Postal Riders and Raiders. W. H. Gantz
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 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 12½ 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 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.
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