better spent if it were directly appropriated for the end purposes of the education and welfare of the country. Mr. MAY. May I make a comment? Mr. JOHNSON. Go ahead. Mr. MAY. I think that we are all aware of the fact there are good books and bad books and good records and bad records. They all get the benefit. Not only does the Bible get the preferential rate but several books that the committee members consider obscene all travel at the concessionary rate. Likewise, in addition to the excellent secondclass publications that move at a very handsome subsidy, we likewise have some magazines against which we have now just recently secured an indictment, criminal indictment for sending through the mail. All of this goes at the same rate. Some good, some bad. In addition to having Beethoven records move through the mail, we have a number of records that move that an entire system of independently owned radio stations have agreed would be banned from the air because their lyrics are so obscene; they think they are so obscene. Those kinds of records move through the mail as well. There are a lot of pluses and minuses in this. I do not think that it is really up to us at this point to second-guess the Congress because the Congress has decided, although we could differ. We are raising the question that there could be a greater benefit to the national interest if this subsidy were spent in a different way. Congress has up to this point, decided that this is the best way to spend these general tax revenues. However, just as in the case of the second class, although Congress decided second class was going to get a substantial subsidy, it also said the subsidy was given on the condition that the second-class mailer will help a little bit and will comply with the Postmaster General's regulations on how this matter shall be mailed. Again, Congress considered what rate would be charged for preferential fourth-class mail last December; when it enacted the law. At that same time Congress, in effect, said we are going to continue this very substantial subsidy for this category of mail, special-rate fourthclass mail, on the condition that these mailers do the same thing, or much like the same thing that we are now and have been requiring that the second-class mailers do in order to enjoy their subsidy. Far from our surprising anyone by in effect increasing the amount of rate increase, Congress itself laid out the requirement of compliance with the Postmaster General's regulation as a condition to the fourth-class mailers of enjoying this benefit. Mr. JOHNSON. Thank you. One more observation. I would say that when we passed this rate bill I personally didn't realize that, in addition to raising these book rates $11 million, which we did, we are also giving up the power to raise them another $4 million. As I say, that kind of goes against my grain. Maybe you are right in doing that, but this point does not seem cricket to me. Maybe it is. Mr. NICHOLSON. Mr. Johnson, it perhaps does shift costs to the mailers, but it is not a rate increase. It is a transfer of costs, whereas our savings are in excess of $4 million Mr. OLSEN. That is a pretty cagey way of saying that. Mr. NICHOLSON. It may be a technical quibble but it is not in the form of a rate. Mr. OLSEN. It sure is. Not maybe, but it is. Mr. NICHOLSON. The mailer does not have the cost of a higher rate but an added manual cost in his own operation. He can control that to some extent. The fact that the Department will save $4 million does not mean that the costs to the mailers will be $4 million. We confidently expect that the mailers will do the work now done by our detached postal units at less cost than we do it, for two reasons. We think, on the one hand, that the rates paid to the workers would be less in the industry framework than they are in the postal framework. In addition, we think by making some relatively modest changes in their operations the mailers will reduce the need for the manual work, whereas, so long as our postal employees are there, there is no incentive for the business itself to change its procedures so as to give economies to that postal unit. Although we will save $4 million, it is not a transfer of that total of $4 million to the mailers. Some lesser amount would have to be spent by them. Mr. JOHNSON. Thank you very much. Mr. OLSEN. Thank you, Mr. Johnson. Mr. DANIELS. Gentlemen, on June 29, 1968, the Federal Register contained a notice from the Post Office Department, a proposed rule to implement Public Law 90-206. It states that interested persons who may wish to submit data and arguments concerning the proposal may do so. What was the response of the industry with regard to this notice? Mr. MCMILLAN. We had most segments of the industry represented. We had disagreements, of course. We had, I believe, 21 letters from Members of Congress, all opposing the new regulations. We had letters from 49 individuals that is, representatives of various segments of the industry-all opposing the new regulations. Mr. DANIELS. May we have the names of those who responded for the record? Mr. MCMILLAN. We will have to do that for the record. Mr. DANIELS. Were any publishers involved? Mr. MCMILLAN. I just cannot say, Mr. Daniels. I will have to get that for the record. I have no recollection of just who made the response to that. (The following was furnished for the record :) CONGRESSIONAL LETTERS OPPOSING CONDITIONS FOR MAILING 1,000 OR MORE PIECES IN SINGLE MAILING AT SPECIAL FOURTH-CLASS RATE OR AT LIBRARY RATE CONGRESSIONAL LETTERS AND CONSTITUENTS 1. Congressman Arnold Olsen: none. 2. Congressman Donald J. Irwin: Burton Stuttman, 2 Cardinal Lane, Westport, Connecticut 06880. 3. Congressman John W. Wydler: J. W. Cassidy, Book Clubs Administrator, Doubleday & Company, Inc., 501 Franklin Avenue, Garden City, New York 11530. 4. Mrs. Charlotte T. Reid: Harold T. Miller, Manager, Midwestern Division, Houghton Mifflin Company, 1900 South Batavia Avenue, Geneva, Illinois 60134. 5. Senator Clifford P. Case: W. Bradford Wiley, President, John Wiley & Sons Inc., 605 Third Avenue, New York, New York 10016. G. H. Gander, Executive Vice President, D. Van Nostrand Company, Inc., 120 Alexander Street, Princeton, New Jersey 08540. Ryan A. Cuneo, Director of Postal Affairs, Prentice-Hall, Inc., Englewood Cliffs, New Jersey 07632. William Sloane, Rutgers University Press, New Brunswick, New Jersey 08903. 6. Congressman Donald Rumsfeld: Joseph C. Vossels, Traffic Manager, Field Enterprise Educational Corporation, Merchandise Mart Plaza, Chicago, Illinois 60654. Robert C. Matthews, Senior Vice President, Sales and Marketing, Brock and Rankin, Inc., 4501 West 16th St., Chicago, Illinois 60623. 7. Senator Everett M. Dirksen: Donald L. Steinbeigle, Vice President, Marketing, Aldine Publishing Company, 320 West Adams Street, Chicago, Illinois 60606. 8. Congressman Frank Thompson: G. H. Gander, Executive Vice President, D. Van Nostrand Company, Inc., 120 Alexander Street, Princeton, New Jersey 08540. William Sloane, Rutgers University Press, New Brunswick, New Jersey 08903. 9. Congressman George H. Fallon: William Momberger, Engineering Department, Waverly Press, Inc., Mount Royal and Guilford Avenues, Baltimore, Maryland 21202. 10. Congressman William L. St. Onge: Arthur J. Egelhofer, Assistant Vice President-Operations, Bureau of Business Practice, 24 Rope Ferry Road, Waterford, Connecticut 06385. 11. Senator Jack Miller: Jack Barlass, Consumer Book Division, Meredith Press, 250 Park Avenue, New York, New York 10017. 12. Senator William Proxmire: Robert C. Matthews, Senior Vice President, Sales and Marketing, W. A. Krueger Co., 12821 West Blue Mound Road, Brookfield, Wisconsin 53005. 13. Senator Thomas J. Dodd: Arthur J. Egelhofer, Assistant Vice President, Operations, Bureau of Business Practice, 24 Rope Ferry Road, Waterford, Connecticut 06385. 14. Congressman Robert N. C. Nix: Coleman W. Hoyt, Distribution Manager, Reader's Digest, Pleasantville, New York 10570. 15. Senator Joseph S. Clark: C. W. Peterson, Executive Vice President, J. B. Lippincott Company, East Washington Square, Philadelphia, Pennsylvania 19105. 16. Congressman John T. Myers: Bernard Perry, Director, Indiana University Press, Tenth and Morton Streets, Bloomington, Indiana 47401. 17. Senator Joseph D. Tydings: William Momberger, Engineering Department, Waverly Press, Inc., Mount Royal and Guilford Avenues, Baltimore, Maryland 21202. 18 Congressman James H. Quillen: C. R. Steadman, Vice President-Traffic, Kingsport Press, Inc., Kingsport, Tennessee 37662. 19. Congressman John Brademas: David A. Tucker, Plant Manager, Scott Foresman and Company, State 2 and County Road 500W, Box 100, La Porte. Indiana 46350. 20. Senator Jennings Randolph: Kent Rhodes, Vice President of Reader's Digest. 21. Senator Edward W. Brooke: W. M. Adamson, Director of Distribution Houghton Mifflin Company, Wayside Road, Burlington, Massachusetts. INDIVIDUAL LETTERS OPPOSING CONDITIONS FOR MAILING 1,000 OR MORE PIECES IN SINGLE MAILING AT SPECIAL FOURTH-CLASS RATE OR AT LIBRARY RATE 1. John W. Gorsuch, Vice-President, Wm. C. Brown Co., Publishers, 135 South Locust Street, Dubuque, Iowa 52001. 2. Mr. William M. Passano, Jr., Executive Vice President, Waverly Press, Inc., Mount Royal and Guilford Avenues, Baltimore, Maryland 21202. 3. Mr. John J. McKenna, Director of Customer Services and Distribution, Harcourt, Brace & World, Inc., 577 Third Avenue, New York, New York 10017. 4. Mr. L. R. McLennan, Vice President, Manager of Sales, Steck-Vaughn Company, Post Office Box 2028, Austin, Texas 78767. 5. Mr. D. B. Kashdan, The Longines Symphonette Society, Symphonette Square, Larchmont, New York 10538. 6. Mr. Oscar E. Palmquist, President, National Council on Business Mail, Inc., 100 West Monroe Street, Chicago, Illinois 60603. 7. Mr. Elliott Gerlach, General Manager, Vikeship Co., Book Distribution Center, 299 Murray Hill Parkway, East Rutherford, New Jersey 07073. 8. Mr. Henry Brief, Executive Director, Record Industry Association of America. Incorporated, One East 57th Street. New York, New York 10022. 9. Mr. Robert B. Clarke, President, Grolier Enterprises Inc., 845 Third Avenue, New York, New York 10022. 10. Mr. Frank G. Rhody, Executive Secretary, The Board of Publication, Lutheran Church in America, 2900 Queen Lane, Philadelphia, Pennsylvania 19129. 11. Mr. John A. Pendery, Executive Vice President, South-Western Publishing Co., Inc., 5101 Madison Road, Cincinnati, Ohio 45227. 12. Mr. Conrad Squires, Promotion Manager, Harvard University Press, 79 Garden Street, Cambridge, Massachusetts 02138. 13. Mr. William Kennedy, Traffic Manager, The Dartnell Corporation, 4660 Ravenswood Avenue, Chicago, Illinois 60640. 14. Mr. Leonard Feist, Chairman, Music Publishers' Committee on Federal Relations, 460 Park Avenue, New York, New York 10022. 15. Mr. Eugene Watson, Executive Vice President, Circulation and Book Operations, Popular Science Publishing Co., Inc., 335 Lexington Avenue, New York, New York 10017 16. Mr. Malcolm Wright, Director of Technical Services, The Haddon Craftsmen, Inc., Ash Street and Wyoming Avenue, Scranton, Pennsylvania 18509. 17. Mr. Richard Landsman, Vice President-Sales, The Greystone Corporation, 100 Sixth Avenue, New York, New York 10013. 18. Mr. Donald E. Layman, President, Scholastic Magazines, Inc., 50 West 44th Street. New York, New York 10036. 19. Mr. Kenneth M. Grubb, President, Allyn and Bacon, Inc., 470 Atlantic Avenue, Boston, Massachusetts 02210. 20. Mr. Warren Lynch, Executive Vice President, Book-of-the-Month Club, Inc., 345 Hudson Street, New York, New York 10014. 21. Mr. Seymour L. Gartenberg, Executive Vice President, CBS Direct Marketing Services, 51 West 52 Street, New York, New York 10019. 22. Mr. Thomas L. McFarland, Assistant Director, The Johns Hopkins Press, Baltimore, Maryland 21218. 23. Mr. Harry E. Jenkins, Division Vice President, Record Operations, 155 East 24th Street, New York, New York 10010. 24. Mr. Walter V. Davidson, Jr., Vice President, American Book-Stratford Press, Inc., 75 Varick Street, New York, New York 10013. 25. Mr. Steuart L. Pittman, Shaw, Pittman, Potts, Trowbridge & Madden, Barr Building, 910 17th Street, N.W., Washington, D.C. 20006. 26. Mr. Robert M. Peck, Executive Director, Book Manufacturers' Institute, 161 East 42nd Street, New York, New York 10017. 27. Mr. Richard H. Lane, Vice President & Secretary, Commerce Clearing House, Inc., 4025 W. Peterson Avenue, Chicago, Illinois 60646. 28. Mr. S. M. Briscoe, Foote & Davies, P.O. Box 1000, Doraville, Georgia 30040. 29. Mr. H. A. Schumaker, Assistant to the President, The Lawyers Co-operative Publishing Company, Rochester, New York 14603. 30. Mr. George W. Brauckman, Advertising Director, W. B. Saunders Company, West Washington Square, Philadelphia, Pennsylvania 19105. 31. Mr. Thomas A. Chacharon, Vice President, General Manager, Children's Press, Inc., 1224 West Van Buren Street, Chicago, Illinois 60607. 32. Mr. W. A. Hacker, Manager, Mail Order-Fulfillment, New Horizons Publishers, Inc., 154 East Erie Street, Chicago, Illinois 60611. 33. Mr. Theodore M. Black, President, Walter J. Black, Inc., Flower Hill, Roslyn, New York 11576. 34. Mr. John Jay Daly, Vice President, Direct Mail Advertising Association, Inc., 921 National Press Building, Washington, D.C. 20004. 35. Mr. Lloyd H. Knox, Publisher, Free Methodist Publishing House, Winona Lake, Indiana 46590. 36. Mr. Bernard Perry, Director, Indiana University Press, Tenth and Morton Streets, Bloomington, Indiana 47401. 37. Mr. Edward E. Booher, President, McGraw-Hill Book Company, 330 West 42nd Street, New York, New York 10036. 38. Mr. Roger L. LaRue, Manager, Corporate Office Service, Xerox Corporation, Xerox Square, Rochester, New York 14603. 39. Mr. Ronald F. Bleezarde, Hamilton Printing Co., Inc., P.O. Box 232, Rensselaer, New York 12144. 40. Mr. Edward A. Sand, President, Parent's Magazine Enterprises, Inc., 52 Vanderbilt Avenue, New York, New York 10017. 41. Mr. Garrison H. Payne, President-Treasurer, Brigar, Inc., 107 Champlain Street, Albany, New York, 12204. 42. Mr. John C. Jackson, Director, Traffic and Distribution, Encyclopedia Britannica, 425 North Michigan Avenue, Chicago, Illinois 60611. 43. Mr. Rhett Austell, Publisher, Time-Life Books, Time & Life Building, Rockefeller Center, New York, New York 10020. 44. Mr. Jarrell McCracken, President, Word Incorporated, 4800 West Waco Drive, Waco, Texas 76703. 45. Mr. Robert W. Frase, Director, American Book Publishers Council, Inc., American Educational Publishers Institute, 1820 Jefferson Place, N.W., Washington, D.C. 20036. 46. Mr. T. P. Casserly, Business Manager, Teachers College Columbia University, New York, New York 10027. 47. Mr. James J. Fehi, Vice President, Personnel Department, Book-of-theMonth Club, Inc., 51 E. Simpson Street, Mechanicsburg, Pennsylvania 17055. 48. Mr. James F. Dinneen, Special Counsel, Raytheon Company, Lexington, Massachusetts. 49. Mr. Donald C. Fowle, Director of Operations and Distribution, Capitol Director Marketing Corp., Hollywood and Vine, Hollywood, California 90028. Mr. DANIELS. I have a constituent here today, Mr. McMillan, who is interested in a publishing company that disseminates these books on behalf of mail users. The complaint, as I undertand it, with regard to their opposition to this legislation, is that you failed to give them reasonable notice of this proposed change which will take place in two phases, one October 1 of this year, and the second phase becoming effective January of next year. They said to go out and hire the necessary help to sack and ZIP code to three digits within a short period of time is to put an unreasonable burden on them. They are fearful they may not be able to get the necessary competent help to do so. Do you have any observation to make in regard to that comment ? Mr. MCMILLAN. Mr. Congressman, I do not know of whom you are speaking. I do know that this matter was discussed with our Mailer's Technical Advisory Committee several months before we proposed this rulemaking. We even had a subcommittee of that committee appointed to work with us. I cannot say that they all agreed with us. In fact, some of them vigorously opposed this. Mr. DANIELS. Specifically, for your information, I refer to the American Book-Stratford Press. Mr. MCMILLAN. I do not know, but I would assume they belong to some organization that is represented on the Technical Subcommittee. It may or may not be a correct assumption. But we did work with the committee and with affected industry representatives. Incidentally, I think it is very important to keep in mind that the first proposal in the latter part of June 1968 has been radically liberalized. In talking to the members of the Mailer's Technical Subcommittee and to representatives of the industry itself, and I have talked to several of them personally, their greatest problem seemed to be the merg ing of identical and nonidentical pieces. This is the one that they figured would cause them the most hardship and the greatest problems. There was very little violent opposition to the first step. Of course, all of them would have liked to have this made a year later or 6 months later or at some other time. But after we received these protestations |