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We are of the opinion that the present jukebox exception in title 17, U. S. C. is an anomally and that in principle the proprietor of a copyrighted musical composition is just as much entitled to a remuneration when his composition is played from a record in a jukebox as he is entitled under the present law to remuneration when the composition is played by a dance orchestra, radio station or through other medium of rendition. At the time of the adoption of the law in 1909, the present day jukebox was unknown. The coin-operated machine of that era was a machine which was found in the penny arcade, and it was considered that this form of performance would not harm authors but would serve as a good advertising medium. The development of the present day version of the coin-operated machine, the so-called jukebox, has long since changed the conditions under which the exception was justified. It is, therefore, believed that the removal of the last paragraph of section 1 (e) of title 17 is much to be desired. This same view was expressed by the Register of Copyrights in connection with a bill introduced a few years ago. (See p. 244 of Hearings of a House of Representative Subcommittee of the Judiciary Committee on H. R. 1269, 1270 and 2570, 80th Cong. 1st Sess.)

If your committee is of the opinion that something other than the complete elimination of the present exception is advisable you may wish to consider the following comments as to the language of the present bill.

It is our understanding that the intent of the proposed bill is to permit the owner of a single jukebox to be exempt from the payment of any royalties if no admission is charged to the place where the rendition occurs. There is some possibility from the language of the present bill that a contrary result could be reached, namely, that the owner of a single jukebox not subject to the compulsory license provision, would be required to obtain special permission to perform the records. The possibility of such an unintended result should be eliminated.

It might also be contended that the basis for the royalty payment is the playing time of the disk or other device rather than the musical composition itself. Since the purpose appears to be to base the royalty upon the number of musical compositions rather than upon the playing time of the disk or other device, it is believed that this ambiguity should be clarified.

There are two separate grants of performance rights, namely, in the sentence beginning on line 5, page 2, and also in the sentence beginning on line 18, page 2. The requirement of a report is referred to only in the second grant. If the prescribed royalty is in fact paid, there may arise the question as to the legal effect of a failure to furnish the desired reports.

A typographical error exists in line 16, page 2 of the bill. The word “on” obviously should be "of".

The paragraph beginning on line 24, page 2, is susceptible of an interpretation which would exempt the owner of one machine from the payment of royalties but might require the person who had only an interest in the receipts of the single machine to pay the specified royalty. Thus, the owner of a single machine, since he also participates in the receipts, might be required to pay a royalty. Since it is not believed that this result was intended, clarification seems to be in order.

The use of the word "collect” in line 9 of page 3 may raise doubt as to the procedure to be followed in bringing an action for the payment of the specified royalties. There may be a question whether a copyright proprietor should bring a series of suits against the parties mentioned in an effort to collect or whether he would be entitled to join each of the individuals involved in a single action. There may also arise the question of the effect of a partial payment of royalties on the part of one of the individuals involved. Further, the use of "and/or" raises a possibility that collection of royalties could be obtained from each of the three parties named where they are in fact separate and distinct persons.

In several references in the bill to the persons involved, the words “owner, operator, and/or distributor" are used. However, in lines 3 to 5 on page 3, an additional person is named, i. e., one who participates in the receipts of the machine. Consistency would seem to require that the person who participates in the receipts be added to other references in the bill where applicable.

If your committee so desires we should be glad to submit clarifying language on the above points for incorporation in the bill. Sincerely yours,

LUTHER H. EVANS,
Librarian of Congress.
ARTHUR FISHER,
Register of Copyrights.

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Mr. FORRESTER. May I ask a question?
Mr. BRYSON. Yes.

Mr. FORRESTER. Mr. Wattenberg, I heard your answer to Mr. Raine's contention in connection with this 26 cents based on 13 weeks, in which you gave your reasons why you didn't think there is much to that argument. Now, in order to get all of the facts revealed, did you hear the portion of Mr. Raine's statement to the effect that this 1-cent per week might have the effect of causing them not to use certain records which had not gained much popularity and that they would be restricted and that they would have fewer records and that by reason of that these artists would stand to lose?

Mr. WATTENBERG. Congressman Forrester, I heard the statement, and I am not entirely in agreement with it. But I would say that that is a matter of opinion, and Mr. Raine is entitled to his opinion in that respect. As a representative of music publishers—and I have represented music publishers for many years and have learned a good deal about the practical end of the music business—I know that it is only on rare occasions that a record manufacturer will make a record unless either the composition has been written by someone who is well known for his talent and who has been a successful, experienced writer or where the composition—and this rarely happens—just happens to be something unique that the recording manufacturer recognizes as a novelty, or where the publisher can give some assurance that he is going to work on a composition--and by working on a composition I mean this: Music publishers as a rule—and I think it is almost universal-employ large staffs of what they call professional men who are commonly known as song pluggers. They contact performers at radio stations, television stations, orchestra leaders in hotels and restaurants, and they contact motion-picture studios, and do whatever they can to popularize a song.

The recording of a song and the release of that recording does to some extent aid in the exploitation or popularization of a song. It is by no means the sole factor, I can assure you.

Mr. FORRESTER. Then from your viewpoint you don't think there is going to be any loss?

Mr. WATTENBERG. No, sir. I think that if a song is recorded it probably has a sufficient amount of merit to be in demand by the jukeboxes whether there is that one penny or not. I mean that I don't think that would have any effect on it.

Mr. FORRESTER. I wanted your answer because we want to get the viewpoints of people who occupy different positions in this line of business.

Mr. WATTENBERG. Yes, sir; I understand.
Mr. Bryson. Thank you so much.
Mr. John Schulman.

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STATEMENT OF JOHN SCHULMAN, NEW YORK, N. Y., REPRE

SENTING THE AUTHORS' LEAGUE OF AMERICA AND THE SONGWRITERS' PROTECTIVE ASSOCIATION

Mr. SCHULMAN. Mr. Chairman and members of the committee, my name is John Schulman, and I am a practicing lawyer, practicing at 120 Broadway, New York.

Mr. Chairman, ladies and gentlemen of the committee, I am here representing the Authors' League of America and the Song Writers' Protective Association, for whom I am counsel.

I think the committee has had a long day, and I think that you should be congratulated for the patience you have shown and the attentiveness with which you have listened to this discussion. I am particularly gratified at the knowledge, practical and technical, that the committee has shown.

I have submitted a statement. If I may be permitted to insert the statement in the record, I won't read it, but just say a few things about the things I have heard here today.

Mr. BRYSON. That privilege is granted.
(The statement referred to is as follows:)

STATEMENT BY JOHN SCHULMAN, COUNSEL, AUTHORS' LEAGUE OF AMERICA, INC..

AND SONG WRITERS' PROTECTIVE ASSOCIATION The Authors' League of America, Inc. (herein called the league) and Song Writers' Protective Association (herein called SPA), respectfully submit their views in support of H. R. 5473, which would for the first time permit authors and owners of musical compositions to collect royalties from the performance of records in coin-operated machines such as jukeboxes.

The league is a nonprofit membership corporation, having membership of more than 7,000 individuals who write American books, plays, motion pictures, and radio and television programs, as well as those who write music for theatrical and motion-picture productions and radio and television programs.

SPA is a nonprofit voluntary association whose membership comprises over 1,900 song writers who compose popular American music.

The league and SPA respectfully submit that H. R. 5473 should be approved.

H. R. 5473 relates to a special exemption presently a part of section 1 (e) of the Copyright Act which permits the performance of music by means of coin-operated machines, without the consent of the copyright proprietor and without any remuneration to him. This exemption is an anomaly in our Copyright Act which otherwise gives to the author or other owner of a copyrighted musical work the exclusive right to authorize its public performance for profit.

When the Copyright Act was adopted over 40 years ago, in 1909, coin-operated machines were a negligible factor in the use of musical works. They were chiefly devices in which the music played could usually be heard only through earphones. These machines were placed mostly in penny arcades and similar places of amusement, and were just like toys with which people amused themselves for a few idle moments. Although other coin-operated devices may have existed, they likewise had no impact upon the economy of the musical field.

In the past 40 years there has been a decided change. The coin-operated machine (known today as the jukebox), is now a substitute for the performance of music by living musicians in restaurants, taverns, and other places where people gather. People no longer listen individually to a record by means of an earphone for a fleeting instant. The music is carried throughout the establishment in amplified form. The performance is truly public and is made for profit.

The coin-operated machine of the penny parlor of 1909 has little relationship to the more than 500,000 jukeboxes which today dot the taverns, soda shops, stationery stores, diners, bars, and restaurants of this country. The operation of the jukebox has become a widespread and profitable industry utilizing the author's property as its very foundation without asking his permission and without paying him anything for its use.

It is no exaggeration to say that this huge industry lives off the work of the author. The person who inserts a coin into a jukebox is not interested in seeing the lights go on or in viewing the garish multicolored pieces of glass through which the lights shine. On the contrary, his sole interest is to hear a song and to derive entertainment, amusement, and enjoyment from listening to that song. Yet the man who wrote the song and whose creative genius has provided the means of this enjoyment derives nothing from this public performance of his music for profit. The jukebox operator is making handsome profits from using another man's work just because many years ago the law failed to anticipate the development of the present-day day coin-operated machine.

We submit that this special exemption enjoyed by this specific industry is contrary to every basic principle of our society. It is contrary to the principle that a man is protected in his private property. It is contrary to the principle that a man has the right to be paid for that which he creates. It is contrary to the principle that no one has the right to use another person's property without authorization and without fair compensation.

For many years the associations on whose behalf I appear, and I myself, have advocated the total repeal of this special privilege which has no place in copyright law. I have advocated this repeal because I believe that this special privilege has no place in the kind of society we believe in. I have appeared before this honorable Congress and have stated my support of the repeal of this special privilege.

Opposition to the repeal of the jukebox exemption has naturally come from those who profit by it. After 40 years it is understandable that the manufacturers and distributors and those who service these jukebox machines believe they have a vested interest in using the author's property for nothing. So far as the individual tavern owner or small-restaurant owner is concerned, his position is somewhat different. Most of them do not own machines nor do they operate them. They permit their installation as an attraction to customers, and since the real dollars-and-cents profit goes to the manufacturer, operator and distributor, these small-business men feel, perhaps with some justification, that they should not account for the necessary royalties. There may well be merit in the position that the author's royalties should be paid by the people who really are in the jukebox business and who actually make the substantial profits which flow from that operation. Consequently, although in theory the establishment might be called upon to pay royalties, there may be social and economic justice in placing the burden where it actually belongs, namely, on the owner, operator and/or distributor. Therefore, the fact that the obligation is removed from the individual who merely owns and operates his one machine does not in these specific circumstances offend our sense of equity.

The bill does however contain a provision which causes concern and that is the statutory license and the statutory fee. The organizations on whose behalf I appear and I myself, am unalterably opposed to the principle of a compulsory license or the fixing of a fee by statute. It seems to us that the basic philosophy of our Nation, except in times of emergency, is to permit the owner of property to sit across the table with the person who wants to buy it or use it and to let them work out their own bargains and contracts. That is the fundamental principle of our copyright law, and of all of our statutes which create or secure proprietary interests. It is the basis on which a free economy properly rests.

However, in this instance there is the practical consideration that the express exemption in the statute, as inequitable as that special privilege may be, has been there for upward of 40 years. The justification, under these special circumstances, for the statutory license and fixed fee proposed, may be the necessity of permitting the industry an opportunity to meet the new conditions. This being so, while supporting H. R. 5473, we reserve the right to continue to advocate for adherence to basic principles and the complete elimination of the special exemption.

For the reasons stated we support the adoption of H. R. 5473.

(The foregoing statement is endorsed by The Federal Bar Association of New York, New Jersey, and Connecticut.)

Mr. SCHULMAN. The Authors League of America is a nonprofit association composed of about 7,000 or more men and women who make their living from writing the things you and I read, the books, the magazine stories, the poetry, the men and women who write the plays that you and I see in the theaters. They write the stories upon which motion pictures are based. They write the musical shows.

Mr. Bryson. Could a person belong to your organization and ASCAP!

Mr. SCHULMAN. Yes, sir; they can because the people whom I rep. resent in the Authors League of America and likewise the people who write radio and television shows, which we have all enjoyed-and some of which we may not have enjoyed—the men who write the music particularly which is to be published not only may belong to the Authors League of America and one of its guilds, but may also be a member of ASCAP so far as the performance rights of his songs are concerned.

So that there are some members—not all by any means of the Authors League of America who may also be members of ASCAP.

Now, the other organization on whose behalf I appear is the Song Writers Protective Association of which Sigmund Romberg is the president and of which Edgar Leslie, one of our finest writers, is an officer.

Now, those are the men who write, for the most part, the popular and serious music. Some of them, many of them, are also members of ASCAP.

ASCAP has a peculiar function. It is a collection agency for the performance rights alone. So you see, there is no conflict of identity because the two functions are different. The Authors League of America and the Song Writers Protective Association don't run a collection agency. They don't collect license fees on rights assigned or vested in them. They are like a trade organization or a trade union of people who are engaged in a common endeavor and who try to mutually and collectively protect everybody's interests who is engaged in that field of endeavor.

It is like a bar association. One of the things that we watch with interest, as this committee may know, are questions relating to copyright. Of course, that is the very basis of the livelihood of these people who write and create.

Now, just what is it that we are speaking about? You know that when we get off on the question of rights and things of that sort we get a little involved and, if I may just discuss this informally with the committee, perhaps I can help in your thinking.

Copyright is something which goes back to the very origins of this country, as a matter of fact to before the time when the United States was the United States because in the colonies which became the United States, the original 13 colonies, there were copyright laws.

Mr. BRYSON. We had one in our State.

Mr. SCHULMAN. Yes, sir. We had one in New York. There was one in Virginia. There was one in Connecticut and in Massachusetts.

Why did they all have copyright laws then and why did the founders of our country give to Congress the power to enact copyright laws! Because they all recognized-our founding fathers recognized—that the man who created a book, wrote a book, a man who wrote a song, or a man who wrote a play created property which had social and economic value, and they said that that man who, through his gifts, created the things that we read and hear should have the ownership of them.

If you will read the Federalist, sir, you will find that they talk of copyright in terms of property because it is just that, just like a man who builds a chair. He owns it, he can sell it, he can sit on it, or he can give it away. And they said that he ought to be able to do the same thing with a book that he writes or a song that he composes and writes.

But it is a peculiar kind of property, because it isn't something that you could hold, as I can hold this ashtray; because you put it out in copies, it spreads around. One of the fundamental theories of copyright has always been that the value of property lies in its re

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91590—51—ser. 11, pt. 1-7

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