Chapter XLII: Owning the Associated Press

When it comes to the Associated Press, the clearest statement I have read was made by Charles Edward Russell in “Pearson’s Magazine,” April, 1914. Says Russell:

About nine hundred daily newspapers in the United States, comprising
the great majority of the journals of influence and circulation,
receive and print the news dispatches of the Associated Press.

This means that concerning any event of importance an identical
dispatch is printed about fifteen million times and may be read by
thirty million persons.

According to the construction and wording of that dispatch, so will be
the impression these thirty million persons will receive, and the
opinion they will form and pass along to others.

Here is the most tremendous engine for Power that ever existed in this
world. If you can conceive all that Power ever wielded by the great
autocrats of history, by the Alexanders, Caesars, Tamburlaines, Kubla
Khans and Napoleons, to be massed together into one vast unit of
Power, even this would be less than the Power now wielded by the
Associated Press.

Thought is the ultimate force in the world and here you have an engine
that causes thirty million minds to have the same thought at the same
moment, and nothing on earth can equal the force thus generated.

Well-informed men know that the great Controlling Interests have
secured most of the other sources and engines of Power. They own or
control most of the newspapers, most of the magazines, most of the
pulpits, all of the politicians and most of the public men.

We are asked to believe that they do not own or control the Associated
Press, by far the most desirable and potent of these engines. We are
asked to believe that the character and wording of the dispatches upon
which depends so much public opinion is never influenced in behalf of
the Controlling Interests. We are asked to believe that Interests that
have absorbed all other such agencies for their benefit have
overlooked this, the most useful and valuable of all. We are even
asked to believe that, although the Associated Press is a mutual
concern, owned by the newspapers, and although these newspapers that
own it are in turn owned by the Controlling Interests, the Controlling
Interests do not own, control or influence the Associated Press, which
goes its immaculate way, furnishing impartial and unbiased news to the
partial and biased journals that own it.

That is to say that when you buy a house you do not buy its
foundations.

The point about the Associated Press upon which it lays greatest stress, and which it never fails to bring forward in defending itself, is that it is a “mutual” corporation; it is owned and controlled by the many hundreds of newspapers which use its services. In La Follette’s magazine during the year 1909 there appeared a series of articles on the Associated Press by William Kittle. Mr. Kittle showed, taking the figures of the year 1909, that the seven hundred newspapers which then used the service had less than one-seventh of the voting control of the organization. The rest of the votes were cast on bonds which had been sold to certain of the members. These bonds represented a voting-strength of four thousand, eight hundred and ninety as against seven hundred and seventy-five votes of the member newspapers. The total of fifty-six hundred and sixty-five votes elected the board of directors, and this board, having power to issue new bonds at any time, could keep its control absolute. Could anyone imagine a smoother scheme for holding a corporation in bondage? And then fancy Melville E. Stone coming before the public and making this statement concerning his organization:

It is purely mutual in its character, and in this respect is unique.
All of the other news-supplying agencies of the world are proprietary
concerns. It issues no stock, makes no profit, and declares no
dividend. It does not sell news to any one. It is a clearing-house for
the interchange of news among its members only.

I wrote to Mr. Stone, explaining that I was discussing his organization in my book, and wished to be scrupulously fair in every statement I made; would Mr. Stone tell me the present status of these bonds and their votes? Mr. Stone delayed for some time to answer, and when he did so, explained the delay:

First, because I have been taking a vacation, and have had no leisure
to think of you, and second, because in the slight reading I have
given to your publications, I was led to believe that any failure to
acquaint yourself with the facts of a matter would in no wise
embarrass you in presenting your case.

My answer was that, curiously enough, this was precisely the impression I had formed of Mr. Stone’s organization; the only difference being that whereas he admitted having given only a slight reading to my publications, I had had intimate first-hand experience with his organization over a period of fifteen or twenty years.

However, Mr. Stone consented to give me a list of the present bond-holders; also his explanation of the matter:

In the organization of the Associated Press in 1900 it was necessary
to provide a certain sum to buy fixtures, etc., and certain first
mortgage bonds were issued and sold to the members, the proceeds being
applied in the way indicated. The Charter authorized an issuance of
$150,000. But this sum was found to be unnecessary. The actual issue
was $131,425. This has since been reduced by redemption in certain
cases so that today there is outstanding $113,125. Under the law of
New York, holders of first mortgage bonds are entitled to vote for
Directors in proportion to their holdings. They have no right to vote
upon bonds on any other matter in the conduct of the business.

Many times, in the course of my experiences as a muck-raker, I have had great captains of privilege endeavor to impose upon my intelligence; but I cannot recall having ever been offered so childish a pretext as I am here offered by Mr. Stone. I am asked to believe that in the nineteen years of its history, this enormous concern has been able to pay off less than twenty thousand dollars of the debt incurred for its office furniture! I am asked to believe that these bond-holders have votes because the law requires them to have votes; and that never once has it occurred to the shrewd gentlemen who manage the Associated Press that by the simple device of remaining in debt for their office furniture, they can keep their organization permanently and irrevocably in the control of the big reactionary newspapers of the country!

Will Irwin, writing in “Harper’s Weekly” five years ago, speaks of the “ring of old, Tory, forty-one vote papers in control” of the Associated Press. It appears that the bonds of the organization are for twenty-five dollars each, and when the association was formed, the big insiders each took one thousand dollars worth—giving them forty votes, with one additional vote as member.

I look down the list which Mr. Stone sends me, and I see that these “forty-one vote papers” include all of the biggest reactionary sheets in America. One after another I look for those which I have pilloried in this book—they are all here! The “Los Angeles Times” is here, and de Young’s “San Francisco Chronicle,” and the “San Francisco Bulletin,” of the itching palm, and the “San Francisco Examiner,” which sent out my Shredded Wheat story, and the “Sacramento Union,” which was sold to the Calkins syndicate. Here is the “Pueblo Chieftain,” which circulated the foul slanders about Judge Lindsey and the miners’ wives. Here is the “Baltimore News” of Munsey, the stock-gambler. Here is the “Washington Post,” which, as I shall narrate, had a typewritten copy of a speech by Albert Williams, and deliberately made up false quotations. Here is the “Chicago Tribune,” which slandered Henry Ford, and the “Chicago Daily News,” which, with the “Tribune,” robs the Chicago school-children. Here is the “Cincinnati Times-Star,” which set out to fight Boss Cox, and didn’t. Here is the “Boston Herald,” which, I shall show you, refused President Wilson’s speech as an advertisement, and the “Boston Traveller,” which lied about my magazine. Here is the “Kansas City Star,” which hounded Mrs. Stokes to jail, and the “St. Paul Dispatch,” whose misdeeds I have just listed. Here is the “Oil City Derrick,” owned by Standard Oil, and the “Seattle Post-Intelligencer,” whose bonds were found in the vaults of the Great Northern Railroad. Here is the “Portland Oregonian,” which exists for large-scale capital, and the “Milwaukee Sentinel,” owned by Pfister, who owns most of Milwaukee. Here is the “New York Herald,” which suppressed my Packingtown story, and paid me damages for the Tarrytown libel. Here is the “New York Evening Post,” which failed to expose the Associated Press, and the “New York World,” which favors twenty-cent meals for department-store girls; here is the “New York Tribune,” which lied about the Socialist state legislators, and the “New York Times,” which has lied about me so many times that I can’t count them.

Such are the newspapers which control the Associated Press: a “stand-pat” machine, precisely like the Aldrich machine which once controlled the United States Senate, and the Cannon machine which once controlled the House. Mr. Stone does his best to persuade me that in the maintenance of this control the bonds have not played any part. He writes:

Since the organization, over one hundred elections of directors have
taken place. In one case only, I believe, was the result different
from what it would have been if no votes had been cast upon the bonds.

And here again Mr. Stone is treating me as a child. Of the total bonds the big insiders control nine-tenths. Of the total number of votes cast at elections, they control five-sixths. A successful rebellion is thus obviously impossible; and the penalty of an unsuccessful rebellion, as I shall presently show, is annihilation; yet Mr. Stone feels virtuous because nobody rebels! Let Mr. Stone pay off his debts for office furniture, and place all the nine-hundred-odd members of the Associated Press on an equality as regards votes, and then let him boast that the bonds have no effect upon elections!

Ten years ago Mr. Kittle made a study of the fifteen directors of the Associated Press. They were all publishers of large newspapers, and from these newspapers could be judged. Just one was a “liberal,” Nelson, of the “Kansas City Star”—and he has since died. All the other fourteen were classified as “conservative or ultra-conservative.” Said Mr. Kittle:

The other fourteen papers are huge commercial ventures, connected by
advertising and in other ways with banks, trust companies, railway and
city utility companies, department-stores and manufacturing
enterprises. They reflect the system which supports them.

There have been many changes of personality in the Associated Press in the last ten years, but there has been no change in this respect; the statement of Mr. Kittle’s remains the truth about the fifteen directors. And likewise there has been no change in the policy of the organization, as Mr. Kittle reported it:

The dispatches themselves disclose the attitude of the management.
They give scant courtesy to movements for constructive legislation in
the public interest. The reports, scores of which have been examined,
are meager, fragmentary, isolated. Every time Tom Johnson was
successful in more than fifty injunction suits, the general public in
other states heard little or nothing of it. When an election recently
went against him, everybody heard of the “failure” of municipal
ownership. When La Follette for five years, by a continuous contest,
was placing law after law on the statute-books, the matter was ignored
or briefly reported in distant states; and temporary defeats were
given wide publicity. When Kansas, in 1908, rejected a conservative
and elected a progressive United States Senator, the general public at
a distance from that state did not know the real issue involved. For
more than two years, there has been a strong movement in California
against the rule of that state by special and corrupt interests, but
that fact, merely as news, has never reached the general public in the
East. The prosecution of offenders in San Francisco has only been a
part of the wider movement in California. The strong movement in New
Hampshire, headed by Winston Churchill, to free that state from the
grasp of the Boston and Maine Railway Company and the movement in New
Jersey led by Everett Colby, which resulted in the defeat of Senator
Dryden, the president of the Prudential Insurance Company, have not
been given to the people adequately as matters of news.

And this is the testimony of every independent-minded newspaper man with whom I have talked about the Associated Press. Will Irwin, writing in “Harper’s Weekly,” shows how the old reactionary forces shape the policy of the organization. “The subordinates have drifted inevitably toward the point of view held by their masters.” And again, of the average Associated Press correspondent: “A movement in stocks is to him news—big news. Wide-spread industrial misery in a mining camp is scarcely news at all.” At a conference at the University of Wisconsin, the editor of the “Madison Democrat” stated that he had been a correspondent of the Associated Press for many years, and had never been asked “to suppress news or to color news in any way whatever.” Reply was made by A. M. Simons: “I have had many reporters working under me, and every one of you know that you will not have a reporter on your paper who cannot ‘catch policy’ in two weeks.”

The general manager of the Associated Press makes public boast of the high character of his employes. “Throughout the profession, employment in its service is regarded as an evidence of character and reliability.” Such is the glittering generality; but investigate a little, and you find one Associated Press correspondent, Calvin F. Young, of Charleston, West Virginia, engaged in sending strike-news to his organization, and at the same time in the pay of the mine-owners, collecting affidavits against the strikers. You find a second Associated Press correspondent, E. Wentworth Prescott, of Boston, dipping into the slush funds of the New Haven Railroad, and giving an explanation of his services, so lacking in plausibility that Interstate Commerce Commissioner Anderson remarks: “I don’t see why they couldn’t just as well have hired you to count the telegraph poles on the street!”

The Associated Press is probably the most iron-clad monopoly in America. It was organized originally as a corporation under the laws of Illinois, but the Illinois courts declared it a monopoly, so it moved out of Illinois, and reorganized itself as a “membership corporation,” thus evading the law. Today, if you wish to start a morning newspaper in the village of Corn Center, Kansas, you may get an Associated Press franchise; but if you want to start one in any city or town within circulating distance of the big “forty-one-vote” insiders, you might as well apply for a flying-machine to visit the moon. The members of the Associated Press have what is called “the right of protest”—that is, they can object to new franchises being issued; and this power they use ruthlessly to maintain their monopoly. Says Will Irwin:

To the best of my knowledge, only two or three new franchises have
ever been granted over the right of protest—and those after a terrible
fight. Few, indeed, have had the hardihood to apply. When such an
application comes up in the annual meeting, the members shake with
laughter as they shout out a unanimous “No!” For owing to the
exclusive terms of the charter, an Associated Press franchise to a
metropolitan newspaper is worth from fifty thousand dollars to two
hundred thousand dollars. Abolish the exclusive feature, throw the
Association open to all, and you wipe out these values. The publishers
are taking no chances with a precedent so dangerous.

A few years ago the editor of the “News” of Santa Cruz, California, applied for the Associated Press franchise for his paper. The San Francisco manager of the Associated Press refused it, and gave this explanation, according to a statement by the editor of the “News”:

The San Francisco daily papers owned all the Associated Press
franchises for that city, and they also controlled a vast outlying
territory, including Santa Cruz, eighty miles away, and would refuse
to permit Associated Press dispatches to be printed by me or anyone
else in Santa Cruz.

There is only one way to get by this barrier, and that is to pay the price. Joseph A. Scranton, proprietor of the “Scranton Republican,” forced a man who wished to start another newspaper in Scranton to pay him ten thousand dollars before he could have the Associated Press franchise for that small city. When the “San Francisco Globe” wanted the Associated Press franchise, it had to buy the “San Francisco Post” at the price of a hundred and ten thousand dollars. Admittedly the “Post” had no value, it was not a competitor in any sense; the price paid was for the franchise alone—and it was stated by the “San Francisco Star” that the greater part of the value consisted in a lower telegraph rate, a special privilege granted by the Western Union telegraph company to the Associated Press.

Also the Associated Press, being a membership corporation or club, possesses the legal right to expel and to discipline its members. This right it has specifically asserted in its charter; it may expel a member “for any conduct on his part, or on the part of anyone in his employ or connected with his newspaper, which in its absolute discretion it shall deem of such a character as to be prejudicial to the welfare and interest of the corporation and its members, or to justify such expulsion. The action of the members of the corporation in such regard shall be final, and there shall be no right of appeal or review of such action.”

This, you perceive, is power to destroy any newspaper overnight. Not merely may a franchise worth two hundred thousand dollars be wiped out at the whim of the little controlling oligarchy; the entire value of the newspaper may be destroyed; for of course a big morning newspaper cannot exist without its franchise. The masters of the “A. P.” hold this whip over the head of every member; and Will Irwin tells what use they make of it:

Two or three liberal publishers have expressed to me, after mutual
pledges of confidence, their opinion of the “A P. cinch.” And they
have finished by saying something like this:

“But for heaven’s sake don’t quote me in print, and don’t tell anyone
I’ve said this. The fine for such an offense runs from fifty thousand
dollars up!”

In my story of the Colorado coal-strike, I showed you the “A. P.” suppressing news, and the newspapers of the country, without one single exception, keeping silence about it. I showed you one bold managing editor promising to tell the truth, and then suddenly stricken dumb, and not carrying out his promise. Now I have shown you the meaning of the phenomenon.

And yet, in spite of everything, members of the Associated Press do “kick”; they “kick” repeatedly, and word of their “kicks” gets out. Fremont Older complained repeatedly, and so did Van Valkenburg, of the “Philadelphia North American.” Herman Ridder complained—as Mr. Stone himself admitted when a Senate committee pinned him down. I quote a significant colloquy from a Senate “lobby” investigation:

Senator LaFollette: Mr. Stone, has there ever been any complaint made
by members of your association of unfairness on the part of the
manager or the management of the Association regarding news?

Mr. Stone: Oh, yes, sir. There is hardly—

Senator LaFollette: Have the members of your association or any member
of your association complained that you suppressed important news?

Mr. Stone: Oh, yes, sir, we have had that for years.

Senator LaFollette: That you have colored news?

Mr. Stone: No, sir, I do not think anybody has ever said that. Well, I
don’t know about that. We have had complaints on all sides.

This is the Committee on Finance of the United States Senate, holding hearings on the subject of reciprocity with Canada (Senate Document 56, Sixty-second Congress, First Session, Vol. II). The newspapers of the country want a clause by which they can get free paper-pulp from Canada; so the Associated Press sends out full reports of the testimony of newspaper publishers before the Senate Committee. But when certain farmers appear and oppose the reciprocity scheme—listen to Senator McCumber, questioning Herman Ridder, a director of the Associated Press:

How do you account for the fact, which every senator here must have
noticed, that while these farmers were giving their testimony the
reporters of the Associated Press leaned back in their chairs day
after day scarcely taking a note, and that the moment any man came
forward to give testimony in favor of this bill every pencil came out
and every pad was on the table and all of our good friends were
studiously at work? And that has been the case all through these
hearings.

And again:

It is a notorious fact that we have been able to get but one side of
the question before the public so far as these hearings are concerned.

Also, consider the testimony brought out by the Senate Committee on the Judiciary (sixty-third Congress, First Session, Senate Resolution 92, Vol. II). It appears that the head of the Sugar Trust had issued a long statement, advocating free raw sugar, and this press-agent material had been sent out in full by the Associated Press. The senators question Melville E. Stone, to find out why, and they cannot even get the name of the Associated Press correspondent who handled the material! It is brought out that the beet sugar interests of the West, which are fighting the Sugar Trust, have made bitter complaint concerning this article, and have been to the head of the Denver office of the Associated Press to demand that their side too shall be given a hearing. You remember how I went to the head of the Denver office of the Associated Press, to try to get a hearing for _my_ side—the people’s side—and how completely I failed? Needless to say, it is different when a representative of Big Business makes complaint; this gentleman obtains the promise of the Associated Press to send out six hundred and fifty words, and later on Mr. Stone is found writing to his Denver manager:

Personally I am inclined to discourage the carrying of long statements
of a controversial nature, but inasmuch as we carried Mr. Arbuckle’s
statement rather fully, my judgment is that we might have handled a
little more of Mr. Hamlin’s provided it was prepared as briefly as our
copy here indicates.

Here, you see, we are close to the heart of a grave problem. Here are enormous sums of “easy money” in sight. If the managers and district managers and correspondents of our great press associations all sternly decline to touch this “easy money,” they are all, all honorable men; also, they are different from most other men in most other branches of Big Business in America.

Do they all decline? I sincerely hope so. But I recall how Max Eastman, in the “Masses” for July, 1913, made very specific charges against the Associated Press, which thereupon caused Eastman’s arrest for criminal libel. The indictment brought by the Grand Jury against Eastman and Art Young quotes a paragraph from the offending editorial, as follows:

I am told that every trust is to be encouraged to live its life and
grow to such proportions that it may and must be taken over by the
working public. But one trust that I find it impossible to encourage
is this Truth Trust, the Associated Press. So long as the substance of
current history continues to be held in cold storage, adulterated,
colored with poisonous intentions, and sold to the highest bidder to
suit his private purposes, there is small hope that even the free and
the intelligent will take the side of justice in the struggle that is
before us.

The indictment goes on to interpret the above:

Meaning and intending thereby that the said corporation intentionally
withheld, suppressed and concealed from its members information of
important items of news and intelligence and intentionally supplied
its members with information that was untruthful, biased, inaccurate
and incomplete, and that the said corporation _for and in
consideration of moneys paid to it_ intentionally supplied to its
members misinformation concerning happenings and events that
constituted the news and intelligence of the day.

Then the indictment quotes another paragraph from the editorial:

The representative of the Associated Press was an officer in that
military tribunal that hounded the Paint Creek miners into the
penitentiary in violation of their constitutional liberties; and this
fact is even more significant and more serious than the abrogation of
those liberties. It shows that the one thing which all tribes and
nations in time have held sacred—the body of Truth—is for sale to
organized capital in the United States.

The indictment interprets this as follows:

Meaning and intending thereby that the said corporation was willing to
and did _in consideration of money paid to it_ knowingly supply to its
members information of such untruthful, biased and prejudiced nature
and so distorted and incomplete _as the person paying such money might
desire_.

This indictment was widely heralded in the press, and everybody thought they were going to get the truth about the Associated Press at last. But when the case was ready for trial, it was mysteriously dropped. For six years I have wondered why it was dropped. I cannot say now that I know; but I have just met Max Eastman, and heard from his lips the story of a certain eminent corporation lawyer in New York, who on several occasions has “kicked over the traces” of Big Business. This man knows a great deal about the Associated Press, and he came forward in this “Masses” case, offering to assist the defense, and to conduct the trial. It was his plan to summon the heads of high finance in New York, beginning with Pierpont Morgan, and to question them as to the precise details of their relationship to the Associated Press! Aren’t you sorry that trial didn’t come off? And don’t you think it a very serious matter that the Associated Press did not face this precise and definite issue, which it had so publicly raised? Let me speak for myself: If any man accused me in the specific and damaging way above quoted, I would consider that my time, my money, my energy, my very life must be called to the task of vindicating my honor. And if, instead of fighting, I put my tail between my legs and sneaked away from the scene, I would expect men to conclude that there was some guilt upon my conscience.