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if he comes under the terms of the statute by having more than one jukebox, fails to make the proper accounting to ASCAP or to the owner of that royalty

Mr. SCHULMAN. Or to whoever he is dealing with.

Mr. ROGERS. That at the end of that month, if he should fail to make the proper accounting, H. R. 5473 would give to the author or whoever has the copyright a cause of action against that individual for minimum damages of not less than $250 a month.

Mr. SCHULMAN. That is right.

Mr. ROGERS. If that is true, how do you square that with your statement that you are old-fashioned enough to believe that when a right has been created and an individual has contracted for that right with another individual, the Government or a statute should not interfere in any manner whatsoever with that right?

Mr. SCHULMAN. May I answer that, sir?
Mr. ROGERS. Yes.

Mr. SCHULMAN. I was born in Pennsylvania, and under the laws of Pennsylvania if I can get a promissory note, and it provides that if it isn't paid on the due date, not only can I sue for the money that is due me, but I can get counsel's fees as well, I can collect. You will find that in many statutes.

Don't forget that you have another side here, too. If the plaintiff brings a suit and he has no just basis for it, the court can assess counsel's fees against the plaintiff.

Mr. ROGERS. Is that true in this bill?

Mr. SCHULMAN. Certainly; it is part of the remedies section of your statute.

Mr. ROGERS. Well, I am glad to know that.

Mr. SCHULMAN. Not only that, but suppose a client of mine is in New York, sir, and has some chap out in some place 2,500 miles away who doesn't pay his royalties. He just sits there and waits to be sued. My client has to go out there to sue him. He has got to go 2,500 miles away

from his home to start a suit. Mr. ROGERS. Yes, but that is the old-fashioned right.

Mr. SCHULMAN. That is what the statute says, and, if you will look at the remedies section and that is what I would like to discuss with you—don't forget that you not only have minimums but maximums under the copyright law. I would like to discuss that whole remedies section with you where 1909 values are placed on maximums that you can recover as well as minimums.

But you see, sir, the man who pays his royalty never worries about the $250. The man who pays his obligations has nothing to worry about. Are we going to start worrying about the fellow who doesn't pay his bills? That is the thing that the $250 says, that the man who breaks the law and doesn't pay his bills has to pay these damages.

Mr. Rogers. Well, is not that unique in the annals in that you have a definite statutory provision for it?

Mr. SCHULMAN. No, sir. For instance, in New York we have a statute that upon the foreclosure of a mortgage on land you can collect an additional amount.

Mr. ROGERS. For security!

Mr. SCHULMAN. Not security. You can collect it as part of your judgment, sir.

Mr. Rogers. It is added security on the man who loans the money.
Mr. SCHULMAN. That is right.
Mr. ROGERS. Saying that your remedies are thus and so.

Mr. SCHULMAN. And your $250 is the added security to the man who owns the property that he is going to get payment on his bills.

Mr. Rogers. Well, is there any other method whereby that security is given to such individuals?

Mr. SCHULMAN. There may be other methods, but you see, that is not part of this bill.

Mr. ROGERS. The point that I am trying to make is this: The thing that is given to the copyright owner is something that is unique in the law.

Mr. SCHULMAN. I beg your pardon, sir, I don't think so because there are some statutes under which you can collect double and triple damages.

Mr. ROGERS. Now, if I went out here and you and I had an automobile accident, do you know of any statute that says that if I sued you and was successful that I could add my attorney's fees to it?

Mr. SCHULMAN. No, because in that case you don't-
Mr. ROGERS. But isn't that a tort action?

Mr. SCHULMAN. But, you see, not all tort actions are the same. For instance, if you sue under the antitrust laws, you can collect triple damages.

Mr. ROGERS. That is by virtue of the statute.

Mr. SCHULMAN. And this is by virtue of the statute, too. That is why I would like to discuss with you whether that $250 should not be raised because $250 today is only $80 compared with 1909.

Mr. ROGERS. I agree with you on that.

Mr. SCHULMAN. That is right. We know it when we go to the grocery to pay our bill. So I would like to discuss with this committee some time an amendment of the copyright law whereby the $250 would be raised to $750, and I would also like to discuss whether the maximums provided in the act shouldn't be brought up to today's values of money.

But, you see, that has nothing to do with our present problem, which is merely a very simple issue: Whether the jukebox operator should pay the fare on the bus that he rides or whether somebody else should pay it for him.

. Mr. ROGERS. Well, assuming that we go along with you and that he should pay the fare, his just share, you would follow through that the one who owns the copyright also has a further remedy that is rather unique in the law? You would follow through on that, would

Mr. SCHULMAN. No, not on this because the remedy there is no different than it is with anybody else. You are not creating any special remedy.

Mr. ROGERS. In this class?
Mr. SCHULMAN. In every class.

Mr. Rogers. Well, if I went down to the grocery store or dry-goods store and extended my credit for $100 or $500 and I didn't pay it back, and if you sued me, you wouldn't add another $150 or $550 or $750 for attorney's fees, would you?

.

you not?

Mr. SCHULMAN. But let me show you what the difference is, Congressman Rogers. When you go down to the grocery store-let's say that I am the grocer. Now, please don't take offense at this.

Mr. ROGERS. No, no. Mr. SCHULMAN. And you say to me, “Schulman, I will take a bottle of milk,” and I say, “Brother, your credit is no good, either you pay me for it or else you can't carry it out of the store," that is one thing.

But under this bill you have your drink first because you have a right to use it and you only pay for it 30 or 60 days later. I haven't the privilege of saying to you, "Your credit is no good."

Mr. ROGERS. Don't you have the privilege of not putting it on the market?

Mr. SCHULMAN. Well, now, sir, you might just as well say that the writer has the privilege of digging streets, but who will write the music.

You see, there is where the difference lies. The writer under this bill, if you are going to restrict it, can't say, “Your credit is no good, and, therefore, you can't play this." This bill says, “You can play it."

Mr. ROGERS. And he pays for it 30 or 60 days later. Also the writer at the time he gets ready to sell his copyright has the right to say then and there what he shall get for it.

Mr. SCHULMAN. No, he has no right to say that.
Mr. Rogers. Well then, I misunderstand what a copyright means.

Mr. SCHULMAN. He has the right to establish his relationship with various people. But once he permits a single phonograph record company to make a record or he himself makes a record, he doesn't go to a phonograph record company, he himself puts it on a record, then everybody can make it without asking him anything, without saying please or pretty please. They just go ahead and make it and then they send him 2 cents a record.

Now, once that record is made, off it goes to a jukebox, and the jukebox, owner doesn't say, "Mr. Harbach, can I use your record ?”

Even under this bill when he plays Mr. Harbach's famous tune, he has 60 days to pay. The law gives him that special privilege of playing without asking Mr. Harbach. Why, if he defaults, should we worry that he pays $250 instead of the $50 or the $5 that he should have paid?

So we have to look at this thing realistically. And, as I say, although in principle I stood before you and asked for the Scott bill, and although in principle I still stand before you and ask for the Scott bill, I say that my clients are willing to give this a chance to see how fairly it works. And if it doesn't work fairly, we are coming back and asking for something fairer.

Gentlemen, that is our story, and I hope I haven't bored you or kept you too long.

Mr. Bryson. We are very much obliged to you. Are there any further questions?

Mr. SCHULMAN. Mr. Chairman, may I say this? Mr. Sidney Kaye unfortunately couldn't come down. gave me a statement to be submitted to the committee. I gave it to Mr. Harris this morning. May I on behalf of Mr. Kaye ask that that statement be received ?

Mr. BRYSON. Yes, you may do so.

I

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(The statement referred to is as follows:)

STATEMENT BY SYDNEY M. KAYE, VICE CHAIRMAN OF THE BOARD, VICE PRESIDENT

AND GENERAL COUNSEL, BROADCAST MUSIC, INC. Broadcast Music, Inc., (usually called BMI) is a New York corporation, the stock of which is owned by licensed broadcasting stations in the United States. It is engaged in licensing the right publicly to perform for profit musical compositions of numerous publishers, composers and authors who have entrusted these rights to BMI. BMI licenses the public performance rights in a substantial part of the recorded music which is performed by means of coin-operated machines.

BMI has long advocated the repeal of the last sentence of section 1 (e) of title 17 of the United States Code. The operation of coin-operated music machines, commonly known as jukeboxes, constitutes an industry of major importance in the United States. The machines serve a useful social purpose in bringing recreation and entertainment to persons at numerous establishments at which it would be impracticable to have more elaborate facilities. It will aid the coin-machine industry in acquiring the stature and recognition which it needs and to which it normally would be entitled, if the industry bears a share of the cost of the music which is the sole commodity that the machines dispense.

That an injustice is being done to the creators of music seems clear. These machines are operated for profit. The musical performances originated by them reach a vast public. That these performances, which are no less for profit and no less public than performances by other means, are presently exempt from payment to copyright proprietors is due only to a fortuitous historical accident. There is no sound social, legal, or economic argument why all other instrumentalities for public performance for profit of music should pay compensation to the creators of music, and the coin-machine industry alone should continue to be exempt.

The time for the correction of this inequity is long overdue. In logic, the way to correct this defect in the copyright law is by outright repealer of the offending sentence. The bill before your committee does not do this and in two respects it pays tribute to history, and attempts to alleviate the consequences to the coinmachine operator of outright repeal. As we understand the bill, a person who owns, operates, services and retains all of the receipts of a single coin-operated machine, will continue to be exempt from payment. Other persons subject to the provisions of the bill have a ceiling price placed upon the compensation which can be demanded for them.

Without espousing the compromise so created, BMI accepts it. For a generation, authors and publishers have received no compensation from what has become one of the most important means of the public performance of their works. This has been unjust, not only to them, but to all the other users of music who have, during this period, paid, and are still paying, their way. It is more important promptly to secure a partial correction of this injustice than it is to follow strict logic.

BMI, therefore, supports the principles and objectives of H. R. 5473.
Mr. BRYSON. Mr. Samuel Buzzell.

STATEMENT OF SAMUEL JESSE BUZZELL, REPRESENTING THE

FEDERAL BAR ASSOCIATION OF NEW YORK, NEW JERSEY, AND CONNECTICUT

Mr. BUZZELL. Mr. Chairman, my name is Samuel Jesse Buzzell. I am a member of the New York and Oregon Bar, and I am speaking now for the Federal Bar Association of New York, New Jersey, and Connecticut.

Mr. ROGERS. Did you say the Federal bar?
Mr. BUZZELL. Yes, sir, the Federal bar.

We are endorsing or we are approving H. R. 5473. The reasons and the grounds for our approval are contained in the statement that was submitted to this committee by the last witness, Mr. John Schulman, acting as counsel for the Authors League of America and the Song Writers Protective Association. We respect fully request that that

. statement by reference thereto be endorsed on our behalf and be so marked in the record. Mr. Bryson. Thank you, Mr. Buzzell.

, Will you excuse us for a moment. (A conference was held by the members of the subcommittee.)

Mr. BRYSON. Gentlemen, the committee has decided to continue the hearing until some time, as early as convenient, after January 8, the convening date of Congress. In the meantime Mr. Harris, our counsel, will accept written statements. Soon after the reconvening of Congress a convenient date will be set for further oral testimony, at which time the opposition to the measure will be heard, and the proponents of the measure will have an opportunity to reply to the testimony offered at that time since they do not have the privilege of hearing it today.

With that announcement, the hearing stands in adjournment until some time after January 8.

(Whereupon, at 4:40 p. m., the subcommittee recessed subject to the call of the chairman.)

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