The Man Who Made the Movies

by Vanda Krefft

  The MPPC reacted with denial and escalating force. Preposterously, MPPC president Dyer insisted in an October 1909 issue of The Kinetogram, the Edison Company’s house organ, “There is a complete understanding between the manufacturers, exchanges and the exhibitors. The best of good-will and harmony prevails.” In case that didn’t fool anyone, and it didn’t, the MPPC also hired detectives, gave them guns and star-shaped badges, and sent them out to destroy unlicensed producers’ equipment, expose their film, and burn down sets. Many independent producers decamped to California, not only for the abundant sunshine, but also to elude MPPC enforcers.

  Unable to stem independent film production, the MPPC declared war on film rental agency owners. As the middlemen between producers and exhibitors, they provided a conduit to market for unlicensed films. By early 1910, only a year after the licenses were granted, the MPPC had whittled its slate of film renters down from one hundred twenty to sixty-nine, largely by license cancellation. (Some agencies went broke.) To finish off the remaining sixty-nine, in February 1910 the MPPC created its own film rental subsidiary, the General Film Company (GFC), to distribute movies made by the ten MPPC production companies. Doing business from Manhattan, the GFC began to knock off its competition by buying out businesses or having the MPPC cancel more licenses.

  By late summer 1911, out of the one hundred twenty rental agencies licensed in January 1909, only one other than the MPPC’s GFC remained anywhere in the United States: Fox’s Greater New York Film Rental Company, which had about five hundred exhibitor customers.

  At first, Fox thought the GFC would tolerate him on the sidelines. Relatively small as it was, his company couldn’t cause much disturbance to the giant organization. The MPPC took a different view. Fox’s company might be small, but it was small in the way of a fly buzzing around in a machine, persistently throwing off the perfect working order. For instance, whenever a GFC branch manager tried to raise prices, customers commented that they could transfer their business to Fox’s company, which hadn’t raised its prices. The GFC manager always had to back down.

  MPPC executives got out their flyswatters. In September 1911, they had Fox’s friend Percy L. Waters, the former owner of another successful New York City rental agency who had been one of the first to sell and who, in return, had been named the GFC’s general manager, invite Fox to his office at 200 Fifth Avenue for a cordial chat. The MPPC had kindly left Fox for last, Waters explained, but now it was time.

  “Waters, look here, I no more want to sell this business than fly off the roof,” Fox snapped. Greater New York was relatively easy to run and was earning annual profits of $60,000 to $75,000.

  Then, when Waters warned him that he might not get another chance, Fox understood. He didn’t really have a choice. And maybe it wouldn’t be so bad. He would still have his theaters. Waters called in his boss, GFC president Jeremiah J. Kennedy, to negotiate the price. Figuring Greater New York to be worth $600,000 to $750,000 based on annual earnings, but aware that the GFC had paid other agency owners “ridiculously low figures,” Fox asked for only $150,000.

  Out of the question, barked Kennedy, a former efficiency engineer who had developed a reputation as a “two-fisted, hairy-chested boss.” The GFC would pay no more than $89,000 for Fox’s company—little more than a year’s earnings. “Mr. Kennedy, if that is the best that you can do, of course I don’t want to sell,” Fox said. Kennedy retorted, “If your license is cancelled, Fox, don’t blame me.”

  That was foolish, Waters chided Fox when they went downstairs afterward for a drink in the building’s café. The GFC was a “great, big, gigantic wheel” and Fox merely a “small chip of wood” in its way. Waters warned, “Every time we meet you, we have got to run over you and crush you.”

  They soon began trying, first by spreading rumors among New York City theater owners that Fox was about to lose his rental license. Fearing an interruption in service, many of his customers transferred their business to the GFC, which temporarily lowered its prices as an added incentive. When Fox managed to hold on, Kennedy fulfilled his threat and, on November 14, 1911, sent Fox a notice canceling his license, effective at 8:00 a.m. on Monday, December 4, 1911. Fox had allegedly violated his contract by allowing MPPC films to be shown in a Hoboken, New Jersey, brothel. Fox knew nothing about that. Upon investigation, it turned out that an employee of one of his customers who was supposed to be returning the reels to the agency had been bribed to divert them. Fox sent an employee to the GFC to explain. No one wanted to listen. The only subject available for discussion was the sale of his rental agency.

  For the next two weeks, Fox attempted to negotiate a better price. Kennedy stonewalled, refusing to accept or return his phone calls. Finally, on Friday afternoon, December 1, only three days before his scheduled contract cancellation, the GFC’s “big chief” agreed to let Fox come to his office. Kennedy had previously offered $89,000. Now, he said, to help the deal along, he’d give Fox $90,000.

  Fox tried to push the price up to $100,000. Kennedy refused. It was just plain meanness. The extra $10,000 would have meant nothing to either the GFC or its parent company, the MPPC. Fox gave up. He agreed to sell his rental agency to the GFC for $90,000, effective December 11, 1911.

  Actually, Fox only appeared to give up. His conversation with Kennedy was a carefully planned trap.

  As he was about to leave Kennedy’s office, Fox turned to mention one more point. If his license were to expire as scheduled on Monday, December 4, then all his customers would receive no films for that week because the GFC wouldn’t own the company until the following Monday. The customers would take their business elsewhere, quite possibly to the independents, and the GFC would end up having purchased “a pile of junk.”

  “That is so, son.” Kennedy nodded. The next morning, Fox received a letter from the MPPC withdrawing his license cancellation. Soon, the rental agency sale contracts arrived.

  Instead of signing, on December 7, Fox had his lawyer, Gustavus Rogers, phone Kennedy to tell him the deal was off. On December 8, Fox received another cancellation notice, this one effective at 8:00 a.m. on Christmas Day, 1911. No sale, no license.

  Fox was quite happy to get that message. It was just the proof he needed.

  On December 16, 1911, Fox’s Greater New York Rental Company sued the MPPC. The two-hundred-plus page complaint alleged that the MPPC had been formed to stifle and suppress competition among film producers and to drive all independent film rental agencies out of business, with the ultimate goal of monopolizing the motion picture industry. The lawsuit had an important ulterior motive: it provided a platform for Fox to urge the federal government to take action against the MPPC.

  Again, Fox’s political connections served him well. To represent him, he hired two fierce legal lions, both Tammany Hall loyalists: Samuel Untermyer, a longtime antimonopoly crusader who would soon serve as counsel to a landmark U.S. House of Representatives subcommittee investigating the “money trust,”* and Alton B. Parker, a former judge and the Democratic Party’s unsuccessful 1904 presidential candidate. A highly theatrical presence inclined toward grandstanding, Untermyer wrangled an appearance in March 1912 before a U.S. congressional committee to testify against the MPPC. There, he described Fox as the “David” of small exhibitors—not exactly so, but useful for dramatic purposes—who was single-handedly fighting a brazen and ruthless giant. Untermyer also accompanied Fox and Gustavus Rogers to a meeting with U.S. Attorney General George W. Wickersham to lobby for antitrust prosecution. Expertly guided, Fox lodged his complaint against the MPPC.

  Once again, Fox’s timing was most fortunate. The Justice Department, spurred by President Taft, had recently undertaken a flurry of high-profile antitrust prosecutions. Trust-busting had started in earnest under Taft’s predecessor, Theodore Roosevelt, and had accounted for a large measure of Roosevelt’s tremendous popularity. Although he’d been Roosevelt’s handpicked successor, Taft initially seemed like a pale imitation. “Takes Advice From Th
eodore,” some joked. Even Roosevelt was disappointed, writing to a friend in June 1910 that Taft seemed “a rather pitiful failure.”

  Aware that he was in trouble with his public image and worried about the consequences for his 1912 reelection campaign, Taft fell back on antitrust as a crowd-pleasing issue. Here, sincerity meshed with expedience. Taft believed that the 1890 Sherman Antitrust Law was “one of the most important statutes ever passed in this country.” He once told his brother Henry, a partner in a leading Wall Street law firm, “Wall Street, as an aggregation, is the biggest ass that I have run across.”

  Taft’s attorney general, George W. Wickersham, felt even more strongly about the subject. Regarding trade monopolies as “evil,” Wickersham insisted that the federal government had to intervene because “Only free men—not industrial slaves—can maintain free institutions.” Wickersham would ultimately file some eighty antitrust lawsuits, nearly doubling in Taft’s one presidential term the record of the two-term Roosevelt regime. Although privately Taft fretted that Wickersham had gotten carried away, publicly he supported him.

  Still, the MPPC case couldn’t have been an easy sell for Fox. It didn’t fit the profile of the government’s other antitrust cases, which so far had focused on industries either essential to commercial development (railroads, steel, oil, aluminum, shipping, cash registers, lumber) or central to average daily life (meat, sugar, tobacco, bathtubs, shoes, coffee, watch cases, plumbing supplies, window glass). No one had to go to the movies, and the national economy wouldn’t fall apart without them.

  Furthermore, the Justice Department in 1912 was in no shape to take on complicated new prosecutions. Even three years later, the department would have an annual budget of only about $10 million, and that money had to cover the salaries of all U.S. judges, attorneys, and marshals. The attorney general’s office had only about sixty staff lawyers, many of whom were young and inexperienced. Clerical functions suffered so badly that files were often left to rot in dark, dirty, overcrowded rooms where, according to a Justice Department investigator, “an electric searchlight is a necessary part of the equipment of one looking for documents.” Straining such meager resources were other imminent priorities. For example, on April 30, 1912, after years of investigation, the Justice Department would file one of its largest and most complex antitrust lawsuits, charging the International Harvester Company and its twenty-four subsidiaries, altogether a $140 million concern, with illegal restraint of trade.

  Fox, however, knew how to get what he wanted against great odds. Essentially, he offered to do much of the government’s job for it, providing all the necessary information and outside resources. It was an irresistible proposition. In the spring of 1912, shortly after Fox’s meeting with Wickersham, the Justice Department began investigatory hearings that uncovered hundreds of cases of wrongdoing, and on August 16, it filed an antitrust suit against the MPPC, its member film producers, the General Film Company, and eleven company officers. According to the government’s petition, the MPPC had bullied its way into controlling 70 to 80 percent of the U.S. motion picture business and operated “to harass and oppress all persons engaged in the motion picture business who have not obeyed its mandate.” In short, the MPPC and the GFC constituted illegal monopolies and ought to be dissolved.

  The filing of the antitrust lawsuit dealt a staggering blow to the MPPC. Massive legal fees, bad publicity, and potentially death loomed for the organization. Edison must have been furious. He detested the Sherman Antitrust Law, which he said had been written by men who “didn’t know pig iron from coffins,” and planned to write a one-page proposed replacement law.

  Fox could hardly celebrate this important step forward. Elsewhere, disaster had struck.

  CHAPTER 9

  Madness and Murder

  Fox’s political protector and financial backer, Big Tim Sullivan, had gone mad.

  Big Tim’s symptoms first manifested in the summer of 1912, just as the U.S. Justice Department was preparing to file its antitrust prosecution of the MPPC. Convinced that devices had been hidden in walls, floors, and furniture to record his conversations, forty-nine-year-old Big Tim began to speak only in a whisper, and he developed paranoid delusions that people were trying to poison him with noxious gases or contaminated food. According to his doctor, he “had the face and bearing of a man living in constant terror.”

  A contributing cause may have been tertiary syphilis. That rumor gained ground not only because of Big Tim’s oversight of New York City’s prostitution business, but also because he had had a number of extramarital affairs. Psychological troubles also plagued him. Despite his façade of cheerful confidence, for years Big Tim’s world had been falling apart.

  The great man’s downfall began in 1909 with a series of personal losses. During that year, Big Tim lost two family members who were among his strongest political supporters. Distant cousin Florrie Sullivan, leader of the powerful Eighth Assembly District, died in June from complications of a nervous breakdown. Then, on December 22, Big Tim’s beloved cousin Little Tim Sullivan died at age forty. Officially, Little Tim was felled by a combination of the kidney ailment Bright’s disease and endocarditis. However, according to rumor, he, too, had suffered a nervous breakdown induced by political worries and large financial losses from a crooked stock deal. Little Tim’s death was an especially hurtful blow. He had been Big Tim’s closest friend and most trusted ally, and he was the person Big Tim had counted on to replace him when he retired from politics. At his Christmas 1909 feast, Big Tim looked around at the crowd and began to sob. He left in tears several minutes later.

  Big Tim’s political constituency had also started to crumble. As previously powerless immigrants began to pull themselves up into the middle class and gain a sense of their rights as Americans, public tolerance for crime and corruption eroded. Self-protectively, public agencies and institutions had to appear to respond to the call for law and order. To some extent, Tammany, helper of the helpless, had served its historical function so well that it was becoming obsolete. In the November 1909 municipal election, the organization suffered an unexpectedly crushing defeat. Despite the victory of its mayoral candidate, Judge William J. Gaynor, Tammany lost the Manhattan and Bronx borough presidencies and many other influential offices. Taking office, Gaynor broke ranks and cut back severely on patronage, sending a number of neighborhood Tammany clubs into serious financial trouble when they could no longer provide jobs for their followers.

  Inevitably, Big Tim became a target. In September 1910, the Citizens Union put him on its “bad boy” list of state senators and recommended that he not be reelected. While it was nothing new for Big Tim to be attacked by “over-cultured, educated gentlemen,” as he called them—the New York Times once condemned him as “a person who is simply not fit to be at large in a civilized community”—the Citizens Union was gaining credibility among average voters as a nonpartisan public-interest watchdog.

  Then, on May 27, 1911, with more symbolic portent than real-life events usually offer, Dreamland, the Coney Island amusement park where Big Tim was a director and major shareholder, burned to a crisp. An early morning fire that began at the Hell Gate scenic railroad attraction spread quickly due to strong winds, destroying some two hundred buildings worth an estimated $3–$4 million. The park’s architectural beacon, a 370-foot-tall white-and-gold, French Renaissance–style tower lit by a hundred thousand electric bulbs, burned like a torch for five or ten minutes, then wavered and collapsed into a steaming saltwater lagoon. Simultaneously, the Dreamland Pier crackled down to its steel foundations. Amid the chaos, the park’s resident employees ran away with cash registers and stacks of souvenirs, while wild animals went berserk. Black Prince, a large lion, broke loose from his restraints, was riddled by police bullets, and ran with his mane aflame toward some painted scenery of Africa. There, after a policeman split his skull in two with a fire axe, he got hacked apart by souvenir scavengers.

  By dawn, Dreamland was in ruins. Insur
ed for only $400,000, it would never be rebuilt, a massive loss for Big Tim.*

  A year later, one of the most shocking events in New York City history destroyed the remains of Big Tim’s sanity.

  Moments before 2:00 a.m. on Tuesday, July 16, 1912, small-time gambling house owner Herman Rosenthal was murdered on the busy, brightly lit sidewalk outside the Metropole Hotel* on Forty-Third Street between Broadway and Sixth Avenue. As Rosenthal left the hotel, where he’d been having a late dinner, four gunmen leapt out from behind the doorway shrubbery, blasted four or five shots at him, then ran away and drove off in a large, slate-colored Packard. Hit twice, Rosenthal screamed, threw up his hands, stumbled backward into the hotel door, crashed facedown onto the pavement, and died.

  The brazenness of the crime outraged the city, especially because evidence pointed overwhelmingly to a Police Department conspiracy. Two weeks earlier, Rosenthal had started providing information about police corruption to District Attorney Charles S. Whitman, a Republican who had been elected by a landslide on the anti-Tammany Fusion ticket in 1909. Rosenthal wanted revenge: he believed that his partner in the Midtown gambling den the Hesper Club, police lieutenant Charles Becker, had betrayed him by staging a raid and causing his arrest in order to please the police commissioner. Rosenthal had been scheduled to testify before a grand jury at 8:00 a.m. on July 16. He was killed six hours before.

  Officially, Becker would be held responsible. Convicted of first-degree murder in October 1912 for hiring the four gunmen, he would die in the electric chair on July 30, 1915, at Sing Sing Prison, the first U.S. police officer to receive the death penalty for murder. Becker always denied any involvement in the crime and denied even having had a stake in the Hesper Club. While it’s highly unlikely he was completely clean, evidence suggests that it may have been Big Tim Sullivan who masterminded Rosenthal’s murder.