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To Hanes—apart from the wartime boom—belongs much of the credit for Hearst's quick recovery. Hanes began by emptying all the furniture out of one room in his home, sorting office documents into little stacks on the floor, one stack for each Hearst corporation. When he totted them up, he discovered that there were 94 separate Hearst corporations, each owing one another and any bank which would lend them money. Total debt: $126 million. He has reduced the 94 corporations to less than a dozen, will soon have them down to four. He has paid off every bank loan but one ($4 million owed to Boston's First National). That meant getting other bankers. The two bankers he persuaded to the rescue of his debt-ridden, jingo client were, ironically, Russian-born Boston Banker Serge Semenenko and an Italian immigrant's son, San Francisco's A. P. Giannini.
One Night's Work. The other wolf that had to be driven from the door was Hearst's 43,000 preferred stockholders, who would take over if Hearst passed four dividends in a row. Hearst and Hanes lopped most of them off in one dramatic night's work last summer—by offering to buy in their shares at the full $25 par value, instead of the $17 market price. To prevent speculators from moving in, Hanes released one master telegram simultaneously to 43,000 stockholders, quickly bought up 730,000 shares. Western Union tolls for the night's work: $30,000.* Now the Hearst Corporation hopes to buy out the rest of its 20,000 stockholders ($39 million is due them), pay back its bank loan, and be debt-free by the end of 1946.
By last week, the Hearst empire felt a glow of restored health:
¶ No Hearst paper has had to be sold since 1939. No more of Hearst's art jumble will be auctioned off, once Gimbel's finishes unloading its present supply.
¶ All of Hearst's tax-eating land ventures have been disposed of, and those which are left—ranches in Texas, Mexico and California (and 44,000 head of Herefords)—are said to be currently profitable. Gone is his 30,000-acre Hidden Valley ranch just 45 minutes from Hollywood, which was scenic but costly. Gone are Hearst's $30-million real estate holdings in Manhattan's expensive Fifties (including the Ritz Tower, the Hotel Warwick, the Ziegfeld Theater). In Manhattan, Hearst now owns only the buildings where his papers & magazines are published.
¶ Every one of Hearst's 17 newspapers, four radio stations,† nine magazines is now in the black, say Hearst officials.
* As long as WPB rations newsprint, Maine Seaboard's present customers (Manhattan's Sim, World-Telegram, Herald Tribune, Wall Street Journal, the Detroit News, the Nashville Banner, etc.) would still get theirs. But when Government control ends, the mill's supply would be all Hearst's.
* Unsuspecting Investor Floyd B. Odlum, who had speculated heavily in Hearst stock and was once the biggest single stockholder (TIME, March 10, 1941), had already sold most of his for much less.
† One of them, Manhattan's WINS, was reportedly about to be sold for 1,700,000 —a record price.