Mr. COLLINS. I am not able to answer that to-day.

The CHAIRMAN. I wish you would have that data for us to-morrow. Representative Moox. Do you know how much the express companies pay to the railroad companies as wheelage?

Mr. COLLINS. No; I do not.

Representative MOON. They themselves have to pay the railway companies for carrying.

Mr. COLLINS. They have their own cars.

Representative MOON. But they are carried on the railroad lines. Mr. COLLINS. I could not answer that question.

Mr. John F. Kelley appeared before the Commission.

The CHAIRMAN. Whom do you represent?

Mr. KELLEY. The National Association of Circulation Managers.

STATEMENT OF JOHN F. KELLEY, NATIONAL ASSOCIATION OF CIRCULATION MANAGERS.

The CHAIRMAN. What is your full name?
Mr. KELLEY. John F. Kelley.

The CHAIRMAN. Proceed.

Mr. KELLEY. I want to state for the benefit of the gentleman who has just spoken that he is in error in regard to the individual distribution of magazines by the express companies. The express companies give for the magazine a pound rate of 1 cent a pound for a distance of 500 miles, as the gentleman states. That rate was originally put in force for the morning newspapers of New York City and other cities. The Pennsylvania Railroad Company at the present time gives a 25-cent rate from New York to Philadelphia and a 50-cent rate west of that on all its lines east of Pittsburg. The gentleman is not correct in saying the express companies quote a cent a pound rate for magazines but do not make an equal distribution. Harper's was the first of the pioneers. The Munsey was the first to make a success as an independent news company. Mr. Munsey was primarily responsible for this rate. Mr. Dwyer was Mr. Munsey's agent in Syracuse, N. Y. He would direct a package of magazines to Mr. Dwyer, to go up on the express train, and Mr. Dwyer would call for it. He was not the agent of the express company. He was the agent of Mr. Munsey, and was a news dealer. Mr. Dwyer retailed those magazines and got his profit in that way.

Aside from the mistake the gentleman has made as regards the personal and individual distribution, he is correct. The express companies quote a minimum rate of 1 cent for 500 miles, and there are two rates on the Pennsylvania Railroad. For the New York newspapers they charge 25 cents between here and Philadelphia and 50 cents west of Philadelphia and east of Pittsburg.

Mr. PFEIFFER. Mr. Chairman, I wish to ask Mr. Madden a few questions.

The CHAIRMAN. Whom do you represent?

Mr. PFEIFFER. The Postal Reform League. Mr. Madden, am I right when I state that the Canadian department carries second-class matter entirely free?

Mr. MADDEN. Not to my knowledge.

Mr. PFEIFFER. Do you know that the Canadian government carries the same class of matter for 300 miles for half a cent pound?

Mr. MADDEN. It would not make any difference to me if I did, but I do not know it.

Mr. PFEIFFER. I am coming to it. Furthermore, you laid so much stress upon the fact that merchandise is included at the rate of 1 cent when it should have been 16 cents a pound.

Mr. MADDEN. I said that, because that is the law.

Mr. PFEIFFER. Very well. I just want to make a comparison. Do you know that the Canadian government permits second-class publications to inclose merchandise at the rate of 1 cent per pound? Mr. MADDEN. I did not know it.

Mr. PFEIFFER. I have the information at home, and I can show it to you. The question is why you should stand here and plead so strongly in favor of our being so far behind our Canadian neighbors? If we have so much business ability as we have, why should we, in the United States, not be able to do something like what they do?

Mr. MADDEN. My answer to that is that is a question for Congress. I am talking about the laws and the difficulty of enforcing them. I did not make them.

Mr. PFEIFFER. I understand that; but you recommend now as much tax on educational matter as on any other kind of matter. Mr. MADDEN. That is the way I stated it; yes.

Mr. PFEIFFER. It has been stated on this floor that we pay the railroads 5 cents a pound for hauling all mail matter, while the English Government has the parcels post. The English Government made a contract with the express companies to carry an 11-pound package anywhere in England for 24 cents. What should be the difference in rates between express matter and mail matter? They are handled by the same parties. They are transported by the railroad companies. You will admit, I believe, because you are an honest man, that if we would strike at the railroad companies and only pay them a fair price for doing our work, there would be no need to tax education.

The CHAIRMAN. You think the railroad companies are getting too much compensation?

Mr. PFEIFFER. I never met an intelligent man in the United States yet unless he said so positively.

The CHAIRMAN. Does your association advocate the parcels post? Mr. PFEIFFER. We certainly do.

The CHAIRMAN. And penny postage?

Mr. PFEIFFER. Surely. We want to serve the people of the United States and let the corporations take care of themselves.

WILLIAM GREEN appeared before the Commission.

The CHAIRMAN. What is your name and whom do you represent? Mr. GREEN. William Green. I live in New York. I am representing the United Typothetæ of America.

In reply to the question about the express rates, the Government is paying the railroads, as nearly as mathematics can make it, $8.01 for the same service for which the express companies pay $2,435.

Mr. GLASGOW. What I want to know from General Madden is, why it is that the Department has not undertaken to establish and promulgate a construction of the law to cover the cases that he has presented?

Mr. MADDEN. When I was on my feet I said much had been done, but that much remained to be done. We are working steadily along the reform lines, making some progress every day. The question is, shall we go on with this reform work or shall we have new and modern laws to govern this class of matter. The work of the Department in conducting the reform is necessarily slow. The reasons have been given; but the work could be expedited by proper increase of force. With our present small force we can not g0 into the publication offices, as required in administrating the existing laws. If we could make sufficient investigations, we would find, I believe, that we are carrying free of postage in the counties perhaps two, perhaps three copies, to alleged actual subscribers to every one copy which should be carried free within the intent and meaning of the law. The law limits the free privilege to "actual" subscribers. What is an actual subscriber? Many of you get your county papers whether or not you have paid your subscriptions. For how long a period can credit be given? That is a question. We can not execute the law in this particular without making an investigation in each individual case, and the worst of it all is that a list of subscribers legitimate to-day may be illegitimate to-morrow, so that, strictly speaking, in an effective administration of this law we would have to be investigating the list of every publication day by day. Such work ought not to be for the Department to do. It is a publisher's private affairs.

Mr. GLASGOW. What I want to know is this: Is there any penalty on sending those publications to people who are not actually subscribers?

Mr. MADDEN. No, sir.

Mr. GLASGOW. Then the trouble you have is in not having a penalty on people who violate the law?

Mr. MADDEN. That is part of it.

Mr. GLASGOW. There is no difficulty in enforcing it?

The CHAIRMAN. The penalty is, to deprive them of the use of the mails.

Mr. GLASGOW. Why do you not enforce the penalty?

Representative OVERSTREET. Mr. Madden, how many different publications are now enjoying the second-class privilege, approximately? Mr. MADDEN. I could not say positively, but I understand the number is somewhere between 40,000 and 45,000.

Mr. GLASGOW. If I understood you correctly a while ago, the dif ficulty of the Department in going into the publishing houses of all these independent concerns, and ascertaining definitely the status, is one of the embarrassments you have labored under?

Mr. MADDEN. Yes, sir.

Mr. GLASGOW. Then I understood you to say you want it so that the postmaster could apply his tape line, and tell whether a publication is proper to go through the mail?

Mr. MADDEN. I say that would be an ideal situation; it should not be a question whether it is educational. A little while ago, if I understood you correctly, you said advertising was educational; yet this law prohibits a publication that is primarily designed for advertising. What is primarily designed? Somebody must decide that question in every individual case.

Mr. GLASGOW. That is the point I want to know about, and it is a point I am entitled to know, or I would not ask it. What I want to know is, why the Department has not undertaken to enforce the law, just as you say it has been violated, because they have succeeded every

time.

Mr. MADDEN. I stated in the beginning that for many years there was no attempt at all to enforce the law, because it involved such personal hazard, and I stated later that

Mr. GLASGOW. What do you mean by personal hazard? I do not understand that.

Mr. MADDEN. You will have to construe that as you like.

Mr. GLASGOW. I am trying to get a little information. That is all I want.

Mr. MADDEN. A strict and honest construction and enforcement of the prohibitory clause of the statute, that no publication shall be admitted to the second class if it be primarily designed for advertising purposes, or for free circulation, or for circulation at nominal rates, taking the benefit of the doubt to the Government, would put out 70 per cent of all our newspapers, big and little, everywhere, and I say I would not like to be in the shoes of any man who undertook to enforce that law to the letter of its intent and purpose.

Mr. GLASGOW. What I want to know is, why it is you have not undertaken, in these cases of fraudulent evasion of the law of which you have spoken, to enforce the law as it exists?

The CHAIRMAN. On that point, Mr. Madden, is it not true that you have, in many hundreds, or perhaps several thousands of cases, enforced the law?

Mr. MADDEN. Yes, sir.

The CHAIRMAN. In the last six years?
Mr. MADDEN. Yes, sir.

Representative OVERSTREET. You are obliged to do it in individual

cases?

Mr. MADDEN. We are obliged to take each individual case by itself. We took three months and a half in one large case, previously explained. How many could we handle in a year at that rate? If we are going to enforce the law at all we must enforce it uniformly, and each provision is as important in itself as any other. All must be complied with.

Mr. GLASGOW. Mr. Chairman, I am not criticising him for not doing it, but what I want to ascertain, if possible, is whether it is possible for the Department, by the enforcement of the law, to work out a practical construction of it which would eliminate a good deal of this difficulty. What I want to know from the Third Assistant Postmaster-General is whether, by a uniform enforcement of the law, a construction would be worked out which would eliminate a great deal of the difficulty he has presented here. That is my purpose, and it is entirely for information.

Representative OVERSTREET. Mr. Madden, if you were confronted with the necessity of making a construction upon whether a paper was published primarily for advertising purposes, would you not be obliged to take into account the proportion of the advertising to the rest of the periodical?

Mr. MADDEN. It seems to me that such would have to be done. 626A-07-7

Representative OVERSTREET. And if you found that proportion showed a greater percentage of purely advertising matter than of other matter, would it have, not necessarily decisive weight, but much weight toward excluding it from the mail?

Mr. MADDEN. It would; much weight.

Representative OVERSTREET. Then have you not found it difficult to enforce this law, lest a too strict enforcement would so overwhelmingly disturb existing conditions that it would be much better to have a statute making plain the administration, rather than limiting it to individual cases?

Mr. MADDEN. I am very glad you express it in that way, Mr. Overstreet. That is what I have been trying to say, but I have not been able to say it as well as you have.

Mr. GLASGOW. Take the case where you said there was 77 per cent of advertising and 224 per cent of reading matter. Why did you not declare that not to be within the second-class privilege and let the courts say whether you were right or not?

Mr. MADDEN. Because in order to do it, if we are going to be fair, we would have to go on the same rule all along the line, and it would put out of the second class 60 or 70 per cent, and a good many of them are regarded as the best in their lines; and it would not be fair or within reason to attempt to enforce such a rule without notice.

Mr. GLASGOW. There are not 60 or 70 per cent of the publications with 774 per cent of advertising?

Mr. MADDEN. No; but we have to have a dividing line, and if you divide on 50 per cent anything over 50 per cent must go out.

Mr. GLASGOW. There is one with 774 per cent about which you have no doubt. Why did you not decide that and then bring the scale down as far as the courts would permit it to come?

Mr. MADDEN. How would it look if we took one with 72 per cent of advertising and rule it out and leave another with 65 per cent in? Mr. GLASGOW. That would be your construction of it, and I would be prepared to accept it.

Mr. MADDEN. And by the time we got to the second one he would have had two or three years' use of the mail while the other man was promptly crushed.

Representative OVERSTREET. Would there be any greater justification in excluding the 72 per cent than in excluding the 50 per cent? Mr. MADDEN. Not a bit.

Mr. COLLINS. Are not your decisions retroactive in that regard? Mr. MADDEN. No.

Mr. COLLINS. I would like to illustrate by my experience. Some years ago I bought the Home Magazine, of Washington, D. C., and I wrote down to General Madden and asked him to please investigate to the limit before it came into my possession, because I wanted to move it between issues. I received no reply. I published two issues under the temporary permit issued by the Minneapolis postmaster and was on the verge of publishing the third issue when the postmaster received orders from Washington to require me to make a deposit at third-class rates and to continue making those deposits at third-class rates indefinitely until the Post-Oflice Department could have time to pass on it.

I inquired how much that would be, and was told I would be required to immediately deposit something like $8,000 and then