Dear Mr. Rae,

I am now in a position to answer more fully your letter of November 18th re the costs involved in the importation of American programmes and transcriptions.

First let me say I doubt very much that the same incentive for cooperation exists in the U.S. radio industry with regard to the balance of international payments as exists in the film industry.

The following is the situation with regard to the points outlined in the second page of your letter:

(1) There is no actual transfer of American funds from the United States to Canada by American advertisers to pay for station time. In the case of network programmes, American networks are billed by the CBC and remittances are made through the Canadian Resident account. In other words, we are actually paid in Canadian dollars for the use of Canadian stations. The Canadian subsidiary does not pay the CBC direct but as I have indicated the parent company pays the American network which in turn reimburses us.

(2) Canadian stations or sponsors, so far as we are able to determine, do not pay a pro rata share of the cost of production of programmes. Therefore, the only cost involved so far as the Canadian end of the network is concerned is payment for the network facilities.

(3) Canadian stations make no direct payments for the use of American sustaining programmes.

(4) Canadian stations importing American transcriptions make payments but in exactly what manner I cannot say. This information with some facts regarding the volume could probably be obtained from All-Canada Radio Facilities, Victory Building, Toronto. This concern and a few others do import transcriptions from the United States but I do not think that the total amount of money involved in this operation is very large. The CBC has contracted for four transcription or library services, one of which only is payable in U.S. Funds to the amount of $126.00 a month. The other three are paid for in Canadian currency and I would imagine that most privately owned stations have made pretty much the same arrangement.

The situation with respect to the major American networks is that their saleable time, if not entirely filled up, is constantly subject to sale and fluctuations in availabilities. It is my opinion that no great success could be met with on a gratis basis with them, generous and all as they are in this respect. Some of the American networks, and more especially Mutual, in years past have carried some programmes ex CRC, but this has been quite limited in extent. Similarly, Town Hall of the Air and other American programmes occasionally originated at Canadian points. Scripts by Canadian writers also are purchased from time to time, but when such writers are found it often happens that they are transferred bodily to New York or Hollywood.

I do not suppose it fits in with the plan of conserving Canadian funds at the moment, but my impression over a good many years and from close contact with American broadcasters is that Canada has been missing a good bit by not carrying on behalf of its tourist or similar activities some sponsored campaigns in the United States over one of the big networks. We have depended too much, I think, on free publicity and might get a substantially larger degree of cooperation if we gave evidence of our readiness to do a little spending that way, not expecting too much for nothing.

For the reasons I have outlined above I do not think we could hope to organize the radio industry in the United States on anything like the same basis that has been done in the motion picture field. Indeed considerable harm could be done by stirring up a situation that has been riding along on a mutually satisfactory basis for a number of years. The net result might be that instead of receiving sustaining programmes free of charge from all four American networks the CBC and Canadian sponsors might be obliged to pay a pro rata share of production costs which might increase rather than decrease the flow of dollars across the border.

I hope this information is helpful and if I can add anything further please do not hesitate to ask.

Yours sincerely,
E.L. BUSHNELL