The Press: Hearst’s Bombshell

“Some day, Marion, I’ll make it up to you,” William Randolph Hearst told Marion Davies in the mid-’30s, when she handed him $1,000,000 to help save his faltering empire. This week the empire was shaken by the news that Hearst had made it up to her handsomely indeed; he had picked her to be the boss of his vast editorial domain.

It was a secret which Marion Davies herself had patiently kept, during a painful fortnight in which she had a good chance to learn who her friends were. The empire’s chieftains, who had once sought her favor, quickly gave her the brushoff. They had read the Chief’s will: it left the multimillion-dollar Hearst fortune* to Hearst’s widow and five sons and to charities, left the details of administration to his sons and eight other executors who assumed, as a matter of course, that they would run the business.

Then Columnist Hedda Hopper, archrival of Hearst’s own Louella Parsons, broke the big news: on Nov. 5, 1950, Hearst had called in Miss Davies, his companion through 32 years, and with her signed a voting trust agreement. It provided that on his death, she would become the sole voting trustee of the Hearst Corp., the empire’s top holding company, and would remain so for life.

The Fight Begins. As such, if the agreement proves to be legally watertight, she would replace the seven Hearst executives who were made the voting trustees in a prior agreement signed in 1937. In her own right, she owns only 30,000 shares (15%) of the Hearst Corp.’s preferred stock. But she would have the voting rights to all 100,000 shares of the common and the remaining 170,000 (85%) of the preferred, which old W.R. himself owned. She would thus have the power to choose all the officers and directors of the subsidiary corporations.

When Hedda Hopper’s bombshell burst, the lawyers who had drawn the agreement for Hearst promptly confirmed it—and so did Marion Davies. The news brought a quick and bold counterattack from the Hearst estate’s special administrators, Son Randolph Apperson Hearst and Lawyer Henry MacKay Jr.: “This so-called agreement . . . was never executed and for this and many other reasons has no more effect than if it never existed.” Snapped Filmland Lawyer Gregson Bautzer, who had helped set up the agreement last year for Hearst: “The document will speak for itself when filed.”

Now a tremendous legal battle is in prospect. But if the opposition tries to prove that Hearst had been incompetent when he made Miss Davies boss, it will have to hurdle the fact that to the very end, all Hearstlings had made a great to-do about the clarity of old W.R.’s mind.

Hard Choice. Miss Davies did not like the prospect of fighting her way through court. Said she: “I would do anything in the world to avoid hurting the boys [Hearst’s sons]. After all, they’re half of W.R.” But she also knew what she thought she had to do: “I’m not the fighting type, but I don’t believe in disregarding W.R.’s wishes. He had a reason for having the agreement drawn up. He thought I was the one who understood best what his policies and principles were and that I could see to it that his ideas were carried out. . . Gosh, I thought I’d have a peaceful time in my old age [51]. Now look at the spot I’m in!”

Miss Davies has opinions of her own on what is good and bad in the Hearst press. For one thing, she has no use for Columnist Westbrook Pegler. Said she, in the most surprising (to Hearst readers) statement of the week: “Both W.R. and I always had great respect for Eleanor Roosevelt. She is a great woman . . . When Pegler started hacking at Mrs. Roosevelt day after day, it got boring and annoying . . . W.R. wired Pegler many times to cut it out; each time Pegler laid it on thicker . . . I never read his stuff any more.”

*The figure commonly bandied about is $200 million. Actually, no one will know the real value of Hearst’s estate until his executors have made an appraisal for purposes of federal inheritance taxes. To make it, they will first have to thread their way through his maze of personal holdings (ranches, mines, oil wells, real estate, art treasures) and interlocking corporations, discover how much has been encumbered by debt, how much previously sold.