postmaster general hitchcock’s persistent activity in seeking to push the “rider” through the senate was a noticeable feature in the closing hours of that session of congress, his industry showing in his daily contact on the floor of the senate with the members who seemed pliable or willing to harken to his wishes in the matter pertaining to the legislation he wished to have made into law. the following communications, adroit and carefully worded to chairman penrose, boldly justified the increase on second-class matter, and may be regarded as the dying struggle of the postoffice head to gain his point.
the italics are the writer’s and set out the controversial promiscuousness of the postmaster general. the letters bear date february 14-15, 1911:
washington, d. c., february 14, 1911.
my dear senator:—in response to your request i submit the following statement relative to the section of the postal appropriation bill, h. r. 31539, now pending in the senate that provides for an increase in the postage rate on the advertising portions of periodical publications mailed as second-class matter.
under the provision in the bill the postage rate on the advertising pages of magazines is increased from 1 cent to 4 cents a pound, but this increase does not apply to newspapers of any kind, nor does it affect periodical publications mailing less than 4,000 pounds each issue. by the terms of the provision the privilege of carrying advertisements is for the first time extended to several classes of periodical publications enumerated in the act of march 3, 1879, namely, the periodical publications of benevolent or fraternal organizations, of regularly incorporated institutions of learning, of trade union organizations, and of professional, literary, historical, and scientific societies, including state boards of health.
as the advertising portions of magazines comprise on an average about a third of their total weight the effect of an increase from 1 to 4 cents on the advertising pages will be to advance the postage rate for second-class matter as a whole about 1 cent, making the second-class rate 2 cents a pound instead of 1 cent, as at present. in view of the fact that it costs the government about 9 cents a pound to handle and transport this class of mail the proposed increase is an exceedingly moderate one.
in a whole page newspaper advertisement printed on the 12th instant, signed by 34 of the principal magazine and periodical publications of the country, it is stated that the increased rate “will drive a majority of the popular magazines out[62] of existence, and with them the enormous volume of profitable first-class mail their advertising creates.” this charge is made in the face of the fact that some, if not all, of the signers of the statement are realizing tremendous profits from the vast amount of high-priced advertisements.
it has been found on investigation that one of the great periodical publications signing this protest contained in 21 of its successive issues, from january 1, 1910, to and including may 21, 1910, exclusive of cover pages, an average of 19,354 agate lines of advertising matter, which, at the same rate, would make a total of 1,006,408 lines for the year.
on october 1, 1910, the publisher of this periodical increased the rate for ordinary advertising in his publication from $5 to $6 an agate line. at the higher rate the gross value of the ordinary advertising space for one year would amount to $6,038,448. increased rates charged for the inside and outside cover pages would bring $650,000, making a total gross value of $6,688,448. allowing a discount of 15 per cent, or $1,003,267, there would remain as a total net value of the advertising in this publication for a single year the tremendous sum of $5,685,181. the additional income from advertising resulting from the increased rates would amount in a year to $957,107, which would be much more than sufficient to pay the proposed higher postage rate of 4 cents a pound on the advertising pages of the publication during the fiscal year ended june 30, 1910. in other words, the advance in advertising rates for this periodical will not only meet the higher postage charges, but will leave a surplus of increased revenue to swell the annual profits of the magazine.
in a printed statement recently issued by the president of one of the leading magazine-publishing companies of new york city, the exceedingly profitable nature of the magazine business was clearly set forth. according to his statement the profits of his own magazine for the month of october, 1910, showed an increase over the corresponding month for 1909 of 100 per cent on advertisements and 151 per cent on subscriptions, making a net annual profit for dividends and surplus, based on a circulation of 500,000 copies monthly, of $348,980. regarding the periodical-publishing business in general, the same gentleman says in his statement that “magazine publishers receive gross incomes as high as $6,000,000 in a single year. dividends amounting approximately to $1,000,000 yearly have been made.” speaking of the publishers of some of the magazines joining in the protest against the proposed legislation, he says that one of them, according to his own statement, realizes a net profit of $1,000,000 annually; of another, the principal owner of two great publications, that his gross income is more than $6,000,000 annually, and that his net profits for the same period exceed $1,000,000; of another, that his magazine yields more than 10 per cent on a capital of $10,000,000; of another, that his net profits are $600,000; of another, that the value of his advertising space alone is $1,500,000 a year; of another, that his advertising receipts are $75,000 per month and his profits are from $600,000 to $800,000 per year; of still another, that his publishing business represents a profit of 100 per cent a year to its stockholders.
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my dear senator:—on february 13, 1911, everybody’s magazine published in the local newspapers a full page advertisement attacking the proposed increase in second-class postage carried by the postal bill now pending in the senate. in their statement the publishers claimed to have a circulation of 650,000 copies per issue and asserted that “the postal measure now before congress increases the cost of handling everybody’s magazine $150,000 a year.” they further stated that in view of the fact that the magazine makes “each year for its stockholders about $100,000,” the proposed increase would “actually exclude the magazine from the mails.”
the department’s figures for the calendar year 1910 show that everybody’s magazine mailed at the new york city postoffice 2,898,372 pounds of its issues as second-class matter, on which the postage at the cent-a-pound rate was $28,983.72. as an average of one-half of the pages is devoted to advertising, the proposed increase of 3 cents per pound on such matter would make the additional postage $43,475.58 per annum instead of $150,000, as stated by the publishers of the magazine.
based on the publishers’ statement of 650,000 circulation, the gross income of everybody’s would be about $1,550,000 annually, divided as follows:
200,000 subscriptions, at $1 (net) $200,000
450,000 news-stand sales, at $1 (net) 450,000
150 pages of advertising per month, at $500 per page 900,000
grand total $1,550,000
since the publishers state that the magazine makes each year for its stockholders only about $100,000, the approximate cost of publication reaches the surprisingly high figure of $1,450,000. using their own statement showing a circulation of 650,000, it appears that everybody’s issues 7,800,000 single copies annually. if their total net profits are only $100,000, it is evident that it must cost the publishers approximately 19 cents to place a copy of the magazine in the hands of a reader who can secure it on the news stand for 15 cents.
before your committee reported the bill providing for the increased rate on second-class matter, the publishers of everybody’s magazine announced that on and after march 6, 1911, their rates for ordinary advertising would be advanced from $500 to $600 a page. on the extremely conservative estimate that the magazine carries a monthly average of 150 advertising pages, this advance will produce an additional income of $150,000 per annum. as the proposed increase of postage during a like period will amount to approximately $43,500, it is evident that out of the increase of revenue alone the magazine will be able to pay the additional postage and still retain a considerable surplus for its stockholders.
yours, very truly,
frank h. hitchcock,
postmaster general
investigations recently made by the postoffice department show that large numbers of periodical publications already entered as second-class matter are in reality nothing more than trade catalogues, which, under the law, ought to be treated as third-class matter and subjected to a postage charge of 8 cents a[64] pound, which is the rate for catalogues. by inserting a few pages of reading matter, these publications succeeded in being classed as magazines and thus secured admission at the cent-a-pound rate. among publications of this kind is one containing 140 pages, 99 per cent of which are devoted to advertisements; another containing 562 pages, 97 per cent of which are devoted to advertisements; another containing 238 pages, 93 per cent of which are devoted to advertisements; and another containing 268 pages, 89 per cent of which are devoted to advertisements. almost the entire space in these publications is devoted to the carrying of commercial advertisements, and this in defiance of the statute specifically excluding from the second-class privileges “publications designed primarily for advertising purposes.”
by the proposed law, magazines, in so far as they provide public information, are left exactly on a par with newspapers and the smaller periodicals, for the increase of rate of 3 cents a pound attaches only to such portions of the magazines as are devoted to advertising purposes.
the stock argument of magazine publishers that the profit to the government on first-class matter induced by the advertisements in their publications offsets any loss incurred by reason of the low postage rate on second-class matter is disproved by the fact that the government’s entire profit on first-class matter is less than the total loss on second-class mail matter.
during the fiscal year 1910 over 800,000,000 pounds of second-class matter were carried through the mails at a loss to the government of $62,000,000. the profits on all other classes of mail matter were more than swallowed up by this tremendous loss, leaving a postal deficit for the year of about $6,000,000. it is estimated that the annual saving to the government through the proposed increase in postage will amount to about $6,000,000, or enough to wipe out what remains of the deficit.
magazines have repeatedly increased their advertising rates as their circulation has grown, but the postal charges for the handling and transportation of these magazines have remained stationary for years, so that while this increased circulation has swollen the profits of the publishers it has added correspondingly to the loss sustained by the government. it is clearly inequitable that the public in its general correspondence, the publishers of books and pamphlets, and the senders of small merchandise should continue to be taxed to meet the deficit caused by a subsidy enjoyed by the publishers of the large magazines.
yours, very truly,
frank h. hitchcock,
postmaster general.
my dear senator:—observing that the periodical publishers in their opposition to the pending provision increasing postage on second-class mail matter frequently refer to the low rate of one-fourth cent per pound charged by the dominion of canada on newspapers and periodicals, i think it well to point out the fact that while this exceptionally low rate does prevail in that country because of the peculiar conditions there, european countries, so far as our information goes, charge a higher rate than the united states, notwithstanding their[65] much smaller areas. the rates charged by great britain, germany, and france are considerably higher than the rate provided for in the bill now pending in the senate. i inclose herewith a memorandum giving such information as we have regarding the postage rates charged on newspapers and periodicals by european countries.
yours, very truly,
frank h. hitchcock,
postmaster general.
postage rate, in cents per pound, on newspapers and periodicals in european countries.
cents.
great britain (one forty-first of the area of the united states), 1 cent a copy for local delivery, but for general distribution by parcels post in quantities, 6 cents for the first pound and 2 cents for each additional pound up to 11 pounds.
germany (one-seventeenth of the area of the united states) 4?
france (one-seventeenth of the area of the united states) 4
italy (one thirty-third of the area of the united states):
daily newspapers 1?
other publications 2
holland (one two-hundred-and-eighty-fourth of the area of the united states) 1?
belgium (one three-hundred-and-eighteenth of the area of the united states) 1?
under the provisions of the international postal convention, newspapers and periodicals are mailed by all the signatory parties at the uniform rate of 1 cent for each 2 ounces or fraction thereof—practically, 8 cents per pound.
postmaster general hitchcock in his letter, submitted under date of february 14, 1911, quotes some publisher (name not mentioned), as saying that “magazine publishers receive gross incomes as high as $6,000,000 in a single year” … “that one of them, according to his own statement, realizes a net profit of $1,000,000 annually” … another, “the principal owner of two great magazines, says that his gross income is more than $6,000,000 a year;” of another “that his magazine yields more than 10% profit on a capitalization of $10,000,000,” etc., etc.
beyond stating that the foregoing declarations were made by the “president of one of the leading magazine publishing companies of new york city,” mr. hitchcock sayeth not, save as he quotes (see seventh paragraph of the hitchcock letter), this president as saying what mr. hitchcock says he said. the postmaster general does not name this “president.”
regretting this oversight of our postmaster general very much, i would like to know whether or not this “president” is the real,[66] genuine article of president, or is merely one of these “phoney” presidents who laboriously support the honors of the corporate title and vote three shares of stock, usually given by the promoters of an organization for the “influence” of an honored name in starting the wheels to revolve.
i mean by this that it would be information to thousands of mr. hitchcock’s readers, as well as to thousands of publishers and printers, and numerous millions of american citizens, had he, mr. hitchcock, told them whether this “president” he quotes so liberally, likewise confidently and confidingly, is a real, live-wire president, active in the management of his periodical, and, therefore, fully informed as to its business, expenditures, profits, etc., etc., or, on the other hand, whether or not he is merely a corporation stool-bird for the promotion of a publication enterprise through selling the stock of the concern to the e. z.-mark investing public.
the quotations which our postmaster general makes from this publisher “president” sound to me with quite a familiar tang. they read a good bit like a promotion circular, like an “annual statement” which corporations and companies as well as individuals print and distribute to call attention to the prosperous future they have in sight, incidentally inviting investment from savings banks accounts, stocking hoardings, etc.
nothing wrong about that method of “public bubbling” at all. even banking institutions, national and state, sometimes resort to it. occasionally, commercial houses have used it. so, also, has the steel corporation, when it wished its employes to chip in a few millions for “a personal interest.” our friend, “bet-you-a-million-gates,” used it to advantage in reorganizing the louisville and nashville system, and it is a practice now and again indulged in among our napoleons of finance, as well as great captains in the industrial realm.
for this reason i cannot—until our postmaster general further enlightens us regarding this publisher-president as to his personality, individuality and general business activity in and knowledge of, his own publication business,—say anything in adverse criticism of this “president” mr hitchcock quotes so liberally, likewise unctuously.
however, having been a periodical publisher myself, in a small way, i shall presume here to present a few figures approximately[67] applicable to larger periodical enterprises. mr. hitchcock has much to say about gross receipts, gross revenues, and other gross. i shall present my estimate of net profits. for this purpose, i shall take a monthly periodical reputedly issuing 650,000 copies a month, each number weighing about one pound.
now, let it be here distinctly understood by the reader that my figures, mostly estimates, are those of a man with experience only as a small periodical publisher, say of 50,000 a month, not 650,000.
estimated income of the publisher of a standard monthly periodical distributing 650,000 copies monthly of average weight of one pound each, mr. hitchcock figures to be (see his letter), about $6,000,000. the gross annual receipts from subscriptions on a periodical issuing 650,000 copies per month, and retailing at 15 cents per copy, is less than $750,000. such periodicals realize about 12? cents each for subscribed copies and 8 cents net for copies delivered in bulk to newsdealers and agencies. the first item of expense the publisher incurs, therefore, is in the issue cost of production over what he receives for the copies issued. it is knowledge common to every periodical publisher, newspaper as well as magazine, that every subscriber as well as news-stand buyer of his periodical is a subsidized reader. do you catch the import of that statement?
did you ever think of that, mr. reader? frankly i confess that i did not, until quite recently, when a large producer of trade journals and edition books, and likewise one of our largest manufacturing printers, pointed out the facts to me. his varied business interests are such that he must necessarily buy at the lowest market cost, must know to the fraction of a cent what those costs are—the cost of composition, of presswork, of ink, of color work, of covers, of binding, of cartage, of rail haulage, of distribution, etc., etc.
well, this gentleman summoned me off the ladder, and “called” me in a way which made my landing somewhat abrupt, in order to tell me some things about periodical publishing which he had shrewdly, likewise correctly, guessed that i did not know.
among the things he told me, not only told me but proved to me, was the one stated: that readers of periodicals get, in net mechanical cost, more than the publishers receive for the publication sold.
in proof of this he cited the 8-page dailies issued in cities of the second and third classes, and the 16 to 32-page dailies published in[68] our metropolitan cities; also the great “sunday editions” issued by the latter, issues which run more largely to color and tonnage than to news and literature. the former, (the dailies), my publisher friend pointed out, realize about six-tenths of one cent a copy—a little less, if they do cartage for any considerable part of their local deliveries or pay rail haulage charges on outside deliveries. of course, my tutor is speaking of news agents and carrier deliveries. on their regular subscribed issues publishers realize a little more. but the difference, when cost of wrapping and addressing is figured, is so trifling as not to be worth considering. it can be safely figured that the net price received by the publisher of a newspaper is six-tenths of one cent for the daily and about three and a half cents—probably nearer three cents—for the leviathan metropolitan sunday edition.
just here is where my publisher friend’s knowledge of market costs came forth for my enlightenment and, i sincerely hope, for my reader’s as well. having studied his business from the “stumpage” up, so to speak, he began with the cost of pulp wood timber, “of stumpage,” from the spruce forests of the north and farther north, the scattered linn or basswood of the east and southeast, and of the soft maple and cottonwood of the southeast and south. then he told me of the prices paid the “lumber jacks” to fell and saw this pulp-wood; of the cost of hauling it by ox, mule or horsepower to the river “roll-way,” which river would carry it down to the pulp mill, or hauling it to the railroad loading station for rail carriage to the same point.
nor did he do that only. he told me the price of the “web press roll” and of “flat-print” papers into which the wood pulp is made, paper stock on which is printed all our periodicals—both newspapers and monthly and weekly periodicals. next he told me of the price of composition, (typesetting, as we used to call it), by the most modern methods, the linotype and the monotype machines. then he talked of ink and presswork costs, of color work, folding, stitching and covering or binding; of the cost of wrapping, addressing, cartage, rail haulage and distribution. the result of the expert’s showing of the cost of raw material and of skilled and other labor in periodical publication, as the periodicals are printed and marketed today, was to the effect that the reader gets his daily, weekly or monthly publication, on an average, at less than half what it costs the publisher to produce it.
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further, it was conclusively shown to me, that the publisher’s net receipts for a newspaper, magazine or other periodical is often but a third, sometimes less than a fourth, of the net cost to him of its production and distribution.
with this preliminary, we will now go back to our magazine of 650,000 monthly issue and postmaster general hitchcock’s estimate of its profits.
postmaster general hitchcock’s talk of “gross” receipts of $6,000,000 a year is ill advised. let us see what must be charged off from that $6,000,000 before the publisher can count his profits.
first, we will figure the publisher’s loss on published copies. taking only the flat cost of paper, ink and composition; of the cost of fine color and half-tone pages such as monthly periodicals must print; of cover designing, presswork, and binding, of wrapping and addressing, say 150,000 copies of the monthly issue to individual addresses, that being, approximately at least, the number of subscribed readers the publisher will have on a total issue of 650,000 copies. next comes the cost of sacking his subscribed circulation and of bundling and wrapping, then of cartage to mail trains. the prominent periodical publisher not only delivers his subscribed list sacked to the mail car, but he routes the larger portion of it, the railway mail clerks having nothing to do with it save to dump it off at the designated stations. then he must meet the carriage and delivery cost, about 1 cent a pound, or $20.00 a ton. all these i consider flat costs of producing and delivering the publication. to this flat cost must be added the expenditures for contributing writers, for editors, proofreaders and special investigators (including travel and other expenses), stenographers, postage and stationery for a large correspondence, clerical, messenger and other administration service, rents, insurance, etc., etc. and, finally, the expenditures made in the way of commissions and premiums to work up a subscribed issue.
a monthly periodical of the size and character which postmaster general hitchcock has reference to—of the size and character to win its way to an issue of 650,000 copies a month—must cost its publisher not less, on an average, than 30 cents per copy, probably more. the subscribing reader pays 12? cents per copy for it—pays directly to the publisher. the news stand buyer pays 15 cents a copy, but the publisher, after paying newsdealer and agency commissions[70] on the latter sales, realizes but 8 cents per copy. here let us see how this publisher’s circulation-cost and receipts figure out. six hundred and fifty thousand monthly issue figures to an issue of 7,800,000 copies for the year. at 30 cents’ cost of production, which is rather low than high, those copies cost the publisher to produce, to get readers for and to distribute, the annual total of $2,340,000. he realizes in return from subscription and news stand sales about as follows:
from news stand and agency sales (500,000 per month, or 6,600,000 copies a year), he realizes 8 cents per copy or $480,000
from subscribers (150,000 per month or 1,800,000 a year), at 12? cents each 225,000
total receipts $705,000
thus it is clear that for an expenditure of $2,340,000 a year to produce and distribute his excellent low-priced periodical to readers, the publisher gets in return only $705,000, thus standing a net loss of $1,635,000 on his mechanical output—no, on his literary and educational output. and, mark you, that $705,000 mr. hitchcock must, necessarily, have included in his “gross” receipts. how, then, is the publisher able to furnish his readers such literary and educational nourishment at so great a loss on production?
there is but one answer: the advertising carried by the periodical must recoup the loss on publication and yield the publisher whatever profit he may realize. yet mr. hitchcock, in the profound profundity of his knowledge of periodical publishing, figures that the advertising receipts are clear profit to the publisher. true, he does, in one of his urgent letters to senator penrose, i believe it is, incidentally admit a possible maximum cost or expense of “fifteen per cent” in securing and printing the advertisements. “fifteen per cent!”
omitting all undigestible words, i shall merely say that mr. hitchcock’s fifteen per cent talk—about the cost of soliciting and printing advertising matter by any of our high-class periodicals, shows a knowledge of the subject nearly on the level of that of a cold-storage egg.
why, fifteen per cent of the gross receipts for advertising by any of our high-class periodicals scarcely would meet—i doubt if in any such case it does meet—the expenditures made for skilled “layout”[71] men and designers. everyone knows that the advertising pages of any of our standard weekly and monthly periodicals are art pages. people read the “ads” in these periodicals. they are largely attracted to them by their artistic arrangement, typographically and in design. it takes brains to make that arrangement, brains of finer fiber or better trained than the cold storage variety. the service of such brains costs money. who pays it? the publisher. and the publisher who gets the services of such brains at less than fifteen per cent of the “gross” charge for his advertising must, in these days, be a wonder in business acumen or a “pow’ful ’suadin’ boss,” as rastus used to say, down on the yazoo, years ago, when he took a job at twenty-five cents a day less than he had asked.
i say the people read these “ads” and, fearing i shall forget it later, i desire to interpolate here another thought: they are led to read them because of the artistic letterpress, the designing, the attractive phrasing, catchy wording, etc. they read them. you and i read them. and—well, that is my point—my thought.
the “ads” in periodicals of the class of which we are speaking cover almost every field and domain of life—of human life—of our lives. they tell us of the latest inventions and achievements in the mechanical and industrial world; of the latest improvements in the cultivation of the land; of the latest and best in “hen range” management and “run-way” poultry raising; of the latest achievements of luther burbank, or some other wizard in the domain of pomology; of kitchen and flower gardening; of how to cut down our gas bills; to make the ton of coal deliver more “duty”—more thermic b. t. u.’s—of the best new books and of bargain reprint editions of the best old ones; of where to get a cheap home, cheap acres around it and how to build and furnish a comfortable home cheaply; in fact, of an infinity of daily and hourly needs. so what is the use of my enumerating further? every reader knows what those “ads” in our standard periodicals do for us. they enlighten, they inform, they educate us. and that is why we read them, and that is why we should continue to do so.
we will get back now to mr. hitchcock and his “wondrous ways” of figuring a publisher’s profits on the advertising he prints. postmaster general hitchcock appears to have ignored the fact i have already pointed out—ignored the fact that the publisher’s heaviest[72] loss is on the printing and distribution end of his periodical, and thus is a charge against his advertising receipts.
mr. hitchcock, so far as i have been able to read him, furthermore ignores the important fact that advertisements are secured for a periodical largely by solicitation. of course, the “want,” “to rent,” “for sale” and similar small line “ads” come to newspapers largely without personal solicitation. but the display advertiser does not frantically rush to the publisher and say: “here’s my check for $500.00. give me a page display for this line of goods.” not at all. the publisher must go after him and, not infrequently, go after him numerous times before he lands his $500.00 or $5,000.00 contract or order. to secure such advertisements the publisher employs the most skilled advertising solicitors within reach of his bank balance. such men, if carried on his regular payroll, are among the “high-salaried” human units which make up the operating, managing and service personnel of his business. if they are not on regular salary the publisher must pay such men a liberal commission on the contracts secured, a commission seldom or never as low as 10 per cent and i have known them to range as high as 40 or 50 per cent of the gross price received on the first or initial contract, “just to show the advertiser what we can do for him,” as the publisher frequently reasons.
testimony under oath.
senate document no. 820 presents a reply by some publishers to mr. hitchcock’s loose or reckless statements on the point under consideration. i wish to appropriate for use here some very manifestly truthful statements made in that senate document no. 820. i shall summarize or quote as best fits my line of presentation.
in 1909 the publishers of five standard magazines, admittedly carrying “the largest amount of advertising” among the monthly periodicals, made a sworn statement covering their receipts, expenditures and net profits. that sworn statement is on file in the department of commerce and labor and is easily accessible to the postmaster general if he desires to know a little something of what the publishers know about their own business. the publishers of the five periodicals thus making sworn statements to the government of their incomes, expenditures and profits, are the publishers of “everybody’s,”[73] “mcclure’s”, “the review of reviews,” “the cosmopolitan” and “the american.”
the named periodicals, it will be at once recognized, if not the strongest, at least are among the strongest monthly periodicals of this country. yet these sworn statements show that mr. hitchcock’s proposed increase of 3 cents a pound in their mailing rates would, under present conditions, exhaust “81.8 percent of their net profits.”
if mr. hitchcock’s proposal, prompted, it would appear, by ulterior motives, as was recently evidenced by his voluminous buttonholing of interested or “interests” senators and congressmen to put his “rider” over—no, maybe it is not really his, but it looks like him—for an increase on second-class matter would, if made operative, would so seriously impair the financial strength of five such strong periodicals as those named, what, it is the part both of duty and of honesty to ask, will become of the scores of smaller periodicals, especially of those periodicals which issue more than “two tons” at a mailing and which serve, inform and educate a reading patronage that needs them?
if mr. hitchcock’s actions in this matter are clean and open—not “influenced”—he might not only serve himself but a good and worthy cause as well, if he would give some pointers to these smaller publishers—those between his “4,000 pounds an issue” exemptions from his four-cent rate and the stronger periodical publications, five of which are before him in sworn statement. if he would give, i say, these middle-class publishers—we may so call them for the comparison in hand, though their published matter is of the highest class all the time—if he would give such publishers some method or scheme to keep from the financial rocks, they, i am quite sure, would greatly appreciate it. possibly they would put him on their free lists in perpetuity.
mr. hitchcock appears to be a phenomenon at “figurin’” and for the devising of methods to obliterate postoffice “deficits;” also at following the ulterior motive and its “influence,” and still provide, by exemptions or otherwise, to protect the “fence-building” country newspapers,—indeed newspapers in general, now that i read him again. likewise he protects the farm, the religious, the scientific, the mechanical and other publications whose influence, it appears, does not obstructively influence the “influences” which have directed his recent action.
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i do not know who wrote that senate document no. 820. whoever it was, he certainly knew “a gob of things,” as our splendid friend, the washerwoman, would put it, about the united states postoffice department, its management and its methods. i shall probably “crib” or plagiarize several times from this senate document no. 820, but just here i desire to quote a paragraph from it:
“postmaster general hitchcock’s profound ignorance concerning the relation of magazine advertising to magazine profits is shown by the fact that although these magazines received in 1909, $2,463,940.39 for advertising, the aggregate of their net incomes was only $230,734.57,—less than one-tenth of their advertising receipts.”
this document no. 820 is all good, so good that i believe i will reprint from it further and at this point:
postmaster general hitchcock proceeds in the first and second paragraphs on page four to cite a recent increase of advertising rates of a certain magazine, and to consider, and use in figuring, as net profits the total amount of advertising it carries for the year.
(it is of incidental interest, in showing the partisan attitude of the postmaster general, that in calculating the total amount of advertising received by this publication, he takes the number of lines actually printed in this weekly’s richest advertising season, ignoring the fact that in the summer this periodical is sometimes published at a loss, and makes an estimate of its advertising patronage for the whole year on the basis of what it received in the months when advertising is at its height).
but the gigantic error of the postmaster general is in calculating the additional income from advertising for this weekly resulting from its increased advertising rate, and assuming that this increased income is all profit. this error arises from the postmaster general’s total ignorance of the publishing business in general; and in particular, of the fact proved above, that the magazines save only a small fraction of their aggregate advertising income as net profits after paying the expenses of production and administration.
then the postmaster general finds out how much money the increased rate brought the periodical and observes with an air of finality that this income was more than sufficient to meet the higher postal charges.
the facts are, of course, that to get this higher advertising rate, the “great periodical” had to publish enough more copies and additional reading matter in those copies to justify the increased rate; and that to manufacture and supply these additional subscriptions it costs magazines more than twice as much as they get from subscribers. furthermore, the postmaster general takes gross advertising income as net profit, apparently thinking that advertising flows into periodical offices without the asking, where, as a matter of fact, it is necessary to spend enormous sums for high-priced men to solicit advertising, for other men to lay out plans and make designs for advertisers, and for a large clerical force to handle[75] the advertising department. the calm way in which the postmaster general ignores the cost of presswork and paper on which the advertising is printed, exhibits his ignorance of the fact that there is in business an expense side of the ledger as well as an income side.
if a magazine has 100,000 circulation and a fair corresponding rate for advertising and if the circulation is then increased to 200,000, the publisher has the same right and the same necessity to charge more for the doubled circulation that a grocer has to charge more for two pounds of tea than for one pound. but what possible relation has this to the fact that postage rates have remained stationary? the postoffice gives no more service than it did before magazine circulations and advertising increased—in fact it gives less, as it now requires the big magazines to separate and tag for distribution, and, in many cases, deliver to the trains, a vast quantity of magazine mail, formerly handled entirely by the postoffice.
i wonder if mr. hitchcock ever read “job jobson, nos. 1, 2 and 3.” if he has not there is something due him which he ought to take immediate steps to collect. “job jobson” in three little pamphlets tells more than either mr. hitchcock or myself will ever be able to learn about second-class mail carriage and handling—unless, of course, we read those three booklets of job jobson.
why are job jobson’s three booklets so important? a very pertinent question, indeed, at this stage of our consideration. job jobson’s three booklets are toweringly important inasmuch as they were written by wilmer atkinson, publisher of the farm journal of philadelphia, one of the most successful as well as the most useful farm periodicals the world has ever produced.
more than that, mr. atkinson has so long and so thoroughly studied this second-class mail rate question that both mr. hitchcock and myself would have to take our places in the kindergarten class where he is tutor.
i haven’t those three “job jobson’s” by me. i have thumbed two of them out of existence, but from the one i have i desire to quote a couple of paragraphs which i hope it will do mr. hitchcock as much good to read as it does me to re-read. here they are in all their vigor:
publishers, one and all, should take their stand upon the immutable principle that newspaper circulation is not a crime, and it is not a fault, that neither a law on the statute books, much less arbitrary power outside the law, should ever be invoked to curtail the liberty and independence of the press, which are a sacred inheritance from the fathers; or to cripple newspaper enterprises or bankrupt those engaged in this noble calling.
that to send their papers into the very confines of the republic, into every[76] home, however rich, however humble, to brighten and to bless, is a great and beneficent work, worthy of all praise and all honor—worthy of the nurturing care, rather than the antagonism of government.
and that was written only a few years ago—written true to the facts. i desire here to quote a couple more paragraphs. they have been published generally throughout the country and universally indorsed. they are written by the hon. woodrow wilson, governor of new jersey:
a tax upon the business of the more widely circulated magazines and periodicals would be a tax upon their means of living and performing their functions. they obtain their circulation by their direct appeal to the popular thought. their circulation attracts advertisers. their advertisements enable them to pay their writers and to enlarge their enterprise and influence.
this proposed new postal rate would be a direct tax, and a very serious one, upon the formation and expression of opinion—its most deliberate formation and expression—just at a time when opinion is concerning itself most actively and effectively with the deepest problems of our politics and our social life. to make such a change, whatever its intentions in the minds of those who proposed it, would be to attack and embarrass the free processes of opinion.