URR.4/27/29

COPYRIGHT BILL

HOUSE OF REPRESENTATIVES,

COMMITTEE ON RULES, Wednesday, February 13, 1929.

The committee met at 10.30 o'clock a. m., Hon. Bertrand H. Snell (chairman) presiding.

The CHAIRMAN. The committee will come to order. There are several members here who desire to be heard this morning in oppo-sition to H. R. 13452.

[H. R. 13452, Seventieth Congress, first session]

A BILL To amend the act entitled "An act to amend and consolidate the acts respecting copyright," approved March 4, 1909. as amended, in respect of mechanical reproduction of musical compositions, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (e) of section 1 of the act entitled "An act to amend and consolidate the acts respecting copyright," approved March 4, 1909, as amended (United States Code, title 17, section 1 (e)), is amended to read as follows:

"(e) (1) to perform the copyrighted work publicly for profit if it be a musical composition, and to make any arrangement of 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: Provided, That the provisions of this act, as far as they secure copyright controlling the parts of instruments serving to reproduce mechanically the musical work, shall include only compositions published and copyrighted after July 1, 1909, and shall not include the works of a foreign author or composer unless the foreign state or nation of which such author or composed is a citizen or subject grants, either by treaty, convention, agreement, or law, to citizens of the United States similar rights.

"(2) If the proprietor of the copyright of a musical composition grants to any person, for the manufacture and sale of ordinary commercial phonograph records or perforated music rolls, the right to use the whole or any part of such copyrighted musical composition upon the parts of instruments serving to reproduce mechanically the musical work, such grant shall be in writing and shall not be effective unless and until promptly recorded in the Copyright Office by the copyright proprietor. Royalties under any such grant, or under any subsequent agreement made under paragraph (3), shall be payable at a specified rate per ordinary commercial phonograph record or perforated music roll. The failure of the copyright proprietor to record pomptly such grant shall be a complete defense to any suit, action, or proceeding for any infringement of such copyright by means of like parts of instruments serving to reproduce mechanically the musical work in a similar manner.

“(3) Any such grant may be altered, modified, extended, or canceled by subsequent agreement between the copyright proprietor and the grantee, but no such subsequent agreement shall be effective until ninety days after being recorded in the Copyright Office by the copyright proprietor.

"(4) After any such grant or subsequent agreement has become effective, any other person may make like use of such copyrighted musical composition upon the same terms and conditions in respect of the royalty payable, the time, mode, and manner of such payment, and the security for the payment thereof, as are prescribed in such grant or subsequent agreement in effect

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at the time he makes such use of such copyrighted musical composition, if he first serves notice upon the copyright proprietor at his last address, as disclosed by the records of the Copyright Office, of his intention to make such like use of such copyrighted musical composition. Such notice of intention shall be subscribed by the intending user under his hand and seal, and duly acknowledged, agreeing that his use of such copyrighted musical composition shall be upon the same terms and conditions in respect of the royalty payable, the time, mode, and manner of such payment, and the security for the payment thereof, as are prescribed by such grant or subsequent agreement in effect at the time of his use of the copyrighted musical composition.

"(5) The payment of royalty by any grantee, or any person making like use of the copyrighted musical composition under the provisions of paragraph (4), shall free the articles or devices for which such royalty has been paid from further contribution to the copyright except in the case of public performance for profit.

"(6) Any manufacture and sale of such parts of instruments serving to reproduce mechanically such copyrighted musical work, in violation of the provisions of this Act, as amended, shall be deemed to be an infringement of the copyright of such musical work.

"(7) It shall be unlawful for any person (A) to change, alter, or deviate from the terms of a grant or subsequent agreement made under this subsection, with respect to the royalty payable for such use of the copyrighted musical composition, or with respect to the time, mode, and manner of payment and security for the payment thereof, except in the manner provided in paragraph (3); (B) to give, grant, or concede to any person any refund, rebate, discount, preference, benefit, or advantage whatever from the royalty fixed in such grant or subsequent agreement; or (C) to accept or receive any such refund, rebate, discount, preference, benefit, or advantage. Any person violating any provision of this paragraph shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than $500 nor more than $5,000."

SEC. 2. The first paragraph of subsection (e) of section 25 of such act of March 4, 1909, as amended (United States Code, title 17, section 25 (e)), and any other provision of such act of March 4, 1909, as amended, in respect of the royalty of 2 cents on each part manufactured of instruments serving to reproduce mechanically a copyrighted musical composition are hereby repealed.

SEC. 3. This act shall take effect on July 1, 1928.

[House Report No. 1520, Seventieth Congress, first session]

The Committee on Patents, to which was referred the bill (H. R. 13452) to amend sections 1 (e) and 25 (e) of the act entitled "An act to amend and consolidate the acts respecting copyright,” approved March 4, 1909, in respect of mechanical reproduction of musical compositions, and for other purposes, having had the subject matter of this bill under consideration, reports the same to the House without amendment and with the recommendation that the same do pass.

The purpose of this amendment is to modify the so-called compulsory license provisions of the copyright act of 1909 (sec. 1, subsec. (e), and sec. 25, subsec. (e), 35 Stat. L., pt. 1, pp. 1075-1088), by securing to the proprietor of a musical copyright an opportunity of freedom of bargaining with respect to the use of his musical composition on the parts of instruments serving to reproduce it mechanically, such as ordinary commercial phonograph records and preforated paper music rolls; and to extend the remedies of the act for the prevention of and prosecution for infringements to infringements by means of such mechanical devices.

The act of 1909 fixed the maximum royalty which might be charged by a copyright owner in respect of such devices at 2 cents per part manufactured, and provided that the copyright owner, if he himself manufactured such devices or permitted or licensed another so to do, then any person might make similar use of the copyrighted work upon notice to the copyright owner of an intention so to do, regardless of the financial responsibility or integrity of such intending

user.

Under the amendment the copyright owner is permitted to bargain for the rate of royalty to be paid by others in respect of devices serving to mechanically

reproduce the work, the time, mode and manner of payment, and security for the payment of such royalties, but is required to promptly file in the office of the Register of Copyrights an original copy of the first license granted by him to another to manufacture such devices. Upon and after such filing, any manufacturer of such devices may, upon notice to the copyright owner, then avail himself of the terms and conditions of the original license as to the rate of royalty to be paid, the time, mode and manner of payment, and security for the payment thereof.

Extended hearings were held, and much testimony, was taken from representatives of both the copyright owners and manufacturers of devices which serve to mechanically reproduce copyrighted musical works. The matter has been studied for years by the committee, and all interests have generally agreed as to the justice of the principle of free bargaining governing the relationships between the copyright owners and the manufacturers of mechanical devices.

It seemed apparent to your committee that obvious injustice was done to the composers and authors of musical works in depriving them of an opportunity to freely bargain in respect of the terms and conditions under which mechanical reproduction of their work could be licensed to others and to subject them to a statutory form of compulsory licensing which afforded no adequate protection against dishonest and delinquent manufacturers.

It seemed equally apparent that for the just protection of the manufacturers a musical composition, once released by its copyright owner to any manufacturer for mechanical reproduction, should be available to all manufacturers upon terms equal to those required to be met by the first licensee.

This amendment meets these conditions, will eliminate abuses and evils and injustices which have prevailed for 19 years, and is therefore recommended for favorable consideration.

I believe Mr. Chindblom is one of the first who desires to be heard. STATEMENT OF HON. CARL R. CHINDBLOM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. CHINDBLOM. Mr. Chairman and gentlemen of the committee, may I inquire whether any rule has been presented and is pending? The CHAIRMAN. There has been no formal rule presented, I believe.

Mr. CHINDBLOM. I hope the members of the committee may be able to survive the experience of finding me in opposition to a request. before the Rules Committee. I think this is my first appearance in

that rôle.

The CHAIRMAN. We are complimented.

Mr. CHINDBLOM. I will say, Mr. Chairman, I am not here to oppose legislation on the subject matter involved, which is principally the mechanical reproduction of copyrighted compositions.

I am, however, opposed to the pending bill, H. R. 13452, in its present form, and I doubt very seriously that during the balance of this session, if the bill were to be brought up on the floor of the House, it could receive that consideration which I think it should have. And I will say frankly that I would be quite disturbed about sending this bill to another body from the House in an incomplete condition, because we know that in the last few hours of a dying session close consideration can not be given in either House to details which require considerable technical and even legal consideration. This bill relates to what are ordinarily known as records, music rolls, and the like, through which music and communications by word of mouth, through mechanical instruments, are reproduced.

There are three parties involved in that kind of a process. There is, of course, first the author or composer, who has written the song

or the piece of music, or the address, or the drama, or whatever it may be.

Secondly, there is the mechanical producer who makes the record or the paper roll. Thirdly, there is the other artist, particularly in the case of a musical composition, who produces the written composition, the singer, the orchestra, or the musical instrument soloist. All three of these have an interest in the production of the record. The interests of all three should be guarded, since we have started out on this theory of legislating on the subject of musical productions.

I am very much afraid that in the preparation of the pending bill the author, the composer, received the bulk of the consideration. I think the bill is written largely for his benefit and in his behalf. I understand that hearings were had, very lengthy and exhaustive hearings, probably, as I have been told, upon the general subject matter; that the bill was prepared by a subcommittee of the Committee on Patents, and that there were no hearings upon the bill after it had been prepared and introduced. Is that correct?

Mr. LANHAM. Do you want an explanation of that?

Mr. CHINDBLOM. Yes.

Mr. LANHAM. We had hearings for about four or five years on this subject. We tried to get the respective parties to agree upon a bill we could introduce.

The respective parties would never do that, and thereupon we drew up a bill ourselves-that is, a subcommittee appointed by the Committee on Patents. Hearings have not been held upon this particular bill, but they have been held on the general subject matter, and the various parties not being able to get together on a bill, the subcommitee drew one, and the committee has never heard objections to this bill.

Mr. VESTAL. As a committee, perhaps, we have not. The individual members have heard objections, and some of the suggestions that have been made we are entirely willing to incorporate in the bill.

Mr. PURNELL. I want to clear up something in my own mind. Were these people who are here now given ample opportunity to appear before your committee in reference to the objections which they will urge before the Committee on Rules?

Mr. LANHAM. If you have reference to the gentlemen who are here

Mr. PURNELL (interposing). I do not know who are here. Mr. LANHAM (continuing). Representing the various talkingmachine companies-yes.

Mr. CHINDBLOM. Not to this bill.

Mr. LANHAM. To the subject matter of this bill.

Mr. CHINDBLOM. Let me ask you whether I am not correct in this statement. At the time the hearings were held-and they were protracted hearings-all phases of the subject matter were discussed by various representatives of various interests, but there was no specific proposition before the committee as one bill.

Mr. LANHAM. There was a specific bill as to this subject matter, but they could not get together upon their amendments, so, after the hearings, the subcommittee drew this bill.

Mr. CHINDBLOM. Is it not true that you did have what you called an informal bill, which was to some extent the basis of the discussion in the hearings, and that bill was never introduced in the House?

Mr. LANHAM. Yes; that bill was introduced in the House, and then the respective sides offered bills.

Mr. CHINDBLOM. There was a bill?

Mr. LANHAM. They could not get together, so the subcommittee, after full hearings, drew a bill.

Mr. CHINDBLOM. I do not mean to say there was not a bill introduced.

Mr. RANSLEY. There were no hearings, then, on this bill?

Mr. LANHAM. On this particular bill?

Mr. RANSLEY. Yes.

Mr. LANHAM. No, sir. We had full hearings, and we drafted this bill.

Mr. O'CONNOR. Were these hearings on the subject matter contained in this bill?

Mr. LANHAM. Absolutely.

Mr. O'CONNOR. There were not any hearings on this literary masterpiece that appears before us now?

Mr. CHINDBLOM. This literary masterpiece is the important thing here.

Mr. VESTAL. May I make a statement? Every phase of the objections to this bill by the reproduction companies has been discussed for the last five years before our committee, every phase of it, even to this particular bill.

Mr. O'CONNOR. Including the 2-cent provision?

Mr. VESTAL. Yes.

Mr. CHINDBLOM. Let me say right there that, of course, the 2-cent proposition has received the publicity.

If you state it blandly that there is a law which provides that a fixed price of 2 cents per record shall be paid by mechanical reproducers, that looks to those of us who are opposed to price fixing generally by statute as a very serious matter.

The fact is that when this present copyright law was passed in 1909 the authors and producers were not protected at all by any kind of remuneration or compensation for the records, and at that time the bill was finally agreed upon and this price of 2 cents was consented to as being what they could obtain at that time.

I will say this: That while this bill has taken some time in its preparation, and the present Committee on Patents has been a long time considering it, the original bill in 1909 received long consid

eration.

I have in my office the hearings held in 1906 and 1908, and there were subsequent hearings in 1909 upon that very bill. Some of them were before the House committee and some were before the Senate committee and some were before a joint committee made up of members of the Senate and House committees.

This is not an easy matter to handle by way of legislation. It is not an ordinary sort of bill. It is not merely a legislative proposition which relates to rules for the conduct of the people, or for the protection of the rights of all the people. It has a large public interest, it is true, a very large public interest, because the entire people of the country are interested in procuring these records for their phonographs and their victrolas and their other mechanicalreproduction machines at reasonable prices; but, aside from that,