The Last Time Hollywood Faced a Shutdown (That Wasn’t Due to a Strike)

People are out of work. The stock market is crashing. And, in Hollywood, the film industry is holding its collective breath to figure out how it will survive.

I could be describing the current moment of the coronavirus crisis, but I’m actually referring to a moment almost exactly 87 years ago, the only prior time that Hollywood faced the possibility of a non-strike-related work stoppage.

Herbert Hoover‘s failure to prevent or respond to the Great Depression led to his decisive defeat by New York Gov. Franklin Delano Roosevelt — 472 electoral votes to 59 — in the presidential election of Nov. 8, 1932. In those days, presidents weren’t sworn in to office until March, so it wasn’t until March 4, 1933, that Roosevelt had an opportunity to implement his own agenda. By that point, Americans were panicked and beginning to withdraw all of their assets from banks, which was only further destabilizing the economy.

In Hollywood, things were looking just as bleak as anywhere else. On March 7, 1933, The Hollywood Reporter’s owner, W.R. Wilkerson, wrote in his ‘TradeViews’ column, “The studios are in trouble. The picture business is in trouble. The whole of America is in trouble. At the time this is written, serious consideration is being given to the absolute closing of the studios here, not to be reopened until the conditions they are at present facing have been eliminated.”

Roosevelt, in his first 100 days, saw it as a central part of his mission to calm the nation. Even the most basic student of American history knows that he did this in part through his inaugural address (“The only thing we have to fear is fear itself”) and subsequent “fireside chats” delivered over radio. Less remembered is that he also declared a “bank holiday,” shutting down all banks from March 6-13,1933.

Roosevelt told the public that the shutdown was necessary in order to give the government sufficient time to assess the stability of all banks before reopening them. But, as Amos Kiewe‘s 2007 book FDR’s First Fireside Chat: Public Confidence and the Banking Crisis explains, there was no way that such a task could be completed in that short period of time, and Roosevelt knew it. The purpose of the bank holiday was largely to give people a cooling-off period and deter runs on banks that would have only made the situation worse. Indeed, there was no run on the banks when he reopened them, even though very little had changed in the interim.

The lesson of the bank holiday is not that it is good to mislead the American people in times of crisis, but rather that it is important, in a crisis, that the American people feel that they can count on their president to do the right thing for the American people, rather than for himself. The current coronavirus crisis is obviously one of a completely different nature, but the takeaways of the prior crisis are worth remembering and considering at a time when Americans are once again panicked.

How does this connect to Hollywood? When Roosevelt declared the bank holiday, Hollywood’s studio chiefs each assembled their employees and told them — Louis B. Mayer through crocodile tears — that, in light of the crisis and the studios’ lack of liquidity, the chiefs could either (a) give everyone a 50 percent pay cut for a period of several weeks and stay in business, or (b) shut down the studios altogether. With their backs against the wall, the employees took the cut, believing that the young Academy of Motion Picture Arts and Sciences — which was established just six years earlier, ostensibly to guarantee harmonious dealings between the industry’s various branches — would investigate to make sure that the cuts were truly necessary; that the cuts were applied to all employees’ paychecks, including the chiefs’; and that restitution would be made at the end of the agreed-upon period.

As it turned out, the cuts did not prove necessary for the full period at all studios, and some studios honored their word by restoring regular pay and issuing back pay. But others did not — most notably Warner Bros., prompting the resignation of the studio’s production chief Darryl F. Zanuck, who was outraged at the titular brothers after giving employees his word that the deal would be honored. And the Academy was either unable or unwilling to do anything about it. Consequently, many in Hollywood began to regard the Academy as a “company union” that did not have their best interests at heart.

Rather than depending on the Academy to protect them, writers formed the Writers Guild (est. April 6, 1933), actors formed the Screen Actors Guild (est. July 12, 1933) and directors formed the Directors Guild (est. Jan. 13, 1936) — many of them resigning from the Academy as well, out of disgust, some quite vocally.

The low point for the Academy was probably the 8th Academy Awards ceremony, held on March 5, 1936, which was sparsely attended after the various guilds urged talent to stay away. Among those who were absent from the ceremony was Dudley Nichols, who was announced as the winner of the best adapted screenplay Oscar for The Informer and subsequently sent a letter to the Academy refusing the statuette, a first: “As one of the founders of the Screen Writers Guild, which was conceived in revolt against the academy, and born out of disappointment with the way it functioned against the employed talent in any emergency, I deeply regret I am unable to accept the award.”

A year later, to save itself, the Academy agreed to henceforth stay out of labor matters, and, over time, the organization came back to life. Eighty-seven years after the bank holiday, the Academy lives on — and the film industry is facing another existential crisis.

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