Mr. Expansion

The fastest rising newspaper publisher in the U.S. is a stubby (5 ft. 3 in.) man who is unknown in most of the cities where his papers are published--and even in the city rooms of many of the papers themselves. He has never made a public speech in his life, he uses a briefcase for his main office, and he carries in his left-hand coat pocket a sheaf of memo paper, held together by a paperclip, showing the status of his papers' cash account. Although he is a registered Democrat, many of his eleven dailies--scattered across the U.S. from New York to Oregon--are pro-Republican. The publisher: Samuel I. (for Irving) Newhouse, 59, who in the past ten years has moved to the top ranks of U.S. publishing right behind Hearst and Scripps-Howard and, counting Sunday circulation, just ahead of Jack Knight. Last week, in a typically unorthodox manner, Publisher Newhouse took the biggest step in his fast-stepping career.

After a one-day visit to St. Louis, the first he had ever made to the city, Newhouse paid $6,250,000 in cash for the 103-year-old St. Louis Globe-Democrat (daily circ. 291,962, Sunday 354,354). With St. Louis' only morning paper Newhouse also got a 23% interest in radio-TV station KWK (whose $1,500,000 indebtedness he assumed). The seller was E. (for Edward) Lansing Ray, whose family has owned the daily for three generations. Publisher Ray sold out because he is 70, has no qualified heir to take over the paper.

With the Globe-Democrat, Newhouse's empire now includes:

Newark Star-Ledger (circ. 200,371) Long Island Press (217,040) Long Island Star-Journal (78,858) Syracuse (N.Y.) Post-Standard (89,399) Syracuse Herald-Journal (133,704) Jersey City Jersey Journal (92,847)

Staten Island (N.Y.) Advance (41,761) Harrisburg (Pa.) News (82,044) Harrisburg Patriot (35,055) Portland (Ore.) Oregonian (236,289)

Unchained. The Globe-Democrat's Owner Ray wanted a buyer who would not change the pro-Republican paper radically and who would not sell it eventually to the thriving (daily circ. 387,398, Sunday 460,501) evening St. Louis Post-Dispatch, thereby giving the P-D a monopoly. Newhouse filled the bill. The day he took over, Newhouse announced that Ray would stay on as publisher. He also said there would be no major staff changes and that the paper's present editors, executives and 1,200 employees will continue to run the daily. But Newhouse expects to pep up the stodgy Globe-Democrat. Although it has made a small profit year after year (estimated at $250,000 after taxes last year), it has been hamstrung by a tight budget.

Publisher Newhouse expects to increase the editorial budget, give his editors a free rein to expand and improve the news coverage, and thus hopes to close the circulation gap on the Post-Dispatch. For Newhouse, the independence of his local editors is the keystone of his publishing theory. He has no use for chain operations that make papers look alike or speak with a common editorial voice. Says he: "Nobody knows better what to print in a local paper than the editors on the spot. The ideal chain is one in which there is no chaining whatsoever."

Knockout. No counting-house publisher, "S.I." believes that "editorial content is the heart of the paper," spends money to improve it at the same time he energetically lights a fire under the paper's advertising and business offices. His tactics work so well that all but the Newark Star-Ledger now operate in the black, even though most were in the red when he took them over. Those that were profitable, such as the Portland Oregonian* which Newhouse bought for $5,600,000 in 1950 (TIME, Dec. 18, 1950) are also doing much better, both in ads and news coverage. In Syracuse, long considered a "sick newspaper town," he bought the Herald and the Journal, merged them into one paper, and wooed advertisers by selling space in the combined paper for the same price they were paying in one.

He also guaranteed a rebate to advertisers unless the paper's circulation grew, never had to pay back a cent, since ad volume and circulation soared. Three years later he bought Syracuse's other daily, the Post-Standard, which is now so independent of the Her aid-Journal that the two papers often disagree on public issues, e.g., U.S. policy in the Far East, have attacked each other in editorials. This is all right with Newhouse "as long as they don't knock each other out."

In Harrisburg, where he bought the morning-evening combination Patriot and News in 1948, he not only brightened both papers but decided they should put out a Sunday edition. Everyone advised against the plan, told him that Monday was a "dead day" for shopping in the area and that the paper would get no ads.

Newhouse went ahead anyway, sold so many ads for his new Sunday paper that Monday became one of the biggest shopping days of the week in the capital.

Cash Only. Newhouse has been a success almost since the day he started in the newspaper business. The eldest of eight children of immigrant parents, he went to work as a $2-a-week office boy for a lawyer right after finishing grammar school. When his boss got control of the ailing Bayonne Times (circ. 15,175), Newhouse at 16 started to run the paper for him. He not only made it profitable, but studied law and was admitted to the bar. After losing his first case, he decided that he preferred the newspaper business. On savings and money borrowed from relatives, he bought control of the Staten Island Advance for $98,000.

Newhouse has never since borrowed from a bank (or anyone else) because banks "can force you to sell if you don't make a profit." He likes to buy his payers for cash. Although he has two brothers in his organization, and two sons, Donald.

25, and S.I. Jr., 27.* Newhouse owns all the voting stock in his property himself, has seldom paid himself a dividend, puts 95% of his profits into buying new properties or improving old. He pays himself a salary of between $150,000 and $200.000 a year, pays his top aides well, e.g.. his editorial chief, Philip Hochstein, 53, makes $85,000 a year. At Newhouse's death all ; his property will go into a taxexempt, charitable foundation administered by public trustees. But his two sons will hold the only voting stock of the papers-- ten shares -- thus remain in control of operation of the Newhouse papers.

Optimist. Newhouse keeps track of his -far-flung empire through frequent reports and by keeping himself on a rigorous I traveling schedule. On trips to his papers ! Newhouse shuns local dignitaries, moves I into any office that happens to be vacant.

He has one iron-clad rule: if a local bigwig complains to him or asks Newhouse for help from the paper, he always refers him right back to the paper's publisher.

In his large duplex apartment on Manhattan's Park Avenue, Newhouse rotates his reading. He thoroughly goes through one of his papers every day, glances over the others. Although he has not written a word for any of his dailies in twenty years, he has a sharp eye for fuzzy writing or sloppy news handling.

In the face of many a publisher who thinks that high costs are making ^ the newspaper business "uneconomic," Newhouse is an unregenerate optimist. He thinks U.S. newspapers "in the long run have a bright future," is still on the lookout for more to buy. Says he: "When a year passes and I don't buy a paper, my two boys tell me I'm slowing up."

*Newhouse still hopes to buy Portland's other daily, the Oregon Journal, which is owned by 92-year-old Mrs. Maria Clopton Jackson. *Who last week arrived in -Moscow ith a group of traveling I'.?, editors.

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