadcasters must have a different program nightly, and it takes 20 songs, according to their own admission, for an hour's program. They could not repeat the same song incessantly for an entire evening. To make up such a program they have to have the product of twenty different composers, and the value of each composer's product lies in the fact that his product must be combined with the work of other men to make it productive of revenue. It is in the combination that the value of the performing rights lie.
A broadcaster must have the fullest latitude in the make-up of his program, which must be of a pleasing, attractive and diversified nature, and of a more or less international character. To require him to deal with the individual copyright proprietor upon the basis fixed by the statute for each rendition, would make it impossible for the broadcaster to make up any such program. It is, however, to the broadcaster's benefit; and the nature of the business is such, that if the catalog of a substantial number of songwriters of the world are united and put at the broadcaster's disposal, at rates considerably lower than those provided by the statute, not only is he served, but it is to the pecuniary advantage of the composer as well to have his work in the combination.
It will be of no interest to the broadcaster to deal with the indi. vidual composer for his individual numbers. The broadcaster derives the right to play all the numbers in the society's repertory when and as often as he likes, and to combine any song with any given set of other songs, and to play and sing them, free from the necessity of carrying on protracted and irritating negotiations with the individuals owning each of the numbers.
Assuming that there was no society, and if the performing rights in the respective catalogs of members could be bargained for separately, the total cost per item to the smallest broadcasting station would exceed by many times that now paid by the most important user of copyrighted music.
The Supreme Court has had before it a group of patent holders, each man holding a patent on a different part of a machine, so that the use of all those patents in combination produced a given article. Such a combination has been declared perfectly legal, and proper, because there is no competition between those several patent holders. Each man's device enters into a machine, and it takes the devices of the several patentees to build the complete machine. To illustrate : The owner of a patent on a plow, covering the handles or beams, might acquire or join with the owners of patents covering the moldboard or share, or other parts of the plow, for the protection of the patented rights of all, and thereby incidentally secure a large part of the trade in plows.
So, in the case of the holders of the copyrights on these different songs, it is necessary, in order to make up an evening's program, to combine together a group of songs, each protected by a separate
copyright and belonging to a different owner. Take the man that runs the dance hall. Judge Hammer, he has got to have 84 dances of an evening. That means 84 different tunes to make
the evening's programs. He doesn't want to play “All Alone 84 times. He wants a combination of Berlin's, Sousa’s, Herbert's, and these others in combination.
Representative HAMMER. In that sense that is true, but I can not get away from the idea that you people pound away on the idea that the radio is destroying the business. And I can not say that it is not tue, because you are truthful men, but I can not understand it, when we have these negro spirituals, that nobody ever knew, but the negroes and the poor whites in the South for years, and now they have become the most popular music in the country, in the West, and everywhere. Such tunes as “Old Black Joe," “ Deep River," "Swing Low, Sweet Chariot." They were absolutely unknown before radio picked them up and made them popular. Now, do not you think that radio weeds out the songs, that it weeds out all the poor songs, and that the good songs will stay. It weeds out all that ought not to endure?
Mr. BURKAN. Suppose they do endure and make millioraires of each and every one of us? It is our property, and we wish to have the right to say whether they shall use it or not, and as to the frequency of the use; and where, how and when it shall be used. We prefer to do business in our own way.
Representative HAMMER. Oh, that is it?
The burden of Judge Tuttle's plea was that this powerful group of broadcasters, represented by the National Association of Broadcasters, was rendering a great service to the publishers in broadcasting their compositions without any renumeration, reward, or recognition from the members of the society, and that this aggressive little band, represented by the society, was compelling the broadcasters to pay tribute to the society.
And it was the desire of the broadcasters to deal separately and individually with each member of the society, independently of the society.
The aim of the broadcasters is to deprive the individual composer of the cooperation of his fellow composers and of the aid of the organization formed for the purpose of such cooperation, because it is hoped that after the destruction of their organization, the composers will again be helpless against despoliation.
The society, is composed exclusively, of publishers of music, authors of lyrics and composers of music, united for their mutual protection in the performing rights of musical works composed and owned by them.
It is nothing more than a union for those who create music and those who publish it, banded together to prevent organized piracy and the destructin of the public performance rights secured for them by the acts of Congress.
The union of publishers, authors, and composers was absolutely necessary to prevent piracy and to cure the evil which the individuals could not themselves accomplish. In its purpose to protect composers and authors of musical works against appropriation of their intellectual labor without a fair compensation, the society is in a kindred class with labor organizations.
In the case of labor organizations, efforts have often been made by employers to bring about the dissolution of these organizations, on the plea that they interfere with the conduct of the employer's business, while the real aim was to deprive each laborer of the organized support of his fellow workers, and to compel him to work for lower wages.
The law is now established that workers have a right to organize, for the purpose of securing such compensation for their labor as they deem fair, and to that end do collectively what each has a right to do individually; to engage in collective bargaining,
The society was organized out of the necessities of the situation. A single composer was helpless in dealing with organized commercial users of his property. He was dependent ordinarily on his royalties earned from his compositions, for the maintenance of himself and family. If a commercial user refused to pay him royalties for the use of his compositions, he was unable to resist arbitrary and unfair treatment, because his opponents were thoroughly organized into trade associations. Union was essential to give composers an opportunity to deal on equality with the commercial users of their property.
Where persons are unable to protect their rights by individual action the destruction of their organization or denial of their right to organization for combined action, is equivalent to the denial of the rights themselves, and very often a means to compel them to surrender their rights for the exploitation of others.
Representative HAMMER. Does Mr. Tuttle object to your organization?
Mr. BURKAN. Of course he does. He objected very strenuously here and before Judge Knox.
Representative HAMMER. I thought he objected to the strength
Mr. BURKAN. Judge Hammer, the National Association of Broadcasters has the same objection to our organization as has an association of employers against a labor union. The Supreme Court (American v. Tri, 257 U. S. 209) has held that labor unions were organized out of the necessities of the situation; a single workman was helpless in dealing with an employer. Don't forget in our long and previous history prior and since the formation of
the society we had to contend with organized piracy.
Representative HAMMER. I am in favor of your organizing, but the question is how far you put it forward.
Mr. BURKAN. The arguments advanced here by Mr. Tuttle against the society are not new, original, or novel. They were first urged by him in 1924 before the Senate Committee on Patents on the hearings on the Dill copyright bill. He made the same argument before the House Committee on Patents on the copyright bills there pending, and he also repeated them before Judge Knox in the action of Waterson against the society.
He expatiated upon the organization of the society, the alleged combination, and stressed the self-perpetuating board of directors, and the classification of members of the society.