Welles' second film for RKO was
The Magnificent Ambersons, adapted from the
Pulitzer Prize-winning
novel by
Booth Tarkington. George Schaefer hoped to make back the money lost by
Citizen Kane.
Ambersons had already been adapted for
The Campbell Playhouse by Welles, who wrote the screen adaptation himself. Toland was not available, so
Stanley Cortez was named cinematographer. The meticulous Cortez, however, was slow and the film lagged behind schedule and over budget.
At RKO's request, simultaneously, Welles worked on an adaptation of
Eric Ambler's spy thriller,
Journey Into Fear, which he co-wrote with
Joseph Cotten. In addition to acting in the film, Welles was also producer. Direction was credited solely to
Norman Foster. Welles later stated that they were in such a rush that the director of each scene was whoever was closest to the camera.
Welles was then offered a new radio series by CBS. Called
The Orson Welles Show, it was a half-hour variety show of short stories, comedy skits, poetry and musical numbers. Joining the original Mercury Theatre cast was
Jiminy Cricket, "on loan from
Walt Disney". The variety format was unpopular with the listeners, and Welles was soon forced into full half-hour stories instead.
To further complicate matters during the production of
Ambersons and
Journey into Fear, Welles was approached by
Nelson Rockefeller and
Jock Whitney to produce a
documentary film about
South America. This was at the behest of the federal government's
Good Neighbor Policy, a wartime propaganda effort designed to prevent
Latin America from allying with the
Axis Powers. Welles saw his involvement as a form of national service, because his physical condition excused him from direct military service.
Expected to film the
Carnaval in
Rio de Janeiro,
Brazil, Welles rushed to finish the editing on
Ambersons and his acting scenes in
Journey into Fear. Ending his CBS radio show, he lashed together a rough cut of
Ambersons with
Robert Wise, who had edited
Citizen Kane, and left for Brazil. Unfortunately, to get
Ambersons made, Welles had renegotiated away his original contract for final cut.
Wise was to join him in Rio to complete the film but never arrived. Other moves were afoot at RKO. A provisional final cut arranged via phone call, telegram, and shortwave radio was previewed without Welles' approval in
Pomona in a double bill, to a mostly negative audience response, in particular to the character of Aunt Fanny played by Agnes Moorehead.
Whereas Schaefer argued that Welles be allowed to complete his own version of the film, and that an archival copy be kept with the
Museum of Modern Art in
New York City, RKO was in no mood for such aesthetic niceties.
RKO studio management was in turmoil as Charles Koerner staged a management coup against Schaefer. It took control of the film, formed a committee which was ordered to remove fifty minutes of Welles' footage, re-shot sequences, rearranged the scene order, and tacked on a happy ending. Schaefer was replaced as RKO President by Koerner, who released the shortened film on the bottom of a double-bill with the
Lupe Velez comedy
Mexican Spitfire Sees a Ghost, thus providing the last nail in the coffin for both Welles's and Schaefer's careers.
Ambersons was an expensive flop for RKO, though it received four Academy Award nominations including Best Picture and Best Supporting Actress for
Agnes Moorehead.
Welles' South American documentary, titled
It's All True, budgeted at one million dollars with half of its budget coming from the U.S. Government upon completion, was treated scarcely better by RKO. They closed down the production, withdrew most of the crew and kicked the Mercury staff out of the studio while Welles was still in Brazil.
In
It's All True, Welles recreated the journey of the
jangadeiros, four poor fisherman who had made a 1500-mile journey on their open raft to petition Brazilian President Vargas about their working conditions. The four had become national folk heroes, Welles first read of their journey in
Time. Despite their leader, Jacare, dying during a filming mishap, Welles begged to be able to finish the film. He was given a limited amount of black-and-white stock and a silent camera. He completed the sequence, but RKO refused to let him complete the film. Surviving footage was released in 1993, including a rough reconstruction of the Four Men on a Raft segment. Meanwhile, RKO launched a premeditated publicity campaign against Welles, falsely claiming he had gone to Brazil without a screenplay, and that he had squandered a million dollars. Their official company slogan was pointedly changed to "Showmanship in place of Genius."
Unable to continue work as a film director after the twin disasters of
The Magnificent Ambersons and
It's All True, Welles worked on radio. CBS offered him two weekly series,
Hello Americans, based on the research he'd done in Brazil, and
Ceiling Unlimited, sponsored by
Lockheed, a wartime salute to advances in aviation. Both featured several members of his original Mercury Theatre. Within a few months,
Hello Americans was canceled and Welles was replaced as host of
Ceiling Unlimited by Joseph Cotten. Welles guest-starred on a great variety of shows, notably guest-hosting
Jack Benny's show for a month in 1943. He took an increasingly active role in American and international politics and used journalism to communicate his forceful ideas widely.
In 1943 Welles married
Rita Hayworth. They had one child,
Rebecca Welles, and divorced five years later in 1948. In between, Welles found work as an actor in other directors' films. He starred in the 1943 film adaptation of
Jane Eyre, trading credit as associate producer for top billing over
Joan Fontaine. He also had a cameo in the 1944 wartime salute
Follow the Boys, in which he performed his
Mercury Wonder Show magic act and sawed
Marlene Dietrich in half after
Columbia Pictures head
Harry Cohn refused to allow Hayworth to perform.
In 1944 Welles was offered a new radio show, broadcast only in California.
Orson Welles' Almanac was another half-hour variety show, with
Mobil Oil as sponsor. After the success of his stand-in hosting on
The Jack Benny Show, the focus was primarily on comedy. His hosting on Jack Benny included several self-deprecating jokes and story lines about his being a "genius" and overriding any ideas advanced by other cast members. The trade papers were not eager to accept Welles as a comedian, and Welles often complained on-air about the poor quality of the scripts. When Welles started his
Mercury Wonder Show a few months later, traveling to
Armed Forces camps and performing magic tricks and doing comedy, the radio show was broadcast live from the camps and the material took a decidedly wartime flavor. Of his original Mercury actors, only Agnes Moorehead was left. The series was cancelled by year's end due to poor ratings.
While his suitability as a film director remained in question, Welles' popularity as an actor continued.
Pabst Blue Ribbon gave Welles their radio series
This Is My Best to direct, but after one month he was fired for creative differences. He started writing a political column for the
New York Post, again called
Orson Welles Almanac. While the paper wanted Welles to write about Hollywood gossip, Welles explored serious political issues. His activism for world peace took considerable amounts of his time. The
Post column eventually failed in syndication because of contradictory expectations and was dropped by the
Post.