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59 3 • THE BLACKLIST AND “RUNAWAY” PRODUCTION In addition to the blacklisted exiles, Europe was awash with Hollywood expatriates during the postwar years. Some, such as the directors Lewis Milestone and Nicholas Ray and the screenwriter Howard Koch, had been “graylisted .”1 The graylist was the work of powerful red-baiting organizations such as the American Legion and a private firm called American Business Consultants (ABC), and it targeted Hollywood’s noncommunist liberals. These pressure groups combed through sources ranging from HUAC transcripts to back issues of the communist newspaper the Daily Worker for names of “subversives,” whom they then included in their respective publications—the American Legion’s Firing Line and American Legion Magazine and ABC’s Counterattack and Red Channels , an index known as the bible of the graylist. Although the studios denied that they circulated a list (either black or gray) of names of those considered subversive , the blacklisted could at least be certain of their status, whereas the graylist was as obscure as its name suggests. As Lewis Milestone explained, “You had adversaries, but you never knew who they were, so you couldn’t face them. You were a marginal citizen, unsure of where you stood.”2 Other Americans came to Europe for economic reasons. In 1951, a new income tax ruling came into effect that excused Americans from paying taxes on income earned abroad for a period of eighteen months. Although the legislation had been intended to encourage America’s titans of industry to expand internationally , it was passed at a time when Hollywood’s stars were eager for a break from the high taxes of the period (for this reason, many Hollywood actors also formed their own production companies in order to be taxed on their income at the lower capital gains rate). Gene Kelly was among those who decided that an extended stay in Europe made good economic sense. Kelly’s studio, MGM, readily agreed on account of the postwar currency restrictions that froze American assets in Europe in order to help Europe’s warravaged economies rebuild.3 Unable to repatriate the profits made from European 60 Hollywood Exiles in Europe distribution, the studios had limited choices: they could hold the funds in European accounts, invest them in European goods or products, or use them to produce films in Europe. With domestic box office receipts rapidly declining, the studios could not afford to wait for the restrictions to be lifted. While many studios did make non-film European investments in assets ranging from real estate to wine, they primarily directed their frozen funds into industry-related ventures, establishing foreign offices, buying production and post-production facilities, and making films abroad.4 The dollar’s strength in relation to the European currencies also meant that production costs in Europe were significantly lower than in Hollywood , where the studios were obliged to pay union wages. With no language barrier and close cultural ties, Britain held particular appeal to Americans, who invested heavily in British studios and productions, one-third of which had U.S. financing by 1956. In addition to the Hollywood studios, penny-pinching independent American producers hoped to take advantage of Europe’s cheap, skilled labor along with the availability of cut-rate blacklisted talent. According to one contemporary survey, American production in Europe doubled between 1950 and 1957.5 Not surprisingly, this trend was not welcomed by some in Hollywood, where unemployment was on the rise as the industry struggled to regain its economic footing in the wake of the Paramount decrees (which forced the studios to divest themselves of their theaters) and competition from television. Film industry labor groups such as the AFL/CIO brought attention to the ill effects of this so-called “runaway production,” a term coined by the Hollywood AFL Film Council in a 1949 report and that quickly assumed negative connotations. As noted in a 1953 editorial in the Hollywood Reporter, “THAT TAG, ‘runaway productions ,’ slapped on the foreign production efforts of our Hollywood producers by the IATSE [International Alliance of Theatrical and Stage Employees] is a bad smear on a most necessary effort.”6 Nor were these foreign productions always a welcome presence in their host countries. As the reaction to the Twentieth Century–Fox London production of Night and the City, discussed later in this chapter, demonstrates, Hollywood’s overseas filmmaking was frequently perceived as a threat to indigenous production and national cinema. Leading the charge against runaway production was the conservative labor leader Roy...

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