The nominees were ...
- Conquest, Cedric Gibbons, William Horning
- A Damsel in Distress, Carroll Clark
- Dead End, Richard Day
- Every Day's a Holiday, Wiard Ihnen
- The Life of Emile Zola, Anton Grot
- Lost Horizon, Stephen Goosson
- Manhattan Merry-Go-Round, John Victor Mackay
- The Prisoner of Zenda, Lyle Wheeler
- Souls at Sea, Hans Dreier, Roland Anderson
- Walter Wanger's Vogues of 1938, Alexander Toluboff
- Wee Willie Winkie, William S. Darling, David Hall
- You're a Sweetheart, Jack Otterson
Though admirers of director Frank Capra's work have hyped Lost Horizon into something of a legendary film, it was a critical and financial disappointment at the time. It was Columbia's most expensive film to that point, and battles between Capra and cost-containing studio head Harry Cohn were intense. According to Capra's biographer, Joseph McBride, Capra shot more than a million feet of film, a ratio of ninety-three feet shot for every one used. After its first preview, it was heavily cut, and another chunk was taken out of it when it was re-released in 1943. The American Film Institute restored much of the film to its intended 132-minute length in the 1980s, using 16mm prints and supplementing missing footage with stills shown over the extant soundtrack. Those of us in the anti-Capra contingent find much of the movie dull and talky, too insistent on its message about the goodness of humanity when not corrupted by a ruthlessly competitive civilization. One thing both sides can agree on is that Goosson's sets are a remarkable expression of the streamline moderne aesthetic, though Graham Greene has a point when he observes that Shangri-la "resembles a film star's luxurious estate in Beverly Hills." (One Denver millionaire was so impressed with the designs that he had his own architect re-create them.)
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