Columbia University President Lee Bollinger currently sits between RAND Corporation Board of Trustees Chairman Ronald Olson and Coca-Cola Company board member Barry Diller on the Washington Post Company media conglomerate’s board of directors. Following is the third part of an article about the Washington Post Company and Newsweek magazine’s hidden history which first appeared in the February 17, 1993 issue of the now-defunct Lower East Side alternative newspaper, Downtown:
Newsweek Magazine’s Historical CIA Connection—Part 3
Newsweek magazine was launched in 1933 by a group of U.S. Establishment stockholders “which included Ward Cheney, of the Cheney silk family, John Hay Whitney, and Paul Mellon, son of Andrew W. Mellon,” according to America’s 60 Families by Ferdinand Lundberg. The same book also noted in 1946 that “Paul Mellon’s ownership in Newsweek apparently” represented “the first attempt of the Mellon family to function journalistically on a national scale.”
To launch Newsweek the group of original owners invested around $2.5 million. Other large Newsweek stockholders prior to 1946 were a public utilities investment banker named Stanley Childs and a Wall Street corporate lawyer and director of various corporations named Wilton Lloyd-Smith.
In 1937, Newsweek merged with the weekly journal—Today—that had been founded in 1932 by a representative of the Harriman Dynasty—former Democratic New York Governor and diplomat Averell Harriman—and a representative of the Astor Dynasty—Vincent Astor. As a result of the 1937 Newsweek-Today merger deal, Harriman and Astor provided Newsweek with $600,000 in additional venture capital funds and Vincent Astor became both Newsweek’s chairman of the board and its principal stockholder between 1937 and his death in 1959. At the time of his death, Astor owned around 120,000 shares of Newsweek’s 179,700 shares of stock and Harriman owned about 40,000 shares of Newsweek stock.
Prior to purchasing control of Newsweek, Astor had inherited a fortune at the age of 21 which included $63 million worth of real estate, such as the Waldorf-Astoria, the Hotel Astor, the St. Regis, Astor Place, and offices and apartment buildings in Manhattan. During the 1920s, former Newsweek Owner Astor “sold about half of the family’s real estate holdings in New York City for $40 million.” Yet, “during his lifetime he succeeded in doubling his inheritance through a program of careful diversification” so that by the time he died the estate which he left the Vincent Astor Foundation had an estimated value of $123 million, according to The National Encyclopedia.
In addition to utilizing his inherited Establishment wealth to subsidize the publication of Newsweek between 1937 and 1959, Astor also “built drilling barges for off-shore oil development, invested in oil ventures in the Southwest,” was a director of American Express, Western Union, Chase National Bank, and railroad companies like Great Northern and the Illinois Central, and was the largest shareholder and a director of the United States Line shipping company, according to the same book. Former Newsweek Owner Astor also was Commodore of the New York Yacht Club for nine years and contributed his money to both Democratic and Republican Party election campaign chests.
The 1961 deal that Ben Bradlee set up, which enabled the Meyer-Graham Dynasty’s Washington Post Company to purchase Newsweek from the Vincent Astor Foundation and former Democratic New York Governor Harriman, was arranged and financed in such a way that David Halberstam described it as “one of the great steals of contemporary journalism” in his book The Powers That Be. The same book noted that, although the official 1961 selling price for Newsweek was $15 million, “in the end no more than $75,000 really changed hands.” For arranging the deal that brought Newsweek into the Washington Post media conglomerate’s stable, Bradlee received a finder’s fee.
At the time it was purchased by the Washington Post Company, Newsweek’s circulation was around 1.3 million per week and, within 10 years, its weekly circulation had jumped to 2.5 million. The only other U.S. weekly news magazine with a higher circulation in the early 1970s was Time magazine. By the late 1980s Newsweek’s weekly circulation in the U.S.A. was around 3.1 million—still higher than the circulation of Mort Zuckerman’s U.S. News & World Report but still lower than Time-Warner’s Time magazine. Around 730,000 copies of English-language international editions of Newsweek were also circulated each week in the British Isles, Europe, the Middle East, Africa, Latin America, Japan, South Korea and Southeast Asia.
Of Newsweek’s 295 full-time editorial staff members in the early 1990s, around 200 worked at Newsweek’s Midtown Manhattan offices in the Newsweek Building at 444 Madison Avenue, where Newsweek then rented skyscraper office space on 18 floors.
Over $225 million worth of ad space was sold by Newsweek each year during the early 1990s. And from the operation of its Newsweek subsidiary, the Washington Post Company took in over $325 million in annual revenues in the early 1990s—around 50 percent of what it took in from operating its Washington Post newspaper subsidiary. About 10 percent of all Washington Post media conglomerate income came from its Newsweek magazine subsidiary operation during the early 1990s.
Given its connection to the Washington Post Company for over 46 years, it’s not too likely that Newsweek magazine will be any more eager in the 21st-century to print many satirical or critical articles about either the Meyer-Graham Dynasty, Ben Bradlee or the Washington Post newspaper than it will be to print satirical or critical articles about the university over which Washington Post Company board member Lee Bollinger currently presides. (end of part 3)
(Downtown 2/17/93)
Next: Columbia University’s Washington Post Company/Newsweek Link and Newsweek Magazine’s Historical CIA Connection—Part 4
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