Broadcasting Telecasting (Apr-Jun 1958)

GOVERNMENT CONTINUED HOME FROM THE HILL? Who says there is no rest for the weary— the FCC and its 1958 trips m Congress, that is. For what little encouragement it is to the Hill-weary (or wary) FCC, House Speaker Sam Rayburn (D-Tex.) predicted last week that Congress would adjourn by Aug. 15 — leaving only 2VS more months for that body to question and investigate the FCC. Rep. Rayburn made the prediction when asked if he agreed with an earlier Republican statement that Congress would be read\ to go home by Aug. 10. "I would say they are at least five or six days optimistic," the Speaker commented. And, even adjournment by Aug. 15 would constitute an extra long election year session for Congress, "Inch usually gets adjournment fever in early June of the even numbered (election) years. CO-OP TAX DISCOUNT BAN FOUGHT he was acting as agent for the tax-exempt group, fulfilling part of his job, which entails fund-raising. IRS denied the reasoning, saying the winnings constitute gross income not to the organization but to the executive director who therefore owed taxes on the amount. In practice the only tv winnings that go without being taxed by the U. S. Treasury are small winnings turned over to charity or some taxexempt source and which do not push the donor's total contributions over the 20-30% limitation. IRS has made one exception. If a member of a religious order pledged to lifetime poverty wins money on a tv show, he may turn it over tax free to his order.' IRS agrees that he can be considered to have no income. Ch. 3 Transfer Refusal Upheld The FCC has been upheld in its refusal last September to move ch. 3 from Philadelphia to Atlantic City, N. J., requested by David E. Mackey (holder of ch. 52 there). A unanimous three-judge Washington appellate court ruled that the FCC acted properly in denying the petition. Philadelphia's ch. 3 is assigned to WRCV-TV. I he Internal Revenue Service proposal to eliminate cooperative advertising as a price discount for manufacturers' excise taxes met vigorous opposition at a hearing in Washington last week. A total of 41, representing manufacturers, advertisers and agencies attended, and others filed protests against the proposed tax ruling. I he Advertising Federation of America on behalf of 30. 000 members said a definition of price which fails to allow advertising discounts is in effect a tax on money spent lor advertising and therefore a tax on advertising. "This, of course, will have a seriously damaging effect on industry as a whole and it will be particularly damaging to local advertising media where it is estimated as much as 90 cents of the cooperative advertising dollar is spent," AFA said. Witnesses agreed in objecting that the proposal reverses earlier rulings by the IRS and Congressional intent. Electronic Industries Assn. endorsed present IRS rulings allowing a manufacturer to pay excise on the price after advertising allowances are deducted, saying these have become settled law and cannot be reversed "by mere administrative action." EIA and AFA both referred to interpretations made for the House excise tax subcommittee in 1956. EIA cited a statement of the House subcommittee report that the forthcoming IRS ruling would confirm the current interpretation with "no change recommended." The tax clarification originally was demanded by the House Ways & Means excise subcommittee headed by Rep. Aime Forand (D-R. I.). The Federal Excise Tax Council said, "The added tax will contribute to the current decline in consumer sales." It also protested the ruling would reverse IRS policy of long standing, "publicly affirmed to the House subcommittee two years ago." The National Assn. of Manufacturers was among those protesting the excise proposal and individual manufacturers represented, included Columbia Records, CBS Hytron! General Electric, Raytheon, Sylvania, Philco and RCA-Whirlpool. For manufacturers acting under prior Cincinnati's Most Powerful Independent Radio Station 50,000 -watts of SALES POWER WC KY CINCINNATI, OHIO STATION On the Air everywhere 24 hours a day-seven days a week special rulings, the new regulation will take effect when published. Others will be subject to three-year retroactivity, but unless amounts involved are large, this is not likely to be enforced, an IRS spokesman said. Rep, O'Hara Leaving Congress To Enter Private Law Practice Rep. loseph P. O'Hara (R-Minn.), a member of the House Interstate & Foreign Commerce Committee and its Legislative Oversight Subcommittee, has announced that he will retire from Congress at the end of his current term. He plans to enter private law practice either in his home state or in Washington, D. C. An 18-year veteran of Congress, Rep. O'Hara surprised colleagues with the announcement. He is second-ranking minority member of both committees and would have stepped up to ranking Republican next January. Rep. Charles A. Wolverton (RN. J.), chairman of the committee during the 83d Congress, had announced his retirement several months ago. Rep. OHara, as a member of the committee in 1952, played an active role in adoption of the McFarland Amendment to the Communications Act. Wanamaker Stymied Again; Mistrial Ruled in Oklahoma Mrs. Pearl A. Wanamaker, former Washington state superintendent of public instruction, has suffered another setback in her multi-million dollar libel suit against affiliates of MBS. In Oklahoma City, federal District Judge W. R. Wallace on May 21 declared a mistrial after a jury reported it was unable to come to an agreement. Mrs. Wanamaker sued Oklahoma stations KOCY Oklahoma City, KOME Tulsa and KGWA Enid for $100,000. The chain libel suit is based on a broadcast by MBS commentator Fulton Lewis Jr. in January 1956. Mr. Lewis linked Mrs. Wanamaker with Communism [Government, Jan. 16, 1956]. The Washington official (she since was defeated for re-election to her school post), filed suit against more than 30 MBS affiliates for damages of $2 million. Early in 1958 the suit in Baltimore resulted in a hung jury. A verdict for $10,000 in Mrs. Wanamaker's favor in Walla Walla, Wash., is awaiting a ruling on a motion for a new trial. Mr. Lewis has filed a counter claim against Mrs. Wanamaker for malicious litigation. Two Am Grants Finalized The FCC last week finalized two previous initial decisions and made am grants to Jackson County Broadcasting Co. for a new outlet on 1320 kc with 500 w, day, in Maquoketa, Iowa, and to Philip D. Jackson for a new am on 800 kc with 1 kw, day, in Weed, Calif. In the case of the Maquoketa grant, the Commission also denied a petition by Jackson County Broadcasting to strike exceptions of KROS Clinton, Iowa. Broadcasting