Monday, May 11, 2009

How Newhouse Dynasty Obtained Its Wealth Historically--Part 1

(The following article first appeared in the 11/18/92 issue of the now-defunct Lower East Side alternative newspaper Downtown)

Ever since Samuel Newhouse I started working as an office-boy, bookkeeper and rent-collector in Jersey Democratic machine politician, Bayonne Times owner and Judge Hyman Lazarus’s law office in 1908, the Newhouse family has shown a remarkable ability to accumulate more money, more swiftly, than most families who get involved in the U.S. media world.

By the time Samuel Newhouse I was 21 in 1916, he was earning around $30,000 per year and had been given 25 percent ownership of the Bayonne Times by his boss, Judge Lazarus, for his loyal service. By 1922, Newhouse had saved up enough money to purchase the Staten Island Advance in partnership with Judge Lazarus. And a few years later, when his original partner, Judge Lazarus, died in 1924, Newhouse also had enough money to buy up the Lazarus family’s share of Staten Island Advance stock.

During the 1920s, the Newhouse family also had enough money to loan the money to Henry Grafinkle which enabled him to open newsstands that were quite good at selling the Newhouse family’s Staten Island Advance at the St. George’s Ferry Terminal on Staten Island, as well as to open newsstands throughout Manhattan, at LaGuardia Airport, at Newark Airport and at the Port Authority Bus Terminal (the world’s largest and most lucrative newsstand)—which also sold other Newhouse publications quite well throughout the years.

During the 1930s Depression, the Newhouse family still had enough money to buy the Long Island Press in Jamaica and the previously competing Long Island Star, North Shore Journal and Nassau Journal, as well as the Newark Ledger, the Newark Star and newspapers in Syracuse. At the Long Island Press during the 1930s—where the Newhouse family was paying its non-unionized newsroom employees only 33 percent of what unionized New York Times and New York Daily News employees were earning for similar work—Samuel Newhouse I’s salary was more than the total of all the salaries paid to the Newhouse family’s 65 newsroom employees there. (end of part 1)

(Downtown 11/18/92)