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Hollywood Renegades
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Cobblestone Entertainment.
All rights reserved.

Hollywood Renegades:

The Society of Independent Motion Picture Producers

by J. A. Aberdeen

 

 

 

CHAPTER 7: Halls and Armories

 

SIMPP Reactivates the Paramount Case  

 
Mary Pickford and Samuel Goldwyn help stage the SIMPP showdown against the Fox theater monopoly in Reno, Nevada.
Going into World War II, the independents appeared to be in a favorable position for the duration of the conflict. As previously mentioned, the government agreed with the independent producers that the elimination of widespread B-filmmaking made sense from the standpoint of conservation of money, man-hours, and raw materials. This prevailing attitude was borne out by the Justice Department’s rejection of the UMPI Unity Plan in August 1942, as well as the visit of the Office of War Information’s Lowell Mellett who came to Hollywood later that year with a message intended to inspire the end of the double feature.

Independent production companies, which by nature required a relatively small staff, also escaped many of the problems faced by studios that lost a significant portion of their man-power to wartime activities. In fact, of all the independents, Walt Disney Productions was hit the hardest by the war, since the animation studio required a large number of skilled workers, similar to one of the Hollywood majors.

The wartime was a boom period for the American cinema in general. As most forms of amusement were subject to radical government rationing, the movies became the primary public entertainment, and the film industry claimed a record 25 percent of the country’s total recreational dollars. Swing-shift screenings for factory workers kept many urban movie houses showing features at all hours, frequently to crowded theaters. Federal movie admission taxes even made film-going a patriotic activity. "You could run film backward through a projector and people would look at it," went one famous wartime saying in Hollywood.

However, the elimination of the double feature and the focus on quality films with long stays in the theater unexpectedly put the squeeze on independents for several reasons. Even though SIMPP had tenaciously supported these reforms at the outset of the war, the majors turned it into their own benefit. As films took longer to make their way through the city runs, the major studios quickly filled the few open spots with studio-produced features. Often, theaters were booked far in advance, creating a freeze on the first-run and key subsequent-run showings for many movies, which SIMPP claimed was in clear violation of antitrust laws. The SIMPP executive secretary John Flinn reported in 1943, "present conditions are tougher and selling is more difficult for the independent than at any time in the history of the business."

Many of the top independents were also hindered by the continuing reluctance of theater chains to offer producers a percentage of the box office. During World War II when popular films were easy to come by, many exhibitors were not inclined to go out of their way to show an independent movie, only to be badgered by a producer who wanted a cut of the theater proceeds.

Of the independent producers who opposed the theater policy, Goldwyn was the most outspoken and vehement. The problems were two fold, he claimed. To begin with, he blamed the major studios for taking advantage of the box office prosperity by decreasing the number of films without improving film quality. Then he criticized the theaters that refused to pay more money for better films, which discouraged the producers of prestige films.

"The art of showmanship has been forgotten," he said, "and little regard is being shown the public or the future of the business because of the satisfied attitude that anything or everything shows a profit nowadays."

Like many of the independents, Goldwyn actively participated in distribution by appointing his own sales representative to cooperate in the booking and marketing of each of his films. According to his distribution deal with RKO, Goldwyn received the right of final approval of every rental agreement, as he and other producers previously had at United Artists. This meant that Goldwyn could cancel any deal with a theater that offered an unsatisfactory price. In fact, most UA producers were accustomed to this provision to insure that their films realized their commercial potential. Goldwyn decided to exercise this option to take a bold stand against the theater monopolies that existed in territories all over the country.

While the major studios held oligopoly control over the first-run theaters in the major cities, many independent chains monopolized the neighborhood and rural regions. One such closed situation was the Sparks circuit in Florida. The Sparks chain had once been a part of the short-lived Universal theater circuit from 1925 to 1927 until Carl Laemmle, faced with the expense of converting to sound films, voluntarily sold off the theaters. Sparks was an independents chain that had a local monopoly in 14 cities in Florida. It was a small-scale example of some of the other theater chains that maintained a regional monopoly even though they were not affiliates of the Hollywood studios (i.e., the Schine chain in upstate New York and Sudekum theaters in Tennessee).

In early 1942, the Sparks theater circuit denied Goldwyn’s demands for a percentage deal on his latest release The Little Foxes (1941). Goldwyn withheld the film altogether, knowing that the highly-anticipated movie—then doing record box office in the major cities—would help publicize the squeeze being put on the independent producers. Goldwyn bought large advertisements in Florida newspapers with the headline, "I Regret That You Cannot See ‘The Little Foxes’ in _____," inserting the name of the respective Sparks-controlled town. In the ads, he explained why he felt the percentage basis was the only fair way for both producers and theaters to profit. "I believe and have always believed that the producer of a motion picture, the man who invests his money in it and exercises his judgement which make it good or bad, should gain or lose in proportion to the favor with which the public receives the picture." Goldwyn also included the location of the nearest theater that would be playing his movie.

Over the next few years, Goldwyn refused to show his films in communities dominated by a theater chain that declined to share the box office. He invoked the same philosophy that W. W. Hodkinson pioneered in the days of the Patents Trust, Goldwyn claiming that giving producers a share of the profits of their films was the only way to insure that producers would continue to make quality movies.

Under the unfavorable conditions for independent producers, SIMPP hoped that the government would reinitiate the Paramount case before the end of World War II. As of November 20, 1943, the Department of Justice was legally free of all consent decree restrictions, and could pursue the case at will. Meanwhile, throughout 1943, representatives of the Society of Independent Motion Picture Producers met with Tom C. Clark, the new assistant attorney general who headed the antitrust division. The Justice Department seemed to express an interest in reactivating the Paramount case, and welcomed the potential involvement of SIMPP to aid the prosecution. However, months passed with no government action taken.

When Tom C. Clark took over the Hollywood antitrust suit, he told the press that the Justice Department was interested in pursuing the case, but had not yet decided how to approach it. SIMPP executive secretary John Flinn called together three SIMPP east coast representatives, Grad Sears, James Mulvey, and Roy Disney. In a confidential meeting, they proposed that the Society should prepare its own brief to submit to the Department of Justice to avoid any further delays in the Paramount suit. They began the first stage of their plans by authorizing the Society to gather a collection of evidence against the monopolies in the film industry to present to the government. The Society encouraged its members to publicize the antitrust issue, and offered its support to any independent producer willing to take part. Sam Goldwyn lead the assault to help SIMPP reach its goal of getting the Justice Department to start the antitrust case back up by the summer of 1944.

Danny Kaye in Up In Arms (1944) - Movie still from the famous "Lobby Number" sequence, a satire of musical films, one of the longest comedy routines of its kind, written by Kaye's wife Sylvia Fine and Max Liebman. (Aberdeen collection). 

To purchase Aberdeen photos for reprint purposes click here.

Goldwyn prepared his latest release Up in Arms (1944) as a showcase for his recent discovery, comedian Danny Kaye. Hoping that Kaye would become a valuable asset for Goldwyn’s independent company, the producer spent $2 million on a lavish Technicolor musical to serve as the comedian’s film debut. The producer even requisitioned the Walt Disney Studio to create an animated finale for the film’s climax. (After great expense, the Disney animation was cut out of Up in Arms by Goldwyn, who was accustomed to making last minute—and usually very costly—changes in production while searching for the most suitable final product.)

Sam Goldwyn decided to use the appropriately-titled Up in Arms to bring attention to the antitrust struggle. In one the most skillfully-orchestrated promotional stunts of his career, Goldwyn involved the Society of Independent Motion Picture Producers in the marketing of the film. The resulting publicity coup made national news and became part of Hollywood legend.

Goldwyn had announced that all theaters that wanted to show Up in Arms would be required to do so on a percentage deal with the producer. Releasing through RKO, Goldwyn believed that Up in Arms had enough clout to take on some of the more difficult theater monopolies, and he was content to refuse any theater chain that would not offer him a share of the box office.

In the spring of 1944, he took on Balaban & Katz, the massive Paramount subsidiary that controlled the troublesome Chicago area. In the past when the Balaban & Katz chain had agreed to pay for Goldwyn films on a modified percentage deal, the films were given undesirable play dates and showings on off-hours. Goldwyn believed his films in the Chicago area were earning one-eighth of what they would in an open situation.

Carrying out his long-promised threat to take his films and exhibit them himself, Goldwyn rented the Woods theater, a small independent movie house, to show Up in Arms in the Chicago area. Goldwyn’s feature played successfully throughout the summer, and netted him over $175,000, a fantastic take for a theater of limited means, and far in excess of the $30,000 he usually received from the Paramount circuit.

The most significant Up in Arms battle came later that year when Goldwyn and SIMPP took on a subsidiary of the notorious Fox West Coast theater monopoly. SIMPP helped Goldwyn single out Reno, Nevada as one of the areas where the Fox theaters operated without competition, and decided to make a stand there. The showdown became one of the defining moments in the independent struggle.

All theaters within 35 miles of Reno were controlled by T. & D. Junior Enterprises, Inc., a Twentieth Century-Fox affiliate also one-quarter owned by Fox West Coast. The T. & D. subsidiary itself was a complex, multi-structured company that operated over 100 theaters in Nevada and northern California under several corporate identities. The chain was accustomed to dictating terms in the regions where its theaters dominated. The monopoly refused to grant any film, including Up in Arms, anything but a flat film rental. Goldwyn, on the other hand, not only insisted on a percentage of the gross profits, but demanded a sliding scale that increased the producer’s percentage as the box office increased. The negotiations between the exhibitor and the producer began in June 1944, and lingered for weeks. For over two months, Goldwyn was represented by John C. Flinn of SIMPP; and when T. & D. rejected Goldwyn’s terms (as expected), the Society was ready to back the renegade producer as he fought one of the largest movie monopolies in the country.

In a closed situation there were few options for Goldwyn to exhibit his own film. The State Auditorium in Reno, the only facility that had seating large enough to accommodate the crowds that Goldwyn expected, became off-limits when local officials declined to rent it to the flamboyant outsider. Desperate to locate a venue, Goldwyn decided to build his own theater by shipping projection equipment from San Francisco. But his idea for a massive canvas tent was condemned as a safety hazzard. Finally he found a location on the outskirts of Reno next to the railroad tracks—the El Patio ballroom, which Goldwyn converted into a makeshift theater at his own expense and over tremendous local opposition.

T. & D. Theatres played into the independent producer’s plans by creating opposition that helped to generate publicity. The theater chain took out newspaper ads that ridiculed Goldwyn’s so-called theater of folding chairs nailed to a temporary wooden floor, showing his film within earshot of the Southern Pacific railroad. At first the negative press seemed to turn public sentiment against the independent producer. SIMPP recruited other independents to participate in the preparations for the August 22, 1944 opening night. Mary Pickford agreed to attend the premiere in person. Walt Disney, Orson Welles, and the Cagney brothers all contributed public statements concerning the incident.

While media attention intensified, so did local hostility, until Goldwyn outmaneuvered the powerful Reno syndicate and won over local officials by donating the opening night box office to the Camp and Hospital Service Committee, the Reno chapter of the Red Cross. This turned his show-of-defiance into a charity event, and guaranteed a strong attendance. The press came to Reno for the media event which was carried over live radio. Goldwyn and Pickford had their pictures taken as they ceremoniously hammered the four-hundredth wooden chair to the floor of the former nightclub.

Pickford, a great supporter of both the independent fight and of the Red Cross, brought her own prepared speech and the endorsements from the other SIMPP members. She had personally and bitterly clashed with Goldwyn at several times over the previous decades, but had always publicly declared her admiration for the incorrigible producer. She effortlessly concealed any animosity toward the man who had created frustrating conditions for her while they were together at Famous Players-Lasky, United Artists, and later at SIMPP. The following is a complete transcript of Pickford’s radio address given before the showing of Up in Arms:

 

Good evening I am proud to be here tonight to represent two most worthwhile causes, first, the benefits for the camp and hospital service committee of Reno, secondly, to take my stand for independence and freedom from the dictates of a picture theatre monopoly. When Mr. Samuel Goldwyn telephoned me I dropped my personal business for the time being in order to be here tonight, well knowing the vital importance of this issue of monopoly, an issue not only vital to Mr. Goldwyn and all independent producers but to the future advancement of the American motion picture industry itself.

I have known Samuel Goldwyn the better part of my life as a man of high purpose, of great courage, a producer of artistic integrity. It is such men as Samuel Goldwyn whose vision, courage and inspiration has led and emanated the motion picture from the obscurity of the Nickelodeon era up to the great and dignified medium of entertainment which it is today. To produce the film Up In Arms Mr. Goldwyn spent a whole year of intensive work and two and a half million dollars of his own; that is a lot of time and very great deal of money but to what avail? Only to be told upon the completion of a year’s work and expenditure of two and one-half million dollars that he shall not be permitted to show his picture but dictated by a theater monopoly. I would prefer and in this I am assured you would agree to sit on a wooden chair, a wooden bench, or even on the floor to see a fine film than to rest upon plush covered opera chairs and to be forced to witness a dull, stupid film in the most elaborate movie palace in the country. No, my friends all the grandeur of the finest theater does not make nor mar a great film. Bricks, mortar, plush and soft lights are empty things without fine entertainment which commemorates the very living soul of the theater.

We are making history here tonight, you, Mr. Goldwyn and I, for we are taking our stand from our inalienable rights for free enterprise and a free America to see to it that no man, group, combine nor monopoly shall dictate where, when or how we shall show our picture.

Our boys, American boys, this very night on the four corners of the earth are fighting and dying in order to protect Democracy and the American way of life. Shall we here at home fail them? Shall we permit the American way of life to perish here in the United States while our men are fighting for that same God given right in every part of the world? Certainly not, so I say it is not merely whether this one or a dozen of Mr. Goldwyn’s pictures do, or do not play in Reno or for that matter in the entire state of Nevada. It is rather the question whether he and I or other Americans are to be given an opportunity to carry on our lives and our business openly, honestly and fairly.

There are a number of wires that have come to us, too numerous to read here, so I shall read just this one from an author whom you all know, respect and love. It is Walt Disney, one of the outstanding independent producers of the motion picture industry. It is an indication of how the creative workers of Hollywood feel about monopoly and I quote, ‘Samuel Goldwyn, Riverside Hotel, Reno, Nevada, I heartily endorse your efforts to carry directly to the people of Reno and indirectly to the American public the question whether the motion picture industry as an industry should continue to exist under American competition principles or be throttled by monopolistic restrictions and limitations. When the channels of motion picture reach the public are restricted or blocked it behooves all of us who are charged with responsibility to the public for the industry to break down these barriers. Impending world competition which will be based on low cost and fostered by forming governmental endowment franchise and tariffs make it imperative that our American products at least in our own country be permitted to operate without artificial obstacles being thrown in its path by selfish interest. The American picture must continue to receive returns, commensurate with the large costs and the better living standards of the people who make them. Our government has recognized the importance of American films as political and commercial assets in foreign relations for America, to lose its leadership in motion pictures would be a blow to all American industry and to our public relations. The motion picture industry and in time the American public will acknowledge and appreciate yours, Sam, your courage and foresight, regards, Walt Disney.’ This is Mary Pickford, good night and thank you.

 

Following Pickford’s speech, Samuel Goldwyn introduced Up in Arms, and also commented on the significance of the battle being waged for economic control of the movie industry. He closed his address by declaring that he and the SIMPP independents were prepared to hire halls and auditoriums in other cities in order to break down prevailing inequities.

These threats by independent producers of showing their own movies were not new. Back in 1930 when the United Artists struggle with Fox West Coast erupted, Goldwyn warned the theater chain that he would form his own makeshift exhibition enterprise before he would ever give in to the unsatisfactory terms of the Fox monopoly. Many of the independent producers were accustomed to road showing their films, and persistently threatened to exhibit their movies whenever they felt an overwhelming urge to buck industry trends. In 1940, when Charlie Chaplin met resistance to his anti-war film The Great Dictator, he became more determined "even if I had to hire halls myself to show it." When theater chains repudiated Orson Welles’ explosive Citizen Kane (1941), Wells exclaimed, "I’ll show it in a ball park with four screens, in auditoriums, at fairs, in circus tents, if necessary." In fact, Fox West Coast actually bought the regional exhibition rights to Citizen Kane, but refused to show it, in order to suppress the movie. The move so incensed Welles that he became a willing participant during the Goldwyn showdown against the Fox affiliate in Reno.

Some of the producers made further inroads into exhibition. Within a year after the Reno incident, the Samuel Goldwyn Company entered into a joint theater venture with David Selznick’s Vanguard Films to secure a first-run foothold in New York City. They become long-term renters of the Astor Theatre, an impressive 1100 seat movie house on Broadway. There they controlled all of the theaters bookings, and each took turns premiering their new movies. The arrangement essentially gave either producer a guaranteed outlet to run a road show debut that could last for several months before demand slackened. Among the most important films that debuted at the Astor when it was controlled by the independents were Selznick’s Spellbound (1945) and Goldwyn’s The Best Years of Our Lives (1946). After two years, around the time that Selznick formed his own distribution company, they allowed the lease to expire.

Due in part to Up in Arms, the government case against the Hollywood studios heated up. Goldwyn had anticipated the debacle in Nevada and alerted Thomas O. Craven, United States Attorney at Reno, to the situation. Goldwyn filed a complaint as a member of the Society of Independent Motion Picture Producers in which he alleged that T. & D. Junior Enterprises had taken an active part in discriminating against independent films including Up in Arms. Craven received clearance from the office of the Attorney General on August 17, a few days before the Reno film opening. The Justice Department also involved the FBI in an investigation that lasted into October.

T. & D. defended itself by attacking the independents. "The reason the picture is not shown in the T. & D. theatres is not that we refused to buy the picture," the district manager N. Dow Thompson said on behalf of the chain, "but rather because Mr. Goldwyn’s sales organization refused to sell it for a showing in Reno unless we bought the picture for all of our situations, in some of which Mr. Goldwyn’s terms were exorbitant. . . ." Nevertheless the FBI report blamed the T. & D. chain for manipulating local officials and conspiring to maintain a monopoly in an effort to suppress the independent film.

While Goldwyn and the other SIMPP members were fighting exhibitors, the Society executive committee continued its petition of the Department of Justice. Tom C. Clark remained in contact with SIMPP president Loyd Wright, who intervened on behalf of SIMPP when the Big Five submitted a new consent decree in which the studios proposed that they keep their theaters. That August, the Attorney General rejected the latest distributor consent decree, and filed a motion in Federal Court demanding theater divorcement within three years. Government attorneys were busy readying their case when the FBI report on Up In Arms recommended that the Justice Department intercede on behalf of the independent producers.

"As long as the independents have to deal with the big five for theaters it seems there will be trouble," the Justice Department declared in a press release that month that commented on the Up in Arms incident. "If all the theaters they now have continue to be controlled by the big five companies, the independent producers will find it difficult to get screens for the product."

Unlike the Balaban & Katz fight, Goldwyn expected to lose money in the Fox West Coast showdown in Reno. The El Patio ballroom had cost Goldwyn between $25,000 and $30,000 to convert into a theater, while the out-of-the-way ballroom only brought in about $1,000 each week. However, in terms of publicity value, the figures were impossible to calculate monetarily. For helping to accelerate the Paramount case, it was money well-spent. After the Reno event, SIMPP celebrated as the Justice Department took the major studios back to Federal Court in New York City late in August 1944. Both the government and the independent producers prepared for the District Court hearing of United States v. Paramount Pictures, Inc. et al—the phase of the antitrust case which the press commonly referred to as the New York Equity Suit.

 

NOTES AND SOURCES FOR CHAPTER 7:

Mellett visit to Hollywood, denunciation of the double feature: Frank S. Nugent, "Double, Double, Toil and Trouble," New York Times Magazine, January 17, 1943, pp. 11, 21.

War time figures: Finler, The Hollywood Story, p. 34.

"You could run film backward" mentioned in: Jim Marshall, "Nothing To It," Collier’s, May 18, 1946, p. 96.

"Present conditions": John C. Flinn to Loyd Wright, January 20, 1943, WWP. Also mentions the violations of the Consent Decree that have frozen first-run play dates.

Goldwyn outspoken—"The art of showmanship": Fred Stanley, "Blast At Hollywood," NYT, July 30, 1944, sec. II, p. 1; Theodore Strauss, "Why Keep The B’s?," NYT, July 26, 1942, sec. X, p. 3. Goldwyn fights Florida theaters: "Goldwyn Tell Fans Via Ads Why They Can’t See ‘Foxes’," HR, January 22, 1942, p. 4. History of Sparks circuit: Dick, City of Dreams, p. 57. Goldwyn refuses other independent theaters: HR, July 24, 1944.

SIMPP discussions with Department of Justice, actions in interim: John C. Flinn to Loyd Wright, January 26, 1943, WWP; Loyd Wright to John C. Flinn, January 28, 1943, WWP.

Tom C. Clark: "Government Is Free To Move In Film Case," NYT, November 21, 1943, p. 27.

Walt Disney animation for Up In Arms: Solomon, The Disney That Never Was, pp. 76-77. The Up in Arms animation, which was believed to have been destroyed, resurfaced in a film print uncovered by the Disney company in the late 1990s.

Goldwyn at the Woods versus Balaban & Katz: Fred Stanley, "Discord In the West," NYT, August 27, 1944, sec. II, p. 1.

West Coast and Balaban & Katz antitrust violations: Conant, Antitrust in the Motion Picture Industry, pp. 85, 105. United States v. West Coast Theatres, C.C.H. Trade Regulation Reports, Supp. IV, 4206, Southern District of California, 1930; United States v. Fox West Coast Theatres, (1932); United States v. Balaban and Katz Corp., C.C.H. Trade Cases, Northern District of Illinois, 1932.

T. & D. Theatres and Up in Arms in Reno, Tuesday, August 22, 1944: "Goldwyn Denounces Theatre Monopoly," HR, August 22, 1944, pp. 1, 6; "Pickford, Disney Support Goldwyn in Monopoly Fight," HR, August 23, 1944, pp. 1, 3; "Goldwyn Fights Film Exhibitors," NYT, August 23, 1944, p. 16; "The Battle of Reno," Time, September 4, 1944, pp. 78, 80; also see Berg, Goldwyn, pp. 384-387; Marx, Goldwyn, pp. 301-302; Marill, Samuel Goldwyn Presents, p. 235.

Pickford speech: Transcription from radio station KEO, FBI report, October 19, 1944, Salt Lake City, FBI 60-86—see Trethewey, Walt Disney: The FBI Files, pp. 117-120.

Goldwyn speaking at Up In Arms opening: "Pickford, Disney, Cagneys, Welles Back Goldwyn Fight," DV, August 23, 1944, pp. 1, 8.

Producers threaten to show their own movies—"Movie Stars Fight Fox Chain in West," NYT, November 7, 1930, p. 32; "even if I had": Chaplin, My Autobiography, p. 393; "I’ll show it in": Lasky, RKO, p. 165.

Welles’ Citizen Kane fight with Fox-West Coast: Welles and Bogdanovich, This Is Orson Welles, pp. 87-88, quoted from NYT, September 7, 1941.

Goldwyn and Selznick with the Astor Theatre: The Society of Independent Motion Picture Producers, et al v. United Detroit Theatres Corp., et al, case number 7589, District Court of the United States for the Eastern District of Michigan Southern Division, Deposition of David O. Selznick, April 28, 1949, pp. 45-48, AMPAS.

FBI investigation of T. & D.: Office memorandum from A. Rosen, FBI 60-3020, November 4, 1944; see Trethewey, Walt Disney: The FBI Files, pp. 123-124.

"The reason the picture": "Goldwyn Fights Film Exhibitors," p. 16.

SIMPP objects to new consent decree 1944: Tom C. Clark to Loyd Wright, January 28, 1944, WWP; John C. Flinn to Loyd Wright, February 3, 1944, WWP.

"As long as the independents": Assistant Attorney General Wendell Berge from press release quoted in A. Rosen, FBI 60-3020; see Trethewey, p. 123.

Department of Justice reactivates the Paramount case: Department of Justice (press release), August 7, 1944, pp. 1-5, WWP; "Govt. Readying Anti-Trust Case," HR, August 7, 1944, pp. 1-2; "U.S. Renews Battle On Film Monopolies," NYT, August 8, 1944, p. 15.