Sun Dec 31, 2017 1:19 pm
Vanda,
You posted:
-- "Ken Viewer wrote:
I just finished listening to your interview with the book's author, and appreciate your efforts and abilities to draw information out of Ms. Krefft. Having neglected your audio resource, I regret not listening to the various interviews sooner, and I'm not the person who gave your show a negative rating. As for Krefft's understanding of Fox and Wall Street's stock world, I fear there may not be any.
In appreciation of your pointing out but a few areas of my two posts that are lacking in adequate details, let me recount the main method The Fox Film Company used to acquire other-people's existing movie-houses, which represented most of the theatres in his various domestic and foreign chains. The Fox companies never had enough cash to meet the goals, so by the time he incorporated and issued stock, Fox was playing with "restricted" stock in his main company as his coin of the realm.
Restricted stock can't be sold or traded in the open market. But it does represent an ownership interest in the company, and can be used as a method of purchasing other things. (The New York Times, bless its heart, is controlled via restricted stock and its public stock has limited voting rights while the restricted stock has full voting authority and is mostly owned by the families of the heirs of Ochs and Sulzberger.)
So Fox, realizing it was way smarter to buy a licensed, existing theatre in various locations, rather than borrow money to build one and deal with permits, contractors, licenses, bribes to government officials, extortion by mobsters, etc., the Fox Film Company used such stock to "buy" most of its theatres. Hypothetically, if you yourself had a theatre worth $10,000 (1920s money if not earlier), assume I'm a Fox executive and come along with an offer of $25,000 for your theatre. That's a nice profit, particularly in a stock-market environment that is headed to the stars before crashing.
But, the stock I offer is restricted, which means if you accept it, you can't go out later that day and sell it on the stock exchange. Well, that's not a very good deal... So what I'm going to do for you, because I like you, and I'm a sucker for your unique theatre which has running water, and stock certificates are falling out of my pockets anyway, is offer, in writing, to buy that stock back from you in, ohh, five years for $100,000 in paper-money or gold. Boy, oh boy, will you clean up in that deal. What a mark I am...
And it worked as long as the stock kept climbing vertically. But one day the Roaring '20s ended and the stock markets crashed and burned. And when you came to me, at the end of the five-years we'd agreed upon, and demanded $100,000 in gold (which was still legal tender), silver or paper-money, I no longer could pay you because I had no cash.
Want some more stock? A boat-load of bananas and lousy books? A home-cooked dinner at my mansion? You can't even have your theatre back because you sold it.
Fox's underlings were running stock scams (and undoubtedly he was, too) faster than a projector can chew up film. And this is but one of them.
I don't think I'm the one who discovered this, in fact I know I'm not, but I don't recall who did, particularly since I hadn't yet been born.
And that's what killed Fox's hold on his operations, more than everything else combined. Mr. Fox was a stock swindler, among other talents he had, and not the holy man Krefft proclaims.
Sidebar: Having heard your interview now, I give Ms. Krefft credit for realizing the potential of the widescreen concept, even if only three Grandeur prints of "The Big Trail" were ever distributed -- one went to Fox-Australia, IIRC. As for Fox and television, Fox would have been a couple of decades too early, particularly since the technology of over-the-air telecasting and the camera inventions needed many years' of work to be properly realized, even if some of the British did have home-television in the 1930s, using what I understand to be mechanical-electric-marriage TV.
I could go on and on regarding the Fox company and stock scams, but is there any demand for it? Fox stock, rather than theatre revenues, made William Fox a very rich man, until he no longer was.
By the way, I read Upton Sinclair's book regarding Fox about a half-century ago. How in the world could that novice-author-Krefft have missed the prior biographies of Fox, as pointed out by a knowledgeable poster/scholar in the audio-interview thread previously?
Ken --
-- Ken,
Regarding your claims about Fox's "stock scams" in buying theaters, where is your evidence--specific names, dates, and details of transactions? What time frame are you talking about? The late 1920s? It was Fox Theatres, not Fox Film, that was buying theaters. And while Fox Theatres did have two classes of stock--A stock sold to the public, with no voting rights, and B stock, with voting rights--Fox always kept all of the B voting shares himself, so he never used them to buy properties. Is that what you are talking about when you refer to "restricted" stock?
You refer to five-year buy back arrangements on the stock provided as compensation for the theaters. Evidently you are talking about deals made in the late 1920s. Thus, the five-year period would have ended in the early 1930s. Fox lost control of both Fox Film and Fox Theatres in April 1930 and had absolutely no influence over the companies' operations after that. As I discuss in my book, his incompetent successors wrecked the companies financially. Fox was highly agitated as he saw their decline and tried repeatedly, but unsuccessfully, to intervene to save them. You appear to be blaming Fox for others' actions.
Furthermore, if Fox acted illegally or unethically in proposing these deals, why were the deals not examined when, in the early 1930s, the U.S. Senate conducted extensive hearings on financial practices of the late 1920s? Fox was called on the carpet and grilled at length about other stock market activities--for instance, short selling his own companies' stock (which is now, but was not then, illegal). I report on this in my book. Also, if these alleged terms that Fox offered were so bad, why did some theater owners accept them? They didn't have to, and as I point out in my book, many theater owners rejected Fox's offers..."[/b]
Vanda --
Do you want me to do your work for you?
There is no reason you would have to have known anything about me prior to these posts here, and to put things in perspective, I am no film scholar and have never claimed to be. I post relatively rarely here. I was attracted to William Fox by the fact that much of his entities' newsreels hoards still exist, particularly the outtakes. But had you contacted me before your book was published, I would have likely shared what I could still find of my documents and notes, etc.
I became an investigative newspaper reporter over half-a-century ago, and towards the end of my career moved over to the business end of publications because that's where I found the compensation adequate to provide for my old age; Social Security and Medicare are great, but not enough.
I never covered Hollywood but did report on news of the "high culture" world, including ballet and opera and museums for about seven years before going back to covering Wall Street (and other "beats.")
How I fell upon pieces of the William Fox story begins with my thought that another book about him would be a worthwhile topic -- this happened over 50 years ago. No World Wide Web, no Wikis, no IMDB. But I did live in New York City. I sort of followed his early path -- trying to find out the history of "real" movie theaters here, not just storefront-rentals with a projector or two.
Up in Bronx County, which has been a part of New York City since before the baby William Fox arrived in the U.S., I tracked down the family of the man who purportedly built the first genuine movie theater in the county, circa 1906. He had died, but two of his children were very helpful in recalling their father's pioneering efforts and sucesses. (One or more members of the family even owned a funeral parlor across the street from one of their theatres. Go figure... Die from too much laughing at a comedy show and get a cut-rate funeral?)
From them, I met other exhibition-pioneering families in other parts of the nation.
And though I no longer recall where I first read about the Fox organization's stock scams, I therefore knew to ask these offspring of pioneers about them. And those are the sources.
As for other Fox stock scams, you seem skeptical. Fox was a man who tried to swindle his creditors out of their funds by faking a Federal bankruptcy proceeding, attempted to bribe a Federal judge, and those were huge felonies, then and now (he bought a Presidential pardon some years later). I covered Wall Street, and thus knew where to look for stock hustles. And they existed. Do you doubt a fellow who partnered with/hired known racketeers and a convicted swindler, was not capable of other crimes?
Fox also allegedly bribed various union leaders during his career. He was not a gentleman and a scholar.
Anyway, the only time this research came in handy to me, since I was never going to write a book, was circa 1978, when, as a freelancer looking to occasionally tweek my own editor, I wrote the first major article on the Broadway-and-national live-attraction-theatre impresario Jimmy Nederlander, Sr., to be printed in the New York Times. But I needed to deal with a rumor spread by several of Jimmy's business competitors that he was funded by mob money, and information obtained by those exhibition pioneers' offspring came in very handy. I found his "bank" -- legitimate wealthy funders, and was able to vouch for that to the editors at the Times.
As for why I never wrote a book, about anything, I was in an industry, which, at the time, if I took a leave of absence for a couple of years to work on a tome, I'd have no employment to come back to and no decent health insurance during the leave.
You also seem to want to hold me accountable for failings of Congressional hearings on the collapse of Wall Street and kingpins of industry's involvement. You're looking at the wrong target.
I don't envy any book author; it's harder work than I was willing to do, even though your book ought to bring you offers of tenure-track teaching film studies at various colleges if you don't already have such a position; I've met enough people who became professors based upon an initial book and subsequent work. I hope it does.
Good luck. And Happy New Year.
Ken
