practical to print and bind books in this country.

This is done even where

copyright is not involved at all as in the case of the Bible and the classics . Thus it can be stated with virtual certainty that of the 2 per cent or so of annual American book production which consists of the works of foreign authors in the English language now manufactured here only a very small part could conceivably be supplied by imports if these works are exempted from the requirement of U.S. manufacture to secure full United States copyright."

I have quoted from my testimony and referred to the figures for 1953, which are the same 1953 figures which appear in Table 1. What had happened by 1958 and 1964? The average size of the importations of British editions had increased somewhat by 1964 to about 1900 copies, but so had the size of the average edition of British works remanufactured in this country. The ratio of edition sizes remained about the same as it had in 1953, with the American remanufactured editions being four to five times as large as the imports. As it had been in 1953, it continued to be more economic to remanufacture in the United States titles with a sizable potential sale and to import the titles with a small sale.

Thus, as predicted, it was not the existence of the manufacturing clause which was responsible for the remanufacture of 395 British titles in the United States in 1953, but the fact that it was more economic to produce American editions where the edition size averaged 7,400 copies. After the UCC had for all practical effect wiped out the manufacturing requirement on works by foreign authors in English, there were 535 editions remanufactured in the United States in 1964 in an average edition size of 8,500 copies.

I have dwelt at some length on this recent historic test because it has a direct bearing on the question now before us-the potential economic effects on the U.S. printing industry of the repeal of the manufacturing clause. American book publishers, who must make the economic decisions and risk their capital, knew from practical experience that the removal of the manufacturing requirement for the books of foreign authors, as required by the UCC, would not result in any significant shift to the importation of foreign editions in English from the remanufacture of such editions here, and that the economic effect on the book manufacturing industry in this country would be negligible. All that I did, as the industry economist, was to try to demonstrate the correctness of this business judgment by means of statistics and economic analysis. The Book Manufacturers Institute, representing the specialized book manufacturing firms of the country, went along with the judgment of the publishers and in the end supported U.S. accession to the UCC in 1954. Witnesses for the printing trades unions continued their opposition, but the Congress decided that they had not made a convincing case. The U.S. book manufacturing industry has never had a period of more rapid growth than since the British accession to the Universal Copyright Convention became effective in 1957. The "U.S. Census of Manufactures" shows the following increases in production workers and value added by manufacture in the specialized book printing industry for the period from 1958 to 1963, compared to manufacturing as a whole :

The book publishing industry is now convinced that what remains of the manufacturing clause has no real protective function for the book manufacturing industry in this country, much less for the much larger collection of industries which make up printing and publishing in general. We believe that everyone would benefit by the complete removal of the clause, and that this can be demonstrated in a number of ways.

THE EXAMPLE OF GREAT BRITAIN

We can, for example, look at the experiences of other countries. No other nation has a manufacturing clause and foreign authors can go anywhere to be pub

lished and their publishers can have books manufactured throughout the world. Despite this complete freedom we find universally that foreign authors have their works published in their own country in practically all cases and foreign publishers have all but a minute portion of their printing done at home. Great Britain provides a good concrete example. Practically no resident British authors are first published elsewhere. British publishers are free to go anywhere in the world for their printing and since they export over 40% of their book production they have more than the usual knowledge of opportunities and incentives to print abroad if there were advantages in doing so. They can go to nearby European countries with lower wage rates, or as far as India, Hong Kong or Japan. What actually happens? Only a very small amount of printing is done in other countries for British publishers, and what is done is frequently not because it is cheaper but because printers on the continent may occasionally be able to give faster delivery or a better quality of work in some specialized field. The total value of British book imports in 1963 was $23 million as compared with $252 million in British domestic production at publishers prices. This import figure includes all kinds of imports and the vast majority consists not of books sent abroad for manufacture by British publishers but of the usual imports of books of foreign publishers. This can be seen clearly by an examination of the import figures from individual countries. For example, the largest volume of British imports by far from a single country is from the United States-about $10 million or over 40% of the total-which clearly represents imports of books by American publishers, not any manufacture of books in this country for British publishers. The import figures from individual countries, especially some on the continent of Europe, suggest that perhaps $3 to $5 million of this British book import figure may represent printing done abroad for British publishers-or one to two percent of the total output of the British book publishing industry, at the prices received by publishers.

While in London in the spring of 1964 I took occasion to inquire of some leading British book manufacturers on what their expectations would be of doing work for American publishers if the manufacturing clause should be repealed, as the Register of Copywrights had recommended in his 1961 report to the Congress. I found that the subject was a matter of complete economic indifference to them. They did not regard the United States as a vast new potential market for the complete manufacture of books by American authors for American publishers over and above the monotype setting some of them were doing on small editions of scientific and technical works. They pointed out that after both the United States and Great Britain had adhered to the Universal Copyright Convention, books by British authors continued to be brought out in Americanmanufactured editions as they had been before. They also pointed out that although they and British publishers had complete freedom to have printing done in Europe and elsewhere, very little was in fact done abroad because lower wage rates did not translate into lower costs for acceptable work.

A TEST IN YUGOSLAVIA

The inability of foreign printers to compete economically with our American book manufacturers despite great disparities in wage rates was demonstrated to me rather dramatically about two years ago in Yugoslavia. I was there for an intensive two-week study of the book industry with a delegation of American publishers. On the urging of our hosts we secured bids on several jobs from one of the best Yugoslav printing plants and compared the prices with those in the U.S. Our conclusion, as set forth in the report which we published in 1963 (The Book Industry in Yugoslavia) was as follows:

"Manufacturing of books or components thereof for American publishers by Yugoslav printers is not likely to attain any significant volume. Yugoslav printing wage rates are low, both in comparison with the United States and with Western European countries; but the cost of the finished product is not. Even for a nearby country like West Germany the amount of contract book manufacturing done in Yugoslavia is quite small. For U.S. publishers Yugoslavia book manufacturing is and will remain more costly than manufacture in the United States and is also subject to delays in delivery by ocean freight."

THE INTEREST OF FOREIGN PUBLISHERS

Since book publishers of other countries have urged us to get rid of the manufacturing clause, the nature of their interest deserves to be explained. At the 17th Congress of the International Publishers Association, which met in Washington in early June of this year, a unanimous resolution was passed opposing a manufacturing requirement in copyright laws.

This concern of foreign publishers (and authors) is not based on direct economic interest: the needs of foreign authors and publishers for U.S. copyright protection and the export of their books to the United States was taken care of, except in rare situations, by U.S. accession to the Universal Copyright Convention over ten years ago. It is opposition in principle, and because of the bad example it gives to developling countries which are now in the process of formulating their copyright laws. When publishers in other countries look at our gigantic, technically-advanced and rapidly growing printing and publishing industries-by far the largest in the world-and our large export balance in published materials, they find it hard to understand why we feel it necessary to maintain this device for the "protection" of our domestic industry.

A FORECAST OF THE EFFECTS OF COMPLETE REPEAL

We have seen how it was possible by statistical and analytical methods to predict accurately in 1954 that the removal of the manufacturing requirement in the copyright law for foreign-authored books in English as required by the Universal Copyright Convention would have no adverse effect on the U.S. book manufacturing industry. It was then forecast that the employment of at most 200 printing production workers out of a total of some 470,000 such workers in the entire complex of printing industries might be touched. This proved to be too conservative employment of production workers in the specialized book manufacturing industry actually increased in the period 1958-63 by an average of over 1,000 workers per year.

Can we now by similar analytic methods estimate what effect repeal of the manufacturing clause might have on U.S. printing businesses? I believe we can. It would be possible to make an analysis similar to that of 1954, considering each specific type of book in terms of its characteristics-such as size of edition, whether quick delivery is important, the type of composition required, etc.—and thus arrive at an estimate of the practicality of foreign manufacture in each case. The structure of the book industry and its relationship to the much larger printing and publishing industry is set forth in Appendix Tables 5 and 6. These indicate clearly what a minute fraction of the multi-billion dollar U.S. printing and publishing industries is affected by the manufacturing clause at the present time. There is, however, an alternative method of analysis available in the present situation which is much more direct and precise.

This method is based upon the fact, well known in the book industry, that for American publishers foreign book manufacturing costs are significantly lower only for foreign language or complicated-that is, monotype typesetting, of books having a very limited sale. Foreign language works are already free of the manufacturing requirement. Printing and binding abroad offers no economically significant cost advantages in all but a very few special situations such as coeditions with European publishers, nor does straight linotype composition. As noted earlier, the benefits of lower monotype composition costs abroad on complicated matter are already being obtained by the practice of doing the typesetting abroad and printing here by offset from reproduction proofs. The binding is then of course also done here. Hundreds of titles have been produced by this method in recent years for American publishers. Although the facts are well known in the book industry, they had never been reduced to statistical form. A special questionnaire was therefore sent out to all members of the Council and the Institute requesting data on foreign and domestic composition, printing, and binding expenditures for the calendar year 1963. Usable returns were received from 83 firms-which published about 36% of all the new and revised titles produced in 1963. Returns were received covering all types of booksincluding general adult books, juvenile books, textbooks, scientific and technical books, university press books, and encyclopedias-hardbound and paperbound. The sample was thus a large one and generally representative. The results obtained are summarized in Table 2 which follows:

64-216 0-669

TABLE 2.-Comparison of foreign and domestic composition, printing, and binding costs for 83 American publishing firms in 1963 (of which only 20 firms had any foreign composition done, either in English or foreign languages)

Number

Percent

Total number of new and revised titles for 83 firms.
Titles manufactured completely in United States..

Titles by American authors composed abroad..

Foreign language and foreign-authored titles (not covered by the manufacturing clause)..

Total cost of composition, printing and binding for 83 firms.

$140, 604, 249

100

Total foreign composition cost on 215 American-authored titles composed abroad

On which monotype composition was used.
On which other composition was used..

868,938

31, 811

Foreign composition cost of 138 titles in foreign languages or by foreign authors..

Total cost of book and pamphlet manufacture in 1963..

Total new and revised titles published in United States in 1963 by all publishers.

As the table shows, the vast bulk of American titles are completely manufactured in the United States-composition as well as printing and binding. Of the 83 firms, 63 did not have foreign composition, printing or binding done at all. Only 215 American titles were composed abroad-2.3% of binding done at all. Only 215 American titles were composed abroad-2.3% of the total titles. The cost of foreign composition was only $900,749 or only 6/10 of 1% of the total composition, printing, and binding bill of the 83 firms, which amounted to $141 million. Monotype composition accounted for 96% of the foreign composition of American titles.

The current practice of having difficult and complicated monotype composition done abroad but doing the printing and binding here provides just about all the cost advantages to American publishers which would be obtained from complete repeal of the manufacturing clause in more than nine out of ten cases. This practice would undoubtedly be continued if the manufacturing clause were eliminated because of the great convenience, flexibility and economies of using American book manufacturers. With the offset plates in the hands of a domestic supplier, the American publisher can quickly and easily secure additional printings here to match sales demand and thus keep expensive inventory at a minimum. Having the printing done abroad is slow-and very risky. Ocean shipping takes time, and the delay can be disastrous if one of the not infrequent shipping strikes holds up delivery of urgently-needed supplies for weeks or months. Besides, American printing is at least as good in quality and the binding is superior.

In view of these facts, repeal of the manufacturing clause will not greatly change the present practice in the vast majority of cases. It will provide a useful flexibility in certain situations, and retain copyright protection where it is now sacrificed. A few more books may be set or manufactured abroad, but very few. By and large these are books which would not be done at all if they had to be manufactured completely here because the prices would have to be set at an uneconomic level. The American printing industry is not losing anything on these books-indeed it is gaining the printing and binding of them when the composition is done abroad.

Thus it can be said with confidence that the less-than-1% of the expenditure for manufacture of American publishers which is now going for foreign composition would not increase materially with total repeal. The expenditures of American publishers for book manufacturing services-which represent the sales of the book manufacturing firms have been growing at a rate of over 6% per year in the 1958-63 period, or an annual increment of over $35 million. This rate of increase is expected to continue for the indefinite future, tied as it is to population growth, educational enrollments, library expenditures and the whole combination of factors which has made book publishing one of our strongest