The film was already ransomed when it began. Welles had to make the film because Columbia Studios' tyrannical production chief, Harry Cohn, had backed Welles' disastrous epic play Around the World in 80 Days, which closed with a whimper after 79 hugely expensive performances on Broadway. But if Cohn thought that merely having Orson's IOU's put him at an advantage, he was hopelessly mistaken.
Cohn complained bitterly when Welles had Rita Hayworth's luxurious dark hair cut short and colored blonde; he had for years lusted after his star, and besides, such decisions were traditionally his prerogative. For his part, Welles actually liked the loutish Cohn, probably because he was so easy to bait. Cohn, who had once complained that he knew when a film was too long because his posterior began to ache (the writer who responded, "Imagine that -- the whole world wired to Harry Cohn's ass!" was summarily dismissed), became infuriated by Welles' constant tweaking. Said Welles of Cohn: "He snarled at you as you came in the door...and you could gradually throw him little goodies and he would quiet down and start lashing his tail." When a paranoid Cohn bugged Welles' office in order to document the director's various transgressions, Welles' used the bug as a broadcasting service, happily narrating a comic version of the day's events on the set. Welles must have been happy at Cohn's reaction to the complex narrative of The Lady from Shanghai: "I'll give a thousand dollars to anyone who can explain the story to me." Cohn wanted the film reshot as a simple flashback drama, to uncoil Welles' labyrinthine narrative a bit.
Welles stymied him on this, but Cohn won in other arenas. Hayworth's recent Gilda had made Cohn believe that a Hayworth film without songs was box office poison. He had a scene inserted into the film at a cost of $60,000 in which Hayworth sang a forgettable lyric, "Please Don't Kiss Me," by Alan Roberts and Doris Fisher, in her own unforgettable way. To be sure the song became as inescapable as "Put The Blame on Mame" had been in Gilda, Cohn ordered orchestrator Heinz Roemheld to insinuate the melody of "Please Don't Kiss Me" into the film, ad nauseum. As a way of making the film's story more comprehensible, Roemheld was also ordered to "mickey mouse" his score, to underline key points of action, a literalism that enraged Welles.
Meanwhile, Welles was designing expensive set pieces, the bills from which must have had Cohn fuming. The sequence in Central park in which muggers attack Elsa/Rita was the longest crane shot yet attempted in Hollywood; Welles' harried cinematographer was ordered to keep Welles/Michael and Rita/Elsa in focus for three-quarters of a mile in a horse-drawn carriage. And the film's spectacular fun house finale required the construction of a 125-foot slide that began at the roof of Columbia's biggest soundstage and ended in an eighty-foot pit. The mirror maze in the sequence used 2,912 square feet of glass -- eighty mirrors, each seven feet high, and another twenty four distorting mirrors, all rigged as one-way mirrors, so they could be filmed through.
Shooting was plagued with so many disasters and rancorous personal squabbles that The Lady from Shanghai seems more like a documentary of its own making than a fiction film. Much of the film was shot on location near Acapulco, aboard Errol Flynn's infamous yacht, Zaca, which Flynn maintained as a perpetual floating party. A drunken Flynn often captained the boat during shooting, and his rages and debaucheries put the film hugely behind schedule. When, on the first day of work on the Zaca, a camera assistant died of a heart attack, Flynn ordered the corpse sewn inside a duffel bag and buried at sea; quietly, the body was put ashore in Mexico and the incident hushed up. Then, one night, Welles was bitten by an exotic insect. His eye swelled up to three times its normal size, and he wailed from a bunk aboard the Zaca that he was surely going to die. Matters were complicated even further by the fact that Welles and Rita Hayworth's stormy marriage was on the rocks. Incapacitated by the heat and sinus problems, nervous about her radically changed appearance and role as a villainess, Rita still seemed hypnotized by Welles' fabulous vision, and to her credit, worked tirelessly on the film. The Lady from Shanghai was finally finished in the early spring of 1947, after further savage cutting by Cohn, including the fun house finale, which was dramatically reduced. Yet Cohn ordered the completed film shelved for nearly a year. When it was released, Columbia was as confused with the film's art house intricacies as RKO studios had been with Welles' The Magnificent Ambersons a few years previously. As RKO had done with Ambersons, Columbia allowed The Lady from Shanghai to languish on the bottom half of double bills, and it quickly slipped away, a hideous financial disaster for all concerned. Perhaps, as historian Frank Brady has suggested, this treatment was intentional; maybe a pained Cohn saw the parallels between the Michael-Elsa-Bannister triangle in the film and the Welles-Hayworth-Cohn armature in real life, and was instinctively reacting to paralyze his rival. Like the scorpion who stings the toad on whose back he is swimming, ensuring his own drowning, Cohn played his own part in the offscreen drama of The Lady from Shanghai only too well.