Paying an extra penny for the day’s news

Hundreds of daily newspapers went out of business a century ago, and others raised prices and cut expenses as they dealt with shortages of newsprint that sent the industry’s costs soaring.
The Post-Star of Glens Falls, in an urgent alert to readers and advertisers, described what happened in Winnipeg, Manitoba, when that city’s daily newspapers shut down for a week.
“Wild rumors ran rampant about the town. There was no newspaper to correct them or to give facts,” the paper reported on Jan. 28, 1920.

Locally the crisis affected not just newspapers but also the region’s paper mills, many of which manufactured newsprint at the time.

Knowing that the newspaper industry survived that crisis brings me at least some reassurance that the industry will make it through its current troubles, although newspapers, like albums in the music industry, may soon be published primarily in a digital format.

Today, as a century ago, readers still need local news organizations to inform them, and advertisers need a vehicle to tout their wares. The shift to a paperless product may mean less cost to the consumer — but also less pay to support the reporters and editors who gather and organize the news.

A century ago, the solution was to pay a little more for the product.
“The days of a two-cent newspaper will soon be only a memory,” The Post-Star wrote in an editorial published Jan. 10, 1920, as it announced a price increase, effective two days later, from 2 cents to 3 cents. The new price was the equivalent of about 40 cents in today’s dollars for a paper that typically ran from 12 to 16 pages.

Daily newspapers in Saratoga Springs, Schenectady, Albany, Troy and elsewhere had already increased their prices to 3 cents a copy.

“The Eagle-News is the last paper in Poughkeepsie to raise its rates; the Star, evening, and the Courier, Sunday, have done so several month ago,” The Post-Star reported on Jan. 6.
The Record of Troy, announcing its own price increase, said it had “attempted to meet the problem by every possible readjustment and economy” and that it believed it had a “duty to give the public a daily newspaper at the lowest possible price.” But its statement, reprinted Jan. 7 in The Post-Star, said the Record was determined not to “lower the standard of its product.”
At the Times, another daily newspaper in Troy, newsprint prices had increased 125 percent, forcing the first subscription price increase in five years.

Over the previous year, 646 daily newspapers across the nation had ceased publication or merged with other newspapers, The Post-Star wrote in an editorial published Jan. 30. St. Louis and Cleveland were down to just one morning newspaper each, and in New York City, the Sun and the Herald merged.

“Weaker papers in smaller places have simply gone by the board and suspended,” the editorial explained.

 

Price of a growing economy?
The 1920 crisis was caused by a combination of increased demand and limited supply.
As the economy began to take off after the end of World War I, newspapers, especially those in major metropolitan areas, sold more advertising and, hence, increased the number of pages in each issue.

But North American pulp and paper mills lacked the capacity to meet demand, so paper prices spiked upward.

The price of white paper had more than doubled since 1914, while other material and labor costs also increased, according to The Post-Star.

Federal officials proposed legislation, mostly impractical, to address the crisis, and paper manufacturers opposed these proposals.

“Only remedy for present trouble is rigid economy by publishers in their use of newsprint,” International Paper Co. Vice President Chester W. Lyman said in a May 5 statement. “It would be the height of folly for government to attempt to regulate or lower spot market.”

Some politicians alleged paper companies had unfairly hiked prices when wartime government price controls expired after the end of World War I.

Maurice Hoopes, president of Glens Falls newsprint manufacturer Finch, Pruyn & Co., defended the paper industry against such allegations of profiteering when he testified in Washington, D.C., on May 13, 1920, before a U.S. Senate panel investigating newsprint prices.

“It was because they knew that production costs were increasing very rapidly and that manufacturers were selling at prices below those in the open market,” Hoopes said, according to a report the next day in The Post-Star.

That explanation did not satisfy the committee chairman, Sen. James Reed, D-Missouri, who pointed out that Finch was selling paper on the open market for 8 cents to 9 cents per pound -- about double the 4-to-5-cent price under government contracts during World War I.

“You were simply trying to make all the money you could make, weren’t you?” Reed asked.
“I beg your pardon,” Hoopes replied. “But if we had been doing that, we would have taken 16 cents for it. We had offers at that price for paper.”

U.S. Rep. William Brown McKinley, R-Ill., proposed allocating $10 million in federal funding for a revolving loan fund to buy and distribute newsprint. The proposed loan fund would have been run by a commission of five publishers of newspapers with a circulation of less than 15,000.
Rep. Charles Eugene Fuller, R-Ill., proposed limiting daily newspapers to 16 pages, Sunday newspapers to 48 pages, and magazines to 100 pages. Fuller also proposed prohibiting U.S. papermakers from exporting newsprint for one year.

John P. Burke, the international president of International Brotherhood of Pulp, Sulphite and Paper Mill Workers, said new mills the previous 10 years had been primarily built in Canada, where there was a reliable supply of pulpwood.

“The workers in the paper industry cannot be held responsible for the paper shortage, because, from the information I have been able to gather, more paper is being purchased now than ever before,” Burke, of Fort Edward, said at the union’s annual convention. “The principal cause of the shortage, in my opinion, is due to the fact that the large metropolitan dailies are issuing enormous editions, the greater part of which is devoted to advertising space.”

Burke said the most sensible long-range solution would be for federal and state governments to focus on reforestation — to help the supply of pulpwood to keep pace with increased demand.
Burke also suggested the state of New York enact a constitutional amendment to reverse the so-called “forever wild” clause that prohibited cutting of timber on state Forest Preserve land.
Eventually supply and demand reached a better balance, though, and readers accepted the advent of the 3-cent newspaper.

 

Maury Thompson was a reporter for The Post-Star of Glens Falls for 21 years before retiring in 2017. He now is a freelance writer focusing on the history of politics, labor and media in the region.