-Caveat Lector-
an excerpt from:
News and the Culture of Lying
How Journalism Really Works
by Paul H. Weaver (C) 1994
THE FREE PRESS
Macmillan, Inc., New York
Maxwell Communication Group of Companies
-----
Paul H. Weaver has been a writer and editor for Fortune Magazine, taught
political science at Harvard University, and worked in corporate
communications at the Ford Motor Company. He has been a fellow at the Hoover
Institution at Stanford University and at the American Enterprise Institute in
Washington, D. C. Weaver lives in Palo Alto, California.
This is quite an interesting book that I would recommend to any researcher.
You will also run into some members of Skull & Bones, imagine that.
Om
K
-----
C H A P T E R 2
Pulitzer's Revolution
There's nothing accidental about the tendency of news to pro-
mote an illiberal and undemocratic politics. The genre was the
product of a broad movement in American civilization that, toward
the end of the nineteenth and in the early years of the twentieth
century, rejected most of the Founding Fathers' view of man and
society in favor of a new politics grounded in concepts adapted
from the physical and natural sciences and intimately connected
with the emergence of the corporation, urban society, and the
modern university. At the core of this transformation was a sharp
narrowing of the sense of citizenship and of the individual's rela-
tionship to society and a radical expansion of the centralized plan-
ning, management, and manipulation of human affairs. Besides
news, these same currents gave rise to other major modern insti-
tutions, including advertising and public relations, the manageri-
al/interventionist state, and the activist presidency.
The George Washington and Henry Ford of the revolution that
brought these changes to journalism was a self-made genius
named Joseph Pulitzer. Today the Pulitzer name is famous because
of the program of prizes for journalistic excellence administered by
Columbia University-and also because it adorns the building on
the Columbia University campus that houses the Graduate School
of Journalism, which Pulitzer's endowment brought into being in
1913. These are peculiarly inappropriate monuments, however, to
a man who didn't go to college, had no special training in journal-
ism, and was no pillar of responsible society. He was sui generis, a
loner who did things his own way, unrespectable, controversial
reviled, rebellious-and, as I said, the man who, practically single-
handily, founded modern journalism.
Pulitzer (the first syllable is pronounced "pull." not "pew")
was born in 1847 near Budapest into a comfortable bourgeois
family that was shattered. during his teens, by the death of his
father and his mother's remarriage. Joseph left home at seven-
teen, shipping out to Boston to join the Union army, the only mili-
tary force represented in Europe that would have the scrawny
youth. During his year in uniform, Pulitzer saw little action but
lots of anti-Semitism (his paternal grandfather was Jewish, his
mother Catholic). and after Appomattox the young non-English
speaker made his way to St. Louis. There Pulitzer's skill at chess
brought him to the attention of liberal publisher (and soon-to be
U.S. Senator) Carl Schurz, who offered him a job as a reporter on
his German-language Westliche Post. Pulitzer, knowing nothing of
journalism but needing work, said yes.
It was a match made in heaven. Pulitzer was an outsider given
to sharp resentment of in-groups yet also intensely interested in
social acceptance and success. Journalism was a magnificent way
to pursue both motives. Covering the Missouri state capital for
Schurz and Washington, D.C., for the New York Sun, he became a
canny insider. He was elected to the Missouri legislature, married
into the socially prominent family of Jefferson Davis, even won a
seat in Congress (he resigned before his term was out). As an
outsider Pulitzer developed muckraking news stories that
exposed wrongdoing in high places and found large audiences.
Not least, he parlayed his journalistic and social talents into a
newspaper arbitrage business, acquiring and reselling an equity
position in Schurz's paper for a thirty-thousand-dollar profit. With
part of this money, he bought two failed papers, merged them as
the St. Louis Post-Dispatch, quickly pushed his partner out, and
held the property for the rest of his life. It was providing him with
the income and social position of a rich man by the time he was
thirty-five.
Then, on a spring day in 1883, while passing through New
York City with his wife and children on the way to a vacation
Europe, Pulitzer learned that the New York World, a respectable
Democratic paper that was operating in the red, was for sale. A
few days later it was his for a $346,000 note payable in two years.
Pulitzer canceled Europe, installed his family in a rented town
house on Gramercy Park, and got to work attracting the readers
who would provide the cash to pay for it all. The result was rev-
o1ution in the scale and nature of American journalism.
When Pulitzer bought the World, it had a daily circulation of
some 11,000 and a Sunday circulation of 16,000. A year later the
circulation had roughly quadrupled, the press run hitting 50,000
on weekdays and 60,000 or more on Sunday. In May 1885, two
years after Pulitzer's advent, daily circulation was 125,000, and
the Sunday circulation was 153,000.
Having engineered a tenfold increase in the World's reader-
ship, making it roughly as large as the biggest newspapers in
America's biggest city, Pulitzer, shifting into high gear, effortless-
1y blew past them. By 1895, twelve years after taking over at the
World, Pulitzer had raised his combined average daily circulation
to 540,000 and Sunday circulation to 450,000. On his twentieth
anniversary as owner, the World's combined daily circulation was
725,000, and its Sunday circulation was in excess of half a million.
Over his career, in short, Pulitzer brought about a seventy-fold
increase in the size of his own newspaper and a fivefold increase
in the size of the biggest newspaper in America.
He did it by making his audience feel the whole world was
watching. From day one Pulitzer's policy was to stop writing sto-
ries about events in their institutional contexts and to start writ-
ing stories that would directly engage the values and the feelings
of the people among whom Pulitzer was seeking his audience.
For example, the day before Pulitzer became the World's
owner, the newspaper's first page, forbiddengly dense with words
and type, included a column entitled "Brooklyn News," in which
the first item was a wordy note about the plans afoot in the
Brooklyn Common Council for a big celebration of the opening of
the Brooklyn Bridge, scheduled for two weeks later. The item
anticipated this event in the stuffy procedural language of govern-
ment, naming the ten kinds of organizations and people who
would be welcome to join the parade but neglecting to mention
the event's date or the fact that President Chester Arthur and
several state governors would be participating.
Two weeks later the Brooklyn Bridge opened. The World that
day was dominated by a dramatic picture stretching across the
first page and a story filling three columns describing the political
engineering, and human drama behind the making of this civic
wonder. The page fairly demands to be read. One's eye is drawn
by the heavily perspectived line of the bridge's deck as it
arcs across the page into Brooklyn in the distance at left. One's
attention is piqued by the promise of a dramatic human story of
tragedy and triumph behind the cutting-edge engineering achieve-
ment. One's interest is also attracted by the suggestion, implicit
in the scale and emotional intensity of the page, that the bridge's
opening and the newspaper's coverage added up to an experience
most New Yorkers would now have in common to react to and
talk about.
In short, Pulitzer was taking events out of their official context
and framing them in stories with a sharp dramatic focus that sug-
gested intense public interest. He achieved this effect by incorpo-
rating into journalism the elements of drama. What previously
had been a sober eyewitness account of an institutionally defined
event now acquired character, action, and plot. There were vil-
lains and heroes. Stories had beginnings, middles, turning points,
endings. Not least, there was spectacle, thanks to the growing
use of illustrations and dramatic graphic formats and the
reporters' growing attention to colorful facts. In short, stories
about constitutional events gave way to narratives of action
directly reflecting the hopes and fears of the audience.
A story in the World, one of Pulitzer's editors remarked
involved "discovering some public good that can be accomplished
and accomplishing it." When Pulitzer bought the World and dis-
covered the Brooklyn Bridge about to open, for example, he
quickly initiated a series of editorials to pressure the city fathers
into backing down from a planned five-cent toll and letting both
pedestrians and vehicles cross the East River gratis. Later,
Pulitzer began a promotional campaign built around the Statue of
Liberty, the eventual construction of which was paid for by dona-
tions from the World's readers. Emma Lazarus's "Give me your
tired, your poor, your huddled masses" was the first line of the
winning entry in a contest the World sponsored to pick a dedicato-
ry poem to be inscribed on the pedestal.
In sum, Pulitzer's strategy for attracting readers boiled down to
creating materials that immediately interested a lot of people and
that created the further suggestion that the whole world was
watching-that there was something in the World for everyone and
that by scanning the paper, a New Yorker wasn't merely accessing
interesting information but doing what everyone else was doing
and so connecting with others and the urban community.
Soon Pulitzer institutionalized these appeals in the brilliant,
complex masterstroke of journalistic invention that is the front
page.
Newspapers, of course, had always had a first page, but until
the end of the nineteenth century it was not sharply differentiated
from the other pages. All the pages, including the first, were
locked into a rigid format in which column rules-the lines
demarcating the vertical spaces in which the text is presented -
ran the length of the page, separating columns from one another
on the page and wedging all the lines tightly together in the bed
of type to keep it from falling apart during printing. As a result,
texts and heads were limited to one column in width, and the
news assumed a largely epistolary form. Items began at the top of
the leftmost column of the first page and, in early newspapers
especially, continued-like a letter-item after item, separated in
most cases by a simple head or horizontal rule, until they came to
the end of the last item at the bottom of the rightmost column of
the last page.
Newspapers acquired a front page in the modern sense as a
result of the appearance of the stereotype rotary press after the
Civil War. In this new technology, particularly suited to newspa-
pers with large circulations, the actual bed of type is used only to
create a mold from which a metal plate that duplicates the type is
made. The plate is given a cylindrical shape and mounted on the
press, where it prints a continuous sheet in a process that turns
out some ten times more copies per hour than the older technolo-
gy could. Since column rules aren't needed to give strength to the
bed of type, lines can be more than one column wide and type can
be used in any size, notably in heads. For the same reason illus-
trations could easily span more than one column.
As Pulitzer began exploiting this technology, the continuous,
letterlike sequence of columns gave way to a hierarchically orga-
nized mosaic of freestanding graphic units. In real life events are
events; their relative magnitude ("This is a big day," we say;
"That's trivial," we argue) is in the eye of the beholder. But start-
ing in the 1890s, Pulitzer's staff began attributing size and rank to
stories by graphic means. By virtue of how they were laid out and
where they ran, stories were made to appear big or small, sensa-
tionally exciting or utterly uninteresting.
Partly this was done by varying the dimensions of the story
unit itself. The bigger and bolder the type a story's headline was
set in, the more columns it stretched across, the more lines it
contained, and the more subheads or decks that descended below,
it, the higher-ranking and bigger the story was. Further signaling
a story's magnitude were the space it occupied, the illustrations
that accompanied it, and the related stories ("sidebars") in its
vicinity.
To specify the size and rank of stories even further, Pulitzer
and his staff created a vocabulary of locations in the newspaper. At
the top of the hierarchy stood the front page. The next highest-
ranking address was the front page of an inside section; ranking a
good deal below that were the back pages of sections; and at the
bottom of the hierarchy were the inside pages of sections. Within
the front page there was a further hierarchy of locations. The
upper right-hand corner became the highest-ranking site, the
upper left-hand corner the second highest, followed by all other
sites "above the fold." The half of the page lying "below the fold"
was the lowest-ranking front-page location.
This sizing and ranking of news involved making fine distinc-
tions among events, and that in turn meant that events had to be
brought into sharp dramatic focus. The emergence of the front
page thus involved a reshaping of the news story itself. In particu-
lar, it led to the rise of the headline.
Before Pulitzer, stories usually ran under generic heads that
broadly categorized the subject event, usually with a noun phrase
"Awful Event" was the head under which the New York Herald ran
its story about the assassination of President Lincoln in 1865.
Such heads, which kept to a low level the journalist's intrusion on
and redefinition of the institutional event, were emblematic of the
constitutionalist spirit of the old journalism.
In the 1890s Pulitzer began to substitute the modern headline
which consisted of a sentence with a subject, verb (usually
active), and often an object. Rather than identifying a type of
event, it tersely describes an action, with named people in a
named place doing something specific.
Within stories, corresponding changes emerged. Previously,
news stories had usually been written as chronological eyewit-
ness accounts in which the narrator began at the beginning of
the event and continued on to the end. Often what we today
would consider the most newsworthy part of the story, or the
lead, occurred in the middle or even toward the end of the story.
An example is the World's coverage of the speech made during
the presidential campaign of 1884 by a New York minister who
stigmatized the Democrats as the party of "rum, Romanism, and
rebellion." The story reporting the speech described the cam-
paign event as it happened, summarizing each of the speeches in
the order in which they were made and finally getting around to
quoting the inflammatory phrase in a late paragraph. The story's
head: "Republican Rally"-hardly the way such an event would be
covered today.
Pulitzer slowly phased out chronological narration in favor of
the so-called inverted pyramid model for telling the news. News
was now narrated as a list of facts in descending order of rank,
with the highest-ranking fact being the lead paragraph that sum-
marizes the event and brings it into sharp dramatic focus. Each
subsequent sentence conveys more material in increasing fine
ness of detail and decreasing centrality to the event as defined in
the lead paragraph.
The techniques of the front page reinforced the suggestion
that the whole world is watching by applying the techniques of a
type of speech classical rhetoricians called epideictic. Epideictic is
the speech of the mass meeting and ceremonial occasion. Its pur-
pose is to praise and blame, express shared values, and evoke a
sense of community. The central method of such speech, Aristotle
observed, is amplification. The speaker describes and dwells on
those aspects of the person or action in question that he figures
the audience will feel are praiseworthy or blameworthy. He
doesn't attempt to reason about the nature of good and evil or
weigh competing values or acknowledge alternative views; these
are techniques suited to deliberative speech, the discourse of
decision making and legislatures. He merely selects and amplifies
according to his purpose and lets the audience's values and emo-
tions do the rest.
Pulitzer's front page was a giant amplifier in all these senses,
It turned news into a structure of crises, a standing epideictic cue
that audience members have enough values in common to make a
ranking meaningful and that the highest-ranking events hold very
intense interest for all. It suggested that the newspaper has a spe-
cial closeness to the people, one transcending the closeness of
other institutions, including political institutions. It suggested
that the values they shared were unproblematic, at least in the
sense that their application to particular cases was clear and
didn't require deliberation or the mediation of government or
informal leadership.
The old, pre-Brooklyn Bridge journalism had also addressed
social and political interests people had in common, but in a more
reserved, less self-aggrandizing, more issue- and institution-ori-
ented, more constitutional way. The old journalism had spoken to
its readers as citizens, members of both a formal political society
and (in many cases) an organized political party as well. It had
embodied this sense of belonging on the part of its readers by
covering public events in the terms and spirit of the institutions
among which they occurred. The old journalism offered itself as a
window on formal institutions. It engaged readers' sociability with
information that reminded them they were citizens of a constitu-
tional society and members of a political party and that enabled
them to follow and participate in its formal affairs.
Pulitzer's new journalism, with its heavy overlay of communi-
tarian story values, stood the old journalism on its head. It
addressed, not the citizen and constitutionalist and partisan, but
the private, prepolitical human being. Where the old journalism
had invited its readers to step into, and renew their commitment
to, constitutional and political processes, the new Pulitzerian jour-
nalism was inviting people to turn away from formal institutions
and focus instead on the community evoked by the storytellers of
the newsroom.
It was just the kind of communication the Founding Fathers
had warned about. They had insisted that public opinion needed
refining and that the job of leadership, formal institutions, and
public education was to provide that vital service. History showed
that in the absence of institutions that shape, inform, test, check,
qualify, and validate popular views, public opinion degenerated
into fleeting passions engendered by passing events and manipu-
lated by unscrupulous demagogues, and self-government col-
lapsed into tyranny. The founders meant to give the republic an
immunity to this fate. They created varied institutions to connect
officials with the most considered, most farsighted, stablest opin-
ions of the public and to insulate them from momentary enthusi-
asms that would lead to the trampling of minority or individual
rights and the sacrificing of future needs to present pleasures in a
rush to do the impossible and please everyone always.
Everything the Constitution had done to make democracy safe
for individual rights and prudent statecraft, Pulitzer's journalism
was undoing. It took events out of their constitutional contexts. It
focused on the near term. It stressed the emotional and the
immediate rather than the rational and the considered. It was, in
the new word people began applying to the World, sensational as
opposed to constitutional.
The impact of Pulitzer's innovations is neatly illustrated by
sociologist Michael Schudson's fascinating study of the evolution
of news coverage of the constitutionally prescribed State of the
Union Address during the nineteenth century. From 1801 through
the Civil War, Schudson found, the leading newspapers simply
reprinted the speech verbatim with little or no additional com-
ment. The president, in effect, was allowed to speak for himself in
the pages of the newspaper as he had been allowed to speak to
the members of Congress.
After the Civil War, the pattern began to change. The war, the
telegraph, and the railroad had made the reporter a much more
important figure in the news business, and now he and his
reportage began to have a higher profile in State of the Union cov-
erage. The speech was still reprinted, but increasingly it was
accompanied by a substantial news story in which the Washington
correspondent reported the events of the first day of the new ses-
sion of Congress, usually in a chronologically structured narra-
tive. At the appropriate point in the chronicle, the story would
note the way senators, representatives, and spectators in the
gallery reacted to the president's message, which at that time the
president conveyed to Congress in writing and which was read to
the joint session by a clerk.
By 1910, reflecting Pulitzer's reforms, a radically different
journalistic approach had taken hold. Gone were the verbatim
reproduction of the president's speech and the meandering nar-
rative of the first day of the congressional session. In its place
was an inverted-pyramid news story, of the sort with which we
are familiar today, about the State of the Union Address itself,
representing the speech as a whole by means of what the jour-
nalists involved saw as its most newsworthy statement or
theme. Thus, between the constitutional event in Washington
and the reading public, there was now firmly interposed the
reporter, the editor, and the news genre itself, which together
defined a stage on which-and in terms of which-events now
became visible and dramatically compelling to the American peo-
ple and which focused intently on the words, deeds, and persona
of the president.
Personally Pulitzer was no adversary of constitutional democracy
But like more and more Americans of the day, he had little attach-
ment to century-old political ideas he had never studied in school.
He believed, and not without reason, that the system created by
the Founding Fathers had been profoundly corrupted by party pol-
itics and corporate bribery. As a result, Pulitzer believed, the old
constitutional ways weren't something the country could simply
carry on with. They had to be fought for and won back. That,
Pulitzer insisted, was what his journalism was all about. The
World would "fight for the people with earnest sincerity," the pub-
lisher promised. It would resist the "purse potentates," "expose
all fraud and sham, fight all public evils and abuses," and be "truly
democratic."
In fact, truly democratic and opposed to the power of purse
potentates were the last things Pulitzer's journalism was. As the
World's ability to project powerful images of popular goods and
evils grew and it found an ever bigger audience, Pulitzer's experi-
ment began exerting an intensifying gravitational pull on, and
itself started to come under the gravitational influence of, the
other great emerging institutions of the age: the corporation and
the state.
The modern corporation was invented in the final decades of
the nineteenth century as an odd but effective marriage of the tra-
ditional business firm with modern technology and social science.
At the core of this new institution was the revolutionary idea of
management, or what the corporation's leading historian, Alfred
D. Chandler, calls the "visible hand," the notion of bringing every
element of the business enterprise under a rigorous centralized
scientific scrutiny with a view toward creating new products, mar-
kets, methods, scales of operation, and efficiencies.
As the idea of management unfolded, there were major break-
throughs in fields from science to education as the founding
fathers of the corporation invented mass production, modern bud-
geting and accounting, organized equity markets, and many other
techniques and products we take for granted today. The corpora-
tion also achieved dominance, however, through a new, coolly
manipulative, power-oriented approach to its relationships with
the external political, economic, and social environment. What
management's new efficiencies didn't accomplish by themselves,
its aggressive way with people and popular institutions did.
From the outset, the corporation stood in a relationship to the
larger society that was both easy and awkward. The easy part was
that the corporation worked. The hard part was that the idea of a
large, growing, centralized, capital-intensive, technology-based
scientifically managed enterprise clashed sharply with a key fea-
ture of the corporation's environment, which was characterized
particularly by the rapid growth of often extremely competitive
and highly unpredictable markets. The constitutional society that
gave the corporation freedom to develop in ways of its own choos-
ing also imposed on it the constraints and risks entailed by those
markets.
From the beginning the new managers, emancipated from the
principled political economy of the Founding Fathers by the coolly
rational social-science perspective of modern management, toiled
ceaselessly to limit the uncertainty and danger of the market.
Many of these efforts were bluntly traditional-cartels, threats
and violence against competitors, mergers creating companies
with dominant market shares, bribery of legislators and journal-
ists. Other market-managing and -controlling ploys, however,
were subtle and novel, particularly the two new strategies by
which corporations worked to co-opt the news media's resources
in support of their efforts: advertising and public relations.
Advertising had its origin in the rise of consumer product com-
panies that developed efficient, high-volume manufacturing oper-
ations and suddenly found themselves eyeball to eyeball with the
challenge of distributing and selling the torrents that came pour-
ing off their production lines. The solution they came up with was
the modern marketing operation, an imaginative blend of man-
power, strategic savvy, and corporate communications. At the core
of the exercise were brand names, corporate logos, trademarks,
packaging, and advertising that positioned the product, created
awareness of the producer, supported selling themes at the point
of sale, reinforced customer satisfaction, sought to validate feel-
ings of product loyalty, and attempt to erect barriers to entry by
new competitors.
In the effort to put marketing information and images across,
the new corporation faced two difficulties. One was the absence of
a means of reaching people on the necessary vast scale and effi-
cient cost. The other was the mass audience's natural resistence
to messages from large, distant, self-serving, obviously manipula-
tive commercial organizations.
Pulitzer's journalism offered an excellent solution to both
problems. It made vast numbers of people available on a daily
basis. It reduced partisan segmentation of the market. News-
papers at the time were often overtly associated with, and some-
times covertly subsidized by, a political party, and though the
World was a Democratic newspaper, Pulitzer's innovations were
mainstays of the broader movement in American journalism
toward nonpartisanship. Above all, its drama of crisis and commu-
nity mobilization, suggesting that the whole world is watching,
enabled advertising to persuade in a subtle new way.
The corporate marketers found that by presenting a seemingly
descriptive message ("Ivory soap floats") in a medium perceived
as being followed and accepted by the entire community, an
advertiser could plant the suggestion that most people were see-
ing the ad, that most people cared about the product attributes it
touted, that most people were feeling the tug of the ad's tacit offer
to do business, that a lot of people may well be enjoying the prod-
uct already. The advertiser relied on the individual's sociability -
his inborn tendency to adopt perceived group norms, his innate
human desire to fit in-to transform these neatly crafted images
of community awareness and acceptance into behavioral realities
Pulitzer's journalism, in other words, enabled advertising to
become a self-fulfilling prophecy, an image of community belief
and activity that comes true because people believe that everyone
in the community is following and responding to the medium in
which the image appears.
The rapid growth of corporate product advertising around the
turn of the century brought big changes to the news business
Pulitzer was building. Newspapers had long carried classified ads
and patent medicine pitches as a supplement to their core busi-
ness of selling information to readers. Starting in the early 1880's
however, the traditional mix of revenues generated by advertising
sales and revenues generated by reader sales shifted sharply. In
1880 about 65 percent of big-city newspaper revenues came from
readers' purchases and 35 percent came from selling space to
advertisers. By 1900 advertising revenues were 55 percent of the
total, compared to 45 percent for reader-derived revenues. In
1920 the advertising share was more than 70 percent, and since
then it has drifted above the 80 percent level.
There is no evidence that Pulitzer, when he first moved to
New York and began creating the first modern American newspa-
per, anticipated this revolution in the structure of his business.
He appears to have intended his sweeping innovations only as
ways of strengthening the newspaper's appeal and increasing its
audience. A dozen or fifteen years into his history-making experi-
ment in Manhattan, however, Pulitzer had clearly become
intensely advertising-conscious and was hard at work, not merely
selling space, but making changes in his product for the purpose
of boosting ad sales revenues. The appeal to Pulitzer wasn't only
that the advertising market was large and growing but that it
offered a way around the ferocious competition that characterized
the New York newspaper market.
The entry in the 1890s of William Randolph Hearst into the
New York media market, already crowded with over a dozen
dailies, confronted Pulitzer for the first time not only with a com-
petitor who used all of Pulitzer's own journalistic tricks but with
one whose vast fortune and soaring political ambitions made him
highly tolerant of the huge operating losses that flowed from his
decision to cut newsstand prices to a penny a copy in search of
bigger circulation. In 1898, for the first and only time in Pulitzer's
experience as a newspaper proprietor, the World experienced a
substantial loss. Creating and applying the devices of the front
page was one of the central strategies by which Pulitzer sought to
strengthen the World's appeal to advertisers.
The transformation of newspapers from a reader-focused,
reader-driven business into an advertiser-focused, advertising-
driven business was a momentous event. Journalism slowly became
less dependent on, and thus ultimately less responsive to, cus-
tomer preferences expressed in the marketplace. Moreover, what
connection with the audience news firms did retain shifted.
Previously, in keeping with the nature of a consumer product
business, they had focused on core news customers, the people
strongly interested in news and willing to pay a high price for it.
(In today's currency values, nineteenth-century newspapers
charged a price in the range of fifty cents, a dollar, even two dol-
lars a copy.) As they became more and more oriented to the
special needs of advertisers for vast, distractible, suggestible
audiences, the focus of the media shifted away from the core cus-
tomer and a traditional product business, in which the quest for
larger sales is subject to the constraint that the marginal transac-
tion must be profitable. Now that the advertiser's presence freed
the quest for circulation from that constraint, the media began to
focus on the marginal customer, who, despite little interest in the
news and little willingness to pay for it, was the building block of
the ever-bigger audience sought-and paid for-by advertisers.
One result was a slow process of concentration and monopo-
lization. Consumer product manufacturers and downtown depart-
ment stores wanted to advertise to big audiences, the bigger the
better. In search of their advertising patronage, newspapers low
ered prices and spent heavily to build huge rate bases. As one
newspaper emerged with the largest audience in its market cate-
gory (morning or evening, upscale or mass), advertisers, seeking
not only the largest audience but also the medium best able to
sustain the illusion that the whole world was watching, converged
on it. The runners-up in the competition for audience experienced
a hemorrhage of market share, page sales, and cash flow until -
often sooner rather than later-they were no longer able to stay
alive. The fact that they might retain a substantial core of loyal
readers wasn't enough to save them, since by now newspaper
product prices had been driven by successful advertising-oriented
media to a level far below that on which a reader-oriented news-
paper could survive.
The demise of these otherwise often viable news media left
the survivors to cope with the inherent volatility of retail adver-
tising, new market segmentation patterns, and the rise of other
media, notably television. Newspaper markets became more and
more concentrated, and the media that survived became more and
more disconnected from the reader.
Pulitzer's World itself succumbed to the process of concentra-
tion and attrition it had set in motion. After World War I the New
York market divided into an upscale segment, dominated by the
Times and the Herald Tribune, and a huge mass segment, domi-
nated by the new Daily News and the Hearst papers. The World
which was positioned in the middle and suffered from weak lead-
ership in the wake of the founder's death in 1911, slowly lost
ground, finally collapsing in the depths of the Great Depression
and being absorbed into a healthier newspaper, the Telegram.
The entente between the corporation and journalism also went
forward on a second front: the corporation's efforts to script itself
into a hero's role in the news genre's crisis-and-emergency-
response scenario in the hope of making itself popular and win-
ning the benefits and privileges emergency government could
deliver. This second connection, initially known as publicity and
now as public relations, was similar to advertising in its aims and
strategy but different with respect to its means. Instead of putting
the corporate message next to the news, the. message was inject-
ed into the news.
As practiced by its earliest major exponent, a Princeton gradu-
ate and Progressive-era liberal named Ivy Ledbetter Lee, public
relations began in the 1890s as an exercise in damage control. In a
typical situation Lee would be retained by a railroad firm to han-
dle the publicity involved in a train wreck. The railroads' instinct
then as now, was to minimize the bad news, keep journalists away
from the accident site, and if possible, discourage any coverage.
We are private business organizations with property and privacy
rights, Lee's corporate clients wanted to say. Just now we don't
choose to give the gentlemen of the press access to our private
affairs. Today we would call this stonewalling.
Ivy Lee took the opposite tack. Contrary to the belief of some
backward, self-serving business firms, he'd have his client say,
we're a thoroughly modern social organization, and we acknowl-
edge we're not just private property. We are invested with a pub-
1ic interest, and we are happy to own up to a public trust and
social responsibility. In the case of this terrible accident, we're
particularly anxious to make good on this obligation. It goes with-
out saying that we'll do everything possible to enable the public
and its representatives, the news media, to find out whatever
they want to about the accident and to join us in satisfying them-
selves as to its causes and the steps needed to insure that such a
thing never happens again.
Behind its defensive and reactive posture, public relations was
an active, aggressive effort to gain positive advantages. It was, in
effect, a political Trojan horse: Inside the seeming subordination
of private rights to public needs, there was a concealed effort to
turn the exercise of public authority to private advantage. In other
words, the blurring of the distinction between public and private,
superficially a source of benefit to the public, was intended as a
means of extracting privilege from government.
In the case of the train wreck, for example, the advantage to be
gained might be a public-private train safety investigation that
would conclude that the railroad's procedures were up to snuff or
that specified changes would eliminate any definable future risk.
In other cases public relations efforts to co-opt the powers of the
press and government to the sponsor's advantage achieved mind-
boggling intricacy and scale. Consider, for example, the historic
and today undeservedly obscure 1905 life insurance scandal, in
which an inspired public relations campaign by the professional
managers of the Equitable Life Assurance Company not only
saved their power and jobs by diluting the voting power of the
company's majority equity owner, who would have thrown them
out if he could have, but induced government to protect the entire
industry from ferocious competition by reorganizing it as a gov-
ernment-sanctioned, government-managed cartel.
It all began on a January night in 1905, when a tall, elegant
Harvard-educated Francophile millionaire and man about town
named James Hazen Hyde threw a lavish costume ball in honor of
his debutante niece. All New York society was present, Sherry's
Hotel on Fifth Avenue was decorated to resemble the gardens at
Versailles, the menu was sumptuous, and the festivities were an
exercise in exuberant fin de siecle excess. At one point a celebrated
French actress, borne into the room on a sedan chair by liveried
footmen, stood to recite a poem about French-American amity and
then performed a cancan on the table. The cost of the event was
variously reported at $20,000 to $100,000, either way a lot of money.
The ball was a news story waiting to happen. The country was
in the midst of a recession, wages were down, workers were
being laid off, and a bank panic had recently cut many Americans
off from their assets. Moreover, Hyde wasn't just any rich young
dandylooking to throw a bash for his friends. He was a vice-presi-
dent of the Equitable Life Assurance Society and a director of
forty-eight companies the Equitable did business with. Later in
the year, when he turned thirty, he was due to inherit a 51 percent
controlling interest in the Equitable, which his late father had
built into the second biggest life insurance company in America.
When Sherry's presented Hyde with the bill, he in turn sent to
the Equitable to be paid as a business expense.
News of the party was leaked to the New York newspapers by
James W. Alexander, president of the Equitable. Alexander was in
the awkward position of being both Hyde's boss and soon-to-be
subordinate. Rising to the bait, the press gave the party front
page coverage, lavishing attention on the wretched excess of it all
and underscoring the irony that such indulgence should be taking
place in an industry that prided itself on prudence, sobriety, and
what the head of another big insurance company insisted were
the industry's "missionary" responsibilities.
This self-made scandal gave Alexander the opening he sought.
Moving with exemplary aggressiveness to deal with the crisis
he'd created, Alexander promptly proposed to the Equitable's
directors that Hyde be fired for "misconduct, incompetence, and
misuse of funds." He also urged the board to preclude any possi-
bility of Hyde's taking control of the company by enacting a new
policy under which holders of life insurance policies would be
entitled to vote for directors. The power of the equity owners
would thereby be greatly diluted. Hyde would never take control
of the company; Alexander, if all went well, could count on
remaining at the helm for the rest of his career.
Journalists weren't the only people whose animal spirits were
aroused by the World's expose. With the Equitable apparently in
play and its management up for grabs, financiers such as Thomas
F. Ryan and Jay Gould projected themselves into the picture,
seeking alliances with the various factions and throwing their
considerable weight behind the combatants' frantic efforts to get
relevant parts of the government and other forces to intervene in
their interest.
For most of the press, Hyde's French ball was a one- or two-
day sensation. But for World reporter David Ferguson, who had
independently been looking into rumors of corruption in the
insurance industry, it was just the opening he'd been waiting for
The week after the story broke, Ferguson went to press with a
shocking follow-up story describing for the first time the bitter
inside struggle between Alexander and Hyde for control of the
company. The Equitable denied the story and threatened legal
action, but in vain. The World pressed on with its coverage, print-
ing a copy of Alexander's charges against Hyde and demanding a
full investigation by the state government. Several months later
the New York State insurance superintendent gave the governor
a secret report on the state of the industry, which the World got a
copy of and printed verbatim.
The report was shocking by any standard. It showed a pattern
of self-dealing, insider trading, conflict of interest, political
bribery, and other abuses on a Brobdingnagian scale. Officers of
the Equitable had routinely put personal funds into the same
investments they were committing the company's millions to.
Unaccounted millions were being spent to bribe legislatures and
newspaper reporters across the country. The superintendent's
report recommended a long list of reforms and seconded Equi-
table President Alexander's proposal that stock control of life
insurance companies be abolished.
There followed the famous Anderson hearings of the New York
State legislature, which, under the leadership of general counsel
Charles Evans Hughes, put every significant figure in the life
insurance industry on the stand and exposed in vivid detail the
insensate aggressiveness with which this huge, fast-growing,
highly profitable, blithely unprincipled industry had managed its
affairs. The World and the rest of the press followed it avidly. By
the time it was all over, Pulitzer's newspaper alone had run 128
separate editorials on the life insurance scandal.
The lives of nearly everyone involved were changed forever.
All the top executives of all the existing life companies, including
the Equitable's Alexander, resigned or were forced out in dis-
grace, many of them dying soon after and a few going to jail or liv-
ing in exile. Hughes became the Sam Ervin of his day and with
Pulitzer's enthusiastic support was speeded along the way to the
state governorship and then to a seat on the U.S. Supreme Court.
Least adversely affected was young Hyde, who resigned from the
Equitable before the superintendent's report was completed and
sold his stock position to Thomas F. Ryan at a healthy profit.
In the hearings' wake, the life insurance industry underwent a
root-and-branch transformation. Previously it had been an innova-
tive, fast-growing, lustily profitable collection of big, sophisticated
companies that in a few decades had gone from being tiny
enterprises to giants playing a major role in capital markets and
expanding abroad as well. Suddenly this stellar aggregation of
growth giants departed from the economic universe according to
Adam Smith and became something almost unrecognizable.
Equity ownership was eliminated in favor of the "mutual" idea, in
which owners and profits don't exist and policyholders share in
any operating surplus and vote for management. The companies
from having been decentralized, competitive, and innovative,
became highly centralized bureaucracies whose products and
prices were minutely controlled by state regulators. Growth con-
tinued, but at a reduced rate. Executive salaries and other bene-
fits were cut back, reflecting the industry's new bureaucratic
identity; security and stability became the great rewards for its
employees. It became a model oligopoly, quiet, insulated from the
customer, self-serving, stuffily respectable-a haven for gradu-
ates of the new business schools being established at Harvard and
elsewhere.
The life insurance scandal of 1905, in short, showed how pub-
lic relations and news management activities by private industry,
amplified by the now-vigorous clout of the press, could turn con-
stitutional society as a whole-not only the formal governmental
process but the whole range of public policies and private behav-
iors that defined and maintained personal freedom, home rule,
and the market economy-upside down to its special advantage.
An opportune event, leaked to the press and publicized with ener-
gy, set in motion a process of revelation and investigation that
ended in an exercise of emergency-style government that
despite the absence of a clear, coherently demonstrated, larger
public purpose, established state control of entry, products, and
pricing in a key industry, all in the name of business ethics and
the public interest, and all in the actual benefit of the industry's
professional management.
pps 42-52
--cont--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris
DECLARATION & DISCLAIMER
==========
CTRL is a discussion and informational exchange list. Proselyzting propagandic
screeds are not allowed. Substance�not soapboxing! These are sordid matters
and 'conspiracy theory', with its many half-truths, misdirections and outright
frauds is used politically by different groups with major and minor effects
spread throughout the spectrum of time and thought. That being said, CTRL
gives no endorsement to the validity of posts, and always suggests to readers;
be wary of what you read. CTRL gives no credeence to Holocaust denial and
nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://home.ease.lsoft.com/archives/CTRL.html
http:[EMAIL PROTECTED]/
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
