77B

Last July Funk & Wagnalls sold the once great Literary Digest to the Albert Shaws Sr. & Jr. (Review of Reviews). Last October the Shaws passed the Digest on to George F. Havell & associates. Mr. Havell and his friends, none of them wealthy, anticipated working capital from an unnamed publishing angel. While Recession interceded and the angel procrastinated, one of the Digest's few substantial sources of revenue was renting to advertisers (at $8 to $15 per thousand names) its mailing lists of 4,000,000 names of present and former subscribers. But that was only a stopgap. On Feb. 24, the working capital not yet in hand, President Havell suspended the 48-year-old Literary Digest for two weeks.

As the date set for resumption of publication drew near, the Digest's angel still hovered uncertainly in the offing. So President Havell extended the suspension for two weeks more. Hopefully, a test letter to 10,000 subscribers pleaded: "Literary Digest is not just another magazine; it is an American Institution of major importance. It cannot be allowed to die. . . . We ask you to put a dollar in the enclosed return envelope. . . . Your dollar will be credited to your subscription as an increase in rate."

Some subscribers responded with dollars, a few volunteered $5 and $10. But other publishers whose agents had sold Literary Digest in combination with their own magazines were grieved because the Digest's suspension and appeal for funds threatened to involve them in difficulties with their own subscribers. So great was trade agitation that the Audit Bureau of Circulations, trade association which watches over such matters, called a hasty session. Rebuked, the Digest last week returned its subscribers' contributions, petitioned U. S. District Court for permission to reorganize under Section 776 of the Bankruptcy Act.

Publisher Havell, certain the Digest had bumped bottom, announced that he hoped to resume publication in less than 60 days and continued to woo his elusive angel with promises the Digest's circulation would be all the better for being pared from 465,000 to a solid, potentially-profitable 300,000 by doing away with combination and bulk sales. Against liabilities of $1,492,056 (including a $60,000 demand note to Funk & Wagnalls--original Literary Digest publishers--$63,000 for paper, $30,000 for printing, $612,000 to readers for paid-up subscriptions), the Digest listed assets of $850,923,: cash on hand, $222,293; mailing lists, furniture, machinery, $377,794; deferred charges, $160,821; goodwill, $90,015.

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