Inside Story

Who owned the owners?

Books | As the power of newspapers grew, the real press barons increasingly hid their control with elaborate ruses

Michael Cannon 1 March 2019 1819 words

Railway newsstand in Melbourne showing banners publicising the opening of Parliament House in Canberra in 1927 and an advertisement for Lustre Silktex stockings. Bruce Howard Collection/National Library of Australia

Paper Emperors: The Rise of Australia’s Newspaper Empires
By Sally Young | UNSW Press | $39.99 | 654 pages

This exceptional book is the work of Sally Young, professor of political science at Melbourne University, and her five research assistants. With that help, she has been able to probe deeply into the mysteries of Australia’s privately owned media up to the 1940s. The result is many revelations, even for those who thought they knew it all.

The book’s overwhelming thesis is that while the public may have believed that the press and, later, radio were free and independent, they were generally secretly owned and controlled by “the money power.” Perhaps Young has underestimated the amount of genuine idealism that motivated many early proprietors and journalists, but that is her call.

The first section of Paper Emperors deals innocently enough with the origins of a commercial press in the 1820s, when Edward Smith Hall in Sydney and Andrew Bent in Hobart fought against dictatorial colonial governors for freedom to publish outspoken editorials. It’s true, as Young points out, that Hall was a major shareholder in the Bank of New South Wales (now Westpac) and Bent was a convict printer who became the creature of Hobart businessmen. But both men also suffered imprisonment as a result of their promotion of press freedom.

After the gold-backed boom of the 1850s, often-radical new publications emerged, only for the most successful to evolve into sedate purveyors of Victorian-age morality. Usually this evolution happened because they had secured a vast increase in advertising revenue, which enabled their selling price to be kept to a penny or so per copy, well below the cost of production.

The Sydney Morning Herald, which constantly opposed measures like universal male suffrage, was able to see off any number of radical would-be competitors. In Melbourne, the formerly radical Argus deteriorated into what its frustrated part-owner Edward Wilson called “old-womanish Toryism,” and attracted a large middle-class following. Only the gold-rush-era Age maintained a modified radicalism that confirmed its popularity among the working class.

The tragic economic depression of the 1890s demolished most of the weaker newspapers, the Age surviving only by rigid economies and its support for business-oriented protectionism. But the hard times and technological advances also enabled the first real press monopolies to emerge.

The Melbourne Herald faltered, then fell into the hands of two prominent land boomers, W.L. Baillieu and Theodore Fink. These two men had kept control of their Herald shares by not disclosing their value to the insolvency authorities. Once free of the law, Baillieu in particular was able to develop his mining interests into the colossus known as the Collins House group, which was to secretly control most of the Australian press during the first half of the twentieth century.

Even by the time of the first world war, the day of the independent newspaper publisher was almost done. The costs of running a newspaper had risen enormously, with ample capital investment needed in huge web-fed rotary printing presses, banks of linotypes for mechanised typesetting, and substantial buildings to accommodate it all.

A new type of journalist was also needed to cater for the mass audience. These men (very few were women) had often worked overseas, where Lord Northcliffe in Britain and William Randolph Hearst in the United States were making fortunes by purveying a mix of political sensations, crime, war, sport and discreetly implied sex.

In Australia, Sydney led the way with John Norton’s raucous weekly, Truth. The formula was also applied, in modified form, by morning and afternoon papers designed to catch commuters on their way to and from home by public transport.

The main Sydney press proprietor in the prewar period was (Sir) Hugh Denison, a successful tobacco manufacturer, racehorse owner and radio pioneer. Scenting even larger profits to be made from the media, Denison bought the ailing Australian Star in 1910 and engaged the Sydney Morning Herald subeditor Montague Grover to convert it into a popular broadsheet simply called the Sun. (I should mention that Grover was my grandfather, and I can report that none of his descendants displayed the same talent for the “popular touch” in newspaper work.)

Sally Young pays tribute to Grover as “a brilliant and original journalist” who put “human interest” news and photographs on the front page, along with stimulating headlines and tightly written text. He also expanded the Sun’s interstate and overseas coverage. As the Sun’s Melbourne correspondent, he hired a young Age reporter named Keith Murdoch.

In 1922, Denison decided to move into the Melbourne market, planning an opposition afternoon paper to the now highly successful Herald, which by this stage was managed by Murdoch. When Denison was reminded of a secret agreement not to compete with the Herald, he asked Grover to design a new morning paper instead. The result was the tabloid Sun News-Pictorial (today’s Herald Sun).

Denison’s success was ruined two years later when he foolishly decided to tackle Murdoch head-on by starting a second paper, the Evening Sun. The new paper accumulated such huge losses that the whole show had to be sold to the Herald. Now Murdoch had an evening monopoly again, and the group as a whole, the Herald and Weekly Times, prospered anew. When Northcliffe visited Australia, he was astounded by the Herald’s monopoly power: “One paper for 800,000 people!” he exclaimed.

What happened next is one of the most drama-filled yet secretive episodes in Australian business and communications history, and Sally Young tells the story beautifully.

By 1921 the thirty-six-year-old Keith Murdoch had returned from his tutelage in London under Northcliffe to be appointed as editor and then managing editor of the Herald empire by Theodore Fink. Seven years later he extended his growing personal power by purchasing a share in the Brisbane Daily Mail from the owner, the notorious Melbourne businessman John Wren. When this pair won control of the competing Courier, they amalgamated the two papers into today’s Courier Mail.

Earlier, during the economic boom of the 1920s, newspaper circulations and profits had soared on the back of lavish advertising. But the depression began to cut the ground from underneath them. By 1933 only twenty daily newspapers survived, and of these the Herald group and Associated Newspapers of Sydney owned half. The only large city that still had competitive dailies was Adelaide.

It has always been assumed that Keith Murdoch, while still chief of the Herald group, privately bought the Adelaide News to safeguard the interests of his son Rupert. Now, for the first time to my knowledge, Young tells the full story.

The experienced but alcoholic Jim Davidson had been editor-in-chief of the Herald, but resigned because of editorial interference by Theodore Fink. From 1921, the forty-nine-year-old Davidson and journalist Gerald Mussen planned a new afternoon paper called the Adelaide News, allegedly to be owned by a company called News Ltd.

According to his friend Monty Grover, Davidson “always told the truth, no matter how unpleasant.” But, according to Young, he never admitted that the true owner of News Ltd was Baillieu’s mining group, Collins House. Davidson and Mussen were each permitted to buy a number of shares in the new company, but even these purchases were secretly financed by Collins House.

The Herald quietly donated two spare Goss rotary presses and seconded its works manager to supervise their assembly in Adelaide. Also using Collins House money, Davidson was able to buy Adelaide’s two existing afternoon newspapers and close them down, clearing the way for the News to begin publication without competition. At the time, Rupert Murdoch was about a year old. The new paper promoted Baillieu’s mining companies at every opportunity. In 1924 it was able to expand into Tasmania; in 1926 it entered Perth with the purchase of the West Australian.

When Murdoch had proved his brilliance at managing the Herald interests, Baillieu (who regarded Murdoch as “a virtual son”) allowed him to hold 2700 shares in the News. The share capital was vastly increased in 1929, Jim Davidson was pushed out of his faux control, and the following year he was found dead in his hotel room. His death was recorded as having been caused by pneumonia.

That same year, a combination of the Herald and Weekly Times, Baillieu, Fink and Murdoch managed to take over the venerable and profitable Adelaide Advertiser, forcing out the Bonython family who had run it for half a century. The Adelaide monopoly was complete.

Two years later, Baillieu agreed to sell Keith Murdoch his 31,000 shares in News Ltd at a bargain price. Whenever more parcels of News Ltd shares became available over the years, Murdoch bought them, even if it meant going into debt. His son’s inheritance was looking better all the time.

Meanwhile, Monty Grover had left his rather dull job as head of the Herald and Weekly Times’s stable of magazines and moved back to Sydney. Like many journalists, he was a lifelong socialist, and was still refusing to recognise what was happening in Soviet Russia under Stalin’s brutal regime. Canny newspaper proprietors were happy to employ men like Grover, recognising that creative people usually produce more interesting stories and publications with fresh perspectives.

In Sydney, the Australian Workers’ Union had long wished to establish its own daily newspaper to counter the influence of the “capitalist press.” It appointed Grover as founding editor, and soon the World was rolling off its own presses, finding a large working-class audience. Unfortunately the union instructed Grover to include turgid front-page editorials written by a soviet of AWU officials. Grover and most of his talented staff walked out, and the paper collapsed.

The World’s modern presses lay idle for some months. Then Robert Clyde Packer, a Denison editor, made an audacious deal to take over the plant in conjunction with E.G. Theodore, formerly treasurer in the Scullin Labor government. George Warnecke, a brilliant English journalist, suggested they use the World’s production facilities to produce a paper designed specifically for women, to be called the Australian Women’s Weekly. It proved a spectacular success and, along with the later purchase of the Daily Telegraph, became the foundation of the Consolidated Press empire.

The final sections of Paper Emperors deal with Keith Murdoch’s interference in federal politics during the 1930s; the rise of commercial radio stations; the press proprietors’ battles with the ABC; the establishment of a local newsprint industry; the creation of the AAP cable service; the rise, fall and rise of (Sir) Robert Menzies (with Collins House backing); the wartime censorship powers temporarily held by Murdoch; and the trajectories of the main Australian dailies up to the 1950s. It is a massive research and writing effort, perhaps a trifle “leftish” but masterfully achieved.

Books like this are the most convincing argument for continued university funding of socially important subjects, and their publication by university presses. This massive tome, thank goodness, contains copious notes and a detailed index, which alone are worth the price of admission. •