the board of directors of both of our associations to present our statement to you today.

Mr. KASTENMEIER. Fine. You may proceed, Mr. Cantor.

STATEMENT OF ELI CANTOR, THE COMPOSING ROOM, INC., NEW YORK, N.Y., FOR INTERNATIONAL TYPOGRAPHIC COMPOSITION ASSOCIATION, INC., AND ADVERTISING TYPOGRAPHERS ASSOCIATION OF AMERICA, INC.

Mr. CANTOR. I am appearing as the representative of some 500 small businessmen, members of the associations that have been described to you. We are in every part of the United States and we are on the firing line of the questions you have been discussing. We are the ones who in our own plants-mostly small proprietorships, family plants and the like-we are the ones who will bear the brunt of the decisions you make.

The 114,000 employees represented in the statement made by Mr. Van Arkel are by and large our employees, aside from those on newspapers. We are the ones who confront the foreign typographer who comes knocking on the door, and today he is here knocking on the door of the American publisher, of the American industrial community, asking for the business that we have in the past been doing.

We therefore have a very vital concern with the manufacturing clause in the copyright law and in clarifying our position under it by spelling out that typesetting is included specifically in every part of section 601 (c).

Mr. Luther's introduction and your papers indicate that my name is Eli Cantor. I could not help but smile, listening to the testimony yesterday, thinking that perhaps my name should be David. When one considers the Goliath of interests opposing our point of view-I don't mean to shed crocodile tears or put on a hair shirt, but, gentlemen, we are small businesses. We have no large resources either of money or of numbers. We don't even have the resources to make a statistical study such as the publishers presented.

But fortunately Mr. Van Arkel and the union have given you the basic structure and brought to your attention the fundamental positions of our segment of the industry.

To save time, let me identify ourselves completely, as is not always the case, with the position of the union. The only reason I come to speak in addition to the statement submitted by our associations is that there are some differences of emphasis and substance between our position and the union which I should like to call to the attention of the committee for your appraisal.

Rather than go through the story that you have already heard, I should like to come to the heart of the matter at once.

Gentlemen, this is the heart of the matter. I hold in my hand a book-exhibit A, a box of film pages, 8 inches by 10 inches by 1 inch in a file folder. I hold in my hand the way this book, in a file folder, can be shipped from Europe today. You have heard the story, but this is what it looks like, gentlemen [showing film pages].

This incidentally is not a reproduction proof, so often mentioned here. This is a handful of film. Now look at this [holding up exhibit B, a page of lead slugs 7 inches by 9 inches by 1 inch]. That book-in

a-file-folder contrasts with—and I am grunting not to make a show, it is heavy-contrasts with this single page of type, the raised letters on the metal surface, the linotype slugs with which you are undoubtedly familiar. This page of type is heavy. It is cumbersome. It can "pi"-scramble easily. If you handle it roughly there goes your page of type the slugs fall apart-goodbye, book.

Gentlemen, what I hold in this hand [showing the box of film again] in 1 inch in a file folder, the equivalent in this to ship would take 12 feet and weigh a ton. This-the 1-inch metal type-is 1 page. Thisthe box of film-is 1 book.

As if this were not bad enough, this piece of tape, off a computerexhibit C, a roll of paper computer tape about 8 inches in diameter— eight of these tapes represent one book.

Now put this into our future, gentlemen-exhibit D, a roll of magnetic film computer tape. This roll of tape represents 15 to 16 books, full, complete volumes.

It is in this sense that the impact of the manufacturing clause has the reality which, I think, makes it worthwhile to explain the difference in technology, because there has been so much gobbledygook and there is so much confusion about the language of 601 (c) that we feel we must have our day in court to show you objectively and fairmindedly what it is that is really being talk about, so that you can make your own decisions about what has been misleading and what has not been.

This, gentlemen, is an offset plate exhibit E, a flat aluminum plate. This is the lithographic process referred to in the foggy 22 words of the second section of 601(c), the words following that horrible "or if done by a lithographic process or from photoengraving plates." Then some say typesetting is not protected. But please follow me; this plate is made in two ways. One can take a page of type such as this metal and pull a reproduction proof off it, this infamous reproduction proof you have heard so much about exhibit F, a paper reproduction proof. Then this proof is taken by the printer, whether it comes from overseas or from the United States, put in the printer's camera and literally a picture is taken of it. You come out with a negative much like the one you get from your own camera when you take a picture of your family.

In this case I have the actual negative that was made from the reproduction proof that was made from this type-exhibit G, the negative film. This negative is then placed on a simple piece of, in many cases aluminum, treated with a chemical surface, placed like this and put in a frame and, as we say in the industry, "burned in." All it means is that light is flashed against it and in effect the picture is taken on this plate. Now the printing is done from this plate, based on the lithographic process, the principle that grease and water do not mix. The key fact to remember here is that this plate is made from a piece of film.

This underlines the urgency of understanding 601 (c) today in terms of a new technology which now gets rid of this metal page of type entirely.

In our own case in our plant in New York we have a division, the Photo-Composing Room, of which I am president, where the type is set, gentlemen, directly on the film. This positive film that I hold

up now-exhibit H, type set directly in film-never was touched by metal. No metal intervened in this process whatsoever-set on a machine that only photographed characters one after another.

You see what happens. We go from this positive to this negative to this plate-no metal, no tremendous investment in a metal plant. The significance is that this does bring the foreign typographer to our doorstep in a way that was never true before. Everything that has been told to you by the publishers, and some of the things they have said bear very considerable scrutiny, has been turned toward the past. This is a new ball game. It is a seriously new ball game and it involves the destinies of all our companies and our employees in a very direct fashion.

Whatever else may be said about 601 (c), it is a nightmare, gentlemen, to have gone through months and years of listening to people talk about a fantasy. The smokescreen which has been cast over this clause is as thick as it is unnecessary and misleading.

Look at it this way. If we accept for a moment the contention made by others that the second part of 601 (c) does not protect typesetting, then you have a statute which is in effect saying in that clause to a publisher or printer:

One, if you print your book by letterpress, gentlemen, which means from a piece of type like these metal slugs-or a plate made from itthen you must set your type in this country to have the protection of the manufacturing clause.

Two, whether you use letterpress printing or a lithographic process from that offset plate I showed you, you must buy your printing and your binding in the United States in any case.

But, three: lo and behold, if you use a lithographic process from the offset plate I showed you, you are free to buy your type outside the United States as long as you buy your printing and binding in this country.

What possibly could be the logic of this distinction? What national interest does it reflect? What purpose does it serve economically, culturally, or any other way, aside from a narrow self-interest on the part of people who would benefit from it?

It seems to us in the typographic segment of the industry that the burden of proof on this question has not been met by anyone who has made that claim, certainly not in the hearings before the Tariff Commission, not in the hearings before the Copyright Office, and not in these hearings today, and I doubt very much in any testimony you will hear later.

It seems as logical to say-if Congress were to say to a toy manufacturer in some comparable situation, "All right, fellows, you can import the heads of dolls but not the arms and legs." Or to a pants manufacturer, "You can import a left leg but not a right leg." There is simply no logic to it.

The typographers have constantly and consistently taken the posi tion, gentlemen, that 601(c) in its present language has always protected all typesetting, that reproduction proofs which have come into this country have come in in violation of that clause, whether the printing process was "printing" as the word is used in the first part of the clause or "lithographic or photoengraving process" as used in the second part.

We regret deeply that there has been no judicial determination of this reality. And here I must repeat what I said a moment ago. We are small companies; we find it difficult to get together the kind of resources necessary to make a judicial test even if it were possible in terms of our being parties in interest, which, as Mr. Van Arkel pointed out, may be questionable.

We do believe emphatically that the revision of the copyright law before you now is a welcome and necessarily vital opportunity to spell out that 601 (c) does what we feel it has always done; namely, that it specifically includes the protection for typesetting regardless of the process of printing, since there is no logic or reality in the distinction between printing from raised surfaces and printing from the kind of offset plate I showed you.

There is another aspect of national interest in these technologies I would like to present for your consideration. This is a difficult one because in honesty nobody has the crystal ball. We certainly don't have one as clear as the publishers.

Without putting our own company case history in the spotlight as generally representative, let me point out a curious phenomenon. We have a machine called the "Monophoto" which sets type on film. It is made by an English manufacturer, the Monotype Co. There are some 130 "Monophotos" in Europe and Asia. There are a handful in the United States of America. Now there are other photocomposition machines, but the point I make highlights the possibility that if we discourage American typographers by virtue of foreign competition from getting into the field of this new technology in a significant way, we may very seriously be giving Europe and Asia a lead in the new technology-a lead that can hurt us when in terms of our national interest, communications, education, and national defense we need a healthy, sound, and growing industry which does bring us all the advantage of new technology in typography.

The publishers have told you not many books are published abroad actually. I submit that these figures fall on several grounds which have not been discussed. This is delicate, gentlemen, but it cannot be said off the record, and we stand by it on the record. The fact of the matter is that reproduction proofs come into this country every day unmarked as reproduction proofs. The fact is that books, under the supposed loophole of the second part of 601 (c), are produced by reproduction proofs which come in in violation of the law and which no one can spot.

We doubt that the reports that are made by the responsible companies, I mean companies responsible enough not to do this kind of thing, indicate how much is done by the companies that are responsible for doing it. In short, I am saying not every publisher is as reliable as the publishers who have testified to you here before.

The number of books overseas is not the whole story in any case. The record would be seriously incomplete and we would be remiss in our responsibility to the members we represent if we did not point out this reality. Let me put it this way. A publisher comes to my office and says to me, "Eli, how much will it cost to set this book?" I say, "$10 a page."

Incidentally, that price would reflect less than 5 percent profit. He says to me, "Sorry, I can set this book in Holland for $5 a page, I can set it in Japan for $2.50 a page or less. I simply cannot pay $10 a page."

If I need the work at the time to keep my equipment and workers busy, I may say, "All right, you have it for $7.50 a page,” and take the loss in the interest of keeping the new machines working along. You see, there is this constant price pressure, a constant shadow over our business caused by this foreign competition, and it is growing rapidly. Now in the statistics so glibly given to you about how few books are set abroad, this price competition does not appear. But the impact of that foreign competition is a very real one in our day-to-day operation, and it hurts increasingly because we are a business in which labor represents over 70 percent of our gross dollar and our breakeven point, therefore, is very high and it does not take the loss of very much volume, or very much pressure on prices, to push a small typographer down below his break-even point.

Mr. Van Arkel has covered many of the points that I would otherwise make some comment about. I will not abuse your patience or time by repeating them. But I think it is very important to recognize a thing that is hard to pin down. We are losing not only books, gentlemen, but we are losing greeting cards, we are losing department store catalogs, we are losing industrial brochures, we are losing material put out by big chemical companies, to overseas typesetting. A habit is developing among buyers of type who are pennypinchers, for which I cannot blame them.

If we encourage this habit by removing the manufacturing clause, we are going to risk serious injury to this industry.

Those people in Holland, in England, in France, in Germany, in Italy, in Japan, in Korea, are not sitting there waiting for the American buyer to come looking for them. They are advertising in our trade journals here. They are saying, "Would you like to buy your type for a dollar a page? Come to Korea." That is almost an exact quote of an ad in a journal only a month ago. They are investing considerable amounts of money in aggressive campaigning over here. In closing, let me just comment on the relation with the other groups interested in the manufacturing clause on specific issues. We, too, agree that it is a fine thing for the clause to take a different posture in relation to the authors. We totally agree that the author should not lose all of his rights if a publisher violates the manufacturing clause. We agree too, that an exemption of some kind should be made for countries like Canada. We are willing, too, are willing absolutely willing, to face into that kind of fair wage competition. And we agree with the publishers, at least on this one point, that fair use should not be extended.

The small business aspect of the typographic segment of the printing industry has been conspicuous by its absence in these discussions. The nature of our activity makes us more vulnerable to any change in the manufacturing clause which whittles away protection than any of the other segments of the industry. It is vital protection for us. The tariff raft is leaking badly and in any case we have been shoved