The Reader's Digest Drama in Real Life   

American Dreamers:
The Wallaces and Reader's Digest, An Insider's Story
By Peter Canning
Simon & Schuster

American Dreamers:
The Wallaces and Reader's Digest, An Insider's Story
By Peter Canning
Simon & Schuster
379 pages; $27.50

It begins, in a town called Pleasantville, as a Life-in-These-United-States idyll. A penniless couple faithfully pursues a dream, surmounts mighty odds, finds breathtaking success.

But by the end, the story of DeWitt and Lila Acheson Wallace is no longer an inspirational Reader's Digest nugget. It is, at least in Peter Canning's version, a darker fable — a tale of individuality trampled by corporatism, of an entrepreneur's brilliant vision corrupted by its own uncontrollable triumph.

It is a full-fledged parable of modern journalism, and that makes this angry new book important.

Peter Canning is a 25-year Reader's Digest veteran who eventually fell in a power struggle. Here, he brings passion and insider detail to the remarkable story of the Wallaces, two Middle Americans who, on a "borrowed shoestring," created a $6 billion company whose cornerstone publication, Reader's Digest, reached 100 million readers worldwide.

"No publication of any kind — not even the Bible," Canning claims, "had ever informed so many human beings."

It was DeWitt, an "errant son" and college dropout, who in 1913 hit on the "stunt" of digesting government pamphlets into shorter circulars for farmers. By January 1922 (about the time he married former social worker Lila, who would inspire and collaborate with him for half a century to come), the idea had expanded. Volume 1, Number 1 of Reader's Digest appeared, backed by $1,300 in borrowed money and $5,000 in subscriptions raised by mail order.

DeWitt labored daily at the New York Public Library, condensing magazine articles in longhand, trusting his own instincts to locate material that was "quotable," "applicable" and "of lasting interest."

He paid generously for reprint rights and shared his rising earnings with his staff and the magazines that did business with him. Circulation crossed the million mark during the 1930s and by its 40th anniversary in 1962, Reader's Digest, published in 13 languages, had 23 million subscribers.

Canning is a clear Wallace partisan. To his credit, he shows their abrasive and sometimes crude behavior. But he holds to an idealistic version of the Wallace legacy: "Wallace had run his business as a reflection of his own modest personality... His publications were esteemed. His customers satisfied. His employees secure and content. That the enterprise remained highly profitable seemed almost incidental."

The Wallaces kept their company in private hands. "Should the desire to make money ever come first in our calculations?" DeWitt asked in another note. "I don't think so."

But runaway success made Reader's Digest too juicy a target. As the Wallaces' health and acuity failed in the 1970s, battles broke open within their empire. Extremists fought moderate conservatives to dominate the magazine's content. Lawyers, accountants and editors arm wrestled to control corporate direction. Most important, a high-powered cast of insiders and outsiders jockeyed fiercely to inherit power over the Reader's Digest board and its related, richly endowed philanthropies.

Canning is exceptionally harsh in condemning the role played by Laurance Rockefeller, who befriended the Wallaces during the 1960s, became one of the company's first outside directors, and eventually saw hundreds of millions of dollars flow from Reader's Digest into his favored causes.

The book suffers because Rockefeller and a few key allies declined to be interviewed. Canning's tone can be blistering, and his take is conspiratorial.

But evidence seems abundant that, after DeWitt died in 1981 and Lila in 1984, the profit motive prevailed at Reader's Digest. Staff cutbacks and tighter-fisted management replaced "the benevolent capitalism of the Wallace era with the bottom-line rapacity of the Greed Decade." Profits quintupled by 1989, and the company's stock value rocketed from $18 to $400 per share, creating instant fortunes.

Charities that had been given Reader's Digest stock over the years profited unimaginably. Canning's figures are staggering. Colonial Williamsburg had holdings worth $280 million; the Metropolitan Museum, $399 million; Lincoln Center, $372 million.

Canning offers a ghastly view of the Wallaces themselves in their last days, presenting them as lonely, ill, isolated, out-of-touch prey for the predators. His sources include their chauffeur and various staff members, many of whom can fairly be described as disgruntled.

So while it's hard to judge how fair this book ultimately is, "American Dreamers" is, at the very least, an inarguably sobering Drama in Real Life, one more symbol of the conglomerate trumping the maverick, one more reason to fear for the future of the romantic journalistic spirit.

Stepp, AJR's senior editor, teaches at the University of Maryland College of Journalism.