What Happend to Harper & Bros.?

KATHERINE MCNAMARA: What happened to Harper & Bros.?

MICHAEL BESSIE: Oh, lots of things. It depends on when you want to start the story?

KATHERINE MCNAMARA: From when you were there till when you left.

MICHAEL BESSIE: Well. When I joined, in the fall of 1946, it was 130 years old; it had started in 1817, and had been, in the latter part of the 19th century, the largest English-language publishing house in the world. It published books and magazines, lots of them: Harper’s Bazaar, Harper’s Weekly, Harper’s Monthly, and so forth. But, shortly after the turn of the century, it was going bankrupt; it had been bled by the various partners, a characteristic thing of a family-owned business.

KATHERINE MCNAMARA: By then, the second or third generation?

MICHAEL BESSIE: Oh, yes: at least third. Four brothers started it, four brothers from a farm on Staten Island, like the Vanderbilts. It was saved by Tom Lamont, who was then the partner of J. P. Morgan, I think for the total of, I don’t know, two million bucks, which then was a large sum. And it went through various hands; and in the middle of the 1920s was joined by a fellow named Cass Canfield, who came from a wealthy family, and who actually joined it to run the London office. Harper’s at that time, and from early in the 19th century, was Harper and Brothers, New York and London, publishing in both places. Then Canfield came back to America, and he wasn’t head of the house, but he became so in 1944; he might as well have been, he was the principal stockholder by that time. The stock wasn’t listed, it was privately held; he bought the largest part of it -- he had about 22, 24% of it.

Anyhow, when I joined it, he was then the head of the house and principal stockholder. And, in addition to being an able businessman and administrator, he was also a publisher, a person who knew about and cared about books and edited a lot himself. Indeed, the jewels of the Harper 20th century list were his: Aldous Huxley and all the English, Thornton Wilder and that generation of Americans: they all were people whom Cass personally published, something which is rare in our time.

In any event, what was the house like then? It was one of the two or three -- along with Doubleday, and Macmillan, maybe -- largest diversified publishing houses. It published all kinds of books: medical, school, college, religious; and its trade department was certainly one of the two or three dominant trade departments. It had begun to seem predictable, by comparison with the new generation of the 1920s and ’30s houses -- Knopf, Simon & Schuster, Random House, and Viking, etc.: they were brighter; the scene was brighter. They were more contemporary, although Harper still had great strength. Cass, for example, had an almost proprietary relationship with the New Yorker, because he had published the Thurbers and the E.B. Whites and so forth. He didn’t maintain that monopoly, because it got passed around; but when I joined, most New Yorker writers published still with Harper’s. The staff of the trade department was essentially Ivy League. Not everybody came from Harvard, Yale, or Princeton, but most did. Women were beginning to play a role editorially, though they tended to be assistants -- not in the role of secretaries. The place had a singular advantage in Harper’s Magazine, which brought in young writers and gave us first crack at ’em. We got a lot of people that way

Anyhow, that was the house that I joined in ’46. And I was there for 15 years, and then came the Atheneum adventure.

KATHERINE MCNAMARA: What became of Harper’s?

MICHAEL BESSIE: I left in ’59. In about 1962 or ’63, Harper & Bros. became Harper & Row, because elementary and secondary publishing became enormously expanded in those years, and there Harper found itself, in the early ’60s, without a schoolbook department. [So it bought Row Peterson, a textbook publisher, and added the new firm’s name.]

The Harper that I left in 1959 was doing about $20 million worth of turnover a year, which was about as much as anybody else. The Harper I returned to, in 1975, was doing nearly $100 million. But in the meantime, Harcourt-Brace, for example, had gone to about $300 million. Subsidiary rights had become considerably more important: book club, paperback, movie, etc. So, the things that we are now so aware of were beginning to develop. The increase of money, in every sense: Capitalization. Money needed for marketing. Money needed for advances. Everything got more competitive, more expensive. General publishing became more closely allied to show biz. The Harper I returned to was dominated by numbers: P & Ls, numbers, and by marketing, in the sense that the firm I had left 16 years before was not.

When I returned, as the senior publisher of the house and one of the corporate triumvirate who were supposed to run the place, I had to go through about a three-week indoctrination, because I had to learn a new business. I learned what had happened to big publishing during that time. Of course, it happened to every other one of the big places: it had become “corporatized.”

I went back to Harper -- I was then 59 -- under an arrangement in which I would be senior vice-president, publisher, etc., until I was 65, and when I was 65, Harper would set up Bessie Books for Cornelia and me, as an imprint under Harper’s aegis, independently. We would own it, but we would have publishing and money arrangements with Harper.

KATHERINE MCNAMARA: What did Cornelia do in the meantime?

MICHAEL BESSIE: Cornelia had been working for Atheneum, actually, until we were married; when Pat Knopf, who saw his mother in Cornelia, became impossible for her to work with, she went off to Dutton. But when I went back to Harper, she came into Harper; or shortly thereafter.

So that was the deal. And for the next -- well, from ’75 to ’81, I was at Harper. In ’81, we set up Joshuatown Publishing, a small corporation which is ours, which is Cornelia and Michael Bessie Books. They kept me on the Harper board. I was on till ’87, when we sold to Murdoch and the board disappeared.

KATHERINE MCNAMARA: And you weren’t in favor of that sale.

MICHAEL BESSIE: I was very strongly against it.

KATHERINE MCNAMARA: Why were you against it?

MICHAEL BESSIE: Because I liked Harper independent, and also because I didn’t like Murdoch. The easiest way to answer your question is, Because I foresaw what has happened.

KATHERINE MCNAMARA: And what has happened, that you foresaw?

MICHAEL BESSIE: Harper has become, or, starting in ’87, became, huge. It became a minor interest, namely a cash cow, for Murdoch. See, he bought it for two reasons: he wanted a publishing house; he by that time had 40% of Collins [William Collins Publishers], in England.

KATHERINE MCNAMARA: Which was a respectable firm as well.

MICHAEL BESSIE: Oh, it was a great firm. It was a great old publisher, and a printer as well, Scottish printer. But under English law, once he acquired 40% he had either to stand still or take on the whole shebang. But he had a vision of a world-wide English-language book-publishing enterprise. I think at the time he had that dream first, he didn’t realize that his real dream was going to be movies and television. He also suffered, as did many another -- why did Paramount buy Simon & Schuster? -- from “synergy.” It was a widely-spread notion.

So, I was opposed to it, as were almost but not quite half the board. Harper was being headed by a fellow named Brooks Thomas, a lawyer by training, but not a book person. The firm was having a hard time adjusting itself to the situation that has since developed in big-time publishing. It was still, in the view of Wall Street, bound to the old-fashioned notion that you published books because you liked them, and so forth, and so forth. And it was beginning to have cash problems: it was profitable, but at too low a level.

KATHERINE MCNAMARA: Ah, yes; that dreaded notion.

MICHAEL BESSIE: Well. RCA became disillusioned with Random House and sold it because they realized, as others have, and I suspect Mr. Newhouse [S.I. Newhouse, head of Advance Publications, a family-owned company which owns Random House, Knopf/Pantheon/Vintage, and other imprints, as well as The New Yorker, Vogue, Vanity Fair, and a number of other glossy publications] now has, that book publishing, even under present circumstances, is very unlikely to return more than five or six percent net profit. In a very good year, you might; but almost nobody does. It’s certain nobody does over a long period of time. Almost anything else in media can and does do better. They’re also capable of generating larger losses. But, you know, they gamble for bigger stakes.

You know what the economics of trade publishing are: about two-thirds of the books that you publish don’t make a profit. So if you’re good, the loss is smaller; the loss narrows. About a third of the books that you publish make a profit; and if you’re good, some of ’em make a big profit. That’s the economics of trade publishing. And in most instances, year in and year out, now, the profit comes from subsidiary rights. You may break even on the sale of books, but it’s book club, paperback, movie and television, foreign rights, etc., where you make money. And one of the effects of the increased power of the agents is that publishers have a smaller and smaller share of subsidiary rights. For example, in the new world, the electronic world, agents of popular authors don’t give book publishers an inch of electronic rights.

KATHERINE MCNAMARA: They think there’s going to be a windfall there.

MICHAEL BESSIE: They think that there may be, and they’re negotiating from strength. And you know, when people start paying five, six, seven, eight, nine million dollars to acquire a popular author, as they do, there’s a competition set up, and so, one of the first things the agent makes clear is this.

Now, just as in the old days -- by which I mean, before my time -- publishers would have 50% of movie rights, or more. It was then reduced to 10%, and then eliminated. That’s, by and large, what’s happened.

It’s amusing that what’s left of Atheneum [the imprint, except for children’s books,was closed in 1994 by its newest owner, Simon & Schuster, itself owned by Paramount, which is owned by Viacom] -- since that’s one of the things we share -- is children’s books, and they’re doing quite well.