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politics or economics, and they incantate a common language of sound that sweetens the spirit of everyone who hears it.

Thank you, Mr. Chairman and members of the committee, for your kind indulgence.

Mr. BRYSON. Mr. Arthur E. Farmer.

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STATEMENT OF ARTHUR E. FARMER, NEW YORK, N. Y., IN BEHALF

OF AMERICAN BOOK PUBLISHERS COUNCIL, INC. Mr. FARMER. My name is Arthur E. Farmer. I reside at 455 West Thirty-fourth Street, New York City. I appear here in behalf of the American Book Publishers Council, Inc.

The American Book Publishers Council is a membership corporation, and its membership comprises practically all the leading and most of the smaller trade-book publishers in this country.

At the outset, I should like to say that the members of the council and the council itself have no financial interest whatsoever in this legislation. They have an interest, however, as citizens and as people who are interested in copyrights and the copyright law, and they appear here in that public interest.

Now, I have submitted a formal written statement. Mr. Harris has it, and I would like it to be incorporated in the record, as I do not intend to read it to the committee. I know the committee will read and consider it in its good time.

Mr. BRYSON. We will have it included in the record and considered in executive session.

Mr. FARMER. Thank you, sir.
(The statement referred to is as follows:)

STATEMENT SUBMITTED BY ARTHUR E. FARMER IN BEHALF OF AMERICAN BOOK

PUBLISHERS, INC.

This statement is submitted in behalf of the American Book Publishers Council, Inc., a membership corporation which includes practically every important book publisher in the United States and the great majority of the smaller book-publishing firms. The members of the council have no financial interest which might be affected by the passage of H. R. 5473; the council supports this bill solely because it believes that the proposed amendment to section 1 (e) of the copyright law is desirable in the public interest, that it will correct an injustice to composers of musical works, and that it will bring the copyright law of the United States more nearly into line with the greater protection afforded to literary, artistic, and musical works by the laws of other leading cultural nations.

Section 1 of the copyright law (title 17, U. S. Code) enumerates the exclusive rights in literary, artistic, and musical works protected by copyright. Subsection (e) commences with the statement that the copyright owner shall have the following exclusive rights in musical compositions:

“(e) To perform the copyrighted work publicly for profit if it be a musical composition; and for the purpose of public performance for profit, and for the purposes set forth in subsection (a) hereof,' to make any arrangement or setting of it or of the melody of it in any system of notation or any form of record in which the thought of an author may be recorded and from which it may be read or reproduced

Subsection (e) further provides that where the copyright proprietor has licensed the mechanical reproduction of a musical composition any other person may make similar use of the copyrighted work upon payment to the copyright proprietor of a royalty of 2 cents on each part (record side or music roll) manufactured ; and that

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1 Subsection (a) of section 1 provides that the copyright owner shall have the exclusive right “to print, reprint, publish, copy, and vend the copyrighted work."

"The payment of the royalty provided for by this section shall free the articles or devices for which such royalty has been paid from further contribution to the copyright except in case of public performance for profit.[Emphasis supplied.]

The final j aragraph of subsection (e) is the one with which H. R. 5473 is concerned. It provides as follows:

*The reproduction or rendition of a musical composition by or upon coinoperated machines shall not be deemed a public performance for profit unless a fee is charged for admission to the place where reproduction ( r rendition occurs."

The effect of this provision, which first aspeared in the Copyright Act of 1909 and which is familiarly known as the jukebox exemption, is to exempt owners and operators of juke boxes from the payment of any royalty to the copyright proTrietor for the right to perform musical compositions by means of recordings in jukeboxes, unless a fee is charged for admission to the place where the jukebox is located. The rason for the enactment of this provision was to protect proprietors of such small businesses as ice-cream parlors, taverns, restaurants, and the like, who kept a coin-operated player piano or phon graph on the premises as a means of attracting customers and to earn a small additional income, from becoming subject to copyright infringement suits or the payment of royalties to the com; osers of musical conipositions for the privilege of playing copyrighted compositions through these mechanical devices. (It should be noted that the so-called jukebox exemption is not restricted to jukeboxes, but is broad enough to cover any coin-operated machine by means of which a musical composition may re reproduced, incluíling play-back machines for wire and tape recordings.)

While the enactment of the jukebox exemption is re dily understandable from the viewpoint of the owners of the small business affected, it is wholly incomprehensible when considered as an invasion or limitation of the rights of the composer, and entirely inconsistent with the general plan or scope of copyright protection in this country. There appears to be no greater reason, in lg'c and fairness, to permit the “public performance, for profit” of a Hamnierstein melody by means of a jukebox than by means of a "name” band. In each case the composer is deprived of fair compensation for the use of his property.

Bills providing for the outright repeal of the jukebox exemption, introduced in the present and earlier Congresses, have never passed either of the two Houses. Opposition to the bills has b«en based upon the plea that the benefit to composers resultant upon the repeal of the jukebox exemption would be far outweighed by the harm to the thousands of small-business men who rely upon jukeboxes as a means to induce the public to patronize their places of business. While this argu ent seems uncomfortably close to a suggestion that Peter be robbed in order to pay Paul, it has been most effective.

H. R. 5473 is an attempt to met the objections of those who oppose outright repeal of the jukebox exemption; its purpose is to restore the principle that all public performances of musical compositions for profit shall be included within the rights protected by copyright.

It provides, however, that any person may perform a copyrighted musical composition by use of a receril or sirrilar device on a coin-operated machine at a place to which no admission fee is charged, upon payment by the owner or operator of the machine to the copyright proprietor of a royalty of 1 cent for each week during which the record shall remain in the machine. This provision is, in effect, a compulsory license, similar to the compulsory license relating to the manufacture of phonograph records included in preceding paragraphs of subsection (e), described above.

The license is intinded to be applicable only to musical compositions, the playing time of which is four minutes or less, and the obligation to pay royalties does not devolve upon th. owner, operator, or distributor of a single coin-operated machine-e. Si, the proprietor of the corner ice-cream parlor who owns the ucbox in his place of business--but only upon the owner, operator, or distributor of tiro or more such machines. In other words, the man who owns and operates a jukebox as part of his lunchroom may continue to do so unaffected by the terms of H. R. 5173; the bill will only affect companies and individuals who own, lease, operate, or distribute such coin-operated machines as their business. Certainly no valid reason can be advanced why such companies or individuals should not pay to the composers of musical compositions which bring them their revenues the nominal royalty of 1 cent per week for each week during which a phonograph recording of the composition shall remain in the machine.

The importance of this amendment is twofold: First, it will restore to song writ. rs and other composers the rights and royalties of which they are now deprived by reason of the unfair and illogical jukebox exemption, by terminating the unjust enrichment of large-scale licensors and distributors of jukeboxes.. Second, it will eliminate a provision of our copyright law which is wholly inconsistent with the constitutional invitation to the Congress to promote the progressof science and useful arts by securing to the creators of literary, musical, and artistic works the exclusive right to their intellectual products.

While the council unqualifiedly recommends in principle the passage of H. R. 5473, it further recommends the amendment of lines 5, 6, and 7 on page 2 of the bill so as to remove the following ambiguity. It is difficult to tell from a reading of these lines whether the words “the playing time of which is 4 minutes or less” refers to the “disk or other device for mechanical reproduction" or to the “copyrighted musical composition.” The latter is intended. The bill should be amended accordingly.

Mr. FARMER. What I would like to say is supplementary to this statement. First, let me say why the publishers feel that this legislation is in the public interest.

In the first place, as of the present day the amendment that we are talking about, the amendment that we want repealed, the one that says "the reproduction or rendition of a musical composition by or upon coin-operate: machines shall not be deemed a public performance for profit, a d therefore shall carry no royalties for the use,” that, we feel, is outmoded and in terms of the present, works an injus-tice to composers by depriving them of their property without compensation.

In the second place, because it works that injustice and because it has become a very important exception to the general principle of protection of copyrighted musical works, it does not carry out the intention of the constitutional provision to encourage the progress of science and the useful arts.

In the third place—and it is a third place, and only as a guidepostwe are the only Nation among the cultural nations of the world which does not completely protect the performing rights of musical compositions, and this is one point where we feel our country should come into line.

Now, it is certainly true that the general plan of the copyright law is to protect all performances for profit of musical compositions. We have an exception to it here, the one to which I have referred, but in terms of 1909 that exception was an unimportant thing. It was not intended to benefit any such thing as the jukebox industry. It was enacted in accordance with the realities of that time, the little thing with the earphones and the little round cylinder, and you put a nickel in and music did not get out past 5 feet from the horn. And it was put in there in a way, I assume, to encourage a new industry, that mechanical rendition, recording industry, which did not exist at that time to any extent. It was not thought it was going to make any

inroads in the rights of composers and song writers.

Today the exception is illogical, inconsistent with the whole plan of our Copyright Act, and unjust. If I go into a hall and a band is there playing dance compositions to which I can dance, the owners of that bali pay a license fee to the composers. Why should they not? But, if it is a jukebox instead of a name band, they pay nothing. There is no consistency and no reason for that. The benefits that were contributed by the composer are precisely the same in both instances, and yet we do have that peculiar situation.

In a way, this present law, as we have it, is a kind of robbing Peter to pay Paul. Perhaps in 1909 it was justified in the interest of a new industry and, well, Peter was not robbed too much and Paul needed

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a little help. But today we have the reverse of that situation and it is not in accordance with American principles of equitable protection of property and fair play to do this.

Now, there are rules of expediency here also. Ideally, to be logical, the jukebox exemption should be repealed outright; there should bə no compulsory license. After all, when a composer writes something it should be his property. Why should anybody else have the right to take it from him upon payment of a penny a week or 2 cents a side? Unfortunately, we have to be realistic about it, as one of the previous witnesses said.

We have an exact precedent for the type of legislation which we have here, and it is the immediately preceding section of subdivision (e) of section 1. It is now provided by the copyright law that, although a composer does not have to license the mechanical recording of his musical composition, once he does, any other person—any other company-can come in and by simply paying him 2 cents a side without a by-your-leave, or anything else, may record that and sell the record.

Now, that was put in to avoid monopoly. There was a feeling back in 1909 that, if that was not put in, the one great recording companyin accordance with the idea at that time, at any rate-would get a monopoly in the field by being able to outbid other companies in getting the services of artists, composers, and the like. Therefore, this was put in to avoid that.

Perhaps there is a fear that one organization might, by superior bargaining power be able to put a strait-jacket on people who want to play jukeboxes or have jukeboxes performing in their place of business, and the 1-cent provision of the present bill very completely scotches any possibility of extortion or overreaching or monopoly or anything of that kind, because all that a jukebox owner has to doall that the company in the business of leasing and operating jukeboxes has to do is to say, "Gentlemen, the statute says we pay you 1 cent per composition per week. Here is your 1 cent. Go peddle

your dishes somewhere else. We have a perfect right to ahead.”

Now, as in the case of your recording companies, it may be convenient to get them to say, “We do not want to keep track of how many records we have and when we change the records, and when we do this or that; let us arrange some kind of mutually agreeable understanding and we will pay you X dollars for a limited period. You have a right to the 1 cent. You agree to waive that and in lieu of that you will take X dollars." That is a common thing that happens. It happens in all walks of life and in all types of business where you have a legal right and you decide to compromise and you settle the thing for a flat sum.

There is nothing unusual about the new legislation either in the terms of the copyright law or in terms of commercial activity.

Now, it was suggested this morning by you, Congressman Rɔgers, that, after all, the composer did have it within his power to control the use of his record on jukeboxes. All that he had to do was to say, "Well, I won't let you record.” But look at the practical results of that decision. If he licenses anybody to make a record, then he has completely lost control. Anybody can come in and for 2 cents make

. his own recording.

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If the composer wants to bargain with that first company and say, “Well, this is giving up a very valuable right, if I do it everybody comes—in the jukeboxes and all-take it, and I have no more control; therefore pay me X dollars," that company comes back and says, “How can we afford to pay you all that money? We are going to be in competition with four or five other recording companies which have to pay 2 cents. We are in no position to pay you anything more than that 2 cents a record because we cannot compete on even terms."

So what is the practical result? The practical result is that your composer either has to say, “I will forego completely all returns from records,” or “I must go along and once I license one person everybody can come along and it can be used in jukeboxes."

Because, as you gentlemen undoubtedly know, the Supreme Court has held that we can not have an equitable servitude on goods that are once sold. Once sold, you cannot put a limitation on the use that may be made of them. You cannot put a limitation on the price at which they can be sold, except insofar as we have now the MillardTydings Act which has been slightly emasculated as a result of the recent Supreme Court decision.

Now the question was also put by Congressman Forrester as to whether this law was 'enforceable, whether this 1 cent per side per week was enforceable. I am going to answer you in an oblique way, if I may, because I think it is the practical answer to it. It is precisely as enforceable as every other right to cbtain royalty for the performance of a musical composition now recognized by the act is enforceable. Obviously, it would not be possible for a single composer to make a trip all over the country or have his agents all over the country to check on dance bands and music halls and see if they played his composition here or there. In that sense, none of these rights are enforceable. But this is enforceable in exactly the same way that the composers by getting together in their three organizations have been able to enforce their rights.

So, again, we have no unique or new problem here. It is merely a fulfillment of a pattern which was set by the Congress in 1909 and even before. To that extent and in the same way, it is enforceable.

So far as the question of damage is concerned and the minimumdamage clause, this, again, is not even a problem. The damage clause has not been rewritten since 1909. It would apply in this instance, if this legislation is passed, precisely the same way it applies to every other instance of somebody who goes in and does not pay a royalty but simply performs the musical composition without compensation to the owner.

The publishers feel that this is a bringing up-to-date and the rectifying of an injustice to composers and that is why they back this bill. They feel it is minimal protection, but a practicable method of protection which can be afforded to composers.

There is one point in which we feel the bill is technically weak or ambiguous. It is a minor point and it is easily taken care of. On pag? 2 of the bill at lines 5, 6, and 7, appears the following clause:

Whenever a disk or other device for mechanical reproduction of a copyrighted musical composition, the playing time of which is four minutes or less, hias been lawfully manufactured

Now you can not tell whether the t-minute playing time, “which is 4 minutes or less,” refers to the disk or device or whether it refers

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