The Trouble With Harry Koch
There’s a rumor going around that the Koch brothers are interested in buying up the Tribune Company, which includes the Chicago Tribune, Los Angeles Times, the Baltimore Sun… And there’s a lot of speculation about what would happen if they did.
Some worry, and rightly so, that the Kochs—whose combined wealth makes them the biggest billionaires on the planet—would integrate the Tribune Co. with the rest of their free-market thinktank-industrial complex, and turn its newly acquired news media property into a gigantic business propaganda machine. Half the reporters at the Los Angeles Times even took a vote saying they’d quit if the Kochs bought the paper.
Others are positively enthusiastic about the possible takeover. Slate’s Matthew Yglesias, for one, argued that "America would be better off for it" because the Kochs would spent lots of money building a better "conservative media product."
But while the country’s media commentators busy themselves trying to predict what Koch ownership would mean for newspapers, many of them are overlooking one important fact: We already know. Because the Koch family has a long history of newspaper ownership.
The Kochs and newspapers go waaay back, right back to their grandfather Harry Koch (yep, that’s a real name), who emigrated to America from the Netherlands in 1888 and bought a newspaper in a podunk railroad town in North Texas called Quanah. With the power of the press behind him, ol' Harry Koch went on to make a fortune for himself and his brood by aggressively rah-rahing on behalf of railroad and banking interests, fighting organized labor and savaging New Deal programs.
Not much is known is known about Harry Koch. Charles and David Koch don’t like to talk about him much. And when they do talk about Grandpa Harry, they don’t tell the truth. Like a lot of billionaires, they want the public to think they're self-made, that they came from humble beginnings, and so they portray their grandpa as if he was a po' immigrant who lived on the edge of poverty, barely scratching out an existence from his tiny newspaper business.
"The whole area was very poor and people didn’t have the money to pay for their subscriptions. So they would pay in produce or chickens or eggs," Charles Koch recalled.
When I travelled to Quanah for the Texas Observer in 2011 to investigate the life of Harry Koch, and to understand the environment that spawned the most powerful brother-oligarchs of our time, I discovered that the truth is much more interesting than Charles' tale. Quanah, Texas, is the world as Harry Koch made it, through his newspapers and railroad. His sons have been remarkably true to the Darwinian-capitalist views Harry ceaselessly proclaimed in his newspaper. So, if you want to know what the Koch brothers have in mind for our country, start by taking a look at the newspaper that their Grandpa Harry Koch ran.
Harry Koch was born in Holland in 1867 into a wealthy family that owned farmland, ran a linseed oil mill and operated a shipping business that ran sailboats between his seaside hometown of Workum, and Amsterdam. Harry Koch's mother died when he was a child, and his father remarried a much younger woman—the daughter of a local banker—and had seven new kids with her.
Life at home didn’t satisfy young Harry. As soon as he turned 21, he emigrated to the United States, hoping to get in on the railroad boom of the late 19th C.
Real estate speculation was a major part of the railroad racket. Railroad companies had acquired huge tracts of public land for free by government grant, and needed to sell it off as quickly and as profitably as possible. That meant railroads were on the constant lookout for sympathetic newspaper publishers to help promote and sell the countless boom towns that had been planned around railroad platforms all across the nation. The railroad town newspaper publishers' job was to hype up local real estate booms and land grabs, providing an opportunity for railroads to dump their properties on gullible settlers at inflated prices
Enter: Harry Koch.
After bouncing around and learning the ropes of the newspaper business, Harry settled in the tiny frontier town of Quanah up near the panhandle, bought two of the town’s newspapers, merged them into the Quanah Tribune-Chief, and quickly established himself as the region’s most ambitious railroad booster.
When Harry moved to Quanah, the town barely existed. There was a cluster of wooden shacks, a crude railroad platform and a whole lot of sunbaked dirt — all of it owned by the Fort Worth and Denver Railway Company. The company had created Quanah just a few years earlier, and wanted to sell as much land in the area as quickly as possible.
Harry’s job was simple: sell Quanah land to as many suckers as he could con. So he dutifully filled his newspaper with wild stories of prosperity, boasting about Quanah’s fertile soil, and the fine qualities of its inhabitants, and the curative properties of the climate.
It wasn’t an easy sell. In the 1890s, North Texas was hit by a massive crop failure, a severe economic depression and low commodity prices, a triple hit that devastated the region and sent many farmers looking for greener pastures. But that didn’t faze Grandpa Harry Koch, who acted like nothing bad had happened, and went about his business hard-selling the superb productivity of the parched, dead land: "Crop failures have been unknown in this valley for twenty years," Grandpa Koch declared in his paper.
He’d print anything, so long as it lured settlers with some loose change in their pockets.
Harry Koch ran his newspaper, the Tribune-Chief like an unofficial sales and advertising division of the Fort Worth and Denver Railway Company, working on commission and kickbacks. Records show that the Ft. Worth-Denver Railway paid Harry directly for his "advertising services." Sometimes the railroad remunerated him in land instead of cash, allowing him to cash in on a real estate bubble that he was helping to inflate. The more he hard-sold the riches of Quanah, the more cash he pocketed.
Grandpa Koch worked hard, and he was credited with helping turn the town into a major regional transportation hub with three different railroad lines going through it. It didn't hurt that he got rich in the process.
Over time, Harry took an increasingly active role in regional development, investing in local businesses and branching out into oil exploration. In 1910, he finally hit the big time: Harry Koch became the founding director, and one of the biggest shareholders, of a local railroad company, the Quanah, Acme & Pacific, which covered a short spur through a handful of towns in North Texas.
After two decades of promoting other people’s railroads, Harry got in on the railroad action himself — and all the perks that went along with it, including the easy money railroads made by bribing and extorting towns desperate to be connected to the railway line. And of course, Harry Koch's Tribune-Chief went all out in the promotional department, printing full-page advertisements for company shares and land in towns created and owned by Koch’s railroad.
Harry Koch went from being a booster to a small time railroad baron, an Ayn Rand hero of the Texas scrub. It was a huge step up in prestige and wealth, and he owed his rise to the way he used his newspaper business.
But Harry Koch wasn’t just about making money for himself. Harry saw himself as a civic-minded publisher who worked for the greater good of his community. He used his paper to educate his readers about complex political, economic, religious and cultural matters. And given that railroad workers were constantly striking for better pay, and farmers in the Populist movement agitated for nationalizing the railroads, regulating Wall Street and breaking up monopolies, the people of Texas were in dire need of the sort of proper education about the free-market facts, that Grandpa Harry Koch heroically provided.
Here are some of Grandpa Harry Koch's editorial highlights:
On unions & strikes:
Harry Koch was no friend of unionized labor. In 1897, not long after he moved to Quanah, Harry penned an impassioned editorial expressing his outrage over the way he was treated by the street railway workers of Galveston, Texas, who decided to strike on the day the National Editorial Association came to town for its annual convention, thereby rudely interrupting a procession of lavish dinners, boozing and partying. Harry was there, and described how the respectable guests were put in the awful predicament of having to walk, with their feet, from one bar to the next. But the newsmen didn’t have to endure the humiliation for long. "Santa Fe officials took pity on the suffering newspaper men and made up a train to Woolman’s lake where the oyster roast was to be held," Grandpa Harry wrote.
On government regulations:
Harry disapproved of financial regulations—or, for that matter, regulations or laws of any kind. He was an anarcho-libertarian before the term was invented! "If we depended upon laws to make us perfect the United States should be a near Utopia and Texas would be the most heavenly spot on earth," wrote Harry, sounding like one of the gazillions of libertarians paid to imitate Grandpa Harry in the Cato Institute, Reason magazine, and elsewhere. This insight didn't stop Grandpa Harry from laughing at the thousands of people who had been defrauded by Charles Ponzi, calling them "suckers" and "idiots."
"In dear old Boston, 11,126 suckers are to hold a conference to discuss ways and means to recover some of the money they entrusted to Ponzi, a former convict. We sincerely hope most of these creditors will bring a guardian along, otherwise it may endanger the peace of the community to have so many idiots come together."
On Rockefeller and oligarch philanthropy:
Harry Koch defended fellow industrialist John D. Rockefeller from critics who accused the robber baron of setting up Chicago University to whitewash his crimes:
"True, Rockefeller’s money is tainted, but how much money is there in circulation that has not at one time or another been possessed by dishonorable men or women? … No person is altogether good or bad, and it seems to us that as long as a bad man is willing to put his money to a good cause, build universities, churches or hospitals, he should not be refused and encouraged to use his money to baser ends."
On ethnic diversity:
Harry Koch frequently weighed in on matters of race. Among other things, Charles Koch's grandpa wrote that he believes "Jews are poor politicians" and that black folks can’t be expected to live up to the moral standards of the white race.
"Marrying comes as easy to some negroes as changing their places of residence. One old negro who died here not long ago, had at least three wives living in Quanah, and several more in neighboring towns. Nobody ever thinks about prosecuting a negro for bigamy, and we suppose it is right not to hold Africans but partly civilized too strictly amenable to laws made by and for white people."
On monopoly power:
Koch published a passionate defense of monopolies and trusts, which he said got a bum rap for no reason at all.
"It is fashion this day and time for democratic newspapers to jump on to trusts and denounce them, whether good or bad. As for the Tribune-Chief, we are enough of a heretic to look upon them with a passive eye and believe that capital has the right to combine. Trusts mark a natural and important and interesting phase of our development. There is nothing in them to be afraid of: they cannot hurt the people, although we, if we pleased, could crush them. We are the people, they are our servants, our creation, altogether ours. We should therefore hold ourselves towards the trusts as masters, proud of what is good in them, anxious to remedy what is evil. And when Europe pales at the tramp of our industrial march, let us remember that we owe to the trusts much of this new-borne prestige… "Let this thing be borne in mind as significant, that all real trusts, all that are destined to succeed and endure, are established on a basis of permanent lower prices for their products. Everybody knows that sugar and oil have been considerably cheaper since these industries have been under trust control. And the same is true, barring periods of fluctuation, of all industries under effective monopoly, from steel rails to cigarettes…"
Harry loved monopolies — but not so much democracies, which he called "Mob-ocracy."
In a 1934 editorial headlined "Democracy’s Problem," Charles Koch's grandpa expressed to readers his concern that democracy might not be all that it’s made out to be: "Mobocracy has long since been discarded as undesirable, even if attainable, and representative democracy has in operation disclosed many defects. . ." (According to the Cato Institute, founded by Harry’s grandson Charles, our wise Founding Fathers agree with Mr. Koch: "Contrary to what propaganda has led the public to believe, America’s Founding Fathers were skeptical and anxious about democracy. They were aware of the evils that accompany a tyranny of the majority. The Framers of the Constitution went to great lengths to ensure that the federal government was not based on the will of the majority and was not, therefore, democratic.")
On public pensions:
Harry Koch raised the "welfare queen" alarm even before the country passed its first welfare laws.
In 1935, Harry Koch described how a dangerous mob of black people descended on his newspaper after a rumor spread "among Quanah’s colored population that the Tribune-Chief contained a request from the government that every man past sixty should report as an applicant for an old age pension." Harry says that was enough to get "every elderly negro in town" cramming into Tribune-Chief‘s offices. It was proof positive that African-Americans (whom you might recall Harry considered "partly civilized" and unable to observe "laws made by and for white people") were already scheming to exploit government programs made for honest white folk.
The Quanah Tribune-Chief kept readers entertained with funny tales about the local black community's zany hijinx in racist, segregated Texas. Here’s one:
An old Negro, passing a graveyard, saw the grave of a man he had known and paused to read the words on the tombstone. Finally he had it: "I still live," read the inscription. "Jes’ look at dat," exclaimed Old Ned. "Who he think he fooling’? If I’m ever dead, I sho’ll be man enough to own up to it."
Blame Heredity, Not Nature Both the Texas Senate and House are reported to be favoring bills providing for the sterilization of some of the inmates of insane asylums and prisons. Such measure is expected to greatly cut down the number of habitual criminals and mental freaks.
On the assassination of elected officials:
In the 1930s, Harry Koch’s Tribune-Chief joined the smear campaign against Huey Long, the popular Democratic Senator from Louisiana who was keen on challenging FDR from the left. To Harry, Huey was a covert Bolshevik for proposing to cap individual' net worth, and to set up a genuine welfare system that would redistribute the wealth. After the Louisiana Senator was by a killed by a lone gunman in 1935, Harry all but approved of the murder:
"Huey Long was shot by a doctor Sunday evening after he had left the Louisiana legislature. Fighting people like he did and depriving them of a livelihood, the shooting did not come unexpectedly. Bill Maddox, who went to school with him said Huey was very bright but greatly disliked by the other boys, while Huey’s younger brother says he had to do his fighting for him."
Of course, Huey Long wasn’t the only covert commie plotting to undermine the United States. As he fought against the New Deal, Harry Koch became a chronic Red-baiter. In a 1938 editorial, he warned his readers (particularly the ones who were "Americans who believe in America") that "Communists were working particularly within the schools" and that "it is the duty of every parent to inspect closely material of a radical nature which is infiltrated ever as skillfully into the public school system."
What Harry didn’t tell his readers was that his own son, Fred Koch, had just come back from the Soviet Union, where he was under contract with Comrade Stalin to build 15 refineries, train commie engineers and beef up Soviet energy independence. Fred made a killing working for the Soviet Union, taking home a $5 million nut for himself, but that didn’t stop Fred Koch from carrying on his father’s red-baiting tradition. Fred Koch took the obsession to new paranoid heights when he helped found the John Birch Society in 1958, after which he toured Elk Lodges and YMCAs across America, arguing for the reimposition of segregation, denouncing President Kennedy as communist agent and traitor, and warning people of a diabolical commie plot to subvert America using labor unions, gays, Jews, blacks and that most evil and cunning of all Soviet-trained commie traitors, General Dwight D. Eisenhower.
When I stepped out of Quanah’s little courthouse, my eyes squinting from hours of staring at dim microfilm, it was as if I was still in Harry Koch’s horrible little dreamworld, because Quanah today is the perfect expression of the Koch family’s ideal world — as ignorant, poor and powerless as Harry would have wanted it to be. Every local I met acted like a pliant peasant: they were too poor, too sick and too tired to care.
In 2011, the Koch family still owned most of downtown Quanah, as well as the gypsum factory on the outskirts of town. Another billionaire owned a massive cattle ranch outside the city limits, where hired hands earn $150 a day—flat rate. "I gotta make sure there enough water, I gotta move them from one patch of land to another, I gotta round em up and drive them into a pen for transportation... you name it, I gotta do it. It doesn’t matter how long it takes to get it done. Five hours, two hours or 18 hours. It pays $150," one of the ranch hand told me. "That’s just the way it is."
If Harry Koch were still alive, he wouldn’t even have to keep putting out his paper, because Quanah, and all the hundreds of other towns like it all over Texas, have so internalized the Kochs' Darwinian ideology, now under the banner of "libertarianism," that heavy-handed persuasion is no longer as necessary as it was in the days when labor unions and socialism were powerful forces.
Perhaps that’s the real reason why the Kochs are so interested in applying Grandpa Harry's formula to the few remaining newspaper holdouts, especially targeting a major coastal city like L.A. — one of the last regions in America that hasn't yet been Quanah-fied.