one hundred thousand copies per issue, 2 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than 50 cents but less than $1.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 1 cent for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than 50 cents but less than $1.01 per year, and whose circulation through the mails is more than twenty thousand copies per issue, but less than one hundred thousand copies per issue, 2 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than 50 cents but less than $1.01 per year, and whose circulation through the mails is more than one hundred thousand copies per issue, 4 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $1 but less than $2.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 2 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $1 but less than $2.01 per year, and whose circulation through the mails is more than twenty thousand copies but less than one hundred thousand copies per issue, 4 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $1 but less than $2.01 per year, and whose circulation through the mails or more than one hundred thousand copies per issue, 8 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $2 but less than $3.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 3 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $2 but less than $3.01 per year, and whose circulation through the mails is more than twenty thousand but less than one hundred thousand copies per issue, 6 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $2 but less than $3.01 per year, and whose circulation through the mails is more than one hundred thousand copies per issue, 12 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $3 but less than $4.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 4 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $3 but less than $4.01 per year, and whose circulation through the mails is more than twenty thousand copies but less than one hundred thousand copies per issue, 8 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $3 but less than $4.01 per year, and whose circulation through the mails is more than one hundred thousand copies per issue, 16 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $4 but less than $5.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 5 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $4 but less than $5.01 per year, and whose circulation through the mails is more than twenty thousand but less than one hundred thousand copies per issue, 10 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $4 but less than $5.01 per year, and whose circulation through the mails is more than one hundred thousand copies per issue, 20 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $5 but less than $6.01 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 6 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $5 but less than $6.01 per year, and whose circulation through the mails is more than twenty thousand copies but less than one hundred thousand copies per issue, 12 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $5 but less than $6.01 per year, and whose circulation through the mails is more than one hundred thousand copies per issue, 24 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $6 per year, and whose circulation through the mails is less than twenty thousand copies per issue, 10 cents for each annual subscription circulated through the mails.

For newspapers, magazines, and other periodicals whose subscription price is more than $6 per year, and whose circulation through the mails is more than twenty thousand copies per year, 20 cents for each annual subscription circulated through the mails.

SEC. 2. That the additional postage charged provided for in section one hereof shall be due and payable quarterly, on the first days of September, December, March, and June, and shall be collected by the postmaster of the office at which such newspaper, magazine, or other periodical is presented for mailing under the provisions of the general law.

SEC. 3. That the Postmaster General be, and he is hereby, authorized and directed to promulgate such rules and regulations as may be necessary for the proper computation of charges as provided in section one hereof, and for the collection thereof.

SEC. 4. That all free-in-county privileges granted to publications under existing laws are hereby retained.

Mr. JOHNSON. The bill can be better understood by noting that the "free-in-county" privilege remains and by condensing the remainder to a table of graduated rates as follows:

Mr. JOHNSON. Now, that's a tentative schedule for second-class rates, and only for second-class rates. A war tax on advertising is quite another thing. We will come to that. It is the particular work of this committee, and I would like to say, in parenthesis, that I do not envy the members of this committee the gigantic task ahead of them. If I can help even in a small way, I sincerely desire to do so, and if the committee will but say the word I'll take my coat off and go to it-endeavor to estimate second-class postage receipts and the like.

First, let me affirm that I believe the committee will find it advis able to divorce the matter of equitable second-class rates from the

matter of a war revenue. I believe that it will be necessary to take from all the periodicals carrying advertising a war tax, but I do not think that a war tax on advertising should be confused with the matter of raising the proper amount of money as second-class postage. That is what is about to happen under present law. Congress tried to correct second-class postage inequalities, but between House and Senate, back and forth, we produced a zone system applicable to the advertising pages, which will bring in some additional postage, but puts advertising in a position where you can not readily tax it for war purposes.

So my bill, to put it before you as quickly as I can, proposes to regulate the second-class postage rates on a graduate scale-I think the committee is familiar with that-based on the subscription price and the number of subscribers, carrying it on up to the first division, say, of 20,000, the next division 100,000, and so on. That takes care of the second-class rate. Then after you have done that and are looking for war revenue let some of it come from advertising. Put on a revenue tax of whatever the committee, in its wisdom, thinks necessary, based on the pages of the publication and regulated in accordance with the size of the pages, and the quantity of paid circulation.

Mr. GARNER. You realize, then, that the second-class matter is not paying as much toward the postal receipts as it should pay. Mr. JOHNSON. I do not dispute that.

Mr. GARNER. Your only criticism is that this should not be considered as a method of getting taxes for war purposes?

Mr. JOHNSON. No. I think we have made a mistake

Mr. GARNER (interposing). Just a moment. When the committee put that in the bill I do not think the purpose was merely for the purpose of deriving revenue for the purposes of the war, but that it was done more for the regulation of second-class matter, so that it would pay its just portion of the expense of the Post Office Depart

ment.

Mr. JOHNSON. And that brings us to the very trouble I now have, namely, in undertaking to appear here, when, as a matter of fact, my bill is always referred to the Committee on Post Offices and Post Roads. That is, the Post Office part of it.

Mr. GARNER. You realize, Mr. Johnson-at least, you have been a Member of Congress long enough to realize that the influence back of second-class postage makes it impossible for the Post Office Committee of the House and the Post Office Committee of the Senate to pass any such bill, and that therefore the only chance we had was to make it a part of the war revenue bill, which could not be defeated. Mr. JOHNSON. I realize that. My object is to endeavor to reach an equitable plan. I regret that there does not seem to be a method by which a plan could be made effective prior to July 1, because I am afraid that the zone system is going to make a lot of trouble. However, I did not come here to analyze the zone system or point out any of the many objections, except that I desire to point out a few troubles in connection with its operation.

Here is a sheet containing instructions to postmasters for the handling of the zone system, effective July 1. That sheet has just been printed in the printing office of the Post Office Department in the

city of Washington. It is made up of nearly three hundred lines of the smallest type and has only been sent to the largest post offices. It has not reached the small post offices, and has not reached the small newspapers. They will secure their information through the printing of it, if it has not already been done, in the supplement to the postal guide. The blanks on which newspaper publishers are to report their proportion of advertising and their zones of circulation have not yet been printed, and the Post Office Department tells me that the congestion at the Government Printing Office is such that they can not say when they will be printed. It is not a big blank, and they have given me copies in typewritten form. I discovered all of this in an effort to ascertain how this thing could be put into effect for my own newspaper, published on the edge of the Pacific. I might take up that paper and the Post Office Department's statement just to show the difficulties

Mr. COLLIER (interposing). Will your bill bring in more revenue than the present law?

Mr. JOHNSON. I think it will-a great deal more.

Mr. STERLING. Is it on the zone plan?

Mr. JOHNSON. No. Let me state the plan again. The bill which I have introduced proposes only a plan to regulate second-class postage rates, and not to make the people in the eighth zone pay extra for the privilege of taking any periodical that they want to take, and at the same time not force the local advertiser to pay anything additional to the newspaper for advertising, because certain copies of that. local newspaper are circulated 1,200 or 1,800 miles away. That is the inequality of the zone system as applied to all but the greatest publications. The zone system will be helpful to and will not especially embarrass certain national newspapers. There are about 24,000 periodicals and publications in the United States, and I am satisfied that three-quarters of them will be under a great handicap because of the zone system, to say nothing of unnecessary trouble and expense. The Government will gain heavily in postage from the few at the expense of the many.

Take my own paper, little local newspaper. It probably has 2,500 subscribers. A short time ago it had less than 200 going throughout the United States; now it has 600, 400 of which go to soldiers 3,000 miles away or more. Ninety per cent of the advertising in that paper is local. The price of the paper is $7.20 a year, but it is sold to soldiers at $4 a year. A local advertiser takes a half page at a rate he can pay. Perhaps he thinks he is making the publisher a gift when he pays 20 cents an inch. It is a hardship on the local advertiser to charge him, say, 24 cents an inch because 400 copies go 3,000 miles away, giving him no benefit. As I said a minute ago, 20,000 of these newspapers and publications, or at least 18,000 of all that are printed, receive their advertising chiefly from local sources. In the State of the chairman of this committee, North Carolina, where they have a large number of fine small dailies, the bulk of the national advertising that goes to those papers is paid for at the lowest possible rate.

Mr. GARNER. Your bill has been referred to the Post Office Committee of the House?

Mr. JOHNSON. Yes, sir.

Mr. GARNER. Have you had a hearing before that committee? Mr. JOHNSON. No; but I am trying to get one. A moment ago the gentleman from Mississippi, Mr. Collier, asked whether I thought my bill would bring in more revenue. We will put it this way: If we can induce the Post Office Committee or this committee to bring out a bill that does not discriminate against the people who live far away from the place of publication but fairly attempts to make the newspapers pay what they ought to pay-and when I say newspapers I mean periodicais-for the use of the second-class privilege, then this committee is perfectly free to fix a tax on advertising, and when this committee undertakes to do that-and I think it is a proper source of revenue-then it must not only tax the advertising in all newspapers and periodicals but all advertising on billboards, street. cars, and wherever it can be reached, whether that advertising is done directly or by contract.

Mr. GARNER. You know the status of revenue from second-class matter?

Mr. JOHNSON. Yes.

Mr. GARNER. I think it has been admitted by all parties that the province of the Post Office Department was to carry at cost all letters, parcel post, and other mail matter. Do you agree to that principle? Mr. JOHNSON. That it should carry it at cost?

Mr. GARNER. As nearly as possible at cost; at least, pay its own way?

Mr. JOHNSON. Yes, sir.

Mr. GARNER. The second-class mail costs the Government about $90,000,000 a year.

Mr. JOHNSON. Yes; I have heard that stated.

The CHAIRMAN. It was $103,000,000 last year.

Mr. GARNER. That may be so, but I know that the lowest estimate was $90,000,000. Out of that the Government got back $11,000,000. Now, if you or anybody else can devise any scheme whereby we can get $90,000,000 or $100,000,000, the cost of carrying second-class matter, speaking for myself, I am for the proposition.

Mr. JOHNSON. I am very glad to hear that. The bill I offer will produce much more than the zone system.

Mr. GARNER. But I do not want you to come along and say, like most of them do, that you do not want to pay your part of the cost of running the Post Office Department.

Mr. JOHNSON. Of course, I have never quite agreed that we positively knew there was a dead loss of $90,000,000, but we will say there is a great loss, and we will call it $50,000,000. Then it is proper to devise any plan that is possible to produce that $50,000,000 or $60,000,000.

Mr. GARNER. I agree with you.

Mr. JOHNSON. And I think it can be done along the lines of my bill, a copy of which I have placed in these hearings. Let me present an example, and I will place others in the record of the hearings.

For instance, Comfort, with 1,276,800 subscribers, would pay 1 cent a pound, and 2 cents for each and every subscription sent through the mails outside of the county in which it is published, or $25.536.

But, if a tax of about $25,000 on a 25-cent periodical with more than a million subscribers is thought to be out of proportion to a