The origins of Pathé-Natan (1) Gilles Willems   Uploaded 12 November 1999 | 5727 words   Translated by Annabelle de Croÿ Abstract Visual documentation Captions translated by William D. Routt and Annabelle de Croÿ	(1) From the proceedings of the international conference, Regards croisés sur l'histoire économique du cinéma français (1895-1995), Palais du Luxembourg, Senate, 16-17 February 1996. Published in Une histoire économique du cinéma français (1895-1995), Regards croisés franco-américains Pierre-Jean Benghozi and Christian Delage, eds (Paris: Harmattan, Collection Champs Visuels, 1997). [This translation has had the benefit of additional notes and comments by M. Willems. Text in square brackets is the translator's.]
To undertake the history of the integrated company jointly designated as "Pathé-Natan" is to confront, in more than one way, a tenacious legend: that of the Jewish swindler of Roumanian descent, Bernard Natan, who acquired the great Pathé firm the better to pillage it. This myth, peddled by the press of the day and by a large number of cinema historians, has been considered established fact for more than fifty years.(2) This extremely reductive treatment does not promote an understanding of this period. In fact for the [Pathé] Rooster(3) the year 1929 did not mark the beginning of an era of asset pillaging, but on the contrary, a period in which a powerful integrated cinematographic company was restructured. This restructuring policy was adopted at the end of a wave of integration initiated abroad. It took shape in a new economic and technological context, characterised by the lively industrial and commercial competition linked to the film industry's changeover to sound cinema, into which the economic crisis of 1929 introduced itself. Nevertheless, this economic conjuncture, dealt with at length by historians, does not allow us to understand the bases on which this particular concentration was organised. In fact, Bernard Natan's projects of industrial integration were pursued along lines already laid out by Denis Ricaud's and Jean Sapène's attempts at concentration [for Pathé-Consortium-Cinéma]. Moreover, this policy was implemented in total opposition to the strategy adopted over the course of the decade by Charles Pathé and Pathé-Cinéma. A thorough comparison of these policies, together with the study of certain aspects of the origin of Bernard Natan's take-over of Pathé-Cinéma and a closer examination of the principal actors of this history will allow us to better discern the origins and composition of this company.	(2) See the introduction to André Rossel-Kirschen and Gilles Willems: En marge du centenaire du cinéma, Bernard Natan à la direction de Pathé-Cinéma, AFRHC [1895, Association Française de Recherche d'Histoire du Cinéma], 21 (Dec 1996, Paris), in which I deal with certain aspects of this history in greater detail ([viz.] the antisemitic and xenophobic behaviour toward Bernard Natan). (3) The rooster was the Pathé company's emblem (the daisy was Gaumont's). Between 1929 and 1935 the Pathé company was known confusingly as Pathé-Cinéma or Pathé-Natan, with Natan often represented by Bernard Natan's signature. This was to make it clear that the newly established company was under his management (see advertisement for Les Misérables in Visual documentation).
The Pathé myth The facts on the basis of which Marcel Lapierre wrote, "at the beginning of 1929 the Société Pathé-Natan reigned over the French film industry" (122), and that Bernard Natan "took over cavalierly - although entirely legally - an enormous asset which he then pillaged at leisure" (125)(4) are corroborated by the testimony given by Charles Pathé in his memoirs published in 1941. By means of this plea, written in 1937 in the form of a memoir for the attention of his judges, he was attempting to clear himself of new charges brought against him and the other directors of Pathé-Cinéma by the firm's assigned liquidators, Maurice Mauger and Marcel Coutant.(5) In order to cleanse himself of these accusations and to more fully conceal the consequences of his policy of liquidating assets and the transaction involving multiple vote shares, he condemned his successor's choices of industrial organisation. His policy of asset sales which gave a short term advantage to major shareholders on the board of directors has, paradoxically, never been analysed by historians. On the contrary, whenever they have tackled this story they have, sometimes involuntarily, maintained the confusion around the name of Pathé and have themselves participated in the creation of the myth. Charles Pathé's defence was simple. It was articulated along three axes: with the generation of 239 million francs in profit and the distribution of 135 million francs in dividends between 1919 and 1928 he had showered his shareholders with gold; he had left his successor an affluent business; and he had done everything to prevent the ruin of Pathé-Cinéma during the latter's management. This impressive description in fact masks several important points. These results were not the fruits of the dynamic nature of the company's activities but the results of the policy of liquidating assets implemented under Pathé's direction. On the other hand, his opposition to Bernard Natan's policies was, as we shall see, less clear-cut than he said on the sale of multiple vote shares and the acquisition of the Groupe Fournier.	(4) Marcel Lapierre, "Annexe: l'affaire Natan" in Charles Pathé, Premier Plan 55 (Lyon 1970), 124-125. (5) The charges had a bearing on the role played by Pathé-Cinéma's directors in the setting up of the Société de Gérance [SGCP] and in the acquisition of the Groupe Fournier. The liquidators mysteriously withdrew their complaint against Charles Pathé.
The liquidation of assets Prior to the First World War, Pathé-Frères was the most completely integrated film company in the international marketplace. It controlled all of the various branches of this industry, from the manufacture of brackets to the distribution of print and non-print products (films and recordings). In 1918, a radical change of policy can be observed. Pathé-Frères split into two distinct corporate bodies: Pathé-Frères, a company involved with talking machines (phonographs and recordings), managed by Emile Pathé; and Pathé-Cinéma, controlled by Charles Pathé. The following year Pathé-Cinéma began to liquidate its foreign subsidiaries, the most enterprising of which, the American subsidiary, Pathé-Exchange, was sold in 1923 for 26 million francs. In 1920, Pathé-Cinéma completely ceased film production and rentals. These activities were undertaken by a new company, Pathé-Consortium-Cinéma, founded (with a capital of 20 million francs) by the banker Denis Ricaud, the Gounouilhou-Bourrageas group and the bankers Bauer and Marchal (charged by Charles Pathé to oversee Ricaud's management).(6) Charles Pathé and several of his close associates (his cousin, Louis Fourel; his intimate friend and the administrator of Belge-Cinéma, Emile Karmann; and the future deputy administrator of Pathé-Cinéma, Paul Brunet) represented the interests of Pathé-Cinéma in this new company.(7) The directors of Pathé-Cinéma justified this policy (at the Extraordinary General Meeting of 16 September 1920) to the minor shareholders as the result of unfavourable conditions in the international market. In response to Charles Pathé's refusal to confront American competition, the company had cut back its activities to the film stock factory in Vincennes, the laboratory in Joinville, and exploiting the smaller formats [the 9.5 mm "Pathé-Baby" and the 17.5 mm "Pathé-Rural"]. In fact, this justification hid the real objectives of the major stockholders: to realise their former investments under the most favourable circumstances. In 1927, after several years of tough negotiations, Pathé-Cinéma sold its most important asset, the film stock factory in Vincennes, for more than 135 million, to its direct competitor, Kodak.(8) This sale allowed the distribution of 45 million francs in dividends to the shareholders of Pathé-Cinéma.	(6) Charles Pathé was directly behind the creation of Pathé-Consortium-Cinéma; this was part of his policy of asset liquidation. (7) Pathé-Cinéma's interests in Pathé-Consortium-Cinéma were numerous. The first was that, by disposing of its production and film rental subsidiary, Pathé-Cinéma was able to refocus its activities on manufacturing film and on laboratory work. These areas were much more profitable and less risky than film production and exhibition as far as Charles Pathé was concerned. Also, Pathé-Consortium-Cinéma undertook to use only film manufactured by Pathé-Cinéma, and this for a period of 73 years. To these draconian conditions was added the annual royalties payment of 10% of Pathé-Consortium-Cinéma's turnover to Pathé-Cinéma, with, initially, a minimum guarantee of 2 million francs for the first ten years, and 1 million for the next 63 years. (8) Furthermore, Pathé-Cinéma obtained 49% of the shares of the new company and preferential prices on film stock.
This liquidation policy was profitable for Charles Pathé. He had arrangements for the transfer of assets ratified by different General Meetings between 1918 and 1920. He had rights to 5% of the profits of Pathé-Cinéma for a period of twelve years (ending in March 1930) and 10% of the total transaction value in the event of a sale [of assets]. The AGM for 12 June 1928 voted to create 50,000 shares with multiple votes. Each multiple vote share had five votes (making 250,000 votes). They were issued at 100 francs and paid up to a quarter of their value (25 francs). They were reserved for members of the board of directors and their creation was justified in order to avoid possible control by a foreign company.(9) In fact at this period Pathé-Cinéma comprised nothing more than its laboratories in Joinville and the Pathé-Baby/Pathé-Rural divisions. In the context of the changeover to sound film, this organisation would not appear to have attracted the greedy. Indeed, aside from the modifications of equipment that this changeover implied, some of the fittings of this factory, which dated from 1913, needed to be replaced. The creation of these shares really amounted to a speculative venture. These shares, paid up to a quarter of their issue price, cost the members of the managing board 1,250,000 francs. Several months later they were resold to Bernard Natan for 50 million francs.	(9) Pathé-Cinéma's capital value was 45 million francs in 1928, comprising 450,000 ordinary shares (each with one vote). The capital was raised by 5 million by means of the creation of multiple vote shares. These shares were purchased by the members of the board of directors, who thereby acquired 36% of the votes, in addition to the approximately 20% of the ordinary shares which they already controlled. The speculative nature of their creation became evident when they were later sold to the Natan group for 50 million francs. The abuse engendered by the creation of multiple vote shares resulted in legislation: two financial laws were passed, the first, in 1930, calling a halt to their creation and the second, in 1933, directing their elimination.
Charles Pathé's presentation of the results of his management of Pathé-Cinéma over the course of the decade participated in the creation of the myth. He declared that he had left his successor more than 90 million francs in the coffers and that the shares nominally priced at 100 francs were selling at 700 francs in 1928.(10) All this leads one to suppose that the business was sound and prosperous. In fact, the 90 million franc sum was what was left from the sale to Kodak and the elevated share price was driven by the value of the dividends distributed after each realisation of assets. The financial well-being of the company at this period is better measured by the operating profits in the last year of Charles Pathé's management. In the course of the financial period of 1927, profits rose to more than 103 million francs as a result of the Kodak sale. In 1928, profits fell to less than 4.2 million francs. It is most difficult to compare this state of affairs with that of other cinematographic firms or with other branches of industry at this period. For most of them, in effect prosperity was the result of dynamic policy, of production growth or of investments. It was seldom the outcome of liquidation of assets. Pathé-Cinéma, much reduced in size by and to the profit of its major shareholders, was left very fragile if not completely compromised. In these circumstances, its future looked bleak. Gaumont, the other big name in French cinema, cut back definitively after 1925 to the provision of services. Its sole notable investment was Leon Gaumont's development of sound processes. These cautious policies of two of the founders of the cinematographic industry were, however, not characteristic of the industry overall.	(10) Charles Pathé, De Pathé-Frères à Pathé-Cinéma (Nice 1941), 146.
Policies of integration The big foreign firms of the thirties had, for the most part, carried out policies of vertical integration since the mid-twenties, basing themselves on networks both of distribution and exhibition. At the same time, the control of production by these firms was characterised by the adoption of a studio policy. These policies of vertical integration, which were not confined to the film industry, were not homogeneous. An essential condition for the development of each company was an assurance of control over the different branches of its activities. The transition to [sound] features, which involved an increase in costs, implied a coherent and competitive production organisation. Control of distribution was necessary in order to recover production costs swiftly. But the factor that characterises this period is competition over control of exhibition circuits. In the United States, the firms that were not able to impose themselves on the market in the first part of the decade asserted themselves later thanks to the perfection and commercialisation of a new technology: sound film. The French context was different. The fact that Pathé and Gaumont, the only companies capable of measuring up to foreign competition, had adopted retrenchment policies, led to a weakening of the entire French film industry. The exhibition network created in the 1910s was fragmented into numerous companies which owned only a limited number of cinemas. Production companies multiplied but remained limited for want of money and functioned only one step at a time. Parallel to the attempts of those such as [Henri] Diamant-Berger or [Joseph] Ermolieff, who tried their hands at studio and production activity, were more elaborate attempts at industrial integration - notably by Serges Sandberg, who, after attempting such an experiment (with Ciné-Studio and Cinéromans in 1919), threw himself into a strategy of integration with the creation of the Société Industrielle Cinématographique "Éclair" in 1920. He concentrated his photographic studios and film laboratories at Epinay, and implemented a policy of production. Louis Aubert, relying on his distribution network, also threw himself actively into production after having hired the Saint Maurice studios. The studios of these two companies united in 1921, under the name of Studios Réunis. (11) In 1926 the new studios would unite with a company that had hitherto specialised mainly in laboratory activity: Rapid-Film, headed by its founder, Bernard Natan.	(11) Information provided by Marc Sandberg.
The unsuccessful integration of Pathé-Consortium-Cinéma Among these attempts at concentration, the one which allows us to best discern the integration orchestrated by Bernard Natan in 1929 with respect to Pathé-Cinema concerns the transactions carried out in respect of Pathé-Consortium-Cinéma and Cinéromans, by virtue of the connection they establish between diverging interests and the protagonists. The terms of the creation of Pathé-Consortium were portentous ones. Pathé-Cinéma ceded to it rights to the commercial use of film prints and equipment, and of the brand name of Pathé and its trademarks for 75 years in return for royalties proportional to the percentage of turnover, with a guaranteed minimum of 2 million francs per annum.(12) Furthermore, to the benefit of Pathé-Consortium, a lease on the studios at Vincennes was included. It was with this asset that Denis Ricaud threw himself, along with the Gounouilhou-Bourrageas group, into a policy of vertical integration. He hoped to ensure the exhibition of his productions by controlling a solid distribution network. Violent opposition by Charles Pathé's group, ostensibly against Ricaud's production programme, led to the dismissal of Pathé-Cinéma's representatives (Pathé, Paul Brunet, Louis Fourel, Emile Karmann, Victor Continsouza and Gugenheim) by the board of directors of Pathé-Consortium in October 1921. Relations between the two companies deteriorated very rapidly. Pathé-Cinéma's systematic obstruction of Ricaud's policy ended in his resignation from the position of director in July 1922. He was replaced by Charles Pathé's candidate, Henri Mège, who paradoxically pursued Ricaud's programmes of feature film production and cinema acquisition. In October 1922 plans were made to acquire 12 cinemas belonging to the Lutétia group (which did not eventuate until October 1923) and the Cinémas Modernes, as well as to set up a distribution agreement with the Omnia group (12 cinemas). The policy of cinema acquisition, linked to an ambitious production programme, cost the company a great deal and this was not offset by box-office profits as anticipated. The studios at Vincennes were in a state of decay and the company had to invest in renting and enlarging the new Levinsky studios at Joinville. Over the period 1923/4 the company's finances reached their lowest point. When Jean Sapène (who had taken control of Cinéromans in 1922) intervened, the company had accumulated nearly 18 million francs in losses. Following agreements for the distribution of Cinéromans productions by Pathé-Consortium and for the rental of the Levinsky studios, in June 1924 Jean Sapène became a member of the board of directors of Pathé-Consortium. He became managing director of the company on 2 July 1924. Under his management, the interests of Pathé-Consortium and Cinéromans became linked.	(12) These royalties were lowered to 1 million francs per annum in 1924.
The failure of the "Sapène trust" The return of Charles Pathé's faction to the board of directors of Pathé-Consortium was the condition for more sustained assistance by Pathé-Cinéma of Sapène's projects. On 28 October 1924, Charles Pathé was named president [of the board]. It was at this stage that Paul Fournier and Henri de Vernou, two of the major shareholders of the Lutétia company, also became members. During the months that followed, Emile Karmann, too, resumed his position on the board of directors. Strengthened by this new management, Pathé-Consortium-Cinéma embarked on a policy of reducing expenses: the cessation of feature film production. In order to improve the state of its finances and after negotiating with Charles Pathé's company, the directors brought about a vote, at the AGM of 10 April 1925, to reduce its capital, which dropped from 20 to 10 million francs. During this period of change, Sapène rationalised his production policy. In 1926 he acquired from Pathé-Consortium the lease of the Joinville studios, which he modernised. By 1929, the Cinéromans studios had the largest and most modern production infrastructure in the French film industry. Despite all of these efforts, the "Sapène trust" was not able to establish itself. The reasons for this failure are to be found in the conflicts which still plagued relations between Pathé-Consortium-Cinéma and Pathé-Cinéma. Charles Pathé had promised the exhibition rights of Pathé-Rural's films to Pathé-Consortium for 1924. This distribution was organised to bring in new revenue - necessary if the latter was to re-establish itself financially.(13) This promise, which was not kept, preceded the resignations, on 15 December 1925, of Charles Pathé, Léon Madieu, Paul Brunet and of Joseph and Henri Mège from the board of directors of Pathé-Consortium.	(13) Board of Directors meeting of Pathé-Consortium for 4 February 1926.
This situation further exacerbated the breakdown in relations with Pathé-Cinéma. Pathé-Consortium was to purchase film stock from Pathé-Cinéma at a preferential price which was not respected. In addition, Pathé-Consortium bore the costs of the launch of a non-flammable film stock which turned out to be brittle and incurred losses. The conflict crystallised around the 10% of Pathé-Consortium's turnover due in royalties to Pathé-Cinéma, which was not paid from 1926 onwards. Legal proceedings were instigated by the latter. The matter was resolved amicably. In October 1928, Pathé-Cinéma withdrew its complaint. In exchange, Pathé-Consortium gave up the name of Pathé and became Paris-Consortium-Cinéma. Paris-Consortium's abandoning of all links with the trade name of Pathé allowed Pathé-Cinéma to reclaim exhibition rights for the [35 mm] standard film format.(14) This arrangement increased the value of Pathé-Cinéma but did not solve Paris-Consortium's problems. The legal proceedings had made Paris-Consortium's financial situation worse. The uncertain outcome of the judgement had curtailed the financial assistance it was likely to receive, with the exception of the support of the bankers Bauer et Marchal, and had repercussions on its commercial activities. The contracts for 1922/23 with the exhibition companies Lutétia and Omnia came up for renewal in 1928. In order not to increase overheads, they were not renewed. The company's activities were limited henceforth to distribution. Jean Sapène, who had made Cinéromans into the spearhead of French production (with more than 40 feature films produced between 1925 and 1929) was exhausted by the struggle to make Pathé-Consortium financially viable. In 1929, as a result of his efforts, the company had become solvent. Its capital was raised to 15 million francs. This share issue was underwritten by the Banque Bauer et Marchal. Despite these results, it was a failure, explained, not by an unfavourable economic situation - for, as its production policy demonstrates, an integrated operation had every chance of success, as it did in other countries - but by the systematic blocking provoked by the interests of the directors of Pathé-Cinéma. At the Extraordinary General Meeting of 8 January 1929, Sapène declared his intention of retiring from business. He was not the only one with this desire. The commercial development of sound cinema which took off in 1926 with the success of Warner and Fox, heralded the complete transformation of the industry. By the end of 1928 in the United States the industrial changeover to sound film had been entirely realised on a foundation of competition between giants, Western Electric and RCA. In Europe the only response worthy of note was the establishment of the Dutch-German-Swiss group Tobis-Klangfilm. At this time no French process had been truly commercialised.	(14) After the creation of Pathé-Consortium in January 1921, Pathé-Cinéma no longer produced or distributed films in 35 mm format. This was done by Pathé-Consortium. Instead, Pathé-Cinéma specialised in 'reduced formats' (i.e. the 9.5 mm Pathé-Baby, from 1922, and the 17.5 mm Pathé-Rural) These formats were aimed at two different sections of the public. Pathé-Baby was directed at the general (affluent) public and allowed people to film and screen family scenes, etc. This format contributed in France to the development of amateur cinema and would later have to compete with 8 mm and Super 8. Pathé-Rural was aimed rather at educational cinema (schools, religious and lay clubs) and was really only perfected under Bernard Natan's management. [16 mm, already used for educational purposes elsewhere, was the competition here]. In both cases, there was no specific film production in these formats [by Pathé]. Reduced format films (with the exception of amateur films) were originally 35 mm films.
The arrival of Bernard Natan If the technological backwardness of the French was compensated for by the respite offered by the language barrier, the major investment which this changeover would require accelerated the retirement of a large number of this industry's leaders. Charles Pathé, whose departure had been scheduled for 1930 by the board of directors in 1918,(15) preferred to cite this combination of events in order to justify his departure. According to him, "he would have needed the strength of a young man to take part in the revolution which was completely overturning the cinema".(16) He was over 65 years old and several of his close associates were over sixty. In fact this context masked Charles Pathé's final transaction; he wished, before his retirement, to make the creation of the multiple vote shares profitable.	(15) Modifications to his conditions of employment were adopted by the board on 28 October 1918 and ratified by the AGMs of 30 November 1918 and 16 September 1920. (16) Pathé, 144.
The myth of Bernard Natan's take-over of Pathé-Cinéma is that it was a purely speculative deal. However, the origin of this sale, the chief point for understanding this event, does not seem to have interested historians a great deal. The experts who went through the company's archives and Bernard Natan's personal accounts with a fine-tooth comb in order to prove the existence of irregularities, eliminated this sensitive subject from their investigations. By 1929 Bernard Natan was an established industrialist in the [film] business. He had been a member of the governing executive committee of the Cinematographic Employers' Federation since 1924. His film laboratory operation in rue Francœur had been transformed in the course of the decade into a small-scale but very dynamic integrated company. Since 1926 he had combined laboratory activities (recognised for the quality of its work) and the production of advertising films. With the creation of two shooting stages he participated actively in film production as a service provider and as a producer.(17) His dynamic policies did not predispose him, however, to take over Pathé-Cinéma, with which he had had very little professional contact. In effect, Rapid-Film, through Studios-Réunis and through the distribution of some of his productions, was in close contact with the Aubert group. How did Bernard Natan, in these conditions, become the candidate to take over Pathé?	(17) For a more detailed account of the activities of Rapid-Film and its founder during the 'twenties, see Gilles Willems, "Rapid-Film et ses branches production…", in J. Kermabon, ed., Pathé, premier empire du cinéma (Paris: Centre Georges Pompidou, 1994) and the article cited in note 2.
Only Charles Pathé's version remains. Prior to his death in Auschwitz, Bernard Natan was never questioned and was thus never able to give his side of the story. Pathé's version, adopted by historians, is simple. Ill, he was recuperating in Nice, and adamantly denied having heard anything about Natan.(18) Initial negotiations were conducted in his absence, during the second half of January 1929. Control of the company (by the sale of the multiple vote shares) was ceded over several weeks during the following month. The speed of the transaction is astonishing when compared with the months, even years devoted by the directors of Pathé-Cinéma to the negotiation of each sale of assets.	(18) Pathé, 150.
The sale of multiple vote shares Charles Pathé informs us that, some months prior to Natan's approaches, he had received a visit from Jean-Simon Cerf, acting on behalf of an Austrian group. Cerf was a well-known Paris-based barrister and businessman, believed to be related to Georges Cerf (one of Pathé's pioneer exhibitors, who was also a director of the Pathé-Baby company and, with Emile Karmann, director of Belge-Cinéma). Did Jean-Simon Cerf hold an option over the sale of Pathé-Cinéma, and what kind of intermediary role did he play? Charles Pathé remains ostentatiously silent on this point. Several months after this, Cerf presented a new candidate to the Pathé directors: Bernard Natan. The 50 million franc transaction (plus 4 million francs for the intermediary) for the control of the multiple vote shares was conducted in several stages, from February 1929 onwards.(19) In his memoirs, Charles Pathé claims that he did not participate in the negotiations and that the initiative to take over the multiple vote shares came from Natan. In fact, it appears that this initiative came, on the contrary, from Cerf, who was seeking a purchaser on behalf of the holders of these shares. It was he who, after several fruitless attempts with regard to possible purchasers, gave Natan the option to purchase.(20)	(19)The shareholders were, along with Pathé: Francisque Gabet, Paul Brunet, Léon Madieu, Jacques Marette and Claude Grivolas. Pathé explained modestly, "I had only 9,520 shares. I sold them to him for 10 million. To be precise, for 9,996,000 francs" (Pathé, 160). (20) Or so Pathé, not in the least bothered by another contradiction, would have one believe (Pathé, 151). This was confirmed by André Conti in the course of several interviews which he granted the author.
This point is important in light of subsequent events. Natan, who did not possess the necessary funds for this purchase, put up the Rapid-Film Company as his initial contribution to the deal. The merger of Rapid-Film and Pathé-Cinéma was agreed to by the Board of Directors of Pathé-Cinéma on 25 February 1929 and gave rise to the nominations of Natan and Edmond Claude (President of Rapid-Film) as directors of Pathé-Cinéma. The net worth of Rapid-Film was estimated by experts to be more than 25 million francs.(21) Thus Natan did not come empty-handed to the position of director of Pathé-Cinéma [as is sometimes charged].	(21) As the officials showed (reports by M. Gauchet in regard to the Doukakis complaint, 1935, 57), the gross assets of Rapid-Film were estimated at more than 48 million francs, and it comprised liabilities of more than 22.5 million francs.
Payment for the 50 million francs worth of multiple vote shares was at first guaranteed by Rapid-Film's financiers, the Banque Conti et Gancel. It was able to guarantee the payment of the first tranche of settlement (29 million francs), but had difficulty in arranging the funding of the second payment. André Conti set up a syndicate with three banks: Lazare, in Paris; Spitzer, in Austria; and Schroeder in London. It was at this time that the Banque Bauer et Marchal reappeared, at Jean-Simon Cerf's instigation and, it seems, as in 1920, on the recommendation of Charles Pathé (whose trust in Natan's financiers was limited). This change was important to the vendors. It allowed them to avoid the company's passing into unknown hands and especially it guaranteed them payment for the shares (staggered from June 1929 to February 1930).(22) The Banque Bauer et Marchal reimbursed the Banque Conti et Gancel and advanced the necessary funds for the share payment to Natan by forming a joint venture with Edmond Claude (the Claude syndicate). This deal, occurring in a set of favourable economic circumstances, was most advantageous for the bankers.(23) It was guaranteed by the commissions on the share issues and the issuing of bonds whose placement it would underwrite. It was also guaranteed by the acquisition of 10% of the multiple vote shares and the retention, until total repayment of the loan, of the whole of these shares. Furthermore, they obtained the right of veto over the management of the company and were to keep Pathé-Cinéma's cash in trust for a sum equal to the loan. This transaction, indirectly financed by the company itself, was profitable both for the vendors and the buyers, and its workings, contrary to Charles Pathé's account, could not have been unknown to either of the two parties. In fact, while the sale was quite settled in February 1930 to the profit of the vendors, ironically, with the intervention of the stock market crisis, the financial arrangement would prove disastrous for the buyers.	(22) At the same period, Léon Gaumont sold his shares for 23 million francs. He would collect barely 5 million francs of this sum. J Champreux, GFFA [Gaumont-Franco-Film- Aubert] et le cinéma muet, AFRHC 5-6: 29. (23) A plan for the creation of the merged entity found by officials in Bernard Natan's office indicates that this merger could only proceed with the signed agreement of six out of the seven members of the board of directors of Pathé-Cinéma (comprising at this time Baron Gabet, Pathé, P. Brunet, Natan, Daval, de Mérode and E. Claude).
An ambitious future plan Bernard Natan was introduced to Pathé-Cinéma's shareholders by Charles Pathé and Baron Gabet at the AGM of 3 July 1929. The company's future direction was outlined by president, Gabet. For the shareholders, this plan announcing a policy of large-scale integration represented a total break from the position of previous years. It pointed, in effect, to the merger of Rapid-Film with Pathé-Cinéma and the establishment, already well advanced, of a major distribution and exhibition network. The required shareholder resolutions were approved by a large majority. Charles Pathé, in order to better get around the problem of the sale of multiple vote shares, always maintained that he had fought against this acquisition policy. His previous policy seems to prove it. However, he was present at the board meetings during which the cinema purchase deals were outlined and voted on. Moreover, in his memoirs, he points out that before the take-over, "I thought to move prudently towards operating large cinemas. At that time this kind of operation realised profits which were modest, but regular and more or less certain".(24) His participation on the board of directors, his confessed wish and the roles played by some of his friends or close associates allow us to put his opposition to Natan's policy in perspective. Furthermore, he makes us wonder, again, as to the exact role played by his associates in the acquisition of Fournier's company [Lutétia] and the establishment of the Société de Gérance des Cinémas Pathé (SGCP). Bernard Natan's programme was coherent. He wanted to guarantee, by means of controlling distribution, the screening of his future productions. At this time of lively competition, he had to act quickly. The respite provided by the language barrier did not last long. The Tobis company had been installed at Epinay since February and had begun to transform its studios. Paramount was due to establish itself at Saint-Maurice in the autumn, with the aim of producing European versions of its films.	(24) Pathé, 143.
The origins of the Société de Gérance In April 1929 the Société de Gérance des Cinémas Pathé was founded by Charles Pathé's personal friend, Emile Karmann, and Jean-Simon Cerf, with 1 million francs in capital. The origins of this project dated back to January. Karmann was offered, through an American intermediary, a call option [with an exercise price] of 100 million francs for the acquisition of the Lutétia group. He passed this option on to Pathé-Cinéma. Marcel Caron, Fournier's solicitor, specified that "M. Karmann introduced the matter to M. Charles Pathé of Pathé-Cinéma." He later added, "negotiations were set in motion between the directors of Fournier's company, M. Karmann and M. Natan as well, but I did not see this last person until the very end of negotiations".(25) In March, an agreement was reached. For the sum of 6 million francs per annum and for a period of twenty years, Pathé-Cinéma would rent the Lutétia company's 19 cinemas, in exchange for a goodwill payment of nearly 16 million francs, through an intermediary: a company charged with managing the Lutétia cinemas.(26) This latter (the SGCP) was controlled from May onwards by Pathé-Cinéma, which bought up its shares for more than 16 million francs. Despite his denials during the legal proceedings, correspondence between Charles Pathé and Natan did not indicate that the old industrialist had been violently opposed to the leasing of Fournier's cinemas.(27) Moreover, Karmann's strong implication in the establishment of the SGCP raises questions as to the true nature of Charles Pathé's opposition to this deal. These deals, for which Bernard Natan would later be reproached (he would be accused of creating a fictitious company), were necessary in the context of his programme. Strengthened by this contract, he was able to pursue the establishment of a large exhibition and distribution group. In May, a change of directors of the SGCP occurred. The founding members were replaced at the directors' meeting by former associates of Charles Pathé: Meignan, Delanoe and Mauberqué, and the cinema acquisition policy went ahead. In June, Natan joined this board and arranged to rent the 12 cinemas belonging to the Marivaux group. In less than a year, Pathé-Cinéma had gained control of 56 cinemas.	(25) Statement made by Marcel Caron in the High Court, 27 May 1938. (26) In 1923, Pathé-Consortium leased the Lutétia company's cinemas for 7 million francs per annum. (27) Letter from Charles Pathé to Bernard Natan, 18 March 1929 (Pathé, 205) in which he advocated leasing the group's best cinemas. This proposition, for the grantors, was ridiculous in a competitive environment.
Integration continued In addition to this policy, from May onwards Bernard Natan engaged in extended negotiations with Jean Sapène. Pathé-Cinéma's Board Meeting of 3 July 1929, voted to take over Cinéromans by purchasing this company's shares for a total sum of 27 million francs. At the same time, he sent representatives of the company to the United States to purchase sound patents. Pathé-Cinéma was to deal with the RCA company for the equipment for its studios and cinemas.(28) In August Pathé-Cinema embarked on the merger with Rapid-Film and distribution agreements with Paris-Consortium-Cinéma were put in place.(29) In autumn, the company proceeded to sound-proof the studios and began its first productions. In September, André Hugon went to London to direct the first French sound film, Les trois masques [for Pathé-Natan]. Two months later, Pathé-Natan production was underway at Joinville with Chiqué and Mon gosse de père.	(28) Subsequent to the licence agreement and the sale contract for the recording equipment signed with RCA on 10 February 1930, Pathé-Cinéma obtained, in return for the payment of royalties to the American firm, a non-exclusive licence for the RCA patents for France and its North African colonies. (29) This company entered the sphere of influence of Pathé in July 1932 and reverted to its original name of Pathé-Consortium-Cinéma.
The financial crisis In order to finance this investment policy, a major share issue was decided on at the Extraordinary General Meeting of 22 August 1929. It was voted on by the board on 10 September (Charles Pathé took part in this vote). Capital went from 55 to 160 million francs. This share issue was offered to the public by the Banque Bauer et Marchal. It bought a shareholding and joined the board of directors (in February 1930). The Wall Street crash dealt a brutal blow to this policy. Share prices plummeted and the share issue was subscribed to only 50 %. This situation was made worse by Bauer et Marchal's financial problems.(30) To this collapse was added the purchase, an inopportune one at this juncture, of Fournier's company for 92.5 million francs, financed in June 1930 by an obligatory loan of 100 million francs from the SGCP. This loan which was again offered to the public by Bauer et Marchal was once again subscribed to only 50%. Pathé-Cinéma and Bauer et Marchal were the underwriters. This deal, which can only be understood by the sudden ruin of the merged entity and the financial difficulties of the bankers, aggravated the cash flow problems of the company and was at the origin of certain irregularities (such as the SEBAGI affair). It was at this time, in May 1930, that Baron Gabet, president of the board of directors, died, and Charles Pathé resigned as a director. These elements show that the take-over of Pathé-Cinéma was less a matter of a speculative deal orchestrated by Bernard Natan than the interconnection of parties and interests set up in the course of the decade around the name Pathé. Things crystallised with the final liquidation of assets and the sale of the multiple vote shares executed under the direction of Charles Pathé. This cluster of interests and the financial difficulties of Bauer et Marchal were at the root of the difficulties of the newly formed company.	(30) With a debt of 90 million francs to the Banque d'Alsace Lorraine that they were unable to repay, Bauer et Marchal precipitated, prior to their own bankruptcy (in 1934), that of the bank.
Assessment of the pillaged company Despite these difficulties and the campaigns waged by the press, Pathé-Cinéma, under Bernard Natan's management, continued to function. In the years between 1930 and 1935, despite the crisis, the company generated close to 100 million francs in profit. During this period work did not stop at the laboratories in Joinville and Francœur. More than 60 feature films were produced and directed by the company in its studios. These films were distributed and exhibited by companies which were themselves controlled by Pathé-Cinéma. At the same time as these activities, Bernard Natan relaunched [the newsreel] Pathé-Journal (not distributed since 1927) and presented the first talkie newsreel in November 1929. He added Pathé-Revue and Actualités Féminines. He then set about developing new interests. He invested in radio broadcasting by purchasing a station in Paris and set up the Radio-Natan-Vitus company. Under Bernard Natan, Pathé-Cinéma was surely at the forefront of technological research. In November 1929 he set up Télévision-Baird-Natan. This company developed 'visiotéléphonie' (a union of telephone and the transmission of televisual images). Beginning in 1930, he also financed the researches of Professor Chrétien, who was developing the hypergonar process (which led to cinemascope). These investments, although they incurred losses, contributed to the company's influence. The success of Bernard Natan's policy, so often denied by historians, can be measured paradoxically by the conclusions of the official bankruptcy report written in 1938: "The Pathé-Cinéma affair exceeds the bounds of a normal industrial matter. The size of its news and exhibition resources make it of national interest. The diversity of its activities, among which the most apparent are of an artistic nature, make the handling of them a particularly delicate matter".(31) This observation is revealing. For the experts, the affluent Société Pathé-Cinéma brought to ruin by the doings of Bernard Natan was a matter of national importance. It was moreover from this asset, principally established by Bernard Natan (notably with its exhibition venues), that the company derived an income until the '80s. The confrontation of the myth of the swindler with this reality explains much both of the greed surrounding this company and of the outburst of sentiment against Natan. He was arrested and condemned in two stages (in 1939 and 1941). In September 1942 he was freed and immediately handed over to the Germans by the French authorities. He died in Auschwitz several weeks later.	(31) Insolvency report, 1938, President Groc, official receiver and MM. Mauger & Coutant, liquidators, 68.

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