Now, what were the motives that led Congress to qualify the limited monopoly that was given to the copyright holder as to its own particular piece in that respect? What were the motives and reasons? The committee has stated them in its report.

It was at first thought, said the report by the committee, that the copyright proprietors of musical compositions should be given the exclusive right to do what they pleased with the right it was proposed to give them to control and dispose of all rights of mechanical reproduction, but the hearings disclosed that the probable effect of this would be the establishment of a mechanical music trust. It became evident that there would be serious danger that if the granted right was made too broad the progress of science and the useful arts would not be promoted but rather hindered, and that dangerous monopolies might be fostered which would be prejudicial to the public interest. And the report said, quoting from a distinguished American composer speaking of this probable monopoly:

Let our people pay tax upon the oil, sugar, and tobacco they consume. Let them render unto the trusts the things which the trusts exact. But let us keep music free from all trusts.

So because of that recommendation, after full hearings by the committee, Congress put in this safeguard limited to the then known mechanical means of reproducing music.

Now, I am going to come down to 1925 and to a decision of the Circuit Court of Appeals for the Sixth Federal Circuit. This decision came about in this way: It is a decision by the Circuit Court of Appeals that radio broadcasting of a musical composition is a public performance for profit within the meaning of subdivision (e). That question had been much debated in the courts. There are three possible interpretations to be given to the language of subdivision (e), in view of the fact that radio was not known at the time. One was that it was a public performance for profit. The second one was that it was not a public performance for profit. The third one was that sometimes it was and sometimes it was not. No other answer is conceivable.

Judge Lynch, sitting in Newark, held that it was a public performance for profit. Judge Hichenlooper sitting in Cincinnati held that it was not. Judge Knox sitting in New York held that sometimes it was and sometimes it was not. So it was an open question. The only appellate court to pass directly on the question was the Circuit Court of Appeals on an appeal from Judge Hichenlooper's decision, and the Supreme Court of the United States refused to grant a certiorari. Whether that means that their mind is open on the subject or not we do not know.

I am calling your attention to this because this opinion contains this important statement:

Bills have been introduced in both Houses.

Now, this opinion is adverse to the broadcasters' position and I am calling your attention to the opinion as also to what is in it.

Bills have been introduced in both House and Senate to permit broadcasting without infringing copyright. The rights of producer, composer, performer, and the public under this new method of reproduction are eminently matters for considered legislation; but until Congress shall have specifically determined the relative rights of the parties, we can but decide whether and to what extent statutes covering the subject matter generally but enacted without anticipation

of such radical changes in the method of reproduction are, fairly construed, applicable to the new situation.

Senator DILL. Mr. Chairman, I would ask that that decision be made a part of the record.

The CHAIRMAN. Very well. That may be put in the record. (The decision above referred to is as follows:)

United States Circuit Court of Appeals, Sixth Circuit.

Jerome H. Remick &

No.

Co., appellant, v. The American Automobile Accessories Co., appellee. 4190. Appeal from the United States District Court for the Southern District of Ohio, Western Division. Decided April 9, 1925

Before Denison, Mack, and Donahue, circuit judges.

MACK, Circuit Judge: The plaintiff brought bill in equity to enjoin defendant from reproducing by radiobroadcasting a musical composition entitled "Dreamy Melody," the copyright of which is owned by plaintiff. The bill alleges that defendant manufactured and sold radio products and supplies for pecuniary profit; that it maintained a radiobroadcasting station in Cincinnati as a medium of advertising and publicity and as a means of bringing its radio products and supplies to the attention of the public and of stimulating the sale thereof, and that the maintenance of the station was effective for those purposes; that the license from the United States Department of Commerce, Bureau of Navigation Radio Service, to operate as a commercial station was issued upon application to operate for commercial purposes; that defendant announced its program to the public by newspaper advertisements and bulletins, and that it started and ended its programs with the announcement, "Station WLW, Crosley Manufacturing Co., Cincinnati, Ohio." The bill further alleged that the defendant charged on its books the radiobroadcasting service to its advertising and publicity account. It prayed for injunction and damages. Motion to dismiss the bill was sustained.

The question presented is whether, under the circumstances stated, the broadcasting of a copyrighted musical composition is an infringement of the statutory copyright. By the act of March 4, 1909 (ch. 320, sec. 1, 35 Stat. 1075), "Any person entitled thereto, upon compliance with the provisions of this act, shall have exclusive right * * * to perform the copyright work publicly for profit if it be a musical composition, and for the purpose of public performance for profit."

While the fact that the radio was not developed at the time the copyright act was enacted may raise some question as to whether it properly comes within the purview of the statute, it is not by that fact alone excluded from the statute. In other words, the statute may be applied to new situations not anticipated by Congress, if, fairly construed, such situations come within its intent and meaning. Thus it has been held in both this country and England that a photograph was a copy or infringement of a copyrighted engraving under statutes passed before the photographic process had been developed. (Gambart v. Hald, 14 C. B. N. O. 303; Rossiter v. Hall, 5 Blatchford, 362). While statutes should not be stretched to apply to new situations not fairly within their scope, they should not be so narrowly construed as to permit their evasion because of changing habits due to new inventions and discoveries.

Bills have been introduced in both House and Senate to permit broadcasting without infringing copyrights. The rights of composer, producer, performer, and the public under this new method of reproduction are eminently matters for considered legislation; but until Congress shall have specifically determined the relative rights of the parties, we can but decide whether and to what extent statutes covering the subject matters generally but enacted without anticipation of such radical changes in the method of reproduction are, fairly construed, applicable to the new situation.

A performance, in our judgment, is no less public because the listeners are unable to communicate with one another or are not assembled within an inclosure or gathered together in some open stadium or park or other public place. Nor can a performance, in our judgment, be deemed private because each listener may enjoy it alone in the privacy of his home. Radio broadcasting is intended to and in fact does reach a very much larger number of the public at the moment of the rendition than any other medium of performance. The artist is consciously addressing a great though unseen and widely scattered audience and is therefore participating in a public performance.

That under the copyright act a public performance may be for profit, though no admission fee is exacted or no profit actually made, is setteld by Herbert v. Shanely (242 U. S. 591). It sufficies, as there held, that the purpose of the performance may be for profit and not ellemosynary; it is against a commercial as distinguished from a purely philanthropic public use of another's composition that the statute is directed. It is immaterial, in our judgment, whether that commercial use be such as to secure direct payment for the performance by each listener or indirect payment as by a hat-checking charge when no admission fee is required, or a general commercial advantage as by advertising one's name in the expectation and hope of making profits through the sale of one's products, be they radio or other goods.

In Pastime Amusement Co. v. M. Witmark & Sons (C. C. A. 4, decided November 13, 1924, affirmed 289 Fed. 470), Jerome H. Remick Co. v. General Electric Co. (S. D. N. Y., decided September 30, 1924), M. Witmark v. L. Bamberger Co. (291 Fed. 776), the courts have reached the same result. (Cf. Kalen v. Harper, 222 U. S. 55.)

There is nothing in White-Smith v. Appollo (209 U. S. 1) that affects our conclusion. There the question was whether a perforated music roll was a publishing or copying of music that had been copyrighted. The court expressly stated that the question whether the manufacturers of such perforated music rolls, when sold for use in public performance, might be held as contributory infringers, was not involved. The question as to what constituted a public performance

did not arise.

Reversed and remanded.

Mr. TUTTLE. Therefore, we have this recognition by the court that turned the broadcasters out on the question as to whether they were performing for profit or not. We have this decision that involves two elements; one an earnest suggestion that in view of the fact that radio is so novel and so new that it is eminently a matter for congressional legislation; and, second, that what radio does is a matter of mechanical reproduction, precisely the language used in this exception in subdivision (e).

Senator DILL. It might be pointed out that the then known methods of mechanical reproduction were provided for in a way similar to the methods provided for by this law.

Mr. TUTTLE. Yes; not only that, but your bill follows the phraseology throughout so far as it is adaptable, in making up this. The CHAIRMAN. It follows the language, does it not, so far as it can?

Mr. TUTTLE. Yes.

Representative BLOOM. I wish to state right there that it is just the reverse, which I will prove when Mr. Tuttle gets through.

The CHAIRMAN. Well, that is my impression now. We will discuss that later.

I come back, therefore, by way of an intermediate summary, to several propositions. In the first place, I advance this thought, that what I have said up to the present time tends to indicate that this bill does not break up copyright principles. It is a mere application of what is already established to a new method of mechanically reproducing music. It does not oblige anybody to broadcast any music if they do not want to. The man who has a piece of music and who thinks that to broadcast it would injure him in any way has the right under this bill to withhold it. If the provisions of this bill are not strong enough in that respect, make it stronger.

It also illustrates the fact that Congress has, in connection with the copyright law, a duty not to be so worshipful of the private limited monopoly that is being granted in the particular piece that it shall forget the consequences to the public of the possibility that

There is

exists in the combination of the various copyright holders. also in this bill a recognition of the principle that, as I have already stated, there is no compulsory license to broadcast.

Now, I want to dwell upon that phrase. It is a war cry that our opponents will use compulsory licensing. I want to read to you what the society does to its own members, so far as compulsory licenses are concerned, and you will see how harmless and insignificant this bill is, a bill which provides an option to the copyright holder. Above all, this bill is not a refusal to pay. We are willing to pay, and we produce our blank check here, as I said before, for any fair tribunal to fill it in.

Why can we not reach an agreement? In the first place, I do not know that the question of why we can or can not reach an agreement is a relevant one, although I shall endeavor to supply an answer to it. It is not altogether relevant-I will put it that way-for the reason, as I have already pointed out, that there are other owners of music. There is that remaining 10 per cent, and their rights have to be considered. This bill proposes, in my judgment, to protect them, because it provides an equality with the favored members of the society, and it provides a police arrangement which furnishes them with guaranties that they will get what is due them under this bill; so that they do not have to assume the risk which they otherwise would, in the absence of police arrangements, and they do not have to assume the vast overhead cost of policing-a subject to which also I shall refer in a moment. But however that may be, whether that construction would lead Congress to feel that whether or not we make an agreement between the boradcasters and members of the society, whether the whole subject, as suggested by the circuit court of appeals, should be made the subject of legislation or not-setting that to one side, we come to the question why we do not reach an agreement.

An effort was made to reach an agreement, last January I think, early in the year. In fact efforts have been made repeatedly over a period of years in all these conferences, and they have all broken down. They have broken down because we have been unable to fulfill one of the elements that is necessary to our business, and that is stability.

Something is said here about permanence. I am not going to adopt that word permanent, because that indicates operation over an indefinite length of time. This bill, I am perfectly aware, puts no limit on the scale of rates which are suggested here. I am saying to the committee that if the committee feels this scale of rates should be limited in time to a certain number of years provided that number of years is adequate to insure a fair measure of stability, it is entirely agreeable to us. We will adopt any such suggestions that the committee may think fair.

At this conference in January, or in the early part of the year, we met with the representatives of the society and we discussed a scale, graduated according to the power of the stations. Of course, graduating according to the audience can not be done. Nobody knows what the audience of a given station may or may not be. It is a matter of the program. The size of the audience is in proportion to the attractiveness of the program; because one of the remarkable things about

radio is that the audience can make momentarily its selection of the program it wishes to hear. You may have the highest powered station in the world and nobody listening at all. There may be millions of listeners listening to the radio, but they are not listening to that particular program. So that I wish to emphasize the thought that the size of the audience is not a proper basis.

However, an element in this suggestion was this, that there should be a three-year agreement on these scales. The society desired a certain figure. I was not one of the negotiators, and I am not going into the details of that negotiation. That can be handled at the proper time by those who had to do directly with the negotiations. What I am aiming at in bringing this matter to your attention is the reason why it broke down.

I hold in my hand a letter from Mr. Mills, chairman of the administrative committee of the American society to the National Association of Broadcasters, for the attention of Mr. Klugh, and I shall read two paragraphs therefrom, because it explains the reason. It is dated January 28, 1926-last January. It says:

Except as to the term proposed by you (three (3) years) we are of the opinion that our membership would accept the plan and rates as outlined in your proposal, but on the question of the term of licenses, I do not feel that in the present rapidly developing situation

And radio has been in existence some six or seven years—

I do not feel that in the present rapidly developing situation it would be wise either for us or the interests which you represent, to enter into a long term agreement, and we would therefore prefer to issue our licenses for maximum periods of one (1) year.

Now, I feel that reading between the lines here is of some interest: Heretofore, our licenses have been issued at nominal fees—

We were not aware that the fees we were paying were nominal in their increasing amounts year after year, but however, this is the language.

Heretofore, our licenses have been issued at nominal fees, awaiting the time when the experimental period of radio should have passed and its elements become more fixed, when, naturally, these nominal rates would, in justice to the value of the service delivered, be substantially increased.

That as a statement of why only one year licenses should be issued was most significant and disturbing to our association. Rightly or wrongly, we gathered the impression from that that if we accepted such a view of the matter we would only find ourselves in the cider press.

How could we prevent it? We would have committed ourselves to a principle of calculating rates as to which we would have no control over the calculation. We have to have music. They, in our judgment, have to have the popularizing. Strange to say, for that we have no power, through the impotency of our own association, be it said, to enforce consideration of that element at all. So that so far as this is concerned it leaves us in the position where there is no roof at all on this matter, notwithstanding our willingness to pay.

Now, I approach another subject. How is this matter being put to us? We are asked, of course not to pay so much for a particular piece of music. We may broadcast to-night at station A a piece of music. We do not pay anything, if we accept the arrangements of