cents a number is fair, but it is different from a phonograph record. Once you pay them 2 cents on a record you can play your record over and over until the record is worn out, but once we play a number on the radio it is gone.

Representative LANHAM. Is there not this difference? In the first place, the reason we want your idea is because we are, of course, inexperienced in radio, except to listen in occasionally. Is there not a difference or two between the rate charged for a phonograph record and the rate charged for broadcasting, and does not a different element enter?

Suppose each member of the committee buys a phonograph record to use in his home. The composer gets 2 cents on each of those records, and we play them in our respective homes for our guests. But when the radio broadcasts that selection we all listen in, and our respective groups are all hearing that broadcasting. Now, of course, you could not make a charge of 2 cents for every group that hears that broadcasting, because that certainly would be prohibitive. You could not say that there is an analogy there and that because we are all listening in it ought to be 2 cents for a radio performance because it is 2 cents for a phonograph record.

Mr. HEDGES. I will accept the responsibility of being pinned down to a figure. As far as our station is concerned, WMAQ of Chicago, I regard the rate that we are paying as being rather high-20 cents per number but I do not regard it as exorbitant. We would be perfectly willing to continue on that sort of basis. We recognize the right of a copyright owner to receive compensation. But we pay 20 cents for a number, and it lasts three minutes, and we have not the privilege of playing that number again, because we have to pay another 20 cents. Mr. LANHAM. Of course, I was asking for your opinion simply because we have no specific information on that subject. Carrying that idea one step further, is there not this additional difference, that where we play for our respective groups a number on the phonograph, the element of advertising does not enter, whereas when a newspaper broadcasts, say, from some remote control station, such as a hotel orchestra, the element of advertising does enter in, does it not?

Mr. HEDGES. Yes. May I continue on that part of it? I want to state that our station devotes most of its time to educational talks. We have connection with the Northwestern University and the University of Chicago. Consequently we do not play very many popular numbers, and therefore our rate would be high. But, as I say, we do not object to that. On the other hand, there are stations whose programs are composed almost entirely of music, and if they paid 20 cents a number that would be altogether too much.

I believe that the American Society has figured out a scale that varies for different sized broadcasters, and that scale ranges all the way from 7 cents a number for the smaller stations up to 12 cents a number for stations of 5,000 watts, and if you use the same factors all the way through it would be around 50 cents a number for the higher powered stations.

Representative LANHAM. I have just been informed that some one else is going to handle that feature of it in the testimony before the committee. My only reason for asking you was that I thought we ought to have some information from those who are actually in the

business and have had experience and ought to know what would be a fair price.

Mr. HEDGES. Then, with the permission of the chairman, it would be perfectly acceptable to me to have that portion of my statement stricken from the record.

Senator DILL. Oh, no; I do not think we should do that. Repersentative LANHAM. We might as well let it remain in. Senator DILL. Mr. Hedges, I want to ask you this question. As I understand the testimony given here by various men who have appeared before the committee, you would prefer to pay even a higher rate if you had the assurance that that rate was not to be increased rather than have the risk of being suddenly brought up on your toes as Judge Tuttle said yesterday?

Mr. HEDGES. Yes. We want it on a permanent basis.

Senator DILL. So that you would know what you had to pay and could figure on that?

Mr. HEDGES. Yes.

Representative LANHAM. May I ask one additional question there? You speak of putting this proposition on a permanent basis. The word "permanent" has come into these hearings a number of times. And yet it seems to me that this whole question is one which is constantly in a state of change. Radio is relatively a new thing. For instance, at these joint hearings, is the first time, I think, that the radio people ever came before us with the contention that they ought to pay something to the society or the composer, the assumption having been heretofore that when a piece of copyrighted music is bought in the store the right to use that piece of copyrighted music in any way was inherent in the purchase of the music. there at least we have seen a change since the hearings of last year with reference to this subject.

They said then that radio was in no way commercial, that it received no profits and no compensation. Now at this hearing we understand that sometimes they make as much as $150 an hour broadcasting advertising matter. So the thing is constantly in a state of change. It has changed very much during the two years or more in which we have been holding these hearings. The situation has changed entirely.

Now, is the situation such that we can with this chaotic condition establish something that is absolutely permanent when the conditions in the industry are changing so rapidly and so constantly?

Mr. HEDGES. I feel that some of the chaos would be straightened out by the passage of such a bill as this. Furthermore, we have also felt that radio has just about served its term of apprenticeship. Representative BLOOM. Referring to what Mr. Lanham says, suppose we should make this a permanent charge and then you should find some way of adopting the Canadian method or the British method and you should charge listeners-in, as Mr. Hoover has suggested and as Mr. Sarnoff has suggested? They say that some day they hope to find some way of remedying this evil. If a charge should be made to the listeners-in, then if we make this a permanent price and the law regulates the price, how are you going to overcome that difficulty?

Mr. HEDGES. I think that is crossing a good many bridges. I do not know of anyone who has been able to suggest a practical way by which the listeners may be charged.

Representative BLOOM. They do it in Canada, do they not? Mr. HEDGES. That is only through consent of the Government, and that is through licensing.

Representative BLOOM. Yes.

Mr. HEDGES. And I believe that in view of the conditions we have here pertaining to radio, Congress would be very reluctant to impose a tax upon the radio listeners.

Representative BLOOм. But Mr. Hoover and Mr. Sarnoff have suggested that; they suggested it at the last conference.

Mr. HEDGES. But as long as there are so many advertisers who are willing to put on ordinary high class programs, I do not think that is anything we have to worry about.

Representative BLOOM. You do not have to worry about it, but if you are going to make these people sell you their goods at a specific price and then afterwards there should be some law whereby you are going to get an extra fee for broadcasting, and these are the only people that are going to regulate it, how are you going to overcome that? Mr. HEDGES. I think that situation can be well taken care of when it does arise.

Senator DILL. Did I understand you to say that Mr. Hoover advocated that?

Representative BLOOM. Mr. Hoover advocated-I have it right here and I will put it in the record. I have Mr. Hoover's speech and Mr. Sarnoff's speech, and I will put in all the other speeches.

Senator DILL. Advocating that the listener be charged?

Representative BLOOM. Yes; he hopes that in the near future some regulation may be made whereby a charge can be made to the listener in.

Senator DILL. I thought he simply said that was a possibility, not that he desired it.

Representative ВLOOм. Oh, well-certainly, it might be a possi

bility.

Senator DILL. He is not advocating it, is he?

Representative BLOOM. That something must be done. He says you can not always expect these people to broadcast and give you these programs for nothing.

Now, on this thing of the 2 cents for a record: You know there are other charges made, higher charges, for piano rolls. Everything is not regulated at 2 cents; it is merely the phonograph record that is That is right, isn't it?

2 cents.

Mr. HEDGES. Yes. That is what I referred to.

Representative BLOOM. But there are other charges, of 6, 8, 10, and 12 cents for other things?

Mr. HEDGES. This charge against radio may be placed at any figure this committee may see fit.

Representative BLOOM. You heard the counsel of your association say that the association would be willing to have this law extended so as to include everything under section D. Is that right?

Mr. HEDGES. I am not asking for it.

Representative BLOOм. But you would have no objection? In other words, if this committee should see fit to make this measure so broad as to include charges for broadcasting everything, including dramas, plays, copyrighted articles, syndicated articles, and everything else, your association, with all its members, would be willing to have a law of that kind passed?

Mr. HEDGES. I can not speak for the American Newspaper Publishers' Association.

Senator DILL. Of course, that has not been proposed.

Representative BLOOM. But I have not been held down to this bill,

Senator.

Senator DILL. But it is not in the bill.

Representative BLOOM. But suppose we should amend the bill so as to make it include section D as well as section E.

Senator DILL. Of course, that is taking up another subject.

Mr. HEDGES. I will say that we do broadcast dramas on which there are copyrights, and we have also obtained permission from the owner of the copyright. In some cases we pay him and pay him well, but we have the privilege in that case of dealing directly with the copyright owner or his representative, a privilege that we do not enjoy with respect to musical compositions.

Representative BLOOM. Will you say yes to the same question that your counsel said yes to?

Mr. HEDGES. As far as the radio committee of the American Newspaper Publishers' Association is concerned.

Representative BLOOM. You are limited to that?

Mr. HEDGES. I am limited to that, necessarily.
Representative BLOOM. That is all.

Representative VESTAL. Mr. Hedges, I desire to ask you one question along the line of the questioning by Mr. Lanham. Do I understand that it is the theory of the proponents of this bill to have a contract for, say, three years, with the idea that broadcasting may be stabilized in that length of time and that we would know more about fixing the rates in the future? Is that the idea?

Mr. HEDGES. Are you referring to the futile efforts that have been made so far to negotiate agreement with the American Society?

Representative VESTAL. No. You spoke about permanency, in answer to Mr. Lanham. As I understand it, it is your theory that these rates should be fixed for a period of three years?

Mr. HEDGES. I do not believe I should answer that; as far as I am concerned you can fix it for any length of time you wish.

Representative BLOOM. May I ask Mr. Vestal a question? Mr. Lanham was speaking about the permanency of the bill itself, not the permanency of the price.

Mr. LANHAM. I had reference to the bill, that the industry was evidently in a state of constant change. I had reference to permanent legislation, both from the standpoint of the terms of it and also, incidentally from the standpoint of prices, that there might be necessity for variation during the years to come if justice is to be done.

Mr. HEDGES. I would like to see it on a five-year basis, or a 10-year basis, and let us have a commission appointed to determine what the rates should be for the next succeeding term, if there is any question in the minds of the committee regarding making it indefinite. Speaking personally, that would be my view of the subject.

Representative LANHAM. Of course, if we can get permanent legislation, if that is possible under present conditions, it is certainly desirable to get these matters settled.

The CHAIRMAN. Senator Dill, have you any questions?
Senator DILL. No; Mr. Chairman.

Mr. HEDGES. We can point to the precedent of the 16 or 17 years' successful operation of the mechanical reproduction clause, since

1.909.

Senator DILL. What do you think of this proposal, that instead of Congress fixing a rate in the law on these musical productions for broadcasting, that the author or the copyright owner may fix and print on the music the charge that he will make for each boardcasting, and the broadcaster if he uses it being bound by that?

Mr. HEDGES. I fear that would involve a great deal of red tape. Representative LANHAM. Would it not allow a wealthy station, a station with plenty of money at its command, to broadcast in a certain area a program that would be much superior to others in the same section of the country?

Mr. HEDGES. In effect this bill would permit the author to do that, because this law does permit the copyright owner to say whether or not it should be broadcast and for how much. It is merely a question of setting a maximum figure here.

Representative GOODWIN. Can you say whether there is any added value to the owner of a copyright resulting from the broadcasting of a particular number and thereby popularizing it?

Mr. HEDGES. We have a great deal of evidence to indicate that many selections are popularized through radio. I believe Judge Tuttle yesterday referred to several selections that reaped very much benefit.

Representative LANHAM. That has been more or less a bone of contention in the hearings heretofore, and we have never been able to tell very definitely whether the returns from the sales of sheet music are greater or less now than they were before radio came into the field.

Mr. HEDGES. I would refer you to the letter that was read yesterday from the American society to its various members, in which the value of radio is recognized.

Representative GOODWIN. That was where the sale jumped from 3,000 to over 100,000 in the course of a year.

Mr. HEDGES. That was not stated in the letter.

Representative BLOOM. Suppose an organization should be formed, such as the Associated Press is at the present time, for the purpose of sending out copyrighted news. Would you want this law to affect an organization of that kind?

Mr. HEDGES. I can not speak for the Associated Press.

Representative BLOOM. No. I mean, would it be fair for this committee to impose a price on an organization of that kind where they have copyrighted the news? If we are going to do it for music, why not for news and everything else?

Mr. HEDGES. So long as the owner of the copyright has the privilege of saying whether or not it shall be broadcast.

Representative BLOOM. But this will be broadcast. They do broadcast news; that is what the organization is formed for.

The CHAIRMAN. Thank you, Mr. Hedges. Have you another witness, Mr. Klugh?

Mr. KLUGH. Mr. Chairman, the next speaker will be Mr. Smith, of the Music Industries Chamber of Commerce.