The Press: Postal Rates: Up, Up, Up

• Share

On March 2 the cost of mailing a first-class letter will go up from 8¢ to a dime, an increase of 25%. Most Americans will feel that bite of inflation at once, but another may go unnoticed at first. On the same day, a new jump in second-class postal rates, which affect magazines and newspapers, will take effect. This increment is the first installment of a 40% rise to be spread over the next 28 months. It comes on top of a fiveyear, 145% rate hike begun in 1971. The new increase, being imposed on a compound basis, means that periodicals collectively will have to pay at least 242% more to use the mails in 1976 than they did in 1971.* Some predictions are even grimmer. Richard J. Barber Associates, Inc., an economic counseling firm in Washington, D.C., says that accelerating Postal Service costs will actually force a crushing 406% rise in second-class postage by 1976.

According to figures compiled by the Magazine Publishers Association, the new rate immediately boosts the average cost of mailing each copy of a magazine by six-tenths of a cent. That amount may seem modest, but it is not, when weighed against the harsh fact that the average profit now earned on each copy of a U.S. magazine is only eight-tenths of a cent. And the bulk of the increase is yet to take its toll.

Soaring rates have already claimed some significant victims. Executives of both Look and LIFE blamed projected postal increases as a major factor in the decision to fold those magazines.

To fend off a similar fate, many magazine publishers now face a bleak future of radical cost cutting.

Part of the March 2 increase involves a rising charge for each piece of second-class mail. But the increase is also based on a complicated formula involving a magazine's ratio of ads to editorial content, its weight and size, and the distance it must travel. Thus no two magazines will be affected in precisely the same way, but all that use the mails are hurting. Says National Review Publisher William Rusher: "Journals of opinion traditionally lose money. The National Review is a journal of opinion, so the postal rates won't eat into our profits—they will simply swell our deficits. It's a very serious problem for us."

Harper's Publisher Russell Barnard says that his projected postal expenditures during the next two years "could more than wipe out our total profits." Hearst Magazines President Richard Deems says, "We're spending every waking hour thinking about how we'll keep our publications as viable businesses."

Postal Service officials do not view the publishers' dilemma as their problem. The Postal Reorganization Act of 1970, which created the present Postal Service as a quasi-independent body, stressed that most classes of mail should pay their own way and contribute a "reasonable" share to the service's general overhead by 1976. The service clearly regards that mandate as all important, and never mind the consequences. "I don't see why any enterprise should expect any sort of subsidy," says Postmaster General Elmer T. Klassen, 65, who was with American Can Co. for 43 years.