STATEMENT OF J. C. ROSENTHAL, AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS

Mr. ROSENTHAL. The accessibility which we offer to the manufacturer does not include the right to or license to use the work if he, the composer, is the copyright owner and makes his own record of it. That is not full accessibility, and the reason for it is this, Congressman: Assuming that this law passes with accessibility to manufacture, and that these manufacturers get together and say: "We won't give over 2 cents," and they are getting together here to-day because they are represented by counsel we want to put the composer in a position where he can make his own records and market his own records and shall not be accessible to the manufacturers who get together and say: "We won't give over 2 cents."

Mr. SIROVICH. That is very fine. Now I want to ask you a question. Suppose this law is written, with the object that you have in view, to have full accessibility; where are you, the author and the mechanical producer at the same time, if we grant you that law of copyright which gives you that protection? You have a right to sublet, so to speak, to other independent mechanical producers that privilege of full accessibility, and if they can not agree on the terms the law provides-and I think it should provide a definite sum that should be given to you, let us say 2 cents

Mr. ROSENTHAL (interposing). We object to the law providing any fixed amount.

Mr. SIROVICH. They do it in Europe, do they not? Do the European governments give exactly what we are doing to-day? Mr. ROSENTHAL. The European governments give a percentage. Mr. SIROVICH. Is not the percentage less than what you are getting to-day?

Mr. ROSENTHAL. The percentage is more than we are getting to-day. But let me explain

Mr. SIROVICH (interposing). The percentage is less than you are getting to-day, from what I understand.

Mr. ROSENTHAL. I am telling you the percentage is more than we get in America. Now, the reason European governments put that in, they followed the American law. We were the first country to enact the compulsory licensing feature, and then the other countries of Europe followed us. Now, in England they recently raised the price. The board of trade in England controls that in England. Mr. SIROVICH. What did they raise it to?

Mr. ROSENTHAL. From 5 to 6% per cent. The percentage of the retail selling price of the record.

Mr. SIROVICH. Is it not a matter of fact that with all the percentages that you get in England, which is giving you the most, that when you take your 2 cents on the basis of the price that you are selling on the two sides of the record, you are getting practically 10 per cent here?

Mr. ROSENTHAL. It is not a fact.

Mr. SIROVICH. How much difference does it make?

Mr. ROSENTHAL. They get more in England than we do here to-day.

Mr. SIROVICH. Will you give us a brief on that?

Mr. ROSENTHAL. Yes; if you wish it.

Mr. SIROVICH. I would like to have it.

Mr. ROSENTHAL. In making this confession, gentlemen, in making available to the manufacturers the right to use the works of all American composers and authors, we think that we are yielding a privilege. We came here with a bill in which we asked the exclusive right to say what shall and what shall not be done with our property, just as any other owner of a property right has; but recognizing the objection that was made, we have agreed to give full accessibility where the copyright owner grants a license to any manufacturer. Now, bear in mind, Congressman Sirovich, this does not mean that the composer can go into the manufacturing business and manufacture records of songs other than his own. He would then be a manufacturer. But we take the position that he ought to have the right to make his own records, in defense of his own property, if these companies agree that they won't pay more than 2 cents, and obviously they are liable to make such an agreement. That is our position. I think that answers your question as to full accessibility. It is not full and complete accessibility.

Mr. SIROVICH. That is just my point. That is not full accessibility.

Mr. Buck. So far as the right of the composer to make his own records is concerned, and why under heaven should he not have that right? It is his property. He has created it. These people made no contribution to it. They take it after he has created it. They take it after he has popularized it. They do not take them all. They take only the hits. And how many songs do you think they take in a year? Very few, so far as percentage of the number that are written and copyrighted is concerned. This is a property right. Why should not these men who create these things have a right to go into the market and bargain for it and get as much as they can, if they find themselves against a combination that will not give it to them? Why should they not make their own records and market them?

Mr. SIROVICH. But the principle that you were contending for, and the bone of contention, was the principle of full accessibility.

Mr. ROSENTHAL. We yield to that, Congressman. We felt, and we still feel, that we should have the exclusive right to our property; that if we create a song we should have the right to do with it as we please, to give it to one or give it to two, or give it to three or give it to none. But we are willing to yield that, as we have said here now, and to agree to an amendment of the bill that will give accessibility. Where we license any manufacturer, all can take it. Now, what cause have they to complain? If none of the manufacturers can get it, how is their business injured?

Mr. SIROVICH. Yes; but with the modern trend of merger, what would prevent a composer going in with a large organization and giving the benefit of his work just to one individual, to the exclusion of everybody else? That would not be full accessibility.

Mr. ROSENTHAL. There the manufacturer would be the copyright

owner.

Mr. SIROVICH. Exactly.

Mr. ROSENTHAL. He is a manufacturer. He is not a composer. This is only where the composer makes his own records.

Mr. SIROVICH. But what would prevent the composers from leasing a part of their work just to manufacturers, just the same as the composers may write a play and lease a theater from some manager and produce his own play?

Mr. ROSENTHAL. That would be a license. If the composer did that, that would be a license, and then any other manufacturer could take it.

Mr. SIROVICH. Now, if any other manufacturer could take it, what would be the price at which he could take it?

Mr. ROSENTHAL. At whatever the first price is fixed.

Mr. SIROVICH. In other words, you would want to remove the 2 cents out of that?

Mr. ROSENTHAL. With that we stand by absolutely. We want elimination from price fixing, Congressman. It has been iniquitous, it has been unfair; you will find it nowhere else in the law governing private property. Why should it be here?

Mr. PATTERSON. What effect would this have on the price of records to the public?

Mr. ROSENTHAL. It would have no effect at all but if you gentlemen want a report of the Victor Talking Machine Co. since its inception, I will show you that after 1909, when they first paid 2 cents a record, their profits increased to such an extent that in one year they gave a stock dividend of 416% per cent, notwithstanding that the law in 1909 for the first time placed an allowance of 2 cents per record on the Victor Talking Machine. I will file here the statistics of the Victor Talking Machine Co. since its inception, showing its profits, its earnings.

Mr. SIROVICH. Is it not a matter of fact that the last few years have shown 70 per cent decline in the manufacture of records by all record producing companies because of the radio influence?

Mr. ROSENTHAL. I do not know.

Mr. SIROVICH. Well, I know these are the records.

Mr. ROSENTHAL. I know that in 1927 or 1926 they made net $8,000,000, and they advanced over the years before.

Mr. SIROVICH. How could they do that with a limitation of almost 70 per cent in the manufacture of their records?

Mr. ROSENTHAL. They came out of it with the orthophonic machine, which produced great revenues for them.

Mr. SIROVICH. Therefore, it was not the records, because every member of this committee will concede that they used to, as I did, buy all kinds of classical records that I would love to hear on the phonograph, but since the radio has come in I listen to the radio. I do not buy any records. I have not bought a record in three years. Mr. ROSENTHAL. And you do not buy any sheet music, do you? Mr. SIROVICH. No.

Mr. ROSENTHAL. Nobody else does. How are we going to live? Mr. SIROVICH. You are making a fortune now through the Vitaphone. I know members of your organization who have made millions where they never had any money before. I know one of them that I at one time loaned money to, and I just heard to-day that he has recently made a million.

Mr. ROSENTHAL. I am glad to hear it, but I do not know of any such cases.

Mr. SIROVICH. I do. I do not care to mention the name for the record, but I know it is so.

Mr. Buck. I will put it in the record. I think Mr. Sirovich has given expression to one of the most successful American composers we have, and a personal friend-Mr. Sigmund Romberg-who has been a very successful composer in this country for some 15 years. Before radio was ever dreamed of Sigmund Romberg wrote beautiful melodies.

Mr. SIROVICH. That is right.

Mr. Buck. Is it possible that because a man who has been eminently famous, and when the talking picture came along they wanted pay this man an enormous fee, that Congress is going to sit here and indulge in price fixing to stop a creator of material from getting a price that through the years he has earned?

to

Mr. SIROVICH. Does anybody try to fix it? fix Mr. Romberg's price.

Nobody is trying to

Mr. Buck. But you cited a man who through the years has spent his life as an accomplished musician, who has been successful and has written some thirty-odd musical comedies such as "The Desert Song," and numerous other hits in this country. You are citing an exceptional case.

Mr. SIROVICH. I am trying to show one thing, Mr. Buck, that you have not brought out. This is the point that I want to bring out, which I discussed with you this morning. We agreed that this is a period of transition. Is that right?

Mr. Buck. That is right.

Mr. SIROVICH. In which anything is likely to happen, where we can not prognosticate and foretell things in the future.

Mr. SIROVICH. And we contend that in this period of transition certain things are taking place in the phonographic-motion-picturetheatrical game which we can not immediately foretell. On that basis I contend, just as you were showing me where every invention or mechanical device brings out some bad for some, it brings out some good for another. So that in the mechanical reproducing end I understand the figures show that only from 30 to 40 per cent is being produced of what was formerly produced. Upon that basis I contend that there is a diminution in the income of that line. Do you wish to controvert that argument?

Mr. Buck. I wish to controvert that argument, that you and I in our discussion of to-day did not discuss what is before this committee now, that is, the free right of the creator of material, of music, who is restricted by law, the free right to bargain with it. If it is not in the field of copyright we did not discuss it.

Mr. SIROVICH. Right.

Mr. BUCK. But what we are here discussing is to give to the author and the composer through that peculiar contract, a vote in the scheme of things, in legislation on copyright matters, because he carries the burden as there has been class legislation laid against him that has not been laid against the playwright, the dramatist, the newspaper writer or any of the other creative people. If Will Rogers gets out a story he goes to Mr. Ochs, of the New York Times, and sells it to

him every day of the year, and Mr. Ochs would give him the right price but Mr. Ochs has the reproducer's right to and he can send that to every newspaper in America. Mr. Nat Goodwin can write an act and go to the producer and have the play produced and no one else can produce that play without his permission.

Now, the composer and author can not do that, and that is what brings us here at this moment because he never has had that right. Mr. SIROVICH. Will you yield on one question?

Mr. BUCK. Yes.

Mr. SIROVICH. I was not in Congress in 1909 when this bill was originally written. I do not know how many members of our committee were. Were you here in 1909?

Mr. BUCK. I was not.

Mr. SIROVICH. Will you give me and the committee the reason why that was done in 1909? Why was this industry, your particular industry, your authors and composers, selected to have this condition imposed? It seems to me that is elementary here. I do not know and I want to know why.

Mr. Buck. It is a most misleading record. The record is loaded with that. I wish to answer the point made by Mr. Rosenthal. Since 1905, when Mr. Roosevelt was President of the United States, they felt the necessity of revising the copyright act, and it was advocated by the President, Mr. Roosevelt. Rosenthal just spoke here, and he was here before. Nathan Burkan was here also and has been here every time, not to-day because he has a trial where he is charging a jury in New York to-day or he would be here. That same gentleman has been through every hearing pertaining to this particular subject in copyright. That same gentleman went into a room with these gentlemen, with Mr. Donovan who was brought into the thing through Mr. Webster when we gathered here some months ago, and they said "Colonel Bill Donovan would like to file a brief: we do not know anything about it." This committee was most gracious and most wonderful to the extent of extending this special privilege after years and months and weeks of hearings, and it was said, "Let us give them 30 more days and have some new people to come along and learn the manuscript of a play or how they should hold a Bible." What happened? Those people were to meet with Donovan, and Mr. Burkan, who knows as much about copyright as any living person, sat down and said, "This is how far we will go. We will put a bill in there to give us the free right to bargain like everyone else has." You gentlemen want accessibility. There is accessibility.

I want to hear one of these gentlemen who will come out openly and say that. Have you heard anyone come out here, anyone of these witnesses, and say "Give them the free right to bargain?" No, they are going to hold that back. You have not heard one of these gentlemen say that it was the practice here to-day, when the chairman said, "Does anyone agree to accessibility?"

These gentlemen are like David Harum swapping horses. We will give accessbility with the restrictions that Mr. Rosenthal spoke of, or Mr. Burkan, as our attorney, who has been all through the courts with these cases to protect our interests to that extent.

Mr. SIROVICH. You have not answered my question. I want to know why the 1909 act?