I promised you I would talk about likability, and I promised someone in "The Fray" we would disagree. So, let's disagree. How did the studio system hurt Red Badge? It didn't.
I don't buy Graham Greene's blurbable argument that Red Badge got "slashed into incoherence through the timidities and the illiteracy of studio heads" for two reasons.
First, Red Badge was not made at the height of the studio system. It was made during its long death throes, made longer at MGM by its refusal to "divorce" itself from its theater chains, as the Paramount decree required. Huston had a multipicture deal, not a seven-year contract. He also had his own independent company, which would have made him a lot more money. "Huston doesn't have enough power"? No; like De Palma, he had too much, at the wrong times. Like his contemporaries and friends Bogart and Robinson, he was one of the big fish who could use the studio as he saw fit.
And he saw fit to light out to Africa when the going got tough. He may have had his reasons, but as his producer Reinhardt says, "I would have to lie if I said it was the picture that I had hoped for. … I cannot speak for you, of course. For you are not here." Ross thinks Huston is an artist, first and foremost; based on Picture and the portrait of Huston in Peter Viertel's (and Clint Eastwood's) White Hunter, Black Heart, he seems more like a sociopath to me. (Ross notes in passing that MGM let Huston out of his deal after the Red Badge flop. He always was cagey.)
Second, unlike "most critics" I don't think Huston's original cut was a "classic." I think it was thoroughly misguided from the start. An example: During pre-production, Huston and his producer received a report from a psychoanalyst, "These differentiated psychological Zwischentöne have to be plastically formed." It seems like so much comic gobbledygook. But Huston's rejection here is of a piece with his "high concept"—there is no explaining courage or cowardice; the youth just switches between them. Mayer is right. There's no story.
Huston carried his hatred of "Zwischentöne" into the lighting design, which is stark black and white and is supposed to look like a Matthew Brady photograph—a picture, but not a motion picture. If you want to see Huston at his best—that is, Huston with a story about the futilities of war or the difficulties of psychological understanding—then watch The Battle of San Pietro and his long-banned Let There Be Light. His Red Badge,however edited (and that is worse than you let on), is precisely the kind of thing that would appeal to Dore Schary. Ross nails Schary as "a firm-minded and paternalistic Sunday-School teacher." No grays.
"Doesn't it look like a Brady, kid?" Huston asked. It does, and that's the problem. Crane's book isn't like a Brady at all. It's a Wolfean explosion of psychedelic colors. (And no story.) Remember the CliffsNotes chestnut, "The red sun was pasted in the sky like a wafer"? Audie's red badge isn't red, it's "panchromatic blood," and when he grabs the colors and leads men to victory, they're colorless.
I will stick my neck out and say that I think Ross knew this, and that is why her Picture isn't like a Brady either. Huston arrives on the scene in a "red-and-green checked cap, a pink T-shirt, tan riding pants flapping out at the sides, tan leggings, tan suspenders, and heavy maroon shoes that reached to his ankles." Producer Reinhardt dresses like a refugee from Picasso's blue period, and everything bad and tacky in Hollywood happens in a "cream-colored" office or a "cream-colored" restaurant. Luscious.
I will go further and say that her love of color is one of the reasons she is so hard on Arthur Freed, whose musical unit was producing MGM's best films. When Freed talks to Mayer, he sounds like a buffoon: "In musicals, we don't have any of these phony artistic pretensions." Well, Freed is lying. Look at An American in Paris, Freed's big picture from 1951; look at Red Badge. Which is closer to art? Which could Ross be jealous of?
That is what makes Picture easily one of the five best books ever about Hollywood. Leave aside its foundational importance for New Journalism and its ready-for-the-screen characters. It is so assured, so New Yorker slick. When she pulls the string at the end and gives us the impression—untrue, I think—that Schenck has been manipulating the process all along—I am hooked.
Last answer: Has there ever been a big novel the studios thought was filmable? Yes. How quickly we forget Great Expectations—Lean's or Linson's. Or David Copperfield. Or Gone With the Wind. Or Rebecca. Alright, these last three are Selznick projects, and he is a special case. But since you include Red Badge and Gatsby as examples of the unfilmable, and since they are such little books, I think you really mean "indisputably great (but not Western or noir or sci-fi or war, etc.)" or something. I thought Wyler did a hell of a job with The Heiress; I like Wuthering Heights. And if I need an example from neoclassical Hollywood and contemporary lit, I'll take The English Patient or L.A. Confidential.