In 1929 Loew's Inc. President Nicholas Schenck agreed to sell a controlling interest in the firm to Fox Film Corp. for $10 million that would have given Fox control of Loew's theater chain and its MGM studio subsidiary. Fox was interested in thwarting Adolph Zukor, owner of Paramount Pictures, who also was anxious to acquire Loew's. Fox claimed that the late Marcus Loew (who died unexpectedly in 1927) and Zukor, who had been partners in vaudeville, had a gentleman's agreement in which their theater chains would only show each other's films and keep out other studios' pictures. Acquiring Loew's would allow Fox to release his pictures in the Loew's theater chain and force out Paramount product, thus giving him a competitive edge over Zukor and Paramount. Fox made an agreement with Schenck by which the Loew's boss would assemble enough shares of stock, in secret, to give Fox control. The $10-million price included a $2.5-million premium for Schenck. Fox planned to merge MGM with his own studio, a merger that would require the approval of the Justice Department's Anti-Trust Division, which Fox expected would approve the deal despite the huge concentration of production and power it would put in the hands of one man and one studio. Fox lobbied the government in order to try to get the deal pushed through. When MGM studio boss Louis B. Mayer got wind of the deal, he used his connections with the administration of US President Herbert Hoover to nix the deal in order to protect himself from being forced out of his own company (as had happened to other studio moguls in the past, most notably Samuel Goldwyn, who had been squeezed out of both Paramount Pictures and his own Goldwyn Studios--which later became Metro-Goldwyn-Mayer). Fox had made a tactical error in trying to keep Mayer in the dark and forcing him out, and he tried to rectify that mistake by offering Mayer $2 million. Although Fox's political clout got him in to plead his case to President Hoover, Mayer's political connections proved to be the stronger. Fox's plan was done in when his creditors, to whom he owed more than $50 million due to expansion and the retrofitting of his studios and theaters for sound, began making financial demands. After at first seeming to go along with the acquisition, the Justice Department reversed course and filed an anti-trust suit against Fox, who had been hurt in a car crash in the summer and had had to convalesce for weeks. The stock market crash in October drove the final nails into the deal's coffin. By 1930 Fox was forced to sell the film company that bore his name, and several years later he went bankrupt. The financially troubled Fox Film Corp. was absorbed by Darryl F. Zanuck's much smaller 20th Century Pictures, creating 20th Century-Fox in 1935, with Joseph M. Schenck as president. Joe Schenck's brother, Loew's President Nick Schenck, partially financed the deal. Mayer, on his part, would replace Zukor as the most powerful movie magnate in Hollywood in the 1930s and would become the highest paid corporate employee in America.
