Postal Riders and Raiders. W. H. Gantz
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 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 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) | 4⅘ |
| France (one-seventeenth of the area of the United States) | 4 |
| Italy (one thirty-third of the area of the United States): | |
| Daily newspapers | 1⅛ |
| Other publications | 2 |
| Holland (one two-hundred-and-eighty-fourth of the area of the United States) | 1⅘ |
| Belgium (one three-hundred-and-eighteenth of the area of the United States) | 1⅕ |
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