15,709 per periodical. The members of National Business Publications, Inc., an association of 89 free-circulation papers, have a total free distribution of 2,245,709 or an average of 25,120 per periodical, an average of 10,000 more copies per issue. Even the higher postage rates has not acted as a brake to prevent a widespread distribution of the controlled-circulation periodical, and you can guess what would happen if you lower the rate.

It should be pointed out that the possible increase of circulation of already established controlled-distribution periodicals is not the only concern of the Postmaster General. As we have pointed out previously, the granting of second-class rates to free-circulation periodicals would cause the establishment of more and more such magazines. This contention, we believe, is well taken in view of a study prepared by Frank Avery, managing director of the Controlled Circulation Audit, and published in the February 1949 issue of Industrial Marketing. This is shown on chart marked "D."

(Chart D is as follows:)

Mr. CHEVALIER. What would have been the rate of growth of "controlled-circulation publications" under lower postage rates, I can only surmise. It obviously would have accelerated the upward trend tremendously. What would be the future growth if the lower rates were adopted?

This study shows the growth of the controlled publications, despite their present higher postage rates, from 1932 to 1948. The number of publications increased 566 percent in this period and the total circulation in this period climbed 315 percent. In this same period audited paid circulation periodicals increased only 35 percent in num

ber, and circulation increased 92 percent, or at a rate following the increase in our gross national product.

Despite the claim of "discriminatory" postage rates, the National Business Publications, Inc., the association of the controlled publications, attest to the tremendous growth of controlled-circulation periodicals since 1911 from 1 periodical to 251 today.

It is not only the 89 free periodicals in the National Business Publications, Inc., nor the 251 Controlled Circulation Audit magazines that will apply for second-class rates if this bill is passed, but the 498 business, scientific, and industrial magazines of all kinds and descriptions that are already being circulated on a free or controlled basisSome under the provisions of the act of 1934.

Gentlemen, the adoption of this measure would result in a tremendous increase in the postal deficit.

The statement has been made that free circulation magazines and paid circulation magazines are the same in every respect-they both have editorial pages and both have advertising pages-they are both equally attractive periodicals. They both cost approximately the same for the post office to handle. All these similarities may be true, but the one criterion that counts is whether or not the reader considers them the same.

If the controlled publications are as highly regarded by their readers as stated, there is no reason for H. R. 3220. Any individual or company in the United States has access to the privileges and provisions of second-class postage provided they mail to a bona fide list of subscribers. To repeat, if the controlled publications have such high acceptance with their readers, it should not be too difficult for them to convert their readers into legitimate subscribers. Automatically, this would provide them with second-class privileges.

There may be some feeling that it is difficult for a publication to change from free distribution to paid circulation. However, the fact remains that publications have made such a transition and have come nder the provisions of the second-class rate. Food Field Reporter, Wood Products, Office Management and Equipment, Quick Frozen Foods, Oil, and others have changed from free to paid.

There is no discrimination in the present postal law toward controlled circulation publications. Rather it is the decision of controlled circulation publishers not to operate under the requirements of the present law that has brought up the question of discrimination. Any publisher has the opportunity to meet the requirements of the Postage Act of March 3, 1879, if he so desires and if he is willing to build a bona fide list of subscribers.

The controlled publications have chosen their own road to success in the publishing business-the easier road. The paid-circulation publications chose their road-the hard way, requiring years of effort and great expense to build up and maintain a legitimate list of subscribers. Both know all the rules, including the postage rates, which far antedate any controlled publications. There is no discrimination here; this is, rather equal opportunity under the law.

In conclusion I would like to point out that this is not the only time that this matter has come before the Congres. It came up as early as 1925 and was rejected. At that time, on November 9, 1925, to be exact, the Hon. Joseph Stewart, executive assistant to the Postmaster Gen

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eral, in an appearance before the special joint subcommittee of the Committee on Post Office and Post Roads, stated:

This cannot be authorized under the existing law, act of March 3, 1879, governing mailable matter of the second class, which makes it a prerequisite to the entry of a publication as second-class matter that it shall have a "legitimate list of subscribers" and not be "designed primarily for advertising purposes or for free circulation or for circulation at nominal rates." Trade journals without subscriptions not only fail to meet the first condition, but they clearly come within the prohibitions of the statute cited. To grant them second-class entry would constitute a radical departure from the long-standing policy of restricting such privilege to those publications which are circulated in response to a genuine public demand, evidenced by the subscriptions of the individuals receiving the publications. Furthermore, it would be a most unwarranted discrimination against those publications which are required to meet the conditions prescribed for publications generally and at the same time greatly increase the loss suffered by the postal service in handling second-class matter.

Mr. GROSS. I would suggest that a lot of good ideas have gone down since 1925.

Colonel CHEVALIER. I would say, Mr. Chairman, in reply to the gentleman, that everything that I have said in my presentation has been directed to show that because a thing is necessarily old, like the institution of the family, it does not mean it is no longer useful in the society to which we belong. I think that the structure of the industrial press which has been built upon the foundation laid on that statute is good evidence of the fact that it was possibly within the scope of that statute to build up a great and a useful technical and industrial press in this country, upon the foundation of which the controlled circulation publications have built their success in very, very recent years. Mr. MILLER. Do you mean to imply that the controlled circulation press then is a parasite?

Colonel CHEVALIER. No, sir; I did not say that.

Mr. MILLER. Do you mean to imply that it serves no useful purpose because it is not old?

Colonel CHEVALIER. No, sir; I did not say that.

The CHAIRMAN. You have already commended the controlled circulation.

Colonel CHEVALIER. Yes; I have commended it.

Mr. MILLER. Yes; but with a very left-handed jab.

Colonel CHEVALIER. That was your contribution, sir, not mine. Mr. MILLER. I certain cannot put any other interpretation on your words, Colonel. In other words, we are right, and the others are a bunch of parasites.

Let me make my position clear to you, because you have been doing a little sharpshooting at me.

I think that the Electrical Journal here is a very fine magazine, but I hope that if it is still in existence it has changed somewhat its format and the type of information given out. I hope that it has been progressive along with age.

I hold no brief for any groups. I cannot understand yet, even from your fine presentation, why two magazines, serving the same field, being substantially the same weight, requiring the same service from the Post Office Department, should not pay a comparable rate.

Colonel CHEVALIER. I can only answer that, sir, by saying that, in accordance with the standard that has been established, that genuine readership be best demonstated by means of a paid subscription renewed, the one publication has demonstrated its right to be considered

under the terms of this act, of dissemination of useful information, and the other one has not done so.

I want to emphasize what has been brought out here before, sir, that at any moment any controlled circulation publisher who wishes to enjoy the privileges of second-class entry can do so by simply following the same procedure and subjecting himself to the same restrictions that have been followed by the publishers of the second-class or paid circulation publications. There is no bar against any publisher of controlled circulations doing that, if he thinks it is in his best interests to do so.

Mr. MILLER. I think that is all self-evident. I understood that for quite some time, since 1879, that has been the law.

But it still does not answer my question, or give me information to change my thinking, as to why these two publications and I am not concerned with the field they serve-requiring the same amount of work in the Post Office Department, should not pay a comparable rate. They require the same amount of work in the Post Office Department, and that is the only thing we are concerned with, after all. In other words, I am certain that the postman that delivers this publication [indicating] is just as tired as the fellow that delivers this publication [indicating]. Both of them have the same backache at the end of the day from carrying around these publications, and both of the publications are costing Uncle Sam just as much to transport, for example, from here to Seattle or from here to New Orleans, and if they go to the same office, they both take the same amount of work. That is the thing I cannot get quite clear.

Colonel CHEVALIER. May I answer that question. If you will apply that principle, sir generally, would you then apply the same right to a house organ of a manufacturing company which is the same size, dimensions, weight, and what not? Would you apply it to any piece of advertising matter put out by a manufacturer, having the same weight, dimensions, and what not?

Mr. MILLER. I do not know. I think that we should take a good look at it. I think we should probe it. That is all I am interested. in doing.

Colonel CHEVALIER. I quite concur, sir. Mr. MILLER. All right. I am starting on that assumption. If there is some good reason for the house organ-and I do not know; I am not familiar with that field-then I should say that if it is as heavy, if it causes as much work, perhaps it should have the same rate. My mind is fixed on that. Perhaps I do not have the same. respect for tradition that you have, but I am concerned with the physical aspects of the thing, and Uncle Sam is the carrier, as far as I am concerned.

Colonel CHEVALIER. That is a very understandable principle, sir, and, as you say, it deserves to be looked into to ascertain whether there should be no distinction in postage rates other than those based upon the physical task of handling.

Mr. MILLER. I say that these things evidence some lack of a unified. standard from the standpoint of handling. If you went to the American Express Co., or to a private carrier, and you said, "Here are three or four magazines that weigh the same" and they are serving the same field, he would not be concerned too much with anything else than what it is going to cost him to deliver them.

Colonel CHEVALIER. That is right.

Mr. MILLER. Now, we do interject into this phase the traditional policy of giving consideration to the dissemination of information. Colonel CHEVALIER. That is right.

Mr. MILLER. A lot of this historic background is immaterial to me. I have looked over your magazines, and you are representing the McGraw-Hill Publishing Co. I think Mr. Conover, if I remember correctly, in speaking of this magazine, said it cost $60 a year to put 12 issues of this magazine in the hands of the reader. I assume that is what your cost would be?

Colonel CHEVALIER. Very much the same.

Mr. MILLER. I am not going into that. But they are within the same relative price?

Colonel CHEVALIER. Yes.

Mr. MILLER. Now, then, I look over your subscription list. I see one of these magazines, Product Engineering, had a subscription of $6 for 1 year, $9 for 2 years, $12 for 3 years; a rapid break-off.

I see the other, Factory and Management, that to me, not being skilled in the printing trade, but just looking at them, I would say the cost is somewhat comparable. I see the subscription is $3 a year, $4 for 2 years, and $5 for 3 years.

Now, if we are going to take this historic thing about the subscription thing, why are not the subscription prices somewhat on a more comparable level? I just cannot understand those things. Those are the things I would like to investigate and look into further and get some of the answers from experts like yourself.

Colonel CHEVALIER. I have no quarrel with anything you said, and I therefore am not going to discuss in detail some of the questions you raise. But I assure you that there are logical and rational answers to the questions you raise.

Mr. MILLER. That is right. I asked the question to ascertain whether it is your belief that you should continue to send this magazine through the mail at a much greater loss to the Government than the loss that we have to accept from the competitor magazine. It becomes a matter of comparative losses, as far as I am concerned again.

The CHAIRMAN. It seems to me you get away from the whole purpose of second-class mail on your argument. You want to charge on a poundage basis. Second-class mail as the colonel has explained, was primarily designed to help the reader, the subscriber, and not to help any publisher of any magazine, or any newspaper. It was for the benefit of the reader, not for business.

Mr. MILLER. I agree with you, but then if the information and the data contained in these two magazines, one a controlled, and one a paid circulation magazine, are the same, they are serving the same

purpose.

Now, the colonel made much of a point that these magazines are sent out to an organization and not to an individual. I was once the sales manager of a trailer manufacturing concern, and I received a great deal of mail addressed to me by my title, and when anything came over my desk that served my purpose, and gave me information in my job, I was perfectly willing to accept it, and I was not going to be concerned with whether they addressed me by my title or surname.