5. RESTRICTIVE PRACTICES OF SYNDICATES

Complaints reaching us indicate the need for an immediate study by the Antitrust Division of the Department of Justice of

(a) Contracts for the sale of features by syndicates to chain or other papers with which they are affiliated which provide for exclusive distribution over a certain number of miles

(b) Termination of contracts for feature sale to small papers published within the circulation area of larger ones which carry the features

(c) Possible misuse of copyrights in connection with the operation of feature syndicates.

6. POSTAL RATE REVISION

Extended study should be undertaken by the Civil Service Committee of the Senate of the second class mailing rates to determine:

(a) Whether the effect of the rates is to carry out the mandate of the Congress to encourage the diffusion of knowledge.

(b) Where the greatest losses occur in the carrying of secondclass mail-in carrying newspapers and small periodicals or in carrying nationally circulating magazines.

(c) Feasibility of measures to simplify the second class rate structure by carrying "basic quota" of any publication's circulation somewhere around 10,000-free regardless of weight or destination.

(d) A change in the second class rates to encourage new ventures by carrying up to 50,000 copies of any new publication free for the first three years of its life.

In and of themselves, these measures may not save the small press or bring about the continuous burgeoning of new publications so vital to other small businesses and to a democratic public opinion. But they would place this high priority economic problem where it belongs in the Congress, which can deal with the problem without in any way raising the fear of abridgment of freedom. A secure supply of newsprint and the reduction of mechanical costs by more efficient production will make possible the economically sound existence of papers which will otherwise die or never be born. Systematic reporting on competition in the newspaper and radio industries, and convenient disclosure of ownership and control will make informed congressional action possible. Elimination of possibly restrictive syndicate practices will remove an unfair obstacle to competition of small papers with large ones that blanket their localities. Postal rates below costs should help those most who need it most.

I have every confidence that this very brief statement on some of the problems involved in maintaining the press as an economically dynamic, competitive institution will stimulate the Congress to the long investigation and study which is required.

JAMES E. MURRAY, Chairman.

CHAPTER II

FATE OF NATION'S NUMBER ONE SMALL BUSINESS

In the 6 years of its life this committee has undertaken studies in behalf of thousands of small businesses in dozens of American industries. It has been my conviction as its chairman that all of those businesses, and their hundreds of thousands of small "colleagues" were essential to the future safety and prosperity of our free enterprise system. Distinctions among them as to importance are rarely meaningful. Yet I have no doubt that there would be almost unanimous agreement in bestowing the title "America's No. 1 Small Business" on the smaller units in the newspaper and radio industries. There are two reasons for this. First, because of the obviously crucial role which the communications media play in the formation of a free public opinion, the staff of a democracy's life; and second, because the small newspapers and radio stations are the most important "highways to the market place" available to small business. generally.

When small papers and stations die or are not born, all small business is deprived of its best advertising channels. (The reverse is also true; when small businesses die or are absorbed by larger ones, the small papers and stations usually lose advertisers.) An example of this interdependence is found in this committee's study on "Small Business and the Community," made in two California farm localities, one marked by small agricultural holdings, the other by large ones. The report states:

The small farm community supports two newspapers, each with many times the news space carried in the single paper of the industrialized-farm community. The future of the small press business (which in the balance of this report is meant to include the local dailies, local weeklies, small magazines, special interest and organizational publications, and the facsimile newspapers of tomorrow) is thus linked with the future of our political democracy and our free enterprise system.

Our traditionally valued American system of small competing press units is now in such serious jeopardy as to warrant the immediate attention of Congress. The competitive press is dying. The threat derives from

1. The rising curve of costs of entering and operating small newspapers profitably.

2. Newsprint and other shortages which prevent the expansion and efficient reorganization of small papers to meet those rising costs with more circulation and advertising revenue.

3. A technological revolution which has already diverted revenue from, and which will, in the next decade remake the face of the American small-press business.

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Pages 10 to 19 of this report are given over to a set of 10 charts which high-light the trends of the past 50 or 60 years. Keep in mind that this is our current starting point. The long-run decline in competition in this industry will be sharply accelerated by postwar economic skill and technological conditions, especially if certain unfair shackles on small papers competing with larger ones are not removed. Small papers cannot pass quietly from the American scene without affecting the giant press, radio and magazine combines. It is always hard to say where the danger point in concentration of control in a given industry is. But the owners and managers of the communications Goliaths will do well to learn from the history of other businesses. So long as the young, energetic, skilled men can enter an industry and compete freely with the established enterprises, some concentration may be defensible. So long as small units are not thumbscrewed by restrictive practices that keep them from freely competing with large ones, big businesses have at least the defense that small ones can grow by virtue of their value. It is no longer easy to make these arguments about the press industries.

In other industries, monopoly has led to the acceptance of "common carrier" or "public utility" status by the few dominant survivors of the drive to combination. The newspaper industry itself has established over and over the crucial role of its advertising pages in building the businesses of those who advertise. Assume then that the trend to local monopoly continues. Or assume that the newsprint shortage limits the advertising space in many of the industry's papers in the future. The day may come when the surviving units or the remaining space will need to be regulated on the economic side as a public utility. Facsimile newspapers, if they become practical, may intensify the likelihood since the number of papers will be physically limited to the number of frequency modulation frequencies.

There is little danger that this revolution in legal status could carry over to the contents of the press. Since the beginning of the Republic, it has been our doctrine that whatever changes in the "content performance" of the press were needed could come through self-discipline and the pressure of expert and public opinion. The press itself deserves high praise for the watchfulness with which it has resisted any tampering with its contents by the Government. Its greatest defense against misguided future efforts will be a vigorous fight to keep competition in the press industries' market place alive and growing; this will be the safest way of keeping the competition of ideas in the press industries' forum alive and growing.

When the clash of newspaper businesses from which service, quality, and low prices ensue is dimmed, so, also, is the clash of ideas and opinions from which truth arises. Nor can we rely on competition among the giants. Time magazine does not compete with Newsweek in the presentation of a sewer problem to the people of Butte, Mont. The Columbia Broadcasting System does not compete with the National Broadcasting System (in its network programs) on a school problem which is vital to the people of Grand Island, Nebr. Local stations or papers may compete, provided that there are two or more independently owned media. The alleged advantages which size and multiple operation give can never compensate for the loss in community significance. Only competitive, local operation can give that.

DISTINCTIVE SMALL PAPER VALUES

Could the giant dailies, many of which are now trying to blanket whole States and the small papers in them, provide the public with services like these (from Editor and Publisher, September 21, 1946):

[Anniston (Ala.) Star]

(1) Organized a Christmas parade, which ushers in the holiday trading season, followed by a pilgrimage from house to house during the Christmas season by boys and girls singing Christmas carols; (2) promoted closer relationships between Anniston and Fort McClellan eventuating in the building at the fort of the finest library in the Army, now having more than 30,000 volumes. Also continued work by local citizens with the USO; (3) got city administration to enlarge and beautify city parks, including the building of five swimming pools, one park and pool for Negroes. Also a living memorial that will provide a bandstand for concerts and house all veteran agencies; (4) promoted a $375,000 Y. M. C. A. building, for which most of the money is in hand. Also a fund to repair organ and chimes at Church of St. Michael and All Angels, a million dollar cathedral built some 60 years ago by John Ward Noble; (5) promoted planting of winter legumes that raised this county in 1 year from twenty-sixth to seventh place in the State in that respect. Also raised $16,000 to subsidize milk routes so as to get away from a cotton economy.

[Sun Prairie (Wis.) Star-Countryman]

In a series of 14 staff-written editorials, accompanied by guest editorials written by citizens whose views represented a cross section of community thinking, the groundwork was laid.

Projects suggested were the need of the right spiritual approach to postwar problems, including the returned veteran's adjustments to his community; better rural-urban relations; a health program; a recreational program with a trained supervisor; a community center; a businessmen's organization to undertake organized civic planning; an agricultural course in the high school; a constructive approach to rural and urban school problems; and the need of a few privately financed enterprises such as a dry-cleaning plant and a skating rink.

Among the contributors were clergymen, housewives, schoolmen, the organizer of the block system, and the mayor of the town. The one doctor whom the draft left us was too busy to write an editorial to accompany our health program.

All of the proposed projects have materialized except the swimming pool and tennis courts which will be built as soon as materials are available.

Our policy has been not only to initiate a program for community development, but also to lend support to the plans of the newly organized chamber of commerce, the village board, and all other agencies acting in behalf of the public.

[Lamar (Colo.) Daily News]

Started as a cultural

Has sponsored a "city size" concert and lecture course. contribution in the gas-coupon days, the course has proved to be one answer to the problem of stabilizing young veterans and their wives in the home community and of eliminating complaints of "nothing to do except movies" in this city of 6,000. The course is on an entirely nonprofit basis and features some big-name talent.

[Mexico (Mo.) Ledger]

Assisted in having rent control established; unveiled several grafts on vets; give ree want ads for veterans' living accommodations and jobs, much space to veterans' news.

[Little Rock (Ark.) Democrat]

(1) Cooperated with Arkansas Department of the American Legion in exposing "bungling" in the sales of surplus Army equipment to veterans, resulting in an investigation by a congressional committee and revision of veterans' preference regulations; (2) exposed a 5-year period of dissension in the State hospital board, resulting in future board meetings being opened to the public and press, leading to improvements in operation of hospital and increased appropriations; (3) promoted a free summer camp for underprivileged girls and free swimming schools for boys and girls and men and women of Little Rock.

These are typical of thousands of others. In hundreds of thousands of ways, the small press justifies its existence in our country. The vastness of America means that we need a multitude of print and wireless communication to serve the economic and cultural needs of thousands of communities. The rich diversity of our populationin trade, profession, craft, labor, religion, national origin-requires a great web of media to serve as an information and meeting ground for many groups. Our social scientists since Jefferson have been alarmed by the concentration of great masses in metropoles. Neighborhood, community, and suburban papers can create a focus of meaningful small group life which cannot be done by the great dailies.

OMINOUS TRENDS

The precise statistics about the number of establishments, owners, and readers of publications are not easy to collect. Nor do they always jibe. Government data are not collected by any one of the recordkeeping agencies in such a way as to give a satisfactory summary. Industry sources also disagree. The two standard reference works are the International Year Book of Editor and Publisher and the Directory of Newspapers and Periodicals of N. W. Ayer & Co. They have differed as much as 12 percent in giving the simple tabulation of the number of daily papers published. Using the same source, a trade survey by Editor and Publisher (January 4, 1947) and a scholarly one by Dr. Raymond B. Nixon, Director of the Division of Journalism of Emory University (Journalism Quarterly, June 1945) also come up with different figures.

But the over-all trends are universally recognized. We are losing dailies and weekly newspapers. Of those that remain very few have local competition. Joint ownerships of two or more papers in a city cut the number of competitive papers still further. Although it is the smaller cities that are being hit hardest, the trend affects the larger ones too. Multiple-owned or chain papers continue to grow slowly although the trend is shifting to State or regional chains. Chains of weekly newspapers seem to be on the verge of expansion.

In 1880 our adult literate population of more than thirty million had almost a thousand dailies and eight thousand weeklies to read. (Charts I and II.) Roughly, one single issue of a daily paper was turned out for every 9 or 10 people. By 1910, the number of literate adults had more than doubled, the number of dailies had almost trebled, the number of weeklies (beginning to decline) had not quite doubled, and one issue of a daily newspaper was turned out for between every two and three people. By 1940 the tide was running the other way, although one daily paper was still being issued for every two to three people. The number of literate adults had more than trebled in 60 years, almost doubled in 30. The number of papers in circulation had shot up almost sevenfold in 30 years, more than elevenfold in 60. But the number of dailies and weeklies had not only not kept pace, they had dropped off sharply. They have continued to drop, although the reading public is still growing, and it is reading more issues of papers.

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