Stephana:
The compulsory license provision is an exception to the bundle of exclusive rights granted to the owner of a copyrighted (c) work.
This provision states that the owner of the (c) is obligated by law to allow a licensee (in this case, the brass quintet) to record the composition, as long as permission to mechanically reproduce (record/use) the work is formally requested in writing by the licensee, along with statutory mechanical royalty payments, which are paid quarterly to the publisher (owner) of the (c) work. Thus the term, compulsory license.
This provision does not have anything to do with the arranger's right to create an arrangement of the (c) work, however. The arranger must obtain permission from the (c) owner to create an arrangement (a derivative work). In this case, the (c) owner is in no way obligated by law to grant this permission.
All this information may be useful, however it may all be moot...
You mentioned that the work was created in the early 1900's. Depending on *when* in the early 1900's, the (c) work may very well be in the public domain. If this is the case, then no permission is required from anyone, because no one 'owns' the work anymore. If is has been at least 75 years from the original (c) date, then absolutely no worries...you can arrange the work and record it without any permission or payment to anyone.
What is the title of the work?
I hope this helps.
Derric Oliver
doliver[_at_]fantasyjazz.com
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