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tions, that we shall be able to take care of whatever problems do arise. The situation, however, is real, and there is nothing imaginary about it.

Several weeks ago I received a little newspaper called the Alba Reporter, and it is a small newspaper from my district. The headline says "Paper rationing may bring on subrationing," and the very fact that he had received a letter indicating that he could not get any more paper than he had been getting for some time previous to the date that he got his letter is evidence that the same problem which we did definitely face in World War II are coming to the forefront again, and there is no question about that. I do hope that, as I suggested, working together we will solve them as they arise.

Mr. WILLIAMS. Thank you.

Mr. BECKWORTH. The next witness is Mr. Charles E. Moreau, publisher of the Bloomfield Independent Press, at Bloomfield, N. J., and he is representing the National Editorial Association.

STATEMENT OF CHARLES E. MOREAU, CHAIRMAN OF THE NEWSPRINT COMMITTEE OF THE NATIONAL EDITORIAL ASSOCIATION, AND PUBLISHER OF THE BLOOMFIELD INDEPENDENT PRESS, BLOOMFIELD, N. J.

Mr. MOREAU. My name is Charles E. Moreau, and I publish weekly newspapers in New Jersey, and have been chairman of the National Editorial Association newsprint committee for several years.

The National Editorial Association has a membership of about 4,500 weekly newspapers, and about 500 small daily newspapers. Mr. Williams has covered the newsprint situation so thoroughly that all I want to do is briefly amplify how a period of shortage affects the smaller newspapers.

The National Editorial Association is naturally concerned about a situation that may develop into an actual shortage. It has in its membership many very small newspapers, and in past periods of scarcity they have been the newspapers to have the greatest difficulty. Obviously their bargaining power, and their financial resources could not compete with the large metropolitan newspapers if a scramble for a short supply should develop. The larger newspapers, including the larger weeklies, in most cases have direct contracts with newsprint mills. They suffered the least in the period of shortage during and after the last war because the mills, though not giving them all the paper they might have liked, at least treated them proportionately. Some smaller weeklies have contracts with jobbers or middlemen and some of the smallest just buy from hand to mouth. During the last period of shortage, some jobbers succumbed to the temptation of diverting paper to the more profitable black market, at the expense of former customers, and in some cases newsprint mills changed over to the manufacture of more profitable types of paper, or were bought by large dailies or magazines for their exclusive use, thus causing serious situations for publishers whose supply was cut off or reduced.

These situations occurred after the controls were removed, following the Second World War, when order L-240 was removed from the industry. The NEA newsprint committee made continuous efforts

during this period to persuade jobbers to treat all of their regular customers uniformly and proportionately, and it was able to persuade a few of the manufacturers to bring pressure on the jobbers who bought from them, toward the same end.

To a limited extent we have had to begin our efforts all over again. Some jobbers are advertising newsprint at black-market prices, two or three Canadian manufacturers have notified American customers that they will have to reduce their newsprint shipments 10 to 40 percent in order to take care of British contracts since Britain now has more dollars available, and one big daily recently bought an interest. in a newsprint mill. The mill then notified a jobber of a reduction in paper available to them, and the jobber cut off about a dozen weekly customers in Connecticut and Long Island. Since that time the daily has relented, and assured these weeklies that newsprint will be made available to them through 1951. Where they will find paper for 1952 remains to be seen.

It only requires between 75,000 and 100,000 tons of newsprint a year to supply all the 9,000 weekly newspapers of the country compared to the millions of tons used by the big dailies, but if the present precarious balance is upset, even this relatively small amount of paper may not be available to these weeklies.

My committee does not feel that rationing is required at this time and might not be needed, even if the shortage grew worse, if a way could be found to "freeze" the present distribution. Every publisher is getting along pretty well with the amount of paper he is now getting, but this will not be so, if any more cases of diversion such as described above occur. I wonder if it might be possible under wartime emergency powers to issue a directive to newsprint suppliers that they may not divert newsprint from their present customers to other more profitable customers unless they have first found a new source of supply for their former customers.

I would be glad to answer any questions.

Mr. KLEIN. Mr. Moreau, have you heard the questions I asked Mr. Williams a little while ago?

Mr. MOREAU. Yes, sir.

Mr. KLEIN. You may be in a better position to answer some of them. This question that you just touched on, the last sentence of your statement, unfortunately we do not have a copy, but you talked about the diversion of some of the newsprint. There is a question of diversion from the smaller newspaper publishers of this country, and that applies not only to the weeklies, but I suppose to the small dailies, if there are any, which may not be members of the ANPA.

Do you not agree with me that if there was such a diversion, that that might be an effective way of getting a competitor out of business, whether it is a form of censorship or not, by refusing to give him the amount of newsprint that he needs to publish his paper, and you effectively would be stopping the publication of his paper. Is that not correct?

Mr. MOREAU. Well, it never was carried out by any newspaper. It came about by jobbers finding more profitable markets. Mr. KLEIN. I am not blaming anybody.

Mr. MOREAU. No newspaper denied another newspaper newsprint. Mr. KLEIN. NO; I am not blaming anybody, but I am wondering whether the possibility remains for some form of control, either over

the editorial content or the news publication--that there is that control. There is that possibility by some control over the supply of newsprint.

Mr. MOREAU. No; I cannot see that there is, because it is not exercised by anyone who would be interested in such control.

Mr. KLEIN. Well, now, who are you talking about when you say that you would like a directive, or you thought a directive might be advisable to newsprint suppliers that they might not divert newsprint from their present customers?

Mr. MOREAU. The suppliers are middlemen and they are merchants who buy newsprint, and also job printing papers from manufacturers, and sell them to their various customers.

Mr. KLEIN. What would cause a diversion by them?

Mr. MOREAU. Because they got a higher price in the black market from some other customer who was willing to pay a premium, and in the period of the last shortage most of the newsprint manufacturers at first claimed that they could not interfere with that, and that they had sold the paper to the jobbers, and they could not control what the jobber did with it. A few of the manufacturers felt otherwise and warned these jobbers informally that if they did not continue to supply their regular customers, when their contract with the mill ran out, the mill would not be interested in renewing it. And the National Editorial Association Committee tried continuously to persuade all of the manufacturers to adopt the same policy, to keep the paper going to all of the regular customers.

Mr. KLEIN. You are not talking now about supply and demand. I suppose if there is a shortage of newsprint, and one newspaper, let us say, bids more than another one, you would not say that we ought to have a directive which said that you could not supply the fellow, or you could not stop supplying your present customer, because you were offered some more money.

Mr. MOREAU. Practically 100 percent of newsprint is manufactured under contract, and it all goes to regular dailies or large weeklies or merchants.

Mr. KLEIN. When the contract expires?

Mr. MOREAU. When the contract expires, the mills have been uniformly fair in renewing those contracts with the existing publishers, unless there is a matter of credit, or some other reason.

Mr. KLEIN. I do not understand what you are referring to here when you fear some diversion of newsprint.

Mr. MOREAU. A big daily just bought a stock interest in the St. Raymond Paper Co., and the paper company notified a certain jobber in New York City that it had been selling paper to, that when his contract ran out they would not renew it. So the jobber had to pass that notice on to weekly newspapers that he had supplied paper to. When the seriousness of this was brought to the attention of this daily newspaper, and that it might result in a demand for rationing or some other control, that the newspaper industry generally does not want, the daily told the mill that it should go ahead and supply paper to this jobber, and it will be sold to the weeklies for the rest of this year. It has not made any promise beyond 1951.

In the past period of shortage Time Magazine bought a newsprint mill in Maine that produced 100,000 tons of newsprint, and changed

it over to manufacturing magazine paper. Well, it caused a very serious situation for newspapers that had been supplied by that mill. Another serious shortage arose in New York during that past period when a jobber that handled a large amount of paper that largely went to big printing plants in New York, turning out trade papers and labor papers, and so forth, sold that paper for a very high premium to the Miami Herald, and all of these small customers in New York, who largely were dealing with a printing house, were out of luck. Mr. KLEIN. I agree with you that we ought to do something to protect the small publishers, but I cannot see how we can have a directive where what you are dealing with here is more or less supply and demand. As Mr. Williams pointed out, a newspaper publisher might buy into a mill, and he does it for the same reason that United States Steel would buy into a coal mine, because they want to assure the source of supply. You cannot blame them, and that is ordinary business. If it were done for the purpose of putting another fellow out of business, that is something else again. How are you going to stop them? This is legitimate business. If I can get more from somebody else than I can ge from you, why should I be stopped from selling it to that other person, and I would like to get your ideas on the so-called

directive.

Mr. MOREAU. Perhaps they can. Perhaps you cannot do anything about it. But this is the thing, if it goes on, this diversion, this competition between the people that do have the big bargaining power and the big money, to buy up mills or pay a premium to jobbers for their paper, that will hurt the little fellows, and they are the ones who would make an outcry, such as we had before, and this I think would result in going back to some form of rationing like L-240.

Mr. KLEIN. Does your association have any dealings with the ANPA?

Mr. MOREAU. Yes; we are very friendly organizations.

Mr. KLEIN. Have you ever talked to them about this question of some directive of this kind that you referred to?

Mr. MOREAU. No.

Mr. KLEIN. Do you have any views on that, Mr. Williams?

Mr. WILLIAMS. Not on this particular point, Congressman. The National Editorial Association and our association have always worked together. If a complaint comes to them of something that has happened to a small paper, we then get busy to try to take care of the particular problem that has arisen, and the babies we work on are the State associations.

For instance, a complaint comes in that involves a paper in Minnesota, for instance, and we take it up with the Minnesota Press Association. We go on the same theory that the draft board does, that the local draft board knows more about what is going on with respect to how this thing happened. So then we get the facts, and as I said, we have a form, and if you want it for the record, we have a form that we used to send on each complaint, and when those questions are answered, we think that the story is pretty well told, and then based on that we decide what to do.

Mr. BECKWORTH. Without objection, it will be made a part of the record.

(The information referred to follows:)

Please Fill Out and Return to

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(Please attach copy of Government sworn circulation statement)

4. Is any part of your circulation free now?

5. Present source of newsprint supply

How much?

(If purchases are through jobber, please advise name of mill supplying him) 6. List other than regular source of newsprint supply, if any

7. Do you have contract with mill or jobber?

8. For what period?

For what amount?

9. Is newsprint needed in addition to regular supply? (a) If so, why is additional newsprint necessary?

(b) Have you started any new activity which requires additional newsprint?

10. What efforts have you made to meet your situation?

(a) Contacted other sources of supply?

(b) Contacted regional or State association?

(c) Requested additional newsprint from regular source?

(d) Reduced unpaid content?

year

(e) Reduced paid content? year?

11. How much newsprint is required?

12. How much newsprint now on hand?.

When and what percent over previous

When and what percent over previous

13. How long will present supply last?.

(a) At normal use?.

(b) By reducing size?.

14. Do you use sheets or rolls?.

(a) What sizes are needed?_

(b) What proportions of half, quarter or other small rolls could you use?

15. What future deliveries of newsprint are expected?.

Date of delivery?.

16. What was average monthly comsumption in 1949?.

Amount?

(a) For newspaper only?

In 1950?_

For job shop?.

(b) If any months show great increase, please explain?_

17. Do you publish any other newspaper?_.

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(Please attach copy of Government sworn circulation statement)

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