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THE
43
MUSIC TRADE REVIEW
TO TAX "ARTISTIC COST" OF TALKING MACHINE RECORDS.
COLUMBIA NEWS GLEANINGS.
Board of United States General Appraisers Decide Money Paid to Singers Shall Determine Duty
on Discs—Makers Contend Government Should Consider Only Manufactured Value.
A. E. Donovan Appointed Special Representa-
tive of Personal Record Department—Co-op-
erating with the Dealer on the Record Ques-
tion—Cleveland Men Motor to City and Tell
of Busy Times—Doings of the Vacationists.
An important ruling was made on Saturday by
the Board of United States General Appraisers,
whereby importers of talking machine records will
hereafter be obliged to pay duty on the so-called
"artistic costs" involved in obtaining the records in
foreign countries. While no case of the kind has
yet arisen at the Custom House, officials are in-
clined to the belief that it will be only a question
of a short time before the board's ruling in this
case will be applied to moving picture films.
The test case before the board was that of the
Victor Talking Machine Co., which exported to
Colombia, South America, blank wax discs. An
agent of this talking machine company visited the
cities of the southern republic and engaged promi-
nent South American singers and musical organ-
izations to transfer their art to the records. The
records thus obtained were shipped back to this
country, being entered at Philadelphia in the care
of Austin, Baldwin & Co., custom house brokers.
In this condition the records were entered as
having a market value of $3 apiece, but as there is
no market for the articles in a customs sense in
Colombia, the appraiser reported he was unable to
appraise the goods in the usual way provided for
in the tariff law. He accordingly proceeded to
make a valuation under the provisions of Para-
graph L, Section 3, of the act of 1913. This re-
quired the ascertaining of the cost of production
of the records as merchandise "which is not
actually sold or freely offered for sale in usual
wholesale quantities in the open market of the
country of exportation to all purchasers." This
process of appraisal, a complicated one at best, re-
sulted in the fixing of a value on the records many
times in excess of the invoiced rate of $3 per
record.
The case was appealed, and Judge Howell's de-
cision in part was as follows:
"We do not think that the statute justifies the
distinction for which counsel contend. We cannot
conceive of any good reason why the amount paid
to the artist for his or her artistic production,
whether such production be by means of the voice
or otherwise, which causes the recording machine
to make certain impressions on the disc, should
not be included as a part of the cost of production
of the record, just as much as would be the wages
paid to an operator for operating any machine in
producing some other article. In the one case the
human voice or other talent is used, in conjunction
with the recording machine, to give to the wax disc
a new and peculiar character and use, while in the
other case the hands or the feet of the operator
may be used to operate the machine which
changes the character of the article on which it is
employed.
"We are of the o; tnion that in ascertaining the
cost of production of an imported article under the
provisions of Paragraph L, no distinction may be
made between compensation paid to an artist and
compensation paid to an artisan in producing the
imported'article. The statute plainly contemplates
that all expenses, of whatsoever nature, incident to
the production of the article, should be included
in ascertaining the 'cost of production' of such
article.
"If it became necessary to find the cost of
production of a hand-engraved steel or copper
plate, we think it would hardly be seriously con-
tended that the compensation paid to the expert
engraver who engraved the plate should not be in-
cluded as an item in the cost of production of such
article. In that case it would be the trained hand
of the expert that would give the value to the
plate, and the compensation paid for his expert
services would undoubtedly be part of the cost of
producing the plate.
"In the case at bar, the trained voice or other
talent of the artist has given the value to the rec-
ord, resulting in changing its character so as to
adapt it to a particular use, and we think the com-
pensation paid to the artist for the services ren-
dered is as much a part of the cost of production
of the record as would be the compensation paid to
the engraver in the case of the engraved plate. It
is the 'cost of production,' not intrinsic value,
which is to be ascertained."
CREDITORSj\CCEPT PLAN.
Agree to Reorganization of Rex Talking Ma-
chine Company.
(Special to The Review.)
PHILADELPHIA, PA., July 19.—By agreeing to the
plans for the reorganization of the Rex Talking
Machine Co. it is claimed the creditors will be paid
in full. Creditors began bankruptcy proceedings
last January, and Gustave Mayer was named as re-
ceiver.
Under the terms of settlement the unsecured
creditors are to receive 20 per cent, in cash, and
have agreed to accept three promissory notes for
26, 26 and 28 per cent, of their claims, payable in
twelve, fifteen and eighteen months respectively.
Creditors holding notes of the company aggre-
gating $26,839.59 have agreed to take stock in the
reorganized company in lieu of participating in the
cash and note settlement.
The capitalization of the new company will re-
main the, same as that of its predecessor, but the
common stock of the new one will be increased
and the preferred reduced. The capitalization will
be $1,200,000. The capital stock of the old com-
pany was divided equally, $600,000 preferred and
$600,000 common. The new concern will have
$700,000 common and $500,000 preferred. Already
$50,000 has been subscribed to stock in the new
company.
AUTHORIZED TO_DO BUSINESS.
The Hoffay Talking Machine Co., incorporated
in Delaware, has been authorized to do business in
the State of New York; capital stock, $1,000,000.
Local representative, M. Tucker, 500 Fifth avenue.
Henry D. King, manager of the personal record
department of the Columbia Graphophone Co., an-
nounced this week the appointment of A. E. Dono-
van as special representative of the department to
assist Mr. King in the various branches of this
division. Mr. Donovan was connected with the
Lawyers' Title Insurance & Trust Co., New York,
for ten years, and enters upon his new duties with
a full realization of the unlimited possibilities of
this department. Mr. King's sphere of endeavors
has also been broadened, as in addition to being
in charge of the personal record division of
the business he will also render material assistance
to the general record department, particularly in
the consummation of arrangements for trying out
new talent. C. F. Thayer is no longer connected
with the personal record department.
A significant indication of the co-operation
which the Columbia Co. is rendering its dealers
is evidenced in the advance lists of new records
which were sent out to the trade this week. Ac-
companying these lists was a printed sheet listing
the popular records included in the new supple-
ment, with blank spaces for the dealers to answer
the following inquiries: "How do you like the
selection?" "How do you like artist or organiza-
tion?" "How is surface?" "How do you like
quality of recordings?" "How do you like ac-
companiment?' "Any other criticisms?" It is
suggested that the dealer place on back of the
sheet any suggestions he may have for future
recordings, also his criticisms of the way the list
is balanced, etc. This is co-operation of the right
sort, which enables the dealer to have an active
voice in the record production.
George R. Madson, manager of the Cleveland
headquarters of the Columbia Co., and G. B.
Stacye, head of the Dictaphone division in that
city, were visitors at the Columbia Co.'s executive
headquarters this week, having motored here from
Cleveland. Both of these Columbia boosters spoke
enthusiastically of conditions in their territory,
predicting a banner fall season.
R. F. Bolton, district manager of the local Co-
lumbia territory, left Monday for a few weeks'
well-deserved res't, subsequent to which he will
make a short up-State trip.
Frederic Goodwin, head of the Columbia edu-
cational division, is now enjoying a fortnight's va-
cation at his Westfield, Mass., home.
W. S. Scherman, of the Columbia advertising
department, returned to his desk Monday, tanned
and refreshed, after a few weeks' stay in the
mountains.
Consult the Universal Want Directory of
The Review. In it advertisements are inserted
free of charge for men who desire positions
of any kind.
TEN DOLLARS IN VALUE FOR ONE DOLLAR INVESTED
Numbers of subscribers have claimed that they had rather pay a ten-dollar note annually for
The Talking Machine World
than to be without it.
It is a large and splendidly arranged paper, containing from 50 to 80 pages, covering comprehensively every branch
of the talking machine industry.
Its educational articles, showing how to build a successful and paying talking machine department, are widely read
—and no one who sells talking machines can afford to be without this publication.
Every merchant and every salesman can gain much valuable information by its perusal. It costs but $1.00 a year to
have it sent to any address in the United States. Samples free for the asking.
THE TALKING MACHINE WORLD
373 Fourth Avenue, New York