The Menace of Privilege, by Henry George Jr.
Installment 42

We are pleased to present, in installments, a very rare yet significant book written by former Congressman Henry George Jr. in 1905.

Earlier installments are available at the Progress Report Archive.


Privilege, as it gathers strength, gathers sway over every division of the press.

And what is to be said of the monthlies and weeklies is to be said of the dailies, which it has far more need to control, since the daily papers reach the mass of the population more intimately and more often.

The increasing cost of making a newspaper has helped this, since it has put restrictions upon competition. A legend of newspaperdom is that Mr. James Gordon Bennett, the elder, started the New York Herald on a dry-goods box. His means were undoubtedly meager. At that time much was not needed. Energy in getting local news and attractiveness of presentation were the chief requisites of newspaper making. But competition for readers in order to attract advertisers has within the past three or four decades added enormously to the cost. While the quantity of local news has been greatly increased and a remarkable era of effective and varied illustration has been opened and developed, there has been a still more remarkable, an almost bewildering, advancement in telegraphic news. This was the least part of our dailies of three generations ago. It now vies with local news in importance, for it offers the daily doings of the globe.

But telegraphic news is, as may be judged, very expensive. The first cause of this is that the telegraphic service in this country is not made a part of our efficient, accessible and same-rate-to-everybody post-office system, as it is in most of the countries of Europe, but is in the hands of private companies and subject to their high and discriminating rates. That is to say, the telegraphic highways in this country are in private hands. The high rates charged make a larger capital necessary to establish a newspaper than would be required if the rates were low. It discourages easy newspaper rivalry. It tends to concentrate the newspaper business in the hands of the comparatively few persons who, knowing its requirements, can afford to pay the telegraph charges.

The principle is the same as a high liquor license, which prevents the starting of rival saloons that would come into existence did no such tax exist. It is also like a Federal internal revenue tax on, say, alcohol or matches, which adds so materially to the outlay necessary to engage in that line of enterprise as to shut out such as would be glad to enter the field against those already there. In this way the newspapers that now exist have to pay a heavier telegraph toll than they would were the telegraph lines a department of the postal service. But they are willing to pay it, and they make no general demand for a postal telegraph, because they are now free of competitors which then would embarrass them.

And if high rates operate to discourage the weak and consequently help the strong, discriminating rates do so still more. Discrimination occurs through secret rebates. If not so open as formerly, yet it is done. And it goes to the benefit of those papers which can bear the requisite influence upon the telegraph companies, just as railroad rate discrimination favors those on the inside who can exert the "pull."

Still another circumstance that works to the advantage of the big and the disadvantage of the small paper is the leased wire between the greater centers. This is a cheap way for the larger papers to handle a considerable part of its special telegraphic news. It is beyond reach of a paper having only a small amount of such special matter. In this way it is seen that in the telegraphic field the strong papers have great advantages over the weak ones. All these advantages stand against the starting of new papers, and to them must be added still another element, a combination of the stronger papers into telegraphic news-sharing associations.

While the general wire service of an American newspaper is very costly, a joining together of a great many papers throughout the country in an Associated Press reduces the cost to each for news which they may share in common. None but members can get this service, and new members, except in new news centers, are not admitted. The purpose is not only to reduce the cost of such service to the lowest point, but to make a monopoly of it to those included within the combination. In the course of time outside weaklings and bantlings must needs combine to establish a common "wire service" for themselves. They in turn shut out papers yet to be born. In this way the news associations contribute materially to prevent the birth of daily newspapers.

Nor is it probable that the old "cribbing" channel will much longer be left open for the free-lance newspaper. It is a habit among newspapers to appropriate or "crib" local news from each other. Out of this habit, and im pelled by the adverse circumstances which have just been specified, the weaklings and bantlings came to "crib" skeletons of wire news from any available source. That is to say, discouraged from getting news in the legitimate ways, the smaller papers resorted to ways that were illegitimate. These skeletons were "padded" into extended reports. This came to be called "grapevine telegraph" service.

Many of the proudest dailies of to-day used "grapevine" at the start. But the Associated Press and the great newspapers individually are now invoking the copyright law against it. Not that Congress has made the copyright act broad enough to fit the case, for it has not. In some of the British colonies legislative acts have in recent years been passed to conserve news rights; but in this country Congress, for whatever reason, has refrained from taking any such step, nor does it seem likely soon to do so. Still, in cases where the legislative branch of the Government has failed or refused to act, our courts have been found to be accommodating; and the Federal courts are now reading things into the copyright act of which Congress obviously never dreamed. This belongs to the body of "judge-made" law, many instances of which we have seen in the labor injunction cases earlier in this book.

One of the judicial extensions of the copyright act occurred in the case bearing title of American Press Association, Appellant, vs. Daily Story Publishing Company. (United States Circuit Court of Appeals, Seventh Circuit, No. 864 October term, 1901; May session, 1902.) Another case was that of the National Telegraph News, F. E. Crawford and A. K. Brown, Appellants, vs. The. Western Union Telegraph Company. (United States Circuit Court of Appeals, Seventh District, No. 789, October term, 1901.)

Circuit Judges Jenkins and Grosscup and District Judge Bunn sat in the latter case, and affirmed exclusive right of the Western Union Company to news transmitted by its "ticker" instruments in advance of others. That the principles involved, or evolved, had very much wider application than this case, however, was demonstrated by Judge Grosscup, who read the opinion of the unanimous court. The judge said, toward the end of his opinion: --

That is to say, these three Federal judges, by "making a precedent" through an enjoining order, make into law what Congress has not seen fit to enact! And here again it will be observed that, like the injunction issued by Judge Grosseup in the Pullman strike, this order was not issued in behalf of the humble citizen. Nor apparently did the court have the parties in the case chiefly in mind. It was thinking more particularly of, to quote its language, "the great news agencies," of "the great newspapers," and of "the great telegraph and cable lines" -- always of the great interest, not at all of the small, struggling one.

By virtue of such construction of the copyright act, the Associated Press and the larger newspapers individually, which regularly "crib" from the European papers, will be able to prevent all "cribbing" from themselves by the weaker papers at home. If such a principle can apply to telegraphic news, it can apply to local news as well. Incidentally it carries with it a power to harry and kill a weak or new paper with litigation over trumped-up charges.

This, of course, is not to say that stealing should not be stopped. But if it is to be stopped in one instance, it should be stopped in all. If the weak papers steal news, it is largely because the opportunities to transmit news are practically stolen from them - being closed or made difficult for them. The abolition of stealing should apply to both cases. But the courts, so ready to construe the law to conserve the interests of the great, have no thought of the others. And this, as we have seen, is but a part of what confronts the lesser paper. The whole telegraphic news practice, which now is such an essential part of our newspapers, from first to last piles up advantages for the strong and refuses them to the weak.

Further advantage accrues to the larger newspapers from the constraint all are under to use high-priced, patented machinery - type-setting, stereotyping and printing. A peculiarly heavy burden for the small journal has arisen from the formation of a monopoly combination of the white paper manufacturers. Controlling the easily available supply of wood pulp, from which the newspaper webs and sheets are made, most of these manufacturers have entered into "a community of interest," by which the output is limited and the price put up. This advance has been considerable even for the newspaper which is a large user and can place a very large order. For the small paper, which can order only a little at a time, the advance has proved exorbitant. (See testimony of Mr. Don C. Seitz, representing the New York World, and Mr. John Norris, representing the New York Times, before the House Judiciary Committee, Washington, D.C., commencing April 5, 1904.)

It is true that in the villages and smaller towns it is now possible to buy a daily service of "plate matter," made in New York, Boston, Chicago, Washington and other centers. This matter offers variety - from editorials and fashion gossip, to useful household hints and telegraphic brevities. It is made into thin type-plates, and shipped in small wooden boxes. The plates are ready to be fastened on metal blocks in a "form," and within a few minutes after they are received the press can be started.

But the railroad facilities that make the shipping of these plates to points within a radius of one, two, or three hundred miles of a plate-making center offer like facilities to the metropolitan dailies, which accordingly have wonder-fully extended their circulations. The "bulldog" Sunday morning edition of some of the New York papers, for instance, goes to press on Saturday afternoon as early as four o'clock. This edition is sold on the news stands on Sunday morning in some of the Southern States. The large papers in Washington, Atlanta, Cincinnati, Louisville, St. Louis and New Orleans also have early train editions which circulate over the Southern States, so that small local papers have poor chance against these great rivals.

And, then, too, since advertising in any considerable volume will go only to the large or influential circulation, and since advertising is the staff of life to the newspaper, the weakling has no chance, and all things join to discourage the starting of daily papers, at least in the main centers, unless such new enterprises be heavily backed.

Thus we see the march of concentration in the newspaper field. Other centralizing processes have been at work, but thus far have not proved successful. From time to time efforts have been made to draw the newspapers of a given locality into close business relations. In Philadelphia, for instance, an agreement was mutually entered into to accept no death notices for an individual paper, but only on the understanding that they appear in all, a rate for the combined publication being fixed. The plan was short-lived, however. It did not work smoothly and was abandoned.

Next Week: The Milwaukee Case

What's your reaction to this material? Tell it to The Progress Report:

Your name

Your email address

Check this box if you'd like to receive occasional Economic Justice Updates via email. No more than one every three weeks on average.

Page One Page Two Archive
Discussion Room Letters What's Geoism?

Henry Search Engine