means, but no law singling out any single part of any one industry for such special treatment.

My second and major point is that we fear that acceptance of such exemption as this bill provides would probably result in compensating legislation.

If newspapers were to be granted such special privileges as encompassed in this bill, there would be those in Government who would quickly move in to regulate the privilege.

What would the price tab be for accepting such favored status? If given the choice, we prefer to continue to operate within existing antitrust laws *** an dwe favor the enforcement of these laws, within the newspaper field, with the same vigor as that used in any other area of American business.

My last point is that I believe antitrust laws should be made more clearly understandable.

They are not. As far as I can discover, all the newspaper industry has to go on-in the area of joint operating agreements-is a letter written by Attorney General Ramsey Clark to Senator Eastland in July 1967. The Attorney General said in this letter:

*** it is normally justifiable for failing companies to enter into pooling of, manufacturing and distributing facilities in order to achieve certain economies and efficiencies. ***

Here, Mr. Chairman, I would like to correct my own statement because I subsequently discovered that Chairman Paul Rand Dixon in September of this year, before this same committee, made a statement that:

Joint printing operations and joint distribution of newspapers are economy measures. They can be conducted jointly by competitors.

But what does this mean? Can newspapers legally pool their presswork, the setting of their type, the joint usage of trucks to distribute their newspapers? What do the words mean: distribution, distribution of sales, distribution facilities? Can newspapers jointly use computers for business purposes? What kinds of business purposes?

It seems that even distinguished lawyers aren't sure about where to draw the line. Louis Loeb's testimony last year pointed this out. He apparently believed at that time that newspapers could jointly operate advertising and circulation departments provided this did not interfere with competition. But apparently Senator Hart did not totally agree with this feeling of Mr. Loeb's.

This lack of clarity simply is not fair. Newspapers need, in fact, all American businessmen need and should have clearer guidelines telling them what they may and may not legally do.

And it is not only the large newspapers that need this. There is another precinct to be heard from. It's the small newspapers. They need this clarification too, or soon will be needing it.

During the recent years there has been a rapid development of high-speed offset newspaper presses sold at a price which several weekly newspaper publishers-not one publisher, perhaps, but a number of small weekly newspaper publishers-can afford to buy. In the Midwest quite a number of joint corporations have been formed in which weekly newspaper publishers own and operate a common press. The result is greatly increased efficiency, an efficiency which has rescued newspapers which probably would have folded for a complex set of reasons. Joint operation of presses has not stifled competition.

It has preserved newspapers which otherwise would be that much closer to extinction because of slow, expensive-to-buy, expensive-tooperate, expensive-to-repair, old-fashioned equipment.

These weekly newspapers, too, now see the value of sharing certain functions but they need to know just how far they may go in doing this. We believe they should be so informed, rather than allowing them to drift along to be prosecuted perhaps 30 years later for a sin they did not know they were committing.

I would suppose the same applies with respect to computers. Might it not be true that small insurance companies could better survive if they were allowed jointly to own and operate a computer? What may the computer legally do, prepare financial statements for its individual members? Prepare industrywide forms? Send out bills? Write letters? Who knows?

To sum this up: We feel there is little need for, support for, or interest in, newspapers as a whole, this type of special exemptive legislation.

We simply cannot see any necessary reasons why this bill would add competition to the newspaper industry or preserve competition that does exist.

Rather than accept such a law we would prefer to operate as we have been, within laws which we believe reflect a sound public policy. But we believe this law should be clarified so that not only newspapers but American business as a whole may get a better idea of what may and may not legally be done in this fast-changing technological world.

Thank you.

Mr. DONOHUE. Thank you, Mr. Shaw.

Any questions, Mr. Kastenmeier?

Mr. KASTEN MEIER. Very briefly, Mr. Chairman.

You do not mention, as the preceding three witnesses did, your fear of concentration, although you speak highly of preserving competition. Do you think we have a problem with respect to concentration in the newspaper industry?

Mr. SHAW. Concentration of what?

Mr. KASTEN MEIER. Ownership, chains, and the like.

Mr. SHAW. Yes, I do. Speaking personally, I believe there is such a problem.

Mr. KASTEN MEIER. You are opposed to this legislation in its present form, H.R. 19123, but I also assume from your statement you might not necessarily oppose it if it were amended to make the antitrust laws clearly understandable in this area or for purposes of clarification or even perhaps amnesty, to use your words.

Mr. SHAW. It depends how they clarify it. I believe that clarification is in order, but of course where the line would be drawn would dictate what my response to that question would be.

Mr. KASTEN MEIER. Thank you, Mr. Chairman.

Mr. DONOHUE. Mr. McClory.

Mr. McCLORY. I have no questions.

I enjoyed the statement, and thank you very much for it.
Mr. DONOHUE. Counsel would like to ask you a question.

Mr. HARKINS. Mr. Chairman.

With respect to the need for legislation that would clarify the antitrust posture of joint ventures, are you familiar with the testimony

of the Department of Justice representative Mr. Zimmerman, at these hearings?

Mr. SHAW. No, I am not, sir.

Mr. HARKINS. Mr. Zimmerman testified that there was no need for antitrust exemption for joint printing arrangments and joint distribution arrangements. Do you believe that it would be helpful or it would be necessary to have legislation that would make it clear that such activity would not be a violation of the antitrust laws?

Mr. SHAW. I don't believe what I was suggesting was legislation, but a public declaration of policy by the Justice Department about what their words mean.

Mr. HARKINS. I think the testimony that we have here by both Mr. Zimmerman and Mr. Dixon makes it very clear on this public record that the point activities of printing and mechanical activities of distributing papers, and for the joint use of trucks, and so on, would not be viewed by their offices as a violation of the antitrust laws.

Is that the kind of guideline that you believe this requires?

Mr. SHAW. Precisely, although the use of the words, "distribution facilities"—well, that in itself should be, I feel, clarified.

Again, for the sake of clarification I think that a contrasting statement should be made. For example, it seems that these joint advertising agreements cannot legally be made. I suggest that there is a lot of innocent blundering into violations because the law hasn't been sufficiently clear.

Mr. DONOHUE. Thank you again, Mr. Shaw.

We have before us several statements that we will incorporate into the record which counsel will read by caption.

Mr. HARKINS. A statement by Jack R. Howard, president and general editorial manager of the Scripps-Howard newspapers in support of H.R. 19123; a statement of John J. Long, legislative representative, International Printing Pressmen & Assistants' Union, AFL-CIO, in opposition to H.R. 19123; a communication from David Thompson, secretary-treasurer of the Washington Printing Specialties & Paper Products Union, Local 449, in opposition to H.R. 19123; a communication from Cornelius V. McIntyre, secretary-treasurer of the Washington Printing Pressmen's Union No. 1, in opposition to H.R. 19123; and a communication from Don Villeneuve, president, Tuscon and Pima County Central Trades Council, Tuscon, Ariz., in opposition to H.R. 19123.

Mr. DONOHUE. Without objection these statements will be incorporated and made a part of the record.

(The documents follow:)

STATEMENT OF JACK R. HOWARD, PRESIDENT AND GENERAL EDITORIAL MANAGER, SCRIPPS-HOWARD NEWSPAPERS, IN SUPPORT OF H.R. 19123

My name is Jack R. Howard. I am the President and General Editorial Manager of the Scripps-Howard Newspapers, and I am submitting this Statement to the Antitrust Subcommittee of the House of Representatives Committee on the Judiciary in support of H.R. 19123. Indeed, I appreciate the opportunity to do so because I believe the legislation the Subcommittee is considering is essential to the survival of many newspapers in this country.

I am aware of the special problems affecting newspaper joint operating arrangements because the Scripps-Howard organization has newspapers participating in seven of the 22 joint arrangements in the country. In each of these seven cities, joint arrangement has made possi the preservation of two independent newspapers.

This proposed legislation will help to dispel the present antitrust cloud which hovers over such joint arrangements and will serve to strengthen and preserve a vigorous free press. I appreciate that that phrase may be self-serving but I make no apology for it because I believe it.

I grew up in a newspaper environment and have spent my life in it. My actual experience has been largely concentrated in the editorial operation of newspapers and, obviously, most of that has been with the Scripps-Howard Newspapers. Including summer employment during college years I have been in the business nearly 40 years.

I have worked as a reporter, rewrite man, copy reader and news editor for newspapers in this country and abroad. I have also had some experience in broadcasting which is, of course, also in the communications field. In 1948 I became General Editorial Manager of the Scripps-Howard Newspapers, and in 1953 I became President. I occupy both posts today and am also President of Scripps-Howard Broadcasting Company.

I am a Director of the American Newspaper Publishers Association, a member of the Advisory Council and the Executive Committee of the Inter American Press Association and a former President and former Executive Committee Chairman of that organization, and a member of the American Society of Newspaper Editors.

There are 17 Scripps-Howard newspapers published in 16 cities. Three of them are published by The E. W. Scripps Co., which is owned by the Edward W. Scripps Trust. The other 14 papers are published by subsidiaries of E. W. Scripps Co. The stock of The E. W. Scripps Co. and its subsidiaries is widely held by executives and employees, reflecting a policy established by E. W. Scripps nearly a century ago.

Although each of you is probably well aware of what is meant by the term "joint arrangement" and how it operates, I will summarize breifly and generally the characteristics of such arrangements in which we participate.

In each situation a single corporation performs the combined business or noneditorial functions-basically production, distribution, advertising and circulation of both newspapers. This results in one production plant, one distribution system, one advertising department and one circulation department. In each newspaper the editorial and news functions are completely separate and independent.

The seven cities in which Scripps-Howard is involved in joint arrangements are Albuquerque, New Mexico; El Paso, Texas; Evanswille, Indiana; Birmingham, Alabana; Knoxville, Tennessee; Columbus, Ohio and Pittsburgh, Pennsylvania.

I did not personnally play a part in the organization of the first three joint arrangements entered into by Scripps-Howard because they developed before I assumed any general management responsibility in the organization. Our records, however, indicate that the Scripps-Howard newspaper in Albuquerque, then the New Mexico State Tribune and now the Albuquerque Tribune, had operated at a loss for several years before the joint arrangement was established in 1933.

The financial condition of the other party to the joint arrangement, The Albuquerque Journal, at that time is something I know nothing about.

Our records indicate that the Scripps-Howard newspaper in El Paso, the El Paso Herald-Post was a losing company prior to entering the joint arrangement in 1936. Scripps-Howard's records do not reveal the financial condition of the other El Paso newspaper, the El Paso Times, but it is our belief that the El Paso Times in 1936 was either losing money or operating marginally.

In Evansville, the Scripps-Howard newspaper, The Evansville Press, was not a losing corporation at the time the joint arrangement was established in 1938. But, having observed the trends in other cities of similar size, it seemed to Scripps-Howard, I have been given to understand, that Evansville could not long have supported more than one daily newspaper operating completely independently.

I am more familiar with the development of the four most recent joint arrangements in which Scripps-Howard has become involved.

In Birmingham, Alabama, our newspaper, the Birmingham Post, now the Birmingham Post-Herald, was losing substantial sums of money prior to the establishment of the joint arrangement. Because of its sizable losses and the fact that such losses would not only have continued but increased, ScrippsHoward had to consider alternatives. Merge, negotiate a mutually satisfactory joint arrangement with the other Birmingham newspaper or discontinue

publication. The Birmingham joint arrangement entered into in 1950 seemed to us to offer the solution most favorable to the public interest, for it preserved two separate, independent newspapers.

In Knoxville, Tenn., the Scripps-Howard newspaper, The Knoxville NewsSentinel, was a profitable company at the time the joint arrangement was established but the other Knoxville newspaper, The Knoxville Journal, had admittedly been a losing corporation for several years. It appeared likely in 1957 that Scripps-Howard might soon be the only publisher of a daily newspaper of general circulation in Knoxville in the absence of a joint arrangement. An approach was made by the other newspaper, resulting in Scripps-Howard's entering a joint arrangement with the Journal in 1957. Here, again, preservation of two, separate, independent newspapers seemed to us to be in the best interest of all concerned.

In Columbus, Ohio, the Scripps-Howard newspaper, the Columbus Citizen, was at the time of the organization of the joint arrangement experiencing sizable losses. Such losses coupled with the prospects of further and greater losses, caused Scripps-Howard to enter into a joint arrangement in 1959 with the Dispatch Printing Company. If Scripps-Howard had not been able to work out a satisfactory joint arrangement, it would have been forced to discontinue the publication of its Columbus newspaper or merge. In our thinking, a joint arrangement was the most desirable of these alternatives.

In Pittsburgh, Pa., the most recent arrangement in which Scripps-Howard participates, the Scripps-Howard newspaper, The Pittsburgh Press was a profitable corporation at the time the joint arrangement was established in 1961. Although we had no certain knowledge, we believed that the Post-Gazette was losing money and might not long be able to continue to publish a newspaper of the quality its publisher desired.

So, it appeared in 1961 that if Scripps-Howard did not enter a joint arrangement with the Post-Gazette, Pittsburgh might soon be served by a single metropolitan newspaper of general circulation. Despite the fact that we stood in a position to become that single newspaper, we felt and still feel very strongly that a community the size of Pittsburgh should not be served by only one newspaper if it can reasonably be avoided.

The factors which have brought about the conditions under which joint arrangements have developed are many and in some instances peculiar to the newspaper business. There have been changes in the business that have resulted in perhaps more vigorous competition than ever before in the dissemination of information and advertising, both between and among newspapers themselves and with other media. At the same time, it has become an economic fact that there are certain cities or markets which can no longer support more than one metropolitan daily newspaper operating separately and independently in both commercial and editorial departments.

The primary cause of all this is that costs have increased far more rapidly than revenues. And newspapers must compete with other media for readers' time and advertising money. The daily newpapers' share of both has decreased substantially and steadily. At the same time there has been a steady and drastic increase in costs of publication, including costs of labor, equipment, distribution, news and feature services, and newsprint.

Other factors, of course, are involved. There has been the flight to the suburbs, the advent of radio and, more recently, television. There has been the curtailment of rail service, the increased development and use of highways. There has been the acute traffic congestion of all major cities and the resulting burdens and problems this has imposed upon the distribution of newspapers. But the primary cause, as I have said, is economic.

In each Scripps-Howard city to which I have referred at least one of the newspapers found itself at some stage of a downward spiral leading to the failure of the newspaper in the absence of some sort of combined operation. In each city there were two basic possibilities short of suspension of publication. The newspapers could have merged their entire operations or they could have combined only the business functions and preserved separate and independent editorial and news departments.

The latter course was our preference, for, as I have suggested before, we believe that it is in the public interest to preserve two separate, independent. newspapers in a community.

The existence of separate and independent editorial voices is a good thinggood for the community and good for the newspapers involved. It promotes the