LeRoy Keller Interview - Part II



(This is part II of Dick Harnett's 1995 interview with LeRoy Keller)

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Harnett: I don't know the whole story.

Keller: Well, I'll tell you about that. I was going to write the story of UPI first. In the late 1920s Roy Howard had -- maybe it was earlier -- Roy Howard left. Roy Howard became president of United Press in 1918. I think it was before the war started. He was set back by the so called false armistice. But he was really right. He got that authentically from Admiral Wilson, but he broke the story prematurely.

Harnett: I think AP, after it was out, made such a fuss about it the newspaper publishers blamed everything on UP. I think at some point UP executives surrendered. I think if they had continued to fight it, at some point they wouldn't have had to admit this so-called error.

Keller: It wasn't an error, but it hurt us for a while. When Roy Howard was president he went to San Simeon to see Hearst. Bill McCall -- you know him, up there in Sonoma -- he reported this first. Roy Howard, when he visited South America when Bill was down there, told this to him at one time.Roy Howard went up to see Hearst, and he said, "Mr. Hearst," he said, "you are an expert at running newspapers, and we've learned something about running a wire service, so why don't you sell us International News Service. We will thus take one low-price service out of competition." Hearst said, "Well, let me tell you something, a mother is always fondest of her sickest child. I think we will keep it." Through the years there were many passes made by others, Hugh Baillie tried hard. Bartholmoew tried. He had a number of meetings and brought in Karl Bickel to help with the Hearst executives. Nothing worked. One day, after Bart was president, he had just been rejected by Gortowski (Hearst executive). Gortowski said, "No, we are not ready to do it." So Bart was going to Europe in the summer of 1956. He said, "Lee, everyone else has tried it. Mims Thomason got into a fight with Seymore Berkson (of Hearst) over merging the picture service. Jack Bisco has tried it. Gortakowski said, "Donít let that guy in my office again. He's nothing but a gimmick man." And Bart was determined for us to acquire International News Service. As he departed for Europe in July, 1956, he called me into his office and said, "Lee, we've all had a try at this and have failed. I want you to be caretaker of the conversations while I'm gone." You know Charlie McCabe, who used to work for United Press, was then publisher of the Mirror, a Hearst paper. So I gladly accepted because it was something I wanted almost from day one. When I joined United Press I envisioned being in on final negotiations for International News Service. So I spent the summer, while Bart was in Europe, courting Charlie McCabe, who favored Hearst selling the International News Service. Like we did with Scripps Howard papers, Hearst was pulling tremendous money out of the Hearst papers for International News Service, which was not a complete service at all. In any event, I worked with Charlie McCabe that summer. Bart was due back the first week of August. I had lunch with Charlie McCabe. I said to Charlie, "Bart is determined to get this thing done. You know both sides of it. You worked for UP and now with Hearst. I want you tell me what you think it will take for Hearst to let loose, give up with INS." He said, "Yes, I have done a lot of thinking about it. You'll have to give Hearst stock in United Press." I said, "All right, if that's what it will take, I will see what I can do." I went back and saw Bart. I said, "Bart, I know how to get this thing going to a successful conclusion. We've got to take Hearst in and give him a percentage of stock in United Press." He said, "Ho ho ho! You know Roy Howard is not going to permit that." I said, "Let's go see him." He called Jack on the phone and said, "Lee Keller has come up with an idea to enable us to get INS. We would like to come over and tell it to you." Roy said, "Meet me at the King's Arms Room at the Barclay Hotel at 12:30 and we'll talk about it." On the way over, Bart said, "Lee, I know what's going to happen. Roy will get in a fight with the waiters. He will ridicule us for this idea and it will be a failure." I said, "I bet you two bucks you are wrong. Roy is going to like the idea." Low and behold, when we had lunch with Roy and outlined the plan, Roy said, "I think it is a pretty good idea." He said, "I always felt we should have a public audit of United Press. Give Hearst a little percentage of it, depending on equities, and we can do the deal." So we got over that hurdle. Joe Kingsbury-Smith (of INS) kept peeing on United Press and saying (to Hearst), "I've got 'em whipped! Don't give them anything." They had just completed a year of losses, almost unbearable losses for INS. But Smith had no grounding in business at all. He made wild statements. He was INS, one of their chief foreign correspondents, very close to Hearst. They were balking. In the meantime I had started this television news service with 20th Century Fox. I was invited over by Spyros Skouras, who was head of 20th Century Fox. He was Greek. He was a big Pooh-bah. He had been put in by Wall Street. And so he invited me to a dinner he was giving for the head of the Bank of America, a man named Peterson, who was in New York. Skouras wanted the big dinner for him because he had helped finance 20th Century Fox. At this dinner over at the Waldorf I spied Dick Berlin, who was then the big Pooh-Bah of Hearst. During the evening I saw Berlin standing over in one corner. I went over to him and said, "Mr. Berlin, it's a shame that we can't come to a conclusion on this merger with INS. Berlin said, "I'm in favor of it. Why don't you get going with it?" I said, "We understood you were blocking it." He said, "No, go ahead and get the deal done." Bart was out in his vineyards. I went back to the office and put in a call to Bart and told him what Berlin had said. He immediately called Gortakowski, who said, "All right. I will be back in New York." He was then on vacation. He said, "I'll be back the first week in November and we will talk about it some more." That started it again. Gortatowski always vacationed by spending his time at the Biltmore Hotel in Santa Barbara. Gorty was a wonderful man. He was a southern Jew, a gentleman. Bart and he got along very well, and that's what helped bring the two organizations together. So after Gortatowski returned Gortatoswski said, "Look, we can't negotiate this thing in New York. Word will get out. So we will go down to Miami." We said OK. The first week in December Gorty and Joe Kingsbury-Smith went down and stayed at the Fontanbleu Hotel. Bart and I went down and stayed at the hotel in Bar Harbor, the Kingsworth or something, I forget the name. We would meet in their suite one day and in ours the next. During this interim we hammered out, and Joe Smith typed it on his portable typewriter, we hammered out 22 clauses that formed the basis of the deal. We presented this to the board of directors, and they said all right it looks OK. And when the lawyers got through with it, this was in early December, we gave him the document and there were all kinds of things that had to be resolved.

Harnett: What did Hearst get, 15 percent?

Keller: Five percent. All they did was lay the equity on the table. You could see they didn't deserve more than 5 percent.

Harnett: Then you bought that back, that 5 percent.

Keller: Yes. That's when they (Scripps-Howard) took the United Features Syndicate. We owned United Features. It was a good moneymaker. We were deprived of that money for the United Press then.

Harnett: Because of the INS deal, Scripps-Howard wanted to separate it?

Keller: They didn't want to give Hearst, which had King Features Syndicate, any part United Features. They demanded that it be taken out of United Press and put in Scripps-Howard direct.

Harnett: Tell me a little about that television. deal. Was that UPITN?

Keller: That's right. I started that all by myself with Pete Lovades of 20th Century Fox. I knew we didn't have movie service. We had picture service. But I knew we had to get moving pictures. So I went to MGM. I went to Hearst. They just laughed me out of the office. They said, "We don't need you. We know how to take pictures." Pete Lovades had the right vision and together we started a service where 20th Century Fox furnished the news (film). They agreed to accept our assignments. We were late, but we got moving pictures for television. We sold it (the service). One year UPITN made all the profit of United Press and Bart called on me to stand up and take a bow.

Harnett: Why did it collapse?

Keller: That was Rod Beaton, who had no love for this service at all, and although Tom Curran sold UPITN to BBC for something like five or six thousand a week. A.L. Bradford, who had been second to Tom Curran in South America, went to Europe to succeed Ed Keen as vice president for Europe and Tom Curran became the vice president for Europe and he and Bradford worked together. Bradford sold Spanish television, German television. He sold it all over -- Africa, Asia.

U>Harnett: It was going good?

Keller: It was going very well, and 20th Century Fox, they felt they weren't getting enough money for their part. They wanted to pull out. We had to start up ourselves. I went to Europe and negotiated. I took Ezra Brian with me from the law firm. We had to free ourselves from 20th Century Fox.

Harnett: I heard that UP could have been in on the ground floor of Ted Turnersí operation, but somehow we missed that too.

Keller: Here's the deal. In 1963 Fox wanted out, so Ezra Brian and I went to Europe and we made a deal with Independent Television. They had bought our report and we made a deal for them to take over, with half ownership of UPITN. Later the whole thing was sold to ABC and they operated Independent Television for a while. They (ITV) are still going, under different ownership now.ICAN (?) as an independent. That was quite an adventure. But you see, we needed money. It was before coax cable had spread anywhere. We had to deliver.

Harnett: Monday morning quarterbacking, it might have saved the company.

Keller: It could have. But as I told Steve as we had our long talks, the United Press just didn't have anyone with the vision of Karl Bickel. Karl Bickel saw all these things and wrote a book called New Empires. Did you ever see it?

Harnett: No, I'd like to see it.

Keller: You ought to get it. It appeared way back in the beginning of 1934. Karl Bickel was a man of vision. He envisioned our doubling our revenues from the sale of.broadcast news.

Harnett: Do you have the book?

Keller: I looked everywhere. I don't have it. I'm sure you can get it in some library. Now, as far as the beginning of United Press is concerned, there are several books. Nelson Chocran of the Chicago Daybook wrote the early story of United Press in a biography of E.W. Scripps. Nelson Cochran of the Chicago Daybook -- I think that was the name of the paper. Then Charlie McCabe, who wrote a long time for the San Francisco Examiner, did a book, Damned Old Crank. Do you have that? That gives you the early story of United Press.

Harnett: Something happened in the 70s I think. I feel the publishers, the important publishers, decided they didn't need to pay for two services. They wouldn't cooperate with UP, and when Beaton came up with the idea to get them involved financially they said no because they didn't want two services.

Keller: Beaton set out to raise our rates to the equivalent of AP and publishers wouldn't go for it.

Harnett: Some of them wanted competitive services but some big ones, Gannett, Knight-Ridder, said, "Why should we pay for two services?"

Keller: Let me talk a little bit about Reuters. After concluding the deal for INS, in 1960 I went over to Europe. I went over partly on vacation. I wanted to talk to Reuters and was visiting European clients with Frank Earl and was in Munich and stayed at the Bonhoff Hotel named after the big railroad station, a first class hotel in Munich. I got this idea of merging the news and pictures, the news department of Reuters with us. Reuters didn't have a picture service. They just had news service. I did a lot of research on that and found out that the royal charter never would permit Reuters to give up ownership of Reuters news service. So I came up with the idea to form United Press-Reuters World News service. I went to London to present it to Tony Cole, who was head of Reuters in London. The idea was that United Press continue to operate in the United States as UP and Reuters operate in the Commonwealth area, that is India, Australia, New Zealand, Canada, so forth, as Reuters. But everywhere else we put out a world report under the label UPI-Reuters. That would cut out a very important competitor. It was taken to both boards of directors. Our board OK'd it, and the Reuters board OK'd it. Then just at that time Bart decided to move out, retire from UP and he made Mims president. Mims and Al Bock went to Europe to attend a board meeting of Reuters for further discussion of this merger. Mims had no idea how this started or what was involved. Tom Curran is authority for the following. Mims Thomason and Al Bock took a taxi to Brighton where Reutersí board was meeting. On the way down they got rid of a bottle of Scotch. They got to the board meeting. Mims stood up and said, "Now, gentlemen, the United Press is the jewel in the crown of Scripps-Howard. We will never give up control of United Press. This must be a United Press controlled operation." The chairman of Reuters rose and said, "Well, Mr. Thomason, thank you for coming along, but I think we have nothing further to talk about." That ended that.

Harnett: It was the Scotch talking, right?

Keller: It just broke my heart. I was in international. Bart should have sent me there. But he had appointed Mims as president. Lyle Wilson described Mims best this way. He said Mims is the only bull I know who brings his own China shop with him. Tom Curran and I and several other ruminated about this later. It ended the negotiations. We never suggested they put in their currency wire. That's what made Reuters worth millions of dollars. Every trader around the world, with the floating currencies, needed instant quotations. They established a wire around the world. Anybody who does business in other currencies than their own has to have Reuters.

Harnett: I worked in an economic agency down in the Peninsula. We never seriously went into that business did we?

Keller: No, and we had no intention of taking that over. It was Reuters. That was to be kept separate. We were just talking about merger of the news service, with our pictures, and with their news service added to United Press, we felt we were armored well enough to do real battle around the world with AP. It was a dream that went by the boards.

Harnett: Do you remember the book Four Days?

Keller: I've got a copy of it.

Harnett: Wasn't that a big substantial thing for UP? Did we make a lot of money on it?

Keller: Yes. That was Smitty, Merriman Smith, a great newsman, and he happened to be in Dallas with Kennedy. He had a car phone and he was riding with the AP and . . .

Harnett: Yes, but I am wondering whose idea the book was, and why we didn't follow up on it. Or did we put out another on the Olympics? I am trying to think of ways United Press might have survived. You say United Features was major help to UP.

Keller: Oh, yes. They made a lot of money. When Scripps-Howard sold the "Garfield" (cartoon) contract, the title back to Garfield, we got $40 million out of that. Scripps-Howard did.

Harnett: (George) Pipal works for them, doesn't he?

Keller: Yes, he did for a long time. You know, (Charles) Shultz has income more than $20 million a year from "Peanuts." It is tremendously popular around the world.

Harnett: Are you suggesting a second wire service could not survive in this environment of news?

Keller: The big papers want exclusive reports, and they are able to finance bureaus of their own in some key centers around world.

Harnett: Yes, but that is not news. A bureau costing The New York Times $2 million for one bureau. That is more than it cost them for the entire UPI report? They used to depend on us for news.

Keller: We cost most papers less than the salary of one reporter.

Harnett: We were a tip service for them. In small communities where there were two bureaus, now the AP guy doesn't have to worry.

Keller: That's right. It's a dangerous situation in many ways. Television has ruined the news business anyway. They are not run by trained newsmen. The television reporters go off half-cocked quite often.

Harnett: We were making inroads in broadcasting a couple of years before UPI folded up. Some of our news people were unwilling to focus their attention on radio news. California radio stations want report every hour, a couple of sentences. Our reporters wanted to be like the L.A. Times people and sit back at the end of the day to write a story.

Keller: It's a different business. I don't know. Take CBS news. It used to be a great news service. They depended on the wire service for tips before they assigned a cameraman. When we went into (TV news) business alone we hired Burt Reinhard away from 20th Century Fox Movietone. He made the assignments. He made the assignments for United press. We went in and covered news of the world ourselves.

Harnett: I heard he was one of those involved in CNN later on.

Keller: He was president of CNN after he left UPI. There was a Jewish boy who worked with us too, and he went over to CNN too. it was staffed by UPI people at the beginning.

Harnett: What about the idea we had for a while of selling corporations like Standard Oil, give them coded news about the oil business.

Keller: That didn't happen in my time, it came a little later. You probably like both of them, but frankly, Rod Beaton and Mims Thomason were not up to. . .

Harnett: I think Bartholomew did what Baillie did. He picked people who would be loyal, not get out of hand. I think it was a mistake in the long run because you don't get independent thinkers.

Keller: Bill Payette would have made a great president. He was a well-grounded newsman. He had been bureau manager in Los Angeles and he was assistant news editor in New York. Tom Curran brought him to South America. He was news editor for Latin America. Bill was a solidly grounded newspaperman.

Harnett: I saw a couple of reference that Hugh Baillie wanted to groom Walter Cronkite to be president of the company. Is that true?

Keller: No, Walter wouldn't give up what he had. He has made millions on it. We sent him Moscow after the war for a brief time to relieve Henry Shapiro. When Walter came back to the United States he was making $125 a week as a famous World War II correspondent. He made 58 sorties in a bomber over the war area. Walter came back, and Earl Johnson wanted to get him a substantial wage increase. Baillie would only go for $25, and this was not enough to hold Walter. So Earl told him (Cronkite), "Why donít you go in and see Lee Keller. Maybe he can do better." And so Walter came to see me and I offered him $175 week to be UP promotion manager. He said he would think about it but first had to go home to visit his parents. He got to Kansas City. I think his mother was living in St. Joe, Missouri. He went to Kansas City. The CBS station grabbed him for some reports on Russia and so forth, and he was so popular -- on KSTP -- I have forgotten the call letters. He was very popular locally. CBS then transferred him to Washington. The rest of the story is he quickly became the top radio voice.

Harnett: Henry Shapiro was in Moscow many years. He didn't write a book?

Keller: I think Henry is still living.

Harnett: No, he died up in Madison, Wisconsin. I think his widow is still there.

Keller: He was quite a guy. He was a Rumanian Jew. He survived all those Stalin years. He had great contacts all during the communist era.

Harnett: Those were the great days of UP, weren't they?

Keller: They were. Harnett: I think United Press could have survived? Jones, what was his title?

Keller: Joe Jones was vice president of the world service, international division. I succeeded him. Earl Johnson was vice president and editor-in-chief of United Press. He was succeeded by Roger Tatarian, and H.L. Stevenson succeeded Roger when Roger had a heart attack. There's so much history. I have so damn much of it in my head because I lived through it all.

Harnett: One of things remarkable is that it was built on people. You, most of the guys, could have made more money somewhere else.

Keller: Yes, Dick, I loved working for United Press, eager to go to work every day because I loved it. When I went on the business side I learned to sell United Press on the basis of the product we had. I read the report every day. I put our report into the Christian Science Monitor. Earl Canham was very skeptical. He said, "We have our own correspondents." I read the report every day for two weeks and laid aside all the stories we had that the Christian Science Monitor didn't have. I took it all up to Boston and laid it on his desk. I said, "You would have had these stories if you had United Press." And it worked. He bought United Press.

Harnett: I was a newsman, a Guild activist and everything else. But, like you, I liked to go to my job every day. I didn't like to see people taking advantage, blaming everything on the company. Afterwards they were bringing in people like Max McCrohon. They brought in some guys from The Washington Post and paid them $1,400 a week. Everybody else, who worked for the company 30 years, were getting half that. It did a lot of damage to people, really committed Unipressers.

Keller: It caused a lot of disenchantment.

Harnett: I get notes from people who worked for UP just a year 30 years ago and now remember it as one of the greatest experiences they had.

Keller: It was remarkable for the cohesiveness of employees and the way they loved the company, far more than the company deserved, no question about that.

Harnett: I am looking forward to this event Thursday, and I am going to do something about this history. I don't know whether I am competent myself, but I have started to put out a few lines.

Keller: The story of how United Press started. E.W. Scripps had the idea of starting a penny press in several cities. He sold the paper for one or two cents a copy. He had to have a news service because he didn't have AP. He started a competitive paper in Cleveland for example, and Cincinnati. They had to have a news service so E.W. Scripps joined force with Publishers Syndicate and one other, McCrae News Service, I think it was, and they started a company called United Press. Roy Howard was the first president of consequence. A man named Hamilton (Cook) was president first. I personally knew all the presidents from Roy Howard on. Roy Howard always called me Roy instead of Lee.

Harnett: Do you think there is any future for a wire service at all?

Keller: No. A service organization is not a profit center and never will be. Thank you for calling me.

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