The first production contingent arrived in late January. Welles's personal assistant Richard Wilson, unit production manager Lynn Shores, and several technicians were members of this group. They had some, but not all, of the necessary equipment with them. Welles flew down during the second week of February. Phil Reisman, vice-president in charge of RKO's foreign sales, accompanied Welles and dispatched the following jubilant telegram to Schaefer shortly after they debarked:
Reception of Orson Welles Rio not only equal to but surpassed Disney's success here. Orson can qualify for my money as a great ambassador. Know that it is no surprise to you that his outlook and understanding are intelligant [sic] and comprehensive and that he has complete grasp of the importance of this job. Despite the handicap of lack of equipment, it is my honest opinion that we are going to get great and unusual picture out of here. His enthusiasm is boundless. This is reciprocated by the reception of the Brazilian officials who are cooperating to an unbelievable extent. The press has been uniform in telling the Brazilian public what I'm now telling you.76
Welles also gushed enthusiasm. After two weeks in Rio, he wrote Schaefer:
We're working too hard down here for good letter writing, or even one good long letter. Since you are my most understanding friend, I won't even attempt to explain my silence or alibi the brevity of this.
…………………………………………………………. .
The new radio series emanating from here should start in a week or two, which means that the picture will receive the most potent exploitation imaginable. The public interest should be aroused to a really wonderful extent by the time we're ready to release. I have great hopes for the film itself. Quite apart from its importance as a documentary, its entertainment values promise to be very great. Every day it grows on us. The Carnaval sequence alone—as a colorful and picturesque finale to the entire film—is going to mark a totally new departure in musicals. Indeed, every aspect of this picture is as fresh as even you could ask for.
This is a big job and a tough one, and I am truly and deeply grateful for the opportunity. I do think our rewards will be great. This is real pioneering and—after all—pioneering is what we like best.77
If one were dependent only on the reports of Reisman and Welles, the story of It's All True would seem a stirring, glorious adventure. But the studio was also receiving weekly reports from another source, a man who portrayed the activities quite differently. Lynn Shores was the company production manager. His duties entailed dispensing the funds, keeping the books on the picture, and taking care of the many problems that cropped up. From the very beginning, Shores's reports were disturbing. Over a period of weeks, their tone changed from concern to outrage. Early on, Shores revealed that the hot weather, the bad food, and the impossibility of operating in an efficient Hollywood manner were contributing to a morale crisis among the members of the crew. Even more upsetting was the communication gap between Welles and the people working on his movie. While the crew established its headquarters at the Palace Hotel in downtown Rio, Welles, Richard Wilson, and the Welles inner circle took rooms at the Copa Cabana Hotel on the beach. According to Shores, shooting was proceeding in a completely “off the cuff” manner. Welles had no script, assigned things to be shot arbitrarily, and frequently did not show up for the filming. On many occasions, Shores or Wilson handled the actual direction. On February 24, Shores reported:
I will not go into the details of my various attempts at trying to pin Welles down as to future plans. In a vague way he has given me to understand that we are to travel over most of South America with Mercury Players, various units of Technicolor and black and white, radio set-ups, good-will speeches and general messing around the next two or three months….
It has been a horrible nightmare to me personally. I am carrying not only the working but the personal problems of 27 individuals, each one with an axe to grind and a grievance of some sort at every hour of the day.78
In early March, Welles and Schaefer had their first major disagreement. From the beginning, the use of Technicolor was supposed to be restricted to the Carnaval footage. It was deemed too expensive to make the entire film in color. Welles decided, however, that he had to make a section of the film about the exploits of four Brazilian fishermen in color, as well. He claimed it would be “part” of the Carnaval story. He planned to recreate an actual incident in which four men from Fortaleza in northern Brazil had sailed their primitive raft (jangada) two thousand miles to Rio, where they handed a petition to the Brazilian president calling his attention to the plight of the starving people in their region. Welles's notion was to juggle history just a bit, having the local heroes (he planned to use the actual fishermen rather than actors) sail in at the height of Carnaval. Schaefer, however, absolutely forbade Welles to use color for this sequence. He explained why:
Orson, I want you to believe me that I am personally on the hook for the whole South American venture. My board were not enthusiastic even with government help. Thought I was taking too much risk. Nevertheless, I pushed it through and prevailed upon them to be guided by my judgment. Further, we receive help from government only up to a certain extent and that was also clearly outlined to my board. That certain extent does not permit us to shoot FOUR MEN [in] Technicolor. It would cause your Man Friday tremendous amount of personal embarrassment and everyone in particular taking a keen delight pointing out you had not lived up to what I expected and what I had stated would be done. Most anxious bring this through at least possible cost. Urge you do so for me. Even though photography black and white, can still blend in to Technicolor Rio carnival.79
The RKO board was debating Schaefer's new contract at this point, so he desperately needed positive news from Rio.
Welles continuously reassured Schaefer that he intended to keep expenses down and emphasized he was getting “ten times more” for the money than would be possible in Hollywood.80 However, the letters from Shores kept arriving like clockwork, each one more hair-raising than the last. Welles was portrayed as dissipating his energies on “research,” on travels throughout South America as part of his “cultural ambassador” role, on preparation of his radio program. It's All True was being shot haphazardly with Welles showing up only sporadically, having sets built, then changing his mind and never using them, and ordering miles of film to be shot without an established plan. As far as expenses were concerned, the cost of Welles's telephone calls and cables alone was running close to $1,000 per week.81 Back in California, some of the Brazilian footage began to arrive. It did not look promising.
The disappointment with the film mirrored the general mood at the studio, which must have seemed like a besieged medieval township at this time. The departures of Rogell, Lesser, McDonough, and others were only the first salvo in a wide-ranging wave of dismissals and eliminations that swept over the lot during the first four months of 1942. Because of the financial crunch, RKO had to cut its expenditures to the marrow. Only workers deemed essential were retained.
Around the time J. R. McDonough and Sol Lesser were handing in their resignations, Cliff Reid and Howard Benedict both departed.82 Reid had functioned primarily as a B producer since 1934 with a number of hits, but many flops, on his record. His pictures had performed poorly of late, so he was a logical candidate for a pink slip. Howard Benedict also had logged considerable service with the organization. For five years, he had been the studio's publicity director before becoming a B producer in 1940. Fortunately, Benedict had a job waiting for him at Universal.83 Frank Woodruff, a B film director, and Reeves Espy, a producer, were also removed from the staff around the same time.
Probably the most vulnerable group during the “great purge” was the independents. One by one, it seemed, nearly every independent association was expunged. Gabriel Pascal, for example, wound up his RKO tenure before it actually began. Pascal began preparing Shaw's Arms and the Man, to star Cary Grant and Ginger Rogers, but became so exasperated with RKO's volatile production e
nvironment that he quit and went back to United Artists, where he had been putting together projects before becoming involved with the studio. Pascal gave “interference by studio executives” as his reason for pulling out.84
Close behind Pascal was Broadway veteran Jed Harris, whose wartime comedy project failed to spark any enthusiasm among the RKO executives. William Hawks also checked out without producing a film, mentioning “differences” with the production staff as the problem.85 There were also dismissals of actors and actresses, but since RKO had no big names left under exclusive contract, none was very dramatic or saved the company significant money. Certain individuals were added to the company's payrolls, mostly at the suggestion of Charles Koerner, who needed help if the studio intended to continue in the filmmaking business. Lou Ostrow, previously a producer at MGM and Twentieth Century-Fox, took over the low-budget unit. Frank Ross signed on as a producer, following the success of The Devil and Miss Jones, and Leo McCarey returned to fill the noticeable gap in A production. His first film (as a director) since Love Affair would be Once Upon a Honeymoon starring Ginger Rogers and Cary Grant. Koerner also hired Val Lewton, a literate protégé of David Selznick, to produce a series of inexpensive horror films. And J. J. Nolan returned to his old office. He would again take charge of contract negotiations and commitments.86 Obligations of all kinds, however, were being kept to an absolute minimum. There was no other choice; the picture company was running out of money.
Sometime in March, J. R. McDonough's forty-two-page report, which was not complimentary of George Schaefer's stewardship of RKO, landed on David Sarnoff's desk. Sarnoff had not paid close attention to RKO for several years, but RCA still owned considerable stock in the corporation and had representation on its board of directors. Sarnoff had originally dispatched McDonough to RKO, and the RCA leader was fond of his former employee. Thus, Sarnoff's reaction to the treatment of McDonough by Schaefer and to the contents of McDonough's document was predictably swift and heated. He issued a statement detailing his “complete dissatisfaction with conditions at RKO” and asking for a full accounting and a new executive setup. Sarnoff also promised to take legal action, if necessary, to block the signing of Schaefer to a new, long-term contract. These events transpired in late March, at a time when even Floyd Odlum was reportedly inclined to support a five-year pact for Schaefer (with six-month option clauses).87
Meanwhile, George Schaefer's blood pressure spiked each time a fresh report on It's All True arrived from Brazil. After Welles announced that he planned to spend $25,000 to “remodel” a Rio nightclub (the Urca Casino) for a sequence that would be part of the Carnaval story, Schaefer tried desperately to reach the director by telephone. Four days later he gave up, believing that Welles was ducking him. At one point the hotel operator even reported she had heard Welles's voice on the line, but still Schaefer was told he was unavailable.88 Finally, the RKO boss cabled Welles. The last portion of the message read:
Sure you can appreciate my worry and concern when I hear commitments have been made to augment show and practically reconstruct Urca Casino at cost $25,000. At that rate we will have another AM-BERSONS situation on our hands. This latter picture as you know well over one million. It is very painful to send this cable because I know what stickler you are for quality but on other hand I am rapidly coming to conclusion you have no realization of money you spend and how difficult it is to recoup cost.89
Welles's reply seemed designed to pacify Schaefer, but it also contained a veiled threat:
Prices for this [the Urca sequence] were quoted to Hollywood before I had chance to cut them down. Twenty five thousand dollars is more than I intend to spend. However that money buys the basis for carnaval production. It would cost one hundred fifty thousand dollars Hollywood and any studio would be happy to pay for it when they saw what they were getting…. When I finish this picture you will see what I mean. Must however be allowed to finish it as I wish to. I have added nothing to original project. We are working night and day to bring closed [sic] production as soon as possible [at] greatest possible saving. Our problems here have been tremendous but unless I can finish film as it must be finished for entertainment value the entire expenditure of time and effort and money will be total loss.90
Schaefer fired back another cable, which also contained a not-so-veiled warning:
Your cable received and have full appreciation production difficulties so far away from home but on other hand I must take firm position and cannot permit moneys to be expended to finish. You have been away now for three months and surely we expected you back long before this. On top of that records indicate over $33,000 in March, 1st week in April $10,500 and budget calls for $15,000 weekly for next four weeks. This is all out of proportion to what we ever estimated and we cannot go along on that basis even if we have to close down show and ask you to return. That is how serious situation is with respect to my own apprehension.91
Schaefer's words apparently had little effect on Welles. As described by Lynn Shores, the following week's filming seems almost like a scene from a Fellini picture:
I cannot say much for this week's work because I do not feel any progress whatsoever has been made toward getting out of here. After working day and night to build three sets on the stage, Welles decided to shoot a building…called the Rio Tennis Club. This was supposed to be one night's shooting but…it went on and on through the week and to the best of my knowledge it seems that these sets are not finished yet. These particular scenes were mostly young girls and boys making love in various odd corners…with a background of 50 or 60 extras and continual calls every day for more beautiful girls. As far as I can judge there [sic] seems to have no bearing whatsoever on what we are trying to do in connection with shooting carnival.92
Shores's letter, plus mounting requests from crew members wishing to be replaced, forced George Schaefer to take action. He decided to send Phil Reisman, who had returned to the States after spending the first month with Welles, back to Rio with authority to close the picture down. On April 27 an enlightening telephone conversation took place between Reisman in New York and Reg Armour at the Hollywood studio. Armour, an executive who had spent years working for RKO distribution in various foreign countries, had relocated to Hollywood in 1941 at Schaefer's behest. Their phone call places the It's All True saga squarely within the context of RKO's and George Schaefer's mounting difficulties:
MR. ARMOUR:
When are you leaving, Phil?
MR. REISMAN:
In about ten days.
He's a tough baby—he [Welles] has done a magnificent job of selling himself to Nelson Rockefeller.
MR. ARMOUR:
From what we have seen from here, the best thing you can do is to send him back—the crew do not feel any loyalty to him. We have received 60,000 feet here and there is no picture in it. If we can get 800 or 1000 feet out of it we will be doing well. We have roughly $60,000 in film stock in Technicolor.
MR. REISMAN:
Maybe we could make a couple of shorts out of it.
MR. ARMOUR:
I don't think so. George [Schaefer] will lose his job out of this.
MR. REISMAN:
George wrote Orson a strong letter which I am to deliver. After he has read the letter he will either come back as George says—or quit.
MR. ARMOUR:
I think Orson wants to stay out of the country. He wants to duck military service.
MR. REISMAN:
I think I could get the authorities to take him off our hands.
MR. ARMOUR:
This picture will put us back in 77B.
MR. REISMAN:
Do you really think so?
MR. ARMOUR:
Yes, I do, Phil.93
Setting aside Armour's gossipy speculation about Welles attempting to avoid military service and Reisman's mean-spirited remark about getting the government to induct him, the most significant portions of the conversation are Armour's predictions that the making of It's
All True would cost Schaefer his job and throw RKO back into receivership. Clearly, the pressure on George Schaefer was increasing daily.
Evidence of this pressure is apparent in Schaefer's long letter to Welles, which Reisman delivered in May. The author is clearly a beleaguered man:
Here I am in New York endeavoring against all odds to maintain the same confidence in you as I have had in the past. Facts and developments come so fast and are so overwhelming that it is no longer possible for me to sustain that frame of mind. The facts and developments recall our early discussions wherein you were so enthusiastic with respect to picture-making and your repeated assertions that pictures could be made costing no more than $400,000 to $500,000. These assertions and discussions are corroborated by our written contract which states that the pictures are to cost a maximum of $500,000. I mention this only as an indication of what we originally planned and discussed and I am prompted to point only to the results because of the crisis which has risen in my relationship with my company and my relationship with you.
After detailing the expenditures on the film, pointing out the near-rebellion of the crew, and reminding Welles of his responsibility to RKO, which should have taken precedence over his role as “Ambassador of Good Will,” Schaefer continued:
I am now again put in the painful position where I have to write you a letter which I never, in God's world, thought I would have to write wherein I am begging you to fulfil in an honorable way your obligation and not put such a terrific load on my shoulders. In respect to the latter, I think I have carried that load a long time.
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