Evening star., 1938-01-10

Government officials and if it did not
have to pay out money for national
defense" through the subsidies to
ocean and airmail, the final account
Ing would show surplus instead of
deficit.
Anybody who examines fairly the
detailed figures as shown in the an
nual report will come to the conclu-
sion that if proper accounting prin-
ciples were used and not those pre-
scribed by Congress, Mr.. Farley is
right. Likewise it will be discovered
that strictly speaking the newspapers
and magazines which are carried un-
der second-class postage rates actually
show a profit to the post office and not
loss.
True Test of Charge.
charge against a particular division
Of a business is held by many experts
to be only those actual expenses which
can be eliminated if the division or
operation in question is abolished.
Applying this to the Post Office De-
partment. it means that if all the
second-Class postage matter were sud-
denly subtracted from the mails, not
a single economy could be effected in
the salaries of postmaSters, postal
carriers, rents of post Office buildings
or any of the other expenses.
The only item that could be saved
by eliminating second-class matter
would be the direct cost of carrying
newspapers and magazines on railroad
trains and it so happens that this is
small part Of the total expense and
is more than Offset by the s24,000,000
of revenues taken in from all second
class mail.
Almost all the larger newspapers OF
the United States have their own sys-
TENS of carrier distribution and de-
pend on the mails only incidentally,
so that anything done to the present
second-class system would probably
hurt the small county newspapers.
which have always had hard time
making ends meet as against their big
city competitors. If the administra-
ton is really as concerned as it claims
lately to be with the plight of the
small business man, 1t would hardly
seem consistent to intimate that pub
lications in the rural districts should
be penatzed.
Nor should 1t be forgotten that sec
ond-class mail privileges are enjoyed
by vast number OF publications,
labor, religious and scientific, and by
educational and fraternal organiza-
tions that are not profit making at
all.
Big Sums for Circularization.
AS for magazine publishers. 1t Is
quite often overlooked that they pay
the Government anywhere from five
to ten times their second-clas mail
fees in the form Of regular postage
used for circularization.
The Post Office Department. in truth,
since 1t must have a delivery system
for quick handling Of f1rst-class mail,
gets such substantial help out Of
the revenues from second-class mail
matter that the Government ought to
be thinking OF ways and means Of
encouraging a bigger volume OF sec
be carried without increasing the
overhead or salaries OF the depart
ment or its plant equipment. One
way, of course, Of encouraging sec
ond-class mailings would be to reduce
the present rates and stimulate volume
somewhat along the lines of the low
price" economy theory enunciated by
tho Brookings Institution and lately
championed by Assistant Attorney
General jackson in his public sd-
dresses.
As for subsidies. the official re-
port of the Postmaster General shows
that If permitted to charge other Gov
ernment departments regular postage
rates instead of carrying all the prop
aganda. speeches, documents, etc, free,
the income to the Post Office Depart
rnent would be an additional $36,00O,-
600. or within 100000 of wiping out
the entire postal deficit. Indeed. when
the subsidy for airnlail and ocean mail
contracts-deemed necessary by Con-
gress for national defense-s elm
mated and proper charges made for
carrying Government mail free, the
Post Office Department has a surplus
Of about sl2, 100000 year. It Is by
and large an efficiently run institution,
for the very good reason that its per-
msnent personnel, rather than its po-
litical appointees, really administer
the department.
Subsidy Given Radio.
Speaking Of subsidies, tn. Govern
rert hands out a rather substantial
one 10 the principal competitor Of
newspapers ard magazines, name!y
tne radio ThH fadio stations and
networks pay noth!n2 for, tnsis !eases
Of the air. tnoIgn sVbesk,na their
substantial profits.
Back in 1877 oetoss ssfso nstSorss
were establEneS-.as pe-ss amount Of
money apent tor nstAebsl advertising
In America VAS Ato2t $$2s 600 900 q
year, out Of Xn.cn ne newspapers re-
ceived about s225 600 ,09e s,ae the
magazines about sies 900 ,090 The
biggest part OF this t,taj was spent by
the publishers for printing labor snt
raw materials, hardly any cetnpsfs bic
amount OF which Is necessary 10 op-
crate a radio station.
In the last year, however. for which
figures are available. the total sum
spent by national advertisers didn't
vary much from the 1927 figure, be-
ing approximately $390,000,000 for
1896. But out of this the newspapers
received only $l88O00,000 and the
magazines only $l43,0o0o00. whereas
radio came in for about $4,000, 900.
This substantial subsidy-one of the
biggest that government has ever fur
nished to private profit-making inter-
ssts-is not wholly without its re-