1939: Newspaper Business

Comparatively few daily newspapers went out of existence during the worst years of the 1930's depression. Total advertising revenue dropped an estimated 40 per cent between 1929 and 1933, but circulation loss was negligible, and by rigid economies, all but a few American dailies weathered the early storms. A notable exception was the New York World, which was sold in 1931 to the Scripps-Howard Newspapers because it could not balance its budget.

Beginning in 1937, however, when the depression entered a new phase, the newspaper business encountered circumstances which numerous publishers have not been able to overcome. Circulations had increased to a new high total; advertising had regained only about a quarter of the depression losses. That combination meant no important increase in revenue. On the other hand, wages paid to organized labor had by 1937 surpassed the hourly wage rates paid in 1929. And a new element, the American Newspaper Guild, had organized the editorial and commercial departments, which, prior to 1934, had been outside of the unionized sphere. Wages in these departments had been markedly increased as a result. Contract provisions with the white collar staffs in many cities barred staff reductions, which had been the publishers' final economy recourse when material savings failed to banish red ink. Newsprint prices between 1937 and 1938 advanced 17½ per cent. Social security taxes further pared the margin between income and outgo.

With economy avenues closed, no new revenue avenues opened, and slight chance of expanding existing revenues, publishers who had been operating at a loss took stock of their prospects in 1938 and 1939. The result has been the elimination of more than 70 newspapers for which there did not seem to be a genuine public demand. Since January 1939, important newspapers in Chicago, Newark, Worcester, Minneapolis, Buffalo, Syracuse, Wilkes-Barre, and San Diego, among others, have disappeared from the roster.

Portentous as that news seems, its principal misfortunes have been suffered by the thousands of employees turned jobless by the consolidations. No group of readers has risen to protest the disappearance of a newspaper. No advertisers have complained that the remaining newspapers provide inadequate service. Inevitable duplication of circulation has been ended by the elimination of competitors. Advertising rate increases subsequent to the mergers have been moderate. Publishers of non-competitive newspapers in most cities have avoided the charge of 'monopoly' by scrupulously equitable coverage of controversial news and by the establishment of reasonable advertising rates. Behind many of the consolidations, a motivating force has been the unwillingness of merchants and manufacturers to pay for duplicate advertising services; there is little doubt, however, that if newspaper publishers exhibited a tendency to exploit their position by unduly rapid advances in space rates, merchants would give their blessing to new competition. There seems no prospect of that now; the few efforts in that direction since 1937 have been uniformly unsuccessful.

Relations between newspapers and the old printing trade unions continued generally harmonious. Even in cities where newspapers were suspended, increased advertising volume has afforded at least partial employment to displaced mechanical department people. The situation of white collar employees has been less happy. Comparatively few of them have been absorbed after the mergers. A Guild strike in Wilkes-Barre, Pa., settled after many months, was followed by a merger of two evening papers with the loss of several editorial situations. A Guild strike against the Hearst papers in Chicago, which entered its second year in December, was marked in mid-course by suspension of the morning Herald-Examiner, with heavy loss of employment in all crafts. Another long Guild strike in Lynn, Mass., was recently settled.

Without a strike, the Guild attained a city-wide contract with all San Francisco newspapers, covering editorial and business department employees, and establishing a partial 'guild' or closed shop. After more than five years of organization, the Newspaper Guild has an estimated membership of about 20,000 — less than 20 per cent of its potential total. While it has introduced a measure of secure employment and gained more adequate compensation for its members, its aggressive radicalism and championship of the CIO program has limited its appeal to conservative newspaper employees and delayed its recognition by employers. The past year brought no marked changes in either of the latter circumstances.

War's impact upon journalism has been negligible to date. Circulations advanced during September, but leveled off with the drop in 'big' news from Europe. All newspapers guarded against propaganda and many warned their readers against both propaganda and censorship — perhaps too earnestly, in view of developments. Advertising made satisfactory gains in the last quarter, without benefit of war business. Newsprint prices, quoted only for the first quarter of 1940, promise maintenance of present rates as long as possible. News service costs, sharply increased by two agencies in October, dropped part way back with the decline in cable and radio reports. Metal and chemical prices will rise if the war becomes active. Wage rises are certain if heavy war production here produces inflation. Even slight increases in any or all of these elements will adversely affect weak papers.

The outstanding aspect of the past year has been the continued trend toward non-competitive newspaper service in all but the largest cities. Two-thirds of the cities which have daily newspaper service now have only one newspaper, or one newspaper ownership. And, despite some year-end experiments with new printing techniques, promising lower costs, there seems small prospect that the trend toward elimination of competition will be reversed. See also ADVERTISING.