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That was a pretty famous case -- the publisher of that particular magazine, "Spicy Detective," got in very hot water, and very nearly went to jail for violating city obscenity laws because of a picture in that issue which, shall we say, revealed a bit too much south-of-the-border terrain. That publisher got one of his low-level employees, a schmo named Herbie Siegel, to take the rap in the case in exchange for a promise of lifetime employment, and decided then and there that he needed to find a more legitimate line of business. He found a struggling publisher of comic magazines, took it over and muscled out its founder, and thru a combination of strong-arm distribution methods and the luck of stumbling onto a character that would become world-famous, he built it into the most successful company in that line. The publisher was Harry Donenfeld and the company was DC Comics. And well into the 1970s, even after Harry had gone to where all magazine publishers inevitably go, employees at DC would see this short, fat, old man sitting around the offices reading the Racing Form, and be told the story of Herbie Siegel, "Spicy Detective," and how he kept Harry out of jail.
Three cool things about your post:
1) I love that Donenfeld basically said "enough" to the sleaze - the moral factor didn't bother him but the hassle factor did - but he sounds like a bull in a china shop regardless.
2) At least he honored his lifetime-employment commitment to Siegel - I can abide rough business leaders, I can't abide people who don't honor their words and plenty wouldn't have kept Siegel on that long.
3) I can't image seeing anything "south of the border" other than upper thighs in that era - no wonder it lead to potential jail time.
Somewhat apropos, I just caught this WSJ article:
Jewish Comic Con Celebrates American Comic Books’ Roots
http://www.wsj.com/articles/jewish-comic-con-celebrates-american-comic-books-roots-1478905127
If you can't open it, please just PM and I'll email it to you (that's legal, pasting it here in full is not).