RKO Radio Pictures

by Richard B. Jewell

  Schaefer nevertheless went forward with Gordon-Goetz, giving RKO The American Way as well as Abe Lincoln. The American Way was never made because of its large projected costs, but the Lincoln film was placed on the schedule, perhaps because it received the Pulitzer Prize in May 1939 and embodied a patriotic hymn to Americanism that Schaefer thought would appeal to audiences of the time. Preliminary estimates indicated that the picture's budget would be more than $1 million.

  Since this was before the outbreak of the World War and its disruption of foreign revenue, Schaefer gave it a green light. Shooting began in August 1939 with John Cromwell directing and Raymond Massey portraying Lincoln, as he had in the stage production. In an attempt to “open up” the drama, the picture was filmed largely on location in Oregon. This caused problems. Rainy weather and days of poor light brought on by forest fires in the Klamath Falls area caused the company to fall nine days behind schedule.24 By the time they finished in October, the company had lost three more days, but Cromwell managed to bring the picture in under the budget estimate. Still, at a price of $1,004,000, the film was an expensive undertaking by RKO standards.

  Even though Abe Lincoln in Illinois was considered an independent deal, the financing came from bank loans guaranteed by RKO—whether the picture made money or not. The only cash advanced by the producers was half the cost of the screenplay ($112,500).25 In effect, RKO had invested almost $900,000 in the picture. If the film did well, both RKO and Max Gordon Plays and Pictures Corporation would profit. But if it fared poorly, RKO would bear the brunt of the losses.

  RKO hoped to release Abe Lincoln in Illinois for the Thanksgiving holiday, but it proved difficult to cut, score, and dub, so it was held for a January 1940 release. Schaefer saw a rough cut in late October, then dispatched the following telegram to Max Gordon:

  Even twenty-four hours after seeing the “Abe Lincoln” production, I still think it is a great motion picture. It makes one proud that he is in the picture business, proud that he is an American, and for my part, I am proud that we in some small measure participated in its production with Gordon and Goetz. It is not sensational but sentimental, packed with human interest, and stays with you days after you have seen it. Everything that you said about it during the course of production was corroborated by the screening…. I think you have every right to feel assured of a very fine public reception. Kind regards and congratulations.26

  Schaefer was so overjoyed by Abe Lincoln in Illinois that he personally devised a unique release pattern. He wanted the picture to open at a gala premiere in Washington, then have special showings with proper ceremonies in several Illinois towns, and subsequently move into Cincinnati, Los Angeles, Boston, San Francisco, and other major cities—all showings at special increased admission prices.27 The Washington premiere must have been the highlight of the film's chronology. Max Gordon dictated the following to Schaefer's secretary: “We had dinner with President Sunday night and saw picture. President and Mrs. Roosevelt were very enthusiastic and kept repeating ‘Great. Great' about picture. Last night's audience tremendously enthusiastic. Spoke to Justice Douglas, Henry Morganthau [sic], Alice Longworth and people of their kind and they were all tremendously enthusiastic.”28

  The enthusiasm continued as critics from around the nation hailed the achievement of Abe Lincoln in Illinois. Frank S. Nugent's encomium in the New York Times was typical:

  It's a grand picture they've made from Robert Sherwood's Pulitzer Prize play of two seasons back; a grand picture and a memorable biography of the greatest American of them all…. There isn't by jingo, a trace of jingo in [the] drama. There isn't a touch of national complacency, of patronage or boastful pride. But Lincoln, and the film they have made about him, is a grave and sincere and moving and eloquent tribute to these United States and to what they stand for, and must stand for, in these and future times. It is a grand thing when the life of a man can come down through the years as a fingerboard pointing a nation's direction; it's almost as grand a thing when the life of a man can be told as beautifully as this one has been told.29

  The ultimate critics—the American audience—were not impressed by the enthusiastic reviews, or the awards garnered by the drama. They found the film sorely wanting and did not support it. The company's attempts to charge increased admission prices for Abe Lincoln were quickly abandoned, yet the film still failed to draw. Hunting for reasons, the studio blamed the failure on the John Ford-directed Young Mr. Lincoln, released by Twentieth Century-Fox six months earlier, which supposedly took the edge off the RKO production. The casting of Raymond Massey, an actor relatively unknown to motion picture enthusiasts at the time, was also believed to have damaged its box-office potency. When the dust settled, two things were certain: RKO had a financial catastrophe on its hands (final loss to the studio: $740,000), and the team of Max Gordon and Harry Goetz no longer possessed an independent production deal with the company.

  Ultimately, the pitiful commercial performance of Abe Lincoln in Illinois must have been devastating to George Schaefer. It called into question his unit-production philosophy, his preference for “important” literary properties, and his own ability to predict what the public wished to see, even after he had seen it.

  Nonetheless, Schaefer never wavered in his game plan for RKO success. Even the departure of two of the company's major talents did not seem to bother him. First to leave was Fred Astaire. His contract had expired in 1939, but negotiations continued into the new year for future pictures on a non-exclusive basis. Astaire even indicated he would be willing to make another musical with Ginger Rogers, but he and the RKO management could never get together on salary. Astaire, through agent Leland Hayward, asked for $150,000 per picture, but George Schaefer decided that $75,000 was as high as RKO would go. Before the negotiations with Astaire commenced, he had completed Broadway Melody of 1940, costarring Eleanor Powell, for MGM. The picture lost money, confirming Schaefer's belief that Fred needed Ginger more than she needed him: “Astaire on his own was not a success either in the picture in which he was starred recently [A Damsel in Distress] or in the Astaire-Powell picture. Certainly we should not pay him the price he is asking in view of the fact that we contribute 50% of the asset that makes it possible for him to be a success.”30

  Schaefer did have a point. Astaire without Rogers had not yet demonstrated the ability to carry a picture successfully. But Schaefer should also have considered that Astaire was more than just a performer; many of the brilliant dance routines in the Astaire-Rogers series had been created and choreographed by him and his associate Hermes Pan. As several critics of the musical genre have pointed out, Astaire is an example of the actor as auteur—an individual whose talents shaped the films he appeared in. RKO was losing a superstar in Fred Astaire; his subsequent career proved conclusively that there were reasons for his preeminence besides Ginger Rogers.

  Another longtime member of the studio family, director George Stevens, ended his RKO employment in 1940. A rift between Stevens and the company had been widening for some time. It began with the development of slow, perfectionist characteristics in his handling of Gunga Din. The film's skyrocketing budget did not endear him to management, despite its quality and respectable box-office performance. After the completion of Gunga Din, Stevens took what was supposed to be a four-week vacation. Without permission, however, he stretched the vacation into eight weeks. When he finally returned to the studio, he claimed to have spent the extra time in New York working on potential properties with Pandro Berman's permission.31 Berman, however, denied giving such permission and took Stevens off the payroll. Negotiations between Stevens's agent, Charles Feldman, and the RKO officials commenced regarding this salary, to which the director felt he was entitled. Apparently, Stevens was also put off by George Schaefer, who refused to allow him to make The Mortal Storm or Address Unknown, both properties about fascism and its effects. As Pan Berman told Stevens in a telegram, Schaefer was “afraid [to] commit us to any picture that is propaganda aga
inst anything.”32 Schaefer, for his part, was growing more and more peeved with Stevens. He wrote Berman during the wage controversy: “I am very much disturbed about the whole George Stevens situation. I think he is acting up very badly, bearing in mind all the considerations that were given him, especially in view of his personal affairs. I think you and the company have been very lenient and considerate and it is about time Stevens was made to realize this.”33

  An agreement was finally hammered out in April 1939, paying Stevens more than half of the disputed $15,000 back pay.34 George Stevens's performance through the rest of the year did not return him to the company's good graces, however. It took him altogether too long to get his next project, Vigil in the Night, under way, and the eventual results proved quite discouraging (a $327,000 loss). When the director's contract came up for renewal on April 2, 1940, George Schaefer did not pick up the option.35 Both parties were apparently pleased by the termination, but Schaefer was kidding himself if he thought the loss of George Stevens would not leave a gaping hole in his directorial ranks, just as the loss of Fred Astaire had left a void in RKO's male talent and Pandro Berman's loss invited serious trouble in the production domain.

  George Schaefer continued to believe that his additions would more than compensate for the subtractions. Shortly after the end of receivership, the “Rambling Reporter” column in the Hollywood Reporter contained this humorous blurb: “Most of the major plants are being confronted with the agent's answer: ‘Sorry, we just signed with RKO.' And the same goes for story properties. Which prompted one exec to send a wire to George Schaefer reading: ‘Read that you were signing so many people that I came out of retirement. My salary's cut to a bone a day. What about it?' The wire was signed by Rin-Tin-Tin…. But, kidding aside, there's more activity in that plant than there has been since the sheriffs walked in.”36 Indeed, the number of independent deals alone must have amazed industry vets. United Producers Corporation (William Hawks, president), Voco Productions (Jack Votion, president), Pyramid Pictures Corporations (Jerrold T. Brandt, president), Vogue Pictures, Ltd. (Lou Ostrow, president and producer), Franklin-Blank Productions (former RKO executive Harold B. Franklin, president), and Frank Ross-Norman Krasna Productions (Frank Ross, producer) all signed to have pictures distributed by RKO.37 And previous independent arrangements, such as the ones with Towne and Baker, Herbert Wilcox, Walt Disney, and Harold Lloyd, still remained in effect.

  The studio also secured the services of actors Charles Boyer, Jean Arthur, and Cary Grant. Although the advertising department referred to these individuals as “RKO stars,” this was misleading. All had signed at least one picture deal with the studio, but were not under long-term or exclusive obligations. In reality, the RKO stock company was in woeful shape. Except for Ginger Rogers (whose contract would expire in 1941), the company had no box-office personalities on call and was constantly forced to borrow from other studios—even for supporting players. Dan Winkler, an assistant to J. J. Nolan, pointed out the problem to his boss:

  In general there is the matter of adopting a policy of whether or not we intend to have a so called stock company. If we intend having one, we should go about setting it up and we should then use the players that we sign in the pictures that we make. If we do not intend having a stock company then we should make up our mind that we are going to be in the same position next year and the year after that we are in now,—that is, to borrow stock players from other studios and put them…in our important pictures.38

  Winkler concluded by listing a number of individuals who had been dropped by RKO and were presently making good at other studios or getting large salaries whenever RKO borrowed them. The names included Joan Fontaine, Laraine Day, John Shelton, Joel McCrea, Linda Darnell, James Ellison, and Ann Sheridan.39 Over the years, talent development had always been one of the company's weakest areas; now, this flaw was beginning to exact a heavy toll.

  Schaefer did hire Erich Pommer, producer extraordinaire from the famous German studio UFA, to handle three to four films per year. The decision to engage Pommer was based largely on his work with Charles Laughton in England before the outbreak of war. There, Pommer had produced Jamaica Inn, Sidewalks of London, and The Beachcomber, all starring Laughton. They would be teamed again at RKO.

  Pommer's efforts, however, would be reduced by a steady diminishment in the company's production plans during the remainder of the year. In early April the RKO board of directors approved a $12,000,000 budget for the 1940-1941 program, with the stipulation that no single picture would cost more than $900,000.40 By May, however, the gloomy European situation and the lackadaisical performance of RKO pictures in the United States forced George Schaefer to establish $700,000 as the maximum budget for any one picture.41

  This information was not conveyed to the participants at the ninth annual sales convention of the company, held at New York's Waldorf-Astoria in late May. RKO at that time reduced its promised offerings for 1940-1941 to fifty-three pictures, although it had no intention of releasing even that many.42 Schaefer did give the salesmen a short pep talk. After describing the European war in gloomy terms but emphasizing “the show must go on,” he declared, “And let no one forget that this isn't to fiddle while Rome burns. The surcease, the recreation, the inspiration that entertainment brings, are as vital in this emergency as bread and meat and other necessities of life. It is not merely the stomach but the spirit that must be fed in these days of trial.”43

  In July, further production cuts were ordered. Schaefer decided to eliminate Sister Carrie from the program because of its estimated $700,000 production cost, and also to reduce the number of program pictures from twelve to eight, thus saving $480,000 more. A series of Westerns featuring Tim Holt would be substituted for the announced George O'Brien vehicles, saving an additional $60,000. Producers now understood that $600,000 was the top budget for any picture, making for an estimated reduction of $1.5 million from the original 1940-1941 budget.44 A revived budget summary issued by George Schaefer at the end of July included Citizen Kane, thus bringing the total figure for A pictures back up to $8 million.45 Still, the corrected plan for 1940-1941 showed a total expenditure of only $10,920,000. This was a rather feeble amount when one considered that a company like MGM could be expected to spend nearly three times that figure on its production operations.46 But then, RKO seemed to be suffering more than its competitors, primarily because it had, once again, been turning out a group of underperforming pictures. Besides Abe Lincoln in Illinois and Vigil in the Night, other disappointments in the 1939-1940 program included Dance, Girl, Dance ($400,000 loss), Allegheny Uprising ($230,000), Swiss Family Robinson ($180,000), Anne of Windy Poplars ($173,000), Tom Brown's School Days ($110,000), and the remake of A Bill of Divorcement ($104,000). There were some bright spots: My Favorite Wife earned a profit of $505,000; Irene, starring Anna Neagle, made $367,000; the Kay Kyser musical comedy That's Right, You're Wrong, $219,000; and Lucky Partners with Ginger Rogers, $200,000. But when all the figures were totaled, the picture company had fallen back into the red with a $480,000 loss.

  Part of the reason for this may be traced to an old bugaboo—final production authority, a source of conflict that had begun to generate morale problems at the studio. Throughout 1940 George Schaefer continued to dictate answers to all production questions. Harry Edington did not seem perturbed by this; he was willing to go along with anything his boss decided about A pictures even though he was supposed to be in charge of them. However, Lee Marcus, the potentate of the B realm, had held his position longer and was used to making this own decisions. He did not take Schaefer's interference lightly. Marcus was both angered and stupefied by it. In March, Schaefer canceled two of his pet projects, The Peter B. Kyne Story and the aforementioned Man Without a World. The incensed executive fired off the following memo to J. J. Nolan:

  I wish to state at this time that I am in complete disagreement with this decision, that I think it dangerous and unsatisfactory…. This unit has functioned with r
easonable success for the past three years, and during that entire time has selected, developed and produced its pictures without submitting scripts to New York. I feel quite certain that if this procedure had been followed in the past we would not have made a good many pictures which have turned out successful, such as: A MAN TO REMEMBER, GIRL FROM MEXICO, SKY GIANT, FIVE CAME BACK, TWO THOROUGHBREDS, FLIGHT FROM GLORY, WITHOUT ORDERS, CONDEMNED WOMEN, LAW OF THE UNDERWORLD.

  I state this because none of these scripts in first drafts were as good as the two which have just been turned down by Mr. Schaefer. In every instance, the subject matter was similar to previous pictures that have been made. I think it is a dangerous thing to have one man's viewpoint control program pictures.47

  Marcus was also offended by Schaefer's insinuation that the B pictures did not contain enough “showmanship.” Marcus spelled out his feelings on the matter:

  Showmanship in pictures is not enough to make them successful at the box office. We have made some pictures replete with showmanship, but no advantage has been taken by the company of these pictures, and by this I mean, they have woefully failed to advertise, publicize and exploit them….

  There is a certain amount of futility in making pictures with showmanship ideas if nothing is done with them after they are finished. While this is no excuse for not making them, these ideas are very hard to find, and the best idea we have had along these lines in the studio was killed by Mr. Schaefer, namely, the WARSAW INCIDENT picture, which we could have gotten out and which would have capitalized [on] the whole Polish incident.48

  Relations between Marcus and Schaefer continued on a lukewarm basis throughout the rest of the year. Schaefer would not surrender the reins as far as final decisions were concerned, however. He was the RKO leader, and he did not believe in true delegation of authority. Lee Marcus must have boiled inside when he received the following letter from his boss, late in 1940: