NEWSPAPER POST (SECOND-CLASS MAIL) IN THE UNITED STATES OF AMERICA
A system for the distribution of newspapers by post, analogous, though not identical, with that which grew up in Great Britain, existed from an early period in America. There the privilege of franking newspapers was a perquisite, but it was not the perquisite of one officer, as in England. All postmasters exercised the privilege as part of their general privilege of franking all their correspondence, the arrangement being part of their emoluments as postmasters; and post-masterships were much sought after by newspaper publishers, who were thereby enabled to obtain free of charge the advantage of the distribution of their publications by what in most cases was the best, if not the only, available means.
The most notable example was Benjamin Franklin, who was for nearly forty years connected with the Post Office in North America, first as Postmaster of Philadelphia, and afterwards as joint Postmaster-General for the northern part of North America, and who, throughout this period, was able to circulate his publications by post free of charge. The Post Office, especially in regard to the exercise of this privilege, is regarded by Americans as having been an important factor making for a general understanding between the colonies, and a conception of the possibility of common action.[331] As early as 1757 the Crown authorities in the colonies were looking with a jealous eye on the unrestricted distribution of newspapers, and were contemplating measures for preventing the dissemination of objectionable ideas.[332]
As the friction between the colonies and the Mother Country grew in the years that followed, the Crown postmasters became more and more active in their endeavours to hamper the distribution by post of newspapers which published improper intelligence, or proclaimed improper political doctrines. In 1774 Franklin was dismissed, and his dismissal has been ascribed to a desire to impede the distribution of his publications.[333]
There is no doubt that the Crown authorities attempted through the postmasters to prevent the distribution of colonial newspapers, and it was this action which led in the first instance to the suggestion for the establishment of an independent American Post Office.[334] The resolutions of the Continental Congress by which the American office was established in 1775 did not provide for the transmission of newspapers. Nor does the ordinance of the 21st October 1782 prescribe any rates for their transmission; but licenses the postriders to carry them, presumably outside the mail, the charges made by them for the service to be retained by the riders as a perquisite.
The statute of 1792 first fixed rates for newspapers, as follows: 1 cent a copy when sent for distances less than 100 miles, and 1½ cents a copy when sent for distances greater than 100 miles. This charge was opposed in Congress, and efforts were made to legalize free transmission by extending, so as to cover the transmission of newspapers, the general privilege of franking conferred by the Bill on members of Congress, on the ground that as the Government of the country was a government of opinion, which always depended ultimately on the suffrages of the people, much greater reliance was to be placed on the confidence of the people than on any other circumstance. Such confidence could
only result from the fullest information, which the people had a right to expect, not only as regards the actions of the Government but as regards the principles on which they were grounded.[335]
Some members were disposed to approach the question from the financial side, and contended that the rates proposed were not sufficient to discharge the expense of the service. The middle way between economic rates and free transmission was finally adopted.
An Act of 1794 amended the rates on newspapers and provided a further special rate for magazines and pamphlets. Newspapers might now pass from any one place to any other within the same State for 1 cent; magazines and pamphlets at 1 cent a sheet for distances not exceeding 50 miles; 1½ cents a sheet for distances over 50 miles and not exceeding 100 miles; and 2 cents a sheet for any greater distance. A suggestion was made in Congress to reduce the newspaper rate to half a cent for distances not exceeding 100 miles, and 1 cent for any greater distance; on the ground that it was desirable to encourage the distribution of newspapers from the seat of Government and the large towns, since such papers must contain more complete information than the country publications, which could only publish selections from the metropolitan papers. There was, however, a feeling that country papers performed a useful function and should be encouraged.
The rates on magazines were altered in 1825 to 1½ cents a sheet for any distance not exceeding 100 miles and 2½ cents for any greater distance, when published periodically and sent to subscribers; and 4 cents on each sheet for distances under 100 miles, and 6 cents a sheet for any greater distance, when not published periodically. In 1845 the free privilege for
newspapers was first introduced, those of not more than 1,900 square inches in size, posted by the editors or publishers, being allowed to pass free within 30 miles of the place of publication. Smaller newspapers, if conveyed more than 30 miles, were charged the rates fixed by the Act of 1794 (which had been re-enacted by a statute of 1825); and newspapers of greater size were charged a uniform rate of 2 cents without regard to distance. Pamphlets, magazines, periodicals, and all printed or other matter, were to be charged by weight: 2½ cents for the first ounce, and 1 cent for each additional ounce or fraction of an ounce, without regard to distance.
The free privilege for local newspapers was withdrawn in 1847, except as regards copies exchanged between publishers. The latter privilege was continued from a desire to assist the country publisher, who seems always to have had friends in Congress, and who was in the habit of obtaining much of the information published in his papers from the great Atlantic cities, and other large towns which were centres of political or other interests. The free privilege was not long withheld.[336] An Act of 1851 again extended it to all weekly newspapers sent from the office of publication to bona fide subscribers within the county where published, provided the newspaper did not exceed 3 ounces in weight; with a scale of postages graduated according to distance for papers sent out of the county where published. A graduated scale for pamphlets, periodicals, magazines, and all other printed matter, was also established by this Act. In the following year a rate of 1 cent was fixed for each newspaper, periodical, unsealed circular, or other article of printed matter, not exceeding 3 ounces in weight, sent to any part of the United States; and for every additional ounce or fraction thereof, 1 cent additional. In 1861
the rate of postage on any newspaper, periodical, unsealed circular, or other article of printed matter, not exceeding 3 ounces in weight, conveyed over the overland route between any State or Territory east of the Rocky Mountains and any State or Territory on the Pacific, was made 1 cent. The letter rate between the same areas was 10 cents per ½ ounce.
A statute of 1863 classified mail matter, defining three groups. Newspapers, magazines, and pamphlets fell into the second group, which comprised all printed matter issued at stated intervals, but different rates were fixed for different sections of such matter. On printed matter issued weekly and sent to regular subscribers, the rate was 5 cents a quarter for publications not exceeding 4 ounces in weight, with an additional rate for every additional 4 ounces or fraction thereof. If issued seven times a week, the rate was 35 cents a quarter for every 4 ounces. If issued less frequently than weekly, the charge was 1 cent a copy not exceeding 4 ounces in weight, and small newspapers might be sent in packages and charged the same rates by weight. On transient[337] second-class matter, and miscellaneous matter of the third class—the third class included all other printed matter—the rate was fixed at 2 cents for each 4 ounces or fraction thereof.
The rates of 1863 were slightly modified in 1872, and a local delivery rate of 1 cent was established for newspapers. Two years later a new method of charging postage on newspapers and periodicals posted by publishers or newsagents was introduced. Instead of being charged on each individual packet, postage was to be charged on the gross weight of the newspapers posted by a publisher, irrespective of the number of separate packets to be handled. The rate was 2 cents a pound on newspapers and periodicals published weekly, and 3 cents on those issued less frequently than once a week. These rates only applied to such newspapers and periodicals as were mailed from a known office of publication, or news agency, to regular subscribers or newsagents, and did not apply to those for local delivery. By a statute of 1876 publications designed primarily for advertising purposes, or for circulation free, or at nominal rates, were made third-class
matter, and thus excluded from the privilege. In 1879 the present rate of 1 cent a pound (bulk rate) and a revised classification were established. Matter was admitted to the second class on the following conditions:—
First.—It must regularly be issued at stated intervals as frequently as four times a year, must bear a date of issue, and must be numbered consecutively.
Second.—It must be issued from a known office of publication.
Third.—It must be formed of printed paper sheets, without board, cloth, leather, or other substantial binding, such as distinguish printed books for preservation from periodical publications.
Fourth.—It must be originated and published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or some special industry, and having a legitimate list of subscribers; provided, however, that nothing herein contained shall be so construed as to admit to the second-class rate regular publications designed primarily for advertising purposes, or for free circulation, or for circulation at nominal rates.
In 1894 the privilege was extended so as to include under certain conditions the periodical publications of benevolent or fraternal societies; and again in 1900, to include the periodical publications issued by State departments of agriculture.
It was provided by the statute of 1879 that a supplement may be enclosed with a second-class publication, without subjecting it to extra postage, provided that it is germane to the publication which it supplements, that is to say, is matter supplied in order to complete that to which it is added or supplemented, but omitted from the regular issue for want of space or time, or for greater convenience. It must, however, in every case be issued with the publication.
Since the establishment of these conditions and rates, there has been a steady and growing increase in the amount of second-class matter sent through the mails. In 1879, under the old rates, the total weight sent at the pound rate was 51,125,500 pounds. In the following year the total weight was 61,822,629 pounds; and by 1910 the total had increased to 817,772,900 pounds, that figure representing an increase of no less than 94,539,718 pounds on the total for 1909.
During the whole of this period the accounts of the Post Office in the United States had in two years only (in 1882 and 1883) shown a surplus of revenue over expenditure. In view of the vast quantity of matter sent in the mails at very low rates, the question naturally suggested itself whether, seeing
that it was necessary year by year to call on the public treasury for funds to meet the deficiency in the Post Office accounts, it would not be practicable, and equitable, to obtain an increased revenue from this class of traffic. The fact that considerable abuses of the second-class mail privilege had grown up made consideration of the question the more necessary.
Periodicals obtained so great a privilege as compared with ordinary books, that publishers sought devious ways to obtain the advantage of the pound rate. Books termed a "library" were issued periodically, with a frequency sufficient to meet the requirements of the Act, numbered in series, and devoted to literature or science; were issued from a known office of publication, and with a list of subscribers. Complying thus with all the requirements of the Act, there seemed no ground on which these publications could be refused admission to the second-class privilege, and they were accordingly entered. The practice grew, and a multitude of libraries, comprising books on every conceivable subject, were distributed through the mails as second-class matter. The Act permitted the posting of sample copies, and as no limit to the number of such copies was fixed, the mails were burdened with vast quantities of sample copies of publications which, while complying with the letter of the statute, as did the "libraries," were in reality mere advertising media. The subscription list was extremely small in comparison with the number of sample copies sent out, and in many cases the subscriptions had been obtained by the offer of premiums at least equal in value to the subscriptions. Another abuse appeared. Under the law, copies of newspapers and periodicals mailed under the second-class privilege which were found to be undeliverable were, when returned to the publisher, liable to postage at the rate of 1 cent for each 4 ounces; but newsagents had the right to send second-class mail to one another, and in order to avoid the higher rate on returned copies, the publishers arranged a scheme by which the copies were returned by one newsagent to another newsagent whose office was near by the publisher's office. These abuses assumed such proportions that in 1889 the Postmaster-General, Mr. Wanamaker, brought them to the notice of Congress and asked a remedy. Nothing was
done, however. In 1892 Mr. Wanamaker again complained of the same gross abuses, and especially of the book abuse, which had then become, he said, "a practice of so long standing that it has crystallized into law, allowing to paper-covered books which are simply numbered, and dated, and designated as periodicals, though in reality not so, the privileges of genuine periodicals."[338] He also attacked with vigour the sample-copy abuse.[339]
Several Postmasters-General caused estimates to be made of the actual cost to the Post Office of the handling and transmission of the second-class mail. An estimate made in 1894 indicated the cost of transportation for all mail matter as 8 cents a pound, and on that basis second-class matter at that time involved a loss of nearly 17 million dollars for transportation alone. In 1897 the total loss on account of the second-class mail was estimated at 26 million dollars. A further estimate made in 1901 indicated that the cost of transportation of second-class matter was at least 5 cents a pound, and that the cost of handling was a further 2 cents, giving a total cost of 7 cents a pound on matter for which postage at the rate of only 1 cent a pound was paid.[340]
In 1905 Postmaster-General Cortelyou submitted an estimate which put the loss on second-class matter at some $27,000,000 a year; and he recommended that the whole question should be considered by Congress, and a law enacted
which should simplify the tests by which mail matter was classified.
These vigorous and oft-repeated recommendations of successive Postmasters-General, though not resulting in legislation, at length achieved a result in the appointment in 1906 of a joint Commission of Congress on second-class mail matter. The Commission held meetings in New York, and took evidence from the Post Office department and from representatives of each national organization of publishers in the United States. Their report, presented in January 1907, was in no sense conclusive. Their chief difficulties had arisen from the impossibility of obtaining from the department any statistics as to the cost of mail matter class by class—a difficulty which is inherent in Post Offices conducted on the modern system of accounting for postage of all classes by postage labels of the same type, and handling all classes of matter promiscuously; and their chief recommendations were that the department should take fresh statistics with regard to all mail matter,[341] and make an analysis of operating expenses with a view to apportionment between the various classes of mail matter. The Commission was so dissatisfied with the department's position with regard to the ascertainment of a proper division of the total expenses, that they recommended the appointment of a further Commission to examine thoroughly "the whole business system" of the Post Office, and particularly to determine, if possible, firstly, the actual cost of all the postal services; secondly, the proper apportionment of that cost between the various classes of mail matter; and thirdly, what modifications of the system of bookkeeping and accounting were desirable.[342]
By a statute of the 2nd March 1907, Congress authorized the appointment of a joint Commission "to make an investigation into the business system of the Post Office and postal service." The same gentlemen who had composed the Commission of 1906 were appointed to the new Commission, but its labours led to no practical result.
The other recommendation of the Penrose-Overstreet Commission, viz. that further statistics should be obtained with regard to second-class matter, was also adopted by Congress, and the statute authorizing the Commission on business methods also authorized the taking of statistics of the weight, number of pieces, and average haul of all classes of mail matter, separately, and the average load of all cars by which it was forwarded by railway.[343] With the statistics so obtained as a basis,[344] the department undertook the task, which, as stated by the Commission of 1906, had previously been impossible of performance, of calculating the actual working cost assignable respectively to the various classes of mail matter. A Committee, which was appointed in October 1908, and reported in November 1909, arrived at the conclusion that the cost of dealing with second-class mail matter was about 9 cents a pound. The whole subject was before the Committee on the Post Office and Post Roads of the House of Representatives in January and February 1910. Many representatives of the publishing interest attended and gave evidence, and the
department's calculations were subjected to examination and criticism.[345]
Congress and the Executive were still, however, unable to arrive at a satisfactory conclusion on the question, and on the 4th March 1911 a joint resolution of Congress authorized the appointment of a further Commission on second-class mail matter, this time not a Congressional Commission. A judge, the president of a university, and a business gentleman were appointed to the Commission, which held sessions in New York in the latter part of the year, and took evidence from the Post Office department and representatives of the publishing interests. They found that the data available were insufficient to enable them to determine the total cost to the Post Office of the services performed in respect of second-class mail matter; but they were able to estimate the cost in regard to certain items of the expenses of the Post Office. The cost under those headings, which must, of course, be less than the total cost, they found as 5½ cents a pound for ordinary paid-at-the-pound-rate matter and 5 cents a pound for free and transient matter.[346] That part of the general expenses of the service which the Commission were unable to assign satisfactorily between the various classes of mail matter was estimated by the Post Office department to amount to over 2 cents a pound for second-class mail matter.[347] On this basis, of course, a heavy increase in the rate of postage would be warranted; but in view of the uncertainty of the effect of the competition of the express companies which would result from a large increase in the rate of postage, of the fact that the publishers' business established in faith of constancy of the postage would seriously suffer from such a sudden increase, and of the well-known policy of encouraging distribution of educational literature,[348] the Commission hesitated to recommend any large increase, and contented themselves with recommending that the rate be raised from 1 to 2 cents a pound.
Given that the actual cost of the handling and transporting of second-class mail matter is on the average 9 cents a pound (regarding which the department is quite satisfied) and a rate of postage for such matter of 1 cent a pound, the department has, on the face of things, a strong case; and it is not necessary to ascribe other motives in order fully to explain and justify the course it has adopted. But the publishers felt that they were not favourably regarded by the Republican Administration. They claim, and the claim is admitted in influential quarters immune from pressure from them, that they are largely responsible for the establishment of the insurgent wing of the Republican party, whose action against the late Administration proved so disastrous to the fortunes of the party. In the course of these political activities they have made enemies; and they conclude that in the Republican party, many of whose members have been disgraced, if not indeed driven from public life, there has arisen a strong feeling against the publishers. The activity of the department against the second-class rate is alleged to have begun after the publication of articles in the magazines exposing the corruption in the cities, and incidentally reflecting on members of the Republican party. Moreover, the department's most drastic recommendations have been directed not against second-class matter as a whole, but against the periodicals; and they have been made under the guise of preventing, as contrary to the intent of the statute, the dissemination at the second-class rate of vast quantities of advertising matter. Thus, the department has recommended that that portion of periodicals which consisted solely of advertising matter should be charged at a higher rate than the rest of the publication (which would be allowed the second-class rate), while nothing at all was proposed as regards ordinary newspapers, a discrimination which cut the publishers of the periodicals deeply.
The representations of the Post Office department, extending over some twenty years, and of most decisive and emphatic character, have not yet succeeded in obtaining legislation for the reform of the second-class mail scheme; but some few years back the department arrived at the conclusion that the authority of the existing law was sufficient to enable the more flagrant abuses to be checked, if not eliminated. A series
of rulings were thereupon promulgated, and by this means some of the worst abuses have been removed, such as, for example, the transmission as second-class matter of "libraries," issued as periodicals. These rulings were resented by the publishing interests, with whom it was a source of great complaint that the interpretation of the statute defining second-class mail matter was left to arbitrary decision by officials of the department.[349] The intense feeling in America against any sort of bureaucracy, and especially against a bureaucracy of the central Government, leads to a natural jealousy of the exercise of this power, and as a remedy the suggestion was advanced that provision should be made, first, for questions of the interpretation of the Act to be decided in the first instance by a permanent Commission located at Washington, on which the publishers should be represented; and secondly, that there should be an appeal from the decisions of this Commission to the ordinary courts of justice.
The department admits that its position with regard to the interpretation of the statutes is unsatisfactory. Under the existing system, all manner of questions are asked regarding the private business of the publisher, and the decisions from Washington are often delayed.[350] But as against the contention of the department, which was for an amendment of the law, the publishers contended that the law, while no doubt not altogether perfect, was in the main sound and just, and the rate of postage of 1 cent a pound was as great a boon as was ever conferred by Congress. They denied that it was in any sense a subsidy.[351] They also denied the existence of a deficiency,
and contended that so far from its being true that the Post Office business involved a loss, there was each year a profit of millions of dollars. This result they arrived at by estimating the cost to the Post Office of the distribution of Government free matter, and the cost of the rural free delivery, which they added together, setting the total against the deficit shown in the published accounts of the department. By this means a balance of profit was obtained for each year. The estimated postage payable at the usual rates in respect of the free matter was of course an item legitimately to be added to gross revenue; but it was doubtful whether the cost of the rural delivery service could be deducted from gross expenses, as the publishers insisted, on the ground that the service was "extraordinary."
The publishers made a further allegation. At that time the express companies cut even the very low existing cent-a-pound rate on second-class mail matter for short distances, and if that rate were raised the range of their competition would be extended. With a 2-cent rate a much greater proportion of the traffic would inevitably fall to them. This would, of course, be very advantageous to the companies, to whom, as to railways, any increase in the volume of traffic handled would be welcome. These express companies had for many years been faithful supporters of the Republican party, and behind the suggestion to increase second-class rates the publishers were convinced there was a desire on the part of the leaders of the party to reward their faithful allies.[352]
But perhaps the chief contentions of the publishers, which the Post Office was bound to some extent to admit, and would in any case find it difficult to meet, were the claim that newspapers create a vast quantity of first-class mail; and the claim that since the payment made to the railway companies in
respect of the transportation of the mail is based on a sliding scale, decreasing as the volume of traffic increases, the weight of second-class matter brings down appreciably the rate actually to be paid.
Some who appeared before the Commission of 1911 were inclined to go beyond these general contentions as to the relative claims of second-class matter, and to assail the whole administration of the department from the economic standpoint; challenging especially the relations with the railway companies, and arguing that the payment made for the conveyance of mails was not equitable when compared with the charges made by the companies for similar services performed for the express companies.
Notwithstanding these contentions, there can be no question that the transmission of the second-class mail at the present rates involves the department in heavy loss; and that Congress, not unaware of this, attaches importance to the advantages which a low rate for such matter confers. The Commission were satisfied on both points. It is, however, doubted by many whether the effect of this privilege has been altogether salutary from the educational point of view. It has encouraged to an almost incredible extent the publication of periodical magazines, and many of these magazines are of a high order of merit as periodical publications. The United States leads the world in the publication of this kind of matter.[353] But the reading matter which is found in these publications is to a large extent light and trivial. The publication of serious intellectual works has shown little advance in recent years,[354] and there is a fairly widespread feeling in
America that the two developments are connected. But that is a matter difficult to determine.
In any case, many people are proud of the development in periodicals, and the department, in spite of its efforts, has so far failed to secure any increase of rate. Although the Postmaster-General and the President[355] adopted the recommendations of the Commission of 1911, and urged their consideration on Congress, Congress has not taken action, and has, indeed, forbidden the department to extend certain arrangements for the use of freight trains for the transmission of second-class matter, whereby a saving of expense could be secured, a phenomenon probably explicable by the constitution of American politics.[356]