23.10.2025

About being subsidised

American socialists debated how to finance their press. With the spam and adverts clogging left websites and podcasts, this has some considerable contemporary relevance. Then there are the state hand-outs to the Morning Star. Much better to rely on loyal readers. This article comes from the August 3 1913 edition of The New York Call

A newspaper is one of those things which sell at the cost of the labor power embodied in them - but with a difference.

You pay two cents for a copy of The Call [at the time, one of the three papers of the Socialist Party of the USA]. Small as it is, only six pages, it costs more than that to put it in the hands of the newsdealers. The actual cost of the white paper is nearly a cent, even for such a modest publication as this. The mechanical work, the ink, the transportation, and so on, raise the price above two cents by the time it reaches the dealer.

If this is so with such a small publication, what must be the case with the big one-cent dailies that run fourteen, sixteen and even thirty-two pages? They must sell for far less than the paper on which they are printed. They do. You can take any one of the New York papers selling for one cent or two cents, and as far as actual cost of material is concerned you have more than your penny represents.

As they make money in spite of the fact that they sell for less than it costs to produce them, there must be a reason. If a paper has 100,000 circulation and loses a small fraction of a cent on each issue, it stands to reason that the more it increases its circulation the more it loses. Yet all papers are after circulation. They want to increase the number of copies sold. This is not because they have an altruistic desire to spread their opinions, but because on circulation, even if gained at the result of a loss, depends all the success they can hope to make. Circulation is the life of a paper. But circulation means a loss unless there is a compensating factor.

There always is. If Andrew Carnegie really wished to die poor he could start a couple of daily papers that refused both advertising and subsidies. In a surprisingly short time he would see the bottom of his cash box and could face the world without a cent.

A newspaper has to come out every day. In that respect the demands are remorseless. The cost does not decrease when business is bad, but it does increase when business is particularly good.

Fixed charges

There is a general idea that at any time you can fire the editorial department and get the paper out with a pair of scissors. It may be that there is some temporary truth to the idea. You can do that for a while. But there are certain things that you cannot get around. You cannot avoid printers’ and paper bills.

Take, for instance, a copy of the Times or the World. The paper in each of them costs more than a cent, the price you pay. There is in them some very wonderful mechanical work. On its straight set the Times is exceptional. The photo engraving in the World costs many hundreds of dollars. There is work that goes into both of the papers that can hardly be estimated as to cost, but which is enormous. Yet the papers themselves sell for less than the cost of the material on which they are printed.

Here apparently we have a complete upsetting of the rule that commodities, on the whole, sell at their value. These apparently sell for less than their value.

It is worth while finding out why and how, and looking over the question so as to discover what is the reason for it.

A newspaper is a necessity. It costs a great deal of money to produce. It gives, in mere physical value, something more than the price that is paid for it. A nickel in real value cannot be furnished for a cent unless there is some allurement, and unless the result seems to be over the penny in value.

As almost every paper is sold for less than the cost of production there must be some factor or factors governing the putting forth of this particular commodity. Those who make the venture are usually men of comparatively small means. Week after week they meet bills and incur expenses that, coming regularly as they do, are almost staggering.

How is it done?

The plain fact is that every paper is subsidized. Its work is bought and paid for in advance. It is not only a means of publicity but it is also a means of forwarding ideas. If a newspaper attempted to depend upon its sales and on the money derived from its sales, it would die of starvation in a short time.

This is true of socialist publications as well as others. We might as well face the subject and consider it for what it is worth.

The Call is a subsidized paper.

When you read the pledge fund, when you go over the list and consider the contributions that are there given, when you think over the annual affair at which over a thousand dollars will be turned into The Call, then you get some idea of the source of its subsidy. All of this is open and apparent. It is frank and above board. The Call is subsidized by the working class for a well defined and definite end. If it does not achieve that end, that is, if it is not a worthy means of publicity for the working class, then it has dismally failed.

The support and the encouragement given The Call show that it has not failed. In every great emergency its friends have rallied to it and have given work and money. They have also given what is of greater value, and that is encouragement. Probably around no publication in this country has there been an equal amount of enthusiastic loyalty and unswerving faith.

From the day it was issued The Call has been in difficulties. It has never had any money.

The editor can make no venture, for he is tied down to a certain number of dollars which it is safe to spend. The business manager lives from day to day, and works always in the hope that the day following will be better than the day previous. For these reasons there can be no ventures, no branching out, no breaking into new fields, and none of that daring which is called enterprise.

Advertising

There are three morning papers here in this city which have not as good a following as The Call; which as advertising propositions in the cold business sense of the word are inferior. They are the Telegraph, Press and Tribune. Despite this fact these papers command advertising and are supported by it. There have been rumors as to the amounts of money Frank A Munsey has lost on the press. As a newspaper manager he is a good telegraph operator. Munsey had a paper before, the Evening News, a thing that was looked upon as a good paying proposition. He was probably the only man who could have murdered it. He did. He has the Press now, and though it really does not amount to a hoot, it commands a certain amount of advertising.

The Tribune is a far better paper, and in Boardman Robinson, who does the cartoons, it has a feature that almost any publication with sense could covet. Editorially it is extinct. In a year there has not been a word in its editorial columns that was worth anything to the people of this country. In news it has been outdistanced. It doesn’t know news, and it does not dare publish news when it sees it. The features of its Sunday edition are sometimes fair. But even its most conscientious reader can go over and over its columns and find that there is nothing.

These two papers live. They get advertising. On legitimate advertising they could not live. So there must be something else.

Well, it is this: like The Call they are subsidized, only in a different way. They are kept going for the opinion they create, the same as The Call is.

The Munsey publication is still Bull Moose [nick name of the Progressive Party founded by former President Theodore Roosevelt]. The Tribune is Republican. But neither has a real cause for existence. They exist and there must be a reason for their existence.

There is no disputing the point that newspapers are sold for less than their cost of production. Neither is there any dispute that some newspapers are highly valuable properties. For the time being they “make” lots of money. In some instances the subsidy is direct. In some instances it takes the form of advertising.

The Call, which is a far better advertising medium than the Tribune, the Press or even the American - even on the basis of circulation - can do very little in the way of commanding advertising. Frankly, we are not wanted. It is not that our following would be unwelcome in the stores. By no means. But our ideas do not suit those who have the giving out of advertising.

An advertiser always has two things in view. One is the selling of goods; the other is the propagation of an idea. If his idea does not get over he wants nothing to do with a publication. For that reason, he always looks to a “class” publication, one that he thinks will meet his ideas and his needs. There is the Evening Post, for example. As a newspaper it is inferior to The Call. As far as circulation goes we do not think it equals The Call. But it is supposed to have a reading public that buys. Consequently, it gets out a fine looking, dull sheet and it commands a lot of advertising. In going over the advertising of the Evening Post, the Press and the Tribune, the wonder grows on us as to the extent to which these papers are and must be subsidized.

On their own merits, and on the commercial advertising, there are few papers that could live for a week. They would lose money so fast they would be ruined.

Abnormal condition

Probably as good a staff as there is in the city is that on the Sun. It works well together, and it has some really fine writers. What the Sun, a two-cent paper, receives in the way of subscriptions and newsstand purchases could never pay for the staff.

It, like The Call, is subsidized.

Business interests, great and small, pay for all other papers excepting ourselves.

We are the only ones who acknowledge the source of our income, and we do that through the lists, regularly published, of contributors to the sustaining fund.

Each copy of the Times and the World costs about 3 cents to put into the hands of the newsdealers. The newsdealers pay less than a cent for each of them. There have been copies of the Sunday Times that cost close on to 10 cents to produce. They sold to the newsdealers for a little over 3 cents. The World, within a few weeks, is able to pay $10,000 for the Connolly expose of Cohalan [a big 1911 corruption scandal] and $10,000 for the Mulhall letters. It can do so because it is subsidized. The Times is able to pay tens of thousands of dollars for its Marconi service. It is subsidized. Some weeks what it gets on the returns for its papers would barely cover its wireless tolls.

In view of the real existing conditions in this country, why should there be any hesitation in supporting The Call or any other socialist paper? You must subsidize them, otherwise they cannot exist. The banking houses and the business firms of this country subsidize other papers, and for their own benefit. They know the value of these papers in forwarding their own ideas and they accordingly utilize them. But they have to pay for them just the same.

If socialist papers are needed they must be subsidized in the same way. Why hesitate? For each issue there must be a certain amount put down. Otherwise it cannot appear. Such a subsidy is honourable, and we welcome it and glory in it, and we publish the list of contributors.