Edward L. Alperson

Creditors were held at bay for most of 1938 while production was cut back to a dozen or so features of declining quality and the company, bleeding red ink at the rate of $35,000 a week, failed in 1939, with over $700,000 in outstanding debts. Alperson resigned as the studio's head on Feb.

Alperson spent $25,000 for the rights of a sure-fire Cagney hit, 'Angels Wth Dirty Faces' but despite all pleading from his associates, opted to produce Something To Sing About (1937) next. It proved a devastating mistake for Grand National, production costs soared to $900,000 and the film, easily Cagney's worst of the 30's, immediately flopped. The fledgling company was ruined.

Edward R. Alperson was an ambitious 39-year old manager of a film exchange when he decided to organize a new studio he called Grand National in 1936. The company headquartered in New York City with the First Division Picture Exchange as it's distribution arm and received a tremendous boost when Warner Brothers' prime star, James Cagney, walked over long standing disputes with Jack L. Warner. Alperson dangled a lucrative offer at Cagney and he signed on, knowing that Warner could effectively blackball him from working at a major studio. With Cagney on board, Alperson flew into high gear. Aging cowboy superstar Tom Mix (by then a far flung circus owner in serious financial straights) rented out his home to Grand National as their Hollywood headquarters while Alperson set about creating an all-important image for his new company, signing on producers and developing projects. Things began well for Grand National. . . the company initially made profitable films that, if not of the same caliber as that of the majors, were fast paced and enjoyable B's.

Cagney scored decent returns with Great Guy (1936) although it was somewhat of a shock to see him in a film with such obviously low production values.

Alperson's Grand National had 29 film exchanges in the U.S. and 6 in Canada. These exchanges were territorial and serviced independent theaters operating, literally, on a film per flat fee basis and then exchanged for another one. During the 1930's an independent theater might completely change their bills 3 times weekly and would typically screen films from other B-movie studios (Monogram, Republic, Chesterfield, Educational, Mascot, Big 4, Puritan, etc.) that would often include re-releases and a short subject. Film exchanges would purchase a film's distribution rights for a determinate period, pay for and repair prints and distribute promotional material. Since an exchange would almost always make money, even on flops, it was more consistently lucrative than independent film production.