there are other costs you need to recover. I am talking about the projected postal rate increase.

Mr. BARNARD. There are two kinds of costs at work here. When the price goes up, whatever small amount, it would certainly be a drop, even if it is small in the percentage response to our solicitation for new subscribers. That increase in cost has to be considered.

The CHAIRMAN. What is your per issue cost now? What do you charge someone who picks it up at the newsstand?

Mr. BARNARD. On the newsstand it is $1.

The CHAIRMAN. So you do a little better there. You are getting $12 a year if a customer picks it up.

Mr. BARNARD. That is only 40,000 a month that we sell at that rate, and it seems to me $1 is a lot to pay for a magazine. For about $2 a pound you can almost buy hamburger.

The CHAIRMAN. Not this week. [Laughter.]

Mr. BARNARD. I think that there are two things to consider about the question of raising price. I certainly would not be willing to say that we cannot raise the price 50 cents over the course of an orderly period of time.

If we had to do it alone or if the class of magazines such as ours had to increase prices and other classes of publications do not, I think we would have a problem certainly. If there is enough time to do it, I think it is reasonable to expect that since people are paying more for everything else, some will pay more for magazines as well. The CHAIRMAN. Thank you very much.

The committee has completed its witness list on this matter and will retire to the inner chamber for deep consultation, study, meditation, and reflection upon one's conscience and public responsibility. [Thereupon at 4:15 p.m. the committee adjourned.] [The aforementioned article follows:]

THE EASY CHAIR

A THREAT OF DEATH BY MAIL

(By John Fischer)

Sometime this month Congress will begin to wrestle with a curious issue-one that cuts across party, religious, ethnic, and geographical lines, and fits no recognizable pattern in American politics.

An unlikely couple-Sen. Barry Goldwater, one-time Republican Presidential candidate, and Sen. Edward Kennedy, quite possibly a future Democratic candidate-joined together to cosponsor legislation they hope will solve it. Other solutions have been proposed by people as diverse as Senators Gaylord Nelson of Wisconsin and Gale McGee of Wyoming, and Rep. Morris Udall of Arizona. Pleas for quick action have come from groups that seldom agree on anything: atomic scientists, the American Legion, labor unions, farm organizations, the Louisiana Baptist Convention, and the Experimental Aircraft Association, to mention only a few. Rabbis, priests, and ministers have chorused in ecumenical alarm. The Rev. Billy Graham, the New York Times, the Cheese Reporter, Guns Magazine, and The Hudson Review have added their voices to the scores of others begging their Congressmen to Do Something.

They all have only one thing in common: a concern for the continuing existence of some 10,000 magazines and small newspapers. These periodicals—many of them, at least-are threatened with extinction within the next five years by a time bomb that Congress inadvertently set ticking in 1970. Whether it should be defused is the question that is currently being debated by the House and Senate Post Office and Civil Service Committees.

Three years ago, in a laudable effort to reform the woefully inefficient and money-losing postal service, Congress passed the Postal Reorganization Act. It was intended to take the service out of politics, by abolishing the 200-year-old Post Office Department and the Cabinet seat of the Postmaster General, traditionally the master of patronage for whatever administration was in power. To replace them, Congress set up a semi-independent Postal Service, under orders to deliver the mail in a businesslike way and to get rid of the deficit then running to about a billion dollars a year. A new Postal Rate Commission was empowered to fix postage rates at levels high enough to make each class of mail pay its own

way.

These were sensible objectives, applauded at the time by a virtually unanimous press. What nobody realized was that the Act would have unforeseen consequences—as so often happens with legislation, from the New Deal farm programs to the Tonkin Gulf resolution. Apparently, too, Congress had no idea that the Act might contradict historic policy, running all the way back to Benjamin Franklin and repeatedly affirmed by Congress over generations. This is the principle that the mails should be not merely a business enterprise but a public service, carrying information, ideas, and educational material to every citizen, whether in Manhattan or on the most remote farm. As Congress is belatedly coming to understand, this principle is not entirely compatible with its other objective: to make the postal service pay its own way immediately. The deficit can, and should be, gradually reduced far below the levels of recent years; but for at least a decade the postmen cannot perform their public-service function without some public funding. To expect them to do so is as unreasonable as to expect a school system or police department to show a profit.

Nevertheless, the new postal management interpreted its mandate in a way Congress probably did not intend. It set out to break even as quickly as possible, regardless of its public-service obligations. One step was to reorganize and partially mechanize the system, and to pare away some of the more expensive operations-with the result, at least temporarily, that mail delivery has become even slower and more uncertain. Another step, as we are all painfully aware, was to raise postage rates. The increases in airmail, first class, third class (advertising or so-called junk mail), and fourth class (books and parcels) were sharp but bearable. The increase in second class (magazines and periodicals) was not. It was nothing less than a death sentence for an unpredictable number of publications.

For the Rate Commission decreed an increase averaging 127 percent in the postage these publications must pay for delivery to their readers. It is being applied in stages over a five-year period. The first-stage increase went into effect last July-a whopping 30 percent, as compared with increases of 6 or 7 percent a year over the past decade.

It quickly became apparent that most publications could neither absorb this cost increase, and comparable ones yet to come, nor pass them along to their readers and advertisers. For magazines alone the additional cost will total about $130 million annually-more than twice as much as all of them earned in 1970, the last year for which figures are available. On the basis of past experience, efforts to raise subscription and advertising rates to close the gap will almost certainly be self-defeating. A big, sudden increase in the price of subscriptions inevitably results in a falloff of readership. This in turn leads to less advertising. What makes the problem even more insoluble is the fact that every publication competes with television and radio for the time and attention of its readers. And the broadcast media, of course, deliver their product free-thanks to the gift of the public's air channels, which they are now using without charge. (If every TV station were asked to pay a reasonable rental for the use of its channel, the resulting revenues would erase the postal deficit overnight. Under the Nixon Administration, however, that's not about to happen.)

The combination of rising postal costs and TV competition was largely responsible for the deaths of Life, Look, and the Saturday Evening Post. The disappearance of these once-mighty publications caused little concern in Congress, however, After all, they had been offering a menu-pictures and light entertainmentmuch like that of television, so the public presumably did not feel an irretrievable loss. On the other hand, when Congressmen began to realize that thousands of smaller magazines and newspapers were endangered, including those published in their own districts, some of them began to worry.

These publications provide many things that television can never duplicate. They include the country weeklies that knit together many a small community.

Among them are the church publications of every denomination; farm journals; technical magazines serving scores of professions and industries; labor-union newspapers; and the publications of educational, fraternal, and veterans' organizations. Equally in peril are the thoughtful journals of opinion, from National Review and Human Events on the conservative side to The Nation and The New Republic on the liberal side of the spectrum. So too are the literary magazines, the newsweeklies, and such specialized organs as Rolling Stone, Commentary, The Texas Observer, The Writer, Commonweal, The New York Review of Books, and The Washington Monthly. The American Legion Magazine confronts a postage increase of 800 percent; Billy Graham's Decision faces a hike of 1,400 percent; countless labor union periodicals, such as the national weekly The Machinist (circulation 1,000,000), are seriously endangered. For its own particular audience, each of these fills a need that cannot be met in any other way.

This is the situation Senator McGee, chairman of the Post Office and Civil Service Committee, had in mind when he recently told his colleagues: "I believe that the American public generally has a vested interest in the survival of newspapers and magazines. Regardless, of the economic, political, or social policies which they espouse, they contribute to the nation's thought process. I am personally convinced that the Congress should not permit magazines to go under because the cost of distributing them through the postal system is higher than their readers are willing to pay."

As Senator Goldwater puts it, "I have coauthored the postal relief measure because I believe the Postal Service should be what its name implies: a service to the American people. It's that simple. The people are entitled to choose from among the widest possible range of opinions and information, and if this bill or something like it doesn't pass, they won't be able to get it."

Senator McGee has introduced a bill that aims to spread the pending increases over a ten-year period, rather than a five, to give the threatened publications at least a fighting chance to adjust to the rising costs. This certainly would help; but in the judgment of other legislators it is not enough. Representative Udall, chairman of the House Postal Service Subcommittee, has pioneered far more liberal proposals. He would limit postage for the first 250,000 subscriptions of any publication to two-thirds of the current rate. In addition, for nonprofit periodicals. Udall would subsidize 50 percent of the postage for subscriptions above the 250,000 level. For profit-making periodicals, he would provide a 50 percent subsidy on all future postal increases after ten years. Meanțime, Senator Nelson has suggested a freeze on present mail rates for the first 250,000 subscriptions, while all circulation above that level would be subject to the scheduled increases. The Udall and Nelson proposals, though different in degree, have a common purpose to redress, in part, the handicap that the postal-zone system imposes on smaller publications. Under this system, the farther a magazine has to travel by mail the more it has to pay. A magazine printed and mailed in New England, therefore, has to service its readers on the West Coast and other distant points at a very high cost. The big circulation magazines, on the other hand, can print and mail their copies from a number of different cities through-out the country. For this reason Harper's, for example, pays roughly twice as much postage per copy as does Time magazine. For the same reason, the scheduled increases will bear especially hard on the smaller publications. Most religious publications face a rise in postage costs not of 127 percent but of 750 percent. Under such circumstances, their chances for survival seem to be virtually nil.

The postal authorities estimate that the lower rate for the first 250,000 subscriptions would cost about $38 million a year. They regard this as a subsidy, in effect, to small newspapers and magazines, claiming that they would fall short by that amount of paying their full cost of delivery. Many publishers doubt this; indeed, they believe passionately that they are already covering the full cost of their second-class mailings, if not more. But they can't prove it, because the calculation of postal costs is an exercise in metaphysics rather than an exact science. Given the existing investment in Post Office buildings, trucks, and other equipment, there is no way to determine precisely how much of its cost should be allocated to magazines, say, and how much to Christmas cards or mail-orders catalogues. Nevertheless, the Postal Rate Commission does arrive at such estimates or guesses-by some arcane method I have never been able to understand. And nobody can prove them wrong, because no publisher or group of publishers has the means to conduct an independent cost audit.

Even if that $38 million is regarded as a subsidy, two things need to be said about it. First, it is a subsidy that benefits the reading public at least as much as it benefits the smaller publications. Second, as subsidies go it is a trivial one.

From the earliest days of the republic Congress has voted subsidies of one kind or another to protect enterprises it deemed vital to the public interest. Tariffs to foster infant industries were among the first examples. The gift of public land to homesteaders and railroads was another. Ever since the Roosevelt Administration, the government has laid out massive subsidies to conserve the nation's soil and to keep farmers from going bankrupt. It has done the same for the merchant marine and rail passenger services. More dubious instances are the oil-depletion allowance, the interstate highway program—a form of subsidy, if you so regard it, to the trucking and auto industries—and the cost overruns granted to defense manufacturers. Typically these subsidies, and many similar ones, run to billions of dollars every year. In comparison, that $38 million shortfall in postal receipts (if it is, in fact, genuine) is a scrawnist kind of chicken feed.

In setting forth this argument I am not, obviously, a disinterested observer. Most of my working life has been spent on magazines and small newspapers, and I carry the scars of several earlier battles over postal rates. I am deeply convinced that such publications are at least as important to the national interest as Amtrak or the merchant marine, but I am also aware that I have a considerable emotional investment in this question and that the reader might well view my opinion with some skepticism.

Consequently I would like to summon a final witness that has no such involvement: the New York Times, which would not be materially affected by the increase in second-class mailing rates. In an editorial last February, the Times described this rise as "staggering" and a threat of extinction to "those prestigious but financially precarious journals that feed and reflect the whole gamut of American public opinion."

"The Postal Service's present course," the Times continued, "is a threat to the freedom of the press by overcharge, a threat as ominous as more overt forms of harassment-and less discriminating. Without this spectrum of the printed word the American people would be handicapped in sustaining a sound democracy. Yet it was precisely to assure a sound democracy that the country's early leaders fostered an informed public, in good part through the wide and inexpensive distribution of journals and periodicals of all kinds. The Postal Service seems to have misread not only the philosophy of the Republic's founders but, as Senator Nelson points out, even the plain objective of the 1970 Postal Reorganiza tion Act, which was an improved mail service, not 'a single-minded concern for postal revenue.'

999

The defense rests, but not very easily.

[The following prepared statements were subsequently supplied for the record:]

Statement of Emory Cunningham, President & Publisher

The Progressive Farmer Company

Before the Senate Committee

on Post Office and Civil Service

April 2, 1973

Mr. Chairman, Members of the Committee:

Even though farm magazines represent only two-tenths of one percent of total mail volume in the United States they play an indispensable role as a great artery of information that helps us keep 200,000,000 people well fed. The information they contain will help us keep 300, 000, 000 people well fed in the next decade. The U. 8. has no greater asset than its agriculture.

I would like to outline briefly some of the contributions The Progressive Farmer, published by my company, has made to the rural South and Southwest. I do this to pinpoint some of the leadership one magazine has given to just one region of our nation.

1) For nearly a century, The Progressive Farmer magazine has crusaded for better education for Southern rural boys and girls. Our editors have served on important educationally-related committees for six U.8. presidents, beginning with Theodore Roosevelt. Four major buildings on land-grant college campuses in the South are named for our editors. 2) The Progressive Farmer, working with the colleges and government agencies, crusaded for a significant livestock industry in the South at a time when this was a one crop region Recent figures show that Southerners now receive 8-1/2 billion dollars a year for livestock compared to 6-1/2 billion dollars a year for crops.

· cotton.

3) Developing rural leadership in the South has been a long-time Progressive Farmer goal. Our magazine alone has honored more than 5,000 persons for their farm leadership roles, including nearly a half century

93-910 O-73-27