by David Nasaw
William S. Hart, the great cowboy star, was not the only Hollywood figure who had landed in tax trouble. That same year, both Marion and Irving Thalberg were also charged with income tax dereliction and threatened with heavy fines. Thalberg was particularly frightened, as he had been accused of fraud and informed that, if found guilty, he could go to jail. Hearst offered Thalberg the use of one of his Washington attorneys and assured him that “various newspaper and political friends will help when and as required.” In a handwritten note mailed to Thalberg in Washington, the Chief promised that he would be exonerated in the end. “I personally don’t believe that anyone is going to be hanged for not knowing what can or cannot be done with these damn complicated taxes. If there is any hanging or drawing and quartering to be done, the first to be executed should be the federal agents who take advantage of the technicalities and the confusion and the general ignorance of the tax question to overtax the public.”22
Marion’s case was similar to Thalberg’s. She too was charged with underpaying her taxes and taking unnecessary deductions for, among other things, her makeup and automobiles. Unfortunately, her case was so complicated and took so long to adjudicate that by the time a decision was made in 1931, Hearst had broken with the Republicans and could not protect her. Marion was, in the end, charged with defrauding the government and required to deliver certified checks for $900,000 in back taxes and $110,000 in fines.23
A large part of Hearst’s exalted status in the movie colony came from San Simeon. While other California millionaires had built glorious mansions along Sunset Boulevard, in the mountains, or at the seashore, Hearst had constructed a veritable Mediterranean village on the central coast. In its eclectic glories, its manic splendors, and its oversized, overwrought magnificence, San Simeon was, for the Hollywood community, a concrete representation of the Chief’s ability to get things done.
Hearst was as proud of his achievements at San Simeon as he was of anything he had accomplished. In early 1929, Adolph Ochs, the publisher of the New York Times, visited Los Angeles and had dinner at the Ambassador Hotel. Hearst, who was also dining at the hotel, stopped by to say hello and sent a handwritten note to Ochs, suggesting playfully that he should relocate to California. “Seriously, it will add ten years to a very valuable life if you live part of your time in California. May I take you up to my ranch and show you what the country is like?”24
Ochs did visit the ranch and was so impressed by what he saw that he asked Hearst if he could send a reporter and photographer to do a story. Hearst agreed and in July of 1929, the New York Times published the first article on San Simeon, a two-page Sunday feature:
A Renaissance Palace in Our West: On His Ranch in California, Mr. Hearst Has Brought Together Objects of Art from Spain, Italy and France.... It is all a long way from anything the old Spanish rancheros of the Central California coastline ... ever dreamed of. Even the eighteenth-century Spanish mission friars ... could hardly have imagined such ethereal white opulence as this, which was at once so full of museum-like magnificence and of charmed repose. But in such a fashion American wealth has brought to the 175,000-acre ranch of La Questa Encantada—The Enchanted Slope—the Renaissance spirit of building and collecting for the sake of beauty to be privately enjoyed.25
A new chapter was opening in the Hearst story. Although there had been occasional hints in the press about his art collecting, from this point on dozens of stories about his lifestyle, especially his compulsive buying and rebuilding, would make their way into print. Journalists who visited San Simeon could not quite decide whether the old man was an eccentric Medici-like relic of times past or a visionary businessman who knew better than most how to lead the good life.
“Atmospheres mingle on the Enchanted Hill,” Fortune magazine reported in May of 1931:
The stage is set with the treasures of Europe; jesters from Hollywood amuse; celebrities strut or peer curiously—but behind and beyond them all there is functioning a great chain of newspapers and their allied enterprises. To spread the gospel, there is a wireless and a telegraph office. Even more vital, perhaps, the telephone switchboard. It is an exchange in itself. Call it if you like. You merely ask for Hacienda, California. Through it you can reach any part of the estate.26
By 1929, the ranch had already become a must stop not only for Hollywood’s stars, but for politicians, businessmen, and world leaders. In September of 1929, Winston Churchill, who had lost his position as chancellor of the exchequer with the defeat of the Conservative government in May, arrived for a visit. Winston’s son, Randolph, every inch the snob, was prepared not to be impressed by San Simeon. But, as his diary entries show, he too was overwhelmed. On September 14, 1929, he wrote in his diary:
The ranch—for so it is termed in false modesty—comprises 300 square miles, stretching along 35 miles of sea. The house is absolutely chock full of works of art obtained from Europe. They are insured for sixteen million dollars ... Hearst is reputed to possess an income of twenty million dollars. The house and grounds are by no means completed, though nine years have passed since it was started. Everywhere are workmen, motor lorries and pneumatic drills. The bathing pool has already been demolished twice, and now is entirely lined with black and white marble. The two or three acres surrounding it are in process of being paved in marble too.... One of the subsidiary houses possesses the most divine overhanging Moorish windows that can be imagined. Monasteries, palaces and castles throughout Europe have been and still are being ransacked for gems of one kind and another.
Because the theater had not yet been built, Hearst entertained his guests by showing the latest talking films in the garden on what Randolph referred to as a full-sized cinematograph apparatus.27
The Churchills spent four days at San Simeon, long enough for Winston to do some painting on the terrace, and inadvertently, according to his biographer, William Manchester, cause quite a commotion when a maid misheard him and interrupted Hearst in conference: “‘Churchill is fainting!’ she cried. ‘He wants some turpentine!’ Hearst rushed out to a terrace, where he found Winston painting, not fainting, awaiting a thinner for his oils and placidly puffing a fat cigar.”28
From San Simeon, Hearst had the Churchill party driven to Los Angeles, where they were installed at the Biltmore Hotel. Intent on proving to his guests that California was as splendid and luxurious as any European capital—and much more fun—W. R. hosted a luncheon in Churchill’s honor for 200 guests at Marion’s MGM bungalow. Entertainment was provided by a twenty-piece orchestra and twenty-five chorus girls. At the conclusion of the luncheon, the Chief and Churchill made speeches that were recorded on sound and film and reprinted the following day in the Hearst papers.
After their royal reception at the MGM studios, the Churchills went deep-sea fishing on the Chief’s yacht, were entertained at a luncheon for sixty at Montmartre Restaurant, and attended a swimming party and banquet at Marion’s beach house at Santa Monica. Hearst had earlier asked Winston’s son Randolph and his nephew, Johnny Churchill, to draw up a list of movie stars they might like to meet. The boys were astounded when every star on their list, except for Garbo, showed up at Marion’s party.
“Charlie Chaplin and Marion Davies danced a pas de deux, the interesting thing being that Charlie’s feet were so small he was actually able to step into Marion’s shoes,” Johnny Churchill remembered later. “Hearst, plump, rotund and hospitable, was in very good form. He contributed to the entertainment with a solo act in which he let his legs go wobbly and lurched his enormous frame across the room to the rhythm of the band"29
The Churchills accepted Hearst’s bigamous relationships with nary a glance. Millicent was at the ranch when they arrived in mid-September and served as their hostess there. “I told you about Mrs. H. (the official) & how agreeable she made herself,” Winston wrote his wife. “She is going to give me a dinner in N.Y. & look after the boys on their way through. At Los Angeles (hard g) we passed into the domain of Marion Davies; & were charmed by her. Sh
e is not strikingly beautiful nor impressive in any way. But her personality is most attractive; naïve childlike, bon enfant.... She asked us to use her house as if it was our own. But we tasted its comforts & luxuries only sparingly”30
At Marion’s poolside party at Santa Monica, the Churchills were introduced to Hollywood’s stars. At Millicent’s farewell dinner at the Clarendon, they met New York’s elites: the Astors, Vanderbilts, Goulds, Swopes, Condé Nasts, and some titled Europeans.
The dinner was, Millicent wrote her husband, “very successful. You should have been here for it.”31
VII. The Depression
27. “Pretty Much Flattened Out”
MILLICENT’S PARTY FOR THE CHURCHILLS was held on a Saturday night in mid-October 1929. Her guests most surely did not discuss the stock market, but prices had been falling all month. On Tuesday, October 29, they crashed, losing in that one day of trading $14 billion in value.
Like President Herbert Hoover and many of the nation’s business and financial leaders, Hearst considered the fall in stock prices a necessary correction. Six months earlier, he had written Brisbane that he was worried about the frenzy of speculation that had gripped the market. “The thing which ought [to] be stopped is fleecing of small investors who are lambs at mercy of the wolves because they speculate with insufficient funds and on small margins. Protecting these innocents by making such marginal speculation illegal would not only protect the people from robbery but would stabilize stock market and minimize chances of panic. France has made it illegal to speculate in food stuffs. America could and should make it illegal to speculate on margins.”1
As stock prices continued to fall through early November, Hearst suggested that President Hoover offer the public some “reassuring utterance,” while pursuing “vigorous action in stimulating the legitimate activities of the Federal Reserve.” He was so convinced that the American economy was fundamentally sound that on the day he published his letter to Hoover, he telegrammed George Young, the publisher of the Los Angeles Examiner, that he wanted “to borrow a million dollars to buy stocks, and I wish you and Frank [Knox] would go out and see if I can get it.”2
The fall in stock prices had not affected him because the bulk of his investments were in real estate. He had, during the 1920s, bought commercial properties in Atlanta, Baltimore, Los Angeles, San Francisco, and Chicago. He was, according to Fortune magazine, among the largest “realtors” in New York City, with properties worth close to $41 million in 1935 or over half a billion in today’s currency. Most of the real estate was owned by his various publishing companies or by dummy corporations set up by his real estate adviser, Martin Huberth; a not insignificant portion was held in partnership with Arthur Brisbane. Hearst’s Manhattan empire included a block in Lower Manhattan between Catharine Slip and Market Slip which was occupied by his newspaper offices and plant; much of the land around Columbus Circle; significant portions of 56th, 57th, and 58th Streets from Madison to Sixth Avenue and of the Madison Avenue blocks between 82nd and 83rd and 54th and 58th Streets; several midtown hotels, including the Ritz Tower on 57th and Park and The Warwick on 54th and Sixth Avenue; and the Ziegfeld Theatre on 54th and Sixth. Hearst continued buying real estate after the market crashed. On November 8, a week after Black Tuesday, he closed on an apartment house on Park Avenue and East 58th Street. A month later, he purchased a huge plot of land in Brooklyn.3
Although confident that the market would eventually rise again, the Chief exercised some restraint. On November 15, he wrote to Alice Head in London, asking her not to proceed on the St. Donat’s renovations without instructions from him. “We have all just been run over by a steam-roller here in America and feel pretty much flattened out. You have been reading about the stock market, of course. It is not that all of us are in the stock market—thank goodness I am not very heavily—but it does not look as if a collapse of this kind would do business any good. Therefore, the other day I cabled you that perhaps you might better stop work at St. Donat’s after the work in hand was finished.” No such orders were issued at San Simeon, where construction continued apace.4
The Chief’s only concessions to the Depression came in early 1930 when he decorated the walls of his new movie theater at San Simeon with red damask instead of a more expensive green Majorcan velvet and authorized his representatives in New York to sell his two yachts moored there. One of them, the Hirondelle, which had been owned by Prince Albert-Honoré-Charles of Monaco, had been bought in 1923 and left unused at a Brooklyn pier since 1924. But even minor adjustments such as these were abandoned as the stock market began to rise again through the winter of 1930. In March, Hearst authorized the purchase of the Canova statue of Venus that is today on view in the Assembly Room at San Simeon. That same month, at a Christie’s auction in London, he purchased an eighteenth- or nineteenth-dynasty Egyptian black granite bust of the lion-faced goddess Sekhmet, which Miss Morgan combined with other Sekhmet statuary in a specially designed setting on the South Esplanade.5
While the nation suffered through the worst depression in its history, the Chief expanded his animal shelters and grottoes at San Simeon and added a new Celestial Suite and a recreation wing with a billiard room and a fullsized moving-picture theater to Casa Grande. He also completed the most spectacular ornament on the hillside, the Roman pool, built under the tennis courts behind Casa Grande, every inch of its walls, ceiling beams, and floors lined with mosaics of blue and gold inlaid glass tiles imported from Murano, Italy.
But he was still not finished. He owned a Mediterranean castle at San Simeon and a medieval fortress at St. Donat’s in Wales. He had built a monstrous beach house for Marion in Santa Monica and bought Millicent the Belmont estate at Sands Point. In the winter of 1929–30, when his mother’s German-style castle at Wyntoon in Northern California burned down, Hearst commissioned Bernard Maybeck and Julia Morgan to replace it with something grander. Phoebe had originally left the estate to her niece, Anne Apperson Flint, but W. R. had purchased it from her in 1925.6
Maybeck wanted to replace the seven-story castle that had burned down with a larger medieval one which would have two main towers and sixty-one Hearst-sized bedrooms. Julia Morgan, according to her biographer, Sara Boutelle, suggested an alternative design: “a ‘Bavarian village’ with three half-timber three-story guesthouses, each composed of four to eight bedrooms (each with its own bathroom) and two sitting rooms. These were to be placed around a large, grassy oval clearing in the middle of the forest, with the back of each house paralleling the river as it curved downstream.” The Chief chose Morgan’s plan. Early estimates—from 1931—placed the preliminary cost of construction at $2 million (equivalent to almost $22 million in today’s currency).
Wyntoon, which Fortune magazine would in 1935 refer to as the “new Hearst principality,” was located on fifty thousand acres of alpine-like forest, with the McCloud River snaking through it. To the north stood the village green with three four-story wooden and stone mansions. The roofs are steeped, with bay windows, chimneys, and gables. Each of the houses overlooks the river on one side and the village green on the other. In the early 1930s, Hearst commissioned Willy Pogany, a muralist, magazine illustrator, and Hollywood set designer, to paint fairy-tale murals on the exteriors. The houses were named after the subjects of each mural: Cinderella House, Fairy House, and Bear House, where Hearst and Marion lived. Though the characters might be from old fairy-tale books, the execution was Disneyesque. There was nothing brooding, nothing foreboding about Hearst’s Bavarian Village. Just below Bear House was River House, which had been built by Charles Wheeler, Phoebe’s lawyer, who had owned the land on which Phoebe built her castle. Morgan remodeled River House into an additional guesthouse. Across the river were two entertainment houses, Bridge House, where movies were shown until the Gables with a full-sized theater was completed, and Tea House, with an outdoor terrace for dancing.
Wyntoon was Hearst’s northern European estate, designed to house his collections of German a
rt and serve as a summer retreat from San Simeon. Because Hearst intended to spend several weeks each year at Wyntoon, he set up a communications headquarters there, much as he had at San Simeon. Adjacent to Bear House, Morgan built a shingled bungalow which served as Joe Willicombe’s home and office and what Fortune magazine called the “empire’s nerve center.” Here were located the telephone switchboards, telegraph facilities, and three operators who kept the switchboards open around the clock.
About a half mile down a winding road were the pool, the croquet court, and the Gables, a stone lodge built on the site of Maybeck’s original castle with a dining room for sixty, a lounge with a great fireplace, and a theater for moving pictures. Across the river from the pool were the stables. A quarter mile further down the road was the Bend, the rustic stone lodge which had been the Charles Wheeler home. In 1934, Hearst purchased Wheeler’s land and set to work enlarging the Bend by adding a mammoth entertainment hall, theater, and dining complex.7
Like their competitors, the Hearst papers lost revenue during the Depression—not from circulation, which remained steady, but from advertising, which dropped precipitously: by “15 percent in 1930, 24 percent in 1931, and 40 percent in 1933.”8 Though it might have been wise for Hearst to sell some of his weaker papers and consolidate his holdings, he refused to even consider the possibility.
Eleanor (Cissy) Patterson, the sister of the New York Daily News publisher Joe Patterson and cousin of the Chicago Tribune publisher Colonel Robert McCormick, tried to buy the Washington Herald from Hearst, but he refused to sell. Instead, he proposed that she edit the Herald for a nominal salary and a third of the net profits. His decision paid off almost at once, with dramatic increases in circulation and advertising. In 1931, rumors surfaced that Ned McLean, the son of John McLean, the publisher who had sold Hearst the New York Journal in 1894, was going to sell the Washington Post. Cissy Patterson, not having given up her goal of owning a newspaper, tried to buy it in partnership with Hearst, but McLean refused to sell. Two years later, McLean having in the meantime pushed the paper into bankruptcy, the Post was sold at auction. Again Patterson and Hearst tried to buy it, but were outbid by Eugene Meyer, who had just resigned as chairman of the Federal Reserve.9
