In June 1984 I got an odd call from an editor at The Wall Street Journal. I had submitted an article that marked the one hundredth anniversary of the first publication of Charles Dow’s stock-market average. How do you know, the editor asked, that July 3, 1984, is the right date? What is your source?
I replied that my source was page 34 of Lloyd Wendt’s The Wall Street Journal, the definitive history of the newspaper, published in 1982. The editor asked me if I could send him a copy of page 34. I suggested that someone at the Journal ought to be able to verify the date. No, I was told, the Journal’s editorial offices could not easily locate a copy of the definitive history of the Journal.
I was reminded of this experience when, a few months ago, I read a fine recent book about the Journal, Edward E. Scharff’s Worldly Power (New American Library, 1987). Scharff describes his astonishment when he first confronted the company archives: “They consisted of a small pile of yellowed news clippings and some crinkled correspondence from a few early employees. . . . Later, I came to realize that the company’s indifference to its origins had been somewhat deliberate. Bernard Kilgore, the man who forged a great newspaper from the ashes of the 1930s, was not merely unconcerned with the newspaper’s earlier days, he was positively determined to eradicate their spirit. . . .”
I am pleased to report that the Journal’s editors are aware that July 8, 1989, will mark the one hundredth birthday of the newspaper that calls itself “the daily diary of the American dream.” Perhaps the editors awakened to the value of preserving an institutional memory; perhaps they merely grew tired of having outsiders remind them about key events in the newspaper’s history.
The man who founded the Journal, Charles Dow, was born in Sterling, Connecticut, in 1851 and, after more than a decade as a reporter, established in 1882 a financial news agency that used boy messengers to distribute business news to customers in New York’s financial district. Dow had two partners, Edward Jones and Charles Bergstresser, but the men preferred the name Dow Jones & Company to Dow Jones & Bergstresser, so poor Mr. Bergstresser has been forgotten.
In November 1883 Dow Jones began to publish a two-page financial news bulletin, the Customer’s Afternoon Letter. This evolved into The Wall Street Journal, a four-pager first published on July 8, 1889.
Even before the Journal was founded, Charles Dow had invented the stock-market index that bears his name—the most famous and commonly used daily index that broadly measures the rise and fall of the market. Nine of the eleven stocks in Dow’s first average were railroads, but the composition of the index has changed with the composition of the economy. It was not until 1928 that the Journal published the first average of thirty industrial stocks comparable to the average that is calculated today.
Edward Jones sold his interest in Dow Jones in 1899, and Charles Dow died in 1902, at fifty-one. Before his death Dow sold the company for $130,000 to Clarence Walker Barren, a five-foot-five-inch, three-hundred-pound dynamo whose name survives in the weekly investment newspaper he founded in 1921.
In 1912, with the Journal floundering, Barren appointed himself editor. Under his leadership, circulation rose from seven thousand in 1912 to fifty-two thousand in 1928, and the newspaper grew from four pages to twenty.
Under Barron, too, the Journal spoke out more and more confidently as a defender of Wall Street against Congress. In March 1928 a typical editorial observed that “people who know nothing about credit, surplus bank funds, collateral, call loans or anything else germane to the question profess to be terrified when the Stock Exchange loans attain the figure of $4 billion or more. . . . Nothing can be so easily liquidated in this country as the speculative position in stocks.”
The liquidation, when it came, was not quite what the Journal had had in mind. But Barron was not around to see it. He had died in October 1928, leaving to his daughter, Jane Waldron Bancroft, 90 percent of the stock in Dow Jones & Company.
To the staff of the Journal in 1929 came a twenty-year-old graduate of DePauw University in Indiana, Bernard (“Barney”) Kilgore, who eventually transformed Charles Dow’s newspaper and became, in the process, one of the legendary editors of the twentieth century.
The Journal staggered through the thirties, with circulation falling below twenty-eight thousand. But Kilgore’s career got an unexpected boost. Asked to explain a complicated Supreme Court decision on the National Industrial Recovery Act, FDR told reporters, “Read Kilgore.” In 1935, at twenty-six, Kilgore became the Journal’s Washington bureau chief. In 1941, at thirty-two, he became its managing editor.
Kilgore took over a paper that had grown shockingly dull. As the world reeled toward war, a typical Journal story would begin, “The Navy Department yesterday sought to buy 3,550,000 pounds of copper but received bids for but 2,100,000 pounds.”
Kilgore insisted that the Journal’s reporters pay more attention to the interests of the general reader. “Don’t write banking stories for bankers,” he said. “Write for the banks’ customers.” He also insisted on crisp writing. “If I see ‘upcoming’ in the paper again,” he warned, “I’ll be downcoming and someone will be outgoing.”
Most important, Kilgore insisted that the Journal must be a national newspaper. The United States was not merely one nation; it was one great business market. The Journal’s job was to report the news that mattered to businessmen everywhere.
To his vision of what the Journal should be, Kilgore added a vision of how it should look. Before Kilgore, the front page of the Journal had been, as Scharff writes, “a mishmash of turgid news stories, brokerage ads, and, every now and then, a photograph. . . .” By the end of the 1940s, readers saw the famous front page we see today: “six clean columns of type, each distinct in purpose from top to bottom.”
On the business side Kilgore, who became president of Dow Jones in 1945, was strongly supported by the owner, Jane Bancroft, and, after her death in 1949, by her daughters, Jessie Cox and Jane Cook. When Joseph P. Kennedy tried to buy Dow Jones after Jane Bancroft’s death, he received a rebuff that must have warmed Clarence Barron in his grave. “Grandfather’s company,” said Jessie Cox, “is not for sale to anybody— at any time, at any price.”
When Kilgore died of cancer in 1967, the headline in the Journal was simple: BERNARD KILGORE DIES; MADE A NATIONAL DAILY OF WALL STREET JOURNAL. Under Kilgore circulation rose nearly fortyfold—from 32,000 to 1,132,000. After Kilgore took over as managing editor, the annual earnings of Dow Jones & Company rose from $211,201 to more than $13 million.
In recent years the Journal’s editorial page has played a role in national policy debates. This phase of the Journal’s institutional life unfolded under the leadership of Robert L. Bartley, a graduate of Iowa State University who took over as chief of the editorial page, at thirty-four, in 1972.
As Scharff tells the story, before Hartley became editor, he had met Jude Wanniski, a writer for The National Observer, a weekly newspaper that Dow Jones published from 1962 to 1977. In 1972 Bartley invited Wanniski to join his team of editorial writers. When Wanniski protested that he didn’t know how to write editorials, Bartley reassured him: “All it takes is arrogance.” Wanniski was a coal miner’s son who had developed a keen interest in economics, but his lack of formal economic training did not stop him from forming strong opinions.
In Washington in 1971 Wanniski had met a thirty-year-old economist from the University of Chicago named Arthur Laffer, then working as an assistant to George Shultz, President Nixon’s director of the Office of Management and Budget. Laffer held a number of highly unorthodox views, views that challenged the conventional wisdom of both the liberal disciples of John Maynard Keynes and the conservative disciples of Milton Friedman.
Late in 1974 Wanniski and Laffer met for a now-famous dinner where, according to Wanniski, Laffer sketched on a paper napkin a bell-shaped curve that showed that low tax rates might produce for the government the same amount of revenue as high tax rates.
“I just went wild over that curve!” Wanniski said later. The Laffer Curve meant that the United States could enjoy a big tax cut without running up an enormous government deficit—if the world worked the way that Arthur Laffer said it worked.
In time Wanniski converted Hartley to Laffer’s ideas, which became known as “supply side” ideas because they emphasized the effect of tax rates on the supply of goods and services. Walter Heller, the chief economic aide to John F. Kennedy and a prominent liberal economist, said the Journal’s “editorial page was a rocket booster for Supply Side theory. Supply Side was hatched, incubated, nurtured, and given wing there. . . . There was an absolute campaign to put it on the map.”
Though Wanniski left in 1978, the Journal under Hartley has remained a vigorous conservative voice. Some of my literary friends tell me that they read the Journal’s editorials to find out what people in business are thinking. I reply that they might as well read Pravda to find out what the Russian people are thinking. In my experience, few business executives are ideologues. Perhaps that is because, in their business lives, they spend much of their time wrestling with uncertainties.
The editors of the Journal, on the other hand, seem to have banished uncertainty, as firmly as Hal banished Falstaff. I can’t say that I blame them. Writing editorials is hard enough, I’m sure, without the difficulties that might arise if Doubt crashed the party.