Also, all the licensees are required to furnish to the Commission their income and expenses, a complete, detailed breakdown of their income and expenses each year. We have that information, yes, sir. But we do not require that they file with us their rates. They are published elsewhere.

Senator WILLIAMS. You do not require them to furnish their rates, but you do require them to file with you their income which would be the total amount collected from this, is that correct?

Mr. RAWSON. Yes, sir.

Senator WILLIAMS. Do you have that information compiled where it could be submitted to this committee-we will say for the past 5 years- so we can see how this has progressed, whether they are moving forward or backward and to what extent these rates may have been increased or decreased over these years?

Mr. SCHATZOW. Yes, Senator. We publish every year a report for radio and one for television which summarizes this information submitted to us. It would not indicate how rates have increased. It would indicate the changes in the overall growth of the industry and the profits of the station.

Senator WILLIAMS. Well, it would reflect the rate increases, or their income as it could be increased by the amount of advertising. It would reflect their income from advertising, would it not?

Mr. SCHATZOw. Yes, sir.

(The information referred to follows:)

In response to the request for information regarding overall advertising income, we are showing below total broadcast revenues and pre-tax profits for radio and television for the years 1961-1965. Similarly, we are showing the figures for the radio and television stations in the five largest markets in the country over the same period of time.

Total revenues and pre-tax profits of broadcasting industry, 1961–65
[In millions of dollars]

Senator WILLIAMS. Without identifying the stations, could you furnish for us a cross section of 20 stations, showing their income from this source over the past 5 years? And also, do you have that broken down by months?

Mr. SCHATZOW. No, these are reports for the calendar year. These published reports would show you such changes as, for example, in a particular market, let's say New York, they could be compared for the 5 years and we could see what the change in the total revenue has been and the change in the profit.

Senator WILLIAMS. Well, would you furnish us-I do not suppose you would want to identify the stations, but would you furnish us this

information by Nos. 1, 2, 3, and give a report on the same station in the various cities for the past 5 years, the income on advertising?

Mr. SCHATZOW. Yes, sir. We can submit again for the record these published reports, if you would like. We can prepare a simple summary statement along the lines that you indicate you would like to have

them.

Senator WILLIAMS. That would be fine and I would appreciate that as you report on station No. 1, that you follow through at this particular point their 5-year record, so that we will have it in a picture. Mr. SCHATZOW. Yes, we will group stations and then give you the composite picture for them for the 5 years.

Senator WILLIAMS. What I am trying to get, we would like to have these advertising rates before voting on the President's proposal. Now, could you give us a sample check of the networks-there are not too many of them-as to their rates for political advertising as compared with commercial rates on an annual basis? That is, when we move into the political arena in the months of October, when it is usually a heavy concentration, are they charging more, or are they charging less for political broadcasts than they would for other types of advertising?

In other words, how does the month of October during a political campaign compare with the month of October during the off year elections? Could you get that breakdown for us for some of the stations and the networks?

Mr. SCHATZOWw. We do not have that information. I am sure we could get it from the networks. You would be interested in their receipts?

Senator WILLIAMS. In the advertising income for the month of October during the campaign years as compared to their income for the same month during the years in off year elections. I think we would need that information if we are going to intelligently act on the tion as to whether or not they could afford to give free time, time at reduced rates, or a combination of both.

Mr. SCHATZOW. Well, we will be glad to. (The information referred to follows:)

ques

The question was asked whether we could supply information on the advertising receipts of networks which would provide a comparison for the month of October during election years and non-election years. The financial data provided to the Commission by networks and stations is on a calendar year basis and we, therefore, do not have the precise information requested. There are, however, figures published in trade publications which provide reasonable approximations of the networks' advertising income on a monthly basis. The Television Bureau of Advertising releases figures compiled by two organizations, Leading National Advertisers and Broadcast Advertisers' Reports. These figures are based on information obtained from the networks and from leading advertising agencies. According to the January 10, 1966, and January 11, 1965, issues of Broadcasting Magazine, network television billings for October 1963, 1964, and 1965 were, respectively, $111.1 million, $120.9 million, and $134.9 million.

T

Total broadcast revenues and pretax profits of television and radio stations in 5 major markets, 1961-65

NOTE.-Figures in parentheses represent number of stations reporting.

Senator WILLIAMS. There have been some suggestions that political advertising has been at much higher rates than the normal charges. Some have argued that it is cheaper, so I want to find out.

Mr. SCHATZOw. I am not sure this information would answer those questions.

Senator WILLIAMS. I am not sure, either, but I think it would be interesting if I could get it. So if you could help me get it for the months of October for networks, and we will say for a half dozen of the principal stations that would be involved in this, so we can make a comparison, I think it would help.

I think it would help us, and any additional information that you may have as to the amount of their income that would be from that advertising. I think we need this for comparison in order to make our decisions. I appreciate your furnishing all these reports, but I wish you could break them down so we ordinary laymen can understand them without too much complication.

The CHAIRMAN. Thank you very much, Mr. Greenburg. We appreciate you gentlemen appearing and we will be in further touch with you.

Thank you very much.

Mr. GREENBURG. Thank you, sir.

The CHAIRMAN. We are pleased to have with us the distinguished senior Senator from North Carolina, the Honorable Sam Ervin. He has made a great contribution to the Senate.

Senator Ervin, I want to say we are proud to have you here before this committee. I once served with Senator Hoey on this committee and he made a great contribution and we are proud to have North Carolina represented here. We are pleased to know your views on the matter, because if I do say it, up to this point, the record would pretty well indicate that you have voted, you have listened, but you have had little to say.

STATEMENT OF HON. SAM J. ERVIN, JR., A U.S. SENATOR FROM THE STATE OF NORTH CAROLINA

Senator ERVIN. Thank you, Mr. Chairman. I appreciate your most gracious welcome.

The astounding increase in the cost of seeking political office in recent years has focused the Senate's attention on the creative work which must be done in campaign finance reform if our Nation is not to forfeit political power to a few wealthy enough to purchase elective office. The necessity for keeping our expanding electorate responsive and the increasingly high cost of using the communications media for this purpose has made it obvious that a public obligation does exist to assist in financing political campaigns.

However, any proposal to accomplish the ends of campaign finance reform must complement certain basic objectives of our political structure. Mr. Chairman, I believe the following fundamentals should be seriously considered before any legislation is enacted:

(1) All present and future political parties, including third parties, must be allowed to benefit from the financing plan.

(2) All individual candidates, from the courthouse to the White House, must be included in any equitable financing arrangement.

(3) Because of the overwhelming position of our national parties, the party primaries have gained such importance that funds must be available to opposing candidates within a single party.

(4) Control over funds should be diffused as much as possible to avoid concentrating political power in the hands of the few who control the national party committees.

(5) The plan must encourage as many citizens as possible to become involved in the election process.

Mr. Chairman, I believe present proposals for Federal financing of presidential campaigns by direct Treasury appropriation to national committees fall miserably short of these objectives. Not only could this method lead to monolithic party structure with rigid, stifling party discipline, but individual giving would be discouraged by the lack of the donor's control in designating the recipient of his contributions. There is a real danger that the direct appropriation by a congressional committee, as recommended by the President, could be controlled by the majority party in Congress at that time. I believe this is a possibility we must not allow. Also, even though direct appropriation approach makes a nominal attempt at the third-party problem, they would be discouraged. The after-the-fact reimbursement of third parties provided for in the President's recommendation is like promising a dead man food if he comes to life. There is no denying that third parties have played a useful role in our political history, and I would hate to limit their opportunity to do so again.

I would support, Mr. Chairman, a $50 tax deduction for contributions to any candidate or party of the taxpayer's choice, whatever the office or party might be. This would be the most meaningful step toward the original purpose of campaign fund reform: First, freeing money for poorer candidates, and, second, broadening the base of financial support for political campaigns. Also, unlike the direct appropriation, the tax deduction method would benefit candidates in the primaries and for offices below that of President where contributions are so difficult to raise.

Through the use of a tax deduction, individuals will be encouraged to involve themselves in all aspects of our political life-Federal, State, and local-and the high public interest in securing the election of unobligated candidates will be served. Too many fine candidates, particularly at the State and Federal level, are discouraged from entering elected public service from the sheer weight of financial realities and a method with the proper built-in safeguards must be enacted to further the cause of a more effective democracy.

Mr. Chairman, I feel a tax deduction approach correctly satisfies the need for campaign financial reform, and I hope the committee will move in that direction.

This is very simple, the tax deduction approach is a very simple method. It requires no elaborate Federal machinery for supervision. It leaves the freedom to control election processes to the people rather than putting them in the hands of officeholders, and I think in the interest of preserving the most precious value of our civilization-that is the freedom of individuals the tax deduction method approach is the only rational way to solve this problem.

I thank the committee.

Senator WILLIAMS. This proposal that you have made would preserve the right of the individual citizen to support the party or the candidate of his choice, while at the same time it would encourage a wider participation on the part of the masses of American people, provide them by this approach a way to take a greater interest in their government. I think it is a constructive suggestion and one which I hope we can follow. I agree with you fully that it would be disastrous for us, by the direct appropriation method, to build in a system here where we could never have anything but these came two political parties. I think the right of the average American citizen to oppose