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TO PROVIDE FOR RECORDINGS IN COIN-OPERATED

MACHINES AT A FIXED ROYALTY RATE

THURSDAY, OCTOBER 25, 1951

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HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY,

Washington, D.C. The subcommittee met at 10:15 a. m., pursuant to notice, in the main hearing room of the Committee on the Judiciary, Old House Office Building, Hon. Joseph Bryson (chairman of the subcommittee) presiding.

Mr. BRYSON. The subcommittee will come to order.

We have before us for consideration this morning H. R. 5473, a copy of which I place in the record at this point.

(H. R. 5473 is as follows:)

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(H. R. 5473, 82d Cong., 1st sess.]

A BILL To amend section 1 of title 17 of the United States Code to make the public repro

duction or rendition of a musical composition by or upon a coin-operated machine a public performance for profit when a fee is not charged for admission to the place where such reproduction or rendition occurs, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1 of title 17 of the United States Code is amended by striking out the last paragraph of subsection (e) of such section, and by adding at the end of such section a new subsection as follows:

“(f) The public reproduction or rendition of a musical composition by or upon a coin-operated machine shall be deemed a public performance for profit by the owner or operator thereof whether or not a fee is charged for admission to the place where such reproduction or rendition occurs. Whenever a disk or other device for mechanical reproduction of a copyrighted musical composition, the playing time of which is four minutes or less, has been lawfully manufactured in accordance with the provisions of subsection (e), any person may perform, reproduce, or render such musical composition by use of such disk or device in, by, or upon, a coin-operated machine at a place to which no admission fee is charged, upon payment by the owner or operator of such coinoperated machine to the proprietor of the copyrighted composition, of a royalty computed as follows: For each such copyrighted composition on a disk or device the sum of one cent for each week (or fraction thereof) of consecutive time during which such disk or device shall remain in the machine. An owner or operator shall be entitled to the benefits of this subsection by furnishing, on or before the last day of each month, a report to the proprietor of the copyrighted composition, stating the amount of royalties due during the previous month, and by paying the royalties so due on or before the last day of the next succeeding month.

"The obligation to pay royalties under this subsection as to reproductions or renditions specified in this subsection shall be limited to the owner, operator, and/or distributor of two or more such coin-operated machines and/or other person having an interest in or relationship to such machine designed to control or obtain, directly or indirectly, participation in the receipts of the machine, except that this limitation shall not apply to any owner, operator, and/or dis

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tributor if a fee is charged for admission to the place where such reproduction or rendition occurs. The proprietor of a copyrighted composition may not collect royalties from more than one owner, operator, and/or distributor of any such coin-operated machine for said composition on a disk or device in said machine during any particular period of time."

SEC. 2. This Act shall take effect as of July 1, 1952.

Mr. Bryson. I believe it would be of value to all of us if we might have read, first, a filed statement by our former colleague on this committee, Senator Estes Kefauver, from Tennessee.

It will be remembered that Senator Kefauver is sponsoring a similar bill to this in the Senate.

Mr. Harris is counsel for this subcommittee and I will ask him to read the Senator's statement at this time.

Incidentally, the Senator's statement is available here, and so are a number of other statements that are filed for the record.

Those of you who have prepared statements and who propose to testify will please make them available to the committee at this time.

Mr. HARRIS. The statement submitted by Senator Kefauver reads as follows: Hon. JOSEPH BRYSON, Chairman, House Judiciary Patents and Copyright Subcommittee,

Old House Office Building, Washington, D. C. DEAR MR. BRYSON: I regret that an out-of-town engagement prevents my personal appearance before your committee in support of H. R. 5473.

As a former member of the House Judiciary Committee and as a member of the Senate Judiciary Committee, I am pleased to be joined with you in sponsorship of this legislation.

When my attention was called to the fact that all commercial users of musicexcept jukeboxes—pay for the performance of music for profit, it seemed to me that the present exemption of coin-operated machines from payment of royalties is an anachronism that can no longer be justified in equity or in current commercial practice. Whatever justification there may have been for this exemption when the present Copyright Act was passed, it is inconceivable that Congress intended to free from payment of royalties the jukebox industry which has grown so great and prosperous in the past few decades. Congress could not, of course, have had in mind in 1909 the amazing technical progress that has taken place since then in the transmission of music, and in the development of vast new audiences able to hear music played by means of phonograph, radio, and television. However, as each of these new devices came into public use, the act of 1909 was applied-successively to motion pictures, later to radio, and more recently to television.

We thus have a situation today where radio and television, cabarets, restaurants, dance halls, hotels, and every public place of entertainment which plays music for profit is obligated to pay royalties to the copyright owners for the use of their music. But not the jukebox industry. In fairness to all, jukeboxes should be placed on the same level with others who publicly use music for profit.

It seems to me that the payment of royalties would be in the long-range interest of the jukebox industry itself. Without music, there would be no jukeboxes and the urge to create music which could be played in coin-operated machines is one that the jukebox industry itself ought to nourish.

In proposing the elimination of this exemption from the present Coypright Act, I was keenly conscious of the need to protect the small tavern owners for whom payment of royalties might be burdensome.

Accordingly, the proposed amendment would entirely exempt from payment the proprietor of a small business with only one coin-operated machine in his establishment. The burden instead would be borne by the distributors, owners, operators of such machines, who place and service such machines in various establishments. also felt that the exemption should not be removed without some restriction on the amounts of royalties that can be collected. Accordingly, the proposed amendment limits the royalty to 1 cent for each copyrighted composition per week. It makes no difference how many nickels or dimes are put

into a box a week; all that can be collected is 1 cent per composition for each week that the record remains in the machine.

I think this country needs music and that composers should have the incentive to create. I think we have advanced enough materially so that we can provide the economic incentive to those whom God has given the spark to write our songs and create the music that is an important part of our American heritage. Sincerely yours,

Estes KEFAUVER. Mr. BRYSON. That statement will be admitted for the record.

According to this agenda, the first witness will be Mr. Fred E. Ahlert.

Will you identify yourself to the stenographer and tell him in what capacity you now speak?

STATEMENT OF FRED E. AHLERT, NEW YORK CITY, N. Y., CHAIR

MAN OF THE SPECIAL LEGISLATIVE COMMITTEE, AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS

Mr. AHLERT. Mr. Chairman and gentlemen of the committee, my name is Fred E. Ahlert. I live in New York City, N. Y.

Mr. Bryson. In what capacity do you now appear?

Mr. AHLERT. I have a little statement here in which I state this information.

Mr. Bryson. Do you have copies of your statement ?
Mr. AHLERT. Yes. I will submit it to you, sir.

I am a writer of songs and also motion picture scores. Possibly you may have heard of such songs as I'll Get By, Where the Blue of the Night Meets the Gold of the Day-Bing Crosby's theme songI'm Gonna Sit Right Down and Write Myself a Letter, and I Don't Know Why, I Just Do.

Mr. Bryson. I imagine we have tried to sing those songs and hum them.

Mr. AHLERT. I hope so.
Mr. Brysox. Of course, we are not going to do that here today.

Mr. AHLERT. However, I appear here as chairman of the special legislative committee of the American Society of Composers, Authors, and Publishers.

On behalf of the society and of composers and authors generally, I want to express my deep appreciation to the committee for holding these hearings after congressional adjournment. We regret the inconvenience that this entails, but will always be grateful for your thoughtful consideration.

As past president of the society from 1948 to 1950, as a director of ASCAP since 1933, and as one who has been continuously active in its various committees, I have an extensive familiarity with the problems of composers and authors in the protection of their creative works.

I will not adress myself to the merits of the bill, since subsequent witnesses will discuss all phases. Nevertheless, before introducing these witnesses, I want to emphasize my belief that the clarification of the Copyright Act to remove the exemption for coin-operated machines is long overdue.

The act has primarily been responsible for stimulating this country's great musical talent and encouraging the creation of a rich cultural heritage. Since the last revision in 1909 there have been revolutionary developments in the entire field of mass communication which have earned for American musical compositions vast new audiences.

The Nation's authors and composers believe that Congress should now eliminate the juke box exemption in the light of the enormous technological developments which have occurred since 1909.

Our first witness in support of this bill will be Mr. Otto A. Harbach, president of the American Society of Composers, Authors, and Publishers.

Mr. Harbach is a charter member of the society; has served as director since 1920; as vice president since 1936, and as president since 1950.

During his career he has written the librettos of more than 30 musical plays, and the lyrics of over 1,000 songs. Among his collaborators have been composers such as Rudolf Friml, Karl Hoschna, Jerome Kern, Sigmund Romberg, and Vincent Youmans, and authors such as the currently great Oscar Hammerstein II.

I ask your indulgence to state a fact that this young man of 78 years is too modest to admit-he is the dean of American song writers and the grand old man of the American musical theater.

I now present Mr. Otto A. Harbach.
Mr. Bryson. We are glad to have you with us today, Mr. Harbach.

STATEMENT OF OTTO A. HARBACH, PRESIDENT, AMERICAN

SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS, NEW YORK, N. Y.

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Mr. HARBACH. Thank you very much, Mr. Chairman, and thank you very much, Mr. Ahlert.

I liked it all except that phrase "grand old man."
Mr. Bryson. I noticed that he stressed that “old” pretty much.
Mr. HARBACH. I did not like his underlining "old.
Mr. AHLERT. I said "young man of 78 years.

Mr. HARBACHI. Gentlemen, I appreciate very deeply the opportunity to appear before this distinguished committee in support of H. R. 5473.

As you know, this bill proposes a change in our copyright law. The copyright law requires all commercial users with one exception to pay copyright owners for the right to perform their music. This exception is the vast jukebox industry which takes advantage of a loophole for coin-operated machines in the Copyright Act of 1909.

My span as a librettist and song writer goes back a half-century. During this period this country has witnessed a great mechanization in the transmission of music paralleling the superb technical advances in industry.

When at the turn of the century I went into a penny arcade and listened to a piece of music through earphones, no one else could hear what I heard. It was for that reason, I suppose, that this kind of performance was not considered a public performance, and, therefore, was exempted by the law.

Mr.. Bryson. You paid a fee to hear that individually? You put a coin in the slot to hear that music?

Mr. HARBACH. Yes, that is right.

How different is a coin-operated machine of today. It takes more than a penny to set it going. It takes a nickel, sometimes a dime,

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sometimes a quarter. You do not need earphones. Music performed on jukeboxes can be heard by audiences filling large halls and even gives passersby on the sidewalk a share of interest.

Congress in 1909 could never have had in mind the jukebox when they exempted the coin-operated machines. The jukebox of today is an entirely different proposition from the coin-operated machines of four decades ago.

Now, in the meantime, from an amusement novelty there has emerged a vast industry. It is estimated that there are approximately 500,000 jukeboxes operating throughout the country with annual gross receipts in excess of $500 million, with tremendous annual profits, made from the use of property which we have created.

We American authors and composers in all justice deserve a small share in the income from this fabulous industry founded upon our years of creative endeavor.

Gentlemen, there would be no jukeboxes without the creative talents and genius of the composers and lyric writers. Nobody contributes anything to the pleasure that comes out of a wooden box except the man who creates the music. It is not the people who build the 6-foot boxes with decorative schemes of red and green lights, but the man who wrote the music that inspires you to listen to it with joy in your heart.

I was a young and struggling librettist when the 1909 act was passed. That act was intended to carry out a fundamental principle of the Constitution to promote the progress of science and useful arts by securing for a limited time to authors and inventors the exclusive rights to their works.

As you gentlemen know, it was this act that established the exclusive right of public performance for profit.

I will not discuss the history of copyrights. This will be done by our counsel, Mr. Finkelstein.

Now, this performance right has become the most valuable right to the musical creator. The reproduction and transmission of music has been highly mechanized. Today's mass enjoyment of music is made possible by radio, television, phonograph, jukeboxes, piped-in music, and so forth.

The last few decades have witnessed the growth of vast new audiences who enjoy the musical works by means of these devices. At first the rapid growth of new means of mass communication resulted in substantial loss of income for American composers and authors.

Sales of sheet music, the major source of income at that time, declined rapidly as radio broadcasts mounted in popularity. Composers and authors were faced with the prospect of using most of their income and their incentive to add new works to the repertory of musical Americana.

Gentlemen, the enactment of the 1909 copyright law was a wise piece of legislation. If not for the right of public performance, I venture to say you would not have music in this Nation. We need music. It is a great solace to our people, and we want to encourage its creation and enjoyment. This has been public policy for years.

Contrary to popular belief, the returns to creators of musical works for their commercial use is very modest. Despite the public performance in radio, cabarets, and public places of entertainment, the annual income for the majority of composers I know anything about averages

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