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the very rights granted to the composer for the purpose of protecting his interests.

This further statement is made in the same report:

How to protect him (the composer) in these rights without establishing a great music monopoly was the practical question the committee had to deal with.

It was at first thought by the committee that the copyright proprietors of musical compositions should be given the exclusive right to do what they please with the rights it was proposed to give them—

In other words, free bargaining—

to control and dispose of all the rights of mechanical reproduction, but the hearings disclosed that the probable effect of this would be the establishment of a mechanical-music trust. It became evident that there would be serious danger that if the grant of right was made too broad the progress of science and useful arts would not be promoted, but rather hindered, and that powerful and dangerous monopolies might be fostered which would be prejudicial to the public interests. This danger lies in the possibility that some one company might secure, by purchase or otherwise, a large number of copyrights of the most popular music, and, by controlling these copyrights, monopolize the business of manufacturing and selling music-producing machines otherwise free to the world.

That was the basic principle that actuated the committee in 1909, and I submit to you that was sound reasoning. A monopoly, in its very nature, is oppressive. The attitude of the public toward monopoly has always been and is now that it should be controlled in some way or by some means.

A composer who gets a copyright has a monopoly, for what purpose? Is it only for the purpose of the composer? The granting of that monopoly to him is to promote progress in the arts and sciences for the benefit of the public, and to encourage composers and encourage inventors that the public might be benefited by their acts.

Thus, while we take care of the composer we must not overlook the actual rights of the public, whom it is our duty to protect from the undesirable conditions that would naturally grow up from a monopoly.

As I have said, and as Mr. Chindblom has very well and forcefully said, this proposed law would absolutely permit the establishment of a monopoly. The committee in 1909 recognized that, and they said there should be some restriction. Public policy at times requires the granting of monopolies, but when they are granted they are always restrained by regulatory measures. A public utility, for instance, is usually monopolistic in character, hence we establish price-fixing and regulatory commissions to control them. They are not permitted to use the monopoly to suit themselves; they are regulated, they are restricted.

In the case of musical reproductions there is no price-regulating body with power to control those individuals to whom copyrights are given. Therefore Congress found it necessary to fix the price.

I realize that, generally speaking, there is objection to Congress or any other legislative body being a price-fixing body. But when we are dealing with monopolies a different situation is created. If there is no control in a board or a commission, then Congress must assume the responsibility in behalf of the public.

There is also another very vital defect in this bill.

There is absolutely nothing in this bill that in any way protects the public from collective bargaining on the part of the publishers.

While they say there should be free bargaining by the composers so far as the mechanical companies are concerned, there is absolutely nothing in this legislation which in any way prevents that small group of publishers in New York City from acting collectively together and fixing the rate of royalty to be paid.

They are without the pale of the law. They are in no way subject to the antitrust laws and are consequently not subject to restraint or prosecution.

They can sit around a table as we are here this morning and absolutely fix the price that is to be paid for the use of a musical production. There is nothing in this bill to stop that. It is my intention to file at the conclusion of my remarks a memorandum that will deal more fully with this and other objections to the bill.

Another pernicious feature of this bill is that they still have the right, under this bill, by the language of this bill, that provides that the payment of a royalty to the owner of the copyright will not release the musical record from the payment of further tribute to the owner of such copyright in case the record is used in a public performance for profit.

That is certainly one of the most pernicious things that could be thought of. It is only about six words in length, but far-reaching in its effect.

I will venture to say to the members of this committee assembled here this morning that if I had the opportunity, and the time permitted, I could produce from each of your respective districts that you represent any number of illustrations of the pernicious influence and effect of this unrestricted right to charge license fees for so-called public performances for profit.

Some one the other day took exception to letters that had been received requesting opposition to the enactment of this legislation. Permit me to say, that I have been in the State legislature, and I have been here sufficiently long to know that in a great many instances people write asking opposition to certain measures, and they frequently do not know either the terms or the effect of the bill they are opposing, but that is not always the case, and in this particular instance these business men know all about it, the unfair practices of this Authors, Composers, and Publishers' Society. There is not one of these business men but who could explain to you why he is opposed to the power or right contained in this bill giving the unrestrained right to fix license fees for public performances. They each know by painful experience.

Let me read to, by way of illustration, just a few letters to show in concrete form why the objection is made and why there is such strenuous opposition to this bill on the part of the business men of the country.

Here, for instance, is a letter written from Schenectady, N. Y., addressed to Lester Lasher, Rendezvous, Stop 18, Albany Road, Schenectady, N. Y. It says:

DEAR SIR: You will hereby take notice that the infringement of the copyright of our client, above named

This is written by the lawyer for the Authors, Composers, and Publishers

was permitted in your establishment between the hours of 10.33 and 11.05 p. m. on June 18, 1928, when the following selections were rendered without the consent of the Society of Composers, Authors, and Publishers:

Blue Danube, Ramona, and others were played on a Victor electric automatic record changer.

It is necessary that we hear from you favorably upon receipt of this letter in connection with the above; otherwise we have been instructed to take action upon the infringement reported.

There you have a business man who has purchased a Victor machine. He has purchased a Victor record on which a royalty_has been paid by the Victor Co. before it left its plant in Camden, N. J., and yet he is absolutely prevented from using that record in his business establishment unless he pays a further license fee to the copyright owners.

A member of this committee at the previous hearing asked why should not the composer have the same protection that the manufacturer of any patented article has in free bargaining to fix the price of his article. I answer, the copyright owner instead of having less protection has, in fact, greater rights given to him; for instance: When the patentee sells an automobile tire-and that was the article used by the committee member as an illustration-which he has manufactured, and you purchased it, you can use it in any way you wish. You could use it upon your own private automobile or upon an automobile, bus, or taxi used for public hire and profit, and it is absolutely free from any further tribute, after you have once bought it.

Is that true of a phonograph record? No; it is not.

For instance, in your town there is a little restaurant conducted by a man who has bought a phonograph. He buys his records and pays for them. The company from which he purchases these records has paid the 2 cents royalty for each composition appearing upon them as the law has fixed, and yet when the purchaser takes that record and places it upon the phonograph machine and plays it in his place of business, immediately an agent of this author's, composer's, and publisher's monopoly in New York City makes his appearance and touching him upon the shoulder, says, "You must pay us $75 or $100 a year to play those records in this restaurant."

He can not understand it. He knows he has paid for the record, but naturally can not understand why he can not use it in his busi

ness.

I now want to show you the arbitrary manner in which the public performance rights are charged for the copyright owners. Here is a letter from the New England Steamship Co., signed by F. J. Wall, the vice president of the company, dated August 2, 1928, and it says:

For the past several years, we have been under contract with the American Society of Composers, Authors, and Publishers, 811 Tremont Building, Boston, Mass.

that is their agent in Boston

under which we were obliged to pay the sum of $100 a year covering the playing of the society's copyrighted music on the various passenger steamers of this company.

We have been advised under date of July 21 that the contract for the current period was terminated, effective July 29, 1928, and that a new contract is issued upon somewhat different terms, so that the amount has been increased to $200 for one year.

Note the arbitrary manner in which this comes about. The letter continues:

The thought has occurred to me as to whether we should enter into the new arrangement, in view of the fact that we now furnish music with your equipment, instead of orchestras as heretofore.

Will you be kind enough to place this matter before your legal department and favor us with the benefit of their opinion as to what action we should take.

Now, to show you how it hurts the little business man as well as the big, here is a letter from the Marquette Pharmacy in Drumright, Okla., which says:

The American Society of Composers, Authors, and Publishers are becoming active in Missouri and Oklahoma, and are making drug stores and restaurants pay for the playing of music in their places of business, regardless of the kind of music that it is.

Their representatives went into a drug store in Macon, Mo., in March and found a phonograph playing Blue Heaven and Is She My Girl Friend. Two days later the druggist received notice that if the matter was not adjusted before April 5 that suit would be entered, and before the druggist's attorney could determine his rights the suits was entered, and it cost this druggist $300 fine, $150 for a three years' license, and also all of the court's costs. Here is how it affects business. The letter continues:

They are now demanding that I pay $15 a year to operate a radio receiving set in my store, when the set does not even belong to me, but is the property of my prescription clerk and is operated by him for his own amusement, also they are demanding $30 a year license fee from the owner of a restaurant in Drumright to operate a Victrola in his place of business. He is paying out a $1,500 investment, and he says that he will let this machine go back before he will pay the license, as he can not afford it, and also if a person would pay it the first year it is more than likely that it would be more the second and would keep on getting larger every year until it would become prohibitive. I do not see how the owner of a business would be interested in the purchase of a music-making device when he is faced with the possibility of having to pay an uncertain amount of tax in addition to the buying of records or rolls or tubes and batteries, as the case may be.

It seems to me that the society should be satisfied with the fee that the record manufacturers pay them, and in case they can collect from a radio receiving set they would be getting a fee from three different sources, if the station was broadcasting mechanical music, as the record maker pays them, the radio station pays them, and the owner of the receiving set would pay them, if he happened to have the set in his place of business.

If the lawyers who represent this society in Oklahoma are trying to collect a tax where they are not entitled to, I would like very much to know it, also I would like your views on the matter.

The CHAIRMAN. Those are the conditions under the present law? Mr. WOLVERTON. Absolutely, and this proposed law reestablishes and makes possible the continuance of that practice.

The CHAIRMAN. And it will be worse under the new law? Mr. WOLVERTON. It says directly in the language of this bill, except in the case of public performance for profit," thus recognizing the principle of right to charge license fees for public performances for profit although a royalty has been paid. If the present fixed royalty of 2 cents is changed and all restriction removed and free bargaining permitted, then there should at least be a provision in the law that releases the record from the payment of any further fees or licenses, and permitting free use of the record for any purpose, the same as in the case of any patented article.

The CHAIRMAN. And the playing of a phonograph in a drug store is a public performance for profit?

Mr. WOLVERTON. The Authors, Composers, and Publishers' Society so hold, and enforce their right to compel payment for such privilege. Here is a letter from the Hollister Drug Co., in Hollister, Mo.

It says:

Inclosed find the case filed against me for playing Victor records on my victrola in my drug store. These records were played for amusement and also to demonstrate records for sale.

This case has been bluffed, and I have taken out my victrola and discontinued the sale of your records.

In other words, if you buy a machine and you are selling records and you put them on for a demonstration for persons who might want to buy records, then it is a public performance for profit, and you have to pay for it. I have known of cases where that has been done, and I can produce those cases in any quantity, if the committee should desire to hear them.

Mr. FORT. Was that the condition referred to in the letter from the Victrola store?

Mr. WOLVERTON. Yes.

For instance, here is the case of The Green Top Restaurant, in Hiawatha, Kans., which shows that situation.

This letter says:

I have been requested by the American Society of Composers, Authors, and Publishers to pay a license to operate a victrola in my café or take the same out. I looked up the law on same and it looks like they hold the whip hand when it comes to a show-down. There are five cafés in this town and we all have victrolas. I don't know how many records the others buy, but up to a few months ago I had averaged seven new records a month. I can not conceive the idea of how this is helping you to sell records all over the country, as most cafés are not going to pay from $35 to $75 a year to play victrolas and 75 cents for new records. It is not right; so I am asking you to look into the matter and advise me whether or not I must pay a license or remove my victrola from my café.

I wish to close by making this further observation. There are approximately 105,000,000 records manufactured each year. Now, let us consider how it will affect the public if this proposed bill should become a law.

If this act should be adopted and the music publishers should increase the royalty on records to the same price of 122 cents which they have already placed on music rolls, it would mean that the additional sum to be paid by the people of this Nation to the few publishers in New York City would approach the sum of $21,000,000 annually. That is what it would mean in dollars and cents each year. The enactment of this law would mean that every family throughout the Nation would have to pay additional tribute on every phonograph record, and if the record should be used in business, no matter how small, then they would have to be paid still further tribute.

1909.

In conclusion, not because I have not much more that I would like to say, but I realize you have already indulged me to a considerable extent in this matter, and I appreciate it very much. The bill destroys the principle of full accessibility guaranteed by the law of There is nothing in this act that would prevent any one of the talking-machine companies from purchasing outright the copyright to a composition, and in such case it could refuse to grant anyone else the right to use that composition, for there is nothing in the proposed legislation that requires a copyright owner who manufactures his own records from having a complete monopoly.

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