In January 1935 Tommy Maloy was a successful Chicago union racketeer. The press called him a “film union czar.”1 Since 1916 he had been running the IATSE Chicago Projectionists’ Union, Local 110, while receiving kickbacks from theater owners to ensure that the projectionists didn’t strike. When approached by George Browne for a possible collaboration, he flatly refused. He did not need Browne or his Capone cronies to take a cut.
On the morning of February 4, 1935, Maloy was driving to work when his car was showered with deadly machine-gun fire.2 A week later, Browne took over Local 110.3 Other heads of IATSE locals took notice, and IATSE allegiance continued to grow.
Clyde Osterberg, at thirty-two, was the organizer of a brand-new Independent Union of Motion Picture Operators in Chicago. He detested the IATSE and refused to have any dealings with them. In early April, Willie Bioff met him in Browne’s office. “Start a new union,” warned Bioff, “and we’ll make an example of you.”4 Osterberg refused to concede. Then on the night of May 13, he, his wife, and his bodyguard left a friend’s home. They were standing on the street corner when a car pulled up and a gunman shot Osterberg in the elbow and chest. Osterberg fell, and the gunman fired two bullets into Osterberg’s head and drove off into the night.5
Louis Alterie was the head of the Theatrical Janitors’ Union in Chicago. A forty-three-year-old loudmouthed gangster, he began talking about expanding his enterprise. His officials boasted that they were going to go after the moving picture unions, into the IATSE’s territory. “It looks mighty good,” they said.
On the morning of July 18, as Alterie walked from his apartment building to his car at the curb, an ambush of gunfire riddled his body. The shots were fired from a building across the street, with the killers abandoning their weapons at the scene.6 Willie Bioff was questioned, but without hard evidence, the police set him free.7
On the West Coast, union membership had been climbing. Labor unrest was rampant in Hollywood and showed no sign of slowing down. The federal government had a new policy on the table called the National Labor Relations Act, set to take effect in early July. Commonly known as the Wagner Act, this statute promised to empower unions and union members, protecting their jobs and their right to organize without threats of being blacklisted.
Many Americans objected to the president’s “New Deal” and its new laws. Citizens challenged the extent of federal power that Roosevelt assumed. Newspaper magnate William Randolph Hearst instructed his papers to denigrate the New Deal.8 Wealthy Democratic industrialists had abandoned their party to form an anti–New Deal organization dubbed the American Liberty League.9 Journalist Westbrook Pegler, the loudest pundit in all of right-wing media, trashed the New Deal and labor unions in his syndicated newspaper column.
The dispute peaked on May 27, 1935, when the US Supreme Court ruled that the National Industrial Recovery Act and the National Recovery Administration, two pillars of the New Deal, were both unconstitutional. The court was ideologically split, with four conservative justices, three liberal justices, and two who were middle-of-the-road. The average age of the justices was seventy-one years. Millions of Americans protested this apparent gerontocracy. President Roosevelt voiced his frustration to the press, calling the stalwart Supreme Court justices “nine old men.” The phrase caught on, and soon the public mocked the Supreme Court as Roosevelt’s “Nine Old Men.”
By the end of the summer, the Chicago-based IATSE controlled projectionist unions as far as Pittsburgh and Newark. Now Willie Bioff and George Browne tackled New York City. They ordered a projectionists’ strike in all New York theaters owned by Loew’s and RKO Pictures. The presidents of Loew’s and RKO, Nicholas Schenck and Leslie Thompson, agreed to meet with Bioff and Browne. At the meetings, monitored by Capone henchman Nick Circella, Bioff and Browne called off the strike and signed seven-year contracts with RKO and Loew’s that included a no-strike clause. In exchange, the presidents paid Bioff and Browne $150,000.10
In December 1935 the IATSE forced the movie studios it influenced to agree to closed shops. In a closed shop, employers are only permitted to hire union members. Meant to strengthen a union, this gave IATSE greater control over its theaters and studios. If non–union members wished to keep their jobs, they were forced to sign with the IATSE and pay union dues. For a worker, it was more attractive to sign with the bigger union than with the smaller, so workers tended to sign with the IATSE.
Bioff and Browne gradually began increasing the fees for IATSE union dues. They added an initiation fee for new members. In December they instituted a 2 percent tax on every paycheck—called the “2% assessment”—and never disclosed to the members where these funds were channeled. The members complained, with no resolution. If the stagehands and projectionists stopped paying dues, their union memberships would be relinquished, and they would be out of work. In a Depression-era economy, anything was better than being unemployed.11
On April 25, 1936, at a secluded table in Hollywood, representatives both from the smaller studios of RKO and Columbia, as well as the titans of Paramount, Fox, Warner Bros., and MGM, sat opposite Willie Bioff, George Browne, and Nick Circella. The studios desired assurance that their electricians, carpenters, lab technicians, property workers, grips, and non-first-unit cameramen would not go on strike. A strike would cost each studio hundreds of thousands of dollars.
Browne and Bioff, who now controlled some twelve thousand workers, wanted a substantial kickback.12 After a negotiation, the producers signed a Basic Studio Agreement. Collectively, they would pay IATSE $500,000 over two years to prevent any strikes. It was by far the fattest contract Bioff and Browne had ever received.13
Browne returned to his headquarters in Chicago. Bioff, however, stayed in Hollywood. That’s where most of the business was, and that’s what he wanted to control.