Most histories of the American film industry, if they delve into politics, chart the beginning of Hollywood's political consciousness in the contentious 1934 California gubernatorial election. Leo Rosten claimed that this occasion represented “Hollywood's first entrée into politics.” And indeed all of the major eight studios got involved in the effort to reelect the rather dull Republican candidate Frank Merriam against author Upton Sinclair, the socialist candidate on the Democratic ticket, using the kind of strong-arm tactics they usually unleashed against their own employees and competitors. They made short films spreading untrue propaganda about Sinclair without allowing him opportunities to respond. They forced their employees to contribute to the Merriam campaign, sometimes under threat of firing, and pressured them to vote for him. It was an ugly and divisive campaign, but the studios got their man elected.Footnote ¹

But “Hollywood's entrée into politics” preceded 1934. MGM head Louis B. Mayer participated in Republican presidential politics during the 1920s, and the brothers Warner were key fundraisers and advocates for Franklin Roosevelt during his 1932 campaign. Even before then, Charles Chaplin and Mary Pickford partnered with the government in selling World War I bonds; former US postmaster, Congressman and politically fierce Republican political operative Will Hays headed the new Motion Picture Producers and Distributors of America organization, which began in 1922 and served as a public-relations and advocacy organization for the major Hollywood studios; and Al Jolson stumped and wrote songs for various Republican candidates during the 1920s, among other examples.Footnote ² But the long and antagonistic fashioning of the National Recovery Adminstration's (NRA) code of practice for the film industry during 1933 represented a turbulent political event that pre-dates and informs the 1934 election. The NRA code process exposed deep and resentful fissions within Hollywood that would never fully heal, and the oligarchic if not monopolistic way in which the major film studios had set up their vertically integrated consolidation of the motion-picture industry in terms of production, distribution and exhibition on a national scale. In addition, this months-long ordeal occurred in full view of the press: every twist and turn in the process, and every revelation concerning the way the moguls earned their money became common knowledge. A spotlight flooded onto the soundstages and executive suites of filmdom, and many, including, apparently, President Franklin Roosevelt, were not pleased with what they saw.

In the summer of 1933, however, the initial prognosis for the film industry's cooperation with the NRA looked rosy.Footnote ³ The NRA, signed into law on 16 June 1933 by Roosevelt as part of his administration's National Industrial Recovery Act, sought to implement an unprecedented (and never seen since) reorganization of the American economy aimed at restoring employment and ridding the economy of dangerous waste. By setting price controls, production quotas, maximum working hours and a minimum wage for hundreds of industries nationwide, the NRA hoped to stop overproduction and cutthroat competition that, according to the administration, hurt companies and put people out of work. It evinced an ameliorative and humane effect as well, contributing much to the demise of sweatshop and child labor.

Perhaps most controversially, especially for the union-averse film industry, the NRA established collective bargaining as a right for workers. It temporarily waived antitrust laws so companies within industries could work together to (theoretically) secure the best outcomes for the workers, the bosses and the American economy as a whole. The program had teeth as well – the government could revoke business licenses of companies that disobeyed provisions of their industry's code. The idea was that, with the government watching the process and ensuring an equal playing field, management and employees would both sacrifice some advantages to increase employment and put paychecks into more people's pockets, improving the national economy during this period of severe economic privation. Each major American industry – over seven hundred in all, including the film industry – was required to draw up their own code of practice for adhering to the NRA's guidelines. But much resistance to the NRA developed as well. It gave the federal government almost unlimited and hotly contested powers over the economy and individual businesses. For laissez-faire business-minded Republicans, it looked like a hubristic act of constitutional heresy, an interference with markets and Adam Smith's “invisible hand” surely doomed to fail.

During the summer of 1933, the Hollywood major studios made a point of showing enthusiasm for the NRA and its goals in marketing that featured the NRA's blue eagle insignia, as well as using Roosevelt-associated slogans such as “prosperity,” “new era” and “national recovery.”Footnote ⁴ All the “big eight” studios made short films featuring movie stars promoting the NRA and its goals.Footnote ⁵ The studios publicly gave the impression of being supportive of the NRA, voicing enthusiasm for the policy and vowing to quickly formulate an NRA code for the film industry. This did not connote a purely altruistic or patriotic attitude. They hoped that if they were seen in public doing their part for the New Deal, by changing their business for the good of the country and hiring thousands more workers, and by featuring the NRA blue eagle at the start of their films and in their ads, the public would reward their stance and their sacrifice with goodwill and additional box office receipts. After all, as one major Hollywood figure noted in the Hollywood Reporter that Depression-saddled summer, the motion-picture industry needed an economic boost: 6,064 of 13,247 theatres nationwide were closed.

Will Hays began meetings concerning the code in June 1933. Several press accounts from July and August predicted a speedy resolution of the code, with the industry expressing a desire to be the “first [to complete an NRA code] for Roosevelt.” Sources in Variety offered readers an optimistic portrait of cooperation between the major segments of motion-picture industry –production, distribution and exhibition – and assured readers that 90 percent of the code was already completed by August, with “representative indie [independent] distributors, according to their own spokesmen … in harmony with major distributors on practically all important points.”Footnote ⁶

Such optimism was misplaced. The disagreements unearthed by the shaping of the document were too profound to accommodate quick resolution. Though articles in the press kept appearing throughout the summer and fall predicting a final wrap-up of the film code, the process ground on. The Roosevelt administration ordered all NRA codes finished and submitted by 31 August, but the film industry code would not be finished and approved by Roosevelt until late November, almost five months after initial predictions of completion. No other industry in the United States took so long to accomplish the task; 690 codes were on the books by the end of August, and of the major American industries, only bituminous coal's code was approved as late as 18 September.Footnote ⁷ The motion-picture industry represented a special and particularly intractable case.

Even before the code's completion, major studios and exhibitors were following general reforms proposed by the NRA and supporting the President in unprecedented ways.Footnote ⁸ A few days after Roosevelt took office, the independent theatre chain Allied States Association of Motion Picture Exhibitors, which would prove a significant irritant to the major studios during the code negotiations and afterward, nationally distributed slides, trailers and lobby cards to theatres across the country urging cinema audiences to “SUPPORT YOUR PRESIDENT.” In August, six thousand theatres received a fifteen-second insert to be shown in every film programme: “This theatre is an NRA member. We do our part.” “Nearly all” theatres in New York City's Times Square sported homemade NRA flags by August, quite a commitment when one considers that NRA rules kept employees to just eight hours per day, cutting the pay of many employees, while forcing theatres to hire more personnel and usually pay more in payroll costs. Executives' hours were not curtailed. The same situation applied at the major studios as well. Such situations did cause tensions, in Hollywood as well as at theatres nationwide, since “white-collared” management employees often ended up putting in far longer hours than lower-ranked employees whose weeks were capped at thirty-five or forty hours under NRA regulations.

As a result of this policy, for example, Paramount reported that their weekly salary expenses jumped $10,000 (roughly $175,000 in today's dollars), adding about forty employees overall. By the end of August, Variety claimed that a total of 30,000 additional employees were hired by the film industry as a whole (a March 1934 Variety article reported that the industry employed 389,000 overall). The industry did its part, but worried about financing the government-mandated hiring. Under the NRA codes, the industry could also raise admission prices to cover those new costs, which made a difference since the studios earned a percentage of the box office take and admission prices had previously been dropping steadily to help lure in larger audiences during the Depression.

But the major studios would not long abide by the ethos of the NRA. Throughout 1933, they violated the spirit and letter of the NRA code, ensuring as much as possible that the economic pain and sacrifice of the Great Depression in Hollywood was visited upon artists and technicians, not studio heads and executives. They used the making of the code to attempt to cement and further the advantages they enjoyed as a vertically integrated oligopolistic business, preserving their unparalleled supremacy in production, distribution and exhibition while offering little to other interests in the motion-picture industry.

The major three players in the making of the NRA code from the government side became household names in Hollywood circles, their names regularly printed in bold headlines in show business periodicals and national newspapers. First on the list was President Roosevelt, already a familiar figure, of course, but his keen interest in films and filmdom was only becoming known as the NRA motion-picture code was being written. Roosevelt did not work directly on policy minutiae concerning Hollywood's code or the other codes his government supervised. But he had to sign off on the final product, he had Hollywood friends, he commented on the film code, and he seemed particularly concerned about issues of compensation and whether independent interests were being served fairly compared with the major studios who largely dominated the proceedings. Roosevelt, a fan and student of film and of Hollywood like no previous President, understood not only its significance in terms of campaigning and governing, but also the importance in a democracy of securing a diverse national mass media. During his first year in office, Roosevelt viewed 1,327 film reels (a reel holds fifteen to twenty minutes of film), “202 reels more than the average stenographer or clerk. It is also four times as many pictures as witnessed by Hoover and almost five times as many as Coolidge viewed when in office.”Footnote ⁹

In May 1933, soldier, lawyer and manufacturer Gen. Hugh S. Johnson took charge of the NRA.Footnote ¹⁰ In newsreels, Johnson appeared dour, heavily scripted and perhaps a little soused. Within the administration, he was known for a fondness for drink, abundant and creative cursing, and memorable if undecipherable aphorisms. He understood early on the daunting task of organizing the affairs of hundreds of industries under the aegis of the federal government: “It will be red fire at first and dead cats afterward.” As the Los Angeles Times remarked upon the announcement of his new post, “Johnson will have the most extensive powers ever wielded by one man over the private business enterprise of the nation.”

Sol A. Rosenblatt, a Harvard law grad, former lawyer for the Democratic National Committee and current lawyer for Columbia Pictures, became the NRA deputy administrator supervising the fashioning of Hollywood's code.Footnote ¹¹ Relatively young (thirty-two in 1933), Rosenblatt possessed enough inside experience to play a sharp psychological game in investigating and regulating Hollywood's business practices. A Variety feature entitled “Rosy Knows Too Much” painted a picture of Rosenblatt and his assistant holding court in a five-room suite at the Beverly Wilshire as he grilled various film representatives (including studio moguls), his interrogation style supposedly taking on an effective amalgamation of “Father Confessor” and “Big Bad Wolf.” The act supposedly worked, with many executives “crying copper” and “spilling everything” concerning their Hollywood brethren. Rosenblatt also seemed to have a realistic understanding of Hollywood's political dynamics and of how they would fit into the construction of the NRA code. In August, when show business periodicals and Hollywood execs unanimously insisted that a final code agreement was imminent, Rosenblatt alone told Variety that he believed “the industry is in a muddle and has not even gotten into preliminary work on a code formula,” an astute and largely confirmed prediction.

The writing of the NRA motion-picture code provoked a fierce power struggle within the industry. Such rancour was not surprising, particularly since the scope of the job was daunting – according to Rosenblatt, it took “276 classes of labor and employers to make a single motion picture.”Footnote ¹² The inner workings of Hollywood had never been codified in such a precise fashion. Every segment of the industry, from the moguls and the creative workers in Hollywood to the nationwide distributors and theatre owners, realized that they needed to manoeuvre quickly to seal the best deal for themselves in the code. In addition, each group aggressively made the case for their interests in the public arena, trying to sway general opinion to their side. Industry rivalries and resentments brewing for decades rose to the surface and became public knowledge.

From the start, the major studios dominated proceedings.Footnote ¹³ Hays initiated the code-writing process during June 1933 by taking recommendations in private from “producing heads” (heads of production at the major studios), drawing up a preliminary version of the code that Rosenblatt would later refine. This “Hays group” set the precedent for the major studios being in charge, with all other groups coming to them and making requests for what they wanted enacted in the code. This situation could not conceivably have gone another way. With their vertically integrated hold on the film industry, the major studios enjoyed 95 percent of the American film market, and would be picking up the majority of the tab for the NRA code reforms. To a large extent, they were the industry, and they naturally would not countenance reforms that challenged their hegemony.Footnote ¹⁴

Independent exhibitors and distributors, as well as actors and other creative and contracted studio personnel, soon realized that the major studios would not be looking out for their best interests and would in fact attempt to drive their salary and benefits downwards, so they did their best to lobby for their own provisions in the code, with varying degrees of success.Footnote ¹⁵ For example, representatives from the Academy of Motion Picture Arts & Sciences (AMPAS), the Hollywood company union (supposedly) representing actors, meeting with the “Hays group” in July, asked for a cessation of the practice of loaning out actors, an action rumoured to be favoured by the Roosevelt administration. The loaning out of actors to other studios increased actors' workloads and made considerable money for the studios without bestowing any of the extra salary paid to actors themselves.Footnote ¹⁶ AMPAS further requested a lowering of production work to forty-eight hours per week, a significant drop but still above NRA mandates for a working week; actors on the Warner lots, for example, usually worked six days a week, often as much as fourteen hours per day, and if a national holiday occurred during production, the actors were required to work on the next Sunday to make up time off.Footnote ¹⁷ Producers refused both requests immediately, and neither made it into the final code. The major studios took care that the code-writing process retained a veneer of fairness for all film interests involved, but made sure that major decisions went the way that they desired and preserved their preferred way of conducting business.

Production costs represented one early concern that lasted throughout the code-writing process.Footnote ¹⁸ The years 1932 and 1933 saw every studio losing money except MGM. The cost of retrofitting theatres and film studios with sound equipment cost tens of millions, considerably raising the cost of film production. But the salaries of Hollywood's best-paid workers, particularly actors, were singled out for contributing to rising production expenses even though early NRA regulations left such salaries unaltered. Between 1929 and 1933, according to the NRA's research, production costs decreased 35 percent, but salaries only went down 16 percent, and, overall, salaried employees took up three times more in production costs than hourly studio workers. Some outside observers felt that the film industry's supposedly bloated salaries had contributed to the run of receiverships and bankruptcies suffered by major studios during the Great Depression. NRA rules held forth on minimum salaries, but said nothing concerning maximum salaries. Creating a day of reckoning for movie stars by reining in their remuneration seemed to constitute a major goal for the studios during the construction of the code, something the studios had wanted to do for years. And if executed correctly under the guise of the NRA, the moguls could cast such a move as a patriotic act.

What was more, “picture scouts” visiting Washington to discuss the NRA code during the summer of 1933 reported back that government figures seemed interested in maximum salaries and were considering looking into the matter, especially after reports cited that over 350 Hollywood figures earned yearly incomes over $100,000 (about $1.75 million in today's money). “We have got to reduce the present high top level and increase the ridiculously low levels now existing in this industry in salaries,” argued Harry Warner. “I believe you can increase the number of people to be employed by 20 to 30 per cent and not use any more money than is being used now.” And who in the studio's present employ would take the salary cuts to increase employment without raising overall payroll costs? Certainly not extravagantly paid executives like Harry Warner, as was proven when they unilaterally excused themselves from the industry-wide salary cuts instituted during March and April 1933.Footnote ¹⁹ The other highest-paid employees were movie stars.

But not everyone bought the premise that actors were mostly responsible for out-of-control Hollywood budgets. In one meeting between Rosenblatt and studio moguls, Paramount head Adolph Zukor accused Mayer and MGM of being the principal cause of rising budgets, with their policy of “pay[ing] any price without regard” for talent, and raising production standards with luxurious and elaborate set designs for films like Grand Hotel (1932). Rosenblatt himself blamed the talent-raiding between studios for contributing to soaring industry expenses, and hoped to secure provisions against it within the NRA code. The general public did not have the facility to judge such industry-centric issues, but they could easily understand the enormity of the salaries of movie stars such as James Cagney and his studio bosses Harry and Jack Warner when they totalled several times what President Roosevelt made per year during a time of economic dislocation. The salary issue continued boiling throughout 1933.

The brothers Warner chaffed at accusations made against them of “star-raiding,” and Hays's initial draft of the code included a provision outlawing such behaviour.Footnote ²⁰ The year before, in a widely publicized case, the studio scooped up the contracts of stars Ruth Chatterton, Kay Francis and William Powell before their previous studios had had a chance to make an offer and before their contracts had expired, a protocol usually followed in Hollywood. Warners had also secretly employed choreographer Busby Berkeley during the evenings for their 1933 musical extravaganza Footlight Parade and offered him a long-term contract while he was also concurrently working during daytime hours on a musical for Samuel Goldwyn. In addition, the studio came down hard on actors who wished to increase their rate of pay once they became stars, as seen in the case of Cagney, who withheld his labor from the studio twice for a total of eight months to receive pay increases during 1931 and 1932.Footnote ²¹ This situation created an intriguing conundrum: Warners insisted on the right not to follow industry protocol when hiring stars away from other studios, undermining other studios' contracts, yet vehemently attacked those actors in their own studio who dared to question the terms of their original contracts once they became successful stars who helped the studio earn hundreds of thousands, if not millions, of dollars. Apparently, the sanctity of contract did not go both ways in Burbank.

In an 8 August 1933 speech at the New York Bar Association that marked the first official industry meeting concerning the NRA code, Rosenblatt set his goals. He favoured a single code, not separate ones for production, distribution and exhibition, since those interests were intricately linked. The major studios also owned major interests in all three segments. Rosenblatt also stressed a single code because in the last few weeks at least seven industry leaders had written their own draft of the NRA code, including Hays, Mayer, AMPAS's president and Abram Myers, head of Allied. Every one of the seven spoke briefly at the event. Rosenblatt also recommended that the issue of film censorship, in the press frequently because of groups pointing out recent violations of the 1930 Production Code, be considered separately from the NRA code process, a position the major studios supported. Rosenblatt further “mentioned that while he had not invited labour representatives to the meeting he was negotiating with such leaders separately and their aims would be considered.”Footnote ²² Not an auspicious situation for labour: the major business interests of the industry were already presenting their plans in a public context and labour was pointedly left out of the proceedings. It represented another sign that, in the writing of the code, the major studios' interests would reign paramount.

At the meeting, Rosenblatt assembled three committees comprising at least a dozen well-known industry figures each, in the fields of production, distribution and exhibition, charging them with drawing up proposals for code provisions dealing with their segment of the industry and asking them to identify any lingering controversies that could not be resolved within their committee.Footnote ²³ All parties gathered to share their progress and air differences among themselves and with as many as six hundred spectators for four days from 12 to 15 September at the US Commerce Building in Washington, DC. Most code matters were ironed out by the committees, but several issues took months to resolve. Rosenblatt broke the industry groups into smaller sessions, hoping to find compromises by grouping different personalities and segments, to no avail. On 25 September, after what the Los Angeles Times termed “another weekend of factional bickering,” Rosenblatt told conferees that he would write the contested parts of the code himself, trying to work out fair compromises between positions. The day before, the Times proclaimed that the code would be sent to Roosevelt for approval in less than a week. Two days later, they reported that motion-picture industry insiders conceded that “the end … is nowhere in sight.” On 30 September, registering the brewing resentment in Hollywood, MGM placed a striking two-page ad in Motion Picture Herald featuring their Leo the Lion mascot standing with his fist in the air next to a message in tall bold lettering: “Gentlemen! Quality cannot be coded!” On 2 October, in Washington, Rosenblatt announced his interpretation of how the controversial issues in the code should be resolved, and, as reported by a Film Daily editor, “the independent delegates, representing [independent] producers, distributors and exhibitors, broke out in open revolt. They waxed emphatic … that [Rosenblatt's] provisions were unfair and workable.” Actors, writers and agents soon declared similar sentiments.

The issues that held up industry approval of the NRA code were numerous.Footnote ²⁴ Most centred on the balance of power and profit between major studios and the independent forces in the industry, as well as highly paid creative workers. A few days after their walkout on Rosenblatt, the independents wrote him a group-signed letter arguing that “the proposed code fails to deal with many major abuses that affect the industry,” fails to prevent “oppression of small enterprises,” and “tends to promote and perpetuate unfair and monopolistic practices.” Unsurprisingly, block booking emerged as a major issue. “Block booking” usually formed the only way independent theatres could access the films of a particular studio. For example, if a theatre owner wanted to show crowd-drawing Cagney films from Warner Bros., he also had to contractually agree to show Warner films fifty-two weeks per year. Thanks to this policy, studios were assured that even their mediocre and poor product would gain an audience and probably a profit. Many theatres, especially those represented by Myers's Allied association, wanted to “purchase films in open competition,” to be able to screen quality studio films without also being forced to show their less desirable product, and to enjoy the right to buy films from independent producers as well. Rosenblatt countered by noting that under his plan theatres were allowed to “reject 15% of the feature films assigned [by major studios] and are required to pay for only half of those eliminated.” But he refused to recognize that such an arrangement meant that major studios continued dominating and dictating what each block-booked theatre screened over the course of the year, and forced them to pay for pictures they did not want. Attacks on block booking essentially constituted attacks on the major studios' preferred and lucrative vertically integrated business operations, and they were loath to give up any of that power to distributors, exhibitors or independent film production companies, no matter the spirit of NRA policies.

In this environment, independent exhibitors walked a fine and difficult line. There were not enough independent features for them to show fifty-two weeks per year, and the independent studios did not possess the resources to promote a film as effectively as the majors did, which usually meant that they made less money than major studio films. At some point, then, the independent exhibitors were forced by the structure of the market to deal with the majors, often on a regular basis on disadvantageous terms. And if they were not affiliated year-round in a relationship with a major studio, they usually received a film on its third, fourth or even fifth run in a certain area, months after their local block-booked theatres showed the film, if the major studios' distributors even allowed an indie exhibitor to show a particular studio's films (and sometimes they did not).Footnote ²⁵ Rosenblatt's code reforms helped a little around the edges for this demographic, but still largely preserved the heavily slanted status quo.

Rosenblatt inserted safeguards into the code that he insisted would protect the independents. NRA grievance boards and the Code Authority would be created to arbitrate disputes between indies and the majors. Such provisions provided “ample protection,” according to Rosenblatt. But signs were not auspicious. The code would largely keep block booking as the industry standard, enshrined by government decree. Rosenblatt was asking the independents to trust him, but if the code-writing process was major-studio-dominated, it did not bode well for what would transpire for independents when they complained to the code-mandated grievance boards, and they knew it. When these boards were organized in late 1933, the membership was overwhelmingly major-studio-dominated;Footnote ²⁶ it looked doubtful that they would ever side in a significant way with the causes of the independent exhibitors, or, for that matter, studio technicians, actors, screenwriters or other creatives. These contentious block-booking issues applying to independents would not go away. Months after the NRA Code for the motion-picture industry was eventually signed into law in the autumn, the NRA's National Recovery Review Board, headed by legendary lawyer Clarence Darrow, the next spring unearthed more evidence concerning the studios' heavy-handed booking policies and voted 3–2, after hearing much evidence, recommending “a complete overhauling” of the Code in this area, but the majority was not enough to warrant a wholesale change of the Code, and the status quo reigned.Footnote ²⁷

News reports about the code negotiations tended to view the objecting independent cohort of distributors and exhibitors around the country as “insurgents” (a loaded word), selfishly keeping the industry from agreement, when they were actually fighting to have control over their own livelihoods. As the Times reported, “Contrasted with the position of the insurgents, major [studios] and [their] affiliated exhibitors indicated more or less complete satisfaction with Rosenblatt's efforts.” Well, of course they did. Their way of doing business was preserved, while independents would be forced to fight on for their issues after the lopsided code was passed. “Neutral observers inclined all along to give the insurgents a break, feel they are entitled to more consideration than they are receiving under the present code,” surmised Variety.

The drive by the studio moguls to pin the blame for rising production costs on actors, and the attempt to reduce actors' paychecks via the NRA code, spurred the thespians into even more action.Footnote ²⁸ Earlier in 1933, they set up the rudiments of the Screen Actors Guild (SAG), but the lack of respect shown actors during the code debacle helped bring many more of them into the fold. If actors were going to be blamed by the moguls for the economic troubles within the industry they ostensibly controlled, the actors were going to fight back by renouncing their AMPAS representatives and signing on for SAG en masse. The Hollywood thespians mounted a spirited publicity campaign, pelting Washington and local NRA representatives with telegrams, scheduling mass meetings and insisting that salaries should be limited only by the free market.

Another factor in the mounting SAG rebellion was the majors' lack of interest and initiative in creating a system of impartial arbitration and mediation between actors and the studios. Rumours in the press signalled possibilities of this happening, but nothing transpired. When the preliminary version of the code came out without this provision, it provided another reason for actors to form their own union. On 4 October, shortly after the indies walked out on Rosenblatt, almost every major Hollywood star gathered for a meeting at a private home, and among those switching from AMPAS to SAG representation were Cagney, Gary Cooper, Groucho Marx, and many more. Four days later, 1,200 actors and writers gathered at the El Capitan, one of Hollywood's premier theatres, for a joint meeting between SAG and the Screen Writers Guild (SWG), to unite and bring more publicity to their mutual cause. Six weeks previously, the SWG's executive board had issued a statement proclaiming that the code “declares war on the industrial workers” and will bring “industrial peonage” to screenwriters. Many screenwriters rejected AMPAS, signing on with the nascent SWG, which grew to 750 members during its first year.

Actors and writers were particularly alarmed by Clauses 4 and 5 of the code, which meant to drive down their earning capabilities and contractual freedoms. The provisions in these clauses promised to enhance the studios' desires for more control over their workforce, and eliminating competition, firmly cementing into place the plantation aura they preferred in their hiring practices, and imposing restrictions they had always dreamed of applying. For example, if the Agency Committee of the NRA motion-picture code wished (five of the committee were major-studio representatives, joined by an agent, an actor, a writer, a director, and a technician), it could require all agents in Hollywood to register with them, and even permanently bar certain agents from the industry. Agents drove up employee salaries, and studios had wanted to place them under their thumb for some time. This represented a particularly bold power grab. It gave the major studios the opportunity of control over a class of motion-picture employees they did not hire or pay, since agents are compensated based on a percentage of their client's earnings. This provision ostensibly sought to intimidate and even restrict agents, reducing potential competition and costs for the major studios.

An anti-talent-raiding clause, probably inspired by actions of Warner Bros. in this realm, further tipped the balance in favour of the largest Hollywood studios. It mandated that no studio could make an offer to a salaried employee until the last thirty days of his contract, and allowed the home studio always to have a chance to match any offer. It also forbade any studio fomenting “dissension, discord, or strife” between another studio and its contracted employees in order to inspire an employee to be “dissatisfied with his subsisting contract” (little recognition of the existence of women in the industry was present in code language). It forbade any “large financial inducements” to sign contracts, sparing the major studios another expense.

Another code provision attempted to assuage the egos of studio chiefs and keep them and their services free from criticism. The code barred the “defamation of competitors by falsely imputing to them dishonourable conduct, inability to perform contracts, questionable credit standing … or by the false disparagement of the grade and quality of their motion pictures or theaters.” Who knew that the tough Jewish immigrants and sons of immigrants who founded Hollywood were so sensitive? In order to stem future Cagney-style contract rebellions, the code allowed blackballing of any employee who “has refused without just cause to render services under any contract of employment” if such action was approved by the Code Authority.

Perhaps most odious of all to those gathered at the El Capitan, the so-called salary clause of the NRA code sought to place an industry-wide $100,000 yearly limit on all contract salaries, with $10,000 penalties assessed to violators by the Code Authority. At the theatre and in a message sent to Roosevelt about the “sinister provisions” of the proposed code, “all the important stars” threatened to walk out of the industry for a year if the provision was made law. John Howard Lawson, avowed communist and first president of the Screen Writers Guild, shouted to the assembled crowd,

The term “racketeering” at the time was usually reserved by the press and federal law-enforcement officials to describe the crimes of legendary gangsters such as Bonnie and Clyde and John Dillinger who roamed, robbed and killed across middle America, particularly during 1933.Footnote ²⁹ The subtle reference and comparison made by Lawson almost certainly was purposeful. In any case, the El Capitan event successfully generated national publicity about the creatives' worries concerning the code, and enhanced membership recruitment. Some 183 new Screen Actors Guild members signed up that evening. The outcry by actors and writers against the NRA code, particularly its salary provision, seemed to succeed on at least one count: as a result of the protests and publicity, Rosenblatt was summoned to the White House in October to talk to officials there (but not Roosevelt) concerning “legal aspects” of penalizing excessive salaries.

Rosenblatt reminded the press and actors protesting the code that the salary provision would apply to “executives as well as employees.”Footnote ³⁰ While this was ostensibly true in the provision's wording, it represented a stretch to believe that this would prove true in reality since the decision on whether a salary was excessive would be made by the major-studio-dominated Code Authority. Would major-studio executives (or those serving on the authority whose livelihoods depended on the major studios) vote against the salaries of fellow studio executives, no matter how disproportionate those salaries were compared to those of executives in other industries, or even within their own? Would even an independent exhibitor wishing to have favourable terms on the most profitable major-studio films bite the hand that feeds? It seems doubtful.

In a story usually pitched in the press as related to the investigation of motion-picture salaries, the Federal Trade Commission announced in November that it was “asking 2000 companies to furnish data on the salaries of their executives and directors.” The point that such coverage seemed to make was that it was not just Hollywood denizens being picked on concerning high salaries. But there seems to be no evidence from the Times or other major newspapers that executives or high-paid employees from other industries had their salaries dragged before the public as film stars did during the 1933 NRA code negotiations in what looked to be a deliberate attempt to undermine and intimidate them. Also, none of this publicity noted that big paychecks earned by stars (and probably executives as well) usually reflected their market value – how their skills, image and personality brought more customers to the box office. While studio executives had no compunction about rewarding themselves based on criteria such as profits accruing to their companies, they strongly resisted paying the market value of the creatives in their employ for the same reasons.

Further curtailing of creatives' rights was announced. In early November, Variety reported,

No creatives (actors, writers, directors, cinematographers etc.) or other nonexecutives were represented on the Code Authority, as originally laid out in the code, unless a 5–5 deadlock existed on a certain issue, in which case “one representative” of that “class” of employees could temporarily serve to break the tie.Footnote ³¹ Imagine the situation if you were an actor taking a grievance to this board, filled with representatives of your bosses, with no peer of yours in attendance. What would be the chances of getting a fair hearing in this system? Especially when lawyers were not supposed to be brought to such hearings? The system appeared designed to intimidate resisters or “insurgents” from bringing their issues for consideration. In this instance and others in this chapter, the idea that both management and employees needed to sacrifice under the NRA had never been taken seriously by the executives.

In the last month before Roosevelt signed the motion-picture code, tensions mounted. The major studios tried to beat back any last-minute challenges to the code, while dissatisfied creatives and independent studios, distributors and exhibitors vowed to “fight on and on” for what they felt to be fair treatment.Footnote ³² On 27 October, the motion-picture code was sent to Johnson, appended with the signatures of “virtually all the major producers and distributors” and the theatres affiliated with them. The Los Angeles Times predicted that Roosevelt would sign the code “within a few hours,” but it took almost a month. No other NRA code in the country experienced such delay between submission and approval. The reasons cited in the press included further study of the legality and practicality of the salary clause, discussions concerning different wage scales for noncontract workers, and the President and his staff wishing to investigate whether the major studios had run roughshod over the concerns of the independents in fashioning the code.

The delay proved so vexing to the major studios that they threatened to back out of the entire deal if the code did not gain complete and immediate approval.Footnote ³³ Variety reported that high-ranking Hollywood executives wanted to “demand … that the code be immediately submitted to President Roosevelt for signature, or that it be officially torn up.” “In the event of any radical changes” that the President might insist upon before signing the document, the executives insisted they should “be allowed to return to Washington in full force and state [their] own versions” of the code. Hearing reports that the major studios hoped the film code would be “tabled,” government sources warned the industry that they “had better dissipate all ideas of treating the code lightly and try and make it work or else the government is likely to hand [Hollywood] something far tougher than the [current] formula. This, it is concluded, might very likely be out and out federal regulation.” The producers had the code pretty much the way they wanted it, and did not want to countenance any backtalk concerning it, from independents or from Washington, DC. More than four months of meetings and negotiation had brought much impatience and frustration, but the major studios' behaviour in the final stretches resembled that of spoiled children who want it their way or not at all.

The major studios further argued in the press that the delay was costing the industry millions, and driving morale down.Footnote ³⁴ “Hundreds of deals” were supposedly suspended in distribution and exhibition, and a “general uncertainty in production” reigned because of “Washington's tardiness.” Some legitimacy clung to this argument: it was somewhat difficult to close deals when no one knew exactly how business would be conducted after the code was signed into law. But the changes were not going to be extreme; unless Roosevelt radically rewrote the code, which he had not done for the more than seven hundred codes already approved, the major studios would still be running the show both in Hollywood and along the vertically integrated pipeline to local theatres. Also, the NRA had already set policy on maximum wages and hours, so anyone trying to surmise the expenses for a new theatre or film-related company would have a good idea what to expect. Roosevelt was being blamed by Hollywood for the code delay, but the real problem was that the code-writing process had exposed the film world as an unusually combative and divided industry. Perhaps Washington was not so tardy as the moguls were intransigent.

A final attempt by the creatives to alter the emphasis of the still-unapproved film code occurred over the Thanksgiving holiday during the last days of November.Footnote ³⁵ Popular screen comedian, Roosevelt acquaintance and SAG president Eddie Cantor visited the President at his Warm Springs, GA retreat, along with writers Fannie Hurst and Robert Sherwood, the latter of whom had served as a presidential speechwriter for Roosevelt. Some in Hollywood groused about this circumstance; the Motion Picture Herald argued that a more experienced film executive should have had the President's ear at this late junction in the code negotiations, instead of a “merry, whimsical song-and-dance man.” Naturally, the issue of the salary clause came up. Cantor made some personal and unrealistic speculation about the possibility of spreading out the overall economic effect of actors' high salaries by paying them smaller weekly amounts over the course of a decade, a notion that when reported in Variety was virulently opposed by Cantor's own union. This concept did not fly, but another point Cantor made seemed to resonate with the President. Roosevelt wanted to know why an actor should make more than $100,000 per year, more than the President earned. Cantor pointed out that whatever amount of money Roosevelt was not paid for his work “stayed in the pockets of the American people,” according to labour historian Nancy Lynn Schwartz, “but if actors and writers made less, it just stayed in the pockets of the [studio] producers,” executives and moguls. The argument may have influenced Roosevelt's future actions on the issue.

On 27 November, Roosevelt approved and signed the film code, adding alterations of his own.Footnote ³⁶ Cantor and fellow film star Marie Dressler were appointed to serve as nonvoting Code Authority members so that “squawking actors,” as Variety termed them, could have a (relatively powerless) voice in film-industry matters. (A few days later, Dressler resigned from the post, claiming it too demanding; no replacement was announced.) In a positive outcome for the creatives, the salary and anti-raiding clauses were suspended for ninety days pending further study by Johnson and the White House. Roosevelt also reserved for himself and Johnson the power to override any Code Authority decisions or changes in its membership. According to a front-page Times article, these actions “aroused outspoken antagonism of industry leaders.” In a decision that went against the creatives, particularly actors and cinematographers, the code allowed certain contract studio employees to work beyond NRA dictates on maximum hours if “intimately involved with production.” It was difficult to discern whether this rule represented a backtracking of NRA policy, or a recognition of the special nature and reality of making feature films. Nowhere in the debate over salaries was it mentioned that perhaps another reason why salaries were so high for star talent was because of the marathon hours usually demanded of such employees.

Distrust between the government and the major studios was palpable, both in alterations to the code and in exchanges about the code in the press following the President's action. Reports swirled of a pending Congressional investigation of the film business. Johnson remarked that no NRA-coded industry would receive more careful scrutiny, because of the breaches in the film world that the code-writing process had revealed and the general sniping at the code in Hollywood – probably also because of the outsized amount of time and effort it took to assemble the code compared to other industries. For example, in addition to the code prepared by Rosenblatt, “47 antagonistic groups” offered their own versions of the code to the federal government. It represented a lot for the NRA to wade through, encompassing more hassle than they had experienced supervising any other major American industry.

Seemingly incensed that some key matters would be left hanging for ninety days and that Roosevelt and Johnson could veto Code Authority decisions, the major studios assembled another rebellion in order to pressure the administration for more concessions, threatening to become the first industry to challenge the NRA's constitutional legitimacy all the way to the Supreme Court.Footnote ³⁷ “The NRA and major filmdom are reported to be at the crossroads,” Variety reported just a week after Roosevelt approved the code. In the same article, anonymously quoted film executives claimed they could not manage to effect $10 million in employee raises under NRA rules without cutting production costs somewhere – they were probably especially thinking about cutting star actors' salaries, which Roosevelt's suspension of the salary clause had rendered impossible for the time being. As scholars Larry Ceplair and Stephen Englund put it, “Now that it was clear that real labor–management bargaining, and not salary fixing, would have to occur, studio management opted out.” Or at least they tried to do so. There was scuttlebutt intimating that industry leaders might withdraw their signatures and refuse to abide by the code, and worries that such action would bring unwanted further federal involvement in their business, alienating millions of customers who supported the NRA. During the first week of December, representatives from all the major studios “pleaded” that Roosevelt rescind his modifications of the code. Some called his emendations “federal dictatorship.” Brief messages featured in the 1934 Film Daily Yearbook from famous Hollywood executives such as B. P. Schulberg (MGM), Adolph Zukor (Paramount) and Albert Warner praised the NRA, yet behind closed doors these executives did all they could to defy and destroy the film code.

The provision that allowed Roosevelt or Johnson as head of the NRA to reverse any Code Authority decision apparently made studio moguls particularly nervous. A committee of film executives headed by Hays headed to Washington asking for “greater self-regulation” under the NRA pact. Perhaps not wanting to risk the industry testing the constitutionality of the NRA, Roosevelt awarded them half a loaf; Johnson could not overrule the Code Authority, but Roosevelt still reserved that right. In exchange, the studios were asked to create policies of arbitration and mediation, which did not occur until long after the NRA's demise in 1935. Hays called the administration's actions “very satisfactory.” He and his studio employers were also undoubtedly pleased by a ruling the same week which proclaimed that no Code Authority member could be added or removed “without sanction of majority of the industry members of the code authority.” This amendment made major-studio dominance under the NRA ironclad, and probably ensured that film-industry lawyers would not draw up any legal challenges to the NRA.

Another surprise unleashed by Roosevelt within the fine print of his code approval centred on the issue of film censorship, a hot topic in Hollywood at the end of 1933, as various groups, particularly Catholics, agitated for stricter adherence to the 1930 Production Code.Footnote ³⁸ The NRA code as submitted to Roosevelt vaguely required the industry to “pledge its combined strength to maintain right moral standards,” with no description of what that might entail. Roosevelt felt more was needed, and appointed Dr. A. Lawrence Lowell, president emeritus at Harvard, to a nonvoting seat on the Code Authority. This news brought “unconcealed resentment” and protest among film executives, according to the Times. Lowell had earned infamy as a vocal exponent of enhanced film censorship, and as an opponent of block booking who recently admitted having seen only three films in the preceding two years. Johnson admitted that the move signalled Roosevelt's intention to influence the industry to use the 1930 Production Code to more strictly regulate itself. Lowell's appointment was so disastrously received that he resigned it in less than a month; Roosevelt and the NRA could not force the industry's hand regarding the censorship issue, but the industry ended up administering its own medicine, admittedly under pressure, during 1934.

Other industries also experienced problems in forming and adapting the NRA codes.Footnote ³⁹ While cotton manufacturers initially appeared to improve the horrible work conditions and pay of their employees and deal effectively with previous long-term overproduction liabilities, many individual companies found ways around such reforms in the long term, and most of the other largest American industries also refused to reform so easily. Early in his tenure, Johnson's staff informed him that the NRA's enforcement powers for punishing offenders would not pass constitutional muster if tested, which is why propaganda and patriotism were brandished by the organization to sell the public more than penalties. Perhaps the film moguls had realized this, or been informed of it by their legal staffs. Their boldness in threatening to abandon the film code and question its constitutionality in order to obtain more of what they wanted (or keep smaller interests in the industry from getting more of what they wanted) makes more sense in this light. Auto magnate Henry Ford did the same thing and, unlike the film moguls, followed through with his threat because he refused to abide by any agreement allowing collective bargaining.

In most ways, the film industry's NRA code followed the pattern of other large industries. Historian David Kennedy's conclusions concerning the NRA's significance demonstrate that the MPPDA served a similar role in the film industry to other dominating producers in different industries:

The motion-picture code followed suit in this realm, with its policy of no workers or creatives serving on its Code Authority as fully voting members. In the end, the high fixed costs which kept competition from developing against the big eight studios since their vertical integration during the mid-1920s lay behind their oligopolistic practices. They basically ruled their industry, which meant that they could get away with such behaviour, and nothing the NRA or independent film-industry forces could do would change that power equation. Similar situations, and similar impotence resulting from the NRA's reforms, also existed in the steel and automobile industries. The NRA's mandate of collective bargaining for workers, though successful during 1933 in the case of mine workers, generally brought results not unlike those found in the film industry: a company union slanted towards management was proffered instead of authentic representation. The workers were almost always on their own in their struggle for a true union, especially since the government could not yet enforce its own provision, hence the redoubling of efforts in Hollywood for the SAG and SWG. The government offered a legal opportunity to capitalize upon, but left labourers alone to try and take it on for themselves. Famous actors and well-paid writers in Hollywood possessed leverage to create powerful unions for themselves relatively quickly, but most American workers were not so fortunate. Eventually, after World War II, Section 7a, the collective-bargaining clause, would engender a revolution in the economic and personal well-being of the American worker.

Rampant mind-boggling bureaucracy represented another inherent problem with the NRA, limiting its effectiveness.Footnote ⁴⁰ “There are boards and committees for any and all occasions,” observed Variety. “So many of them, Washington contacts of filmdom reveal, that they seem to overlap in various instances or to nullify the work of each other.” For example, when seeking redress on issues of fair trade practice, a complaint could travel from a local industry grievance board to the Code Authority, then on to the divisional administrator (Rosenblatt, in the case of the film industry), then on to the National Compliance Board and the national compliance director. If the complainant still felt dissatisfied, he or she could submit the issue to Johnson, and from there go on to the US Attorney General and the Federal Trade Commission, with the US District Court serving as a last resort until reaching President Roosevelt, where the chain finally stopped. In April 1934, it was announced that ten boards would be established around the country to watch for violators of the NRA film code, adding seventy workers to the already sprawling NRA bureaucracy. Such myriad and intersecting pathways could not have helped the NRA's popularity or utility. In addition, the organization probably tried to codify too many industries. Historian William Leuchtenberg pointed out the multitude of NRA codes nationwide: “Code 450 regulated the Dog Food Industry, Code 427 the Curled Hair Manufacturing Industry and Horse Hair Dressing Industry, and Code 262 the Shoulder Pad Manufacturing Industry.” It sounds humorous until one calculates the time and money used to formulate and police each code. Narrowing NRA focus to the largest and most important industries where it would have done the most good would have saved time and bureaucracy and probably produced a better overall economic effect.

Though the major studios won their arguments and kept their one-sided business system, the NRA codemaking process exposed their modus operandi to the public and the government like never before. Overall, it represented a short-term loss for the crowd not affiliated with the majors, but it sowed the seeds for a long-term win. The worst nightmares of the independent and artistic forces in the film industry mostly came true: the federal government's intervention justified and strengthened the major studios' position and business model, making it even more difficult, if not impossible, for any true competition to emerge against them. The absence of antitrust worries instigated unprecedented collusion at the top of the film industry, and the result decidedly did not produce the balance of interests between workers and management that the NRA hoped to effect. Yet the code experience also represented a significant first step toward the eventual breaking of the vertically integrated stranglehold that the majors enjoyed over the careers of the various creatives they employed, as well as theatres and distributors around the country. Like most efforts to bring more equality and a level playing field to American society, righting the balance in Hollywood would take a long time. Too long. The NRA, particularly in Hollywood but also around the nation, did not live up to its initial promise among workers, in fact it mostly reinforced oligarchic business conditions in the motion-picture industry, but it allowed its workers a glimpse of the possibilities, commencing a difficult and sometimes violent path towards strong independent unions and industrial reform.