IN 1918 the movie industry was shaken by a serious loss of patronage because of the influenza epidemic and the absence of millions of men at the front or in training camps. The public's distaste for war films after the Armistice was also a threat to the industry's well- being. But the setback was only temporary. Recouping their losses, producers quickly resumed expansion and consolidation. Inter-organizational rivalry attained proportions that made the old trust war seem petty. Having realized its fundamental large-scale characteristics, the industry began its ten years of growth as big business--a growth to be intensified, in the closing years, by the sudden and revolutionary addition of sound.
Unrivaled by foreign films during the four war years, American films were firmly established not only at home but in all parts of the globe--even in India, western Asia, and Africa. In 1919 American motion pictures exclusively were being shown in South America; in Europe ninety per cent of the movies shown originated in the United States. Hollywood had become the unquestioned motion picture center of the world.
The post-war period was one of unrestraint in business as in life generally. To be important a thing had to be big--and so the movie became one of the biggest things in American civilization. Everything connected with it was inflated, materially and psychologically. Companies, studios, productions, theatres, salaries, sales, advertising --all took on gigantic proportions. Excesses were characteristic of the hysteria and booming prosperity of "the jazz age."
Profits, huge though they were, were not big enough to finance