Postal Riders and Raiders. W. H. Gantz
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 12½ 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 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 12½ 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” 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 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,” “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.”