position is correct that reproduction proofs are covered by present statutory language. Mr. POFF. Would the chairman yield? Mr. KASTENMEIER. Yes, I yield. Mr. POFF. I would like to clarify your answer to one of the chairman's questions. Am I correct, or not, that you use Canada only as an example of a country that might be exempted from the manufacturing clause? Mr. VAN ARKEL. Yes. Mr. POFF. You propose an amendment that would give the Executive the discretion to grant exemptions in those areas where the wage level is comparable to that in the United States? Mr. VAN ARKEL. That is right. Mr. POFF. Certainly this would apply to Canada? Mr. VAN ARKEL. That is right. Mr. POFF. And likely not elsewhere? Mr. VAN ARKEL. I don't know any other place. There may be other places. I have not examined statistics. Of course, you are quite right, Mr. Congressman, I thank you for pointing it out, that we are not asking for legislation with respect to Canada. We think its practical impact, as of this time, would be limited to Canada. But we say if you will adopt an amendment saying that countries with comparable wage conditions shall be exempted from the manufacturing clause, then, obviously, it gives other foreign countries an incentive to lift their wage rates to the level that we enjoy in this country. This, we think, is desirable internal and international policy. Mr. POFF. I ask your pardon, but I wanted that point to be clear, and I am sure the witness did, too. Mr. VAN ARKEL. I am grateful you asked that. Mr. KASTEN METER. Is it not true that wage rates for all commodities differ throughout the world from the standards set by the United States? Mr. VAN ARKEL. I wish I could give a more definite answer to that question, Mr. Congressman. I simply have not compared wage rates in any area other than the printing trades. Mr. KASTENMEIER. Would it not be your belief? Mr. VAN ARKEL. I assume that is probably true. But I also point out that there are few other commodities that can be shipped in an envelope, that is, where you have had important amounts of work done, work which is expensive to do, which takes a long time to do, which you can put in an envelope and put on a jet airplane and have in this country within a matter of a few hours. If you are talking about sewing machines, bicycles, steel, or any other commodity, you have to absorb substantial costs of shipment, you have the problem of delays in shipment and all the rest. These are missing, particularly in the area of typesetting and of reproduction proofs. Mr. KASTEN MEIER. Actually, this is a clause for the protection of the American printing industry, is it not? Mr. VAN ARKEL. Well, Mr. Chairman, I would like to repeat that the origins of this clause show very clearly that it was not a protective device. It was a condition attached to a domestic privilege and it was done with the consent of all the parties who were interested at that time. Now it is true that this thing has been phrased in terms of free trade against protectionism. I think that is an entirely wrong way to look at it. I insist once more that we are talking about excluding American manufacturers by American law from the American domestic market, and that this is not a question of protectionism or free trade, this is a question of a desirable way to handle copyright. We are constantly told that the manufacturing clause has nothing to do with copyright, that it has no place in the copyright law. It is obvious that it has the most intimate relationship to American domestic copyright. There is a question whether or not it is an appropriate condition to impose on the grant of an exclusive monopoly in the United States. Mr. KASTENMEIER. Is it true as the witness stated yesterday that the United States is the only country that has a manufacturing clause in its copyright law? Mr. VAN ARKEL. I would like to say a word about that. I have gone into that in my statement, Mr. Chairman. Practically every country in the world except the United States, in the patent field, has what is called a working requirement, including England. Under the working requirement, unless you manufacture in the country granting the patent, you lose your patent right. If you will look at Mr. Warner's statement, there appears to be reason to believe that this was the antecedent of the manufacturing clause in this country in the copyright field. Now I have heard of no American activity to remove the working requirement from British law as an exclusionary device directed against American manufacturers, and I would regard it as a highly questionable intrusion into domestic British affairs for Americans to take any such action. I think this is an appropriate requirement for England to impose if it chooses. Mr. Frase yesterday mentioned the fact that some 20 countries have become parties to the Florence Convention, thereby eliminating any tariffs on books. What he failed to state was that there are all kinds of ways of skinning a cat. France, for example, flatly forbids the importation of large quantities of books into its country. There is no point in talking about a tariff on goods that you are not allowed to ship into the country. Mexico has the requirement that if you don't translate into Spanish within 3 years, you lose your copyright. Brazil and Portugal require licenses to import books and you have an awful time getting a license if your book is in Portuguese. In short, any effort to portray us as kind of dogs in the manger who are excluding stuff, and other countries as generously permitting the importation of anything we want to send them, is entirely incorrect. Many of them achieve it through currency controls, for example. Sure, you can get a copyright in the country, but if you try to exploit the copyright, you can't take your profits out of the country, which is of course a limitation on the copyright. We permit foreigners to exploit copyright here to take the profits out of the country. In short, to portray us as some kind of devils in this respect and other countries as completely free and easy is an entirely erroneous impression for anyone to leave. Mr. KASTEN MEIER. Mr. St. Onge. Mr. ST. ONGE. No questions. Mr. EDWARDS. No questions. Mr. KASTEN MEIER. Mr. Tenzer. Mr. TENZER. I have no questions because I did not hear yesterday's testimony. I would like to assure the witness that this committee will give a qualitative rather than a quantitative analysis to the testimony in accordance with your remarks. Mr. VAN ARKEL. I am grateful for that thought. Mr. POFF. Of course, following the sentiment my colleague has just expressed, it sometimes becomes necessary in evaluating qualitatively to consider the impact of certain quantities. That is the line my questions will take right now. First, I will quote from the statement of the Register in order that you may comment on it. He says: "The 3,500-copy figure was suggested as the point, in the present book market, beyond which it is generally more costly for a publisher to import copies than to manufacture an edition here. As such it would be the equivalent of 1.500 copies in the market of 1949, when the statute was amended to provide a 1,500copy limit on importation." Do you care to comment on that statement? Mr. VAN ARKEL. Yes, I will be glad to, Mr. Congressman. As I stated earlier, the 1949 amendments, which the printing trades unions supported, adopted a simple single test; namely, that foreign manufacturers ought to have the right to test the American market to determine whether or not it was economically feasible to bring out an American edition. Now I think it is obvious from the Register's own statement that he has departed from that standard. He is not now talking about what is required to test the American market. He is in effect converting that into a test of profitability of production in the United States. What he seems to me to be saying in that language that you quoted is that it is not economically feasible to prepare editions of less than 3,500 copies in the United States, and, therefore, we are going to grant this exclusive monopoly on editions of less than 3,500 copies of foreign manufacture. Now we think that is a wrong standard. We think the standard ought to remain what it has been; namely, the testing of the market standard. I have stated that we have no objection, in view of the fact that the market is much larger now than it was in 1949, to a modest increase in that amount. But we say that to increase it by substantially over 100 percent at one jump is totally unwarranted. I repeat that I have not heard anyone say that the standard of 1,500 copies is insufficient for testing the market under present-day conditions. So that if you adopt the standard which the Congress has historically used in dealing with this problem, I can see no justification whatsoever for a jump of over 100 percent. Mr. POFF. Now, language has a habit of meaning one thing to one person and something else to another person. Mr. VAN ARKEL. That is why Congressmen hold hearings. Mr. POFF. Exactly. "Testing the market" means something to me, but I am not sure it means exactly what it should mean. Would you care to define that phrase? Mr. VAN ARKEL. My understanding of the phrase, Congressman, is that prior to 1949 you could only bring in one copy of the work. Obviously with one copy you cannot determine what the reaction of the American market to that one book will be. However, what the foreign manufacturer may now do under present law is to bring in 1,500 books. He can put them on sale in, let us assume, 10 major bookstores. If they sell like hotcakes and are quickly exhausted, he knows that there is a demand in this country sufficient to warrant the publication of an American edition. If all 1,500 stand idly on the shelves for 5 years, he knows then that an American edition would be a waste of time and money. This, I say, was the inception of the clause. This, I think, is the appropriate ground on which it should be appraised. We think that, appraised by any such standard, that the 3,500 requirement is way over what anyone can demonstrate is the necessity of the situation. Mr. POFF. Do you have any figures indicating the amount or the percentage increase in the market since 1949? Mr. VAN ARKEL. I am perfectly willing to accept the statements which appear, I believe Mr. Frase covers this in some of the tables attached to his presentation. On page 36 of this statement, Table 5: Growth of the U.S. Printing and Publishing Industry, he has the rates for 1947, 1954, 1958, and 1963. In the bookbinding and related industries—well, it has gone up about a 100 percent in that. In book publishing I note it has gone up even more than that. Mr. POFF. I understand that the increase might be appropriately based on the acknowledged fact that the market has expanded. Mr. VAN ARKEL. I don't think that follows, Mr. Congressman. Mr. POFF. It does not necessarily follow in tandem. Mr. VAN ARKEL. No. What the foreign manufacturer wants, what he has under present law and what we have no objection to, is the right to bring into this country a sufficient number of books to find out whether there is a popular demand for them. Now that figure is not necessarily related to the total amount of book publishing done in this country. It might have been necessary, for example, in 1820, when the book publishing industry was in its infancy in this country and production was very low, it might even then have been necessary to introduce 1,500 copies in order to test the market. By the same token, in a very largely expanded market that may still be adequate. In any event, what I would like to see is debate focused on that issue and not on the issue of what size edition is profitable for the American manufacturer to produce, as the Register in effect, it seems to me, in his comments suggests. Mr. POFF. Do I also correctly understand that while you would favor the increase up to 2,000 as a preference to the proposal to increase it to 3,500, you would not make this the guiding criterion in the decision? Mr. VAN ARKEL. No. As I say, we have no objection to some modest increase in this. We recognize that the market is bigger, our country is more populous. It may well be that a case can be made out for the importation of an additional number of copies, but we think in one fell swoop to more than double it has not been shown to be necessary. We are fearful that this will mean that quite a number of editions will be published outside the United States which otherwise would be published here, and that therefore this major change in the law should not, at this time, be undertaken. Mr. POFF. Thank you. Mr. KASTENMEIER. Thank you very much, Mr. Van Arkel. That was an excellent statement. Mr. VAN ARKEL. Thank you, Mr. Chairman. Mr. KASTENMEIER. Also, Mr. Bailey. Mr. BAILEY. Thank you. Mr. KASTEN MEIER, I assume, Mr. Van Arkel, that you would like your text to be made part of the record? Mr. VAN ARKEL. Emphatically, Mr. Chairman. There are a number of things I did not cover in my oral testimony. Mr. KASTEN MEIER. The printed statement of Mr. Van Arkel will be made a part of the record. [Mr. Van Arkel's prepared statement follows:] STATEMENT OF GERHARD VAN ARKEL, GENERAL COUNSEL, INTERNATIONAL The International Typographical Union, with a membership of some 114,000, represents printers throughout the United States and Canada. It is affiliated with the International Allied Printing Trades Association, composed of unions in the graphic arts field, and with the AFL-CIO. Our purpose here is to support the provisions of section 601 of the proposed bills, the so-called manufacturing clause. The history of this clause was carefully analyzed by the Honorable Sam B. Warner, former Register of Copyrights, in a speech to the Book Makers Institute Convention in October 1951. He pointed out that the original Copyright Act of 1790 provided no protection whatever to foreigners, in this respect following British law. This led to complaints by American authors that they were discriminated against, since no royalties were paid British authors, and to wholesale pirating of British titles by us and of American titles by the British. Mr. Warner noted that the manufacturing clause "was chosen as the way out of this dilemma of how to secure both royalties for English authors and cheap English books for American readers." It was first suggested by a group of Boston booksellers in 1838. (See memorial of the Book-sellers of Boston against the passage of the International copyright law, 25th Cong., 2d sess., H. Doc. 340.) It won gradual acceptance and was incorporated in the Copyright Act of 1891. Thereafter England also allowed our authors to copyright their works there; pirating ceased and all parties were protected. This principle was carried forward in the Copyright Act of 1909. But foreign authors experienced some difficulty in obtaining copyright in this country. In 1949 the requirements were notably relaxed so that authors and book manufacturers might introduce into this country 1,500, rather than 1 copy; they were permitted 6 months rather than 60 days to register their book; and they were required to manufacture within the United States within 5 years rather than within 6 months. The union members of the International Allied Printing Trades Association, including the ITU, at that time supported these amendments. They were based on a simple theory; namely, that by importing 1,500 copies, over a period of 5 years, foreign manufacturers would have an opportunity to test the American market to determine whether an American edition was desirable. We felt then, and we feel now, that these were generous concessions to the interest of foreign authors and manufacturers. It should be borne in mind that there are presently large exemptions from the manufacturing clause; for books in other than the English language, for books in English by foreign authors, for the blind, and for others. The history of the clause thus shows that this was not some protectionist scheme dreamed up by greedy book manufacturers and those representing their employees; it was a condition attached to a much-desired privilege, that is, copyright in this country for foreign authors and manufacturers. Basic, we feel, to any discussion of the merits of this clause is the fact that it has nothing to do with free trade. There is today free trade in the import of books into the United States except for the purely nominal 3 percent or 7 percent tariff, which it is proposed to abolish. There is no statute or any other restriction on the importation of books, except perhaps for such matters as libelous, pornographic, or subversive writings. This committee is considering copyright law. The whole point and purpose of a copyright is to grant a monopoly. Those who advocate the elimination of the manufacturing clause seek both free trade and the grant of an unlimited monopoly, within the United States obtained, under the Universal Copyright Convention, by the mere act of printing a symbol on the work. Easing the requirements for obtaining a monopoly can hardly be described as a victory for free trade. Hence this problem is not to be settled by falsely portraying it as a battle between free traders and protectionist interests. The only valid questions before this committee are whether American law properly may impose conditions on the grant of a monopoly, and if it may, what conditions are proper. As to the first question, the answer admits of no doubt. The congressional power in this area stems from section 8, article I, of the Constitution, granting the Congress the power "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Manifestly, this must mean to promote the progress of the useful arts within the United States; it is hardly to be supposed that the framers of the Constitution were concerned with their promotion abroad. Thus we say that the Constitution not only permits, but requires, the Congress to exercise its power in the American interest and thus enables it to impose such conditions on the grant of these monopolies as it deems wise. The second question is whether the manufacturing clause is a reasonable and desirable limitation on such a monopoly grant. We assert that it is. It rather obviously rests on the premise that the foreign manufacturer shall be subject to the competition of the American book manufacturer on an equal and nondiscriminatory basis, without the grant of a monopoly; or, if he wishes a monopoly, that he must publish the excess over 1,500 copies in this country, within 5 years-hardly onerous conditions. Insofar as competition in this field is concerned, the foreign manufacturer, as we show subsequently, has a sometimes spectacular advantage over his American competitor in the lower wages he pays. We assert that foreign manufacturers ought to have the right, which they now have, to shop around the world to find where their work can be done under the most degrading standards, or the right to a monopoly in this country, but not both. As I have pointed out, the advocates of repeal of this clause seek free trade with a monopoly at the end of it. It is of course difficult, if not impossible, to obtain completely accurate comparisons of wages as between different countries; such matters as fringe benefits, currency changes, differing work weeks and the like may somewhat distort any calculations. But these minor variations cannot conceal the vast discrepancies between United States and foreign wage rates. In 1963, we calculate that the average wage of the ITU members in the United States was at an hourly rate of about $3.50 with a daily rate of about $27. In Belgium, the 1964 ILO Yearbook of Labor Statistics shows it was about $0.75 per hour for men and $0.38 for women; in Denmark, about $1.30 for men and less than $1 for women; in France, less than $1 for men; in West Germany, about $1.10 for men and $0.60 for women; in Italy, about $0.70 for men; in Luxembourg, about $0.80 for men; in the Netherlands, about $0.77 for men; in Norway, about $1.25 for men and $0.85 for women; in Sweden, about $1.50 for men and $1.10 for women; in the United Kingdom, about $1.16 for men and $0.80 for women. These figures are roughly computed on average hourly or weekly rates without considering fringe benefits which are substantial in all countries, including the United States; for example, we believe that there would be a still wider variation if earnings at overtime rates in the United States were included in the computation. But the highest wage rate, that in Sweden, is less than half the U.S. rate, and the lowest, that of Belgian women, is only a little more than a tenth. We have not even attempted to compute the rates for Japan and other Far East countries, or for South America but believe that they are substantially below even these figures. Nor is there any reason for believing that present figures are materially different from those of 1963, the latest year for which statistics are available. The importance of these discrepancies ought to be considered in the light of other developments in the industry. One of the more important is the development of the jet airplane, which makes it possible to get copy from the United States to foreign countries about as quickly as from New York to New Haven. The other is the technological revolution which has been going on in the industry, including principally computers and photographic typesetting and a host of associated devices, which make it entirely feasible to perform work abroad which, for technical reasons, could not be handled there within even comparatively recent years. In short, distance is no longer an equalizer of competition to any significant degree, and is steadily becoming less so. We are heartened by the fact that the Register of Copyrights has recommended the inclusion of section 601, retaining the basic principle of this legislation. As he notes at page 144 of part 6 of his Report on Copyright Revision, “the manufacturing requirements would be much more limited in scope than those of the present law." The principal change, we feel, is one, to which we do not object, that violation of the clause should not deprive copyright owners of rights, such as performing, dramatization, motion picture rights, and the like which are not related to the reproduction and distribution of copies. These other rights are foreign to our interest, and we welcome this degree of protection for authors and other interests. While we could discuss the many changes proposed at considerable length, we shall confine ourselves to three points. First, we would urge that provisions be included to exempt from the operation of the clause works produced in a country where wage standards are substan |