2. A corresponding advance in the price of some desired, or even needed, article which is not absolutely necessary to subsist, clothe or shelter them will induce them to hesitate before purchasing—will often lead to an exercise of self-denial which refuses to make the purchase—refuses, not because they do not want the article, but because they cannot afford it by reason of pressing subsistence needs.
That these rules of domestic economy apply to the sale and circulation of periodicals was quite conclusively shown to Mr. Hitchcock by the publishers. Senator Owens adverts to this point as follows:
“It has been suggested that the magazines could collect the additional cost imposed on them by raising the price of their magazines.”
He then quotes “Exhibit D” of the publishers in reply:
It has been shown (Exhibit A) from the original books of account of the chief magazine properties that the measure providing for a new postal rate of 4 cents a pound on all magazine sheets on which advertising is printed would wipe out the magazine industry—would require more money than the publishers make.
Could not the burden be passed on to advertisers or subscribers, or to both?
WHY ADVERTISERS WOULD NOT TAKE THE BURDEN.
Magazine advertisers buy space at so much a thousand circulation. The magazine is required to state its circulation and show that the rate charged per line is fair. Some advertisers go so far as to insist on contracts which provide that if the circulation during the life of the contract falls below the guaranteed figures they will receive a pro rata rebate from the publisher.
In view of the small net profits of the industry—it is shown in Exhibit A that the combined final profits of the five leading standard magazines of America are less than one-tenth of their total advertising income—it is clear that the publisher must be trying always to get as large a rate as possible for the advertising space he sells, and it is absolutely true that he has already got this rate up to the very maximum the traffic will bear.
Advertisers would not think of paying more than they are now paying for the same service. Some of them would use circulars under the third-class postal rate, which the Postmaster General says is unprofitable to his department. Most advertisers would simply find this market for their wares gone, and the thousands of people—artists, clerks, traveling men—engaged in the business of magazine advertising would lose their means of livelihood.