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wanted to come in and build a mill as an investment nature or speculative nature. Then there is the other group that owns large interests in mills. There are only two mills in Canada where the majority interest is owned by the newspapers, and those two mills are owned by the Chicago Tribune and the New York Daily News.

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Now, the output of that mill, or those mills, goes to those two papers. It is not sold on the commercial market. It goes to them just like all the coal that is mined by a coal mine owned by the United States Steel Corp. goes to their steel mills.

Then there are other mills where the publishers own stock and they

have contracts.

Mr. HESELTON. Well, now, in that immediate group where the publishers own stock, does that result in a guaranteed source of supply to them as against some one who does not own the stock?

Mr. WILLIAMS. So far as I know, the two mills that are largely in that category are mills in Texas and Alabama.

I know of some instances where the publisher could not convince himself that he ought to buy stock in the mill, then, later on, after it was built and was going good, he was able to make a contract with the mill, even though he owned no stock, and that contract is just as good and just as binding as if he had had stock in it.

Mr. HESELTON. Well, I am a little bit puzzled as to why a newspaper would invest in a mill unless there was something in it for him.

Mr. WILLIAMS. Oh, no, sir. My favorite saying in connection with that is that the United States Steel Corp. did not go into the business of coal mining because it loved to mine coal, but the only way they could make steel was to be sure of a source of supply.

The only way the newspaper can be sure that it is going to publish is to have a source of newsprint supply, and, therefore, some publishers-it varies-some publishers feel, in order that they may be sure of a supply, that they should take steps to assure it by investing in a corporation that will build a mill, and they will make a contract with that mill.

Mr. HESELTON. Well, that brings me back to my first question, sure supply. They assure it by investing in the stock of a mill or one

means or another.

If Mr. Underwood does not invest and I do not invest, and we are out at the end of the year without a supply, I assume that I would be fairly well protected from lightning striking me, and that Mr. Underwood would be left in the hole. Is that not possible?

Mr. WILLIAMS. I think it is possible; yes, sir. But, so far as I know, both at the Alabama mill and the Lufkin mill-those are the most recently built mills-they have those contracts and they have got some customers. No doubt they are human beings like most of us, and that if their contracts expire-I am not suggesting that this is the way they operate-but if there is a choice to be made, upon the expiration of a contract, it is very readily understandable that the publisher that is in on the ground floor and helped build the mill, all things being equal, is in a good position to continue to make a contract. Mr. HESELTON. I should think he would be in a better position. Mr. WILLIAMS. Well, I just would not know, not knowing the situation intimately. If I had the facts with respect to how they operate, I might be able to answer. For the moment, all mills have contracts

for all of the newsprint they can make. I do not know of a mill in North America, in Newfoundland, Canada, or the United States, to which you could go today as a new customer, never having been on their books, and get a contract for newsprint.

Mr. HESELTON. That is all, Mr. Chairman.

Mr. KLEIN. Mr. Chairman?

The CHAIRMAN. Mr. Klein.

Mr. KLEIN. Mr. Williams, I just have one or two questions.

Are all of the newspaper publishers in this country members of your association?

Mr. WILLIAMS. No, sir. There are about 1,750 daily newspapers and about 800 are members of our association.

Mr. KLEIN. Well, are they judged by the size of the newspaper, or what is the qualification?

Mr. WILLIAMS. To be a daily newspaper, bona fide daily newspaper. We are delighted to have them all. But they have not all seen fit to join. There is no reason why they should not.

But, I should say, generally speaking, all of the newspapers in the United States with over 100,000 circulation are members, or a large number of them are.

Mr. KLEIN. In other words, that is not a qualification for membership, the fact that they have at least 100,000 circulation?

Mr. WILLIAMS. No; we have one member, a small newspaper, with only 3,300 circulation. They must be a bona fide newspaper and have a daily circulation. We do not take weeklies or other types.

Mr. KLEIN. How about a small newspaper such as the union papers, and the local papers?

Mr. WILLIAMS. Well, I do not know of any of them that are dailies. We are composed of dailies only.

Mr. KLEIN. If they are dailies, is there any reason why they cannot join?

Mr. WILLIAMS. None whatsoever. Up until recently, the question has been asked what would happen to the Daily Worker if they applied. So far as we know, if they made application for membership, there is nothing in our constitution and bylaws which would prevent them from becoming members.

Mr. KLEIN. Now, I am very much opposed to any form of censorship and it occurs to me that, would not that be a subtle form, perhaps, of censorship, if any group had the power-let us say your association or even the Government for that matter was in a position to allocate newsprint to individual newspapers? You would be very much opposed to that as an association?

Mr. WILLIAMS. Oh, yes. You would hear us screaming.

As to allocation, if you are familiar with World War II conditions, that was done on the basis of an order, LP-240, and that was on the basis of every newspaper being entitled to use a percentage of the newsprint it used in the year 1941 for net paid circulation. That is the secret or the trick. It was net paid. In other words, it could not have been a newspaper that had a circulation of, say, 10,000 and gave away 5,000 and get your additional 5,000. It was net paid.

Where the censorship question did not arise is that amount of newsprint goes to the publisher and he uses it to put on it anything he wants to. In theory he could have all comics or all in news, or anything, and that was to avoid any question of how it was used. He was given

the amount of white paper and then the publisher used it however he saw fit.

Mr. KLEIN. So under that order, there was no possibility of, let us say, some Government official saying that "I do not want such and such a newspaper to get as much newsprint as they might be entitled to. They ought to get less," for one reason or another?

Mr. WILLIAMS. None whatsoever. The only thing that they had was an appeal from Government orders, and I presume that that is a sound thing in a democracy, the appeal. A publisher could appeal from an order when he had something to appeal from. In other words, when a publisher sought to get additional tonnage feeling their base was wrong or needed widening-and some of those were sound, because you remember the year 1941, at the end of the year 1941 was Pearl Harbor and then we had this big migration to the Southwest and the Pacific coast for the airplane factories and shipyards, and those newspapers felt that they had a sound basis for getting some additional tonnage. We called that appeal tonnage. What you got on appeal tonnage was what you could prove to the appeal board you were entitled to have. Of course, the publisher who did not get it, did not know the formula that it was given by. But even that does not approach a form of censorship.

Mr. KLEIN. Do you feel that that order that was in existence in World War II worked out well, by and large, so far as the newsprint situation was concerned?

Mr. WILLIAMS. Yes, sir, and anticipating that something might happen in the future that we would have to have some form of rationing, we have, by inquiries and questions, inquired of everybody who had anything to do with the order-that is, the officials and the industry, and the situation is that nobody has come up with a better method of handling newsprint rationing than order L-240 in World War II as it finally wound up. That order was amended several times, in the light of experience.

Mr. KLEIN. Let us go a step further. We are talking about possible censorship of some Government agency or some Government official in the allocation of newsprint. Let us take the possibility of a weekly newspaper which is not eligible for membership in your organization; is that correct?

Mr. WILLIAMS. Yes, sir.

Mr. KLEIN. The small paper.

Mr. WILLIAMS. Yes.

Mr. KLEIN. Could you conceive of a case where they might have to come to a member of your association, a newspaper which I think you mentioned in your statement that has very large stocks-not too large-but with perhaps over a half million tons of newsprint in their own stocks, and a situation where by refusing to supply a small weekly newspaper, which may be a trade journal of some kind, or possibly let us say a left-wing organization's journal-something that you might frown upon-can you conceive of a possibility of your refusing, or your membership refusing to furnish this small newspaper with newsprint, so that in effect that would be putting it out of business?

Mr. WILLIAMS. I testified to this. Let me say in the stringencies of World War II the Daily Worker ran out of newsprint, and we asked the New York Times to let them have enough newsprint to continue publication. Now, that is an extreme case. We felt, under a free

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press and a free country, we had an obligation. It was a case of misshipment.

Now, we have had cases repeatedly. As we came out of controls there was the idea of keeping on controls to take care of everythingwe made the promise-I say "we"-all of the associations: State, regional, and daily associations-and that included the National Editorial Association, which has weekly papers as members--we made the statement that we would not let any bona fide newspaper suspend publication solely for the lack of newsprint, and we made good on that and up until this hour no newspaper in the United States, bona fide newspaper-and there is a trick in that "bona fide"-there is no bona fide newspaper that has had to suspend publication solely for lack of newsprint. Some have suspended for other reasons.

Mr. KLEIN. That is the point that I wanted to make.

Mr. WILLIAMS. And I think we can stand on that within limits. In other words, right today, publishers are borrowing and swapping newsprint. Now, that does not mean that you can go on indefinitely. You just cannot do it. But we have been able to cope with every situation that has arisen up to now.

Mr. BECKWORTH. As a matter of fact, in World War II, what was the general situation that characterized the weekly newspaper as to rationing, and so forth?

Mr. WILLIAMS. Order L-240 was on a quarterly basis, that is the way you figure, and so it provided that every newspaper would have allowed automatically 25 tons per quarter, or 100 tons per year. There is no small weekly in the United States that even remotely consumes that much. The way to compare it is the large number of people that are blanketed out from making an income-tax report because they do not earn so much. Therefore, any newspaper in the United States that consumed up to 100 tons was allowed 100 tons a year, 25 tons a quarter, without reporting or answering or anything. Then when he got beyond 100 tons it went into this graduated scale, and in the graduated scale, the best way to compare it, it was modeled on your present income-tax laws; that is, the larger your income the higher your surtax brackets were.

Now, that was the method by which this order practically took most of the newsprint away from the larger papers, to assure this supply to the smaller papers.

Mr. KLEIN. I just wanted to sum up by saying that I wanted to commend your association. My experience in the last war with people who came to me, who published small trade journals, weeklies, mostly, was the fact that the fight, if any, was with the Government, and not with the newspaper association. I am glad to get your assurance that if it were necessary for a small newspaper to get some newsprint in order to keep on publishing that you would find some way of supplying it.

Mr. WILLIAMS. Yes; as a matter of fact, we have a form, if we get an inquiry from a Member of the House or Senate. Out of experience we can find that if we will ask that publisher that has complained to you, ask him a series of questions, when they are all answered it is very plain why he is in the predicament he is in, and we do not lean back to say if it is through his own fault, we do keep him going. There are some of these instances where we have found that due business 80176-51-pt. 1-3

acumen was not exercised to assure himself, and, of course, credit is an element sometimes as to why you do not get as much as you want. But we have gone through this on the other occasion, and, so far as I know, up until this hour, there has not been a single instance of a newspaper weekly, daily, or regardless of size, that has not been able to get newsprint to continue publication.

Do not mistake me. There are many of them that are not getting all they want, but they are getting enough to stay in publication.

Mr. PRIEST. Mr. Chairman, I believe Mr. Williams answered, in response to Mr. Klein, the one question that I was very much interested in, and that was that in the event it became necessary for rationing of newsprint in the future, that an order somewhat like the order L-240 would be agreeable, and that it worked fairly successfully during the last emergency period. That was your answer?

Mr. WILLIAMS. My way of answering it is that nobody came up with a substitute or an improvement on L-240, and we have sought that. We anticipated what might happen.

Mr. PRIEST. Then one further question, Mr. Chairman.

Has the ANPA, through any of its committees or otherwise gone into the question of any specific recommendations as to what we might do to alleviate a shortage condition that we face at this time?

Mr. WILLIAMS. What we are working constantly on is trying to do that. If we can find a project that is in varying degrees of probability, we then get busy with those people and locate newspapers that we think will make contracts. Now, frankly, we do not talk much about that publicly, because these projects sometimes can be blown higher than a kite if folks unfriendly to them do not like them, so we like to have them all signed and wrapped up before we say there is going to be another mill.

Now, we are at work on projects, and there is one in Alabama, one in Arkansas, and one frankly, I think, is going to come into being in the far Pacific Northwest, and the Alberta project is coming along. We have problems there relating to the long freight haul, and there is no water there, but publishers are willing to make contracts, and, after all, the contract is the thing that makes it possible. I do not think any man with the millions of dollars required for investment would want to build a paper mill just on the off chance he could sell it. He could sell it right now, but whether he could do it later, I do not know. We are working on these projects, and there are one or two of them, frankly, that have reached the stage where they have approached RFC as a straight business proposition.

Mr. PRIEST. That is all, Mr. Chairman.

The CHAIRMAN. The Chair would like to ask, Mr. Williams, for the purpose of clarification, one question. Do I understand you clearly to say that you do not think any additional legislation is necessary for the purpose you have in mind?"

Mr. WILLIAMS. No, sir; at the moment I do not think so. I am a little old-fashioned. We are hunting for newsprint, and trying to get more production, and I do not know of any legislation at the moment that could make that. I do think, as I stated, Mr. Chairman, that it is a very healthy thing, we feel, as users of newsprint, for this committee to display interest, because some problems are going to arise that you will doubtless want to ask questions about later on, and follow up with.

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