A History of the Atlanta Fox Theatre
Part Two
"The Best Laid Plans of Mice and Men"
The Early Years and Extreme Chaos 1930-1936

By Hal Doby
Originally written, March 1996, last revision: February 14, 2014

Yet despite the financial horrors going on, the Atlanta Fox Theatre opened to much public jubilation on Christmas Day, 1929. Two days later, the Shriners held their first business meeting in their new Mosque. The Mosque was formally dedicated on New Year's Day 1930 with a grand Shrine ceremony held in the Grand Ballroom.

Yet all was not well with the people and organizations involved in the Yaarab Shrine Temple Mosque. Thanks mainly for attempting to aquire Loews, Inc., William Fox had overextended himself by aquiring loans in order to purchase Loews stock. After the Stock Market Crash, Fox went from having assets estimated of over four hundred million to being ninety-two million in debt. A few monhts into 1930, Fox was ejected from the Fox Films Board of Directors, loosing control and ownership of the empire that bore his name. 

The Fox Film Corporation was also in a dire situation. Because they now held the substantial stock William Fox had purchased in the Loew's Corporation along with that came the outstanding bank loans he had taken out to buy that stock.

 Loew's and MGM were in much better financial shape than Fox and it appears they assumed at least a portion of Fox's loan debt and through that they negotiated the retirement of some of this debt through the aquisition of Fox Film holdings. Part of those holdings were the ownership of over a thousand Fox Theaters. One of those assets was the lease of the Atlanta Fox Theatre. In August of 1930, less than 8 months after the Atlanta Fox opened, Fox Films turned over operations of the theater to Loew's. From that point on the Atlanta Fox Theatre had nothing to do with its namesake.

Something a lot of people do not take into consideration is that the Great Depression lasted nearly an entire decade. The great Stock Market Crash of October 1929 saw a major drop of the Dow Jones Index over a multi-day period. The dip was bad, but it was relatively minor compared to the steady decline that was to come. As that decline progressed, things got worse, much worse.  The Stock Market did not hit its absolute bottom until July 8, 1932 when it closed at 41.22 shares. Where the Stock Market had lost about 24% of its value in October of 1929, by the time it hit its absolute low, the Stock Market had lost a whopping 89% of its post-crash value.

Early in the year, as a method to raise income for itself, the Oriental Band Unit of the Yaarab Temple subleased the Banquet Hall for $100 per weekend for the remainder of 1930, to stage weekend dances that became extremely popular. Their weekly dances made sufficient profit for the band unit to pay for the room rental plus the unit's traveling expenses to other Shrine functions.That brought in $5,000 worth of income for the Shrine in 1930. For the next six years, it made approximately $5,200 each year. 

As the Stock Market hit its bottom, so did the Yaraab Temple. The Great Depression struck every single man, woman, and child in the United States. Nobody escaped unharmed. People lost everything they owned and money that was deposited in many banks was lost forever when the un-insured banks failed and went out of business. By the end of 1930, unemployment had risen in the Atlanta area to over sixty percent and continued to climb.

In January 1930, just days after the Shrine Mosque was dedicated, a Temple financial report stated that unpaid pledges and subscriptions to the Temple amounted to over $300,000. Because of that, the Temple was short $250,000 in order to complete payments due or past due. In order to help make those payments, each Shrine member was assessed an extra fee of forty dollars. This action was neither adequate nor could the membership afford to do as the Temple asked.

As the Shriners had to do with the construction of their Mosque back in 1928, people were now forced to reduce their budgets to an absolute minimum with absolutely no non-essential items. One of the first perceived non-essentials was memberships in fraternal or social organizations. As the memberships declined, paying Temple bills went from being hard to nearly impossible. In January 1931, only one year after the opening of the Fox, the Yaarab Temple was forced to take out a second mortgage for $395,000. After a forty dollar extra fee was imposed on the membership, hundreds more canceled their Yaarab Temple membership because they could not afford basic dues, not to mention any other assessments of any amount. The Shrine's membership had been decimated and the forty dollar fee that was to help actually made things a lot worse. 

   

In the spring of 1932, the Fox was the host for the 1932 Ogelthrope University Graduation Ceremony (pictured above). It's honored guest was then candidate for president, Franklin Delano Roosevelt. In the photo above, Then Governor Roosevelt recieving an honoary degree from Oglethorpe University President, Thornwell Jacobs. In the second more casual picture, taken back stage, standing to the left of FDR is his son. Note in this photo, FDR is seen standing while using a cane. FDR made a point of usually not having any photos that gave a hint that he had suffered the ravages of Polio, so this makes this photo one of a rare few. While in Atlanta FDR also did some campaigning for his run for the White House.

By the end of Spring 1932, it was becoming very likely the Shriners were going to loose the Temple's Mosque. The final nail in the coffin was driven in by Loew's. Long before Loew's gained control of the Atlanta Fox Theatre, they had purchased the deGive Opera house in downtown Atlanta and had re-purposed it into the Loew's Grand Theatre. While it sat approximately 2,000 patrons, far less than what the Fox Theatre could accommodate, it was considered the Atlanta flagship of the Loew's Theater chain. Despite the Great Depression, Loew's decided it was going to build a new theater, relinquish the Fox lease, and sell the Grand. The Shriner's were given notice of Lowe's intentions of breaking the lease and the final show Under Loew's management occurred on June 25, 1932. As it worked out, Loew's plan to build a new "Grand" theater never materialized. Eventually Loew's chose to give the existing Grand a major Art Deco style renovation. The Grand soldiered on in this form until it was shuttered in the late 1970s. 

In July 1932, the Trust Company of Georgia began legal proceedings against Yaarab Temple Building Company, and the Fox Theatres Corporation to begin to begin forclosure procedings on the Mosque property. In August of 1932, with no other option available to them, the Yaarab Temple filed for Chapter 7 bankruptcy liquidation.  

Even though they were now in bankruptcy, the Yaarab Temple signs a one-year lease on the auditorium with a group of Atlanta business men led by Mr.N. Edward Beck called Southeastern Amusement Enterprises, Inc. Former Fox Orchestra leader Enrico Liede is selected as general manager for the theater.  

Ownership of the Shrine Mosque/Fox Theatre complex was transferred to Trust Company Bank of Georgia in November. The next month, the Fox Theatre Complex was sold at public auction on the stpes of the Fulton County Courthouse to Theater Holding Company (THC). THC was an organization that represented bond holders that held now-worthless Shrine Mosque construction bonds that were issued by the Yaarab Temple to finance the construction of the Mosque. At the time of the Temple's bankruptcy, the bondholders were still owed $325,000. THC was able to purchase the building for $75,000 at the liquidation auction. This was done in the hope that the Fox Theatre Complex could be re-sold at a price that could recover some of the money that the Yaarab Temple defaulted on through their bankruptcy. 

(Please Note: As long as the Yaraab Temple owned the building, I refer to it as the Atlanta Yaraab Temple (Shrine) Mosque with the Fox Theatre operating from inside it. Once the property was no longer owned by the Yaarab Temple, I then refer to the building as the Fox Theatre or the Fox Theatre Complex with a portion of the building used/rented by the Shriners as the "Yaraab Temple Mosque" portion of the complex.)

It appears that Southeastern Amusement Enterprises continued to operate the Fox Theatre without interruption during the bankruptcy and the Yaraab Temple also continued to operate within the Mosque portion of the complex. I believe this was in good part because the former bondholders that comprised Theater Holding Company were mainly composed of former or current Yaarab Temple members. After the bankruptcy was completed, the Yaarab Temple was allowed to remain in residence at the Fox Theatre Complex as renting tenants.

When the Southeastern Amusement Enterprises lease expired, The Fox auditorium was leased to Robert E. Wilby on September 2nd, 1933. Wilby failed to successfully operate the Fox Theatre and within a year his lease was not renewed.

The auditorium was then leased to Atlanta Enterprises, owned by Arthur M. Lucas and William K. Jenkins. At that time, both of these partners were members of the Yaarab Temple. Prior to this they had been in business as promoters of a community theater company. This was their first experience in operating a movie house, an auditorium of over 2000 seats, and a theater in a "downtown" district. Unlike Wilby, they are quite successful in running the theatre. 

After two years of ownership and not being able to find a commercial buyer for the Fox Complex, THC acts on the notion that the Fox Complex should be sold to the City of Atlanta so it can be used as a Civic Auditorium for Fine Arts as well as to continue to show motion pictures. The idea was that the Fox would continue to be operated as it had been with Lucas and Jenkins leasing the auditorium and the Yaarab Temple continuing to rent the Mosque portion of the complex. Both tenants would directly report to the City's Public Buildings and Grounds Commitee. 

The acquisition is controversial from the start, but Mayor James L. Key (pictured left) likes the idea and eventually the City Council votes to approve the city's ownership of the Fox in April of 1935. As the measure worked its way through the City Council, a fundraising campaign was undertaken to get companies and contributors to donate enough money to cover a down payment. It's reported that the Coca-Cola company was the major benefactor of the fundraising drive that raised $110,000. 

The opponents of the sale brought up a legitimate problem. Theater Holding Company had not paid its 1935 tax bill of approximately $9,000 and until that was settled, the City could not purchase the Fox Complex. In order to get around this problem,attorneys Harold U. Hirsch (pictured right) and Marion Smith on behalf of an unnamed citizens group file papers to incorporate "Mosque, Inc." on March 21st. The mission of the new corporation, once the City voted to accept the Fox Complex, was to purchase the Fox complex from Theater Holding Company for $725,000.  Once it was deeded to Mosque and the past due tax situation resolved, the property could then legally be "given" to the City. I am assuming that as part of the transaction to purchase the building, part of the $110,000 down payment was used by Theater Holding Company or Mosque, Inc. to settle the outstanding tax debt. To pay the remaining $615,000 balance owed, the City would issue bonds that would mature over a 21 year period and the cost of the bonds would be covered by the expected proficts made from operating the Fox. 

The City of Atlanta took ownership of the Fox Complex on April 19th, 1935, the same day Mosque, Inc. aquired the deed of the complex from THC. But this is where fate gets cruel. Many of the citizens of Atlanta were not happy that the City owned the Fox. After the deal was completed, the city auditors made a report that anticipated the Fox Complex to run a deficit of approximately $30,000 for 1936, plus the City would no longer be paid the $9,000 property taxes bill because it now owned the complex. Two unnamed "concerned citizens" filed a law suit against the City of Atlanta to force it to relinquish ownership of the Fox Complex.

Soon it was aparent that the Mayor and the City Council were in a no-win situation and the only way out was to divest itself of the Fox with the quickest way to do that was to return ownership back to Mosque, Inc. It was pointed out by a city tax accountant that if it gave back the Fox by the end of January 1936, Mosque would owe the City the property taxes for 1935 and 1936. Seeing this as the best way out, and with time running out, the Mayor approved the plan and the City Council voted in favor of giving back the Fox on January 29th. With less than three days left to complete the task and force Mosque back into ownership and owe the city the $18,000 tax bill, the officers of Mosque, Inc. did their best to hide from having the deed served back to them. With only hours left before midnight on January 31st, the paperwork was successfully served. What was supposed to be a very temporary corporation was now stuck with the Fox Complex!

This concludes Part Two of our story. Please continue one to read Part Three Midlife 1936-1969.

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