In response to an article about the Cowles publishing companies that appeared in Sunday's Business & Finance section, Washington Post Co. President Richard D. Simmons said yesterday that at no time did David Kruidenier solicit an offer from the Washington Post Co. to purchase the Des Moines Register & Tribune. Des Moines Register and Tribune Co. President Michael Gartner said he and his family made $341,549 on the sale of McCoy Broadcasting to the Register and Tribune Co., not $500,000 as reported from court documents in the Sunday Business & Finance section.

On the surface, the Cowles family reunion last month was typical of such occasions, with members of the far-flung brood politely becoming reacquainted. But the gathering seethed with tensions.

The Cowles family empire--a loose confederation of companies sharing many of the same stockholders and managers--once was one of the mightiest of communications giants, owner of the Des Moines Register and Tribune, the Minneapolis Star and Tribune, Look magazine and other print and broadcast properties.

Over the past 15 years, however, the Cowles fortunes have gone into a steep decline. The result has been conflict between members of the clan who manage the enterprises and some others in the family, one segment of which would like to sell part or all of the properties.

The family managers are being criticized for:

* The belated closing of the afternoon papers in Des Moines and Minneapolis, and the declining circulation of the surviving morning papers.

* The acquisition of a Buffalo, N.Y., newspaper that subsequently had to be closed after losing millions of dollars.

* The financial strain caused by the purchase of a radio and TV station from the father-in-law of a top executive of the Des Moines newspaper.

* The handling of an aborted attempt to merge the Des Moines and Minneapolis operations.

* The interlocks between the Cowles management and the trustees of the family stock.

Costly mistakes of management, the dissidents contend, are responsible for a drop in the value of their stock and for reductions in dividends, which many members of the family count on for their financial support.

Some of the small number of outsiders who own stock in the Cowles companies--former employes of the Des Moines Register & Tribune Co. and of Cowles Media Co. (which publishes the Minneapolis paper)--also are unhappy, particularly with measures taken to ensure permanent family control of the companies. Two lawsuits filed by outside shareholders are pending in the courts.

The Cowles family frictions reached public view a few weeks before the family gathering with the ouster of John Cowles Jr., 53, as head of Cowles Media Corp. Its board of directors, which includes his sister and cousins, replaced him with his 61-year-old cousin, David Kruidenier. The critics point out that the Des Moines company, which Kruidenier has headed since 1973, is no model of success.

During the three-day family reunion, which was held in California, John Cowles and Kruidenier took pains to avoid one another, sources said. Meanwhile, other family members were quietly lobbied by the dissidents in the fourth generation of the family--chief among them Shawn Kalkstein, husband of a great-granddaughter of the family patriarch. Over the past year Kalkstein has written seven letters to Cowles shareholders in which he offered critical analyses of the finances of the Des Moines operation.

Kruidenier and other family executives blame their troubles on high interest rates and the severe effects of the recession on the Midwest, as well as on maladies common to the newspaper industry--particularly the decline of afternoon papers.

The Cowles empire traces its roots to Gardner Cowles Sr., who bought the Des Moines Register in 1903 and later added the afternoon Tribune. Within a few decades his creation was successful from both a business and journalistic standpoint: The Register and Tribune held a virtual monopoly in Iowa, while winning a string of Pulitzer Prizes exceeded only by the New York Times.

The success of the Des Moines Register and Tribune can be measured by one astounding figure--at its peak a decade ago, the circulation of the papers' joint Sunday edition totaled 560,000--nearly three times the population of Des Moines, the result of wide circulation in Iowa's outlying farming communities. (The current circulation of 380,000 is still about twice the city's population.)

The Cowles family next moved into Minneapolis, with sons John and Gardner Jr. achieving success with the Star and Tribune in the late 1930s. At about the same time, Gardner Jr.--known as Mike--started Look magazine, which also became a winner.

By the 1960s, the name Cowles stood for an impressive collection of journalistic enterprises centered in the Midwest, but with national publications and local operations as far away as Puerto Rico. Cowles Communications, the company publishing Look magazine, was publicly held, but the family retained control of the Des Moines and Minneapolis operations.

Cowles Communications ran into trouble during the 1960s that some say was a harbinger of the family's problems today. A series of unproductive acquisitions and new ventures--notably a disastrous attempt to start a daily newspaper in Long Island, the Suffolk Sun--began Cowles Communications' slide. Then television killed Look in 1971, further weakening the company, which since has been whittled down to a holding company owning two televison stations.

Despite the problems, however, the family publicly stuck together until the ouster of John Cowles Jr. in late January, which shocked many long-time Cowles-watchers. "That shook me--and anybody else who knows anything about them--right to the core," said a former executive of the Des Moines company. And Christopher Burns, former senior vice president of the Minneapolis Star and Tribune, observes, "The newspaper business is still run by publisher's kids, by the owner's son . . . This is the first time I know of that a major corporation has thrown the kid out."

John Cowles Jr. and Kruidenier are reluctant to say much about the events leading up to the action. In a statement released after the Cowles Media board voted him out, John Cowles said that a majority of the company's directors had "made clear to me their dissatisfaction with my management of the company." He will not elaborate.

Kruidenier, one of the board members, says the directors were upset that Cowles did not consult the board before shutting down the money-losing Buffalo Courier-Express and firing Star and Tribune publisher Donald R. Dwight. "The board didn't quarrel with the decisions as much as with the way the decisions were being made," Kruidenier says. Cowles remains a member of the boards in both Minneapolis and Des Moines.

Kruidenier denies that the ouster of Cowles was a power play on his part, but a long-time Des Moines executive who knows both men says Kruidenier resented the fact that Cowles reached the top of the Minneapolis company several years before Kruidenier took over in Des Moines in 1973. "That always, always stuck in Dave's craw," the now-retired executive said. "He was so envious of that . . . I think that probably enters into the picture some."

But many critics--particularly those involved with the Minneapolis operation--question Kruidenier's ability to improve on Cowles' performance, particularly since he will still be running the Des Moines operation and will commute between the two cities. "The irony is the obvious one, which is that the Des Moines Register and Tribune has been in the red, and the Minneapolis Tribune has not been," says Dwight.

Although both companies have had rough going in recent years, it's hard to tell which one has had the worst time of it. After several years of declining earnings, Des Moines is expected to report a loss of about $800,000 for its fiscal year just ended. Minneapolis saw its profits shrink to $747,000 in the last fiscal year from $7 million the year before and $12.2 million in 1979; the company has reportedly been running at a loss for the first six months of the current fiscal year.

Both companies were forced to close their afternoon papers last year, adding to morale problems even though the closings were widely considered overdue. The surviving morning papers--which carry the names The Des Moines Register and The Minneapolis Star and Tribune--have further cut costs through layoffs and other austerity measures.

In addition, both companies have suffered from their efforts to expand through acquisitions. After John Cowles Jr. took over in Minneapolis in 1968, succeeding his father--who died last month--the Star and Tribune acquired a television station in Wichita, Kan.; a one-third interest in book publisher Harper & Row; control of Harper's magazine and the Buffalo Courier-Express. All of those properties have since been sold or closed.

"I don't think the Cowles Media Co. has anything to be proud of, as far as business decisions," says a former executive of the company. "The list of failures is long and remarkable . . . I think it's one of the worst records among major media companies in the last decade."

The worst move of all may have been the acquisition of the Buffalo paper. Cowles himself admits that the 1979 purchase of the Courier-Express was a big risk. In a reversal of the usual pattern, the Courier-Express, a morning paper, was losing ground to the afternoon Buffalo News. Cowles hoped to revitalize the newspaper, capitalize on the production and promotional advantages of morning papers, and "get enough momentum going soon enough that we could sort of sneak by the News before the News really woke up," Cowles says.

But Cowles didn't count on the recession--or on the News rising to the challenge. "We lost the gamble," he says. "By last summer it seemed to us that we were locked into a kind of trench warfare situation, with big operating losses on both sides, ours bigger than theirs . . . The game stopped being worth the candle."

The Courier-Express was losing $8 million a year when Cowles shut it down last September. "It began to make no economic sense for us to continue."

"The acquisition of Buffalo had a negative impact--a substantial negative impact--on earnings," says Luther L. Hill Jr., executive vice president of Equitable of Iowa Cos., who serves as a nonfamily member on the boards of both the Des Moines and Minneapolis companies. "It appeared as though we might be jeopardizing bigger things by continuing the losses in Buffalo."

(The situation was not without a silver lining, however. The acquisition included a Buffalo cable television system called Cablescope, whose value may balance Star and Tribune losses on the deal.)

The performance of the Register and Tribune's acquisitions has not been nearly as poor, but the cost of those acquisitions have put severe financial strains on the Des Moines company.

When Kruidenier took over the Des Moines operation from his uncle, Gardner Cowles Jr., he set to work cleaning house and mapping an acquisitions strategy. Many long-time Register and Tribune executives were shunted aside, replaced by a management team that included Michael Gartner, a former top editor of the Wall Street Journal who came to Des Moines as editor and is now president of the company, and Gary Gerlach, a lawyer who is now publisher of the Register and Tribune.

The key to the new management's strategy was the financing of acquisitions with borrowed money, a reversal of the company's policy of avoiding debt. A cash surplus of $30 million turned into a debt of $40 million in 1978 as the company went on an acquisition binge, purchasing McCoy Broadcasting, a group of radio and TV stations in Honolulu, Denver and Portland, Ore.; the Waukesha, Wis., Freeman, a daily newspaper outside Milwaukee; a TV station in Moline, Ill.; and completing a previously announced purchase of an AM-FM radio station in Madison, Wis.

"They were just extremely gung-ho--this was going to be a big empire," says an executive of the Register and Tribune Co. who has since left the company. "I think they went way too fast and too far."

The company did not reckon on rising interest rates, however, and soon was laboring under huge interest expenses. In fiscal 1979, the first full year after the acquisitions, the company's interest costs soared to $3.2 million from $116,000 the year before and just $9,000 in 1975. In fiscal 1981 interest payments reached $4.4 million.

At the same time, operating earnings were declining, from a peak of $7.4 million in 1978 to $4.1 million in fiscal 1971--less than the company was paying in interest charges on its acquisition debt.

The most questionable of the purchases, in the view of many experts, was also the largest: McCoy Broadcasting, which the company bought for $27.7 million. The Register and Tribune took out a $30 million loan to pay for the purchase of McCoy and for other uses, at an interest rate of 9 5/8 percent. That alone cost the company nearly $3 million a year in interest--and McCoy Broadcasting was earning just $420,000 a year when it was purchased.

The purchase of McCoy stirred up shareholder resentment for another reason: Arthur McCoy, who was the principal owner, is Register & Tribune Co. President Michael Gartner's father-in-law. Gartner himself owned 1.5 percent of McCoy Broadcasting stock and made $500,000 on the sale. Gartner has made no secret of his involvement in the transaction, but some shareholders, inside and outside the family, have charged that there was a conflict of interest.

Further, according to depositions filed in one of the stockholder suits against the Register and Tribune Co., the $27.7 million purchase price for McCoy was set without an outside appraisal of the McCoy stations.

During the negotiations over McCoy, Kruidenier asked the Minneapolis company if it was interested in joining the deal, but was rebuffed. "We thought the price was too high," Dwight says. "And there were questions about the insider relationships."

The Des Moines company's experience with its new properties has been mixed. The McCoy station in Denver and the Waukesha paper did not live up to expectations and were recently sold, raising funds used to reduce the company's debt by several million dollars. The Moline and Madison stations are struggling, officials concede. The other McCoy stations and a newspaper in Jackson, Tenn., bought earlier, are doing well, company officials say.

While the Register and Tribune management was active buying companies in the summer of 1978, it also was taking steps to lock up the Cowles family's control of the company.

A year before, Gartner and two other executives assessed the Register and Tribune Co.'s worth to a potential acquirer, presenting their findings in a memo to Kruidenier. They concluded that a buyer would cut costs by eliminating much of the Register's outlying circulation, slicing the newsroom staff, reducing the papers' traditionally large news space and taking other austerity steps. "We believe that all of these moves would instantly double--at least--the net income after taxes of the Des Moines papers," the memo said.

The memo also concluded that a buyer would pay about $155 million for the Register and Tribune--about $120 a share, or about four times what the company was at that time paying to buy back shares from family members and other shareholders. (There was, at the time, no other market for the company's stock.)

The memo was used by company officials to argue that the family should take steps to prevent a takeover by one of the large, acquisitive newspaper chains.

The result was the establishment of a voting trust that ties up 51 percent of the company's stock into one voting bloc. Additional chunks are held in other family trusts. Both the voting trust and most of the family trusts are controlled by Kruidenier and other executives and top family members, giving management firm control over the stock.

The voting trust was formed by the major stockholders in August of 1978, but it was not disclosed to other shareholders until three months later. That delay, and the trust itself, prompted a shareholders suit by a group of former Des Moines employes and their families. Robert Scism, an attorney for the shareholders, says the voting trust is "in effect, a confiscation of minority shareholders' rights by the Cowles family." The suit hasn't gone to trial.

The management of the Register and Tribune also has close ties to one of the bigger outside shareholders.

Last year, when the company, because of financial problems, ended its policy of buying back stock from shareholders at $31 a share, a limited public market for the stock sprang up at prices about half that level. Since then, most of the stock sold by shareholders has been bought by the endowment fund of Grinnell College. Trustees of the school include Kruidenier's wife, Elizabeth, and several other persons with links to the Register and Tribune.

Des Moines' attempts to consolidate control of the company have been matched by the Minneapolis branch of the family. A large family trust--with many of the same trustees as Des Moines' voting trust, including Kruidenier--controls about 40 percent of the Minneapolis stock; with the 13 percent share held by the Des Moines company and other family trusts, that gives the Cowles family similar iron-clad control over Cowles Media. (In all, the family is believed to control at least 80 percent of each company.)

Now that Kruidenier has taken over Cowles Media, speculation has risen anew that the Des Moines and Minneapolis companies will merge. A proposed merger fell through last year after disagreements arose about the valuation of the companies in the exchange of stock and over who would run the combined company.

Under the merger plan, John Cowles Jr. would have headed the new company from headquarters in Minneapolis, with Kruidenier, Gartner and other Des Moines executives as subordinates. The Des Moines faction of the family was displeased with that arrangement. "They Des Moines executives were getting the top spots, but they weren't getting the top spot," Kruidenier says. "They thought Des Moines was going to get some sort of secondary role."

But the insurgent members of the family say they worry about the future of a combined company under the management of Kruidenier. "The two of them merging wouldn't accomplish anything at all--they'd still be run by David Kruidenier," says Jonathan Jordan, a great-grandson of Gardner Cowles Sr. who sides with Kalkstein. "That's the blind leading the blind."

Another scenario has the family selling one of the papers, a move that would likely strengthen the other. But Cowles family members have long said that they are adamantly opposed to sale of the Des Moines and Minneapolis papers.

The family's stance has tended to discourage any but the most informal overtures. But shortly after the collapse of negotiations for the merger of the Des Moines and Minneapolis companies, Kruidenier briefly entertained an offer for the Des Moines Register and Tribune from Katharine Graham, chairman of The Washington Post Co.

Kruidenier, who has given the impression that the offer was unsolicited, says he told Graham the paper was not for sale. But there have been persistent reports that he asked The Post to make an offer so he could have more leverage in the negotiations with Minneapolis, although he had no intention of selling the Des Moines paper to The Post. Kruidenier could not be reached for comment on that version of the story. Washington Post Co. officials would not comment on the matter.

Should the Cowles family sell one or both of the remaining pieces of the empire, members of the clan would likely do well by their holdings. Shares in the companies would probably fetch upwards of $100 apiece, it has been estimated, four or five times their current value.

But Kalkstein and the other dissidents fear that their elders won't sell the companies, and the complicated family trusts make a takeover all but impossible.

"The philosophy in the older generations of the family is that only this family can run this company, and if you sell out for $120 a share it's greed and disloyalty," Kalkstein says. "The only acceptable alternative to them is to hold onto it--even if they run it into the ground."