New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-25
The Postal Subsidy Mess

Inc SeCOTQ CLASS pOSlol ioIC piOSANAii'
side little group of extreme postal sub
sidists nobody could be expected to be
satisfied with the cowardly compromise
which the committee adopted. The
American Publishers Association, as a
body, has made protest against the de-
csion to levy a special tax of per cent
on the profits of newspaper and magazine
publishers. 1t has also protested against
the proposed quarter of cent increase
in the fiat second class mail rate.
Those who want to see postal rates
eoualized and the present governmental
subsidy to users of the second class mails
abolished are deeply disappointed. What
the committee recommends would only in
crease the existing disparity between first
class and second class rates. Letter post
age, already high, is to be raised so per
cent-from cents to 8 cents an ounce
while second class postage, already abnor-
mally low, is to be increased only 20 per
cent-from / cent to IA cents pound.
This is a preposterous readjustment. The
committee is fully aware of its unfair
ness. But the periodical publishers, who
threaten to make Rome howl, North and
South" if their governmental subventlon
is taken away from them, seem still to
lave power enough to prevent cleanup
in rates which would put the Postoffice
Department once more on sound bust
ress basis.
In order to square itself with the pub
lie for not charging the users of second
class mails their just due, the committee
has nut forward a scheme to tax the
profits of all newspaper and periodical
publishers 3 per cent This is in addi-
ton to the excess profits tax and the cor
poration income tax which these pub
fishers will have to pay. II is admittedly
discriminatory tax. Honestly described,
il is something more than that. 1t is
countervailing tax-levied to offset in
small part the gross undercharges on
second class matter by which the publish
ors Of periodicals and "mail order jour
halls" now profit.
The benefit Of second class under
charges accrues in largest measure TO
publications Of this grade with nation
wide circulation. Their owners have been
most active in fighting a rate readjust-
ment. And the success of their efforts,
so far as the Senate Finance Committee
is concerned, is shown not only by the re-
tention of the fat second class rate-in-
creased by trifing % per cent-but by
the imposition, in lieu of further IN
creases, of tax on publishers profits,
which will fall on all newspapers and
magazines, regardless of the extent 10
which they profit from the present second
class rate subvention. The long haul pub
locations are so habtuated to the idea of
doing business at somebody else's cost
that they now intend to shift on the pub
fishing trade in general the countervail-
n ing profits tax, which represents an escape
en- their part from a fair payment for
y mail service under a properly graduated
zone system.
In a brief filed with the Finance Com
mittee last month by Mr.. Arthur J. Bald
win, vice-president of the Associated
Business Papers, Inc, this astonishingy
candid statement was made:
'You. gentlemen, in the face Of the
strong temptation to depart from the
principles Of Jeffersonian democracy
and raise a ready revenue, have steadily
refrained from prohibitive tax on raw
materials. At most you have applied
to these essentials of industry a 10 per
cent increase. Why, then, do you tax
by $50 per cent increase one of the
important raw materials Of our indus
try-second class POSTAGE"
Nothing could illustrate more strikingly
than this does the besotting illusion Of the
benefciaries of second class postage
undercharges. Because the government
has been mistakenly giving them mail
service below cost they have come to as
sumo that such service is a "raw ma
terial" in their business-access TO which,
as 10 their supply of print paper, or ink,
or printing machinery, ought not TO be
made more difficult by governmental ac-
ton. In levying duties on imported raw
materials the government is regulating
business relations between them and other
producers. IL is third party in the
transaction. But in fixing postal rates
Congress is putting a valuation on a
service which it renders itself. II is ex-
ercising sovereign power-a purely gov
ernmental function-not selling a raw
material" or putting an impost on the sale
Of it.
It's duty 10 the public in peace time is
% keep the postal service from running
at loss. II may become it's duty in war
time 10 make that service an important
sourc. Of revsnll. Why should Congress.