The most salient feature of post–World War I France for future film scholars was the coalescence of the film culture around France's first cinéphiles and first avant-garde. Inspired by the influx of Hollywood films, a generation of young intellectuals took an interest in the cinema. An avant-garde sensibility emerged, championed by the journalist turned director, Louis Delluc (1890–1924), that had a profound influence on the development of cinema as a national art form, most notably on the New Wave in the post–World War II era. Although Delluc died in 1924, he gave his name to a prestigious prize for best film, and his writing influences French thought and film scholarship to this day.

For Delluc, cinema must be "cinematic" and "French." It must express the specificity of the cinematic medium as an art form while countering the tendencies of film as entertainment. Impressionism, associated with Delluc, was a loose and often inconsistent body of thought. The Impressionists reacted against the pictorial-realist tradition of French cinema by seeking inspiration in the editing and camera styles of new Hollywood directors, who had evolved away from a strictly documentary or theatrical presentation of story. Though often dismissed as melodramatic by contemporary audiences, films such as La Roue ( The Wheel , Abel Gance, 1923) and L'Inhumaine ( The New Enchantment , Marcel L'Herbier, 1923) exploited rhythmic editing, point-of-view shots, soft focus, and optical devices such as superimpositions to convey subjective experience. Writer-filmmakers associated with the movement such as Germaine Dulac (1882–1942) pursued the idea that film functioned like a language; however, the conviction that film was an art form rather than merely a vehicle for entertainment was Impressionism's most important legacy. Following his death, Delluc's influence was evident in the work of such directors as Dulac, Jean Epstein (1897–1953), Abel Gance (1889–1981), and Marcel L'Herbier (1888–1979), who remained affected by Impressionism goals while often moving in different directions. Dadaism and surrealism inspired a second avant-garde in 1923 and 1924. The American photographer Man Ray (Emanuel Rabinovich; 1890–1976) and the painter Fernand Léger (1881–1955) created experimental films that resembled the essay films of Dulac and the fantasies of the Brazilian expatriate director, Alberto Cavalcanti (1897–1982). Two directors who would leave their mark on French cinema as part of this movement were René Clair (1898–1981) and Luis Buñuel (1900–1983).

Though largely ignored by intellectuals, French cinema as a popular narrative form thrived during this period. Rarely exported, French popular film continued to appeal to French audiences, with serials such as L'Enfant roi (The Child King, Jean Kemm, 1923), or Fanfan-la-Tulipe ( Fanfan the Tulip , René Leprince, 1925). Successful directors of the period included Julien Duvivier (1896–1967), Raymond Bernard (1891–1977), and Jacques Feyder (1885–1948). Facing increasing production costs, studios during this time inaugurated the European co-production, often working with German production companies.

Two of the most influential production companies, Ermolieff Films and Alexander Kamenka's L'Albatros, were founded by Russian émigrés, and produced films destined for the émigré audience as well as French works. This group of émigré Russians, known as les Russes de Montreuil (the Russians of Montreuil), included such directors as Yakov Protozanov (1881–1945), Victor (Vyatcheslaw) Tourjansky (1891–1976), and Alexander Volkov (1885–1942), as well as technicians and actors and actresses. Kamenka produced notable works of French cinema, such as Clair's Un Chapeau de paille d'Italie ( An Italian Straw Hat , 1928), and Les Deux timides ( Two Timid Souls , 1928). Later Kamenka produced Les Bas-fonds ( The Lower Depths , Jean Renoir, 1936), which won the Louis Delluc Prize.

During this period, many stars were recruited from the stage or cabarets, including Maurice Chevalier (1888–1972), already a star of the Parisian music halls, who attained prominence in a series of movies foreshadowing the great success he would achieve in America in the 1930s. Other stars from theater included Michel Simon (1895–1975), Gaby Morlay (1893–1964), and Albert Préjean (1893–1979). Simon, in particular, represented the French tradition of the "monstre sacré," or "eccentric," the flamboyant character actor with a singularly striking physiognomy, used to great effect in, for example, Renoir's Boudu sauvé des eaux ( Boudu Saved from Drowning , 1932).

By the end of the 1920s, French cinema had recovered from the effects of World War I. Though the battle with Hollywood at the international box office had been lost, French cinema had acquired the position of a national art form that was distinct from the entertainments produced for the masses. Paradoxically, Hollywood films, because of their impact on the avant-garde during the war years, were a primary influence in creating a French cinema that was cinematic and French, in the terms defined by Delluc. It is in Hollywood film that the Impressionists found their inspiration—in the camera work and editing of D.W. Griffith (1875–1948), the lighting of Cecil B. DeMille (1881–1959), and the dreamlike scenarios of Charlie Chaplin (1889–1977). And it is Hollywood that left its imprint on the foundational avant-garde films of the dadaists and the surrealists—films such as Dulac's La Coquille et Le Clergyman ( The Seashell and the Clergyman , 1928), and Buñuel's Un Chien andalou ( An Andalusian Dog , 1929)—setting French cinema apart as the international forerunner of the "film-as-art" movement, a place that France arguably retained throughout the remainder of the twentieth century.

Although Hollywood was the object of polemical discussion, other national cinemas such as Russian cinema, particularly through émigré producers, and German cinema, in terms of financial backing, also influenced the directions of French cinema. French popular cinema—in the form of comedies and serials, as well as the popular policier (later known as the polar ) or police film—continued to be effective in French theaters, constituting a parallel strand to the higher profile films praised by the intellectual elite. With the advent of sound, French cinema as art would encounter its biggest challenge.

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