The Time a Newspaper Stared Down the Country’s Largest Advertiser

by Richard Tofel ProPublica, April 22, 2015, 1:33 p.m.

Editor’s Note: The news last week that Buzzfeed had deleted posts critical of advertisers got some of us at ProPublica wondering about any instances when news organizations stood up to advertiser pressure. As it turns out, ProPublica president Richard Tofel wrote a whole chapter of a book about one of those cases: In 1954, the Wall Street Journal and its publisher, Barney Kilgore, confronted General Motors. The little-remembered incident helped establish the notion that news organizations could and should preserve their independence from advertisers.

Here is an adaptation from the book, “Restless Genius: Barney Kilgore, The Wall Street Journal, and the Invention of Modern Journalism.”

In 1954, General Motors was the largest company in the world. Its CEO was Harlow (“Red”) Curtice. Curtice’s world was a sheltered one. He made more money than any other salaried employee in the country. He lived, as he had since 1914, in Flint, a city where nearly two-thirds of the workforce was employed by the company he ran, and flew back and forth on corporate aircraft each week to work in Detroit. As Time magazine would soon describe Curtice’s existence:

In many ways he lives a life that is beyond the comprehension of most of his car owners. Platoons of subordinates jump when he twitches. Garages filled with gleaming limousines and beaming chauffeurs stand ready to transport him wherever he desires. A private 18-plane air force of multi-engined, red-white-and-blue airplanes is at his disposal. Private secretaries and public-relations men take care of bothersome detail, see to it that Cadillacs, hotel suites, restaurant tables and theater seats are there when and where he wants them. High-salaried assistants smooth his path, greet him wherever he arrives, order his drinks, fetch his newspapers.

On May 3, 1954 Harlow Curtice can hardly have been pleased by what he found in one of the newspapers they fetched. A Wall Street Journal article laid bare a tactic the auto manufacturers had recently been deploying to great effect. The tactic revolved around the practice of “bootlegging” cars 2014 sales by smaller, independent dealers of excess new car inventories at cut-rate prices.

GM and competitors Ford and Chrysler comprised the nation’s three largest newspaper advertisers. The three companies alone (not including their dealers) accounted for about half of all newspaper spending on automobiles, and automobile advertising accounted for a little more than one-fifth of all national newspaper ads. For the Journal itself, the picture was even more dramatic: of the four largest national newspaper advertising categories, the Journal participated only in automotive; it did not publish advertisements for groceries, alcohol or toiletries.

This kind of spending yielded a certain amount of influence, and that influence, the Journal now reported, seemed to be being used to limit advertising of bootlegged cars.

The Journal story was sweeping, painfully specific, and implicitly critical of the ethics of a different industry 2014 newspapers. The New York Times, the Journal reported, had changed its advertising policies in late April, just after the Justice Department rejected anti-bootlegging contract language proposed by GM. The Times now refused to accept advertising offering new cars for sale by non-franchised dealers. The Times’s advertising director said, “It is our opinion that our readers’ interest is best served by doing business with franchised dealers.” New cars were defined as those with fewer than 2,500 miles on them. One independent new-car dealer continued to advertise in the Times, indicating that its cars for sale had “run over 2,500 miles.” But a Journal reporter visiting the showroom noted that of the 60 cars on the showroom floor “not one … appeared to have run 2,500 miles. Some still had shreds of factory wrapping on them.” Mileage indicators on a dozen cars checked by the reporter ranged from 1 mile to 36 miles. A salesman at the independent dealership told the Journal, “We don’t have any used cars. That’s the only way [the Times] let us advertise.”

Nor was the Times alone. The New York Journal-American had gone so far as to take out an advertisement of its own in Automotive News headlined “NO ‘BOOTLEGGING’ PROBLEMS IN THE NEW YORK JOURNAL-AMERICAN.” The Journal story reproduced the ad. The classified display advertising manager at the New York Daily News, the nation’s largest-circulation paper, reportedly acknowledged to an independent dealer that he feared the loss of other business if he continued to accept advertising from bootleggers. “Zone managers [from manufacturers] have told us face-to-face across the table what would happen to us if we took ads from discounters.” The dealer had a similar experience with the New York Mirror, the city’s (and the nation’s) second-largest selling newspaper.

But even before the article was published, the Journal’s reporting of the story had an effect. The Mirror reversed itself, and resumed accepting advertising from the bootleggers. The New York World Telegram & Sun declared that it was re-examining its policies. The ad manager from the New York Herald Tribune, the most direct competitor of the Times, told a Journal reporter, “This is a very touchy subject: I understand the F.B.I. is asking some of the same questions you’re asking.” He added, “I wouldn’t say we have a policy.”

Auto industry reaction was swift. On the day the story was published, Ward’s Automotive Reports, the industry bible, cancelled the Journal’s subscription to the weekly newsletter.

The confrontation between the Journal and Curtice’s company was only beginning, however.

On May 28, the Journal published another exclusive story, revealing details, including rednerings of the styling of the 1955 new car models due in the Fall. Read today, Williams’s story seems innocuous, even perhaps excessively promotional. It began: “Forecast for 1955 auto models: More makes will be thoroughly restyled than ever before in the half-century of automotive history.”

From an industry perspective there was a big problem. But the problem wasn’t the renderings 2014 it was the story’s timing. As the story itself noted, “the alterations are certainly intended to be sufficient so that 1954 models will strike their owners as old-fashioned, once the ’55’s are in the showrooms; they will stir the itch for a brand-new car.” In the Fall that would be good for business: the ’54’s would be nearly all sold. But just ahead of June, traditionally the industry’s biggest sales month, the revelations were thought by the automakers to cause a possible disaster: sales of the about-to-be-“old-fashioned” ’54’s could dry up prematurely, as buyers awaited the exciting ’55’s. The president of Chrysler told the reporter he “had put a dagger into the hearts of the dealers.”

The automakers had traditionally avoided this problem by briefing reporters well ahead of the new model introductions, but doing so “off the record.” But this year the Journal had declined to participate in the briefings, apparently recognizing that the information could be derived independently and published earlier. As Journal publisher Barney Kilgore later told Time magazine, “For years almost everything in Detroit has been ‘off the record.’ We just decided not to play it that way. It isn’t journalism.”

GM’s pent-up fury at the bootlegging story and the premature release of the 1955 new car designs quickly exploded. Curtice himself had years earlier personally made the decision to begin advertising

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