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Senator THOMAS of Utah. I do not understand what the technique of the fee has to do with the treaty. Has it anything to do with it?
Mr. LUST. Yes, sir. If this bill were passed or if we joined the Bern Convention, these additional authors and composers and music publishers from the foreign countries would come into this country and add this additional fee to the theater owners, in addition to the fee that we now pay. That is what I am trying to bring out.
Senator THOMAS of Utah. Then, you have no fee to pay to the foreigners now?
Mr. Lust. No, sir.
Mr. Lust. Yes, sir; that is a free field; but, Senator, I may say this. It is not a free field, because ASCAP collects from us, and they use this music. Whether they pay, I do not know, but I do know that they use this foreign music, plus American music, and they make the theater owners pay this fee.
Senator THOMAS of Utah. That is, you only pay, though, for the American music?
Mr. Lust. Yes, sir.
Senator Thomas of Utah. Is it true that the foreign music producer has at least one advantage-he does not have to pay that fee? That is a practical advantage, not an advantage at law?
Mr. Lust. You mean if a foreign producer makes a film over in England or anywhere else?
Senator THOMAS of Utah. Yes.
Mr. Lust. Well, undoubtedly he does not have to pay that fee unless he uses American music. He does not have any fee unless he happens to use American music.
Senator Thomas of Utah. The American producer then is relieved of some little expense, if he is using American music?
Mr. Lust. No; we would still pay the producers and authors, by the year,
every seat we have. Senator Thomas of Utah. Whether they pay the other fellow or not?
Mr. Lust. Yes. In other words I believe this. I believe that when this film is reproduced in this country, for use on a copyright or a patented piece of machinery that ASCAP has any control over, or URCO, as we call them, or RCA, there is a fee paid for the use of that film, to these different companies, and we still pay ASCAP, regardless of what music is used. We pay them by the year for each seat that we have in our theater, and that, of course, we have always opposed. We think it is wrong. We feel that they are collecting this fee from the producers in Hollywood or wherever that film is made, for the use of this music on that film.
Now, the Motion Picture Theater Owners of America have a membership of over 8,000. That means three-fourths of the better motionpicture theaters in the United States belong to this organization of ours, of privately owned and operated theaters, and, of course, our position is opposition to a favorable report by this committee.
(Mr. Lust then read into the record the following statement on behalf of A. Julian Brylawski:)
STATEMENT OF A. JULIAN BRYLAWSKI, VICE PRESIDENT OF THE Motion PICTURE
THEATER OWNERS OF AMERICA BEFORE THE SUBCOMMITTEE OF THE FOREIGN RELATIONS COMMITTEE OF THE SEVENTY-SEVENTH CONGRESS, APRIL 17, 1941 Gentlemen, I am here as the official representative and vice president of the MPTO of America, an organization of theater owners and managers, with a membership representing more than three-fourths of the better motion-picture theaters in the United States, or a membership of more than 8,000 theaters. In other words, we are the exhibitors, as entirely separate from, the producers or distributors of motion-picture film. Our huge investment is largely in privately and independently owned and operated theaters. Our interest is in opposition to a favorable report by this committee.
To fully understand our position in this matter I must ask the indulgence of this body to digress from a direct discussion of the treaty to seemingly irrelevent matters, but actually necessary to explain our position. Under the copyright law of 1909 the theaters have for years been paying to the owners of copyrighted music fees for the “performing rights” to all music used in their theaters. These fees have been collected by an organization known as the American Society of Composers and Publishers, or ASCAP. These fees were based on the seating capacity of the theater and were on a reasonable basis as the theaters had an escape that in case the fees became unreasonable they could dispense with the use of ASCAP music entirely, as has been done recently by the broadcasting chains.
With the event of sound pictures, however, the music was recorded on the film with the picture and thus inseparable, this picture changed completely and the theaters protection against exorbitant or ruinous charges was based purely on the public interest and a definite feeling in Congress that if these charges ever became oppressive that something would be done about it. It is not that the theater owners objected to paying the fee on account of the actual money, so much as the principle involved, as well as the ever-present danger of ruinous increases in the fees.
The theater owners purchase or lease from the producers the motion picture, which is a perfectly useless piece of merchandise unless it can be shown to the public. Therefore, any music, or other copyright material, embodied in the film shown is construed as being shown for profit. This condition makes the theater owner liable (under the authors exclusion of performing rights as provided in the Copyright Act) for the use of all the copyright material in the film, which includes the story, scenery, scenario, costumes, as well as many other things besides the music. Realizing this peril to the exhibitor, producer arrangements have been made to clear all of this material for the public, with the exception of the “performing rights” of the music, most of which are assigned to ASCAP even before the music is written.
A contract, which expires September, is at present our only protection should the society seek to obtain from the theater the loss of revenue they have suffered by their recent breach with the broadcasting chains. The broadcasters can do without ASCAP, but the theater owner is absolutely helpless inasmuch as he must run and show the music that is incorporated in the film, as it is impossible to separate them.
While all of this will seem to this committee purely domestic matters with no bearing on the treaty I bring it in as background because of our fears. ASCAP is an American organization for the control of copyrighted music. Practically every other country signatory to this, and especially the large ones, have their own performing rights societies. Many of them we note were delegates to the Berlin-Rome Conventions. At one time ASCAP had reciprocating arrangements to control the rights of the foreign societies in America, but that contract expired many years ago, so that with the ratification of this treaty the theaters, broadcasters, and other users of music in the United States are faced with the danger, if not actual necessity, of paying “performing rights” fees to scores of Foreign Copyright Associations. That this is not idle fears let me inform the committee that in 1936 when the treaty was first confirmed by the Senate, later to be withdrawn, that in the period between the treaty passing and reconsideration, three foreign copyright societies opened offices in New York for the collection of fees from the American theaters, radio and users of music, and more would have followed if the treaty had not been withdrawn. It is further explained to this committee the tremendous importance of this phase of the legislation. Let me call your attention to the fact that under the present copyright law each user of music is subject to a punitive fine of $250 for every performance of any piece of music, whether a few bars, a song, or complete show the penalty is the same for which if they have not paid the performing right fees and each performance is considered a separate breach. Faced with the enormous danger the theaters have no choice but to pay “performing right” fees, no matter what the cost.
I am creditably informed that in Europe these performing-right societies actually have representatives sitting in the box offices of the various theaters and the purchaser of a ticket to a show in Europe pays not only for the price of the ticket to one collector, but a government tax to another collector and the music tax to still another collector before his ticket has any value, and this tax runs from 5 to 10 percent of the ticket. If this system were followed in America, based on our recent collection experiences with our own defense tax, the cost to the American public might be anywhere from 40 to 80 millions of dollars a year. The American theater has never passed on to the public any of the music-tax fees they have been paying, but were the European condition to prevail this, of course, would be inevitable.
Of course, the remedy for all this lies in the revision of our copyright law, that will set forth a reasonable scale for the use of music, as has been done in Canada, or such necessary restriction as to not leave the users of American music at thé mercy of exacting societies. Believing that every disease, or condition, that is so bad must bring either a cure or catastrophe, the theater owners still hope that we may be able to clear at the source the use of music embodied in film, but the ratification of this treaty, at this time, with its retroactive condition, restoring to copyright so much of the music now in public domain, on the incidental use of which so many millions of American capital are involved, it seems to us entirely necessary that this ratification be delayed until changes can be made in our own copyright law that will adequately protect American users of music, and espe, cially the theater interests, who are in such a helpless and defenseless position.
Senator Thomas of Utah. Mr. Lust, I notice this in Mr. Brylawski's statement:
That this is not idle fears, let me inform the committee that in 1936 when the treaty was first confirmed by the Senate, later to be withdrawn, that in the period between the treaty passing and reconsideration, three foreign copyright societies opened offices in New York for the collection of fees from the American theaters, radio, and users of music, and more would have followed if the treaty had not been withdrawn.
Do you th nk that that could rossibly be true? The treaty was ratified on an afternoon, as I remember it, w en Senator Duffy was not present. The next day, he made his statement in the Senate, and the ratification was withdrawn, right there and then.
Mr. Lust. Well, that may be correct, Senator Thomas. However, I could check on that. I will be glad to check on that.
Senator THOMAS of Utah. I remember that the treaty went through in just a very, very informal way, by the reading of the calendar, and the sponsor of the treaty, and the person who made the report, was not even present. The next day, Senator Duffy called attention to the fact that they were still in the midst of discussing some arrangement whereby a domestic law would be reported, and therefore the treaty was restored to the calendar. The point is not a great one, of course. Anyone might open an office in anticipation of the treaty.
Mr. Lust. It is possible. It can be done.
Also, Mr. Chairman, with regard to what is said by Mr. Brylawski about taxes, I will relate a comparison at this present time in the State of Maryland where I have several theaters. We pay the State, in addition to paying the town tax- we pay our State tax, our music tax, and a real-estate tax. We pay a tax of 1 percent on our receipts, not on our profits. We do not pass that on to our patrons.
absorb that tax. We absorb this music tax that we now pay ASCAP but there has got to be a saturation point eventually if these taxes continue to pile up on us theater owners; the public has got to pay the taxes. The tax we are asking the public to pay now is just the defense tax or the emergency tax. I mean that is what must eventually happen, if they continue to ask us to pay all these things.
Senator THOMAS of Utah. Thank you.
STATEMENT OF WOODRUFF RANDOLPH, SECRETARY-TREASURER,
INTERNATIONAL ALLIED PRINTING TRADES ASSOCIATION,
Mr. RANDOLPH. My name is Woodruff Randolph, SecretaryTreasurer of the International Allied Printing Trades Association, and I desire to present for the record a statement of that association, which is composed of five international printing trades unions, namely, the International Typographical Union, the International Printing Pressmen and Assistants Union, the International Electrotypers and Stereotypers Union, the International Photo-Engravers Union, and the International Brotherhood of Bookbinders.
First, Mr. Chairman, let me express the thanks of the association for the courtesy the committee extended to our association, and for its cooperation in our efforts to present to the committee a matter which to us is of very grave importance. Admitting our own inadequacy, and due to the fact that we are engaged in the work of the labor union, to appreciate all of the intricacies of foreign relations, we ask that you bear with us in hearing our story in our way, regardless of how it may appear in relation to the technical conception that lawyers may have of foreign relations and foreign obligations.
The association and wherever I use that word I mean the International Allied Printing Trades Association-is composed of approximately 175,000 printing trades workers included in the membership of the above-mentioned printing trades unions. This large number of printing-trades workers are vitally concerned with the question of American copyright and are most emphatically opposed to the ratification of the Copyright Treaty because it would mean the nullification of American laws and a substitution therefor of laws agreed upon by representatives of foreign nations. In a statement made to a similar subcommittee hearing on Tuesday, May 29, 1934, the Honorable Clarence C. Dill, United States Senator from the State of Washington, described this International Copyright Convention in the following words:
It is a convention made up by foreign countries; the representatives are of reign countries. It is a
law, and if we are going to join it, we must scrap our long history of copyright legislation and take the laws of a combination of foreign nations.
I have appended to this statement the full text of Senator Dill's brief statement before that subcommittee, for the information of those who may care to read it.
It is admitted by representatives of the State Department that such is the case.
A list of countries, parties to the convention for the protection of literary and artistic works (according to the records of the Department of State, April 1, 1935), and listed in exhibit 1, page 6, Executive Report No. 4, Seventy-fourth Congress, first session, April 1935, discloses that:
Of the countries listed, 25 are now under the domination of the Axis Powers. Nine other small countries are listed, 2 of which are now at war with the Axis, and others soon may be. The rest of those listed are a part of the British Empire, the future economy of which is definitely uncertain. I have appended to this document exhibit No. 1, in which the various countries, as printed in the State Department records, are separated into those that are under Axis domination, numbering 25, and the few small independent countries that are not under Axis domination, and the British Empire, as the only other signatory to this convention, and of those few small countries that are listed as independent countries I find Greece and Yugoslavia. Since I prepared this statement, Yugoslavia may be listed among those now under Axis domination. Not having seen the morning paper, I do not know whether Greece is or not. So that would leave about 7 small countries in the list that are not under Axis domination or a part of the British Empire.
It is a generally accepted fact that business, as we have known it, cannot exist under the laws and the economic philosophy of the Axis Powers. What the condition will be in the British Empire in the future is seriously open to question. The other nine small countries listed-namely, Brazil, Greece, Haiti, Irish Free State, Portugal, Sweden, Switzerland, Turkey, and Yugoslavia-are hardly in a position to have any important influence on world policy regarding copyrights.
It is amazing that our State Department would ask us to scrap what protection we have under our present copyright laws in the face of such world chaos.
The Senate of the United States, by unanimous vote, on August 5, 1935, the last time copyright legislation was acted upon, inserted an amendment which reads as follows:
Section 15 of such act, as amended, is hereby amended to read as follows:
"That all copies of any copyright material in the English language which shall be distributed in the United States, in book, pamphlet, map, or sheet form, shall be printed from type set within the limits of the United States, either by hand or by the aid of any kind of typesetting machine, and/or from plates made within the limits of the United States; or if the text be produced by lithographic, photogravure, or photo engraving, or any kindred process, or any other process of reproduction now or hereafter devised, then by process wholly performed within the limits of the United States, and the printing or other reproduction of the text, and the binding of said book or pamphlet, shall be performed within the limits of the United States. Said requirements shall extend also to any copyright illustrations, maps, or charts within any book or pamphlet, or in sheet form. Said requirements shall not apply to work in raised characters for the use of the blind.”
I believe that was referred to as the Trammel amendment.
The Senate therefore unanimously agreed with the position taken by the allied printing trades and printing trades employers.
It has also heretofore been considered by all affected that enabling (domestic) legislation is necessary before this country adheres to the convention (p. 223, hearings March 10, 1936, House Patents Committee).