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Price Control and the Publisher

2015; Johns Hopkins University Press; Volume: 123; Issue: 2 Linguagem: Inglês

10.1353/sew.2015.0064

1934-421X

James L. W. West,

Taxation and Legal Issues

Price Control and the Publisher James L. W. West III (bio) Publishing often repeats itself. In this article I will discuss several important events that took place in American book publishing during the first half of the twentieth century, events that seem to be repeating themselves today. The fact is that the fundamental elements of book publishing do not change. No matter whether one is studying book publishing in eighteenth-century London or nineteenth-century Boston or twentieth-century New York, the components of the business are the same: acquisition and shaping of manuscripts, plant costs, running costs, labor, materials, advertising, distribution, fulfillment, length of print runs, new titles to be emphasized, managing the backlist, timing of remainders, disposal of subsidiary rights, cross-subsidizing, flat fees vs. royalties, postal regulations, shipping fees, customs laws, domestic and international copyright, and price control. Printing technology changes constantly, as do methods of distribution, but two basic challenges remain: how to manufacture books efficiently and how to persuade readers and libraries to purchase them at a price set by the publisher. Price control is a particularly slippery matter because books do not behave like ordinary merchandise—like jars of peanut butter, for example, or sets of windshield wipers. “A book is a thing by itself,” wrote the American publisher Henry Holt in 1905. “There is nothing like it, as one shoe is like another, or as one kind of whiskey is like another. Intelligent book buyers want that book; no other will fill its place.” Books appear to be mass-market items, but they frequently behave like luxury goods. They perform well at fixed prices; they also do well if the price moves, but only if the fluctuations are controlled by the publisher. If prices are not stable, no one can pay the bills: bookshop owners cannot pay publishers, who cannot pay authors and printers, who in turn cannot pay their various creditors. Cash is not moving; business becomes stagnant. Everyone suffers, and everyone blames the publisher. In the pages that follow I will recount three case histories: the failure of the American Net Book Agreement in 1913, the advent of US book clubs in 1926, and the success of paperback publishing in America from 1939 [End Page 272] forward. All involve price control. The developments I’ll describe occurred in the American book trade, but some background on the British book business will be necessary before we begin. British houses had difficulties with price control from the earliest days of book publishing on the home island. The situation became particularly acute during the last half of the nineteenth century. Undercutting, price wars, piracy, and loss-leadering were common in the trade. All worked against price maintenance, making it difficult for all but the most venerable firms to sustain their operations from year to year without resorting to short-term bank loans. Fluctuating prices caused problems with cash flow and made account collection difficult. Because too many books were carried on credit, publishers did not have dependable working capital. Finally, in 1899, the major British houses came together under the leadership of Sir Frederick Macmillan and put into effect the Net Book Agreement. They were supported by the Society of Authors and by most of the important booksellers in London. The Net Book Agreement was a disciplinary measure. If bookshop owners and other buyers did not uphold the price structure, they would cease to be supplied with books at discount by the major British publishers. The Net Book Agreement took hold almost immediately and began to introduce order and stability into the British trade. The publishers were soon challenged, however: the Times Book Club began to buy stock at discount, to rent best sellers once or twice, and then to sell these “lightly used” copies at half price or lower. The publishers viewed this practice as a form of price-cutting and, in 1905, ceased to sell discounted books to the Times Book Club. After much skirmishing in the press, the club capitulated. British publishers thereby established the principle that the book business was entitled to a loose monopoly on its product.* In the late nineteenth century most major American publishers still hoped to...