monopoly in the periodical business, with all its attendant evils and dangers.
Trade and scientific papers would suffer grievously. They appeal to relatively few people in each center of population, and depend for circulation upon their ability to reach all the people throughout the country who are interested in their particular trade or science. Many of them could not continue to exist if confined to a restricted field by prohibitive postal rates. As daily newspapers have but limited circulation beyond the first or second zone around the place of publication, they would be less seriously injured financially, but the same tendency to sectionalism and to restrict spread of information and to prevent interchange of opinion would become apparent. The channel which has been used by the Government to reach producer and consumer in its present campaign for food production and economy would be clogged.
The country newspapers and those published in small cities and towns would be less affected directly than the great city news papers or other periodicals, for the House proposes to continue the present privilege of free circulation and the present second class mail rate within the county of publication. But the country editor would be injuriously affected in other ways. The daily press of this country is one structure, in which the big city newspaper is closely related to the country paper. The news of the world is collected and distributed by the Associated Press as the co-operative agency of the big papers, and through them it reaches the country papers. Any legislation which cuts the revenue of the big papers will reduce their ability to perform this necessary function. Every editor needs to keep informed of affairs and opinion in the country at large. and he can best do so by obtaining city papers; in exchange and by reading the weekly and monthly magazines. Prohibitive mail rates would put these beyond his means. The country paper's prosperity is closely bound up with that of the farmer whose success is promoted by the farmer's weekly paper. Newspapers of this class would cease to be National in scope, would be confined to a limited field and would deteriorate in quality. Thus a blow at one part of the periodical press sends a shock through all parts.
Although the professed purpose of this advanced rate is to raise revenue, its actual effect would be to destroy many of the sources from which revenue is derived. The postal revenue directly derived from second class matter might be reduced to a sum even less than that which is now paid. Further, much other postal revenue, which is traceable to the wide circulation and advertising patronage of periodicals would be lost to the Government. They cause many letters to be sent at first class rates, many money orders and parcels to be sent in response to advertisements. The number of these would be so reduced that the Government might be disappointed of the $50, 000,000 of war revenue which it ex pects from the increase in letter rates. The zone system would kill the goose which lays the golden egg.
The Senate finance committee was quick to see the force of these objections. It struck out the section establishing the zone system and substituted one raising the fiat rate from one cent to one and a quarter cents a pound, but it still believes that publishers should pay a special tax. It inserted a pro vision for a tax of five per cent on all net income of publications in excess of $4,000 a year in addition to the income tax, the excess profits tax and all other taxes imposed by this bill and existing
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