Volume I: Narrative History

 

Chapter 7 (1914): Financial Shenanigans

In the days before the establishment of the Securities and Exchange Commission there was little regulation of the stock market, and much misinformation, some of it quite fraudulent, was foisted upon the public. In the case of the Thanhouser Syndicate Corporation, the Mutual Film Corporation, and related companies, only good news was given out. The fact that Zudora was a critical and financial disaster was withheld from prospective stock buyers. The Morning Telegraph carried a column, "Film Market Quotations and Financial Gossip," by R.D. Small of A.E. Butler & Co., Chicago, which served to hype the stock of these companies. On November 29, 1914 The Morning Telegraph, which regularly carried quotations and information concerning motion picture company stocks, reported that Thanhouser Film Corporation stock was bid 83 and ask 92; Thanhouser Syndicate (Zudora) preferred stock was bid 55 and ask 75. Thanhouser Syndicate common stock was bid 65 and ask 85. Syndicate Film Corporation (The Million Dollar Mystery) preferred stock was bid 165 and ask 185, the same price as Syndicate Film common. An editorial comment was given:

The first release of Zudora on Monday, November 23, and its popular reception by the public, advanced the prices of the stock of the producing company, The Thanhouser Syndicate Corporation, to the above quotations. The newspapers in the syndicate have been increased to something over 1,500 and contracts booked at release date exceed those of The Million Dollar Mystery by $150,000, so that some convenient comparison can be made as to the prospects of this company with the wonderful financial record of The Million Dollar Mystery.... A new jump of 25 points has been made in Syndicate Film - the producers of The Million Dollar Mystery. 140 was paid a little over a week ago, and 165 is now bid (ex-dividend) and there is no stock offered at this moment under 185. Note

On December 6th The Morning Telegraph commented:

It is now a known fact that the contributing elements to the splendid advance in net earnings of the Mutual Film Corporation are mainly due to earning secured through the Syndicate Film (producers of The Million Dollar Mystery) and Thanhouser Syndicate (producer of Zudora), as the Mutual charged, from their standpoint, an exceedingly satisfactory rate for the distribution of both serial films. In respect of The Million Dollar Mystery this amounted to over $300,000 and will probably go as high in the Zudora production.... Thanhouser Syndicate (Zudora) now promises to exceed the record of The Million Dollar Mystery, as contract bookings were over $625,000 on December 1. This means Thanhouser Syndicate common stock will probably duplicate the present high rate of Syndicate Film, sales on the latter being made at $165 within the last week.

Syndicate Film: There is a persistent rumor that this company will make another disbursement of 25% on both the common and preferred this month. It will be remembered that this amount was paid last month. Should this take place it will mean that over 55% has been paid out in dividends in about four months. It has been reported that future policy has not yet been definitely decided as to whether the company will entirely liquidate its profits or embark on another serial.

On December 13, 1914 The Morning Telegraph informed its readers:

Mutual Film common: The demand for this stock by insiders has been very insistent; stock has already advanced to 73 bid, with a very small lot at 76. Net earnings are reported to be at the rate of well over $500,000 per annum. Syndicate Film: The rumor suggested in this column last week has been fulfilled and the stockholders of record on December 7 were paid an additional cash dividend of 25% on both the preferred and common on December 10. It is now rumored that still another dividend of 25% will be paid on both the preferred and common prior to January 1, 1915. Thanhouser Syndicate supplied the public with some new excitement in the offer contained in the Chicago Tribune and other newspapers in a full-page sheet to the effect that $10,000 will be paid for the best suggestion - irrespective of literary value - to be used as a basis for a photoplay. This has more significance than is evidenced at first glance. To a certain extent it ties up the American Film, the Thanhouser Film, the Chicago Tribune, and a syndicate of newspapers for a successor to Zudora when that serial is concluded. The Thanhouser Syndicate Corporation falls heir to a rather strong combination that will bring in additional receipts. The common stock advanced sharply to 78 bid, with no stock offered under 95. Actual sales have taken place at 85.

On December 20, 1914, The Morning Telegraph noted:

Thanhouser Syndicate: An aggregate of over $670,000 in contracts has now been secured, and, in attempting to reach a proper idea of the ultimate bookings, the only recent parallel afforded is that of Syndicate Film - the producers of The Million Dollar Mystery, whose net bookings were approximately $150,000 less than Zudora in about the same length of time.

The $10,000 offer connected with Zudora and freely advertised on the back page of the Chicago Tribune and a large number of metropolitan dailies had an immediate effect upon the common stock, which has sold at higher than 80. The effect of combining the American Film, Thanhouser Film, the Chicago Tribune, and Syndicate of newspapers for a successor to Zudora, was a strategical stroke and has considerable more import than will at first be realized. The Thanhouser Syndicate Corporation falls heir to this strong combination and is thus assured of additional receipts after the completion of Zudora.

The Morning Telegraph, December 27, 1914, commented:

Thanhouser Film: The stock of this company has this year been the most active in its decline. Whereas stock was not offered for under 90 in the last 10 days, it can now be had at 79."

On January 3, 1915 The Morning Telegraph reported:

Thanhouser Film - this stock registered a new low sales price of 70 last week. Several lots of stock are offered at 73. Mutual Film also had a reaction from a high point of 77 to sales at 70. While the motion picture stocks in general cooled off very decidedly in the last 10 days, the break in Mutual and the amount of stock the past has represented the most important activity in the stocks of the week.... Thanhouser Syndicate: This stock is also been a little easier in the last 10 days. Most of the stockholders are waiting some rather unusual developments promised with later episodes. The best single factor that has come into the situation recently is the knowledge that the American Film will handle operations connected with this company's next production, which will be on a rather pretentious scale.

It is evident that the present operations, fraught with problems, were being overlooked and emphasis was being placed on future activities.

The Morning Telegraph, January 10, 1915, told of Zudora and other items. Mutual Film common was 70 bid, 74 ask, preferred was 55-58; Thanhouser Film was 70-75; Thanhouser Syndicate preferred was 50-60; Thanhouser Syndicate common was 60-70, and Syndicate Film was 141-150. This commentary was given:

Mutual Film: After a decline in the common from 77 to 69, stock advanced to bids of 72 and then reacted again. Most of the inquiries, both from stockholders and brokers, have been transferred from the common to the preferred, and the latter is wanted at 55. Syndicate Film: The demand for this stock has quieted down perceptively, and several lots may be had at 150-155. A number of the stockholders expect another disbursement of 25% in January, and it has been intimated that even 50% may be expected.... Thanhouser Syndicate: The later episodes, from the seventh to the fifteenth - have been reconstructed. We understand that Daniel Carson Goodman and Mr. Sullivan, in their respective roles of scenario writer and director, have been relieved of their duties, and Howell Hansel is now in full charge of the production with an enlarged cast and the introduction of a new character, Jim Baird. These later episodes, instead of being complete in themselves, are now all interdependent, and the real mystery will not be divulged until the last episode. Both preferred and common have declined within the past week.

The Morning Telegraph, January 17, 1915, carried more Zudora news: Note

Thanhouser Syndicate: The Sunday papers announced the trend of the reconstructed story. All of the episodes are now connected. Hassam Ali has been disposed of and practically the entire Thanhouser cast is now working on what the studio claims to be the most exciting screen productions they have ever been responsible for. New bookings have proven the exhibitors responses to the recent changes that have been effected.... Syndicate Film: Income is reported to be in excess of $8,000 per week in what might be termed the fourth phase of this remarkable production. Stock is reported to have a book value of over $200 per share, but is offered now at $150.

 

Copyright © 1995 Q. David Bowers. All Rights Reserved.