Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-11-21

Facilities Already Needed
Held to Curry 'By-Product
Of Second-CIuss Matter
By David Laurence
When Senator Paul Douglas,
Democrat Of Illinois. one Of the
ablest of the first Senators.
says offhand that magazine and
newspaper publishers should Ell
Their give up their alleged subsidy
on second class mail or forever
shut up on the subject of urging
q balanced Federal budget, he falls
into a common error which also
has been made by some Of his
colleagues in Congress.
For the truth is that under up
to-date bookkeeping methods
there is no clear proof that the
publishers of the country are
benef1ciaries of a real subsidy. The
publishers Of newspapers and
magazines pay annually about
$40, 000,000 in revenue to the Post
Office Department for second
class mail. This more than bal
ances the out-of pocket or direct
cost of the department for Sec
ond-class mail delivery. The Post
Office Department, however, has
been claiming that it has $780,
100000 deficit from second-class
mail but many of the items are
a matter Of serious dispute, as for
instance, the s75,000,000 which
the Post Office Department ap-
portions to publishers to bear halt
the cost of the rural free delivery
system in America.
y. The best way to prove whether
there is a deficit from second
class mail is to ask the Post Office
Department to demonstrate that
it could actually save 5000. 000, 000
If all second-class mail were elm
mated. Obviously the require
ments for handling f1rst-class let
ter mail and parcel post, for ex-
ample, would not be curtailed in
asmuch as the department would
have to employ just as many letter
carriers. maintain just as, many
post Offices, and it would not wish
to discontinue half of the rural
delivery system.
By-Product Brings Income
Like many another business, the
Post Office Department gets siz-
able revenue from handling a by
product. Removal of the by-pro-
duct does not permit any ap-
preciable saving on overhead after
out Of pocket charges have been
cut off.
The bookkeeping system Of the
Post Office Department has long
been a subject of controversy and
the Hoover Commission recently
criticized the department for an
tiquated methods Of cost account
ing and called for a scientific
study which for some reason OF
other the department has never
favored.
Just now there Is q controversy
over increasing ~ second class
postal rates. The figures show
that IS per cent of the revenue
from carrying magazines, for in
stance. comes from Is per cent
Of the publishers. They are In a
strong enough position to set up
alternative delivery systems of
their own and increase their
newsstand sales while the smaller
and weaker publishers would be
penalized by almost prohibitive
rates. It would furnish another
example Of how so-called liberal
administrations often play into
the hands of those who own large
enterprises by reducing the eco
nomic opportunity for smaller en-
terprises.
Some Would Benefit.
In the plan for increased postal
rates, moreover, the publications
which compete with those that
are issued by so-called non-profit
enterprises would suffer another
disadvantage. Many of the trade
association periodicals, agricul-
tural, educational and labor papers
issued by non-profit organizations
now have an advantage in that
they do not pay income taxes
This disparity would be further
widened by giving exemptions
from proposed increases in Sec
ond-class mail rates to such CO.
operatives. Senator Douglas
might well ask why one set of
publishers should be required to
Subsidize another set Of publishers
Who pay no income taxes at all.
But the argument which the
Illinois Senator has advanced
about the financing Of second
class mail Is far less important
than the principle he enunciates
which would disqualify the edi-
tors Of all manner Of publications
from discussing the unbalanced
Federal budget because theoreti-
cally they themselves add to the
Federal deficit. This is one way
to weaken freedom Of expression.
u Does the acceptance of financial
benefits from Government mean
that all citizens who receive them
are involuntarily restrained from
expressing themselves on what
ever fiscal policies the Govern