In the Matter of the Petition by DEADLINE DATA, INC. 1078 Madison Avenue, New York 28, New York for a hearing upon its application on for second-class entry of "DEADLINE DATA ON WORLD AFFAIRS." P.O.D. Docket No. 1/149 August 28, 1959 William A. Duvall Hearing Examiner POST OFFICE DEPARTMENT, WASHINGTON 25, D.C.
Deadline Data, Inc., 1078 Madison Avenue, New York 28, New York, the Petitioner in this case, filed application on April 7, 1959, for admission to the mails as second-class matter of its publication known as Deadline Data on World Affairs, hereinafter sometimes referred to as Deadline Data or the publication. On April 24, 1959, the Director, Postal Services Division, Bureau of Operations, Post Office Department, the Respondent in this proceeding, notified the Petitioner that he proposed to deny the Petitioner's application on grounds which were stated as follows:
"The law, Act of March 3, 1879, as amended (39 United States Code 224 and 226; sections 132.211, 132.223, Postal Manual) provides second-class mail privileges only for "newspapers" and "other periodical publications" and requires, among other things that they be formed of "printed sheets." Blank pages may not be carried as pages as provided in section 132.483, Postal Manual.
The material submitted purporting to be the April 3, 1959 issue is not a periodical publication under a distinctive title but consists of a group of cards, printed only on one side, which are to be filed for reference purposes. These cards are prepared to supplement or add to the previous basic card file. It is a card-index reference service as referred to in your advertising literature and not a newspaper or other periodical publication within the meaning of the law."
In the notice of the proposed denial the Petitioner was advised of his right to appeal from the Director's ruling, and the Petitioner was furnished with a copy of the Rules of Practice. Thereupon the Petitioner appealed from the ruling of the Director and filed his petition to which the Respondent submitted an answer.
The matter came on for hearing before me on June 15, 1959. The President of the Petitioner was present and the parties were represented by counsel. The President of the Petitioner testified on behalf of the Petitioner. Counsel participated in examination and cross-examination of the witness, in oral argument at the conclusion of the hearing and they have filed proposed findings of fact and conclusions of law and briefs in support thereof.
At the hearing it was agreed that there were four matters at issue and these issues were stated to be:
1. Is "Deadline Data" a periodical publication?
2. Is "Deadline Data" formed of printed sheets?
3. Is "Deadline Data" designed for circulation at nominal rates? and
4. Does "Deadline Data" have a legitimate list of subscribers?
For the sake of convenience, the issues will be disposed in the reverse order to that in which they have just been stated.
The Petitioner's President, Mr. Victor Bator, testified that there are approximately 232 subscribers to the publication among which are the following:
33 United States newspapers
12 Foreign newspapers
1 Press Association
9 Magazines and magazine publishers
5 Encyclopedias
8 Television and radio stations
50 Educational Institutions
4 International Organizations
11 Business Organizations
12 Governmental Organizations
4 Banks
1 Chamber of Commerce
10 Foreign Relations Groups
20 Foreign Governments or Embassies of Foreign Governments
4 Religious Organizations
1 Political Organization
10 Individuals
4 United Nations Organization
Insofar as the regulations of this Department are concerned there appears to be only one statement with respect to what constitutes a legitimate list of subscribers. This statement is found in Section 132.225 of the Postal Manual as follows:
"Publications must have a list of persons who have subscribed by paying or promising to pay for copies to be received during a stated time."
There has not been a great deal of litigation on this particular point, but in Myrick v. United States , 219 F. 1, 4, the Court said:
"The phrase 'a legitimate list of subscribers' evidently means a list of subscriptions taken at more than a nominal price, and the price must have been paid, or the subscriber, or someone in his behalf, be under obligation to pay the agreed price; and that subscriptions taken at a nominal price, or without price, do not answer the requirements of the statute in this particular and cannot be counted in making up a legitimate list."
Nowhere in the statute (39 U.S.C. 226), in the regulation or in any court decision so far as I am aware is it required that the list be a "long" list, or that it be comprised of a given number of names, or that it contain only the names of private citizens. It would seem that it would be incumbent upon the Respondent to show, in addition to some such requirement as has just been mentioned, that the list of subscribers is false or padded, that the subscribers to this publication receive it free of cost or that the subscription price paid by the subscribers is inadequate to meet the costs of publication. No such showing was made. Respondent's counsel in cross-examining Mr. Bator inquired as to the cost of a small filing cabinet which is furnished to each subscriber to the publication and he was advised that the cabinets are purchased by the publisher at a cost of $5.20 each. Respondent's counsel also attempted on cross-examination to establish that the initial background material which is furnished to each subscriber represents a substantial portion of the value of the subscription. However, Mr. Bator was unshaken in his testimony that this initial background information in and of itself has only slight, if any, value.
Therefore, there is no reason to believe that the 238 persons, organizations and concerns do not constitute a legitimate list of subscribers within the plain meaning of the language of the quoted postal regulation and within the definition established by the Court in the Myrick case. It is true that there are not many subscribers to this publication, but it is also true that this is a comparatively young publishing enterprise, it having been started in 1956.
With respect to whether Deadline Data is designed for circulation at a nominal rate Mr. Bator testified that the subscription rates are as follows: $250.00 for one regular subscription for one year; $62.50 for three months; $200.00 per subscription per year for educational institutions; and, in the case of multiple subscribers, 2 subscriptions per year for $450.00 and 3 subscriptions for $600.00.
In the light of (1) the cost to the publisher of the filing cabinets; (2) the uncontroverted testimony of Petitioner's witness as to the value of the original supply of background information furnished to subscribers; and (3) Mr. Bator's testimony that the Petitioner is a business organization with the usual and normal desire for profit, it must be concluded that the subscription rate is not nominal. It is quite likely the number of subscribers is limited, also, because of the fact that the subscription rate is more than the average person either can or desires to pay.
The next question is whether "Deadline Data" is formed of printed sheets. Prior to the amendment in 1958 of the provision of law codified at Section 226 of Title 39, U. S. Code, the third clause of that section read in pertinent part as follows:
"Third. It must be formed of printed paper sheets, without board, cloth, leather, or other substantial binding, such as distinguish printed books for preservation from periodical publications * * *."
By Section 204(d) of Public Law 85 - 426, approved May 27, 1958, (72 Stat. 139) this clause of this section of the statute was amended so that the pertinent part now reads:
"Third. It must be formed of printed sheets: * * *"
On pages 26 and 27 of House Report No. 1760, dated May 21, 1958, 85th Congress, 2nd Session, the Committee of Conference on the bill (H.R. 5836) made the following comment with respect to this amendment:
"Section 203 (f) of the Senate amendment contained an amendment to section 202 (a) of the Act of February 28, 1925 (39 U.S.C. 283). This amendment reaffirms, in effect, that provision of law which requires the payment of second-class mail advertising rates on advertisements which are inserted in and attached permanently to a publication.
"The amendment proposed by section 203 (f) of the Senate amendment is consistent with the amendment proposed by section 203 (e) of the Senate amendment, which proposed to remove from existing law the requirement that a publication "* * * must be formed of printed paper sheets * * *" in order to gain admission to the second-class mail privilege.
"In conformity with existing law, the Post Office Department has held consistently that there could not be included in publications admitted to the second-class mail privilege those advertisements which, in effect, did not consist of printed paper sheets -- that is, advertisements printed upon and consisting of foil laminates and similar materials, which (although in sheet form) are not "printed paper sheets" and, in many instances, constitute actual samples of the product advertised.
"There is an increasing use of foil laminates and other material not constituting "printed paper sheets" for advertisement purposes. The proposed elimination from the law by sections 203 (e) and 203 (f) of the Senate amendment of the requirement that the second-class mail publication sheets be of paper will permit the Post Office Department to revise its rulings in this area in keeping with existing circumstances and conditions and modern practices."
The only information on this point contained in the Postal Manual, so far as I have been able to determine, is found in Section 132.223 which states simply that "Publications must be formed of printed sheets." There are no instructions or directions to publishers as to the material that may be used, the size of the sheets that may be used, their thickness, or any other physical attributes which they must possess. Counsel for the Respondent stated at the hearing that he knew of no other publication having the physical characteristics of Deadline Data which was presently entitled to transportation in the mails at the second-class rate. This fact is not so surprising in view of the testimony of the Petitioner's President that he conducted a survey for the specific purpose of determining whether there was any publication similar to that which he proposed to issue, and it was his finding that there was no such publication that helped him to reach his decision that there was a definite need that could be filled by a publication such as Deadline Data. The format used was adopted in order that an interested person could obtain an entire picture of the international relations of a given country, without having to go through a plethora of extraneous material such as would be necessary in gathering the information from past issues of newspapers or magazines. It is doubtful that Congress intended that only publications having the formats that were in use at the time of the enactment of the 1879 statute could be entitled to second-class mail privileges. I would not ascribe to Congress any intention in this area of legislation which would tend to impede progress or to stifle initiative.
It is in conformity with custom and accepted usage of the English language to refer to "sheets" of various materials. There are sheets of cloth, sheets of paper, sheets of metal, sheets of rock, and even sheets of cardboard. Congress having eliminated the necessity that second-class matter be formed of printed "paper" sheets, it would be a reasonable construction to hold that it intended that this criterion would be met if the matter is printed on sheets of any kind of material not otherwise prohibited. In any event, the paper stock used by the publisher of Deadline Data is sufficiently light that it is easily pliable and flexible and it can readily be bent or folded. I find that the publication is formed of printed sheets.
Respondent's counsel adverts to that portion of Section 132.483 of the Postal Manual which provides that "Blank sheets may not be carried as pages." He stated that "Since Deadline Data on World Affairs uses only one side of the card and generally not all of that, less than 1/2 of the cards are devoted to printed matter." (Brief, page 7a) I am sure that this statement is an inadvertence. At random, I picked the subject "Soviet Union, Foreign Relations" and followed it throughout Joint Exhibits 1-A through 1-K. On this subject there are 48 cards, 10 of which - or slightly over 20 per cent - are printed on both sides. This subject probably consumes as much or more space than any other in the publication, so it is likely that the incidence of cards with printing on both sides is higher here than in any other subject. Nevertheless, in riffling the various issues, I saw an occasional card with printing on the reverse side.
Mr. Bator related the history of Deadline Data. It was found that there existed a gap in readily available information on international political affairs. Encyclopedias necessarily are limited in their presentation of such information to some period prior to their publication. Current information is found in newspapers and weekly news magazines. It was the thought of Mr. Bator and his associates that there might be a need and a market for a publication that would bridge the information hiatus that exists between the encyclopedias and other reference materials on the one hand and the more current publications on the other hand.
Acting upon this idea Mr. Bator and his confreres started to gather and to condense information about the various countries of the world and concerning certain topics and events of international interest. This information was transferred to pieces of paper stock, measuring approximately five by eight inches in size which for the sake of convenience I have called cards. (Sheets would be just as descriptive a term and equally accurate). Information is given for each country or subject and these topics are arranged alphabetically. Within each topic the cards are arranged numerically.
To each person who subscribes to the publication there is furnished a set of approximately 3500 cards which comprise the "background information" previously mentioned. For convenient storage and systematic arrangement each subscriber also receives the metal cabinet to which allusion has been made. The background material and the file case are sent to the subscriber by express and second-class mailing privileges for these items are not being sought. The publication is issued weekly and the cards for the current week have the name of the particular country or topic in the upper left hand corner, followed by a number indicating the numerical sequence in which each card is to be placed in each subject. There is not a card on every subject every week, the frequency of the publication of a card on any given subject being determined by the frequency of the occurrence of events which the editors deem to be of sufficient news value. In most weeks there are some subjects on which several cards of new material are published and the cards of some of the subjects are revised from time to time.
The information is garnered from a wide variety of sources as shown by Joint Exhibit No. 4, and it is obvious from an examination of the publication, as well as from the testimony of Mr. Bator, that the object and purpose of the publication is to provide background and current information on political affairs of international interest. Where a matter of fact is reported there generally is no authority or source shown. When, however, an opinion is given or a characterization is made, a source usually is shown, e.g., "(N.Y. Times 5-13-59)". The purpose of the practice seems to be to show the place from which the item originated, much the same as a lawyer cites a case in support of a legal proposition, rather than to refer the reader to the cited source for further information, although the reference could serve either purpose.
While the original background material was not introduced as evidence at the hearing, a study of Joint Exhibits 1-A through 1-K makes it fairly obvious that this background material would have little, if any, value unless it were read and considered in conjunction with the current issues. It might have some historical value, but only to the same extent as that of past issues of newspapers or magazines. On the other hand, and this was also the position of the publisher, one could be advised as to current happenings from a perusal of the current issues without resorting to the background materials. In current issues, however, there are references by dates to previous issues where the reader may become acquainted with, or refresh his recollection of earlier related events.
The pertinent statutes are Sections 221, 224 and 226 of Title 39, United States Code, which read as follows:
221 "Classification of mail matter. Mailable matter shall be divided into four classes: First, written matter; Second, periodical publications; Third, miscellaneous printed matter and other mailable matter not in the second, third, or fourth classes; Fourth, merchandise and other mailable matter weighing not less than eight ounces and not in any other class.
224 "Second-class matter. Mailable matter of the second class shall embrace all newspapers and other periodical publications which are issued at stated intervals, and as frequently as four times a year and are within the conditions named in sections 225 and 226 of this title."
226 "Same; conditions admitting publications to. Except as otherwise provided by law, the conditions upon which a publication shall be admitted to the second class are as follows: First. It must regularly be issued at stated intervals, as frequently as four times a year, and bear a date of issue, and be numbered consecutively. Second. It must be issued from a known office of publication. Third. It must be formed of printed sheets: Provided, That publications produced by the stencil, mimeograph, or hectograph process or in imitation of typewriting shall not be regarded as printed within the meaning of this clause. Fourth. It must be originated and published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or some special industry, and having a legitimate list of subscribers. Nothing herein contained shall be so construed as to admit to the second class rate regular publications designed primarily for advertising purposes, or for free circulation, or for circulation at nominal rates."
Applicable Departmental regulations on the subject are sections 132.211, 132.224 and 132.483 of the Postal Manual, as follows:
132.211 "Mailable Publications. You may mail only newspapers and other periodical publications at the second-class rates. The copies may not contain obscene, treasonable, lottery, or other kinds of material that would cause them to be nonmailable under the provisions of part 124."
132.224 "Contents. Publications must be originated and published for the purpose of disseminating information of a public character, or they must be devoted to literature, the sciences, art, or some special industry."
132.483 "Novelty Pages. Novelty pages are printed sheets that may be used for purposes other than reading, or printed sheets with novel characteristics. Novelty pages must be prepared specifically for and intended as integral pages of newspapers or other periodical publications. Blank sheets may not be carried as pages. The total number of novelty pages in the copies may constitute only a minor portion of the total pages. An excessive use of novelty pages may give a publication the characteristics, both as to format and purpose, of books, catalogs, or other third- or fourth-class mail. The following kinds of pages are examples of novelty pages that may be included in second-class publications:
a. Printed pages bearing words, perforations, or symbols indicating they are for detachment.
b. Pages having printed pictures for cutting out.
c. Printed pages having blank spaces for writing or marking.
d. Pages having printed paper illustrations pasted to them.
e. Pages with coupons or application or order forms occupying not more than one-half of the page."
There have been few cases in which there was for determination the question of whether a publication was in fact a "periodical publication" within the meaning of Sections 221, 224 and 226 of Title 39, United States Code. The leading case dealing with this question is Houghton v. Payne , 194 U.S. 88. Here the Court said:
"A periodical, as ordinarily understood, is a publication appearing at stated intervals each number of which contains a variety of original articles by different authors, devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series. It implies a continuity of literary character, a connection between the different numbers of the series in the nature of the articles appearing in them, whether they be successive chapters of the same story or novel or essays upon subjects pertaining to general literature. If, for instance, one number were devoted to law, another to medicine, another to religion, another to music, another to painting, etc., the publication could not be considered as a periodical, as there is no connection between the subjects and no literary continuity. It could scarcely be supposed that ordinary readers would subscribe to a publication devoted to such an extensive range of subjects."
Because it is such a well known fact it is unnecessary to elaborate upon the point that low postage rates were established for newspapers and other periodicals because the Congress recognized that it was in the public interest and in the national interest to provide an inexpensive means for dissemination of information to the greatest practical extant.
The crux of this issue is whether this publication is originated and published for the dissemination of public information. That the publication is so originated and published is so clear as to be incontrovertible. While it is true that Deadline Data is an esoteric publication with a comparatively small list of subscribers, it is believed that its information reaches many more people than would seem at first blush to be the case. Contrary to the views expressed by Respondent's counsel, the fact that there are so few private citizens who are subscribers is without significance when consideration is given to the remainder of the list of subscribers, such as newspapers, a press association, magazines, libraries, encyclopedias, television and radio stations and educational institutions. These subscribers make up nearly 50 per cent of the entire list. Each of these groups is, in turn, a medium of providing immense segments of the public with information. While this assumption can not be based on anything in the record in this case, it is not unreasonable to conclude that more people receive information because the publication is printed in its present form and goes to its numerically limited list of subscribers than would be the case if the publication adopted a more conventional format such as that of a newspaper or magazine. In other words, the question here is one of substance rather than form, although even in matters of form the publication has been found to comply with the controlling statutes and regulations. I find that Deadline Data on World Affairs is a periodical publication.
The record in the case, particularly an examination of the publication under consideration, clearly warrants a reversal of the Director's proposed action and the granting of second-class mail privileges for Deadline Data. I conclude as a matter of law that the publication Deadline Data on World Affairs complies with all the requirements of sections 221, 224 and 226 of Title 39, United States Code and with the regulations of the Post Office Department governing the entry of publications into the mails as mail matter of the second class. The action of the Director, Postal Services Division, Post Office Department in proposing to deny the publisher's application for second-class mail entry for the publication is set aside and the application is granted.