United Artists, Volume 1, 1919–1950: The Company Built by the Stars

8. The Goldwyn Battles: 1936-1941

8 The Goldwyn Battles [1936-1941] In one of his first public statements Giannini said, The greatest need of the motion picture industry at the present time is peace with itself-a peace which will wipe out personal enmities and personal animosities and permit cooperation which will enable the industry to progress as a whole. . . . It is unfortunate to see that personal differences should cause the trouble they do in this industry. There are many deals held up and never completed because one individual may not like another individual, no matter what the result may be. In the United Artists Corp. we shalt never permit personal differences, either inside or outside the organization, to interfere with our work. 1 Giannini was either deluding himself about VA or engaging in wishful thinking. The company was about to come apart at the seams and he knew it, or at least he should have if he understood the significance of the stockholders' actions when they elected him president. The bylaws were amended to reflect a new balance of power in the company. With Schenck gone, Fairbanks in retirement, Pickford once again inactive after a brief team-up with Lasky, and Chaplin as unreliable as ever, Goldwyn became a force to be reckoned with. His distribution contract had expired as had all the contracts with the owners. When the time came to draw up new ones, Goldwyn seized the opportunity to announce that he would discontinue releasing through VA unless the company granted him certain concessions. In essence, he demanded veto power. Since his pictures generated most of the revenue, he wanted the assurance that his partners could not radically alter the course of the company without his consent. This could be avoided, he suggested, simply by formalizing the concept of the unanimous vote. It was now placed in writing that the unanimous approval of the stockholders would be required to elect officers, to engage all personnel, and to acquire product. Goldwyn also demanded unanimous consent for stock transactions either among the owners or involving the sale of treasury [ 142 ] The Goldwyn Battles: 1936-1941 [143 Douglas Fairbanks, Alexander Korda, Mary Pickford, Murray Silverstone, Charles Chaplin, A. H. Giannini, and Samuel Goldwyn stock to bring in a new partner. On these matters, his partners acquiesced as well. These amendments had the effect of divesting management of most of its power. But still Goldwyn was not content. As he had little faith in Giannini's sales ability, a provision had to be placed in the bylaws stipulating that "no person, other than Dr. A. H. Giannini or M. Silverstone, shall at any time be elected President or Chairman of the Board . . . unless such election of such person be first approved by the unanimous vote ofall the shareholders." Silverstone, who had been setting sales records in Great Britain, was Goldwyn's choice for the presidency. The others preferred Giannini, so as a compromise they agreed to make Silverstone the prime candidate for the job should Giannini resign or, for that matter, be eased out. These were the concessions that Goldwyn wrung from his partners. He would have preferred to take over the company completely, ofcourse, but the time was not yet ripe for such a move. 144 1 U NIT E DAR TIS T S GOLDWYN'S ATTEMPTS TO BUY UA Giannini was able to keep peace for nearly a year, something of an achievement considering the volatile temperaments of the owners. But inevitably they reached the flash point. At an unusually heated directors' meeting in May, 1937, Goldwyn cried out that Pickford, Fairbanks, and Chaplin were contributing nothing to the company and should have the decency to sell out. His offer to buy each oftheir interests for $SOO,OOO was met with a flat rejection. The idea was intriguing, though. Miss Pickford, Fairbanks, and Chaplin excused themselves from the room and, after a short conference, returned to tell Goldwyn that they would sellout, but the price would be $2 million apiece. Turning to Korda, Goldwyn asked if he wanted to participate. Korda nodded and the two were granted an option giving them until December 21 to come up with the money. Korda's Dissatis.faction with VA By now, UA's relations with Alexander Korda had deteriorated. Of the ten pictures Korda delivered to the company after Henry VIII, only one, Rene Clair's The Ghost Goes West, could be considered a success...