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The Fairfax Family

For a hundred years this newspaper has asserted the right, in the interests of the whole state, to criticise government actions and there has never been a time when the liberties which every free Australian enjoys has been menaced as now …

Sydney Morning Herald editorial, 23 September 1931

Fairwater stands as a symbol of faded family wealth, a mansion whose manicured lawns run down to Seven Shillings Beach on Sydney Harbour, nestled in between Double Bay and Point Piper. Its chatelaine is Lady Mary Fairfax, the third wife of Sir Warwick Fairfax and the mother of young Warwick. But Sir Warwick is dead, young Warwick fled the country two decades ago, and Lady Mary, now in her nineties, rarely leaves the house. She is a lonely, isolated figure. She also has been one of the key participants in the destruction of the Fairfax family empire, ending its control of one of Australia’s greatest media companies.

To understand how all this has happened, we need to go back to the beginning, back to 1838, when Sydney was celebrating the fiftieth anniversary of its founding. There was no Opera House in those days, no opulent harbourside restaurants. Sydney was just a dusty town of some 25 000 people. The Tank Stream still flowed through its centre. There were convicts confined in chains and 500 British soldiers were based in barracks on the main thoroughfare of George Street.

On 26 September of that year, John Fairfax, just turned thirty-three, sailed into the harbour on the Lady Fitzherbert with his wife Sarah and four children. The voyage to Sydney from Gravesend on the Thames in London via the Canary Islands and the Cape of Good Hope had taken four and a half months. Fairfax had fled England a bankrupt, unable to pay his debts after fighting a crippling defamation action against his newspaper, the Leamington Chronicle. It was all a little unfair—Fairfax had won the defamation action, twice, and the offending item was simply a published letter from an overenthusiastic reader that reflected poorly on the reputation of a local solicitor. But it was enough to convince Fairfax that he was finished with England.

He started out modestly in Sydney, supporting his family by taking on a job as a librarian in Macquarie Street, in the centre of town. But within three years he had found his way back to publishing—Fairfax and a business partner, Charles Kemp, bought the Sydney Herald for £10 000 pounds (the equivalent of about $600 000 today) on vendor finance. The Sydney Herald was New South Wales’ dominant newspaper and prided itself on being a Tory, or conservative, publication. It sided with the Protestant ascendancy and the property-owning sectors. It was against emancipists, penal reforms, Catholics and, as Indigenous people were referred to then, blacks.

John Fairfax fitted this profile well. He was a political conservative, a committed Christian and a deacon of the Congregational Church—a position he held in common with another recent immigrant, David Jones, who had just opened his first department store in George Street. John Fairfax was also a passionate publisher—this was his third newspaper venture—and he helped set the Sydney Herald’s patrician and conservative tone right from the start.

The most important political issue of the day was constitutional change. Needless to say, Fairfax’s publication wanted power to remain in responsible hands. This was the advice that the newspaper, now renamed The Sydney Morning Herald, gave to its readers before the 1842 municipal elections:

Much, very much, depends upon this one question—whether the respectable classes—by which we mean professional gentlemen, merchants, bankers, shopkeepers, and master tradesmen—will come forward heartily and with good will, to consecrate their intelligence and proper influence to the municipal cause; or whether, from a sordid devotion to their private affairs, or from a selfish and cowardly aversion to trouble, they will hold back, and leave the city in the hands of the working classes?

The Fairfax family became the sole owner of the SMH in 1853 when Kemp decided to enter politics, after which John Fairfax made a victorious return trip to England to repay all his creditors in full. That same year, he brought his eldest son, Charles, into the business and built the foundations of a publishing dynasty that was to last for over 150 years.

The Fairfaxes were by now key players in the politics of the colony, their views thundering out from the SMH’s editorial pages. This is what they had to say about the Eureka Stockade 1854:

It was surely the most wanton aggression against authority ever known in any country … It really does become … very serious when we see treason committed in the boldest and most undisguised way—when war against established authority is openly proclaimed—when nothing short of an armed insurrection has taken place—to find not only a Jury acquitting against evidence, and a mob shouting victory, but a community looking on, half of it with approval, the other half with indifference or a fear which assumes the air of indifference. This is what we have witnessed at Port Phillip, and in every way it is a matter for grave reflection.

The newspaper then supported squatters when a move was made in 1857 to unlock vast, unused acreage for development by free selectors:

[The squatters] have done vast service, such as we can never appreciate too highly; they deserve not only applause but reward. The country is bound to protect them from capricious and vexatious legislation—not only for their sake or for the sake of political justice, but for the sake of the country which they, more than all others put together, have made commercially great.

John Fairfax died in June 1877, but the conservative tradition he imprinted on the SMH, and his family’s firm control of the newspaper, lived on.

From where we sit in the twenty-first century, with so much media available to us—the internet, pay TV, free-to-air television, radio and magazines—it is hard to understand just how important newspapers were in the nineteenth and early twentieth centuries. There was no radio in Australia until late 1923, when 2FC (later Radio National) was launched in Sydney. There was no television until 1956. Newspapers like the SMH and The Age and news magazines like The Bulletin and Smith’s Weekly were the sources of all news and political commentary in the country. As such, the role of a newspaper proprietor was a very powerful one. And newspapers were lucrative. Advertisements adorned the front pages in those days, while the news reports were inside the paper.

The likes of the Fairfaxes knew what their main business was—it was classified ads. But they also took their responsibilities as members of the fourth estate very seriously. The SMH sent Banjo Paterson to southern Africa to cover the Second Boer War in 1899. In 1915, it dispatched CEW Bean, Australia’s official World War I historian, to cover Gallipoli.

Proprietors like the Fairfaxes in Sydney and David Syme at The Age in Melbourne also relished the ability to voice their political views in newspaper editorials. There was a lot of ego involved. Judged by today’s standards, the language tended towards the extravagant, the sentiments often extreme.

The SMH, for example, railed against Jack Lang during the Great Depression of the 1930s. Lang, the NSW premier, had refused to cut government spending and salaries during the economic collapse, as other states had done, making NSW’s fiscal position particularly parlous. He had his own plan for economic recovery, which included a refusal to pay interest on overseas loans, the abolition of the gold standard, and the immediate injection of £18 million into the economy, in the form of Commonwealth Bank credit. It doesn’t sound so radical now, given what has happened in Greece since 2009, but it was greeted with horror in 1931.

When the federal government repaid the overseas bondholders and then passed legislation to seize the funds from NSW, Lang withdrew all the state’s funds from government bank accounts and held them at Trades Hall in cash so that they could not be accessed.

On 23 September 1931, the SMH editorialised as follows:

Eight months later, after Lang had been dismissed by the governor of NSW, Sir Phillip Game, the newspaper celebrated:

A great weight lifted from the people—an incentive to common thanksgiving for deliverance from grave danger—a relief as from malignant evil miraculously removed from our midst—these impulses moved the hearts of the great mass of the community through the weekend … The constitutional way out has been achieved at a desperately late hour, and the whole State breathes again as though a cleansing wind had swept it from end to end.

These were the early days of the reign of Sir Warwick Fairfax, then just plain Warwick, the great-grandson of John Fairfax. Warwick became managing director of the family company in 1930, when he was a mere twenty-eight years old, following the death, in quick succession, of two Fairfax brothers who had held the position. First, Warwick’s father, James Oswald Fairfax, had died in 1928 (on the 18th hole of the Royal Sydney Golf Course), then his uncle, Geoffrey Fairfax, died in 1930. Warwick was an only child and the eldest male Fairfax of that generation to join the family firm; Geoffrey Fairfax had no children.

It is (Sir) Warwick Fairfax, his younger cousin Sir Vincent and their sons James, (young) Warwick and John Brehmer (or John B) who represent the Fairfax family in our living memory—or at least the memory of those of us who have worked for the company or followed the family saga.

Warwick was a somewhat donnish young man, fine featured, intellectual, absorbed in the classics. Educated at Geelong Grammar and Balliol College, Oxford, after finishing his studies he spent several years in Fairfax’s London office, which had been set up in Fleet Street in 1923. He enjoyed writing and contributed to the SMH articles, such as the five-part series ‘The world today: statesmen’s views’, which appeared in 1926. The following year, he wrote a four-part series on the doctrines of Dr Sun Yat Sen, the first president of the Republic of China.

Warwick was to reign over the company for forty-six years. He might have been a nerd, but it was under his rule that Fairfax flourished. By the time he stepped down in 1976 (or, rather, was dragged out), Fairfax’s newspaper empire included the SMH, the afternoon Sun, The Sun-Herald, The Australian Financial Review (the Fin Review) and The Age. It had a television network, its flagship station being ATN 7 in Sydney. It controlled the Macquarie Broadcasting Network, as well as a string of suburban newspapers and regionals in Newcastle, Wollongong and Canberra.

There was, however, a power behind the throne. This was Rupert AG Henderson, widely known as Rags. He was Warwick’s general manager and then managing director between 1938 and 1964, though he remained on the Fairfax board, a powerful influence, until 1978. Henderson was five years older than Warwick, a former ace reporter, a staunch conservative, and a man with a personality of such intensity that the SMH’s editor in 1965, John Douglas Pringle, said of him that he ‘could not remark on the weather without making you feel it was a matter of life and death’.

He was also an excellent businessman with a passion for newspapers that probably rivalled that of company founder John Fairfax. He was the keeper and builder of the family’s wealth for more than thirty years. And Warwick drove him nuts.

James Fairfax, Warwick’s son, who succeeded him as chairman in 1977, recalls Henderson complaining about his father: ‘How can you run this place when the chairman ambles in at midday?’

Henderson wrote to Warwick in January 1945 to (again) spell out his concerns:

From time to time I have stressed to you the difficulty of management due to your absences, and I think it is desirable to emphasise that now. I do not know what the solution is but certainly the position is not helped by the fact that during your limited attendance in the office a substantial amount of your time is devoted to writing special articles.

Warwick would travel to Europe or the United States for months at a time, shipping his Rolls-Royce over as well so that he could travel in comfort and simultaneously telegraph his status. But while Warwick tended to live the life of the moneyed intellectual, more Brideshead Revisited than Citizen Kane, Henderson and his deputy, Angus McLachlan, ensured that the Fairfax empire grew and prospered.

David Marr was editor of The National Times when Fairfax held its 150th birthday celebrations in 1981. ‘There was a big dinner at a Sydney hotel’, he recalls. ‘The unbelievably ancient figure of Rags Henderson walked into the room and the whole Fairfax family got up and mobbed him. They showed by their instant response to his appearance in the room their gratitude to this man.’ (It is unlikely, however, that Lady Mary would have been part of the mobbing. She loathed Henderson, as we shall see.)

Marr had interviewed Henderson in 1978 when researching his biography of High Court judge Sir Garfield Barwick—Henderson and Barwick had had a falling-out over antimonopoly legislation that Barwick introduced as attorney-general and impacted the newspaper and television industry. ‘Very rarely in my time interviewing people have I been as physically uneasy as I was with him [Henderson]’, Marr says. ‘He was scary. Bony, very thick glasses. My memory is he somehow saw you without looking at you. The mind was not a generous big roaming mind, it seemed to me, but the laser focus of hatred on Barwick was just fantastic.’

During the 1950s and 1960s, it was Henderson who proved to be a match for the competing media moguls of the time—Sir Frank Packer, Ezra Norton at Sportsman Ltd, Sir Keith Murdoch at the Herald and Weekly Times. And it was Henderson who, after years of nurturing close relations with Syme family descendants in Melbourne, was principally responsible for bringing The Age into the Fairfax camp. Thanks to Henderson, Fairfax more than held its own during this period.

The growth of the Fairfax empire looks entrepreneurial on the face of it but it was essentially defensive. Every deal was a deal done to protect the strength of the SMH, to keep competitors off its turf, to protect its flanks, to maintain the power and influence of the family’s flagship.

James Fairfax confirms this in his memoir My Regards to Broadway, albeit with a clarification: ‘There was no conscious policy of empire building, but where does self-protection cease and territorial ambition start?’

When the Fin Review was set up in 1951, for example, it was done in a rush to counter the threat of a new financial weekly that was being planned by Roger Randerson, the Australian correspondent for the London Financial Times, with financial backing from Norman Rydge, a significant stock market figure, entrepreneur and publisher of business journals. The new venture was to be called the Financial Times, but it never got to first base. The Fairfax threat killed it. As Randerson wrote to Rydge: ‘I am game to go ahead but I have to warn you that we would run the risk of driving a scooter into a tram’.

When Associated Newspapers decided to back out of its Australian operations in 1953, Fairfax bought it to stop Packer getting his hands on The Sun, The Sunday Sun and a stable of magazines that included Pix and People. Then, when Ezra Norton, publisher of the scandal sheet Truth and Sydney’s The Daily Mirror, decided to retire in 1958, Fairfax bought him out rather than see Sir Frank Packer add an afternoon newspaper to his Telegraph stable. It meant that Fairfax now owned both afternoon newspapers, an unsustainable situation in an era when the Fairfax family claimed to champion diversity of media ownership as a key plank of democracy. Two years later, Henderson sold The Daily Mirror to Murdoch, giving him his first foothold in Sydney. This turned out to be a big mistake, but it initially served its purpose, which was to stymie Packer.

When Sir Frank Packer bid for a television licence in the 1950s, Fairfax did too. When Lew Grade, the British media baron and founder of Associated Television in the United Kingdom, wanted to sell his Australian radio interests, it was the Fairfax and Packer groups that lined up to battle it out, with Fairfax scoring a narrow victory at the last minute. This was the beginning of the Macquarie Broadcasting Network. There were fights in Newcastle over the Newcastle Herald and the NBN Television station, which Fairfax won. Fairfax also expanded to Wollongong, buying the Illawarra Mercury. And when both Rupert Murdoch and Sir Frank Packer showed an interest in establishing a foothold in Canberra in 1964, Fairfax bought The Canberra Times to protect its readership and its advertising revenue.

But perhaps the biggest battle of this period was over The Age.

The Syme family had controlled The Age since 1856. They exerted a different influence on the city of Melbourne than that of the Fairfaxes on Sydney. The tone was set by David Syme, who, as the newspaper’s principal proprietor and sole editor, presided over The Age for nearly fifty years, from 1860 to 1908. Syme was known as ‘the radical Scot’. He supported manhood suffrage, the opening of land for free selection with no compensation for squatters, compulsory free and secular education, and protection for local industry. Syme was considered to be the bane of the colonial bourgeoisie in Victoria. But time moves on, of course, and The Age at its peak became revered by Melbourne’s intelligentsia, even if its views often were more liberal than conservative.

In 1966, David Syme & Co., by then publicly listed on the stock market, faced an ownership crisis. The Syme family’s command over the company had become widely dispersed, and under a complicated trust arrangement, due to expire on the death of David Syme’s last surviving son, Oswald, control of the share register was vulnerable. The HWT, the Murdoch family and the Packer family were all keen to get their hands on The Age. For managing director and chairman Ranald Macdonald and his stepfather Edwin Neill, both Syme relatives, a Fairfax deal was a preferable alternative. The two companies were more compatible in their views on the role of an independent, quality press.

The deed signed by the chairmen of Fairfax and David Syme stated that the objective of the deal was

to maintain the independence of the company, to sustain and foster the traditions of the late David Syme as developed and expanded by his heirs and in particular to maintain the influence of the Syme family in the affairs of the company as publisher of The Age, to maintain The Age as an independent newspaper of high quality and responsibility in competition with other newspapers …

By today’s standards, it was a tough deal. Even if John Fairfax and Co. acquired 90 per cent of the shares in David Syme and Co., it could not procure the passing of a resolution at a meeting of shareholders or directors that was opposed by the Syme minority. It was seen as proof of Fairfax’s intention to maintain the independence of David Syme and The Age.

Both Packer and Murdoch tried to stymie the transaction at the last minute. Murdoch stationed a courier outside The Age with instructions to look out for Oswald Syme (‘an old man with a stick’) and give him a letter containing an offer from News Limited. Packer, meanwhile, sent an open message to Ranald Macdonald on The Age’s telex machine. ’There are advantages in our two organisations being linked together’, he wrote.

Fairfax won the day, however, and in subsequent years it consolidated its hold. By 1972, Fairfax’s stake had increased to more than 50 per cent and David Syme had become a subsidiary. By 1999, David Syme & Co. had become The Age Company Ltd, ending the Syme family’s connection with the newspaper. But it was the initial gaining of control over David Syme and hence The Age that gave the Fairfax group a true national presence, made it an almost unbeatable force in Australian publishing (for a time) and extended its political influence.

The Warwick Fairfax/Rupert Henderson combination clearly proved to be a winner, adding strength and prestige to the Fairfax empire. And while Warwick frustrated Henderson on practical matters, the two could be very close. They had worked in London together as young men when Warwick first came down from Oxford and Henderson was the London office manager. They shared an interest in intellectual pursuits and particularly in politics. They spent hours in discussion formulating the SMH editorials, though by the 1950s, even the editorial policy seemed to be Henderson’s domain. Warwick spent much of that decade concentrating on intellectual pursuits, such as writing his book on metaphysics, The Triple Abyss: towards a Modern Synthesis. This all changed in the early 1960s, however, due to Warwick’s rather colourful personal life.

Warwick was married three times. His first marriage, to Marcia Wilson, was more of a Sydney society match, organised by two prominent families, than a love match. There were two children, Caroline and James, but the marriage ended in divorce in 1946, when the children were in their early teens. James Fairfax remembers that it was quite a scandal, the first ever divorce in the Fairfax family. He also remembers that his two new step-parents were familiar presences well before the divorce took place.

Marcia Wilson remarried to a French naval officer, Pierre Gilly, whom she had met while he was stationed in Australia during World War II. Gilly later became the French naval attaché to the Chinese government of Chiang Kai-shek and Wilson moved with him to Chongqing in China and later to Japan and Paris.

Warwick remarried too. Hanne Bendixson was a Danish woman who was evacuated to Australia from Bangkok during the war. Her English husband, Donald Anderson, was an executive with the Shell oil company and had been a prisoner of war. Bendixson divorced Anderson to marry Warwick in 1948. They had a daughter, Annalise.

Ten years later, Warwick was ready to move on again. Gossip was swirling in Sydney’s social circles about a relationship between he and Mary Symonds, the wife of prominent Sydney lawyer Cedric Symonds. In those more conservative days, this caused a great deal of embarrassment within the Fairfax family—and the company. It wasn’t seemly for a newspaper proprietor to be the subject of such salacious gossip.

But Warwick was in love. He and Mary Symonds divorced their respective spouses and married just after midnight on 3 July 1959, minutes after his divorce from Bendixson became official. Warwick was fifty-eight and Mary was twenty years his junior.

Henderson was very wary of Mary Symonds. He felt from the beginning that she had designs on the Fairfax company, that through Warwick she would try to interfere in its management. In June 1959, just a month before Warwick and Mary’s marriage, Henderson convinced Warwick to transfer 15 per cent of his shares in Fairfax, almost half his total shareholding, to his 26-year-old son James, under what became known as the ‘Kinghaven arrangement’. It was ostensibly done on the basis of sensible estate planning—James was already a Fairfax board member and the clear heir apparent. It would avoid future death duties and it avoided gift duties because James was paying for the shares over time with dividends he received from the company.

By this stage, Fairfax was a publicly owned company, having been listed in 1956. The Fairfax family still controlled the majority of the shares, 53 per cent, almost all of which was held by three family members—Warwick, his son James and his cousin Vincent. Warwick historically had held most of the shares, around two-thirds, but after the transfer urged by Henderson, Vincent and James’ holdings together narrowly exceeded Warwick’s holding. In other words, he needed their support on the board, which at that time included the three Fairfaxes and Henderson.

Mary Fairfax never forgave Rupert Henderson for ‘tricking’ her husband into giving up control of the company. She was convinced he had done it to ensure that her influence over the company would be limited. She was almost certainly right. And soon there was a further complication. In December 1960, Mary Fairfax gave birth to young Warwick—another male heir.

The following year, in the midst of escalating tensions on the Fairfax board, Henderson made another fateful move, one that cemented Mary’s hatred of him.

Cedric Symonds, Mary’s former husband, in 1959 had taken out a Supreme Court writ against Warwick, alleging that he had induced Mrs Symonds to leave her husband and claiming the sum of £100 000. As the case got closer to being heard in court, it became clear that Symonds intended to present evidence that might reflect poorly on Warwick and therefore tarnish the reputation of the company. Henderson discussed the matter with James and Vincent and concluded that Warwick should step down from the board while he, Henderson, assumed the role of chairman until the case was concluded. Warwick and Mary were incensed, accusing James of betraying his father and Henderson of seizing an opportunity to advance his own position. Warwick even thought initially that his removal from the board was permanent, but Henderson assured him that it wasn’t. He guaranteed that he would step down in favour of Warwick once the court case was over and the board had agreed that the reputation of the company would not suffer. Warwick conceded and stepped aside from January to March 1961. The case was settled out of court, but Warwick had been humiliated and the board’s decision caused a deep rift with his son James, who had sided with Henderson and Vincent.

In My Regards to Broadway, James Fairfax sums up his step-mother’s attitude to the company:

From the time of their marriage she worked successfully to change Sir Warwick’s concept of his own role in the company, and at first she must have genuinely thought him capable of assuming the command. Henderson was still powerful, but whatever he had contributed in the past, he had had his day. McLachlan was an enemy and whatever his competence, he must be got rid of … she considered [that I] did not play a significant part (she was appalled when she discovered the size of my shareholding and the Kinghaven arrangement).

There is no doubt that she held these views and propagated them—she saw herself as restoring her husband to his rightful position, rather than obtaining power herself.

Certainly, Warwick’s attitude to the company was transformed after his third marriage and he took a much deeper interest in events.

As it happened, 1961 was a very politicised year in Australia. Prime Minister Robert Menzies was facing a tight federal election, one of the tightest in history, and the Australian economy was in a slump. Newspaper coverage of the election campaign was to be particularly contentious. And at Fairfax, the rising tension between Warwick Fairfax and Rags Henderson underlay the key editorial discussions.