Cinema: Universal to Cowdin

Among the eight major producing companies of Hollywood, Universal Pictures Corp. is the oldest and possibly the most extraordinary. It was formed in 1912 by Carl (“Uncle Carl”) Laemmle. For the past 20 years it has produced an average of 40 pictures a year, with emphasis on horror films and Westerns. Its most famed silent picture was The Hunchback of Notre Dame. For the past year, Hollywood has heard rumors that Universal was for sale. Last week the rumors were confirmed. Uncle Carl Laemmle sold his controlling interest in the company — 80% of the common stock — to a group headed by Poloist-Banker J. Cheever Cowdin, for $5,500,000.

From the” mass of Hollywood gossip which preceded the deal, observers were able to get an accurate idea of how it was put through. For the past two years, Universal has been short of cash. Last November, in order to get money to finish its two biggest current features, Slitter’s Gold and Show Boat, Laemmle borrowed $750,000 from Standard Capital Co. controlled by Cowdin, his friend & partner, George Newell Armsby, and Broker Lawrence W. Fox Jr. In return, Laemmle gave Standard Capital an option on his stock until Feb. 1. The option was extended six weeks. Last week Standard Capital deposited $1,500,000 in a New York bank. An additional deposit of $4,000,000 will be made within 20 days. After that Universal will be in the hands of its new owners.

In a year of almost unparalleled upheavals in Hollywood, last week’s deal was the grand climax. It brought into the industry a new and powerful group of capitalists whose previous interests have been aviation, mines, oil and Bancamerica-Blair (TIME, March 28, 1932). Out of the industry it pushed an almost legendary character, the only member of that astounding collection of immigrant fur-dealers, jewelry salesmen and clothing merchants who founded the cinema industry, who still maintained his old authority.

Carl Laemmle arrived in the U. S. from Laupheim, Germany when he was 17. For the next 22 years he struggled manfully in the clothing business at Oshkosh, Wis., managed to save up $2,500, In 1906, when he was 39, encouraged by an advertising man named Robert Cochrane, he opened a Chicago nickelodeon called The White Front. Six months later, he had a string of them and his own film exchange. From 1909 to 1914, Laemmle and his famed Independent Motion Pictures Co. (“IMP”) fought the patents company which then threatened to get control of the industry.

Like William Fox, Adolph Zukor, Jesse Lasky, Lewis J. Selznick and the rest of his picturesque competitors, Uncle Carl Laemmle was a brilliant showman. What other qualifications he had to run a major cinema company sometimes seemed mysterious. But for a long time none was necessary. Nepotism, always prevalent in Hollywood, was a fixed tradition at Universal City. On frequent trips to his birth place, Carl Laemmle usually returned with relatives who were promptly placed on Universal’s payroll. Many were incompetents. None was discharged. The peak of Universal nepotism came in 1929. Carl Laemmle made his son, Carl Jr., general manager of the company, in honor of Junior’s 21st birthday. Bird-like little Junior started out brilliantly with All Quiet. Two years ago, he resigned to become an associate producer. Even a change in management was not enough to rescue Universal.

A kindly, baldheaded, pot-bellied little man, barely five feet tall and talking in a broad German accent. Carl Laemmle has a harmless egoism which in 1931 caused him to engage Poet John Drinkwater to write his autobiography. He also kept a book in his office in which he had his employees write down what they thought of him. He likes wearing a red carnation in his buttonhole, eats enormous quantities of Sanerbraten. Bitterly determined never to lose control of his company, he refused $10,500.000 for it in 1929, denied rumors that it was in pawn all winter.

Under the new regime, Carl Laemmle Sr. will lose his presidency, will stay on in some less authoritative capacity. The presidency will go to Robert Cochrane, Laemmle’s right hand man since 1906. Carl Laemmle Jr., Sales Manager James R. Grainger and his able producer son Edmund are also likely to remain with Universal. In other respects, the studio will be reorganized. No cinemanufacturers, Buyer Cowdin and associates, whose backing includes Eastman Kodak Co. and Electrical Research Products Inc., will hand production management over to their friend, Producer Charles R. Rogers, associate producer at Paramount from 1933 to 1935, who promoted this deal. First job for Producer Rogers will be to weed out Universal’s brood of minor Laemmles, install an abler personnel.