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The title of Sig Herzig and Gene Thackrey's original story was "Venus in Velvet." Artists and Models was the name of a series of revues produced in New York by Lee and Jacob J. Shubert from 1923-1930 that featured nude models in frozen poses and scores of chorus girls performing lavish dance numbers. As reported in Hollywood Reporter on January 24, 1936, Paramount purchased the rights to the title "Artists and Models" from the Shuberts. According to a modern source, the Shubert revues were devised as competition to the "scantily clad lovelies" of the Earl Carroll Vanities. The sequel to this film is called Artists and Models Abroad (see below). Eastern Service Studios, formerly known as Astoria Studios, were originally owned by Paramount. In March 1932, Paramount suspended all feature production at Astoria and sold the lot to Eastern Service Studios, Inc. A handful of Paramount films were made at Astoria after March 1932, including a series of Ben Hecht-Charles MacArthur films in 1934 (see entry for Crime Without Passion below). According to a news item in Hollywood Reporter on March 2, 1937, A. Edward Sutherland turned down the directorial assignment for this film in order to take a vacation. Copyright records credit Ellsworth Hoagland as editor, although he is not listed on the film. Billed in onscreen credits as "America's leading artists and illustrators," Arno, Barclay, William, Goldberg, LaGatta and Patterson, actually painted pictures of models for the stageshow scene within this film. Sandra Storme is billed as "England's most famous model." Film Daily credits "59 models" as appearing in the film. Russell Patterson's "Personettes," marionettes, appear in a number called "Mr. Esquire" in the Miami hotel floorshow scene. The floorshow "orchestra" consisted entirely of these puppets. According to the pressbook, the puppets were made to resemble George Burns and Gracie Allen, W. C. Fields, Bob Burns, Carole Lombard, Claudette Colbert, Martha Raye, George Raft, Edward Everett Horton, and the Yacht Club Boys. The pressbook includes the "Cycling Starys" among the film's specialties, although only Jack Stary is credited in the pressbook cast list and in the Call Bureau Cast Service. The pressbook also credits a tumbler named Fawcett in addition to Pat Moran. In addition to Judy Canova's single billing, the Canova family is billed as "Judy, Anne and Zeke." The Yacht Club Boys are: Charlie Adler, Jimmy Kern, George Kelly, and Billy Mann.
During the Artists and Models Ball scene, Martha Raye sings "Public Melody No. 1" with Louis Armstrong and his orchestra in a mock Harlem gangster setting. The film's pressbook called the scene "the largest, and hottest, Negro number ever filmed in Hollywood." In response to the scene, Variety remarked: "This intermingling of the races isn't wise, especially as [Raye] lets herself go into the extremest manifestations of Harlemania torso-twisting and gyrations. It May hurt her personally." According to files in the MPAA/PCA Collection at the AMPAS Library, local censors were outraged at Raye's interaction with blacks on the screen. On August 25, 1937, Dolph Frantz, Managing Editor of the Shreveport Journal, wrote to Adolph Zukor, head of Paramount, the following: "Without wishing to appear in the role of an unkind or unfriendly critic, I will appreciate you granting me the privilege of expressing my protest against the social equality tone in the picture Artists and Models, which I understand was produced under your direction. I was dreadfully disappointed and displeased at the mixture of negroes with white persons in the specialty by Martha Raye that I could not get much enjoyment from it....For negroes and whites to be shown in social equality roles is offensive in this part of the country, where the races have nothing socially in common. It never fails to offend the white citizens of this section, and I have an idea that many negroes have the same feeling because my lifetime observation has been that representative negroes in the Southland wish none of the social equality ideas. Please do not get the impression that I am antagonistic to negroes. Rather, I am their friend. I feel certain representative negro citizens here will say that I am a genuine friend of the negroes, but, of course, they must stay in their place and not try any social equality plans. Our Newspaper, which has the same policy as most others throughout the South, will not publish negroes as Mr. and Mrs., nor will it publish negroes' pictures, but unfailingly it publishes worthwhile things they do. I hope you will understand my position in writing on this subject. I confidently believe that if the practice of mixing the races in pictures continues much longer, the reaction will be very hurtful to the picture industry in this part of the country."
On August 31, 1937, Mrs. Alonzo Richardson, the chairperson of the Atlanta Board of Review wrote to Joseph I. Breen, director of the PCA, the following: "I have one large squawk, for there is always one, you know, in Artists and Models. I am conferring with the manager and I believe we will cut Martha Raye's cabaret scene out entirely. This would be a matter of friendly consideration for Miss Raye as well as expedient for the theatre. For a white woman to act with negroes is a most certain offense to the south. For ANYONE to act in as obscene a manner as Miss Raye does, in this scene, would offend good taste anywhere, but, in the south, and with negroes, it will certainly be her finish. A very disgusted previewer remarked, 'She out-niggers the niggers.' Her postures, her dancing, her whole presentation of this scene is altogether disgusting and so it was agreed at the preview. In the south, white women can't act with negroes themselves on the same plane. There is a place for both in the pictures, and each in his proper place makes for real art; but such as Miss Raye's performance is nothing but disgusting. I am simply telling you the reaction to the picture as we previewed it and I believe the kind and wise thing will be to cut this scene out altogether. Maybe we are provincial, but a lady must be a lady and no one has a keener contempt for a white woman who descends to their level than the negro himself. One wiggle of Miss Raye's stomach condemned her."