Power and the Press

When a hog-raiser buys a sausage-factory, nothing could seem more natural to the man-in-the-street.

Equally natural to the man in the streets of Boston seemed, at first, last week's news that International Paper Co., makers of newsprint on the banks of the St. Lawrence, had bought a half-interest in the Boston Publishing Co., publishers of the Boston Herald (morning) and Boston Traveler (evening), two of the most prosperous, of the Seventh City's many dailies.

The purchasers quietly explained: "The stock was acquired as a profitable investment in an allied business closely related to the manufacture of newsprint, to insure a permanent outlet for newsprint, and the arrangement was welcomed by the Boston Herald and Traveler interests as a reliable source of supply on a favorable basis."

It was further explained that, though International Paper is a New York corporation (long dominated by the Publishers Reid of the New York Herald Tribune, control of the Herald and Traveler would remain in Boston through the appointment of Philip Stockton, John R. Macomber and Sidney W. Winslow Jr., all oldtime Bostonians, as trustees.

What the average citizen did not realize, what precipitated one of the loudest journalistic uproars in New England history, was an underlying chain of circumstances not visible in the simple announcement of the sale but well known to rival journalists, cranks, alarmists and vigilant patriots; a chain of circumstances which non-New Englanders viewed variously as a bit of shrewd industrial mechanism or as a sinister instrument to shackle Public Opinion, to strangle the Freedom of the Press.

International Paper Co. is not its own master. It is merely a money-losing subsidiary of International Paper & Power Co., a holding company formed last year when newsprint prices were bad and it became obvious that more valuable than International Paper's coniferous forests were the rivers that rushed through those forests with vast potential horsepower (TIME, Aug. 27).*

Other subsidiaries of International Paper & Power are New England Power Co. and several similar public utilities operating within the sphere of influence of the Herald and Traveler. I. P. & P. is primarily a power combine nowadays, affiliated through such men as it placed in charge of the Herald and Traveler with potent finance (Old Colony Trust Co., First National Bank, Harris Forbes & Co.), with potent industry (United Shoe Machinery Corp.), with potent traction interests (New York, New Haven & Hartford R. R.).

Central figures in I. P. & P. are two: Malcolm Greene Chace--a quiet man of mystery-millions, a man so quiet his name is not on his office door or in Who's Who. For years he was a dominant stockholder in International Paper and New England Power. When he obtained control of the former, combinations began. He kept in the background. Seldom has his name appeared in print except, during the 90's, in the sport news. He used to be an able tennis racqueteer. His background is Quaker, and old New English. His father, Arnold Buffum Chace, is chancellor of Brown University. The Chace spokesman, figurehead and factotum was and is:

Archibald Robertson Graustein. As a young Harvard law graduate, Archibald Graustein was just the man Tycoon Chace needed to look after his interests. A turbine for work, a turtle for silence, enormously shrewd, Lawyer Graustein was given charge of International Paper five years ago. Consolidations, trade agreements, and his activities on the directorates of other Chace interests, have kept hard-driving Mr. Graustein busy day and night, but now the industrial empire of which he is chancellor is approaching romantic vastitude. Grausteinia is becoming Graustark.* In the imperial coffers lies a treasure to which the felicitous French have given a suitable name. Besides paper, Graustein of Graustark now deals chiefly in White Gold -- water power.

White Gold Rush. Folded into mountains and valleys, cut by many a swift river, densely populated, primarily a manufacturing area needing railroads to carry workers and their products, their necessities, New England is a hydro-electric El Dorado. Its latent wealth of White Gold was discovered comparatively late owing to a} pre-emption of the handier power sites by textile and other factories; b} New England conservatism -- small men content to make and sell power in a small way.

When the textile industry declined and power sites began to be cheap, into New England from the midwest went a little man used to doing things in a big way -- Samuel Insull, public utility pope of Chicago. His operations centred at first in Maine, where securities of his Central Maine Power & Light have become popular legal tender and his henchmen, Walter S. Wyman and Guy P. Gannett, are ruling powers. Mr. Wyman is Water Power. Mr. Gannett, a cousin of Chain-Publisher Frank Gannett of Rochester, Syracuse, Brooklyn, Hartford, Albany, Utica, Elmira, Newburgh-Beacon (N. Y.), Plainfield (N. J.), Ithaca, Olean (N.Y.), Ogdensburg (N. Y.), is Power of the Press. His monthly Comfort reaches 1,226,330 homes. His dailies in Portland (the Press-Herald and Express} and Waterville (the Sentinel} dominate. Working quietly as always, Mr. Insull intrenched himself early and deep. But his operations eventually awakened such utility companies as the Boston Edison to look around and consolidate, to form the New England Power Association and other companies, to employ such brains as Graustein of Graustark to fight Invader Insull and mine New England's White Gold themselves. Hydroelectric Minute Men, they set out to meet Mr. Insull with his own weapons. He had newspapers. They acquired the Herald and Traveler.

On Beacon Hill. For the moment at least, this newspaper purchase was a set-back to every private interest in the White Gold Rush. Ever since the Senate-ordered investigation of interstate public utilities, precipitated by Mr. Insull's contributions to politics in Illinois, public utility privateers have been uncomfortably under the arc-light for their propagandizing in schools, colleges, textbooks, newspapers. The purpose of the privateers has been to represent municipal (public) ownership, operation or control of light, power, and traction companies as "socialistic." Pending in the Massachusetts Legislature last week was a bill designed to aid New England towns which desired to erect and run their own power plants, but retaining in the state power commission the authority to veto, the power to keep sites open for private enterprise.

This last provision was on the point of acceptance by all important factions in the legislature when the Herald and Traveler, through the legal necessity of publishing their annual statements of ownership, were discovered to have passed into the hands of the so-called Power Trust. Loud then were the cries on Beacon Hill The bill was delayed indefinitely by great confusion. Investigations of the privateers,- their plans and propaganda, were called for hysterically. Popular Representatives with very little knowledge of what it was all about, but excited by the electricity in the air, exclaimed that they were "shocked," "horrified," "astounded," that the I. P. & P. should so "defy the Federal Government," "fly in the face of authority," "brazenly attempt to silence Free Speech," etc. etc.

Graustein of Graustark and his associates bore these assaults in silence, watching to see what the legislature would do. Outsiders judged it would be ironically probable that, in flaying the I. P. & P., New England Power, et al, the overheated legislators were playing a lot of cards for I. P. & P.'s more potent and more tactful rivals, Samuel Insull & Friends.

* International Paper's report for 1928, published last week, showed a deficit of $4,706,403. In 1927 it had a surplus of $49,588. *FabuIous kingdom in the fiction of George Barr McCutcheon.