Although Welles clearly showed promise as an artist who could develop into a talented actor- director, no one outside of Schaefer’s management team expected the contract to be anything but a journeyman’s invitation into motion picture production.

So when Welles and RKO reached an agreement that featured the most liberal creative terms ever granted to a director working within the confines of the traditional studio system— let alone to a newcomer— the news shattered Hollywood.

Despite the rumors about the concessions RKO would offer to sign Welles, insiders accustomed to the iron hand of studio rule refused to believe that George Schaefer would sign away its control of Welles’ projects. But there it was— nestled within the usual legal verbiage about rights, money, and distribution— the phrase that stated it plainly: for Welles’ productions, “each picture shall be under the sole supervision and control of the producer.” Another clause reinforced the point: while RKO could confer with Welles on the cutting and editing, “control of such cutting shall vest in the producer.”

The RKO insiders who opposed studio chief George Schaefer’s new “quality plan” were just as appalled by an annoyingly casual sentence that reinforced how much freedom Welles was granted: the contract stated that “the producer will, from time to time,” notify RKO about casting, staff , music, labor, material, and supplies needed for each production.

In short, as long as the budget did not exceed $500,000, Welles received full creative control of his work, including the precious right of final cut for the finished motion picture, and he was not required to explain to RKO what he was doing— concessions that enraged studio executives across Hollywood who had never granted to their most trusted directors a fraction of the creative control that Welles received before he ever set foot on a studio soundstage or shot a frame of film…