Boom turned to slump in 1937. The year before, the British film industry had over produced, making 220 pictures. Studio space had increased seven fold in ten years. The result was poorly made, rushed films that were not worth watching and nobody wanted. This opened the door to the American industry, and American companies moved into the UK to make quality British films that would qualify them for the home market quota.

All the major film producers started to take over studios. MGM-British, Warner, Radio, 20th Century Fox, they all moved in to virtually swallow up the failing industry. This was a period of classic movies. The Citadel with Robert Donat and Rosalind Russell, Goodbye Mr Chips also with Donat; Vessels of Wrath, Laughton and Lanchester; Pygmalion, Leslie Howard and Wendy Hiller; Victoria The Great, Nell Gwynn and Glorious Days all with Anna Neagle; The Man Who Knew Too Much; The 39 Steps; The Secret Agent; Sabotage; The Lady Vanishes; and Jamaica Inn.