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Anecdotally, Lane recounted how it was his experience with the poor quality of reading material on offer at Exeter train station that inspired him to create cheap, well designed quality books for the mass market. (Other sources attribute the idea for a Penguin Books-like entity to Krishna Menon. ) However the question of how publishers could reach a larger public had been the subject of a conference at Rippon Hall, Oxford in 1934 which Lane had attended. Though the publication of literature in paperback was then associated mainly with poor quality lurid fiction, the Penguin brand owed something to the short-lived Albatross imprint of British and American reprints that briefly traded in 1932. Inexpensive paperbacks did not initially appear viable to Bodley Head, since the deliberately low price of 6d. made profitability seem unlikely. This helped Allen Lane purchase publication rights for some works more cheaply than he otherwise might have done since other publishers were convinced of the short term prospects of the business. In the face of resistance from the traditional book trade it was the purchase of 63,000 books by Woolworths Group that paid for the project outright, confirmed its worth and allowed Lane to establish Penguin as a separate business in 1936. By March 1936, ten months after the company's launch on 30 July 1935, one million Penguin books had been printed. This early flush of success brought expansion and the appointment of Eunice Frost, first as a secretary then as editor and ultimately as a director, who was to have a pivotal influence in shaping the company. It was Frost who in 1945 was entrusted with the reconstruction of Penguin Inc after the departure of its first managing director Ian Ballantine. Penguin Inc had been incorporated in 1939 in order to satisfy US copyright law, and had enjoyed some success under its vice president Kurt Enoch with such titles as What Plane Is That and The New Soldier Handbook despite being a late entrant into an already well established paperback market.

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