I wanted to undertake a musical project which will lead me to take
mainly older songs (Pre 1972).. mainly from the 40s-60s and re-record
them, but with my own take and version on it.. Similar to artists of
today taking an older songs lyrics or theme and using it with their
own styles and remaking the beat, adapting lyrics to their song etc..
however, these re-recordings would be for non profit, however will be
distributed on CD and or online, but will not be sold. What is the law
regarding this?

In the United States, once an artist has commercially released a song,
anyone may "cover" the song and re-release it, as long as it isn't
substancially altered. In order to do this,  you need permission from
the copyright holder and pay whatever royalties are required. This
information (including each publisher's address) is available through
the following Performance Rights organizations:

BMI (www.bmi.com)
ASCAP (www.ascap.com)
SESAC (www.sesac.com)

Also, please see the disclaimer below.

Thanks, that helped me a lot..

There are several points in your question that should be addressed.

1. "Not for profit" Whether the re-recording of a copyrighted piece of
material is for profit or not does not free you from your obligation
to seek a license and to pay reproduction rights, (mechanical rights
in this case), royaltes.

2. Unique arrangements of songs are allowed as long as the essential
character of the composition remains intact. That gives you a lot of
room and recent cases by the Supreme Court uphold that right. The only
time you might find yourself on the wrong end of a lawsuit would be if
you took a song like "What A Wonderful World" and put the song in a
context that implied just the opposite. Then you would be infringing
on the creator's "moral right" to have the character of their work
maintained. However this too has been the question of a few
contemporary court cases.

3. Because of the volume of requests, Music Publishers do not handle
their own mechanical licensing, which is the license you need. They
assign that job to a collective. For that you would have to contact
the Harry Fox Agency in New York The good news would be that it will
only cost you about 8 cents per copy for your reproductions. So, if
you pressed 500 CD's and you had 10 songs on each CD, the total cost
to the original copyright holders through the Harry Fox Agency would
be about $400.00

There are several points in your question that should be addressed.

1. "Not for profit" Whether the re-recording of a copyrighted piece of
material is for profit or not does not free you from your obligation
to seek a license and to pay reproduction rights, (mechanical rights
in this case), royalties.

2. Unique arrangements of songs are allowed as long as the essential
character of the composition remains intact. That gives you a lot of
room and recent cases by the Supreme Court uphold that right. The only
time you might find yourself on the wrong end of a lawsuit would be if
you took a song like "What A Wonderful World" and put the song in a
context that implied just the opposite. Then you would be infringing
on the creator's "moral right" to have the character of their work
maintained. However this too has been the question of a few
contemporary court cases.

3. Because of the volume of requests, Music Publishers do not handle
their own mechanical licensing, which is the license you need. They
assign that job to a collective. For that you would have to contact
the Harry Fox Agency in New York The good news would be that it will
only cost you about 8 cents per copy for your reproductions. So, if
you pressed 500 CD's and you had 10 songs on each CD, the total cost
to the original copyright holders through the Harry Fox Agency would
be about $400.00

Thanks a lot! Definitely helped me a lot.