The Man Who Made the Movies

by Vanda Krefft

  The proceedings rapidly descended into warfare. Defying the court’s instructions, Fox refused to permit access to All Continent’s records. When Steedle ordered Herbert Leitstein, Fox’s bookkeeper since 1909, to turn over the books, Leitstein clutched them tightly and refused to let go. As for Fox’s personal financial records, Leitstein claimed that they had “disappeared” in 1930 and that he hadn’t “the slightest idea” who’d taken them. Steedle cited Leitstein for criminal contempt.

  Under questioning by the creditors’ lawyers, Eva Fox, who was nominally All Continent’s president and who’d received a $25,000 salary for 1935, claimed to have no memory of recent transactions. “I’ve been sick and I’m just sitting here in a daze. I can’t remember anything,” she pleaded. Steedle let her go, but ordered her back the following day. She sent a doctor’s note instead. Although a court-appointed doctor found her well enough to testify a few days later, she still didn’t return. Steedle cited Eva, too, for contempt.

  Outwardly, Fox made a show of arrogance, laughing at the Capital Company’s lawyer and called the hearings “child’s play.” Privately, he was worried. He had challenged two of Steedle’s unfavorable rulings in the Federal District Court in Camden, New Jersey, had lost, and had appealed both cases to J. Warren Davis’s Third Circuit Court of Appeals. Davis would have to make the right decisions.

  That was going to cost extra.

  With both cases pending, Davis phoned Fox and arranged to meet on December 18, 1936, in a room at the Adelphia Hotel in downtown Philadelphia. There, Davis told Fox that his daughter, now Mary Firestone, had given him money for safekeeping. He wanted to return it, but had spent it. Could Fox lend him—in cash, of course—$12,500? This would be the same kind of “loan” as before, never to be repaid and never to be asked for.

  Fox got the money in twelve new $1,000 bills and $500 in other new bills and took the train from Atlantic City to Philadelphia’s Broad Street Station. There, after calling Davis from a pay phone, he bought a newspaper, wrapped the money in it, and then walked the short distance to meet Davis at the corner of Twelfth Street and either Chestnut or Walnut Street (later, he couldn’t remember which). Fox said, “We withdrew into the hallway of a building and I handed Judge Davis the money.” The transaction took two or three minutes. Neither spoke. Then Fox returned to Atlantic City.

  Davis gave Fox his money’s worth. Of the total of five Fox bankruptcy cases that came before the Third Circuit Court of Appeals between 1936 and 1938, all five were decided in Fox’s favor. All the opinions were signed by the elderly Buffington, but as Buffington later admitted, they had all been written by Davis.

  A particularly blatant display of bias occurred regarding Eva’s contempt citation, which bankruptcy referee Steedle had issued in September 1936. In January 1938, Davis appointed another doctor, his good friend, the dean of Philadelphia’s Jefferson Hospital, to assess Eva’s condition. Never having seen her before, Dr. Ross V. Patterson decided that, in fact, sixteen months earlier she had been too ill to testify. The Davis court then invalidated Eva’s contempt citation. It was a shocking course of events, not only because Patterson couldn’t possibly have inferred Eva’s previous condition from present data, but also because, by law, the Circuit Court of Appeals was supposed to consider only the existing record and not any new information. When the opposing lawyers, representing the bankruptcy trustee and Fox’s creditors, protested, Davis simply disregarded them. So that was that.

  Inflamed by his legal victories, Fox’s desire for revenge burned through relationships and the remnants of relationships that might have helped him recover. His unchecked rage alienated George Wharton Pepper, the distinguished Philadelphia lawyer who had represented him before the U.S. Supreme Court on the Tri-Ergon case and who had agreed to work on one aspect of the bankruptcy case. In late 1936, several of Fox’s New York lawyers drafted a court pleading that they wanted Pepper’s firm to rubber-stamp. “And we had some rather acute controversy about it,” Pepper recalled. The document “did not square with my ideas of professional propriety. They called people names. They engaged in, well, I think it was a vituperative, bad-mannered, bad-tempered document and I would not stand for it.” Pepper’s firm quit the case.

  Fox also became estranged from one of his most steadfast allies, brother-in-law Jack G. Leo. Fox owed money to Leo, and although he had plenty of it, he doled it out in slow, parsimonious installments. By the time Fox made the final payment around the beginning of 1937, Leo felt “a bitterness on both sides, which I don’t believe will ever be smoothed out, and I am just as well pleased that the matter stands as it is.”

  Then, bizarrely, in the late spring of 1937, Fox went to Hollywood to demand restitution from Twentieth Century–Fox. After failing to get what he wanted from chairman of the board Joe Schenck and company president Sidney Kent, he approached Sol Wurtzel, still head of the Western Avenue studio. Wurtzel, having just returned from a vacation in Asia, found a message on his desk reading, “Mr. Fox returned your call—he is stopping at the Beverly Wilshire Hotel.” In fact, Wurtzel had made no such call, but Fox couldn’t acknowledge that he was in a needy position. When a curious Wurtzel phoned back, Fox invited him to lunch at his hotel the next day. “It was the first time I had seen him in about eight or nine years,” Wurtzel wrote to Jack Leo and his wife, Rose. “I immediately assumed that the reason he called me was because he wanted something from me. This I found to be correct.” Fox asked Wurtzel to press Schenck and Kent to call off the Fox companies’ 1932 lawsuits against him and pay him $1.8 million in back salary.

  Wurtzel was astonished: “Of course, I felt Fox’s demand for settlement was ridiculous. However, I told him I would speak to Kent and Schenck.” Kent and Schenck told Wurtzel, as they had told Fox, that only the board of directors could settle the matter. Then Fox made an even more absurd request. He wanted Wurtzel to tell his two bosses that unless they gave Fox what he wanted, he, Wurtzel, would be very unhappy, and if he were unhappy “my work would suffer and the pictures would suffer.” And if Kent and Schenck then suggested that Wurtzel resign? Wurtzel would land on his feet, Fox promised, because he intended to start a new production company and Wurtzel could run the business for him.

  “This request was so ridiculous that while he was talking to me . . . I came to the conclusion that either Fox thought I was an idiot, or that he himself was a lunatic or desperate or ruthless,” Wurtzel recalled. “When he made the statement to me that he was going back into the film business, he forgot that he mentioned to me the day previous that he was financially broke.”

  Finally Wurtzel had an opportunity to exact revenge for all the years of abuse he had suffered. “I told Fox his request was an important one and I would like to think it over for a few days. The next morning I called up Joe Leo and told him to tell Fox that I considered his request preposterous and so ridiculous that I did not want to see him or talk to him again, that he would do me a great favor by not communicating with me.” Wurtzel had given Fox his private phone number. “This I immediately had changed, and also left word at my home that in case Fox called I was not in.” They never saw each other again.

  On Sunday, July 9, 1937, around 3:00 a.m., a series of explosions shook the Little Ferry, New Jersey, warehouse to which Twentieth Century–Fox had banished all its prints and negatives of William Fox–era movies. The trouble began when, in one of the building’s improperly ventilated vaults, gases from decomposing nitrate film spontaneously ignited. Flames spread quickly to all the other vaults, shot out of windows in tall sheets, set five nearby homes on fire, severely injured several bystanders, and pitched “blazing rolls of film” every which way. The entire archive was obliterated. Gone forever were the only known copies of most of the films Fox had produced.

  Twentieth Century–Fox hadn’t sent all its old movies to the Little Ferry warehouse—only everything* from 1914 to 1932, the year that the Chase Bank fired Harley Clarke and began trying to pull the studio out of the abyss into which
everybody’s bad decisions had plunged it. The studio’s new leaders wanted to bury history. Fate—and a heat wave during which temperatures soared to one hundred degrees and a shoddily constructed facility without automatic sprinklers—went them one better. Now there would be scant evidence to remind anyone of William Fox’s once-towering stature in the motion picture industry.

  “What are you grieving for, Mr. Fox?” Everything, it seemed: his lost kingdom, his ruined legacy, the broken promises of his beloved country, and finally, irretrievably, his honor, which he himself had willfully destroyed.

  CHAPTER 52

  Confession

  More or less, there is always something the matter with me.

  —WILLIAM FOX, AUGUST 1941

  Inevitably, Fox was caught. With rumors abounding for years about Judge J. Warren Davis’s corrupt practices—one of his judicial colleagues said Davis was a “crook and always has been”—the FBI focused on him in early 1939, soon after opening a nationwide investigation of misconduct among federal judges. Scrutiny of Davis quickly led to an examination of his court’s five controversial rulings in the Fox bankruptcy case, all of which had favored Fox regardless of law or logic.

  At first, Roosevelt administration higher-ups tried to sweep the Davis matter under the rug. In the spring of 1939, U.S. attorney general Frank Murphy pressured Davis to retire, evidently on the assumption that the FBI probe would then dissolve. Davis acceded. At seventy-two and eligible under a 1937 law to receive his full $12,000 annual salary for life, he well knew the risks of remaining on the bench. In addition to his dishonest dealings with Fox, Davis had evidently sold decisions in many other big-money lawsuits. Among them were cases involving Paramount Pictures, Singer Sewing Machine, the Kelly-Springfield Tire Company, Universal Oil Products, and New York poultry racketeer Joseph Weiner.

  To minimize institutional embarrassment, Attorney General Murphy tried to present Davis’s departure as a respectable event. He told the press, “You can be sure that when anyone retires he is confident that his record is clear.” Likewise, President Roosevelt, approving Davis’s retirement application in late April 1939, wrote to the judge to thank him for his twenty-two years of service on the federal bench (including eighteen on the Third Circuit Court of Appeals) and to wish him “many years of health and happiness.”

  Actually, it wasn’t going to be that easy. After learning that Davis had received a letter of exoneration, District Court judge William Clark, who had fought with Davis for years over what he believed were his corrupt decisions, went on the warpath. Clark, a Harvard graduate and heir to the Clark Thread Company fortune, told the FBI that he and other federal judges were not going to take this “laying [sic] down.” They wanted to see Davis in prison. So, as it turned out, did J. Edgar Hoover, who considered Davis a primary target of the judicial investigation.

  Facing such a strong backlash, Attorney General Murphy pivoted and threw his full weight behind the effort to expose Davis. In early June 1939, Murphy announced that the Justice Department was assigning some of its best agents to examine Davis’s “financial transactions and difficulties.” This was the same team that several days earlier had won a landmark corruption-of-justice conviction against Second Circuit Court of Appeals judge Martin T. Manton. (In 1934, Manton’s court found in favor of Fox on the New York part of his Tri-Ergon patents case; that ruling wasn’t presented at Manton’s trial because the prosecution had an abundance of other evidence.) A Columbia Law School graduate who had once been rumored as a prospect for the U.S. Supreme Court, Manton was the first federal appeals court judge to be tried for, and thus also convicted of, influence peddling.

  Invigorated by the Manton victory, the government bore down hard on Davis. In late August 1939, Davis was barred from sitting in any new cases, even though retired judges were supposed to remain available for duty if needed—that was the reason they drew full salary. Then, in February 1940, the Circuit Court of Appeals began rehearing twelve cases decided by the Davis court. Fox came into the crosshairs in February 1940, when a federal grand jury in New York began to investigate Davis’s activities there. Subpoenaed as a witness, Fox underwent several preliminary interviews with prosecutors that spring and appeared twice before the grand jury there. Apparently not yet realizing that he’d had direct contact with Davis, but out to get Kaufman as Davis’s intermediary, prosecutors asked only about Fox’s relationship with Kaufman.

  Outwardly Davis feigned indignation, denouncing the accusations against him as “false and pernicious” and the result of a contemptible personal vendetta against him by Judge Clark. Privately, he panicked. He wasn’t worried about Fox’s first $15,000 payment. Fox had given that to Kaufman in small bills that couldn’t be traced. The second payment, of $12,500, was another story. Fox had handed that to Davis in twelve $1,000 bills, and Davis had passed five of those bills along to his daughter, Mary Firestone, who had deposited them in a Florida bank. How closely did banks track high-denomination currency?

  At Davis’s insistence, he and Fox met in early 1940 at New York’s Hotel Pennsylvania, across the street from Pennsylvania Station. They hadn’t seen each other since December 1936, when Fox gave Davis the $12,500 wrapped in newspaper in the Philadelphia office building hallway. Davis wanted Fox to find out whether his bank in Atlantic City had recorded the serial number of the thousand-dollar bills. Fox said he would check. He didn’t even try. He no longer cared what happened.

  His indifference turned to revulsion in early July 1940, when they met a second time at the Hotel Pennsylvania, again at Davis’s request. Highly agitated, Davis had learned a few days earlier that federal agents had traced the serial numbers of the five $1,000 bills from Belle Fox’s bank account in Atlantic City to Mary Firestone’s Florida bank account. They needed a good cover story, Davis said. Would Fox go along with this? For years, Davis had loaned money to a secondhand tire dealer in Trenton, New Jersey, David Lewis. Fortunately, David Lewis was now dead. Davis asked Fox to tell federal investigators that he, Fox, had borrowed $5,000 from Lewis and had paid it back with the disputed bills. Davis would then claim that Lewis had used the same money to repay a loan to him.

  It’s difficult to guess which aspect of the story Fox found more offensive: its utter implausibility or the notion that he, who had once dealt with the nation’s leading financiers, would be reduced to cadging money from a man who bought and sold discarded automobile parts. Whatever the reason, Fox balked. “I said I couldn’t possibly do that. I had never met the man in my life. I didn’t want to become involved in that at all.” As a compromise, he did agree to say, because it was true, that his daughter Belle had often deposited thousand-dollar bills at the Land Title Bank and Trust in Philadelphia, where David Lewis also did business. As for the way the money had made it through to him, Davis planned to say that Lewis had tried to repay a loan to him with a pile of grubby, wrinkled small bills, but he had refused to accept them and had told Lewis to go to the bank to get fresh, crisp large bills. It was still a highly unlikely tale, but at least Fox would be only tangentially involved.

  For the next eight months, Fox rigorously avoided Davis.

  He could not, however, sever their past ties. In early 1941, when the FBI’s investigation of Davis shifted to Philadelphia, a grand jury there subpoenaed Fox as a witness. In preliminary interviews in early March in New York, government agents asked him if he had ever given money to Davis or to Kaufman to give to Davis. Fox said no. The agents told Fox they knew he was lying. Get a lawyer, they advised, and tell the truth.

  During the following week, Fox changed his position dramatically. Abandoning his passive hope that the trouble would go away and leave him alone, he decided to take responsibility. However, Davis and Kaufman would have to go down, too.

  To establish evidence of his direct connection to Davis, Fox laid a trap. Through Morgan Kaufman, he set up a meeting for Monday, March 17, 1941, at the Governor Clinton Hotel at Thirty-First Street and Seventh Avenue. As instructed by Fox’s l
awyer Murry Becker, Davis checked in under a false name, signing the registration card in front of the desk clerk as Herman Goldberg, the name of one of Kaufman’s friends in Pennsylvania. As an unexpected bonus, a hotel chambermaid saw Davis repeatedly peering around the corner in the hallway outside his room while waiting for Fox, and shortly afterward, she saw Fox enter Davis’s room. Fox stayed for an hour and a quarter and assured Davis he would tell the Philadelphia grand jury that they had never met.

  The next day, on March 18, 1941, Fox told another of his lawyers, Martin W. Littleton, that he was ready to confess.

  It wasn’t inconsistent that after fighting so zealously and expensively for several years to perpetrate a fraud, Fox should now surrender. His five purchased decisions in Davis’s court had been hollow victories. He hadn’t gotten any satisfaction from demonstrating the easy corruptibility of the justice system, and money for its own sake had never meant much to him. Money as a symbol of social status did matter greatly, yet he had proven himself an enemy of society by striking at one of its primary institutions, the judicial system. His conscience had never left him alone. He wanted to confess, he later explained, to “cleanse my soul.”

  Fox was also deeply troubled by the shame and distress he had heaped on the people he loved. Already there had been one casualty. At 2:00 p.m. on October 25, 1939, several months into the Davis investigation, Fox’s seventy-three-year-old cousin Charles S. Levin had jumped off the roof of the ten-story building adjacent to the Cameo Theatre, at 138 West Forty-Second Street. A co-owner of the Cameo, which for the past ten years had shown mostly Russian Communist films, Levin had been the corporate secretary of Fox Film and one of its board members during Fox’s reign. If the FBI hadn’t already approached him, he must have feared that prospect. A witness saw Levin kneeling at the eastern end of the roof muttering to himself and then walking over to the west side and jumping.