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The Postal Service contends that second-class rates have been artificially low for decades and that magazine mailers must pay both direct cost and a share of the service's general overhead. Magazine publishers are willing to pay more; LIFE in August proposed 60% over five years. But the industry argues that the proposed new rates are grossly unfair because they do not take into account the ease with which magazines can be handled; many are now presorted and sacked, requiring only minimal processing by postal employees. The publishers contend therefore that too high a proportion of Postal Service overhead is assigned to second class. Post offices, mail trucks, sorters and carriers are, after all, required primarily for processing first-class mail.
Besides, while Congress wants the Postal Service to try to recover costs, that is only one ingredient in setting new rates. Other factors must be weighed against it. The Postal Reorganization Act that set up the Postal Service specifies eight criteria, including the value of the mails to senders and recipients, and the effect of new rates on the public. Testifying before the rate commission on behalf of his monthly magazine Decision, Evangelist Billy Graham demanded a "social evaluation of the relative merits of various rates."
Unique Role. Theodore Peterson, dean of the University of Illinois College of Communications, pleaded that "magazines have been important in drawing up the agenda of national issues and problems for public discussion and debate." Others recalled that higher postal rates imposed four years ago in Canada brought about widespread magazine failures and cutbacks there. A Canadian parliamentary committee, in deploring that result, said: "A free flow of information is vital to our national existence." While the Washington rate hearings were going on, the New Republic said: "Once prosperous magazines have folded; others, large and small, are on the skids and may go under" if the Postal Service request prevails.
In his testimony, Hedley Donovan, editor in chief of Time Inc., contended that mass-circulation, general-interest magazines in particular "play a unique and indispensable role in American education and political processes" and must be allowed to be "vigorously competitive and reasonably profitable." Unlike local newspapers, Donovan said, magazines "have done much to create national audiences. They enrich our national dialogue. But the present quality, competitiveness and openness of the magazine field cannot be long sustained if profits do not improve beyond current levels."
If the new second-class rates go through approximately as proposed, profits are sure to fall rather than rise —disastrously in some cases. The industry's search for more efficient operating techniques has been stepped up, but most publishers had already made drastic economies even before the postal increase was proposed. Other distribution systems are under study to reduce or eliminate the postage cost, including the servicing of subscriptions with coupons redeemable for magazines at newsstands. But such schemes so far seem both clumsy and prohibitively expensive.