New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-18
Dodging the Subsidy Issue

mail
lie members are being influenced by
threats similar TO those with which the
House leaders in the movement to equalize
nostal rates have in times past been bonn
barded. 1t was said on the floor Of the
House a few weeks ago that the bene..
fciaries of the undercharges on second
class mail had boosted of the part they
plaved in defeating President Taft for re-
election. revenging themselves on the Taft
Administration because it made an hon
est effort to expose and stamp out under
charge abuses.
One Of the most impudent and clamor-
Gus Of these defenders of special priv
lege is understood to have written let
ter to Chairman Moon of the House Com
mittee on Postoffices and Post Roads, in
which this warning was given: IF you
desire to bring the same fate upon your
marty which befell the Taft Administra-
ton and caused its downfall, increase the
second class postage rates and you viii
successfully accomplish that result.
You will hear Rome howl, North and
South, if you carry this policy into effect
That was three years ago, when Mr..
Moon was trying to bring about a fair
readjustment of postal rates. He failed
because the subsidists were too strong for
him. They are as belligerent now as
they were then, and their work seems 20
have told in the Senate. The Finance
Committee found itself in a painful pre-
dicament. II sees the utter illogicality OF
raising to a war basis the rates on first
class mail matter, already high, and at
the same time leaving undisturbed the
second class rates, which are abnormally
and inexcusably low. Yet it shrinks from
offending publishers who have so long
enjoyed a governmental gratuity that
some of them arc almost honestly CON
WINGED that it would be brutal perversion
Of public policy TO ask them suddenly TO
begin to pay their own way.
The committee is certainly hard pushed
for trouble-dodging expedients when it
approves, even temporarily, as it did last
Friday, a plan to offset non-increase I'm
second class rates by levying a per cent
tax on the net profits of newspapers and
periodicals derived from the portion of
their circulation which goes second class
through the mails. This new profits tax
merely begs the issue. Newspapers and
periodicals are subject under another
section Of the bill to tax on excess
profits. however derived. IL may or may
not be Just TO ask them TO pay an add
tional profits tax But it is absurd 70
lay a special and partial tax on their
profits on circulation in the second class
mails. as a counter balance 10 the govern
mcnt's undercharge for that service.
Here is a plain admission on the part
Of the committee that the second class
rates are too w. But the courage is
lacking TO a. a direct and common
sense remedy II has been estimated by
various investigating commissions that the
government loses 100000 or 1000, r.
COO or SSO,OOOOOO year through second
class undercharges. The simple, business
like thing 70 do is TO eliminate that loss
by increasing the rates and introducing n
zone system, like that Of the parcel post.
II is running all the way around Robin
Hoods barn 10 permit the low rates 10
continue in force and then % collect 3
per cent Of the profits realized by publ
cations benefting from a government
postal subsidy. That would mean recov-
cring a possible per cent Of the depart
ments loss on second class carriage, in
asmuch as most publishers contend that
the low second class rates alone assure
them their profit. But 100 per cent Of that
loss should be recovered. There is no ex-
cuse for granting the privileges Of the
mails below cost 70 any private industry.
The House Of Representatives has inn
posed second class postal rates which will
make that branch Of the service more
nearly self-sustaining The reform thus
accomplished is one that stands on It's
own merits, war emergency or no war
emergency. The Senate will only be per-
petuating a gross abuse in postal admin
igtration If IL yields % the clamor Of the
publishing interests and continues the
.scond class subsidy, meanwhile trying %
throw dust in the eyes Of the public which
fas TO pay that subsidy by imposing a
futile 3 Der cent tax On the profits which