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3 - Capital and Commerce

Published online by Cambridge University Press:  18 November 2022

James Chapman
Affiliation:
University of Leicester
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Summary

The perennial crisis in British film finance has shifted its ground since 1940 when Oliver Lyttelton was President of the Board of Trade and I was asked to write a memorandum for him on a Films Bank. In those days the Board of Trade was fearful lest the precious few capitalists financing British films – Lady Yule, Arthur Rank, Stephen Courtauld – should suddenly die. To-day their deaths would be regretted but not feared. Indeed, the different nature of the present crisis in British film finance was revealed a year ago in the death of Mr J. W. New, the forceful manager of the Piccadilly Branch of the National Provincial Bank who was the real financier of British films. (Nicholas Davenport

In 1939 it was estimated that the total capital invested in the British film industry amounted to some £97 million: the largest proportion of this investment (£77,750,000) was in cinema properties. The exhibition sector, while subject to seasonal fluctuation, was the most stable part of the industry. It was also the most profitable: in 1934 – the first year for which reliable statistics are available – the British public spent an estimated £41.1 million at the box office. The production sector was the most unstable part of the industry and tended to be subject to cycles of boom and bust. However, following the financing and production crisis of 1937, the revised Cinematograph Films Act of 1938 – which introduced a minimum cost threshold for British quota pictures and allowed renters to claim double or treble quota for higher-cost pictures – brought a degree of relative stability to the production sector until the outbreak of war in September 1939 once again plunged the industry into uncertainty. The Cinematograph Films Council reported that a total of £5.7 million had been invested in film production in the first year following the Act. And the Bank of England estimated a total cost of £8,186,500 for all the British films released in the eighteen months following the Act. Around half of that total (£4,214,333) was from American companies producing films in Britain.

It is evident that significant capital sums were invested in the film industry, but where did the money come from?

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Information
The Money Behind the Screen
A History of British Film Finance, 1945-1985
, pp. 46 - 61
Publisher: Edinburgh University Press
Print publication year: 2022

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