RKO Radio Pictures

by Richard B. Jewell

  Is there a simple explanation for the poor quality of studio product during RKO's first three years? No, but some tentative answers may be suggested. Beginning with William LeBaron and including its producers, directors, and stars, most of RKO's formative production personnel had earned their reputations in the silent cinema and were slow to adapt to the new medium. Even though studio personnel worked in such talkie-friendly genres as the musical and the gangster film, their efforts were labored and constipated compared to Paramount's Applause, The Love Parade, and Monte Carlo on the one hand, and to Warner Bros.' Little Caesar and The Public Enemy on the other. Another problem was the complete failure of RKO to develop any stars during the three years. The attempts to make talking-picture luminaries out of such silent performers as Bebe Daniels and Richard Dix were unsuccessful, and no new faces were discovered or promoted with the exception of Irene Dunne.

  RKO's initial leaders made few sagacious decisions during their three years in power. Future administrations would not have the same opportunities that were presented to Messrs. Brown, Schnitzer, and LeBaron; instead, each new RKO executive would be expected to build something great upon the faulty foundation laid down by these gentlemen.

  3. “Failure on the installment plan, a ticket

  at a time”

  The Aylesworth-Kahane-Selznick Regime (1932-1933)

  A scene that would be repeated all too frequently during RKO history played out during David O. Selznick's first few months as production head. “Reorganization” was the objective—a general realignment and housecleaning intended to get the company on the right track. Many changes were made, the most dramatic coming in the executive ranks.

  Early in 1932, it appeared Hiram Brown and Joseph Schnitzer would continue at the top of the RKO totem pole. Schnitzer announced that he planned to move his office back to New York, leaving production matters on the West Coast completely in Selznick's hands.1 Schnitzer had spent most of 1931 overseeing (some said interfering with) picture making in Hollywood. In February, Hiram Brown was given a vote of confidence by the RKO board of directors, and it seemed that the status quo would indeed be maintained.2

  But “status quo” did not have the same definition at RKO as it did at other organizations. In April, Schnitzer resigned to enter independent production.3 Soon after, Brown was replaced by Merlin Hall Aylesworth, the president of the National Broadcasting Company.4 Brown, it was announced, would continue to serve RKO in an “advisory capacity.” He stayed on as a lame duck through the summer, then left the industry forever.

  David Sarnoff was the impetus behind the shake-up. As chairman of RKO's board and president of its parent company, the head of RCA had been highly influential from the very beginning. But now that RCA had gained even stronger control of RKO, Sarnoff appeared determined that no more missteps occur. The tall, eloquent Aylesworth was said to be a master organizer with an exceptional flare for public relations; Sarnoff fully expected him to be as successful in guiding RKO as he had been with NBC.

  Merlin “Deac” Aylesworth had grown up in the Midwest. He attended several colleges, eventually receiving a law degree from the University of Denver.5 After practicing law in Fort Collins, Colorado, from 1908 to 1914, he became chairman of the Colorado Public Utilities Commission. In 1919 he accepted the post of managing director of the National Electric Light Association. Aylesworth surrendered this position in 1926 to become the initial president of the National Broadcasting Company, the nation's first coast-to-coast radio network. The incredible aspect of his appointment as president of Radio-Keith-Orpheum was that he planned to devote only half his time to the position. He would retain the presidency of NBC, spending mornings on RKO business and then devoting his afternoons to the broadcasting concern. Aylesworth was supposed to have boundless energy, but the arrangement still raised plenty of eyebrows in Hollywood. RKO, struggling to make money as the United States continued its economic free fall, deserved full-time attention.

  The corporation promoted one of its own to replace Schnitzer as president of the production company. Benjamin Bertram Kahane was a “theater man,” having begun with the Orpheum circuit in 1919. Later, he worked for Keith-Albee and was secretary and director of the Keith-Albee-Orpheum Corporation when RKO was formed in 1928. He became the first secretary-treasurer of RKO. Like Aylesworth, Kahane held a law degree, which prompted the company to appoint him general counsel in 1929. Kahane's new office was set up at the Hollywood studio; there he would soon become a mediating figure attempting to satisfy the financial needs of Selznick's filmmaking operation while placating New York executive concerns about production expenditures.

  Other important executive posts were handed to Ned E. Depinet, now vice-president in charge of distribution, and Harold B. Franklin, the new president of the theater division (Keith-Albee-Orpheum). Lee Marcus was invited to stay on in the vague position of liaison officer between the studio and the home office.

  In one year, RKO leadership had been revamped from top to bottom. The new setup had not come inexpensively, however. Several of the former executives held long-term contracts; the only way to dispense with them was to make settlement deals, and these deals dug deeply into RKO's cash reserves. For example, in May, David Selznick convinced B. P. Schulberg of Paramount to hire former production chief William Le-Baron. But RKO still had to pay LeBaron $1,500 per week until his contract expired in 1933.6 The company had been paying LeBaron $3,500 per week since Selznick arrived, even though he had no real function within the production schema. This was, therefore, considered a successful—though costly—arrangement.7

  One of the reasons Sarnoff had placed Merlin Aylesworth in charge of RKO quickly became obvious. Aylesworth's mission was to unite the entertainment spheres of radio broadcasting and movie production. The idea had been paramount in the formation of RKO, but little of consequence had been made of it during the first three years. Shortly after assuming the RKO presidency, Aylesworth stated that the “picture business and radio business must be co-ordinated” and that radio “should be used to exploit motion pictures.” He also announced plans to erect a broadcasting studio on the RKO lot and assured movie executives that radio was no threat to the picture business: “People will never stay at home. They will always seek entertainment elsewhere. Radio programs plugging the idea, ‘Go to the theatre' will serve to get people out of their homes and into the motion picture theatres.”8

  The leaders of the other companies were not only dubious but downright antagonistic. Everyone was suffering because of the recent chilling drop in box-office attendance. The lure of “free” radio amusement had to be partially responsible, and thus, radio had become something of a villain in Hollywood circles. Aylesworth's remarks raised questions about his true allegiance. Would he really use NBC to boost the movies and get people back into a picture-going routine—or would he employ RKO to strengthen broadcasting? Deac Aylesworth seemed to think he could do both.

  In June, RKO's leader journeyed to Hollywood to present his philosophy of mutual cooperation. A luncheon sponsored by the Academy of Motion Picture Arts and Sciences introduced him to the industry moguls. In his speech, Aylesworth promised that radio could work for the studios, that radio's great “lung power” should be exploited to bring people back to the theaters. He emphasized that there was more than enough business for both concerns and that radio had not ruined the newspapers as had been feared at one time. He also stated that television was still a long way off because there was, as yet, no demand for it.9

  Unfortunately, Aylesworth coupled his remarks with an excessively gloomy analysis of the current motion picture industry. He predicted that all the companies could be in bankruptcy within ninety days unless drastic measures were taken. He blamed the “ridiculously high salaries” of stars and executives and the overabundance of both theaters and poor pictures for the calamitous state of affairs.10

  The Hollywood establishment was not impressed. Here was a man whose movie experience amounted to fewer than th
ree months, who was running a company in considerably worse shape than most of their studios, yet had the audacity to predict apocalypse for the entire business. An editorial in the Motion Picture Herald criticized Aylesworth for his bad timing and negativity:

  Words such as these are scarcely spoken across a conference table of industry without first a cautious survey of those in the room. That the responsible head of a corporation in the peculiar responsibility of RKO…should as daringly become the herald of disaster and ruin in the presence of the American press pertains to an order of logic which he alone, if anyone, can explain.

  ……………………………………….……….

  Mr. Aylesworth, in his speech, is selling the motion picture short…. He is in the position, as president of RKO, of inviting the public to spend its money at the boxoffice for entertainment merchandise produced under what he sets forth as a condition next akin to bankruptcy. He asks the American picture- going public to buy failure on the installment plan, a ticket at a time.11

  Aylesworth's impolitic speech won few friends and even fewer supporters for his radio- movie cooperation plan. Speaking in San Francisco two weeks later, he flip- flopped from despair to optimism, predicting that radio would ultimately revive the theater business. He cited a “growing spirit of mutual cooperation between radio broadcasting companies, the theatres and studios” as the basis for his belief that attendance would soon begin to increase.12

  Aylesworth's Hollywood remarks were too frank, but they were based on reality—specifically the dire financial condition of his new company. Even before he assumed his RKO post, the company catchphrase for 1932 had become “cost-cutting.” If the studio hoped to survive a steadily worsening depression, every identifiable strip of fat would have to be pared. A 10 percent salary cut was put into effect for all company employees in January.13 In February, RKO revealed its plan to eliminate RKO Pathe, merging that production unit with Radio Pictures. This not unexpected decision meant that the Gallic gamecock, long a Pathe trademark, would be seen in future only on company newsreels.14 The RKO Pathe studio in Culver City was soon closed to effect further savings. It reopened in May, principally as a rental lot available to in de pen dent producers.

  Despite these efforts, along with belt- tightening procedures in the theater organization, RKO continued to operate in the red. A net loss of $2,166,713 was reported for the quarter ending March 31.15 B. B. Kahane then embarked on the unpleasant job of eliminating every inessential aspect of studio operations.

  This meant that David Selznick's decisions would be subject to intense scrutiny. But Kahane took an immediate liking to his brilliant young production head, and they soon became a supple and effective team. Selznick's first few months were spent completing pictures set in motion by the previous regime, such as The Lost Squadron and Bird of Paradise, and preparing the 1932-1933 program. This program would be Selznick's first as studio head; thus, he was determined to make it as impressive as he possibly could.

  In April, Selznick abolished the established policy of using “supervisors” or “associate producers” to oversee individual films. Considering the supervisor to be “just another mind to convince, to compromise with and to argue with,” Selznick decided to watch over the pictures himself as they would all reflect on him.16 By that time, David Selznick was working closely with two assistants who would help him in this herculean undertaking—Merian C. Cooper and Pandro S. Berman.

  Merian Cooper was a former military man, aviator, and explorer who had made two famous documentary films in the 1920s, Grass and Chang. The documentaries, shot in some of the most primitive, treacherous regions on earth, so excited Jesse Lasky of Paramount that he hired Cooper to produce The Four Feathers. The adventure saga starring Richard Arlen and William Powell turned out well, and Cooper's Hollywood career was launched. David Selznick became friendly with Cooper while both were working at Paramount. Impressed by Cooper's exuberance as well as his production abilities, Selznick invited him to come to RKO and soon offered him opportunities to begin producing films again. Ernest B. Schoedsack, a cameraman and director who had functioned as Cooper's partner since the days of Grass and Chang, also joined the company.

  Pandro Berman was only twenty-seven years old, but he had worked in the movie industry for several years as an assistant director, script clerk, and editor before William LeBaron allowed him to begin producing movies. His initial RKO pictures were The Gay Diplomat and Way Back Home, neither remotely noteworthy. Thus, Berman fully expected the ax to fall shortly after Selznick took over; indeed, he heard rumors that the New York executives had told Selznick to fire him. Berman was, therefore, shocked when Selznick kept him on as his second assistant and eventually allowed him to resume his producing career.17

  The immensity of the task facing these men became clear when the company sales convention was held in May.18 Delegates learned that sixty-two features would be completed by RKO. The count included pictures that would fill out the rest of the 1931-1932 season, as well as the 1932-1933 offerings, but the figure still looked highly challenging. Unable to attend the convention, David Selznick sent the following terse message: “We are facing a big job and a big responsibility. Anything further I have to say will be said with what I trust will be box office product.”19 The tone of the statement suggested grim determination on the part of the new head of production.

  Figure 4. David O. Selznick, the wunderkind whose tenure as head of RKO production would be short- lived but memorable. (Courtesy of the Academy of Motion Picture Arts and Sciences)

  David Selznick would not be required to supervise sixty-two different productions, which must surely have been a relief to him. The reason the company decided to back off of its commitment was, however, deeply disconcerting. Despite all the economizing measures, RKO was still losing alarming amounts of money when summer arrived. This initiated a high level of concern about the progress of production from corporate president Merlin Aylesworth. Soon, B. B. Kahane found himself in the uncomfortable position of middleman between Selznick, who was trying to make the best possible pictures at the least expense, and Aylesworth, who was not always satisfied with the results.

  Intimations of a baleful future were contained in a June 4, 1932, letter from Kahane to Selznick. After discussing the distressing “Consolidated Profit and Loss Statement,” Kahane continued: “I wish I could write you an optimistic letter and point out some signs of an early improvement in business conditions generally, but the gloom is very thick and black…. There is no doubt that the conditions facing the industry are critical. The next six months will be crucial ones and it will be a case of the survival of the fittest.” Kahane also expressed regret that he and Selznick had taken over at such an inopportune moment: “I am sorry, David, that you and I, in what is virtually our first year, have these external problems and difficulties to add to the task we have of getting product of quality and merit, produced at a proper cost. It would be so much easier if we did not have to be concerned so much about cost and if we had no worry about our cash requirements being filled. But we must face conditions as they are.”20 Conditions now required the production of forty pictures on a total budget of $9,548,000, or an average expenditure of $238,000 per picture.21 If RKO's financial status did not worsen and the pictures were solid, Kahane believed the company could make money on such a program.

  While Selznick made pictures, B. B. Kahane continued to whack away at studio expenses. On July 11 he wired Aylesworth that overhead had been slashed by $254,000 and, by year's end, savings of $1.4 to $1.5 million could be expected.22 Among the economies were a reduction of the writers' payroll by $3,000 per week, a reorganization of the prop department that was expected to result in savings of $6,868 per picture, and elimination of certain crew personnel on productions, cutting $40,000 per year. Kahane promised even more reductions and assured his boss that “these savings are being accomplished without impairing quality or detracting from production value. Morale at studio is good and Mr.
Selznick is cost conscious and is co-operating with us fully.”23

  Not everyone viewed the cuts so positively. One of the most disturbing new policies was a rule allowing only one take of any scene to be printed.24 To print more than one take, directors or editors would have to secure approval from a number of different individuals. This policy remained in effect for years and resulted in several ingenious gambits on the part of directors who wanted more latitude to view what they had shot.

  Kahane also started looking for ways to rid RKO of some of its highest-paid employees. He was instructed by Aylesworth to study the contracts of all those making large salaries and come up with some plan for reducing the obligations. On July 25, Kahane wrote Aylesworth concerning his findings. The letter provides insight into the “relative worth” of most of the current talent. Constance Bennett, the highest-paid RKO actress, would be more than willing to release RKO from her contract, according to Kahane, because she could certainly make an even better arrangement with one of the other studios. Therefore, unless the company was willing to forfeit its biggest star, nothing could be done about her. Kahane was certain Ann Harding would accept a cut in salary if the company agreed to extend her contract and “give her the right to approve the stories upon which her pictures are based.”25 But since he felt dubious about the contract extension and was firmly opposed to giving Harding story approval, there appeared little chance of a concession.