Evening star., 1934-07-01
INHERENT PERIL TO PRESS
ENNPART OF NEW DEAL
Exclusion of Advertising in Manufac'
turing Costs May Seriously Curtail
Papers, Writer Believes.

-four milling code.
One part of the code fixes what is
called stop loss" price for -four.
This is really a minimum selling
price, price below which millers
can be forbidden to SELL
Processing Cost Limited.
In arriving at this minimum price.
one element is the cost of manu-
featuring wheat into -four. In the
code this manufacturing cost is
limited to so cents-the code reads
Shall not exceed fifty (5O) cents per
barrel"
In arriving at this standard manu-
featuring cost there was much argu-
ment, many meetings between millers
on the one side and A. A. A. au-
thorities on the other. In the dis
cusslons, A. A. A. officials took the
position that the charge for manu-
featuring shall not include advertis-
ing. Nor executive salaries, nor de-
preciation.) In this there NAV be
sound philosophy of accounting. Cost
of advertising is not part of the cost
OF making" flour, though it is. of
course, part of the cost of marketing
flour.
Let me say at once that this re-
quirement by A. A. A. does not. at
this time, necessarily tend to reduce
advertising. Up to the present A.
A. A. only fixes minimum price for
flour, and does not at this time en-
force it. The miller. for the present,
is free to sell for more than the mini
mum price, and can take the cost
OF advertising out of his profits.
II we were to stop at this point we
could not say that A A. A. SO far
tends to reduce quantity of advertis-
ing. But in the future a. A. A. NAV
fix not only the minimum price of
flour but also the maximum. 1 am
confldent-I am speaking necessarily
of the future. but I am confident
that A. A. A. will shortly fix the price
not only of flour but of many other
commodities. think the course A.
A. A. is on will force them-unless
they abandon their fundamental
policy and reverse themselves-to
practically universal price-fxing. I
am expressing an opinion about the
future, and of course any one is free
to disagree with me.
II A. A. A. fixes the price of wheat
and the price of flour, and does not
permit advertising as a charge between
the two. millers will pretty certainly
do less advertising All manufacturers
subject to the same kind of price
regulation will do less.
Firm Head Points 1t Out.
I suspect this is what was meant
by Colby M. Chester, head of the
General Foods Co., when he said
IF some of the trends that are now
apparent are carried to their indicated
objectives, there would be little or nc
advertising and the publishing indus
try as We know it would then cease
to exist
1t is not quite correct to say the
publishing industry would cease to
exist But the number of newspapers
in the country would be cut down to
something like the numbers in Euro
pean countries. In the condition pic
tured by Mr.. Chester I should doubt
whether there would be any news
papers at all in the smaller villages
and towns of America. And such
press as would remain would be like
much of the press in some European
countries, dependent on largesse from
the government and under the con-
troll of government, or having a
similar servile relation to some private
interest.
Advertising is an American institu.
ton. one of our "folkways" America
would be dreary place with its towns
and villages and even cities deprived
of, let US say, nineteen out of twenty
of the newspapers that now dot the
country.
A. A. A.. in taking its position, i,
not-so far as I know its mind
directly or deliberately trying to re.
duce the number of newspapers. Some
of the new dealers may realize that
the existence of large number OF
newspapers freely printing criticisms
of the new deal in their news columns
may make difficult or impossible the
change in social organization which
some new dealers wish to bring about
But in not recognizing cost of adver.
tising as proper charge between
price of raw material and price oi
finished product-in that they are
merely expressing a philosophy they
hold about advertising. This philoso.
phy is revealed in several places be-
sides the fixing of standard costs fol
manufacturing.
They have expressed this philosophy
in their negotiations with business
men. They say that advertising does
not help the farmer who raises the
wheat and does not help the con-
sumer who buys the flour; does moi
help the farmer who raises the to-
bacco, or the consumer who buys the
cigarettes. They say advertising Ii
merely a way by which some business
men try to get business from Other
business men.
In all events. limitation upon ad'
vertising can work against freedom o.
the press as effectively as direct cen
sorship. Upon this point there wa'
thoughtful passage in speech made
by Arthur Hays Sulzberger of tht
New, York Times at Columbia Univer'
sity one day this month:
Freedom of the press involves
other factors than mere escape from
news or editorial censorship. Specia
taxes, as for example an unwarrantec
duty upon print paper, violent In
crease in postal rates, or a govern
mental limitation put upon advertis'
ing would be, 1 believe in spirit al
least, in conflict with the first amend
ment to the Constitution"