operated machine was a public performance; it described the exemption as the exception regarding the public performance of a musical composition upon coin-operated machines.

Why, then, did Congress specifically exempt the use of music on coin-operated machines from the obligation to pay performing fees?

The answer is clear. In 1909 the coin-operated machine was indeed a crude device; its use was limited; it was found mainly in what the committee referred to as so-called penny parlors; it did not make any great or important use of music.

The coin-operated machine of today is a large machine run entirely by electricity; illuminated in many colors; capable of reproducing at the touch of a button any one of dozens of the day's most popular musical compositions, recorded by the Nation's top performing artists. Indeed, except for establishments which can afford to furnish live a large musical organization, the coin-operated machine is much more attractive to prospective patrons than live talent would be. As a result, the coin-operated machine, now universally known as the jukebox, is found in perhaps 400,000 to 500,000 hotels, bars, restaurants, taverns, and other public places. Its purpose is to attract patrons and guests who will buy food, drink, and other commodities which may be offered for sale. It accomplishes this purpose by providing entertainment, and in many cases, also the music for dancing.

Mr. Justice Holmes, of the United States Supreme Court, in the famous case of Victor Herbert v. The Shanley Co., recognized the element of profit in this type of a public performance.

The music in that case was furnished by a live orchestra and the defendant argued that, since no admission fee was charged, his use of the music did not violate the copyright.

Mr. Justice Holmes held: "If the rights under the copyright are infringed only by a performance where money is taken at the door, they are very imperfectly protected. Performances not different in kind from those of the defendants could be given that might compete with and even destroy the success of the monopoly that the law intends the plaintiffs to have. It is enough to say that there is no need to construe the statute so narrowly. The defendants' performances are not eleemosynary. They are part of a total for which the public pays, and the fact that the price of the whole is attributed to a particular item which those present are expected to order is not important. It is true that the music is not the sole object, but neither is the food, which probably could be got cheaper elsewhere. The object is a repast in surroundings that to people having limited powers of conversation or disliking the rival noise give a luxurious pleasure not to be had from eating a silent meal. If music did not pay, it would be given up. If it pays, it pays out of the public's pocket. Whether it pays or not, the purpose of employing it is profit, and that is enough."

For all practical as well as legal purposes, there is no difference between a performance by a live name orchestra and the same performance by the same orchestra, recorded, and by means of a jukebox. Both are public performances, and both are for profit, and whether an admission fee is charged is of no more significance or consequence in the one case than in the other.

There is no exemption even under existing law for a jukebox where an admission fee is charged, nor is there any exemption covering a live performance where no admission is charged. The exemption given to coin-operated machines where no admission fee is charged can no longer be justified in view of the fact that the effectiveness of the two types of performances are, in the majority of cases, at least on a par.

As a matter of fact, the jukebox in many cases makes a much more extensive and important use than the live orchestra from whom the composer does receive his "adequate compensation." Contrast the use of music made by a three-piece orchestra in a roadhouse with the use made by a similar establishment directly across the highway where a jukebox is stocked with 30 or 40 of the day's top phonograph records. The contrast is indeed great.

The proprietor of the second roadhouse, even if he does not share in the "take" of the jukebox, does benefit from the increased patronage and sale of his food and beverages.

The manufacturer of the jukebox profits from his sale or lease of the machine.

The owner and distributor of the machines realizes substantial profits. The man who services the machines and supplies it with records profits from his services.

The only persons who are foreclosed from sharing in the profits are the author, composer, and copyright proprietor who create and furnish the music.

The Music Publishers' Protective Association, Inc., supports H. R. 5473 because it would put an end to this inequitable condition.

II

Owners of establishments or operators of jukeboxes cannot in good faith contend that the repeal of the exemption will place them at the mercy of the composer or proprietor of a musical composition.

A maximum royalty is provided for by H. R. 5473, and it is indeed reasonable in amount. It is not substantial enough to affect to any appreciable degree any establishment which employs a jukebox, or any manufacturer, operator, or distributor of jukeboxes. Their rights and interests are completely safeguarded.

III

American authors and composers are not alone in their resentment of the exemption which the coin-operated machines possess at their expense. Author and composer nationals of foreign countries complain bitterly about the "legalized piracy" of their works by the jukebox. They are protected against it in their native lands, but as a condition to protection in the United States they are forced either to refuse to permit the manufacture of any phonograph records of their works at all or, as an alternative, suffer the widespread use of their works on jukeboxes without royalty fee or other compensation.

At the present time our Government has appointed delegates to meet with the representatives of other nations under the framework of UNESCO, with a view toward working out a universal copyright convention. The exemption given to juke boxes will be a serious obstacle, and it should be removed from the statute. It unquestionably would make for better international relations in the fields of art and science if the jukebox industry were required to make payment of a reasonable royalty or fee for the music it uses, just as all other users. 5473 would fix such a reasonable royalty or fee.

H. R.

On behalf of the Music Publishers' Protective Association, Inc., it is submitted that Congress should now recognize that the exemption bestowed upon coinoperated machines in 1909 has outlived its usefulness; that it permits and encourages the use of property without compensation; that it has made possible the development of an enormous industry which it permits to prey, without hindrance, upon the property rights of others; that it is not consistent either with the American concept of copyright or with the Constitution of the Unied States and its guaranties.

For the reasons set forth, the association supports H. R. 5473 and asks that it be made law.

STATEMENT OF SIDNEY WILLIAM WATTENBERG BY AND ON BEHALF OF NATIONAL MUSIC COUNCIL, INC.

SUMMARY

National Music Council Inc., favors the passage of H. R. 5473 for the reason that the existing statutory exemption covering coin-operated machines has become obsolete and by all present-day standards is unfair in that it discriminates against the author and composer in favor of the jukebox industry by permitting public performance for profit of musical compositions without any compensation to the creators or owners thereof.

National Music Council, Inc., is a nonprofit membership corporation organized under the laws of the State of New York. Only associations and organizations of national scope and activity which are interested in the development of music are eligible for membership in the council. Its members, by reason of their respective memberships, represent perhaps as many as 600,000 or 650,000 persons in the United States.

One of the stated purposes of the council is "to speak with one voice for music whenever an authoritative expression of opinion is desirable." Here then the National Music Council, Inc., states that it is desirable and equitable to enact into law H. R. 5473. The council favors the enactment of H. R. 5473 for the reason that its provisions would eliminate from existing law an antiquated

and inequitable provision which operates to the detriment of authors and composers of music, in direct contravention of the letter and spirit of the Constitution of the United States and the legislative intent of the Congress of the United States.

Article I, section 8 of the Constitution of the United States provides: "Congress shall have the power

"8. To promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries."

The present copyright statute, now referred to as title 17 of the United States Code, was enacted by Congress on March 4, 1909, under this provision of the Constitution. It was indicated in House Committee Report No. 2222, Sixtieth Congress, second session, that one of the desired methods "to promote the progress of science and useful arts" is "to secure to him (the composer) adequate compensation from all reproducers" of his music. This was one of the situations that the committee had in mind and considered when it formulated and drafted section 1 (e) of the existing act.

The committee correctly recognized the right of the author and composer to collect fees for the public performance for profit of their music, and Congress created such right in enacting the present statute. The committee further recognized that the performance of a musical composition on a coin-operated machine was, in fact, a "public performance." However, at that time it appeared that coin-operated machines for the most part were located in penny parlors and arcades and other places where an admission fee was not charged, and did not constitute a source from which the author and composer should be compensated for the use of their music. For this reason the committee recommended the exemption covering the use of music on coin-operated machines, which H. R. 5473 would now eliminate.

In the committee's report, it was stated "The exception regarding the public performance of a musical composition upon coin-operated machines in a place where an admission fee is not charged is understood to be satisfactory to the composers and proprietors of musical copyrights. A representative of one of the largest musical publishing houses in the country stated that the publisher finds the so-called 'penny parlor' of first assistance as an advertising medium." In other words the coin-operated machine of those days was looked upon as being more valuable as an "advertising medium" than as a source of compensation for the use of music. Such an exception no longer is "satisfactory."

Whether or not the enactment of this statutory exemption in favor of coinoperated machines was justified in 1909, it never could have been intended that it apply to the modern jukebox. In the 42 years since the enactment of section 1 (e), the jukebox and its manner of use have completely changed. It no longer is used almost exclusively in penny parlors, arcades, and saloons.

Partly because of the tremendous development in the field of science and partly as a result of the statutory exemption, the modern coin-operated jukebox is a most pretentious, efficient, and effective instrument. An industry has grown around the jukebox to such an extent that there are perhaps between 450,000 and 500,000 such machines currently in use throughout the United States. These machines are now used as a substitute for live musicians and in a majority of locations they serve as a perfect medium for dancing and entertainment. There is no doubt that the presence of the jukebox enhances the popularity of any location. Not only do these machines themselves take in millions of dollars each year, but the proprietors of the locations where such machines are installed realize greatly increased profits from their businesses as a result of the presence of the machines.

The jukebox no longer is looked upon as an "advertising medium" for music as indicated in the Committee Report No. 2222; it now makes use of music as an advertising medium for the establishment in which it is installed.

There is no reason to distinguish between a performance given at a roadhouse by a three-piece amateur band, and a performance in a neighboring roadhouse by a nationally famous orchestra by means of a jukebox. The performances are similar, if not identical, in the results that they bring, and although Congress rightfully has recognized the right of the author to receive compensation in the first instance, it has denied him a similar right with respect to the second instance.

Because of the existence of an obsolete exemption clause enacted in 1909 in view of conditions then existing, the author and composer of today are unable to prevent, or to share in the proceeds derived from, this vast commercial use of their works.

The United States Treasury Department refused to distinguish, for tax purposes, between the utilization of an orchestra and a mechanical-music device for dancing. It held that where music, whether by an orchestra, mechanical device or otherwise, and a space in which the patrons may dance are furnished in a night club, restaurant, bar, etc., the entertainment constituted a public performance for profit, and that all amounts paid for admission, refreshment, service, and merchandise by or for any patron or guest who was present during any portion of the time entertainment was furnished, were subject to the cabaret tax imposed by section 1700 (e) of the Internal Revenue Code, as amended.

In addition to the injustice suffered by authors and composers of this Nation as a consequence of the exemption, there has arisen considerable ill-will in foreign countries. The exemption afforded coin-operated machines, which this bill would eliminate, has been the cause of widespread resentment on the part of Europeans and Latin-Americans. They contend that this exemption sanctions and legalizes the piracy of their works by owners and operators of coin-operated machines. The State Department made this clear at previous hearings relating to bills seeking amendments to the copyright statute. (See statement filed by Durward V. Sandifer, Esq., Acting Legislative Counsel for the Secretary of State at hearings held on H. R. 1269, H. R. 1270 and H. R. 2570, May and June 1947). The coin-machine exemption clause has outlived its usefulness; its presence in the present act is a gross inequity to the author and composer; its retention in the act cannot be justified. This clause fosters a commercial enterprise, national in scope, of enormous monetary worth, to the exclusion of the author, the very person whose creations make the entire operation possible.

Hon. JOSEPH R. BRYSON,

NATIONAL FEDERATION OF MUSIC CLUBS
Providence, R. I., October 24, 1951.

House Office Building,

Washington 25, D. C.

MY DEAR CONGRESSMAN BRYSON: As president of the National Federation of Music Clubs, I should like to inform you of the fact that the entire membership of our organization, which functions throughout the 48 States, wholeheartedly supports the measure which you have introduced to amend the Copyright Act, H. R. 5473.

Our members, who have striven to advance the cause of music and musical education throughout this country, support this bill because it would benefit composers and authors of musical compositions and would further their creative efforts. American creators of music, of whom the Nation is justly proud, deserve some measure of economic security, which this bill would help provide. If this measure becomes law, composers will for the first time be compensated, to a modest extent, for the public performance of their works on coin-operated machines, which at present are unfairly exempted from the obligation to pay creative composers for the use of their music for profit.

If composers and authors receive just compensation for the profitable use of their music by the jukebox operators, increased funds might thereby be made available to further the cause of American music. Additional facilities for musical education will be provided in schools and colleges, scholarships will be granted to deserving young creative talent, and further aid will be given to meritorious composers of serious works.

For these reasons, the membership of the National Federation of Music Clubs urges the passage of H. R. 5473, as a necessary amendment to the copyright law which is not only a benefit to individual composers and authors, but is in the public interest.

Sincerely,

ADA HOLDING MILLER, President, National Federation of Music Clubs.

The Honorable EMANUEL CELLER,

Chairman, Committee on the Judiciary,

DEPARTMENT OF STATE, Washington, October 19, 1951.

House of Representatives.

MY DEAR MR. CELLER: Further reference is made to your letter of October 10, 1951, requesting the Department's comments on H. R. 5473, to amend section 1 of title 17 of the United States Code to make public reproduction 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. Reference is also made to your letter of the same date inviting a representative of the Department to attend the hearings on October 25 and to testify.

Since the principal effect of the bill is domestic in nature, the Department would prefer not to testify on the bill as such. The Department would like to state, however, that in its opinion the bill does contribute to the betterment of international relations in the copyright field by providing for payment to composers of musical works for performance for profit on coin-operated machines. On a number of occasions in the past the Department has received complaints from foreign governments and their citizens, particularly in Latin America, concerning the present situation in which no such payment is provided, together with accusations that this treatment is essentially a form of piracy of their works. The Department, therefore, believes that an appropriate solution to the problem which would eliminate the present friction could lead to improvement in the protection of United States works abroad and would improve the opportunity for developing and obtaining general adherence for a satisfactory universal copyright convention, a project which is now being developed in UNESCO. Because of the urgency of the matter, this letter has not been cleared with the Bureau of the Budget. However, a copy is being sent to that Bureau.

Sincerely yours,

Re H. R. 5473

Hon. EMANUEL CELLER, M. C.,

JACK K. MCFALL,
Assistant Secretary.

(For the Secretary of State).

THE LIBRARIAN OF CONGRESS,

Washington 25, D. C., October 22, 1951.

House Office Building, Washington 25, D. C.

DEAR MR. CELLER: In reply to your request for a report on the above-mentioned bill, we are pleased to submit the following.

The proposed legislation provides for the removal of the so-called "jukebox" exception in section 1 (e) of the present law whereby the reproduction or rendition of musical compositions on records in "jukeboxes" is not subject to the payment of a performance royalty. The bill adds a new subsection (f), which provides that a public reproduction or rendition of a musical composition embodied in a record in a “jukebox" is deemed to be a public performance for profit by the owner or operator of the machine, and sets up a compulsory license system under which the performance of a record at a place to which no admission fee is charged is authorized upon payment of a specified royalty on the part of the owner or operator of the "jukebox." The owner or operator of a single coinoperated machine is exempt from the payment of the specified royalty unless a fee is charged for admission to the place where the rendition occurs in which case the compulsory license provisions are inapplicable.

While the bill will require the persons affected to expend sums of money which they are not now required to disburse, it should be remembered that as stated by the House committee considering the bill which later became the 1909 copyright law, that law is based upon the ground "that the welfare of the public will be served and progress of science and useful arts will be promoted by securing to authors for limited periods the exclusive rights to their writings Not primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given. Not that any particular class of citizens, however worthy, may benefit, but because the policy is believed to be for the benefit of the great body of people, in that it will stimulate writing and invention to give some bonus to authors and inventors." (Committee on Patents, House of Representatives, 60th Cong., 2d sess., H. Rept. 2222.)