by David Nasaw
In making his case against the president, Hearst combined two of his favorite political weapons: Red-baiting and guilt by association. His newspapers first identified Roosevelt supporters like Sidney Hillman and David Dubinsky as Communists and then used that identification to prove that Roosevelt was himself a Communist. As Coblentz informed Hearst in his September 25 message, “My slogan for the State campaign is ‘remember Dubinsky and vote Landon insky.’”70
Spurred on by Coblentz, who insisted that the Chief and his proxy Alfred Landon were winning the battle against Roosevelt, Hearst pounded away. In a front-page editorial on October 1 he wrote:
Mr. Roosevelt declares that he is not a Communist, but the Communists say he is one. The Communists ought to know. Every cow knows its own calf.... The Communists may be misguided in many ways, but they are at least sincere.... They hail Mr. Roosevelt as a comrade. Stalin hails him, and asks the Communists to support him.... Mr. Roosevelt says HE IS NOT a Communist; but what about the marxian professor Frankfurter, Communistic counsellor of the Administration and personal confidant of Mr. Roosevelt? And what about the fiery and flaming labor lawyer, [Donald] Richberg, Communistic spokesman of the Administration, who assures us that the revolution is actually here? And what about the terrible [Rexford Guy] Tugwell, who preaches Bolshevism violently ... And what about little Miss Pink [Secretary of Labor Frances] Perkins, who wants all the Communists and criminals to be kept in the country and new ones to be invited in? And what about I.W.W. [Secretary of Commerce Henry] Wallace, who is worth a dollar a day or less, and thinks that nobody should have more?71
As proof that their anti-Communist onslaught was succeeding, Coblentz reported on his most recent conversation with “our friend [FBI director J. Edgar Hoover], concerning whom I phoned you. He was sent for by the President and asked about the seriousness of the Communist movement. The President was told it was very serious. After some hedging he ordered our friend to start an immediate investigation.... He [Hoover] told me of having been sent for by Attorney General Cummings just before we printed that first blast from the Russian document [charging that the Comintern supported Roosevelt for president]. Cummings said to our friend, ‘this is a forgery’ and was promptly told that it was not a forgery and that if he [Cummings] gave out a statement to that effect he would have his fingers burned.”72
All through October, the Chief, from Europe, and his editors in New York kept up their barrage against Roosevelt as a Communist dupe. They were so consumed by their campaign that they did not notice that the wind was blowing away from them. It was one thing to “expose” selected professors, college-age “sap-heads,” and White House advisers as communistic, but to claim in print that the president was “Moscow’s candidate” was to venture a step too far.
Had Hearst kept his name out of his newspaper, as did Adolph Ochs of the New York Times, or kept his editorials off his front page, it would have made it easier for those who disagreed with him politically to buy his papers. But the more he paraded his opinions, the more ammunition he provided for the boycott leaders, who argued that to buy a Hearst paper was to endorse his political views. The boycotts organized by the Communists and the American Newspaper Guild were joined by hundreds of informal, quiet protests, as families who had once subscribed to the local Hearst paper abandoned it out of disgust with the Chief’s diatribes. Long-time readers, forced to choose between the publisher and the president, banned the Hearst papers from their homes. In the Bronx, New York, the Pelham Parkway Democratic Club responded to Hearst’s attack by holding a meeting “attended by a thousand of its members and friends,” at which it was resolved “by unanimous accord [to] refrain from purchasing any Hearst publication....It is our thought,” the club leaders telegrammed the president, “that this attitude will be followed by all Democratic clubs and communities in this state and the entire country.”73
By late October, the effect of the anti-Hearst boycotts was such that even the stalwart Cissy Patterson was, according to her friend Harold Ickes, preparing “to resign as publisher of the Washington Herald. Her decision was purely a business one. Apparently she cannot sit idly by and see circulation and advertising falling off because of the way Hearst plays politics.”74
IX. The Fall
33. The Fall
THE CHIEF RETURNED FROM EUROPE in early November 1936 on the Queen Mary. It was an adventurous trip. Alice Head, who traveled with the party, wrote Jack Neylan that W. R.’s eldest son, George, had become “enamoured of a Polish dancer when we were on the continent and eloped with her. His father managed to get him back just in time to board the Queen Mary. We were met by what seemed like a vast army of detectives and Scotland Yard men who warned us that the woman was on the boat. (I saw her—prowling around like a panther.) George was hustled into his cabin and locked in. I said to the Chief, ‘Why not let him change cabins with Dick Berlin [the chief of Hearst’s magazine division]? Then when the woman goes to find him, she will find Dick.’ The Chief said, ‘Somebody’s going to be shot anyway. Which shall it be?’”1
On arriving in New York, with both George and Dick Berlin intact, Hearst gave an impromptu news conference at the pier and expressed his belief that Governor Landon would be elected.2 The following day, Franklin Delano Roosevelt was reelected by the greatest landslide in U.S. history. Sometime during the evening of Election Day, at Hyde Park, where the Roosevelt family was celebrating its victory, John Boettiger, Roosevelt’s son-in-law, was called to the phone. Harold Ickes recounted the incident in his diary. Marion Davies, whom Boettiger knew from Hollywood, was on the line.
“‘Hello, John, this is Marion Davies. I just wanted to tell you that I love you. We know that a steam roller has flattened us out, but there are no hard feelings at this end. I just wanted you to know that.’ Then, while John was still holding the wire at the request of Marion Davies, Hearst himself took the telephone at the other end and he said something like this: ‘Hello, is that you, Boettiger? Well, I just wanted to repeat what Marion said, that we have been run over by a steam roller, but that there are no hard feelings.’”3
Hearst graciously acknowledged his defeat, and, in the weeks that followed his return to the United States, went out of his way to make amends to his former enemies. According to Harold Ickes, he “slobbered all over the president” in a signed congratulatory editorial in his newspapers. He also settled the Seattle strike, and hired John Boettiger to edit the reopened PostIntelligencer with an offer of editorial freedom that was without precedent in the Hearst empire.4
Unfortunately, his turnabout was too sudden, his gestures toward Roosevelt too transparent an attempt to curry favor. Instead of mending fences, he made himself into something of a laughing stock.
At Mrs. Roosevelt’s fourth annual Gridiron Widows Party, held a month after the election, Washington’s newspaperwomen entertained their guests with three different versions of Romeo and Juliet. The New York Times reported on the second episode the next morning:
Juliet, in trousers, cap and veil, impersonated John Boettiger, while the Romeo represented William Randolph Hearst. The skit opened with the following dialogue:
ROMEO [Hearst] But, soft, what light through yonder Guild strike breaks? It is the West and John Boettiger is the very man for The Post Intelligencer!
JULIET [Boettiger] Ah me.
ROMEO He speaks.
JULIET Oh, William Randolph, William Randolph, wherefore art thou, William Randolph? Shall I deny my father-in-law and accept thy jack?!
ROMEO Shall I hear more, or is it too soon after the election?
The skit concluded with Juliet/Boettiger telling Romeo/Hearst that the woods were full of “dangerous radicals and Jim Farley’s hatchet men” and that “if my wife’s kinsmen [the Roosevelts] see thee they’ll make thee pay thy income tax.”
Romeo responded, “Alack, there lies more peril in losing circulation than twenty income taxes.”5
The moral of the tale was not lost on the Roosevelts, the Washington press c
orps, or Hearst himself. The result of the Chief’s anti-Communist, anti-Roosevelt crusade had been a loss of circulation and advertising which no about-face could reverse. Readers forced to choose sides between the president and the publisher had voted twice: at the ballot box for Roosevelt, at their newsstands against Hearst.
Seven years of depression, combined with the anti-Hearst boycotts and protest movements of the mid-1930s, had had a devastating effect on the Hearst empire. Circulation on the New York American had declined 8 percent between 1933 and 1937; circulation on the Evening Journal and the Sunday American had also fallen. The gap between Hearst’s Mirror and the Daily News had increased in those four years by almost 200,000. It now stood at more than one million. The same trend was at work in Los Angeles, San Francisco, Chicago, and Boston, where the Hearst morning papers had lost about 10 percent of their circulation between 1933 and 1937. The only part of the Hearst newspaper empire that was thriving was the Sunday papers, nearly all of which held their circulation—in large part because of the popularity of their comic supplements.6
Had Hearst reduced his spending to compensate for the loss in revenues from circulation and advertising, he might have been able to weather the storm. But, aside from the temporary wage cut that Neylan had forced on him four years earlier, he had taken no effective cost-cutting measures at his publications. Worse yet, he had accelerated his spending on real estate, art, and antiques. “I’m afraid I’m like a dipsomaniac with a bottle,” he told Neylan. “They keep sending me these catalogs and I can’t resist them.”7
It was not as if Hearst wasn’t kept informed of the bad news. On the contrary, Jack Neylan and his financial advisers pleaded with him to slow down his spending, to institute real economy measures, and to consider selling off some of his assets, particularly those newspapers that continued to lose money. Hearst, hoping that the economy would magically rebound, refused to listen.
On occasion, he would, as he had in the past, call a temporary halt to one or more of his building projects. But such détentes were always partial and never long-lived. In September of 1936, he cabled Miss Morgan from Europe to “bring Wyntoon and San Simeon work to conclusion October first and hold up Arizona until my return which will be soon.” (One of Hearst’s plans was to build a new mansion on his property near the Grand Canyon.) Only a few weeks later, on a visit to St. Donat’s, he spun out a web of new building schemes for the future that so disturbed Alice Head that she wrote a long letter to Jack Neylan. Only after a lengthy heart-to-heart talk with Head had the Chief agreed to postpone his plans for his castle in Wales. Neylan was delighted: “When I think of what a great satisfaction and relief it would be to him if his spasms of virtuous resolution were more extended I cannot understand why he does not see it himself. However, there is no use moaning about it; he is too old to do much reforming.”8
Neylan was right. Hearst could no longer help himself. From New York, he wrote Morgan in November that he had postponed their building plans because of “taxes, which are becoming confiscatory, and will be worse this coming year.... The election was not much help, was it?” He then, incongruously, directed her to “completely finish the beach house [in Santa Monica] now, and proceed with work at San Simeon after the first of the year.”9
To escape California’s state income taxes, he and Marion spent the winter of 1936–37 in New York City in their floor-through suite at the Ritz Tower. Soon after the election, he contacted his old friend Joe Kennedy and asked him to come up with a plan for corporate reorganization that would lighten his tax load and make it possible for his family to inherit his empire without being destroyed by estate taxes. Kennedy was well suited for the job. He was not only friendly with Roosevelt, the New Dealers, and the Washington press corps, but had recently performed miracles as a financial consultant for Paramount Pictures and RCA, and was a former chairman of the Securities and Exchange Commission, which would have to approve any new Hearst stock or bond issues.10
According to both Marion and Bill Hearst, Jr., Kennedy offered to buy the Hearst magazines, but the Chief turned him down because the price was too low—and he did not intend to sell any of his publications. While Kennedy and his associates set to work on a long-term reorganization plan, the Chief huddled with his financial advisers, senior editors, and Jack Neylan to find the money he needed to pay his bills in the short term. With debts mounting, revenues shrinking, and income tax obligations looming, the Hearst corporations were stretched beyond the limit. Reluctantly, the Chief agreed to cut his personal expenses, dispose of some of his losing newspapers, and sell off a portion of his overmortgaged real estate.
One of the first properties to go was the Clarendon on Riverside Drive. As Hearst no longer stayed there when he visited New York, it made no sense for the corporation to carry the expense of maintaining the building. The boys had moved out, and Millicent—who wintered in Palm Beach, spent the in-between season at Sands Point, and much of the spring and summer in Europe—did not need the entire apartment for herself. Hearst offered to move her to a property the corporation owned on Park Avenue. The initial negotiations took place through third parties, though when Millicent complained about having to talk to lawyers, W. R. assured her that he would handle the matter himself. Money, he insisted, was not the reason he was abandoning the Clarendon. He was selling it because it was no longer a desirable place to live and Riverside Drive was a deteriorating district. Millicent would be much better off if she relocated across town.11
Marion and W. R. celebrated Christmas in New York in 1936. It was not a joyous occasion. “On Christmas morning,” Marion Davies recalled in her memoirs, “the phone rang and Cissy Patterson said, ‘A. B. [Arthur Brisbane] just died.’ I said, ‘Good Lord, Cissy, aren’t we in enough trouble? I better not say anything to W. R.’ But he had heard the phone ringing. He started to cry, because he really liked A. B.... The funeral was at St. Thomas’s on Fifth Avenue, and it was revolting. The photographers were going up and down taking pictures while the service was on. W. R. and Vincent Astor were pallbearers, and there were hundreds of photographers in the church. I felt I was getting sick.”12
“I imagine W. R. was rather overcome at Mr. Brisbane’s death,” Alice Head wrote Jack Neylan in January. “At any rate, he has stopped buying antiques for the time being.” Neylan was quite pleased to hear about Hearst’s “moratorium on antique buying.” The Chief had, Neylan thought, entered a period of reformation. “I would not have you think,” he added, “that I have become guileless to the point of believing in the permanency of such a condition. However, every day that it lasts is just that much profit.”13
Unfortunately for all concerned, Hearst’s “reformation” was a chimera. As Joe Kennedy’s chief accountant later discovered, during the first five months of 1937, while the Chief was discussing corporate reorganization and downsizing, he was also spending almost $200,000—about $2.4 million in today’s currency—on antiques and another $200,000 on real estate.14
As Hearst’s advisers at the Ritz Tower and Joe Kennedy’s associates in New York and Washington pored over his accounts, they discovered that the situation was far worse than any of them had imagined. By mid-January, Arthur Poole, Kennedy’s chief associate, with the help of Tom White, who now served as the chairman of Hearst’s newly established executive committee, had calculated that the Chief and his corporations owed $9 million to Canadian paper mills. They also owed $78 million (almost a billion dollars in today’s currency) to the banks and the holders of Hearst corporate bonds and preferred stock. Thirty-nine million dollars of that debt was scheduled for repayment within the next twelve months.15
Hearst had been on the brink of fiscal catastrophe for decades, but in the past he had always managed to find a way to re-fund his old debts by raising new capital through bond or stock issues. As long as the Hearst newspapers and magazines had churned out sufficient income to pay off the interest on their loans and the dividends on their stock and bonds, no bank officer or broker was going to
turn down requests for re-funding.
The Chief had learned early and well the first tenet of the new consumer age: that there was no shame in being in debt. Debt was, on the contrary, the magic ingredient that had made it possible to build his castles and buy his art collections. He didn’t believe in the Protestant ethic or trust in Poor Richard’s aphorisms. A penny saved might be a penny earned, but a penny borrowed was worth even more.
It had taken almost half a century, but his debts had finally grown to the point where no banker in his right mind would consider re-funding them. By 1936, most of his newspapers were losing money. Worse still, his reputation as a publisher and businessman had turned sour. Potential investors could no longer assume, as they had in the past, that his publications would continue to generate sufficient revenue to payback the interest on his loans. “WRH is not well thought of by many bankers and investors because of his journalistic policies,” Poole concluded in his report to Kennedy in early January, “and his prestige with his readers must have suffered considerably in the course of the last election. There is a steady stream of [unfavorable] articles appearing.” In response to Kennedy’s suggestion that capital might be raised through a new offering of Hearst stock, Poole cautioned that “the popular reaction to a 50–60 million dollar stock issue would be conditioned to some extent by this unfavorable publicity.”16
