this is a bill which essentially affects private interests and private industries. It affects large investments of capital; it affects large stocks on hand.

In 1927 there were 105,000,000 records sold in the United States. In 1928 there were probably 120,000,000 sold. The figure of 105,000,000 is from a census report on the sale of records in the United States in that year. I have not the figures for the sale of music rolls.

There is now coming in a new method for making these mechanical reproductions that is, reproduction not by the use of records or paper rolls but by the use of films-and that process is not covered by this bill at all. There is no reference to it.

All of these reproducers have large stocks on hand. In a branch of one of the large concerns in which there was a fire about a year ago 65,000 records were destroyed by fire, and that is only one of 25 or 30 branches maintained by that company alone. I do not know how many records there are on hand now.

Mr. BANKHEAD. How does this bill affect the stocks of those who have those records?

Mr. CHINDBLOM. This bill provides that this provision shall be retroactively effective as of July 1, 1909.

Mr. BANKHEAD. Are you sure of that?

Mr. CHINDBLOM. Yes; there is no question about that. I will say to the chairman of the Patents Committee, I know that question was discussed in the hearings, but the committee disagreed with the people who are interested in these mechanical reproductions and made it effective as of July 1, 1909.

Mr. MICHENER. Are you clear on that?

Mr. CHINDBLOM. It is in this bill, H. R. 13452. On page 2, line 3, you will find this proviso:

Provided, That the provisions of this act, so 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 composer is a citizen or subject grants, either by treaty, convention, agreement, or law, to citizens of the United States similar rights.

Mr. MICHENER. Let me ask you one question there. I have not studied the bill through, but is not the real purpose of this legislation to place the composer of music, for instance, on the same footing as a patentee? In other words, the creative genius of the composer is his, and the inventive genius of the patentee is in that which he invents. Is not the real purpose of this bill to simply provide that there shall be no distinction?

Mr. CHINDBLOM. That may be so, but I will venture to say that that is not a complete analogy. I stated a moment ago, I think before the gentleman from Michigan came in, that in the production of one of these records there are three distinct parties involved.

Mr. MICHENER. Wait one moment. Let us get down to the fundamentals. Let us say you and I live in the same town. You are an artist along a particular line, and you develop and create a musical composition. I am interested in automobiles; I spend my time in my shop, and I invent a certain device. I write down here to Washington-making this matter very plain-I write to Washington and

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state to the department that I have an invention that I want patented.

The United States Government gives me a patent. They say to me, "Mr. Michener, you have created this invention; it is yours. You can sell it to such persons at such prices as you think you can obtain."

On the other hand, they say to you, "Mr. Chindholm, you have worked and you have also created something, but you can only sell your creation under certain limitations."

Is not the real purpose of this bill to remove those limitations, and place those people on a parity?

Mr. CHINDBLOM. I will say this first, that our copyright laws, of course, create monopolies. They create statutory rights, not natural and inherent rights.

Mr. MICHENER. The same as a patent?

Mr. CHINDBLOM. There was a common-law copyright, but we have gotten far beyond that. The patent is the same thing.

Let us take this for illustration. You write a song. You come to me as a mechanical reproducer. Your song will always remain in a state of " innocuous désuetude" unless I produce a proper person to sing that song.

Mr. MICHENER. I guess that is all right.

Mr. CHINDBLOM. That is a good Democratic phrase. In other other words, the mechanical reproducer engages the artist who performs the composition. It will make a big difference to you whether Jennie Jones sings the song or Galli-Curci sings it.

Mr. MICHENER. But it makes no difference to the two men in the shop.

Mr. CHINDBLOM. What two men in the shop?

Mr. MICHENER. To you and me, to you working on music and me working on an automobile patent. We would not have this legislation here, had there not been a distinction in the first place. There was a distinction made as to talent, the one man being an inventive genius and the other a creative genius. We have dealt differently with the creative genius than we have with the mechanical genius, and as I see it, this bill is for the sole purpose of allowing the creative genius the same rights under the law as a protection of his creation that the patentee now has.

Mr. CHINBLOм. But it is not the protection of his creation merely; it is the use of his creation in a mechanical reproduction with which he has nothing to do, and in which he has no investment, and has no interest, financial or otherwise, through the creation-by invention and manufacture-and the operation of an ingenious and costly machine, and the reproduction of his composition by another person, another artist, who is just as essential as the author or composer is in popularizing that production.

Mr. WILLIAMS. What is wrong with giving the producer or the composer the power to bargain?

Mr. CHINDBLOM. We are not opposing that, as a general proposition.

Mr. WILLIAMS. As I understand it, in the present law there is a limitation so far as that is concerned, that the patentee has that right, but the composer of music is limited to a certain amount.. in the present law.

Mr. CHINDBLOM. Of course, if we do not put the composer into this law, he will have no right at all. He did not have a right prior to 1909. While the patentee had the rights you are speaking of, the copyright owner did not have these particular rights prior to 1909, though he had the general copyright protection upon his manuscript.

At that time these authors and producers came to Congress and secured the enactment of the bill which is now the law. It was then recognized that this was a subject for special treatment, and it received special treatment, to the extent that Congress went out of its way at that time to compel the payment of a specific price for the purpose of protecting the author and the composer.

I am not in favor of price fixing by statute; I think my record is as clear as anybody's on that. But I think when this law is changed it should be comprehensively changed, and changed with full protection of all the rights of the people who are interested in one way or another.

In the first place, it is not right, in my opinion, to go back to July 1, 1909, and say to these people, " You will now have to bargain with these composers for songs that they wrote in 1909.” Mr. MICHENER. I agree with you.

Mr. CHINDBLOM. And for which you now have records on hand in your stocks.

Mr. O'CONNOR. And for which they have contracts?

Mr. CHINDBLOM. They do not have to have contracts. I will say this. They have been making contracts. The present law provides that there shall be a payment of 2 cents per record, or not exceeding 2 cents per record.

Mr. GARRETT. This language was carried in the act of 1909, was it

not?

Mr. CHINDBLOM. The first part of it was carried in the act of 1909. Mr. GARRETT. The proviso?

Mr. CHINDBLOM. Not the proviso in that form.

Mr. O'CONNOR. I do not think we should consider this rule at all. The bill does not comply with the Ramseyer bill, the way it is printed. You have to dig out what it amends, to find out just what we are doing now.

Mr. LANHAM. It was reported before the rule was adopted.
Mr. CHINDBLOM. Here is the provision of the present law:

And provided further, And as a condition of extending the copyright control to such mechanical reproductions—

I call your attention to that language. It was made a condition to the extension of the copyright control to mechanical reproductions, because prior to that time there was no copyright control of mechanical reproduction—

That whenever the owner of a musical copyright has used or permitted or knowingly acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work, any other person may make similar use of the copyrighted work upon the payment to the copyright proprietor of a royalty of 2 cents on each such part manufactured, to be paid by the manufacturer thereof.

And then it goes on to provide for a report on the twentieth of the month, substantially as in the proposed amendment.

Going further on this subject of the retroactivity of this proposed legislation: Ever since 1909 that has been the law; 2 cents have been paid for each record, where there was no contract. At that time, and for a long time subsequent to 1909, the producers and composers made contracts with these mechanical reproducers for a less price than 2 cents, because they conceded that some reduction was fair. Mr. O'CONNOR. How are those contracts going to be affected in any way?

Mr. CHINDBLOM. Because now this law becomes effective as of July 1, 1909, and they will have to go in and bargain anew. There is no protection for the mechanical records which are on hand. There is no protection for them at all.

Mr. O'CONNOR. You mean if anybody has made a contract for less than 2 cents he can come in and demand a new contract?

Mr. CHINDBLOM. Certainly.

Mr. MICHENER. What you mean is that the law was in force, and certain manufacturers, without those contracts, relying upon the law, manufactured, and that they have large stores on hand to-day, and those will be affected, although they had no legal contract other than the guaranty given them by the law.

Mr. CHINDBLOM. I will give you some distinct, definite facts on that. These authors and composers were in the habit always of making contracts with the mechanical reproducers for the royalty that was to be paid, and it was practically always less than 2 cents, because they realized that there would be a loss in the case of the supply in hand.

But in 1927 when it became apparent that there might be a change in this law, the representative of the producers, the authors, composers, and producers-and they are as close a corporation as there is in the United States

Mr. O'CONNOR (interposing). What do you mean by producers? Mr. CHINDBLOM. The authors, composers, and producers of musical compositions.

At that time their executive officer, not under the title of such executive officer, but in behalf of those who are said to be named in Schedule A thereof, one Mr. E. C. Mills sent a letter to the four biggest mechanical reproducers in the United States, and he said then, after reciting certain whereases:

I am, therefore, authorized and requested to notify all manufacturers of parts of instruments serving to mechanically reproduce musical works (phonograph records and instrumental player-piano rolls) that on and after January 1, 1928, the copyright owners named in Schedule "A" hereto attached, will require that musical works of which they are the copyright proprietors be thus mechanically reproduced only under procedure as and at the full rate of royalty provided by the copyright law of 1909.

In other words, the mechanical reproducers were served with notice that the copyright owners would not make any contract or any agreement. Of course that was their privilege, but it shows their attitude. They sent these notices to the four big mechanical reproducers, and I am informed they did not inforce that rule as to other mechanical reproducers. Evidently this law was to their advantage in December, 1927.

That is one feature, but I am not going to discuss the 1909 feature any further.

To show you how different this subject matter is from any other subject matter with which Congress has to deal, I might mention— and it was astounding to me when I satisfied myself of this factthat a copyright owner under the copyright law has no less than 19 different rights.

There are so many things involved here. There is the dramatic. reproduction, the public performance. This same organization, the Authors, Composers, and Producers, are the people who are inforcing, as they have a right to do under this law-and this is to show the special privileges which they are enjoying-who have the right to compel the payment of royalties for any sort of a performance

after 1909.

It has come to the point now that a drug store selling these records manufactured by the mechanical reproducers is not permitted to play a record in that store for the purpose of advertising a record in order to get a sale for it, because it is claimed that that is a public performance.

Mr. LANHAM. If they put a nickel in the slot?

Mr. CHINDBLOM. I do not understand so. As an illustration, our daughter is engaged in producing an amateur play which requires about 15 minutes to perform. The performers are members of a young people's society of one of the churches in the District. They have to pay $5 to the person who wrote that little playlet, under the present copyright law. I am not complaining of that, but it shows the extent to which the present copyright law goes in protecting authors and producers.

The mechanical reproducers have a fear-and I think they have a right to have that fear-that if this bill in its present form goes into effect they are not going to have anything to do with the bargaining. There will not be any bargaining. This closed organization of authors, producers, and composers will tell them what they must do, and if they do not do it somebody else will produce the mechanical records.

The CHAIRMAN. May I interrupt you right there? As I understood you earlier you said you were not opposed to the principle of the right of bargaining?

Mr. CHINDBLOM. If it is properly safeguarded.

The CHAIRMAN. You are not opposed to the principle, but you want it properly safeguarded?

Mr. CHINDBLOM. Yes; I want it properly safeguarded. I will say this with reference to this law: It is not an ordinary piece of legislation. It relates to acquired rights.

I am saying acquired rights because I know "vested" does not sound so well. It relates to rights already acquired and existing. Under this law it may entirely revolutionize the manufacture of records and music rolls and the like, and I think it ought to be framed, before it comes into the House, in such shape that it has at least substantial support on the part of those who are reasonably fair on the proposition.

Mr. BANKHEAD. You say you believe in the right of bargaining if it is properly protected. What suggestions have you to make with reference to this subject matter as to the proper protection of the rights of the mechanical producers, which are violated, according to your theory?