REPEAL OF PRICE-FIXING CLAUSE IN COPYRIGHT ACT FOR MECHANICAL REPRODUCTION WEDNESDAY, MARCH 5, 1930 UNITED STATES HOUSE OF REPRESENTATIVES, COMMITTEE ON PATENTS, The committee was called to order at 10.25 o'clock, a. m., Hon. Albert H. Vestal (chairman) presiding. The CHAIRMAN. Mr. Meixell, will you proceed? Mr. MEIXELL. Mr. Chairman, in view of the fact that we can not have the postponement desired but that you very kindly consented that the mechanical producers could file a brief, we have decided that we will put on no more oral testimony but that we will simply hold to the matter of the filing of the brief in which some new elements and some new facts can be set forth. In this connection I would like you to listen to Mr. Webster, who will set forth the facts. STATEMENT OF B. M. WEBSTER, JR. Mr. WEBSTER. Mr. Chairman and gentlemen of the committee, I am speaking for Col. William J. Donovan, my senior partner, who was retained less than a week ago to prepare an argument in opposition to the bill which this distinguished committee is considering. Prior to a week ago Colonel Donovan, as you may know, was very actively engaged in an investigation of the public utilities situation in New York State as counsel for the committee of the legislature before whom that matter was pending. It was impossible for our present clients to see him or talk to him; and it was not until, as I say, less than a week ago that they had an opportunity for a conference. Since that date we have obtained the entire record of these proceedings not only to this bill, but to prior bills of the same, or related nature. We have undertaken to prepare a respectable written and oral argument on this subject. We think that our point of view is entitled to a fair, and a well-considered, and a well-prepared statement, but we learned only yesterday afternoon that the committee had decided, in its discretion, to close these hearings as soon as possible and foreclose the opportunity for delivery of the argument which we were preparing. We would like to go forward with the preparation and filing of our brief, and we want to do it at the earliest possible date. We do not want to delay the committee; we do not want to delay the reporting of this bill if such a bill is going to be reported; but we do feel that the case warrants careful consideration, and that we should 57 be given an opportunity to file and submit a brief to this committee which is worthy of consideration by it. Mr. LANHAM. What is your estimate of the length of time you would require? Mr. WEBSTER. I think if we could have 30 days from to-day in which to prepare the brief that that would be ample; and we would guarantee to file our brief on or before that date. Mr. SIROVICH. Whom do you represent? Mr. WEBSTER. Colonel Donovan represents the mechanical reproduction industry. Mr. SIROVICH. The whole industry? Mr. WEBSTER. The whole industry. Not only does he represent the industry, but as a necessary incident to that he represents the public, which is vitally interested in opposing a favorable report from this committee of the bill now before it. Mr. SIROVICH. In what way does he represent the public? Mr. WEBSTER. We have not had any opportunity to study the entire record; and while my statement is based to some extent on the advice I received and from my general knowledge of this. subject, I am familiar with the Society of Authors, Composers, and Publishers; and I think that it is perfectly manifest that if this bill goes through it will benefit that particular group to the exclusion of the public; and that is the design and intent of the bill; that they will be in a position to charge royalties and to deal in such a way that the public will be definitely prejudiced by such legislation; and we think that we should have at least 30 days, Mr. Congressman, in which to prepare our argument. We should like to have an opportunity for oral argument, but that seems to be impossible at this time. Mr. SIROVICH. Have you any facts showing that the composers,. publishers, and authors have been doing what you allege; or do you purpose to set forth facts sustaining that statement in your brief? Mr. WEBSTER. We hope to develop this whole case if we are given an opportunity to file such a brief. The CHAIRMAN. Of course, Mr. Webster the committee is going to give you an opportunity to file a brief. I do not know how the other members of this committee especially the older members, feel about it, but I do not know what new thing can be said by either side in presenting the matter. We have gone over this situation for five years. Mr. WEBSTER. I understand that. The CHAIRMAN. And it is a rehash of the same arguments that were presented on both sides on other occasions. Of course, some of the new members of the committee have not heard testimony or the arguments. The committee wants to be, and will be, absolutely fair with all parties concerned, but I can hardly see why it should take 30 days for you to prepare a brief on this case. Mr. WEBSTER. Mr. Chairman, may I say something about that? The CHAIRMAN. Yes. Mr. WEBSTER. We realize fully that this is old ground; that this committee and these gentlemen here have been over it time and time again; and we ask for 30 days simply to enable our firm to present a respectable, and a well-considered argument. We realize that this committee is impatient to get at this legislation, or similar legis lation; and we do not want to present a brief that is ill-considered, and half-baked. We want an opportunity to present a complete argument. It is only because of the fact that we have not had an opportunity to read these minutes in full, as the committee not only has, but they have in addition painstakingly listened to the testimony and the arguments-it is only because of our unfamiliarity that we ask for this time. Mr. LANHAM. May I make a suggestion with reference to your brief, Mr. Webster? Mr. WEBSTER. You certainly may, sir. Mr. LANHAM. As stated by the chairman, of course the members of this committee who have served on it so many years are familiar with the hearings and the arguments; any any brief which is submitted should be succinct, because we do not care, and have not the time, to wade through a voluminous brief of words that merely rehash the testimony that has been adduced at these hearings. Mr. WEBSTER. I think that is an extremely valuable suggestion. However, you will understand, Mr. Congressman, that it takes more skill and more time to write a brief succinctly stating the facts than it does to write a long one. Mr. LANHAM. I agree with you on that. Mr. SIROVICH. It is your contention that new phases have entered into the argument within the last year, and changes and readjustments have come about which bring in new factors which could not have been considered during the last four years. Mr. WEBSTER. I think the whole industry has changed and has developed within the last few years. As a matter of fact the industry is changing daily, and has changed greatly within the last six months. I think if we are given an opportunity that our firm with its connections and its experience in this and related fields will be able to present an argument bringing up considerations that have never been fully, or in fact to any extent, presented before; and it is simply because we feel that this subject is so important that we ask for the extension in order to prepare our brief. We also feel, if I may say so, that a vastly more important consideration is the general revision of copyright legislation, in which we should be very glad to cooperate and take a part. We are not taking a position of opposition; we favor general revision. We simply passed to this legislation because it is up for consideration at this particular time. The CHAIRMAN. You say you favor general revision of the copyright laws. I am fairly convinced that the copyright laws ought to be revised; they are out of date; but if the copyright laws were revised and this same provision were put into the revision of the copyright laws, you would be fighting it just the same. Mr. WEBSTER. I think your conclusion is sound, Mr. Chairman. The CHAIRMAN. So that your argument that you are not opposed to the revision of the copyright laws would not in anywise affect your views on this particular legislation. Mr. WEBSTER. Oh, no. We are opposed to this legislation. That is perfectly clear. Mr. SIROVICH. It is your thought we ought to make haste slowly because there is so much money involved. Mr. WEBSTER. A very large amount. Mr. SIROVICH. About how much is involved in the organization you represent? Mr. WEBSTER. Millions of dollars. As a matter of fact I can not state definitely what is represented. While it is a very substantial interest it is only one side of the picture. On the other side is the public who pays for these reproductions eventually. Mr. SIROVICH. Do you think the public is clamoring for this legislation at the present time? Mr. WEBSTER. I see no evidence of it. I have not seen or heard any evidence of sufficient clamor to be conscious of it. Mr. SIROVICH. So that the public certainly would be benefited and your interests would be benefited if the matter were delayed for 30 days; that would help you prepare your case properly. Mr. WEBSTER. Extremely so, Congressman. The CHAIRMAN. Do you not think that haste has been made pretty slowly when these folks who claim to be hurt by this legislation have been trying since 1909 to get a revision of it? Mr. WEBSTER. Mr. Congressman, if I understand these facts correctly, this particular bill was introduced on the 7th of February. The notice was sent to my clients on the 19th of February. During the subsequent four or five days, as I say, my senior partner was very deeply engrossed in public-utility work in New York State. He was not consulted until last Saturday afternoon and he has not had any opportunity to prepare this matter. The CHAIRMAN. Of course, that is not the fault of the committee. Mr. WEBSTER. It is not the fault of the committee; but I do not want you to think that we are making an unreasonable request. We feel that we want to file this brief as soon as possible; and I ask for 30 days, because I do not want to be in the position of breaking my promise. I hope sincerely to file the brief before that time. Mr. LANHAM. May I ask you a question, Mr. Webster? Mr. LANHAM. I wonder why it is that, year, by year as we have this play before us we have a new cast. There are very few of the original "company" that are now appearing before us. The CHAIRMAN. I was wondering myself why it is that they change. Mr. LANHAM. It is the same "play" but an entirely new "cast". The CHAIRMAN. What is the purpose? Is it to delay the matter? What is the purpose of getting new counsel every year to present arguments here? Mr. WEBSTER. Mr. Chairman, of course I do not know what my clients have in mind in that respect. I can tell you perfectly candidly that my firm was not engaged for the purpose of delay and that we are not in the position of accepting such retainers. We are interested in this case because we think there is an opportunity to present a cogent and respectable argument. Mr. LANHAM. My question was not predicated upon anything of that kind, to be sure. Mr. WEBSTER. I understand. Mr. LANHAM. But I was just wondering why so many new counsel have appeared before us representing the same interests. Mr. SIROVICH. Is it not a matter of fact that because there have been so many readjustments in the organizations you represent, with different interests constantly coming in, that changes of attorneys have been necessitated? Mr. WEBSTER. I was just going to say that, Mr. Congressman. One answer to that is that the field is changing with almost volcanic rapidity-the corporate structures, the condition of the art, the relationships between the artists in the art and the industry; and it is, I am sure, a large part of the background of all these changes which you refer to and which Congressman Sirovich refers to. It is not a stable industry, it is volatile, living, dynamic industry; and it is because of that fact that we think this committee ought to be very fully advised, and because we think these people representing the mechanical interests should have a chance to fully present their case at the present time that we ask this delay. Mr. SIROVICH. Is it not also the fact that there has been a change in the opponents of this bill because legislation that might have been shaped last year, or two years ago would now be inadequate because of the constant changes that are taking place in the industry? Mr. WEBSTER. I think that is a very definite incident of this delay. Mr. SIROVICH. So this delay has helped the thing instead of hurt it. Mr. WEBSTER. I think it has. Mr. LANHAM. We realize, of course, that we are dealing with many concerns, but we do not want this thing to be like Tennyson's brook. Mr. WEBSTER. I assure you, Mr. Congressman, we are not in this matter for delay; and I will guarantee that we will present our brief within 30 days. Mr. SIROVICH. Is it your purpose to bring witnesses before the committee? Mr. WEBSTER. We would have liked better to have had a complete adjournment so that we could file not only a brief, but make oral arguments. However, we do not want to trespass too far on the committee's time, and we understand that you are anxious to close these hearings. If you permit us to file a brief we will be satisfied. We do not want to ask for more than we are entitled to. The CHAIRMAN. None of the changes that you mentioned here in these mechanical reproduction concerns could in any wise affect the fundamentals underlying this whole legislation. I do not know how the other members of the committee feel, but in my opinion it is only a question of principle involved here as to whether or not we are going to permit a price-fixing proposition by the Government in one particular field unless we are going into the entire field of price fixing on everything. If this principle be right in this instance, then it is right in other instances; and it is upon that principle that I think this committee is really going to act. Mr. WEBSTER. We recognize that, Mr. Chairman; and it is that principle to which we wish to address our opposition. We think that principle is sufficiently important to warrant very serious consideration. The CHAIRMAN. Mr. Buck, did you want to say something? Mr. BUCK. I do, when Mr. Webster has finished. Mr. Chairman, with due regard and respect for a great man, and a great lawyer, and a great soldier, Col. Bill Donovan, whose name has been injected here with true dramatics-yesterday there was sort of a shadow cast by 106215-30- -5 |