Chapter XXXVI: The Empire of Business

Let the reader not misunderstand my thesis. I do not claim that there exists in America one thoroughly organized and completely conscious business government. What we have is a number of groups, struggling for power; and sometimes these groups fall out with one another, and make war upon one another, and then we see a modern application of the ancient adage, “When thieves fall out, honest men come into their own.” If, for example, you had studied the press of New York City at the time of the life insurance exposures, you would certainly have concluded that this press was serving the public interest. As it happens, I followed that drama of life insurance with the one man in America who had most to do with it, the late James. B. Dill. Judge Dill ran a publicity bureau in New York for several months, and handed out the greater part of this scandal to the newspaper reporters. He told me precisely how he was doing it, and precisely why he was doing it, and I knew that this whole affair, which shook the nation to its depths, was simply the Morgan and Ryan interests taking away the control of life insurance money from irresponsible people like “Jimmy” Hyde, and bringing it under the control of people who were responsible—that us, responsible to Morgan and Ryan. The whole campaign was conducted for that purpose; the newspapers of New York all understood that it was conducted for that purpose, and when that purpose was accomplished, the legislative investigations and the newspaper clamor stopped almost overnight.

And all through this terrific uproar I noticed one curious thing—there was never in any single newspaper or magazine or speech dealing with the question the faintest hint of the one intelligent solution of the problem—that is, government insurance. I made several efforts to get something on the subject into the New York papers; I gave interviews—I have forgotten now to what papers, but I know that these interviews never got by the blue pencil. It took the emergency of war-time to force government insurance—and now the lobby of the private insurance companies is busy in Washington, trying to scuttle government insurance, as government telegraphs and telephones, government railroads, government shipping, government employment agencies, have all one by one been scuttled.

The thieves fall out; and also new thieves are continually trying to break into the “ring.” There is always an enormous temptation presented by our peculiar newspaper situation; our Journalism is maintaining a vacuum, with incessant pressure on the outside. The people want the news; the people clamor for the news; and there is always a mass of vitally important news withheld. The Socialist papers are publishing scraps of it, orators are turning it into wild rumor on ten thousand soap-boxes; if only the people could get it in a newspaper or a magazine, what fortunes they would pay! And of course there are wide-awake men in the world of Journalism who know this: what more natural than that one of them should now and then yield to the temptation to get rich by telling the truth?

The whole history of the American magazine-world is summed up in that formula. Some fifteen years ago our magazine publishers made the discovery of this unworked gold-mine; “McClure’s,” “Success,” “Everybody’s,” “The American,” “Hampton’s,” “Pearson’s,” the “Metropolitan,” even the staid and dignified “Century” jumped in to work this mine. Their circulations began to go up—a hundred thousand increase a month was not unknown in those days of popular delirium. Magazine publication became what it had never before been in American history, and what it has never been since—a competitive industry, instead of a camouflaged propaganda. Is it not a complete vindication of my thesis, that in a couple of years half a dozen magazines were able to build up half a million circulation, by no other means whatever than telling what the newspapers were refusing to tell? And is it not a proof of the pitiful helplessness of the public, that they still go on reading these same magazines, in spite of the fact that they have been bought up by “the interests,” and are filled with what one of their “kept” editors described to me, in a voice of unutterable loathing, as: “Slush for the women!”

For, of course, the industrial autocracy very quickly awakened to the peril of these “muck-raking” magazines, and set to work to put out the fire. Some magazines were offered millions, and sold out. Those that refused to sell out had their advertising trimmed down, their bank-loans called, their stockholders intimidated—until finally, in one way or another, they consented to “be good.”

“Success” refused to “be good”; it persisted in exposing Cannonism, and maintaining a “People’s Lobby” in Washington; so “Success” was put out of business. The “National Post” adopted a radical policy, and it was put out of business; likewise “Human Life,” edited by Alfred Henry Lewis; likewise the “Twentieth Century Magazine,” edited by B. O. Flower; likewise the “Times Magazine”—a monthly having nothing to do with the “New York Times,” but edited by a young man of means who naïvely supposed that he would be allowed to tell the truth to the people of New York. “Pearson’s” of the old régime was brought to ruin, and it survives in its new form by the defiant genius of one man, Frank Harris. “Harper’s Weekly” started out bravely, with Norman Hapgood as editor, and Charles R. Crane as “angel”; for two or three years it fought the advertising boycott, and then it died.

In the “Profits of Religion” I told in detail the story of how “Hampton’s Magazine” was put out of business. I did not intend to repeat this story, but it happens that I have just met my old friend Ben Hampton again, and have gathered fresh details. I will let him tell his own story:

Never in the history of magazine-publishing was there such a great
success in such a short time as that of “Hampton’s.” This is not my
conversation. It is simply the records of the American News Company.
We had, I think, 425,000 circulation, and we broke all records for the
same length of time. No other magazine ever succeeded with an
investment as small as ours. When they took the magazine away from me
I think we had nearly thirty thousand dollars a month advertising.

But it is a peculiarity of magazines that when they grow too fast they lose money for a time. You have contracted for a year to publish advertisements, based on a circulation of a hundred thousand copies. If, three months later you have four hundred thousand circulation, you are giving four times as much as you were paid for; also, you have to have four times as much paper and press-work, for which you do not get returns until three months later. Hampton put in all his fortune and his wife’s, and then he started selling stock to his readers. He had just got by the difficult place; his printing-company and the bank which owned the printing-company had audited his books, and the bank-auditor had certified that in the first four months of 1911 the magazine “had earned a profit of not less than three thousand and not more than seven thousand dollars per month.”

Yet they put “Hampton’s Magazine” out of business! Hampton had started Charles Edward Russell’s articles exposing the “New Haven” swindle—two or three years before the truth broke out, you understand. An agent from the “New Haven” came to inform him that if he started this publication, he would be put out of business. I now learn for the first time the name of this agent—Sylvester J. Baxter. Readers of the “Profits of Religion” will give a start of recognition: the same gentleman who contributed that wonderful boost of the “New Haven” to the “Outlook,” organ of the Clerical Camouflage! And the “Outlook” pretended not to know that this was an official boost of the “New Haven,” and to have been astonished when the “New Haven” ordered a big edition of this issue!

Let Ben Hampton tell the rest of the story:

A nice young man got a job in our accounting department. He was one of
the finest fellows we had ever had around. He was willing to work days
and nights, and he did work days and nights, and one night when he was
working, he took a copy of our list of stockholders. Of course, we did
not find this out for months. In the meantime, a man and a woman,
working separately, visited all our stockholders they could reach and
told them I was robbing the Company. They said I had a large estate in
the Adirondacks and a home in the Fifth Avenue district of New York
City. At that time Mrs. Hampton and I were having a time to buy
clothing for the children. We were drawing almost no salary from the
magazine, and we had put all our money in the undertaking. In fact, we
were near the line of desperation, we were so hard up.

Something like twenty brokers on the Wall Street curb began to
advertise our five dollars par stock at four dollars, down to three
dollars a share. We sent to them and offered to buy the stock and were
never able to buy one share. One of the brokers afterwards admitted to
us that they had none of the stock, and that they were paid to do the
advertising.

All these methods, of course, created confusion in the minds of our
stockholders, and practically killed our efforts to raise thirty
thousand dollars, which was the insignificant sum of money needed to
pay off our paper bill. We were entitled to a line of credit of three
hundred thousand dollars at the paper makers. We owed the paper maker,
I think, about forty thousand dollars and he notified us arbitrarily
on a Monday that we would have to pay the bill Wednesday, or he would
decline to furnish paper for the current edition, which was then on
the press.

When I saw trouble coming I got together a committee of my
stockholders in New York City, and a group of about a dozen men
endorsed three notes of ten thousand dollars each. The net worth of
these dozen men was over two million dollars. We took the notes to one
bank in New York City. The bank accepted them. We checked against
them, and got money on them, and the next day were notified we would
have to take the notes out of the bank.

Of course you say this is an illegal proceeding, and can’t be done. I
assure you it was done. We were thrown out of that bank, after the
bank had accepted our paper, and after we had checked against it. The
manager of the bank told me that he was powerless—that the “down-town”
folks had thrown us out. Several other banks that had loaned me money
for ten years told me that they could not do anything for me now—that
I was in bad “down-town.”

One banker who flatly said he would loan us money whether Morgan’s
crowd wanted him to or not, was put out of business himself within a
few months. This man’s name is Earle. He was then running the Nassau
Bank. I do not know whether Earle would tell his story or not, but the
way the Morgan crowd drove him out of the banking business was one of
the coldest-blooded things I ever heard of. They punished him for
trying to accept perfectly good banking-paper to help me out of my
crisis.

The foregoing facts are dictated hurriedly but there are some points
in them that I believe you will want. Of course you know the finish of
the properties. Within ten days after the thing began to close in on
me, I had to turn my affairs over to the lawyers, and then a group of
people appeared who were said to be the “International Correspondence”
group of Scranton, Pa. They brought in letters from bankers, etc.,
showing they were very reputable and high-classed, and I had the
choice of going into the hands of the receiver, or letting them take
the property. They paid me just money enough so I could get my stock
out of hock. The rest of the money they were to pay me was evidenced
by a contract. I turned the contract over to my attorneys for
protection of my preferred stockholders. Within a few weeks’ time we
became convinced that the fellows who had taken over the property
intended to loot it. The bookkeeper told me they took one hundred and
seventy-five thousand dollars out of the property in a few months, and
took the books down to the East River and threw them off the bridge.

The result of it all was that I worked with the United States
Government and had the crowd indicted. In time we brought them to
trial. The trial lasted four or five weeks. We literally could not
prove anything. We did prove that “Hampton’s Magazine” was a valuable
piece of property and that it was making money, but we could not prove
that the fellows who got it were crooks. All the records were
destroyed. The result was, the judge threw the case out of court,
after it had been in court for four or five weeks, and we never got
back any of the money. Of course, the property in the meantime had
been ruined.

I have told about several of the magazines which consented to “be good.” I have shown the pitiful plight of the “American,” and the miserable piffle they are publishing. And what is the meaning of it? The meaning was given in an item published in the “New York Press” early in 1911, when the “American Magazine” was taken over by the Crowell Publishing Company. The “Press” stated that this concern was controlled by Thomas W. Lamont, of J. P. Morgan and Company, and declared “The ‘American’ will do no more muck-raking.” In answer, the “American” in its next issue made a statement, haughtily announcing that the same editors, John S. Phillips, Ray Stannard Baker, Ida Tarbell and Finley Peter Dunne were remaining in charge, and that “the policy of the magazine will be unchanged.” To a discussion of this, my own language is inadequate; I have to employ the vocabulary of my son, a student in high school: “The poor boobs!” Four years these editors stuck it out, and then they quit, and a couple of young fellows who had been their office-clerks are now the “editors” of the “American Magazine”—which boasts a million circulation, and fifty-eight thousand lines of advertisements per month! Now, as I write, I learn that this Crowell Publishing Company has purchased “Collier’s,” and we shall see the same thing happening to our “National Weekly”!

In the same tragic way, my old friend Ridgway, who published the “Condemned Meat Industry,” is out of “Everybody’s,” and a new and wholly “tame” staff is in charge, acceptable to the Butterick Publishing Co. In the same way S. S. McClure was turned out of his magazine, which once published Ida Tarbell’s exposure of Standard Oil, and now publishes the solemn futilities of Cleveland Moffett, and anti-Socialist propaganda by the unspeakable Newell Dwight Hillis. It happened the other day that I was glancing over a back number of “McClure’s,” and my eye was caught by the opening instalment of a serial, announced in this style:

At last! A great new novel by the author of “The Broad Highway.”
“BELTANE THE STRONG,” by JEFFREY FARNOL, who also wrote “The Amateur
Gentleman” and “The Money-Moon.” This is no ordinary story. Many
novelists would have written three books, some six, in the time
Jeffrey Farnol has given to this tremendous love-tale of Beltane and
Lady Helen. The result is the finest thing of its kind “McClure’s” has
ever printed—by all means the novel of the year.

And opposite this is a full-page pink and purple illustration of a misty, mystical girl in a thrilling state of semi-nudity, with this quotation:

Breathless and as one entranced he gazed upon her: saw how her long
hair glowed a wondrous red ’neath the kisses of the dying sun; saw how
her purpled gown, belted at the slender waist, clung about the
beauties of her shapely body: saw how the little shoe peeped forth
from the perfumed mystery of its folds—and so stood speechless, bound
by the spell of her beauty.

“The perfumed mystery of its folds!” Such is the perfumed garbage now being fed to the American public in the name of Sam McClure!

Or take the “Metropolitan,” which a few years ago announced itself as a Socialist magazine. We were all tremendously thrilled by the idea that the money of Harry Payne Whitney was to be used to bring about Social Justice in America; but then we saw the “Metropolitan” suppress its exposé of Rasputin at behest of the embassy of the late Tsar; now we see it turning over its editorial columns to Gen. Leonard Wood, to be used in a propaganda for universal military training! In this greatest crisis of history, the people’s cause is left without a single champion in our popular magazines. There are only the Socialist papers, and two or three radical weeklies of limited circulation; the rest is Barbarism.

In every newspaper-office in America the same struggle between the business-office and the news-department is going on all the time. The business of getting the news involves “hustle,” and young brains are constantly being brought in, and these young brains have to be taught the discipline of special privilege, and sometimes they never entirely submit. They have powerful arguments on their side. “You want circulation, don’t you? What’s the use of a paper without circulation? And how can you get circulation if you let the fellow around the corner have this ‘scoop’?” So the owner of the paper has to get busy and make a gentleman’s agreement with the other papers to suppress the news; and sometimes it turns out that the other fellow isn’t a gentleman, and there is a row, and the live young “hustlers” get their way for a while, and the public gets a bit of the news.

Various stages of this struggle are exemplified by different newspapers, or by the same newspaper at different times. You may see a staid old family organ—say the “New York Tribune,” owned by a rich capitalist, Whitelaw Reid, who publishes it as a side issue to gratify his vanity, taking his pay in the form of an ambassadorship. The circulation of such a paper will go steadily down. But then perhaps the old man will die, and his sons will take charge, and his sons won’t feel like paying out twenty or thirty thousand dollars a month, and will get a “live newspaper man” to “put life into” the paper; or perhaps they will sell out to people who have less money, and will be tempted to give the public a little of what it wants.

The fundamental thing that the public wants is, of course, enough to eat. Modern society is complex, and there are thousands of public issues clamoring for newspaper attention, but in the final analysis all these questions boil down to one question—why is the cost of living going up faster than wages and salaries? So the spectre of “radicalism” haunts every newspaper office. The young publisher who wants to make money, the “live newspaper man” who wants to make a reputation, find themselves at every hour tempted to attack some form of privilege and exploitation.

So come “crusades.” The kind of crusade which the newspaper undertakes will depend upon the character of circulation for which it is bidding. If the paper sells for three cents, and is read by bankers and elderly maiden aunts, the newspaper will print the sermons of some clergyman who is exposing the horrors of the red-light district, or it will call on the district attorney to begin prosecuting the loan-sharks who are robbing the poor, or it will start a free ice fund for babies in the tenements. Any cause will do, provided the victims are plunderers of a shady character—that is, small plunderers.

Or perhaps the newspaper is a popular organ. It sells at a low price to the common people. In that case it may go to extremes of radicalism; it may clamor for government ownership, and attack big public service corporations in a way that seems entirely independent and fearless. You say: “Surely this is honest journalism,” and you acquire the habit of reading that newspaper. But then gradually you see the campaign die down, the great cause forgotten. The plundering of the public goes right on, the only thing that has been changed is that you, who used to be a reader of the “World,” are now a reader of the “Journal”; and that is the change which the “Journal” had in mind from the outset. You will see the “Journal” tabulating the amount of advertising it publishes each week or each month, and boasting that it is greater than the “World” publishes; and maybe you feel proud about that, you like to be in the boat with the best fishermen—even though you are there as a fish.

Anyone who is familiar with the newspaper-world can think of a score of publications to which the above statement would apply. There exists a chain of one-cent evening papers scattered over the country, the Scripps papers, catering to working-class audiences. They were founded by a real radical and friend of the people, E. W. Scripps, and for a decade or two were the main resource of the workers in many localities. Now E. W. Scripps is a sick man, out of the game, and his eldest son, who runs the papers, is a young business man, interested in the business management of a great property; so in one city after another you see the Scripps papers “toned-down.” They espouse the cause of strikers no longer. The other day I was staggered to find them dragging out that shop-worn old bugaboo, the nationalization of women in Russia! In the Seattle strike the Scripps paper, the “Star,” “scabbed” on the strike, and its editorial attitude won it the name, the “Shooting Star.”

Or take the “New York World.” This paper was built up by one crusade after another; it was the people’s friend for a generation. Today it is a property worth several million dollars, living on its reputation. It still makes, of course, the old pretenses of “democracy,” but when it comes to a real issue, it is an organ of bitter and savage reaction, it is edited by the telegraph and railroad securities in which the Pulitzer fortune is invested. The “New York World’s” opinion of the “Plumb plan” is that of a Russian grand duke discussing Bolshevism.

Or the Hearst papers. They too have been made out of the pennies of the masses; they too have lured the masses by rainbows of many-colored hopes. They still ask for government ownership—when they happen to think of it; but they lie remorselessly about radicals, and exclude the word Socialism from their columns, except when some Socialist is sent to jail. They support Sinn Fein and twist the lion’s tail, because it brings in the Irish-Catholic pennies; but the one revolution in which their heart is really engaged is the one which is to make Hearst’s Mexican acres into American acres.