Friday, January 9, 2015

A Collusion

During the 40's and the 50's there were three major daily newspapers in Vancouver: the Province, the Sun and the Herald. The Province had the most circulation with the Sun following and the Herald lagging behind the other two. All three were slashing ad rates and pushing the editorials to stay ahead of the others.

Southam Press from Toronto owned the Province and one day in 1956, Robert's son, Don Cromie of the Sun, arranged to go on a fishing trip with the general manager. Somewhere in Howe Sound, the two made a deal. The two larger papers would unite and buy out the Herald. The partnership was now known as the Pacific Press. 

Both papers were produced at the Sun's facilities. If an advertiser wanted to by an ad in one paper, they had to pay for a corresponding ad in the other paper. Ad prices were raised dramatically. The two papers quietly consolidated operations even though they were being investigated.

Not everyone was happy with this partnership, especially Canada’s Restrictive Trade Practices Commission, known as the anti-combines commission, began an investigation. The two papers had created a monopoly and the commission found the 'merger' was illegal.

Cromie and the Southam representative argued it was necessary for the two publications to unite in order for them to stay in business. They said it was financially necessary and didn't use the legally binding word 'merger', the businessmen danced around it. In their words, both papers would have folded if the two hadn't joined forces. Somewhere along the line, the demise of the Herald due to the uniting of the Province and the Sun was conveniently forgotten.

The anti-combines commission saw things a different way: “Pacific Press Limited is a combine in that it is a merger, trust or monopoly,” reads a statement of evidence presented to both companies. The document adds this competition-stifling monopoly “is likely to operate to the detriment of the public.”

This decision wasn't reached until 1960 though and by then it was too late to separate the mutual assets of the two papers. And the argument Cromie and his partner had made about combining the papers for financial necessity was now true.

The commission accepted the amalgamation and recommended that no further combination or collusion be pursued. That recommendation was forgotten when Southam purchased the Sun in 1980.

I would like to thank The for the above information.

I hope you find the beauty around you.

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