The Basement Under A Speakeasy Where Reader’s Digest Was Born

In 1916, DeWitt Wallace was 26 and working as a promotional writer for a Minnesota publishing firm. Wallace found that Midwestern farmers were getting swamped with long government farm bulletins they didn’t have time to finish. He edited them into a slim, pocket-sized booklet called Getting the Most Out of Farming and sold about 100,000 copies to rural banks, which gave them away free to customers. He traveled across Minnesota and the Dakotas by horse-drawn buggy and secondhand car, promoting it. The Reader’s Digest concept was already in place, years before the magazine existed.

DeWitt was a sergeant in the U.S. Army when he was struck by shrapnel on October 1, 1918, during the Meuse-Argonne Offensive in France, just outside Verdun. This was one of the largest battles fought by the U.S. Army in World War I. Shrapnel tore into his neck, shoulder, nose, and abdomen. Wallace lived through the experience, though not without consequence. The wound required him to stay at a U.S. Army hospital in Aix-les-Bains, France, for about four months to heal. And that was just the beginning of what would happen with his free time.

Lying in a hospital bed in Aix-les-Bains for about four months, DeWitt needed something to occupy him. He began cutting up popular American magazines with a pair of scissors, chopping the articles down to their barest essentials, and pasting the excerpts in a notebook. The formula he came up with, piece by piece, would become the blueprint for Reader’s Digest.

DeWitt went back home to Minnesota and worked in the Minneapolis Public Library for several months copying out the condensed versions of magazine articles by hand. In 1920, he had a local printer run off a small batch of a prototype magazine called Reader’s Digest, packed with dozens of shortened articles. He sent the magazine to New York publishers and told them he’d either sell the idea to them or edit the magazine himself if they hired him. All rejected his offer, believing condensed reprints would never sell.

In 1921, DeWitt found himself in New York, where he ran into Lila Bell Acheson, a college-educated former teacher and social worker for the YWCA. Where DeWitt saw a rejected article idea, Lila saw a lucrative business opportunity. She joined him as an equal partner, investing her own money as well as her organizational expertise and keen editorial eye. They were married on October 15, 1921, in Pleasantville, New York.

With no one in the publishing industry willing to take on the magazine, DeWitt and Lila Wallace raised $1,300 from family and friends. They mailed out letters to teachers, nurses, and community volunteers asking if they’d be interested in receiving a small pocket-sized magazine full of condensed articles for just $3.00 a year, and then headed off on their honeymoon. When they came back to New York, 1,500 people had already responded, with $4,500 in hand, enough to pay for printing the first issue.

In a basement storeroom on Minetta Lane in Greenwich Village, just beneath a working illegal bar from the Prohibition era known as a speakeasy, the Wallaces set up their workspace. With little more than two tables, they edited, addressed, folded, and bundled up the first issue. They had to pay the patrons of the speakeasy downstairs to help carry the bags of mail to the post office. In February of 1922, 5,000 copies of the first issue, without any advertising, were distributed through the main Manhattan post office.

After outgrowing their Greenwich Village basement, DeWitt and Lila moved the operation north to Pleasantville, N.Y., where they rented the second floor of a garage behind a private residence for offices and a mailroom. Over the ensuing years, as circulation grew, the operation continued to rent additional space throughout the town, ultimately occupying 14 buildings, instead of erecting its own monolithic complex. The idea was to keep costs low.

The stock market crash in 1929 destroyed magazines that were dependent on advertising dollars. Reader’s Digest didn’t have any, so it had nothing to lose when those advertising budgets disappeared. It offered small, cheerful essays at a time when many families were in desperate need of such inexpensive solace. It went from about 200,000 subscriptions to more than a million within a few years, while the magazine business as a whole was contracting.

By 1933, Reader’s Digest was popular enough that other magazines no longer allowed Reader’s Digest to reprint their work. Instead, DeWitt’s staff began writing or commissioning original articles and paying magazines such as Scribner’s and The North American Review to publish those articles under their own names. Reader’s Digest would then “condense” those planted articles and publish them as if they were regular finds. The magazine did this from about 1933 to 1943.

When DeWitt asked journalist J.C. Furnas to write about highway deaths, the resulting piece, “And Sudden Death,” appeared in Reader’s Digest in August 1935 with graphic details of car-crash injuries. More than 8 million free copies were printed for police departments, courts, and civic organizations. It was read on the radio and displayed in traffic courts around the country. The article has been cited as helping accelerate driver education and road safety efforts.

The Wallaces then published an edition abroad for the first time in 1938, in London. In 1940, they published the first Spanish-language edition for Latin America, Selecciones del Reader’s Digest, which reached over 220,000 readers per issue in its first year. While the American magazine was free of ads, these foreign versions carried advertising to pay for translation, freight, and distribution.

For years, DeWitt and Lila had been operating the company from 14 separate rented buildings spread around Pleasantville, New York, which had become rather chaotic. In response, they purchased 80 acres of woodland in Chappaqua and inaugurated a single Georgian-style campus, dominated by the Cupola Building and its bronze Pegasus sculptures. While the company’s address was officially Chappaqua, it still maintained a “Pleasantville, NY” return address for its mailing.

During World War II, Reader’s Digest collaborated with the U.S. military to produce lightweight, pocket-sized books called Armed Services Editions, for American servicemen overseas. These books had no cover art and no advertising. Millions of copies shipped out to combat zones from about 1942 to 1945. Many of those soldiers would return home and keep their subscriptions, contributing to the magazine’s growth in subsequent decades.

In February 1944, Harold Ross, editor of The New Yorker, openly declared that he would not renew his magazine’s reprint agreement with Reader’s Digest, accusing the magazine of secretly inserting articles in newspapers and magazines and then claiming them as standard fare. Other magazines joined him. But instead of destroying the company, the boycott forced DeWitt to build an actual editorial staff of real journalists.

In 1943, DeWitt ran “Life in These United States,” in which he paid more than $100 for true and funny stories about ordinary Americans. Two years later, dictionary editor Wilfred Funk came up with “It Pays to Increase Your Word Power,” a monthly 20-question quiz to help people improve their vocabulary. Both features transformed readers into contributors and became among the most famous features in the magazine.

In 1950, Reader’s Digest introduced Condensed Books, a mail-order service that packaged four abridged bestsellers into one volume. It was an instant success, with more than 2.5 million subscribers in its first few years, and it grew to more than 5 million subscribers by the mid-1950s. Reader’s Digest had become one of the largest hardcover book publishers in the world.

In October 1952, journalist Roy Norr summarized the new medical findings linking smoking to lung cancer in an article for the Christian Herald. In December, Reader’s Digest ran a condensed version of Norr’s article under the title “Cancer by the Carton.” The piece was read by tens of millions of people and led to the first sustained two-year drop in U.S. cigarette sales since the Great Depression. As a result, tobacco companies organized joint public-relations committees.

By the mid-1950s, surging costs for paper and postage had pushed the Digest into a yearly deficit of over $1 million, despite the cover price having barely moved since the magazine started. Wallace presented readers with the option of paying more or accepting ads. Over 81% favored the ads. In the next year, the Digest issued the first American edition with advertisements, at a then unheard-of rate per full-color page. It would still not run ads for cigarettes, liquor, or unproven patent medicines.

By 1955, 10 million paid subscribers in the U.S. alone made Reader’s Digest the highest-circulating magazine in the world, with versions in more than 20 languages abroad bringing total circulation to more than 18 million copies. Lila Wallace furnished the Chappaqua offices with her own collection of Impressionist works, many connected with Monet, Renoir, Degas, and Cézanne, while DeWitt maintained wages and profit-sharing policies generous enough that unionization never became an issue in the company.

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