Paul Davidson, the founder of the Projektions "Union" A.G., became the production head of Ufa, but he left most production decisions to the subsidiary companies, which were still largely independent, while continuing a policy of acquisition. Thus, in 1918 Ufa purchased the May-Film Co. (Joe May), BB-Film (Heinrich Bolten-Baeckers), Gloria (Hanns Lippmann), and Maxim (Max Galitzenstein) film companies. Ufa's first international success came with the so-called "Monumentalfilme" of Ernst Lubitsch (1892–1947) ( Passion [ Madame DuBarry , 1919]; Deception [ Anna Boleyn , 1920] and Joe May ( Herrin der Welt , [ Mistress of the World, 1919–20]), big budget historical epics calculated for an international market. However, a sea change occurred when Erich Pommer's (1889–1966) Decla-Bioscop AG was merged with Ufa in November 1921; simultaneously its capital was increased from 25 to 200 million reichsmarks. Ufa was now a major player in the German and European market, controlling distribution in large parts of Central and Eastern Europe, much to the chagrin of the Americans.
Pommer, who had won an international success with Das Cabinet des Dr. Caligari ( The Cabinet of Dr. Caligari , 1920), gave his directors a large degree of freedom, preferring to concentrate on increasing Ufa's export business by guaranteeing a cinema of quality, which would be saleable abroad. As a result, Ufa directors produced some of the greatest films of the era, including Die Nibelungen (Fritz Lang, 1923–24), Michael (Carl Theodor Dreyer, 1924), Der Letzte Mann ( The Last Laugh , F. W. Murnau,1924), Varieté ( Jealousy , E. A. Dupont, 1925), Ein Walzertraum ( The Waltz Dream , Ludwig Berger, 1925), and Geheimnisse einer Seele ( Secrets of a Soul , G. W. Pabst, 1926). This was accomplished by hiring Germany's best directors, expanding the Babelsberg studios outside Berlin to become the most modern facility in Europe, and bringing together a team of technicians, art directors, and cameramen who were encouraged to experiment. Among the innovators were cameramen Karl Freund (1890–1969) and Fritz Arno Wagner (1891–1958). The giant studio sets, innovative lighting designs, optical tricks (Schüfftan process), and daring camera movements in the films of Murnau, Lang, and Dupont would not have been possible without an atmosphere Kreimeier has described as that of a medieval "Bauhütte" (cathedral builders' guild). Unlike American studio stars, Germany's best known actors, including Conrad Veidt (1893–1943), Emil Jannings (1884–1950), Werner Krauss (1884–1959), and Brigitte Helm (1906–1996), were never contractually bound to the company, each working only intermittently for Ufa. Ufa also established newsreel, documentary, educational, and advertising departments and an experimental film laboratory, where Viking Eggeling (1880–1925) completed his abstract animations.
But by late 1925 Ufa was at the brink of financial collapse due to multiple factors, including the revaluation of the reichsmark after a period of hyperinflation, failing to invest profits in infrastructure, high production costs ( Metropolis  is later blamed), and the mounting pressure of American companies attempting to make inroads in the German and Central European markets. In December 1925, Ufa announced the so-called Parufamet contract, which gave virtual control of Ufa's first-run theatres to Metro-Goldwyn-Mayer and Paramount while also granting them 50 percent of income from Ufa's own productions. In exchange, Ufa received a loan for four million dollars and American distribution of its "suitable" films in theatres in the United States. But the Americans claimed that all but a handful of German films were unsuitable for distribution.
The contract was a disaster, and Ufa continued to bleed cash. Relief of sorts came in the form of Alfred Hugenberg, Germany's greatest newspaper czar who was also the leader of the right-wing German National Party (Hugenberg entered Hitler's first cabinet in 1933). Hugenberg purchased Ufa in March 1927 and immediately instituted reforms, putting his longtime lieutenant Ludwig Klitzsch at the head of the company. Klitzsch renegotiated the Parufamet contract by paying off the loan and establishing a producer-unit system of production, much like the one Hollywood had in place by the late 1910s. He also brought Pommer back from Hollywood to head the company's A unit while B units for genre films were headed by Günther Stapenhorst (1883–1976), Alfred Zeisler (1897–1985), and Gregor Rabinowitsch (1889–1953).
Erich Pommer is one of the few internationally known German film producers, responsible for the "golden age" of Weimar cinema as the head of production at Ufa in its most productive period. He joined the Berlin branch of Gaumont Production Company in 1907 and by 1919 he was the sole owner of the Decla company, which produced Das Cabinet des Dr. Caligari ( The Cabinet of Dr. Caligari , Robert Wiene, 1920), establishing Pommer's reputation far beyond Germany's borders. While accounts differ as to Pommer's role in that production—the scriptwriters even accused Pommer of watering down the film's ideological message—most agree that Pommer's advertising campaign made the film a success. In April 1920 Decla merged with its largest competitor (besides Ufa), Bioscop, giving Pommer control over forty more theaters and the newly constructed Babelsberg studios outside Berlin.
The success of The Cabinet of Dr. Caligari convinced Pommer to continue a policy of mixing art and commerce, which he pursued by green-lighting films by Robert Wiene, F. W. Murnau, and Fritz Lang and establishing a stable team of film technicians who would come to dominate German cinema. When Decla-Bioscop merged with Ufa in November 1921, Pommer became production head, producing such classics as Dr. Mabuse (Fritz Lang,1922), Die Nibelungen (Lang, 1923–24), Der Letzte Mann ( The Last Laugh , F. W. Murnau, 1924), Varieté ( Jealousy , E. A. Dupont, 1925), Faust (Murnau, 1926), and Metropolis (Lang, 1927). Yet the latter film's cost overruns also spelled Pommer's doom, forcing him to resign in January 1926.
Pommer went to Paramount Studios in Hollywood and before year's end released Hotel Imperial (Mauritz Stiller, 1927), then Barbed Wire (Rowland V. Lee, 1927), both melodramas situated in World War I Europe, before being called back to Berlin. The media czar Alfred Hugenberg now controlled Ufa and had instituted an American-style producer-unit system to control costs. Some directors, like Wilhelm Thiele or Robert Siodmak, thought Pommer too controlling, but the fact remains that over the next several years he produced some of the most successful German silent and sound films of the late Republic, including Asphalt (Joe May, 1929), Der Blaue Engel ( The Blue Angel , Josef von Sternberg, 1930), Der Kongress Tanzt ( Congress Dances , Erik Charell, 1931), and F.P.1 Antwortet Nicht ( F.P.1 Doesn't Answer , Karl Hartl,1932). Unlike many of his earlier art films, these were highly profitable light entertainments, whether musicals or science fiction dramas.
The rise of National Socialism forced Pommer into exile and he never recovered, even though he worked in Paris (Fox), London (Korda), and Hollywood (RKO). In August 1946 Pommer was invited by the United States Army to return to Germany as a film control officer to rebuild the German film industry—a difficult task, given government bureaucracy and German resentments against the émigrés.
Das Cabinet des Dr. Caligari ( The Cabinet of Dr. Caligari , Robert Wiene, 1920), Die Nibelungen (Fritz Lang, 1923–24), Der Letzte Mann ( The Last Laugh , F. W. Murnau,1924), Varieté ( Jealousy , E. A. Dupont, 1925), Barbed Wire (Rowland V. Lee, 1927), Der Kongress Tanzt ( Congress Dances , Erik Charell, 1931), Jamaica Inn (Alfred Hitchcock, 1939), Kinder, Mütter, und ein General ( Children, Mother, and the General , László Benedek, 1955)
Hardt, Ursula. From Caligari to California: Erich Pommer's Life in the International Film Wars. Providence, RI: Berghahn Books, 1996.
In September 1929, Ufa completed construction of its new sound film studios in Babelsberg. Its first sound film, Melodie des Herzens ( Melody of the Heart , Hanns Schwarz) opened on 16 December 1929, followed by Der Blaue Engel ( The Blue Angel , 1930), which made Marlene Dietrich (1901–1992) famous around the world. Both
films were shot in multiple language versions (German, English, and French) because synchronization still presented technical difficulties. Musical comedies, like Melodie des Herzens, Die Drei von der Tankstelle ( Three Good Friends , WilhelmThiele,1930), and Der Kongress Tanzt ( Congress Dances , Erik Charell, 1931), were wildly popular, apolitical, and staple products in the early 1930s. Another genre that gained increasing prominence was historical films that resurrected the past glories of Prussian militarism, including Das Flötenkonzert von Sanssouci ( Flute Concert of Sans-Souci , 1930) and Morgenrot ( Dawn , 1933), the latter film opening one day after Adolf Hitler's ascension to power. Dawn depicts the "heroic" struggle of U-boats in World War I and was the perfect fascist film for the new era. (The hero states, "We Germans may not know how to live, but we certainly know how to die.")