Marcus Loew’s is a rags-to-riches story, like those of Adolph Zukor, Samuel Gold-wyn, Louis B. Mayer, and other the founders of the American film industry. Loew was born on 8 May 1870 in a slum on New York’s Lower East Side. His father, a Jewish waiter, had immigrated to the United States from Vienna a few years earlier and had married a German widow with two children. Marcus was one of five children. At age 6, he was selling newspapers in the early morning in front of a saloon on Hester Street. Three years later, he left school to find his way in the world. After pulling maps in a printing plant for 35 cents a day and teaming up with a man with a hand printing press to publish a weekly throwaway paper called The East Side Advertiser, he wound up in the fur business at age 16 working for a wholesaler on lower Broadway. He was made general superintendent after six months, but naturally, he wanted to go it alone, and with $63 in cash in his pocket, he became an independent fur broker. But Loew was unable to keep up with the fashions, and within a year he was bankrupt.
‘He emerged from bankruptcy with unpaid debts amounting to $1,800, which seemed an enormous sum to him then,’ recounted his obituary (‘Marcus Loew’ 1927). ‘Going back to work for others, he became a fur salesman, and, by carefully saving, got together enough to pay off the $1,800 which, he insisted, he still owed his creditors, although, having been through bankruptcy, he was not legally responsible to them.’ This story would be recounted in various versions in the trade and popular press and became a centerpiece of the Marcus Loew myth. Loew had another go at the fur business and barely escaped bankruptcy a second time when the fur trade collapsed. After Loew paid off his debts, he was left with $7. Now he had a wife to support, having married Caroline Rosenheim in 1894. Loew’s fortunes improved when he was hired by Herman Baehr, an expert furrier, who knew how ‘to buy [furs], to cut them, to manufacture the garments. Loew knew how to sell,’ said Crowther (1957: 22).
People’s Vaudeville Company
Loew moved into show business by chance. One day, while looking over some apartments as investments to protect him from the volatile fur trade, he happened to meet David Warfield, an up-and-coming stage actor, who too was looking at apartments. From this chance encounter in 1899, they became business associates and close friends. Warfield had witnessed the carloads of pennies being collected by a penny arcade called the Automatic One-Cent Vaudeville and convinced Loew to try to buy into the venture. Warfield was starring in a hit Broadway play, The Music Master, and had money to invest. The arcade was located in Union Square, the heart of the city’s entertainment district, and contained more than one hundred peep-hole machines – mostly phonographs, mutoscopes, and penny-in-the-slot machines that delivered peanuts, candy, and the like. The men behind the operation were two fur dealers who were branching out – Adolph Zukor and his partner Morris Kohn – and a Buffalo merchant, Mitchell H. Mark. Warfield and Loew made their pitch to the group in 1903, and it was accepted. With the new cash infusion, they formed the Automatic Vaudeville Company in 1904 and set out to open new arcades in Newark, Philadelphia, and Boston.
Within a year, Loew and Warfield struck out on their own to form People’s Vaudeville Company. They opened their first penny arcade in January 1905 on Twenty-Third Street, near Seventh Avenue. This was the beginning of Loew’s theater empire. He was 35. The same year, Marcus Loew hired the man who would become the financial mastermind behind the company, David Bernstein. As reported in the New York Times (‘David Bernstein’ 1945), ‘in 1905, Mr. Bernstein, then 23, answered a “want ad” of the Marcus Loew People’s Vaudeville Company requesting the services of a young bookkeeper. He found that the job demanded knowledge of corporation accounting, of which he knew little.’ Bernstein, who was raised in Utica, had dropped out of school at age 18 and was a clerk in a dry goods store. People’s Vaudeville hired him at a salary of $14 a week with the understanding that he had to report in three days. In the interval, he taught himself corporation accounting. In 1910, Bernstein was made general manager of Marcus Loew’s operations and, two years later, vice president, treasurer, and board member of the company. At the time of his death in 1945, the New York Times stated, ‘His skillful guidance had enabled the company to weather the financial storms that had threatened the industry during the last thirty years.’
Loew soon opened four more arcades in the city. ‘These got along fine for a few months,’ he said, ‘and then they all took a decided turn for the worse. In fact, we lost all our money and as much more as I could raise … Luck finally changed six months later, when I opened my first moving picture show in a room over my last penny arcade in Cincinnati,’ one of his stops on his selling trips (‘A Motion Picture Show Magnate’ 1911: 324). He named it the Penny Hippodrome. As reported in Moving Picture World (Judson 1917: 78), ‘Someone told him about a motion-picture show across the Ohio River at Covington, and he went over to see it. The proprietor was the ticket seller, gateman and operator.’ The man ‘would sell tickets till he got his lobby filled, then he would open the gate and let them into the theatre, close the gate again and repeat the process until the theatre was full, and then he would begin projecting the pictures.’ He was paid $75 a week, and ‘Loew thought he could do as well.’ The following Sunday, Loew opened his nickelodeon with a [Pathé] comedy called Hot Chestnuts and a few other shorts. Nearly 5,000 people paid their nickels to see the cheap show. The following week, business picked up even more. After returning to New York, Loew removed the penny machines from his arcades and converted them into nickelodeons. In six months, ‘we had forty other places going, all store shows, and all doing a land-office business,’ he said.
Motion picture exhibition expanded prodigiously beginning in 1905. Thousands of nickelodeon theaters were springing up all over the country, particularly in urban, industrial cities with large immigrant populations. It was an ease-of-entry business. After renting a storefront, restaurant, or amusement parlor, a newcomer needed only a projector – easily purchased – a supply of films – now readily available from Edison, Biograph, Vitagraph, and other studios – and some chairs, a piano, and perhaps a gaudy sign outside to lure in the customers. Programs lasted fifteen to twenty minutes. The industrial workweek was declining, albeit slowly, and workers now had some leisure time for entertainment. The circus, burlesque, legitimate theater, vaudeville, billiard parlors, and saloons prospered along with the movies, but a five- or ten-cent nicklelodeon ticket provided a special inducement.
Small-time vaudeville
By 1907, Loew sensed that the nickelodeon craze had peaked and started unloading theaters. In the bigger cities, the market had become saturated. Nickelodeon operators, as a result, had to compete harder to attract customers. And securing more and better films for their programs proved difficult. Although American film producers had adopted mass production techniques, they were simply unable to keep up with the demand. Loew found a way to survive by converting his houses to small-time vaudeville. As the name implies, small-time vaudeville was a second-tier version of big-time vaudeville. Big-time vaudeville was dominated by a few powerful circuits such as Keith-Albee, Proctor, and others. Both tiers presented a mix of short films and variety acts, but big-time paid higher prices for the top acts and presented national celebrities in purpose-built houses to a better-class clientele. Big-time programs played twice a day, while small-time played three times daily or on a continual basis.
Loew’s first dedicated movie theatre was a boarded-up burlesque house in Brooklyn, known as Watson’s Cozy Corner. Loew purchased it in 1907 for a song and had it fumigated physically and then morally by booking an Italian stock company. ‘To give it a new standing,’ Loew said, ‘I engaged an Italian tragedian, Antonio Miori, and kept him there for six months in Shakespearian plays. Then I entered upon my original plan and changed it into a moving picture and vaudeville theatre,’ which he renamed the Royal. The first year, Loew made a profit of $63,000. ‘It was undoubtedly the combination of moving pictures and vaudeville that did the trick,’ he said (‘A Motion Picture Show Magnate’ 1911: 324).
Loew’s goal thereafter was ‘to provide a high-class entertainment to a great number of people at the same time at a nominal price’ (Judson 1917: 78). He could do this by spreading the cost of the best shows among as many patrons as possible. Loew adopted a 10–15–25 cents admission scale; big-time circuits charged twenty-five cents to a dollar. ‘The Loew policy of vaudeville and pictures, no matter what kind of vaudeville or what kind of pictures that were made in those days, commenced to do business,’ said Variety (‘Expansion’ 1919: 12). ‘In fact the Loew houses seemed to do business from the moment he opened their doors.’
In search of bargains, Loew leased older houses in out-of-the-way places at first. With the proceeds, he constructed new theaters in the better parts of town. To jump-start the box office, he would give away thousands of passes through department stores and other places of business. Whenever he encountered competition from a big-time house that lowered its ticket prices to compete directly with a Loew house, Loew spent more to acquire better acts and was willing to sit tight until business improved. By the summer of 1909, People’s Vaudeville operated a popular-priced vaudeville circuit covering a large part of the East. In New York alone, he had twelve houses.
The brothers Schenck
Meanwhile, in 1906, Marcus Loew became associated with two more individuals who would play key roles in his growing theater empire, Nicholas and Joseph Schenck. The brothers were born in Rybinsk, Russia, and had immigrated to the United States as young boys with their parents and brother in 1893. They sold newspapers and did odd jobs to get by. At nights, they slept behind a drugstore where their older brother worked as a pharmacist. In 1905, they invested in a beer concession called the Old Barrel at the Fort George Amusement Park. The park was located in Upper Manhattan and had a spectacular view of the Harlem River. The park consisted mainly of a loose and disorganized strip of sideshows when the Schencks bought in, but the park had potential. It stood on the highest point of Manhattan and caught summer breezes. And it could be easily reached from most parts of the city by trolley for a nickel. The Old Barrel was a spectacular success, and with the proceeds, they constructed a new summer park on the premises called Paradise Park in 1906. ‘Paradise Park is plainly designed to attract the poor class of patronage,’ said Variety (‘Summer Parks’ 1906: 12). ‘The chief attractions are the music hall giving a vaudeville bill of nine acts and a dance hall.’ Admission to the park was free; revenue was derived from the sale of concessions, which cost five cents.
The decade prior to World War I spawned more than 400 amusement parks around the country, and the Schencks had gotten in on the ground floor. Marcus Loew was a steady visitor to Paradise Park and had befriended the brothers. After the first season’s receipts came in, he agreed to loan them money to add several thrill rides to the park. After the second season’s receipts came in, Loew invited the Schencks to join him in the People’s Vaudeville venture. ‘Thus the brothers were joined in a 20-year association with Loew until his death in September, 1927,’ said Variety (‘Nick Schenck’ 1969: 4). Nick Schenck ‘remained at Loew’s side to the end as chief lieutenant in charge of theatre operations’ and Joe Schenck as ‘head of the various Loew talent booking offices’ before going into independent production in 1919.
Loew’s Consolidated Enterprises
In a bid to raise additional capital, Loew and his partners agreed to pool their assets and form a new corporation, Loew’s Consolidated Enterprises, in February 1910. It was capitalized at $1.5 million and acquired the assets of People’s Vaudeville (Crowther 1957: 32). Marcus Loew assumed the presidency, Adolph Zukor was elected treasurer, and Nick Schenck secretary. (Marcus Loew and Adolph Zukor had become friends and had previously cooperated on some joint ventures.) A large block of the Loew’s Consolidated stock was sold to Broadway producers Lee and Jacob Shubert, who were building the largest chain of legitimate houses in the country. Having rented two idle New York houses to Loew’s People’s Vaudeville in 1909, they had acquired a taste for small-time vaudeville and wanted in. Loew now had sufficient capital to expand throughout New York City and beyond. In October 1910, he opened the National Theater in the Bronx, which served for a time as his flagship theater, and acquired control of the lucrative Harlem Casino. By the 1910–11 season, he owned a circuit of forty small-time vaudeville theaters, stretching from Chicago to New England. Loew’s next move was to purchase the William Morris independent vaudeville circuit in March 1911. The circuit included the American and Plaza theaters in New York and houses in Chicago, St. Louis, and Cincinnati. After the buyout, Loew moved his headquarters to the American Theatre on Eighth Avenue between Forty-First and Forty-Second Streets.
To assure a steady supply of vaudeville acts, Loew formed the Marcus Loew Booking Agency in 1910 with Joseph Schenck as manager. To assure a steady supply of films for his theaters, Loew formed the People’s Film Exchange in 1910 with David Bernstein as manager. People’s Film was a state’s rights exchange that distributed single reelers. In both cases, Loew cut out the middleman and collected the booking fees and film rentals. The film exchange did not last long, however. In 1911, Loew sold the exchange to General Film Company, the new distribution arm of Motion Picture Patents Company, which was maneuvering to take over the industry. Loew, like other state’s rights distributors, had little choice in the matter. Either they sold out to General Film or faced the threat of having their entire film supply cut off.
Loew’s Theatrical Enterprises
In 1911, Loew reorganized a second time and formed Loew’s Theatrical Enterprises. It was capitalized at $5 million and took over the assets of Loew’s Consolidated (Gomery 1986: 53). Zukor resigned from the company in 1912. He saw the future of the business in feature films and moved into film production by forming Famous Players in Famous Plays. Loew did not follow Adolph Zukor into motion picture production at this point. Rather, he expanded his theatre circuit to reach the Pacific coast. He did this in August 1914 by acquiring the Sullivan & Considine Theatrical Syndicate, which comprised around thirty houses in the Midwest and Far West. Loew bought out the circuit for a reported $4 million, and for a while, Loew’s chain comprised around a hundred theaters that stretched coast to coast. Formed in 1906, Sullivan & Considine operated both theaters and a booking agency in New York to supply a steady stream of acts to the expanding circuit. Charlie Chaplin, Will Rogers, Marie Dressler, and Albini the Magician had gotten their start playing the circuit. However, the deal went sour nearly at once, and Loew returned the houses to Sullivan & Considine in April 1915 after having lost $500,000 in the venture. Loew’s brand of small-time vaudeville did not take off in these theaters.
The Loew’s circuit for the time being was confined to the East. Small-time vaudeville had been good to Marcus Loew. In a little more than ten years, he had become a wealthy man and had won the attention and respect of the financial community. As the Los Angeles Times opined, ‘He has demonstrated how a man can win a fortune quickly and still honestly, and the strangest part of his career is that he has built up this huge fortune with nickels, dimes and quarters’(‘Facts about Marcus Loew’ 1914).
The rise of Famous Players-Lasky
But Loew dared not stand pat. The film business was changing, in no small measure due to Adolph Zukor. Zukor’s Famous Players in Famous Plays had become a resounding success after the release of the French import Queen Elizabeth (Desfontaines and Mercanton) starring Sarah Bernhardt in 1912. Zukor then teamed up with Daniel Frohman, a big theatrical producer, and signed up Broadway stars to perform feature film versions of their Broadway hits. In 1916, he staged a coup and took control of Paramount Pictures, the national feature film distributor founded by W. W. Hodkinson, and merged Paramount with his Famous Players and the Jesse L. Lasky Feature Play Company to form Famous Players-Lasky Corporation. When Zukor completed his consolidations and acquisitions in December 1917, he had created the largest motion picture company in the world. Zukor maintained a strategic hold on the market by signing most of the biggest s...
