In 1924, theater magnate Marcus Loew had bought Metro Pictures Corporation
(founded in 1916) and Goldwyn Pictures (founded in 1917) to provide a steady supply
of films for his large theater chain, Loews, Inc. However, these purchases created a
need for someone to oversee his new Hollywood operations, since longtime assistant
Nicholas Schenck was needed in New York to oversee the theaters. Loew addressed
the situation by buying Mayer Pictures on April 16, 1924. Because of his decade-long
success as a producer, Louis B. Mayer was made a vice-president of Loews and head
of studio operations in California, with Harry Rapf and the twenty-five year old "boy
wonder" Irving Thalberg as heads of production. For decades, MGM's legal name was
"Loews, Inc." Originally, the new studio's films were presented in the following
manner: Louis B. Mayer presents a Metro-Goldwyn picture, but Mayer soon added
his name to the studio. Though Loew's Metro was the dominant partner, the new
studio inherited Goldwyn's studios in Culver City, California, the former Goldwyn
mascot Leo the Lion (which replaced Metro's parrot symbol), and the corporate
motto Ars Gratia Artis ("Art for Art's Sake").
Marcus Loew died in 1927, and control of Loews
passed to his longtime associate, Nicholas Schenck.
Rival mogul William Fox of Fox Film Corporation saw
an opportunity to expand his empire, and in 1929, with
Schenck's assent, bought the Loew family's holdings.
However, Mayer and Thalberg were outraged --
despite their high posts in the company, they were not
shareholders. Mayer in particular used his political
connections to persuade the Justice Department to
sue Fox for violating federal antitrust law. During this
time, in the summer of 1929, Fox was badly hurt in an
automobile accident. By the time he recovered, the
stock market crash in the fall of 1929 had virtually
wiped out Fox's financial holdings, ending any chance
of the Loews merger going through even if the Justice
Department had given its blessing. Schenck and Mayer
had never gotten along -- in fact, Mayer reportedly
called his boss "Mr. Skunk" in private. The abortive
Fox merger only increased the animosity between
them. Schenck blamed Mayer rather than the stock
market crash for costing him an instant fortune. The
animosity between the two men led to a heated rivalry
between the New York and Hollywood sides of the
company that lasted over 20 years, until Mayer's
dismissal by Schenck in 1951.
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