1917. CONGRESSIONAL l{EOORD-SENATE. I. 4 6407
Also a bill (H. R. 5846) granting a pension t~ Marga-ret James Lodge Poindexter Smoot Steele: to the Committee on Invalid Pensions. Johnson, Cal. McCumber Robinson ~!~~l~ng J ohnsoNn, ~{· Dak. MMcKNellar Ss'ahulfsbnthry Sutherland Also: a bill (H. R. 5847) granting a pension to Mary F. Jones, . Ll ex. c ary · a ro Barnum; to the Committee on Invalid Pensio~. · . Jones, WaEh. Martin Sheppard Swanson · Kellogg Nelson Sherman Thompson Also, a bill (H. R. 5848) granting a pens10n to Anme l\I. Kendrick New Shields Townsend Easland · to the Committee on Invalid Pensions. Kenyon Norris Simmons Trammell Also, ~ bill (H. R. 5849) granting a pension to Melissa C . . King Overman Smith, Ga. Vardaman Kirby Page Smith, Md. Watson Lewis · to the Committee on Invalid Pensions. Kno~ Penrose Smith, Mich. Williams Also: a bill (H. R. 5850) granting a pension to 1\lrs. William La Follette Pittman Smith, S. C. . Bader· to the Committee on Invalid Pensions. Mr. SHAFROTH. I desire to announce the unavoidable ab Also: a bill (H. R. 5851) granting an incr~se of pension to sence of my colleague [Mr. THOMAS] on account of illness. I Harrison W. Fox· to the Committee on Invalid Pensions. will state that he is paired with the senior Senator from North Also. a bill (H.' R. 5852) granting an increase of pension to Dakota [Mr. McCUMBER]. This announcement may stand for Julius ·o. Deming; to the Committee on Invalid Pensions. the day. Also, a bill (H. R. 5853) granting an increase of pension to Mr. SUTHERLAND. I wish to announce that my colleague, Thomas Conley ; to tlie Committee on Pensions. the senior Senator from 'Vest Virginia [Mr. GoFF], is absent Also, a bill (H. R. 5854) granting an increase of pension to on account of illness. I will Jet this announcement stand for Domitile Brennisou; to the Committee on Invalid Pensions. . the day. Also, a bill (H. R. 5855) granting an increase of pension to Mr. FRELINGHUYSEN. My coJleague [l\Ir. HuGHES] is ab James F. Coakley; to the Committee on Pensions. . sent owing to illness. This announcement will stand for the By Mr. MAHER: A bill (H. R. 5856) granting a pension to day. Elizabeth McGuiness; to the Committee on Pensions. . Tile PRESIDENT pro tempore. Sixty-seven Senators have ALo. a bill (H. R. 5857) granting a pension to Joseph P. answered to their names. There is a quorum present. Hamblen · to the Committee on Invalid Pensions. Bv Mr.' MONTAGUE: A bill (H. ll. 5858) for the relief of THE PRESIDENT'S REPLY TO THE POPE'S PEACE PROPOSAL. Pnst Asst. Paymaster P. l\1. Lathrop, United States Navy; to Mr. BRADY. 1\!r. President, I have in my hand the reply of the Committee on Claims. President Wilson to the suggestions of the Pope relative to tlw By Mr. RIORDAN: A bill (H. R. 5859) granting a pension to te1~ms of peace. I am going to ask that tllis reply, together .Toseph F. Flynn; to the Committee on Pensions. with au editorial and certain comments from the press, be By l\Ir. WILLIAMS: A bill (H. R. 5860) granting a pension printed in the RECORD. I do tllis for the reason that I believe it to Pearley P. Beal; to the Committee on Pensions. iS a document that will go down in history and will mean much Also. a bill (H. R. 5861) granting a pension to John W. Me- not only to the democracy of America but to the democracies of Donn ld · to the Committee on Pensions. - the- world. While the President rejects the terms suggested by Also, 'a bill (H. R. 5862) granting an increase of pension to the Pope, yet he points a way that will enable the other !lati.ons. Lonn Boutwell; to t~e Committee on Invalid Pensions. by following the lines ~uggested, to reach peace on fntr, JUSt, and honorable terms at the proper time. I ask that these press comments, as well ns the etlitorial, be PETITIONS, ETC. published for the reason that I llope to have a page taken from Unc ler ria use 1 of Rule XXII, petitions and papers were laid the RECORD, printed, and distributed to the lending citizens in on tl1 e Clerk's desk and referred as follows: every county in my State, so that they may nt first hand know P,v l\Ir. DALE of New York: Petition of H. N. Scott, Winthrop, what the immediate impression of this reply has.been J]pon the N. Y.. fayoring the Moore purple-cross bill, House bill 5410; to people of the East. We of the West, of course, do not enjoy the Committee on Military Affairs. the advantages of reading all the great daily newspapers nor By l\fr. FESS: Petition .)f 69 citfzens of Greene County, Ohio, of reading the comments that they may make, and for that lll' ~dll g a Christian amendment to the_Constitution of the United reason. ! ask to have inserted in the RECORD the editorinl and ~tate~ acknowledging Almighty God as the source of all au comments of the press. tlloritv in civil government; to the Committee on the Judiciary. Mr. McCUMBER. Will the Senator include the editorial in n,· ·l\lr. JOHNSON of Washington: Petitron of various citi the Post of this morning? ,;e n ~ of Tncomn, "\VasiL, favoring Irish independe.nce; to the Mr. BRADY. I have included the editorial from the Post of Committee on Foreign Affairs. this morning, and the comments of the press, the New Y?rk B\· 1\lr. STINESS: Petition of the Rhode Island State Com Herald, the New York World, the Times, and a few other leadrng mittE>e of National Defense, medical section, favoring provision papers. for ;:1ili tary rnnk among medical offi ~ers of the Army com I believe that this document is going to take its place in the mensurate \\·ith that of medical officers of.the Navy; to the Com world's history and in our history, as the generations go by, mit tt>e on Military Affairs. with Lincoln's· Address at Gettysburg and ·washington's Fare AL ·o petition of the board of trustees, Memorial Hospital, well Address to his soldiers and the people, for I believe that of Pm~tucke t , H. I., fasoring provision for military rank among this document will cause us, when the proper time arrives, to m€'tlicnl officers of the Army commensurate with that of medical l1ave a seat at the table when the terms of peace are made. offi('€'1'S of the Na\y ; to the Committee on Military Affairs. This reply of the President to the Pope is the beginning of the Also, petition of ~Jagl e Council, No. 8, Junior Order United end of autocracy in the world. American 1\Iechnnics, of Providence, R. I.; favoring the passage The PRESIDENT pro tempore.· Without objection, the re of House bills 4802 and G369 ; to the Committee on Immigration quest of the Senato1· from Idaho will be granted. an
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1917-._ CONGRESSIONAL RECORD-S~ATE .. 6409
"The President makes:. that· issue· fundamental. Everything -The:- PR'EJSIDE:NT' pro:· tetnpoTe: The question before the can be left to compromi e and adjustment except tbe safety and Senate is on. a-g.r.eeing to tne amendment- of. the.. Senator from. seeurity of civilization. There must be guaranties: for that-. and Tennessee [Mr.. . McKELLAR] as amended. there can be· no guaranty while. the present Government ot:Ger- Mr. KliNG~ I offer an amendment to the· pending bill in tha many endures." nature· of a substitute. :fon sections 200 to 2U, Title II, heing the· New York_Times: '\\lll.r-pcoftts provision; which: I ask rn3.N' lie on· the. table· and be: " 'l'o the Pope's proposal that the allies meet Germany in1 a . print-ed! . . friendly and mutually trustful negotiation, the President answers · The· I!RESID'EN'JT DTO tempoTe· The amendment· will r~ on· that there is no one to. negotiate· with. The negotiation r-esults j·the table· and be: printed:.. . in.scraps oflpapen~ *' * * The Gemna:n: people·
6410 CONGRESSIONAL. RECORD-_ SENATE. AUGUST 29, free-in-county privilege was extended to all newspapers, save that unless postage paid they were not to tie delivered. at letter-.carrier offices or ACT OF JUNE 9, 1884. distributed by carriers. . In 1879, with the same restriction, this privi- By the act of June 9 1884, the transient rate on newspapers and lege was given to all second-class privilege. ~ · t •· • period ~ cal pub1lcations oi the second class-that is, when sent by others Returning to newspapers and periodicals other than those made free, than the publisher or news agent-was made 1 ceht for each 4 ounces or the act of 1845 continued the rates of 1825 :for newspapers not more fraction thereof. than 1 900 square inches. For those of larger size the same rate was ACT OF MARCH 3, 1885. fixed as on magazines and pamphlets, and the '1atter were charged 2! cents a copy weighing not. more than an ounce and 1 cent more for each In 1885 the pound rate for second-class matter was reduced to 1 additional ounce or fraction in excess of one-halt ounce. Passing the cent a pound. provisions of the act of 1851, which were enforced for little more than LATER STATUTES. a year, w ~ come to that of 185~, which made the rate for newspapers, In 1894 the definition of publications entitled to be admitted to the periodicals and other printed matter weighing not over 3 ounces 1 cent mails as second-class matter was enlarged by the following provision to any part ot the United States and 1 cent additional for each addi with respe<'t to those issued by benevolent or fraternal societies, trade tional ounce or fraction thereof, with one-halt this rate for those not unions, and learned associations: over 1~ ounces circulatro In the State where published. Small news All periodical publications issued from a known place of puhliration papers and periodicals published monthly or oftener, and pamphlets at stated intervals and as frequently as four times a year by or under containing not more than 16 octavo pages each, when SE.'nt iD single the auspices of a benevolent or fraternal society or order organized un packages of at least 8 ounces to one address, were charged one-half der the lodge system and having a bona fide membership of not Jess cent per oun<>e or fraction thereof. than 1,000 persons or by a regularly Incorporated institution of learn In 1863 mailable matter was divided in'to three classes: (1 l Letters, ing or by or under the auspices of a trades-union, and all publications (2) regular printed matter, (3) certain miscellaneous matter. The of strictly professional, literary, historical, or scientific societies, in second class embraced all mailable matter exclusively in print, t.ssued at cluding the bulletins issued by the State boards of health, shall be ad stated periods. 'Vhen, issued weekly or oftener, not over 4 · ounces in mitted to the mails as second-class matter, and the postage shall be weight and sent to regular subscribers quarterly postage was charged the same thereon as on other second-class matter and no more: Pt·o running from 5 cents a quarter for weeklies to 35 cents for those issued vided further, That such matter shall be originated and published to seven times a week. For each additional 4 ounces or fraction thereof further the objects and purposes of such society, order, trades-union, there was an additional rate. When issued less frequently than weekly, or Institution of learning, and shall be formed of printed paper sheets the rate wa.s 1 cent a copy, not over 4 ounces, and small newspapers in without board, cloth, leather, or other substantial binding such as dis nackages to one adddress ·were charged the same rate per pac-kage. tinguishes printed books for preservation from periodical publications. Transient second-class matter ·and third-class matter (except circulars Under this amendment we are advised that the -department has uni and books) were charged 2 cents for each ~ ounces or fraction thereof formly held that the publications containing advertisements in the in in one package to one address ; books, double ; and unsealed circulars. terest of other persons or concerns than the society or trades-union or 2 cents for three·or less in number and proportionately fm• more. institution of learning which the paper l.'epresents are not entitled to In 1872 the qu. arterly rates on newspapers and periodicals were lDod1- these privileges, and that to justify such advertisements there must be fied And 1n that year there was provided a local-delivery rate of 1 cent each for newspapers (except weeklies), periodicals, and c-irculars compliance with the conditions of the act of March 3, 1879. not over 2 ounces In weight, and 2 cents for periodicals over 2 ounces There was a further supplementary act in 1900 with respect to the when deposited in a letter-carrier office for delivery by the office or its publications of StatE.' departments of agriculture, as follows: carriers. By this statute third-class matter was made to include samples All periodical publications issued from a known place of publication of merchandise not over 12 ounces, anti all other articles not e-xceeding at stated intervals as frequently as four times a year by State depart 4 pounds, which were not liable to injure the malls ; and the thJrd-cJass ments of agriculture shall be admitted to the mails as second-class mail rate was 1 cent for each 2 ounces or fraction thereof; books, samples matter: Provided, That such matter shall be published for the purpose of metals ores, minerals, and merchandise had double rates. · of furthering the objects of such dl.'partments: And f]rovided turt11er, In 1874 there was introduced a pound rate for newspapers and periodi That such publications shall not contain any advertising matter of any cals mailed from a known office of publication or news agency to regu kind. lar subscribers or news agents (save in case the local delivery rate was In 1910 it was provided that where publications mailed at the pound payable u-...der the act of 1872). This was fixed at 2 cents a pound .or rate or free in county are undeliverable they shall be returnable to the publisher, after specified notice and in the circum!l'tances stated, ~barged fraction thereof for those issued weekly or more frequently ; otherwise with postage at the third-class rate. 3 cents. And the rate for all third-class matter was made 1 cent for each 2 ounces or fraction thereof. · IIXISTING RATES OY SECOND·CLASS MATTER. The act of 1876 p,ut " regular public.ations designed primarily for advertising purposes,' or for circulation free or at nomina rates, under The existing rates on second-class matter are those established by , the third-class rate. - - • · the act of 1879, as amended in 1884 and 1885. There are, in the words of the Postmaster General, "seven rates, or variations of rates, applica ACT OF MARCH 3, 1879. ble to different circumstances," as follows : The present law classifying mail matter was enacted in 1879. This (1) The general rate of 1 cent a pound on copies mailed by publishers established four class+>s: First, written matter; second, periodical pub to subscribers, to news agents, and as sample copies. lications; third, miscellaneous printed matter, and fourth. merchandise. (2) The free-of-postage rate on copies mailed to subscribers residing Mailable mattet· of the second class was defined as embracing all news in the county where the publlcations are printed and publishecl when papers and other periodical publications which are issu.ed at stated not addressed for delivery at a city letter-carrier office. intervals and as frequently as four times a year, under specified contli (3) The cent-a-pound rate on copies mailed for deJlvery by rural tions, as follows : carriers when emanating from a city letter-carrier office. First. It must regularly be issued at stated intervals, as frequently ( 4) The cent-a-pound rate on weekly publications mailed for deHvery as four times a year, and bear a date of issue, and be numbered COflsecu- at a city letter-carrier office. (5) The cent-a-copy rate for newspapers, other than weeklies, ancl tiv~~~ond. It must be issued from a known office of publication. for perlod1rals not exceeding 2 ounces in weight. when deposited in a Third. It must be formed on printed paper sheets, without board, city letter-carrier office for local delivery by carriers. cloth leather or other substantial binding, such as distinguished printed (6) The rate of 2 cents a copy for periodicals exceeding 2 ounces in books for preservation and periodical publications. weight when deposited at a city letter-carrier office for local delivery by Fourth. It must be originated and published for the dissemination. of carriers. inforiiUltion ot a public character, or devoted to literature, the sciences, (7) The rate of 1 cent for each 4 ounces for copies mailed by others arts, or some special industry, and having a. legitimate list of sub than publishers or news agents. scribers: Provided, howet:er, That nothing herem contained .shall be so construed as to admit to the second-class rate regular publications de Mr. HARDWICK. What I started to say on this subject is signed primarily for advertising purposes, or for free circulation, or for this: We have tried the zone system and we have tried the flat circulation at nominal rates. rate system both with respect to first-class matter and with re The provisions as to rates on second-class matter were: . "SEc. 11. Publications of the second class, except as provided m sec spect to second-class matter. We finally came to the present tion 25 when sent by the publisher thereof, and from the office -of pub fiat-rate system for the one reason that it was considered abso lication including sample copies, or when sent from a news agency to lutely necessary, if democratic institutions .were to be perpetu actual subscribers thereto, or to other news agents, shall be entitled to transmission through the mails at 2 cents a pound ,?r traction thereof, ated and maintained, that education should be general1y (]i:ffused such postage to be prepaid, as now provided by law. among the people, and that the press of the country especially " SEc. 25. That publications of the second class, one copy to each should have something like a national spirit. This country was actual subscriber residing in the county wbere same are printed, · in whole or in part, and published, shall go free through the malls; but so vast, its conditions were so different n'nd diverse, that if there the same shall not bi! delivered at letter-carrier boxes or distributed by was to be created and maintained anything like a spirit of na <'arriers unless postage is paid thereon at the rate prescribed in section tional unity it must come from some movement originating in 13 (sic) of this act: Provtded, That the rate of postage on newspapers, except weeklies, and periodicals not exceeding 2 ounces in weight. when the press and reflected by it. Those policies are sound, those the .same are deposited m a letter-carrier office for delivery by its <'ar principles are correct, and _to their application to this situation riers, shall be uniform at 1 cent each; periodicals weighing more than 2 no Senator who has given the question intelligent thought can ounces shall be subject. when delivered by such carriers, to a po~tage of 2 cents each, and these rates shall be prepaid by stamps affixed .. enter his dissent. Provision was made that foreign newspapers and other period1cals But I ·must invite the attention of the Senate and of the of the same general character as those admitted to the second class in country to the fact that since the year 1885, when the present the United States might. under the direction of the Postmaster General, be transmitted through the mails at the same rates as is published here. rates were fixed by law, this country has undergone a remark Further· all publishers of second-class matter were allowed, without abie business transformation. At that time, according to a table paying extra postage, to fold within their regular issues a supplementl that I shall print in connection with my remarks, which bas been provided· the added matter was germane; that Is, supplied for sake or completeness. carefully prepared by the Post Office authorities, not 5 per cent Third-class matter embraced books, transient newspapers, and ~erlod of all the newspaper publicat.ions in this country, fl!agazines or icals, circulars, and other matter whopy in print, proof sheets, ~orrected what not was advertising matter. It was less than 5 per cent. proof sheets, together with manuscr1pt copy, and these were charged 1 cent for each 2 ounces or fraction thereof. . , Since t8s4 however, the remarkable development of American Fourtti-class matter consisted of that which was not included m the business ha~ been reflected in the newspaper and magazine other classes, not in the form or nature liable to injure the contents world, and to-day many o:f these periodicals are nothing in the of the mall bag or harm those engaged In the Postal Service, and not exceeding 4 pounds in weight for each package (except in case of single world but business enterprises, or largely so, as shown by the books), and the rate was fixed at 1 cent an ounce or fraction thereof. . following table : · · ._.., .,._- I
1917. CONGRESSIONAL RECO'RD-SENATE. 6411
Ptopor'tion of ad1:e1·tising to reading mattet· in certain -publications of this stun: that goes through the mails is a large per cent adver.. the dates indicated. tisement. Gentlemen, that is a perversion of the principle upon SATURDAY EVEXING POST, PHILADELPHIA, P~. which-we gave-the publishers a purely,nominal rate. .The following tables show this condition: Total Advertis Per cent Proportio-n of aclv:erti..sing to reading matter in certain publications.. Dateof~e. columns ing col ofadver contents. umns. • tising. DAILY NIJWSPAPERS •
Total :Ang.1,1S74 ...... •.•..••.••••••••••••••.• 48 1.50 a.n col- Adver- Per Oct.17, 1874 •••...•...••.••••..••.•••.•••.•.••• 48 1.50 3. .l2 Name of publication. · Frequency ·Date of issue umns tising cent of Dec. 26, 1874 •••...... ••••••...•..••.•...•.. 48 • 70 · l."lii of lSSue. · con- col- adver- 48 8.10 17.00 tents. umns. tising. 48 7.50 15.62 Fit ~~~rJ~-~~::: :::::::::::::::::::::::::::: ~ 48 4.40 9.16 - --- .64 5.40 8.44 64 3.20 5.00 The Times, Los Angeles, Cal .• Daily •••.. May 12,1917 144 66.4 46.11 Rit ~i~!:_:::: :::::::::::::::::::::::::::::: 64 3. 70 o.ro Examiner, San Francisco, Cal. ... do ...... do ..•••. ~ 160 33.4 48.37 Apr. 14, 1917 .•••.....••••••••.••••.•.•••••••.. 528 324.00 61.00 Post, :Penver, Colo ...... do ...... do ...... 96 18.3 19-ll6 Constitu~1 Atlanta, Ga ...... do...... May 16,1917 98 49.5 .50. 51 Tribun~ 9rucago, lll...... · ...... do ...... do ...... 224 139.0 62.05 News, vnicago,llL...... do ...... May 15,1917 208 "145.0 69.71 YOUTHS' COM.PA.NIOX, BOSTON, 1\I.A.SS. Times-..Picayune., New ••-do ...... May 15,1917 -128 64.7 50.54 Orleans, La. Americant Baltimore, Md ...... do...... May 17,1917 112 45.0 40.17 16 None. None. Post, Boswl!l Mass. __ ._ ...... do...... May 16, 1917 16 None. None. 128 88.5 69.U 16 None. None. Free Press~-...uetroit, Mich .••••.••. do...... do...... 176 121.0 68.75 12.50 Dispat~ ~t. Paul, Minn...... do...... May 15,1917 112 61.0 54.46 32 4.00 Kansa,g.vity Journal, Kansas ... do...... do.... -... 70 10.5 15.00 32 4..85 15.16 City Mo. 32 3.50 10.94 32 4.00 12.SO Globe-tiemocrat, St. L<>uis, ... do...... May 16,1917 112 39.5 39.50 "32 4.00 12..00 Mo. 48 10.00 20.85 Journal~,.~ew York~,.~· Y ...... do ...... do ...... 160 84.0 52.50 "64 20.SO 32.00 World, .New York, .N.Y ...... do...... May 17,1917 176 104.0 59.09 .Inquirert Cincinnati, Ohio...... do...... May 14,1917 96 21.7 22.60 N o r t n A m e r i c a n , ...do...... May 16,1917 112 58.0 51.79 ./ . HARPER'S MAG.A.ZINE, NEW YORK, N. Y. Philadelphia, Pa. - Dispatch, Pittsburgh, Pa ...... do...... do ...... , 140 64.7 (6.21 Times, Seattle, Wash...... do ...... May 12,1917 98 31.7 32.35 June, 1850 ...... 290 None. None. Journal, Milwaukee, Wis.. _ ...... do...... May 14,1917 112 65.2 58.21 290 None. None. i~!~~~850::· : ::::::::::::::::::::::::::::::: 296 None. None. WEEKLY AYD -OTHER THAN DAILY NEWSPAPERS. 288 None. None. ~~~br:r~ef~~--:::::::::::::::::::::::::::::: 285 None. None. 286 None. None. Total November, 1850 ...... Adver- Per December, 1850 ..•...... ••.•.•.•.•.•.•••••.•.. 288 - None. None. col- tising 1anuary, 1.S75 ...... 302 None. None. Name of publication. Date. of issue. umns cent of 320 None. None. con- col- adver- 302 None. None. tents. umns. tising;· ~~~~1-~~~::::::::::::::::::::::::::::::: 328 48.00 14.63 May, 1885 ...... 320 52.00 16.25 ------370 44.00 11.89 Rutherford Republican, Rutherford, N.J .. Feb. 27,1915 84 29.50 35.12 ~~~ AMERICAN AGRICULTURIST, NEW YORK, N. Y. AGRICULTURAL. Total 62 4.50 7.26 Adver- Per 64 7i 11.19 Frequency o.f col- tising cent""(){ 64 5! 8.85 Name of publication; Date of issue: umns J.SSue. con- col- adver- "132 "35.50 .26.89 umns. tisi.ng.· 120 33J 28.05 tents. 120 29.50 .24. 58 : 144 45.00 31.25 ISO 581 38.75 P~essive Farmer, Bir- Weekly-~·-··. Feb. 17,1917 ••• 192 115.00 59.895 ISO 57.00 38. ()() mmgham Ala. 80 32.00 40.00 .Home and :Farm, Louis- Semimonthly. May 15,1917.... 128 20.00 15.62 ville, .Ky. Farm and Ranch, Dal- Weekly .•..... Apr. 21,1917 .... 160 78.00 48.75 I have on my desk a number of specimens ~ illustrating that las, Tex. May~,1917 .... development. Here is the Dry Goods Economist; one of the' ~~~~~~~,c~- -~-·-do~ ...... 48 26.50 55.20 last issues, a journal of the dry goods trade, published in New Better Farmmg, Chi- Monthly ...... Oct. -,1916 ..•• 96 50.50 52.6() Semimonthly. York, entered as second-class mailing matter. It is nothing in ~~au_~·DairyFarmer, May 15,1917 .... 160 00.00 . 61.8i the world but advertiSing, pictures, all sorts of fancy looking Waterloo, Iowa. things, everything in the world except information, unless you Iowa Homestead, Des Weekly ...... Mar. 9,1916 .... 224 144.00 64.28 count information about how to spend your money on dry goods Moines, Iowa.. D hi . Successful Fannmg, es . Mont y ...... May-;i917 .... 204 103.00 52.94 and styles as important information. S o I might go through · Moines Iowa. the category of all the e trade journals, and to-some extent most Missouri Valley Fanner, .....do •••.•... Apr.~,l!i17 .... 96 46.833 48.78 of the farm journals as well, and al.$0 most of the journals that Topeka, Kans. ekl · 1 d f , Board's Dairyman, Fort We y...... May 18,1917 .... 160 92.00 - 58.75 represent almost every spec1a ize line o indush·y and busi- .Atkinson, W1s. _ nes , and the arne thing is true. A.merica.n PoultV. .•· ...... May-,1917 .... 132 63.5 48.10 1\Ir. SMITH of Michigan. 1\!r. President-- F~r~l!~~·lome Semimonthly· Ma-yl,1917 ..... 144 79.333 55.09 1\.fr. HARDWICK. Let me "finish this statement and then I Mii&eapolis, Minn. ' • will yield the Senator. '.rhe table I shall present--but I 'TheRuralNewYorker, Weekly ...... i May 19,1917- --· 112 39.833 35.56 to -wm 1 not weary the patience of the Senate to read from it·now unless 1 -0 ~~"FJ:'~~~le~Iand, .....-do .. ··---- May 12, 1917 ...• 96 42.00 . ,43... 75 some Senator request · it-show. that in in tance -nfter instance ' Ohio. • CONGRESSIONAL RECOR.D-SENATE. AUGUST 29 6412 ' Propo1·tioll of acl~ertising to read-iltg matter! etc.-Continued. Pt·oporti~n of adverti~illg to reading matter, etc.-Co!ltlnued. AGRIClJLT~RAL-COn_tlnued. TRADE PlJBLIC.ATIONS-CODtinued. Total Adver- Per F eq.uency f col- tising cent of Name of publication. r iSSUe. o Date·orissue. : col- adver- of Date of issue. ~ 1~i~~- c~~rot Name ofpublication. Fr~~~~Y con- col- adver tents. umns. tising. tents~ umns. tising. ------l·------l------1------6-i 35.00 M.68 Kansas Farmer, Topeka, WeeklY-:-···· May 12,1917 .. . Machinery, New York .. Monthly ...... May, 1917 ...... 936 7~.00 76.93 Kans. 78.89 Semimonthly. May 15,1917 ... . 192 102.00 53.12 JJ-on Age, New York, .....do ...... May 10, 1917 ... . 758 598.00 Dakota Farmer, Aber N.Y. deen, S.Dak. 172 57. 0{1 I Weekly ...... May 12,1917 ... . 160 70.00 43.75 Printing Art, Boston, ..... do ...... May, 1917 ...... 33.14 Country Gentleman, Mass. Philadelphia Pa. 256 144;00 56.25 Farm Journal, Philadel Monthly ...... May-,1917 .. .. 141 7L50 50.71 R~~~aYo~fe Gazette, Weekly ...... May 11, 1917 ... . phia, Pa. Boot and Shoe Recorder, ..... do ...... May 12, 1917 .. .. 308 2~2. 00 78.57 American Agricultural Weekly ...... May 12,1917 •..• 80 32.00 40.00 ist, Springfield, Mass. Boston. F r u i t G r o we r, St. Semimonthly. Feb. 1,1917 •••. 174 93.50 53.75 Joseph, Mo .• RELIGIOUS. SCIENTIFIC. Baptist and Commoner, W eekl,y...... May 2, 1_917 ..... 64 10.50 16.40 Journal of Entomology Quarterly ..... Jan.-Mar ...... 50 12.00 24.00 Little Rock, Ark. Signs of tho Times, ..... do ...... May t\,1917 ..... ~8 2. 50 5.20 and Zoology, Clare- lr Mountain View, Cal. mont, Cal. e4 18. 75 American Journal of Monthly...... Jan., 1917 ...... 94 6.00 6.38 Southern Christian Ad- ..... do ...... -~pr. 19, 1917 .... 29.30 vocate, Anderson, S.C. · Science, New Haven, E,Pwort.h Herald, Chi- ..... do ...... May 19,1917 .. ! . 72 13.0::1 18.05 Conn. · ·one. None. ca~o, Til. American .Anthropolo- Quarterly..... Oct.-Dec ...... 174 72 10.50 14.70 gist, Washington, D. C. . Northwestern Christian .....ao ...... May 16, 1917 .... 136 None. None. Advocate~...Chicago, lll. American Journal of .....do ...... do ...... Missionary Tidings, In- Monthly ...... May, 1917 ...... 88 3.16 3.59 :"'-rchaeology, Wash- · . diana~olis, Ind. rngton, D. C. • Christian Observer, Weekly ...... May 2, 1917 ..... 87 9. 16 10. 5? American Journ:~.l of SemitbLanguagesand I.... do ...... Apr ...... 114 8.00 7.01 0 ~r I~usvs·tJ·aillne~Knyd.eavor.1!; ..... 7.00 8. 75 Literature, Chicago, Semiquarterly Jan.-Feb ...... 112 6.00 5.35 C do ...... May 17, 1917 .... so World, Boston, Mass. Ill. 180 36.00 20.00 Journal of Geology, Chi- Quarterly..... Jan.-Mar...... · 111 1.00 1.0 Record of Christian Monthly ...... May, 1917 ...... cago, ill. Work, East North , Journal of Race Devel- ..... do ...... do ...... 57 None. None. field, Mass. Catholic Union and Weekly ...... May10,1917 .... 56 18.25 32.59 .~:S~nt, Worcester, Times, Buffalo, N.Y. Monthly ...... Apr.,1917 ...... 136 4.00 2.94 Annals of M:~.thematics, Monthly ...... May, 1917 ...... 21 8.00 38.09 American Missionary, New York, N.Y. Princeton, N.J. 80 14.00 17.50 Technologist, Brooklyn, ..... do ...... do ...... 67 1. 70 2.54 Catholic News, New Weekly...... May 12, 1917 ... . N.Y. York, . Y. American Naturalist, ...... Christian Herald, Now .. ... do ...... May 16,1917 .. .. 112 42.00 37.50 York., N.Y. • New York, N .Y. 2l,G8 13ulletinoftheAmerican ..... do ...... Dec., 1916 ...... 55 6.00 10.90 The Cnurchman, New ..... do ...... May 12, 1917 .. .. 83 18.00 York, N.Y. Mathematiral Society, 108 35.75 35.64 New York, N.Y. American Hebrew, New .....do ...... May 11,1917 .... 22 None. None. York, N.Y. Zoological Society Bul- Bimonthly.... May-June ...... 32 3.00 9.37 lelin,NewYork,N. Y.' Forward, Philadelphia, ..... do ...... May 26,1917 ... . 212 4.00 1. 88 Pa. Journal of the American Monthly ...... Mar ...... 48 9.00 18.75 Chemical Society, Sunday School Times, ..... do ...... M:~.y 12,1917 .... 1 ;Easton, Pa. · Philadelphia, Pa, Economic Geology, Lan- Semiquarterly Feb.-Mar., 1917 110 . 8.00- 7.27 C~~'~t~o~kA~~y~ate, .....do ...... May 10,1917 .... 96 24.33 25.35 ca~ ter, Pa. American Mathematical Monthly...... Apr., 1917 ...... 60 6.00 10.00 Extension Magazine, Monthly ...... May, 1917 ----~. 132 48.00 36.37 Chicago, m. Monthly, Lancaster, 48 8.16 17. ()() Pa. Sacred Heart Review, Weekly ...... May 5, 1917 ..... OJ?hthalmoJogy, Seat- Quarterly ...... do ...... 176 7.00 3.97 Boston, Mass. - A~:r~~·Economicat ..... tio ...... Mar ...... 272 None. None. Review, Princeton, :MAGAZIXES. N.J. Tho Auk, Boston, Mass ...... do ...... Apr .... _...... 170 2.00 1.17 Journ:ll of Nervous and Monthly ...... do ...... 140 41.50 29.64 Overland Monthly, San Monthly...... May, 1917 ...... 234 36.00 15.39 Mental Diseases, Lan Francisco. Cal. caster, Pa. National - Geographic ..... do ...... Jan., 1917 ...... 284 92.00 32.39 Ohio Archaeological and Quarterly ..... Jan., 1917 ...... 1M None. None. Magazine, Washing Historical Quarterly, ton, D. C. Columbus, Ohio. Blue Book Magazine, ..... do ...... Jutn, 1917 ...... 432 42.00 9. 72 Chicago m. Popular Mechanics, Chi- ••••. do ...... do ...... 620 294.00 47.42 TRADE PlJBLICATIO~S. cago . .Atlantic Monthly, Bos- ..... do...... May, 1917 .. : ... 4.58 170.00 37.12 Printers' Ink, New Weekly ...... May 10, 1917 ... 312 181.00 58.01 ton. York,N. Y. Y ~!~;n. · Companion, ..... do ...... May 10, 1917 ... . 64 18.00 28.12 Fourth Estate, New ..... do ...... May 12, 1917 ... 128 45.50 35.M York, N.Y. Little Folks, Salem, .....do ...... Apr., 1917 ...... 68 ~-00 29.41 Farm Implement News, ..... do ..... : .. .Apr. 26, 1917 ... 132 75.00 56.81 Mass. Cbirago. Review of Reviews, ..... do...... May, 1917 ...... 496 2i0.00 M.44 American Builder, Chi- Monthly ...... May, 1917 ...... 40 286.00 70.09 New York. ca.go. Cosmopolitan, New ..... do ...... June, 1917 ...... 348 138.00 39.66 Concrete and Cement ..... do ..... : ...... do ...... ·i . 1917. C,ONGRESSIONA:{J RECORD-SENATE. 6413 Proportion ot advertising to reading matter~ etc.-Continued. 1\Ir. SIDELDS. I wished to know whether they would ordi· narily come within what is known t.s the third zone or 300 miles~ 1\USCELLA..."'EOU S. Mr. HARDWICK. They would circulate in that, to some ex· tent, but that would be a very small part of the circulation. Total col- Adver- Per They go all over the United States and to its remotest corners, Frequency o! tising cent or Name of publication. Date of issue. UIDD3 and at the expense of the Post Office Department that is handling ISSUe. con- col- adver- UIIUl3. tising. this sort of stuff as educational at a charge of one-eighth of tents. what it costs to handle it. ------Now, let us see. The Senator spoke of percentages. I have United States Govern- Monthly ..••.. May 7, 1917 •••.• 66 17.40 a.01 them here, and I will be glad to furnish them; I will take ment Advertiser, first the class known as religious magazines. They have the Washin~n, D. C. smallest percentage. The Christian Herald, for instance, has The AdYertisin~ Age ...•.do ...... Apr., 1917 ••••• 135 53.00 39.0) and Mail Order Jour· 14.2 per cent only of aQ.vertising. I will take some of the more nal, Cbica~o, ill. ordinary magazines. Collier's Weekly, a high-class weekly, Civil Service News, Weekly .•••••• May 15, 1917 .... t:4 11.25 17.53 Chicago ill. has only 15.9 per cent ; the Literary Digest, 12.8 per cent ; the Si~ Cfu Quarterly, Quarterly ••••. Feb., 1917 •••••• 150 ...... Youth's. Companion, 21.2 per cent advertising; the Ladies' Home hica!o, ll1. ········ Journal, and I believe that is the smallest of all, 8.6 per cent; Han·ar Lampoon, Fortnightly ••• May 9, 1917 ···-· 42 43. 2-} 60.0) Cambridge, Mass. the American Magazine, that is just a. little under it, 8.4 per American Federational- Monthly .•.••• May, 1917 •••••• ~ 82.0) S9.42 cent; the Delineator, 12 per cent; Everybody's, 53.4 per cent; ist, Was~nh D. C. Review of Reviews, 14 per cent; Woman's Home Companion, Law Notes, ort port, .•.•.do ...... do ••••.•••• ~4 4.25 17.21) N.Y. 14.8 per cent...... do ...... do .•..•••.• 128 37.0!) 28.91 Now a few weekly papers. The Rutlierford Republican, ~:f~ow:al, Phil- Rutherford, N J., 35.12 per ce.nt; the Stoutsville Journal, The ~hieid or Delta Qu!lrterly .. : •• Feb., 1917 ••••.• 3.00 7.14 Sigma Epsilon, Me- ·~ Stoutsville, Mo., 56.25 per cent ; the Woodson Beacon, Woodson, nasha, Wis. Tex., 62.5 per cent; the Fryeburg Post, Portland, Me., 32.14 The Club Wot:k:er, New .....do ...... do ...... 17 ...... -...... per cent; and so with that class of papers. YorkMN. Y. Road aker, Moline, Monthly .•..•• May, 1917 ...... 120 43.2.i 36.1H Now let us take a few of the daily newspapers and se-e what ill. per cent of their columns is devoted to advertising matter, and Philatelic Gazette, New Semimonthly. Sept. 1, 1911. ••• (4 19.00 29.69 what do we find? The '.rimes, Los Angeles, Cal., 46.11 per· cent York, N.Y. Monthly ••••.• May 5, 1914 •••• M8 122.00 24.08 advertising; the Examiner, San Francisco, Cal., 48.37 per· cent; Piq~;i~I Culture, New the Post, De.nver, Colo., 19.6 per cent; the Constitution, At· (0 (.00 PW.'H~y, Manchester, Bimonthly•••• Apr. 5, 1917 •••. 15.0J lanta, Ga., 50.51 per cent ; the Tribune, Chicago, Ill., 62.5 per Art in America, New .•••.do ..••••••• Dec., 1913 •••••• ~00 40.00 20.00 cent advertising; and so on I can go through the daily papers. York, N.Y. Mr. SMITH of Michigan. Take Munsey's, with only 10 per Municipal Journal, New Weekly ••••••. June 6, 1912 •••• 152 8L333 53.51 York. cent. Our Dumb Animals, Monthly ••.••. Dec., 1914 ...••• CG !:1.00 15.00 Mr. HARDWICK. Yes; that is one of the low ones. Boston, Mass. Mr. SMITH of Michigan. It is very low. It goes all over the Aviation and Aeronaut!- Semimonthly . Aug. 1, 1916 •••• 72 15.00 20.83 cal ETeering, New country. York, . Y. Mr. HARDWICK. So I can go through Fith the other jour· Tho Musician, Boston, Monthly .••.•• Apr., 1917 ..•••. ~52 66.50 26.39 nals. Take some of the great religious papers. The Baptist Mass. Pacific Fisherman, Se- .....do ...••••.• Jan., 1916 •••••• 320 174.50 E4.53 and Commoner, Little Rock, Ark., 16.40 per cent; Signs of the attle, Wash._ Times. Mountain View, Cal., 5.20 per cent. You will see that these religious publications, as a rule, are lower. . I now yield to the Senator from Michigan [1\Ir. SMITH]. Now, take some of the trade publications. Printers' Ink, 1\Ir. SMITH of Michigan. The Senator, of course, has selected New York, 58.01 per cent; Fourth Estate, New York, 35.54 per from among all the publications the one publication whose per cent; the Farm Implement News, Chicago, 56.81 per cent; the Concrete and Cement Age, Detroit, Mich., in the Senator's centage of advertising to other matter is greatest. There are State, 62.38 per cent advertising; the Automobile Dealer and only one or two others of that class. Repairer, New York, 67.94 per cent; the Automobile Trade Mr. HARDWICK. The Senator haS the table I used b~fore the Journal, Philadelphia, 68.52 per cent; the Horseless Age, New Senate committee? York, 79.28 per cent; and so on. · Mr. SMITH of Michigan. Yes~ I have the table here. Mr. HARDWICK. Is it the one I used before the Senate Mr. President, it is perfectly apparent to any man who wants to approach this question candidly, and I know every Senator committee? of the United States wishes to do that, that we must do one l\Ir SMITH of Michigan. I think it is. thing if we are going to solve it right. If we, are prepared to 1\Ir: HARDWICK. The Senator may read from it. It is just maintain the position, and I am for one, that this Government what I am going to do. ought to continue the policy of charging only a very nominal rate Mr. SMITH of Michigan. I would be glad· to hand it to the for the transportation and handling of newspapers, magazines, Senator except I wish to call attention to the fact that 71 per and other publications that really represent intelligence and cent of' the Drygoods Journal is advertising, but there are news, then we must separate the business enterprises that I have scores of journals, like the Furniture Manufacturer and Artisan, enumerated, and many more that infest the country, from this of Grand apids, Mich., 42.39 per cent of which is advertising, policy. How can you do it? Some Senator may suggest that and so on. every one of these papers, daily, weekly, and monthly, contains Mr. HARDWICK. There can be no question between the reading matter as well as news matter, and th tit is impossible Senator and myself about that. Of course, I used an extreme to separate the two for rate-making purposes. I say you can illustration. I have the table here now. I am going to show the do it, and I say it on the authority of the Post Office Depart· Senator what that is, as long as the Senator raised the question, ment, because that department has done it with a foot rule. and if the Senator from Mjchigan has not raised it himself he You can take a rule and you can measure column after column will be astounded to know how the second-class mail privilege and page after page of space in these publications, and you can is being abused along that line. tell when you get through how many inches of space in each Mr. SMITH of Michigan. I am no apologist for the present paper, magazine, or journal have been devoted to advertising system. I found it when I came, and it has been maintained ever matter and how much has been devoted to reading matter. since, not by my vote but in spite if it. When you average that through enough issues, then you can Mr. HARDWICK. And we ought to do all we can to remedy get a stable and reliable balance ; and that is just how the fig. it. ures which I have quoted and put into the RECORD were obtained. Mr. SIDELDS. I desire to ask the Senator what is the nature Well, then what? Where are we then? I say keep your of the circulation of the class of-publications he is now referring present rate, low as it is, nominal and no more, representing to? A.re they general throughout the United States or at least something like one-eighth or even, if the Senator from .Massa in several States? chusetts [Mr. WEEKs] should be right, one-fourth of the cost Mr. HARDWICK. Oh, yes; trade journals like that are sent of rendering the service, for all of these newspapers, magazines, to every important city in the country. So it is with the mining and other publications, or for so much of them as are really journals; so it is with the LlJ.mberman's Journal; so it is with carrying out the purpose for which this policy was created and every one of these journals de-..wted to certain special lipes of is maintained; in other words, allow the present flat rate of 1 industry or business. c~n~ per pound or fraction thereof to be kept on all the reading LV-407 6414 CONGRESSIONAL RECORD-SENATE. AUGUST 29, and educational matter; but when it comes to the advertising tion between the two. These men have always made such specious part of each one of thes~ publications, whether it is daily, contentions as these, suggested by their self-interest. I remind whether it is weekly, or whether it is monthly, whether it is the Senator-that at the same- time the rates on second-class mat a trade journal or whether it is a religious journal-because if ter were lowered so were the rates on first-class matter; and it is it is a religious journal and carries advertisements to tllat just as reasonable, and far more reasonable, to conclude that the extent it is a business proposition, and the same is true as well reduction in the rate that we charge on letters· induced the fn of the trade journal and of the daily or weekly paper-as to crease in the volume of the first-cia ss mail and the increase in each .one of these papers apply a higher rate for handling the postal revenue'3. That is the contention advanced everywhere advertising matter, a rate that in the end, if we are honest by the postal authorities,_ and no postal authority who is disin men and good business men, will produce what it costs the terested ever paid any serious attention to any such theory as Government to render the service, so that no man, whether he these publishers now auvance in their own interest, and as they is running a daily or a weekly or a monthly newspaper, a maga have advanced for some time in their own interest, 1n respect _zine or other publication, whether his publication is religious, to this particular matter. whether it is a farm journal, or whether it is a trade journal, Mr. BRADY. Mr. President-- or whether it is a magazine of fiction, shall be permitted to put The PRESIDING OFFICER. Does the Senator from Georgia his hands into the Public Treasury and to take out of it the yield to the Senator from Idaho? money that belongs to the people of the United States and which Mr. « ' 1917 .. CONGRESSIONAL RECORD-SENATE. 6415 only the overhead charges but the distance that we transport strong argument on this question ·said that these papers would the merchandise. not be able to survive if the rates were doubled. So they would l\Ir. JONES of.a New l\fexico. Mr. President-- not, unless their advertising rates "\\ere increased. The pub The PRESIDING OFFICER. Does the Senator from Georgia lishers of this country complain plaintively, continuou~ly, and :yield to the Senator fL·om New 1\IexicQ? peJ.·sistently to this body and to the other House of· Congress Mr. HARDWICK. I yield to the Seriator. that no action wiJ:h respect to these matters ought to I.Je taken, 1.\Ir. JONES of New Mexico. The Senator, I presume, has even though they admit the grieYous injustice that has been the same information as some of the rest of us, that newspapers done and is being done to the Public Treasury and to the people and periodicals coultl not exist were it not for the advertise of this country by existing law, because they say they haye ment ''hich they carry; that from the advertisements they ob already suffered so much from the increased price cJf print tain tbeiL· chief revenue; and if you do anything to discourage paper that this is no time to require any further exactions of advertising and carrying that through the mail, would you them. not necessarily increa e the cost of information and intelligence Mr. SMOOT. 1\fr. President-- to the public? The PRESIDING OFFICER. Does the Senator from Georgia 1.\Ir. HARDWICK. I will be very glad to do so. . I intenll to yield to the Senator from Utah? address myself to that subject presently; but, of course, it is 1\Ir. HARDWICK. I yield to the Senator, of course. not directly related to this question, and, if the Senator will l\Ir. SMOOT. Does not the Senator believe that it would be pn rdon me, !-will come to it in a few minutes. much fairer if his amendment provided that its provisions should 1\lr . .TONES of New l\Iexico. Very :well. take effect a year later than the date he has named?- 1\.'Ir. HARDWICK. Now, bearing these general principles in 1\fr. HARDWICK. A year later than December, 1917? mind, the officers of the Post Office Department, the .experts Mr. SMOOT. Yes; say, on December 31, 1918. Would not who have been engaged for months on this labor, have finally that be very much fairer? Then the successive steps of · in prepared at my request an amendment which Je intend to pro crease- pose, if the Senate gives me the opportunity to do it by rejecting -Mr. HARDWICK. 'Vould be postponed a year, of course. the amendment of the Senator from Tennessee, as an alt~rna 1\fr. Sl\IOOT. They would be postponed a year. . tive to that amendment; and I hope the Senator from Tennessee Mr. HARDWICK. I thought about that, and so did the de will be able to accept it because if he really earnestly wants to partment, but we did not think it right to ask-to defer the plan accomplish what he has expressed himself to-day on this floor that long, because the increase in the first year is hardly as and yesterday as favoring, he will certainly support a logical much as the committee's proposal, as I will show later'; -in othet· and general application of this principle. You must remember words, the first step in the increase is so small that the pub that the House of Representatives in dealing with this question lishers can meet it without the slightest trouble. dealt' \vith it from the basis of a zone rate, buf they applied 1\Ir. McKELLAR. Mr. President, I was just going to ask the the zone rates to reading matter as well as to advertising Senator if he would give us the figures as to the revenue that mntter, to the educational side as well as to the business side of would be raised under ills proposal. · this question, and in that way rendered it difficult if not im 1\Ir. HARDWICK. I will do that in a few moments. I desire possible for periodicals that carry very little advertising and now to give a short explanation of the amendment. It leaves that are almost wholly educational, like the religious journals all reading matter at a flat rate of 1 cent a pound or fraction and some of the great weekly and motithly periodicals, to cir thereof, .regardless of distance. Any man in this country who · culate from one end of this country to the other without a pro wants to run a paper purely educational, purely religious, hibitiYe increase in postal rates. · purely news matter, can send it to the remotest corner of the Now, here is the proposition which I hope the Senator ·from Republic for this purely nominal rate, if he keeps it entit~ely Tenne see will be able to accept, but wbich in any event I in that sort of a paper. The Senator from New Mexico suggests tend to offer, if I get the opportunity, as an alternative to the that he can not do it without advertisements and run the paper. proposal he has made. Substitute for the amendment proposed Granted ; but to the extent that he perverts the original pur by the committee for section 1101 the following: pose, to the extent that he combines the business end of his That the rates of postage on publications entered as second-class enterprise with the public purpose that is to be served, to that matter. including sample copies to trJ.e extent of 10 per cent of the extent at least he ought to be made to pay what it costs the weight of copies mailed to subscribers during the calendar year, when sent by the publisher thereof from the office of publication or when sent Government to handle his business, and I am sure the Senator by a news agent to actual subscribers therefor- himself must think so. Now, let us see. The amendment then provides zone rates on advertising m;:ttter on a graduated scale All this is a repetition of the existing law and regulations over a period of four years. The basis of the zone rates is the or to ~ther news agents for the purpose of sale, shall be 1 cent a pound or a fraction thereof for the proportion of the publication devoted to difference in each case between the present rate of 1 cent per reading matter other than advertising, and for that portion devoted to pound and the ,_Parcel-post rates for the respective zones. This advertising the rate per pound or fraction of 1 pound for the delivery is worked out in: the same way that the parcel-post rates were within the several zones applicable to fourth·class mall shall be as follows : From December 1, 1917__:. worked out, and based exactly on the same· computations and plan, and covers practically only the transportation charges ; It "\Vould be impracticable for t"he department. to begin to ad in this latter respect only the plan differs from that employed just it elf to this plan at an-earlier ·date than that, ~nd t do ~ot in the parcel-post rates. know bow much earlier than that this bill will pass- The Senator from Massachusetts and the Senator from Utah From December 1, 1917, to June 30, ·1918,· for the first and seco~d zones 1 cent- lay great-stress upon the extravagant estimates of the loss frow That is on advertising matter as well as on reading matter, second-class matter made by the present administration of the within a distance of 150 miles from the post office of entry, and Post Office Department, and, for that matter, they might just surely that is liberal enough for every local publication in this as well :n.a ve said by all-other aclministra tions of the weekly, or monthly, that are largely made up Qf advertising, Mr. PAGE. Can the Senator not go further and say the have no btt.. engaged in making money out of advertising as- much as any .. Mr. McKELLAR. Mr. President, I will just say to the Sen body else. If the Senator undertook to say that he would make . ~tor that I have the figures from the, Post Office Department an exception in favor of religious papers that did not carry showing that it will be an increase of $12,600,000. advertising, in fayor of farm journals that did not make a profit Mr. HARDWICK. An increase of that much? out of the advertising business, just as much as anybody else, 1\lr. McKELLAR. An increase of $12,600,000. then I could understand it. Mr. HARDWICK. I ·misunderstood the Senator, then. · Mr. McKELLAR. Mr. President, " ·ill the Senator yield to me Mr. McKELLAR. Why, of course. for a moment further? Mr. HARDWICK. I thought the Senat01~ said it would rnise l\Ir. HARDWICK. I yield, with pleasure. that much. I asked him what it would raise. Mr. McKELLAR. The necessary and absolute result of the l\Ir. McKELLAR. Oh, no; it will raise twelve million six Senator's proposition, if his amendment is adopted, is to say to hundred and some odd thousand dollars in addition, which is the publi hers of this country who publish journals with no ad a great deal more than the Senator's amendment would raise. ::rertising connected with them: "You shall be exempt from any Mr. HARDWICK. I That i:t is pmcticable- tO> increase- thil subscriptron na. te:s. i sfiown by: that they. have• lreuped. Gn me has been. the- fact that for-.t-wo: oi· tfu! fact· that a. larg.e- percentage &f magazines ha:ve- alJ:eaey inex:ea:sed theiL· subscription rates. and, others are- prepaPing to do sq, _a-s is slwwn three years I have been waging this figfit. The time has come by the following letter recently sent out by one publication accom when public men nre no longer to. be intimidated or bulldozed by panied by ru Cli.IIDing published several months ag01 in one of the l:rrge these publ.isheFs. The tinre has come, the hour struck, whel} the dailies: · peopre of the United S'tate · must Irnow the truth is- the.se arro [Woman'. Home Compani~n. The Crowell Publishing Co., 3 1 Fourth Ave.re, Ne.w York.] • gant people are common. grafters. With an arrogan{?e that • FINAL NOTICE OF PRI,CE INCRE.A.SE. shames a democracy, they assume to control men, to make and DEAR SunscR.IBER: Right now is your: last ehanee to ave fl:om $ll to mnnake admim trations and cabinets, to exercise- all sorts of !$3".GO on your renewal subscription to the Woman's Home Companion. despotic and arbitrary power, and to mold, by the- mere force: On June 1 th~ presentr l~mg-term. subscription rates and low rntes of iteration, "public sentiment and opinion, anti especially if any... with other· magazines will positively be withdrawn. Isn't it true:--that in SI!i:te of the greatly increased cost of ~aper stock one undertakes to lay a finger,.s weight upon their bounty. So and of everything el e. involved in ma.ga..zin.e manufacture, isn t it true- long as they are right, so long as their arguments or statements that you m-e getting rn bigger and betteD and! finer Companinn. than you are ba.sed on truth, I do not object; but when tlley begin to echo ever got b-cfo:r . ? And you will continue- to get a still bigger and.. better and finer Com with parrotlike unanimity exactly tile same sentiments nbout panion each month to come. This the editors and publishers guaran every question that ~omes- up, people begin to wonder who e tee, eve:n though, in order to do so, they mu-st get" more for the maga sentiment they are e>:q>re sing. and to ask themselves whether zine. Here are the most important savings, if you renew now, before they are not, with a few honorable and notable excepUons, all June 1: tarred with the same stick, alL fed from the same crib, all paict Woman's Home Companion• (two-year subscl!fptlonJ, until J'tme 1, by the same nwstet. $2 ; saves you $1 (yearly price, $1.50). Woman's Home Companion and the American Magazine (one year JUr. HARDWICK Mr. President, I did not intend to make each), until June 1, 2 ; saves you· $1:. nny more extended rem-arks about thls mat ter, and yet I think Woman's Home Companion.. and the American Magazine and Every it wOuld be utterly unjust to the Senate, as well as unfair to Week (one year each), until June 1, $2.25; saves you. $1.75. If you wish othe.r magazines with your Companion, the large. amimnts the Post Office Department, if I did not submit to the S'enate you can save by ordering before June 1 are shown on the inclosed price tile reply of the Post:nutster General to the facts and figures list. and brief of the Southeastern Publishers,. Association. upon Here is one instftnce where " rising- prices " will not affect you ff you act now. Your special acceptance blank is on the back of this letter. which is predieated th.e argument of the Senator from Tennessee Mails are often delayed these days, so take no chances. Mail it to-day. [Mr. SHIELDs], and from which comes the amendment of the Cordially, yours, juniot• Senator from Tennessee [1\lr; l\IcKii:LLA.RJ. DA. VID BLA.m. Before I do- so, let me say that it will be impossibTe for me to P. S.-No matter when your present subscritJtion to Woman's Home Companion expires, even though it is many months from now, you call' vote for the amendment of the Senator from Tenne see for the take advantage of this " last cbance " offe.r and arrange forc your renewal reason that, although it is somewhat better- than existing law, at the present low prices. Your new subscription will begin at the when the proposition is boiled down it means no more or less expiration of your present one. and the saving is wo.rth while. than that the newspapers who are partners in this subsidy pronose to leave every one- of the other partners· in it with [Newspaper clipping.] the bag to hold and get out themselves. That is what it means. "MAGAzr ' E Fonc~o~·~ ~~~.!!~: ~~~::;;-:t;1~~~£s~~nrL'fsE 11AI.9x m It is- no more than that and no less than that, and' I can "The mngazines as well as the newspapers have been. hit hard by the prove it. immensely increased cost of white paper and other materials necessary Of eourse-, if not only the newspapers but oti'I.er- periodicals to printing and art work. Announcement was made yesterday that are all getting a bounty or subsidy from the Government, it man:v periodicals have been fo.rced to raise their priees. h b · th "The M~>tropolitan will jump from $L50 to $2 a year, Vogue from mig t e satd at if we- can not take the bounty away from all $4 to $51 Country Life from $4. to $5, McClure's from.: $1 to $1.50, Cos- of' them at one time we ought to take it awu~ from as many mopolitan from $1.65 to $2.20" Nautilus fronr $.!..10 to $:1:.60,. Hearst's ' of. them as we can ; out, someliow or· otrlel·, the proposition- does from $1.65 to $2.20, Photoplay from $1 to $1.20,. Journal o.f Education. not apnear to me- a.."! inherently J'ust and' fair to Ieave the news- from $1.75 to $1.85. Outlook from $2.75 to $3.35. ~: "This is but a partial list of the magazines that have of necessity pa-pers with· their subsidy and take it away from everybody else. been compelled to inCrease their subscription price a.s well as the- single- · I wt'sh my -~'"-I· ends wh"'- m· ·~ et'gh so eloquently agam·st subst'ilinc!. • 1 ... ,. f th ha h d t this ti t ir . ~ . \7 ~ . 1ssue pr ce. .luany o em ve a a me o renew the con- ~r.a t th ·· 1 · t · t 11 •t b ~.11: ·. • • • . CT • =~ tracts !or paper, and so were obliged to meet the extreme expellse- in eow.' se eu ance m res agilli1s a 1 s en\::llctanes, a,am~~. the only way possible. Those of the magazines fortunate enough br aU the bounty tak~rs, whether they happen to De newspapers ha-.e longer contracts are safe enough for the time being; but. they: 1 published in Tenne see> or Georgia or mngazines published in realize that sometliing wiD have to be done in· the neaD future. . 1\.r y k B ' h l . b r . . " Nearly 100 newspapers in the United States h:ave bad to raise- prices. ' .~..,-ew or or- oston or somew ere e: se' ut suppose Lt IS. ex- and have notified their readei:s- that the increa·se will go into effect with· : pecting almost too much of human nature to think that at one the new year. Most o~ the newspapers of th': country are now making eff'ort we can g 1\lr. SHIELDS. Mr. President, I am sure the Senator does a ton, for a 30-foot car. Although the department has not completed not wish to misquote me. a recent ascertainment of these averages, they are believed to be · sub - 1\Ir. HA.RD,VICK. No; certainly not. I listeneu to the Sen stantially the same under present conditions- . ator very carefully, and I thought that was his contention. That means under the experimental h·ial of the space sy tern 1\Ir. SHIELDS. - l\Iy contention was that only 48 per cent wns instead of the weight system. The department continues : that, and 'that there was 52 per cent left for payment of over- The ~verage weight of mails carried 'jp the GO-foot storage car was head charges. , ascertamed to be 14,516 pounds, but newspaper mail is not generally carried in such cars. These avel'ages will no doubt' be ~omewhat modi 1\lr. HARDWICK. Yes; that 52 cents, or one-half of 1 cent fied in the new ascertainment, and it is believed that where bulky per pound, was the overhead charges. That was the Senator's parcel-post matter is now c.arrled in greater proportion than the heavier contention? • fourth-class matter in former years the average weight per car will be rather reduced than increased. A consideration of these figures will 1\lr. SHIELDS. That 48 cents was for the haul and G2 cents show po~ complet~ly e1·rone~ms is the assumption that 12,000 t)ounds was left to pay the overhead charges. of mall IS carried rn a working or distributing car, and it must be re 1\Ir. HARDWICK. In other words, that the overhenu charges membered that it !s in this class of cars that newspapers are mainly carried. It follows, of t:ourse, thll"t the estimate of cost per pound of these new papers in the zone specified by the Senator amount based upon 12,000 pounds to the car is very much too low- to fifty-two one-hundredths of 1 cent per pound? · l\Ir. SHIELDS. No; 52 cent's per hundred pounds. And those were the estimates that the Senator from Tennes ee l\.lr. HARDWICK. Well, that is fifty-two one-hundl·edths of gave the Senate this morning. The department continues: a cent a pound, I think. That is what I said. The fallacy of the conclusion that $1 per h~ndred pounds is ample to pay the cost of railroad transportation and leave a surplus for Mr. SHIELDS. The other is the easier way to put it. handling charge- 1\Ir. HARDWICK. It is the same thing. I haye the other figures calculated on a pound basis. Now, that statement is And that was the contention of·the Senator from Tennessee not substantially or materially different from the one I have is further shown by a consideration of some general unit cost figures. The department has made an ascertainment of the cost of railroad ju t made, because that amounts to nothing, practically. transportation alone, exclusive af the cost of railway post-office cn rs, Let us see, however. I do not a k the Senator nor the Senate per ton-mile for all mail and equlpment carried on the ·railroads for the nor the public to take any opinion of mine with re pect to any year 1916. This cost is 7.28 cents pzr ton per mile for all hauls. On this basif. of these matters, becau e, of course, neither myself nor the Sen ~We~ost of carrying 100 pounds of newspapers the average haul of 25o ator from Tennessee has any information of our own that is e pecially important or in the least valuable to either the Senate By the way, that was found to be an average haul of the news or the country on this question. The Senator from Tennessee paperN of the country by the Hughes Commission. Two hun gets his information from this press association and from the dred and fifty-fiye miles is the average haul for newspaper - argument and papers prepared by it. lr·. SHIELDS. l\lr. Pre i 1\lr. HARDWICK . . 'Veil, I belie.>e the Senator is mistaken 1\.Ir: Sl\ITTH of Georgia. Then we agree entirely. about having ever seen any such proposition. I would be' glad to Mr. HARDWICK. All right. ha\·e tile ~enator produce it. · l\Ir . .SMITH of Georgia. I thought you meant that a news 1\lr. SMITH of Georgia. They were Government contracts paper that had business a part going 255 miles distance, a part and Utey are not here. of it 10 ~piles, a part of it 50 miles, would pay an average of 1\Ir. HARDWICK. The Senator is in error, th.at is all. 93 cents .on each pound hauled. l\Ir. Sl\IITH of Georgia. I am not. 1\Ir. HARDWICK. Of course my colleague understands it as l\Ir. HARDWICK. The Senator is in error. well as I do. Nothing in the world except .the law of averages Mr. Sl\iiTH of Georgia. I say I ani not. can be applied to that service. - l\Ir. HARDWICK. I believe you are. I have not the slightest l\:Ir. SMITH of Georgia. Then is the average to which they doubt of it, either. refer the average cost for 255 miles or the ave1:age cost for less lr. SMITH of Georgia. Neither have I that I am right. than that distance, going up to that? l\Ir. HARDWICK. You must remember that you are not mak- 1\fr. HARDWICK. The co~ of carrying 100 pounds· of news ing the statement from the record, but from your memory. papers the average haul of 255 miles would be 93 cent~. That Mr. Sl\IITH of Georgia. I had tbe record then and saw it. is plain enough, it looks to me. l\Ir. HARDWICK. Here is the record now. 1\Ir. SMITH of Georgia. That is practically what I tllought 1\Tt-. SMITH of Georgia. I say the record at that time it was. The average haul when they were on a fiat rate 'vas a showed it. little less than 1 cEnt for something over 200 miles. l\1r. HARDWICK. This is the department record. There 1\fr. HARDWICK. Two hundred and fifty-five miles. can be no dispute about it. l\Ir. SMITH of Georgia. It was a little less than a cent a l\1r. SMITH of Georgia. What I said was that the cost figures pound for 200 miles when we studied it four years ago. four years ago furnished by the department showed second Mr. HARDWICK. That is not much of a discrepancy. class mail costing a little less than a cent a pound for 200 miles. Mr. SMITH of Georgia. Not much. 1\Ir. HARDWICK. 1 again say I think the Senator must be l\lr. HARDWICK. It is pretty much the same thing. So tl.Jat in error. corroborates rather than contradicts the statement I present. l\Ir. McKELLAR. l\lr . .President-- Mr. Sl\llTH of Georgia. I have no doubt that is righl; uncl The PRESIDENT pro tempore. Does the Senator from I ha>e no doubt I wns right when I said the e'ridence furnished Georgia yield to the Senator from Tennessee? four years ago was that it cost nearly a cent a pound for 200 1\lr. HARDWICK. I do. · miles. · l\lr. McKELLAR. Does the Senator know of his own knowl l\fr. HAHDWICK. That depends on what you mean by eugc who prepared that table? nearly-on how much margin is covered by that. word. l\Ir. HARDWICK. I do, and I will be glad to give the Sena Mr. Si\ITTH of Georgia. l\Iy recollection is that for nbnu t 210 tor the information. It was prepared by l\fr. Stewart, an ex miles it cost a cent a pounu, and my cost was greater than even pert of the department, at the personal request of the Post the cost :ron are presenting no\v. ma ter General, l\Ir. Burleson, and was by l\Ir. Stewart brought l\Ir. HARDWICK. What I am presenting is the cost figured to me with a statement that the Postma ter General had asked out by this expert. It may have been · reduce(]. him to bring it to me. l\1r. SMITH of Georgia. I knew it had been reduced. l\fr. McKELLAR. It is not signed by anybody. . l\Ir. HARDWICK. It may have been reduced a little. The hlr. HARDWICK. I do not think the Senator wjll impute--· economy of the department- may have reduced it a little, and l\Ir. McKELLAR. Oh, no. that may account for whatever discrepancy there is between the l\lr. HARDWICK. I told the Senator where I got it, and he figures of the state~ent and those referred to from memory by lmows it to be true as I have stated it. · my colleague. . l\Ir. McKELLAR. I have not the slightest doubt in lhe world Mr. Sl\UTH of Georgia. I intended to state that I knew it hut that some derk in the Post Office Department prepared those had been reuuceLl below the point it then stood at. figures and submitted-them. Mr. HARDWICK. Let u see; the statement continues: 1\fr. HARDWICK. The Senator i~ ab olutely w-rong, as he is Furthermore, the e figures do not cover the cost of the full r!lilway about most of these things. He knows nothing whatever about post-office cars- . it. The figures came .from the very best 'expert the Government No allowance is made for that- ever had on this question, and they were made at the request of which m 191G was over S4.000.000, anu unuer the old system was figured the Postmaster General and were sent to me at the request of in as a part of the handling charge-- the Postmaster General. I do not wonder that the Senator A.nd properly so, let me interpolate, of course. These rail squirms because it destroys his newspaper-made figures. It puts way mail curs carry these newspapers, a.nd the 'newspaper~ ought a Senator who is crusading against bounties and subsidies in to pay some part of the expense of the use of the cars- rather an awkward position. Neither do they cover the cost of any other means of transpol'tation 1\Ir. McKELLAR. I will say, if the Senator ''ill permit an than the mere haulage on the railroad. . The cost of other tran!' porta interruption, that the amendment I offer takes some of the tion has been estimated by the department to be-- bountie away on the Senator's own figures. That is, where they actually rendered it- l\lr. HARDWICK. Not a bit of it. I will answer the Senator 6.7 mills per pound- on tbnt. A. very low figure- .Mt·. SMITH of Georgia. Let me ask the Senator if the average As before mentioned, the papet· pt·actically ignot·es tbe cost of han charge on newspapers is 93 cents for 256 miles, the haul being dling and overhead charges, which has been estimated by the department 266 miles, they must go up to something like a cent a.nd a half. to be 3.86 cents per pound on the average for all second-class mall Mr. HARDWICK. No; for 300 miles it goes to $1.09. matter. l\lr. Sl\IITH of Georgia. I atn trying to draw a distinction Mr. SHIELDS. Mr. President-- between tlte average price and the total price for 200 miles. Mr. HARDWICK.. I yield to the Senator. What is the average rate for 200 miles or 250 miles? Mr. SHIELDS. That is, one and eighty-six one-hundredths ~Ir. HAHDWICK. Let me read again exactly what the.expert per pound more than was estimated when the Hughes report was say , so that the Senator can draw Ws own <;onclusion: made. I see in that report it was estimated that handling and The There are many minot• errors of statement and conclusion in the paper 1\Ir. HARDWICK. The Senator may dispute them if be 1 but, as they mostly appear t()J be secondary to the maln assumptiow likes. which have been analyzed and refuted, it would eem unnecesSlll1y to · J.\.fr. SHIELDS. As to the deficit, they are estimating it here mention them. · one at $72,000,000 and· the other at $100,000,000. There does not 1\Ir. President, so the issue is, when it i under tood. when seem to be anything accurate and certain coming .from the stripped before this body- and the country, the only merit of Po t Office Depnrtment about this matter. It has been the the proposal of the Senator from Tenne see is that he, inveigh greatest trouble I have had in investigating it. I could not get ing against bounty, against special privilege, against bounty two reports that made the same statement. grabbers and Treasury looters, wants to stop some of them-not 1\Ir. HARDWICK. That is be<>ause different men have made all of them. Of course, so far as he stops any of them. it different reports,.but I doubt if the Senator can show very many is better than what is happening under existing law, but for one different estimates as to the amount of the deficit, coming from I am opposed to any halfway measures about this thing. If the Post Office Department. The estimate of l\Ir. Stewart, this business is wrong, as the Senator from Tennessee contends, the expert who prepared this statement, was $72,000,000, and it is just as wrong when the newspapers benefit as it is when the the Senator will find on examining the hea.l'ings before the magazines benefit. We ought not to draw any line between them Senate Finance Committee he shows how he rnived at that or make any discrimination lletween them that is not based on :figure. the facts or on what the service costs. Mr. McKELLAR. Mr. Pre ident-- Iri that respect I submit to both Senators from Tennessee 1\lr. HARDWICK. I yield to the Senator from Tennessee. that instead of taking the figures and the conclusions drawn 1\Ir. McKELLAR. Is 1\lr. Stewart an employee of the Gov- from figures by these puhlishers, who have a selfish pecuniary ernment? interest in it, it would be much safer and much wiser and much Mr. HARDWICK. Undoubtedly. He was Second As istant better for us to take the estimates of the Government officials, Postmaster General for many years. who are impartial about this matter and have no selfish motive. ~Ir. McKELLAR. I know that. of any kind involved in i£. Mr. HARDWICK. He has been in the Postal Service for Mr. SHIELDS. 1\fr. President-- many years. l\1r. HARDWICK. I yield to the S~nator from Tenne see. Mr. McKELLAR. Sometime ago the Senator will recall that l\1r. SHIELDS. I know the Senator will remember that in my 1\fr. Stewart was-I do not know how to express it other than discussion of this matter ·I asked no favors for the daily news· to say that he was let out of the service of the Government and papers, but my contention was that they paid full value for the another gentleman was put in his place as Second Assistant service rendered, if not a little more, and the Senator's state· Postmaster General. ment that I would give to the newspapers the bounties they re· 1\fr. HARDWICK. . Then he was made a special assistant. I ceive is wholly beside the question, because I did not ask that do not know his precise designation. He is, I think, special they be granted any bounties. assistant of the Postmaster General assigned to the Post Office 1\Ir. HARDWICK. I think the amendment of the Senator from Department. He is the gentleman who prepares the statements Tennessee [1\fr. McKELLAB.] does, Senator. for the Po t Office Department with respect to all these matters, Mr. SHIELDS. That is a different thing. If I am wrong and with respect to matters before the Interstate Commerce in my estimate-- Commission relating to the mails and the Postal Service; and :1\Ir. HARDWICK.. Tbe department says you are- let me say to, the junior Senator from Tennessee that hP is the 1\fr. SHIELDS. And they do not pay for the service rendered greatest expert, in my opinion, this Government has ever had and they are ~etting some bounty; while I am not intere ted in fu regard to matters of this sort. . any newspaper nor close to any man in the way of relationship l\fr. Mch..'"ELLAR. · I was informed by Mr. Koons that Mr. who is, I feel authorized to say on this floor for the new papers Ste\vart was probably the man who ha,d prepared the nmend of our country-in Georgia, in Tennessee, throughout the great ment whieh r have introduced anct which was first introduced Mississippi Valley and the West, all, I might say, of that class out· by Judge 1\IooN in the H·ouse. side of the metropolitan papers-if the Post Office Department Mr. HA.RT>WICK. Undoubtedly he might have done so, at will make a careful calculation and estimate a correct cost of Judge MooN's request; I have no way of knowing; I never made transportation of papers they would be glad to pay it. the inquiry ; but, however, this amendment of yours was first Mr. HARDWICK. And be willing to pay 't introduced by Judge MooN in the House7 Mr. SHIELDS. They are not asking any bounty. They be Mr. McKELLAR. By Judge MooN in the House:. lieve they are paying full value, and they are willing to pay it. 1\fr. HARDWICK. All right. 1\Ir. HARDWICK. I am very glad to hear the Senator say 1\lr. McKELLAR. In the Sixty-fourtli. Congres. that. Does the Senator say that by authority of the newspapers?. Mr. HARDWICK. This statement proceeds: 1\fr. SHIELDS. No. As before mentioned, the paper practically ignores the cost of handling Mr. HARDWICK. That is merely your opinion? and overhead· charges, which has been estimated by the department to be 1\fr. SHIELDS. That is my opinion. 3.&6 cents per poood on tbe an•rage for all seeond-clas mail matter. Mr. HARDWICK. Then, eventually the Senator will learn Apparently an ell'«trt is made to prove that newspapers are not charge able with any handling cost, but the mistake of this must be evident to that justice to the Treasury and to the people of the United anyone familiar with the mail service. As a matter of fact, newspapers States will require that these rates be raised as to newspapers which go into the mails are given preferred treatment in post offices and as well as to magazines, and my friend from Tennes ee will adopt in the postal cars They are hauled substantially with as much expedi tion as first-class mail matter. The paper describes the receipt and that course, but when he does I predict he will have to part com· delivery of certain newspaper matter as typical of all, but 1t is apparent pany with his newspaper friends, who will be found, then as nows that a description has been given of the handling of what is' generally standing by their pocketbooks. known as outside mail, or outside packages which are made up and banded to thE' railroad employees and merely put off the train when 1\Ir. McKELLAR. If the Senator will yield, that has been reaching the stagon of destination. This constitutes a very small part exactly the course that has been, pursued and contended before of newspaper mail matter. Furthermore, it may be that the writers of here by this Senator from Tennessee from the very beginning. this paper have confused with the mail service the practice cf n<'ws paper publishers of handling their mail matter on trains wholly outside 1\Ir. HARDWICK. I am perfectly willing to credit the junior of the· mall service. It must be understood that all such newspaper Senator from Tenne i'ee, for whom I always have high regarll, matter can not be considered at all, as it does not enter the mail serv with the same honorable intention. I never for a m{)ment ice. The Government receives no postage from it and therefore it Js not chargeablE' with any cost and is never considexed by the department thought ot.herwise; yet I do say that both Senators from Ten· in ma~ing estimates of costs. . nessee and every other Senator who supports this propo ition is • The writers of the paper also argue that newspapers are not charge wrong. r thi'nk I might have voted for it myself if you had not able with the cost of rurnl free delivery, because, as they claim,. i! the newspapers were not sent on rural routes, the department could not put in it an amendment that exempts from its terms several discontinue any service or diminish the expense. This argument ignores classes of publications; a proposition I can never support in any the fundamental principle of cost keeping, viz, that all functions should kind of legislation. But let no Senator deceive himself; when he be charged with their proportionate share or exl}ense in which they participate- votes for this proposal he will, in effect, have continued to give a subsidy of a good many million dollars a year to the news·· And, I wni add, from which they benefit- papers of the couQtry . .· On the theory of tbe writers· of the paper, all the magazines could ll.kewlse make similar claim that they should not be charged wtlh any · 1\Ir. Sl\llTH of Georgia. Would it interrupt the Senator if I expense. Indeed, all the other classes of mail would be entitled to the ask him a question? same- exemptions. Mr. HARDWICK. Certainly not. The writers -of the pape» make other erroneous statements in_ com paring newspapers with magazines, one of which is that the newspap rs Mr, SMITH of Georgia. Was r right in understanding the at no time require or demand extra cars or extra servic.e. The facts Senator to say that the department reported to you that the arc that extra mail trains are established out of the large cities almost overhead cost, the handling cost, was jus 7 mill. per polmd? entirely for· the benefit of newspapers. Thee ordinary mails" would not call for trains at such hours and, Wl!re it n~t for the newspaper , prob Mr. HARDWICK. No; you are not rigbtl. ably could,:. be disp.en ed wiJ h. Mr. SMITH of Georgia. I took it down. 1917. CONGRE.SSIONAL RECOllD-. SENATE. 6423 :Mr. HARD\VICK. I will let the Senator have access to these My objection to the report of the committee is that it does not figure . Tl1e particular figure my colleague now has in his regard in its increased charges the actual cost of the particular -min profits to he1'p. ~ri.ke up f0r it:his lOSS rOD the seeond-dass. 'J)OStRge. tr. :SMITH ·of·Geo.rgla. ii yield. Thut is not fair. · 1\fr. LEWIS. The -Senator from Georgia ·now speaking luts Mr. McKELLAR. On'the long haul -of 1t. entered into a very int-ere· ting' field as to the amount -of money Ir. SIDTH of Gero:gia: Wen, l say fthe loss on fue .serond that in his jUdgment· would l>e produced nnder the operation 'Cla s postage. Let ill; think about that n moment. Here nre 'Of the 'amendment of the ena.!l:or from Tenne ·see. That to me "rnr.o newspapers published in the arne city-a morntng pape1· i -a most lmportant phase of the questi{)n, ahd I think. the :Sen nd an afternoon -paper. -The morning paper may clear $10,()00 .atot· from Goorgia will' -disoover it is very important to many a · year :and the afternoon .paper may clear -$50,000 a year. I of us Who do not know the rnewspaper business as a· busines . :am ·taking a small city. The :afternoon paper cit·cnlates by· ·car May I take t:he liberty to ·:a: k the Senator if he would object Tiers in tbe dty and has practically no mailing list. It may to inel:miing in hls remarks such ·t>bservations as his knowledge upply soine surrounding ctties, but rr so, it .ships its pa-pers <>f newspaper publication. aM 'tircillation may warrant, showing rout by express in bundles for delivery t0 its own CRITiers. It~ bh.at bis statement Is nol a g'ness merely as n legislator, but 1s cost to the Government ~or tran portntion is 1SC.ru'Cely .anything. borne 'out ·bY :some p..ersonal 'experience he bas had with news It makes $50,000 n yeur. The morning paper makes $10,000 .a papers -and .the :method !by :whi'ch tbey are conducted, so .as ·to year. Tbe bulk of its issue goes out in the ·mail; it. costs the give to.ithe figtires which he ,pr-esents -u base .of ..accuracy~/ yon • 6426 CONGRESSIONAL JtECORD-SENAT~. .AUGUST 29, These things were all presented to the committee. The ·ad Mr. Sl\IITH of Georgia. Oh, (he Senator is utterly mistaken visability of establishing a zone system at all was considered. about that. The rate per pound hauled, as shown to-day, is a The argument wa':l presented that in this country of ours cent for each 275 miles; and if the haul is 3,000 miles the pay there should be no such thing as a zone system ; that even ad ment to the railroads for transportation per pound relates to vertisements are just as educational as some of the reading the haul for 275 miles as 3,000 relates to 275. matter which goes out and ·would go out under all these amend Mr. WILLIAMS. Yes; and the Government loses upon both ments with no increased postage. These things were ~ pre operations, so it makes nothing on either. sented to us. We rea1ized the difficulties in the way, and there 1\lr. JONES of New Mexico. The argument has been made fore, 1\Ir. President, instead of trying to revise the postal sys that w~ should not increase the rates within the first, seccmd, tem of the country we considered the matter from another point and third zones for the reason suggested by the Senator from of \iew entirely. · Georgia; but in any ambitious center in this country the veJ.'Y The question as to what the postal rates should be is one newspapers and periodicals published there, which to-day would which, I submit, should be considered by the Committee oil get special benefits from the suggestion of the Senator, in my Post Offices and Post Roads. The Finance Committee was opinion would be ultimately injuring their business if they arc excoriated to a considerable extent because it had dealt with ambitious to become means of' communication to the countrv this question at all. I want to say that the Finance Committee at large. It would tend to localize the information ·of tw'; has dealt with it just as tenderly as it possibly could in view country; and if there is ap.y one tp_ing we do not want to do it ·. of the bill presented to it from the House. is to localize the information of the country. We want the in· .. This bill provides that the revenues to be derived under the formation to go out all over the country, and, so far as I am con bill from postal rates shall be turned over to the General Treas concerned, I want the advertisements to go out all over the ury ; that they are not to be kept in the post-office funds, as country. According to my · notion~ they are a: great medium of other receipts from postal rates are kept. That shows that information. They weld the people of the country together. the purpose of this bill is to increase revenue for the general The people are permitted in every section of the country to purposes of the Government during this time -of war. So the know of the ne.w devices, and, among the ladies, to keep up committee, when it came to consider this question, treated it with the styles and the fashions of the country throughout the precisely as it has attempted to treat every other question, to whole Nation. try to raise revenue in a way that would cause the least possi- But these, Mr. President, were the difficulties which the ble injury to the business of this country. · . Finance Committee encountered, and it did not undertake to Every system which is proposed· here by way of amendment, solve all these problems. There are objections to every one of the one amendment or the other, if put into effect, would abso them. They are serious and strong; and so the committee un lutely destroy some of· the big business interests of the coun dertook to do something which would raise revenue but would try, and this is no time for destruction at home. . We have not injure the business interests of the country. ·- So it has pro enough desh·uction to do abroad. We want to keep up the posed to put a quarter of a cent a pound increase on the car business interests of the country. If the McKellar amendment riage of second-class matter. It has proposed, as will come. up is adopted, which establishes a zone system in a modified form, in the bill further on, a tax of 5 per cent on the net income of there is IJI)t any doubt. but that it is going to bankrupt a num these publishers, with a $4,000 exemption. That provision will ber of the publishing concerns of the country, and the same be debated when we get to it. I have received a telegram from thing may be said of the Hardw~ck amendment. So the com my own State to-day asking me to vote against this 5 per cent mittee decided that it did not want to bankrupt anybody, but tax. They evidently did not realize there was a $4,000 ex it did want to raise revenue if it could do it without injury to emption, and I do not believe there are over one or two papers anybody. For that reason, observing and realizing the com in my State that will pay anything under the 5 per cent income plexity of the probiem as presented in these amendments, the tax provision in this bill. At any rate, they will not be hurt. Finance Committee chose ·not to go into it and try to reform They ha,·e had the benefit of the maiL They can afford to do it. the postal laws of the country. It is not logical. I agree with the statements here that it is Mr. SMITH of Georgia. Mr. President, is it not true, though, not logical; but this is a time of war, when we are trying to that you put on these increased 1·ates upon the ground that make provision to carry on this Government ; when we. are try there was a loss in second-class postage ; and is it not further ing · to get revenue where it will not injure anybody ; and i'nas true that you put them where there was not a loss, a:nd did not much as these second-class matters are being carried at a loss, put them fully where there was a loss? apparently everybody agreeable to the proposition, it seems to Mr. JONES of New Mexico. Mr. President, the suggestion of me that we might go into that line of industry and obtain at the Senator carries much of merit with it; but we did realize least some revenue. that second-class postal matter was being carried at an apparent I therefore ask the Senate to vote down the McKellar amend loss, and that there seemed to be more sentiment for trying to ment, to vote down the Hardwick amendment, and then let us take do something with the second-class rates to bring them up . on up the consideration of the amendments offered by the committee. some kind of an equality, or to make them bear some part of 1\fr. 1VILLIAMS. Mr. President, there are some few things the cost of carriage. But we realized that to do that would in of which Senators and Representatives are afraid. Among these vol\e the very integrity of these enterprises; and we ascer things are- the newspapers and the magazines of the country. tained, so far as we were able to ·do, that the imposition of It Js not at all strange that Senators and Representatives should an increase of a quarter of a cent a pound upon second-class be scared by either one of them, because they have an immense matter would not materially injure or bankrupt any business influence, intellectually and morally, tand they do impress them in the country. _ selves upon the mind of the average citizen to an extent that The suggestion just made by the Senator from Georgia in one sOlitary voice, whether it be the voice ·of a Senator or a volves the question of a zone system. The Senator:s proposition Representative, can not counteract. means nothing more than that you should favor concerns send I want to appeal to the Senate, in the first place, to discuss ing their mail only one or two or three hundred miles from the this question without any cowardice, to discuss it without any place of deposit in the post office. That establishes the prin fear, and to discuss it solely from the standpoint of trying to do ciple of the zone system ; and it is my belief that if there is any justice by these people. · one thing which ought not to be done it is the establishment of Mr. President, there is nothing harder in the world than for a a zone system in this country. class of men to agree voluntarily to discontinue, even partiall~f , Mr. SMITH of Georgia. Mr. President, if those going only a subsidy or a bounty, which they have been receiving from the 200 miles do not cost the Government a cent a pound, why · general public: Of course it is \ery difficult for the newspapers should you load them down with a charge because something and for the magazines to make up their minds to discontinue else, going very much farther, costs more than a cent a pound? even partially the bounty that we ha\e been giving them. That 1\Ir. JONES of New Mexico. Mr. President, if the suggestion bounty runs all the way fi'om thirty millions to sixty millions of the Senator were carried out, I think it would be the worst per annum-depending upon the man who is calculating its possible thing for the very enterprises which he seeks to shield. amount. We have attempted to get back from them in the 1\lr. SMITH of Georgia. Mr. President, that is scarcely fair. shape of taxes fifteen millions of it-one-half of it, if it is thirty I do not seek to shield them, if the Senator will permit me. millions, and one-fourth of it, if it is sb::ty millions. T hat is all Mr. JONES of New Mex;ico. 'Veil, I withdraw that word. ·we are trying'to do. ·Mr. SMITH of Georgia. I ask that they may not be charged . You take a man out of the ordinary sphere and surfeit him and more than they are an expense to the Government. That is all feed him at the public expense a long while and of course it is' I ask. very difficult for him to conceive that it is just to deprive him of 1\ir. JONES of New 1\lexico. I will say "protect," then. his daily bread, although his ·daily bread has been given to him Mr. WILLIAMS. It costs the Government' just as much to as a free gift by the pUblic. That is exactly and literally the carry mail matter in one zone as it does in seven. case- with- these-· people. 1917. CONGRESSIONAL RECORD-SENATE. 6427) ~!r. Pre ident, . omebody in thi debate said that this Finance Mr. President, we nre, after some ineffectual e.fl"orts of my Committee provi ion mi(Tht or would be all right, but this was not ancestors to the contrary, a Nation. The great trouble with e ttmc to do it. It is preeminently the time to do it. It is pre- America to-day is that lt is not sufficiently a Nation yet. There inently the time when tlle F.'e(leral Government should try to rs a German group, a Bohemian group, a Hungarian group, an' f!<:onomiz by withdrawing ub idl and bounties to anybody, .Austrian group, a workingman' group, a capitalist group, all rur:: nny enice 'vha oe"Ver. Now, in ordinary: pence time. l sorts of groups-Inck ot harmony of purpo e and lack of unity <~elie,·e in giving a bounty to the dissemination o:f information. of thought. Here are the representntives of little papers down l do not cn.re whether the Government lo e thirty or sixty mil- in Georn1a and Tennessee and v rlous other Stat a. kinf!' that :Ion. ot dollar. ; I have been willing to lo it, bee u e all demo- ·they' shall have a zone y tern. Why? So they may lo ally era tic in .. titutions are founded upon the assumption of informa- compet with the n '" p per from the great center.•. o tlmt •Jorll aiUODg' the people, s that I have been willing alway to let they can lo alize and denationaliz · the n w . I am not a gren.t' e ~ond-cla mail rate stay where it wa..s. 1 have thought nn.tlonalis ; I never eyen spell the word "nation " with a cnpintl that it :my bounty by the ..,.en rn.l public to any particular in· "N." I ' am, rather, in tnvo~ of n whole lot of local indivi 1 r} ootinuin~ a: pn.rt of the bounty that we nrc and have b en over th St. Loui llepublie and tb Pot DL pn.t<:h, the • ·ew ng them, n part of· the subsidy that they. a~ rcceivtncr and York Het·ald and the Time , the Chicago Tribune,. nnd \Urluu v received for yenrs'-t"eceiv1ng upon the theocy' that I have otl1er papers. lu t rnted, that· it was worthl the money that it co t the Govern- I! know: it i quite natt1rnl for us to be afraid of th<> e pnpers: tnent to inform the prople. It is ab olutely an unfounded statC" I am afraid' of them· myself.' God' kno if the told the trutll' rnent that we nre trying- to do anything with: the C' people ex- about me I •oulu have an awful tim . But· I am not gofng·ta t"ept to get back a little bit of the money that we h ve been giv· act' like n co ard on this ffoor ·and let them· care me. Thut i ~·a lIn,.. them annually-gtving them, or, if you ehoo e• to e:x:pre. it ill:tr rent' propo ition. b paying to them,. upon th theory tll t they were· rendering a Anoiller thing, ..:fr. Pre Went: "Whom tbe gntls · woulfl ruin tmbllc ~rvice-it does not make :>.ny ditference hich~nl~ they fir t make mad." 9 <>w, let me t II the gentlemc>n if they •one-bulf of their hitherto gratnit , even by their calculation do not quit o tructing very p . ibl e.tl'ort that ha. b n m:ule: ?.Ir. Pre "deut, r am in fa or ot the ettlemem: whiCh the for them to pay their just and fah.. shar of taxe~ they wHl m~et' Ii'lnnn Committe ot th Senate ha · reached ~n this que - witli ruin sure enoug-h; we may conclude to· rni. · , O!Hl-cht;~ . luon ... ,.ow, what i it? It is a rai of onr.-fourthi of 1 cent pel' postage to its right rate, and when we do that at least hnlf. of I' Pon~d' on econd-cla mail matter. That i a part of it. Does them will go out of bu iness. T11ey·have 11ve •. o ::\fr. ::\IcKET.LAn'H nmentlmcnt to the nmC'uilment wns Dm·ing the em·lier weel whose repeated acts of kindness I esteem more highly than I tically e'\"erytlling they aske"d arid deemed essential to the -prose- ueed try to express. For these men, and all others situated as cution of the war. · they are, I sympathize beca:use of their special environment; ' 1\Ir. President, I even \Oted for the conscription bill, although and so, Mr. President, does every Senator here sympathize it was a hard thing for me to do. I dicl not like to force our with them; I have heard many so dealare on this floor. I do young men into the war, but I Yoted for that bill because I be not think the loyalty of these men needs defense; but, in passing, lieved that that was the only way we could raise an army of I will say that I agree with the President in his recent utterance sufficient strength to carry on the war, and I so sai ticularly affect the newspapers were under consideration hy the bnhuwe. But my C'OllNtgu R on tltP C'ommittec kuow that I en t Finance Committee. As the. bill came from the House to the all F>ueh rou:-;ideration:-; 1vi 1917. CONGR.ESSIONAL RECOR.D-SENATE. 6433 Mr. POMERENE. In view of· that explanation, I will not The PRESIDING OFFIOER. The Chair is not able to l1ear make the point of no quorum. "" the Senator from North Carolina. · l\Ir. Sil\Il\.:10NS. I a k that the Secretary may rea I .6434 CONGRESSIONAL RECORD-SENATE . -AuGUST 29, that language several times-fir t, as to domestic corporations 1\Ir. FLETCHER. 1\Iay I ·inten-upt the Senator to make an and indiYidual citizens; second, as to foreign corporations; inquiry before tbe chairman of the committee answers? and third, where the capital was increased or decreased. That The PRESIDING OFFICER. Does the Senator from North is substantially the only change made in those sections. Carolina yield to the Senator from FloTilla? 1\!r. NORRIS. Mr. President, may I ask the Senator a question? l\Ir. SIMMONS. Yes. The PRESIDING OFFICER. Does the Senator from North l\fr. FLETCHER I presumed the Senator from North Caro~ Carolina yield to the Senator from Nebraska? lina had relinquishe based on the aYerage net income for the three years 1911, 1912, Mr. Sll\IMONS. As determined by their return of net profits. and 1913 · but if those profits fall below 6 per cent, then we 1\lr. LA FOLLETTE. Yes; but are you not involved in the allow the'm an exemption of 6 per cent upon their im·ested same difficulty there, because their net profits are ascertained capital; that is to sa~·. if the deduction on account of the upon a capitalization that may be half water? normal profit is less than 6 per cent, we permit them to ha"\"e l\1r. SIMMONS. Yes; but t;he Senator, I think, does not catch 6 per cent under this amendment. the whole proposition. We first take the net profits of these rep There is also :motller provision in the bill which is of great resentative concerns during the prewar period. Then we take importance to the man whose profits during the prewar period their net profits during the taxable year, and we find the ratio were subnormal. It is that provision of the bill which relates that the one bears to the other, and find what per cent that is, to the profits of representative concerns in like business. and then we allow the concern whose capital stock the Secretary If it shall be made to appear by a taxpayer that his profits has been unable to ascertain accurately the same percentage. were subnormal during these three years as compared with the 1\Ir. LA FOLLETTE. Yes; I followed the Senator. I under profits of like business, he is then permitted to have the average stood that. earnings during these prewar years of representative concerllS :Mr. SIIDIOXS. So that the matter of capitalization does not engaged in like busine s up to the full maximum, 10 pe1· cent. seem to me to be involved there. That is to say, having shown that his profit was subnormal :Mr. LA FOLLETTE. You allow the corporation about which during this period, if the profits of average bu iness exceed 6 the Secretary of the Treasury is in doubt the same percentage per cent, he will be permitted to take the actual profits of like as was made by certain selected corporations, called Tepresenta business at any point between 6 and 10 per cent. If tile aYernge tive corporations; and the average profits of these concerns will was 7 per cent, he would have 7. If the average was 8, he be based upon the book values of their respective businesses as a woulu have 8. If the average was 9, he would have D. If 10, be basis of ascertaining the average of their profits. would have 10, but he could have no more. On the otller hand, Mr. SIMJ\IONS. Not at all. I do not understand that the if the profits for the prewar period were GO per cent or 25 per net profits of a concern are baEed at all upon capitalization cent or any per cent in excess of 10 per cent upon the actual under section 204. The.y are not based upon capitalization at capital invested, then the taxpayer would not be entitled to a all. They retm·n to the See1·etary of the Treasury their net deduction in excess of 10 per cent upon his capital actually in profits-that is, the net profits of their operations-without re vested and employed in tile business. 'Ve have sought to be gard to their capitalization, just as the net income ·of a person fair, 1\lr. President, to the man whose profits were low during is returned without reference to his capitalization. 'Ve accept these years, to the man whose profits were subnormal during their returns for the purposes of the income ta:x:, and we accept • these three years, and \\'e have sought not to permit the concern the.ir returns for the purposes of this tax. It is not a return or the indi-vidual that happened to be making a very large profit based upon capitaL It is a return based upon the net income before the war to escape taxation in exce~s of the 10 per cent growing out of the operations of that business, whether the exemption which we have allowed. capital be large or be small. - In order to make our original system "'IYOrknble with these 1\fr. LA FOLLETTE. Yes; but that net income is determined changes it becomes necessary for us to define what "in"\"ested aft~r they have paid dividends upon watered stock, and so capital" means; and '"e have adopted the House definition as to would be affecteti by whether the capitalization is fictitious or that, with some slight changes, as I indicate(} before. not. Those are, I believe, substantially the change· made in this Mr. SnDIONS. I do not think that is after they have paid amendment by the committee. any dividends. Dividends are not allowed to be deducted from Mr. LA FOLLETTE. Mr. President, before tlle Senator sits net incomes. Expen es of operation are deducted ; taxes are down I should like to make an inquiry of him. deducted; insmance is deducted; any of those elements of ex The PRESIDING OFFICER. Does the Senator from :Korth pen ·e are deducted, but they are not permitted to deduct divi Carolina yield to the Senator from 'Visconsin? dends. l\1r. Sil\IMONS. I yield to the Senator. M:r. LA FOLLETTE. I misstate(} myself in that respect. Mr. LA FOLLETTE. I understand the Senator to say that l\Ir. SIMMONS. Yes. the U.efinitions of capital upon which this per cent is to be com l\lr. LA FOLLETTE. I was not present at the meeting of the puted are the definitions which are carried in the Hou ·e bill. committee this morning. I did not get my notice in time, for Mr. SIMMONS. The Senator understand~ me correctly. some reason or other. Do I understand from this amendment Mr. LA FOLLETTE. I understood the Senator in his report that all corporations are entitled to a 10 per cent exemption? and in his opening address upon the bill to criticize quite 1\lr. SIMMONS. No; not all corporations. That is the severely those provisions of the House bill as involving the maximum. The corporation that is making more than 10 per Treasury Department in very serious embarrassments and cent is only entitled to 10 per cent deduction. complications in endeavoring to ascertain what wa real capital. 1\Ir. LA FOLLETTE. But a corporation that is making more l\Ir. Sil\!1\IONS. The Senator is right about that. I did. I than 10 per cent secures a 10 per cent exemption? will state to the Senator that to avoid as far as practicable the l\Ir. SIMMONS. If the concern is making more than 10 per dangers that I then brought to the attenion of the Senate, which cent, it is not allowed to have more than 10 per cent. If it is grew out of a situation Yery common in this country, 'vhere a making 12. per cent, we will say, or making 20 per cent, we do corporation has so-called watered stock as the re ult of prob not permit it a deduction of the 12 or t,he 20, but we onl~ per ably a fictitious valuation of its good will, trade-mark, and so mit it a deduction of the 10. That is the maximum amount that forth, the House provision attempts in very specific language it is entitled to have deducted. to provide against that. I do not know whether the House pro Mr. LA FOLLETTE, As an exemption? vision has succeeded or not ; but we have added-I n m glad the . Mr. Sll\fl\fONS. As an exemption ; yes. Senator calls my attention to the matter-an additional pro 1\Ir. LA. FOLLETTE. If a corporation is making 7 per cent, vision to the definition of the House bill, which we hope will take the exemption is 7 per cent, as I understand. care to a large extent, if not altogether, of that situation. It is Mr. SIMMONS. If it is making 7 per cent-no. tills-it follows immediately after the definition: Mr. SMITH of Georgia. Seven per cent before the war. (b) If the Secretary of the Treasury is unable satisfactorily to de Mr. SIMMONS. Yes; before the war. If the man was mak termine the average amount of the annual net income of the trade or LtlSiness during the prewar period, or the actual invested capital as of ing 7 per cent before the war, he would be entitled to 7 per cent; January 1 of the taxable year, the war profits shall be determined as if he was making 8 per cent before the war, he would be en r1rovided in subdivision (a) of section 204. titled to 8 per cent, or 9, or 10, as the case might be ; but if That is, by determining or ascertaining what were the average he was making only 6 per cent before the war, and he can show profits of repre entative concerns engaged in like busine s. We upon complaint that he was making substantially less than haYe nttempteu to leave thi · n;1atter largely with the Secretary like business, then he would be permitted to have the average of the Treasury. of like business, and whatever that average is, he is alloweu as Mr. LA FOLLETTE. If I might inquire, then, how is it ex a deduction, until it reaches 10 per cent. pected that the Secretary of the Treasury could ascertain the Mr. LA FOLLETTE. That is, if the corporation was making capitalization and the amount of water in the representative con less than 6 per cent it would fare better in that respect than a cerns that are to be taken as the standard with which the busi corporation that ~as making 7 ? ness in question is to be measured? Mr. SD\fl\IONS. Provided the corporation that was making Mr. Sil\lMONS. When we come to determine the profits of less than 6 per cent was making substantially less than the aver representative concerns for this purpose, we do not deal with age in the industry in which it is engaged. The Senator will capitalization at all, as the Senator will discover if be will turn see that that is intended to take care of the unfortunate man to that section of the amendment. \Ve simply take the net who was making an income upon his investment substantially profits as determined by their return. lower than others who were engnged in the same line of business, 1\fr. LA FOLLE'.rTE. You take the aYerage profits of repre as the result, we will say, of some misfortune, or some Yisitation sentative concerns? of Providence, as in my case, wher:. we had the floods down in 6436 CONGRESSIONAL RECORD-SENATE. AUGUST 29; 1917. my State. By reason of the enormous losses, the profits were recel.ved during the calendar yea1· P.nding December 31, Hl16, the tax herem imposed shall be that proportion of the tax basetl upon such practically nothing during tho ·e years. Now, he is entitled to £ full fiscal year. which the time from January 1, 1917, to the entl of such per cent if he actualJy made it, or he is entitled to 7 per cent if fiscal year bears to the full fiscal year. he actually made it, or 8 per cent if he actually made it, up to SEc. 204. That corporations exempt from tax under the provisions of section. 11 of Title I of the. act approved September , 1916, and 10 per cent; but if he was unfortunate, and made less than the partnerships carrying on or dotng the same busmess shall be exempt average in the IJusin€' s, then he is entitled to that average, up to from the provisions of this title and the tax impos d by this title shall not attach to i.Dcomes of partnerships derived from agriculture the 10 per cent. or from personal services. Mr. LA FOLLET'".rE. I wish to reque t that the expert for SEc. 205. That every corpora.tion having a net income of $5,000 or the committee compute, on certain corporations which I will more for the taxable year making a return under Title I of such act name, the changes that the propo ed amendment will make in of September !:!· 1916, shall for the purposes of thi title include in such return a detruled statement of the actual capital invested. the war-profits tax ''hich they will be required to pay under this Every partnership having a net income of • 5,000 or more for the new amendment. ta~able year shall render a corr:ect retUl'n of the income of the partner 1\lr. SIMMONS. I shall be very glad to have that done. ship for the taxable year, settmg forth specifically the actual capital invested and the gross incom~ for such year and the deductions herein Mr. LA FOLLETTE. I will submit to the expert a list of the after allowed. Such returns shall be rendered at the same time and in corporations upon which I Rhould like those computations made. the same manner and form as is prescribed for income-tax returns Mr. SIMMONS. Mr. President, I desire to say again that it ~nder Title I of su ch. act of September 8, 1916. In computing net mcome of a partnership for the purposes of this title there shall be is expected, as a result of these changes in the bill, that the allowed like deductio!J.,; as are allowed to individuals in sections 5 (a) amount of revenue estimated to be derived from the bill will be and 6 (a) of such act of September 8, 1916. increased in round numbers $500,000,000. Of course a consider SEC. 206: That all· ad~inistr3;tive, special, and general provi ions of law, includmg the laws m relatiOn to the assessment remission collec able part of that, though much the smaller part of it, is the tion. and refund of internal-revenue taxes not heretofore spe~!fl.cally r~sult of the increase in the rates, raising the maximum gradu repealed and not inconsistent with the provisions of this title are herebv ated rate from 50 up to 60 per cent; but the larger part of that extended and made applicable to all the provisions of this titl~> and to the tax herein imposed, and all provisions of Title I of su it act increase comes from the fact that corporations and individuals of S~pt~mber 8, _1916,. relating to returns and payment of t..:~ tax who · during the prewar period were making a supernormal therem Imposed, rncludmg penalties, are hereby made applicable to the profit, a large profit, will be entitled to this reduced exemption tax required by this title. · SEC. 207. That the Commissioner of Internal Revenue, with ,e ap on account of fixing the maximum at 10 per cent. Together the prov:d (Jf the Sec·retary of the Treasury, shall make all necessar re1fu amendments swell the additional receipts of the Government lations for c1_1rrying out th~ provisi!>ns of this title, and may eqmre from this bill from $562,000,000 to $1,060,000,000. That is the any corporation or partnership subJect to the provisions of this title to furnish him with such facts, data, and information as in his judg· additional amount that will be raised by this bill-$1,060,- ment are necessary to collect the tax provided for in this title. 000,00Q-from exces war profits, which, added to the amount , estimated to be raised under the exi ting law which we have re 1\ir. FLETCHER. I understand the situation to be that the pealed and incorporated in this, makes $1,286,000,000 which will committee has now perfected its amendment and the Senator be raised lJy thi bill from the taxes upon war profits. from Alabama [Mr. BANKHEAD] offers what has ju t been read Mr. LA FOLLETTE. Will the Senator state what propor as an amendment to the committee amendment in the nature of tion of that 'increased amount of aduitional taxation is derived a sub titute for it, and that is the pending que tion. I -· nuld from the new Lracket of 60 per cent which is auded to the war like to inquire of the Senator from Alabama if be has 1 ~ ;;ured profits provision of the bill 't out tbe reYenues that woulU be produced by his amend mel t? l\Ir. SI.l\lMONS. In round numbers, about $70,000,000. Mr. BANKHEAD. We have figured it out and we ar\! hav l\ir. BANKHEAD. Mr. President, I desire to offer an ameud ing it revised by an expert with a v1ew of presenting the 1 gures ment, which I should like to have read, printed in the RECORD, to-morrow morning definitely and in uetail. I will say, how and pending in the morning. ever, that we have no uoubt whatever that the amendment I The PRESIDING OFFICER. Without objection, the Secre have offered will raise more money t11an the revi. ed amend tary will read the amendment. ment of the Senate committee. The SECRETARY. The Senator from Alabama proposes to Mr. SIMMONS. 1\Ir. President, I send to the desk a paper strike out all of the last paragraph of section 200 from line 1 signed by 59 Senators with this preface: to line 8, inclusive, on page 12; also to strike out sections 201, We, the undersigned Senators, move that, in accordance Wl{h the 202, 203, 2~ 205, and 206 and to insert in lieu thereof the provi ·ions of Rule XXII of the Senate, debate be brought to a clo•;e upon following : the pending bill, to wit, H. R. 4280. SEC. 20J. That jn addition to the taxes under existing laws there ·hall I ask that the Secretary may read the names. be levied, assessed, collected,, and paid for each taxable year JJpon the The PRESIDING OFFICER. The Secretary will read as net income of every corporation and partnership organized, authorized, or existing under the laws of the United· States, or any State, Territory, requested. or District thereof, no matter how created or organized, excepting in The Secretary reau as follows: come derived from the buswe s of life, health, and accident insurance w. F. Kirby, F. M. Simmons, Morris Sheppard, Thomas S. combined in one policy issued on the weekly premium payment plan( a Martin, George E. Chamberlain, Duncan U. Fletcher, tax on the amount by which such net income exceeds the sum a) Claude A. Swanson H. L. Myer , John F. Shafroth, $5,000 and (b). 8 per cent of the actual capital invested, as follows: John K. ShieLds, Kenneth McKellarj Ollle M. James, Up to and including 5 per cent additional on such capital, 5 per cent. Willard Saulsbury, Peter G. Gerry, ohn B. Kendrick, From 5 per cent up to and including 10 per cent additional on such F. G. Newlands, J. C. W. Beckham, Key l:?ittman, Lee capital, 10 per cent. S. Overman, William H. Thompson, 0. W. Underwood, From 10 per cent up to and including 15 per cent additional on such Paul O, llusting, John H. Bankhead, James D. Phelan, capital, 25 per cent. Ed. S. Johnson.!? John Walter Smith, Joseph E . Rans From 15 per cent up to and including 20 per cent additional on such dell, Henry l!"'. HOllis, Atlee Pomerene, John Sharp Wil capital, 50 per cent. liams, Joe T. Robinson, J. 0. Wolcott, H. C. Lodge. Above 20 per cent additional on such cal>ital, 75 per cent. Henry F. Ashurst, W. G. Hardin;;, J. S. Frelinghuysen, Every foreign corporation and partnership, including corporations and Knute Nelson, William M. Caloer, P. J. McCumber, partnerships of the Philippine Islands and Porto Rico, shall pay for Howard Sutherland, Frederick Hale, Miles Poindexter, each taxable year a like tax upon the amount by which its net incom • Charles Curtis, LeBaron B. Colt, Thomas Sterling, P. C. received from all sources within the United States exceeds the sum of Knox, Boies Penrose, Charles L. McNary, Frank B. Kel (a) 8 per cent of the actual capital inwsted and used or employed in logg, Harry S. New, C. S. Page, B. M. Fernald, Charles the business in the United States, and (b) that proportion of $5,000 E. •.rownsend, W. P . Dillingham James E. Watson, which the entire actual capital invested and used or employed in the John W . Weeks, E. D. Smith, G. Hitchcock, Robert business in the United States bears to the entire actual capital invested; M. and in case no such capital ls used or employed in the business in the L. Owen. United States the tax shall be imposed upon that portion of such net The PRESIDING OFFICER. The notice will be entered un income which is in exce s of the sum of (a) 8 per cent of that propor tion of the entire actual capital invested and used or employed in the der the rule. business which the net income from sources within the United States Mr. Sil\11\fONS. Mr. President, I wi h to simply 1otlge the bears to the entire net income and (b) that p1·oportion of $5,000 which motion ba ed upon that request of 59 Senators. I unue ·stand the net income from sources within the United States bea1·s to the en that we can not vote upon this proposition under the rule until tire net income. SEc. 202. That for the purpose of this title, actual capital invested Friday morning. m<:!ans : First, actual cash, and second, the actual value, of all assets Mr. UNDERWOOD. l\lr. Presiuent, I desire to give notice other than cash, u ed or employed in the business ; but does not in clude money or other property borro.wed by the corporation or partner that I shall addre s the Senate on ·the amendment offered by ship. my colleague [1\Ir. BA -KHEAD] when· t.he Senate meets to-mor SEC. 203. That the tax herein imposed upon corporations and partner row morning a soon us the bill is taken up. ships shall be computed upon the basis of the net income shewn by their income-tax rehuns under Title I of the act entitled "An act to BECESS. increase the revenue, and for other purposes," approved September 8, 1916, or under this title, and shall be assessed and collected at the Mr. Sil\IMONS. I do not know whether there i ~ any P,esire same time and in the same manner as the income tax due under Title I for an executive session. There appears to be none, and I move of such act of September 8, 1916: Pt·ovided, That for the purpose of this title a partnership shall have the same privilege with reference that tile Senate take a rece s untilll o'clock to-morrow m ruing. to fixing its fiscal year as is accorded corporations under section 13 (a) The motion was agreed to; and (at 5 o'clock and 10 minutes of Title I of such act of September 8, 1916 : Pi·o1rided further, That p. m., Wednesday, Augu. t 29, 1917) the enate took a recess where a. corporation or partnership make& return prior to March 1, until to-morrow, Thursday, August 30, 1917, at 11 o' ·lock a. m. 1918, covering its o'vn fiscal year and includes therein any income 1l to. . gro. Iy a sailed antl insulteu by n number of metropolitan 'l'ht' mnE>n