The Publisher (30 page)

But what if Hadden had lived? One could imagine several scenarios, none of them remotely similar to Time Inc.’s subsequent history. Harry and Brit, having reached an impasse in their troubled relationship, might have gone their own ways—with Brit most likely retaining
Time
and Harry breaking away; or with the bored and restless Hadden leaving the company to Luce, who—with Hadden still in the background—would likely have had a much more difficult task in establishing his own authority (given Hadden’s stockholdings). Or they might have stayed together, with Hadden still the editorial leader of the company and Luce still the manager of its business affairs. Had that been the outcome, much would have depended on Brit’s ability to adjust to changing times. His death in 1929 came just before the end of the great prosperity of the 1920s and, for Harry and Brit’s generation, the fading of the age of cynicism and irreverence. Could Hadden have left behind his exuberant iconoclasm? Could Time Inc. have flourished during the Great Depression with Hadden’s raffish, Mencken-like outlook at the helm? Brit represented the disillusioned, skeptical, flippant culture of the “Jazz age.” Luce, on the other hand, was a serious, earnest, questing exception to his
generation’s style; and his sense of purpose, even of mission, may have been better suited to the more sober 1930s than Hadden’s ironic temperament might have been. The only certainty, however, was that the history of the company—and of Luce’s life—would have been profoundly different had Hadden survived.

Among Luce’s first acts as the solitary leader of the company was to acquire Hadden’s stock. Hadden’s hastily composed will left his entire estate to his half brother, Crowell Hadden, with instructions that he use the income to support his mother and stepfather throughout their lifetimes. He also directed that Crowell should “hold my stock in Time Inc. and not sell the same until after the expiration of forty-nine years after my death.”
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Neither Luce nor Crowell Hadden seemed to take this last command very seriously. No record survives of the negotiations between Luce and the Hadden estate, but there is little to suggest that they were in any way hostile. In hindsight the Hadden family would have done better to keep the stock, which appreciated dramatically over the following decade and more. But no one at the time could have predicted the magnitude of the company’s future success. And so selling seemed to make sense for both parties. Crowell wanted to diversify the estate to provide more security for his family, while at the same time retaining a healthy share of Time stock. Luce wanted to give himself more control over the company and to launch a stock-purchase plan for his employees. Brit had owned a total of 3,361 shares of Time stock, about the same as Luce. In September 1929 the estate sold just over 2,800 of them to a syndicate Luce had created, which consisted of the executive officers of the company. The stock had never traded on the open market, so Luce consulted with several investment bankers for advice on its value. They valued the stock at the astonishing price of $360 a share. (Two years later it passed $1,000 a share.) Luce himself, already the largest stockholder, took out a loan and bought more than 600 additional shares for himself. Roy Larsen bought 550 shares and became—as he remained for many years—the second largest stockholder. The rest went to nine other officers and directors of the company. The Hadden estate received more than a million dollars in return.
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The importance of the purchase was not so much that Luce increased his own holdings, which were already substantial. The real value to him was that the deal eliminated the Hadden family’s ability to exercise control over the company or to transfer it to someone else.
With much of Hadden’s very large share of the stock now dispersed, Luce now stood alone as the controlling stockholder. It was also important to him that ownership of so much of the stock lay within Time Inc.—not just because it reduced the circle of outside investors who might intervene in the company’s affairs but also because it tied his colleagues more firmly to the company and thus gave them an additional incentive to work for its success and profitability. In short, the settlement gave Luce almost unlimited power to shape the future of the company as he wished—a power he used almost immediately to launch a new project that Hadden had tried to thwart.

Late in 1928, well before Hadden’s death, Luce began planning for a new business magazine. He did so slowly and somewhat secretly because of Hadden’s conspicuous lack of enthusiasm for the idea.
Time
was at a crucial point of development, Hadden argued, and should not yet have to compete for attention with a new project. Luce privately called Hadden’s objections “specious” and bemoaned the “great spirit of stalling” that enveloped his proposal. But he did not give up. Work on the project took place within a new Experimental Department. Luce created it in part to insulate what he was doing from his censorious partner. He assigned the
Time
business writer Parker Lloyd-Smith—whom Luce described later as “brilliant” and someone with whom he had recently become “very simpatico”—and a talented researcher, Florence Horn, to work on the new magazine. He placed them in a small, remote room (almost as if he were trying to hide them). Luce’s relations with Hadden were by now so tense that the two partners often communicated with each other through proxies. Hadden told Harry Davison that he thought Luce’s project “should be abandoned.” Luce replied, also through the board of directors, asking them to postpone a decision until he could explore the possibility further.

After Hadden’s death Luce put off the project again while he worked to stabilize the shaken company. But the planning continued, and Luce finally brought a formal proposal to the board in May 1929, now claiming that Hadden would have approved of it had he lived. The venture was a gamble, Luce conceded, with perhaps a “50-50 chance” of success. But
Time
was enjoying “remarkable and unexpected prosperity” and “it would seem querulous to worry.” The board approved, although not without reservations, and Luce began moving toward a late-1929 publication.
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Hadden and Luce had launched
Time
by describing it as the world’s
first newsmagazine; and while that title was open to dispute (the rival
Literary Digest
could make some claim to it), their boast was certainly plausible. In its format, style, and outlook,
Time
was—and for many years remained—a singular magazine. Not until
Newsweek
began publication in 1930 was there anything like it. Luce and the new business magazine’s other founders insisted that it, too, was a pathbreaking publication—the first to examine business in real depth and with real detachment. “Publishers,” they claimed in a prospectus, “have almost entirely overlooked the Vogue of Business.” It would be the first real “record of Modern Industrial Civilization.”
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But it was not the first American business magazine—not even the first effort to look at business in a broad social context. For several decades publishers had been trying to serve the world of business with a broad array of magazines. Most of them were specialized, industry-specific publications largely unknown to the general reading public. But there were also a few business-oriented journals that aspired to be more than trade magazines. One of them was
World’s Work
—a monthly magazine with a 1930 circulation of about one hundred thousand—which had been chronicling American business since the 1870s. With its broad-ranging inquiries into the culture of the business world, it could make a fair claim to being not only a precursor to, but also a model for what became,
Fortune
. In a single issue in 1929, for example,
World’s Work
examined the economics of managing the White House; the arcane field of book collecting; controversies over chain stores; and the character of the Harvard Business School.
World’s Work
was also, like
Fortune
, a magazine with literary aspirations. It attempted to attract talented journalists and writers and sought to make its stories broadly interesting to a wide readership. But
World’s Work
was also an unapologetic cheerleader for business. It expressed unqualified admiration for big corporations and the “captains of finance and industry.” And it trumpeted undiminished optimism about the state of the economy—including the “Greatest of Bull Markets”—that made it highly vulnerable to the crashing fortunes and reputations of corporations and their leaders once the Great Depression began. It failed rapidly in the early 1930s. It was absorbed in 1932 by another magazine and was merged a few years later with
Time’s
former rival, the floundering
Literary Digest
, which itself ceased publication in 1937.
⁶

The heady economic climate of the late 1920s inspired other publishers to launch new business magazines, including the short-lived
Magazine of Business
, which, like
Fortune
, claimed to be committed to a
broad portrayal of the capitalist world aimed at a wide readership. In many ways, however, it epitomized the kind of business journalism for which Luce and the other founders of
Fortune
often expressed contempt. Luce’s colleague Eric Hodgins might well have had the
Magazine of Business
in mind when he once described business reporting in the 1920s as “simply pap…. If they weren’t written from handouts [from corporation publicists], they might just as well have been.” The
Magazine of Business
was, indeed, a willing promoter of its corporate constituency. Launched in 1927, it was clearly failing by mid-1929, even before the stock market crash. In August it was absorbed by a new and more important periodical published by McGraw-Hill:
Business Week
—a magazine inspired in part by
Time
and once proposed to Luce, who rejected it in favor of
Fortune.
⁷

Luce’s idea for what became
Fortune
had come in part out of his own longtime and growing curiosity about the world of business and the people who led it—an unsurprising interest for someone who was himself a young businessman working in the booming economic climate of the late 1920s. Seldom in American history had there been more interest in and enthusiasm for the corporate world and its leaders, an enthusiasm epitomized by the laconic Calvin Coolidge’s claim that “the business of America is business.” Luce echoed Coolidge’s view. “Business is essentially our civilization…. Business is our life,” he said in a March 1929 speech.
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But Luce’s interest in business was also partly anthropological. Because corporations now exercised so much power in the world, Luce argued, it was important for Americans to understand how they worked. Corporate leaders in the past had tended to hide from public view, aided by what Luce called the “Stygian ignorance of business which has almost universally characterized the press.” Corporations, he said, needed to be held up to honest scrutiny. Luce denounced the common belief in the 1920s that “anything faintly resembling an honest analysis of business was regarded as vulgar or Communistic or both,” that “something called private business as then organized was the God-given order of the universe.” He worried that most writing about business was uncritical, even adulatory. This slavish adulation of the “tycoons,” as
Time
had famously named corporate titans, could not continue, in part because of a fundamental change in the nature of business management. Corporate leaders, Luce insisted, were no longer mainly the visionary founders of their companies; the “tycoon” was becoming “less and less the owner and more and more the semi-detached or, at any rate, detachable manager.”
That meant that corporate leaders were more likely to play multiple roles in society, at times using their generalized expertise as strategists and managers in areas outside business altogether. “Many more tycoons … will emerge as public characters,” Luce accurately predicted. “Being well-known they will be repositories of public trust … they will constantly be called upon for advice and even for positions in local and national government.” They would, in short, be even more influential than the single-minded founders of great companies in the late nineteenth century had been. And so the press would now have to watch. Given the dramatic collapse of the American economy, and of the stature of business that began just as the new magazine was being launched, this idea of looking at business from the outside proved to be especially critical to the magazine’s success.
⁹

Most of all, however, the creation of a new magazine gave Luce a vehicle to establish a voice for himself within the company. He was proud of
Time
, to be sure, but it it had never really been his magazine—not only because Hadden had dominated its early years but also because its rigid format and inflexible system limited the ability of any one person, even its owner, to shape its content. The new business magazine, by contrast, would allow Luce to design a publication for his own boundless curiosity and ambition. Providing news to busy, uninformed people—the principal goal of
Time
—was a worthy but no longer a wholly satisfying purpose. Luce wanted as well to communicate big ideas, to tackle important questions, and to establish great goals for the world of business and for the nation. At first, he considered calling the new magazine “Power.” But in the end, that seemed to him an inadequate name for what he envisioned. He settled instead—partly in response to a suggestion from Lila—on the title
Fortune
, which Luce liked because the name referred not just to wealth, but also to such ideas as “chance,” “fate,” and “destiny.”
¹⁰

Luce’s almost passionate commitment to
Fortune
—his “real love among his magazines,” Peter Drucker, briefly a Time Inc. writer, once observed—began to pour out of him once he threw himself into the planning. Among his first decisions was to emphasize design—to make
Fortune
“a beautiful magazine, if possible the most beautiful in the world.” It was certainly among the most elaborately and lavishly designed publications of its time. Luce hired “one of the finest typographers and art directors in the country,” Thomas Maitland Cleland, who revived an elegant eighteenth-century typeface, Baskerville, for the
magazine. Luce also chose unusually expensive paper that would not have the shiny look of conventional coated stock but could still accommodate high-quality photographs. He commissioned eminent artists and designers—among them Rockwell Kent, Diego Rivera, Charles Sheeler, and Fernand Léger—to create elegant, complex covers. (The first issue bore a striking black-and-bronze image by Cleland of an almost abstract “wheel of fortune,” symbolizing not just the magazine’s title but industry and progress more broadly.)
Fortune
’s aesthetic represented, among other things, Luce’s own new attraction to modern art and design. Only one printer in the country could handle
Fortune
’s exacting demands, the Osborne Chromatic Gravure Company in New Jersey. It was necessary to print each side of each page in a separate run. Covers sometimes had to go through seven different print runs to handle the complex coloring.
Fortune
was not only expensive to print. It was also, unsurprisingly, expensive to buy—one dollar an issue, an astonishing price in an era when most magazines sold for five or ten cents, but one that Luce correctly predicted would give
Fortune
a kind of status that would attract the affluent readership he was targeting—“those active, intelligent and influential individuals who have a relatively large stake in U.S. Industry and Commerce.”
¹¹