Freedom Communications, R.I.P.

by John Seiler by John Seiler Previously by John Seiler: McCain Flips Out on Leno

A great friend of freedom died Tuesday, when Freedom Communications filed for bankruptcy. Owned since its founding in the 1920s by the Hoiles family, Freedom now effectively is owned by its banks. Long the journalism profession's major proponent of libertarianism through its 30 daily newspapers and eight TV stations, Freedom's demise casts uncertainty over the continuation at the newspapers of the "freedom philosophy," as company stalwarts call it.

R.C. Hoiles (1878–1970) was a flinty old newspaperman who relished a fight into his nineties. He loved to debate public school superintendents, who headed what he always accurately called "government schools" or "gun-run schools." People encountering R.C. on the streets were left with a libertarian pamphlet on one topic or another.

A 1986 review of his life by Carl Watner in The Voluntaryist described one of his most famous battles:

Hoiles “entered into one of the bitterest newspaper fights in the history of the publishing business in Ohio.” The Hoiles paper in Lorain had exposed the corruption prevalent in the awarding of paving contracts to the Highway Contracting Company of Cleveland. Horowitz, the owner of this company, was eventually shown to be the owner of the newspapers in Lorain and Mansfield, both of which strove to “get even” with Hoiles for his part in exposing the fraudulent practices. The rivalry between Horowitz and Hoiles prevailed till 1931, but in the meantime the front porch of the Hoiles home was destroyed by an explosion in November 1928, Hoiles’ car was wired with dynamite (which fortunately failed to detonate), and a dud bomb was discovered in the office of the Mansfield News. None of this gangsterism was ever explained, but it did motivate R.C. into selling the papers in Mansfield and Lorain.

He moved to California and in bought The Santa Ana Register (later named The Orange County Register), which became the flagship for the company. But even brought R.C. into conflict with corrupt government power:

During the New Deal days, R.C. became a victim of New Deal legislation. He had effected the sale of his two papers in Ohio in 1931, but according to the terms of settlement he was not to receive all of the proceeds until 1935. By that time FDR had devalued the dollar and nullified the gold clause in all private contracts. As R.C. expressed himself in a private letter to Robert LeFevre, written on February 4, 1964, he “had a little experience” with the government abrogation of contracts whereby “I lost $240,000 [at least $10 million in 2009's inflated money].” It was for this reason, if no other, that, he concluded, government should have nothing to do with money or credit.

Defending Japanese-Americans

R.C.'s perch on the California coast providentially brought him to his finest hour as owner of The Register. During World War II, The Register was one of the few newspapers in America to oppose the putting of Japanese-Americans in concentration camps by Franklin "Dictator" Roosevelt and California Attorney General (later Gov.) Earl Warren. R.C.'s editorials were especially pertinent as he was located in the area where the Japanese were being kidnapped and exiled.

An excellent article describing R.C.'s heroism was published by Register senior editorial writer and columnist Steven Greenhut. It's worth reading the whole thing. A follow-up article is here.

Greenhut wrote:

What were newspapers saying?

An editorial in the March 6, 1942, San Francisco News argued:

Japanese leaders in California who are counseling their people, both aliens and native-born, to cooperate with the Army in carrying out the evacuation plans are, in effect, offering the best possible way for all Japanese to demonstrate their loyalty to the United States.

By contrast, here was Hoiles on Feb. 5, 1942, before the internment order was announced:

The recommendation of the grand jury to have all alien enemies removed from Orange County calls for a difficult undertaking. Every bit of wealth that these workers are prevented from creating, which we so badly need during the war, will have to be created by the labor of some other worker.

Of course, there is no such thing as absolute security. We must run some risks in every move. Risks are life itself.

“It would seem that we should not become too skeptical of the loyalty of those people who were born in a foreign country and have lived in the country as good citizens for many years. It is very hard to believe that they are dangerous.”

Throughout the year, the Register printed columns that worried, in general, about the state of civil liberties in the nation. By October, Hoiles stepped up the criticism of the internment specifically, calling for a rollback of the order and a rethinking of the evacuation process.

In an Oct. 14, 1942, editorial, the Register argued,

Few, if any, people ever believed that evacuation of the Japanese was constitutional. It was a result of emotion and fright rather than being in harmony with the Constitution and the inherent rights that belong to all citizens.

As Greenhut notes, to this day the survivors of the crimes of FDR and Warren are grateful for R.C.'s efforts defending them.

Libertarian Leader

After the war, R.C. continued his long, difficult fight for liberty. He published such great libertarians as Frank Chodorov, Rose Wilder Lane, Robert LeFevre, Ludwig von Mises, and Leonard Read.

He much respected Mises, but was not afraid to tackle him from a position close to the anarchism of Murray Rothbard. Watner writes:

Once he challenged Ludwig von Mises on his “contention that we have to have monopolistic local, state, and federal governments to protect our lives and property.” The two were personally acquainted as R.C. had at one time in the mid-1950’s invited von Mises to lecture in Santa Ana, at R.C.’s expense. Some years later, in 1962, R.C. directed a letter to von Mises in New York, asking him to reconsider his rejection of voluntary defense agencies. R.C. said that he saw von Mises doing so much good on behalf of free enterprise and free market economics, that he hated to see von Mises “continue to advocate any form of socialism, or any form of tyranny. And when you are advocating that the free market is not the better way of protecting man’s lives and property, I think you are serious in error… .” There is no record of von Mises’ response.

That was pretty cheeky, given that Mises was the world's foremost economist and libertarian and the scholar who demolished the theoretical arguments for socialism. But R.C.'s stance foreshadowed the total critique of government by Mises disciples Rothbard and Hans-Hermann Hoppe.

Libertarian philosopher Tibor Machan began writing columns for R.C. in the late 1960s, something he has continued at The Register for more than four decades. He recalls how R.C. asked him to drop out of college and come to work at The Register as an ad salesman. Tibor declined, finished his academic studies through his Ph.D., and today is Freedom's libertarian adviser.

The Next Generations

After R.C.'s death in 1970, his three children and several grandchildren carried on his libertarian philosophy. Unfortunately, a family split developed in the 1980s when son Harry Hoiles didn't like how the company was being run and wanted to split up the company to get his equity. A long legal dispute was resolved against him.

I joined The Orange County Register in 1987 as an editorial writer hired by then-Editorial Director K.E. Grubbs Jr. I stayed for 19 years until 2006, when I took a buyout as the paper began its decline. The best thing about the paper was that every politician in Orange County knew The Register would oppose all new taxes and regulations. We didn't win every fight, but won many. This is the reason, I believe, that Orange County's taxes and regulations are significantly lower, and its employment and economic growth rates higher, than in neighboring Los Angeles, which must suffer the leftist Los Angeles Times' perpetual yelps for higher taxes and more government.

In recent years, major campaigns have included Senior Editorial Writer Alan Bock's efforts to legalize medical marijuana, about which he wrote a book; and Greenhut's efforts against eminent domain abuse, which also produced a book. Both men are well known to LRC readers and to libertarians around the country. (You can get either book now on Amazon for a couple of bucks.)

And I must have written 100 articles pointing out that California's wild spending couldn't last, and the state budget would implode during the next recession — which turned out to be the Bush-Greenspan Depression we're now suffering. I also wrote numerous articles warning about the Greenspan inflation and how it would lead to a bust.

All of us were followers of Austrian economics and fans of Ron Paul, H.L. Mencken, LRC,, and numerous other great defenders of liberty.

The Commentary section also produced award-winning cartoons by Mike Shelton and illustrations by Art Director Jocelyne Leger. Some of their current work is at PoliticalB******

Against Bush's War

But during my tenure, The Register's finest hour came in 2002–03, when we were one of the few newspapers in the country to oppose Bush's unjust, unconstitutional, and unconscionable Iraq War. Most of those editorials were written by Bock, with Greenhut and myself chipping in.

As early as August 23, 2002, I wrote an editorial warning about the horrors to come should Bush invade Iraq, as it was becoming clear he would. Bush and his retinue were in Orange County, so I brought up the Weinberger-Powell Doctrine as a last-ditch effort to talk some sense to the Bushies. I didn't agree with the Weinberger-Powell Doctrine (because it still made war too easy to start), but used it as a way to get through to Secretary of State Colin Powell and others in the administration. It didn't work, of course. But how many newspapers, seven months before the war began, warned:

One of the major lessons of history is that wars never turn out as planned. Saddam's troops might collapse quickly as they did in the desert in 1991. But this time, defending their own cities and families, they might be joined by civilian guerrillas and fight like the Somalians did in 1993….

It is Americans whose sons and daughters, fathers and mothers, brothers and sisters would die in a war. The people have a right to be heard on whether it's necessary to make that sacrifice. In recent weeks, House Majority Leader Dick Armey, Sen. Chuck Hagel and other members of Mr. Bush's Republican Party have questioned the need to attack Saddam. We believe a declaration of war should be passed by Congress before any war….

Diplomacy still works. Saddam has indicated that he is willing to allow arms inspectors back into his country. This avenue at least should be pursued seriously.

In conclusion, the Weinberger-Powell doctrine means that, despite America's overwhelming global military power, that power should not be used unwisely. It means seriously thinking through whether other means, especially diplomacy, can be used to achieve an objective, looking at all the ramifications of an action and formulating an exit strategy.

War is not the first-reach answer, even in the new War on Terrorism, even as the anniversary date [9/11] of its horrific opening round comes into view.

I don't know if Bush or anyone in his regime ever read the editorial. And Bush is famous for being stubborn and ignorant. But it still was a worthwhile effort. Unlike almost every other newspaper in the country, we warned our readers of the horrors to come in Iraq.

Family Feud

Unfortunately, in the early 2000s the Hoiles family feud boiled over again. In 2004, about 40% of the family was bought out by the other 60%. The money was raised through a $500 million loan from Blackstone and other equity firms. This was the height of the Bush-Greenspan Boom, with the Bust seemingly far distant. So the company probably was much over-valued, as was the payoff to the 40%.

Up until that point, Freedom almost never had borrowed money, certainly not such a large sum. R.C. was allergic to borrowing. If the money had not been borrowed, Freedom still would have lost much of its private equity value in the ensuing years, but would not today be in bankruptcy.

The 40% of the family that got the cash did well financially. In a free-market system, that certainly is their right. But the real heroes were the 60% who kept the company so it could still advance the "freedom philosophy" for a few more years. I knew some of these family members and they were great folks who prized liberty. I only wished more family members had been directly involved in the business, instead of hiring outsiders who didn't know what they were doing.

Almost immediately, the company began suffering problems. The Internet reached the point where it was taking over ad revenues, especially through craigslist. An ad that cost $60 and ran for a week in The Register cost nothing and could be repeated indefinitely on craigslist. Great news for consumers, bad news for newspapers. Circulation also crashed as readers preferred getting their news online, usually for free, shortly after it happened, rather than wait for it to be dropped on their doorstep, at a price, the next morning.

In 2006, a major Freedom management blunder occurred when the company blew $20 million (for starters) on a new newspaper in Orange County, the OC Post. It was a dumbed-down tabloid of the kind popular with subway commuters in New York City, Chicago, and Philadelphia. Except in Orange County there is no subway and almost everybody commutes by car. The paper was canceled just over a year later.

In 2007, the Bush-Greenspan Depression struck hard, cutting ad and circulation revenues even more. Other newspapers — The Seattle Post-Intelligencer, The Rocky Mountain News — started failing. The Ann Arbor News closed and went totally online.

The Register is profitable for now, but that is unlikely to continue. Other Freedom newspapers cannot be doing any better. The eight Freedom TV stations still have value.

Whither Freedom?

Even though I don't work for Freedom Communications any more, I still feel a strong attachment to the company. It gave me a voice for 19 years. I hope the new owners keep the "freedom philosophy" at what remains of Freedom Communications. But I fear that won't happen. New owners usually have their own ideas about running things.

Many times over the years, Register readers told me that they only bought the paper for the libertarian editorial page. How much circulation would be lost if the editorial page became a mirror of the leftist L.A. Times, or, worse, a bland, moderate voice like USA Today? It's hard to say, but I'd suspect 10% or more. Especially nowadays, with so many choices on the Net, blandness doesn't sell.

Whatever happens, the legacies of the Hoiles Family, Freedom Communications, and The Register are secure as great champions of freedom. If America had only a few more such newspaper companies the past 100 years, instead of so many sycophants to government, we would not have lost so many freedoms. And our fight to regain those freedoms would not be as difficult.

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