King News by Moses Koenigsberg: Chapter 17 Part 1

 King News by Moses Koenigsberg

Published by F.A. Stokes Company, 1941

Chapter 17

The Sick Cat Chases the Mammoth (part 1)

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The jealousy with which W. R. Hearst guarded the making and handling of his features was explained by his immense confidence in their power. It was that faith which produced for me the opportunity to write the title of an important chapter in journalistic history. It put me in position to defeat an international cabal striving to establish a monopoly in news. A telegram from Hearst to Bradford Merrill was a prelude to this exciting sequence of events. Dated at Los Angeles, April 1, 1919, its purport was telephoned to me by Merrill, as follows: “General management of International [News Service] should be immediately turned over to Koenigsberg. This will enable International to be introduced by means of Koenigsberg’s features. Moreover, profits of Koenigsberg’s syndicate can maintain International until self-supporting. Universal, too, should be under general direction of Koenigsberg.”

The reference to “Universal” identified a corporation formed on June 17, 1918, as Universal Service, Inc. to furnish supplementary or special stories gathered at world centers for morning papers. The message had left a deep impression on Merrill. It meant a sweeping change in central functions of the Hearst organization. Merrill was prepared to give the assurance that he expected me to demand. The news services would have the same independence of management as the syndicates. My authority would be subordinate only to the owner himself. Hearst confirmed this understanding to me personally at a meeting the next week.

To muster in support of International News Service all the syndicate resources available, I added several corporate units. The time came when the list of corporations which recorded me as president and general manager was long enough to tickle a stock promoter’s fancy. But each of these eight companies fitted into a coherent operation: King Features Syndicate, Newspaper Feature Service, International Feature Service, Premier Syndicate (specializing in elements distributed on a commission basis), Star Adcraft Service (translating news illustrations into business promotion projects), International News Service, Universal Service and Cosmopolitan News Service (paralleling in the afternoon field the budget of telegraphic matter supplied by Universal Service to morning editions).

International News Service was in dire need of all the assistance that could be squeezed out of its pretentious roster of affiliates. It was one of the sickest cats that ever clung to the door-posts of metropolitan journalism. Deprived of cable facilities in 1916 by both the British and the French governments in rebuke for its methods, it had not divested itself of the stigma of propagandism with which it had been assiduously smeared by critics of Hearst. In the twelve months ending June 30, 1919, its deficit was calculated as $388,934.40. In the next eight years, its clients increased from less than 300 to 591. Its annual income meanwhile rose from $694,230.69 to $2,054,601.59. Its books showed several profit-paying years.

The accomplishment reflected in these figures lacks meaning without an understanding of the desperate plight to which International News Service had sunk. The lowliness of its estate was indicated by the distrust it excited among those who should have been most anxious for its welfare. Editors of Hearst papers, compelled to rely on it exclusively for general news, used its dispatches with proverbial fear and trembling. It became a by-word in the organization. It was called “reliably unreliable.” Not only did its institutional facade bear the bar sinister etched by the British and French governments, but it stood unacquitted of charges of piracy tried in United States courts.

Only two years before the management of International News Service was entrusted to me, it had been laid under an historic injunction. On complaint of the Associated Press, it was enjoined by the United States District Court of the Southern District of New York from “bribing employees of newspapers published by complainant’s members to furnish Associated Press news to defendant before publication.” It was also prohibited from “inducing Associated Press members to violate its by-laws and permit defendant to obtain news before publication.” The suit was appealed.

Melville Stone

That litigation was the climax of Melville E. Stone’s quarter of a century campaign to establish the claim that news might he held as private property. The sanctimonious passion with which the “grand old man” of the Associated Press clothed this so-called crusade, won the collaboration of a tremendously powerful circle. Such adversaries as Charles Anderson Dana and H. H. Kohlsaat, who came forward from time to time to contest his purpose, were weighted with the impedimenta of selfish interest. They fought just long enough to safeguard their individual assets.

No champion in shining armor ever led an array of ethical forces in front-line attack against the movement to create the basis for a news monopoly. Opposition to Stone, pathetic in its feebleness, did come from obscure workers anxious to shield a vital principle of human liberty. In this might be counted my own quixotic gesture of enlistment in the Laffan News Bureau of the New York Sun in 1897.

It is reasonable to assume that Stone suffered one of the worst shocks of his highly active life when the Supreme Court of the United States tarred the Associated Press with the same stick that was applied to International News Service. Both were placed under a reciprocal injunction. Each was enjoined from appropriating the news of the other. This decree was rendered May 19, 1919, six weeks before International News Service came under my-management. It did not absolve International News Service of culpability. It did imply that the Associated Press—that exalted assemblage of prestige and piety—might stoop to the same depraved practices of which it had accused the Hearst group.

But an adjudicated parity in potential impropriety did not embrace parity in business prospects. Membership in the Associated Press was the most highly prized privilege in newspaperdom, even if there were some stains on its background. There were critics harsh enough to describe it as born in perfidy and reared in subterfuge. The natal slur had reference to the machinations and betrayals through which the Western Associated Press deserted en masse from the Associated Press of New York in 1893 and entered a new corporate phase as the Associated Press of Illinois, progenitor of the present body.

The suggestion of trickery concerns the flight in 1900 of the Associated Press of Illinois from the State of Illinois to escape the application of a judicial mandate. That ruling required the organization to deliver its service to any newspaper tendering payment therefor. The escape was to New York. There a law existed under which a non-profit-making corporation could own property and yet function as a social unit. Thus, it was free to exclude any unsatisfactory member. The statute had been enacted at the behest of a coterie of sportsmen. It was framed to authorize corporate ownership of shooting and angling preserves. So the Associated Press obtained a charter on the same footing as a fish and game club.

Contemplating the taints on a competitor’s record neither gained additional subscribers nor strengthened the satisfaction of the current clientele. And there were some stains that International News Service must erase from its own escutcheon before pointing elsewhere. Hearst realized this. He cheerfully approved my plans for reorganization. Foremost was the need for a thorough house-cleaning. Next must come a different window-dressing. Convincing proof must be furnished that a changed management was eliminating whatever bias may have tinctured the service in the past.

Hearst expressed particular pleasure over the slogan I proposed to adopt. It was an amplification of a legend that had been in use. To the line, “Get it first,” I added, "But First Get It Right!’ That was the keynote of the policy Hearst sanctioned. “How can we expect the editors of our papers to comment intelligently on the actual news,” he asked me, “if the news we supply to them is false?” There was no naivete in that question. It had a double purpose. Primarily, it was a disclaimer of direct responsibility for the past. Secondarily, it was a sanction of the altered course.

It should be noted that Hearst never revised this instruction to me. The closest semblance to friction with him concerning International News Service arose over some dispatches from Mexico. Hearst’s vast holdings in that country afforded him sources of intelligence inaccessible to the ordinary newspaper correspondent. Moreover, Hearst cited a complaint from E. H. Clark, his general financial counsel, who specialized in Mexican affairs. A similar criticism some time later evoked a corrective program. I proposed to dismiss the offending correspondent and to replace him in each case with any of three seasoned journalists whom E. H. Clark would select from a list I would submit. Hearst was pleased with this arrangement.

That method of handling the International News Service personnel in Mexico was in effect in 1927 when the Hearst newspapers committed the historic fiasco of publishing a series of documents alleged to have been abstracted from the official archives of Mexico. It will be recalled that one of these writings mentioned a $500,000 bribe to a United States Senator. Another gave details of a conspiracy to foment a Central American revolution inimical to the United States. Still another outlined a plot to colonize Mexico with hordes of Japanese in preparation for possible invasion of this country. The investigating committee of the United States Senate, which finally declared the letters spurious, left untouched several phases of this extraordinary miscarriage of journalism. One, germane to my management of International News Service, is set down here.

Hearst had instructed three of his lieutenants to assure the fullest publicity for these “sensational disclosures.” The trio were Victor H. Polachek, for many years one of Hearst’s chief editorial functionaries and at the time the director of Sunday circulation for all the Hearst Sunday newspapers; Edmond D. Coblentz, managing editor of the New York American; and Victor Watson, executive editor of the New York American. Polachek, Coblentz and Watson urged me to take over the promotion and distribution of “this historic revelation.” I declined.

Not one word of the fantastic fake was transmitted over the wires of International News Service. No mention of the forged documents was made in any of its reports during my administration of the Service. Hearst never communicated with me about them. He suffered the penalty of an excessive faith in what he wanted to believe.

The first step in dissipating the propagandist atmosphere that hovered over International News Service was the employment of a chief of staff who could be held forth in promise of the new order—whose reputation offered a distinctly non-Hearst flavor. I appointed Marlen E. Pew editorial manager. Prominently identified for a while with the United Press, he had later served as editor of the Boston Traveler and of the Philadelphia News Post.

Pew was fanatic in his repugnance for secret influences. That quality made him especially valuable in the regeneration of International News Service. Unfortunately, at the end of three years, he found himself at loggerheads with his chief assistant, Earl Barry Faffs. They had been on the most intimate terms—a Damon and Pythias relationship. Pew demanded Faffs’ resignation. Faris was the wheel-horse of the news service. It would have been folly to let him go. Pew went instead. Afterward, he became the head of Editor & Publisher. George G. Shor, with a highly creditable journalistic record, replaced Pew as managing editor. In 1927, Faris became general news manager and in 1932, the editor. Evidently, no mistake was made in the choice that Pew forced upon me.

The rapid progress of International News Service led to an embroilment with the Associated Press of major consequences. The strife began with a letter I addressed to Melville E. Stone. It attacked what he esteemed sacrosanct—a claim for which he contended above all others—the exclusive ownership of news assembled by members of the Associated Press. Before the quarrel subsided, it wrought revolutionary changes in that august organization.

My communication was dated March 5, 1925. It called Stone’s attention to a story published on January 5th in the Associated Press newspaper in Lakeland, Fla., duplicating, almost word for word, an exclusive International News Service item which appeared the same day in the other Lakeland daily. The dispatch told of a criminal assault on two women in Jacksonville. It bore the dateline of that city.

This was a perfect predicate for the charge that the permanent injunction of the United States Supreme Court had been violated. Stone's answer was indulgently patronizing. It was an exposition of the sophistry on which the Associated Press position was based.

Stone did not deny that the Associated Press had made use of International News Service news. On the contrary, he asserted that the action had been fully warranted. The story had been “furnished” by the Jacksonville Journal. That newspaper was both a member of the Associated Press and a client of International News Service. Stone cited this notice regularly published by the Jacksonville Journal and by all other Associated Press papers: “The Associated Press is exclusively entitled to the use for republication of all news dispatches accredited to it or not otherwise accredited in this paper and also the local news published herein.” The Jacksonville Journal failed to label the story in question. Hence, according to Melville E. Stone, this piece of intelligence became the property of the Associated Press.

The issues raised in my response have never been met. The annoyance and apprehension they aroused in the Associated Press directorate were indicated by the bitterness of the onslaught that followed against Hearst.

My reply, dated March 23, 1925, contended that the absence of a label did not alter the facts of a story’s origin and that the Associated Press could not gain rightful proprietorship of a competitor’s news through any incorrect or misleading notice published by its members. The great care taken by International News Service to investigate the source of each report it used was contrasted with the Associated Press pronouncement which authorized the taking of matter with no further inquiry than a glance for credit lines.

On the part of International News Service we found faithful observance of the United States Supreme Court injunction against the appropriation of a rival’s news. On the part of the Associated Press we observed a policy capable of interpretation as constant incitement to violate that writ.

These premises formed the basis for even more serious representations. Under the theory stated by Stone, it was pointed out, International News Service would suffer deprivation not through any fault or omission of its own but by reason of the remissness, neglect or deliberate design of members of the Associated Press. Finally, the requirement for publication of the notice purporting to vest in the association the ownership of news appearing in the papers of its members made it possible for them to print the dispatches of other services without credit so that the Associated Press could lift and use those dispatches on the theory that it was entitled to do so.***

The first rumbling of the Associated Press storm that was to break upon Hearst came with word that his newspaper, the San Antonio Light, was to be deprived of its protest right. The San Antonio News was to be voted a membership. This was more than a slap in the face. It was a discrimination against a franchise-holder too violent to be other than a punitive measure. The situation was aggravated by notice that similar action was pending in Rochester, N. Y. There, also, the Hearst unit was to lose the exclusiveness of its service. Dismay seized Hearst’s advisers. This was a fight imperiling many millions of dollars represented in Hearst’s fifteen franchises—the largest number held by any member of the Associated Press.

This troublesome problem had prompted me several months before to advise a radical departure. My plan was to remove the bone of contention between Hearst and the Associated Press without real sacrifice to either side. A review of the central facts is necessary to envision the idea. When Hearst successively launched the New York Journal, the Chicago American and the Boston American, no adequate service of general news was obtainable for them from organized agencies. They were debarred from the Associated Press by the protest rights of existent members. A number of years were to pass before the United Press, under the vigorous management of Roy W. Howard, reached metropolitan stature. International News Service was organized not only to gather news for the Hearst dailies, but also to secure a permanent and inalienable source of supply.

It was possible to assure that objective without direct ownership. Operation by friendly hands could accomplish the desired end. It was my suggestion that Hearst rid himself of his Associated Press embarrassments by relinquishing formal ownership of International News Service to a purchaser on whom he could rely to safeguard his personal and his newspaper interests. I proposed to buy International News Service myself. My proposition was taken up by Hearst’s order at a special session of the executive council, his advisory board. The permanent chairman of that body was S. S. Carvalho, who had rejoined the organization some time before. The meeting began with the reading of a letter from Hearst, under date of May 6, 1926.

It told how Hearst had been startled by my proposition that he sell International News Service to me. He saw no reason to accept my offer. But the peculiar action of the Associated Press convinced him that he should maintain International News Service, if for no other reason than to protect his newspapers. This conclusion also embraced Universal Service. Nevertheless, he felt that the modifications of the present system which I had outlined might be advantageously applied to the organization under his continued ownership.

Hearst’s communication reviewed in detail my project to introduce a regime of mutuality in the relations between the news services and their clients. He accepted my plan for a committee of publishers, or at least for a Board of Control, on which the subscribing newspapers would have a 50-percent representation. He suggested the possibility of issuing stock certificates and bonds of which he would keep 50 or 51 percent. While he admitted that this would not make a wholly cooperative, mutual membership, he argued that “it would be about as good as the Associated Press” and that it would give the clients the feeling that they had something to say in the management of the institution as well as a certain permanence in the possession of their franchises. He completely endorsed the fundamentals of my proposition, but added some elements to assure his proprietary standing.

The executive council had not formulated any judgment on this proposal when the group in control of the Associated Press delivered its main assault on Hearst. It was the adoption by the board of directors of a resolution unparalleled in the annals of the organization. It was a formal declaration of Hearst's unfitness for membership. It was a patent preliminary to expulsion. Under date of October 8, 1926, it read as follows:

Resolved that in the judgment of the Board of Directors the relations of the newspapers owned by William Randolph Hearst represented in membership in the Associated Press with the news services owned by Mr. Hearst, cause an ever-recurring evasion and nullification of the obligations each to the other of members of this mutual organization and must be regarded as highly prejudicial to the interests and welfare of the Associated Press and its members, the prime object of the organization being the mutual cooperation, benefit and protection of its members.