by Bob Thomas
Walt tried to prove with Dumbo that a cartoon feature could be produced on a modest budget in a reasonable span of time.
Based on a book by Helen Aberson and Harold Pearl, Dumbo was an engaging tale of a big-eared baby elephant who learns to fly. The simplicity of the story became evident to one of the Disney animators, Ward Kimball, when he met Walt in the parking lot one day. Walt proceeded to tell him the entire plot of Dumbo. The recital took only three minutes, yet it was a practical, well-rounded, airtight vehicle for a cartoon.
Walt assigned economy-minded Ben Sharpsteen to be supervising director. Sharpsteen avoided the excesses that had skyrocketed the expense of the previous feature cartoons. Story work took six months, animation required only a year. The film was completed for $800,000, with a running time of sixty-four minutes. The RKO salesmen argued that it was too short for a feature and asked Walt to add another ten minutes. Walt, who had originally planned Dumbo as a thirty-minute featurette, replied, “No, that’s as far as I can stretch it. You can stretch a thing so far and then it won’t hold. This picture is right as it is. And another ten minutes is liable to cost five hundred thousand dollars. I can’t afford it.” Dumbo proved to be one of the most endearing of the Disney feature cartoons, providing the Disney company with an $850,000 profit.
When Roy Disney asked Walt to visit his office one day in 1940, Walt realized that meant trouble. Over the years he had learned that when Roy came to Walt’s office, he usually bore good tidings. When Walt was summoned to Roy’s office, that meant bad news.
“Sit down, kid,” Roy began, shutting the door behind Walt. Roy took his place behind his desk and said, “This is serious. I’ve got to talk to you.”
Walt studied his brother’s long face and asked, “What’s the matter?”
Roy outlined the financial reverses of the past year: how the profits on Snow White had been eaten up by the costs of Pinocchio, Fantasia and Bambi; how the European war had caused a sharp decline in theater revenue; how the company now had a thousand employees in a brand-new studio built at a cost of $3,000,000.
“And now, Walt,” Roy concluded, “we are in debt to the bank for four and half million dollars!”
Roy expected his brother to be shocked and concerned. Instead, Walt began to grin, and then he burst out laughing.
“What the hell are you laughing at?” Roy demanded.
“I was just thinking back,” Walt said between fits of laughter. “Do you remember when we couldn’t borrow a thousand dollars?”
Roy, too, began to laugh. “Yeah, remember how hard it was to get that first twenty-thousand-dollar credit?” he recalled.
They regaled each other with memories of when they had to plead for loans to meet the weekly payroll. “And now we owe four and a half million dollars!” Walt remarked. “I think that’s pretty damn good.” When their amusement was over, Walt asked his brother, “What are we going to do?”
“I’m afraid we’re going to need some outside capital,” Roy replied. “We’ll have to issue a preferred-stock issue.”
Both Disneys had resisted the issuance of stock. Theirs was an extremely personal business, and Walt despised the idea of having outsiders share in the decisions that he had made by himself throughout the company history. The two brothers had operated as a partnership until Walt Disney Productions was incorporated in 1929, assuming the partnership’s assets of $85,852 and liabilities of $32,813. The new company issued 10,000 shares of stock, 3,000 apiece to Walter and Lillian Disney and 4,000 to Roy. In 1938, Walt Disney Productions was reorganized to absorb three other companies that had been created in the early 1930s: Liled Realty and Investment Company, which took care of the Disneys’ real estate; Walt Disney Enterprises, which dealt with licensing of the cartoon characters; and the Disney Film Recording Company. The new Walt Disney Productions in 1938 issued 150,000 shares of stock, with Walt and Lillian Disney receiving 45,000 apiece, and Roy and Edna 30,000 apiece.
Despite Walt’s misgivings, Walt Disney Productions made its first public offering of stock in April 1940, with 155,000 shares of 6-percent cumulative convertible preferred stock at $25 par value and 600,000 shares of common stock at $5. The prospectus for the sale listed Walter E. Disney as President and Executive Production Manager of the corporation, and Roy O. Disney Executive Vice President and Business Manager. Total assets of Walt Disney Productions at the end of 1939 were $7,000,758.
The stock offering quickly sold out, contributing $3,500,000 of much-needed capital to the Disney company. Financial troubles were assuaged for a time, at least, but other problems began to appear.
During the last half of the 1930s, the Hollywood movie studios, like many other industries in the country, were undergoing unionization. Emerging from the nightmare of the Depression, the nation’s workers sought greater security in their jobs, as well as a larger share of the new prosperity. Franklin Roosevelt’s New Deal gave them the apparatus for unionization with the National Labor Relations Board. The film industry was ripe for the unions. Jobs were often subject to the whims of the producers and the fluctuations of the movie market. Filming went on six days a week, and night shooting was common, without overtime. Studio workers recalled vividly the grim times when they were ordered to take 50-percent cuts in salary during financial crises, while the executives made no such sacrifice. By 1940, most of the salaried workers in the industry—actors, directors, writers, crew members—had been unionized. The Disney studio had closed-shop agreements with musicians, cameramen, electricians, costumers, restaurant workers, makeup artists, prop men and other set workers. Union organizers next went after the cartoonists.
The nature of the Disney enterprise had changed immensely in a brief span of years. The studio work force had grown from a handful of artists working in day-to-day collaboration with Walt to a factorylike operation of a thousand persons. A close personal relationship with Walt was no longer possible for the great majority of employees, and many of them felt overlooked in the creative process. The move to the new studio was traumatic for some. Hyperion had been cramped and chaotic, but it had created a feeling of group endeavor. The Burbank studio, for all its order and comfort, seemed to magnify the stratification between job functions. Those in the lower categories felt neglected, underpaid. Indeed, some of their salaries seemed low, though not unusually so by post-Depression standards.
The hints of discontent were exploited by a new element in the studio. Many of them had arrived from the East during the expansion before and after Snow White, their double-breasted tweed suits and homburg hats contrasting with the sport shirts of the Californians. The newcomers were products of the artistic ferment of Manhattan, and they rejected the paternalism of Walt Disney. They argued that the only protection the studio workers had was in a union. Some of their listeners agreed, especially as the European war plunged the company into financial problems. With their market shrinking, the Disneys obviously could not afford the inflated staff. Rumors of mass layoffs circulated through the studio.
Two unions sought to organize the Disney cartoonists: the unaffiliated Federation of Screen Cartoonists and the Screen Cartoonists Guild, affiliated with the A.F.L. Painters and Paperhangers Union. The leader of the Screen Cartoonists Guild was a tough left-winger, Herbert Sorrell, whose strikes and jurisdictional battles brought turmoil to Hollywood labor. Sorrell’s hard-fisted tactics infuriated Walt. Years later, Walt gave this version of a meeting with Sorrell in Walt’s office:
Sorrell claimed he had a majority of the cartoonists in his union and demanded a contract. “You sign with me or I’ll strike you,” Sorrell threatened.
“I’ve got to live with those boys from now on,” Walt replied. “I must have a vote. You’ve got to put it to a vote through the Labor Board, and whatever way it comes out, I’ll go along with it. Then I’m keeping faith with them. I’m not signing with you on your say-so.”
“All right, I’m warning you,” Sorrell said. “I can make a dust bowl out of your place here, Disney. You
don’t know what you’re doing. The strike will hurt you. I can pick up that telephone and I’ll have you on unfair lists all over the country. I’ve got friends. I’ve got connections.”
“That may be true,” Walt said. “But I’ve got to live with myself. I can’t sign these boys to you. I have no right to. They have come to me from the other union and claimed you don’t have them. A vote will prove it.”
Walt decided to take the matter directly to his employees. In February 1941, he addressed studio meetings about “the real crisis we are facing…a crisis that’s going to vitally affect the future security of all of us.” He warned his listeners: “Everything you are going to hear is entirely from me. There was no gag meeting or anything to write this thing. It’s all me, and that will probably account for some of the poor grammatical construction and the numerous two-syllable words.”
He began by telling of the storms he had weathered during twenty years of the cartoon business. He delivered his credo: “I have had a stubborn, blind confidence in the cartoon medium, a determination to show the skeptics that the animated cartoon was deserving of a better place; that it was more than a mere ‘filler’ on the program; that it was more than a novelty; that it could be one of the greatest mediums of fantasy and entertainment yet developed.”
He told of his hungry years, how he and Roy sold their cars and mortgaged everything to meet the payroll in 1928, how they refused to join other producers in enforcing a 50-percent pay cut in 1933. Over seven years, almost $500,000 had been paid to Disney employees in bonuses and adjustments. He and Roy could have taken dividends worth $2,500,000; instead, they invested everything back into the company.
Walt outlined the hectic expansion following Snow White, the building of the new studio, the collapse of the foreign market and the financial crisis it brought. Three solutions were offered: salary cuts for everyone, which might have caused panic; abandonment of feature production, which would have laid off half the studio staff; selling a controlling interest to a major company or individual. Walt said he rejected all three, preferring to enforce economies that had helped to bring production costs down to more realistic levels.
He went on to blow down rumors that had been circulating and to deny that the new studio fostered a system of class distinction. One of the rumors was that girls were being trained to replace higher-priced male artists. Not so, said Walt. The girls were being trained to make them more versatile employees, to prepare for the future when men might be drafted, and to give women equal opportunities with men.
Walt also dealt with the much-asked questions: “Why can’t Walt see more of the fellows? Why can’t there be fewer supervisors and more Walt?”
He explained that the staff had grown too large for him to devote his attention to everyone, adding, “It’s my nature to be democratic. I want to be just a guy working in this plant—which I am. When I meet people in the hall, I want to be able to speak to them, and have them speak to me, and say ‘hello’ with a smile. I can’t work under any other conditions. However, I realized that it was very dangerous and unfair to the organization as a whole for me to get too close to everybody. This was especially true of new men. You all know that there are always those who try to polish the apple or to get their advancement by playing on sympathy. It is obvious that this is definitely unfair to the conscientious, hard-working individual who is not good at apple-polishing. I know and am well aware of the progress of all the men after they reach a certain spot in this organization….And, fellows, I take my hat off to results only.”
Walt concluded by citing the studio’s heavy financial load—weekly operating expense of $90,000—$70,000 in salaries—and by pointing out the employees’ advantages in vacations, holidays, sick leave, etc. The remainder combined pep talk (“The future of this business has never looked better…and I want you to know that I’m rarin’ to go”) and blunt realism (“It’s the law of the universe that the strong shall survive and the weak must fall by the way, and I don’t care what idealistic plan is cooked up, nothing can change that”).
He closed by quoting his memorandum to the staff: “The Company recognizes the right of employees to organize and to join in any labor organization of their choosing, and the Company does not intend to interfere with this right. HOWEVER, the law clearly provides that matters of this sort should be done off the employer’s premises and on the employees’ own time, and in such a manner as not to interfere with production….”
It had been a rare performance by Walt Disney, an exercise in self-revelation which had never happened before and never would again. That he would be so frank and open with his massed employees indicated how serious he considered the situation. Recent events had perplexed him—the descent of the company’s fortunes, the disaffection of a portion of his workers, the threats from Sorrell. In the next months he often responded from raw emotion, saying and doing things he later realized were unwise. Some of his associates believed he was being ill served by advisers who considered a tough stance as the best policy.
On May 29, 1941, Walt was astonished to find a picket line in front of the studio. Herb Sorrell had called the Screen Cartoonists Guild out on strike, claiming support of a majority of the Disney cartoonists. Yet 60 percent remained on the job. Of the three hundred strikers, many were sincere believers in the principle of unionization. Some were concerned about the recent and impending changes at the Disney studio and were convinced that a union was the best protection for their jobs. Some were radicals who seemed more interested in the strike itself than in the results it might bring.
Walt at first took the strike lightly. On the second day, he stood inside the studio gate and shouted wry comments to those he recognized in the picket line. “Aw, they’ll be back in a couple of days,” he said.
But they weren’t. Herb Sorrell directed the strike from a tent pitched in the vacant lot across from the studio entrance, and he stepped up his campaign. Unable to shut down Disney production when other unions refused to honor the picket line, Sorrell organized a secondary boycott of Technicolor, and he successfully stemmed the flow of film into the studio. Sorrell launched a propaganda campaign in union papers and leftist publications across the country, accusing Disney of being anti-union and operating a sweatshop. The anti-Sorrell Federation of Screen Cartoonists was branded as a company union.
Walt struck back with public statements and paid advertisements—almost with his fists. One day as Walt parked his car inside the gate, one of his striking animators announced over the loudspeaker: “There he is—the man who believes in brotherhood for everybody but himself.” Walt started taking off his coat and was stalking toward the gate when studio police intercepted him.
He found it punishing to sit in negotiation meetings and listen to his own employees try to dictate conditions under which they wanted to work. In his public statements he said naive things that were damaging to his own cause. Finally, out of frustration and dismay, he walked away from the strike, accepting an offer for a goodwill and film-making tour of South America. Before he left, he poured out his feelings in a letter to a newspaper columnist:
To me, the entire situation is a catastrophe. The spirit that played such an important part in the building of the cartoon medium has been destroyed. From now on, I get my artists from the hiring hall of the Painters and Paperhangers Union. Out of the 700 artists and assistants coming under this jurisdiction, 293 were on strike and 417 remained at work.
The Union refused to use the ballot to give the people here the right to determine their choice. In turning down the ballot, they said, to use their own words: “We might lose that way. If we strike, we know we will win.”…
I was willing to sacrifice everything I had and would have fought to the last ditch had it not been for the fact that a lot of innocent people might have been hurt. It didn’t take long to see that there wasn’t a fair, honest chance of winning; the cards were all stacked against me, so for the time being I have capitulated, but, believe me, I’m not li
cked—I’m incensed….
The lies, the twisted half-truths that were placed in the public prints cannot be easily forgotten. I was called a rat, a yellow-dog employer and an exploiter of labor. They took the salaries of my messenger boys and claimed them to be the salaries of my artists. My plant and methods were compared to a sweatshop, and above all, I was accused of rolling in wealth. That hurt me most, when the fact is that every damned thing I have is tied up in this business. The thing that worries me is that people only read headlines and never take enough time to follow through and find out the truth.
I am convinced that this entire mess was Communistically inspired and led. The People’s World, The League of Women’s Shoppers, The American Peace Mobilization and every known Communistic outfit in the country were the first to put me on their unfair list. The legitimate American Federation of Labor unions were the last and they were reluctant to move….
I am thoroughly disgusted and would gladly quit and try to establish myself in another business if it were not for the loyal guys who believe in me—so I guess I’m stuck with it.
This South American expedition is a godsend. I am not so hot for it but it gives me a chance to get away from this God-awful nightmare and to bring back some extra work into the plant. I have a case of the D.D.’s—disillusionment and discouragement….
By the time he returned from South America, the strike had been settled—badly. The resolution brought even more problems, especially when the inevitable layoffs came with the slowing down of production. Strikers and nonstrikers had to be dismissed in a predetermined ratio, producing hardship and bitterness.
Walt was on his travels when he heard of the strike settlement. One of his companions from the studio muttered comments against the strikers. “Now, wait a minute,” Walt interrupted. “For whatever reason they did what they did, they thought they were right. We’ve had our differences on a lot of things, but we’re going to continue making pictures, and we’re going to find a way to work together.”