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we got about 33 of them it was found that they were all the same, except the titles and one or two pages.
Investigation disclosed that a publishing house had started in St. Louis, known as the Brooks Publishing Company. They issued one general magazine. The scheme was to go through the country and place in every county a portion of the copies to go through the mails free of postage from the local publisher at that point, who, as a matter of fact, was nothing more or less than an agent of the real publisher in St. Louis. The publishing house at St. Louis took from the local publisher from 1 to 16 pages. I believe, of local matter, printed it, and bound it in under a separate title for each local. As an illustration, we have here Page's Magazine, for August, 1904 (Exhibit 18a); The Sunnyside Magazine, for August, 1901 (Exhibit 18b); The Mondamon Magazine, for August, 1904 (Exhibit 18c). They are identical as to contents, except the variations I mention. That [exhibiting) is the way one of them looks. By the device of getting into the mails from a number of publishers rather than one, free postage would have been secured if we had not checked it for what was essentially one publication, issued in St. Louis. The only grounds upon which we could reach it was to hold that the publisher at the local point was not the real "publisher thereof;" that the true publisher was in St. Louis; that we would not deny entry in St. Louis, but coming from 100, 200, or 300 publishers, the same publication, they were not the real publishers. The second-class rates can be given only to the publisher. The matter was adjusted finally by the agreement that in no case would the local publisher apply for the free rate of postage within the county. They were then admitted.
Mr. KRACKOWIZER. Do you make the same rulings on the patent insides of the new papers, so-called, this being a patent inside magazine?
Mr. Maddes. It is substantially the same question; yes, sir. But the volume is not as great in the case of patent inside, as a rule, as it is in these cases.
Mr. KRAKOWIZER. It is the same principle?
Mr. MADDEN. Yes; that is one of the faults of the law-it can not be uniformly enforced.
For a long time there has been in existence an institution known as The Western Newspaper Union. It is located at Chicago and New York. It has a list of publications running into hundreds. This map. (Exhibit 18d) shows their locations. It is the advertisement of them. The question is whether the New York house or the Chicago house is the real publisher, or whether the man at each local point is the publisher. He prints something on it. If you desire to place an advertisement in one of the publications you must, as a general thing, deal with The Western Newspaper Union.
The question is, Who is the publisher in all these cases? The statute of 1879 provides only for newspapers and periodicals and prohibits even these when primarily designed for advertising purposes. We have here a great many exhibits of what is known as the mail-order
type of publication. The exhibits are endless. The question in each is not only whether it is a newspaper or periodical, but whether it is primarily designed for advertising purposes or for free circulation, or circulation at nominal rates. If so, it should be excluded. I have a copy of the Ladies' Magazine, published in Portland, Me., the April, 1906, number (Exhibit 19). It is about the average, I should say, of all of them. We find some fiction, and a lot of advertising, some scissors and paste-pot stuff. It is what is known as the mail-order publication. When they get a little more advertising, they add a little more of the fiction or some more scissored stuff.
I hardly know how to present these now. We will come to this question again later. There are so many such publications that it is hard to present them in order. They are sold at varying prices from 25 cents down to 5 cents a year. If my recollection is correct, they are mostly 10 cents. This one is 25 cents a year, and I think you
will find the publisher combines it with something else and, in effect, gives it away.
The CHAIRMAN. Is it a weekly or a monthly publication?
Senator CARTER. You had better proceed. The illustrations have been quite sufficient, I think, on that point.
Mr. MADDEN. They can be taken up at any time. They are difficult of analysis, and we have not had time to measure and analyze them as we have others.
We now come to the acts of 1894 and 1900. They are as follows:
All periodical publications issued from a known place of publication at stated intervals and as frequently as four times a year, by or under the auspices of a benevolent or fraternal society or order organized under the lodge system and having a bona fide membership of not less than one thousand persons, or by a regularly incorporated institution of learning, or by or under the auspices of a trades union, and all publications of strictly professional, literary, historical, or scientific societies, including the bulletins issued by State boards of health, shall be admitted to the mails as second-class matter and the postage thereon shall be the same as on other second-class matter and no more: Prorided further, That such matter shall be originated and published to further the objects and purposes of such society, order, trades union, or institution of learning and shall be formed of printed paper sheets without board, cloth, leather, or other substantial binding, such as distinguish printed books for preservation from periodical publications.
All periodical publications issued from a known place of publication at stated intervals as frequently as four times a year by State departments of agriculture shall be admitted to the mails as second-class mail matter: Provided, That such matter shall be published only for the purpose of furthering the objects of such departments: And provided further, That such publications shall not contair any advertising matter of any kind.
These acts, unlike that of 1879, take into account not only the publication, but who publishes it. They provide only for periodical publications. Newspapers are not included. They require that the publication shall be issued from a known office of publication at stated intervals as frequently as four times a year, and what was said regarding like requirements in the act of 1879 and the difficulties attending a correct enforcement of them applies equally to these acts. These acts do not define a periodical, but in so much as they follow long after the passage of the other act it is more than probably true that the periodicals intended to be covered are similar to those provided for in The previous act, with the exception that under the act of 1894 they
must be published to further the objects and purposes of the publisher. The act of 1894 grants the privilege to benevolent and fraternal societies or orders organized under the lodge system and having a bona fide membership of not less than 1,000 persons, to regularly incorporated institutions of learning, to trades unions, to strictly professional, literary, historical, and scientific societies, and to bulletinissued by State boards of health; and whether the publisher of a periodical offered for entry is one of these must be determined in each case. One of the four chief abuses referred to as having been corrected was under the provisions of this law. One of the questions which must yet be determined is whether it was intended that only one periodical publication issued by the central body of a benevolent or fraternal society should be admitted to the privilege, or whether, in addition to that, each local branch of each organization may have its local periodical. Since the publication must be a periodical, another question which must be determined is whether an annual catalogue, an annual report, or any distinctly annual or semiannual publication is to be carried at the second-class rates merely because it is labeled with the title and is clothed with the dress of one of the numbers of a periodical issued by one of the institutions provided for in this act. We have great difficulty in determining what is a benevolent or fraternal society: what is a professional society: what is a historical or scientific society, for every man and every organization wants to get the second-class rates. The Department is not equipped with specialists in these lines, but we must come to that. Since the law requires the determining of such questions in order to fix the postage rates, the business must be done. The courts have given us light on what constitutes an incorporated institution of learning, and it is an entirely different thing from what it was conceived to be in the first administration of that act. The act of 1900 provides for periodical publications of the State departments of agriculture, and, like the act of 1894, the privilege depends upon who the publisher is as well as upon the thing to be mailed. Under this statute comparatively few publications have been entered at the second class. It is easy of enforcement because of the provision that they shall contain no advertisements of any kind. I hope the foregoing has given light—much light—as to what problems there are and what kind of questions arise from day to day under the administration of this complicated patchwork of laws and of the difficulties attending a solution of them. It was necessary to consider these laws and their abuses in detail. and the administrative reform of some of the abuses, in order to give a correct understanding of the whole subject. The exhibits are relied upon for a physical demonstration of the situation and the conditions. There is scarcely a provision or a requirement of the acts of 1879 or 1894 which is or which can really be enforced uniformly in all cases throughout the postal service. The expedients and subtle deceptions employed to circumvent the requirements for second-class matter, in order to secure the advantage of the rates prescribed for that class for matter of the third class, are impossible of effective control by the Department as at present equipped. With a sufficient force
of special agents in the field to check and chase down abuses promptly before they have made headway and a sufficient force in the Department to dispatch the business there, the proportion of matter carried wrongfully at the second-class rates would soon be materially lessened. The effect would be an increase in the volume of matter paying the third-class rate, and there would be no deficit.
We have undertaken only one investigation into the publishing business such as these laws actually require. A statement concerning the case will give some idea of what a real enforcement of them means. Two publications by the same publisher were involved. In due course it became necessary to determine beyond any question whether the lists of subscribers were, as a matter of fact, legitimate, and the number in each. It was claimed that there were approximately 800,000 for one and 300,000 for the other. Five trained men were sent from the Department. They required the assistance of 65 others. These 70 persons consumed three months and a half, working eight and sometimes ten and twelve hours a day, in the publication office reviewing the publisher's books and other records before they had ascertained the facts.
The Third Assistant Postmaster-General is charged with the duty of determining the issue. His action depends not only upon the report on the subscription lists, but upon other circumstances. It will be necessary for him to review personally the report of this committee and all other papers in the case. They comprise, to be exact, in addition to the report, 522 separate communications covering 781 typewritten pages, the majority close spaced. There is also a volume of other documents relating to the case to be considered before a decision can be made. It is roughly estimated that a review of all these papers alone will require ten or fifteen days of that officer's time, during which he will be able to transact but little other business.
The entire force in the Department engaged upon the work of classifying all the mails (it is of course understood that there are many questions asked, many decisions to be made, and much correspondence concerning the other three classes of mail matter) numbers forty-five persons. There emanates from the division of classification rulings, decisions, instructions, and correspondence incidental thereto, from two to three hundred communications every working day. About one-half of the persons engaged on classification work devote their entire time to questions regarding the second class of mail matter. The occupation of the five trained men on the two cases mentioned, therefore, depleted the force by about one-fourth. From this it will be plain that we could not handle in the course of a year many such cases, yet that is exactly the kind of an investigation and scrutiny the law contemplates and which must be undertaken in thousands of cases if the present laws are really to be enforced.
The following table gives an estimate of the proportions of the different classes of mail matter and the percentage of revenue derived from each. It is based upon the weighing and count of 1890 and the weighing of 1900, the conclusions reached being the result of a comparison with the postage revenue by means of proportion and percentage.
Statement of the actual and estimated weights of the different classes of matter,
except Government free, mailed in the fiscal year ended June 30, 1905, with the revenue derived from same, and the percentage of weight and revenue of each class, compared with the total.
postal cards Second class at
pound rates... County, free. Second class, stamps
affixed (mailed by publishers and
news agents). Second class, tran
8, 348, 635
984, 784, 181
146, 654, 216.07
The following table shows what the difference in revenue would have been if the third-class rate had been collected on one-third, onehalf, and three-fourths of all the matter carried at a cent a pound and free:
Statement showing the loss in postage sustained by the Government in handling
second-class matter during the fiscal year ended June 30, 1905, assuming, first, that one-third of such matter, second, that one-half of such matter, and third, that three-fourths of such matter should have been charged at the third-class rate. [NOTE.-The rate for third-class matter is “one cent for each two ounces or fractional
part thereof,” but for the purpose of this table it is calculated in even pounds at 8 cents per pound. ]
Pounds. One-third of 44, 442, 374 pounds of matter carried free.
14, 814, 125 One-half of 44, 442, 374 pounds of matter carried free.
22, 221, 187 Three-fourths of 44, 442, 374 pounds of matter carried free.
33, 331, 780 One-third of 618, 664, 754 pounds of matter at pound rate.
206, 221, 585 One-half of 618, 664, 754 pounds of matter at pound rate.
309, 332, 377 Three-fourths of 618, 664, 754 pounds of matter at pound rate.
463,998,565 Loss in postage on matter mailed free.. Loss in postage on matter mailed at the pound rate..
23, 430,961. 35
An ordinary pound of third-class matter, made up of miscellaneous mailings, contains a number of pieces which yield an average total of 14 cents postage. The average revenue from a pound of third-class matter is therefore estimated to be 14 cents, although on an even