Mr. CARLYLE. Colonel, did I understand you to make this observation: That by placing controlled circulation in the third-class rate, with that increased rate, it was, in fact, a protection to the postal service by possibly preventing a great flood of second-class mail being distributed free?

Colonel CHEVALIER. No, sir; I did not make that statement. May I just comment on the first part of the question?

Mr. CARLYLE. You understand the import of the question; do you? Colonel CHEVALIER. Not exactly.

Mr. CARLYLE. I gathered from some of the statements that you made that by placing controlled circulation in third-class mail, with that increased rate for controlled circulation, that the effect would be to protect the postal service by preventing a great flood of second-class mail being distributed free?

Colonel CHEVALIER. I understand the question.

No: I do not think there was any such motive. As a matter of fact, Mr. Carlyle, the controlled-circulation papers originally have been mailed under the fourth-class rate. Then in 1934 there was a special act creating this place for them under third class, and I would like to point out as a footnote what Mr. Conover said with respect to relative rates: That the rates being paid today by the controlled-circulation publications actually are less than they were when they were put under this special third-class rate in 1934. There was no motive at that time except to give them a better break, and today they are able to mail more cheaply than they were prior to 1934, when they went under third class, while the second-class rate has been static and has not been reduced. So there was no motive to prevent this flood.

What I said was the converse of that; that if you now opened it up to the distribution of a free publication, without responsible subscribers, the whole second-class rate that was designed and has been intended for the benefit of the paid subscriber-you would be creating the danger of a great flood of second-class mail being distributed free without having the curb or the break or the check of a required subscription price.

Mr. CARLYLE. That is my understanding.

The CHAIRMAN. In other words, even the Shopper's Guide could have 25 percent of reading matter and the remainder advertising, and the mails could be flooded with the Shopper's Guide?

Colonel CHEVALIER. Very easily.

Gentlemen, I do not want to appear-and I am very sorry if I created an impression that I am-a dog in the manger on this. I very sincerely believe that the provision of requiring a subscription price on the part of a bona fide subscriber is a necessary check to prevent the abuse of a privilege that was created for the specific purpose of serving the reading public of the country.

Mr. REES. And it is true also that the question of subscription price is of less importance than it was back in the days that you have discussed here a while ago?

Colonel CHEVALIER. That is quite right, sir.

Mr. REES. So that the publisher depends less upon the subscription now than he did then?

Colonel CHEVALIER. That is quite true.

Mr. REES. So he has been drawn a little closer to this group by reason of the fact that he gets nearly all of his money from the manufacturer, or whoever he is, and very much less of it from the subscriber? Colonel CHEVALIER. That is right.

Mr. REES. You suggested at one time that there are two or three classes; there is probably a third class in your classification, and that is a group of papers which specializes in sending their papers, for instance, to school teachers or doctors or whatever they may be. Their list is a specified or classified group.

Then you have another group that serves the public. But it seems to me that it must be said when you emphasize so much the necessity of a subscribers' list, that that is not as important as it used to be, insofar as the recipient of the paper is concerned, because he can pay a small subscription, and get a paper that has cost just as much as this one here [indicating], perhaps.

Mr. MILLER. Let me cite an example for you, Mr. Rees.

A paper started out in my area some years ago as a shopper, and did not become a success. Then the ingenious publisher went around and lined up first a group of veteran organizations and then a group of other fraternal organizations, and he said: "Here; for a nominal sum, we will make this your official journal."

So they pay him a very nominal sum. I belong to one of the veteran organizations, so the paper comes to me as a bona fide subscriber every week, even back here in Washington, taking advantage of second-class mail.

The thing has just been built up to bring it under that through a method that frankly is not entirely legitimate.

I still pay my dues in the veteran's organization, I am not interested in the three-quarters of an inch or so describing the meetings, but it has become the official organ, with a bona fide list of subscribers, because these organizations pay him and furnish a list.

If you want to get around the shopping deal, that is a very easy way of doing it.

Mr. GROSS. Which means there is nothing particularly sacred about the second-class mail rate.

Mr. MILLER. That is right. That is one of the things I had in mind wehen I suggested that we take a look at it.

Mr. GROSS. The witness injected a little flag-waving in his remarks about the American home.

It is my understanding that we had American homes before we had technical magazines.

Colonel CHEVALIER. That is right.

Mr. GROSS. And if frequency modulation develops as it probably will, in this country, and we publish newspapers on the basis of frequency modulation plus facsimile, we will still have American homes, will we not?

Colonel CHEVALIER. That is right.

Mr. SADLAK. I was interested in one particular thing. I have enjoyed this presentation on both sides of this issue. I am most interested in the statement you make, Colonel, that the Post Office Department back in 1925 turned down a like proposition.

I am further interested in the presentation of Mr. Conover, wherein he seemed to put forth that Mr. Wentzel and the Postmaster General

were in agreement with what he is desiring to obtain before this committee this morning.

I would be most interested in your comments, if you would like to make them, upon what Mr. Wentzel and the Postmaster General feel about it.

Colonel CHEVALIER. I do not know whether I am familiar enough with all of the atmosphere surrounding those quoted statements to comment on them intelligently. My impression is, from a reading of the record of the hearing, that this question was injected at a time when it was not a major subject of discussion, and there was an exchange you will know more than I about that-as to the controlled circulation and its place in the scheme of things.

I did not understand from the statement that any recent conclusion or opinion was expressed on that subject.

I think I should be interested also in knowing what the current attitude of the Post Office Department is in the matter.

Mr. SADLAK. To me it seems as if there must have been a change on the part of the Post Office Department in this rate spread, and, of course, I wanted your comment on it.

Colonel CHEVALIER. That I should like to know myself.

The CHAIRMAN. I think the Postmaster General will be here at the hearing on Monday, and we can question him about that matter then. (Other statements are as follows:)

STATEMENT OF MR. LOUIS F. DONATO, SECRETARY, ALLIED PRINTING TRADES COUNCIL OF GREATER NEW YORK

Mr. Chairman and members of the committee, on behalf of the 50,000 printing trades workers belonging to the affiliated unions of this council, whose thousands of members are employed in the commercial printing and binding industry of Greater New York, we strongly but respectfully urge your honorable committee to recommend no increase in the existing postal rates.

It is our considered opinion, that the proposed increases in postal rate bill, H. R. 2945, would result quickly in drastic curtailment in volume of direct mail advertising, publishing, and binding, and would adversely affect publications to the point where many would have to be abandoned. This would be particularly true of publications directed to civic, religious, and commercial special fields, and maintained on tight budgets. Publications of this nature are essential for the information and knowledge they convey to the people, and make up a large part of the production and jobs of the commercial printing and binding industry in Greater New York, and other centers.

Aside from the bad effects on our economy nationally, considered in the broad sense of cutting down ready exchange of news, ideas, and information generally, such curtailment of commercial printing and binding would jeopardize the livelihoods of thousands of workers in the printing industry.

In Greater New York alone the jobs of 8,000 to 10,000 workers engaged in the printing, binding, and distributing of direct mail and publications will be endangered.

We have a very real basis for our grave concern that the proposed increases may become law. We strongly protest favorable consideration of these proposed increases, both because of the harmful effect they would have on our national economy and very directly because of the threat locally to jobs of members of this council in the printing industry.

Substantial diminishment of the production of direct mail, publishing, and bookbinding over even a short period would result, we believe, in serious dislocations within our industry and much irreparable harm.

We sincerely trust you will heed this protest of the 50,000 members and their families of the printing trades unions affiliated with this council.

TELEGRAM FROM MRS. ARTHUR FORREST ANDERSON, PRESIDENT, YOUNG WOMEN'S CHRISTIAN UNION

Representative TOM MURRAY,

NEW YORK, N. Y., March 18, 1949.

Chairman, House Committee on Post Office and Civil Service,

Washington, D. C.

The national board of the Young Women's Christian Association strongly oppose H. R. 2945 to readjust postal rates eliminating provisions of the act of 1879 which allow special second-class rates for certain mailings by religious, educational, and other nonprofit organizations. The national board of the Young Women's Christian Association has operated within provisions of this act since 1907. Elimination of the special rate provisions of the act of 1879 and other rate increasing provisions of H. R. 2945 would seriously curtail program and services of the national board of the Young Women's Christian Association in the United States and overseas, as well as all nonprofit organizations essential to development of responsible American citizens.

STATEMENT BY ED. E. TOWNS, CIRCULATION MANAGER, JOURNAL-TRIBUNE PUBLISHING CO., SIOUX CITY, IOWA

Mr. Chairman and members of the committee, in voicing our protest against proposed legislation to increase second-class postage rates, H. R. 2945, our publisher, Mr. W. R. Perkins, asks that the following facts, as they affect our newspapers, be presented to the House Committee on Post Office and Civil Service and be incorporated in the records of that committee.

SECOND-CLASS POSTAGE BILL FOR 1948

The second-class postage bill for the Sioux City Journal, the Sioux City Journal-Tribune, and the Sioux City Sunday Journal for the year 1948 amounted to $67,000.

The above estimates are based on the average number of pages through 1948 as follows: The Sioux City Journal, 22 pages; The Sioux City Journal-Tribune, 22 pages; The Sioux City Sunday Journal, 59 pages. We have used the zone rates as of October 1, 1948.

Estimated actual increase in second-class postage under H. R. 2945

CURRENT AVERAGE POSTAGE ON INDIVIDUAL SUBSCRIPTIONS BY MAIL

In estimating the cost of second-class mailing of an individual subscription, daily and Sunday, for 1 year under the proposed legislation, we have used the average number of 22 pages daily and 59 pages Sunday published during the year 1948. To arrive at the mailing cost under present rates we have employed the key number 015715 for the daily and .016288 for the Sunday, these key rates having been determined by the Post Office Department and is an average of all zones. Seventy-two pages equal one pound.

Daily, 22 pages 313 days =6,886 pages÷72=95 pounds.
Sunday, 59 pages×52 Sundays=3,068 pages÷72=43 pounds.

Key number daily, 0.015715×95 pounds=$1. 49 second-class postage 1 year.
Key number Sunday, 0.016288×43 pounds=

Present cost second-class postage, daily and
Sunday

.70 second-class postage 1 year.

2. 19 for 1 year

Daily and Sunday would include either The Journal and Sunday or the JournalTribune and Sunday.

ESTIMATED SECOND-CLASS POSTAGE RATES UNDER H. R. 2945

Applying proposed rates under H. R. 2945 to an individual subscription to the daily and Sunday for 1 year for the same number of pages and average for all zones, the cost of second-class postage would be approximately as follows:

POSTAGE COST SHOWN ON SUBSCRIPTION BILLS

Our present subscription rates by mail in Iowa, South Dakota, Nebraska, and Minnesota are as follows: Daily, either the Journal or the Journal-Tribune, $9 per year or 20 cents per week for periods of less than 1 year. The Sunday Journal, $5 per year or 10 cents per week for periods of less than 1 year. Combination of either the Journal or the Journal-Tribune and Sunday, $14 per year or 30 cents per week for periods of less than 1 year.

As it is therefore obvious that our publications could not absorb this increased cost of mailing it would necessarily have to be passed on to our subscribers. In billing subscribers the subscription price and the approximate amount of postage required would be shown separately for the reason that the subscriber would object to any increased subscription price or additional costs at this time, especially in view of the shrinkage in farm prices.