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Last week the cinema industry was ad- justing itself to two momentous shifts in personnel. At a meeting of Paramount's directorate, three new directors had been added to the board. One of them, John Hertz (Yellow Cabs, race horses) became chairman of the finance committee. The others were William Wrigley Jr. (gum) and Albert Davis Lasker (advertising). Also last fortnight, President Hiram K. Brown of RKO-Radio and RKO-Pathe announced a merger of the production facilities of both companies, announced that David Oliver Selznick had been named vice president-in-charge-of-produc-tion of RKO-Radio and vice president of RKO-Pathe.
As to the consequences of the first shift, Hollywood last week was still uncertain. The consequences of the second shift were not uncertain at all. It was the end of a chapter in the history of Radio-Keith-Orpheum Corp., a chapter which corre sponded to an exciting and seemingly parlous period in the cinema industry.
Hollywood producers were frankly frightened in 1929, when Radio Corp. of America entered the cinema industry by buying 118 Keith-Albee and Orpheum theatres, the producing facilities of Film Booking Corp., and organizing RKO. Their consternation seemed to have a reasonable basis. The new company had a directorate sufficiently powerful to rock any industry. David Sarnoff, head of Radio Corp., was chairman; other direc tors were General Electric's Owen D. Young, Publicist Herbert Bayard Swope, Bankers Arthur Lehman and Elisha Walker, President Merlin H. Aylesworth of National Broadcasting Co., Maj. Gen eral James G. Harbord, retired, Drygoods Tycoon Cornelius M. Bliss. President Hiram Brown was head of U. S. Leather Co. RKO was capitalized for $20,000,000. Behind it were all the resources of Radio Corp. of America, all Radio's affiliated companies for producing mechanical amusement—National Broadcasting Co., R. C. A. Photophone. R. C. A. Victor, R. C. A. Radiotrons, Radio Music Publishing Co.
From the era of the nickelodeon, the cinema industry has been created by the crafty and extraordinary methods of one-time fur peddlers, garment dealers, second-hand jewelers—mostly Jews—who were, ail-importantly, great and daring showmen. These individuals had an embarrassing presentiment that "big business" might discover methods in the cinema industry far more efficient than their own. They had padded their payrolls with relatives, produced pictures at immense cost, settled their biggest deals over all-night poker games, entertained each other at parties decorated by the most expensive actresses in the world. They discussed the new force which RKO represented in "picture business" with awe-stricken whis-pers and comic strip dialect. For a time, the chief slogan of the industry was: "Vait till ve see vat Radio vill do."
RKO began by securing William Le-Baron, long with Paramount, for production manager. LeBaron brought in two Paramount stars—Richard Dix, Bebe Daniels—augmented the list later with Ina Claire, Betty Compton, Bert Wheeler, Robert Woolsey, Evelyn Brent, Lily Damita. RKO installed RCA sound apparatus in its circuit of theatres, enlarged the U. S. circuit to 202 by buying the F. F. Proctor chain, the Pantages circuit on the West Coast, the Interstate circuit in the South, and the Libson-Heidingsfeld-Harriss chain in the Middle West. In January 1930, RKO acquired Pathe and four stars of