Content-Type: text/html
Collusion and Price Fixing in the American Newspaper Industry, 1890-1910:
A National Trend
Submitted by
Edward. E. Adams
Brigham Young University
Department of Communications
HFAC F-366
Provo, UT 84602
Email: [log in to unmask]
Collusion and Price Fixing in the American Newspaper Industry, 1890-1910:
A National Trend
"I do regard this arrangement of yours, combining with the [Seattle] Post-Intelligencer and Times.... I have been in the same position. I have both accepted and given bribes of this character. I have allowed it to be done in the cases of other papers. I have known of other publishers doing it. Blades did it with the Los Angeles Record. He made several hundred dollars on several different occasions. All of the Los Angeles papers proved to be in a pool or trust.[1]"
-E.W. Scripps to E.F. Chase, business manager of the
Seattle Star
By 1900, the Scripps newspaper empire was the largest chain in the United States. E.W. Scripps owned nine dailies, six through the Scripps McRae League and three by the West Coast group of Scripps.[2] The Scripps McRae League operated papers in Cincinnati, Cleveland, Akron, St. Louis, Kansas City, and Covington, Kentucky, and had two other papers in Buffalo and Chicago died in the same year as their inception.[3]
By 1900, Scripps's Pacific Coast Penny Papers was the largest chain west of the Mississippi River with four newspapers located in San Diego, Los Angeles, San Francisco, and Seattle. Scripps formed a partnership with Paul Blades to form the west coast chain.
Publishing in these cities brought the Scripps McRae-owned papers in direct competition with renowned publishers Joseph Pulitzer, William Randolph Hearst, Joseph Medill, William Rockhill Nelson, and Charles Taft, half-brother to future U.S. President William Howard Taft. In most cases operating papers in these cities made for a competitively intense situation.
The competitive confrontations in these markets often left the Scripps papers battling from a subordinated market position, a role they first fought and on which they then compromised. The Scripps newspapers often resorted to "combinations" to accomplish a joint venture with one or more competitors to create or maintain a profit. Combinations formed collusive agreements to uniformly set advertising or subscriptions rates or to establish publication size and exclusive zones of newspaper delivery. By 1900, all operating Scripps McRae dailies had entered into combinations of one form or another.
This paper suggests that the formation of these collusive agreements was not limited to the Scripps chain, but that these types of arrangements were widespread among urban newspapers. Many of the "combinations" were initiated by competitors of Scripps, however, Scripps papers were willing participants.
Price fixing, collusion, and combinations are not mentioned in media history textbooks. There is only a brief mention of combinations, such as joint operating agreements in media economic studies.[4]
Recent media economic research is beginning to deal with the factors behind competition, and collusive methods used to compete, yet more research is needed in media economic and business history.[5]
Research on newspaper owners and publisher has primarily been in the form of biographies. There are numerous biographies of William Randolph Hearst, Joseph Pulitzer, William Allen White, and E.W. Scripps. These books provide valuable insight into the decisions made by newspaper management but rarely review details of the business decisions they made.[6]
Books on E.W. Scripps contain few details on the creation of corporate empire he created..[7] Trimble's biography on E.W. Scripps, Astonishing Mr. Scripps: The Turbulent Life of America's Penny Press Lord, includes some information about the chain, but only from the perspective of E.W. Scripps through his correspondence. Trimble discussed the corporate split, but he viewed it as an issue of a family squabble. The participation of the management in the different parts of the chain is not considered.[8] Another recent book by Casserly, Scripps, The Divided Dynasty: A History of the First Family of American Journalism, reviewed little of the circumstances surrounding the split other than it occurred..[9]
Baldasty's book, E.W. Scripps and the Business of Newspapers is one of the best sources on the business and economic history of newspapers and E.W. Scripps's business decisions. The book does provide additional insight into Scripps and his business operations.[10]
To accomplish this research, this paper utilized the E.W. Scripps papers housed at Ohio University. Business correspondence between 1890 and 1926 was analyzed. This paper adjusts the scope from 1890 to 1910, because mentions of combinations and collusive-type agreements after 1910 were sporadic and relatively few, whereas there are several mentions within time frame prior to 1910.
Competition
Between 1890 and 1910, The Scripps empire was vast. During that time period Scripps operated in twenty different cities. Some papers closed in less than a year, but the majority were profitable. Competing in these cities came at cost. Many of the publishers Scripps papers competed with became legendary in the annals of journalism (see table 1).
____________________________________________________________________________
Table 1
Scripps Newspapers and Competitors
City Scripps paper Competitors Publisher
Cincinnati Post Times-Star Charles A. Taft
St. Louis Chronicle Post-Dispatch Joseph Pulitzer
Kansas City World Star William Rockhill Nelson
Los Angeles Record Times Harrison Otis
Tribune William Randolph Hearst
San Francisco News Examiner William Randolph Hearst
Seattle Star Times Alden Blethen
Chicago Press Tribune Joseph Medill
Denver Express Post Frederick Bonfils
Dallas Dispatch Morning News Alfred Belo
_____________________________________________________________________________
Several of the publishers listed operated papers in other cities.
Forming collusive agreements and "combinations" was a business practice that involved competing papers. Since Scripps operated in many different markets this paper suggests that collusive practices described later in this paper were likely widespread throughout urban papers nationally.
Why did newspaper publishers resort to collusive agreements? Economist Lester Telser in his book, Competition, Collusion, and Game Theory, suggests that collusion occurs when the financial gain can be greater for all concerned than it would have been through competition.[11]
Cooperating economically rather than competing may have been more profitable for many publishers. Alfred McClung Lee, in his book the Daily Press in America, stated that by 1900, most urban cities in America had between six and eight daily newspapers competing for advertisers and subscribers.[12]
Forming combinations was one way to survive. These "combinations" referred to in the Scripps correspondence usually involved one of three aims: to fix subscription or advertising rates to optimize revenue, to fix the price on city printing so that one competitors could receive an optimal rate while other competitors received kickbacks, and lastly, to eliminate competition. Some combinations seemed to accomplish all three aims. In a sense all the combinations described were collusive activities.
And the practice appeared to be widespread and generally accepted.
In a letter to E.W. and George Scripps, Milton McRae suggested the practice of forming combinations may well have been prevalent among many newspapers nationwide:
I find from observation and inquiry that in many cities of the United States, publishers have made more money by combinations as I suggest, than they would have made otherwise under any circumstances.[13]
Price Fixing
In several markets where Scripps papers operated, mutual agreements or arrangements were made to fix prices with competitors. These agreements usually involved a coordinated effort with a competitor or several competitors to increase subscription prices or advertising rates.
One of the earliest references to combinations came in 1893. In Cleveland, E.W. Scripps's partner, Milton McRae, suggested an agreement to benefit the four established afternoon newspapers by advocating a combination which would accomplish several aims: set the maximum size of the papers, fix subscription price of all competing papers, and establish uniform advertising rates. In actuality, McRae was more concerned with preserving the dominant market share held by the Scripps McRae-owned Cleveland Press than helping competitors. In a letter to one competitor, McRae alluded to similar agreements organized in cities elsewhere and suggested that, "the papers made more money by such combinations than they would have otherwise under any circumstances."
He then proposed to E.H. Perdue of the Cleveland Leader:
There are many ways the Cleveland papers can make money by concerted action. There is no secret, no scheme, no unfair method in anything I propose. I would however like you to consider this matter, and if you will agree to make such an agreement as outlined, I am sure it can be carried out successfully and profitably to all concerned....I will be glad to talk to you and I believe I can eradicate from your mind any ideas you may have showing the proposed scheme to be disadvantageous.[14]
McRae seemed to almost speak from experience, even with expertise on the subject. He suggested that there other ways that papers could make money through "concerted action." However, he would not relate them in the letter, but would innumerate them in a personal visit to Cleveland.[15]
McRae was well aware of other arrangements by Scripps papers. A couple of agreements to fix prices were made in San Diego. Eager to start the new year and century with an advantage, Scripps executive Paul Blades met with the owners of the competing San Diego Tribune. After two months of negotiation the Scripps-owned afternoon San Diego Sun formed an agreement with the competing Tribune to raise subscription rates.[16]
Negotiation with the Tribune became difficult when it was sold to the Spreckles interests in September 1901.[17] Two years prior to Scripps' entry into San Diego, the Union was acquired by sugar magnate John D. Spreckles on August 1, 1890. His financial interests spread from San Diego and San Francisco to Hawaii. Among the Spreckles properties in San Diego were office buildings, hotels, the transit system, the Coronado Resort and Ferry, and the San Diego and Arizona Railway.
Spreckles and Scripps had served as members of the San Diego highway commission along with Albert G. Spaulding of baseball and sporting goods fame. At one point differences of opinion between Spreckles and Scripps had resulted in a newspaper fight. The Scripps-owned Sun had begun running scathing editorials of Spreckles, while the Spreckles-owned San Diego Union had printed caustic cartoons of Scripps.[18]
These differences between the two owners made negotiation of any agreement difficult. However, in July 1902 an agreement was reached between the Sun and Tribune to raise the monthly rate of the competing papers to thirty-five cents.[19]
These types of agreements were not new to the Scripps organization, nor did they seem to be out of the ordinary for competing papers. In 1895, Solomon S. Carvalho of the Pulitzer-owned Post Dispatch approached Milton McRae with the proposition of both papers joining with another competitor, the St. Louis Star-Sayings, and simultaneously raising the rural subscription rates of all three papers. This arrangement would not change the competitiveness for subscriptions, but profits would increase from the venture.[20]
McRae had little interest in an agreement to raise rural subscription prices, but he did want to get closer to the management of the Post Dispatch. He knew the subscription agreement was a beginning step required for other future mutual arrangements. "I note what you say about nursing the management of the Post Dispatch and cooperating with them personally, but of course doing the reverse publicly," McRae told Scripps.[21]
E.W. Scripps may have learned the practice of price fixing from his brother James, or it may have already been widespread practice among newspapers. Scripps' brother James, owner of the Detroit News, partnered with his son-in-law George Booth in 1896 to start the papers in Grand Rapids and Flint, Michigan, and in Chicago.[22]
Booth wrote McRae in 1902 about a combination between the competing Detroit News and Detroit Free Press to fix and stabilize subscription rates.[23]
Collusion on Government Printing Contracts
In St. Louis, combinations were also extended to securing government printing contracts. In May 1897, the papers of St. Louis formed a collusive agreement whereby the Republic could secure the city and county printing and then return the excess profits to the other papers. The plan was to win away the city and county printing contact away from the St. Louis Journal, which the competitors viewed as a thorn and wanted to eliminate.
The arrangement called for the Republic to make the lowest bid at six cents a line and the Globe Democrat and Post Dispatch to bid slightly higher at eight and ten cents a line respectively. According to the plan, the Chronicle and Star would not bid, but would run large stories revealing circulation irregularities by the Journal, during the week bids were due. The Journal had the lowest bid, but the city solicitor, wary of the negative publicity about the Journal, granted the contract to the Republic."[24]
The news that the family-owned Journal lost the city printing, its main source of revenue led the family to believe, "that the blow may almost kill father."[25]
Combinations previously utilized in St. Louis to secure government printing contracts were also being used in Kansas City. E.S. Wright, business manager of the Scripps McRae-owned Kansas City World, met with the publishers of the Kansas City Journal and the Kansas City Times with a plan to artificially raise the price of printing for the city. The arrangement called for the Times to make a minimum bid of five cents per line, two cents higher than the previous year's contract. The competitors would bid higher so the Times would retain its contract with the extra two cents per line split between the World and the Journal. "This arrangement would net us between $400 and $500 a month at the small cost of endorsing a check," noted Wright.[26]
With Kansas City using practices used in other cities, such as arranged bidding on government print contracts, the Scripps McRae League management was hopeful for greater profitability.[27]
San Diego newspapers were not only involved in price fixing, but the competing papers also had an "agreement" on how to handle the city printing contract. The Scripps-owned San Diego Sun agreed not to seek the city printing in return for advertising from the Spreckles interests, leaving the Spreckles-owned San Diego Union and Tribune to bid a higher rate for the city contract. In exchange the Scripps paper received an increase of advertising from Spreckles properties which owned the Coronado Beach Company, sugar interests, street cars, utilities, and real estate. W.H. Porterfield reported to Scripps:
We had advertising which we might otherwise may not have had.... I received a visit from the Union-Tribune people and they related the amount of advertising we received and that averaged about one-sixth of the of the total amount of the city contract they wanted to continue the same way. I said, "very well let it go." When I left San Diego, we were running the Coronado advertising.[28]
Even with the "so-called agreement" finalized, Porterfield had doubts about it's propriety. Porterfield related to Scripps, "The arrangement with the Union-Tribune people seemed fairer that any other arrangement I knew, but I think I can truly say that this act, is the one act of my business life which can be regarded as dishonest."[29]
W. H. Porterfield's predecessor, Paul Blades, seemed to have little reservations on "pooling" together on city printing contracts. Blades shared with Scripps one of his agreements,
I suggested to the publishers we could get together and over bid on the city printing contract; this would leave the Los Angeles Express to bid eight cents a line, three cents a line over last years contract. They would then send all the publishers a check for the overage.[30]
The agreement almost dissolved when Spaulding, the publisher of the Los Angeles Herald, threatened to pull out of the agreement. Blades related to Scripps,
Spaulding had a sudden spasm of virtue, and notwithstanding he and Otis [publisher of the Los Angeles Times] used to go into those fruitfully immoral "combines" to get to others and us; but this time it looked like he refused to pool. It looked like a wide open cut throat game till about an hour before the city bids went in when I succeeded in patching up a deal.[31]
Ultimately, the city accepted the bid. The acceptance of the Express bid actually gave the Scripps-owned Los Angeles Record a seventy-five percent increase over the previous year's kickback.[32]
Combining to Eliminate and Avoid Competition
During 1897 in Cincinnati, the possibility of an extensive combination was developing. The afternoon Scripps McRae-owned Cincinnati Post was in a head-to-head battle for circulation with the Taft-owned Cincinnati Times-Star..[33]
The two papers contended for control of the afternoon field for eighteen years and both Scripps and Taft were looking for a change. Scripps executive, Lemuel Atwood approached Taft in late May 1897 to discuss with him "combinations" used among the St. Louis papers. Atwood made no suggestion for Cincinnati, but Taft seemed quite interested in the subject. In a subsequent meeting Atwood promoted the idea of forming an agreement in Cincinnati to fix the daily circulation rate per paper. Taft countered by suggesting something larger than the normal combination: the possibility of arranging a "trust" between the competitors.[34]
As negotiations continued, Scripps and Atwood deviated from the usual norm of correspondence. Typically, Scripps was a stickler for typed correspondence in triplicate. As the bargaining advanced between the two Cincinnati papers, however, Scripps demanded changes in the methods of correspondence. Telegram services were not to be used, negotiations should not be mentioned in the normal business correspondence, and separate letters detailing the negotiations were to be handwritten with the contents shared with no one. Scripps explicitly stated,
I myself stipulated with Mr. Taft and he with me perfect secrecy during these negotiations...and I stipulate that no copies of my letters shall be taken nor shall you make any copies or retain any original communication from him [Taft]. Neither should either of you put down in writing notes embodying what you converse [which] will enable either of you under any conditions to state what the other said.[35]
Scripps and Atwood continued the pattern of handwritten letters throughout the negotiations and did not include a hint of them in other business correspondence.
One desire of Scripps was a ten-year limitation on the trust contract, but Taft did not want a limitation -- he felt that all receipts should be pooled into the trust and then divided between the owners. This concerned Scripps because he was afraid that one of the organizations might become slothful and live off the other..[36]
In October Scripps proposed that the arrangement allow each paper to gain from the other's increase. A system of payments would be based on the gross receipts of all circulation sales, and a percentage would be agreed upon in advance. The pro-rated system Scripps suggested would make both papers desirous for the other to be successful. Scripps wrote Atwood, "I honestly believe that such an arrangement is feasible, profitable, and moral....The modus operandi for carrying out this or any other plan need not and should not be discussed."[37]
One week later, Taft remained indecisive on the percentage split, but he suggested the adjustment of equities could be handled by a disinterested party. He also was concerned about the ten-year limit on an agreement, but he agreed with Scripps that cooperating rather than fighting was the proper approach. "There are barrels of money to be made in the afternoon newspaper field if it is properly managed," Taft predicted.[38] To resolve the percentage-split dilemma and the ten-year limitation, Taft resurrected the trust idea of the Times-Star and the Post pooling revenue receipts. Then, he and Scripps would have an interest in both the Times-Star and the Chronicle. Taft wanted both parties to share in each other's business, advertising, and circulation enterprises, yet conduct separate editorial departments. The separate operations would include philosophical differences -- one paper could be conducted along Republican lines and the other along Democratic lines. Thus, both could maintain editorial independence.[39]
Atwood responded to Taft's trust idea by asking if it would not come within the prohibition of anti-trust law. Taft had not considered this, but upon Atwood's questioning he thought not. Nevertheless, Taft reiterated the need for continued secrecy in these negotiations, and he reassured Atwood that he had discussed the matter with no one, and he asked the same of Atwood. Taft emphasized that discussion on these matters should be limited between him and Scripps, and he urged Atwood to exercise extra caution in their correspondence. The next time Atwood wanted to see Taft he was told not to call the Times-Star office nor his home, but simply write a note arranging for an interview. The note should not discuss the matter, and a time would be arranged for the meeting after business hours at Taft's residence, when he felt the time was best.[40]
A month later on November 16, Atwood sent a note requesting a meeting which he arranged at his residence. In the intervening month Taft had given considerable study to the St. Louis combinations and was particularly interested and intrigued by these ventures and asked Atwood for more information. He again reiterated to Atwood his desire to establish an arrangement, but he did not want to merge the two papers except for the business operations. He pushed Atwood to discuss with Scripps the establishment of shared interests in the two papers by the proprietors. Taft considered the arrangement "to be more of a partnership than anything else."[41]
The next day Atwood wrote to Taft proposing the percentage splits and methods for calculating reimbursements. The recommended agreement ended, "The Times-Star then would be entitled to its full gain in profits if it held to its ratio."[42]
This letter represented the last of the correspondence on the matter between Scripps, Atwood, McRae, and Taft. The correspondence in the E.W. Scripps collection reveals no contractual arrangement or any further discussion on the matter. However, three months later income statements for the Cincinnati Post showed a twenty-percent increase in circulation revenue.[43] This alone does not confirm the establishment of a trust. As the negotiations stood with the last letters, Scripps wanted a combination on circulation and possibly advertising while Taft wanted a trust agreement where both shared in the complete business operations, yet maintained editorial diversity. They probably negotiated some type of arrangement with the minimum outcome of a combination on circulation, but it is unlikely the trust developed. Financial statements or letters would have later revealed some organizational or structural change in reporting profits and loss, and none exist.
E.W. Scripps also had connections to The Clover Leaf Group of Newspapers, which was started by former Scripps employees, Frederick W. Kellogg and Laurence V. Ashbaugh. Kellogg was married to a niece of E.W. A substantial part of their start-up capital came from E.W. and George Scripps. By 1903, the group was among the with its ownership in the St. Paul Daily News, The Des Moines Daily News, Minneapolis News, and The Omaha Daily News.[44] Scripps monitored the progress of Clover Leaf, since this was one of four chains from which he received dividends.
In March 1904, the competing Minneapolis papers pooled against all local advertisers who advertised in the Clover Leaf-owned Minneapolis News. If an advertiser selected the News, then the combined agreement between competitors kept the advertiser out of their papers. The competitors hoped to squeeze the Clover Leaf group out of Minneapolis.[45]
At the same time Clover Leaf was dealing with the competitive advertising pool, the Scripps-owned Tacoma Times faced a similar situation. Tacoma was the stronghold of Samuel A. Perkins, the owner of the morning Tacoma News and afternoon Tacoma Ledger.
In Tacoma, E.F. Chase, the business manager for the Scripps-owned Seattle Star wrote about a proposed agreement with Perkins. Chase related his proposal to Scripps:
If your people are the right kind, and I think they are, we can and will get along harmoniously. There is room for both of us in this Pugent Sound country....Now I have a direct proposition to make. I will enter into an alliance, if you wish, in this country. Let my papers fight your papers. Fight like hell, but don't go knifing the business ends.[46]
Chase was wary of Perkins. He referred to him as a man who was "reckless with the truth" and someone "totally lacking principles." However, Chase still wanted an agreement;
I would want agreements with him [Perkins] to be in black and white, with witnesses to duly attest the same. Some people do claim he is a man of business honor. Some claim otherwise. I would never myself want to be closely identified with him. Yet a form of mutual reciprocity may be advisable up here, owing to the peculiar conditions which are developing.[47]
Perkins talked about an agreement but then aggressively responded to Scripps entry Tacoma by offering two different rates to advertisers. Simply stated, it cost less to advertise in the Perkins-owned paper if a business avoided the Times. Some advertisers were even offered cash bonuses for not advertising in the Times.[48]
Perkins did not maintain these rates long because he was feeling pressure from the Blethen family, owners of the Seattle Post-Intelligencer. The Blethen family started a paper in Bellingham, Washington to compete with the Perkins-owned Bellingham Daily Herald. Colonel Joseph Blethen's plans included moving into every market where a Perkins paper was located.[49]
Blethen sent his son, Clarence, to implement the plan in Tacoma in 1903 by attempting to purchase the Scripps-owned Tacoma Times. The younger Blethen was disappointed to find out they could not buy the Times, butt he was pleased when he found out it was under Scripps ownership. Four years previously, E.W. Scripps had invested in the Seattle Star, a competitor to the Blethen-owned Post-Intelligencer with the objective that his ownership stay a secret.
Blethen was glad to know that Perkins would have a tough fight in Tacoma with the resources the Scripps papers commanded. Tacoma Times business manager E.H. Wells grasped the opportunity to discuss a mutually beneficial arrangement in which the two organizations would cooperate in news gathering and avoid each other's communities in future expansion. Wells related his discussion with Blethen to Scripps,
Would it not be better advisable for you and ourselves to reach some understanding to give you a free field in certain towns and you will agree to keep out of others we wish to go? By following some such policy and working harmoniously together, each will do better and have the best results attained financially.[50]
The discussion continued between Wells and Blethen on how the two could engage in "mutual helpful arrangements" and "harmonious cooperation."[51]
Harmonious cooperation was a theme developing in Los Angeles. In 1904, William Randolph Hearst started a new paper in Los Angeles. E.H. Bagby, secretary-superintendent for the Scripps-owned Pacific Coast Penny papers and the Los Angeles Record suggested,
It might be necessary for the permanently established papers in Los Angeles to get together for self-protection, similar to the action of the publishers of Chicago, at the time of Hearst's advent in that community. I recited information which I learned as to the course pursued by Lawson [owner of the Chicago News] and other publishers to prevent Hearst from cleaning up the entire field....it might be advisable for a conference between Otis and Mr. Scripps for the good of all concerned, and particularly applying to the Los Angeles Examiner.[52]
By 1911, Hearst was also looking at entering the San Diego market. The competing Scripps and Spreckles papers had formed several agreements, and Porterfield described them as "ideal competitors." Even if Scripps and Spreckles did not like each other personally, their papers had found a way to co-exist. The previous agreements with the Spreckles-owned San Diego Tribune became important to Scripps newspapers as Hearst was looking to move into San Diego. Porterfield wrote the editor and business manager of the Scripps-owned San Diego Sun,
The easy times are gone and hard times are now upon us. If Spreckles is wrong politically, Hearst is a thousand times worse. If Spreckles is morally oblique, journalistically, then Hearst is putrid. There is nothing he will not stoop at to gain his point. I certainly recommend, and in fact, direct, both of you that no aid or comfort be given to this man Hearst or any of his crowd.... I advise you to see McMullen [general manager of the San Diego Tribune] and form an offensive and defensive alliance with him at once as to both circulation and advertising.[53]
Porterfield concluded by saying, "I propose to make it cost Mr. Hearst half a million easily in San Diego. If you will follow my lead in this matter, he will be a very sick man indeed by the time we get through with him."[54]
Conclusion
Although the terms or type of the agreements were not the same, the underlying reasons for arranging the agreements were to maximize revenue..
The application of these collusive practices provides some insight as to how widespread the practices were. In some of the agreements, Scripps executives initiated the combinations, in some others competitors took the lead. In all cases, the Scripps executives did appear to welcome the collusive agreements.
The correspondence on these agreements in the Scripps papers is relatively small in comparison to the entire collection. Yet the number of letters citing this practice should not undermine how extensive or how frequent these methods were used. The correspondence between managers and publishers in Cleveland, Kansas City, San Diego, St. Louis, Los Angeles, Cincinnati, and Seattle treat these practices as rather commonplace. Also, the Scripps papers represent only one company's dealings in these specific markets. The sensitivity of this correspondence may not have been kept by other families or companies willing to release files and letters of noteworthy publishers or editors which they feel could be embarrassing.
In actuality the business of newspapers closely parallels activities of many businesses of the Gilded Age when examining these collusive agreements.
The Press Barons have long been lauded as champions of the people and pioneers in journalistic practices, but these practices reveal characteristics strikingly similar to industrial capitalists of the late 1800s.
Examinations of the content of newspapers during this period have led many historians and scholars to identify characteristics deserving of the moniker of "Yellow Journalism". However, an examination of the business practices moves the industry closer to a type of Gilded Age Journalism.
So prevalent was the collusive activity that McRae boastfully claimed to Scripps, "Combinations are winning everywhere now-a-days, and if necessary the evening papers of the country will combine."[55]
Many newspaper publishers formed "combinations" with Scripps papers. It is likely the business trend was applied in many other markets.
McRae hints at the fact that it was applied elsewhere. In a letter to E.H. Perdue of the Cleveland Leader, McRae said, "I find from observation and inquiry that in many cities across the United States, publishers have made more money by just such combinations as I suggest than they would have otherwise made under any circumstances."[56]
[1] E.W. Scripps to E.F. Chase, December 27, 1902, subseries 1.2, box 4, folder 19, E.W. Scripps papers, Alden Library, Ohio University, Athens, Ohio. Herefater referred to as E.W. Scripps papers.
[2] Alfred McClung Lee, The Daily Newspaper in America: The Evolution of A Social Instrument (New York: The MacMillan Company, 1937): 214.
[3] Vance Trimble, Scripps-Howard Handbook, (Cincinnati: E.W. Scripps Company, 1981): Appendix I.
[4] See J. Herbert Altschull Agents of Power (New York: Longman Inc., 1984); and Birthney Ardoin, "A Comparative Analysis of Newspapers Under Joint Printing Agreements," (Ph.D. diss., Ohio University, 1971) 7-10; and Birthney Ardoin, "A Comparative Analysis of Newspapers Under Joint Printing Contracts," Journalism Quarterly 50 (Summer 1973): 340-349; and Ben H. Bagdikian, Media Monopoly (Boston: Beacon Press Books, 1983), and Walter S. Baer, Henry Geller, Joseph A. Grundfest, and Karen B. Possner, Concentration of Mass Media Ownership: Assessing the State of Current Knowledge, (Santa Monica, California: Rand Corporation, 1984); and Gail Lund Barwis, "The Newspaper Preservation Act: A Retrospective Analysis," Newspaper Research Journal 1 (Summer 1980): 27-38; and George A. Donohue, Clarice N. Olien, and Phillip J. Tichenor, "Reporting Conflict by Pluralism, Newspaper Type and Ownership," Journalism Quarterly 57 (Winter 1985):488-499, 507; and Stephen Lacy, "The Effects of Ownership and Competition on Daily Newspaper Content" (Ph.D. Diss., The University of Texas at Austin, 1986); and Stephen Lacy, "Content of Joint Operating Agreements," Press Concentration and Monopoly, eds. Robert G. Picard, Maxwell E. McCombs, Stephen Lacy, and James P. Winter, (Norwood, New Jersey: Ablex Publishing, 1988), 148-151; and Alf Pratte, "Terms of Endearment: Owner Ethics, JOA's, and Editorial Independence," Journal of Mass Media Ethics 2 (Fall/Winter 1987): 30-40; and Royal H. Ray, "Concentration of Ownership and Control in the American Daily Newspaper Industry" (Ph.D. Diss., Columbia University, 1950).
[5] See Jon Bekken, "The Most Vindictive and Most Vengeful power: Labor Confronts the Chicago Newspaper Trust," Journalism History 18 (Winter 1993): 11-17; and Tim A. Pilgrim, "Newspapers as Natural Monopolies: Some Historical Considerations," Journalism History 18 (Winter 1993): 3-10; and Minko Soitron, "Concentration and Collusion in the Canadian Newspaper Industry, 1895-1920," Journalism History 18 (Winter 1993): 26-32; and Gerald J. Bladasty, The Commercialization of the News in the Nineteenth Century (Madison: University of Wisconsin Press, 1993).
[6] James Wyman Barrett, Joseph Pulitzer and his World (New York: Vanguard, 1941), and George Britt, Forty Years - Forty Millions: The Career of Frank Munsey (New York, Farrar & Rinehart, Inc., 1935), and Negley D. Cochran, E.W. Scripps (New York City: Harcourt, Brace and Company, 1933), and Copley Press (Aurora, Illinois: The Copley Press, Inc., 1953), and Gilson Gardner, Lusty Scripps (New York City: Vanguard Press, 1932), and Loren Ghiglione, Gentlemen of the Press (Indianapolis: RJ Berg, 1984), and Roy Hoopes, Ralph Ingersoll (New York: Anthenum, 1985), and Oliver Knight, I Protest (Madison, Wisconsin: University of Wisconsin Press, 1966), and Ferdinand Lundberg, Imperial Hearst (New York: Equinox Cooperative Press, 1936), and Milton A. McRae, Forty Years in Newspaperdom, (New York City: Bretano's, 1924), and Charles McCabe, Damned Old Crank: A Self Portrait of E.W. Scripps (New York: Harper and Brothers, 1951), and Daniel W. Pfaff, Joseph Pulitzer II and the Post-Dispatch: A Newspaperman's Life (The Pennsylvania State University Press: Pennsylvania, 1991), and George Seldes, Lords of the Press (New York: Montouak Bookbinder Corporation), and John Tebbel, The Life and Good Times of William Randolph Hearst (New York: Ed Dutton & Company, Inc. 1952), and Vance Trimble, Scripps-Howard Handbook, (Cincinnati: E.W. Scripps Company, 1981), and Vance Trimble, The Astonishing Mr. Scripps: The Turbulent Life of America's Penny Press Lord (Ames Iowa: Iowa State Press, 1992) and Samuel T. Williamson, Frank Gannett (Duell, Sloan, and Pearce: New York, 1940).
[7] See Gilson Gardner, Lusty Scripps (New York City: Vanguard Press, 1932), and Negley D. Cochran, E.W. Scripps (New York City: Harcourt, Brace and Company, 1933), and Charles McCabe, Damned Old Crank: A Self Portrait of E.W. Scripps (New York: Harper and Brothers, 1951), and Oliver Knight, I Protest (Madison, Wisconsin: University of Wisconsin Press, 1966).
[8] Vance Trimble, Astonishing Mr. Scripps: The Turbulent Life of America's Penny Press Lord (Iowa State University Press: Ames, Iowa, 1992).
[9] Jack Casserly, Scripps, the Divided Dynasty: A History of the First Family of American Journalism, (Donald I Fine, Inc.: New York, 1993).
[10] Gerald J. Baldasty, E.W. Scripps and the Business of Newspapers, (University of Illinois Press: Urbana, 1999).
[11] Lester G. Telser, Competition, Collusion, and Game Theory, University of Chicago Press: Chicago, 1972).
[12] Lee, The Daily Newspaper, Appendix II.
[13] Milton McRae to E.W. Scripps and George H. Scripps, October 18, 1895, subseries 1.1, box 9, folder 1, E.W. Scripps papers.
[14] Milton A. McRae to Eugene H. Perdue (General Manager of the Cleveland Leader), August 13, 1895, subseries 3.1, box 2, folder 3, E.W. Scripps papers. "Surely we would suffer less than our contemporaries, and would naturally profit more than the others by such an understanding or agreement."
[15] Milton A. McRae to Eugene H. Perdue (General Manager of the Cleveland Leader), August 13, 1895, subseries 3.1, box 2, folder 3, E.W. Scripps papers. "There are other ways the Cleveland papers can make money by concerted action. What we want is good, stiff competition in an honorable way. But, concerted action in many ways will prove advantageous to both parties interested...I shall be in Cleveland within the week and will be glad to discuss the matter with you. Of course, as stated above, I ask you to treat the entire matter as confidential communication."
[16] Paul H. Blades to E.W. Scripps, March 6, 1900, subseries 1.1, box 15, folder 2, E.W. Scripps papers.
[17] The Copley Press, (San Diego: The Arts & Crafts Press, 1953): 200.
[18] See E.W. Scripps letters, series 4, box 9, E.W. Scripps Papers; and "Copley Press," 197.
[19] E.W. Scripps to Robert F. Paine, July 7, 1902, series 2, box 7, Letterbook 11, E.W. Scripps papers. "At last Porterfield has combined with his competitor to raise the price of both papers to thirty-five cents a month. I fear that Porterfield has got the usual trouble, that of being in too much of a hurry."
[20] Milton A. McRae to E.W. Scripps, 23 Oct. 1895, subseries 1.1, box 9, folder 1, E.W. Scripps papers. McRae writes to Scripps, "I note what you say about cooperating with Carvalho. The main proposition he made to me was to make the papers in the country ten cents, it would make the Chronicle high and dry and make it a paying property. I shall attempt while in St. Louis this week, to get closer to Carvalho."
[21] Milton A. McRae to E.W. Scripps, 23 Oct. 1895, subseries 1.1, box 9, folder 1, E.W. Scripps papers.
[22] E.W. Scripps to Robert F. Paine, March 24, 1900, subseries 2.1 box 3, letterbook 5, page 217, E.W. Scripps papers. "If you are going to do this thing do it quickly as you can before I get scared and back out. $18,000 a year is a good deal of money.... As President of the S.M.P.A. Co., I order you in the interest of that Company to start a paper in Chicago at the earliest possible moment spending not more than $12,500."
[23] Milton A. McRae to E.W. Scripps, May 1, 1902, subseries 1.1, box 19, folder 7, E.W. Scripps papers.
[24] Edward W. Osborn to Milton A. McRae, May 29, 1897, subseries 3.1, box 3, folder 2, E.W. Scripps papers. "The Journal bid $1.90, but the city solicitor decreed that they had not the required circulation. They made some fight, finally had to admit it was not paid."
[25] Edward W. Osborn to Milton A. McRae, May 29, 1897, subseries 3.1, box 3, folder 2, E.W. Scripps papers. "It [the city printing contract] was awarded to the Republic, which was in accordance with our plans. The sole object of this move was to get it away from the Journal. This the papers all agreed to do."
[26] E.S Wright to Milton McRae, April 26, 1900, subseries 3.1, box 6, folder 4, E.W. Scripps papers. "The Times in this case would be the lowest bidder, would receive the work and the basis of a division of three-fifths of the money to the Times, and one-fifth each to the Journal, and the World."
[27] E.S Wright to Milton McRae, April 26, 1900, subseries 3.1, box 6, folder 4, E.W. Scripps papers. "I believe this plan would be more profitable than an open scramble for the work, I am sure."
[28] W.H. Porterfield to E.W. Scripps and Lemuel T. Atwood, October 29, 1905, subseries 1.1, box 26, folder 2, E.W. Scripps papers.
[29] W.H. Porterfield to E.W. Scripps and Lemuel T. Atwood, October 29, 1905, subseries 1.1, box 26, folder 2, E.W. Scripps papers.
[30] Paul H. Blades to E.W. Scripps, February 8, 1897, subseries 1.1, box 10, folder 9, E.W. Scripps papers.
[31] Paul H. Blades to E.W. Scripps, February 8, 1897, subseries 1.1, box 10, folder 9, E.W. Scripps papers. "I succeeded in a deal which kept Wilson [business manager of the Los Angeles Times] out of the bidding and yet retained goodwill... leaving the contract for the Express.
[32] Paul H. Blades to E.W. Scripps, September 11, 1897, subseries 1.1, box 10, folder 10, E.W. Scripps papers.
[33] Lewis Leonard Alexander, Greater Cincinnati and Its People Volume II (Cincinnati: Lewis Historical Publishing Company, 1927): 569-570.
[34] E.W. Scripps to Lemuel Atwood, June 1, 1898, subseries 1.2, box 3, folder 9, page 6, E.W. Scripps papers.
[35] E.W. Scripps to Lemuel Atwood, June 1, 1898, subseries 1.2, box 3, folder 9, page 7, E.W. Scripps papers.
[36] E.W. Scripps to Lemuel Atwood, June 1, 1898, subseries 1.2, box 3, folder 9, page 11, E.W. Scripps papers.
[37] E.W. Scripps to Lemuel Atwood, October 2, 1898, subseries 1.2, box 3, folder 10, E.W. Scripps papers. Scripps writes, "I feel certain that there would be a very large increase of the net receipts from the joint interests by such an arrangement."
[38] Lemuel Atwood to E.W. Scripps, October 10, 1898, subseries 1.1, box 11, folder 8, page 2, E.W. Scripps papers. Atwood writes, "I think the arrangement fair to both parties. I agree with you that each paper should gain from the others increase in circulation, and share in the others loss.
[39] Lemuel Atwood to E.W. Scripps, October 10, 1898, subseries 1.1, box 11, folder 8, page 5, E.W. Scripps papers.
[40] Lemuel Atwood to E.W. Scripps, October 10, 1898, subseries 1.1, box 11, folder 8, page 7, E.W. Scripps papers. Atwood relates, "Secrecy seemed of first importance to him [Taft]. He said nobody had communicated with him as to the matter and I reassured him that I had told no one. He cautioned me not to again call him up at the Times-Star, but to address him a personal note at his home arranging an interview."
[41] Lemuel Atwood to E.W. Scripps, November 16, 1898, subseries 1.1, box 11, folder 8, E.W. Scripps papers. Atwood wrote, "I met Mr. Taft yesterday to renew the discussion on an arrangement between the Post and the Times-Star. He read and re-read the letter very carefully three times. He took particular interest in the 'St. Louis Situation' and asked me for more details....Mr. Taft seemed very much interested in the negotiation, He wanted E.W. Scripps as the proprietor of the Post to be interested in the profits of the Times-Star as he (Taft) was and vice-versa. He wanted this interest to extend to advertising receipts as well as circulation receipts.
[42] Lemuel Atwood to Charles A. Taft, November 17, 1898, subseries 3.1, box 3, folder 10, E.W. Scripps papers. In reviewing specifics about the proposed agreement, Atwood writes, "If either paper should fall below the average net circulation receipts as a ratio for apportionment for profits - the paper that fell below should sacrifice the amount of the decrease."
[43] See February income statement, circulation revenue line, compared to January income statement, circulation revenue line, in business report from Lemuel Atwood to E.W. Scripps, February and March reports, 1899, subseries 1.1, box 12, folder 6.
[44] See Frederick Kellogg to Milton A. McRae, May 1905, subseries 3.1, box 18, folder 11, E.W. Scripps papers; and James F. Evans, "Clover Leaf: The Good Luck Chain, 1899-1933," Journalism Quarterly 46 (Autumn 1969): 482-491.
[45] Milton A. McRae to E.W. Scripps, March 5, 1904, subseries 1.1, box 22, folder 11, E.W. Scripps papers.
[46] E.H. Wells to E.W. Scripps, May 13, 1903, subseries 1.1, box 21, folder 14, E.W. Scripps papers. The discussion continued, "I would not fight your paper in any way. Would much prefer to see you make as much money as you can. I would want to receive equally considerate treatment.... There would be no occasion for a clash, war or anything else. Don't you think a paper, governed by the policy of live and let live would be more to your advantage in the end?"
[47] E.H. Wells to E.W. Scripps, May 13, 1903, subseries 1.1, box 21, folder 14, E.W. Scripps papers. Chase continued, "I explained to Perkins as much as I could how things were handled by the Scripps-owned [Seattle] Star to avoid friction and fighting with the times, giving him to understand that a similar policy would be followed in Tacoma.
[48] E.H. Wells to E.W. Scripps, September 17, 1904, subseries 1.1, box 22, folder 18, E.W. Scripps papers.
[49] E.H. Wells to E.W. Scripps, September 17, 1904, subseries 1.1, box 22, folder 18, E.W. Scripps papers. "Mr. Perkins will probably drop his present tactics very soon, for he is up against a hard fight with Colonel Blethen who has announced his intention of entering every town where Perkins is now established. This means a bitter fight and a losing game for both of them. Blethen has just begun his campaign by publishing an eight page paper daily in Bellingham."
[50] E.H. Wells to E.W. Scripps, September 23, 1904, subseries 1.1, box 22, folder 18, E.W. Scripps papers.
[51] E.H. Wells to E.W. Scripps, September 23, 1904, subseries 1.1, box 22, folder 18, E.W. Scripps papers.
[52] E.H. Bagby to J.P. Hamilton, February 11, 1904, subseries 3.1, box 15, folder 10, E.W. Scripps papers.
[53] W.H. Porterfield to McGrew and Doppler, November 4, 1911, subseries 1.1, box 31, folder 7. E.W. Scripps papers.
[54] W.H. Porterfield to McGrew and Doppler, November 4, 1911, subseries 1.1, box 31, folder 7. E.W. Scripps papers. Porterfield continued, "Business is war, relentless and continuous. I don't propose to underestimate the power of those piratanical gang who are now attempting to raid us.
[55] Milton A. McRae to E.W. Scripps and George H. Scripps, March 19, 1896, subseries 1.1, box 10, folder 2, E.W. Scripps papers.
[56] Milton A. McRae to Eugene H. Perdue (General Manager of the Cleveland Leader), August 13, 1895, subseries 3.1, box 2, folder 3, E.W. Scripps papers. "Surely we would suffer less than our contemporaries, and would naturally profit more than the others by such an understanding or agreement."