South Bend news-times., 1920-12-05
Surrey SholOs Increased Cost
Of Production JustJies Raise

Newspapers which have advanced
their subscription rates 100 and 200
per cent, and advertising rates from
so TO $50 per cent. are justified in
their action. according TO the Indi-
ana committee on public utility in
formation.
This is the conclusion reached
after an extensive survey made at
the request OF advertising managers
of utility companies. accessories and
equipment concerns and utility in
vestment houses.
The report shows the striking par
allel existing in many points between
the utility business and newspaper
business. Il makes this important
point: That newspapers and public
utilities in many respects are in the
same boat
They cannot suspend operations
when production costs become
tiOnS unfavorable. A manufacturing
plant can suspend A newspaper or
utility corporation cannot; both
are 24-hour services.
Survey Answers Questions
The report on advances in news
paper rates answered these questions:
Cd Why have newspaper sub
scrlpuOn rates advanced 100 10 200
per cent and advertising rates so 10
$50 per cent?
% Why do these rates continue
TO advance when the price Of some
commodities are declining?
(3) How can newspapers justify
such adVanCes-after previous big
advances. in view of the difficulties
that some utilities. afflicted with the
same high cost problems. have had
in increasing rates?
The investigation laid bare facts
/ that show the first question can be
answered with the statement that
newspa per costs increased from Aug
I 1, 1914, TO Jan. I, 1920. as follows:
/ Paper. 2I2.5O per cent ink, 200 per
cent; machinery. equipment, 1O4 per
cent; labor, 91.75 per cent.
] And to show that this year such
expenses have continued 70 advance,
| il is stated that from Jan. /, 1920.
/ 10 Sept. /, 1920, an additional cost
was recorded as follows: Paper.
/ 1915 per cent; ink. 1855 per cent;
| machinery. equipment, 20 per cent;
! labor. IL per cent
Regarding the second question.
! the report makes this point:
A manufacturing plant or retail
store may adjust selling prices Of
products from day 10 day 10 meet
/ increased costs of commodities. ma
( terials or labor This has been at
tested by increases Of from 100 70
| 400 per cent in commodity prices
since 1913. In direct contrast, due
TO public regulation by utilities COM
| missions, telephone rates on an av-
| erage increased but ) per cent. cleo
/ trio hrrF
rates but Il per cent, in spite OF the
unregulated prices being charged
these companies for the commodities
! entering into the manufacture of
their services. 1t is clearly 20 be
seen that unregulated prices (tO
which newspapers are also subject)
/ which rose TO such extraordinary
heights. have a long way to fall be-
fore they reach the level Of regu-
! lated prices"
Cannot Postpone Development.
Another point of similarity be-
tween the utilities and the newspa-
pers is that they cannot postpone
| extensions or development until
price conditions are more favorable
To quote the report:
"A manufacturing plant or retail
| store may postpone extensions or
development work until price condi-
tions are favorable. Newspapers,
like utilities, cannot. They must ex-
tend as demands OF their communi-
ties require, or injure the commun-
! i-y. They must maintain a reason
able degree OF efficiency at all
! times-high production costs not
| withstanding. They cannot close
down but must buy "at the market"
the necessities entering into produc-
ton, regardless of price. A 24-hOur
suspension Of a newspaper might