1941: Newspaper Business

Daily newspapers ended 1941 with the highest circulation in history, a gain of 2.3 per cent over the record of the previous year. The total daily circulation was 42,080,391; the Sunday circulation total was 33,435,575. These impressive totals were compiled before the Pearl Harbor incident which put the United States into the war as an active belligerent, and there is no doubt that current circulations are higher than they were as of Oct. 1, 1941, the date of the quoted averages.

Advertising linage also showed a gain of 2.8 per cent over 1940, although the end of the year was marked by a considerable slackening in the advertising of automobiles and allied lines. Classified advertising also tapered off during the final quarter, reflecting the decline in unemployment as munitions and aircraft plants expanded their payrolls. The immediate outlook for newspaper advertising at the end of 1941, however, was not promising, despite a strong increase in the advertising of foods and beverages. The withdrawal from public consumption of such staple lines as automobiles, refrigerators, heating apparatus, and radio receivers was certain and, at the end of the year no new lines to replace them had been discovered. As the year ended, and conversion of the automotive plants became a certainty instead of a possibility, the immediate prospect was that newspaper advertising linage would be at least 10 per cent below the 1941 record.

A year ago, this article reported the establishment of a new publication in New York, a newspaper which would depend entirely upon revenue from readers rather than advertisers for its sustenance. This was PM, a six-day evening newspaper, with no Saturday, but a comprehensive Sunday edition. To date, the belief in the trade is that it has not been financially successful. It has weathered at least two financial storms and is now the property of Marshal Field III, although it remains under the editorial direction of Ralph Ingersoll, who first projected its publication. PM has also survived several attacks which sought to establish its reputation as a Communistic, or at least, a Left Wing organ, and even though its circulation has by no means achieved the goals set by its founders, it appears to have become a fixture in the New York newspaper firmament.

With his New York experience as background, Marshall Field in December issued the first number of the Chicago Sun, a morning and Sunday newspaper designed to exploit the philosophy of the Roosevelt New Deal against the Chicago Tribune, the outstanding antagonist of that political school. It was not at all in Field's book that the Japanese should have attacked the United States at Pearl Harbor on Dec. 7, thereby uniting all domestic divisions of thought on the war and destroying his strongest point of opposition to the Tribune — but it happened. The Sun, nevertheless, has persevered and at the end of the year had achieved a substantial daily and Sunday circulation in Chicago, even though it had not yet become a dangerous competitor to the Tribune's supremacy.

Establishment of the Chicago Sun marked the second attempt in two decades to mount a successful offensive against the established metropolitan dailies. Backed by the uncounted millions of the Field estate, it seemed to have a better chance of permanence than most of its predecessor efforts. In all other large cities but two, the newspaper situation remained static. In New Orleans, the morning and Sunday Tribune were suspended, leaving the Item and States as evening papers and the Times-Picayune in the morning and Sunday field. In Philadelphia, the Evening Public Ledger was in receivership as the year ended, with early suspension a probability. That tragedy was realized early in January 1942.

Efforts of the American Newspaper Guild to establish the closed shop in daily newspaper editorial departments marked the outstanding development of the year in newspaper labor affairs. Strikes on this, as the major issue, were called against the Birmingham (Ala.) Post, Chester (Pa.) Times, and Aliquippa (Pa.) Gazette. As the year ended, the strike against the Birmingham Post was called off, mainly because of illegalities attending the strike call. The other two strikes were still in progress. The Guild shop issue has taken various forms, but in the main it calls for enrollment of all eligible employees in a newspaper office in the Guild during a stated period, and maintenance of that membership as a condition of retaining employment. Newspapers have, in general during 1941, rejected this proposal.

There were no other notable labor disturbances in the daily newspaper field.

On the legal side, the cases of the Dallas (Tex.) News, Lowell (Mass.) Sun, and Easton (Pa.) Express and Easton Free Press excited interest. In the Dallas case, the employer had contracted with his employes for a definite salary base per week, plus a bonus, plus overtime if earned. The National Labor Relations Board contested this arrangement, but lost the decision both in the District Court at Dallas and in the U.S. Circuit Court at New Orleans. In the Lowell and Easton cases, the dispute revolved around the legal right of a deputy administrator of the NLRB to call for the books and records of the respondent corporations. In both cases, the publishers were upheld by Federal courts in their refusal to produce their books. None of these three cases had come before the Supreme Court in 1941.

The right of newspapers to comment upon legal trials pending the final appellate decision was upheld by the U.S. Supreme Court in the case of the Los Angeles Times against the Bar Association of California. The Times had commented upon several cases in which sentence had not yet been passed. Upon five of these, the Bar Association brought a complaint before the Supreme Court of California. The lower court held for the Bar Association, upheld by a close decision in the appellate court, whence the case went directly to the U.S. Supreme Court. After two hearings the highest court held in favor of the newspaper on a 5-4 decision.

Newsprint prices at the year's end remained at the $50 basic level of the past three years, but an advance of $3.00 per ton had been announced for April, 1942. No shortage of this or other basic materials for newspaper production was anticipated, although it was conceded that transportation difficulties due to war might cause temporary local shortages of paper, ink or metal. See also PAPER AND PULP INDUSTRY.

1940: Newspaper Business

Compared with the four or five previous years, 1940 marked a period of progress, increased prosperity and relative tranquility for newspapers. That was true, despite the excitement and technical difficulties of covering not only war activities in many parts of the globe, but also a Presidential election at home. Daily newspapers, generally speaking, ended the year with recovery of their 1937 peak in circulation, and with a gain of about 4 per cent in total advertising.

No important daily newspapers ceased publication during 1940. In the smaller towns, however, approximately 50 either suspended publication or changed from daily to weekly status. The reason generally assigned was inability to operate as a daily newspaper under the overtime requirements and short work-week schedule of the Fair Labor Standards Act. Since weekly newspapers are specifically exempted from that law, daily newspapers that were seldom more than marginally profitable found themselves in better case as weeklies.

For the first time in many years, a new daily newspaper was established in New York in June. Entitled PM, it was projected as a newspaper which would depart from stereotyped methods and controls of the established press, presenting the news according to its genuine importance rather than its passing interest. It proclaimed that it would accept no advertising, but would report the offerings of the New York stores as news. The new publication, which appears evenings except Saturday, and Sunday, is of modified tabloid form, printing many pictures, and employing a printing process never before applied to daily newspapers. Ink, supplied as a solid, is reduced to a liquid by heat and is kept liquid until it strikes the cold surface of the printing paper. It then solidifies immediately, providing a surface which the manufacturers claim will not rub off on hands or clothing, offset or strike through on other parts of the newspaper, and which will permit the better printing of illustrations. Insufficient time has elapsed for judgment as to the place of this form of journalism in the metropolitan picture; the difficulties which have been encountered to date have been of the sort to be expected with a new departure. Another experiment, using the offset printing process, was started as the Newsdaily, in Hartford, Conn., during March. Like New York's PM, it was a five-cent paper, against the three-cent price of the established dailies. Newsdaily appeared for three months, then suspended pending reorganization, which has not been consummated at this writing. No other marked departures from accepted practice were noted.

Labor affairs were comparatively tranquil. The only prolonged strike affecting newspapers was that of the American Newspaper Guild (CIO) unit in Monroe, La., against the News-Star and World. This was settled at the end of the year after a nine-month course. At this writing, the Newspaper Guild is not engaged in any newspaper strikes. During the year, it signed several new contracts and renewed others. It faced new competition in the establishment of editorial room organizations in New York and Chicago under auspices of the American Federation of Labor. The Chicago unit of the latter signed a year-end contract with the Herald-American; the New York unit to date has no contractual relationships. The American Press Society, a professional, non-union editorial organization, marked time during the year. Difficulties with the printing trades unions were infrequent and unimportant.

Newsprint paper prices remained stable throughout the year and are assured for the first half of 1941 — a factor of great importance in newspaper economy. Deliveries of new machinery to newspapers were on a larger scale during 1940 than in several previous years, but it seemed likely that the facilities of equipment manufacturers would be increasingly occupied with orders for defense mechanisms. Several were already enjoying a large volume of that business before the year ended.

Not to be overlooked in the year's chronicle was the final reorganization of the Bureau of Advertising, American Newspaper Publishers Association, for an expanded campaign for the promotion of newspapers as an advertising medium. With an increased budget and staff, the Bureau produced approximately 25 'Continuing Studies of Daily Newspapers,' an intimate analysis of the reading attention commanded by every item in every column. These studies are continuing. The advent of frequency modulation in radio transmission caused a number of newspapers operating radio stations to apply for licenses to experiment with the new process. This development is still in infancy, but it is believed to hold important possibilities for the extension of radio facilities to the small city daily.

With approximately 66 per cent of the daily press, holding 75 per cent of the total circulation, opposing the re-election of President Roosevelt, his success at the polls produced a recurrence of the criticism that the press no longer influences public opinion. This charge was quickly rebutted by newspaper spokesmen, both in the press and on the air, and little has been heard of it since Dec. 1. The critics who most strongly attacked the domestic policies of newspapers were high in praise of the coverage of international news, unprecedented difficulties since the conquest of France and the bombing of Britain — the principal clearing points for foreign news.

As this is written, the press looks forward to a year in which both domestic and foreign affairs will require coverage hitherto unparalleled. It expects also that income from both advertising and circulation will be ample for the adequate execution of the job.

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.

1938: Newspaper Business

Economic problems arising from a simultaneous increase in operating costs and a sharp decline in advertising revenues made 1938 a difficult if not an especially eventful year in American newspaper annals. Six months before the year began, an announced increase of 17.5 per cent in the cost of newsprint paper, the basic raw material, had been recognized as a danger signal. Coming as it did, when advances in wage scales were general and when the trend of taxation continued upward, it threatened to wipe out the profit level reached in 1937, even though 1937 levels of income were maintained.

Three months before 1938 began, it was evident that a sharp decline in advertising revenue was certain. Automotive advertising during the winter first reflected the habitual optimism of the motor industry, then abruptly contracted as that optimism was not ratified by public acceptance of the 1938 car models in the expected volume. Other large advertising interests curtailed their newspaper advertising in the first quarter of 1938.

During the first five months of the year, the curve of revenue from advertising dropped steadily. Politics held the stage and seemed to have paralyzed the initiative of business organizations. The fight in Congress over the Reorganization Bill engrossed both business people and newspapers to the exclusion of almost all other topics for many weeks. Bad news from economic fronts and predictions of worse filled the financial pages. Threats of war in Europe lent their ominous thunder to the prevailing gloom. There were fewer strikes in large industries, but the conflict between two great factions in organized labor promised small prospect of uninterrupted production if business should improve. In short, newspapers could not expect, early in 1938, to balance their budgets on prospective advertising revenues.

Circulation.

One of the major moves of 1938 was, therefore, a general increase in circulation prices. This continued a tendency which had been noted during the previous year and greatly accelerated it. Even the New York morning newspapers, which had long resisted increases in their city sale prices, were compelled to take the step early in the summer. Except for the two New York tabloid newspapers, there are few dailies in large cities selling for less than 3 cents a copy. Many now retail for 5 cents. The net result has been to increase the proportion of newspaper revenue from circulation from about 15 to nearly 30 per cent. The loss in circulation has been negligible; the daily loss is about 2 per cent; the Sunday, less than half of 1 per cent.

While advertising revenues improved slightly after June, reflecting the better tone of general business, it is probable that the loss for the year, against 1937, will be considerably more than 10 per cent.

Sales and Mergers.

Sales and mergers have been few, but important. The Scripps-Howard Newspapers sold their News-Bee in Toledo and their Times-Press in Akron to local competitors. The Long Island City Star was taken over by the Jamaica Long Island Press, which also absorbed the Flushing North Shore Journal. Both of these New York suburban papers succumbed to a combination of decreased revenue, aggravated by suspension due to a strike of white collar employees, and the increased costs required by the strike settlement. In Boston the old and conservative Transcript was operating under a trusteeship as the year ended. The Hearst Herald-Examiner and the American in Chicago were published in December, despite a strike of about 350 members of the American Newspaper Guild against a reduction in staff. The Herald-Examiner had been converted to tabloid size in midyear, in an effort to attain new public interest and at the same time reduce expenses without cutting personnel. The American Newspaper Guild also conducted major strikes during the year against the Duluth Herald and News-Tribune, and the four newspapers of Wilkes-Barre, Pa., which were shut down completely after October 1. The Miami (Fla.) Tribune was combined with the Miami Herald early in the year. Many small newspapers, new to the daily field within the past two years, found the pace too fast during 1938 and reverted to weekly status. The St. Paul Daily News was suspended during the spring.

National Problems.

As a whole, however, the newspapers came through 1938 unimpaired financially and in popular esteem. The candidates favored by the majority of newspapers were generally successful in the November elections. Animosity toward the press, strongly evident as 1938 opened in official Washington, died to nothing as the year advanced and was actually replaced by an almost friendly atmosphere. The Wage and Hour law offers difficulties of application to newspaper operation, unsolved as the year ended; but their solution is being approached by press and administration in a sympathetic spirit.

Technical Processes.

The year saw few notable advances in technical processes. Interest in pictures continued to grow, as did improvement on color printing processes. Newspapers continued their efforts to improve physical appearance and to facilitate intelligent reading by grouping and correlation of news. Editorial-page treatment of current topics is regarded by some observers as markedly improved during the year. Publishers completed, after three years' preparation, a plan for promotion of the newspaper as an advertising medium. Within newspaper ranks the year ended more pleasantly than it began, with the prospect of gains in revenue that will permit the exercise of enterprise and initiative vital to the continued prosperity of the press as it is now constituted.