McGraw-Hill, Inc.

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McGraw-Hill, Inc.

1221 Avenue of the Americans
New York, New York 10020
U.S.A.
(212) 512-2000

Public Company
Incorporated: 1909 as McGraw-Hill Book Company
Employees: 13,868
Sales: $1.94 billion
Stock Exchanges: New York Pacific

McGraw-Hill, Inc., a leading international multimedia publishing and information company, caters to education, business, industry, professional, and government markets. Through books, magazines, film, and many kinds of electronic networks, McGraw-Hill supplies information worldwide. Formed initially from the merger of McGraw Publishing Company and Hill Publishing Company, the business has always aimed to provide to technicians, scientists, and business people complete, accurate, and up-to-date information of both specialized and general interest. The company has almost from its beginning, pursued acquisitions and mergers that would increase market share, reach new markets, and expand its global reach.

Born in 1858, John A. Hill—typesetter, silver prospector, newspaper publisher, and railroad engineer—came to the attention of the publisher of American Machinist with his contribution of letters and articles on practical aspects of railroading. When the publisher began Locomotive Engineering in 1888, Hill was its choice for editor.

By 1869 Hill had become part owner of both magazines. In 1897, divesting his interest in Locomotive Engineering, Hill took over full ownership of American Machinist, and established the American Machinist Press in 1898. In 1902 he incorporated Hill Publishing Company, going on to acquire Power, Engineering and Mining Journal, and Engineering News. By 1909, Hill was a leading trade publisher not just of magazines but of such books as Colvin and Stanley’s American Machinist’s Handbook, 1908, and Herbert Hoover’s Principles of Mining, 1909.

Hill’s chief competitor was onetime teacher and subscription salesman James H. McGraw. McGraw was an advertising salesman for the American Railway Publishing Company in 1884. He rose to vice president by 1886. Resigning from American Railway in 1881, McGraw began to acquire magazines that reported on technological progress. Titles included American Journal of Railway Appliances; Electrical Industries, later retitied American Electrician; Electrical World; Electrical Engineer; Electrochemical Industry; and Engineering Record. In 1899 McGraw incorporated McGraw Publishing Company, which in 1907 put out its first engineering handbook, the Standard Handbook for Electrical Engineers.

In the years following the U.S. Civil War, the United States changed from an agrarian to an industrial society. Both McGraw and Hill found their markets in the growing number of technicians concerned with the practical application of science to transportation, lighting, and engineering, among other facts of daily life. In 1909 Edward Caldwell and Martin M. Foss, the respective heads of the book departments of the two firms, agreed that a merger of the two book departments would well serve both companies. After the two men persuaded their bosses, a coin toss decided whose name would come first in naming the new company, the loser becoming president. The McGraw-Hill Book Company, with John A. Hill as president, was thus born, locating itself in McGraw Publishing’s building in New York City.

The two companies, however, were still distinct, different entities. The magazines that formed the chief interests of both and that supplied the articles for many of the books remained separate concerns. In 1914, as World War I broke out in Europe, Hill moved his company into an air-conditioned building in New York City, one specially constructed to house his publications and their printing facilities. McGraw-Hill Book Company had established itself in 1910 with its first publication, The Art of Engineering, and its first series, Electrical Engineering Texts. This series marked the beginning of a company trend toward publishing series of books by multiple authors covering the entire range of knowledge in a field.

A more complete merger of the McGraw and Hill interests came about in 1916 when John A. Hill died at the age of 57. Arthur Baldwin, Hill’s attorney, led Hill Publishing for a brief time following Hill’s death. McGraw became president of the book company; the two established the McGraw-Hill Publishing Company in 1917, with its offices located in the Hill Building, publishing Electrical World, Electric Railway Journal, Electrical Merchandising, Engineering Record, Metallurgical and Chemical Engineering, The Contractor, American Machinist, Power, Engineering and Mining Journal, Coal Age, and Engineering News. This concentration of interests, along with the enlargement of the book company, now a subsidiary of McGraw-Hill Publishing, made McGraw-Hill the largest technical publisher in the world at that time.

World War I, which the United States entered in 1917, made this a particularly good time for technical publishers including McGraw-Hill. The first title to benefit from wartime increased demand was the American Machinists’ Handbook, originally published before the war. There also was increased demand for engineering books in radio communication, aviation, construction and maintenance, chemical warfare, trench construction, automotive transportation, aerial photography, and antisubmarine tactics. To this market, McGraw-Hill responded quickly, for example, supplying the required texts for the U.S. Army Educational Commission in France, an order of 150,000 technical books that the company in a matter of days printed, bound, specially packed, and shipped.

After World War I, McGraw-Hill Book Company expanded rapidly. With Foss in charge of editorial and sales activities and Caldwell heading up finances and production, the book company had grown by establishing close contacts with the faculties at various universities and engineering schools, not only to make sales, but also to find new authors. With the addition of series designed for educational use, McGraw-Hill Book Company formed a college department in 1927, thus establishing a lasting emphasis on textbooks. Foss was equally innovative in finding new ways to market the technical books that seldom found space in general bookstores. By both advertising at cost in the parent firm’s magazines and sending letters and circulars to subscribers, Foss offered interested parties a chance to examine a book for ten days without payment, an approach that quickly resulted in increased book sales.

During the 1920s James McGraw began to shift some of his authority in the company to other people. The first shift came when he named himself, his son James McGraw Jr., and Malcolm Muir to a governing board of trustees. Then in 1925, McGraw turned over the presidency of the book company to Edward Caldwell, who was to be succeeded by Martin M. Foss the next year. In 1928 Malcolm Muir became president of the publishing company. James McGraw remained chairman of the board.

With the purchase of the A.W. Shaw Company of Chicago in 1928, McGraw-Hill extended its reach into the field of business books and magazines. The editorial staff turned a monthly put out by Shaw, the Magazine of Business, into a weekly, covering and interpreting news of specific interest to business people. Now known as Business Week, it has become the best known of all McGraw-Hill publications.

Just after the stock market crash of 1929, The Business Week, as it was then known, predicted, in its November 2, 1929, issue that “Business will gradually and steadily recover as businessmen regain their perspective and go back to work.” Following this optimistic line of thought McGraw-Hill Publishing established four new magazines in 1930, opened a west coast office and book depository in San Francisco, and under the imprint of Whittlesey House, named after James McGraw’s father-in-law, entered the trade book field for the first time. The first title under the new imprint, selected so as to distinguish this division from trade publications, was Ernest Minor Patterson’s The World’s Economic Dilemma.

McGraw-Hill Publishing commissioned a new office building designed by Raymond Hood and located on West 42nd Street in New York City. Nicknamed Big Green because of the blue-green cast of its Art Deco exterior, the new McGraw-Hill building aroused controversy because of the horizontal banding of its windows, now a standard feature of many modern office buildings. When first occupied in 1931, Big Green included a complete production plant taking up four floors. The increasing severity of the economic depression during the early 1930s, however, forced McGraw-Hill not only to make deep cuts in personnel and in salaries but also to sell its press machinery and equipment in 1933. In 1932, the parent company’s deficit ran to $239,137.

That same year Whittlesey House had its first best seller, Life Begins at Forty, by Walter B. Pitkin. The company’s other publications made themselves useful sources of information for business people by providing hard facts and analysis of the economic situation. The vocational-education department of the book company helped those seeking new skills. Established in 1930, it concentrated on mechanical arts, agriculture, and home economics. By 1937 the company had an annual profit of more than $1 million.

The 1930s also saw major shifts at the executive level of McGraw-Hill Publishing. In 1935 James H. McGraw handed over the chairmanship of the company to James McGraw Jr. During the next two years Malcolm Muir failed to get along with the McGraw family, key players in the maneuverings for top positions in the company. In 1937 Muir left McGraw-Hill to run Newsweek, and James H. McGraw Jr. became both president and chairman of the board.

With the coming of World War II in the 1940s McGraw-Hill Publishing Company was in an advantageous position. Because its technical publications were especially important to the war effort, its paper requirements received special priority. The company’s magazines began to cover a range of topics of wartime relevance, from accelerated training in the use of metal working power tools to dehydrated foods. In addition the company began to publish special wartime titles, such as En Guardia, a Spanish-language paper promoting Latin American relations; and Overseas Digest, excerpting articles from other McGraw-Hill titles for distribution to military personnel posted abroad.

It was in the area of special training manuals however that McGraw-Hill was to make a special effort. As untrained men and women poured into industry and the armed services, accelerated technical training was important to the war. By 1943 the book company had published 231 titles for the Engineering and Science Management War Training Program. Of the 304 books published by 1944 to further the war effort, many dealt with radio and electronics, a newly important part of warfare. One title, Mathematics for Electricians and Radiomen, by Nelson M. Cooke, first published in 1942, continued to be successful after the war, and by 1964, under the new title of Basic Mathematics for Electronics, had total sales in excess of 485,000 copies.

Although McGraw-Hill had been present in the United Kingdom and Germany as well as other countries since before World War I, the company made use of the opportunities World War II offered to increase its foreign activities. In 1943 the book company opened a book-export department, which by 1944 had a foreign-language translation office. That same year, McGraw-Hill acquired the Embassy Book Company, Ltd., of Toronto, that later became the McGraw-Hill Company of Canada, Ltd., yet later to be called McGraw Ryerson. In 1945, to provide its magazines with international coverage, the company started World News Service.

After the war the book company prospered under the presidency of Curtis G. Benjamin, who succeeded James S. Thompson, president for only two years. Benjamin developed a text-film department, a venture inspired by the use of educational films during World War II to supplement textbook materials. As teachers discovered the value of motion pictures and film strips in the classroom, the market expanded, and by 1965 McGraw-Hill was the leader in the field. Another wartime dividend for the company was the 13-volume U.S. Navy Flight Preparation Training series printed for the Bureau of Aeronautics during the war. With the growth of commercial aviation in the postwar period, McGraw-Hill found a large market for civilian editions of the series. Building on the close contacts with governmental agencies in research and development made during World War II, the company contracted to publish the Radiation Laboratory series, 27 volumes concentrating on the results of wartime research into radar. According to Charles A. Madison’s 1966 Book Publishing in America, this series, published in 1949 and costing more than $1.2 million, “set a precedent for the commercial publication of government-financed projects.” Although McGraw-Hill lost money on another project, the National Nuclear series, the company made an arrangement with the U.S. Atomic Energy Commission to produce an eight-volume compilation of scientific reference materials that was presented at the first International Conference on the Peaceful Uses of Atomic Energy at Geneva in August 1955.

Another project that was started in the late 1940s was the publication of the manuscripts of James Boswell. Consisting of the voluminous collection of original manuscripts of the 18th-century Scottish author that were collected by Colonel Ralph H. Isham, the project was guided through negotiations with its purchaser, Yale University, by Edward Aswell, Whittlesey House’s editor in chief since 1947. Publication of a projected 40 volumes began in 1950. It was not to be under the Whittlesey imprint, however, as Yale preferred to have the McGraw-Hill name on the books. Thus began the relegation of Whittlesey House to juvenile titles. A commercial milestone proved to be the publication in 1950 of Betty Crocker’s Picture Cook Book, which achieved sales of more than 235,000 copies in its first two years.

When its co-founder, James H. McGraw, died in 1948 at age 87, McGraw-Hill Publishing was well on its way to developing a departmentalized organizational structure. An independent technical-education department had been established in 1941, then a text-film department in 1945. The acquisition of the Gregg Publishing Company in 1949 transformed the company’s business-education department into the Gregg division. In response to the need for training literature during the Korean War, beginning in 1950, the book company established a technical-writing division to produce specialized materials for both government and industry. The next year, following a reorganization of the handbook, technical, and professional publishing department, the industrial- and business-book department was born. The company had formed a medical publishing department in 1945. It was not until 1954, when it acquired from Doubleday, Blakiston Company, specializing in medical titles, that it began to have a major share of the medical market with its newly named Blakiston division.

What proved by far to be the most important division for company progress in the postwar period was the international division, established in 1946. In less than 15 years, book exports trebled, with a profitable business in text-films, film-strips, and the sale of foreign-language rights. A major force in the international growth of the company was Curtis Benjamin, who proceeded along lines mapped out by James Thompson. Benjamin succeeded, along with B.G. Dandison, head of the international division, in making the company successful in foreign countries; in 1962 McGraw-Hill was presented by President John F. Kennedy with a presidential E-for-Export award, making McGraw-Hill the first commercial publishing firm to be so honored.

During the 1950s, James McGraw Jr., who had headed up the company since 1935, was replaced by another son of the first McGraw, Curtis. He was followed by Donald C. McGraw, yet another son.

Just before the death of Curtis, the company purchased the National Petroleum Publishing Company, the W.C. Platt Company, and Platt’s Price Service, Inc., all from Warren C. Platt. The book company began three major encyclopedia projects in the late 1950s, each continuing on into the 1960s: The McGraw-Hill Encyclopedia of Science and Technology, The Encyclopedia of World Art, and the New Catholic Encyclopedia. When in 1959 the publishing company commemorated its 50th year, the revenues for McGraw-Hill Publishing Company exceeded $100 million.

While Curtis Benjamin remained chairman of the board and chief executive officer of the book company, Edward Booher, who had joined the company in 1936, became president in 1960. They doubled overall sales within five years, contributing 39% of the total income of the parent company in 1965. F.W. Dodge Corporation, information provider to the construction industry, was purchased in 1961. The following year the general-book division was formed by merging the industrial-and business-book department with the trade department. The purchase of Webster Publishing Company in 1963 marked the company’s entry in the elementary school and high school textbook markets.

In 1964 the book company and F.W. Dodge Corporation merged with McGraw-Hill Publishing Company to form McGraw-Hill, Inc. The reorganization created a single corporation, the parent company, with three operating divisions: book publishing, the Dodge complex, and magazines and news services. The company established an Australian publishing unit that same year.

With the acquisition of the California Test Bureau in 1965, McGraw-Hill strengthened its educational services. The company moved into two new fields in 1966. One was legal publishing with the purchase of Shepard’s Citations, Inc., and the other was financial information services with the acquisition of Standard & Poor’s Corporation. Other acquisitions were Schaum Publishing Company, Capitol Radio Engineering Institute, and Postgraduate Medicine magazine, all in 1967. The company expanded into Mexico in 1967 and into Japan in 1969.

A key figure in this expansion was Shelton Fisher. Beginning as promotion manager for Business Week in 1940, by 1968 Fisher had succeeded Donald McGraw as president and chief executive officer of McGraw-Hill. His goal was to change the perception of McGraw-Hill as an old-fashioned publisher of trade magazines into that of a dynamic media giant. Fisher further extended the company’s reach into Canada, Brazil, and India, bought four televisions stations from Time Inc., and moved the company out of Big Green and into its present, new 50-story international headquarters in 1972. While increasing the company’s prestige, the large capital outlay came at a time when a recession caused a loss in revenues for the McGraw-Hill magazines. After a period of uncertainty during which the McGraw family worked out a succession, Harold McGraw Jr. became president of the parent company. Fisher assumed the chairmanship. This changed within a year with Fisher’s retirement, and Harold McGraw Jr. became chairman in addition to his other positions.

The picture of McGraw-Hill, Inc. at the end of the 1970s, according to John Tebbel’s History of Book Publishing in America, was of “an extremely healthy, well-managed conglomerate, composed of several operating divisions.” Along with the book and publications companies, there was the information system company, composed of the F.W. Dodge division, Sweet’s division, and Datapro Research Corporation. Two other divisions were Standard & Poor’s Corporation and the McGraw-Hill Broadcasting Company. In 1978 total operating revenues amounted to more than $761 million.

Its very success made McGraw-Hill the target of a takeover attempt by the American Express Company in 1979. The chairman of American Express, James D. Robinson III, and its president, Roger H. Morley, were shocked by the ferocity with which Harold McGraw fought the attempted stock buyout. Concerted action by the McGraw family, along with various legal actions, defeated the bid for ownership.

Although American Express had failed, McGraw-Hill remained a prime target for a takeover. Harold McGraw was planning to retire in four years and while another generation of McGraws waited in the wings, none were as yet ready to run the corporation. By appointing Joseph L. Dionne, who had been in charge of planning, to the newly created position of vice president of operations, McGraw sought to improve management organization and put someone in charge who could generate the fast growth needed to discourage further takeover attempts.

Dionne stepped up to president and chief executive officer in 1983, while McGraw remained chairman. While remaining committed to print publishing, Dionne planned to reduce the 80% of the business that was print-oriented in 1983 to 65% or 70% over several years. One part of this goal had been achieved as early as 1979 when the company acquired Data Resources, Inc., which held a vast share of the world’s business and economic data.

As McGraw-Hill moved into the electronic information marketplace, much of the information supplied by the news service, magazines, Standard & Poor’s, Dodge, Platt, and Shepard’s was made available in computerized form and in various configurations, making that data useful to a broad market. Another move was to enter into the computer publishing field by acquiring BYTE, Unixworld, and LAN Times magazines, as well as Osborne Books, all of which provided support information to computer users. Another part of Dionne’s plan for revitalizing the company was shifting from media-based planning to market-focused business units; 20 such units were created in 1985. Harold McGraw approved, with reservations, of the direction in which Dionne was taking the company, as he indicated in 1988 when he became chairman emeritus while Dionne added the title of chairman to those of president and CEO.

In its attempt to weather the communications revolution, McGraw-Hill had gone through three major reorganizations in four years, resulting in an organization centered around 14 market-focus groups. These reorganizations, the automation of F.W. Dodge, and the shutdown of the general-book division, ending the company’s involvement in the trade-book market, caused a layoff of more then 1,000 workers.

The company expanded globally and had success with the Standard & Poor’s Marketscope, and with other on-line, realtime services. Early in 1990, however, two on-line services, McGraw-Hill News and Standard & Poor’s News, were discontinued. Some acquisitions resulted in costly write-offs, notably Numerax, Inc., an electronic data and services operation. McGraw Hill has continued to invest in strong growth markets and has divested itself of several publications and units connecting it with its past. American Machinist & Automated Manufacturing, Coal Age, and Engineering & Mining Journal were sold in 1987. New magazines, such as LAN Times and UnixWorld for the computer networking market, have been started or acquired. To master this new field has meant a continuation of the strategies for acquisitions, mergers, and innovations that marked the company’s birth. In 1988 McGraw-Hill acquired Random House’s college division at a cost of over $200 million. In 1989 it entered into a 50-50 joint venture with Macmillan, combining both companies’ elementary, secondary, and vocational education business. Finally, in 1990 McGraw-Hill implemented a new electronic textbook-publishing system that allows teachers to custom design textbooks, the results being printed, bound, and shipped within 48 hours. McGraw-Hill seems to be determined to modernize and remain independent.

Principal Subsidiaries

McGraw-Hill Book Company; McGraw-Hill Book Company Australia Pty., Ltd; McGraw-Hill Broadcasting Company; McGraw-Hill Holdings U.K., Ltd; McGraw-Hill Ryerson, Ltd. (Canada); Standard & Poor’s Corporate Information Company; Standard & Poor’s Financial & Economic Information Company.