Press: Digest’s Doings

As he lay hospitalized behind the lines after the Argonne offensive with a hole in his neck and a piece of shrapnel in his lung, Sergeant DeWitt Wallace of the 35th U. S.. Infantry perfected his plans for a magazine of condensed reprints culled from all the publications on the market. The tremendous success of this notion of a wounded soldier in 1918 was made manifest this week by a unique and thoroughgoing account of Reader’s Digest published in FORTUNE.

Not until 1921, when Westinghouse let onetime Sergeant Wallace out of a press agent’s job, did he have an actual chance to get into the business of reselling U. S. magazine material condensed to about a quarter of its original length. First office of Reader’s Digest was in Manhattan’s arty Minetta Lane. First staff consisted of Publisher Wallace and his wife. Their magazine promptly prospered beyond the Wallaces’ wildest hopes, moved in 1923 to suburban Pleasantville, N. Y., flourished further, and last year grossed $2,178,000. Published in FORTUNE for the first time was the circulation of tight little Reader’s Digest: 1,801.400. “largest ever achieved by a magazine without fiction or pictures; and larger than that of any other magazine costing 25¢ a copy, except Hearst’s Good Housekeeping.”

Such success was made possible by the original willingness of U. S. magazines to grant Publisher Wallace reprint rights in return for a Readers Digest credit line. However, Publisher Wallace began to pay something for his material in money as well as publicity as soon as he began to make some for himself.

Checks were small at first, soon increased to $100 per article. Publisher Wallace also habitually pays the authors of the material used in Reader’s Digest. Royal ties to individual magazines for exclusive three-year reprint contracts have risen to an estimated 1936 top of $30,000. For years the Saturday Evening Post and the American Magazine refused their reprint rights before coming into the Digest camp. Last month the Hearst magazines-also finally fell into line after a deal of higgling & haggling.

Regarded at first with kindly tolerance, Reader’s Digest in the late 1920’s became a source of alarm to publishers who wondered if its checks made up for its bang-up competition for readers’ attention. So Edi tor Wallace quietly began to publish original articles, now pays $500 to $1,000 for such material. Most famed Reader’s Digest original was ” -and Sudden Death,” by Joseph Chamberlain Furnas, which ap peared in August 1935, dramatized the slaughter of automobile casualties, was quoted far & wide, fathered many a horror-struck accident report in the Press.

Editor Wallace next began to supply free articles to other magazines. According to FORTUNE, since the practice began a year-and-a-half ago. some 60 such articles have first been planted in magazines like Scribner’s, Forum and Century, American Mercury, North American Review, Today The Rotarian. All Reader’s Digest gets from this curious deal is the right to reprint what it had originally created. This maneuver indicates that, if necessary, Editor Wallace could furnish his large and loyal following with a readable publication without having recourse to the files of other magazines.

Routine and personnel of Reader’s Digest staff, FORTUNE found “most curious. … Of its 32 members, only two had worked on a magazine before, and the others had done everything from selling linoleum to designing houses.” Promptly at 8 o’clock each morning, these individuals go to their comfortable, unmarked offices over Pleasantville’s Mount Pleasant Bank & Trust Co., across the street from the business offices which are in the First National Bank building. There they begin thumbing through some 500 magazines. Like professors grading themes, “readers” (i.e., sub-editors) mark possible articles on a basis of excellence for the purposes of Reader’s Digest. At home, Mrs. Lila Bell Acheson Wallace also “reads” for the magazine.

Readers’ findings are handed on to Associate Editors Ralph Henderson, a onetime missionary, and Harold A. Lynch, a one-time clergyman. After further winnowing, these editors send on some 50 or 60 possibilities to Managing Editor Kenneth W. Payne, who, as onetime editor of Popular Science and the defunct McClure’s, is one of Reader’s Digest’?, employes with a previous journalistic record. Final decisions are made by Mr. Payne and Mr. Wallace. Cutting is done, in most cases, by direct excision. Rewritten lines are cast in the author’s style, so that no one can tell where Reader’s Digest has used its journalistic scalpel, taken its literary stitches,

Resulting product, biggest printing order of the Rumford Press at Concord, N. H., so fascinates its consumers that, according to FORTUNE, readers have been known to “change the color of their bathroom towels and soap each month to match the current Reader’s Digest cover; and to be inoculated-with solutions of the paper stock to overcome an allergy which caused violent sneezing. . . . They rush out and buy the books condensed in the book supplement. . . . They sent in 48,300 manuscripts in a contest for amateur writers. . . .”

Though widely circulated and avidly read, Reader’s Digest stuns admen by refusing to carry advertising. Reason: the Wallaces as sole stockholders, whose 1935 profits were $418,000 before taxes, are content with their magazine as it is, confine its sole non-editorial activity to the spirited circulation promotion of Business Manager Arthur E. Griffiths, English-born onetime secretary of the New York Journal of Commerce.

Editorial employes, whose comings & goings are marked in a book and who must report once a month in writing as to what they have been up to, are compensated by a handsome share of Pleader’s Digest’s handsome profits. In 1934 Editor Henderson got $32,567; Editor Lynch, $20,750; Managing Editor Payne, $102,467. Two months ago, paternal Publisher Wallace bought-land at nearby Lawrence Farms for a Reader’s Digest building.

*Good Housekeeping, Harper’s Bazaar, Pictorial Review, Cosmopolitan, Town and Country, Motor, Motor Boating, House Beautiful, American Druggist, American Architect.