Hearst Prunes

Since last summer the biggest unofficial fact in publishing has been that William Randolph Hearst--nearing 75 and acutely "conscious of the uncertainties of life"-- is liquidating those parts of his $220,000,000 holdings which make no profit. Junking of three big dailies was strong evidence of the trend. Lease of two more was confirmation. So was consolidation of the two Hearst news services (Universal and International News), the recent disposal of the unprofitable Hearst radio station KEHE, Los Angeles, and the announcement that some $15,000,000 worth of art objects were for sale. This week Mr. Hearst's plan of liquidation was official fact.

In July he decided to put into a voting trust his 95% stock control of American Newspapers, Inc., top holding company in the bewildering Hearst corporative pyramid. In September Lawyer Clarence John Shearn was given full and irrevocable power to vote Mr. Hearst's stock for ten years. Mr. Hearst retained only his right to earnings and editorial control over 19 Hearst daily newspapers and twelve magazines.

The little man to whom Mr. Hearst passed the staggering responsibilities of revamping his empire is one of his oldest but least publicized advisers. Clarence Shearn intended to be a newspaperman, but one of the first stories he wrote as a New York Times reporter resulted in a libel suit. Assigned to help frame the defense, Reporter Shearn soon took the law for a livelihood. In the early 90s he became Mr. Hearst's attorney and legal crusader against coal and food combines, has since drawn up most of Mr. and Mrs. Hearst's most intimate documents. In New York Mr. Shearn was defeated as a Democratic Hearst candidate for district attorney and later Governor, but finally won a seat on the State supreme court. In 1919 he left the bench for the bar, took along with him a pinched, judicial expression.

When Mr. Hearst named him trustee last summer, Mr. Shearn called in the eminently respectable Manhattan law firm of Milbank, Tweed, Hope & Webb, finally accepted its advice to scotch wild rumors by making the trusteeship known publicly. And in October, Trustee Shearn set up a supreme council of top-ranking Hearst executives: Thomas J. White, chief of the Hearst organization and liaison man with "The Chief"; Harry M. Bitner, general manager of Hearst newspapers; Richard E. Berlin, publisher of Hearst magazines; Joseph V. Connolly, head of features, wire services and radio; Martin F. Huberth, real-estate adviser; F. E. Hagelberg, general auditor; W. R. Hearst Jr.

Said Mr. White for that committee this week: "A policy of gradual liquidation as to some of the collateral and unrelated investments will be followed." Mr. Hearst has not always conducted his business as his bankers would have preferred. Once he had bought a paper, it was a matter of pride to keep it going as a unit in his one-man show. That policy Mr. Hearst dropped last July when he killed the New York American, explaining: "The newspapers that are favorites with me are the newspapers that are favorites with the public." Henceforth it is evident that the Hearst empire is to be run on a new principle: primarily to make a profit.

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