I drew the articles of association. The reasons for the creation of the society have been fully explained to you. One of the evils which was largely instrumental in its creation was the fact that restaurants, cabarets, and motion picture theaters took the material of songwriters, which represented 60 per cent of the entertainment value offered by these amusement purveyors, without any compensation to the composers. The commercial users ran their shows, made up largely of the material of the songwriters, taken gratuitously, and frequently in competition with the owners of legitimate attractions.

Theatrical managers known as musical comedy producers caused their musical plays to be written to order by musical comedy writers, for which they paid a royalty of 3 per cent of the gross receipts to each the composer and the author, or a total of six per cent. These musical comedy producers charged the public a minimum of $2 for an orchestra seat. The commercial users appropriated the outstanding "hits" of the current shows for the entertainment of their patrons and to attract patronage, running their entertainment in competition with the legitimate theaters. When the practice became aggravated and attempts were made to stamp it out, the proprietors of the hotels, restaurants, and cabarets refused to respect the rights of the composers and resisted the rights of the composers in the courts. Suits were started to prevent these piracies, and they were defended by the trade associations to which these commercial users belonged.

The commercial users were successful in the District and Circuit Courts of Appeal, until finally the Supreme Court declared the performances without the author's consent, given in hotels, restaurants, and cabarets, were "for profit" and illegal.

Organization was absolutely essential to combat the piracies taking place all over the country and defended by trade associations. There are several groups of songwriters in the American Society: (a) so-called production writers-authors of the text and lyrics of musical plays and the composers of the music of musical plays; (b) standard or classic writers-authors of lyrics and composers of songs of the order of "The Road to Mandalay," "The Holy City," I Hear You Calling Me," etc; (c) popular songwriters, such as jazz music, "Yes, Sir, She's My Baby,' "Yes, We Have No Bananas," etc.

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The publishers are divided in the same way-publishers of productions, publishers of standard or classical music, and publishers of popular music.

The great majority of the membership consists of so-called writers and publishers of popular music. It was absolutely essential for the organization to function fairly and properly, to give and assure representation to each group on the board of directors. It was contemplated that the board of directors, consisting of twentyfour should have on it two popular music writers and two popular lyric writers; two standard music writers and two standard lyric writers; two production music writers and two production lyric and text writers, and four popular publishers; four standard publishers; and four production publishers.

If the election of the board of directors was left to the entire membership, owing to the preponderance of popular songwriters and publishers in the membership, the board would consist of only popular songwriters and popular publishers, or because of their preponderance they might elect representative men of each of the several groups. There are about 40 production writers in the organization, and a smaller number of standard and classical writers, and so the production and standard publishers are limited in number.

The interests of these varying groups are not at all similar. Each group has problems of its own. A policy or program that may be beneficial to one group may prove detrimental to another. Due consideration must be given to the rights and interests of each of the several groups. It was the aim of the organization to treat all classes of membership on a perfect equality, to consider the necessities of each group, and to protect the interests of each group of membership, and, accordingly, to assure perfect equality and exact representation to each group, the election of vacancies to the board of directors was left in the hands of the board of directors.

The purpose of this scheme was to protect minorities, to assure minority representation on the board-and minority representation on the board is assured by this method of electing the members to the board. If this election of members of the board of directors were left to an open meeting, one group of the membership would dominate the organization and its policies, because one class in a common membership predominates.

This method of selecting directors has proven wise and beneficial. There have been but two resignations in the society since its organization in 1914. One has returned to the fold; the other is a phonograph and radio parts manufacturer and his sympathies are with the broadcasters.

The principal reason for the absence of discord in the organization, or any clash or trouble within its internal workings, is that the rights of every group of membership are protected. It is one organization where the minorities are protected. When a director's term is up, the board requires that the class of membership represented by the retiring director recommend his successor, and the man recommended by that class is elected. If the term of a production member expires, the production writers name his successor, and the board elects such successor. That practice has gone on year after year for years, to the satisfaction of all, assuring perfect harmony and concord in the organization, and assuring minorities of equal representation and protection in the organization.

That organization was organized with one view-to protect and encourage song writers, and they have been encouraged and protected to the utmost, and they are gaining revenue from the use of their works from such a source, which, before the organization of the society, yielded nothing.

By dint of organization piracy has been suppressed; commercial users have been forced to respect the rights of property of the members of the society.

Another cogent reason for providing for the election of members of the board of directors by this method, is that the right of the individual member to share in the royalties collected by the society

from commercial users and distributed among the members is determined entirely by its classification in the society.

The scheme of allotment of royalties was fashioned after the system of the French society. It contemplated that a member should participate in the royalties collected upon the basis of the number of times his composition has been played or sung during the quarter for which the allotment has been made. To apportion the royalties in such manner it was necessary for the commercial users to send in daily and nightly programs with notations thereon of the number of times the composition was played or sung in the establishment. Many orchestra leaders refused absolutely to prepare or mail to the society such programs, and in the few instances where it was done, it was found that the returns were not at all reliable or trustworthy there were so many inaccuracies, confusion of titles and names, and whether by design or accident, credit for renditions were given composers whose songs were not at all played in the programs accounted for.

The cost of checking and compiling the programs made the operation almost prohibitive.

Therefore, that scheme of collection of royalties had to be abandoned and a more practical one devised; that is, classifying members in groups of classes and segregating the membership into the several classes. The publisher members of the board are constituted in a committee for classification of the publisher members of the society, and the writer members of the board are constituted in a committee for the classification of writers. The publisher classification has absoluetly nothing to do with the classification of composers, and vice versa. A member's classification is dependent entirely upon his contribution to the society, by way of popular, meritorious, attractive, and pleasing compositions, and in each classification of writers are represented popular, standard, and production writers, and in each classification of publishers are represented popular, standard, and production publishers.

The members of the board are representative members, thoroughly conversant with their particular profession or business, and possess the expert knowledge, integrity, and sense of business to assure square dealing all around.

Provision is made in the by-laws for an aggrieved member to appeal to the entire board of directors from an erroneous, unfair, and improper classification.

In the history of the society there has never been a complaint to the entire board on account of improper or unfair classification. The system of classification is fair, just, and equitable to everybody. Representative WEFALD. It seems to me you would be a good man to organize the farmers.

Representative HAMMER. If we had him among the cotton growers, he would organize them, I am sure.

Representative BLOOM. I suggest that in answer to Judge Hammer you tell about the organization of the patent owners.

Mr. BURKAN. I will get to that. I am coming to it. Collective bargaining has resulted in a promulgation of rates fair to commercial users and to members of the society. The rates adopted by the society are very reasonable. The Hotel Men's Association suggested

the schedule for hotels, restaurants, and dance halls. The rates are $5, $10, and $15 per month, dependent upon the character of the establishment and the nature of the musical programs. Those rates have been in force since 1917 without change. The rates charged to the motion-picture theaters have been fixed on a basis of 10 cents per year for each seat. The rates for picture theaters have also been in force since 1917 without change.

The motion-picture people have never complained about the rates. Their complaint is that they do not wish to pay any rate, large or small.

The radio broadcasters, until the fall of 1925, did not complain about the rates. They wished to broadcast copyrighted music without paying any sum, and the purpose of the 1924 Dill bill was to assure their being able to continue so to do.

It is not a question of rates, with organized piracy. It is a question of payment. No rates adopted by the society are acceptable. Representative HAMMER. The Supreme Court, I understand, has upheld collective bargaining.

Mr. BURKAN. We are engaged in collective bargining.

Representative HAMMER. I know it can be done in our State, and I understand the Supreme Court has upheld it.

Representative WEFALD. Are they organized?

Mr. BURKAN. I should say the radio interests are organized. They are the most powerful and best organized group in the world. There has been much talk about our being a monopoly. The accusations against us have been many, grave, and serious. Now, let me tell you about them a little. Mr. Tuttle loves so much to dig out of the moth balls old letters, antiquated literature, and ancient articles of association. I have got a little literature in my bag and I am going to read it and show it to you. [Laughter among the spectators].

That appeals very much to my radio friends over there.
Representative WEFALD. Have you got more than one bag?

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Mr. BURKAN. I have got two. Well, if you want to keep up and cope with the broadcasters you have got to have a couple of bags. These gentlemen started in to negotiate a contract-a contract which they never intended to sign. They thought it was a wonderful stroke to come before this committee and charge that the society exacts "a million dollars" for radio. It would make excellent propaganda against the society. Mr. Harkness testified on the radio control bill, that his company had a hook-up with 600 newspapers. The representative of that group of newspapers stood here arguing in favor of taking our property from us and turning it over to the radio trust.

We have been investigated so often we think it is high time to investigate the radio gentlemen and find out who they are, what they are, and what they stand for. If, after these revelations, you think you ought to regulate our prices, I will ask you if you don't believe that you ought to regulate their prices.

The General Electric Co., the Western Electric Co., and the Westinghouse Electric Manufacturing Co., are the largest manufacturers of radio and electrical products in the world. During the years 1919 and 1920 these corporations signed a number of con

tracts, under which some 2,000 patents relating to radio were pooled. I have mentioned the American Telephone & Telegraph Co. so often that I nearly forgot to add that the American Telephone & Telegraph Co. is also a party to these agreements.

Representative HAMMER. They own the whole thing, do they not? Mr. BURKAN. I should say they do, and they want to own us. But they will have a hard time to do it.

The American Telephone & Telegraph Co. owns the Western Electric. The Western Electric Co. is the manufacturing and sales company for the American Telephone & Telegraph Co., and manufacturers all the devices used in connection with the operation of the telephone service, and also all the devices in connection with radio broadcasting transmission. This company owned or was licensed under various patents covering inventions useful both in radio and in wire telephony. Under these patents it manufacturers and sells apparatus principally to the parent company, the American Telephone & Telegraph Co.

The Radio Corporation of American was caused to be organized by the General Electric Co. on October 17, 1919. Thereafter, the General Electric Co., the Western Electric Co., the Westinghouse Electric & Manufacturing Co, the Radio Corporation of America, and the American Telephone & Telegraph Co., and others, the companies which own or control practically all patents approximately 2,000 in number-covering radio devices considered of importance to the art entered into agreements for the pooling of such patents and for the control and domination of the radio field in America.

With certain minor limitations, the Radio Corporation under these agreements has secured an exclusive divisible right to sell and use the radio devices covered by the patents involved, or by patents which these companies may acquire before the termination of the agreements. The agreements with the American Telephone & Telegraph Co. and the Western Electric Co. are to terminate in 1930, while the remainder are to terminate in 1945.

The Radio Corporation, under these agreements, is made the selling company for practically all radio devices to be sold to the public under the hundreds of patents involved. The General Electric Co. and the Westinghouse Electric & Manufacturing Co. are to manufacture and sell to the Radio Corporation only these devices and apparatus, the Radio Corporation agreeing that 60 per cent of its annual requirements be purchased from the General Electric Co., and 40 per cent from the Westinghouse Co.

The Radio Corporation has practically a monopoly in the sale of vacuum tubes. In the sale of receiving sets, the Radio Corporation predominates in the field. The Western Electric Co. is manufacturing and selling only transmitting apparatus for commercial purposes.

Having pooled their 2,000 patents, which gives them almost absolute, complete, and positive domination of the radio industry of America, they have parceled out among themselves the whole field of radio activity in the United States. To each one has been allotted its own particular and special field and department of activity. And the others are required fo respect such field and not to encroach upon