BY ERIC HOYT | HollywoodReporter.Com
Troy Warren for CNT #Entertainment #Business
The crash culminating in the March 1933 bank holiday — in which workers felt studios used the crisis to cut salaries and increase corporate profits — proved a pivotal moment for the industry, as depicted in forthcoming book ‘Ink-Stained Hollywood.’
“The motion picture business is neither depression-proof nor fool-proof,” observed Abram F. Myers in the pages of Film Daily and The Film Daily Year Book at the dawn of 1932. The occasion was reflections from industry leaders on the past year, and Myers, the chairman of the Allied States Association and longtime opponent of vertical integration, was not in any mood to pull his punches. Indeed, no sector of American life was truly depression-proof by 1932.
The Great Depression was also boldly invoked in the advertisements within Hollywood’s papers. Paramount promised exhibitors booking its pictures that “Your Box Office Depression ends.” MGM went a step further in its 1932 campaign, “The Hell with Depression!,” which featured cartoon illustrations of Leo the Lion enthusiastically dancing, and, in another ad, punching a man wearing a tuxedo and top hat.
Unlike its relatively fast bounce-backs from previous financial panics, the United States was now two full years into this depression, and the conditions were only worsening. The unemployment rate was more than 20 percent, hitting African American communities and working-class whites especially hard.
People who had considered themselves middle class now worried about how they would get by; those who always had worried about how they would get by and who lacked safety nets were plunged into new depths of poverty. Inexpensive forms of entertainment that were once considered depression-proof, like going to the movies, increasingly became perceived as a luxury, one more thing that needed to be rationed.
Within this context, the nation’s film exhibition sector experienced tremendous losses and closures. Film historian Kathryn Fuller-Seeley emphasizes that small town theaters were hit especially hard; she estimates that “by 1932, about 8,000 of the nation’s 23,000 movie theaters were closed. Densely populated urban areas of the East Coast and West Coast experienced a relatively minor theater closure rate of from 7 percent to 20 percent, but the Midwest, Plains, South, and northern New England lost from 22 percent to 47.7 percent of all their movie houses.” Small-town theaters fought to stay afloat by offering reduced price admissions, double-features, and “dish night” promotions (which were eventually surpassed by “bank night” cash prize drawings).
These practices were regarded with disdain by the major distributors and frequently critiqued in the pages of Motion Picture Herald for the ways they seemed to devalue the core products of the industry and, in the case of double features, keep children up too late at night. But the promotions clicked with Depression-era audiences, and they brought warm bodies and much needed revenue into theaters on nights that they might otherwise sit empty.
To inexpensively book the content needed for a dish night, bank night, or the second half of a double bill, exhibitors turned to the Poverty Row producer-distributors, such as Monogram, Tiffany, and Astor. The same theaters that the major companies resented for running double features and dish nights had their own long list of grievances coming back toward them. Independent exhibitors complained about block booking, high rental fees, and an abundance of pictures that they regarded as too “urban” — a term that could mean something either too racy and risqué or too highbrow and sophisticated — for the tastes of their audiences. These exhibitors looked for trade papers that would keep them informed, give them forums to discuss problems and solutions, and forcefully represent their interests.
They also found a champion in Abram F. Myers, who as a former Federal Trade Commissioner understood how to lobby the government into greater investigation and oversight into antitrust practices within the film industry. The Depression’s effects, of course, extended to theaters located in major American cities, too. Theater ownership proved to be financially disastrous for some of the industry’s biggest corporations. In January 1933, Paramount-Publix and RKO both entered receivership, the result of a depressed box office and the huge debt burdens that both corporations had taken on in their massive theater acquisitions of the late 1920s. As Tino Balio notes, “Paramount’s bankruptcy was the second largest the country had ever known and one of the most complicated.” In the weeks following the announcements, Paramount took out full-page advertisements in several trade papers to emphasize that its subsidiaries, Paramount Productions Inc. and Paramount Pictures Distributing Corp. were “NOT in receivership. They will continue to produce and distribute quality motion pictures under the same management and personnel as before.”
Yet the power structure had changed. Paramount’s Adolph Zukor, who had long been regarded as the film industry’s human embodiment of unrestrained expansion and monopoly, was no longer in charge of the corporation he had built. William Fox and Universal’s Carl Laemmle also lost control owing to major financial restructurings of their companies. Ironically, just as the nation’s Prohibition laws were ending, a more sober and cautious approach to the corporate management of the major film corporations was taking hold.
The RKO and Paramount bankruptcies were both announced during the period now widely viewed as the lowest point of the entire Great Depression — the four months between the November 8, 1932, election of Franklin Delano Roosevelt to the presidency and his inauguration on March 4, 1933. Outgoing president Herbert Hoover resisted helping Roosevelt implement the bold policies on which he had campaigned and beaten the incumbent. A stressed financial sector became even more uncertain, and the general public worried about the solvency of local banks and the security of their savings accounts. Although thousands of American banks had already closed during the Depression, a new wave of bank runs — with customers withdrawing their money from banks en masse — created an all-out crisis in February 1933 that threatened to decimate the institutions that remained.
Roosevelt famously addressed the panic in his inaugural address, declaring that “the only thing we have to fear is fear itself.” Yet words alone were not enough. Within days of taking the Oval Office, Roosevelt declared a banking holiday, closing all banks temporarily to try to avoid their permanent collapse.
The March 1933 bank holiday proved a pivotal moment in Hollywood history, particularly in the relationship between studios and their creative workers. In response to the bank holiday, the studios implemented 50 percent salary cuts to most of their production workers. The studios claimed that the cuts were a temporary necessity resulting from the tightened credit situation and a shortage of cash to meet payroll obligations.
But as banks reopened and the salary cuts remained in place, Hollywood’s writers, actors, and other creatives came to believe they had been duped. They felt that the studios had cynically and opportunistically used the bank crisis to cut salaries and increase corporate profits, all at the expense of people who actually made the movies that audiences paid their hard-earned money to see. Galvanized, writers organized and formed the Screen Writers Guild in April 1933. Actors followed soon after with the Screen Actors Guild.
All of these groups read the local trade papers closely, looking for voices in the press to affirm their perspectives and call out the greed of their opponents. Somehow, in the midst of so much upheaval, these studios and their workers managed to produce some of the most spectacular and memorable movies ever made.
Depression audiences were temporarily transported watching King Kong (1933) climb the Empire State Building, Fred Astaire and Ginger Rogers dance in Top Hat’s (1935) art-deco Venice, and Clark Gable lead a Mutiny on the Bounty against Charles Laughton’s Captain Bligh. The high-energy, show-must-go-on spirit of the Warner Bros. backstage musicals 42nd Street (1932) and Gold Diggers of 1933 (1933), featuring a mix of new and seasoned chorus girls, presented the enduring American dream of upward mobility alongside a jaded knowingness that life ain’t fair, kid.
The real showstoppers always came at the end: Busby Berkeley’s kaleidoscopic musical numbers, using massive sets, high camera angles, dozens of dancers, and intricate editing to transform the cast into plastic abstractions. The style, energy, and ambition dramatized and embodied in the backstage musical found their way into show business journalism, too.
The film industry’s trade papers found new ways to compete, and the ones that survived lasted for decades to follow.
This column is edited and excerpted from Eric Hoyt’s Ink-Stained Hollywood (UC Press, March 22), which examines the film industry trades’ most heterogeneous and tumultuous period — from the early feature film era in the mid-1910s to the vertically integrated studio system, strained by the Great Depression, of the mid-1930s.