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Following “The War of the Worlds” broadcast of his CBS radio series The Mercury Theatre on the Air, Welles was lured to Hollywood with a remarkable contract. RKO Pictures studio head George J. Schaefer wanted to work with Welles after the notorious broadcast.

Welles signed his contract with RKO on August 21, which stipulated that Welles would act in, direct, produce and write two films. Mercury would get $100,000 for the first film by January 1, 1940, plus 20% of profits after RKO recouped $500,000, and $125,000 for a second film by January 1, 1941, plus 20% of profits after RKO recouped $500,000. The most controversial aspect of the contract was granting Welles complete artistic control of the two films so long as RKO approved both projects’ stories and so long as the budget did not exceed $500,000. 

RKO executives would not be allowed to see any footage until Welles chose to show it to them, and no cuts could be made to either film without Welles’s approval. Welles was allowed to develop the story without interference, select his own cast and crew, and have the right of final cut. Granting the final cut privilege was unprecedented for a studio because it placed artistic considerations over financial investment. The contract was deeply resented in the film industry, and the Hollywood press took every opportunity to mock RKO and Welles. Schaefer remained a great supporter saw the unprecedented contract as good publicity. Film scholar Robert L. 

Carringer wrote: “The simple fact seems to be that Schaefer believed Welles was going to pull off something really big almost as much as Welles did himself.” Welles spent the first five months of his RKO contract trying to get his first project going, without success. “They are laying bets over on the RKO lot that the Orson Welles deal will end up without Orson ever doing a picture there,” wrote The Hollywood Reporter. It was agreed that Welles would film Heart of Darkness, previously adapted for The Mercury Theatre on the Air, which would be presented entirely through a first-person camera. After elaborate pre-production and a day of test shooting with a hand-held camera—unheard of at the time—the project never reached production because Welles was unable to trim $50,000 from its budget. 

Schaefer told Welles that the $500,000 budget could not be exceeded; as war loomed, revenue was declining sharply in Europe by the fall of 1939.He then started work on the idea that became Citizen Kane. Knowing the script would take time to prepare, Welles suggested to RKO that while that was being done—”so the year wouldn’t be lost”—he make a humorous political thriller. Welles proposed The Smiler with a Knife, from a novel by Cecil Day-Lewis. When that project stalled in December 1939, Welles began brainstorming other story ideas with screenwriter Herman J. Mankiewicz, who had been writing Mercury radio scripts.”

 

Photo Credit: AFI Movie Club