Returning herewith copy of story, PRETTY PENNY and here is my reaction.
While it is interesting, it seems to me to be just another picture. No doubt you could make a very interesting one but it seems to serve no particular purpose and, in particular, has no unusual showmanship. Think, in our approach to some of the more important pictures you are going to make, we should definitely have the showmanship idea in mind—the type of pictures Warner Bros. have been making which, quite frequently, turn out to be sleepers.49
One person that Schaefer treated more gingerly was Orson Welles. Early 1940 found Welles working on Heart of Darkness and Smiler With a Knife. The plan was to film and release both by the end of the year. However, in late spring the projects were canceled. The reasons were varied and complicated. Budget was the major problem with Heart of Darkness. Despite a series of long, arduous cost-cutting sessions, the final projection could never be reduced to less than $1 million. The script itself may also have figured prominently in the shelving of the project. Eight years later, RKO story editor William Fadiman read Welles's screenplay (much of it to be conveyed through subjective camera) and wrote the following memo to Edgar Peterson, who was looking for unproduced properties of value:
I read HEART OF DARKNESS Saturday afternoon—all 174 pages of it…. I think it is postured, mannered, unreal, overwritten, possessing a plot reminiscent of TARZAN combined with KING KONG, cumbersome in its symbolism, repetitious in its sequences, murky in its thought, expansive in its potential cost (we already have $116,000 in charges against it), likely to turn into a mystical melodrama reminiscent of M.G.M.'s ill-fated ADVENTURE, potentially capable of arousing laughter instead of tension, frequently grisly and unpleasant in its horror sequence—I bet you've guessed by now that I don't like it.50
This is just one man's opinion, but there is nothing in the RKO files to indicate that any of the executives were ever enthusiastic about the project.
Smiler With a Knife was canceled for a different reason. A mystery thriller about a plot to overthrow the U.S. government, the film would have centered on a bridal couple who discover a secret subversive organization and unmask its playboy leader, thus averting disaster. Since the story had strong political overtones, one might suspect that George Schaefer quashed it because of his disinclination to mount anything controversial. Actually, Welles and Schaefer together decided against production. The problem related to expectations—the expectations of the public, the industry, and the critics regarding Welles's initial motion picture.
Orson Welles had joined RKO with tremendous fanfare. His unprecedented contract, his much ballyhooed belief that he could handle four major areas on a picture (acting, producing, directing, writing), and his reputation as a theatrical and radio “genius” generated both a surplus of publicity and an abundance of ill will. In Hollywood, many were offended by the audacity of Welles and the foolishness of Schaefer in giving an untested filmmaker such an outrageous contract. Welles had not “paid his dues,” and there were many who expected, indeed hoped, he would fall flat on his face, taking RKO to the canvas with him.
As the months unfolded, months in which Welles tried and failed to make Heart of Darkness, Orson Welles jokes became a staple in Hollywood. Gossip columns were filled with sarcastic stories about “Little Orson Annie,” the boy wonder determined to revolutionize moviemaking in America.51 The pressure mounted as his first anniversary as an RKO employee approached—a year without verifiable progress toward filming anything. Both Welles and Schaefer realized that the first Mercury Theatre production would have to be sensational in order to silence the many carping voices. Thus, Smiler With a Knife was dropped because it was little more than a routine thriller. Even if it were a good thriller, the subject matter precluded its being taken seriously. No doubt Welles could imagine the critical reaction: Is this the best he can do? Is this what we have been waiting eighteen months for? Orson Welles's first motion picture had to be special—original, innovative, a production that would galvanize film audiences and strike his critics dumb.
In May, RKO asked the Audience Research Institute to conduct a poll regarding the story that audiences would most like to see Welles tackle. The winner, by a wide margin, was “Invasion from Mars,” a picture based on War of the Worlds—and Welles's famous radio broadcast of it.52 Both Heart of Darkness and Smiler With a Knife elicited much less public curiosity than the science fiction tale. Welles, however, had no desire to make “Invasion from Mars,” at least not as his first production. This prompted production chief Harry Edington to write George Schaefer about the big mistake he felt Welles was making:
It seems to me that the whole mental attitude of everybody in the United States during the last two weeks has completely changed…. Everybody is talking about war and the underfeeling seems to be a terrific dread of what this great machine of Germany is doing…. This all to me seems to point exactly in the right direction to warrant terrific excitement in what might be Welles' interpretation on the screen of this sort of thing and if ever the time was right for it to be done at all, I cant [sic] but think that time is now.
There is no doubt that the publicity that has surrounded Welles, and the curiosity concerning what he is going to do, is a terrific backwash of something that could be capitalized on with very little additional exploitation and might be built into a public curiosity campaign quite comparable to what went on in the public mind prior to the making and distribution of “GONE WITH THE WIND.”53
Edington's idea to transform the H. G. Wells's novel into a cinematic allegory about the present war was intriguing. Schaefer agreed with his thinking, but also pointed out why Welles was adamant in his refusal to film War of the Worlds: “The only way I was able to secure Orson originally, was because of my sympathy with his viewpoint,—that he did not want to go out and be tagged and catalogued as ‘the horror man' by appearing in a picture such as the HUNCHBACK or immediately go into the production of a picture such as THE MEN FROM MARS. He was anxious to do something first, before Hollywood typed him. This has been uppermost in his mind and I know it would be difficult to change.”54
It would have been impossible to change Orson Welles's mind at that point, for he finally had a project nearly ready to go before the cameras. The film was, of course, Citizen Kane, and its preproduction was veiled in secrecy. Once again, the immediate problems were budgetary. The initial estimate, based on a sixty-eight-page treatment outline, was $1,083,000.55 Evidently, Welles had not learned a great deal from the Heart of Darkness experience. Herman Mankiewicz and Welles's first screenplay for the project ran 214 pages, prompting J. R. McDonough to wire George Schaefer: “We have told Welles that his shooting script is about fifty to sixty pages longer than the longest script we have ever shot in this studio and in our opinion the result in final negative will be far longer than the one hour and thirty-five minutes he is aiming at. We will time the script. I told him as far as I knew the cost we were aiming at is in the neighborhood of six hundred thousand dollars. Welles says he is figuring on a minimum of seven hundred thousand dollars.”56
This time, the negotiations between Welles and the RKO bean counters did result in a substantial reduction of the budget. By July everyone knew that Orson Welles was finally making a picture. Citizen Kane and the altercation with William Randolph Hearst concerning its release are discussed later in this chapter.
Let us turn our attention now to They Knew What They Wanted, a ripe example of the bungling that was beginning to characterize RKO film production. Sidney Howard's Pulitzer Prize-winning play, first presented in 1924, had been filmed twice before. The initial production, a silent made by Paramount in 1928, was called The Secret Hour and starred Pola Negri. MGM acquired the rights and released a talkie version entitled A Lady to Love in 1930. On February 19, 1940, Don Gordon and Ardel Wray, readers on Lillie Messinger's staff, both submitted negative reports on the property.57 Disregarding their advice, Schaefer acquired the screen rights in early March for $50,000.58 From the b
eginning, the story was viewed as a Charles Laughton-Carole Lombard vehicle to be produced by Erich Pommer and directed by Garson Kanin.
Both studio readers had indicated there would certainly be censorship problems with They Knew What They Wanted, an adulterous drama about a waitress who agrees to marry an Italian grape grower in the Napa Valley and is then seduced by the farmer's hired man. Someone forgot to check with the Production Code Administration before the purchase, however, prompting the following letter from chief Hollywood censor Joseph Breen to Mac McDonough:
As I think you know, this property for many years has been listed on the, so-called, “banned list” of the industry. Inquiry from Mr. Hays in New York brings back the information that if a screen play, based upon this story, (which is so thoroughly unacceptable in its original form) can be made acceptable under the provisions of the Production Code, the picture made from this new and revised story may be approved, providing it is agreed by your studio that (a) the original title will not be used, or referred to in connection with this revised story; and (b) no reference whatever is to be made at anytime, either in the advertising or in the publicity, that the new and revised story is based upon the play, THEY KNEW WHAT THEY WANTED.59
At that very moment, RKO was paying for trade-paper advertisements announcing its plans to make They Knew What They Wanted. Schaefer decided he had better pacify Breen quickly, so he sent him the following repentant letter:
Am terribly sorry we made the mistake of buying THEY KNEW WHAT THEY WANTED without having checked with you. It has been on the “banned list” so long that none of our boys knew, and I assure you that I did not know, it was not acceptable. I am hastening to send not only my apologies and that of the company, but to assure you that we have put into effect an operating policy whereby no stories will be purchased in the future without first having checked with you, securing your approval….
With regard to the production of the above picture, I am assured that it will be handled in such a way so as to meet all the provisions of the Production Code and, although an announcement has already been made to the effect that we have bought it and we have announced it in the tradepapers [sic] through an ad, nothing from this point on will appear to the effect that we are producing it and the title will definitely be changed.60
So RKO had paid a handsome price for a property that would, of necessity, be gutted in its scripting, with its title changed to throw audiences and critics off track and Sidney Howard's original efforts completely disavowed. The Other Man became the working title.61
The filmmakers, particularly Garson Kanin, Erich Pommer, and screenwriter Robert Ardrey, were outraged by RKO's cringing attitude toward the Production Code Administration. They began an exhaustive battle to force Breen to accept the title of the play and its basic story. After persistent appeals based on the recently deceased playwright's reputation and the “classic” stature of the play, Breen and his boss, Will H. Hays, finally acceded to the use of the title and the essential plot, so long as the latter conformed to Production Code requirements.
Meanwhile, even before production commenced, George Gallup's Audience Research Institute tested the “audience accept ance value” of the property. Using a short synopsis and including the information that Lombard and Laughton would star, Gallup's researchers determined that audience enthusiasm for the project was low.62 J. R. McDonough decided to keep this information from the individuals making the picture—for obvious reasons.
A second survey was conducted between July 27 and August 2 using They Knew What They Wanted as the announced title. Once again, public interest remained lukewarm at best. According to Gallup, the reasons seemed not to lie in “the marquee values of Laughton and Lombard,” but in “the basic elements of the story, which does not find favor with a large number of theatre-goers.”63 Movie patrons were evidently less impressed by prestigious properties than George Schaefer was. Gallup, incidentally, did not pretend his system was foolproof: “It may be, of course, that the picture will do better business than we predict. In 1939 we underestimated the box-office performance of NINOTCHKA, by failing to make sufficient allowance for the Lubitsch touch. Perhaps the Kanin touch will succeed in raising THEY KNEW WHAT THEY WANTED above 100%; that is the kind of rare element which cannot easily be evaluated in advance.”64
Figure 22. They Knew What They Wanted (1940). Director Garson Kanin and writer Robert Ardrey discuss censorship problems with the head of the Production Code Administration, Joseph Breen. One year later, Breen would be running production at RKO. (Courtesy of the Academy of Motion Picture Arts and Sciences)
Notwithstanding the gloomy forecast, George Schaefer dispatched one of his customary ecstatic telegrams to Harry Edington after viewing the finished film. Schaefer called They Knew What They Wanted “one of the finest pictures we ever received” and praised Lombard (“she has never done a better job”) and Laughton (“absolute perfection”).65 When it opened in October, however, the response was even less enthusiastic than Gallup had predicted. Schaefer immediately tried a new advertising approach with no discernible effect. On Halloween, Ned Depinet regretfully informed his boss: “I dislike very much to report that the receipts generally from around the country where THEY KNEW WHAT THEY WANTED has opened are poor and exhibitors are beginning to holler. We have not had any engagement that we could point to with pride.”66 The eventual loss was $291,000.
Even though George Schaefer's productions were not performing as he had hoped, his spirits must have been boosted by the outcome of the government's anti-trust suit against the major studios. The signing of a consent decree on November 20, 1940, revealed that the Big Five companies would not have to jettison their theater chains, at least not in the following three years. It did, however, mandate significant changes to be implemented in the future distribution of motion pictures. Tino Balio has admirably summarized these modifications “Blind selling was prevented by requiring trade shows of films; block booking was limited to five pictures; the forced purchase of shorts was abolished; and the use of unreasonable clearance was proscribed.”67
RKO executives began to consider the ramifications of a new sales landscape, beginning the following fall, in which each picture would be shown to exhibitors before it could be booked. The era of blind selling was over. This would certainly affect the production staff; they would be required to complete five different films and have them ready for trade-showing on a certain date, and these five represented the largest block the studio could sell at one time. Without question, the new regulations were going to impact company cash flow as well.
But if the consent decree was vexing to RKO and the other movie suppliers, it was an outrage to exhibitor groups that had expected more profound changes. According to the Motion Picture Herald, every independent exhibitor in the country had opposed this particular solution.68
The war in Europe went badly in 1940. Denmark, Norway, Holland, and Belgium all fell to the Germans, and heavy aerial bombardment closed many theaters in Great Britain.69 The situation hit painfully close to home in the fall when New York headquarters learned that Ralph Hanbury, managing director of RKO's English distribution operation, had been killed by a Luftwaffe bomb.70 Just two days before his death, Hanbury had written Schaefer assuring him that he was doing everything he could to “further the Company's business,” but also informing him that “owing to the severe bombing of London the business in the London cinemas is just non existent [sic] these days.”71
Perhaps the greatest shock of all was the fall of France. In December, George Schaefer received the disheartening news that three of RKO's Paris representatives had been arrested by German military authorities and the company's records had been confiscated along with half a million francs.72 While Secretary of State Cordell Hull was aware of the situation, there appeared to be little the U.S. government could do about it. The ban on American films in all the countries under German control and monetary restrictions placed on British earnings meant that salary cuts remaine
d in place for many RKO employees, and careful scrutiny of the Latin American market as a possible source of additional revenue would continue.
At least 1940 ended on one of the high points of the Schaefer era. RKO's holiday release, Kitty Foyle, not only brought the studio its first major Oscar in many years (to Ginger Rogers for her performance) but also became a gold mine, earning profits of $869,000.
The studio had first begun to consider the purchase of Christopher Morley's novel in September 1939. Two of the readers in Lillie Messinger's department evaluated it, and both recommended against its acquisition. Don Gordon's remarks are indicative of Ardel Wray's feelings as well as his own:
This is a slow, dull long-drawn-out account of a girl's life. It hasn't any point that I can see. Her romance is about as trite as one can be. It is also a futile romance which fizzles out over the old problem about the girl from the wrong side of the railroad tracks and the young man of a wealthy family. As to the struggles of the white collar girls, which fill one part of the story—there is absolutely nothing new in the treatment of that material. There have been scores of pictures dealing with the problems of stenographers; and it is more repetition here. Altogether, I am unable to see any screen value in this story.73
Gordon's taste did not mirror that of the general public, which readily embraced Morley's novel. One of the staff members of the Saturday Review of Literature, Morley had written a tale that particularly appealed to American women. The property soon had a presold audience.
In spite of his readers' negative feelings, George Schaefer went ahead and pursued the rights. Among his reasons were the need for vehicles for the company's female performers and David Hempstead's desire to produce the picture. The deal was closed on December 20 at a final cost of $50,000.74 Although Hempstead had Ginger Rogers in mind from the beginning, Schaefer believed that Carole Lombard, or perhaps Maureen O'Hara, would be better suited to the part.75 Hempstead convinced Schaefer, then began to sell Rogers, who was skeptical at first. She eventually agreed, and Sam Wood, formerly a contract director at MGM, was hired to take charge of the filming.
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