More than a year after the great Wall Street crash of 1929, conventional wisdom had it that the movies were immune to the Depression. The motion-picture business had been improving yearly since 1927. The public had welcomed the talkies enthusiastically and unequivocably, which seemed to justify the enormous expenditures required to wire the nation's theaters and to convert Hollywood's studios to sound. Looking back over 1929, Variety reported that in New York City the talkies had "driven legit shows to the side streets and [had] given filmdom a command of Broadway with an array of pictures unexcelled numerically and in quality."¹ In 1930, motion-picture attendance reached a then all-time peak of 80 million patrons a week.

But beginning in 1931, Hollywood felt the effects of America's disabled economy. Describing the magnitude of this disability, one historian said that during the Depression, "the statistics of unemployment read like casualty...