The success of Disney's Snow White was a harbinger of major changes in RKO's production policies and market strategy, which coalesced after the arrival of George Schaefer (1888–1981) as RKO president in late 1938. Schaefer was a former top executive at United Artists who was hired to adapt the UA model—i.e., the financing and distribution of independently produced A-class pictures—to RKO's resources. Schaefer took complete control of the studio, displacing Pan Berman, who had returned for a second stint as production chief and had provided the only real consistency in terms of management and creative vision at the studio since its founding. Berman clashed with Schaefer and soon accepted a position at MGM, although he did finish off the 1939 campaign, which was typically eclectic and also the strongest in studio history. RKO's 1939 slate included Gunga Din , a Kipling-inspired adventure fantasy directed by George Stevens and starring Cary Grant, Douglas Fairbanks, Jr. (1909–2000), and Victor McLaglen (1883–1959); Love Affair , a romantic drama starring Irene Dunne (1898–1990) and Charles Boyer (1899–1978) that was written, produced, and directed by Leo McCarey; The Story of Vernon and Irene Castle , a musical biopic and the last of RKO's Astaire-Rogers teamings, directed by H. C. Potter (1904–1977); Bachelor Mother , a surprise comedy hit starring Ginger Rogers and directed by newcomer Garson Kanin (1912–1999); and The Hunchback of Notre Dame , an adaptation of Victor Hugo's novel starring Charles Laughton (1899–1962) and directed by William Dieterle (1893–1972).
Schaefer, meanwhile, signed or extended a wide range of independent deals with filmmakers like Hawks and McCarey and top stars like Grant and Dunne. In fact, by 1940 Ginger Rogers was the only major star under exclusive contract at RKO; then, after an Oscar ® -winning performance in Kitty Foyle (1940), Rogers was awarded a limited, nonexclusive pact in 1941. Schaefer signed a distribution deal with Sam Goldwyn that year which was similar to Disney's in that Goldwyn had his own studio and line of credit, allowing him to independently finance and produce, with RKO providing distribution. Disney and Goldwyn supplied many of RKO's "prestige" releases and top star vehicles in the early 1940s, including Disney's Pinocchio (1940), Dumbo (1941), Fantasia , and Bambi (both 1942); and Goldwyn's The Little Foxes (1941), a quintessential Bette Davis (1908–1989) melodrama directed by William Wyler (1902–1981); Ball of Fire (1941), a Hawksdirected screwball comedy starring Gary Cooper (1901–1961) and Barbara Stanwyck; and The Pride of the Yankees (1942), a biopic starring Cooper as Babe Ruth, directed by Sam Wood (1883–1949). Schaefer also signed a two-picture deal in 1940 with David Selznick for Alfred Hitchcock's (1899–1980) services, resulting in an ill-advised romantic comedy Mr. and Mrs. Smith (1941), as well as a solid hit—and a return to directorial form—with the psychological thriller, Suspicion (1941), starring Cary Grant and Joan Fontaine (b. 1917) in an Oscar ® -winning role.
Orson Welles remains one of Hollywood's most legendary and paradoxical figures, thanks to his role in creating Citizen Kane (1941), widely regarded as Hollywood's signal achievement, and his continual battle with the studio system. Welles's historic entry into Hollywood was the result of both his own precocious talent and the particular industry conditions at the time.
Born to a well-to-do Midwestern family, Welles was a gifted child who developed early interests in theater and the arts, traveled extensively, and made his acting debut on Broadway and on radio by age twenty. He teamed with John Houseman to form the Mercury Theatre stage company in 1937, and landed his own CBS radio drama series a year later. A radio adaptation of H. G. Wells's The War of the Worlds on Halloween night in 1938 caused a national sensation and caught the attention of Hollywood—and particularly George Schaefer, who was looking for new talent to bolster RKO's output of A-class features as the United States pulled out of the Depression.
In July 1939, Schaefer signed Welles to an unprecedented two-year, two-picture contract as producer-director-writer-actor. Welles reserved complete control over all aspects of his productions, including "final cut," as long as he remained within the studio-approved schedule and budget. This historic pact generated considerable resentment in Hollywood but fundamentally transformed the individual authority, creative control, and trademark status of top filmmaking talent. Welles maintained artistic control over Kane , but the controversy surrounding its release and its modest box-office performance, along with Schaefer's own diminishing authority at RKO, caused Welles to lose control of his next project, an adaptation of Booth Tarkington's 1918 novel The Magnificent Ambersons . Welles was cutting Ambersons in December 1941 when the attack on Pearl Harbor on December 7 dramatically changed the fate of both Welles and his production. At the behest of Nelson Rockefeller and in support of the wartime Good Neighbor Policy with Latin America, Welles set off to South America to work on "It's All True," an experimental amalgam of fiction and documentary that was destined to remain unfinished. Meanwhile, the RKO brass deemed Ambersons too long and too downbeat, and instructed editor Robert Wise to drastically cut the picture and to reshoot the somber ending, replacing it with a more upbeat resolution.
Thus ended Welles's relationship with RKO—and began a mutual love-hate relationship between Welles and the Hollywood studio powers that would persist for decades, eventually recasting the role of the victimized auteur in truly mythic proportions. Although he would have a successful career as an actor, most of Welles's subsequent films were compromised by inadequate funding, including those made outside of Hollywood.
As Actor: The Third Man (1949); As Actor and Director: Citizen Kane (1941), The Lady from Shanghai (1947), Mr. Arkadin (1955), Touch of Evil (1958), Campanadas a medianoche ( Chimes at Midnight , 1966); As Director: The Magnificent Ambersons (1942)
Callow, Simon. Orson Welles: The Road to Xanadu . New York: J. Cape, 1995.
Kael, Pauline. The Citizen Kane Book: Raising Kane . Boston: Little, Brown, 1971
McBride, Joseph. Orson Welles . New York: Viking, 1972.
Mulvey, Laura. Citizen Kane . London: British Film Institute, 1992.
Perkins, V. F. The Magnificent Ambersons . London: British Film Institute, 1999.
Schaefer's most radical and significant independent deal involved Orson Welles (1915–1985), who was signed in July 1939 to a two-year contract that called for the twenty-four-year-old stage and radio prodigy (and Hollywood neophyte) to produce, write, direct, and act in two motion pictures. The deal included sizable salaries for Welles and his Mercury Theatre stage company, and also gave Welles profit participation and "final cut" on each film as long as he stayed within the allotted schedule
and budget. After two false starts, including an adaptation of Joseph Conrad's Heart of Darkness that RKO nixed due to costs, Welles eventually teamed with screen-writing veteran Herman J. Mankiewicz (1897–1953) on a thinly veiled biopic of newspaper tycoon (and Hollywood producer) William Randolph Hearst (1863–1951). The result, of course, was Citizen Kane , certainly the most important film in RKO's history—and perhaps in Hollywood's as well. Welles followed with an adaptation of Booth Tarkington's novel, The Magnificent Ambersons , which was being edited by Welles and Robert Wise (1914–2005) in December 1941, when the US entry into World War II took Welles to South America for a documentary project. Meanwhile, Wise was instructed to cut the over-long (and by then well over-budget) Ambersons and to create a new upbeat ending that was distinctly at odds with Welles's vision. The Magnificent Ambersons was a critical and commercial failure on its release in July 1942—just weeks after Schaefer tendered his resignation and left the studio.