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article number 599
article date 10-25-2016
copyright 2016 by Author else SaltOfAmerica
Who Will Control the Movie Industry? Also a Dancer Named Valentino Debuts, 1917-1921
by Terry Ramsaye

From the 1926 book, A Million and One Nights.

EDITORS NOTE: For those who have not read previous chapters from this book, Adolph Zukor and Famous Players-Lasky Corporation may not sound as familiar as other companies mentioned in this chapter like Fox Film Corporation, Metro and Goldwyn (soon to be Metro-Goldwyn-Mayer) and United Artists, but it was a powerhouse of subsidiaries such as Paramount Pictures and commanded a large share of the movie industry.

* * *

EARLY in 1917, just when Adolph Zukor had bought a dubious truce with Selznick and was busy counting all the jewels of starland into the strongbox of his Famous Players-Lasky Corporation, the tocsin sounded again. He rushed to the battlements.

A cloud of dust was rising on the western horizon and there was the increasing thunder of hurrying hoofs. An uprising had broken out in theatredom and the foe was riding down on the citadel of Adolph-the-Aggressive.

The exhibitors were coming! Their lances gleamed in the starlight and their eyes lusted for treasure.

The leader of that menacing column had risen out of the sea and the other end of the world. J. D. Williams, former assistant treasurer of the Parkersburg opera house, was home again from Australia, looking for something to do.

It was late in 1916 when Williams, after parting with his large theatre interests in the Antipodes, set about trying to promote a big screen theatre project in Los Angeles.

Right abruptly Williams found Los Angeles bankers and capitalists timid about such a venture. They had heard something. He sought the source of their timidity and found it was in the conversation and complaints of Thomas L. Tally, one of California’s leading showmen and a pioneer from peep show days.

Tally, it seemed, was exceedingly annoyed because of the rising cost of big star pictures, more especially the pictures controlled by Adolph Zukor. Also the selling policy which had made him buy a whole program in order to get Mary Pickford was an embitterment.

Mary Pickford in ‘The Little American’, 1917.

Tally was alarmed lest the increasing control of the producer interests should reduce the whole race of theatremen to serfdom.

Williams tried to win Tally’s support for a big theatre project in vain.

Tally had another, combative notion. It was time, he opined, for the exhibitors to pool their purchasing power and deal directly with the stars. Williams joined in the plan and together they started on a tour of the key cities enrolling the leading exhibitors as they went.

When Williams arrived in New York he had enlisted the cooperation of about twenty-seven of the principal theatre operators of the country, each in control of a pace-making house in an important center.

The First National Exhibitors’ Circuit was announced in New York in the middle of April 1917.

Zukor broadsided with expressions in the trade press and signed a preachment in ‘Variety’ on the question “Are you an Exhibitor or a Producer?”

Meanwhile Goldwyn and other picture chieftains were busy, everybody seeking to make a block-booking contract with the combined exhibitors, or to undermine their organization.

A new war was on.

The masters of the industry were out to wipe out this new menace of their supremacy before it could gather headway. Many and devious were the moves.

The most simple and direct steps started, as usual in the strategy of the picture business, over the luncheon table. J. D. Williams, as the organizing factor of First National, was invited to lunch with Lewis J. Selznick and Adolph Zukor, then partners in Select Pictures Corporation.

They met at the Café Beaux Arts and when it got down to the coffee Williams was offered a large and handsome salary. It was pointed out to him that the First National idea would probably fail and leave him flat. He was prevailed upon to conditionally accept a sum in advance.

He put it in his pocket, playing safe. After awhile he returned it. The first significant move of First National was pursuit of Charles Chaplin. Chaplin was making his last picture for the Lone Star Mutual release. Mutual was a desperately sick company. Its decline had been steady and continuous from the day it lost Griffith, Ince and Sennett.

John R. Freuler, president of Mutual and the author of the big Lone Star deal with Chaplin, figured anew and bid a salary of $1,000,000 for another series of twelve comedies.

Chaplin was shopping about.

Charlie Chaplin with Edna Purviance and Syd Chaplin in ‘Shoulder Arms’, First National production 1918.

Syd Chaplin, representing his brother, met officials of the First National in Chicago at the Hotel Sherman. They offered to pay $1,075,000 for eight two-reel pictures, with a number of provisions for latitude in production which Chaplin wanted.

Freuler’s bid was in fact the highest, since it meant straight salary, with Chaplin assuming no production cost. First National’s offer meant more liberty of expression. Chaplin had outgrown a job.

First National got Chaplin.

It was a pleasant bit of irony that Thomas L. Tally, the Los Angeles member of the First National group, who did not think Chaplin was funny, had to handle the details of the signing of the contract. Tally had never used a Chaplin comedy in his theatre.

Now First National threw down the gauntlet and went after Mary Pickford. Harry Schwalbe, First National official rep- resenting the Stanley theatres of Philadelphia, went to Los Angeles on this mission. It was an arduous campaign. He sought Mary and dined often with her mother, Mary’s shrewd business counsellor.

Schwalbe had the backing of the great theatre organization and the bidding mounted higher and higher. Eventually he agreed to give Mary a contract for three pictures at $250,000 each, if she would leave Artcraft, and to pay $50,000 to her mother for her good offices and good wishes.

Mary accepted the First National offer. She again was not going to be “second to Chaplin.” By a later adjustment Mary got an additional $100,000 each for her pictures, making a total of $1,050,000.

First National reached about for stars and acquired among others the Talmadges and Thomas H. Ince with his increasing production plant.

In the period of his First National contract, Chaplin’s comedies evolved from the two reel calibre of his Lone Star-Mutual series into feature length dramas. This was in a degree a mechanical adjustment to the market, fitting his product physically to his star value and the major position on the program of the theatre.

Chaplin’s greatest picture of the time was ‘The Kid’, which incidentally made a star of little Jackie Coogan. It is the tradition that Master Coogan stumbled into his screen career by winking at Chaplin in a Los Angeles railway station.

‘The Kid’ was completed in the midst of Chaplin’s first domestic crisis, when attorneys were seeking a settlement with Mildred Harris, the first Mrs. Chaplin.

There was prospect that the negative of the unborn ‘The Kid’ would be attached on an alimony claim and Chaplin hurried East with it. In New York the process servers pursued Chaplin and his comedy from hotel to hotel and up and down and about.

Meanwhile the negative, for safe-keeping, was continuously in transit in a meandering taxicab, with Carlyle Robinson, Chaplin’s press agent, riding on guard over the treasure.

When the chase pressed too close the film laden taxi leaped convenient state lines, into New Jersey, into Connecticut, up hill and down dale across bridges and ferries.

Those tin cans contained a world of laughs and a fortune for Chaplin. They came to rest at last in far away Utah where the state laws prevented attachment. Chaplin there caught his breath and cut his comedy in peace while the lawyers negotiated in Los Angeles.

‘The Kid’ Charlie Chaplin and little Jackie Coogan. 1920 production for First National.

‘The Kid’ was worth the trouble. It was far beyond the anticipations of the original First National contract, which, after many squirmings and negotiations by Chaplin, was abrogated.

On the new and special deal for ‘The Kid’, Chaplin profited considerably more than a million dollars. The one picture was worth more than the original contract for eight pictures had contemplated. Chaplin’s art and craftsmanship had outgrown contracts.

Meanwhile First National was a-whirl and agog with internal politics and external combat. The threat was noised about that Adolph Zukor was out to win a control of this troublesome independent manifestation by the purchase of component theatre interests.

Williams fortified the First National by the formation of a voting trust. The moves were intricate, rapid and continuous.

Famous Players began to launch into a theatre control campaign of its own with the purchase of many houses in dominant centers, leading eventually to the acquisition of several hundred theatres.

The war for motion picture supremacy had moved on to new battlegrounds. We saw it rise in the beginning over patent control, thence to market monopoly based on a patents pool or cross-licensing system, and then for a time center on a competitive struggle of picture production and stars, from which Zukor emerged with the stars.

Now in its next phase it was becoming an issue of theatre seats, real estate investments and large scale financial operations.

The fight started at the lens in Edison’s first camera at West Orange and spread to the screens of the world.

Mary Pickford in ‘The Hoolum’, 1919. She had left Zukor and produced the movie herself.

* * *

Now that the inventors, cameramen, exchangemen, and exhibitors had taken their fling at motion picture control, it was the actors’ turn.

The scene and setting for this new manifestation was the rose bowered veranda of a California bungalow. William G. McAdoo, son-in-law of President Wilson, also former Secretary of the Treasury and now Director General of the railroads, was there taking his ease and recuperating from the travail of government service under the stress of war. McAdoo had, on December 12, 1918, resigned effective January 17, 1919.

About January 7, when the Director General’s private car arrived in the yards of Los Angeles, there was a band serenade under the auspices of Douglas Fairbanks, and a conclave of picture personages of high degree.

Remember that incident of Liberty Loan days when the stars in the drive were around the desk down in the treasury building in Washington? “Why don’t you folks get together and distribute your own pictures?” Oscar Price had casually suggested.

Price was the press agent of McAdoo’s administration in the treasury, and now his assistant in administration of the government’s railroad affairs. The idea behind that chance remark was now about to hear fruit. It was a notion that had been stirring into life in many minds.

Up at Santa Barbara at McAdoo’s bungalow the old friends of the Liberty Loan campaigns talked it over. It was quite a gathering. Douglas Fairbanks, Mary Pickford, and Charles Chaplin and D. W. Griffith were there. There were several such conferences.

The picture stars now definitely proposed that McAdoo should head an organization which would market their film wares. Both McAdoo’s record and his fame, begilded with high office and Washington, made him an especially desired association. McAdoo declined.

“But, if you will get Oscar Price, I will help you organize and be your counsel,” McAdoo suggested.

And so it was arranged at a meeting held at Fairbanks’ home in Beverly Hills January 19. About the eighteenth of March, Price arrived in New York to begin operations.

The United Artists Corporation of Delaware was incorporated in April, with Price as president and McAdoo its general counsel.

Douglas Fairbanks, Mary Pickford, Charlie Chaplin and D. W. Griffith were part of United Artists.

The announcement of United Artists was something of a sensation to the sensation-weary film world. The classic comment of the occasion came from Richard Rowland, then head of Metro Pictures Corporation. He received the interesting tidings from Arthur James, press and intelligence agent of Metro. Rowland meditated on the significance of the new move for almost a full second.

“So,” he remarked, “the lunatics have taken charge of the asylum.”

It should be added, lest there be an assumption that the comment sprang from snobbery, that Rowland has been philosopher enough to classify himself as “one of the accidentally successful.”

The name of Hiram Abrams came early into the affairs of United Artists and presumably he had been something more of a factor in the formation of the organization than the outward moves indicated.

Abrams’ long association with Paramount and the Zukor enterprises gave him, in the eyes of the uniting artists, something of the atmospheric value that accompanied the comfortable assurances of the old Famous Players-Artcraft payroll with which they had parted not so long before.

McAdoo and Price were a handsome new front, but they seemed to want some of the old back to lean against.

Meanwhile Abrams and Adolph Zukor had fallen apart with considerable depth of feeling. Therefore Abrams might well have been expected to make the competition of United Artists with Famous Players-Lasky decidedly snappy. Ben Schulberg, who had risen in executive function from his position as Zukor’s first press agent, went along with Abrams.

Differences arose a little quicker than immediately between Price and the United Artists over issues which centered on Abrams’ program and plans as general manager of the concern. There was a most animated debate in Douglas Fairbanks’ bedroom in a New York hotel, and Price resigned, effective April 15, 1919. Shortly McAdoo also disconnected and sold his shares in the enterprise.

Incident to the McAdoo-Price withdrawal a vastly pretentious theatre project intended to assure the stars of United Artists a sure avenue to the market went by the boards. This scheme which Price had been engineering included the millions of the Dupont interests, James and Nicholas Brady, E. E. Smathers, a wealthy oil operator, Joseph Godsol, and a consolidation with the then still active Goldwyn concern.

This loss of the theatre project left the United Artists and their product to the open market, with only the box office value of big names to compete against the intricate machinery of control and theatre domination which the big corporations were building.

The consequences were becoming evident as this chapter was written in 1925 when Joseph Schenck, a factotum in United Artists and a friend of the “big interests,” all but consummated a plan to lead the big stars back to the fold by a merger with Metro-Goldwyn-Mayer. The deal was upset by Chaplin’s refusal.

Meanwhile D. W. Griffith, departing from United Artists, entered in the service of Zukor again as a director for Famous Players.

Buster Keaton in “The Navigator,” 1924. Metro became part of the producing company for the film, Metro-Goldwyn-Mayer.

* * *

With First National bidding for stars for its theatre machine, Zukor building a theatre organization and the great stars organizing themselves, Marcus Loew, theatre magnate, found it necessary to bestir himself.

Loew had continued prosperously as an exhibitor since the historically remote days when Zukor left Loew Enterprises to go his own gait. He was extending his theatre holdings widely.

There appeared to be an excellent chance that he was going to be caught between the two sides of exhibitor-distributor warfare. As a counter move Loew acquired a control of Metro Pictures Corporation in January, 1919. Loew became a producer-distributor to protect his far-flung theatre chain.

Loew went into Metro at a fortunate moment. Metro’s fortunes were at low tide. The concern was somewhat uncertainly recovering from the staggering blows of the influenza epidemic and its shutdown of the picture industry, coming on top of the post-armistice period when it, along with every other motion picture concern, was overloaded with war dramas.

In those gloomy days Metro saw its weekly income drop from $108,000 a week to $6,000, while a weekly payroll for the distributing system alone was eating into the treasury at the rate of $30,000 a week. In addition Metro was at that time engaged in the costly production of ‘The Red Lantern’ with Alla Nazimova.

The world was trying to find itself in the dull hush that followed the war. Loew got in on the ground floor.

Ethel Barrymore in ‘The Divorcee’, Metro Pictures, 1919.

Then strange fortune smiled on Metro. Richard Rowland, then president of the concern, is a person governed by a whimsical even if practical philosophy. War pictures had well near spelled the ruin of Metro, and yet Rowland followed with a fatal fascination the weekly advertisements of ‘The Four Horsemen of the Apocalypse’ by Vincente Blasco Ibánez.

The ‘The Four Horsemen of the Apocalypse’ was a novel of war, and through these months when all the world was trying to forget the war its circulation was mounting, mounting, mounting.

Here was a success which seemed to flaunt itself in the face of every index of the times. It was something to engage the attention of the busy-minded Rowland, alert in that game of chance and wits that is the motion picture.

But, curiously typical of the world of the motion picture, Rowland’s curiosity did not lead him to investigate the book, to read that rapid, cloying tale of horrendous glamours for himself. The book was nothing, but those weekly figures in the ‘Literary Section’ of the ‘New York Times’—”fortieth printing—forty-first printing—forty-second printing” were enamoring and compelling.

A dozen times he decided to order negotiations for the motion picture rights, and then one word, “War,” intervened, and he did not make the step. It would be a folly against all experience. War pictures were dead.

An agent, a Broadway sharpshooter, vending motion picture rights, found his way into Rowland’s office in his rounds.

“How’d you like to have the rights on ‘The Four Horsemen of the Apocalypse?’—ten thousand dollars advance against ten per cent royalty?”

Rowland sat like a man with a lone ace and a distrusted hunch against a pat hand. He decided to draw four cards.

“I’ll take it,” the president of Metro decided, wondering what to think of himself as he spoke.

A week passed and nothing happened. Rowland was almost glad it did not.

Then Jack Meador, press agent for Metro, strolled into the office.

“How would you like to buy ‘The Four Horsemen of the Apocalypse’—I know the Ibánez representative.”

Here was that hunch offering itself again.

“Yes, I want it,” Rowland replied.

Metro paid a commission of $1,000 to the agent who could not deliver the story, and agreed to pay $30,000 to the representative of Ibánez on the signing of the contract.

Meanwhile Ibánez came over to see this strange America which had gone so mad over his book. There were other bids for ‘The Four Horsemen’. It was winded that the Fox Film Corporation had offered $75,000. Ibánez thought the Metro deal, all but consummated, was inadequate.

Rowland effected a compromise and paid an advance of $20,000 against ten per cent of the royalties. The story was Metro’s.

Alice Terry and the “dancer,” Rudolph Valentino in ‘The Four Horsemen of the Apocalypse.’ Metro Pictures, 1921.

“Read the Four Horsemen,” Rowland wired Metro’s west coast studio.

“Do not buy Four Horsemen, it will not film,” the studio replied.

“Have bought the Four Horsemen and it is going to be filmed anyway,” replied Rowland. Everybody in the Metro establishment shook their heads over this wild notion of the boss’s.

Rowland called in June Mathis.

“Take this book and make a continuity. When you get one you like bring it to me. You’ve got to make good on this for me. Everybody in the world thinks I’m crazy.”

When Miss Mathis delivered her script Rowland thumbed it over rapidly. It looked like a script and he had faith in Miss Mathis.

“Now about a director?”

Miss Mathis had a notion of her own.

“There’s a young man out there who is more likely to see this than anyone else—Rex Ingram.”

Rowland was taking chances all along the line on this wild war picture project now.

“O. K.,” he ruled. “And how about Carlyle Blackwell for this ‘Julio’ part you like so much?”

“There is an Argentinian dancer out there—Valentino—he is the part,” Miss Mathis suggested.

Rowland deliberated. “Why deliberate?”

“Say, you take this script and go out there and make this picture—hire anybody you like. It’s your job.”

When the ‘Four Horsemen’ came to New York and got its Ritz premiere the picture folk looked at it. “Great picture—but it’s war,” they said, and went away feeling a bit surprised, maybe even a little sorry for Rowland.

Rowland had many grave doubts himself. The picture represented $640,000 of what had been very good money before it was spent.

Then the picture went on at the Lyric theatre. The second day brought a capacity business and the great career of the production had begun.

Profits began to loom. Rowland was preparing to leave Metro and he had in mind a trip to Europe.

“It looks like we were going to have to pay Ibánez a lot of money,” he commented to Marcus Loew. “Let’s buy him out.”

Alice Terry and Rudolph Valentino in ‘The Four Horsemen of the Apocalypse.’ Metro Pictures, 1921.

Over in Mentone, by the blue, blue sea, Rowland visited Ibánez. The Spanish novelist was building an expensive new home. He possibly could use some cash. The conditions looked auspicious for a deal.

Rowland and Ibánez motored over to Monte Carlo and dined. In the after-dinner hour they strolled about the Casino.

Oblivious to the clustered groups over the roulette tables they walked up and down that hall of chance. Rowland had to have a pretext for his proposition. He sprang it.

“As long as you have an interest in that picture we shall have to handle it by itself to be fair to you. But we want to be free to deal with it as our own. We may want to sell it along with other pictures and make combination deals—so we want to buy your share.

“Now you might get more by waiting and riding through with the picture—and you might not. Anyway, we will give you ——“

Rowland mentioned some figure in francs, many, many francs.

Ibánez grinned.

“Talk dollars,” he answered.

“A hundred thousand American dollars,” Roland responded.

They took another turn down the Casino. Fortunes were passing at the whim of the little ivory ball at the wheel.

“The best possible figure is $150,000,” Rowland ventured.

“No, no,” from Ibánez.

They strolled back and forth, pausing idly and casually to glimpse the monotony of that endless drama of desperation at the wheels of Monte Carlo.

“One hundred and sixty thousand.”

Ibánez shook his head.

“One hundred and seventy thousand—and that is all.”

Ibánez looked at Rowland and decided it was indeed all.

And so it was settled. Which made the total cost of the story rights on ‘The Four Horsemen’ just $190,000 to Metro.

When Rowland came ashore in New York again the books. showed that they would on that date have owed Ibánez $210,000. The gross earnings up to the end of 1925 on the picture were about $4,000,000. Ten per cent of that amount is $400,000, so Metro’s winnings on that night at Monte Carlo are nearing a quarter of a million.

The role of ‘Julio Desnoyers’ in that picture of course made Valentino such a figure of such a quality of fame as would have fired the pride of the virile old centaur, ‘Madariaga’, himself, the fictional progenitor.

It was not, after all, a triumph of a war picture. It was a triumph of a new Don Juan of the screen, a victory for Latin love and suppressed desire among the movie millions.

Valentino’s fan mail mounted into hundreds of letters a day, on scented violet paper without outpourings of reverie fantasies about “dream visits.” The box-office horde swallowed the ‘Four Horsemen’ and the ‘Apocalypse’ to get a sex thrill.

“Valentino’s fan mail mounted into hundreds of letters a day . . .” Alice Terry and Rudolph Valentino in ‘The Four Horsemen of the Apocalypse.’ Metro Pictures, 1921.

Not so long ago, Richard Rowland, now at the helm of First National, picked up the novel of ‘The Four Horsemen’ to read it for the first time. He turned a few pages and then threw it under the radiator. He had had all the excitement there was in that story.

Marcus Loew, hero of one of those storybook careers, beginning at the age of six as a newsboy on New York’s East Side and in middle life, now the head of a hundred million dollar motion picture concern, the Metro-Goldwyn Corporation.
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