New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-28
SUES MAGAZINE TRUST
Wise Would Dissolve It as an
Illegal Combination.
TWENTY-FIVE DEFENDANTS
Government Indicates Criminal
Charges Won't Be Brought
Against Individuals.

OEdl 5cS WOu LIZ 80 C"S-
Against Individuals.
A suit in equity seeking the dissolution
Of the Periodical Clearing House as
combination I'm restraint of interstate TRACE
was fled yesterday in the Federal Circuit
Court by Henry 4. Wise. United States
Attorney. In long complaint the gov
eminent described the formation OF the So
called Magazine Trust and the manner
In which the organization tried to mo-
ropolize part Of the trade in magazines
and other periodical publications since
July, 1909.
The action includes all the publishing
corporations which own stock In the PERI
odical Clearing House and the individuals
who at present are directors or officers
Of the combination. When the suit was
filed the question was preached In the Of
fee Of the United States Attorney whether
any Of the undertaking magazines" in
cluded in this action would soon publish an
article on The Iniquities OF the Magazine
Trust" as they had done in most OF the
other trust cases brought by the govern
ment
The Investigation Of the Periodical Clear
Ing House has been going on for hve
months There was a rumor that criminal
charges might be preferred against In
dividuas connected with the organization
and that the matter had been presented TO
the grand jury II was indicated yester-
day that no such prosecution would be
sought. and that the equity action was
"a lffore Tho
grand jury.
The defendants in the suit are the Peri
odical Clearing House, Doubleday. Page ~
Co. Crowell Publishing Company. S ;.
Mcclure Company. Current Literature
Publishing Company. Phillips Publishing
Company. Harper & Brothers. Leslie
judge Company. Review Of Reviews COM
pany. international Magazine Company.
New Publication Company. Butterick Pub
fishing Company. Standard Fashion Conn
Danv. New Idea Publishing Company,
Rdgeway Company. American Home
Magazine Company. Short Stories Com
panv. Limited: Frank y Doubleday Her
bert s Houston, Frederick l.. Collins.
Charles D. Lanier and George Won Utassy.
How Business Was Done Formerly.
The governments complaint described
the trade IN magazines prior TO the forma-
ton of the Periodical Clearing House as
have been carried on in two ways-one
bv the publisher Of each separate puhlica-
ton directly TO the purchaser either by
single copies or by subscription; the other
by middlemen, who sold single copies and
term subscriptions. The complaint then
goes on to say:
During the last thirty years there has
grown up In the United States large
business I'm trading in subscriptions 10
magazines and other periodicals conduct
ed by said mddlemen. There has always
been keen competition between said mid
dIemen as well as between the publishers
OF such magazines snd periodicals which
has resulted in the citizens OF the several
states and territories OF the United STATES
obtaining periodicals al lower prices than
would obtain without such competition. II
was the custom of the publishers TO make
contracts with the subscription agencies
BIZ which the publishers sold subscriptions
10 periodicals al prices much less than the
puhlication price. and the subscription
agencies sold these subscriptions to the
general public at prices less than the pub
LEGATION price but sufficiently higher than
the publishers price to the agency 10 allow
a profit 10 the agency. The publishers In
effect made wholesale rates TO the agencies
and the agencies fixed retail rates 10 the
general public. depending upon the price OF
the publishers 70 the agencies.
BY a system Of clubbing together two
or more different periodicals, these Sub
scription agencies and agents We're
able TO sell subscriptions 10 the public at
prices frequently as low as one-half the
publication price.
In July. 1909 the complaint continues. ths
defendants conspired with an intention tC
destroy the competition in prices OF sub
scriptions Of all magazines and periodical
publications in the United States through
the Incorporation OF the Periodical Clear
ing House and by entering into contrac
with the new organization. agreeing 10 al
the rules designed to prevent competition
Says Agencies Were Coerced.
In pursuance Of this, the government
charges the Periodical Clearing House
sent notices TO all the principal subscrip
ton agencies in the country that they
would have TO sign a contract providing
new rules for their business and coercec
| them 10 the agreement. This agreement
as we'll as a similar one signed I'm August
1910. was appended to the complaint.
TO enforce these rules an elaborate
scheme Of fines was provided by the or
ganzation. particularly for violations Ct
the wholesale price list prepared by thu
ltombination. on this point the complaint
says:
Whenever an agency quotes price 10
prospective purchaser or subscriptions
Y nich Is less than that contained In thu
aforesaid Publishers Wholesale PTic,
! List" and the same becomes known 10 In,
manager OF the Periodical Clearing House
a fine Is imposed on such agency varyini
| from s. to Rj. and the amount thereo
! ia deducted from the credit of such agency
on the books OF tho defendant Perodica
! Clearing House Whenever an agency re-
/ fuses 10 give 10 the defendant Fcriodica
| Clearing House fun information r. to an,
/ prices IL may have quotAi for periodical
whether such periodical II puhllshed b'
one OF the defendants or not. such agenc'
is fined from IS to $40. and the amour
| thereof IS deducted from such asency
credit or the books Of the defendant Peri
Cdcal Clearing House.
Other fines for so-called "violations o
! the ao-callcd rules" of the Periodlca
| Clearing House have been and are iron
| time to time arbitrarily imposed upon IN
various subscription agencies ana agents
and all OF these unlawful fines ana penal
| ties have been and are imposed ana col
| lected under the pretended authority .
| said unlawful contracts between the ne
| PENDANT Periodical Clearing House and sal
| subscription agtnciSs.