The Chief

by David Nasaw

  Ned McLean was not the only second-generation publisher who foundered during the Depression. Though Joseph Pulitzer’s sons did better with their father’s legacy, they were not able to weather the storm. By early 1931, frightened by the amount of money they were losing, they put the morning, evening, and Sunday Worlds up for sale. Hearst, too, was losing money in New York, but he could not let an opportunity like this one go by. Because he knew the Pulitzers would never entertain a bid from him, he entered into partnership with Herbert Bayard Swope, the former editor of the World. The two met clandestinely at Marion’s MGM bungalow, her beach house in Santa Monica, and at Charles Chaplin’s home in Beverly Hills. Hearst was willing to pay between $5 and $8 million for the morning and Sunday editions, which he intended to close down. He never got the chance. The Pulitzers sold instead to Roy Howard of the Scripps-Howard chain, who killed off the morning and Sunday editions and merged the evening World with his own Telegram.10

  Though Hearst’s New York American had been hemorrhaging circulation and advertising revenues more rapidly than the World, Hearst had no intention of shutting it down. On the contrary, buoyed by the 100,000 readers who moved to the American when the morning World was closed, the Chief set in motion yet another plan to reinvent his flagship newspaper by positioning it as a third choice between the ultra-serious, text-heavy Times and Herald Tribune, on the one hand, and the illustrated tabloids, on the other. There was, he was certain, room in the marketplace for a paper that was smart, well written, attractively illustrated, and filled with news stories condensed for busy readers, a paper not unlike the early San Francisco Examiner or New York American. Unlike the Times and the Herald Tribune, he would give his readers “brief stories and bright stories.” Unlike the tabloids, he would continue to carry the strong features and opinion pieces that would establish the American, as its logo proclaimed it to be, “A Paper for People Who Think.”11

  Although he had the greatest respect for Adolph Ochs of the New York Times, who was not only weathering the Depression but adding circulation year by year, Hearst did not intend to follow his example. When Coblentz suggested that the American should eliminate its women’s page because the Times did not have one, the Chief resisted. “You mention the Times not having these things. I do not think that means a great deal. We have never run the kind of paper that the Times runs. The Times is an Ochs paper. Our papers are Hearst papers. There is a definite difference in everything, from political policies to news judgement, and character of the departments. In fact, it is desirable for us not to be like the Times but to be sufficiently different from the Times”12

  As the former Times reporter Alva Johnson noted in a 1932 Vanity Fair article, though Hearst and Ochs had been publishing newspapers in the same city for more than thirty-five years, they had had “little effect on each other.” Ochs saw himself as “a vendor of information.” He kept his name and opinions out of his paper. Hearst, on the contrary, appeared before the public “as a minstrel and sage, ethical guide, social coach, financial adviser, confidant and strategist in affairs of the heart, culinary tutor, educator, house mother, prophet, purveyor of warm data on high life.... Every day of his life, he strives to exert his influence to the utmost.”13

  Instead of borrowing from the Times, Hearst, in early 1931, decided to go it one better and add a new feature, a contributors page—what would later come to be called the op-ed page—aimed rather directly at more educated and affluent readers. “The idea of the new page of contributions is to reach new class of people,” he told Coblentz. “It is necessary to do something different with the American than we have been doing.”14 The heading of the new page, “Writers With Something to Say, Who Know How to Say it,” was an apt description. A large number of these writers—Bertrand Russell, Aldous Huxley, G. K. Chesterton, and Rebecca West—were British. All were masters of the short-form essay. Huxley was among the most prolific. According to James Sexton, who edited a collection of these essays, Hearst contacted Huxley’s American publisher in June of 1931 to propose that the author, who had just completed Brave New World, write a series of weekly articles “which would provide a very comfortable income.” He was to be given a free hand as to subject matter. “It seems good money for not much work, and of a kind that might be rather interesting,” Huxley wrote back to his publisher. He would, over the next four years, deliver 173 different essays on an extraordinarily wide variety of subjects: from “drugs, to pieces on travel, language, nature, entomology, medicine, art, books,” dogs, communism, fascism, and current politics and political personalities.15

  Hearst’s daily opinion page was run opposite his editorial page. Each of his contributors was free to write on whatever he or she chose. The result was a remarkably diverse set of essays. On September 9,1931, to offer just one example, Hearst published a column by Bertrand Russell, “In Praise of Artificiality,” in which Russell argued that “the praise of nature, in which our age abounds, is not itself natural; it is a reaction against too much artificiality. As a reaction it has its uses; as a theory of life, it won’t do.” Three days later, the page carried an essay by Huxley on “Bullfights and Democracy,” in which he reflected—brilliantly—on the French government’s bizarre decision to outlaw bull fights in which the bull was put to death, but let the events take place if the promoters paid a fine in advance.16

  Unfortunately for Hearst, short essays by British intellectuals on his oped page did not make up for the steadily deteriorating news sections. The Hearst papers were weak in both local and international news. While Hearst’s International News Service had bureaus in every major European city, they were staffed, for the most part, by writers and editors who were paid by the Chief to express his opinions. The same was true of his Washington coverage. Hearst set the editorial line which everyone was obliged to follow. If in the past he had been able to find able reporters willing to work under these conditions, that no longer appeared to be the case.

  A. J. Liebling would remark after Hearst’s death that he would be remembered for introducing “big money” into newspaper publishing. And that he had—paying his star writers, columnists, and cartoonists much more than the going wage in the industry. To recoup these costs, Hearst required each of his newspapers to purchase and publish, uncut and unedited, a large number of Hearst-syndicated columns, comics, features, and daily opinion pieces, like Brisbane’s. His local editors, robbed of space and editorial budget, had to cut back somewhere and did: on reporters, columnists, and opinion writers. The result was apparent to anyone who compared the Hearst papers to their competitors. The Hearst papers looked much the same, as Liebling also remarked, wherever you were in the country. The Chief recognized the problem and urged his city editors to be more resourceful, but without adequate funds to hire reporters, there was little they could do.17

  The Hearst papers’ weakness in local and international reporting was, to some degree, compensated for by the strength of their syndicated columnists. Damon Runyon, who had been with the paper since the 1920s and had covered everything from sports to Mexican border disputes to the Lindbergh kidnapping trial, continued to write for the American. Walter Winchell filled his role as star columnist at the Mirror. Both were widely syndicated to other Hearst papers. So were Louella Parsons, Hearst’s Hollywood reporter; Maury Paul, his society columnist; Robert Ripley, the author of the “Believe It or Not” cartoons; and a number of lesser names. When the World folded, Hearst tried to hire Walter Lippmann to write another syndicated column for him, but Lippmann signed on with the Herald Tribune instead.

  The Chief’s intellectual in residence remained Arthur Brisbane, but it was difficult to know whether he was an asset or a liability. Every Hearst morning paper was forced to run Brisbane in the far left column of the front page and pay the Hearst syndicate for the privilege. None were particularly happy with the arrangement.

  It is difficult to describe but easy to parody the contents of a typical Brisbane column. He wrote on whatever happened to come int
o his mind that day, the only constant being his positive references to his friends and the stocks he had invested in. Each column contained several different items, usually including the kind of pseudo-scientific musings he had specialized in as a Sunday feature editor. David Starr Jordan, the president of Stanford University, coined his own word to describe Brisbane’s musings: “sciosophy,” which he defined as “systematized ignorance, the most delightful science in the world because it is acquired without labor or pain and keeps the mind from melancholy.” Another commentator referred to his writings as “Brisbanalities.” A. J. Liebling was particularly biting about Brisbane’s “inspirational sapience”:

  The kind of thing that would worry Brisbane ... was the number of eggs produced by a female codfish. According to Brisbane, it was millions. Then he would multiply the number of eggs by the number of codfish, and point out that nature, which he always spelled with a capital “N,” had thoughtfully provided a number of oöphagous fellow-creatures who kept the codfish population of the world within bounds. But what would happen if these monitors suddenly lost their appetite for eggs, he would ask. The world, within eleven months, fourteen days, and a number of hours that he ventured only to approximate, since he hadn’t gone into the problem deeply, would turn into one vast uncooked codfish ball, with only the top of Mount Everest and possibly a small portion of San Simeon protruding from a limitless sea of cod-liver oil.18

  And yet, there might still have been room, even given the Brisbanalities on the front page, for the type of morning paper Hearst envisioned, one that was “smart” and informative, but not as intimidating, weighty, or wordy as his nontabloid competitors. The problem was that Hearst, approaching seventy, had neither the time nor the energy nor the capital to invest in such an ambitious venture. While he had tried to create a reserve fund for new projects, it had long ago been exhausted. He was overextended with long-term and short-term debt, bloated payrolls, real estate mortgages, construction and renovation costs, and huge bills to art dealers and auction houses on both sides of the Atlantic. There was no ready capital available to invest in his morning newspapers nor, in the midst of the Depression, was it going to be easy to borrow money for this purpose.

  This is not to say that Hearst was prepared to reduce his publishing empire or sell off his assets, as the Pulitzers had. On the contrary, he urged his local newspaper executives to spend more of their revenues on circulation campaigns and promotion. He continued to believe that the most effective way to recruit new readers was through radio. In April of 1930, he appointed Emil Gough of Los Angeles as his special assistant for radio:

  I think you should make a tour of the whole circuit and attend to various matters of prime importance in connection with the radio situation. The first thing of importance is to find the best possible man for radio editor of each paper ... I am afraid that not all of our publishers realize the importance of radio.... It is fully as important as moving pictures. It is much MORE important than the drama.... The second matter for which you are making the tour is a matter that had been pretty thoroughly discussed with the publishers heretofore; namely, acquiring broadcast stations or making adequate connections with established stations and providing attractive programs.

  That it would cost a small fortune to buy or build new radio stations did not concern the Chief at all.19

  All his life, Hearst had been able to borrow capital whenever he needed it to refinance old debts and buy new properties. Jack Neylan, who had taken over as corporate treasurer on the retirement of Joseph Moore, had floated two successful multimillion-dollar bond issues in 1925 and 1927 and was, in 1930, prepared to raise more capital by selling stock in Hearst’s corporations. In May of 1930, he had incorporated Hearst Consolidated Publications, Inc., in Delaware. In July, shares of preferred stock in the new corporation were offered to the public with the same kind of hoopla that had celebrated the Hearst bond issue of 1927. B. C. Forbes, Hearst’s financial columnist, recommended the stock in his columns, as did advertisements prominently placed in all Hearst publications, each with a coupon, phone number, and illustration of a smiling mother and father holding their dividend check, their young daughter looking on. Playing upon the fears of Americans everywhere, the advertisements offered the Hearst stock as a Depression safety net, a sound and secure place to earn money in times of economic distress.

  Seven Per Cent with Safety

  is still available as

  Falling Interest Rates

  disturb

  Fixed Incomes

  FINANCIAL INDEPENDENCE

  may be secured by the purchase of

  Hearst Consolidated Publications, Inc.

  7% Class A Shares

  TIME is your greatest aid in the accumulation of MONEY

  START TODAY

  For those who could not afford the $25 it cost to purchase a share, a partial payment plan of $5 down and $2 monthly was available. Hearst company employees were offered the stock for $24 a share, the extra dollar allegedly paid by Mr. Hearst himself. Readers were regularly reassured that the Hearst publications would remain strong and stable forever, because their product was “an urgent public necessity in the face of all economic conditions.”20

  What the advertisements didn’t say—though it was clear in the prospectus—was that the preferred stock carried no voting rights. These were lodged in the common stock, all of which was owned by Hearst’s personal holding company. Only in the event that Consolidated skipped four consecutive dividend payments would the preferred stock holders be given voting rights to elect their own board of directors. The advertisements for the stock also didn’t say where the money raised was going.

  Because Hearst Consolidated had bought its properties—ten newspapers, the American Weekly, and a newsprint company—from Hearst’s personal holding company for $50 million, a substantial portion of the funds raised through the stock offering was committed to paying off this debt to Hearst. Another portion was dedicated to paying off the bonds and debts owed by the individual properties which had been bought by Hearst Consolidated.

  Hearst profited all the way round. Not only did his personal holding company get an immediate cash infusion, but because it owned all the common stock in Consolidated, it received a substantial portion of the dividends distributed. Between 1930 and 1935, $10 million of the $17 million paid in dividends went directly to Hearst’s personal holding company.21

  Although early advertisements said that “application will be made to list this Class A Stock on the New York Curb, and the Chicago, San Francisco and Los Angeles Stock Exchanges,” this was never done. The notice disappeared from later advertisements. Hearst sold the stock himself through his newspapers. Remarkably enough, the absence of an open market for the stock was not a major problem through the early 1930s. As the advertisements promised, preferred shares of Hearst Consolidated, Inc., turned out to be reliable investments in an uncertain marketplace. Hearst had promised an enormous and safe interest rate and he delivered on that promise. That he also profited from the arrangement was not, at the time, cause for concern to anyone.22

  Through the first year of the Depression, the Hearst papers refrained from criticizing Hoover’s economic policies, perhaps because the Chief was in agreement with the president that the Depression was a domestic business crisis caused by excessive stock market speculation that would, given time, heal itself. On other issues, the Hearst papers were as active as ever through the early years of the Depression. Prodded by the Chief, his editors initiated crusades for improved public schools, prison reform, and “state hospitals and farms for the cure of narcotic addicts” and against crime, boxing, auto accidents, capital punishment, licentious theater, “the narcotics evil,” and Prohibition.

  Hearst’s major policy initiative was the campaign against Prohibition. While Hearst had originally supported the 18th Amendment, as early as January 1925, he had begun to criticize it for breeding “law violators” and financing the underworld. Privately, he paid the law l
ittle heed. There was always a steady supply of the best beers at San Simeon, much of it shipped West from New York by Chris MacGregor. In February of 1927, for example, Joe Willicombe urgently telegrammed MacGregor:

  As AB [Arthur Brisbane] is leaving Saturday or Sunday, you have little time to act on this matter—so get after it quickly and oblige. Chief says AB has way of getting Bass, and Rudolph [an unidentified employee] has way of getting the German. (I must necessarily make this cryptic.) Chief would like AB to get some Bass for here and would like Rudy to get some German also for here, same to be turned over to you for transportation. In communicating on the subject, you can refer to the Bass as the English and the other as the German or Germanic—I will understand.... And ask Rudy if he cannot get a real big shipment, even if it is down below over the border and we will try to engineer way to get it up.23

  By January of 1930, Hearst was ready to launch a direct assault on Prohibition. In a signed editorial, he blamed the 18th Amendment for every ill that had befallen the nation since it was passed: