Enquirer on the Block

Employees of Cincinnati's Enquirer struck a soft spot in the hearts of newsmen everywhere nearly four years ago when they raised $7,600,000 to rescue the paper from sale to the opposition and to give themselves a share in its ownership (TIME, June 9, 1952 et seq.). Last week, though the Enquirer (circ. 206,408) is Cincinnati's most prosperous daily, the experiment came to failure. A block of securities that ensures working control of the paper went on sale to the highest bidder.

Trouble erupted in November, when Reporter James Ratliff Jr., who had led the employees' campaign, accused top management under Publisher Roger Ferger of feathering its own nest at the paper's expense. Ratliff lost his job, but gradually began winning his demands for a management shakeup.

What gave Ratliff and his friends their bargaining power was the quiet support of marble-faced old (74) Harold L. (Harry) Stuart, head of Chicago's Halsey, Stuart & Co. and one of the country's top financiers. It was Stuart who floated $6,000,000 in loans to swing the Enquirer deal and who still holds $1,500,000 in debentures, which are convertible into stock. The stock would give its holders working control of the paper.

Since the fight over management began. Financier Stuart has taken a dim view of Publisher Ferger, who now votes a majority of the paper's stock under a trust agreement. Once Ferger flew to see him in Chicago, and at the end of their conference said he was going directly to catch his plane back to Cincinnati. Stuart later checked Ferger's expense account for the trip, found that it did not jibe with Ferger's account to him.

But Stuart was no less firm with the Ratliff faction, and impatient with their failure to win the battle with Ferger. Last week he called in Ratliff, told him he had decided to sell his interest in the Enquirer. "Might as well get out while there is a chance," he said. "Under this management, I don't think the stock will ever go up." Ratliff argued--as he had before --that Stuart himself could change the management. The banker's reply: he had no desire to run a newspaper.

Stuart thought that his $1,500,000 block of debentures might bring as much as $3,000,000--a handsome capital gain for him, and a bargain for working control of a thriving, big daily. Control of the Enquirer would be a coup for the Taft-owned Cincinnati Times-Star, which tried to buy it before, or for the Scripps-Howard Cincinnati Post. But the purchase, which would give either paper a total of 70% of the city's advertising and circulation, might draw frowns from Government trustbusters. At week's end there were plenty of other possible buyers. Stuart counted 15 inquiries, including one from a major paper in New York or Chicago. Gloomed Ratliff: "We're licked."

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