FINANCIAL CRISIS IN HOLLYWOOD.

New Zealand Herald, Volume LXIX, Issue 21100, 6 February 1932, Page 10 (Supplement)

FINANCIAL CRISIS IN HOLLYWOOD.

FILM INDUSTRY CALLED TO HALT

The big American banks, which have £43,000,000 invested in the film industry, have delivered something like an ultimatum to Hollywood. The only salvation for the industry, they declare, is the production of really good pictures. This conclusion was reached by representatives of 12 bankjng concerns, headed by the the Chase and the Guaranty financial groups of New York, after discussing for seven hours in private means for protecting their invested money. With the exception of Mr. Irving Thalberg and Mr. Louis B. Mayer, of the Metro-Goldwyn-Mayer concern, every producer was marked down for what was described as an " efficiency investigation." It was decided that Hollywood must be rid of incompetent executives drawing preposterous salaries. Millions of dollars, it was said, were wasted by them every year. Mr. Thalberg and Mr. Mayer were considered to be among the few producers making films which proved box-office attractions. The Metro-Goldwyn-Mayer 6tudio received more praise for good work this year than any of the others. One of Mr. Thalherg's clever moves has been the putting of two and three stars in the same picture who hitherto have been too " temperamental " to work together. Hard times have changed the attitude of the players. Examples of the new policy include Miss Marion Davies and Mr. Clark Gable in " Polly of the Circus," and Miss Greta Garbo, Miss Joan Crawford, Mr. Lionel Barrymore, Mr. Clark Gable, Mr. Wallace Beery, and Mr. Buster Keaton, all cast for " Grand Hotel," under the direction of Mr. Edmund Goulding, an Englishman. The bankers' edict resulted in the biggest conference yet held of film chiefs, conferring on salary and ether reductions. Warner Brothers acted first by announcing salary cuts of 40 to 60 per cent., only

SALARY REDUCTIONS AND RETRENCHMENT ENFORCED

six months after previous big reductions, and by discharging hundreds of employees. The only three stars at the Warner studios not affected are Miss Ruth Chatterton, Mr. Richard Barthelmess, and Mr. William Powell, who are considered good attractions, according to Messrs. Warner Brothers, but the fact is that they were only recently recruited from the Paramount organisation by tho offer of bigger salaries, and they laughed' at the suggestion of a reduction in their terms so soon. Film directors, actors, writers, and technicians are all accepting the cuts because they are threatened that unless they do so they risk loising everything when tho options for extending their present contracts are discussed later on. The film studios have agreed to act together to black-list any " disloyal " people who stand out. Hollywood is facing ruin, declares Mr. David Selznick, who at the age of 30 was recently appointed chief of the Radio-Keith-Orpheum studios. Retrenchments must go far beyond 6alary reductions, he asserts, if the industry is to bo saved from disaster. To make an average 7000 ft. film, he says, about 125,000 ft. to 150,000 ft. of negative is now used, and this extravagance must end. Mr. Ernst Lubitsch and Mr. Lewis Milestone take only two or three shots each of a scene, while most other directors take eight or ten shots, thus wasting expensive film and using more electricity lind electricians' time. Fortunes have been made and lost during the present chaos, Mr. Adolph Zukor, Mr. Lasky, and Mr. Schulberg were in a big stock pool together, but have lost practically everything. Mr. Zukor recently told Mr. Joseph von Sternburg that he is now a poor man, relying mostly on his salary as president of the Paramount organisation.