I strongly urge the passage of this bill, Mr. Chairman, as a necessary support for our constitutional precepts of freedom of the press.

I trust early and favorable action will be taken by your Committee in this connection.

With kindest regards and best wishes, I am
Sincerely your friend,

JOE L. EVINS, Member of Congress.

STATEMENT BY HON. RICHARD FULTON

Mr. Chairman, I have been invited here this morning to speak in behalf of my bill, H.R. 10625, originally introduced June 7, 1967. Since that time hearings have been held in the other body and modified legislation has been introduced which, I understand, would grant the relief sought by the 44 newspapers which have bound themselves into operating agreements and now find themselves threatened should this relief not be forthcoming.

Therefore, at this time, I will confine my remarks to the need for relief as sought under the modified bill, H.R. 10625.

Also, I will not attempt to argue specifics as to the desirability of these joint operating agreements. There will be before you today others who, as participants in these agreements, will ably present their case and you and your Subcommittee may judge it on its merits.

Rather, at this time, I would like to express my concern over the great loss which might be suffered by my community, Metropolitan Nashville Davidson County, Tennessee and by many areas of the Nation because of the court finding that these joint operating agreements are per se in violation of the Antitrust laws.

Though the Nashville Banner and the Nashville Tennessean operate jointly in a business sense, they are fiercely independent in a journalistic sense. Their editorial staffs, news gathering personnel and resources, and editorial policies are individual, distinct and separate. This is not only the case today but has been throughout the history of the joint operating agreement. The ultimate beneficiary of this strong competition is, of course, the public which is afforded full coverage of the news combined with forthright expression of editorial opinion and commentary on many important issues. This is vital to our Democratic form of government.

Not only has each newspaper been fearless in its expression of editorial and fair in its coverage of the news, each has also been a dynamic force in the forward movement of the economy and industrial growth of our Metropolitan area and th Mid-South Region.

The preservation of this dual journalistic competition and contribution would not have been possible had it not been for the joint operating agreement entered into by the Nashville Banner and The Nashville Tennessean back in 1937. At that time, both newspapers were in very serious financial difficulties. One, The Nashville Tennessean had just been sold out of receivership to Mr. Evans late father, Siliman Evans, Sr., the other was heavily incumbered by debt and had been losing money for several years. Without the joint operating agreement one or possibly both would not have survived and our community and region would no longer have been served.

Mr. Chairman, when a newspaper fails everyone loses, the public, the publisher, the employees of the newspaper, the advertisers, the stockholders and even our democratic form of government is sapped of the strength gained through the free presentation of ideas and discussion of issues.

Politically, I have enjoyed the support and suffered the disfavor of each of these Nashville newspapers at one time or another. However, my personal political fortunes or those of any public office holder or seeker are not germane here. What is, is the preservation of a free and independent press in America. There cannot be too many voices in this field. But there can be too few. The Constitution's guarantee of freedom of the press is a hollow guarantee if we do not preserve the viable independent instruments which give life and breath to that freedom.

Mr. Chairman, that breath will be hushed and that life stilled if these newspapers do not receive the relief sought in this legislation. I believe this relief is very much needed to assure the full preservation and viability of a free press in America and I respectfully solicit your favorable consideration.

The CHAIRMAN. Our next witness is that great Senator, Carl Hayden, from Arizona.

TESTIMONY OF HON. CARL HAYDEN, A UNITED STATES SENATOR FROM THE STATE OF ARIZONA

Mr. Chairman, members of the subcommittee, I appreciate this opportunity to submit a statement on H.R. 19123. This bill, like the Senate substitute to S. 1312 which 14 other Senators joined in cosponsoring, would make clear that when two newspapers enter into a joint business agreement or combination necessary to save one or the other or both from going out of business, then the parties are not guilty of an antitrust violation.

My interest in this legislation came about when the publishers of the Arizona Daily Star and the Tucson Daily Citizen, constituents of mine, brought their plight to my attention. It should be made clear that for a quarter of a century these two newspapers have published through a joint printing and business operation. It should be made equally clear that these two newspapers have remained editorially separate and distinct. Not only does each paper have its own editorial and news gathering staff, each also has its own political bias. Then in 1965, the Department of Justice filed an antitrust suit against the Citizen and the Star to break up their joint printing and business system. The Department of Justice was successful in the Federal District Court and the case is now on appeal to the Supreme Court of the United States.

Mr. Chairman, joint newspaper operations similar to that in Tucson exist in more than 20 cities and presumably the Department of Justice has long been aware of this fact. Prosecutors for the Department have indicated that they will take antitrust action against all other newspapers in similar circumstances.

It is the purpose of the antitrust laws to foster competition rather than stifle it. From facts presented to me it is apparent that if the Department is successful, Tucson will become a one newspaper city. Today, only five cities in the entire Nation have three or more daily newspapers. Only 59 cities have separately owned, editorially distinct newspapers; and in 22 of these cities, editorial independence has been maintained through the use of joint printing and business procedures like those attacked in the Tucson case.

When one considers the historical role of newspapers in a community as organs of debate and instruments for the expression of ideas, then it would seem that the time has come to preserve that editorial competition and independence which yet remains in this country.

We are probably all familiar with the dramatic metropolitan newspaper failures of recent years. I have seen figures that show that the

number of cities with separately owned daily newspapers decreased by 40 during the single decade 1954 to 1964.

For these reasons, I think newspapers should be permitted and indeed encouraged to take all reasonable steps to maintain financial good health.

H.R. 19123 would permit those newspapers now being published through a system of joint operation to continue to do business that way, and it would remove the legal cloud that now hangs over them. This bill does not condone or exempt from the law predatory practices that are anticompetitive in means or ends. In fact, this bill and the Senate substitute specifically forbids the use of predatory prices and practices.

I am happy that the distinguished publisher of the Tucson Daily Citizen is here to testify. Mr. Bill Small has been able to publish a successful newspaper mainly because he has utilized a joint operating plan to deal with the economic and technological problems involved in newspaper publishing today.

Let me add that his newspaper has not always supported my reelection to the Senate. Otherwise, I have a good deal of respect for its independent editorial voice.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you Senator Hayden. We will now hear from Congressman Torbert Macdonald of Massachusetts.

TESTIMONY OF HON. TORBERT H. MACDONALD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Gentlemen, it is a privilege to appear before this subcommittee today to testify on behalf of H.R. 8963, a bill which I introduced, and the several identical bills which have been introduced in the interest of saving countless small suburban newspapers throughout this country.

Virtually, every community in this country has a local newspaper of which it can be proud. These local newspapers provide an in-depth coverage of those news items and features which are of too parochial an interest to make the pages of the big-city newspapers nearby. Yet, because this news is closest to home, it is often of significant interest

to us.

The people of my district-the Seventh Congressional District of Massachusetts are extremely fortunate to have many of these fine local newspapers to serve them. It is on behalf of these newspapers that I urge your approval of this legislation.

As you undoubtedly know, this bill would allow a single newspaper owner to operate two or more of these papers, thereby, enabling him to better defray the constantly rising costs of ink, type, and printing facilities. H.R. 8963 would exempt such newspaper combinations from the antitrust laws and would assure thousands of communities of the continuing benefits provided by the local newspapers.

I am here today to ask that you speed this bill on its way to passage by the entire Congress. I firmly believe that it marks a step which we are long overdue in taking. I am certain that my respected colleagues on this subcommittee share in this desire, and I only want to confirm

their feelings with my own and to inform them of my great concern in this matter. Thank you.

The CHAIRMAN. Thank you, Mr. Macdonald. Our final witness will be the Honorable Page Belcher, of Oklahoma.

TESTIMONY OF HON. PAGE BELCHER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA

Mr. Chairman, I certainly appreciate this opportunity to discuss with you and the members of this very fine subcommittee legislation which I have proposed along with other Members of the Congress to grant a limited exemption from the antitrust laws relative to newspapers involved in joint arrangements or combinations.

Gentlemen, I have introduced this legislation because I believe it meets a very serious and apparent need to modernize existing law in the face of changed conditions in order to maintain the American tradition of editorial and reporting competition in the newspaper business.

Let me recite briefly just a bit of background with which you are probably already familiar and which you no doubt will hear from other witnesses. Nevertheless, I think it very important to emphasize two facts: the importance of a free, healthy, and competitive press as an essential of democracy and the precipitous decline in recent years in the number of newspapers and, more particularly, the number of cities with more than one newspaper. The first point, I think, does not need documentation. Perhaps the second does.

In 1910 there were 700 cities in the United States which had two or more competing daily newspapers. By 1954 that number was down to 106; by 1960 it was 61; and last year it was only 59.

In 1910 there were about 2,200 daily newspapers. By 1960, while the U.S. population had doubled, the number of dailies was down to fewer than 1,800. Last year that figure dropped to 1,753.

What is the problem? Essentially it is a financial one. The cost of production continues to spiral upward while advertising, one of the traditional sources of revenue in the newspaper business, gets more and more scarce, owing to the pressure of competition from small suburban papers which get an increasing share of the classified business and from television and national magazines which have carved for themselves many of the choicest slices of national advertising.

Further, the newspaper business has certain inherent economic problems. For example, a single newspaper having its own printing facilities can utilize only a fraction of the full capacity of its plant and frequently, because modern minimum wage law and union contracts, must pay full shift wages for only a few hours of work.

For these reasons and others, it has become essential to the financial survival of many newspapers to enter into joint operating arrangements of a limited nature, usually involving joint production, distribution or advertising solicitation, but not joint editorial operation. Under such arrangements separate and independently owned newspapers can continue to serve the public, competing and operating as editorially distinct news sources, but on a sound financial basis im

possible without the pooling of production facilities, cooperative distribution, and/or combined advertising solicitation.

This is not an arrangement which the newspaper business seeks to invent or adopt for trial. It is an arrangement under which many metropolitan dailies have been working satisfactorily for many years. Today, for instance, 22 of the 59 cities which still have two or more separately owned, editorially distinct newspapers maintain that situation only through the utilization of certain joint operating arrangements. In my hometown of Tulsa, the Tulsa Tribune and the Tulsa World have had such an arrangement for over 25 years. Had they not done so, I can assure you that Tulsa would long ago have become a "one newspaper" city. I, for one, do not think any metropolitan area of 500,000 people should be without more than one major newspaper, and I am grateful for these two fine cooperating but editorially competitive newspapers in Tulsa.

But what has happened? After more than a quarter of a century during which traditional American editorial competition has been maintained by means of cooperative production, distribution, and advertising arrangements, the Department of Justice has brought suit against the jointly operated papers of one city and has served notice that if this test case is upheld by the Supreme Court it will move against papers in some of the other cities where this practice has been in operation.

These suits are based upon existing antitrust laws which require the application of an extremely narrow "failing company" doctrine developed for industries which lack the unique characteristics of the newspaper business.

With all these things in mind, it is apparent that there is a need for the modernization of the antitrust law as it relates to newspapers in order that it may be adapted to changing trends and new exigencies faced by the business. This was my purpose in introducing H.R. 12476. I joined in the introduction of H.R. 19123 which, as you know, incorporates amendments suggested as a result of hearings on the Senate side and which was introduced in the House as a matter of convenience to the committee so that it could consider the legislation as it is expected to be reported by the Senate committee.

For what exactly then do H.R. 12476 and the similar bills which you are presently considering provide? Very simply they would permit a newspaper found to be a "failing newspaper" to take one of two courses of action. First, it could choose to enter into a "joint newspaper operating arrangement" with another newspaper in the same city, community or metropolitan area for the purpose of combining some or all of its business functions with that newspaper while remaining a wholly separate and independent entity in its editorial functions. Or second, the "failing newspaper" could cease business as an economically independent entity and merge or consolidate with another newspaper in the same city, community or metropolitan area early enough in its decline for there to be a reasonable opportunity for the acquiring newspaper to continue its publication and before its greatest assets-its reputation and its staff-were completely lost to the acquiring newspaper.

In an editorial in its edition of August 22, 1967, The Washington Post had this to say in opposing this legislation: