Hollywood in Crisis

Cinema and American Society 1929-1939

Colin Schindler

• Publisher: Routledge
• Year: 2005
• eBook ISBN: 9781134850464
• Topic: Social Sciences
• Subtopic: Media Studies
• Index: Social Sciences

Hollywood in Crisis is a detailed study of the workings of the American film industry during the 1930s. Colin Schindler, looking at Hollywood as an agent of Roosevelt's New Deal and the attempts made by film moguls and movie makers to withstand the political turmoil that threatened to engulf America. Schindler illustrates how the studios and their products, from the glamour of MGM stars and escapist musicals to gangster movies and Westerns, even to the 'radical' films of the Warner studios, helped foster ideas of social unity and patriotism.

1

Snapshot

Hollywood and the Nation, September 1929

Go to a motion picture…and let yourself go. Before you know it, you are living the story—laughing, hating, struggling, winning! All the adventure, all the romance, all the excitement you lack in your daily life are in Pictures. They take you completely out of yourself into a wonderful new world…out of the cage of everyday existence! If only for an afternoon or evening—escape!

Robert S. Lynd and Helen Merrell Lynd, Middletown

On 3 September 1929 the Dow Jones average of stock market prices reached its peak before the Crash which was to begin seven weeks later. On 3 September 1939 Great Britain declared war on Germany. Between these two events lay a decade of political, economic and social turmoil from which the American film industry, despite its apparent rude health, was not immune. Indeed one of the purposes of this book is to evaluate to what extent the changes of the decade were reflected in its motion pictures and conversely to question whether some of those changes were positively caused or at least influenced by the movies. To chart the progress of this decade of change it is necessary to begin by examining the state of the American film industry and the condition of the United States in 1929.

Appropriately enough Hollywood was built on a dream. It wasn’t the dream of the Jews who started and operated the major film studios. That came later. The original Hollywood dream was that of Horace Henderson Wilcox and his wife, Daeida. In 1883 they moved from Kansas where they had grown rich in real estate development to Los Angeles where they bought a ranch of 120 acres in the flat waterless country, eight miles north-west of the city centre at the foot of a range of hills. Their dream was to build a Christian Utopia.

In 1887 the Wilcoxes began to subdivide the ranch into small parcels of land which they offered free to any denomination that would erect a house of worship. The Wilcoxes were unreconstructed Methodists, passionate cam-paigners for Prohibition. All purveyors of alcoholic beverages were strictly forbidden from this spiritually uplifting environment. Daeida called the ranch Hollywood after the country estate of some friends who lived in her home state of Ohio. The Christian Utopia never materialised but the name stuck.¹

What lingered after this first dream died was the sensation that Holly¬ wood still offered a geophysical paradise. In the very first days of the pioneers the air was attractively temperate, fragrant with orange blossom, jasmine and eucalyptus. Even in 1929 it was still possible to be astonished by the bunches of red berries on the ubiquitous pepper trees which lined the major roads. The writer and producer Robert Lord who arrived in Holly¬ wood in 1925 recalled vividly nearly fifty years later, ‘Los Angeles at that time was a charming place. You had a feeling of the Old West. There were beautiful trees. Hollywood Boulevard was lined with pepper trees, beautiful pepper trees.’²

Los Angeles was a veritable cornucopia of flora and fauna which survived the first onrush of the movie pioneers. In 1929 it was still possible to notice the orange pansies and clusters of mariposa dotting the sides of the Hollywood Hills, the geraniums, bougainvillaea, roses and poinsettias growing wild. From the top of the Hills away to the east the snow-capped San Gabriel mountains towered over the desert. Looking westward there was an unobstructed vista for miles all the way to the Pacific Ocean.³

Certainly southern California attracted early film-makers because of the variety of its locations and the availability of land, not to mention local wage levels which were half those in New York or San Francisco.⁴ It was aided too by its proximity to the Mexico border in the event of financial or legal complications but the effect of working in such an attractive environment is too frequently overlooked entirely. The way in which movie personnel behaved and thought and hence the style and content of their work were to a considerable degree affected by this environment. In 1929 it was still possible to be aware of Hollywood’s physical origins.

In 1915 when Rabbi Edgar Magnin arrived in Los Angeles he had found it to be ‘a rustic patch of rose-covered bungalows, sighing palms, dirt roads that got impossibly rutted when it rained, an ostrich farm and 400,000 residents’.⁵ Those who profited early in the successful westward transplant of the film industry had the pick of the countryside in which to settle. West of Hollywood, Pickfair, the house built by Douglas Fairbanks and Mary Pickford, arose on the ridge between Benedict and Coldwater Canyons, close to Chaplin’s stately home on Summit Drive. To the east of the studios on the hills overlooking the Cahuenga Pass were built a rival series of grand houses. Cecil B. DeMille lived in Los Feliz on the eponymous DeMille Drive. In some areas of the San Fernando Valley an acre of land reportedly sold for a nickel. It was in referring to these relatively placid early days that an actor could recall,

There was nobody out here. Hollywood was a beautiful, sleepy town. At night there was nothing. It was very quiet. The Security Bank at Hollywood and Cahuenga, that was the skyscraper—it must have been all of four stories—and that intersection was the hub of activity such as it was.⁶

Such tranquillity was destined to be short-lived. Between 1910 and 1920 the population of metropolitan Los Angeles rose from 325,000 to 576,673 but in the next ten years it increased to 1,238,048. In the wake of this population boom facilities were constructed to meet the soaring demand. In 1927 the neoGothic fantasy hotel, the Chateau Marmont, opened its doors within weeks of the transformation of Nazimova’s home, directly across Sunset Boulevard, into the legendary series of twenty-five separate villas known as the Garden of Allah. The following year saw the completion of the Beverly Wilshire to compete with the long-established Beverly Hills Hotel.⁷

Cultural life in the city struggled to keep pace. In 1916 the Hollywood Bowl was constructed and in 1919 the Los Angeles Philharmonic Orchestra was founded. Already Pasadena had an Academy of Fine Arts, Los Angeles a well established School of Art and the architects Frank Lloyd Wright and Rudolph Schindler were building some of their most innovative houses in the new city.⁸

Between 1924 and 1927 eight new theatres were built so that by 1929 Los Angeles had a fair representation of cultural organisations and artistic activities. What the city did lack, however, was an intelligentsia, any sense of an intellectual ferment from which movements might be born. This was a deficiency that was to be remedied in the following decade as the power of the movies strengthened and the predominantly Jewish intellectual exiles of central Europe gravitated towards Hollywood.

In the popular imagination the 1920s were a decade of uniform economic growth but such prosperity was really built on construction and the automobile industry—two key trigger industries. It certainly bypassed the farmers and the coal industry altogether. However, the postwar boom released a flood of consumer spending and encouraged the growth of conspicuous consumption, from both of which trends the American film industry benefited enormously.

The superficial results of prosperity in Hollywood were very apparent. On 27 September 1929 Richard Barthelmess signed a new contract with First National which Warner Brothers (who were in the process of negotiating the purchase of First National) were legally obliged to honour. Under the terms of the agreement Barthelmess, whose faltering career had recently been revived by the success of the now-forgotten The Patent Leather Kid, was to be paid $187,000 per picture or $7,000 a week. He was able to command such figures because he was one of the few silent movie stars whose first sound film had succeeded.⁹

The effects of the sound revolution were still reverberating through Hollywood in 1929. It was the coming of sound which provided a dramatic climax to the years of studio consolidation. Following the lead of Warner Brothers and the Fox Film Corporation the rest of the studios recognised that sound was not a temporary fad and they began their conversion in 1928. By September 1929 the dominance of talkies was complete in the major urban areas and only small towns were still showing silent pictures with piano accompaniment.

The transformation wrought by the arrival of sound was total. A myriad of technical problems was created whose solution demanded the soundproofing of studios, the wiring of cinemas and the employment of a whole new range of technicians whose services had never previously been necessary. Title writers were supplanted by playwrights, and silent film actors, particularly those of European extraction, were replaced by Broadway actors. MGM were probably the most suspicious of the major studios but once Thalberg saw that the profits from The Broadway Melody approached $1.5 million his personal conversion was absolute. In a typical Thalberg manoeuvre MGM raided Broadway and quickly signed Robert Montgomery, Ruth Chatterton, Leslie Howard and John Barrymore. The growl of Wallace Beery and the foghorn of Marie Dressier turned them into stars but John Gilbert’s light tenor voice, Mae Murray’s squeak, the thick Mexican and French accents of Ramon Novarro and Renee Adoree soon terminated their careers.¹⁰

It was the biggest revolution to date in the fledgeling film industry but it appeared to have no adverse effect whatsoever on its profitability. None of the companies collapsed, a new one—RKO—was founded and major studios enjoyed a new surge of profits that allowed them to ride out the first years of the imminent Depression.

Between 1926 and 1930 weekly attendance at the movies in America rose by 45 per cent to ninety million paid admissions. In those years the assets of the industry tripled to reach $1 billion.¹¹ Another source puts the total investment in exhibition real estate at closer to $1,250 million.¹² Certainly, Warner Brothers’ assets rose from $5 million in 1925 to $230 million in 1930. They and the Fox Film Corporation owned five hundred cinemas while Paramount, the most acquisitive of the studios, owned over 1, 400. In fact the five major studios (Paramount, Warners, Fox, RKO and Loews, the parent company of MGM) owned the crucial 2,600 first-run theatres. They might have been only 16 per cent of the total number of cinemas in the United States but they delivered three-quarters of the total revenues.¹³ Each studio owned theatres in the big cities but they carved up the country between them into areas of influence like Great Powers subdividing the African continent for imperial ends. Fox controlled the West Coast as Warner Brothers dominated in Pennsylvania and New Jersey and Paramount in Canada, New England and the South.

The reason for the massive expansion in studio profits in the 1920s lay in the ability of their theatre chains to model themselves on the retailing of major American corporations like Sears, Roebuck and F.W.Woolworth & Co. They regularised costs, booked from a central office and exploited the advantage that came from operating nationally.¹⁴ Additionally, the parent companies divorced the manufacturing process (Hollywood) from the financial decisionmaking (New York) and employed unit managers (producers) to supervise the production of six to eight films a year within previously agreed budget limits.

They all had substantial production facilities in southern California, a worldwide distribution network and a sizeable chain of cinemas. It might have been the dominance of the companies as distributor-exhibitors rather than the existence of the studios as production centres which was the true source of their economic power but it was the success of this vertically integrated system of operation which gave them the means effectively to exclude other companies. By any other name the major studios operated as a cartel and colluded to keep out competition as far as it was possible.

All parent companies played rival studios’ product when it was in both their interests to do so. A successful Warner Brothers film might be good news for Loews Inc. if it played in their cinemas in towns in which Warners didn’t own a theatre, although Louis B. Mayer might not have seen it that way. There was considerably more competition between the rival studio heads than there was between the chairmen in New York who shared a common interest in reducing risk and maximising profits. The risk element was thus left to Mayer, Jack Warner, Darryl F.Zanuck and so on in Hollywood at whom the finger of blame could be pointed if their choice of pictures was unsuccessful. It accounts for the deep and abiding hatred within the production chiefs for their nominal employers on the East Coast.

The sound revolution was no doubt an inevitable outcome of the many experiments in research and development which Sam Warner and William Fox in particular had financed in the 1920s. The immediate increase in profits certainly justified the outlay in capital expenditure required by the sound conversion which was estimated at anything up to $500 million. Production budgets virtually doubled as production schedules expanded to incorporate the extra time necessitated by the use of the new cumbersome technical equipment.

Such major financial restructuring exacted its own price. It came in the form of alliances with the Eastern investment banks. The chaotic slapdash Hollywood of the early years with dozens of independent production companies fighting for survival had become by 1929 a tight core of eight powerful studios subdivided into the Big Five (Loews, Warner Brothers, Paramount, Fox and RKO) and the Little Three (Columbia, United Artists and Universal).¹⁵

Warner Brothers moved into the ranks of the major powers as the result of an alliance with Goldman, Sachs. Waddill Catchings, the head of its investment division, was impressed by the prospects of future growth through strict cost accounting, tight budget control and managerial talent. He agreed to accept a seat on the board as Chairman of the Finance Committee in which capacity he persuaded New York’s National Bank of Commerce to lend money. This was followed by four other significant banks and Warners soon had the money in place to purchase Vitagraph Corporation and aggressively pursue the sound revolution. In April 1926 Warner Brothers and General Electric formed Vitaphone.

Other alliances soon followed. Loews Inc. approached Lehman Bros and Paramount joined forces with Kuhn Loeb & Co. The very existence of RKO was the result of this revolution. It had been formed in October 1928 by a merger of RCA and its sound process known as Photophone, with the FBO studios and its limited distribution network and the hundred theatres of the Keith Orpheum vaudeville circuit. RCA, the prime financial mover, failed to sell its Photophone process to Loews or Paramount as it had hoped. On 11 May 1928 United Artists, Paramount and Loews instead signed an agreement with Western Electric. RCA moved quickly to include under its umbrella the NBC radio network, RCA Victor records and music publishing.¹⁶ It was a trend that was to continue in the 1960s with the swallowing of studios like Paramount into the conglomorate Gulf & Western and United Artists into the TransAmerica Corporation. It reached its most recent apogee with the purchase of Columbia by the multinational Sony Corporation.

Other mergers were also proposed at this time. Warner Brothers held talks on a merger with United Artists but Charlie Chaplin swiftly vetoed the move. Instead a new company, United Artists Consolidated, was capitalised at $15 million in January 1929.¹⁷ More significant was the threatened merger of Fox with Loews. In 1927 with the death of its founder, Marcus Loew, the company was ripe for a hostile takeover. The new Chairman, Nicholas Schenck, entered discussions with Harry Warner and Adolph Zukor but the real interest was exhibited by the voracious William Fox.

Fox proposed to buy out MGM and merge it with his own holdings, financing the $50 million deal with a combination of loans from New York investment houses, chief among them Halsey, Stuart and Company, and by the sale of shares in Fox Film Corporation and Fox Theaters. Schenck would emerge from the deal with a commission of $10 million and Fox would control the richest and most powerful studio complex in the world. The deal was signed on 24 February 1929.

It was killed in short time by a combination of events. Although Fox had received a provisional approval from the antitrust division of the Justice Department, Nicholas Schenck was unable to prevent Louis B. Mayer, who deeply resented the manner in which his studio was being carved up without due consultation, referring it to his political friends in the newly installed Hoover administrati...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Dedication
• Contents
• General editor’s preface
• Preface
• Acknowledgements
• 1. Snapshot: Hollywood and the Nation, September 1929
• 2. Trouble in Paradise: October 1929 to February 1933
• 3. The Blue Eagle: March 1933 to November 1936
• 4. The Swimming Pool Reds
• 5. Fanfare for the Common Man
• 6. The Hays Office
• 7. The Left-Handed Endeavour
• 8. Cry of the City
• 9. Good Citizenship and Good Picturemaking: Warner Brothers and the New Deal
• 10. Black Fury: A Microhistory of Compromise
• 11. Foreign Affairs
• 12. Snapshot: Hollywood and the Nation, September 1939
• Filmography
• Notes
• Bibliography
• Index