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The studio was founded in 1907 in Chicago, United States by George K. Spoor and Gilbert M. Anderson, originally as the Peerless Film Manufacturing Company. On August 10, 1907, the name was changed to Essanay ("S and A").
Essanay was originally located at 496 Wells Street (modern numbering: 1300 N. Wells). Essanay's first film, An Awful Skate, or The Hobo on Rollers (July 1907), starring Ben Turpin (then the studio janitor), produced for only a couple hundred dollars, grossed several thousand dollars in release. The studio prospered and in 1908 moved to its more famous address at 1333–45 W. Argyle St in Uptown, Chicago.
Essanay produced silent films with such stars (and stars of the future) as George Periolat, Ben Turpin, Wallace Beery, Thomas Meighan, Colleen Moore, Francis X. Bushman, Gloria Swanson, Bebe Daniels, Tom Mix, Ann Little, Helen Dunbar, Harold Lloyd, Lester Cuneo, Eugene Pallette, Florence Oberle, Virginia Valli, Edward Arnold, Edmund Cobb and Rod La Rocque. The mainstays of the organization, however, were studio co-owner G. M. Anderson, starring in the very popular "Broncho Billy" westerns, and Charlie Chaplin. Allan Dwan was hired by Essanay Studios as a screenwriter and developed into a famous Hollywood director. Louella Parsons was also hired as a screenwriter and went on to be a Hollywood gossip columnist. Both George K. Spoor (in 1948) and Gilbert M. "Broncho Billy" Anderson (in 1958) received Oscars, specifically Academy Honorary Awards, for their pioneering efforts with Essanay.
Due to Chicago's seasonal weather patterns and the popularity of westerns, Gilbert Anderson took part of the company to California, moving from Northern to Southern California and back on a regular basis. This included locations in San Rafael and Santa Barbara. They opened the Essanay-West studio in Niles, California, in 1912, at the foot of Niles Canyon, where many Broncho Billy westerns were shot, along with The Tramp featuring Charlie Chaplin. Eventually the studio moved all operations to Los Angeles.
The Chicago studio, as well as the new Niles studio, continued to produce films for another five years, reaching a total of well over 1,400 Essanay titles during its ten-year history. The Chicago studio produced many of Essanay's famous movies, including the very first American Sherlock Holmes (1916), the first American A Christmas Carol (1908) and the first Jesse James movie, The James Boys of Missouri (1908). Essanay also produced some of the world's very first cartoons (Dreamy Dud was the most popular character).
In late 1914 Essanay succeeded in hiring Charlie Chaplin away from Mack Sennett's Keystone Studios, offering Chaplin a higher salary and his own production unit. Chaplin made 14 short comedies for Essanay in 1915, at both the Chicago and Niles studios, plus a cameo appearance in one of the Broncho Billy westerns. Chaplin's Essanays are more disciplined than the chaotic roughhouse of Chaplin's Keystones, with better story values and character development. The landmark film of the Chaplin series is The Tramp (1915), in which Chaplin's vagabond character finds work on a farm and is smitten with the farmer's daughter. Chaplin injected moments of drama and pathos unheard of in slapstick comedies (the tramp is felled by a gunshot wound, and then disappointed in romance). The film ends with the famous shot of the lonely tramp with his back to the camera, walking down the road dejectedly, and then squaring his shoulders optimistically and heading for his next adventure. Audiences responded to the humanity of Chaplin's character, and Chaplin continued to explore serious or sentimental themes within comic situations.
Chaplin's stock company at Essanay included Ben Turpin, who disliked working with the meticulous Chaplin and appeared with him in only a couple of films; ingenue Edna Purviance, who became his off-screen sweetheart as well; Leo White, almost always playing a fussy continental villain; and all-purpose authority figures Bud Jamison and John Rand.
Chaplin disliked the unpredictable weather of Chicago, and left after only one year for more money and more creative control elsewhere. His departure caused a rift between founders Spoor and Anderson. Chaplin was the studio's biggest moneymaker, and Essanay resorted to creating "new" Chaplin comedies from file footage and out-takes. Finally, with Chaplin off the Essanay scene for good, Essanay signed French comedian Max Linder, whose clever pantomime was often compared to Chaplin's. Linder failed to match Chaplin's popularity in America. In a last-ditch effort to save the studio, Essanay joined in a four-way merger orchestrated by Chicago distributor George Kleine in 1918. Kleine's new combine, V-L-S-E, Incorporated, was an amalgam of the Vitagraph, Lubin, Selig, and Essanay companies. Only the Vitagraph brand name continued into the 1920s, and was absorbed by Warner Brothers in 1925.
George K. Spoor continued to work in the motion picture industry, introducing an unsuccessful 3-D system in 1923, and Spoor-Berggren Natural Vision, a 65 mm widescreen format, in 1930. He died in Chicago in 1953. G. M. Anderson became an independent producer, sponsoring Stan Laurel in a series of silent comedies. Anderson died in Los Angeles in 1971.
The Essanay building in Chicago was later taken over by independent producer Norman Wilding, who made industrial films. Wilding's tenancy was much longer than Essanay's. In the early 1970s a portion of the studio was offered to Columbia College (Chicago) for a dollar but the offer lapsed without action. Then it was given to a non-profit television corporation which sold it. One tenant was the midwest office of Technicolor. Today the Essanay lot is the home of St. Augustine's College, and its main meeting hall has been named the Charlie Chaplin Auditorium.