West

popular system is that of the Western Electric Co. Mind you, under its patents there is no compulsory license; only such motion-picture manufacturers that it chooses, and at such prices as it dictates, may use its sound-reproducing system. There are 50,000 motion-picture theaters in the world, and 24,000 of them are in the United States. The 24,000 owners are compelled to go to the Western Electric's subsidiary and negotiate with it for the installation in their theaters of its system. Nobody has as yet gone to Congress and said, "Oh, well, now, Western Electric has the monopoly for the best soundreproducing devices-unless sound-device installations are made the theaters will have to be shut down and the investments therein jeopardized-and we are at the mercy of the monopoly, so won't you please fix the price at which the installations are to be made?" ern Electric has exclusive rights under its patents. It has licensed most of the owners of the picture theaters of the United States to use its devices. Licensor and licensees got together around a table, negotiated, and fixed a price, and under the law of barter and trade, without the intervention of Congress, struck a bargain. Western Electric, through its subsidiary, realized that its licensees, the picture makers, must have accessibility to the songs of America in order to make sound pictures. Neither it nor the picture makers rushed to Congress for an extension of the compulsory license law to the use of songs for sound pictures. Electrical Research Products sought to secure accessibility by negotiation with the copyright owners. It realized, of course, that it would be a very difficult problem to negotiate separately with each copyright owner. It invited all the publishers to a meeting to sit around a table and to endeavor to agree upon a fixed price for the use of their works for sound motion pictures. Well, the answer to it, of course, was, that a conference ensued, they sat around a table, and had conversations. I do not mean to say for one minute that it was the result of one day's work that produced an agreement. There were many complications, perplexities, protracted discussions; at times it looked like a break-up. But eventually a formula was arrived at and an agreement was drawn under which the Electrical Research Products and all its licensees throughout the world may utilize in the making of sound motion pictures for purposes of public exhibition for profit, the works of all the signatories. The signatories represent most all of the publishers of music in these United States. A similar agreement was made between the publishers and the R. C. A. Photophone (Inc.). By bargain, the right of freedom of contract, by discussion, by open negotiation, fairly, freely, and frankly conducted, satisfactory results were secured. I want to say to you that what was finally agreed upon was not what the publishers thought they should get when they first started out, because they thought they ought to get a good deal more than what was finally agreed upon. Electrical Research Products and R. C. A. Photophone (Inc.) thought they ought to pay a good deal less than they finally agreed to pay. They convinced the publishers that they had mistaken notions as to profits from sound pictures. Reason and logic played a very important part in the negotiations. Like business men, the parties agreed, without the coercion or intervention of Congress. I challenge anybody in these United States to appear before this Congress and show where a single user, or a single motion-picture manufacturer, has

been denied the right to reproduce the songs of America in motion pictures. Is their situation any different than that of the phonograph and music-roll manufacturers?

On the argument of monopoly and accessibility let me say that that is a well-studied argument, and very effective. For the benefit of those members of this committee who have not heard this argument before, let me state that this question of accessibility was first raised in 1904. As you all know, the introduction on the market of the commercial sound record and music roll dates from 1888. From that year until 1909 the phonograph manufacturers and roll manufacturers waxed rich, enjoying to the fullest the monopoly of their patents, but at the same time not paying a penny of royalty to any of the composers whose works they appropriated for use in the manufacture of their patented devices. In the case of "Babes in Toyland, one of the finest works ever written, Mr. Herbert never received a penny for those beautiful melodies and tunes which were recorded on record and roll. The musician who played them and the bard that sang them received pay, but their creator nothing. The Victor Co., the Columbia Co., the Edison Co., the Aeolian Co., and all the rest of them made millions of dollars, and never paid a penny or gave any recognition to the composer.

Robin Hood was written before 1909. John Philip Sousa made his mark before then. The Stars and Stripes was in vogue before then. So with innumerable other things; but no reward or compensation to their creators. You would think that companies of the opulence, standing, and prestige of those companies would willingly, without compulsion of law, pay some little tribute to the men upon whose labors, genius, skill, and talent their whole industry was founded. Parasites they were and parasites they preferred to be.

So it was with many other noted composers whose works lived and breathed long after their creators were gone, but whose widows and orphans get not a penny for their reproduction.

Mr. GOODWIN. Neither did the publishers get anything out of them. Mr. BURKAN. In respect of mechanical reproduction, the works were outlawed and no one got anything. For five years these companies stood before Congress arguing accessibility, using one scheme after another, racking their brains to conjure up pretexts and pretenses to delay and defer the day of the enactment of a law to cover this inequity. It was Mr. Roosevelt, then President of the United States, who sent a message to Congress, calling its attention to defects in the copyright laws which permitted modern reproductive processes to make new use of works without compensation. He had been a writing man himself; his attention had been called to this infamy, to this iniquity, to the fact that manufacturers were building up a tremendous industry by reaching out and taking away the fruits of American writers and composers who had made great contributions in the field of American music. It must have impressed him that it was not an honest nor a fair thing, and, above all, not in accord with American principles of square dealing. That message was the impetus to the bill that culminated in the act of 1909. In the first bill Congress gave us exclusive rights; but this vicious compulsory license clause finally crept in, as I told you before, without our having an opportunity to say one word upon it. And this is the only exception in our whole

body of laws where the right to bargain, the right to freedom of contract, the right to fix the price to be paid for the products of creative genius, has been denied.

Well, the act of 1909 has been put to the test for 21 years. How has it worked out? We found that fly-by-nights, disreputable, dishonest promoters, stock jobbers, and others who operated these record companies, deliberately took our works, reproduced them, and never paid a penny of royalty. In many instances false accounts, false statements, or no statements or accounts at all, were furnished to us. The legitimate companies insisted upon a 10 per cent discount on account of breakage; required us to pay for advertising material to advertise the manufactured article, refused to pay royalties on records sold in foreign countries, but manufactured from master records made here. Favoritism and the boycott were practiced. The companies favored as well as punished publishers.

I do not want to rehash this old matter. It is covered very fully in the testimony that has been taken very exhaustively previously, and there is no use in repeating it. You will find it, and it will be very interesting reading. You will find it in the hearings before this committee on House of Representatives bill 11258, in part 2, February 3, 1925, starting on page 147.

I say to you that the means by which Electrical Research Products (Inc.) secured accessibility to America's music only demonstrates the correctness of my claim that by restoring to the composers what they are entitled to have, namely, the exclusive right to deal with their own works, round table discussions will result. Everybody else dependent upon copyrighted works for publication, presentation, reproduction, and exhibition seems to get along without compulsory price fixing. You were warned by the radio broadcasters that unless you extended the compulsory license law to broadcasting you would put these broadcasters out of business. Do you know of a single broadcaster that has gone out of business because the composer absolutely controls the broadcasting rights in his songs? Then the sound picture came along. The industry has not been throttled; it is growing by leaps and bounds. Each producer has his own license, and each producer pays his royalty. Each broadcaster holds a license, and this rule applies to every user of music except the Nation's favorites-the phonograph record and music-roll manufacturers. They seem to be the wards of the Nation; a chosen people. You are going to have another suggestion here, to the effect that we ought to compromise and get together. We did offer to compromise. We did get together. We did prepare a bill assuring accessibility to them. And while we acted in good faith with you, and were prepared to stand by that bill, the manufacturers instigated opposition to the bill. They hinted monopoly, the destruction of their business; launched whispering campaigns to prevent the bill from being even discussed in the House.

We can not compromise with adversaries that do not play fairly. We have been here on this particular bill since 1924. Nearly six years have passed. By inaction and preventing action our adversaries have gained. Now there is a suggestion made to await the general revision of the copyright act. When that comes up you are going to have the same story rehashed. There will be no revision. For 21 years the compulsory license law has been tried out. The manu

facturers have had 21 years time to offer some suggestion to remedy the iniquities of the present law. Those that I have pointed out are not denied. It is not denied that fly-by-nights have been selling our works in roll and record form, and have not paid us our royalties. That false statements and no statements have been rendered is not denied. That judgments have been secured that are not collectible; that under corporate form many swindles were perpetrated is not denied. Is not this alone enough to entitle us to an amendment of the law?

Our opponents should have come up with a bill long before this, and said: "Gentlemen of the committee, we realize this bill of 1909 works a great deal of injustice and iniquity; experience has proven some glaring defects; we think these composers ought to be protected; you gave them 2 cents; we suggest as a remedy against the mischief of existing law, thus and so." As recipients of the extraordinary bounty of Congress it was their sacred obligation to see to it that the composer was not victimized and exploited. But they have not done that; we are not even getting the 2 cents called for by the law. There is no punishment provided for failure to comply with the terms of the law. There is no way of getting an honest accounting. There is no way of enforcing an honest accounting. In a good many cases you get no accounting at all.

The CHAIRMAN. In answer to the proposition that you wait for a general revision of the copyright law, it should be said that the passage of this act will in no way prevent a general revision of the copyright law. It will not affect it at all, will it?

Mr. BURKAN. Not in the slightest, Mr. Chairman.

Mr. PERKINS. In view of the tremendous forward steps in mechanical reproduction of music and everything else, does the subject matter of this bill have relatively the same importance that it did two, three, or four year ago?

Mr. BURKAN. To be very frank with the committee, I think that so far as the music roll and the record business is concerned, it has suffered very considerably, very materially, in recent years from the competition by radio broadcasting and talking pictures. It places us at a point of disadvantage, perhaps. Originally the position taken by the motion picture manufacturers in respect of the reproduction of musical works for sound pictures was that under the compulsory license law they had the right to take the work of any composer and make a record of it in the form of disc or photograph sound on film for the purpose of synchronizing their talking pictures, under section 1, subdivision E.

They contended that film upon which was photographed the sound of a song or the disk or phonograph record made in synchronization with a motion picture, was simply a part of a mechanical instrument within the meaning of that provision, and, therefore, they had the right to do that upon the payment of the 2-cent royalty.

Of course, that argument is baseless, because during all the discussions held before this committee between 1904 and 1909 it was obvious that the only thing that Congress had in mind was the ordinary commercial sound record and perforated roll for home use. The compulsory license law had no other application. Modern sound-reproducing devices as aids or instrumentalities for the public performance or exhibition for profit of musical works did not exist and were not known.

Mr. Perkins, they could not even have been conceived until after 1909.

Mr. BURKAN. But they did make that contention and even threatened to test out their right so to do in the courts. The matter was argued back and forth, and finally it was worked out satisfactorily by the agreement that I have discussed.

I leave this bill in full confidence that this committee will do the fair and the right thing. As I said before, the composer must sell the rights in his music; he must live and provide for his family; and the only way that I know of whereby he can do that is not by keeping his compositions to himself, but by selling them, and disposing of them. He needs the purchaser to the same extent that the purchaser needs him. The compositions must be sold. That was realized at the round table discussions that led to the agreement with the Electrical Research Products (Inc.).

Now, Mr. Vestal, I desire to make an amendment to the bill as it is presented, because through inadvertence.

The CHAIRMAN. I was going to call your attention to it.

Mr. BURKAN. Through inadvertence we worded it to apply from 1909.

Mr. LANHAM. You now want to take care of any interference with vested rights?

Mr. BURKAN. Yes; any vested rights that exist under the provisions of the act of 1909. The amendment I wish to ask is as follows:

SEC. 2. The first paragraph of subsection (e) of section 25 of such act of March 4, 1909, as amended (United States Code, title 17, section 25 (e)), and any other provision of such act of March 4, 1909, as amended, in respect of the right of any person to manufacture parts of instruments serving to reproduce mechanically a copyrighted composition, and the payment of the royalty of 2 cents on each such part manufactured are hereby repealed in respect of works copyrighted after this act shall take effect, but all such provisions shall continue in full force and effect in respect of parts of instruments serving to reproduce mechanically musical works copyrighted subsequent to July 1, 1909, and before this act goes into effect.

Mr. BURKAN. I wish to thank the committee for its consideration. Mr. BUCK. Mr. Chairman and gentlemen, I would like to present a distinguished author and an attorney. We have some attorneys, like Arthur Train, who have great facility at writing.

I would like to present William Hamilton Osborne, a member of the council of the Authors' League, and the chairman of their copyright committee. William Hamilton Osborne.

STATEMENT OE WILLIAM HAMILTON OSBORNE

Mr. OSBORNE. Mr. Chairman and gentlemen, I shall be very brief. I am the general counsel for the Authors' League of America of America and vice chairman of the copyright committee, the chairman of the copyright committee being Will Irwin; the president of the Authors' League of America being Arthur Richman.

The Authors' League of America, as you already know, Mr. Chairman and gentlemen, is the national organization of authors, playwrights, artists, and screen writers in America. It is composed of about 2,500 producers of literary, dramatic, and artistic workers. It places itself on record in favor of this bill that is now before this committee.