PUBLISHERS, BOOKSELLERS, AND THE LAW.
r'HE quarrel between the publishers and the Times has familiarised most people with the way in which book- producers and booksellers conduct their business. Let us put the main points shortly and simply. An author writes a book and prevails upon a publisher to issue it. The author receives so much for each copy sold,—which is called a royalty ; the publisher pays his manufacturing and advertising costs and charges something for his trouble ; and there remains only the bookseller. But the bookseller must make his pkofit, so he must buy the book from the publisher at a price lower than he intends to sell it at to the public. Now it is obvious that this selling- price must be settled at the beginning of the transaction, since it is the key of the whole business. It could only vary within narrow limits, for it is bounded on the one side by the price at which the publisher can self to the bookseller, and on the other by the price which the public is willing to pay for works of this class. Let us take a shilling book, which, allowing for author's royalty, manufacturing costs, and publisher's profit, can be sold to the bookseller at 9d. The public will only pay is., so no profit is to be got by increasing the price. If the shilling is paid, however, the bookseller has a reasonable profit, which covers his cost of carriage, and leaves some- thing over. But suppose you have a bookseller on an immense scale who does not order a few dozen copies of the book, but many thousands. The publisher can afford to supply him at a lower price than 9d. per copy. He gets the book, say, at something between 7d. and 8d. Now, what is to hinder him selling the book at 111 or 10d. ? The purchaser will come to him rather than to the small man who sells at is., and since he buys the book cheaper, he makes the same profit, and yet lowers his selling-price. If these tactics were allowed, in a little while the small book- sellers would be squeezed out. So in self-defence booksellers enter into a compact that they will not sell books marked at a net price below that price, and the publishers agree to back them up by not supplying books to any bookseller who breaks the compact. That is the famous Net Book Agreement which we have heard so much of lately. The bookseller undertakes not to sell below the net price ; the publisher undertakes not to supply books to any one who does not respect the Agreement,—an arrangement perfectly reasonable and legitimate per se, and one which surely cannot be forbidden in any place where true freedom of contract is respected.
Our readers will now perceive the importance of the decision of the Supreme Court of the United States on Monday. In America they have the same kind of organisa- tion as in Britain. There is a Publishers' Association and a Booksellers' Association, which represent the chief publishing and bookselling interests in the country. For some years a battle has been raging between these organisa- tions and the great general stores which have bookselling departments. In this country we have such stores, but the chief among them are all subscribers to the Net Book Agree- ment. In America it is different. The big stores decline to be bound by any rules of the bookselling trade, and sell their books at any price on which they can see a profit. It is a little difficult to understand the case from the summary printed in the Times. It is not clear, for example, whether Macy's Store, which brought the action, was a signatory to the bookselling Agreement. But the terms of the judgment of the Supreme Court are apparently clear enough. It was held that the publishers could not dictate the price at which books should be sold. It was held, further, that the Publishers' and Booksellers' Associations were illegal combinations in restraint of trade, and violations both of the statute law of New York and of the Anti-Trust Law of the United States. It is there- fore immaterial whether the store was a subscriber to the Agreement or not, for in the view of the Court it is not an Agreement which could be enforced by any process of law. Apparently any bookseller who gets books from a publisher as a signatory to the Agreement can sell them in defiance of the terms of that Agreement. Judgment has not yet been given on the second contention in the case,—that the Associations were guilty of boycott, and therefore liable for damages. But if the decision of the Court on the general question is correctly reported, we should imagine that this contention would also prevail. The publisher will not only be unable to force a bookseller to stick to the terms of the Agreement, but will be compelled to go on supply- ing books to him to be dealt with on his own terms.
The American decision is based on American statutes, and is therefore no guide to what would happen here in a similar action. For ourselves, we do not see how under the common law of England such a judgment would be justified. If shipping companies can agree under certain conditions to fix rates, it would appear to be competent for publishers and booksellers to do the same. The Agree- ment between the booksellers and the other signatories of a Net Book Agreement is a personal contract with consideration attached. The limitation as to price does not attach to the book, but to its sale by a specific person. Once the book leaves his hand the Agreement terminates. If a subscriber to the Agree- ment violated its provisions, he would, in our opinion, be liable for a breach of contract ; and if a publisher refused thereafter to supply him with books, it is at least extremely doubtful whether any case of boycott could be set up. We grant that the question is full of difficulties, but in the absence of any such statutes as governed the American decision, we should be inclined to think that the publishers had the stronger arguments in their favour. The matter, however, is less one of law than of public policy. This was recognised half-a-century ago when the booksellers and publishers fell out over this very point. The matter was referred to Lord Campbell as an informal arbitrator, and he sat in the library of Stratheden House with Grote and Milman as assessors. He found for the booksellers, but the fact that the victors in after years changed their views and entered into an alliance with the publishers shows that it is all much more a matter of Policy than of legal rights. Books are a necessity for our
national well-being. How can they be sold with equal advan- tage to the producer, retailer, and consumer ? There are those who urge—and with some show of reason—that books should be in the same position as most other commodities. They should be sold at any price at which the retailer thinks he can get a profitable market. It is possible that m time this state of things may come about ; but we shall have first to see many changes in the methods of book- selling. If books are to be sold on the same terms as soap and candles, they must be sold in the same way. Bookshops would have to be centupled, and booksellers would have to adopt the selling methods of the ordinary grocer or haberdasher. They would become vast emporia, and the small man would disappear. All this maycome about in time, but for the present there is a very great deal to be said for the Net Book Agreement. It prevents ruinous competition among retailers. It prevents the standard of taste in format from being lowered, for the publisher is able to fix a price in accordance with his views on the matter. A book is not like a piece of soap. In soap all that we ask is that certain qualities be present, and these qualities, being the essence of the article, can only be absent in a fake. But a good book may be presented with hideous binding, paper, and type, and yet remain the identical book. It there were no Net Agreement, there would be a wild rush to cheapness and shoddiness, for the publisher would have to cater for firms who had cut down the price till their profit was infinitesimal, and a similar reduction in terms would be exacted from him. Finally there is the question of the author. Literary property does not last long, and he has to reap his gains in a short season. Since books are not articles of universal use and necessity, a price must be fixed which will give him fair remuneration. We should gladly see books cheaper ; we believe that it would often be far more profitable both for author and publisher to look for small gains over a large area than large gains over a small ; but obviously there must be a point where cheapness ceases to be profitable, and the point would be soon passed if every book-vendor were engaged in cutting prices. Indeed, we find other trades recognising to-day the wisdom of fixing some kind of standard. In the case of many "proprietary articles" in the drapery trade, for example, the manu- facturer sells to the retailer on condition that the article shall not be sold below a certain price. Such articles are, in our opinion, a closer parallel to books than articles of universal consumption like soap or oil. On mere grounds of public policy, we think the present arrangement better than the unregulated market which, apparently, will now be the rule in the United States.
To sum up, we hold that it is wise to maintain wherever possible the principles of freedom and free contract ; and, on the whore, the side of freedom seems to be that of letting the owners of copyright books settle the price at which their books are to be sold. If we do not allow them this liberty, we are in fact, if not, in name, taking away with one hand the property which by the law of copyright we are giving with the other hand. In the end the question is a question of the proprietary rights conferred by law on the author.
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