Gannett Foundation

Ten years ago when he was approaching 63, William Randolph Hearst began integrating his $220,000,000 empire of 28 newspapers, 13 magazines, eight radio stations, two cinema companies and vast real estate holdings for current business reasons and so that it should be more wieldy for his heirs and executors. Last week Hearst profits were examined by such divergent publications as FORTUNE* and the New Masses, but nowhere could anyone read what Publisher Hearst intends shall become of his empire after his death. On that point even his lawyer and grand vizier, San Francisco's John Francis Neylan, professes utter ignorance.

A far smaller publisher than Hearst, and only approaching 60, is Frank Ernest Gannett. But last week he made news by announcing what shall happen after his death to his $8,000,000 kingdom of 19 newspapers, one magazine.

In Rochester, N. Y. high-minded, unspectacular Publisher Gannett announced formation of the Frank E. Gannett Newspaper Foundation Inc. Profits of the Gannett chainpapers, which have averaged $800,000 over the past ten years and reached a Depression high of $848,925 in 1934, will be used primarily to keep his properties alive and prosperous, on the theory that no press can be free which is not financially independent. What profits are not needed to bolster business will be devoted exclusively to "general philanthropic" work in the cities where the papers are published.

The eleven directors of the Foundation, chiefly major Gannett executives, will serve for life, elect their own successors. The Foundation will hold a controlling majority of the common (voting; stock, all of which is now held by Publisher Gannett. Prime consideration of the directors will be to pay dividends on the preferred stock, which is owned largely by employes, executives and the public. After a cash reserve (not to exceed $100,000) has been set up, not less than 75% of the net income each year must be distributed to charity.

Unlike Mr. Hearst, who has five grown sons, Publisher Gannett at 59 has only one son, Dixon, aged 6. His daughter Sara ("Sally") at 12 has no ambition to run a chain of newspapers, even the Gannett chain, which, unlike others, virtually runs itself. Publisher Gannett has provided for his family independently of the Foundation, in which they have no interest, but he has no intention of leaving his son & heir a large fortune.

Most curious thing about the Gannett papers is that they follow no set mold, have no common editorial or typographical formula. Each was a growing concern when Publisher Gannett bought it (average age: 75 years). Each is permitted to continue virtually without interference as an individual newspaper reflecting local conditions and sentiment. Only common denominator of the Gannett papers is that each aims to be as clean, honest and wholesome as its Unitarian publisher.

Frank Ernest Gannett was born on a farm in upstate New York, peddled papers as a boy, worked his way through Cornell by newshawking in his spare time. After graduation he accompanied the first U. S. Commission to the Philippines as secretary to its president, Dr. Jacob Gould Schurman, then Cornell's president later Ambassador to Germany. Back in Ithaca, Frank Gannett was by turns city editor, managing editor and business manager of the Daily News and editor of the Cornell Alumni News.

After brief terms on Pittsburgh and New York papers he spent his meagre savings on a half-interest in the Elmira Gazette, prospered slowly but surely. In 1912 he bought the Ithaca Journal, followed it six years later with two Rochester papers. These he merged into the Times-Union, which he still edits personally at his Rochester headquarters. Thenceforth round, beaming Publisher Gannett acquired other upstate papers, added small dailies in New Jersey, Connecticut, Illinois, briefly entered the metropolitan field by buying and then reselling Brooklyn's venerable Daily Eagle. Nearly two years ago he bought his only magazine, The American Agriculturist, from his good friend Henry Morgenthau Jr. when that farmer-publisher became Secretary of the Treasury. Oldest (93 years) farm publication in the U. S., it has a circulation of nearly 200,000.

Antithesis of the late hated Chain Publisher Frank Munsey, Frank Gannett gives his editors a free hand, signs his name to anything he asks them to publish in conflict with the papers' policies. For supervising his autonomous brood he draws an aggregate salary of $64,370 a year. Politically he is independent. A Hooverite and a Dry in 1932. he became a New Dealer through his interest in managed currency and his friendship with its No. 1 manager, Cornell's famed Professor George Frederick ("Rubber Dollar") Warren. Lately he has reverted to Republicanism. Still bone-dry in sentiment, he permits the editors of his individual papers to accept beer and liquor advertisements at their own discretion, notes with delight that none is so indiscreet as to do so. A boyhood job as barkeep's assistant in a hotel taught Publisher Gannett to say: "After watching booze ruin men, I made up my mind that if I ever got a chance I would fight it."

He has no immediate intention of retiring, makes work his hobby, was this year elected a director of the Associated Press to fill the vacancy left by the death of Adolph Ochs. A golfer, tennist, yachtsman and air traveler in his spare time, Publisher Gannett showed he was not without dash when, in 1931, he dived off his yacht Widgeon to rescue Mrs. Karl Bickel, wife of the then president of United Press.

*Total Hearst income for 1934, according to FORTNE's exhaustive audit, was $4,500,000 net.

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