In the Matter of the Petition by

EXXON TRAVEL CLUB, INC.,
North Road,
Poughkeepsie, New York 12601

Proposed Revocation of Second-Class Mail Privileges for "VISTA/U.S.A."

P.S. Docket No. 2/85

John W. Williams Administrative Law Judge

APPEARANCES:
William Simon, Esq.
Richard S. Harrell, Esq.
Howrey, Simon, Baker & Murchison
1730 Pennsylvania Avenue, N.W.
Washington, D.C. 20006, and
Mrs. Judith R. Smith
800 Bell Avenue
Houston, Texas 77002 for Petitioner

Arthur S. Cahn, Esq.
Grayson M. Poats, Esq.
Law Department U.S. Postal Service
Washington, D.C. 20260 for Respondent

INITIAL DECISION

This is a proceeding initiated by Petitioner pursuant to 39 C.F.R. Part 954 to contest the ruling of Respondent, represented by the Manager of the Mail Classification Division, Finance Department, U.S. Postal Service (hereinafter at times referred to as the "Manager"), to revoke the second-class mailing privileges of "Vista/U.S.A.".

This matter was initiated by notice, dated June 16, 1972, to the Publishers of "Vista U.S.A." by the Manager wherein the Manager proposed to revoke second-class mail privileges for VISTA/U.S.A. on the ground that the publisher "is solely owned by the Humble Oil & Refining Company, a wholly-owned subsidiary of Standard Oil Company of New Jersey," that the members of the Humble Travel Club, Inc. "must use Humble credit cards to join the travel club and to obtain products advertised in copies of the publication," that the "purpose of the Humbel Travel Club, Inc., is to encourage trips by cars, and provide services to its members typical of other travel clubs," that Humble Oil & Refining Company "sells services and products such as gasoline and oil for automobiles," that VISTA/U.S.A. is "being used to promote the sales of the company and encourage continued membership in the Humble Travel Club," and that VISTA/U.S.A. "is devoted primarily to stories about places to visit and calendars of events," and is, therefore, "being used to promote the sales of the company and encourage continued membership in the Humble Travel Club." The Manager then stated, as follows:

"Therefore, we must conclude 'VISTA USA' is owned and controlled by the Humble Oil & Refining Company and its subsidiary, the Humble Travel Club and is conducted as an auxiliary to and essentially for the advancement of the main business of Humble and its subsidiary, the Humble Travel Club. The publication is designed primarily for advertising purposes and does not qualify for second-class mail privileges."

The Manager, by letter dated February 12, 1973, again proposed to revoke the second-class mail privileges for VISTA/U.S.A. on the ground that:

"The publication is owned and controlled by the Humble Oil & Refining Company and its subsidiary, The Humble Travel Club, and is conducted as an auxiliary to and essentially for the advancement of the main business of Humble and its subsidiary, The Humble Travel Club. Section 132.226, Postal Service Manual (section 4354(c) of Title 39, United States Code) provides that publications designed primarily for advertising purposes may not qualify for second-class mail privileges."

By letter dated March 30, 1973, the Manager amended the proposal to revoke the second-class mail privileges for VISTA/U.S.A., by adding the new ground that:

"in addition to the previously stated reasons for proposing to revoke the second-class permit authorized for 'Vista U.S.A.,' the Postal Service proposes to revoke the permit because 'Vitas U.S.A.' does not have a legitimate list of subscribers as required by section 132.225, Postal Service Manual (section 4354(a)(5) of Title 39, United States Code)."

However, on November 30, 1973, Respondent filed a "Motion to Amend" wherein it sought to withdraw "the ground for revocation based on the absence of a legitimate list of subscribers put forth in the Letter of Revocation of March 30, 1973." This motion was granted by the undersigned Administrative Law Judge on the record on February 19, 1974, the first date of the hearing (1T 21) ^1/ .

Accordingly, this issue is moot and is not a matter for resolution in this proceeding.

In its "Appeal from Ruling", dated April 27, 1973, Petitioner, among other things, stated: (1) that the "application of Humble Travel Club, Inc., as publisher, for second-class mail privileges for VISTA/U.S.A. was granted on September 8, 1967, effective October 7, 1965"; (2) that on "January 1, 1973, the name of the publisher of VISTA/U.S.A. was changed from Humble Travel Club, Inc. to Exxon Travel Club, Inc." (hereinafter called "ETC"); (3) that there "has been no change in the format, editorial policy or manner of publication and issuance of VISTA/U.S.A. since it was granted second-class mail privileges"; (4) that at "all times since it was granted second-class mail privileges VISTA/U.S.A. has been, and continues to be, a mailable periodical publication entitled to be entered and mailed as second-class mailxxx" in that it, in effect, meets all of the basic qualifications for second-class mail privileges; (5) that "VISTA/U.S.A. is a magazine published at stated quarterly intervals from its office of publication: North Road, Poughkeepsie, New York 12601" and that the publication of "(e)ach issue since winter 1965-1966 has been numbered consecutively"; (6) that "VISTA/U.S.A. is designed to be of interest to those who are travel-oriented" with its editorial content selected, in effect, on the basis of "articles that maintain a balance among vacation or leisure time sports", coupled with a "Traveler's Calendar of major seasonal events of national or local interest", and other "features, such as book reviews and recipes"; (7) that it "has been, and continues to be, the policy of VISTA/U.S.A. to avoid publishing articles of advertising, either directly or indirectly, the business or products of ETC's parent, Exxon Corporation (formerly named 'Standard Oil Company (New Jersey)', or of its former parent, Humble Oil & Refining Company"; (8) that "VISTA/U.S.A. has a list of more than 400,000 subscribers", and that, in effect, while most subscribers are members of ETC whose membership dues in ETC cover the subscription price as well as other offered benefits and services, the few subscribers who are not members of ETC pay seventy-five cents per issue; and (9) contended, as follows:

"The determination of the Manager that VISTA/- U.S.A. is no longer entitled to second-class mail privileges is erroneous for the following reasons:

"(A) The determination is contrary to applicable statutes and regulations;

"(B) The provisions of 39 C.F.R. 132.2(b)(6)(ii) that 'publications designed primarily for advertising' include

"Those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them' and similar provisions of Section 132.226(b) of the Postal Service Manual, upon which the Manager purports to rely, are not authorized by any statute and are unlawful;

"(C) The determination is not based upon the contents of VISTA/U.S.A., but purports to make an unauthorized judgment as to the publisher's motives for including editorial matter such as 'stories about places to visit and calendars of events;'

"(D) The determination is inconsistent with and contradicts the earlier correct determination that VISTA/U.S.A. is entitled to second-class mail privileges;

"(E) The determination is inconsistent with and contradicts determinations that other similar publications are entitled to second-class mail privileges;

"(F) The determination prejudices and unreasonably discriminates against VISTA/U.S.A. and is an undue preference among users of the mails; and

"(G) The determination is arbitrary and constitutes an abuse of discretion."

Pursuant to the Petitioner's request of May 14, 1973, the deposition of the Manager was taken on June 12, 1973. The Manager sought to amend certain portions of his deposition by letter dated November 27, 1973. The deposition, as now corrected by the amendments, was received in evidence at the hearing (1T 24-5). Another pretrial discovery document was also admitted in evidence, namely "Petitioner's Response to Respondent's Interrogatories" docketed on August 24, 1973 (1T 26, 2T 4, Exhibit P-9).

On September 18, 1973, Petitioner concurrently filed an "Application for an Order that the Manager's Deposition be Continued and that Relevant Questions be Answered", and a letter request on the Respondent seeking eight categories of additional documents. Various correspondence between the parties resulted in the Respondent's furnishing the Petitioner the major portion of the requested document as detailed in Respondent's "List of Documents Requested by Petitioner", docketed December 5, 1973. Respondent, on December 3, 1973, filed its response to Petitioner's concurrent filings of September 18, 1973, wherein it objected to a second deposition of the Manager being taken and to its production of the remaining documents on the bases that the documents "relate exclusively to the grant of second-class privileges to the subject publication", were not specifically identified and were not readily accessible, or in the possession of the Respondent. Petitioner, in a document filed December 17, 1973, renewed its request that the second deposition of the Manager be taken, that the Manager be directed to answer certain questions and that the Respondent produce the remaining documents.

By order issued December 26, 1973, the undersigned, among other things, denied Petitioner's request for further pretrial discovery and stated, in pertinent part, as follows:

It appears that the parties to this proceeding have resolved their differences to the extent they consider possible and that the pleadings phase of this case is completed. Accordingly, the petitioner's request of December 17, 1973, is denied. However, in denying this request, attention should be directed to the consideration that factual matters leading to the justifiable issuance of an initial decision may be relevant, in the absence of any change in the facts and law applicable to the matter, to the question of the continuing propriety of such decision.

On February 19, 1974, Petitioner filed a document entitled:

"Petitioner's Memorandum in Support of Motion to Dismiss" wherein it contended that the Respondent had failed to comply with the requirements of 5 U.S.C. 558(c) of the Administrative Procedure Act, which states in pertinent part:

"(c) * * * Except in cases of willfulness of those in which public health, interest, or safety requires otherwise, the withdrawal, suspension, revocation, or annulment of a license is lawful only if, before the institution of agency proceeding therefor, the licensee has been given--

"(1) notice by the agency in writing of the facts or conduct which may warrant the action; and

"(2) opportunity to demonstrate or achieve compliance with all lawful requirements."

As the principal basis of support for its motion to dismiss, Petitioner states that its appeal instituting this proceeding alleges at paragraph VI:

'There has been no change in the format, editorial policy or manner of publication and issuance of VISTA/U.S.A. since it was granted second-class mail privileges.'

"The USPS answer does not deny this allegation, but instead replies:" 'We do not have information to attest to the truth or falsity of this statement.'

In addition, Respondent contended that while "(i)t is the policy of 5 U.S.C. 558(c) of the Administrative Procedure Act to encourage compliance prior to revocation", that "compliance is impossible where the agency refuses to specify what is wrong" and that "(d)espite repeated demands, USPS has continually refused to specify those matters in VISTA/U.S.A. that it claims violates the applicable statutes and regulations."

At the hearing, the Manager testified at length with respect to his specific objections to the publication and stated that he had met with representatives of ETC to discuss the proposed revocation of the second-class mail privileges of VISTA/U.S.A. (1T 54, et seq ).

The issue in this proceeding, as set forth at the hearing by the parties (1T 20, 21, 65-6) is as follows:

Wheter or not VISTA/U.S.A. is designed primarily for advertising purposes in that the publication is either (a) owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling or those who own or control them, or (b) consists principally of advertising and editorial write-ups of the advertisers, or both.

Hearings were held on February 19, 1974, and on June 25, 1974, in Washington, D.C. at which testimonial and documentary evidence was presented by both parties. The second day of hearing was required due to the malfunction of the recording equipment at the initial hearing .

One further matter which warrants notation is set forth, in pertinent part, in the undersigned's Order Responding to Request for Reconsideration, Scheduling Date for Supplemental Hearing and Prescribing Procedures", issued May 28, 1974, as follows:

By letter dated April 10, 1974, I notified the parties of my tentative proposals with respect to the supplemental hearing which is required in this case due to the malfunction of the recording equipment at the initial hearing. As stated in my letter, two of these proposals: one relating to Mr. Sharp's crossexamination and the other to my rendering an oral initial decision at the close of the hearing, were requested by Respondent's counsel in his letter of April 4, 1974.

Petitioner apparently was not served with a copy of the Respondent's letter of April 4, 1974; and, on April 23, 1974, Petitioner filed pleadings for "an opportunity to reply to respondent's ex-parte request," for reconsideration of my proposals, and for a directive that Respondent's counsel "refrain from all further ex-parte communications with the Administrative Law Judge relating to this proceeding."

Respondent, on April 29, 1974, replied, in pertinent part, to these pleadings as follows:

It is Petitioner's usual and customary practice to send copies of all letters he submits to a presiding officer at a hearing to opposing counsel and to the docket clerk for inclusion in the official record. If Petitioner, in fact , did not receive a copy of the April 4, 1974 letter it was inadvertent and not intentional. Respondent has never had any ex parte communications with Administrative Law Judge Williams, and wishes the record to be perfectly clear in this regard. On May 7, 1974, Petitioner filed an answer wherein he renewed his requests. Turning first to the subject of ex parte communications, I regret that a copy of counsel's letter of April 4, 1974 was not served on Petitioner, and had assumed that service of a copy of that letter was made on Petitioner when I wrote my letter of April 10. However, the response of counsel for Respondent to this unfortunate affair is accepted; and all parties are directed to scrupulously avoid even a hint of ex parte activities.

In prescribing the procedure for this supplemental hearing, it warrants mention that a full and complete evidentiary hearing has already been had in this case. All that remains is to supplement that portion of the record which was not transcribed at the hearing. Furthermore, I advised the parties in my letter of April 10, 1974 that they should be prepared to argue the merits of their case at the conclusion of the supplemental hearing and they have had ample time for such preparation. Accordingly, good cause is found to exist for my rendering an oral decision at the conclusion of the supplemental hearing, and it shall be so rendered. It is hereby ordered:

(1) xxx

(2) The hearing will commence with the crossexamination of Mr. Darwin Sharp and shall not be unduly repetitious of that portion of Mr. Sharp's testimony that has been transcribed. At the conclusion of Mr. Sharp's cross-examination, witnesses for the Petitioner may present their direct presentations and be cross-examined thereon.

(3) The parties shall submit, orally or in writing, proposed findings of fact and conclusions of law at the conclusion of the hearing.

At the conclusion of the evidentiary presentation on June 24, 1974, both parties submitted proposed findings of fact and conclusions of law: the Respondent's presentation was made orally and the Petitioner's presentation was made in writing.

Whereas , the undersigned rendered his oral decision, including both findings of fact and conclusions of law, on the record, the following written findings of fact and conclusions of law represent the formal and official decision of the undersigned:

FINDINGS OF FACT

1. Petitioner was organized in 1964 as "Humble Travel Club, Inc." (Exhibit R-8B). It was then a wholly-owned subsidiary of Humble Oil & Refining Company ("Humble") which was, in turn, a wholly-owned subsidiary of Standard Oil Company of New Jersey ("SONJ"). (see 3T 35).

2. Petitioner was created to earn a profit from rendering special services of the type ordinarily offered by travel clubs. These were to include a travel magazine, family travel atlas, travel and tour aids, accidental loss of life insurance, a $5,000 bail bond and other membership benefits and features. Payment for these services would be in the form of monthly dues. To reduce the costs of dues collection, membership was to be offered to holders of Humble retail credit cards, with billing and collection performed by Humble for Petitioner at cost. (see 3T 23-4, 34-5).

3. The travel magazine offered as one of the benefits of membership of the Club was to be called VISTA/U.S.A. Editorial supervision of VISTA/U.S.A. was to be performed by General Drafting Company, Inc. ("General Drafting"), Convent Station, New Jersey 07961. The executive editor of VISTA/U.S.A. was to be Mr. Robert N. McCready, an employee of General Drafting with no employment relationship to petitioner. (see 2T 32-3).

4. Additional editorial work and the actual printing of the magazine were to be performed by Western Publishing Company, Inc. ("Western Publishing"), 850 Third Avenue, New York, New York 10022. The magazine was to be printed at Western Publishing's facilities in Poughkeepsie, New York. During most of this period, and beginning prior to the first issue, the activities of Western Publishing have been under the direction of Mr. Carleton Gibson, who is Production and Editorial Coordinator of VISTA/U.S.A., and has no employment relationship to Petitioner. (2T 80, et seq .)

5. The following guidelines were established by Petitioner regarding the matters to be included in VISTA/U.S.A.

A. Editorial and pictorial materials would be the highest quality and devoted to subjects of interest to the traveling public (3T 10, 2T 89).

B. Editorial and pictorial materials would deal with matters relating to travel primarily in North America, including the 50 United States, Canada, Mexico and the Carribean. (3T 10, 2T 41).

C. Editorial and pictorial materials would maintain a geographical balance throughout this area of primary interest (2T 39, 40).

D. Editorial and pictorial materials would maintain a balance among vacation and leisure time interests, including, for example, a variety of such sports as boating, hiking, skiing, etc. (2T 41-4).

E. VISTA/U.S.A. would not advertise products of Humble or SONJ (2T 45).

F. VISTA/U.S.A. would not carry articles that would constitute so-called "image" advertising for Humble or SONJ, such as articles on oil exploration, refining or the production or use of derivative products. (2T 45).

G. VISTA/U.S.A. would not carry the "logo", i.e., the distinctive oval familiar from signs unused at service stations, used by Humble or SONJ in connection with the marketing of their products. (2T 45, 62).

H. VISTA/U.S.A. would not carry editorial or pictorial materials either representing or referring to service stations or other facilities or products of Humble or SONJ or containing express or implied suggestions that subscribers avail themselves of those facilities or products (2T 45, 74-6, 84, 90-1, 3T 12-3).

I. VISTA/U.S.A. would not accept advertising from other concerns and, therefore, had no advertising rate schedules (3T 36-7).

J. Subsequently, Petitioner added "Vacation Values", which is a tour proposal, "Vista Values", and "Book Values" (2T 46-7, 66, 3T 16-8).

K. Petitioner, if it were found necessary to keep its second-class mailing privileges, would delete "Vacation Values", "Book Values" and "Vista Values" (3T 20-1).

6. The guidelines referred to in Finding No. 5 were given to Mr. McCready by Mr. E. M. Wolf, then President of Petitioner, prior to the publication of the first issue of VISTA/U.S.A. and have not been changed at any time since then. Mr. McCready has followed those guidelines in every issue of VISTA/U.S.A. published under his direction, which includes all issues of VISTA/U.S.A. from the first through Mr. McCready's retirement from General Drafting on April 1, 1974, after which his duties were assumed by John H. Dennington. (2T 40-1, 32-3).

7. The first issue of VISTA/U.S.A. was for Summer 1965. VISTA/U.S.A. has been published regularly at quarterly intervals thereafter. The second quarterly issue was for Fall 1965. (Petitioner's "Appeal from Ruling", p. 4).

8. On October 7, 1965 Petitioner made application for second-class mailing privileges for VISTA/U.S.A. Beginning with the issue for Winter 1965-1966 all issues of VISTA/U.S.A. have contained the required statement of frequency and have been consecutively numbered. (Petitioner's "Appeal from Ruling", p. 1, 4).

9. During the pendency of Petitioner's application for second-class privileges, Respondent conducted, or had an opportunity to conduct, a thorough analysis of all matters published in VISTA/U.S.A. and of all matters considered relevant by Respondent regarding the manner in which VISTA/U.S.A. was issued to its subscribers. On April 26, 1967, Mr. Joseph R. Maher, a representative of Western Publishing wrote to the Postmaster in Poughkeepsie on behalf of VISTA/U.S.A. asking, among other things:

"1). If a subscription rate is published, can sale be limited to members or must it be open to anyone? Adventure Road, mailed second class, publishes 'subscription rate $2 a year' and also "published exclusively for members of the American Oil Motor Club.'" (Pet. Ex. 2.)

10. This inquiry was forwarded by the Poughkeepsie Postmaster to the Director, Classification and Special Services Division, Bureau of Operations, Mr. Edwin A. Riley, who then held the position that corresponds to the present position held by Mr. Darwin E. Sharp, Manager, Mail Classification Division, Finance Department. A memorandum to the Poughkeepsie Postmaster dated May 4, 1967 over Mr. Riley's signature, a copy of which was forwarded to Petitioner, replied in part:

"Please inform the publisher in answer to his query that there is no postal law or regulation which would prohibit their limiting the sale of subscriptions to members of Humble Travel Club.

"Please refer to our memorandum of February 8 concerning the membership form submitted by the Humble Travel Club. Forms must be adopted in accordance with the instructions in the enclosed Form 3513. Have the publisher submit a specimen of a form meeting these requirements."

Enclosed with this memorandum was a copy of POD Form 3513, dated "Sept. 1962". The form contains the following suggested clauses to be included in the application, transmittal and bill forms used by publishers who collect the subscription price of the publication at the same time that they collect organizational dues:

"(a) I, , hereby apply for membership in the ( Name of organization to be printed here ) and enclose $ as my annual membership dues for the year . $ of this amount is for a subscription to the ( Name of publication to be printed here ) for one year.

(b) I, , herewith transmit my annual membership dues of $ in the ( Name of organization to be printed here ) for the year . $ of this amount is for a subscription to the ( Name of publication to be printed here ) for one year.

(c) Annual membership dues for the year in the ( Name of organization to be printed here ) $ . $ of this amount is for a subscription to the ( Name of publication to be printed here ) for one year. Return this bill form with remittance." (Pet. Ex. 3.)

11. Questions raised by Respondent were reviewed and answered by Petitioner in a letter of August 23, 1967 from Mr. Wolf to the Poughkeepsie Postmaster. In this letter Mr. Wolf offered to make the following specific changes to satisfy objections raised by Respondent, (Ex. p-4):

"1. Publication in the next issue (Winter 1967-68) of the identification statements as required by Section 132.25 Postal Manual. A sample issue is enclosed, showing how we propose to include these identification statements.

2. Furnish to the Postmaster General and publish in the appropriate issue Ownership, Management and Circulation Statement as required by Section 132.611.

3. At the present time two different membership solicitation forms are used. Copies are enclosed, marked A and B. We propose to continue use of these forms without change until current stocks are exhausted.

The next and future printings of these forms will include the changes indicated on enclosed copies A and B to comply with instructions in Form 3513 requiring the separation of the subscription price for Vista/U.S.A. from other dues paid by Humble Travel Club members." (Pet. Ex. 4.)

12. The proposed change referred to by Mr. Wolf in his Item 1, as shown on the sample issue enclosed with that letter, was the addition of the words "subscription price 75[ per issue" to the statement at the bottom of page one of VISTA/U.S.A. The proposed changes referred to in Item 3 were the addition of the words "A continuing subscription to VISTA/USA magazine at 75[ per issue is included in membership dues" at various places in the solicitation brochure enclosed with that letter and marked A and B. Also enclosed with Mr. Wolf's letter was a copy of Petitioner's official Membership Handbook, which described in detail all services offered by Petitioner to its members. This letter concluded:

"We trust that this gives you sufficient information about the magazine and hope that our proposed steps to comply with post office second class regulations meet with your approval." (Pet. Ex. 4.)

13. Mr. Wolf's letter and its enclosures (Pet. Ex. 4) were forwarded by the Poughkeepsie Postmaster to Mr. Riley with a copy of the Fall 1967 issue of VISTA/U.S.A. and the Postmaster's memorandum of August 31, 1967 (Pet. Ex. 5.) Mr. Riley's reply of September 8, 1967, a copy of which was forwarded to Petitioner, was as follows:

"In connection with the authorization of second- class privileges for 'Vista U.S.A.' the publishers should be informed that while old membership forms are being used the subscription information must be handstamped or printed thereon. Also, inform the publishers that the issue number and subscription price must be included in the identification statement in all future issues of the publication as required by Sections 132.25d and e, Postal Manual.

Have them submit a copy of the Winter 1967 issue showing these statements." (Pet. Ex. 10.)

14. On September 8, 1967, Respondent granted authorization for second-class mail privileges for VISTA/U.S.A. effective as of October 7, 1965. Eight issues of VISTA/U.S.A.-- Winter 1965-1966 through Fall 1967--were published while this application was pending. When the application was granted, Petitioner was refunded the amount of excess postage paid on these issues while the application was pending. (Pet. Exs. 6, 7, 11.)

15. There has been no significant change in VISTA/U.S.A. since the original entry was granted on September 8, 1967, other than a small increase in the number of pages per issue and a decrease of about 1-1/2 inches in the length of each page. During that time there has been no significant change in the benefits and services available to members. Membership in Petitioner, which was exclusively available to credit card holders, is no longer exclusively available to credit card holders. In early July Petitioner plans to broadcast a series of radio commercials in Houston and New York offering membership to persons other than Exxon credit card holders. At about this same time Petitioner will test mail membership solicitations to persons other than Exxon credit card holders. At about this same time Petitioner will test mail membership solicitations to persons outside the Exxon credit card holder list. Memberships will be available on a cash basis. (3T 8,9).

16. The original guidelines referred to in Finding 5 above for the contents of VISTA/U.S.A. have been consistently followed in every issue of VISTA/U.S.A. An analysis of those issues by the undersigned confirms this testimony. In this regard the following colloquy warrants notation (2T 94-5):

"JUDGE WILLIAMS: I would like to state on the record my view of Vista magazine.

"THE WITNESS: Yes.

"JUDGE WILLIAMS: I found it to be a charming publication. You are to be congratulated.

"THE WITNESS: Thank you; thank you very much.

"JUDGE WILLIAMS: As far as the magazine itself, the articles, the coverage of the articles, I noticed that at least -- to my view -- there was nothing that would offend anyone in respect to race, color, creed, sex, national origin.

"This was a definite point made by you to achieve this goal as such; is that correct?

"THE WITNESS: Yes, sir. I wouldn't want to over-dramatize that, but it was always very much in ou minds that we had to be as objective and as fair as possible."

17. Eight issues of VISTA/U.S.A. were submitted by Respondent as "an example of what the publication is today." (1T 50-1). These included six issues of VISTA/U.S.A.--Spring 1971, Summer 1972, Fall 1972, Winter 1972-1973, Spring 1973 and Summer 1973--that had been described by Mr. Sharp as the issues upon which he relied in making his determination to seek to revoke second-class mailing privileges. Also submitted were two additional issues--Fall 1973 and Winter 1973-1974-which were said to have been submitted "to bring you up to date." (1T 51).

18. typical of these issues is the issue of VISTA/U.S.A. for Spring 1971, consisting of 37 pages in addition to the front cover and its reverse and back cover. The front cover contains a photograph of the White House including the garden and fountain on the front lawn. It contains the name and date of the magazine and the phrase "THe Magazine of Humble Travel Club" in addition to a summary of contents. The reverse of the from cover is a "Travelers' Calendar" which lists "some of the major seasonal events to be held across the nation and in neighboring countries." The first page lists the contents of the magazine, the officers and directors of Petitioner, the officers of the publication and the information required by Respondent regarding date, number, frequency of publication, publisher, office of publication and second-class entry, including the phrase "subscription price 75[ per issue." Page 2 contains four Letters to the Editor. Three of these comment on articles published in the Summer and Fall 1970 issues of VISTA/U.S.A. and one comments on services provided by Humble MExico Insurance Agency. Pages 3-6 contain an article and pictures entitled "Off to Cape Cod." Pages 7-9 contain an article and pictures entitled "Scuba Up to Sunken Treasure." Pages 10-12 contain an article and pictures entitled "Mountain Crafts: a matchless heritage is revitalized." Page 13 contains four recipes captioned "Dinner on Deck." Pages 14-15 contain photographs of plants and flowers with a brief text captioned "Patterns of Spring." Pages 16-19 contain an article and pictures entitled "Two Mississippi River Towns--Vicksburg and Natchez--Offer a Journey to The Past." pages 20-22 contain an article and pictures entitled "A Very Different World . . . East Texas." Pages 23-25 contain an article and pictures entitled "Rails to Adventure All Aboard] The age of steam is alive and well all over the U.S. and Canada." Pages 26-28 contain an article and pictures entitled "Conservation is Really Up to You. Natural or man-made, waste is as profound a problem in the country as in the city. Recycling may be a possible solution." an insert between pages 28 and 29 refers to Humble Vacation Guides, available to members without cost. Page 29 contains text and map with the caption "Try a New Vacation Area This Year." The text discusses Humble Travel Club vacation guides available free to members. It concludes, under the caption "Driving on To Mexico?" information about needed Mexican auto insurance and "Humble Mexico Trip Highlights." The page includes a small picture of the head of a fanciful tiger wearing a sombrero bearing the word "Humble." Page 30 contains puzzles and a small cutout area to be forwarded with the name and address of someone who may care to take advantage of Club benefits. pages 31-32 entitled "Facts and Figures" discusses places to stay in East Texas, a listing of scenic railroad tours, and "Exploring the Cape by Car.: Pages 33-36 list VISTA Values, picturing merchandise available to Humble Travel Club members and which may be purchased by use of their credit card and the order form inserted between pages 36 and 37. Page 37 contains book reviews for travelers, the answers to the puzzles on page 30, reference to articles to appear in the next issue of VISTA/U.S.A. and the required statement of ownership, management. The back cover is a photograph of a North Carolina farmer holding a hand made wooden frame.

19. A similar analysis of the issue of VISTA/U.S.A. for Fall 1967 forwarded to Mr. Riley in connection with the original application (Pet. Ex. 5) is strikingly similar. The cover and contents pages are identical in form and the articles and pictures are similar in content and subject matter. The Fall 1967 issue contains four full pages, 24-27, of information regarding a "Humble Travel Club Hawaiian Holiday for Humble Travel Club Members and Their Immediate Families." Pages 41-44 contain information regarding various Sheraton Hotels, stating that your expenses at Sheraton Hotels may be charged to the Humble Travel Club card and reservations for Sheraton Hotels may be made through Humble Travel Club. However, this issue does not contain "Vista Values" or "Book Values".

20. The reference to travel in Mexico in the Spring 1971 issue had its counterpart in the Spring 1967 issue, also before Respondent prior to original entry, which contains a full page discussion of the Humble Mexico Travel service with a designation of offices where automobile insurance needed for use while touring in Mexico may be purchased.

21. Each of the changes that Mr. Wolf offered to make in his letter to the Poughkeepsie Postmaster of October 23, 1967 (Pet. Ex. 4) continues in effect today. The words "subscription price 75[ per issue" appear at the foot of page one of each of the eight issues of VISTA/U.S.A. submitted by Respondent in support of its proposed revocation (Resp. Ex. 5.) The phrase "A continuing subscription to VISTA/U.S.A. magazine at 75[ per issue is included in membership dues" continues to appear in current solicitation materials and applications (Resp. Ex. 8h (11) and 8h (12).) The manner of operation of Petitioner, including the benefits available to members, is essentially the same today, except for "Vista Values" and "Book Values", as it was described in the Membership Handbook sent by Mr. Wolf to the Poughkeepsie Postmaster Marked D in connection with the application for second-class entry (Pet. Ex. 4.)

22. Other than the insertion of "Vista Values", "Vacation Values" and "Book Values", there have not been any substantial changes in VISTA/U.S.A. since the original grant of second-class entry (1T 84-6). Mr. Sharp concedes that based upon the information shown in this record to have been available to Mr. Riley at the time second-class entry was granted to VISTA/U.S.A. (Pet. Exs. 2,3,4,5,6,10 and 11), Mr. Sharp would have denied the application (1T95-102).

23. The subscribers of VISTA/U.S.A. consist primarily of the more than 5000,000 members of Petitioner. Subscriptions are also available to non-members, and there are a few non-member subscribers. (3T 7,8).

24. As of January 1, 1973 the name of Petitioner was changed to "Exxon Travel Club, Inc." At the same time the name of SONJ was changed to Exxon Corporation ("Exxon") and Petitioner became a wholly-owned subsidiary of Exxon. (Petitioner's "Appeal from Ruling," p.2).

25. Petitioner has consistently followed a policy of avoiding any open or disguised advertising in VISTA/U.S.A. of the products, services or facilities of its parent corporations. None of the eight issues submitted by Respondent as current examples of VISTA/U.S.A. contains any reference to any service station or other facility or to any product of Humble or SONJ in issues prior to January 1, 1973, or of Exxon after January 1, 1973 (Resp. Ex. 15.)

26. None of the eight issues submitted by Respondent as current examples of VISTA/U.S.A. contains any depiction of any logo or trademark of Humble or SONJ in issues prior to January 1, 1973, or of Exxon in issues after January 1, 1973. The logo and trademark of Petitioner itself as depicted in these issues has carefully avoided the use of the distinctive oval which was employed by Humble and SONJ prior to January 1, 1973, or the distinctive rectangle employed by Exxon since January 1, 1973 (Resp. Ex. 15.) The only logos are those of the Travel Club and they are contained on the content page.

27. Respondent claims to find an exception to this policy in the small picture of the head of a fanciful tiger appearing at page 29 of the Spring 1971 issue. However, in making this contention, Respondent is apparently unaware that Humble had ceased its "Tiger in the Tank" promotion several years prior to publication of this issue, and the decision to use a tiger again in connection with the later change in corporate name to Exxon was some years in the future. In fact, it was because no use was being made of a tiger for any promotional purpose that it was selected for this issue. Respondent's misunderstanding of the significance of this symbol as a promotional device is best illustrated by Mr. Sharp's reference to the symbol as "Tony the Tiger" (1T 63-A), which is actually the name of an advertising symbol employed by a manufacturer of breakfast food.

28. VISTA/U.S.A. has thus carefully avoided any advertising for Humble or SONJ prior to January 1, 1973 or for Exxon since January 1, 1973. Moreover, as a channel of communications, VISTA/U.S.A. reaches primarily subscribers who are already credit card holders and members of Petitioners, which is sufficient proof that the publication is not being used as a means of promoting either membership in Petitioner or the wider use of credit cards. (3T 8-10)

29. VISTA/U.S.A. is designed primarily for purposes of offering an attractive, interesting, high-quality magazine devoted to matters that will appeal to persons whose interest in travel has been demonstrated by their having joined a travel club. It is designed primarily and published as one of a group of services available to Petitioner's members. Petitioner has scrupulously avoided any offensive articles with respect to race, creed, color, sex or national origin. It is the further finding of the undersigned that VISTA/U.S.A. not only romanticizes travel and the beauty of the country, but also exercises extensive geographic coverage in that it contains articles covering all the 48 states as well as Alaska and Hawaii, Mexico, the Caribbean and, with one exception, all of the Canadian provinces. (2T 76-7, Ex. p-23)

30. Seven of the eight issues of VISTA/U.S.A. submitted by Respondent contain a column of "Letters to the Editor." These columns contain 19 letters from subscribers of VISTA/U.S.A. commenting favorably on the contents of the magazine. A survey conducted by Petitioner of its members demonstrated that VISTA/U.S.A. was one of the features of membership in Petitioner viewed favorably by its members. The continued success of Petitioner is, in part, a reflection of the appeal of VISTA/U.S.A. to its subscribers (2T 57).

31. All of the editorial work for VISTA/U.S.A. is done by General Drafting and Western Publishing. All editorial and pictorial materials are selected, edited and assembled by General Drafting and Western Publishing. Although Petitioner retains the right to reject any suggestions of General Drafting or Western Publishing, that power is seldom exercised. (2T 33-40).

32. The suggestions that Petitioner has made regarding matters to be published in VISTA/U.S.A. have been broad guidelines designed to ensure the high quality of the magazine. They include the guidelines set forth in Finding 5 above, which have been consistently followed by General Drafting and Western Publishing in preparing all issues of VISTA/U.S.A. They have also included suggestions that controversial issues of interest to the traveling public be covered and that both sides of those issues be fairly reported. (3T 6,7,9-13).

33. Petitioner's policy that all geographic areas within the area of principal interest be covered has been followed through the history of the magazine. This is demonstrated by Mr. McCready's maps showing VISTA story coverage for the years 1965 through 1974. (Pet. Ex. 22.) General Drafting and Western Publishing have been under specific directions to maintain this uniformity to publish all articles relating to a geographic area without regard to whether or not products of the parent corporations are marketed in those areas. (3T 10-3).

34. VIST/U.S.A. is devoted to the subject of travel generally, not simply to the subject of motoring. This has been part of the guidelines given to Mr. McCready and followed in all issues of VISTA/U.S.A. Although many of the areas referred to can be reached by car-depending upon where one lives--there is only the remotest possible relation to auto travel in articles on subjects such as: scuba diving for sunken treasure, mountain crafts, recipes, spring flowers, steam railroads, conservation (SPring 1971); island hopping in Puget Sound, separate vacations, Mississippi River Steamboats, recipes (Summer 1972); architect Frank Lloyd Wright, airport planning, recipes (Fall 1972); ice sports, country life, America's 200th birthday, icy underworld (Winter 1972-1973); the Potomac, the great American scavenger hunt (Summer 1973); the National Horse Show, outdoor photography, pedal power, football (Fall 1973); Florida fishing, golf landmarks and skiing (Winter 1973-1974).

35. A typical issue of VISTA/U.S.A. originates with General Drafting's proposals, arrived at jointly with Western Publishing, of subjects and possible alternate subjects to be covered in a forthcoming issue. The articles may have been written, or they may be articles to be written by any of a number of independent authors, many of whom are members of the Society of American Travel Writers. Mr. McCready customarily went to Houston at this stage to discuss the content of forthcoming issues with representatives of Petitioner. Although these proposals were reviewed with Petitioner, Mr. McCready felt at all times that he was free to insist upon his view of editorial matters being reflected in the final magazine on any matter of importance. (2T 37-41).

36. Thereafter, the editing and publishing of the issue is handled entirely by General Drafting, under Mr. McCready,a dn Western Publishing, under Mr. Gibson. Although they keep Petitioner advised as to the progress of their activities, the actual editorial work is performed by them and the editorial decisions are theirs. (2T 82-8, 69).

37. Both Mr. McCready and Mr. Gibson testified to their understanding that they were not to advertise or otherwise promote the Petitioner or its parent corporations in any issue of VISTA/U.S.A. and that both considered it their sole duty to produce an interesting, educational and informative magazine on subjects of interest to members primarily related to North American travel. (2T 44-5, 84).

38. VISTA/U.S.A. does not accept advertising and receives no advertising revenues.

39. Each issue of VISTA/U.S.A. contains information on goods and services believed by Petitioner to be of interest to members. These are primarily features entitled "Vacation Values", a variety of available tours; "Vista Values", various merchandise offered at favorable prices and, in some issues, "Book Values", books on subjects of interest to the traveling public at attractive prices. These products and services are made available to members by Petitioner as one of the benefits of membership, and can be paid for either in cash or by credit card. Petitioner does not make a profit on products or services purchased by members. (3T 18, 21-3). The material describing these products and services included in VISTA/U.S.A. is furnished by Petitioner. In no instance has this material constituted as much as 1/5 of any issue of VISTA/U.S.A. (1T 69-70).

40. Each issue of VISTA/U.S.A. since Winter 1965-1966 has been received by Respondent to determine which are "Non-advertising" and which are "Advertising" portions for the purpose of applying the rates prescribed in 39 C.F.R. 132.1(b). Mr. Sharp did not refer to any issue of VISTA/U.S.A. that he claimed contained as much as 20% of what he called "patent" or "blatant" advertising. (1T 69-70).

41. On the basis of the foregoing detailed findings of fact and the record as a whole, the evidence in this proceeding demonstrates and I so find, that:

(a) VISTA/U.S.A. was from the start, and has continued to the present, to be published by petitioner as its official publication.

(b) VISTA/U.S.A. derives nearly all of its subscribers from members of Petitioner. The portion of their membership fees which constitute the subscription price of VISTA/U.S.A. provides the revenues that Petitioner derives from the publication of the magazine.

(c) The amount of space devoted to "Vacation Values", "VISTA Values" and "Book Values" is in the aggregate limited in amount and their inclusion in VISTA/U.S.A. is an incidental result of the latter's publication. Clearly, the offering of the products and services in those features is not the main business or calling of Petitioner or of its parent corporation, nor is it the primary purpose of VISTA/- U.S.A. The publisher of VISTA/U.S.A. does not, and has not, made any profit from "Vista Values", "Vacation Values", or "Book Values".

(d) VISTA/U.S.A. is published for a dual purpose; its primary purpose is to inform, educate and entertain the reader on travel-related subjects and it incidentally serves as a means of communication between Petitioner and its members and advises them of services available to them as members. Other materials furnished by Petitioner to its members inform them of the benefits provided for them. (Resp. Ex. 8h)

(e) The record supports the conclusion that VISTA/U.S.A. is considered by readers as an attractive and interesting travel magazine worth perusal and supports the testimony proferred on Petitioner's behalf that it desires to and does publish VISTA/U.S.A. as such a magazine intended to serve this end. The eight issues of VISTA/U.S.A. offered by Respondent demonstrate that this evaluation of the magazine is correct. (Resp. Ex. 15.)

(f) As compared to this purpose and its accomplishment, the use of VISTA/U.S.A. as a channel of communication between Petitioner and its members is incidental.

42. The Winter 1971-72 issue of ADVENTURE ROAD, one of the issues considered " In the matter of Amoco Motor Club, a division of Amoco Enterprises, Inc. , "P.S. Docket No. 2/50, issued May 7, 1974, by Judge Sobernheim in that proceeding has on its cover and second page the emblem of the American Motor Club, including the distinctive oval and torch logo used by the American Oil Company. The publishers letter on page 2 refers to the change of name and the fact that "you'll be seeing a lot more of the name 'Amoco', especially on products sold by your Authorized Station Dealer." Text and pictures at page 3, entitled "Cold Spots for Winter Fun" refer to other articles appearing in the magazine, including "North Woods Adventure on a Minnesota Sno-Fari" at pages 4-6, "Yankee Weekends Recreate Colonial Hospitality" at pages 8-9, "A Lot of Old West" at page 10 continued on page 15, "A Family Adventure for Any Season" at pages 20-23. Between pages 6 and 7 is an advertisement and Gift Membership Application for the Motor Club. Page 7 pictures a full page of gifts available free to any person giving a gift membership. Pages 16-17 are entitled "Information Center." Page 16 pictures a car standing in from of an American Oil Company service station. The text is devoted to the change of name. On page 17 are two columns of text and a picture describing the "American Musical Calvalcade" and television advertising of American Oil products. A brief story on "America's Toughest Snomobile Race" concludes "and by the way, all fuel for the race is compliments of American Oil Company." Page 18 is a full page ad for Best Western Motels, containing a large reproduction of the American Oil Company credit card which can be used to reserve and charge rooms. The insert following that page and the next page, 19, is an ad for car coats available from American Oil Merchandise Center which can be charged to the American Oil Revolving Charge Account. The back cover of the magazine advertises a battery sold by American Oil "at your American Oil Company Dealer" together with a picture of the American Oil Company credit card and logo. (2T 74-5, 90).

43. Respondent invited Petitioner to let Respondent know of other publications that violate the policy Respondent seeks to impose on VISTA/U.S.A. (1T 89). In response, Petitioner has proffered a number of second-class publications, including the following that are published by and circulated to members of travel clubs: TEXAS MOTORIST for February 1973, the masthead of which states: "Serving over 200,000 members of the American Automobile Association, Texas Division, with offices in Austin, Beaumont, Corpus Christi, El Paso, Ft. Worth, Houston, McAllen, Midland-Odessa, San Antonio and Waco"; DRIVING for January/February 1973, which states that it is the "Official publication of New Jersey Auto Club-AAA"; AMERICAN MOTORIST for February 1974, published by the American Automobile Association and distributed to members who pay the subscription price as part of their dues. (Pet. Ex. 21.)

44. Petitioner has also submitted copies of the following publications which, while not distributed by motor clubs, are subject to the same objections raised by Respondent in this proceeding:

A. CARTE BLANCHE for November/December 1973 states, at page 1, "Annual subscription $1.50 available only to Carte Blanche cardholders." Editorial material at pages 2-12 is entitled "News From the World of Carte Blanche," and contains matters said to be of special interest to Carte Blanche cardholders. Pages 6 and 14 list "Miami's Fine Dining Spots," which can be assumed to accept Carte Blanche credit cards. An insert between pages 16-17 advertises the Carte Blanche credit card. A Letter to the Editor at page 19 praises Carte Blanche and help that the writer received from Carte Blanche personnel in Singapore. Pages 41 through 48, together with the full page insert following page 48, deal with "Prestige Gifts", describing a special deferred payment plan available to Carte Blanche cardholders. There is an advertisement for Carte Blanche insurance at page 49. Pages 50-51 describe beef restaurants which, again, can be assumed to accept Carte Blanche credit cards. The full page advertisement for Goodyear at page 56 contains a large reproduction of the Carte Blanche credit card, which is stated to be honored at all Goodyear stores. The insert between pages 64-65 is another advertisement for the Carte Blanche credit card. page 65 is a full page advertisement for Cartan Travel, a division of Carte Blanche. The back page of the magazine is an advertisement for Avco Financial Services which, according to information on page 1, is the parent corporation of Carte Blanche. In addition to the foregoing, there are 22 other advertisements in the magazine for products or services that may be purchased by use of the Carte Blanche card. Other apparent advertisements for restaurants and hotels can be assumed to be places where the Carte Blanche card may be used. This is made specific in the insert following the front cover page which refers to the use of the Carte Blanche card at Hilton Hotels, advertised on the preceding page, and of the advantages of being a Carte Blanche cardholder. Each of the articles in the magazine relates to travel, for which holding a Carte Blanche card would be of benefit. (Pet. Ex. 21.)

B. SIGNATURE for January 1974 is strikingly similar to CARTE BLANCHE, except that it is published by Diner's Club, Inc. (Pet. Ex. 21.)

C. PLAYBOY for December 1973, contains extensive advertising and editorial material dealing with commercial activities of the publisher. Among those commercial activities is the production of motion pictures. Pages 26 through 50 of this issue are movie reviews. Pages 40-41 are full page ads for PLAYBOY magazine, which can be charged to a Playboy Club Credit Key. The full unnumbered page facing page 49 advertises Playboy Club-Hotels and hotels in Ocho Rios, Jamica; Miami Beach, Florida; Great Gorge, McAffe, New Jersey; Chicago, Illinois; and Lake Geneva, Wisconsin. Page 54 contains an advertisement for the facilities of various Playboy Clubs available for "parties, meetings and important sales presentations." Page 62 contains an advertisement for glassware sold by Playboy products. Page 75 and the adjacent insert page is an advertisement by Playboy Clubs International, Inc. for the Playboy Club Holiday Gift Key. Page 78 has an advertisement for the Playboy Club and Playboy Towers Hotel in Chicago. page 94 has an advertisement for earrings sold by Playboy Products. Adjacent to page 95 is an insert advertising PLAYBOY magazine, a subscription to which can be charged to the Playboy credit Key. page 111 is a full page advertisement for PLAYBOY as a "winning combination for advertisers at holiday time or anytime." An insert before page 247 advertises PLAYBOY magazine. The full pages 266-267 advertise the Playboy Book Club, whose book offerings include Playboy's Host & Bar Book, The Playboy Gourmet , Playboy's Complete Book of Party Jokes , and Playboy's Book of Forbidden Words . Page 283 contains an advertisement for cufflinks sold by Playboy Products. An unnumbered page between pages 293-294 advertises puzzles available from Playboy Products. The insert adjacent to page 300 advertises PLAYBOY magazine, the subscription to which may be charged to a Playboy Club credit Key. Page 325 is a full page advertisement for OUI magazine, which may be charged to a Playboy credit Key number and is published by the publisher of PLAYBOY. Page 337 is a full page ad for the Playboy Playmate Date Book for 1974. (Pet. Ex. 21.)

D. FORTUNE for February 1974 contains advertisements at pages 144-145 with an intervening insert for the Beethoven Bi-Centennial Collection of phonograph records offered by Time-Life Records. Page 161 is an advertisement for programming suitable for playing on a video player offered by Time-Life Video, a multi-media service of Time-Life Films, Inc. Page 164 advertises a "Library Case" for FORTUNE magazines. Page 165 is a full page advertisement for the Fortune Book Club. (Pet. Ex. 21.)

E. THE WALL STREET JOURNAL for Monday, December 31, 1973, is published by Dow Jones & Company, Inc. Page 7 contains a full page advertisement for THE NATIONAL OBSERVOR, another Dow Jones publication. Page 9 contains in the first column a story on "bond markets" showing the "Dow Jones Municipal Bond Yield Index." That page also contains an advertisement for More Tax Tips and Tax Dodges as reported in the Wall Street Journal available from Dow Jones Books. Page 10 contains an advertisement for "BARRON's, the Dow Jones Weekly. That same page contains a story on commodities, reporting Dow Jones bond averages. Page 17 devotes the first two columns to a summary of the Dow Jones averages for the period September 14 through December 28. (Pet. Ex. 20.)

F. TIME for February 18, 1974 contains at pages 61-62 and the included insert, an advertisement for "The LIFE Science Library" by Time-Life Books, an advertisement at pages 63-64 for the "TIME Education Program," and inserts between pages 34-35 and 94-95 advertising TIME. (Resp. Ex. 16.)

45. Each of these other publications is subject to all or some of the objections Respondent levels at VISTA/U.S.A. The motor club publications are similar to VISTA/U.S.A. in all respects, except that they have failed to achieve the total avoidance of direct or indirect company advertising that has been the consistent policy of VISTA/U.S.A.

46. In Petitioner's "Motion to Dismiss", docketed on February 19, 1974, Petitioner contends that Respondent's proposed revocation of second-class mailing privileges should be dismissed on the grounds that the Respondent had "failed to comply with the requirements of 5 U.S.C. 558(c)" of the Administrative Procedure Act in that the Respondent had refused "to specify those matters in VISTA/U.S.A. that it claims violate the applicable statutes and regulations," and that while it was the policy of this section of the Administrative Procedure Act "to encourage compliance prior to revocation", compliance by Petitioner "is impossible where the agency refuses to specify what is wrong."

With respect to Petitioner's motion to dismiss, Petitioner was notified on June 16, 1972, that the basis for the proposed revocation of second-class mailing privileges was that the Postal Service considered the publication" to be designed primarily for advertising purposes" (Ex. R-2). Thereafter, continuing negotiations were conducted by Petitioner and the Manager for the purpose of discussing the proposed revocation (1T 55, et seq .). With respect to Petitioner's motion, it may very well be that Petitioner was advised of Respondent's reason for the proposed revocation. Furthermore, it is the opinion of the undersigned that both Respondent and Petitioner have not only reasonably tried to resolve their differences, but also have reasonably tried to furnish the documents requested by the other. Accordingly, Petitioner's motion to dismiss, docketed on February 19, 1974, insofar as the Petitioner's contentions therein are concerned, is denied.

CONCLUSIONS OF LAW

1. Respondent purports to base revocation of second-class mail privileges for VISTA/U.S.A. on 39 U.S.C. 4354(c) (old) which provides:

"a periodical publication designed primarily for advertising purposes . . . is not entitled to be admitted as second-class mail under this section."

Respondent also purports to rely on provisions of 39 C.F.R. 132.2(b)(6) as follows:

"Publications designed primarily for advertising purposes may not qualify for second-class privileges. The include:

* * *

"ii. Those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them.

"iii. Those that consist principally of advertising and editorial write-ups of the advertisers."

Respondent does not claim to seek revocation based upon any other provision.

2. VISTA/U.S.A. does not "consist principally of advertising", because not more than 20% of any issue constitutes advertising. Respondent does not point to any editorial matter in VISTA/U.S.A. that is claimed to constitute editorial write-ups of the advertisers." Therefore the provisions of Postal Service Manual 132.226.c., 39 C.F.R. 132.2 (b)(6)(iii) are not applicable. See 39 C.F.R. 125.5(b).

3. VISTA/U.S.A. is not owned or controlled by business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of Exxon Oil Company, or any other wholly-owned subsidiary of Exxon Oil Company.

4. The interpretation of 39 C.F.R. 132.2(b((6) has been recently reviewed in Vertical Marketing, Inc. , P.S. Docket No. 2/6 (1974). A magazine is published primarily for advertising purposes (i) where notwithstanding editorial content it serves in the first place or for its principal purposes as a tool for advertising merchandise ( Conover-Mast Publications, Inc ., H.E. Docket No. 5/173 (1958); Pool Publications, Inc ., P.O.D. Docket No. 1/143 (1959); National Association of Trailer Owners, Inc. , P.O.D. Docket No. 1/144 (2nd Jud. Off. Dec. 1960); see also Channel Northwest, Inc. , H.E. Docket No. 5/178 (1958)); or (ii) where it chiefly seeks to obtain customers for the publisher's goods or services ( The Citizen Soldier , 1 Ops. AAG for P.O.D. 400 (1877), reprinted H.E. Docket No. 5/173 (1958), App. A; Credit Bureau of Albuquerque , P.S. Docket No. 1/218 (1973); Pleasure, Inc ., P.S. Docket No. 1/48(1973).

5. (a) Petitioner's publication of VISTA/U.S.A. is, in respect of its content, essentially a service undertaking. VISTA/U.S.A. is primarily designed as an attractive, interesting, and informative publication to educate and entertain its subscribers on travel- related subjects. It is one of a group of benefits and services of membership in Petitioner. The subscription price of VISTA/U.S.A. is paid by subscribers as part of their membership dues, a practice specifically approved in the general policy stated in Respondent's Form 3513.

(b) The cogent statement of Mr. Arthur S. Cahn, counsel for Respondent, that VISTA/U.S.A. is "a very good publication" is supported in fact.

6. Respondent specifically approved VISTA/U.S.A., and each facit of its publication and distribution now objected to by Respondent, at the time that original entry was granted on September 8, 1967, effective October 7, 1965. In connection with that determination, Petitioner at the direction of Respondent, modified its publication to accord with Respondent's regulations.

7. In a similar case, but for even less compelling factual reasons than found here, the revocation of the second-class mailing privileges of ADVENTURE ROAD was reversed in the matter of AMOCO MOTOR CLUB, a division of AMOCO ENTERPRISES, INC. , initial decision issued May 7, 1974.

8. The underlying findings of fact, the applicable administrative precedents, and the legal considerations heretofore all lead to the final conclusion that VISTA/U.S.A. is not a matter of law a publication primarily designed for advertising purposes or used by those who own or control it as an auxiliary to and essentially for the advancement of their main business. VISTA/U.S.A., on the contrary, is a profit making activity of ETC, having its own value as such and as a service and public relations effort for the pleasure of its readers and the indirect enhancement of the Exxon image. Hence, the magazine is not banned from second- class mail privileges by PSM 132.226. Accordingly, the revocation action of the Manager is reversed and VISTA/U.S.A. deemed entitled to second-class mail privileges.

1/ The transcript of the hearing conducted on February 19, 1974, is designated as 1T. The transcripts of the morning session and of the afternoon session held on June 25, 1974, are designated as 2T and 3T, respectively.