The Bancroft family that controls Dow Jones & Co., the parent of the Wall Street Journal, and has been steadfast in its decision to uphold the newspaper's integrity, is playing right into the hands of Rupert Murdoch by evoking the management of the former family leader Clarence W. Barron.
In deciding to meet with the News Corp. CEO to discuss his $5 billion offer for Dow Jones, the Bancroft family issued a statement May 31 saying that it is committed "to preserve and protect the editorial independence and integrity of the Wall Street Journal" as "we have been since 1902," which is the year when Barron acquired control.
But if family members had done a cursory study of the Journal under Barron, they would have discovered it violated some of the same ethical standards that many criticize Murdoch and his papers for violating.
In fact, Clarence Barron has more in common with Rupert Murdoch than the family probably cares to admit.
Barron built his media empire through the force of his personality and guile, much like Murdoch, who inherited two small newspapers when his father died and leveraged them into a global media company. Barron built his company from scratch, starting in 1887 when he created the Boston News Bureau. He parlayed that into a similar news service in Philadelphia in 1896 and then bought Dow Jones. In 1921, Barron expanded the business by starting Barron's, a weekly business newspaper named after himself—exhibiting the sort of hubris that Murdoch is accused of having.
Barron owned Dow Jones until he died in 1928, and his Journal was one of the loudest cheerleaders of the stock market run-up of the 1920s that led to the 1929 stock market crash and the Great Depression. Barron was too close to many of the Wall Street titans whom his newspaper covered. As former Forbes and Columbia Journalism Review editor Marshall Loeb wrote for Time magazine in 1988, "Clarence Walker Barron, 5 ft. 5 in. and 300 lbs. in his prime, was a high-living, big-investing champion of unrestrained capitalism who improved the Journal's standards while ordering up stories promoting companies whose shares he owned." The Journal'sslogan in the early 20th century was the "Newspaper for the Investor," with Barron being that investor in many cases.
Subtract the physical description, and it sounds a little like Murdoch, who has been accused of using his media properties to promote his self-interests in places like China by those who don't want him to buy Dow Jones. A Page One piece in yesterday's Wall Street Journalsupports those accusations.
Under Barron, Journal journalists received money from stock touts wanting to use its pages to make more profits in the market. Author Edward Scharff noted in his history of the paper: "What drew most young men to the Journal was an open secret having nothing whatever to do with the fabled fun of the news business. … [Reporters] could practically guarantee profits in the stock market. In addition, they were paid—sometimes handsomely—to work in conjunction with speculative rings and stock syndicates."
The most famous of these cases were the two reporters who wrote the "Broad Street Gossip" and "Abreast of the Market" columns in the 1920s. In 1932, after Barron had died, Rep. Fiorello LaGuardia, D-N.Y., produced canceled checks written to the reporters by a Wall Street publicist. The stories based on the bribes had gone as far back as 1923—the heyday of Barron's management. That's about as close to the recent scandal at Murdoch's New York Post, where a restaurant owner gave $1,000 to the editor of the "Page Six" gossip column, as you can get.
To be sure, Barron improved the Journal. Today's Journal bears no resemblance to Barron's. But if the Bancrofts really want to preserve a legacy, then they need to acquaint themselves with the warts on theirs. History does repeat itself.