"Showmanship in Place of Genius"

The Rathvon-Koerner Regime (1942–1945)

At the beginning of June 1942 the United States had been at war with Japan, Germany, and Italy for nearly half a year without success. The Japanese military, on the other hand, mounted an extraordinary offensive throughout Asia after bombing Pearl Harbor, "capturing one-sixth of the surface of the planet in only six months." But on June 4 the U.S. Navy scored a resounding victory during the Battle of Midway, sinking four Japanese carriers and effectively short-circuiting the enemy's dominance in the Pacific. Although advancement would be slow, bloody, and intractable from this point forward, the future outcome of battles fought in Europe, Africa, Asia, and the Pacific would generally favor U.S. forces.

In a scenario that eerily mirrored America's early efforts in the global conflict, RKO Radio Pictures, a major American motion picture company, had also been foundering between December 1941 and May 1942. On the day of the Midway confrontation, RKO corporate president George J. Schaefer instructed his new Hollywood production chief Charles W. Koerner to make "no further commitments on the pictures that are to be produced later in the year for 1942–43." This message was issued because it appeared that fiscally challenged RKO might close its studio or fall back into receivership, a state of corporate bankruptcy in which the company had languished throughout most of the 1930s. The order became one of the last formal directives issued by Schaefer, who resigned shortly thereafter.

Charles Koerner obeyed, realizing that even if new funding were found to prop up the company he would likely still be asked to cut his filmmaking budget even further. Nevertheless, perhaps inspired by the confidence that other members of RKO's leadership team seemed to have in his abilities, Koerner showed no signs of despondency. He continued to work resolutely on the films that would comprise the initial portion of the new season's releases. They would be his first pictures as RKO executive producer, and he was determined to turn out successful product.

During the months of financial decline that led to Schaefer's resignation, there had been considerable squabbling among three powerful groups that comprised the leading investors in RKO: RCA, the Rockefeller family, and the Atlas Corporation. Even though the production arm was scheduled to run short of cash and be unable to meet payroll in the middle of June, none would agree to support some sort of stopgap measure to keep the cameras turning.

But as soon as George Schaefer was out of the picture, Floyd Odlum of Atlas, who had never been a supporter of Schaefer, stepped up to protect his investment. Owning some 46 percent of RKO, considerably more than either RCA or the Rockefellers, Odlum arranged to redirect $600,000 from the corporation, which it had to draw from its theater subsidiary, and secured a temporary loan of $800,000 from Manufacturers Trust Company to keep the studio operating throughout June and July. This was only a temporary solution but, by July 10, Odlum had convinced the other owners to accept an arrangement whereby Manufacturers Trust would loan an additional $3 million, with RKO putting up its theaters as collateral. As Time magazine reported, Floyd Odlum intended to take a more active interest in RKO than ever before.

Proof of this came in late June with the naming of Odlum subordinate N. Peter Rathvon to replace Schaefer as president of Radio-Keith-Orpheum and chairman of its board of directors. As a reward for ten-plus years of diligent service, Ned Depinet, a veteran executive and the top man in the distribution division, became president of the picture company, RKO Radio Pictures.

This new hierarchy faced enormous challenges, and it is unlikely that anyone in Hollywood expected them to succeed. Indeed, RKO had a dubious history of placing untested, inexperienced executives in key management positions, and the company appeared to be making the same mistake once again. A graduate of the University of Colorado Law School, fifty-one-year-old Peter Rathvon worked for various mining companies, practiced law, and became a member of the New York Stock Exchange before joining the Atlas Corporation in 1933. During his years as one of Floyd Odlum's most important lieutenants, he had applied his fiscal and organizational skills to a number of companies in which Atlas had interests, including RKO. In fact, most of his energies had been focused on the movie concern during the past few years, and he was serving as an RKO vice president and a member of its board of directors when Schaefer submitted his resignation. Still, Rathvon had never functioned as top man of any corporation before, and his knowledge of the motion picture industry was manifestly inferior to that of the executives running the other major Hollywood companies in 1942.

Charlie Koerner, born in 1896, on the other hand, had been working in the business since he started projecting movies at a theater in Havre, Montana, while still a teenager. Following service in World War I, Koerner continued to work in exhibition, catching on with RKO in the early 1930s. Eventually he would be placed in charge of various regional sectors of the RKO theater chain, including those in the Southwest, upstate New York, New England, and the West Coast. Koerner was finally named general manager of all the RKO houses in 1941. But his stay at the company's New York headquarters would be short-lived. In early 1942 he departed for Hollywood, supposedly to pinch-hit for studio production chief Joseph Breen while Breen recuperated from an illness. In fact, this was a ruse to enable Breen, who had been RKO's executive producer for a little over one year, to save face; Schaefer and the company's board of directors had decided Breen could not handle the studio job and were turning it over to Koerner. After his recuperation Breen would head back to his old position running the Production Code Administration, Hollywood's in-house board of censors. Unquestionably, Charles Koerner was a show business veteran, but his long experience was entirely in exhibition, not production; now he was taking on the toughest task of them all, a job that required a daunting matrix of organizational, literary, and personal...