End of a Success Story

The Crowell-Collier magazines shook last week with the biggest convulsion since Paul C. (for Clifford) Smith took over the publishing company three years ago. The 80-year-old American Magazine, whose own rise paralleled the go-getting success stories it pioneered, came to an unhappy ending. Smith announced that with its August issue the magazine would fold up, leaving the company with Collier's and Woman's Home Companion. Into Companion went a new editorial regime to snap the magazine out of the doldrums.

American, which began life in the days of the second Grant Administration as Frank Leslie's Popular Monthly, embraced the whole rise of mass magazine journalism. Changed to American in 1906, it spent a muckraking youth publishing Lincoln Steffens, Ida Tarbell and Ray Stannard Baker, made its biggest impact under Editor John Siddall, who pushed circulation from less than 500,000 to over 2,000,000 between 1915 and 1923 with the inspirational magic of success stories. In its time, American was the first to run Kipling's If and Edna Ferber's short stories, ranged in contributors from Skeptic H. L. Mencken to Booster Bruce Barton. When Editor Sumner Blossom took over in 1929, he announced, "Horatio Alger doesn't work here any more," and American turned itself into a family magazine. It went on thriving for years.

"Transfusion." The magazine's failure would have mystified the business heroes it once lionized. American still has a steady circulation of 2,682,144, just about as big as it has ever been. Yet, in the last ten years advertisers have been steadily deserting the 35-c- family monthly. "I don't know exactly what the reasons are," says Smith. "I guess they are myriad." By cutting costs, American managed to pare its losses from $800,000 in 1953 to $150,000 in 1954, and last year it broke even. In the first half of this year, as advertising kept thinning out, losses grew to $300,000. Smith decided that the task of wooing advertisers back was too big and costly to tackle.

Instead, he and his planners reckoned that the death of American would benefit the company's two other magazines -which are in even worse financial trouble. "The odd thing," said Smith, "is that the least loser turned out to be the best one to pick to put out of business." Collier's (circ. 3,772,079) lost $7.5 million in 1953, $4.5 million in 1954 and $1.5 million last year, and Smith expects losses to be no lower in 1956. Woman's Home Companion (circ. 4,117,734), which was making a profit until 1953, has lost more than $1,000,000 in advertising in the last six months.

Crowell-Collier plans to bolster both of the ailing magazines with a "transfusion" of circulation from American. After August, the company will send Collier's or Companion, on an arbitrary, fifty-fifty basis, to the defunct American's 1,875,000 subscribers. If a subscriber does not like what he gets, he may request the other magazine or -only as a last resort, the company hopes -ask for his money back. Most of American's editorial features will be split up between the two magazines. Its longtime Editor Blossom, 64, becomes a Crowell-Collier vice president assigned to editorial planning, and the company will try to absorb 50 of American's 65 editorial and advertising employees.

"For Future Use." Smith is hopeful about Collier's editorial prospects. To shake up Companion, he moved out Editor Woodrow Wirsig, installed his own assistant for magazine editorial direction, 43-year-old Theodore Strauss, novelist, onetime film scripter and a savvy alumnus of LIFE and the New York Times. Strauss's mission: to woo "the modern woman with a wide range of interests."

Both surviving magazines may be helped by a 12% boost in advertising rates, starting with the January issues, to cover increased costs. Cottier's notified advertisers that it would raise its rate by an extra 10% to pay for an increase in its circulation guarantee from 3,700,000 to 4,000,000.

The company will hang on to American's name "for future use." As part of his drastic, long-range overhaul, President Smith, 47, a onetime journalistic wunderkind on the San Francisco Chronicle, wants to start a newsmagazine. Smith already has added a phonograph-record division to Crowell-Collier, is shopping for a daily newspaper and in the last two months has bought six radio and four TV stations across the U.S., including a pair in Honolulu. Under his three-year regime, the company's profitable book division ( Collier's Encyclopedia, the Harvard Classics) is expected to double its business by the end of this year to an estimated $22 million in annual sales, and the company as a whole was able last year to show a small profit. "If we could have the magazines break even," he told a press conference, "we could make a $5,000,000 profit." A reporter suggested that Crowell-Collier might achieve the same effect by dropping its remaining magazines. After a startled look, Smith assured him that the company regarded its magazines as "the first order of the day."

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