A Matu'n

Pamtrnn Oligopoly, 1g0.19,48

Stnuotusre

of the IndustnY

l'e guaratttccd a sl'rowing.

c Littlc 'Ihrcc: lJnivcrsal, C]olumbia, anci Jnivcrsal anci Colunbia hacl thcit'owu
stuclios anel clistrillr-rtion lhcilitics and we:rc useful 1.o lltc: rrtajors cluling thc 1930s ancl l940s in :ir-tplrlying low cost piclrrr.cs lo facilitalc [i'cquc--nt pl-ogfalll chaugcs ancl ilotttrlcl fcrturcs. tJnitocl Artisls, lho stlallesl tlf'1h cigh1., witt;

sort of symbiotic relationship with

1hc

uniquc;

i1 was

solcly a clislr'ibutioll collllla-ny fol'

r slnLll

tlic nrovitl

itleh'rs1r'Y as

cloluiualcd by a sclrticotlpttls<lty

)5\

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1

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wor'a

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Part

III / A Mature

Oligopoly,

fII

/ AN['ature Oligopoly, 1930-1948

255

d to pay premium rates. ercised even greater power

about 95 percent ofall film rentals )utors. This oligopolistic situation independent producers in a subordito secure financing from banking nts had to guarantee national distri:tter-class theaters. Only then could ,hance of making a profit. But the
extensive theater chains, gave pref_

in distri_

carried overwhelming economic power in that they accounted for nearly 70 percent of the nation's box office receipts. The Big Five competed with one another at the frrst-run level in the large cities, but in the neighborhoods and smaller towns, the situation was different. In building their chains, the Big Five acquired theaters in different regions of the country-Fox's chain was located in the pacific and Rocky Mountain states; Paramount's in the South, New England, and grcat Chicago; Loew's in New york City and Ohio, and so forth. Because each major company wanted to distribute its films nationwide, they exhibited one another's pictures in noncompetitive areas as a matter of course. In this "community of interests," a hit motion picture was profrtable for all the integrated companies. The monopolistic structure of the industry was challenged by the Department of Justice, culminating in l93g in the antitrust case United States v, paramount pictures, Inc., et al, The case reached the Supereme Court ten years later, after thousands of pages of testimony and exhibits, urt decisions, and apCourt held that the Big n that had monopoly
sated companies were direcred,"

panies either owned or controlled only three thousand, but this number represented the best first-run houses in the metropolitan areas. The ownership of these first-run outlets

holdings from the production-distribution ends of their business. The proceedings, along with the rise of television, brought an era to a close.

iff"lXtTl;.t:iJ:-

re another's pictures and closed an he market to outside product.

use of such trade practices as block ng, the majors preempted the play_

Effects ol the Depression

Sound staved off the Depression in the motion picture industry for well over a year. But when the novelty of the talkies wore offin 1931, box ofrce receipts plummeted and Hollywood felt the effects of a disabled economy. Warner, after realizing profits of $ 17 million in 1929 and $7 million in 19 llion in 193 of $ illion profit RKO from 1930 million defrcit. Paramount remained in the black that year,

lters nationwide. exhibition that the Big Five had the : eighteen thousand theaters operati in 1945, the five integrated com'roblem of Monopoly," Annals of the AmeriSocial Science 254 (November 1947): 125.

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u1

ItI / A Maturc Oligopoly. 1930-1948

paf III I A'Matvrc Oligopoly,

1930-1948

)aly's profts fall fronr $1t nrillion )32 he had a deficir of $21 million. ith its 501 subsidiarics. wcnt into vent reorganization; and RKO was p. Warner, battered by losses of $14 million in 1933, was fighting to rs, only Loew's had not yct shown lrnings plunged lrom $10 million in 1933. As for the minors, Uni:eivershipt Columbia and Unitccl

lut not down.

'e slashed, audicnces shrank-avcr-

lropped fi'om an estimated cighty nrillion ]n 1932 and 1933-productublcd because of souttd, and rcve:ets dwindled, bu1 these factors in se the collapsc. It resulled from the rcxtended themselves, frrst in the najors for control of the country's rd thcn in the tremendous capital Lnd theater equipment required for d. In short, the Big Five could not rligations, which means, simPlY, :ash 1o pay their mortgagc commitlations, and thc hcavy chargcs on common stock value of thcse maa 1930 high of $960 rnillion to $140 er after thcatel went dark. Parar to close many of its unProfrtablc pay overhead costs. The comPanY rg Island studio and laid off almost
s who had been earning between hc number of unemPloYed and un,wood became a nalional scandal. enough to find work dloPPed from :n President Roosevelt declared a torium in March 1933, studlo heads stic personnel that everyonc earnlng J have to lake a salarY cut of 50
S.

.w
5#:
Gold Dgger,s

Y' t
.t{

of

1933 (Warner Bros.)

dawn of the New Deal. In a comprehensive attempt to revive industry, President Roosevelt drafted the National Industrial Recovery Act (NIRA), which became law in June 1933 and was administered by the National Recovery Administration (NRA). Its general aim was to promote cooperative action among trade groups. The act assumed that collective action was superior to cutthroat competition and that members of the business community would be willing to put aside selfish interests for the good of the na_ tion. It stipulated that industries were to drw up codes of fair competition enforceable by law. Business could ig_ nore antitrust laws but, in return, had to make concessions
such as guaranteeing labor the right ofcollective bargain_ ing and establishing minimum wages and maximum hours. Code of

ltair Competition.[or

the Motion picture Inclustrv

f the motion piclure industry at the

The Code of Fair Competition for the Motion picture Industry was signed into law on November 27, 1933. Reflecting the vertically integrated structure of the industry, it regulated trade practices among producers, distributors,

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Part

III / A Mature Oligopoly, 1930-194g

paflllU A Mature Oligopolv'

1930-1948
As a long

259

tablished guidelines for labor-manaseacting in concert through the office-s r Producers and Distributors of Amer: association, the major companies the code. ost importantly, in receiving governtrade practices that they had spent through informal collusion. These ised the block-booking system, clearadmission price discrimination. All st the greatest possible profits from lp independent exhibitors in a subor-

produc ing in Pre tion bY cl

of distributors'
eral Trade Commission,
so

tion PlaYi et to inde

Before it was endorsed by the NRA, block booking had been attacked by consumer groups, Congress, and the Fccl-

in addition to the independents' in drafting the Motion Picture Code, the majors made few concessions in the hope of quelling the controversy.

But the block-booking system remained pretty much intact. The majors also succeeded in protecting the favored
status of their theaters by controlling the clearance and zoning boards. The boards took over the function of local film boards of trade, established before the NRA and dominated by the Big Five, to arrange theatels in a particular territory into a marketing pattern consisting of run, clearance, and zoning. Theaters first showing newly released pictures were designated rst-run. Located in the large

without doubt the most contested All the majors sold their varying size, usually consisting of an ). These were offered to exhibitors on ,efore the pictures had actually been ing for these blocks, exhibitors were : subjects as well. This practice, the rther with block booking, was known s a congressional investigating comris is the only industry in which the r of what he is buying, underwrites :t offered him."2 reater owner was not against block g he needed a large number of pictures e of his theater, which probably rnd changed programs two or three did vigorously object to having all of Lpany foisted on him regardless of rbility. Compulsory block booking did rits affiliated with the majors, it majors negotiated selective contracts , only the best of each other's pictures' rled the major studios to function at rrance that even the poorest picture is, in turn, helped them secure a flow
business.
rnal Economic Committee, The Motion Picturc lrol (Washington, l).C.: U.S. Government
1.

metropolitan areas and owned mainly by the circuits affiliated with the majors, these theaters accounted for nearly 50 perccnt of all admissions. Neighborhood houses and those in surrounding to'trns had the subsequent right to show pictures and were designated second-run, third-run, and so on. Clearance referred to the number of days that had to elapse before a picture having closed in one theater could open in another. Zoning referred to the gcographical area over which clearance restrictions applied. Since the value of a motion picture to an exhibitor depended on its novelty, the granting of excessive clearance to lrst-run theaters had the effect of increasing their drawing power and keeping patronage in subsequent-run houses at comparatively lower levels. Practically every legal action independent exhibitors or the government filed against affiliated circuits contained charges of inequitable clearance and zoning. With the creation of the clearance and zoning boarcls, the majors now had the power to adjudicate these matters tbr themselves. The same held true for complaints of admission pricc discrimination which would be heard by the grievance boards. In licensing their pictures to exhibitors, distributors stipulated minimum admission prices. This eliminated price rivalry among theaters and captured optimum rcvc-

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ciisiilnrtor;"

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oi.rIo
1910. "ltuii rrs

rlccisiot't ilvllir;r crl lt l'.,1 {i\,. il'h iiiiiir:rJiit irt rriit.i ,r iltrt irtolirtrt rir:iru'c ilrrltislrl, lva5 l;li11l1i. li llrrrf r:91; iltr.rirrilj i.ltc I )tr1;1;;ott viri.rurlly irliir.. ir,r;it,,.":1, i!rrJ,{)1,/rri : i,;:: r,1,, ;liir'i !) T ! :ll,l wilri,r i\rr \.:t,. ,lll ill, {.,rrl,jtrr(,, !. j, onoo rfrairr er'niirfr rlo1s, will f ,ocw':; ihc r1(liiirllr(r lcacfr,:r"" l4y 19.lll, lori.rrrlrr11 ;rrrl lirx lriul rrr.rclcr,,.r)r() i.coi t.ji,irir iior. tr, lg.l(r, aicr r;clrirri ,i'ii., irrr:ri.urri, IJrriv.r.s;rl

1,l()\:J" ilr.

l.irrrr..rrrr:

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l)rttltIl

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ilitrtlt:r's
As t

wor'c corl)tiaiivcly slroi'i liverrl" rlrlrrlrlc irrlrirr.s rirrlr) lrtslilr, irni;rc1 orr [rr" iitrllr;ir.y. llrr;l tlrr'l)l{):., iirr ;,,,.,,i,,1 rrror;r lrt{,1lt jrt (.ln:t..r.,1 o'a lilllrrrc rrrel ir bw slorrs. Alor.rrlrl l1).:! 1, irrrktrcirricri

io 'l)rr)tri rrr si4yli', trox''frrer r(r i.o aorirrx)i() wiirr i'r; rrrr Ilt.;li.rs. rl'r'rrlr fl;rrr)s liklr I;r:rrr.ir., lliirk.,;irirl Nirr1.

As rilttttl.iortr:rl ;lllovr:. hc i )crlry;sir)i lt.ilr.,,.,rr)rl yr.r,.r ,.-. jli lrif i,rr i'iL.iirxrs r.r'hir:lr wrrlt: i,irrrrJrri:url rry iirrlr.i.rrr r.rrir;

irr i\l.w

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filt.rft Of'triftc cltiirri i,lr;ry,r1)r!.j,i.llrlt.

tr.irt.

ir,.rifll,:rrrrl l,rrrtr rrrrlu:iiiirr1

Itlilrorrglt rtil,rticrl ilii;ir r:,;ri ilir rr.irri.rl io 1rrrrfr,. iri,i, ovoll.liilly iill<wt:rj srri, wiill i.irl rllltril iliu lrr,, ir.) J,t r.rol Ilrcricr'l; orrisirlc ir'si. r rir rrl:ryr"rl lllrrlrlt lti]1r,. 'f'ltc l^irlrr;rccci)i;il(.r.o rlorirjr,fi.:rirrrr",. r.h,tt^,t.,J it,r.
, ,i,r ,:il,|r r.,ti, i,,ti ;i ilt.;iu , r/rr//i.il

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l;ri,.rrl ri1rl"

Part

III / A Marure Oligopoly, 1930_194g

t I

Aate Oligopolv,

1930-1948

261

upon production facilities. In the long run it did not affect aendance figures. As more and more theaters in a given area adopted this practice, business was no better than it would have been if all the exhibitors had continued to
show only single features. A signifrcant reason was that few

)unt and Fox had undergone reor_ rr selling off its theaters, Universal ). RKO was not stabilized until the industry's monopolistic trade rce without signifrcant alteration.
the Depression spawned new exhi_
n

lustry.
:cepted movie program consisted orts. Around 1931, independent began presenting doubl. fratu.e,
g

to draw more patrons. The lure

pread and,
budge, they by 1935 mosr

exhibitors could afford to pay the rentals of two quality pictures on a single bill. An exhibitor typically showed one strong attraction and one cheap class-B picture. Hollywood, therefore, adopted a differential pricing policy to deal with distribution: flat fees for class-B pictures and percentages for the class-A product. Although flat fees were set low out of necessity, producers could predict with great accrracy the amount of revenues B features could generate and scale production costs accordingly. Class-A pictures remained the staple of the industry. By selling them on a percentage-of-the-gross basis, companies assumed the risks, but in so doing, could benet from surges at the box office. Revenues from second features might have been small in comparison, but on the plus side, cheapies allowed the studio to operate at full capabity and provided an inexpensive training ground for new talent. Theaters playing double features required twice the product, obviously. The Big Five did not possess the capacity to fill the playing time of all the theaters, not even with the Little Three in addition. There remained a gap, albeit small, between supply and demand. This situation explains the existence of Poverty Row, a group of tiny studios in Hollywood that ground out small budget genre pictures for the lower half of double bills in theaters usually located on the wrong side of the tracks. Republic, Monogram, Grand National, and Producers' Releasing Corporation were the important ones, but a host of others made brief appearances. As a group, however, Poverty Row had marginal impact on the business.

Motion Picture Production and Vertical lntegration

Mae Huettig has described the structure of the Big Five "a large inverted pyramid, top-heavy with real estate and theaters, resting on a narrow base of intangibles which constitute frlms" (ch. ll). This structure had far reaching effects on the quantity, quality, and content of motion
as

'double features changed the resented many perplexing distri_ )re rmportant, put a heavy burden

)6?
pt

l)ri Ill / /\ Mnltrc

cturcs

Oligo1rol1,. 'l3()_ f !4g

all, 1o

fi

of'

subsccl u
c1'rangecl

to lhree hundrcd piclurcs a itscll'to l)r()ducirg {wo ryrcs o1 piclrrr.r,s_tht, class with name s1ars, lavish scts ancl cosrumes, and bie budscr. and thc class B, chcapics proclucccl on a shocstr i,ig. i""", would not havc bccn proflablc for thc s1.u<jios to-nake class-A p'ocrucl cxcrusivcly, critl thcy havc rhc f'anciar 'or rcsourccs ol' al'tistic pel'sonncl to clo so. A1 .n.1, ,iu]' dio coulcl producc from fifly 1o sixly fcaturcs 'rost, a ycar. with the rcsulr that thc Big Fivc ptayecl u,r. o,rutl,.r,r';;i;;r'^,, a lrattcr of'coursc. As ear.licr., lhis was porlrt i. t .-"" 'otccJ cause thc aflrialed crrains wc'e r.catcd mainly in cliffcrcnt rcgions of thc counlry. Dcspitc all thc publicity givcn 1o }lollyr,vooci, thc hcad_ quacrs of thc industry was in Ncw york. As L,illian Rss put 11,
gL'flrcd Almost 1wo ycars bcfbre. I hacl bcconlc lntcrcslc(.I in ,l-hc llccl adgc o.f CoLtrctga ancl I hacl bccn followinf is proglcss step by stcp cvcr sincc. to lcal'n what I coulci abou thc A'rcr.icui rotion picture industry. Now, thl.ec thousand nrri..r'lun, rn an ofce building at Forty_fifh and llroaclwar, , 'ollyw.oct, I was getling closcr than I cvcr had bcfore to thetr.*ou to fecl that hcarl of thc

mattcr.r

o1' clislr

wcrc acquired l.hr.ough thc salc of llonds ancl othcr"fornrs of long-ternt fnancing, an inclebtcclncss r.c,r,i,.irrg fxr.lrl payments.'fhc hcad of cxhibitiou, as a rcsrrrt,.,rntcd tcr play safc with rrovcr stars anci pclprrlar.g,,ur.r. Thc hr:acl

ally, exhibition cxcrtccl a conscrvaliu" i,ru.,u... Thcatcrs

l oflccs such as thesc, company cxccutivcs ntadc ntany crucial dccisions affcting procluctin. Be.aus,, most of.thc Big Five 's moncy was invcsted an mai in thc bricks ancl mortar branch of thc busincss, cxhibition had an inrpor. tant voice in fol.ntulating policy. power wcnl to thosc erlos_ cs-t to thc trincipal sou.ctcs of inconc, says llrrcllig. llasic_

clui.cd for' thc 1blowing soasol, prccricalccl thc contparry's own lhcatcrs anc.l thc oulprrl
3.

i,Lrri.ri wourrr incricate t,. nunrl.i

o1'

pic,r,r'cs rc-

.n thc neerris of'

of. lhet c:onrltr:1t_
2,.i7

l.illan l{oss. /)i'll (Nny y1.

^von.

1969).

't ti] l'

l,/ii

rllr( .'llil{itr(rl,

1').i0_l()z!$

ril, itrri iltii jllr' 'tlltt,, i,;i,i. il|sl rrf to ()l' thcil hort:lcs. hzlos1 ol'ihcir. jLye rl rlou b1c lbirirrrr,'s whrclr w,'r,k. Srlllt, lllr,:lli.ls ri.tlrrir.,1 , s a you'. Iftrllywoocl, as r r,csult,
;l 1wo lytrx)s
r1s

PtrI

Ill I h

r'/ti

itt..)/liorr()l\', l')',1,) lt)/ll

),i

'

1jolr. iii' lkly trlt:,r;ti ilrc ilrtriup, ol'a toi.ittlar ttovol. a well kgw.rr c)onio s1.t'it. or a l)trlitizct' l)rizc ltlity, rttr whir:It lhorrsancis ltaci a|:acfy lretcn stcnt on aclvct'tising by otltrsj"

ol'trliclut'()s. thc class A aJd cosltulc:j. tn(l big ltrrclgcls.

[)r(xlucccl ou a shocsh"ing. lt )fi1blc Iil' thc strrclios 1-o trrrkc :ly, nttr rlicl 1.ircy h;tvc (.lr luin1

)luol to do so. At rnost" cclt s1u_ ffi1, io sixty batLrlr:s a yr:ur'. wiih vc lrlaycr.l tlnc arrothcl'':i l.riclurcs g rlcrl callir:r', lhis wal pclss [tc ltc.$ wcr'o loctlctl rnairrly in ciillc.rcnt
y
i

Th:l' lhc cllirtf'cxccttlivc. Lh;r1. l;, thc prr:sirlcnl. rlr:1cl'l'niltcrl lhc tolal lll'oduoljon ltrtclgc1. trasccl otr thc cotri;ttry's overaJl pcr'll'rtt;rttcc" [,o0w's mi11t1 slrcrtc] as l'nrrch as l28 nril. lioir a ycar; a slnallcl" company lrkc (lolurnbia, $7 urilliorr to $[ rnillion" Nc:x1, hc rJiviclccl trc bucllcl amoug lltr-r "{" and "l-1" grolrps anrl linally 1hc indivirlual piclurcs" ,Aflcr' 1; alislr:iltrrliotr <lcparlmcnl had prcptro(1 a r'ckrasc sr:lLcc[ 'l'o t'cpca1, corlp;ny cxcculivct;^ rrlc, fhc sturlio look ovcr,
"

vctr trt llolll'wooc{. thc hcacl-

lvas

il Ncw Yolk"

1rs l illran .l{oss

iroi ar"til;l.ic []otsoill01. elcciclcd ihc typcl; o- rictrrre s 1o l;c lnadc, thc numl)cl' in cach cosl catogot'y, rd so I'or'1h. Iollywoor{ nrotion piclnlc llro(Lrc1ior is clralaclelizeril as the siudio syslcrn. It elcvckrpccl eluring thc risc of the fi:a. turc llr-Lr and 1y1rifccl thc 1;t'oeluctiorr ptoccss oI tlte: lLrriol' frrrns lhlougltoui thc silcrri cl'a" Sorrncl moclilecl iltc sysicrrr solncwhat, brrt i1. r'cmainccl csscnl.ially inlaerl urlil thc frfties.

inir:r'csfcrl ir 'l'he llcrl I bccn lirllowin1 i[s progless stcp by r"1 I coulcl abottl Lltc Amr-rlica.n ntotion
lrrrl lrrrcr<rrrrc

: lhousalrl rnilcs il'orrl llolly*,oucl, n Lflh .r.nd Broacl'vay, I bcgan to lccl that :vc' hrel lrcioir.: io ilrc hcii of ihc
'. oolnpany cxc<:ulivcs rrradc rlany ploducliorr. Fkrcausc nlosl of lhc

vcslc(l anrl nrarlc in tllc bricks

lincss.

ancl

cxhibilion hrrl an inltr)or', rolicy. l'owcr wonl 1o thosc closL's ol ircolnc, srys TXrrcttig. lasicc()ttselrvati vc lfl uc:ticel.' I'hcalcl's c salc ol ttolrtls alrtl ollretl' frr'lns n inrlcblcrlnerss rcqtririrtg lxcd
xhibit.ion, as u rosu1, wan10d 10
rs 11(1 toprrlat' fcll'0s. 'l'llc liead icalc lhi: nrrtrht:f ol picl ttl'os rc(rs()n, lrr:rlir-'itlcrl ort iltc llcc(ls of )t's atlrl th(r tltttrrrt1 ol hc trrlttrlcttYor
L<:

Sluclios wcrc organir,cd by clcpartl.ron1s. ,AL 1hc 1op o1' the hicrarchy s1.oo(l 1he s1udio chir;f, who usually crro(1 tho corroratc iii.lc of vicc plcsirlcnt, Pr'imal'ily concclneel wilh buriincss alluils, ho rrcgotialcel corrlr'acls with sials. smoothccl orrt labor problcms, cnsurcrl that thcl slurJio opclai.cel c-[cierrily" ancl aclcel as liaison wiih l{cw Yolk. Louis Il. Maycr funclioncd in lhis capacity at M(M; Darryl Zanuek al l'wenticth Ceutury-F'ox: ancl Jack Waluor' at Warner. 'I'hc studio chief ntighl also frnction in a- dui,rl capar:i1y as head of production or dclcgatc this resporrsjbilty 1o

anolhcl cxeculivo. ln cithcr 6s:, thc bcgiuning s,iiagc o['llrr: proeluelion profi)ss involved Lhc sclcction of'propcrlics f'oi stoly irlc;r"s" 'l'<l assist irr 1.hesc clecisiorrs" i.hc si(tr-y ckrrai ment, which had ofhccs in Eulc-rpc, NIcw York, ancl .tlolly woor, siftec lhrorrgh novcls" tlroaclway t)ltys, .ihorl. stoi'icrl, and oliginal iclcas fbr suitable rnatcrial. Propcriirts wollri then bc assigneel to associaf.e ploduccrs (or erxor:u1.i vu; wiilr similal ii ilcs) uzhrl can"iccl Lhcur hrough io etourtlcir:r.l rrro
L

'Loii

Avrrrr. )()6()\,

lt

).tl'l

res. luvitrg'ltratlcrg. Lirc treaci o'Txcritrcriorr ar. i.eu rssoeiai.c l)l'o(lui.;cts ullelci hiiir. eaeh a sl;,r.rcialist irr cr:rtain lincis of'pctLU'cs-- riophist.ical.crl cortrcclicri, lcltoti lihns" 1cnler rir:1.r.rlcs, titcl ctvcu trriirtl s1<irics 'll'hetv

M[M, ltarl

1rici.r.r

l'l it
i

ltr..i,,

ilr'

.,.,

ilL,iitl
itr ttri1.
i

lrc

I / A Mature Oligopoly,

1930-194g

Part

lll

I A Mature OligoPolY,

1930-1948

265

s, but surrogates for the pro-

wishes and concepts. By thc lios had organized their producrnner with each associate pronsibility of making arouncl six

;e the

on a project, thc associale prowriting of the screenplay.

gh several stages of develop.ory version around twenty-flve

the producer cast him or her in different roles and measur audience reaction to each performance' Fan mail,

cribing each major scene; and :ontaining a breakdown of the gue. Seldom did one screenWore likely, a different writer or
assigned

to each successive
screenwriting had
career would come

It the studio,

iters were hired for their skill in comic effects, and others for
[, the production chief now as)r the top stars, the scripts were Directors, too, might have been 'en consulted during the frnal but only a few, such as Ernst .chael Curtiz, were afforded this shot the script as written. He , casting, or editing. The concept d only as it related to the proexample, thouglrt of the com-

to an unhappy end unless, of course,

ll. After sneak previews, he

t and altered endings for
greater

rstproduction phases, other de-

lion, costumes, makeuP, cineown the line to special effects. contribute to each picture as fGM made its forty pictures a of six thousand who were
lepartments. lerized Hollywood production nomic rationale for using stars Thalberg added a new twist

d at being stereotYPed' RePeatthe spirit and Prevented a tals full potential. Studios justified their policies with the explanation that developing a star required enormous expenditures of money' To tamper with success would be foolhardy. Regardless, they could dictate policy by enforcing the provisions of the option contract. Used for stars, feature players, and important production personnel, this contract tied talent to the studio lor a fixed term, usually seven years. At yearly intervals, the studio had the option of renewing or dropping the contract. If renewed, the person received an increase in salary as previously specifed. This type of contract placed taleni in a subservient position; they were employees who had to perform as the studio wished. "Difficult" people could b disciplined by being loaned out to appear in pictures that had little chance of succeeding.
revolved around dimensions great lywood glamour, and goings were public mind. interest in the publicity department handled press releases, interThe press agent activities. lt was organized like the views, nd

266

Parl
as cclitol'.

ill / A Malnrc ()lironol1,

to;1g J!.i

of the studio and to Lluog; n t unit reporlers who covcrcd thc big picturcs ancl built up n;^" players, and pubricisls who wcie assignc to inivluai stars. Sincc thc publicisf was conccr,,.,l *ith thc prope
carecr. Working undcr thc clcparlmcnt heacl wcrc eup. and gcucral
ap_

10 protcct 1hc r.cpulation

wc'c llis spocia donrain. whcu a suicicrc o' lossy di'orcc occurred. he had 10 usc public relations of high a or,j..^"'

it was rclcascd, Speci salaries, and harcl ncws slori

bcfore

clly roonl of'a nc:rvspapcl.. 'l rnakillg assignn)cn

void. The rcnrainder of thc publicity dcpartment spccializccl in crcating fasnin"fay_" outs, in scrving as lia_isons with fan -ogorin"r, on,i pJnt_ ing stories with Louclla parsons, Hcclcta"Hoppcr, and othcr gossip columnists. Hollywoocl was thc thir.cl lrgcst rr.*r''' source in thc country, outrankcd only by V/ashington ancl Ncw York. Three hunched correspondents reprcsenting fan magazincs, newspapcr syndicatcs, and periodicals scnt news all ovcr the tJnitccl Statcs and abioad. Evcn thc Vati_ can had a corr.espondcnt in Hollywood. Of all the outlets for publicity, thc fan nragazine was lhe most voracious. Screen, thc large tions of nearly a ) children, and death were their ()' maclc the best copy, and clnple. f)eanna f)urbin.
oncy.

ifJ:ili':i.?iill'

takcn of key sccnes for usc in lobby ,iitoyr, aclver.tising, and poster layouts. Glamour ponra;ts, a staplc of.thc clc_ partment, reached the level of ."objcts (l,art.,, In thc hands of such skilled photographcrs as Gorgc luncl ancl Clar_ cncc Bull, thcse portraits capturecl" i a singc still, thc cssence. the inragc lhc s1ar. wrrar rhe rr'r"took ,ri,i.iu 'f By mlnutes to cstablish, the lhousands thcsc siills wcrt out

plcture expcrence. For all procfuctions, photographs were

nrcnl supplied the iconogra_ sical artifacts of the motion

I|', /tt

()/t

ll

t(' I

lo

W01I) alisiip;ro(l 10 irlrl ivirliltl

r4/i|li lf()tt(]ct

i;tli,, 'l iir r.rr.;riirr,,. iir,;lj1 ;. ; wiilr irrr nir'lrrin()r.i, ail(l i)l;r1_

ltr,ri Wiiil ilirt r)rlll.t, llrirrl" rr.ral<cu[), ti(l l)0nor.rtl a)l rrrlilic itl)l)cirr,ttc()r;" I )r.ii1 i <.1ucsl iotrr; i.llr: r;iar' irrrlr rliliio rvoirl.'['lrr" ririnriirrLrr o. lhr:

:r'sollsl I llrtrlela l l0rrr-.r'. t(J o1lcr

oo(l wts ilrc iliirrl llul',csl rrclvs l;rttkr'rl olrlV llV W:tSlirrr,i()rr rntl

I colrr:stonclr:n1r; rcIti.rtse)|1.ilg f:ln rlic;r f cs, airrl liclioel iualrj rjotrl

iia'ics; rrlrl ti)t'oxl.
,l

i.

,vr:u

i.lrr,.

Vati_

rr IJollywooel.

flir'ily ili,. rn rtrjtr',.r'irrr.

,
ll,l
r

v/s llc

rl c t" t t,\i r' i' a c t1,

r t

tr 1,,",' I I , c t,

r()s, c!0lt lrae ltr()rrl.trly Cir(jul;r:)n" Mu't i,f0, :livor'(o. it)itco.

rr:il ftvor iic iorirl.;" ( irclil ( ar.bo. nil n1r(10 1.hc llcl;i. cot)y. llxl
:)y 'l'rtrnrlc, I )c;trl rlr t )rrr'lirr,
{{

l r... rf L':'lt:, I i "'

-

t.aitl;.:ia:.'",: ",':,,,1 i:r i ::

oorrcy.

i::.|:i't i ..'.

.
. .

l),lt'l'tr('trl':lti1tli,.,l Ifr,. i,.ql,r1,!l:t rhysir:;rl rr'lii<tir; t i1tr; rrrolion [)l'o(f uctiotlrj, )hoiol,iai)lts vl/oilj iu loblty cl ispliryr;, arlvcr.i isiri,,, ti'x)liroiis, t sitt)lrt ol'ihc rlc of'"'olt jcs <l'rr t." lrr ilic hurrls r'5; tt.s (icoTlo Ilrrlrr:ll irrl llar. :lr_tii't(1" rr .t sllltl() siilJ, i_lre ;lr Wlt;ri ilt, il'lr irrrrk rtrrr|iy )iltorsr ir<lr; iltr:sc siills wcrri

i, .' i ,::'

Gcolgr: c( w("

i(

$ci

Litllc

ltr,tas

wcck
(lUr,(:rr

fitus, rria;azincs,
<-:t.lrl

rowsl)al)0r'ij

l;ttrI

or.l.

V rt i ir:rl l i ii i qlr'a1. ion., rir ori ol)r)l i si ic i.i'r<ic ir't(l i(:or, i ( l i.htr trtrlrlt: al' tr'orlrrrl ir)n \,1/ci'c ;rll inlhrcrti.ial iir sltariirJ,, ihl

fili'rt:ritrl

rl\ir1"ri lrf llr, lu,lrrr,1 't'{1,1. frr'irr,r rr.r iilr,i

268

parr

lll / A Marure Oligopoll,, 1930_ i 948

constitutional guarantecs

be rememberecl that thc

ent in the systent. But be uct to reach a mass audie to outside intimidation i

1922. As a result of adept public relations work on the par.l of its president, Will UVs, reformers were mollifed with the assurance that the inr itselL The Committee on Hays used to achieve hi absorbed into the MppD ducled a study of the speci by state censorship boaids. ment entitled .,Don'ts and Be Carefuls.,, The list of "Don'ts" contained ereven rtems that could not be shown

a;i;, Carholic layman and publish.iof tfr. influential trade magazine

the use of drugs, and exces askcd for voluntary .orptiun." U.., machinery was thought to be repugnant fo producers. The vagueness of rhe coae spu. Marti'n

Moilon picture Herald, to improve ;, ;;. Lord, a Jesuit priest The King of Kings, to 'fhe Motion picture ed in 1930 and with Havs,
re

"

of production from the writinl i u ,".nurio to the nal editing of the picturc. Up un1 ducers wcrc firly conscien_ tious in a ion Code, but when box office atte 32_33, they introduced more explicit and violent subjcct malter into lheir pi.tur.,

: empowercd to work with proclucers

wa s i m p
r

m en

d,

rh

srudio

througho;a;ll-r;";;,

i,i,?: J T;

t.

rt Iil

/A Mature

Oligopoly, I930_l94g

Paft

lll I A Mature

1930-1948 in an attempt to attract not sure that the 1930 with the public wanted
OIigoPolY, Drotest, as

269

over, producers were resented and reflected

lre content and Hollywood scan_ a public outcry for censorship dur_ ading to the formation of the Mo_ nd Distributors of America in It public relations work on the part ys, reforners were mollified with
dustry could effectively regulate

r Public Relations was the means his goal. After being formally )A in 1925, the commiflee con:cific rejections and deletions made ls. These were codified in a docurd Be Carefuls." The list of :n items that could not be shown rite slavery, miscegenation, sexual rf the clergy. The list of "Be Careix subjects such as international
techniques, rape, first-night scenes,
:essive and

church cried out in did Protestant and Jewish organizations. The batholics were the most militant and declared war against the industry by forming the Legion of Decency in 1934 with the goal of boycotting offensive pictures until the industry created a mechanism to enforce the Production Code. Rt the height of its crusade, more than eleven million church members signed pledges of support. The Legion of Decency exerted irresistible economic pressure. Faced with the potential loss of revenue from such a large group of patrons at a time when the industry was practically bankrupt, the majors e July l, 1934, Will HaYs and the boar MPPDA amended and amPlified the Joseph I. Breen was placed in charge of the Production Co Rministration, tlte successor to the Studio Relations Committee, and having considerably more clout. His find-

lustful kissing, Hays

pliance because an enforcement o be repugnant to producers.

:ode spurred

Martin Quigley, a

rlisher of the influential trade t Herald, to improve on it. He 'Daniel A. Lord, a Jesuit priest tdvisor on The King of Kings, fo :d version. The Motion Picture npleted in 1930 and with Hays' )A members. To see that the code

udio Relations Committee was producers throughout all stages ,riting of a scenario to the final n, producers werc fairly conscienroduction Code, but when box :ted in 1932-33, they introduced subject matter into their pictures

Scarface; Shame of the

Nation (United Artists, 1932), starring Paul Muni, Ann Dvorak, and George Raft

;.irlr:tii ilr;i
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Part

III / A Mature Oligopoly,

JII

:view only on app

s. Breen's depart ctures with the kn

oligopolv' / A Mature

1930-1948

271

Hays Oftce seal n aftliated theater r subject to a $25, 's, of course, no pi ruld return its inv
re

treating such

r extremist
ument, yet in its own code defeated the commission, the of opinion the purpose by making it impossible for pictures to treat sex naturally and honestly. And lastly, the report asked why screenwriters must invent "compensating moral values" when they are lacking in real life. Thus, prodded by the Catholic Legion of Decency, Hollywood directed its powers of persuasion to preserving traditional concepts of morality. For the next generation, the industry would produce the, "family" frlm, which addressed itself to the undifferentiated mass audience' Motion pictures might be technically polished and contain so-called expensive production values, but they would not deal in an honest fashion with the pressing concerns of an enlightened citizenry.

picture could reach its full potential r medium for the enrichment of 'e published in Inglis' rcport, Free_ recommendations were too idealisrtion, two were ultimately acted rt guarantees were granted to the vertically integrated companies recommendations obviously were implementation create a renaissance had hoped. Nonetheless, the come of the Production Code's effect :nt remains valid. The commission o industry who complained that the any serious treatment of significant ral issues. But it did not make a Breen Oftce. The report accused :hind the Production Code to avoid.

The Labor Movement in HollYwood

The development of the studio system of production is inextricably linked to the rise of organized labor' As each step in the production process became departmentalized and further subdivided, competing unions fought to win jurisdiction over ne\/ work funotions and to codify responsibilities. At the heyday of the era in 1946; labor was organized into forty-three distinct craft and talent groups. The largest union group was the International Alliance of Theatrical Stage Employees (IA), which had thirteen locals and over ten thousand members in Hollywood. IA controlled virtually every craft required to shoot a movie. The Conference of Studio Unions (CSU), with a membership ofseven thousand, controlled the preshooting crafts. Talent was organized into the Screen Actors Guild, the Screen

27

Parr

IIt / A Maturc Oligopoly.

930_t 94g

lj,T;L,

Wrilels Guild, the Screen f)ircctors Guild, and thc Amer_ can Fcderation of Musicians. C)fficc employees, stry'a_ or tri srs, a nd orhcrs w er c or sani),. in ro *ii._i"l

lrr'

Stirrings among the talcnt groups, especially the actors, led to rhe crearion of rhe e.o""nr'Motion picturc Arrs " and Sciences in 1927. Conceived y-iori, fufuv"., rfr"

III / A Marure Otigopoly,

1930_194g

III / A Mature Oligopolv,

1930-1948
e catee given

273

Directors Guild, and the Amerilns. Office employees, story ana_ 's were organized into white_coliar
wood's t laborgitation.
rela-

writers,

zing

the main. Labor peace was I the Studio Basic Agreement in formally recognized five impora mechanism for the arbitration or won better working conditions dios succeeded in keeping an t employees did not have to be o work. This fact pretty much lfa strike since the studios could
L

bombarded Washington with telegrams, held mass meet-

rntral Casting Corporation, also of Hollywood extras. Moviethe country had flocked to Los laking into pictures. A small il work but only a handful steady
iubjected to all kinds of abuses tgency fees, underpayment of nent, and other forms of exploihe source of many social probcandal, Will Hays commissioned n to study the situation. Central frnanced by the MPPDA comre name implies, the organizarghouse; extras could now call in trek to the studios, which were

permanent suspension of the obnoxious provisions in the ode. However, the guilds failed to receive recognition as bargaining agents for the actors and writers or to substantially improve the status of their members in the industry. The itudios readily acceeded to the demands of the craft unions and the army of stagehands and technicians organ-

in
se

se se

sa
o

and working conditions imemployment opportunities. re major respect; it did not find :housands of aspirants so that could enjoy at least a semblance

duction. As Larry Ceplair and Steven Englund remark, "On the surface, industry management appeared liberal and farsighted in granting concessions to well-established unions and technicians vital to the movie-making process' When the creative personnel who, if organized, might challenge the studio system, however, formed guilds, management proved intransigent, shrewd, and unscrupulous."a
4.Lar.y Ceplair and Steven Englund, The Inquisition in Hollywood: Politics in the Film Community, 1930-1960 (Garden City, N.Y.: Anchor Press/Doubleday, 1980), p. 18.

t groups, especially the actors, cademy of Motion Picture Arts eived by Louis B. Mayer, the

274

Part

III / A Mature

Oligopoly, 1930-194g

Although stars earned salaries in excess sf six figures, ths plight of the regular actor was not as fortunate. The typical weekly wage was $66. The workweek, however, consistecl of six days. Actors often worked past midnight and then were ordered to report back to the studio at 8 a.u.; they did not receive overtime compensation or premium pay for Sunday and holidays. Nor did an actor enjoy continuous employment. He would be paid only for those days actually worked during a shooting schedule that stretched several weeks. Needless to say, therc was no machinery guaranteeing the impartial arbitration of disputcs for those under contracts. For screenwriters, exploitation took the following form, which is described by Leo Rosten:
For two dccadcs [192]-41] thc movic writers in the low salary brackets (of whom wherc are plenty) were not given the protection of minimum wages or minimum periods of employment. They were discharged with no advance notice; their employment was sporadic and their tenure short-lived. They were laid off for shortterm periods, under contract but without pay. They worked on stories on which other writers were employed, without knowing who their collaborators (or competitors) were. Their right to screen credits was mistreated by certain producers who allotted
credit to their friends or relatives or-under pseudonyms-to themselves. They were frequently offcred the bait of speculative writing without either guarantces or protection in the outcome.s

The passage of the National Labor Relations Act in 1935 theoretically gave unionization another boost in that the act restored many of the labor provisions of the invalidated NRA code and specifically authorized collective bargaining. Hollywood producers, like management in other industries, simply ignored the act. Finally, after two years, the actors threatened a massive strike. This won recognition for the Screen Actors Guild on May 15, 1937. Lowsalaried players received most of the initjal benefits. 'Ihe contract set minimum rates of pay, guaranteed continuous employment, and stipulated twelve-hour rest periods between calls. Although successive contracts won concessions for all classes of performers, the relationship of the actor to the production process remained unaltered; in fact. it
5. Leo Rostcn, Iltlltt,ord: 7'hc Moyie (.tol1t al thc llovie tVakers (Ncw York: Harcourt, Bracc, l94l), p. 136.

laturc Oligopoly. 1930-194g r excess of six figures, th as fortunate. The typical )ck, howevcr, consisted

Part

llI I

A Mature Oligopoly,

1930-1948

215

was neyer an issue. The conccssions had rclativcly nrinor'

economic impact on the studios, which accounts for thc

ready acquicsccnce.

ast midnight and then : studio at 8 ,+.t.; they

ation or premium pay an actor enjoy conlinuid only for those days schedule that stretched )re was no machincry .ion of disputes for those
ook thc following form,
,ic writcrs in the low salary verc not given the protection rds of employment. They ce; thcir employment was They were laid off for shortout pay. They worked on nployed, without knowing rs) were. Their right to in producers who allotted under pseudonyms-to red the bait of speculative 'rotection in the outcome.s

Recognition for the Screen Writers Guild came only afler' a protracted and acrimonious battle. Undcr the leadership of John Howard Lawson, a militant minority drew up a

bor Relations Act in 1935 other boost in that the rvisions of the invalidated ized collective bargainmanagement in other Finally, after two years, rike. This won recognirn May 15, 1937. Low-

the initial beneflts. The

y, guaranteed continuous 'e-hour rest penods be;ontracts won concessions elalionship of the actor :d unaltered; in fact, it
)olonv and lha Movie Maker,s
).

platform that went far beyond thc brcad-and-bulter issues of the Actors Guild. Lawson's group wanted thc screenwriter to share creative authority in the production process. In the studio system, the screcnwriter was typically an employee who wrote for hire, just another cog in the wheel. The platform had three goals: (l) a union strong cnough to back its demands by shutting off the supply of screcnplays; (2) alliances with the Dramatists Guild and othcr writers' organizations so as to be able to stop the flow of all story material at the sourcc; and (3) remuneration on a royalty basis that would give authors greater contl'ol ovcr the content of their work by making them part owncrs of the movies based on their scripts. Debate over the platform split the ranks of thc scrcenwriters. Conservatives consisting of the older, elitc writers saw the amalgamation plan as a clilution of their privilegccl status. For this and ideological reasons, thcy revolted to form a rival union, the Screen Playwrights, in 1936. Seizing the opportunity to squelch the militants, the studio chiefs recognized the Screen Playwrights almost immediately and signed a five-year pact. The Screen Writers Guild counterecl by filing a representation suit with thc National Labor Relations Board. Thc NLRB held elections and certifed the Screen Writers Guild on August 8, 1938, as the sole bargaining representative of motion picture writers. But because of recalcitrancc on the part of producers, it took three years to hammer out the tcrms of rccognition. A guild shop was finally established in May 1941. Needless 10 say, none of the goals of the original platform was realizcd. The studios agreed to ban spcculalivc writing, set a minimum wage, and make thc guild sole arbiter of screen crcclits, but they would have nothing to do with clevating the creativc status of the screenwriter. In its dealings with talenl groups, Hollywood proved to be a belligerent and devisive foe; 1o kcep the labor force in line, the studios adoptcd the tactic of collusion. Although craft workers and the rank-and-file laborcrs receivecl certaiu

276

part III

/ A Marur.e Oligopoly. 1930-194g

ccoronic bc'cfts fronr thc NRA. thc opcn shop l.enrained inracr. A fight over jurisdicron taunch. Uv iA i"j seemed to cripple the labo dios and rival craft unio As strikebreakers wcrc br mernbers flocked to join Afterward, IA ceased to The next year, howeve William B. Brownc. the Machinc Opcralors Unlo sonal reprcsentative, Bro and professional hoodlurn

wrinklc to the Hollywood labor state his union, Browne used ppealcd to the theater projec_

"n.. immedialely buckled, Although paramount Browne,s price for a srike se'tement was trigh_;.iJJ;'rli;. -not ment for all IA's former members only at paramount but throughoul.lhe entire industry. Feeling ,lr. p**rr,' rhe studios capirutalecl. As a resur of tnc grel;.;i-i;., mcmbership ju1p.j from thirty_three to twelve thousand. Browne and Bioff rhereupon lnstituted -.f;;;il;,, u by levy assessment on every IA paycheck and set
19.36.

rhe paramo unl chain

l"3

j,:i,i'::,:;

of u p.o.tionlri-ririt. to extract $100,000 bribes from company heads in retun for either reducing wage demanJ, . no, making them at all. Throughout the.yers of Hoilywood's rabor troubres. "the role of the studios was far i._ tt u, ;;" ;;;;;;, bystander," in the words of John gr.y. ..As employers, thc studio chiefs were very much invotvecl in behind_the_ scenes manipularions, playing one [labor] c.";;ag;i;r;;" -'^ orher. when bribes were pai to wiic din ii ii,; studio bosses who paid them. . . They [later] acknowl_ edged that by agreeing 1o the nowne_iof ,u,rurrg._rtr, about wage-cuts and inc.eares, the niovie companies hacl saved approxiniatcly $15 million.,,6 6 J-ohn oogrey, Report on hcklisrirt L. 7.he Movics(Func1 fbr trrc ^ Repubtic, 1956), p. 52.

studios,

seies

11i.#lilli1,1. r potent thrcat

/ r\ Maturc t)igopoly,

l9-10-194g

part

II / A Matule Oligopolv. 1930-l94fl

211

NRA. lllc opctr shop rcnraillcd ion launchcd by IA in 1933 movemcnl, whcreupon the stu_ ;uccessfully crushed lhc slrikc. ght in to fill vacancics, IA rer unions to save their jobs. ction in Hollywood. A installed a new president. ner head of the Motion Picture n Chicago. To act as his pcrI appoinled lcllow (hicagoan /illiam Bioff. The arrival of wrinkle to the Hollywood labor state his union, Brownc used pealed to thc theatcr projectsing down all the houses in dispute with that studio in rmmcdiatcly bucklcd, Browne's
was

high-a closed shop agree-

nbers not only at Paramount Custry. Feeling the pressurc, result of the agreement, IA's rirty-threc to twelvc thousand. on instituted a "defensc funcl" iment on every IA paycheck 's hegcnrony by inslituting a

. in their dealings with the : threat of a projectionist strikc )m company heads in return rands or not making them at Hollyu,ood's labor troublcs, far from that of an innocent John Coglcy. "As employers, nuch involved in behind-theg onc flabor] group against thc I to Willic Bioff, it was thc t. . . . They [atcr] acknowlBrowne-Bioff 'arrangcments' s, thc movic companics had lion."6 slirtg I: 'l'hc Moyi-r (Fund 1'or tlrc

Browne's and Bioffs activities camc 10 light when labor lawyer Carey McWilliams urgecl that the California Assembly investigate IA. McWilliams charged that Bioff was a formcr membcr of the Capone mob and hacl been arrestcd and qucstioned in connection with at least two murders in Chicago-both victims were trade unionists who hacl challenged Browne's and Bioffs control of IA locals. Hcar'ings were held in 1937 bul no formal action was taken by the Assembly. Afterward, columnist Westbrook Pegler revealed that Bioff had run a brothel on Chicago's South Side and that he was convicted for pandering (though he never served), Subscquent rnvestigations on the part of'thc U.S. T'reasury Department led to charges of cxtortion against Brownc and Bioffin 1941. In the same action, Joseph Schenck, head of Twentieth Century-Fox. was indicted on a chargc of income tax evasion for conccaling a company bribe of $100,000 to the pair. Browne and Bioffwcrc sentenced to ten and eight years, respectively. Schenck was found guilty of perjuly, for which he received a prison scntcncc ofone year and a day. With Brownc and Bioff out of the way, progressivc trade unionism now had a chance. Under the leadership of Herbert Sorrell, a group of twelve non-IA unions formed the Conference of Studio Unions in 1941. This coalition originally consisted of unions peripheral to the industry,

but grew rapidly to encompass most preshooting crafts

such as painters, carpenters, decorators, and electrical workers. Originally the business agent for the painters' union, Sorrell was a radical and aggressive labor leader who emphasized bread-and-buttel' issues and collective strength. To those in Hollywood who consitiered IA a cor-

rupt and reactionary forcc, thc emergence of CSU malked a long step forward in the labor movcment. To studio executives, however, Sorrell spelled trouble. The Wagc Stabilization Act froze salaries for the duratior. Afterward, they anticipated that Sorrell would call a strikc demanding excessive wage incrcases and other costly concessions. 'I'o contain Sorrell's influencc, thc studios conspired to exploit one of the many jurisdictional disputes that charactelizcd thc warfale bctween the CStl and IA fi'om thc bcginning. In 1945, the Association of Motion Picturc Plo-

218

parr

III / A Marurc Oligopoly,

1930_1943

who voted to.oin the CSU, Although Sorrell ,u.r.rriuty appealed to rhe War Labor Board, the AMpp igoor.J in. ruling. perceiving this as a portent of the studios' "uin. after the war, Sorrell raunched a stike in March lqat-ir,ut

ducers, the Hollywood affiliate of the Hays Office, refused to recognize a change in affiriation of the interio,

..r,o.,

which settled nothing.

picket rines. _ The strike, meanwhile, took on ideological overtones. Roy Brewer, who was sent in by IA Inteinational to take over and direct strategy, labeled the strike ,,potitic,,-nA distributed a barrage of leaflets attacking Sorrell . " "Communist associations" and support of ,,Communist causes," Coming from a scandal_rien union, ,fr"r, poii,l cal attacks proved ineffective at frrst. The strike.n. in a stalemate, with most of the issues relegated to arbitraiion,

hiring IA more violent , and the disrupt

in 1946 over yet y now, Brewer's hostilities marked

servative backtash against rhe legacy the domestic front. In catch_up ,io.n., to oflset the wartime wage freeze, workers in most industries ,tru.r. ln rlu.r,'

"r,fttff.*;i:;

to hire IA scabs. Brewer, for his part, further consolidated his power by aligning with right_;ing patriotic g.orpr, _or, notably the Motion picrure tiance-fr ,rtr p.r.,ion" of American Idears. This srrike dragged on for tril-;;.r, cSU picket rines dwindring as deser-ted to IA and -.rib.., the assurance of work. Menwhile, the antilabor cause was given a boosl when the House Co-itt.. on Un__"ri.n Activities investigated the alleged communist infrrtration of the film indusrry in 1947 fJn. f S)- tsy 1949, Sorrelt and

ing anti-Communism, to w wood executives fought lab more closely with Brewer t

prompting management to

I / A Marure Oligopoly, Ite

1930_194g sed

of iation

partllI / A Mature Oligopoly, 1930-1948

279

Altho Board,

ators

rortent of the studios' behavior

lli.

:d a strike in March 1945 that dios retaliated by hiring IA rticular, opted for more violent ,ear gas, fire hoses, and the re departments to disrupt

other left-wing labor leaders were purged from all Holly_ wood unions, and the democratic labor movement in the film industry came to an end. Roy Brewer and the IA, with the approval of the studios, now dominated the labor scene in Hollywood.

Effects of Wortd War il

The Foreign Market

k on ideological overtones. by IA International to take led the strike "political" and rts attacking Sorrell for his rd support of ,,Communist dal-ridden union, these politi_ at first. The strike ended in issues relegated to arbitration,
r

>ther strike

with IA. By now, Brewer's lhe end of hostilities marked

in foreign affairs and a conlegacy of the New Deal on ) moves to offset the wartime ndustries struck in droves, r any and all means, includ_

in

1946 over yet

:i
'ck

;ll
and

is part, further consolidated

t-wing patriotic groups, most iance for the Preservation dragged on for three years, members deserted to IA and rile, the antilabor cause was Committee on Un-American
ed Communist inflltration . l8). By 1949, Sorrell and

As hostilities spread in Europe and the Orient during the thirties, American frlm companies saw their foreign markets dwindle. Spain was the first casualty of the industry, following the outbreak of the Civil War in 1936. By 193g, Japan had occupied parts of China, Manchukuo, and the Kwantung Peninsula. Nearly half of the Far Eastern market soon came under Japanese control. In the wake of the German Anschluss, the industry retreated from Austria, Czechoslovakia, Norway, and Occupied France. Continental Europe, where the majors had done over a quarter of their worldwide business in 1936, practically vanished as a market by 1941. The only business conducted on the Continent during the war was with neutral Sweden and Switzerland. Of greater consequence was Great Britain, the principal outlet for American frlms abroad. Revenues fell off alarmingly after war \ryas declared in September 1939. The Nazis began to bomb London and other English cities, which necessitated the evacuation of more than three million people. Until the threat of air attack subsided, theaters remained closed. By 1940, however, all but about 10 percent of the country's forty-eight hundred movie theaters were open once more, providing escape and relaxation from danger and war related work. Average weekly attendance in Great Britain increased from nineteen million in 1939 to more than thirty million in 1945, and gross box office receipts nearly trebled. Although business in Great Britain did not suffer, U.S. companies could not share in the bonanza because of currency restrictions. Immediately following the declaration of war, Britain reduced the amount of sterling that American

280

parr

III / A Marurc

Oligopoly, 1930_t94g

distributors could remove from the country; half of their rmer revenues, or $17.5 milion, could be taken ou1 in 1940, and only 912.9 million jn 1941.

III /

I from the country; half of their

5 rnillion, could bc takcn out in

Maturc Oligopoly, I 930-

1948

pat III / A Maturc Oligopoly, 1930-1948

28t

lion in

1941.

rch as thosc inrposcd bl,Great to Amcrican distributors. They o quotas. taxes, contiugcnts, and
: rise of nationalisrr
as protcctionism

in Europe for national llnt

scverely

lmericans had succcssfully fought r in the past-with the hclp ol'the

ld bc notcd-thc war
market (ch. l7).

thc war-torn Europcan counlr-ics, n America. There, although thc rpoly. thc markct had nevcr becn :tnrcnt of Statc aidcd Hollywoocl's :e of the Coordinalor of Interin October 1940. lts objective Ncighbor Policy and to initiate bat pro-Axis sentiment in South ; Motion Picture Divison almost rcctorship of John Hay Whitncy. to convincc the induslry to rodthirsty Latin-An-rerican vilto produce flnrs havrng Latintlcs. His sccond was to ncutralizc rrgentina, Brazil, and Chile from s, ncwsrccls. and documcnlalics. irecl Section for this purposc, d slrippcd to Sourh Amcrica :wsrccls ploduccd in c'oopelatiorr niversal, Fox, and Hearst's News reachcd an audience of morc 944, according to CIAA
ca improved steadily during thc ,xpecled. Several factors hclp betwccn thc two conlirrcnts op-

Wallace Bcery as Pancho

Villa in Viva Villa! (MGM,

1934)

and third, national film companies, especially rn Mexico, stepped up their own production.
T'he Domestic Market

i'cquently than bcforc; sccond, which Hollywood churncd out in Lning, had littlc nrass appeal;

By the time America entered the war, it was apparent to the industry that it would have to rely on the domestic market. Fortunately, conditions at home created a boom in business. Dollars were plentiful, while commodities wcre not. Movies were the most readily available enteainment. Although gasoline restrictions hurt attendance in some rural areas, the integrated companies, whose theatcrs wcre more favorably situated, flourished. Domestic film rentals for the eight majors jumped from $193 million in 1939 to $332 million in 1946. As Variety noted, "Every night was Saturday night" at the movies. B pictures, low-grade pictures, pictures featuring unknown players-all commanded an audience . Weekly attendance by thc end of thc war reached ninety million, the highest ever. As business improved, pictures ran longer and longcr to

Part

III / A Maturc Oligopoly,

lg30_194g

ures

x, paramount, ancl Warner cut the pro_ duction of B pictures in 1942. nlthough he decision was in part by warrime rarionirig-oifilm stock, ii" i:ltl1:d_ oecame apparent early on that more and more dollars could be earned from fewer un f.*eiiop_grade films. se during this period, to be sure, but margins. paramount,s earnings, for m $10 million in l94l to an incredible The industry contnued to operate during the war unfet-

with a significant result. The eight majors in 1939, but only 252 in t946. T;;;_-

i;+
'

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g,l f

&
*ir

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James Cagney in yankee Doodle Dandt, (Warner Bros., 1942)

Ill / A Marurc

Oligopoly, 1930_194g

gnificant result. The eight majors t39, but only 252 in 1946. Twenlunt, and Warner cut the pro)42. Although the decision was
ime rationing of

that more and more dollars er and fewer top-grade films. ng this period, to be sure, but rs. Paramount's earnings, for million in 19411o an incredible
to operate during the war unfet_
- :.r . l 1...'till.':tli;. :j.,. .tr.. .i: :i:.rtij..,i,.

film stock, it

283 Pa/-lll I A Mature Oligopoly, 1930-1948 tered by government controls of any sort. Roosevclt rccognized the importance of thc industry fi'om the outscl, stating, "The American molion pictule is one of our most effective mediums in informing and entcrtaining our citizcns. Thc motion picture must rcmain frcc insofar as national security will permit. I want no censorship of the motion picture."T Nonetheless, no unanimity existcd as to the specic role Hollywood should play. Wartime flm production emanated fronr threc sourccs: (1) government agencies with thcir own productron units; (2) federal agencies that contractcd with private firms: and (3) Hollywood. To provide direction and organization to meet the needs of the armed forces, the federal bureaucracy, and the public, the Coordinator for Govcrnment Films operated out of the Offce of War Information hcaded by Elmer f)avis. The industry appointcd the War Activities Committee to coordinate its efforts. As a first objectivc, the committee arrange<l with cxhibitors nationwide to provide free playing time for government flms. Tcnsions existed from the start. The OWI pushed Hollywood to increase its output of war frlms, even though about one out of every four pictures produced during the l94l-42 season related in some way to the war efl'ort. Moreover, the OWI believed that fluctuations in the war necessitated closer supervision of motion picture content. Olcials complained that Hollywood typically dcpictcd Americans as living lavishly and seemingly oblivious to the great sacrifrces being made abroad. Our allies felt that characTerizations of their countrymen were distorted. Both wanted the motion picture to be self-conscious, attuned to the rcalities of the time. The industry, however, was attuned to the audience and looked to the box office as a gauge to determinc prefercnccs. After all, the public could also reccive news ancl information from the othcr media. Hollywood learnccl from experience in England that aftel three years of ghting, audiences wcrc rejecting the steady dict of war lms in fvor of entertaining, escapist picturcs. Issues wcre never resolved. In 1943, the OWI camc under attack fi'om C-'ongress. Some of its mcrnbers chargcd
7. Quotcd

Varner Bros., 1942)

in "Hollywood in Uniform," 'ot'tuttc 25 (April 1942): 92.

284

Palt III
.'z'gt

/ A Maturc Oligopoly. 1930_194g

of lhe Big Fl've were: Twentiethbcntury_Fox, g22 3i]llo", warnc, $19 ^million; Loe*'r, $g miilion; ano RKO, $12 nillion. Afterwar, tne indusiry undcrwent a period of retrenchment, rcappraisal, and rorganzation.
be.rs.

that governmcnt-sponsored films, sucl as tl.tc Why We serics, \rycre nothing hu,, political p.opugunOu -o.. for a Roosevelt fourth teim. The OWis U,,agct was slashc<l in 1944, and the War Activities Committee took over the entire job of coordination. Hollywooa,s showecl fioOuct a prolounced trend toward lighter and mellower diversion. The machinery created by the majors carried ihem to . the crest of_pr-osperity in tS+6. puru_orn,s profits fo.lnut year have already becn stated. Earnings for th other me'ni