II
That national organization is, to all intents and purposes, the Associated Press of to-day. The only really important change has been in its transference as a company from the jurisdiction of Illinois to that of New York. This change was accomplished in 1900, owing to an adverse judgment of the Supreme Court of Illinois. To grasp the significance of that judgment, and indeed the current agitation against the Associated Press, it is necessary to sketch briefly its rules and methods.
The Associated Press is not a commercial company in the sense that it is a dividend-hunting concern. Under the terms of its present charter, the corporation “is not to make a profit or to make or declare dividends and is not to engage in the selling of intelligence or traffic in the same.” It is simply meant to be the common agent of a number of subscribing newspapers, for the interchange of news which each collects in its own district, and for the collection of news such as subscribers cannot collect singlehanded: that is, foreign news and news concerning certain classes of domestic happenings. Its board of directors consists of journalists and publishers connected with subscribing newspapers, who serve without payment. Its executive work is done by a salaried general manager and his assistants. It is financed on a basis of weekly assessments levied, according to their size and custom, upon newspapers which are members. The sum thus collected comes to about $3,000,000 a year. It is spent partly for the hire of special wires from the telegraph companies, and partly for the maintenance of special news-collecting staffs. The mileage of leased wires is immense, amounting to about 22,000 miles by day and 28,000 miles by night. Nor does the organization, as some of its critics seem to imagine, get any special privileges from the telegraph companies. Such privileges belonged to its early history, when business standards were lower than they are now.
The Associated Press has at least one member in every city of any size in the country. That in itself insures it a good news-service; but, as indicated above, it has in all important centres a bureau of its own. Important events, whether fixed, like national conventions, or fortuitous, like strikes or floods or shipwrecks, it covers more comprehensively than any single newspaper can do. Its foreign service is ubiquitous. It no longer depends upon its arrangement with Reuter’s, and other foreign news-agencies: early in the present century the intelligence thus collected was found to lack the American point of view, and an extensive foreign service was formed, with local headquarters in London, Paris, and other European capitals, Peking, Tokyo, Mexico, and Havana, and with scores of correspondents all over the world.
Enough has been said to show that its efficiency and the manner of its organization combine to give the Associated Press a distinct savor of monopoly. As the Sun News Bureau and other rivals have found, it cannot be effectively competed against. Too many of the richest and most powerful newspapers belong to it.
Is it a harmful monopoly? Its critics, as explained above, are busy proving that it is. They urge that, being a close corporation, it stifles trade in the selling of news, and that it is not impartial.
The first argument is based upon the following facts. Membership in the Associated Press is naturally valuable. An Associated Press franchise to a newspaper in New York or Chicago is worth from $50,000 to $200,000.[[6]] To share such a privilege is not in human or commercial nature. One of the first rules of the organization is, therefore, that no new newspaper can be admitted without the consent of members within competitive radius. Naturally, that assent is seldom given. This “power of protest” has not been kept without a struggle. The law-suit of 1900 was due to it. The Chicago Inter-Ocean was refused admission,[[7]] and went to law. The case went to the Supreme Court of Illinois, which ruled that a press agency like the Associated Press was in the nature of a public service and as such ought to be open to everybody. To have yielded to the judgment would have smashed the Associated Press, so it reorganized under the laws of New York, with the moral satisfaction of knowing that the courts of Missouri had upheld what the Illinois court had condemned. Its new constitution, which is that of to-day, keeps in effect the right of protest, the only difference being that a disappointed applicant for membership gets the not very useful consolation of being able to appeal to the association in the slender hope that four-fifths of the members will vote for his admission.
[6]. In the appraisal of the estate of Joseph Pulitzer in 1914, the two Associated Press franchises held by the New York World, one for the morning and one for the evening edition, were valued at $240,000 each.—Ed.
[7]. This is an error which is corrected in Mr. Stone’s reply, cf. p. [124].
The practical working of the rule has undoubtedly been monopolistic; not so much because it has rendered the Associated Press a monopoly, but because it has rendered it the mother, potential and sometimes actual, of countless small monopolies. On account of the size of the United States and the diverse interests of the various sections, there is in our country no daily press with a national circulation. Newspapers depend primarily upon their local constituencies. In each journalistic geographic unit, if the expression may be allowed, one or more newspapers possess the Associated Press franchise. Such newspapers have in the excellent and comparatively cheap Associated Press service an instrument for monopoly hardly less valuable than a rebate-giving railway may be to a commercial corporation. It is also alleged by some of its enemies that the Associated Press still at times enjoins its members against taking simultaneously the service of its rival.
It is easy to argue that, because the Associated Press is a close corporation, it cannot be a monopoly, and that those who are really trying to make a “news trust” of it are they who insist that it ought to be open to all comers; but in practice the argument is a good deal of a quibble. The facts remain that, as shown above, an effective news-agency has to be tremendously rich; that to be tremendously rich it has to have prosperous constituents; and that the large majority of prosperous newspapers of the country belong to the Associated Press. In the writer’s opinion it would be virtually impossible, as things stand, for any of the Associated Press’s rivals to become the Associated Press’s equal, upon either a commercial or a coöperative basis.