I will give them awards, and they will do everything for me: why Louis B. Mayer invented the "Oscar" (4 photos)
One of the most successful film producers in history figured out how to keep the stars under control. 
In the late 1920s, the main problem for the powerful head of MGM, Louis B. Mayer, was the emergence of one labor union after another. These guilds entered into expensive labor agreements that were too burdensome for the film industry. When Mayer realized that he would not be able to attract MGM decorators at a reasonable price to build his Santa Monica beach house because of the unions, he decided that something had to be done about the chaos. After all, if this continues, then the writers, directors and, worst of all, actors will join unions. 
Louis B. Mayer
As a result, Mayer and several of his associates created the Academy of Motion Picture Arts and Sciences (AMPAS). The Academy served as a tool for preserving power and profits in the hands of producers. Under the guise of a "film League of Nations", it prevented the creation of actors' unions and ensured complete control over film production. At the same time, creative workers were deprived of pensions, no insurance, and were not even paid extra for overtime. Instead, they were given the opportunity to receive a gold statuette.
Soon after, Mayer gathered 36 actors, directors, writers, technicians, and producers at a luxury hotel and told them that by becoming "Academy members," they would receive improved working conditions and join an elite community. Not wanting to miss out on such an opportunity, the Hollywood figures, including Academy President Douglas Fairbanks and the only woman on the board, Mary Pickford, signed the agreement. 
Douglas Fairbanks and Mary Pickford
The awards ceremony, watched by millions of viewers around the world every year, was initially a secondary idea of this new organization. The members of AMPAS wanted some kind of bright confirmation of their special status, some kind of elite get-together. So in 1929, the first awards ceremony was held, dedicated to films released from August 1, 1927 to July 31, 1928. In the Blossom Room of the Hollywood Roosevelt Hotel, 250 smartly dressed guests drank champagne while Douglas Fairbanks gave a short speech and presented gold statuettes to his colleagues. The event was rather modest, with almost no media attention. The presentation of the statuettes itself lasted no more than 15 minutes. 
The first Oscar ceremony, 1927
By the way, no secret was made of the winners back then. The names of the laureates were published in newspapers several months before the ceremony. Envelopes appeared in 1946.
It turns out that Mayer created the Motion Picture Academy to curb the growth of labor unions in Hollywood and to tighten his grip on his employees. The ceremony was also devised with a hidden agenda.
In his book, Lion of Hollywood: The Life and Legend of Louis B. Mayer, Scott Eyman quotes the producer as saying:
I found that the best way to manage filmmakers was to hang medals on them. If I gave them trophies and awards, they would move mountains to create what I wanted. That's what the Academy Awards were created for.
However, the Oscars only helped for a while. In 1933, after a powerful earthquake in California, technicians at film studios went on strike, and then the first union was secretly organized by screenwriters.
