regards copies exchanged between publishers. The latter privilege was
continued from a desire to assist the country publisher, who seems
always to have had friends in Congress, and who was in the habit of
obtaining much of the information published in his papers from the great
Atlantic cities, and other large towns which were centres of political
or other interests. The free privilege was not long withheld.[336] An
Act of 1851 again extended it to all weekly newspapers sent from the
office of publication to _bona fide_ subscribers within the county where
published, provided the newspaper did not exceed 3 ounces in weight;
with a scale of postages graduated according to distance for papers sent
out of the county where published. A graduated scale for pamphlets,
periodicals, magazines, and all other printed matter, was also
established by this Act. In the following year a rate of 1 cent was
fixed for each newspaper, periodical, unsealed circular, or other
article of printed matter, not exceeding 3 ounces in weight, sent to any
part of the United States; and for every additional ounce or fraction
thereof, 1 cent additional. In 1861 the rate of postage on any
newspaper, periodical, unsealed circular, or other article of printed
matter, not exceeding 3 ounces in weight, conveyed over the overland
route between any State or Territory east of the Rocky Mountains and any
State or Territory on the Pacific, was made 1 cent. The letter rate
between the same areas was 10 cents per 1/2 ounce.
A statute of 1863 classified mail matter, defining three groups.
Newspapers, magazines, and pamphlets fell into the second group, which
comprised all printed matter issued at stated intervals, but different
rates were fixed for different sections of such matter. On printed
matter issued weekly and sent to regular subscribers, the rate was 5
cents a quarter for publications not exceeding 4 ounces in weight, with
an additional rate for every additional 4 ounces or fraction thereof. If
issued seven times a week, the rate was 35 cents a quarter for every 4
ounces. If issued less frequently than weekly, the charge was 1 cent a
copy not exceeding 4 ounces in weight, and small newspapers might be
sent in packages and charged the same rates by weight. On transient[337]
second-class matter, and miscellaneous matter of the third class--the
third class included all other printed matter--the rate was fixed at 2
cents for each 4 ounces or fraction thereof.
The rates of 1863 were slightly modified in 1872, and a local delivery
rate of 1 cent was established for newspapers. Two years later a new
method of charging postage on newspapers and periodicals posted by
publishers or newsagents was introduced. Instead of being charged on
each individual packet, postage was to be charged on the gross weight of
the newspapers posted by a publisher, irrespective of the number of
separate packets to be handled. The rate was 2 cents a pound on
newspapers and periodicals published weekly, and 3 cents on those issued
less frequently than once a week. These rates only applied to such
newspapers and periodicals as were mailed from a known office of
publication, or news agency, to regular subscribers or newsagents, and
did not apply to those for local delivery. By a statute of 1876
publications designed primarily for advertising purposes, or for
circulation free, or at nominal rates, were made third-class matter,
and thus excluded from the privilege. In 1879 the present rate of 1 cent
a pound (bulk rate) and a revised classification were established.
Matter was admitted to the second class on the following conditions:--
_First._--It must regularly be issued at stated intervals as
frequently as four times a year, must bear a date of issue, and
must be numbered consecutively.
_Second._--It must be issued from a known office of publication.
_Third._--It must be formed of printed paper sheets, without board,
cloth, leather, or other substantial binding, such as distinguish
printed books for preservation from periodical publications.
_Fourth._--It must be originated and published for the
dissemination of information of a public character, or devoted to
literature, the sciences, arts, or some special industry, and
having a legitimate list of subscribers; _provided_, _however_,
that nothing herein contained shall be so construed as to admit to
the second-class rate regular publications designed primarily for
advertising purposes, or for free circulation, or for circulation
at nominal rates.
In 1894 the privilege was extended so as to include under certain
conditions the periodical publications of benevolent or fraternal
societies; and again in 1900, to include the periodical publications
issued by State departments of agriculture.
It was provided by the statute of 1879 that a supplement may be enclosed
with a second-class publication, without subjecting it to extra postage,
provided that it is germane to the publication which it supplements,
that is to say, is matter supplied in order to complete that to which it
is added or supplemented, but omitted from the regular issue for want of
space or time, or for greater convenience. It must, however, in every
case be issued with the publication.
Since the establishment of these conditions and rates, there has been a
steady and growing increase in the amount of second-class matter sent
through the mails. In 1879, under the old rates, the total weight sent
at the pound rate was 51,125,500 pounds. In the following year the total
weight was 61,822,629 pounds; and by 1910 the total had increased to
817,772,900 pounds, that figure representing an increase of no less than
94,539,718 pounds on the total for 1909.
During the whole of this period the accounts of the Post Office in the
United States had in two years only (in 1882 and 1883) shown a surplus
of revenue over expenditure. In view of the vast quantity of matter sent
in the mails at very low rates, the question naturally suggested itself
whether, seeing that it was necessary year by year to call on the
public treasury for funds to meet the deficiency in the Post Office
accounts, it would not be practicable, and equitable, to obtain an
increased revenue from this class of traffic. The fact that considerable
abuses of the second-class mail privilege had grown up made
consideration of the question the more necessary.
Periodicals obtained so great a privilege as compared with ordinary
books, that publishers sought devious ways to obtain the advantage of
the pound rate. Books termed a "library" were issued periodically, with
a frequency sufficient to meet the requirements of the Act, numbered in
series, and devoted to literature or science; were issued from a known
office of publication, and with a list of subscribers. Complying thus
with all the requirements of the Act, there seemed no ground on which
these publications could be refused admission to the second-class
privilege, and they were accordingly entered. The practice grew, and a
multitude of libraries, comprising books on every conceivable subject,
were distributed through the mails as second-class matter. The Act
permitted the posting of sample copies, and as no limit to the number of
such copies was fixed, the mails were burdened with vast quantities of
sample copies of publications which, while complying with the letter of
the statute, as did the "libraries," were in reality mere advertising
media. The subscription list was extremely small in comparison with the
number of sample copies sent out, and in many cases the subscriptions
had been obtained by the offer of premiums at least equal in value to
the subscriptions. Another abuse appeared. Under the law, copies of
newspapers and periodicals mailed under the second-class privilege which
were found to be undeliverable were, when returned to the publisher,
liable to postage at the rate of 1 cent for each 4 ounces; but
newsagents had the right to send second-class mail to one another, and
in order to avoid the higher rate on returned copies, the publishers
arranged a scheme by which the copies were returned by one newsagent to
another newsagent whose office was near by the publisher's office. These
abuses assumed such proportions that in 1889 the Postmaster-General, Mr.
Wanamaker, brought them to the notice of Congress and asked a remedy.
Nothing was done, however. In 1892 Mr. Wanamaker again complained of
the same gross abuses, and especially of the book abuse, which had then
become, he said, "a practice of so long standing that it has
crystallized into law, allowing to paper-covered books which are simply
numbered, and dated, and designated as periodicals, though in reality
not so, the privileges of genuine periodicals."[338] He also attacked
with vigour the sample-copy abuse.[339]
Several Postmasters-General caused estimates to be made of the actual
cost to the Post Office of the handling and transmission of the
second-class mail. An estimate made in 1894 indicated the cost of
transportation for all mail matter as 8 cents a pound, and on that basis
second-class matter at that time involved a loss of nearly 17 million
dollars for transportation alone. In 1897 the total loss on account of
the second-class mail was estimated at 26 million dollars. A further
estimate made in 1901 indicated that the cost of transportation of
second-class matter was at least 5 cents a pound, and that the cost of
handling was a further 2 cents, giving a total cost of 7 cents a pound
on matter for which postage at the rate of only 1 cent a pound was
paid.[340]
In 1905 Postmaster-General Cortelyou submitted an estimate which put the
loss on second-class matter at some $27,000,000 a year; and he
recommended that the whole question should be considered by Congress,
and a law enacted which should simplify the tests by which mail matter
was classified.
These vigorous and oft-repeated recommendations of successive
Postmasters-General, though not resulting in legislation, at length
achieved a result in the appointment in 1906 of a joint Commission of
Congress on second-class mail matter. The Commission held meetings in
New York, and took evidence from the Post Office department and from
representatives of each national organization of publishers in the
United States. Their report, presented in January 1907, was in no sense
conclusive. Their chief difficulties had arisen from the impossibility
of obtaining from the department any statistics as to the cost of mail
matter class by class--a difficulty which is inherent in Post Offices
conducted on the modern system of accounting for postage of all classes
by postage labels of the same type, and handling all classes of matter
promiscuously; and their chief recommendations were that the department
should take fresh statistics with regard to all mail matter,[341] and
make an analysis of operating expenses with a view to apportionment
between the various classes of mail matter. The Commission was so
dissatisfied with the department's position with regard to the
ascertainment of a proper division of the total expenses, that they
recommended the appointment of a further Commission to examine
thoroughly "the whole business system" of the Post Office, and
particularly to determine, if possible, firstly, the actual cost of all
the postal services; secondly, the proper apportionment of that cost
between the various classes of mail matter; and thirdly, what
modifications of the system of bookkeeping and accounting were
desirable.[342]
By a statute of the 2nd March 1907, Congress authorized the appointment
of a joint Commission "to make an investigation into the business system
of the Post Office and postal service." The same gentlemen who had
composed the Commission of 1906 were appointed to the new Commission,
but its labours led to no practical result.
The other recommendation of the Penrose-Overstreet Commission, viz. that
further statistics should be obtained with regard to second-class
matter, was also adopted by Congress, and the statute authorizing the
Commission on business methods also authorized the taking of statistics
of the weight, number of pieces, and average haul of all classes of mail
matter, separately, and the average load of all cars by which it was
forwarded by railway.[343] With the statistics so obtained as a
basis,[344] the department undertook the task, which, as stated by the
Commission of 1906, had previously been impossible of performance, of
calculating the actual working cost assignable respectively to the
various classes of mail matter. A Committee, which was appointed in
October 1908, and reported in November 1909, arrived at the conclusion
that the cost of dealing with second-class mail matter was about 9 cents
a pound. The whole subject was before the Committee on the Post Office
and Post Roads of the House of Representatives in January and February
1910. Many representatives of the publishing interest attended and gave
evidence, and the department's calculations were subjected to
examination and criticism.[345]
Congress and the Executive were still, however, unable to arrive at a
satisfactory conclusion on the question, and on the 4th March 1911 a
joint resolution of Congress authorized the appointment of a further
Commission on second-class mail matter, this time not a Congressional
Commission. A judge, the president of a university, and a business
gentleman were appointed to the Commission, which held sessions in New
York in the latter part of the year, and took evidence from the Post
Office department and representatives of the publishing interests. They
found that the data available were insufficient to enable them to
determine the total cost to the Post Office of the services performed in
respect of second-class mail matter; but they were able to estimate the
cost in regard to certain items of the expenses of the Post Office. The
cost under those headings, which must, of course, be less than the total
cost, they found as 5-1/2 cents a pound for ordinary
paid-at-the-pound-rate matter and 5 cents a pound for free and transient
matter.[346] That part of the general expenses of the service which the
Commission were unable to assign satisfactorily between the various
classes of mail matter was estimated by the Post Office department to
amount to over 2 cents a pound for second-class mail matter.[347] On
this basis, of course, a heavy increase in the rate of postage would be
warranted; but in view of the uncertainty of the effect of the
competition of the express companies which would result from a large
increase in the rate of postage, of the fact that the publishers'
business established in faith of constancy of the postage would
seriously suffer from such a sudden increase, and of the well-known
policy of encouraging distribution of educational literature,[348] the
Commission hesitated to recommend any large increase, and contented
themselves with recommending that the rate be raised from 1 to 2 cents a
pound.
Given that the actual cost of the handling and transporting of
second-class mail matter is on the average 9 cents a pound (regarding
which the department is quite satisfied) and a rate of postage for such
matter of 1 cent a pound, the department has, on the face of things, a
strong case; and it is not necessary to ascribe other motives in order
fully to explain and justify the course it has adopted. But the
publishers felt that they were not favourably regarded by the Republican
Administration. They claim, and the claim is admitted in influential
quarters immune from pressure from them, that they are largely
responsible for the establishment of the insurgent wing of the
Republican party, whose action against the late Administration proved so
disastrous to the fortunes of the party. In the course of these
political activities they have made enemies; and they conclude that in
the Republican party, many of whose members have been disgraced, if not
indeed driven from public life, there has arisen a strong feeling
against the publishers. The activity of the department against the
second-class rate is alleged to have begun after the publication of
articles in the magazines exposing the corruption in the cities, and
incidentally reflecting on members of the Republican party. Moreover,
the department's most drastic recommendations have been directed not
against second-class matter as a whole, but against the periodicals; and
they have been made under the guise of preventing, as contrary to the
intent of the statute, the dissemination at the second-class rate of
vast quantities of advertising matter. Thus, the department has
recommended that that portion of periodicals which consisted solely of
advertising matter should be charged at a higher rate than the rest of
the publication (which would be allowed the second-class rate), while
nothing at all was proposed as regards ordinary newspapers, a
discrimination which cut the publishers of the periodicals deeply.
The representations of the Post Office department, extending over some
twenty years, and of most decisive and emphatic character, have not yet
succeeded in obtaining legislation for the reform of the second-class
mail scheme; but some few years back the department arrived at the
conclusion that the authority of the existing law was sufficient to
enable the more flagrant abuses to be checked, if not eliminated. A
series of rulings were thereupon promulgated, and by this means some of
the worst abuses have been removed, such as, for example, the
transmission as second-class matter of "libraries," issued as
periodicals. These rulings were resented by the publishing interests,
with whom it was a source of great complaint that the interpretation of
the statute defining second-class mail matter was left to arbitrary
decision by officials of the department.[349] The intense feeling in
America against any sort of bureaucracy, and especially against a
bureaucracy of the central Government, leads to a natural jealousy of
the exercise of this power, and as a remedy the suggestion was advanced
that provision should be made, first, for questions of the
interpretation of the Act to be decided in the first instance by a
permanent Commission located at Washington, on which the publishers
should be represented; and secondly, that there should be an appeal from
the decisions of this Commission to the ordinary courts of justice.
The department admits that its position with regard to the
interpretation of the statutes is unsatisfactory. Under the existing
system, all manner of questions are asked regarding the private business
of the publisher, and the decisions from Washington are often
delayed.[350] But as against the contention of the department, which was
for an amendment of the law, the publishers contended that the law,
while no doubt not altogether perfect, was in the main sound and just,
and the rate of postage of 1 cent a pound was as great a boon as was
ever conferred by Congress. They denied that it was in any sense a
subsidy.[351] They also denied the existence of a deficiency, and
contended that so far from its being true that the Post Office business
involved a loss, there was each year a profit of millions of dollars.
This result they arrived at by estimating the cost to the Post Office of
the distribution of Government free matter, and the cost of the rural
free delivery, which they added together, setting the total against the
deficit shown in the published accounts of the department. By this means
a balance of profit was obtained for each year. The estimated postage
payable at the usual rates in respect of the free matter was of course
an item legitimately to be added to gross revenue; but it was doubtful
whether the cost of the rural delivery service could be deducted from
gross expenses, as the publishers insisted, on the ground that the
service was "extraordinary."
The publishers made a further allegation. At that time the express
companies cut even the very low existing cent-a-pound rate on
second-class mail matter for short distances, and if that rate were
raised the range of their competition would be extended. With a 2-cent
rate a much greater proportion of the traffic would inevitably fall to
them. This would, of course, be very advantageous to the companies, to
whom, as to railways, any increase in the volume of traffic handled
would be welcome. These express companies had for many years been
faithful supporters of the Republican party, and behind the suggestion
to increase second-class rates the publishers were convinced there was a
desire on the part of the leaders of the party to reward their faithful
allies.[352]
But perhaps the chief contentions of the publishers, which the Post
Office was bound to some extent to admit, and would in any case find it
difficult to meet, were the claim that newspapers create a vast quantity
of first-class mail; and the claim that since the payment made to the
railway companies in respect of the transportation of the mail is based
on a sliding scale, decreasing as the volume of traffic increases, the
weight of second-class matter brings down appreciably the rate actually
to be paid.
Some who appeared before the Commission of 1911 were inclined to go
beyond these general contentions as to the relative claims of
second-class matter, and to assail the whole administration of the
department from the economic standpoint; challenging especially the
relations with the railway companies, and arguing that the payment made
for the conveyance of mails was not equitable when compared with the
charges made by the companies for similar services performed for the
express companies.
Notwithstanding these contentions, there can be no question that the
transmission of the second-class mail at the present rates involves the
department in heavy loss; and that Congress, not unaware of this,
attaches importance to the advantages which a low rate for such matter
confers. The Commission were satisfied on both points. It is, however,
doubted by many whether the effect of this privilege has been altogether
salutary from the educational point of view. It has encouraged to an
almost incredible extent the publication of periodical magazines, and
many of these magazines are of a high order of merit as periodical
publications. The United States leads the world in the publication of
this kind of matter.[353] But the reading matter which is found in these
publications is to a large extent light and trivial. The publication of
serious intellectual works has shown little advance in recent
years,[354] and there is a fairly widespread feeling in America that
the two developments are connected. But that is a matter difficult to
determine.
In any case, many people are proud of the development in periodicals,
and the department, in spite of its efforts, has so far failed to secure
any increase of rate. Although the Postmaster-General and the
President[355] adopted the recommendations of the Commission of 1911,
and urged their consideration on Congress, Congress has not taken
action, and has, indeed, forbidden the department to extend certain
arrangements for the use of freight trains for the transmission of
second-class matter, whereby a saving of expense could be secured, a
phenomenon probably explicable by the constitution of American
politics.[356]
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NEWSPAPER POST IN FRANCE