Heinl radio business letter (July-Dec 1941)

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r 8/09/41 In addition he said the latter media were favored by the heavy second class mail subsidary privilege. The PCC chairman said soivie of the smaller stations would be hard hit. ”Take the Don Lee system*’, he went on, ’’this is an exten¬ sive and important regional network on the ..ea: Coast, Yet it is not coirposed entirely of big and profitable stations. The proposed tax in the Defense revenue bill might cause the abandonment of some of the stations in this netv;ork,” LIr, Lafount asserted that 300 broadcasters already operated at a loss in which case the neij levy would have the eifect of taxing a loss, liaurice Lynch, of tlie Ghijcago Federation of Labor, opposing the tax, told the Senators that his station V/CPL in Gilcago vi?as operating at a loss, SenatD r Davis inquired into the charges of the long-lines telephone service for connecting the broadcasting stations, hr. Ply said this varied with the location of the studios and the distance covered, Mr, Alvord said he had had to advocate all sorts cf taxes in his long experience, but that he hoped tlie state of the treasury would never be so low tliat he v/ould have to favor a tax such as this on gross receipts, "That sort of a tax is unsound because it is based solely on dollars received and lias nothing to do with profit and loss" the tax expert argued, "Also tliero is no justification in taxing cne iraport£int advertising medium vi/itliout taxing all of them," This again referred to the advertising in newspapers and magazines for which no tax is provided in the Defense lievenue bill," "An ad¬ vertising tax is nothing but a tax on the dissemination of urns and on a free press," Alvord declared. Testimony was given the committee to the effect that the gross yield of the nev/ tax would be more than :".12, 000, 000, but that its net addition to Federal receipts v;ould not exceed ’;5, 000, 000, Mr, Ply said that is not a large amount, but v;ould have a substantial effect on the broadcasting industry. He said it is not a big industry "in a money sense," Senator Clark pointed out tliat in a Louisiana case the ouprenie Court held a tax on nev;spaper advertising of doubtful con¬ stitutionality, He said he understood the contention of the radio industry is that, since radio and newspapers are competing media, radio ought not to face tliis tax. Others appearing in opposition to the tax were Mrs, Linily Holt of New York, for the American Federation of hadio Artists, and by Lawson IVimberly of the International Brotherhood of Blectrical V/orke rs , X’^r gr 'r *'7' V V* J\. ji\ J\. J\. JV J\. u\ •« 4 ••