This story first appeared in the Aug. 9 issue of The Hollywood Reporter magazine.

The 1930s are celebrated as one of Hollywood's golden ages, but in an exclusive excerpt from his controversial new book, The Collaboration: Hollywood's Pact with Hitler (Harvard University Press, on sale Sept. 9), Harvard post-doctoral fellow Ben Urwand uncovers a darker side to Hollywood's past.

Drawing on a wealth of archival documents in the U.S. and Germany, he reveals the shocking extent to which Hollywood cooperated and collaborated with the Nazis during the decade leading up to World War II to protect its business.

Indeed, "collaboration" (and its German translation, Zusammenarbeit) is a word that appears regularly in the correspondence between studio officials and the Nazis. Although the word is fraught with meaning to modern ears, its everyday use at the time underscored the eagerness of both sides to smooth away their differences to preserve commerce.

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The Nazis threatened to exclude American movies -- more than 250 played in Germany after Hitler took power in 1933 -- unless the studios cooperated. Before World War I, the German market had been the world's second largest, and even though it had shrunk during the Great Depression, the studios believed it would bounce back and worried that if they left, they would never be able to return.

Beginning with wholesale changes made to Universal's 1930 release All Quiet on the Western Front, Hollywood regularly ran scripts and finished movies by German officials for approval. When they objected to scenes or dialogue they thought made Germany look bad, criticized the Nazis or dwelled on the mistreatment of Jews, the studios would accommodate them -- and make cuts in the American versions as well as those shown elsewhere in the world.

It was not only scenes: Nazi pressure managed to kill whole projects critical of the rise of Adolf Hitler. Indeed, Hollywood would not make an important anti-Nazi film until 1940. Hitler was obsessed with the propaganda power of film, and the Nazis actively promoted American movies like 1937's Captains Courageous that they thought showcased Aryan values.

Historians have long known about American companies such as IBM and General Motors that did business in Germany into the late 1930s, but the cultural power of movies -- their ability to shape what people think -- makes Hollywood's cooperation with the Nazis a particularly important and chilling moment in history. -- Andy Lewis

'Victory Is Ours'

On Friday, Dec. 5, 1930, a crowd of Nazis in Berlin seized on an unusual target: the Hollywood movie All Quiet on the Western Front. Recognized in most countries as a document of the horrors of the First World War, in Germany it was seen as a painful and offensive reenactment of the German defeat.

The Nazis, who had recently increased their representation in the Reichstag from 12 to 107 seats, took advantage of the national indignation toward All Quiet on the Western Front. They purchased about 300 tickets for the first public screening, and as they watched the German troops retreat from the French, they shouted: "German soldiers had courage. It's a disgrace that such an insulting film was made in America!" Because of the disruptions, the projectionist was forced to switch off the film. Nazi propagandist Joseph Goebbels gave a speech from the front row of the balcony in which he claimed that the film was an attempt to destroy Germany's image. His comrades threw stink bombs and released mice into the crowd. Everyone rushed for the exits, and the theater was placed under guard.

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The Nazis' actions met with significant popular approval. The situation came to a climax Dec. 11, when the highest censorship board in Germany convened to determine the fate of the film. After a long discussion, the chairman of the board issued a ban: Whereas the French soldiers went to their deaths quietly and bravely, the German soldiers howled and shrieked with fear. The film was not an honest representation of German defeat -- of course the public had reacted disapprovingly. Regardless of one's political affiliation, the picture offended a whole generation of Germans who had suffered through the War.

And so, six days after the protests in Berlin, All Quiet on the Western Front was removed from screens in Germany. "Victory is ours!" Goebbels' newspaper proclaimed. "We have forced them to their knees!"

In Hollywood, the president of Universal Pictures, Carl Laemmle, was troubled by the controversy surrounding his picture. He was born in Germany, and he wanted All Quiet on the Western Front to be shown there. According to one representative, his company had "lost a fine potential business, for the film would have been a tremendous financial success in Germany if it could have run undisturbed."

In August 1931, Laemmle came up with a heavily edited version of the movie that he was convinced would not offend the German Foreign Office. He made a trip to Europe to promote the new version. The Foreign Office soon agreed to support All Quiet on the Western Front for general screening in Germany, under one condition: Laemmle would have to tell Universal's branches in the rest of the world to make the same cuts to all copies of the film. Late in the summer, Laemmle agreed to cooperate with the request.

As months passed, however, Laemmle, who was Jewish, grew worried about something much more important than the fate of his film. "I am almost certain," he wrote in early 1932, "that [Adolf] Hitler's rise to power … would be the signal for a general physical onslaught on many thousands of defenseless Jewish men, women and children." He convinced American officials that he could provide for individual Jews, and by the time of his death in 1939, he had helped get at least 300 people out of Germany.

And yet at precisely the moment he was embarking on this crusade, his employees at Universal were following the orders of the German government. In the first few months of 1932, the Foreign Office discovered unedited versions of All Quiet on the Western Front playing in El Salvador and Spain. The company apologized. Afterward, there were no more complaints; Universal had made the requested cuts all around the world.

The following year, Laemmle made another concession to the Foreign Office: He postponed The Road Back, the sequel to All Quiet on the Western Front. His son, Carl Laemmle Jr., also agreed to change many pictures in Germany's favor. "Naturally," the Foreign Office noted, "Universal's interest in collaboration [Zusammenarbeit] is not platonic but is motivated by the company's concern for the well-being of its Berlin branch and for the German market."

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Throughout the 1930s, the term "collaboration" was used repeatedly to describe dealings that took place in Hollywood. Even studio heads adopted the term. An executive at RKO promised that whenever he made a film involving Germany, he would work "in close collaboration" with the local consul general. A Fox executive said the same. Even United Artists offered "the closest collaboration" if the German government did not punish the studio for the controversial 1930 air combat movie Hell's Angels. According to the Foreign Office, "Every time that this collaboration was achieved, the parties involved found it to be both helpful and pleasant."

All this was a result of the Nazis' actions against All Quiet on the Western Front. Soon every studio started making deep concessions to the German government, and when Hitler came to power in January 1933, they dealt with his representatives directly.

The most important German representative in the whole arrangement was a diplomat named Georg Gyssling, who had been a Nazi since 1931. He became the German consul in Los Angeles in 1933, and he consciously set out to police the American film industry. His main strategy was to threaten the American studios with a section of the German film regulations known as "Article 15." According to this law, if a company distributed an anti-German picture anywhere in the world, then all its movies could be banned in Germany. Article 15 proved to be a very effective way of regulating the American film industry as the Foreign Office, with its vast network of consulates and embassies, could easily detect whether an offensive picture was in circulation anywhere around the world.

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The Mad Dog of Europe

In May 1933, a Hollywood screenwriter named Herman J. Mankiewicz‚ the man who would later write Citizen Kane, had a promising idea. He was aware of the treatment of the Jews in Germany and he thought, "Why not put it on the screen?" Very quickly, he penned a play entitled The Mad Dog of Europe, which he sent to his friend Sam Jaffe, a producer at RKO. Jaffe was so taken with the idea that he bought the rights and quit his job. Jaffe, who, like Mankiewicz, was Jewish, planned to assemble a great Hollywood cast and devote all his energies to a picture that would shake the entire world.

Of course, various forces had been put in place to prevent a picture like this from ever being made. First and foremost was Gyssling. Up to this point, he had only invoked Article 15 against pictures that disparaged the German army during the World War. The Mad Dog of Europe was infinitely more threatening: It attacked the present German regime.

Gyssling was unable to use Article 15 against The Mad Dog of Europe for the simple reason that the independent company producing the picture did not do business in Germany. He was left with only one option: Inform the Motion Picture Producers and Distributors Association of America (popularly known as the Hays Office), which regulated movie sex and violence for Hollywood, that if the movie were made then the Nazis might ban all American movies in Germany.

The Hays Office reacted quickly. Will Hays, the organization's president, met with Jaffe and Mankiewicz. He accused them of selecting a "scarehead" situation for the picture, which, if made, might return them a tremendous profit while creating heavy losses for the industry. Jaffe and Mankiewicz said they would proceed despite any ban that Hays might attempt.

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Hays needed to adopt a different approach. He asked his representative, Joseph Breen, to reach out to the advisory council for the Anti-Defamation League in Los Angeles. The advisory council read the script and felt that the direct references to Hitler and Nazi Germany might provoke an anti-Semitic reaction in the United States. But "if modified so as to apparently have reference to a fictitious country, and if the propaganda elements … were made more subtle … the film would be a most effective means of arousing the general public to the major implications of Hitlerism."

Even if the script were toned down, the Anti-Defamation League suspected that the Hays Office would object to the film because the major Hollywood studios were still doing business in Germany. Nobody in the ADL group knew exactly how much business was being done. Some imagined that Germany was banning films starring Jewish actors; others thought that Germany was banning entire "companies supposed to be controlled by Jews." Nobody had the slightest idea that the Nazis were actually facilitating the distribution of American movies in Germany.

The Anti-Defamation League decided to carry out a test: It asked a well-known screenwriter to prepare an outline of The Mad Dog of Europe that contained none of the obvious objections. This scriptwriter then submitted the outline to three different agents, and without any hesitation, they all told him the same thing: "It was no use submitting any story along this line as the major studios had put 'thumbs down' on any films of this kind."

Eventually, Jaffe gave up his plans and sold the rights to The Mad Dog of Europe to well-known agent Al Rosen. And when the Hays Office urged Rosen to abandon the picture, Rosen accused the Hays Office of malicious interference and issued a remarkable statement to the Jewish Telegraphic Agency claiming "on good authority" that Nazi officials were trying to stop the picture. He scoffed at the idea that the picture would provoke further anti-Semitism.

Over the next seven months -- from November 1933 to June 1934 -- Rosen continued to work on the film, but he failed to convince Hollywood executives to pour money into the project. Louis B. Mayer told him that no picture would be made: "We have interests in Germany; I represent the picture industry here in Hollywood; we have exchanges there; we have terrific income in Germany and, as far as I am concerned, this picture will never be made."

And so The Mad Dog of Europe was never turned into a motion picture. The episode turned out to be the most important moment in all of Hollywood's dealings with Nazi Germany. It occurred in the first year of Hitler's rise to power, and it defined the limits of American movies for the remainder of the decade.

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Zusammenarbeit

In 1936, the studios started to encounter major censorship difficulties in Germany. Nazi censors rejected dozens of American films, sometimes giving vague reasons, sometimes giving no reasons at all. The smaller companies had all left Germany by this point, and only the three largest companies -- MGM, Paramount and 20th Century Fox -- remained. By the middle of the year, these three companies had managed to have a combined total of only eight pictures accepted by the censors, when they really needed 10 or 12 each just to break even.

The studios were faced with a difficult decision: continue doing business in Germany under unfavorable conditions or leave Germany and turn the Nazis into the greatest screen villains of all time. On July 22, MGM announced that it would bow out of Germany if the other two remaining companies, Paramount and 20th Century Fox, would do the same.

Paramount and Fox said no. Even though they were not making any money in Germany (Paramount announced a net loss of $580 for 1936), they still considered the German market to be a valuable investment. They had been there for years. Despite the difficult business conditions, their movies were still extremely popular. If they remained in Germany a while longer, their investment might once again yield excellent profits. If they left they might never be permitted to return.

Over the next few years, the studios actively cultivated personal contacts with prominent Nazis. In 1937, Paramount chose a new manager for its German branch: Paul Thiefes, a member of the Nazi Party. The head of MGM in Germany, Frits Strengholt, divorced his Jewish wife at the request of the Propaganda Ministry. She ended up in a concentration camp.

The studios also adopted new tactics. When Give Us This Night and The General Died at Dawn were banned, Paramount wrote to the Propaganda Ministry and speculated on what was objectionable in each case. Give Us This Night was scored by a Jewish composer, so the studio offered to dub in music by a German composer instead. The General Died at Dawn had been directed by Lewis Milestone, who had also directed All Quiet on the Western Front, so the studio offered to slash his name from the credits.

In January 1938, the Berlin branch of 20th Century Fox sent a letter directly to Hitler's office: "We would be very grateful if you could provide us with a note from the Führer in which he expresses his opinion of the value and effect of American films in Germany. We ask you for your kind support in this matter, and we would be grateful if you could just send us a brief notification of whether our request will be granted by the Führer. Heil Hitler!" Four days later, 20th Century Fox received a reply: "The Führer has heretofore refused in principle to provide these kinds of judgments."

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The Final Cut

In April 1936, Laemmle lost control of Universal Pictures to the American financier and sportsman John Cheever Cowdin, who revived All Quiet on the Western Front sequel The Road Back. "When this story originally came in four or five years ago," a Universal employee explained to the Hays Office, "we were loath to produce … solely due to the jeopardy in which its production would have placed our German business. … [S]ince then the situation with regard to the American Film Industry has completely changed and we are now ready and anxious to produce this story."

Despite this proclamation, Universal had not lost interest in Germany. In February 1937, Cowdin traveled to Berlin, and according to U.S. ambassador William E. Dodd, he made an "unusual offer" to the Nazis. "The company in question was previously controlled by Jewish interests but after recent reorganization, it is understood that it is now non-Jewish," wrote Dodd, "[and after] discussions with government officials … a plan was considered whereby, probably in collaboration with German interests, his company might re-enter the German market."

On April 1, 1937, Gyssling made his boldest move yet. He sent letters to about 60 people involved in The Road Back -- the director, the cast, even the wardrobe man -- and he warned them that any films in which they participated in the future might be banned in Germany. The move created an uproar. Gyssling had directly threatened American film workers for their activities on home soil. He had used the U.S. Postal Service to frighten and intimidate individuals. Universal told everyone to keep the matter a secret, but the news leaked out. Several actors sought out legal advice; complaints were lodged with the State Department. One member of the Hays Office hoped that Gyssling would finally be expelled "on account of his viciousness."

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The matter was considered at the highest level. A representative of the secretary of state met with the counselor of the German embassy and pointed out that such actions did not fall within the proper functions of a consular officer. He did not want to lodge an official complaint; he simply asked the counselor to bring the matter up with the German government.

In the meantime, Universal Pictures made 21 cuts to The Road Back. By this stage, there was hardly anything in the film to which the ambassador could object. So many scenes had been cut out that the plot barely made any sense. The ending, which had criticized the rise of militarism in Germany, now criticized the rise of militarism all around the world. But the Nazis would not allow the company back into Germany.

For Gyssling, the news was less bleak. The German Foreign Office sent a brief, unapologetic letter to the State Department to explain that the consul in Los Angeles had been instructed not to issue future warnings to American citizens. As a result, the State Department considered the matter closed.

In all of these dealings with the Hollywood studios, Gyssling was doing something very strategic. He was objecting to a series of films about the World War when his real target lay elsewhere. Ever since he had heard about The Mad Dog of Europe, he had understood that Hollywood was capable of producing a much more damaging type of film from his perspective: a film that attacked Nazi Germany. His reaction to The Road Back was carefully calculated. He was focusing his energies on the films set in the past in an attempt to prevent the studios from moving into the present.

In April 1937, the final volume of Erich Maria Remarque's trilogy, Three Comrades, which was prime Hollywood material, was published in the United States. Whereas All Quiet on the Western Front had been about the World War and The Road Back had been about its aftermath, Three Comrades was set in the late 1920s, when the Nazis were emerging as a significant political force. The MGM producer Joseph L. Mankiewicz (brother of Herman) hired none other than F. Scott Fitzgerald, who wrote a script that mounted a powerful attack on the rise of Nazism in Germany.

When the Hays Office's Breen read the new script, he panicked. He had just received a fourth warning from Gyssling about Three Comrades, and he knew exactly what the German consul was capable of. He wrote to Mayer in the strongest possible terms: "This screen adaptation suggests to us enormous difficulty from the standpoint of your company's distribution business in Germany. … [and] may result in considerable difficulty in Europe for other American producing organizations."

Despite Breen's concerns, the shooting of Three Comrades went ahead. Screenwriter Budd Schulberg recalled MGM screened the movie for Gyssling: "There was some films that Louis B. Mayer of MGM would actually run … with the Nazi German consul and was willing to take out the things that the consul, that the Nazi, objected to." Although Breen did not keep a record of the meeting between Mayer and Gyssling, he was soon in possession of something else: a list of changes that needed to be made to the film. It is very unlikely that Breen came up with the list himself, for he had his own separate set of suggestions (relating to sex, foul language, etc.). In all likelihood this secret document, which contained 10 unusual changes, was the list that Mayer compiled with Gyssling at the end of their screening of Three Comrades.

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Breen went through the list in a meeting with several MGM executives. The film needed to be set somewhat earlier, in the two-year period immediately following the end of the World War. "Thus, we will get away from any possible suggestion that we are dealing with Nazi violence or terrorism." He read out the scenes that needed to be cut, and he pointed out that these cuts could be made without interfering with the romantic plot at the center of the picture. The MGM executives agreed. After all the changes had been made, Three Comrades neither attacked the Nazis nor mentioned the Jews. The picture had been completely sanitized.

From Gyssling's perspective, the removal of all the offensive elements of Three Comrades was the true benefit of his behavior from the previous year. He had reacted so dramatically to the second film in the trilogy that he had now managed to get his way on the third. And this was no small feat, for Three Comrades would have been the first explicitly anti-Nazi film by an American studio. At this critical historical moment, when a major Hollywood production could have alerted the world to what was going on in Germany, the director did not have the final cut; the Nazis did.

'Throw Us Out'

The collaboration between Hollywood and the Nazis lasted well into 1940. Though Warner Bros. released Confessions of a Nazi Spy in 1939, this B-picture had no effect on the studios still operating in Germany. MGM, Paramount and 20th Century Fox kept doing business with the Nazis, and MGM even donated 11 of its films to help with the German war relief effort after the Nazis invaded Poland on Sept. 1, 1939.

As the war continued, the studios found it virtually impossible to distribute their pictures in England and France, two of their largest sources of foreign revenue. In this context, they were less concerned with the relatively minor German market. MGM soon embarked on its first anti-Nazi picture The Mortal Storm, and 20th Century Fox began work on Four Sons. The Nazis responded by invoking Article 15 and by September 1940, both had been expelled from German-occupied territory.

In the year that followed, the studios released only a handful of anti-Nazi movies because of another, very different political force: the American isolationists. The isolationists accused Hollywood of making propaganda designed to draw the United States into the European war, and in the fall of 1941, Congress investigated this charge in a series of hearings. The most dramatic moment came when the head of 20th Century Fox, Darryl F. Zanuck, gave a rousing defense of Hollywood: "I look back and recall pictures so strong and powerful that they sold the American way of life, not only to America but to the entire world. They sold it so strongly that when dictators took over Italy and Germany, what did Hitler and his flunky, Mussolini, do? The first thing they did was to ban our pictures, throw us out. They wanted no part of the American way of life."

In the thunderous applause that followed, no one pointed out that Zanuck's own studio had been doing business with the Nazis just the previous year.

Excerpted from The Collaboration: Hollywood's Pact with Hitler by Ben Urwand (Harvard University Press, on sale Sept. 9). Copyright Ben Urwand.