by Tom Bower
By 1973, what had previously been confined to arguments hardened into an outright struggle for power. Under Betty Maxwell's chairmanship, a meeting approved a motion proposed by Robert Maxwell that Edge was 'guilty of anti-party activities' and voted to expel him. Other anti-Maxwellites were not voted on to committees, and councillors who were critics of Maxwell lost their party's sponsorship for the local elections. Transport House was powerless other than to forbid the constituency to begin the process for selecting a parliamentary candidate. London's hope that another candidate would somehow appear to heal the divisions ignored the reality that the executive committee was firmly pro-Maxwell. In summer, the probability of a general election meant that a decision could no longer be delayed. Maxwell was summoned to Transport House for a private conversation about
Underbill's report, while Cassidy was allowed to call a selection conference for 29 September. Maxwell now tried to mend his relations with Wolverton.
On 9 July he politely wrote to After outlining their joint achievements since 1959 and asking that he be allowed to address the Wolverton party to win their support for the nomination as the candidate. By return, After curtly rejected the peace-feeler and Maxwell's request. Their feud was reopened and Maxwell replied that Atter's letter demonstrated 'the latest shocking example of your continued unfairness to me and dictatorial behaviour in matters concerning the Wolverton Local Labour Party which is so harmful to Party unity'. There were, said Maxwell, many in Wolverton, and they represented the majority, who had pledged their support for him. Instead of leaving Wolverton to its fate, Betty Maxwell organised a petition to overrule the ward's decision. Unfortunately, she chose as her envoy someone who neither lived in Wolverton nor was a member of the Labour Party. Worse still, four days after launching the petition, the representative was tried in a local court for theft. The names on the final petition were a motley collection of non-Labour Party members, non-residents and people who eventually denied that they had signed. When Maxwell failed to win the nomination, he launched a public attack on After and the ward, who had nominated a left-wing academic, Stuart Holland, as their candidate.
Gratifyingly, the selection committee under Cassidy did not choose any other well-known centrist candidates for consideration. Holland, Maxwell's only other opponent, would hold little attraction for Buckinghamshire's voters. On the day of the selection conference, puffing a large cigar outside the Labour Hall in Bletchley, Maxwell showed some nervousness as he waited for the outcome. Inside, carefully supervised by Foster, who checked every delegate's credentials, Cassidy ran meticulously through the procedures, knowing that the result was a foregone conclusion. In the weeks before, Maxwell had successfully obtained sufficient nominations to guarantee the result - 82 votes in his favour and 33 against. Maxwell and Betty were thrilled. It was proof, said Maxwell, of the strength of his support. Some leaving the hall claimed that the vote showed the strength of the opposition. In an appeal for unity, Foster asked the majority not to 'hammer the dissidents' and told the latter, 'Although I do not expect everyone to retract their attitudes towards the candidate, we must work to return a Labour MP from this constituency.' Cassidy was confident: 'With Bob, we've got a winner.' Delighted, Maxwell boarded a chartered plane to fly to Blackpool for the party conference, certain of his return to Parliament. Hours after his arrival, he stepped ahead of dozens of other applicants on to the rostrum to address his comrades. On that occasion it was to advise the party organisers not to pay the rental fees for the hall unless the wages of its employees were improved. 'Bob', it was muttered, 'was true to form. He never makes the right speech. For him, just to have spoken is counted as a success.' In retrospect, Maxwell would admit that, in the glow of reselection, he had been foolishly shortsighted.
Atter and Edge were simmering about their defeat but Maxwell made little attempt to placate his enemies. In Wolverton, eight weeks later, Atter seized upon the third DTI report as justification for the criticisms. The report disclosed that the fifteen acres of railway land at Wolverton which Maxwell had purchased in 1966 for £355,000 had been resold three years later for over £1 million. For the workers in the locality, his enormous profits seemed incompatible with socialism. Disgruntled, they predicted that Maxwell could now definitely not count upon their help and consequently he would never win the seat. He dismissed the dissenters as irrelevant. They had been defeated and now there was more good news. His triumph in politics coincided with his return to the board of Pergamon. After a hard year, his other enemies, in the City, had also been trounced.
During 1972, Pergamon, whose staff had shrunk to just over eight hundred, struggled to survive on the core of its scientific journals. Its profits of just £315,000 were dwarfed by debts of nearly £5 million. Sir Henry d'Avigdor-Goldsmid had resigned at the end of 1971 because he was unwilling to mediate in the continuing feud between Maxwell and Steinberg. He was replaced by Walter Coutts, who had inherited a board of directors which was, with one exception, totally pro-Maxwell. As a former colonial officer in East Africa with no commercial experience, Coutts had been appointed by his friend Toby Aldington to fill up the necessary quota of independent directors. If anything, Coutts was less suited to the task than d'Avigdor-Goldsmid, and he was equally uncomfortable in the chair. ‘I didn't like Maxwell,' says Coutts, 'and I had no time for Steinberg.' His discomfort with both men was probably aggravated because during the year he needed to understand Pergamon's business, he became reluctantly convinced that Pergamon's survival depended upon its founder.
Soon after his appointment, Maxwell sought to impress Coutts with the support he enjoyed among the journals' editors, especially in America, and to explain how Pergamon's viability was endangered by their growing dissatisfaction. Coutts agreed to visit New York, Boston, Chicago and Los Angeles to meet groups of editors who had been preselected by Maxwell. He set out intending to explain that until the DTI's reports were all published and the government had signalled that there would be no criminal charges, Maxwell's reinstatement as Pergamon's manager was untenable. But by Chicago, the third stop, Coutts felt the noose tightening. 'The strong undercurrent was that if Maxwell wasn't put back, we would lose their services,' says Coutts. In Chicago, the discussion degenerated into a brawl: ‘I was violently attacked as an interloper and I was furious. I told them that the City would never let him return but they just abused me. I spat blood at Maxwell for that.'
Nevertheless, after meeting thirty-one editors, Coutts returned impressed by Maxwell's indispensability, although those he had met represented only a minority of Pergamon's 128 editors. He was anxious to break the impasse. Steinberg was showing only negative interest in the company - 'All he wanted was to keep Maxwell out,' says Coutts; the Stock Exchange still blocked any chance of trading Pergamon shares; and the DTI inspectors, whom Coutts labelled 'dodderers', had still not completed their reports, which until then had, in his view, resulted in 'Nothing firm or positive.' A shadow lay across the company which the authorities were deliberately unwilling to lift.
Stalemate is not a condition which Maxwell can endure for long. At the end of April 1973, he forced the issue by threatening to refuse to renew his consultancy contract in October unless he was voted on to the board. Courts, fearing the prospect of Maxwell establishing a rival publishing house, summoned an extraordinary meeting for 18 June. Pro-Maxwell editors were flown from America and introduced by Coutts to Norman Freeman, the ICI pension fund manager who co-ordinated the institutions' policy, to urge Maxwell's election. Freeman, who represented the balance of power, was unimpressed. Reluctantly, Coutts adjourned the extraordinary meeting and Maxwell's bravado seemed doomed. But Maxwell was unwilling to succumb. During July, when he realised that publication of the final report was imminent and could possibly again delay his return to the board, he gave Coutts another ultimatum. The chairman, whose several abilities did not include a willingness to stand between Maxwell and his opponents, felt vulnerable to Maxwell's renewed threat of resignation and agreed to re
convene the extraordinary meeting in November. Maxwell set about marshalling his supporters and telephoned Brian Spalding, a professor of heat transfer at Imperial College in London. Spalding, more than any other editor, tipped the balance firmly in Maxwell's favour.
The two had met in the mid-1960s at one of the multitude of scientific conferences which Maxwell attended, seeking new ideas. Among those new ventures was a journal on heat transfer under Spalding's editorship. Like most of Maxwell's editors, Spalding was sincerely grateful for the opportunity of controlling a journal and, like most of his colleagues, he had been frankly uninterested in the City squabbles and the DTI's criticism of Maxwell. But Spalding was particularly grateful to Maxwell because the publisher had offered to assist his campaign for a Soviet academician, Ben Levitch, to be allowed to emigrate to the west. 'Maxwell said that he was going to Moscow and would speak with Brezhnev,' recalls Spalding. Once in Russia, Maxwell visited Levitch's home and the Russian was eventually released. Spalding was touched that Maxwell had 'gone out of his way to help'.
In early 1973, Spalding was on the Yugoslav Adriatic, chairing the annual meeting of his journal's editorial board, to which scientists had travelled from Japan, Russia and France. He was surprised when Maxwell telephoned to say that he would be joining them. Maxwell was charming and generous, hosting two fine dinners, and made no bones that he wanted in return their support. Spalding was receptive and warmed to Maxwell's comparison of his plight with Levitch's. 'Both had suffered from an unfair system,' explains Spalding, 'of faceless men in a Star Chamber court allowing no opportunity for a defence.' Spalding admits that he has never read the DTI report and is quite candid that Maxwell's initial approach was 'very subtle. He correctly assessed me that I felt this was something I wanted to do.'
On his return to London, Spalding met Courts who in turn confided to the professor that Pergamon had not a penny in the bank and was possibly bankrupt. 'Courts', says Spalding, 'gave the impression that he was out of his depth and uncomfortable.' By the end of the second meeting with Coutts, after many calls from Maxwell and visits to Oxford, Spalding was convinced that he was important to the company's survival: ‘I hadn't realised before that we had so much power, but I decided to use it.'
Coutts, at Maxwell's suggestion, arranged a series of meetings between the scientist and Freeman. Their undisguised hope was that the institutions would bow to the pressure and switch their vote at the November extraordinary general meeting. As an afterthought, it was decided that Spalding should also meet Steinberg. The American had been aware of Maxwell's tactics and had organised a number of testimonials from American scientists to be delivered to Freeman pledging that there would not be mass defections from Pergamon if Maxwell was not on the board. Among them was Professor Bruce Chalmers of Harvard who wrote, 'I specifically refute the implication that my continuing as editor of materials published by Pergamon Press is conditional on the reinstatement of Robert Maxwell.' The battle for the hearts and minds of the editors and their influence upon Freeman was to be resolved in a conference room on the seventh floor of Imperial College, starting at 9 a.m. at the end of October.
Spalding was visibly surprised by the number of 'City men' who had appeared, outnumbering the delegation of scientists. Maxwell, an uninvited guest, sat one floor below in Spalding's office. Steinberg meanwhile was 27,000 feet above London, stuck in a jumbo circling the capital and waiting for the weather to clear before his plane could land. Spalding, accompanied by Maxwell's faithful ally Professor Harold Thompson, used the time to tell Freeman that the scientists' loyalty was to Maxwell, 'the devil that we know', and that they would withdraw if Maxwell were not put back in control. 'Maxwell is indispensable,' said Spalding, 'because only he understands and encourages us while we have never heard a squeak from the Americans.' Freeman interjected that Maxwell might face criminal charges, so forcing the editors to accept a change. Spalding was unmoved. Freeman's evident antagonism towards Maxwell had an adverse effect upon Spalding. 'It's not our task', said the editor, to the fund manager's ill-concealed irritation, 'to judge guilt. We are scientists who base our actions on what we know, not on value judgements which masquerade as statements of fact.' There was little answer to such pious oratory, which ignored nearly one thousand pages of evidence to support the condemnation of Maxwell, as Steinberg discovered when he finally arrived in the afternoon. The American's offer of more money, new editors and a bid for the institutions' shares pleased Freeman but not Spalding, who announced that, after hearing the arguments, he would definitely speak on Maxwell's behalf at the extraordinary general meeting. 'We want Maxwell back,' he said as he offered his guests a glass of whisky before they left. He would never be rewarded for his support and would be surprised that Maxwell's promise to 'rationalise' the journals, to reduce the costs for libraries, was not completely fulfilled. But he is pleased that Maxwell, despite its unprofitability, has protected Levitch's own journal on chemical-hydrodynamics.
Steinberg left Imperial College resolved to renew his campaign against Maxwell and now also against Coutts. 'I am fed up with your confusion of our position,' he told Coutts after he had read the chairman's letter to shareholders which condemned 'eternal squabbles between contesting parties'. Once again, the independent chairman with no financial stake in the company was siding with Maxwell. He had little choice. Four years after the debacle, Maxwell still controlled PPI and his family companies were still deeply intermingled in Pergamon's business because they had retained the exclusive worldwide rights to sell the journals. Pergamon's meagre trading profits were still falling and there was the suggestion that, according to a secret agreement, in the event of Pergamon's bankruptcy the ownership of the journals reverted immediately to MSI Inc. More than ever, Maxwell had successfully frozen Steinberg on the sidelines.
In a pre-meeting circular, Courts resolutely told shareholders that Maxwell would be brought on to the board regardless of any condemnation by the DTI. 'The company', Courts explained, 'needs his entrepreneurial flair for recognising the publishing opportunities in the international scientific world and I am unaware that the DTI inspectors have criticised that part of his work.' Naively he asked Steinberg to abstain in the vote because 'Maxwell has promised' not to interfere in the company's financial management. Steinberg thought the idea was preposterous but Courts, urged on by Maxwell and the board, was set on the strategy. Notice was given that the extraordinary general meeting would be reconvened at the Connaught Rooms on 20 November. When Steinberg protested, Courts threatened that the board would just ignore the majority of shareholders and co-opt Maxwell.
Steinberg might fume, but other than making a bid and taking over Pergamon, or forcing the company into receivership, he was powerless. On Rothschilds' and his lawyers' advice, he had deliberately adopted a low profile and had not even given evidence to the DTI inspectors. Pergamon's problems had been ignored as he guided Reliance towards a remarkable recovery. His company was now rated by Fortune magazine as America's twenty-fourth largest with annual revenues of over $700 million and it was growing fast. But the American's strength could not neutralise Maxwell's single-minded strategy. Maxwell had skilfully convinced Freeman and the institutions about his own indispensability, and the
City's disinclination to involve themselves directly in Pergamon's management by an alliance with Leasco had grown. Steinberg was therefore unable to extract anything from Coutts and could only threaten to vote against Maxwell's return. During the day before the meeting, Peter Stevens telephoned Coutts several times but he did not sense that a coup had been planned.
On the day itself, at precisely 8 a.m., the DTI released the third report describing the relationship between Pergamon and the private companies. Its timing was interpreted as an attempt to sabotage Maxwell's return. At 11.05, once again in the Connaught Rooms, the meeting was formally opened. Coutts announced that, since the report had just been released, the meeting would have to be adjourned until the board had given it proper consideration. Coutts and
the board including Maxwell had been given copies four days earlier and some inspired leaks had already appeared in the newspapers about the inspectors' 'blunder' of admitting a mistake although the error did only affect 9 out of the report's 1,254 paragraphs. But Coutts realised that the publication removed any hope that the institutions would support his proposal for Maxwell's return. But, just as the vote for the adjournment was to be taken, Spalding rose and urged the chairman, on behalf of the editors, to co-opt Maxwell on to the board. Coutts nodded and called for the vote which, on a show of hands, was approved. Puzzled, Stevens neither voted nor protested. It was just after the adjournment that Coutts delivered the bombshell. The board, he announced, had decided, considering the views which were expressed at the meeting, that Maxwell should be invited to return as a temporary measure until a proper extraordinary general meeting could be reconvened in January. The artifice, despite the failure to obtain approval, was engineered in Coutts's words by the generous agreement of John Silkin, who, 'at his own risk', would allow Maxwell to sit as an 'alternate director' in his place on the board.
In the afternoon, Stevens telephoned Coutts and demanded an explanation for his 'outrageous capitulation'. Coutts was unapologetic. There had just been 'no time' to inform Stevens about the change of plan. 'I had given Stevens nothing more than an undertaking that we would not co-opt Maxwell without further consultation,' says Coutts. 'If we were to continue to govern Pergamon, and keep the editors with us, we had to act immediately. Maxwell threatened the night before to vote against the adjournment because he would resign his consultancy if he wasn't allowed back on to the board. I had no alternative but to allow him back. There was no time to ask for Leasco's opinion. The question was whether Leasco would make a bid for the company or shut up.'
